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OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
B0ST0 ^, p .H^!miVi«iii / iiiiiiiilllllllll DIVISION OF REVIEW 



3 9999 06317 514 3 



THE KNITTING INDUSTRIES 

By 
W. A. Gill 

Frank Pouder Willis H. Ray A. H. Barenboim 



WORK MATERIALS NO. 80 



INDUSTRY STUDIES SECTION 
March, 1936 



< 



OmCH OS NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REV IE'.. 



THE KNITTING. INDUSTRIES 

3y 

W, A. f --iH 

Frank Fouder i/illis H. Ray A. H. Barenboim 



INDUSTRY STUDIES SECTION 
March, 1936 



9823 



i' R JS t. it D 

This study of the knitting industries ras prepared under 
the direction of tir, '/irt A. Gill, of the Industry Studies 
Section, ,.ir. M. D. Vincent in general cnarge. 

The study endeavors to give a background picture of the con- 
ditions of these industries out of which their problems arose; to 
measure the amount of success attr-ined by the industries under their 
respective codes of fair competition in recognizing and remedying 
their ills; and to describe r.-ost-code conditions and efforts toward 
voluntary regulation. 

The original iolan of the study called for more comprehensive and 
more analytical coverage than later proved oossible in the light of 
limitations of time and -personnel. As it stands, however, the renort 
has value both in its own right and as ^ork-materials to be used as a 
basis for further study end. analysis. Suggestions for further study 
are made in Appendix I. 

At the back of the report '"ill be found a brief statement of the 
studies undertaken by the Division of Review, 



L. C. .-iar shall 

Director, Division of Review 
March 18, 1936 

-i- 
9823 



Table of Contents 



Page 
Tu ibers 



sui :: ahy 

PAST a 

ETTHODUCTIOIT, HISTORY 0" THH IHDUSTRY'S DEVELOP! HUNT AID ITS 
S3 EHkL CliiiliACTEPJSTICS 

CKAPTTT, I ITiTRODUCTIOK 4 

Industries £ nd Codes Covered 5 

CHAPTER II HI STOUT 0? THE INDUSTRY' S DEVEL0PHE1TT 6 

Technological Development 6 

Knitting 5 

The Machine 5 

CHAPTIH III GIFT <AL CH... ACTERISTICS CT THE E'lTTIITG INDUSTRIES. 

Overlao Bet'.7een the Textile and the Knitting Indus- 
tries. 9 

Overlao Between the Three Knitting Industries 9 

Rav i iat erials 11 

Size of Establishments, by Knitting Hochines 17 

Plant Location , 17 

Financial Data IS 



9823 •ii- 



< 



Page 
THE HOSIERY INDUSTRY numbers 



CHAPTER I THE HOSIERY INDUSTRY DESCRIBED 24 

Definition of the Industry? 24 

Pro ducts 24 

Method of Manufacture 25 

Preliminary Processing 25 

Rayon 25 

Cotton 25 

TJool 26 

mixed 26 

H itt ing 26 

' "ashin :• 26 

Dyeing 26 

Boarding 26 

Finishing 26 

Size of Industry 25 

Size of Establishments - 3~ r Irunber of Employees ^er 

Establishment 27 

Geographical Location 29 

Sice of Town of Location 52 

Machinery 32 

Seamless Branch 32 

Size of Seanless Establishments 37 

Full— ]?ashi one d Branch 38 

Sizri of Pull-Fashioned Establishments 41 

Ease of Entering the Industry/ 42 

CHAPTER II LABOR 44 

Employment 44 

l?unber of Employees by States 47 

Hours 49 

Average H urs Per Ue :■!: 49 

Man-Eou.rs 49 

TTages 52 

Payrolls 52 

Average Hourly VJages 55 

Average Y/eekly TTages 57 

CHAPTER III PRODUCTION aITD DISTRIBUT'IOP 60 

Production 60 

Rarr Materials 60 

Rav? Material and Labor Costs 61 

Volume of Product ion 61 



9823 -iix- 



4 



PART B (Continued) 

Pace 
TJIE HOSIERY INDUSTRY Numbers 

Value of Production 65 

Interindustry Changes , 67 

Style Changes 67 

Trend to Full-?ashioned 68 

Shipments and Stocks ...... 6S 

Distribution 75 

General Characteristics 75 

Distribution Channels 73 

Sales Policies of F-dl-Fashioned 

mills CO 

Exports and I. ports 81 

Territorial Tr;.de 85 

CIIAPTS'I.IV ADOPTION AND AD;IITIST?ATIOk 0? THE CODE...., G5 

Code Adoption . ..... 85 

Introduction 85 

Preliminary Steos 85 

Points of Viev? on Code 86 

Ho irs . 36 

'.,"• ;es , . 87 

Child Labor 88 

Trade Practices 88 

Co de Approval 88 

Administrat ion of the Code q 89 

Adninistration of Code ay Code 

Auti ority. 89 

Co;". Authority Personnel 89 

Industry Members 39 

Labor Members 90 

Administration Members 90 

Trade Association Relationship, , , 91 

Code Authority Committees 91 

Code Authority Financing 92 

Compliance activities 93 

Compl iance Activities of BRA, 94 

Litigation 95 

Violationsof Collective Bargaining. 

Provisions i 95 

Exemptions > 97 

General Attito.de of the Code 

Authority, , . . . , » 98 

Collection ant? Dissemination of 

Statistics, , 99 

Code Authoritj' Interpretations ...100 

Administration of the Code ^oy ISA 

Development of Codal Administration... .100 



9823 -iv- 



4 



PART B (Continued) 

Page 

THE tt CSI SRY INDUSTRY Fanbers 

CHAPTER V MAJOR PROBLEMS. 102 

Production Control 102 

Production Control by Machine Hour 

Linitation 102 

Limitations on Footers 105 

Five Ueek Curtailment 105 

Additional Curtailment Recommended Ill 

Production Control by Capacity Limitation 111 

Prices 112 

Price Movements - 1926-1933 112 

Price Fi::ing 115 

Lo-rest Reasonable Cost 116 

Price Guarantees 117 

Homework 119 

CHAPTER VI EFFECTS 0"' TEE CODE 121 

General Effects of the Code 121 

Effect of Code Abolition 123 

Post-Cod*} Trade Association Activities 124 



U1TD3RTJEAE A1ED ALLIED PRODUCTS INDUSTRY 



C TJ APTER I IHTRODUCTION - DEFIITITIO" OF IFDITSTRY, ITS 

PRODUCTS, AMD PROCESSES 125 

Definition of Industry 125 

Products 126 

Classification Difficulties Re: Over- 
lapping Code Provisions 126 

History of Underwear Stales 127 

Processes and Methods of Manufacturing 128 

V.'indin ■; 128 

Knitting 128 

Loopin ;; and Sealing 123 

Cut b in, • 129 

"fashing and. Bleaching 129 

Nap-oing 129 

Sering 129 

Finishing Operations 130 

Knit ting Variat ions 130 

Construction Details of Undemenr, Full-Fashioned 

and Seamless 130 



9823 



-v- 



CHAPTER Ill 



PART C (Continued) 

Page 
THE U1TDEEOTEAR AKD ALLIED PRODUCTS INDUSTRY Numbers 

CHAPTER II CHARACTERISTICS OP THE INDUSTRY 131 

Hon-Corr^arable Statistical Definitions 151 

Size of Industry 131 

Geographical Location 132 

Size of Community Location 133 

Pinancirl Data on Under-near Manufacturing 135 

PRODUCTION AND DISTRIBUTION 137 

Stability of Underwear Production 157 

St' r le Trend s 139 

R?77 Materials 140 

Shift in Materials 140 

Value and Volume of Production 141 

Value of Production by States 141 

Production by T--;oe of Product 12 

Cost of Production 145 

Shipments 146 

Stock Turnover 147 

Distribution 149 

CKAPTII. IV LABOR 155 

Employment 1 53 

Average Employment Per Plant 155 

Emplo^naent and Payrolls bjr States 155 

Hours 156 

Han-Hours 1 57 

'.ages 

Payrolls 158 

Average Hourly "."ages 159 

Average ""eelzly "ages 160 

Seasonality „ 161 

CHAPTTd V CODE A1TD CODE ADIlII'IS'TR^TIOi; , 166 

Formulation of Code 166 

Labor Provisions.. «- , 166 

Administration of the Code 167 

Code authority Renresent ation 167 

Code Authority Findings 169 

Compliance 171 

Interpretations 171 

Major Problems of Code Administration 172 

Circular Knitters Controversy 174 

Code Administration Shortcomings 179 



9823 



-vi- 



i 



PART C (Continued) 
THE UND1HWEAR AND ALLIED PRODUCTS IiDUSTRY 



Page 
Numbers 



CHAPTER VI DEFECTS OP THE CODS 180 

Benefits to Labor 130 

Benefits to the Industry 180 

Effects of Code Abolition 181 

Post Code Trade Association Activities 181 



INDUSTRY 



CHAPTER I DEFINITION, DEVELOPIIELTT , *uD SCOPE 07 THE 

INDUSTRY 183 

Definition of Industry 183 

Products 134 

History and Development of Knitted Outerwear 134 

Cooperative Activity Among Manufacturers 187 

National Knitted Outervear Assn 188 

Hand Knitted Sportsv,'ear Assn 189 

National Hand Crochet Assn,, Inc 189 

Metropolitan Knitted Te::tile Assn...., 189 

Infants' & Children's Outerwear Assn 190 

Other Trade Associations 190 

Cooperative Activity Among TTorkers 191 

Size of the Industry 195 

Types of Manufacturers 195 

Size of Establishments 195 

Distribution of Industry by Geographical Area 197 

Distribution of the Industry by Size of 

Cities 203 

CHAPTER II LABOR 206 

EraplO'Tnent 206 

Number Employed and Seasonality 206 

Geographic; 1 Distribution 209 

Hours 210 

Average Weekly Hours 210 

Wages 211 

Total Payrolls 211 

Hourly Wages 213 

Weekly Wage s 214 

Area. Wage Differentials 216 

Child Labor. 218 

Learners or Apprentices .,.. 218 

Labor Union Influence 219 



9323 



-VI 1- 



CKkPTBR III 



ChAPTZT- IV 



CHAPTET. 7 



982S 



PaET P (Continued) 

Page 

THE MMITTZD OUTEFrEAE INDUSTRY "-.unbors 

PRODUCTION AND DISTRIBUTION 223 

Production 22S 

Ravr lis terials 223 

Quantity & Value of Products 223 

Processes 224 

Machines 226 

Tyues 226 

Extent of Use of Each Type 227 

Age 230 

Cost of Production 231 

Seasonality of Production 232 

Distribution 233 

Imports end Exports. 233 

Distribution Methods 234 

Trade Practices 236 

Regulatory Measures 236 

Misbranding and Misrepresentation 239 

Seles Terms 240 

Return Goo ds 241 

Rebates and Manufacturer's Payment 

of Customers Accessories and Advertising 245 

Consignment Selling 246 

Selling Belo-; Cost 247 

Order Cancellation. 251 

Style Piracy 252 

administration oe code 254 

Code Authority 254 

Election of Officers & Organizations 254 

Re-Election of Officers 256 

Protests Against Methods of Re-electtion. 258 

Code Authority Functions 258 

Legislative 258 

Compliance i:n Labor and Trade Practice 

Provisions 270 

Financing 274 

ERA Action on Code Matters 282 

MAJOR PROBLEMS - CONTRACTING Ala) HOMEWORK 288 

Contract System of Production 288 

The System 288 

The Problem 288 

ERA Control , 288 

Extent of the System 293 

Homework S^ste:! of Production 298 

The Problem 293 

ERA Control 298 

-viii- 



* • 



PART D (Continued) 

Page 

TEE i lTITTID OUTER ' ."M, /:. INDUSTRY Numbers 

CHAPTER V Number and Location of Homeworkers. ., ,J| 300 

Earnings of Homeworkers, 301 

Product Classification of Homeworkers 301 

Payment to Homeworkers Aero:.;.' State 

Borders 301 

Homework Employers 302 

Homework Contractors 302 

CHAPTER YI GENERAL EEFSCT 07 COLE 307 

Benefit of Code to Labor 307 

Benefit of Code to Industry Members 308 

Post Code Labor Conditions 310 

Post Code Trade Association Activities 310 

APPENDIX I Methodology and the Field for Further Research... 472 



TABLES 

Part A 

TABLE I Brief Chronologic;! List of Important Knitting 

Inventions. 8 

TABLE II Knitting and Textile Manufacturing Concerns, 

Classified According to Principal Function or 
operation, Showing Machinery Operated - 1935..,.. 10 

TABLE III Knitting Industry - Number of Concerns end 

Knitting Machines by Product Group, 12 

TaBLE IY Purchased Yarns Consumed by the Knitting 

Industries. 13 

TABLE V Raw Fibre Consumption of the Knit Goods Industry,, 14 

TABLE VI Raw Material Consumption o^ the Knitting 

Industries - 1919 to 1931.. 15 

TABLE YII All Knitting Concerns Grouped According to Size 

and Product Produced - 1935 16 

TABLE VIII Number of Knitting Concerns Grouped According 
to Number of Strtes in whieh Their Mills are 
located*- 193c , 19 

TABLE IX Number of Knitting Concerns Grouped According 

to Number of Mills Owned— 1935.. 20 

TABLE X Percent of Concerns Reporting to Bureau of 

Internal Revenue that Showed a Met Profit after 
9823 Taxes 21 

-IX- 



TABLES (Continued) 

Part A Page 

"l umbers 
TA3LE XI Relative Return on Investment - All .manufacturing 

and Knit Goods Kanuf-.xct j.ri:i < - 1926 - 1933 23 

Part j! 
TABLE I Estpblishments, Wage Larders, Wages, Cost of 

material, Value of Products, ant? Value Added by- 
Census Years - 3.923 - 1" 33 28 

TABLE II Establishments, Wage Earners, Wages, Cost of 

Materials, Value of product'.-,, and Value Added, 
Classified .r~ IJumber of Wage Earners, 1933 30 

TABLE III Number of Companies and Plants by States - 

December 1934 31 

TABLE IV Establishments, Ears Earners, Wages, Cost of 

i.aterials, Value of Products, and Value Added, 
Classified by Size of City, 1933 33 

TA3LE V Distribution of Seailecs Knitting Equipment 
Classified by Type of Go ds Lanufactured 
January 1 , 1934 34 

TABLE VI Percentage Distribution of Seamless Knitting 
Equipment, Classified by Producing Areas 
January 1 , 193-_ 35 

TABLE VII Distribution of Seamless Knitting Equipment, 

Classified by hajor Tyoes of Machines January 1, 

1934 ' ". 57 

TABLE VIII Percentage of Seamless Hosiery Companies, 

Classified by Huaber ^f Hachines January 1, 1934 37 

TABLE IX Percentage of Seamless Rosier^ Machines in Place, 
Classified by Comoanies of Particular Size 
January 1 , 1934 33 

TABLE X Percentage of Full-Eashioned Hosiery Knitting 
Hachines in Place July 15, 1933, Classified 
by Producing District 39 

TABLE XI Percentage Distribution of Full-Eashioned by 

Gau 3 e July 15, 1333 40 

TABLE XII Percentage of Total hachine Te::tions - Classified 

by Gauge July 15, 1933 40 

TABLE XIII Percentage of Establishments Cla-mrified by Lumber 

Of machines July 15, 1953 41 

TABLE XIV Percentage of i.achines in Place Classified by 
Companies of Particular Size - Larch 1, 1929 
and July 15, 1933 42 

9325 -x- 



A 



TaBLE XV 

table; :;vi 

table xvii 

table xviii 
table xix 

table xxi 

table xxii 

table xxiii 
table xxiv 

table xkv 
table nivi 
Table xxyii 

TaELE XXVII I 
TABLi juvIa 

TABLE j\u\u\ 

Table xxxi 



TABLES (Continued) 

Page 
Part B numbers 

Cost of Machinery requirements for a Small 
Hosier-/ Plant 43 

Enrol 03Tnent in the Knit Goods Industry - 1899 
to 1921. 44 

Employment in the Hosier" Industry - 1923 to 
1933 44 

Index of Employment - 1927-1935 45 

Estimated Eumber Employed, 1927-1935 47 

Number of EErolo-ees, "by States, One Week 
in March 1934..... 43 

Average Hours Per week in the Hosiery Industry 
for Specified States, for Certain Periods of 
1926, 1930 rnd 1932 49 

Average Hours Per Week, 1928, 1928, 1930, 
1932, 1933, 1934 and 1935 (7 Months ) 50 

Estimat ed Total Man-Hours , 1932-1935. 51 

Annual Payrolls in the Hosiery Industry/-, 
1923 to 1933 , 52 

Index of Payrolls - 1927-1935 53 

Estimated Weekly Pa-roll - 1927-1935.. 54 

Average Hourly ''age Rates in the Hosier- Industry 
for designated St; tes for Certain Periods of 
1928, 1950 ana 1952 55 

Average Hourly "age, 1926-1935. 56 

Aversge Weekly Earnings in the Hosiery Industry 

for Designated States for Certain Periods of 

192S, 1930, and 1952 57 

Average Weekly Wage, 1926-1935 58 

Volume, Value and Percentages of Total Con- 
sumption of Principal liar Materials Used by 
the Hosier- Industry in 1929 60 



9 323 



-xi- 



TABL3 JEXII 

TABLE SOCHI 

TABLE LuiIT 
TABLE 2aXV 

table icxxvi 

table sdcvii 
table xxxviii 

TABLE jiuvAIX 

TABLE XL 

table xli 
table xlii 

table xli i i 



TABLE XL IV 



table xlv 



TABLE XLVT 



TABLE XLVIII 



TABLE XLIX 



TABLES (Continued) 

Page 
Part B Number:: 

Total Value of Products, Total Labor Cost, 
and Total Cost of Materials, 192?, 1931 and 
1933 61 

Estimated Production (000 of dozen pairs) - 
1926-1935 62 

Index of Production - 1926-1935 63 

Volume of Products, by Kind and "by State - 1934... 64 

Value of Products in the Hosiery Manufacturing 
Industry 1927, 1929, 1931 and 1933 65 

Value of Products, By Kind and By State, 1934 66 

Leading Hosiery Colors - 1924-1929 67 

Production of '.'omen's Hosiery 1925 to 1934 
"by Type of Product in Dozens of Pairs 69 

Estimated llet Shroments (000 of dozen) - 1926- 
1935 70 

Estimated Stocks, end of Month (000 of dozen) 71 

Percentage Distribution of Hosiery Production 
1929, and Population, 1930, "oy Ste tes 76 

Hosiery Production and llet Sales of Certain 
Wholesalers and of Retailers by Important Pro- 
ducing St tes and by Specified Eon-Producing 
States, 1929 ,.. 78 

Volume of Full— Fashioned Hosiery - Sales - 1933, 
According to Distribution Channel 80 

Pull-Fashioned Hosiery Mills in 1933, According 
to Sales Policy 80 

Quantity of Exports by Product, Three-Year 
Average, 1928", 1930, and by Years, 1930-1934 81 

Quantity and Value of Imports by Type, Five- Year 
Average, 1926-1950, and by Years, 1930-1934 83 

Quantity end Value of Exports of Hosiery to 
Possissions of the United States, 1931-1934...... 84 



9823 



-xix- 



TABLE L 
TABLE LI 

TABLE LI I 

TABLE LIII 

TABLE LIV 

TABLE LV 
TABLE LVI 

TABLE LVI I 

TABLE LVI II 



TABLE I 

TABLE II 
TABLE III 
TABLE III A 



TABLE 


IV 


TABLE 


V 


TABLE 


VI 


TABLE 


VII 


TABLE 


VIII 


OS23 





TABLES (Continued) 

Fart B 

Pr :e 
ITurabers 

Hosier;; Code Violations - September '-'-, 1.33 

to March, 193.5 5^ 

Violations of Hosiery Code Reported to Compliance 
Division - April 20, I93U - Ray f, 1935 95 

Action on Requests for Machine Hour Exemptions ...98 

Questionnaire Replies on the Question of Cur- 
tailment 10S 

Distribution of Questionnaire Replies on 

Curtailment in the Sea: lies s Branch of the 

Industry by Type of Product Manufactured 107 

Questionnaire Replies on Trype of Curtailment ....108 

Inde:: of Hosiery Price- - IJSo - 1935 ^3 

Index of Hosiery Ba- Material Prices - I92S - 

1935 118 

Average Employment, Average Hours Per T7eel;, 

Ave "' r 'e Hourly 'age Rate, an" Aver,' ;e Ueehly 

t , .--.;v <- ic^i — i c "-' l 1 - 1 ?1 

Part C 

Establishments, '.'age Earners, "Jages, 

Cost of Materials, Value of Products, 

Value Added by Manufacture, 1923-1533 -32 

Huaber of Unfei -err ..ills by Type and 

Geographic Division, 1333 13 ■ 

Number of Hills anc" Hill Sales by Size 

of To- :n, 1333 x 33 

Important Financial Ratios of Si;: Divi- 
sions of the Knitted Under -ear anc. Allied 
Products Manufacturing Industry, Based 

Upon 133H Operations 136 

Hill Sales by Ge ts lie Division, 1923, 

1?32, 1333 138 

Volune and Value of Production lUl 

Value of Production Per State lH2 

Value of Products ^i' Type of Kill, 1333 1^3 

Volume and Value of Production, by 

Type of Product lUU 

-siii- 



TABLE IX 

TABLE X 
TABLE XI 

TABLE XII 

TABLE XIII 

TABLE XIV 
TABLE XV 

TABLE XVI 
TABLE XVII 
TABLE XVIII 

TABLE XIX 
TABLE XX 
TABLE XXI 
TABLE XXII 
TABLE XXIII 
TABLE XXIV 
TABLE XXV 
TABLE XXVI 



TABLES (Continued) 
Part C 

Page 
Nmriberfe 

Ratio of Labor end Materials Costs to 

Value of Pro- uct 145 

Seles by Type of Mill, 1934 146 

Annual Shipments, Average Monthly Stocks 

and Bate of Stock Turnover of Underwear 

by Product - 1934 147 

Annual Shipments, Average Monthly Stocks, 

and Bate of Stock Turnover of Allied 

Product s - 1934 149 

Percentage of Production and Population 

Per State 150 

Exports Quantities of Knitted Underwear 152 

Number of Estaolishments and Employment - 

1923-1931 153 

Index oi Employment - 1929-1935 154 

Estimated Number Employed 154 

Average Number of employees Per Plant 

Number of Firms - Number of Employees 155 

Employees and images by States 156 

Average Hours Per '..eek 157 

Estimated Total Weekl - i Ian- Hours 157 

Index of Payrolls - 1927-1935 156 

Estimated ' eekly Favrolls 159 

Average Hourly age (Cents) 160 

Average ffeeklv \>ge 161 

Variation of Employment Index 162 



9823 



-xiv- 



•TABLE I 



TABLE II 



TABLE III 



TABLE IV 



TABLE V 



TABLE VI 



TABLE VII 



TABLE VIII 



TABLE IX 



TABLE X 



TABLE XI 



TABLE XII 



9823 



TABLES (Continued) 
Fart D 

Page 

Numbers 

Labor Unions, Fumber of Establishments 

Organized and Employees Affected (1935) 191 

Extent of Unionization bv Percentage of 

Mills and Employees, 1935 191 

Establishments, Wage Earners, Wages, Cost 

of Materials, Value of Products Value Added, 

and Horsepower, by Census Years, 1923 to 1935 196 

Establishments, Wage Earners, '/ages, Cost 

of Materials, Value of Products, and Value 

Added, Classified by Number of Wage Earners 

per Establishment, 1933 198 

Distribution of Industry Establishments by 

Districts, 1935 197 

Establishments, Wage Earners, Wages, Costs 
of Materials, Value of Products, and Value 
Added by ianuf acture by States, lb29 200 

Establishments, Wage Earners, Wages, Costs 
of .aterials, Value of Products, and Value 
Added by Manufacture by State, 1931 201 

Establishments, 'wage Earners, v;pges, Costs 
of Materials, Value of Products, and Value 

Added by Manufacture by States, 1953 202 

/ 
Percentage of Total Capital Investment by 
State, 1922, 1925, 1928 203 

Establishments, Wage Earners, './ages, Costs 
of 'aterials, Value of "roducts, and Value 
Added, Classified by Size of City, 1933 204 

Establishments, Wage Earners, Wages, Costs 
of Materials, Value of Products, Value Added, 
Classified by Number of "wage Earners per 
Establishments and Size of Citv, 1933 205 

Estimated Numbers Enrol oyed Monthly, 1931, 

1932, 1933, 1934, and 8 Months of 1935 207 

-xv- 



TABLE XIII 
TABLE XIV 
TABLE XV 

TABLE XVI 

TABLE XVII 

TABLE XVIII 
TABLE XIX 
TABLE XX 
TABLE XXI 

TABLE XXII 

TABLE XXIII 

TABLE XXIV 

TABLE XXV 

TABLE XXVI 
TABLE XXVII 
TABLE XXVIII 

TABLE XXIX 
TABLE XXX 



9823 



TABLES (Continued) 

Part D Face 

Numbers 
Index of Enroloyraent, Monthly, 1931, 1932, 
1933, 1934, and 8 Months of 1935 208 

Distribution of Wage Earners by State, 1929 

and 1931 209 

Average Hours worked per Week, Snown by 
the Month, 1932, 1933, 1334 and 8 Months 
of 1935 210 

Estimated Total Man-Hours per Week, 193 2 - 

1935 211 

Estimated Weekly Payroll in 1,000's of 

Dollars, 1931 - 1955 212 

Index of Payrolls - 1931 - 1935 213 

Average Hourly "age 1932 - 1935 214 

Average Weekly (.age 1932 - lt.35 215 

Average Monthly, Weekly, and Hourly Wages 

of Six Industry Districts 217 

relative Value of the Different Industry 

Products, 1929 - 1933 224 

Production, Cuantity, and Value; by Products, 

1929 - 1933. 225 

Products of Philadelphia, Cleveland, and 

New York Froduced on Circular and Flat 

Machines 228 

Pelative Cost of ''/ages and Materials, 1924 - 

1931 - 1933 232 

Summary of Production, Imports and Exports £33 

Extent of Use of Distribution Methods, 1929 235 

Number of Contractors and Contract-Employers 

by Industry Groups 293 

Summary of Weekly Production of Iniants' and 

Children's Knit Wear Contr-- ctors From 9/&/34 

to 5/11/35 295 

Summary of Weekly Number Workers Employed, Total 
l.eeklv Hours Worked, Total ..eekly Payrolls, Average 

eekly Hours, Average Weekly '.ages, and Average 
Hourly Wages, in infants' and Children's Contract 
Brancn - From 9/1/34 to 5/11/35 296 

-xvi- 



TABLES (Continued 

Fart D 

Page 
Numbers 

TABLE XXXI Homework ifenufacturers, Foine-orkers and 
Fayroll of Home' -orkers, Classified by 
States for the Eight Ueek Period, Aor.l, 
1935, to i>y 25, 1935 303 

TABLE XXXII Number of Homevorkers and Total Payrolls, 
by States - for the Eight Week r eriod - 
April 1, 1935, to -ay 25, 1935 304 

TA3LE XXXIII Range and Distribution of Earnings of 
Homevorkers for the Eight Weeks Feriod, 
April 1, 1935, to ,,iay 25, 1935 305 

TABLE XXXIV Homework Contractors, Homevorkers Employed 
by Contractors anc Payrolls of Homework 
Employed by Contractors, by States - 
Aoril 1, 1935, to ay 25, 1935 306 

CHARTS 

FAST 3 - HOSIERY INDUSTRY 

CHART I Index oi Emnlovment and Payrolls *46 

CHART 1 1 Hours anc Wages 59 

CHART III Estimated Production, Man-Hours, 
Net Shipments, and Stocks at End 
of Month, 1926 - 1935 74 

CHART IV A. Percent Distribution of Shipments 

and Retail Sales of Hosiery 75 

B. General Business Activity and Total 

Hosiery Shi-oments 75 

CHART V hosiery Wholesale Prices and Textile 

Material Prices 120 

FART C - UNDERWEAR AND 
ALLIED PRODUCTS INDUSTRY 

CHART I Index of Employment and Payrolls 163 

CHART II Hours and "„ages 164 

9623 -xvii- 



CHAB.TS 

(Continued) 

Fart C 

Page 

Numbers 

CHART III Shipments, Stocks et End of iionth, 

Production and Estimated Man-Hours 165 

PART D - KNITTED OUTEnWEAR 
INDUSTRY 

CHART I Index of Employment and Fayrolls 220 

CHART 1 1 Hours and Wages 221 

CHART III Estimated Total Man-Hours per Week 222 

CHART IV Infants' and Children's Contractors Group- 
Production, Orders and. Shipments 
Employment, Weekly Fayroll, Average Hours 
per Week, Average Weekly Wage 297 



9823 



-XVI 11- 



SUi&LARY 

CHARACTERISTICS Oj THE INDUSTRY 

The manufacture ox knit goods is one of the major industries of 
the United States, comprising in 1929 about 1900 concerns, employing 
208,500 workers at an annual payroll of $210,714,000 and producing 
nearly $900,000,000 worth of product. 

It consists of tnree main divisions or separate industries, 
namely, hosiery, knit underwear and allied products, and knitted outer- 
wear, " Overlap between these brancnes, and between the knit goods and 
textile industries dues not appear to be great. In 1929, hosiery had 
730 establishments, employing 129,500 wage earners at an annual payroll 
of $140,07-97000 and producing $528,700,000 worth of product. In the 
same year the knit underwear industry consisted of 251 establishments 
employing 41,500, at a payroll of $32,928,000 and uroducing $150,642,000 
value of product. The knitted outerwear industry that year, comprised 
757 establishments, employing 29,000 persons, at $26,934,000 payroll 
and producing product valued at $147, 249, 000. 

The industry is irterstate in character, and highly decentralized 
composed largely of small units, generally located in small towns. 
Demand is fairly stable for hosiery and underwear, but outerwear demand 
is largely affected by style. The industry does not appear to be as 
profitable as "All Manufacturing" operations and suffered great deficits 
during the depression. 

Pre-code problems of the industry were similar to thuse of the 
textile industries with much unemployment, irregularity of employment, 
and a trend toward low wages, idle equipment, very large inventories 
in some branches and erice demoralization, complicated oy certain 
economic movements taking place within the industry. It also suffered 
from much economic pressure from its customers. 

CODE ADMINISTRATION 

Hosiery 

Production control c^de provisions, though given much thought, 
amended and widely advocated by the trade association, were largely 
ineffectual, and apparently discriminated between certain groups in 
the industry, 

Frice control, without unqualified governmental approval, though 
attempted, was not effective. Prices which in 1932 had declined to 
less than one-half of 1929 vplues -ere somewhat increased by higher 
labor and material costs under the Code. 

The trade association-code authority tie-up, which apparently did 
not make for a true representation of small and non-association units, 
after criticism by the Darrow Board, was partially corrected. The 
Code Authority was marked by an active and efficient administration, 

9823 



-2- 



al though at times through po-'er extra-legally assumed. Its statistical 
activities were of great value. 

Underwear and Allied Froducts ( . 

The definition of the industry contained in the code was not clear, 
resulting in problems of classification between the Industry and the 
following industries: Cotton textile, cotton garment, infants' and 
children's '"ear, undergarment and negligee, and knitted outerwear, 
These difficulties were never entirely eliminated. 

Controversies ^ith the "circular knit group 'J, due to the provision 
limiting the productive hours of knitting machines, continued throughout 
the code period, which, combined with an attitude of indifference on the 
part of the Code Authority, together with the loss ,of the effective en- 
forcement agent - mandatory labels - made effective compliance difficult. 

Knitted Outerwear ' 

Some criticism was made as to the truly representative character of 
the Code Authority, and' it was charged that elections were controlled by 
a few individuals. 'The leadership of the Code Authority was strong, ac- 
tive and efficient. In activities such as interpreting code provisions 
and acting on exemptions, the Code Authority exercised powers which the 
National Recovery Administration later ruled were beyond the Code Auth- 
ority's legitimate domain. 

Regulation and statistical knowledge of the evils in the relation- 
ship between the Industry's contractors and contract-employees, and in 
homework, were progressing nicely at the time of the Supreme Court 
decision in the Schechter case. These are real problems and inherently 
threaten the Industry's structure. Over 20,000 uomeworkers, scattered 
throughout 31 states, were a great concern to members of the industry. 

EFFECTS Pi; THE CODES ON LABOR 

Hosiery 

Employment during the depression declined to an estimated low of 
96,500, the average work week to about 42 hours, and the ^average hourly 
wage rate to about 34 cents per hour, resulting in average weekly earnings 
of $13.63. 

The code was a great benefit to labor, in abolishing child labor, 
in decreasing working hours 27 percent, in increasing employment to 
within 5 percent of the 1929 level, and in checking the trend toward 
unsocial wages bv increasing the average weekly earnings 16 percent 
to $16.11 per week. 

Underwear and Allied Products 

1 — 

Employment was increased from a depression low of 25,500 to an 



no *-\i-r 



average of 34,600 in 1934; the aver.- ;e Work week was shortened from 
40 to 3?. 9 hours; the average hourly wage rate for 1934 at 39.8 cents 
per hour was 14.6 percent higher than that oi 1932 and 71.5 percent 
higher than the low of ADril 1932 (;-.3.2 cents). Average weekly earnings 
for 1934 ($13,15) were 11.1 percent MgKer than in 1932 and 33.7 percent 
higher than the low of $9,64 in July l93i ;. largely, as a result of the 
Code in this almost unorganized "industry.' 

Knitted Oute rwear 

The principal benefit tc the : employees of the Knitted Outerwear 
Industry appears to have been a 14.6 percent shortening of the work 
week ( fr >m 41 to 35 hours), coupled" Willi a simultaneous 33,6 percent 
increase in the average hourly .wage. rate. The employment increase (6,6 
percent) due to the shorter "'ork week i ;i as slight. A partial smoothing 
out of the seasonality fluctuations in employment appears to have occurred. 
Average '"eekly earnings show slight changes from the pfe-code period, 

POST-CODE CONDITIONS 

Up until September, 1935_ attempts on the part of the. industry to 
induce its members' to present 'voluntary codes were not successful, not 
through lack of need, but because of failure to obtain assent from 
sufficient numbers of the members of the various groups. Only the 
■Wool group of the -hosiery-industry 'succeeded in ■obtaining an agreement 
but no formal approval had been obtained by this group up .until- : 
September, 1935. In the knitted outerwear industry failure was attri- 
buted t-o -the i-nert-ia -amdng-'-ir.di-vxdua'T'Taembers and to the physical 
nature of the industry. 

As of March 19, 1926 no voluntary trade practice codes had as yet 
been submitted to. the Federal Trade Practice Commission since the 
termination of the'codes as a result of the Schechter Decision. (*' 

Indications are that "7ost-Code" labor conditions are little 
changed from those of the code period, in spite of union charges of 
ch-is-eling in- the- hosiery industry and strikes occurring lately in some 
branches of the industries, however, additional data on this phase- 
are' desirable. - . .... 



' I 



(*) Statement of Mr. George kcCorkle,. Director of Trade Fractice 
• Confere-nces--of- Federal Trade Commission, 3/19/36.- 



9823 



PART A 

By 

Wirt A. Gill 

INTRODUCTION AND HISTORY OF THE INDUSTRIES' DEVELOPMENT 

And 
THEIR GENERAL CHARACTERISTICS 
CHAPTER I 
INTRODUCTION 



■ ■ ■ 



The knit goods industry is one of the most important of the textile, 
and apparel industries. Its problems are those of these industries in 
general - obsolete and idle machinery, contracting, homework, styles, and 
sea.s6nali.ty. 

Further, the industry is extremely decentralized, as may be seen 
from the following comparison:; 



Textile. Industry 



Average Value of Product 
per Plant, 19 2 9 



Cotton 
Wool 
Silk .. 
Knit Good's 



SOURCE: Census of Manufactures. 



$1,193,810 

1,133,543 

438,936 

467,125 



Thus the average knitting establishment is only about one- third the 
size of the average cotton or wool plant , and is approached in smallness 
of size only by silk mills. 

The importance of the industry from a statistical point of view can 
be seen from the 1929 census figures.. In that year, there were 1888 
establishments, which produced nearly $90Q , 000 , Don uorth of products, em- 
ployed 208,433 wage earners, and had an annual payroll of $210^714, 000'. 

There are certain distinct advantages to knitted fabrics which make 
them admirable for clothing purposes.. These may briefly be summarized 
as follows: (*) 



(*) "Knitting - its Products and Process" by J, F.. Captin 
(New York Dry Goods Economist,. 1927) 



...fi„ 



-Advantages- 
It Soft and elastic - soft to the touch - strain due to hody movements 

distributed, therefore comfortable - elasticity 
makes it durable. 

2. Absorbent - Because of looped construction absorbs moisture. 

3. Economical - Uses low ^rade loose spun yarn-process, and is 

more rapid than weaving. 

4. Adaptable - thick or thin, close or or>en. 

In all fairness, it must be stated that such fabrics have the 
following disadvantages: 

-Di sad van t age s- 

1. Looped construction allows drop-rtitching. 

2. Hard to sew. 

3. Garments sag and stretch and lose shape. 

4. Garments not dressy. 

INDUSTRIES AID CODES COVERED 

As this study deals with the knit goods industry as recognized by 
NRA codification, it is divided into the following" branches: 

HOSIJSY 

UHDERUE^ AltD ALLIED PRODUCTS 

KNITTED OUTERWEAR 

The census has a fourth classification, the manufacture of ' knit 
cloth. In this study, such a branch of the industry will not be recognized, 
since this product "is later used in further manufacture by the knitted 
outerwear and' underwear industries. 

Since ea.ch of these branches is, in effect, a distinct industry, 
after the preliminary historical sketches, they are treated under separate 
sections of the report. 



9323 



CHAPTER II 

TECHNOLOGICAL DEVELOPMENT 

Knitting . 

Knitting, one of the fundamental inventions (*), consists of forming 
a fabric or looped web (**) from yarns or threads. 

Woven fabrics have been made from the earliest times, and indica- 
tions are that the process of knitting by hand was known even at the time 
of Christ. In addition knitted products have been found in archaeological 
ruins. 

Partner historical reference to the -orocess is lacking until about 
1492, when mention is made of the Saxon word "cynttan" (***<) meaning to 
make a fabric from threads by hand. 

It apnears that the growth of the art of hand-knitting was extremely 
rapid about this time so that forty years later women in all walks of life 
throughout England and Scotland were so engaged. 

Since the earliest times, when men discovered the advantages of pro- 
tected feet, they have tried every imaginable experiment with all kinds 
of fabrics, designs and constructions (****), xhe invention of knitting 
solved the perplexing problem of how to make a garment that would fit the 
shaoe of the '.human leg ^nd foot. This is largely due to the elasticity 
of the knitted cloth which allows it to expand or contract .and thus fit 
the' contours of the body. 

The Machine . 

In 1589, Reverend William Lee invented a knitting machine (*****) 
which fundam entail;' - has not been changed since that time. The knitting 
machine is largely responsible for the industry's enormous growth. Today 
it is the very heart of the industry, as is easily seen by the following 
comparisons: In the old days, a fast hand-knitter could make one sock 
a day. Lee's invention made it possible to nroduce with the hand frame a 

(*) See "The Manufacture of Hosiery &_.£ts Problems" by E. M. Schenke 
(National Association of Hosiery Manuf cturers Hew York) 

(**) "Story of the Stocking" by 0. Osborne (published by 0. Osborne 1927) 

(***) "Knitted Fabrics" by John Chamberlain and J. H. Qui tier, (London, 
Hew York, Pitman and Sons 1919) 

(****) „ T he Story of Hosiery" by W, Taylor, (May Hosiery Mills 1931) 

(*****) "Knitted Fabrics," J, Chamberlain and J, H, Qjuitler, supra 



-7- 

few pairs per day; an operator of a set of oO automatic seamless machines 
at the present time can produce over 150 dozen pairs of half hose in a day. 
William Lee saw the possibility of knitting at one one-ration the complete 
course, instead of a single loop, by bringing all of the loops forward 
simultaneously and casting them over a new corrugated thread. After soma 
experimenting this was accomplished, and we received the hook form, or 
barbed bearded needle, which to this day is used in every country where the 
knitting industry is established. 

Although there have been no fundamental changes in the knitting 
machine since the original invention, i t has been vastly improved by altera- 
tion so as to be operated by power instead of \>y hand and refined by the 
addition of several rows of needles and by changes in needle arrangement* 
As an indication of 'the improvements in the machine, the modern full- 
fashioned machine consists of about 55,000 parts. 

Principal among these developments has been the invention of a self- 
acting latch needle : by Matthew Townsend, in England, in 1847. This needle 
consisted of a spoon-shaped latch, attached to the stem near the hook-end 
of the needle by a pin. This was the first practical alteration of Lee's 
original bearded needle. The eye of this needle was closed by this latch 
automatically in its' movement through the yarn instead of being closed by 
the pressure of a bar as in the bearded^ or spring needle. This new form 
of needle revolutionized the entire Knitting Industry, in many respects, 
since- its invention was shortly followed by the circular latch needle 
machine. \ 

The following table contains a brief chronological list of important 
knitting inventions: \ 



-8- 

Table I 

Chronological List of Important Knitting Inventions 



INVENTION 


: DATE: 


INVJOTOR 


RESIDENCE 


Original Knitting 


1589 


Wm. Lee 


Calverton, 


': Machine 






England 


Rib Machine 


1758 


Jedidiah Strutt 


Derby, 






& Wm. Uollatt. 


England 


Openwork 


1764 


Morris, Betts 
and Shaw 


England 


Knit Plush 


1767 


Hardy, David, 
Dorilla 


England 


Power Knitting 




Samuel I7ise 


England 


Machine* 








Warp Machine 


1775 


Disputed 


- 


Fleece Fabric 


1786 


George Holland 


London, 
England 


Thread Carriers 


1789 


Rose 


Nottingham, 
England 


Circular Knit 


1738 


Decroix 


France 


Machine 








Circular Loop-Wheel 


1808 


Leroy 


Paris • 


I achine 








Moveable Bladed 


1641 


Jacquin 


Troves, 


Eurr 






France 


Moveable Bladed Burr 


1847 


Fourquet 




Parallel Bars 






M 


Autonatic or Latch 


1847 


Matthew Townsend 


Leicester, 


Needle 






England 


Parallel Needle up- 


1849 


Moses Miller 


it 


right Knit Machine 








Circular Latch-Needle 


1853 


Thompson 


ii 


Knit Machine 








Large Jack- Sinker Burr 


1856 


Nopper & Foquet 


Germany 


Lamb Knit Machine 


1863 


I. W. Lamb 


U. S. 



Sources: Compiled from standard works on knitting such as "Knitted 

Fabrics" by John Chamberlain and J. H. Quilter, (pit/ian & Sons 
1919 New York and London), abridgments of British Patents, and 
standard encylopedias. 



- 9- 

CH&PTEL III 
GENERAL CHARACTERISTICS OE THE KNITTING INDUSTRIES 

OVERLAP BETWEEN TIIE TEXTILE AID THE KNITTING INDUSTRIES 

Although the knitting industries are very close to the textile 
industries in many of their processes and problems, the overlap "between 
them is not great. Table II indicates the amount of this overlap as 
measured "by the equipment owned by the concerns manufacturing both types 
of product. 

Of the concerns that are primarily knitting establishments only 
about 200 or less than 12 -oer cent perform pny tortile operations. As 
would be expected the largest overlap occurs among the knitting concerns 
which prepare their own raw materials. 9.? ;4y8: per cent persona- both .kni&binf 
and spinning operations. This group is relatively unimportant from a 
machinery standpoint as it owns only 2.1 per cent of the total spindles 
and 15.1 per cent of the total knitting machines. 

It is surprising that this group is not larger. Its smallness in- 
dicates to what a large extent the knitting industries purchase their 
raw materials as yarns already processed and ready for knitting. 

The groups of primary textile concerns who perform some knitting 
operations are even smaller as only 5 "spinning and throwing", 3 "weav- 
ing" and 25 "braiding" concerns perform some knitting operations. As 
evidence of the relative unimportance of these orimary textile concerns 
which in any way affect the knitting industries, the above groups combined 
own only about 1 oer cent of the total knitting machinery. 

The groups that perform three operations are also small, only 11 
concerns "weaving, knitting and spinning"; only 2 "braiding, knitting and 
spinning"; and only 3 "knitting, weaving and braiding"; and only 9 "knit- 
ting, weaving and spinning". These groups own an extremely small part of 
the total knitting equipment. 

OVERLAP BETWEEN THE THREE KNITTING INDUSTRIES 

Table III, shows the relative importance of the various branches or 
separate knitting industries, and the degree of overlap between these 
industries as measured by their knitting equipment. 

Hosiery and outerwear are of almost equal importance in their pro- 
portions of the total knit goods industry (roughly 37 oer cent each), but 
the hosiery industry is far more important in machinery inventory, as it 
has nearly 64 -oer cent of the total knitting equipment. This proportion 
would probably be even greater if this tabulation had included "ribbers" 
among the knitting equipment. 

Underwear and knit cloth are a small portion of the knit goods in- 
dustry both in numbers (5.4 and 3.9*.per cent respectively) and in their 
ownership of equipment (4.9 and 2.7?o respectively). 

9823 



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The overlap between the various branches of the industry, as a result 
of the uroduction of products in other branches, does not appear to be 
very great, the most important case oc r ' iere concerns manufacture 
both ovter-'err and underwear. As would be expected, a product like knit 
cloth, which is the rrv/ mat rial for further processing into garments, 
overlaps into both the outer and under garnent fields, many concerns manu- 
facturing their own knit cloth. Instances where manufacturers engage in 
making three -oroducts are relatively unimportant, less than 1 per cent 
of the concerns in each group owning not more than 2 ">ev cent of the in- 
dustry's equipment being so engaged. 

This tabulation and the facts revealed "by it indicate that the pro- 
blem of jurisdictional conflict due to inadequate and overlaying code 
definition should not "orove wholly incapable of solution, as far as these 
industries are concerned, and makes one binder at the great amount of 
trouble and annoyance it created in 33RA code administration. (See Chapter 
V, Fart C). Of course the "rugged individualism" and opposition to re- 
gulation on the part of some business men partly exolain such difficulties. 

HA" MATERIALS 

Further relationship between the textile and the knitting industries 
are seen in raw material purchases. 

The knitting industries are marked by the fact that they do not make 
their own yarns from raw fibres, but buy them in the o"oen market. The 
textile industries, on the other hand, although they buy large quantities 
of yarns, use a greater proportion of raw fibres. These facts mean that 
the knitting industries are the customers of the textile industries for 
raw materials. 

In this respect, the knitting industries are a very important user 
of yarns, roughly 40 : o of the total United States consumption of purchased 
yarns being consumed by them during the period 1925 through 1931. 

Table IV, shows the relative importance of the 'mitting industries 
consumption of purchased yarns by important fibres. 

In 1931, over one— half of the total consumption of silk yp.rns; over 
40To of the rayon yarns; over 40fi of the cotton yarns; nearly 37fi of the 
wool yarns; and nearly 30fo of the "other yarns" were consumed by the knit- 
ting industries. 

This table also shows consumntion of purchased yarns for other census 
years back to 1925. Uote the increasing volume of novelty or "other yarns" 
consumed by the knitting industries. 

As a consumer of raw fibres the v nitting industries are not so im- 
portant, only about 2 per cent of the total raw fibre consumption being 
consumed by them. Only in raw silk consunrotion do the knitting industries 
take a sizeable amount of the total consumption. Roughly 15^ of the raw 
silk fibre consumed in the United States is consumed in the knitting in- 
dustries, most of this being \ised in hosiery manufacturing. (See Table V). 



9823 



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-lo- 

TABLE IV 
C LiSED YaEKS C i 1 ED iBYTHE KHIEPIMO PTDUSTRIES 



Thousands of Pounds 

Total Consumption 

' : . S. oi tiie 

Consumption Xnit Goods Industry 



Cotton 


344,058 


Wool 


125,634 


Silk 


25,221 


Rayon 


133,282 


Other Yarns 


17,385 


♦Total 


651,113 


1929 




Cotton 


480,954 


Wool 


141,993 


Silk 


26,039 


Rayon 


128,259 


Other Yarns 


20,732 


*Total 


798,507 


1927 




Cotton 


481,399 


Wool 


138,2:14 


Silk 


39 , 531 


Rayon 


89,645 


Other Yarns 


21,651 


* Total 


770,450 


1925 




Cotton 


484,720 


Wool 


141 , 637 


Silk 


35,689 


Rayon 


57,119 


Other Yarns 


11 , 300 



Per cent of Total 
Consumed by the 
Knit Goods Industry 



30.435 



138,714 

46,431 

12,996 

55,739 

5,237 

259,177 



190,356 

45,435 

13,207 

56,368 

3,715 

309,038 



210,680 

43,515 

11,537 

36,581 

2,425 

304,738 



222,943 

44,990 

8,790 

23,680 

791 

501.19 4 



40.3 
36.9 
51.5 
40.3 
29.6 

39.8 



39.6 
32.0 
50.7 
43.9 
17.9 



38.7 



43.8 
31.5 
29.2 
40 : 8' 
11.2 

39.6 



46.0 
31.8 
24.6 
41.5 
.7 

41.2 



* Hemp, Linen and i.iohair omitted 
Source: Census of Manufactures 



9823 



TABLE V 
HAW EIESS COITSUIIPTIOIJ OF THE KITIT GOODS INDUSTRY 
(Thousands of Pounds) 





Total 


Consunrotion 


Per cent of Total 




IT. S. 


of tlie 


Consumed by the 


1931 


Consumption 


Knit Goods Industry 


Knit Goods Industry 


Cotton 


2,759,091 


56,690 


2.1 


Wool 


451,611 


2,980 


.7 


Silk . 


56,512 


8,967 


15.9 


*Total 


5,267,214 


68,637 


2.1 


1929 








Cotton 


3,635,322 


71,655 


2.0 


Wool 


533,377 


6,599 


1.3 


Silk ■ 


64,215 


9,484 


14.9 


*Total 


4,232,969 


87,738 


2.1 


1927 . 








Cotton 


3,765,409 


66,772 


1.8 


Wool 


544,901 


4,909 


.9 


Silk 


47,755 


8,023 


16.8 


* Total 


4,358,065 


79,587 


1.8 


1925 








Cotton 


3,232,790 


66,068 


2.0 


Wool 


562,447 


6^,223 


1.1 


Silk . 


43,058 


4,921 


11.4 


♦Total 


3,838,295 


77,212 


2.0 



* Hemp, Linen and Mohair omitted 
Source: Census of Manufactures 



9823 



3l 



9323 



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-17- 

Table VI, shorn the relative importance of the various raw materials 
consumed by the knitting industries. Cotton is by far the most important 
raw material ased by these industries, accounting for 60*0 by weight of the 
total raw material- ''consumption of the knitting industries in 1931. In 
previous yerrs it wad a far more important raw Material, in 1919 account- 
ing for 88.2$ of the total raw material consumption. Cottons displacement 
as a raw material is largely due to the rapid rise of rayon as a raw 
material. In 1919 this material amounted to only 1.2$ of the total raw 
materials consumed by the Icnitting industries, by 1931 it amounted to 17$ 
of the total. This increase in importance of rayon is largely due to its 
popularity in underwear manufacture and to small amounts being used as a 
low nriced substitute for silk in hosiery manufacture. 

Attention is called to the fact tn- t total raw material consumption 
of the knitting industries by weight, has remained roughly constant through- 
out the. years 1925 to 1929, and did not materially decline in the depres- 
sion year of 1931. This in spite of the fact that there is a decided trend 
toward lighter weight garments, especially in underwear. 

SIZE OF ESTABLISHMENTS, BY KNITTING- iACIHiES 

An inrportant characteristic of the knitting industries is the pre- 
ponderance of small sized concerns. As pointed out in the first chapter, 
the knitting industry is extremely decentralized when measured by the 
average annual value of product per plant. A further measure of the size 
of -knitting establishments is shown by the following table in which the 
knitting industries a.re classified by number of knitting machines per 
establishment. 

■Note that over 60$ of the concerns of the entire industry are small 
in size (less than 50 machines per plant) and nearly 42 per cent are ex- 
tremely small. In smite of the large number of small concerns, they own 
only a snail proportion of the industry's total equipment, less than 13 per 
t cent being owned by group composed of mills with less than 50 machines each. 

Smallness of sijze of establishments appears to be characteristic 
not only of the entire industry but of each of its branches. 

. Over 50 per cent of the mills in each Industry are small in size 
(less than 50 machines per concern). The only noteworthy difference ap- 
pears in the hosiery industry, where, thoxigh over' half the industry is made 
up of small concerns, there is, on the other hand, an exceedingly small 
group (less than 2 per cent) of exceptionally large mills with over 1,000 
machines each, which own over 19.3 ner cent oi the total knitting equip- 
ment of the hosiery industry. (See Table VII.) 

plant location 

The knitting industry is not one in which firms have a large number 
of plants widely scattered through ut the country. According to a tabula- 
tion of the concerns in "Davidson's Knit Goods Trade" (1935 Edition) 98.6 
per cent of the mills have their plants in only one state, only 1.3 per 
cent have mills in 2 states. (See Table VIIl) 



9823 



-18- 

Examining Table IX, it is seen that roughly 5 per cent of the con- 
cerns in the industry operate more than one plant. Though in numbers this 
proportion is small this group potentially could control a sizeable amount 
of the industry's production since they om nearly 22 per cent of the in- 
dustry's knitting equipment.' 

The importance of these large concerns is particularly noticeable in 
the hosiery industry. 

EIHAIICIAL DATA 

The accompanying important financial data for the knit goods indxistry 
is taken from compilations made from published reports and tabulations 
sheets of the Bureau of Internal .Revenue for the period 1926 to 1933, 
While it is impossible to thoroughly analyze this data under the limitations 
under which this study is made, certain salient facts are worth mentioning. 

The number of concerns reporting annually to the bureau remained prac- 
tically constant at around 1200 throughout the period. From 1927 through 
1929, over 700 of this number reported a net income. Beginning in 1930 the 
number reporting net income declined sharply to 512 in 1931. Even in the 
depression year of 1932 nearly 30 r ! concerns showed a net profit. In 1933, 
considerable improvement is seen with 580 concerns showing a net r>rofit. 

Table X, shows a comparison between knit good manufacturing and all 
manufacturing; it is seen that in percentage of members of each industry 
with a net income, about the same proportion of the both industries made a 
profit for the period 1927 through 1929. During the depression a smaller 
proportion of the knit goods industry made a profit. Thus for 1927 through 
1929 about 60$ of the concerns in both all manufacturing and knit goods 
manufacturing had a profit. 

In 1930, although 66.3$ of all manufacturing concerns had a profit, 
only 40.7$ of the knit goods concerns had a profit. Conditions were even 
worse in 1932, in which year 43$ of all manufacturing concerns showed a 
profit, while only one-fourth of the !mit goods concerns showed a profit. 

Recovery apparently occurred more rapidly in all manufacturing than 
in knit goods manufacturing. In 1933; 66.5$ of all manufacturing concerns 
operated profitably while only 45.2$ of knitting concerns so operated. 



9823 



•1 - 



TABLE VIII 



Preliminary Draft 



OITT T NG INDUSTRY 

Number of Knitting Concerns Grouped. According to Nunber of States In 
'.'l:ich Their Hills are Located — 1935. 



Number of States in TThich 
Tills of Individual Concerns 
Are Located 



Concerns Having "ills in 
Specified Number of States 
Nunber Percent of 

L, Total 



Total Number of Concerns 




1,758 . : 100.0 


Total Number of Hills 




1,868 . : 


One only 




1,733 : : 98.6 


Two ; 




23 ." : 1.3 


Three 




2 .' : 0.1 


SOURCE: Compiled by Industry Rep< 


>rt 


ing Unit, Division of Review 

m _^_n -irT7tr fi'a;ij 



from, "Davison's Knit Goods Trade) 1 1935 Edition. 



9823 



Preliminary Draft 



-20- 

TABLE IX 
KNITTI-NG-IIIDUSEBT 



Number of Knitting Concerns Grouped According to Number of I Tills Owned 

- 3 1935 





















Total Knitt 


ing 


Machines 




Concerns 


Owning 


in Concerns 


Owning ' 




Specified Number 


Specified Numb 


sr of 


Number of "'ills 


of i; 


ills 


Hills 






Owned by Individual 


Number 


Percent 
of : 


Hum per of 
Knitting 




Percent of 


Concerns 










Total 


Ha chines 




Total, 


Total Number of 












Concerns \ 


a/1,758 


100.0 


152,145 




100.0 ' 


Total Number of 


. 1,864 


- 


- 




- 


Mills 












One Only 


b/1,681 


95.6 


118,941 




78.2 


Two 


54 


3.1- 


18,375 




12.1 


Three 


£/ 18 


1.0 


6,294 




4.1 


Four 


• ' 4 


0.2 


6,593 




4.3 


Five 


1 


0.1 


1,942 




1.3 



SOURCE: Compiled by Industry Reporting Unit, Division of Review, 
from "Davison's Knit Goods Trade 1935 Edition. 

Note; a/ Includes 89 concerns which do not report knit machines 
•5/ 11 37 it 11 ti 11 ll II I! 

c / 11 g " " " " " " " 



9823 



- ]> .. 



Year 



TABLE X .., 

PIE CENT OF COFCE] S ' RTIiTG To 'jBtfrtEAU 01 ilTTEi 

REVEi.TJl THAT SI- T CT"V A HHE PROFIT,.AFTER TAX7-S 



All I'anufacturin- 



Knit Goods '"anufacturing ; 



1326 
1927 
1928' 
1929 
1930 
1931 
1932 
1933 



61.5 
60 "l 
61.1 
61.0 
66.3 
47'. 6 
43.0 
66.5 



54..0 
62.2 
62.8 
61 .:1 

.40.7 
37.7 
'25.3 
45.2 



,'.;• r 



Source: Bureau of Internal Revenue, tabulation sheets nad. published re- 
ports - also in IIRA Files 



The combined figures for the entire industry show a compiled net 
profit after taxes of well over $21 , 000 , 000 for the -period 1926 through 
1929, with a net profit in some years (1928) of iver $30,000,000. 

From 1930 through 1932 the combined figures for the entire industry 
show a rather large deficit, ranging from over $15,808,000 in 1930, to a 
high of$26,147,000 in 1932. 

By 1933, the industry had affected a partial recovery, the combined 
figures for the entire industry showing a net profit of $4,381,000. 

It is interesting to note that the knit roods industry paid combined 
dividends (cash and stock) during this period, reaching a maximum of over 
$25,000,000 in 1929, declining sharply to around $5,000,000 for 1932 and :. 
1933. 

Also interesting is the fact thr t the industry's compensation-paid 
officers in no year was less than $12,000,000, and over $17,000,000 an- 
nually for the years 1928, 1929 and 1930. 

Table XI, shows a comparison between the return on investment in 
knit goods industry and all manufacturing. In this comparison "orierpting 
net income", roughly represents income from the knitting or manufacturing 
operations since profit or deficit from sales of capital assets are de- 
ducted from statutory net income. In this tabulation the net worth of 
the knit goods industry was estimated for the period 1926 through 1929. 

From this tabulation it appears that return on investment in the 
knit goods industry for the -orosperous years 1926 through 1929 was slightly 
less than the return on all manufacturing investment. It is likely tha.t 



9823 



-22* 

the assumed net "orth is high for the years 1926 and 1927 so that return 
probably was greater in these years, but even so it is doubtful if it was 
greater than in all manufacturing* 

The depression as measured by deficits began sooner in the knit 
goods industry than in all manufacturing. In 1930 the knit goods industry 
showed a negative return on investment of nearly 3.5$ while all manufactur-r 
ing showed a positive return of 2.25$. In both the years 1931 and 1932 
the deficits were proportionately greater in knit goods manufacture than 
in all manufacturing, the ratio of operating net deficit' to net worth being- 
5.6 and -6.5$ for these respective years in knit goods compared with only 
-1.24 and -3,55$ for all manufacturing. In 1933 both industries showed a 
profit, with a slightly greater ratio of operating net income to net worth 
in the knit goods industry. 

Gross sales which approximated $700,000,000 annually from 1926 through 
1930, declined sharply to $542,156,000 in 1931 and to a low of $416,461,000 
in 1932, recovering slightly %o $453,485,000* in 1933. 



9823 



tallz xi 

RELATIVE BETUHE E I1W 1ST "' T - ALL LiAHL?ACT!JRI>TG 
A1ID KNIT GO TS r.&ilUFACTURIlIG - 1926 - 1933. 
P'il lions of Dollars) 









Al 1 i lanuf actur in ?: 






Knit Goods 








V 




Rat ior Operating^ 






5/ 


Ratio 


Operating 




fi/ 


or 


erating 


Fet Income 


a/ 




Operating 


Net Income 




Net 




llet 


to 


Fet 




net 




to 


Year 


Worth 


Income 


Tet Uorth 


"Torth 


Income 




: T et ^Torth 










Percent 










Percent 


1933 


43,339 




450' 


1.04 = 


358, 


9 


5.5 




1.53 


1932 


43,975 


- 


1,553 


- 3.55 


352. 





-22.7 




- 6.46 


1931 


47,638 ' 


- 


577 


- 1.24 


401. 


3 


-22.4 




- 5.60 


1930 


52,121 




1,172 


2.25 


458. 


5 


-16.0 




- 3.49 


1929 


52.692 e/ 




4,247 


• 8.04 


fl/ 




^y . o 


c/ 


6.37 


1928 


50,020 ej 




3,779 


7.52 


a/ 




35.0 


c/ 


7. .17 


1927 


48,047 f/ 




3,087 


6.44 


. 5/ 




31 . 2 


2/ 


6.5 


1926 


46,272 f/ 




3,708 


8.03 


a/ 




25.5 


c/ 


5.55 



a/ iTet Worth = Preferred plus donraon capital stock plus surplus and 
undivided profits. 

b/ Operating llet Income - Statutory net income minus orofit or deficit 

from sale of capital assets. 

c/ Estimated assuming a constant net rrorth - 1926 through 1929 of $460,000,900 

♦ 

d/ Hot available 

e/ Loss from sale of capital 'assets' included rith the deductions 

f/ Profits and loss from sales of capital a.ssets not segregated. 

g/ A nega.tive sign indicates a deficit. 

Source: Tabulation sheets end., published reports, Bureau of Internal Revenue, 
also in ERA Files 



5823 



-»24- 

PART 3: THE HOSIERY INDUSTRY 

By 

Wirt A. Gill 

CHAPTER I 

THE HOSIERY INDUSTRY DESCRIBED (*) 



DEFINITION OF THE INDUSTRY 

By amended definition - Article II, of Section 1 - the Code of Fair 
Competition for the hosiery industry, states: 

"The term 'hosiery industry', as used herein, includes- 
the 'manufacturing, finishing, repairing, selling, and/or 
distributing by manufacturers at wholesale or retail, or 
distributing by selling agents of hosiery " 

The original definition in the code, approved August 26, 1933, 
covered wholesalers. On September 4, 1933, a wholesalers code was 
approved by the Administration, afterwards .amendment number 3 was 
unanimously adopted by a code authority meeting on March 4—8, 1934, 
and approved by the Administration on June 7, 1934; redistributors were 
eliminated from the Code of the hosiety industry. 

PRODUCTS 

This excellent definition is for a single product. There are, 
however, two distinct branches within the industry differing mainly by 
type of machine ured and methods of manufacture, namely: 

1. Full-fashioned. 

2. Seamless. 

The first of these products is knit in a flat piece gradually 
narrowed or fashioned by dropping or adding stitches to fit the shape 
of the leg. After knitting, the flat piece is seamed up the back, to 
form the stocking. This type of product is usually made of silk and 
has the female buyers' preference largely because of better fit and 
appearance. It also leads in value, but in quantity in .amounts to only 
half the number of dozens of seamless produced. 

The seamless stocking is knit around and around to form a tube. 
Subsidiary types of this product are the infants and childrens ribbed 
hose, golfl socks, anklets and work socks or bundle goods. This product 



(*) Acknowledgment is here made to Mr. J. B. Freund who -orepared many 
of the work sheets from which Part B, "The 'losiery Industry," was 
written. 

9823 



is preferred by men because of its greater comfort. (*) It is made of 
silk, cotton (lisle, mercerized or plain), ,700k, rayon, and mixtures of 
any of the above. 

METHOD oF LJAKUTACTimS 

Preliminary Process! ng 

Before yarns are knit into hosiery^ it is necessary to give them a 
preliminary processing (**) to make them soft and pliable so that they 
will run freely and smoothly through the knitting machines. This pro- . 
cessing varies for each ty:e of yarn, depending upon the fibre. In 
general, it consists of soaking in a bath of lubricant. Yarns are pro- 
cessed as follows: 

Silk: Raw silk as received in this country, in the form of skeins, 
is stiff and unworkable. It is first softened by soaking in a heated 
bath, composed of a mixture. of soap, water and oil for six or eight hours. 
Excess solution is then removed "oy centrifuging, after which the silk is 
dried and wound onto spools. 

The silk is next "thrown" (***). The term "throwing" is derived 
from the AngiC-Saxon word "thrawan", meaning to "twist". Several strands 
are often twisted together to form a single yarn. Throwing accomplishes 
two purposes, it adds strength to the yarn and it changes its lustre. The 
twist may vary from 3 to 75 turns per inch, depending upon the type of 
product. Low twists produce ;ustrous fabrics., high twists are used for 
crepes and dull finishes. The most common hosiery twist is called "tram", 
in which several strands are combined in a yarn usually having 5 turns 
per inch. Lately, however, due to the popularity among women of sheer 
dull finished stockings, much yarn is being thrown with the higher organzine, 
grenadine and georgette twists. 

After throwing, the yam i si. wound onto cones or, bobbins for use on 
knitting machines, .. \... 

Rayon: Rayon yarns may be bought either on cones ready for xxse, or 
in skeins. If bought in skeins it must be softened by oil treatment and 
thrown in much the sane manner that silk is processed. 

Cotton: Ordinary cotton yarn is not usually processed before knitting. 
However, mercerized and lisle yarns are much used in hosiery manufacture, 
Mercerizat'i'on consists of treating the yarn, under .tension, with an alkali 
or lye solution. This results in a ; stronger and more lustrous yarn, which 
dyes better than ordinary cotton. Lisle thread is made from a long fibre 
cotton, tightly twisted and treated with gas. It may also be mercerized. 



(*) "The Story of Hosiery", by Wesley -Taylor, (-May Hosiery Mills 1931) 

(**) "The manufacture of Hosiers' and Its Problems" by E. M«. Schenke 

(***) MA Evidence Study S!b» 39 Division of Review - "The Throwing In- 
dustry" by W. A. Gill. 

9323 



-26- 

Thete two types of yarns are sometimes oil-treated to soften them 
for knitting purposes* 

Wool: Wool fibres may be mg.de into two types of yarns — woolen 
and worsted. In woolen yarns the fibres lie in a helter-skelter arrange- 
ment producing a soft oliable yarn which knits well. In the worsted 
yarns the wool is first combed to set all the fibres lieing parallel, 
then it is given a hard twist, producing a harsh stiff yarn. These 
yarns, therefore, knit better if softened by an oil or oil-water emulsion 
treatment. Wool yarns are also, oftentimes, dyed before knitting. 

Mixed: Mixed yarns are composed of several fibres mixed or twisted 
together. When undyed yarns are used, they are usually oil-softened be- 
fore knitting. 

Knitting: The processed yarns are usually wound on cones or bobbins. 
Fro'm these it is fed to the knitting machines. The modern knitting 
machine has almost unbelievable capacity. One operator tends an 18 to 
24 section full-fashioned machine which knits 18 to 24 stockings simul- 
taneously. Seamless hosiery is knit on machines with a circular needly 
cylinder, producing one stocking at a time. Seamless stockings are knit 
from top to ankle, at which point the machine is geared to continue only 
one half of the needles in such a manner as to turn the heel.. After 
that, a*ll needles again become operative to knit the tubular foot. At 
the toe, the same operation is repeated but on the old fashioned machines 
the toe is left open and closed later by an operation called "looping" 
on a special machine. There are automatic machines which complete the 
knitting in one operation, without the looping. 

Washing: The hosiery is next thoroughly washed to remove the natural 
gum, oil and dirt accumulated in knitting. After washing, inventory goods 
that are not to be shipped immediately are often stored in the "grey" or 
undyed condition. 

Dyeing: Some hosiery yarns, especially woolen goods, a.re dyed be- 
fore knitting. In general, however, the dyeing is done on the finished 
product. This is generally performed by immersion of the product contained 
in nets into vats of dyes. 

Boarding: After dyeing, hosiery is dried and shaped by placing it 
upon forms (boards) which are heated. 

Finishing: Stockings are finally inspected for defects, matched 
into pairs for color and size, stamped r.nd ticketed and 'oa.cked for ship- 
ment. It takes 4 to 5 weeks to make a pair of stockings, from the beginnig 
of the process to packaging, 

SIZE OF THE INDUSTRY 

The importance Of the Hosiery Industry from a statistical point of 
view is indicated by Table I which shows important Census data for the 
period 1923 to 1933, 

In 1923 there were 721 establishments employing nearly 97,000 wage 

9823 



- .- 



earners at an average payroll of $78,762,000 and producing $390,273,000 
worth of product. 

By 1329 the hosiery, as a manufacturing Industry, ranked within the 
first 20 in importance in the United States, at to number employed and 
value of its products (*). In that yesar, according to the U. S. Census 
of Manufactures, it employed an average of 129,500 persons at an annual 
payroll of $140,079,00?), and produced $528,700,00 worth of goods. It has 
been estimated that the invested capital in 1930 amounted to $600,000,000 
(**) This figure is undoubtedly an over estimate. In this connection 
attention is called to Chapter III of Part A indicating a net north of 
less than $450,000,000 ever since 1930, for the entire Knit Goods In- 
dustry. 

In 1953 according to Census figures, there were 614 establishments 
employing 116,000 workers at an annual payroll of $82,959,000. The 
value of product for 1333 has declined to $263,710,000 or to about one 
half of the 1929 level. 

In December, 1934, according to the Code Authority, there were 634 
companies in the industry operating over 800 plants or establishments, 
employing 137,000 workers at an annual payroll of $108,000,000, some 
288 of these plants were engaged principally in the manufacture of full- 
fashioned and 565 plants were making principally the seamless product 
at that time. 

In 1934 according to Code Authority records, 103,900,^00 dozen 
pairs of hosiery were oroduced valued at $290,000,000. 

SIZE OF ESTABLISHMENTS - BY HUHBfiR OF EMPLOYEES PES ESTABLISHMENT 

Although complete statistical data regarding the size of the 
establishments in the hosiery industry are not available, it is apparent 
that small units predominate. (***) 

Establishments vary in sire from those with a few thousand dollars 
invested, owing five cr ten knitting machines and employing less than 
fifty workers, to those many million dollar companies with thousands of 
machines, employing as high as eight thousand workers. 

Even though they do not employ a. large percentage of the industry's 
total wage earners, we find a relatively large proportion of the industry 
to be small-sized establishments. Referring to Table II, it is seen 
that over 11 percent of the establishments in the industry are extremely 
small, having less than twenty employees for establishment and 30.3 per- 
cent have less than fifty employees per establishment. In an industry 
where some establishments have thousands of workers, any mill with one 
hundred employees should be considered small in size. This fact is 
further illustrated by Table II, where it is seen that about one-half 



(*) NPA Evidence Study Division of Review - "The Hosiery Industry" - 
by W. C. Henderson. 

(**) Transcript of Public Hearing, July 25, 1933. NSA files. 

(***) Preliminary Draft - Code Administration Study, Division of Review on 
9825 the Hosiery Industry by W. H. Dillingham. 






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• • 3 • 


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o\ 


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€ 


SSi* 


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t\J 


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o\ 


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W«< O 




H 


H 



eg 

in 

o\ 
cu 



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r- h 
k\ o\ 



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"at ^o| 



•29- 



of the concerns in the industry ' : : i t I i than one hundred employees 
each, employ less than 12 percent of tar total r 'cr':ers in the industry. 

Slightly over one-half the establishments in the hosiery industry, 
on the other hand, with more than one hundred wage earners e-ch, em- 
ployed the hulk of the industry's workers. This group of establishments 
in 1933 employed 83.4 percent of fie total wage earners, paid 88.9 ; 
percent of the total wages, and produced 87.8 percent of the total value 
of product. 

GEOGRAPHICAL LOCATION 

The plants of the Hosiery Industry are scattered throughout thirty- 
one states. However, they are highly concentrated in Pennsylvania, where 
two hundred and fourteen companies operate two hundred and fifty-seven . 
plants and in North Carolina where one hundred and si:::ty five companies 
operate one hundred and ninety five plants. The following table shows 
the geographical distribution of the industry: 



9823 



30 



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-31- 

TABLE III 

HOLDER 0? COMPiillLS AKD PLAtTTS 
Bv'SEAT-iS — DECEiliCR .1934 





. 






Companies 


: Plants 


Total 


634 


: 800 


Pennsylvania : 


214 


: 257 


Delaware 


1 


: 1 


lieu Jersey : 


30 


31 


ITew York : 


9 


: 13 • 


Connecticut : 


3 


: 3 


Massrchusetts : 


9 


: 9 


llev Hampshire 


9 


: 11 


Rhode Island 


4. 


: 4 


Maine 


1 


: 1 


Vermont 


2 


: 2 


Alabama -• : 


D 


: 6 


Georgia 


23 


30 


Eentuclsy - • 


5 


: . 6 


Louisiana 


g 


: . "2 


Maryland 


3 


4 


Mississippi 


3 


: 3> 


South Carolina 


3 


7 


Tennessee 


45 


: 62 


Iforth Carolina , 


1S5 


: 195 


Texas 


1 


: 1 


Virginia 


'•' 13 


: 17 


Uest Virginia 








Calif ormia 


4 


: 5 


Illinois 


- 8 ' . 


: 9 


Indiana 


8 


: 8 


Iowa 


v' .1, - •. 


\ '.-.'% 


Michigan 


7 


Minnesota 


4 


: ■ 5 


Missouri 


1 


: 1 


Ohio 


S 


: 6 


Uisconsin 


: 11 


: 17 


Mills in more 






than "one state 


: 24 


: 76 



Source: 



9323 



Code Authority Records, Peoruary, 1934. 

Refer also L~RA Evidence study, Division of Review 

"TIE HOSIERY IEDUSTRY" — oy IT. C. Henderson. 



-32- ■ - 

SIZE OF TOffiJ 0? LOCATIOiJ 

The hosier;' - industry is essentially a small-town enterprise; over 
one-half of the establishments are located in torms of less than 10,000 
population and 23 -per cent in towns of less than 2500 copulation. These 
small-town establishments (less than 10,000 population) employ nearly 
44 per cent of the rage earners and paid 40.3 per cent of the total 
na r ;es paid by the industry in 1933. 

These small-town establishments in 1933 -produced nearly 40 per cent 
of the total value of product «. •• ■• 

On the other hand, a sizeable portion of the industry is located in 
large cities, 16.5 per cent of the establishments employing 16 per cent 
of the wage earners, paying '21 per cent of the total payroll, and pro- 
ducing nearly 19 per cent of the value of product (1933) were located in 
cities with over 500,000 population. The above facts are easily seen 
from Table IV, which shows essential data for the hosiery industry for 
1933 classified by size of city of plant location. : 

Although the reasons for the industry locating in small towns are 
not definitely known, it is.' probable that these locations furnished an 
abundance of cheap, relatively unskilled labor. Since large cities are' 
usually strongholds of organized labor, the higher wages -prevailing in 
these localities could easily be avoided by moving to the small towns. 
Many firms were encouraged by Chambers of Commerce which offered induce- 
ments such as reduced or eliminated taxes and rent free properties to 
locate in small towns. '. 

.' MACHINERY : 

Ho more statements as. to the number and location of plants in an 
industry give a complete picture unless the volume and capacity of the > 
productive machinery in the plants is known. In the following discussion, 
the equipment in the two main branches of the industry is treated. 



S£Afc.LJ2SS BRANCH 



Thf re wpfe 129,500 knitting machines in place in 
industry on January 1, 1934. (*) 



this branch of the 



The distribution of the majority of this equipment by type of product 
is shown by the following, table: 



(*) "Knitting Equipment] of the Seamless Hosiery Industry, January 1, 1934" 
by &. TJ. Taylor and'G. A. Dash, Jr., (industry Research Dept. Uharton 
School of Finance and Conmerce, U. of Pa. Philadelphia, Pa.) 



9823 






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^1 



EABLE V 

DISTRIBUTION OF SEAMLESS KNITTI1TG EQUIPMENT 
CLASSIFIED BY TYPE OF GOODS IiMTUFACTURED JAliUARY 1, 1S34 



Type of Goods Manufactured 




Number of 
Machines 


Per Cent 


Men's Half-Kose 




43,590 


37.9 


Women's Hosiery 




37,718 


24.1 


Men's and Boys' Golf Kose 




: 4,867 


4 jo2 


Infants' and Children's Hosiery, 






and All Types of Anklets 




10,880 


9.5 


Cotton and Uoolen Bundle Goods 


: 4,430 


3.9 


fibbed Goods 




: 17,481 


15.2 


Ribbers 


8,934 






Footers 


7,602 






Automatics 


945 






Miscellaneous (*) 




: 5.988 


5.2 


Total 


: 114,954 


100.0 



(*) This classification is made uo of: 



(1) Machinery not possible to classify; 

(2) Machinery used to manufacture several different kinds of 
hosiery but not detailed by the reporting company; and 

(o) Hon-de tailed machinery data received from authoritative 
sources on comoanies that did not report. 



SOURCE: Knitting Equipment of the Seamless Hosiery Industry, January 

1, 1934, ~o- G. XI. Taylor and G. A. Dash, Jr. (industry Research 
Department Wharton School of Finance and Commerce, U. of Fa., 
Philadelphia,, Pa. 



This table shows the importance of the manufacture of men's hose 
in the seamless branch of the industry, nearl3 r 38 per cent of the seam- 
less equipment being devoted to its manufacture. Next in importance in 
the seamless branch is the manufacture of women's hosiery, 24.1 per cent 
of the equipment being so used. 

Geogra ideally this branch of the industry shows high concentration 
in the South, (*) over 64 per cent of the seamless equipment being in 

(*) "Knitting Equipment of the Seamless Hosiery Industry, January 1, 
1934" by G. 17. Taylor and G. A. Dash, Jr. (industry Research Dept. 
Wharton School of Finance and Commerce, U. of Pa. Philadelphia, Pa.) 



9823 



t 



-35- 



that area, with high concentrations of 26 and 17.3 per cent of the 

equipment in Horth Carolina and. Tenr.e s see res ^ectivel.y, these states 
being apiroached only by Pen.tsylvanir with 15.8 -per cent of the total. 

The following table shows the geographical distribution of this 
equipment. 

TABLE* VI 

PERCENTAGE DISTRIDUTIOir OE SEAi.iLSSS iailTTIIiG EQJJIPliEITT, 
CLASSIFIED 3Y PRODUCING AREAS JANUARY 1, 1934 



Producing Area 




Per Cent 


Pennsylvania 


, 


16,8 


Other Horth (*) 




5.0 


West 




13.9 


North Carolina 




26.0 


Tennessee • 




17.3 


Georgia 




7.5 


Other South (**) 




13.5 




Total. 


lOOoO 



(*) Including New York, New Jersey, and the Hew England states 

(**) Including Alabama, Kentucky, Louisiana, Maryland, Mississippi, 
South Carolina, Texas, Virginia and "Jest Virginia. 

SOURCE: Knitting Equipment of the Seamless- Hosiery Industry, 

January 1, 1934 by G. W. Taylor and G. A. Lasii, Jr. Supra. 



The following from Taylor & Dash's book (*) describes the different 
types of seamless hosiery machines: 

"1. AUTOMATIC — those circular machines which knit 

the entire stocking from the ton (ribbed top or 
welt) to the toe. 

"2. TRANSFER — 'those circular machines to which a 

ribbed too or a welt is transferred after being 
knit on a rib machine, the transfer machine com- 
pleting the remainder of the stocking. 



(*) "Knitting Equipment of the Seamless Hosiery Industry, January 

1, 1934" by C-. W. Taylor and G. A. Dash, Jr. (industry Research 
Department, Wharton School of Finance and Commerce, U. of Pa., 
Philadelphia, Pa.) 



9823 



-36- 



"3. STRING UORK — those circular machines which knit 

the leg and/ or the foot of the stocking in a con- 
tinuous string. vUhen somen's hose are knit in 
this manner the fabric at the tope of the leg is 
folded inward and sewed to make a welt or hen, • 
Children's hose, anklets, golf hose, and certain 
types of half hose are often knit by this process 
and are completed by sewing p. ribbed cuff or top 
onto the string work product. 

"4. FLAT BED— those machines which do not contain a 

needle cylinder but have two flat inverted V-needle 
beds on which a seamless hose is knit. ' This type 
of hose is started rr ith a closed toe and is knit 
toward the- top. 3y the addition of needles as the 
knitting proceeds, the -iroduct is shaoecl or fash- 
' ioned. 

"5. RIT3SD GOODS — divided into these three parts: 
■ (a,) Ribber'e, those rib machines used for ribbed 
goods knitting and not as auxiliary equipment in 
other line.s; (b) Footers, those knitting machines 
used exclusively for jutting the feet on the ribbed 
- goods, and (c) Automatics, those knitting machines , 
on iihich the complete ribbed stocking is knit. 

"6. MISCELLANEOUS — those machines for which detailed 
information could not be secured, as well as liar- 
tain few machines which it is impossible to classify 
under any simple grouping." 

■The following table .shows the number of each type of seamless hosiery 
machines: 



9823 



-37- 



TABLE VII 



DISTRIBUTION OF SEAMLESS KNITTING EQUIPMENT 
CLASSIFIED BY MAJOR TYPES OF MACHINES JANUARY 1, 1534 



Types of Machines 



lumber of Machines 



Per Cent 



Automatic 

Transfer 

String Work 

Flat Bed 

Ribbed Goods: 

Ribbers 8,934 
Footers 7,6")2 
Automatics 345 

Miscellaneous 

Total 



27,839 
43,700 

10,380 

4, -±57 

17,481 



11,097 
114,954 



24.2 

38.9 
9.0 
3.9 

15.2 



9.7 
lOt.C 



SOURCE: Knitting Equipment of the Seamless Hosiery Industry, 
January 1, 1934, by G. W. Taylor and G. A. Dash, Jr. 

SIZE OF SEAMLESS ESTABLISHMENTS ; _ \ 

The following table shows a percentage distribution of the seamless 
hosiery comnanies. by size according to machinery owned: 

.' TABLE VIII • 

[ PERCENTAGE OF SEAMLESS HOSIERY COMPANIES (*) 

CLASSIFIED BY NUMBER OF MACHINES JANUARY 1,. 1934 



Number of Machines 


Per Cent 


Jumb er 


of Machines 


Cumulative 


— S Per Cbnroany 




Per 


Company 

50 


Per Cent ' 


Under 50 


21.0 


Under 


21.0 


50 and under 100. 


15.3 


ii 


190 


36-3 


180 : ". " 2C0. 


26.1 


ii 


20,8 


62.4 


2CC " " 300. 


13.2 ' 


n 


3C0 


75.6 


300 " " 400 


4.3 


ii ' 


400 


80.5 


4C0 " " 500 


6.2 


ii 


500 


86.7 


5'jc5 " ' " T 600 


3.2 


ii 


600 


89.3 


500: " " '700 


* 1.7 


r ••• • n 


700 *' 


. • 91.6 


700 "" " " 800 


2.3 


ii 


800 


' 93.9 


800 " " 900 


1.3 


it 


900 • • 


* 95.2 


900 " over 


4.8 


ii 


6,000 


■100.® 


Total 


100.0 






- 



(*) 



Seamless hosiery companies considered in this tabic manufacture all 
types of hosiery. It is impossible to break this table down for 
companies engaged in manufacturing mdh's seamless, women's seamless, 
etc. , because of the fact that many companies manufacture more than 
one type of seamless hosiery. 

SOURCE: Knitting Equipment of tne Seamless Hosiery Industry, Jan. 1, 
1934, by G. W. Taylor and G. A. Dash, Jr. 



9823 



-38- 



Exceptionally noteworthy are the high concentrations in the lower 
"brackets among small sized establishments, 21 per cent of all companies- 
having less than fifty machines, and 36 per cent less than one hundred 
machines. On the other hand there are relatively few extremely large 
sized concerns, only 4.3 per cent of the companies having over nine hun- 
dred machines apiece. 

In order completely to understand the situation it is necessary to 
k now what proportion of the total loiitting equipment is owned oy the 
different size groups. This is shown in the following table: 



TA3LE IX 
PERCENTAGE 07 SEAMLESS HOSIERY LiACHliiES III. PLACE 

classified by companies ce particular size January i, 1934 



Number of Machines 


Per Cent 


Number of Machines 


: Cumulative 


Per Company 




Per Company 


: Per Cent 


Under 50 


2.1 ! 


Under 50 


2.1 


50 and under 100 


4.1 : 


" 100 


6.2 


100 " " 200 


13.6 


" 200 


! 19.8 


200 " " 300 


11.5 


" 300 


31.3 


300 " » 400 


6.2 


" 400 


37.5 


400 " » 500 


10.0 


" 500 


47.5 


500 » » 600 


6.5 


" 600 


54.0 


600 " " 700 


• 4.0 


11 700 


58.0 


700 " " 800 


6.4 


11 800 


64.4 


800 " " 900 


3.9 


" 900 


68.3 


900 and over : 


31.7 ! 


" 6,000. 


100.0 


Total 


100.0 







SOURCE: Knitting Equipment in the Seamless Hosiery Industry, January 1, 
1934, by G. U. Taylor and G. A. Dash, Jr. (independent Research 
Pept. TOiar ton School of Finance and Commerce, U. of Pa., Phila- 
delphia., Pa. ) 



Thus ij< is seen that though 36 per cent of the companies had less 
than one hun Ired machines each, the total machine's nossessed by this group 
amounted to 'but 6.2 per cent of the total equipment in the industry. On 
the other hand, the 4.8 per cent of the companies falling in the top brac- 
ket (large concerns) owned nearly 32 per cent of the total equipment in 
the industry. • ' 

FULL-FASHIONED 3RANCH 

On July 15, 1933, according to the study by the -Industrial Resea.rch 
Department, Uharton School of Finance & Commerce, made in cooperation 



9823 






with the National Association of Hosiery Manufacturers and the Textile 
Machine Forks, there were 15,113 fulL-fashioned machines in pl n ce. 

These machines for the entire indust] jre in the ration of 2.6 ledgers 

to one footer on this date. Geo. -r- hically., the full-fashioned equip- 
ment was distributed rs follows: 



TABLE X 

PERCENTAGE OF FULI-FASHIONED HOSIERY KNITTING 
MACHINES Ii; PLACE JULY 15, 1933. CLASSIFIED BY PRO- 
DUCING riS'.niCT 



Produci-v: District 



Percentage of Machines 
in Place, July 15, 1933. 



Philadelphia • 

Reeding 

Other Pennsylvania 

T7e s t 

New York"- New Jersey (l) 

New York - 

Hew England (2) 

llorth Caro3 ina 

Other South 



27.2 
19.5 
11.7 
13.0 
7.7 

4.5 
9.8 
6.6 



Total 



100.0 



1,1) lie" York - Hew Jersey district includes the northern Jersey and 
southern New York regions. 

(2) New York - Hew England district includes the northern ITe^ York 
Section and the New England str.t s. : 

Source: Hosiery Release, L'o. 12, Oct. 15, 1935; Industrial Research 
: Denti, TTharton School of Finance and Commerce, U. of Penna. 



The high concentration of the industry in Pennsylvania is noteworthy, 
with the Philade*! hia district the r.ost important area. 

According fro this survey the trend is toward the use of finer gauge 
machines. The following table shows a percentn-je distribution of the 
full-fashioned irchines by gauge on July 15, 1933: 



9823 



1. 


,2 


19. 


,2 


49< 


,6 


23. 


,4 


4, 


,4 


1. 


,8 


0. 


,4 



TABLE XI 
PERCENTAGE DISTRIBUTION 07 FJLL-FASHIOIED fiACHINES BY GAUGE JULY 15, 1933 

Gauge July 15, 1933 



36 and under 

39 

42 

45 

48 

51 

54 and over 



Total 100.0 



Total Machines 15,113 



SOURCE: Hosiery Release No. 12, October 15, 1935; Industrial Research 
Department, ITharton School of Finance and Commerce, Universit]' 
of Pennsylvania. 



The importance of the f orty-t^'O mid forty-five gauge machines is 
evident. 

To comprehend the capacity of full-f ashioned machinery it is neces- 
sary to lciou the number of sections of the machines in use, since each 
section can produce one leg of a stocking or one foot. Thus an eighteen 
section machine vrould produce eighteen stocking legs or feet simultaneously. 
The following table shorrs a distribution of the machines by sections per 
machine on July 15, 1933: 

. TABLE XII 
PERCENTAGE 0B TOTAL MACHINE SECTIONS - CLASSIFIED BY GHUGE JULY 15, 1933 



Gauge Percentage of Machine Sections 

36 and under 1.1 

39 17.3 

42 49.5 

45 25.3 

48 4.5 

51 1.9 

54 and over ; .. 0.4 

Total 100.0 

SOURCE: Hosiery Release, No. 12, October 15, 1935; Industrial Research 
Department, Uhsrton School of Finance and Commerce, University 
of Pennsylvania. 



9823 






SIZE OF FULL-FASHIONED ESTABLISHMENTS 



The following table snows a -Dercentago distribution of the estab- 
lishments according to the number of machines ner establishments: 



TABLE XIII 
PERCENTAGE OF ESTABLISHMENTS CLASSIFIED BY NUMBER OF MACHINES 

July 15-, 1933. 



■ Number-, of Machines Per ■ Cumulative 
• Per Establishment Cent : • Per' Cent 



Under 13 24.3- 24.3 

13 and under 26 28. V ■ • 53.5 

26 » I' 51 21.3 74.8 

51 " " 101 12.9 . 87.7 

101 arid over 12.3 100.0 



Total. . . . . . '100.0 

L I 



Source: Hosiery Release, No. 12, October 15, 1335; Industrial Re- 
search Department, T .?hprton School of Finance and Commerce, 
University of Pennsylvania. 

Full-fnshaoned knitting eauipment is a fixed and specialized as- 
set that represents a relatively large investment. Because of this 
capital requirement and because of the relative youth of the industry, 
it is not surprising that a majority of the plants have less than twenty- 
six machines. 

The large number of small establishmgnts is obvious with 31 per 
cent of the establishments having less than twelve machines each and 
nearly 58'-oer cent having less thari twenty-six machines per estab- 
lishment. « 

It is necessary to know -'hat' -orocortion of -the total of the in- 
dustry' s ecuronent is owned by eacg size ;rouo. This is shown in the 
following table: 



9323 



-42- 



TA3LE XIV 



PERCENTAGE OP MACHINES IN PLACE CLASSIFIED BY COM- 
PANIES OP PARTICULAR SIZE - MARCH 1, 1929 and JULY 15, 1933 



NUMBER OP MACHINES 


PER 


CENT 


: NUMBER OP MACHINES 
PER COMPANY 


CUMUI 

PER 


ATIVE 


PER COMPANY 


1929 


1933 


CENT 




1929 


1933 


Under 13 
13 and under 26 
26 « ii 51 
51 " " 101 
101 and over 


4.8 
10.2 
15.2 
14.8 
55 ;0 


3.8 

9.9 

13. 4 

17.2 

55.7 


Under 13 
" 26 
» 51 
" 101 
I' 1300 


*±o8 

15*0 

30.2 

45.0 

100.0 


3.8 

13.7 
27.1 

44.3 
100.0 


Total ■ : 


LOO.O 


100.0 





SOURCE: Hosier Release, No. 12, Oct. 15, 1935; Industrial Research 

Department, Wharton School of Finance and Commerce, Universi- 
ty of Pennsylvania. 



These tables show that although small size establishments make 
up the majority of the industry in number of plants, the large estab- 
lishments (with over 101 machines) own over half of the industry's 
equipment. 

EASE OF ENTERING- THE INDUSTRY 

The full-fashioned branch of the Industry is not one that has 
Characteristics making it easy for manufacturers to enter the bus- 
iness, because its knitting eauioment is a specialized asset requir- 
ing a relatively large investment, each full-fashioned machine cost- 
ing between $3,000 and $9,000. (*) 

In the seamless branch of the industry on jriie other hand, it is 
relatively easy to enter the business, since a new seamless machine 
cost only about $350 and much second-hand eauipraent is available at 
considerably lower cost. An estimate recently appearing in the "Tex- 
tile World" of the cost of equip-oing a small seamless plant capable 



(*) "How Hosiery Workers Find Jobs" by Dorothea DeSchweinitz. (in 
dustry Research Dept. , Wharton School of Finance, 1 U. of Pa., 
Phi la. Pa.) 



9323 



-43- 

of manufacturing forty to fifty dozen -.airs of half-hose per day of 
ten hours, is given below: 

TA3LE XV 

COST OF MACHINERY REQUIREMENTS FOP. A 
SMALL HOSIERY PLA1IT 



Machinery Cost 

8 Hosiery Machines 42, 800 

4 Ribbers 1,000 

2 Looners 300 

1 Table of drying forms 300 

Dyeing Eauipment 400 

Electric motor and drive 80 

Shafting and mlleys . 20 

$4,900 



SOURCE: Technical Editor, Textile World, March 1933, Page 72. 



9823 



"• '..GHAHUR II 
LABOR 



EMPLOYMENT . , 

Employment is not iraown for the hdsiery industry prior to 1925. 
however, it must have been somewhat less than that shown in the follow- 
ing table for the loiit goods industry as a' whole. 



TABLE. XVI 

EMPLQYHE1TT IN THE EfflT. GOOZS INDUSTRY 
■ 1899 to 1921 



Year 



Wage Earners 
(Average for the year) 



1S99 
1904 
1909 
1914 
1919 
1921 



83,691 
104,092 
129,275 
150,520 
172,572 
161,880 



SOURCE: Census of Manufactures. 



Since 1923, the Census has been tabulating data separately for the 
Hosiery Industry; according to this source, the employment in the In- 
dustry has been as follows: 

TABLE XVII 

EMPLOYLEUT IN THE HOSIERY INI USTRY 
1923 to 1933 



Year 



1923 
1925 
1927 
1929 
1931 
1933 



Wage Earners 
(Average for the year) 

96,957 
103,930 
112,800 
129,542 
112,374 
117,919 



Source: Census of Manufactures, 
9823 



- 



The growth of the industry is re I 'om these figures, employ- 
ment rising iron 97,000 in 1923 to over 129,500 in 1929. During the 
depression it declined to nearly 11 !,000. 

The accompanying indexes, pre;oared bj the Eureau of Labor Statistics 
in cooperation with the- P2A, and ad iusted to census figures, in which the 
1929 employment is tafcen as a base equivalent to 100 per cent, show that 
employment declined duriny the depression to a "point of 85.2 ,)er cent of 
the 1929 figure for the 1932 yearlj average, and to a low point in July, 
1952 of 74.5 per cent of the 1929 level, at which tine it is estimated 
that there were only 95,500 wage earners employed in the industry. Thus 
during this ; eriod employment had reclined to less than the yearly aver- 
age for 192 . 

Since that time, and it is believed parti; due co the benefits 
derived from an 1TRA Code, employment has increased so timt the annual 
index has moved up to 96.6 for 1924 within 5 per cent of the 1229 em- 
ployment. Although the data may not be strictly comparable, records 
of the Coue Authority show that employment lias since increased to an 
avera e of 137,000 in 1934 and to an all tine high of nearly 145,500 
in one month in 1955. 

According to Code Authority data in 1935 about 79,000 to 80,000 
employees were in the full fashioned brar.cn of the industry and between 
58,000 and 50,000 in the Seamless branch, 

Table XVIII . 



HOSIERY INDUSTRY 



1926 



Index of Employment (1929=100) a/ 

192° 1329 1920 1931 1952 1933 



1934 1935 



J clii • 




94.7 


82.5 


85.7 


32.5 


90.7 


97.5 


Feb. 




96.4 


86.0 


36.0 


82 .3 


28.8 


99.3 


Mar . 




98.3 


87.0 


37.7 


61.3 


102.5 


100.4 


Apr. 




98.5 


87.1 


85.2 


81.5 


102,8 


100.4 


i [ay 




98.8 


37.0 


81.1 


34.3 


OQ C 


98.0 


Jun, 




GO A 


89.1 


30.0 


83.1 


100.7 


94.6 


Jul. 




98.5 


84.3 


74.5 


88.1 


94.5 


91.5 


Aug. 




99.7 


86.3 


73. 4 


37.9 


89.7 


97.1 


Seu. 




101.9 


35.3 


36.0 


100.1 


8S.7 




Oct. 




105.5 


86.6 


91.1 


101.0 


95.9 




ITov. 




105.6 


89.1 


93.2 


97.9 


98.0 




Dec. 




103.4 


89.7 


91.0 


95.6 


98.6 




Average 


87.1 


100.0 


86.8 


35.2 


89.1 


96.6 





a/ 1927-1929, Census of ilanufactures; 1931 to date„B.L.S. in cooperation 
with TT2A and HEA adjustment to 1935 total. 

Sample covers about 45$o of the concerns and 70 2 of the employees of 

the industry. 



9823 



1 



(O 



o 

Q. 



Q fc 



^L 


UJ 




5 




> 


> 


O 

_J 


cr 


Q. 


UJ 


UJ 


0) 


U. 


o 


o 


X 


X 




UJ 




a 







Table XIX 



host n i: us 



Jan. 

Fe"b. 

Mar . 

Apr. 

May 

Jun. 

Jul. 

Aug. 

Sep. 

Oct. 

l T ov. 

Dec. 



19.16 



Estimated ITumber Employed (000) b/ 
1927 1923 1939 1330 1921 1932 



1933 1334 1935 



122.6 
1 34 . j 
127.3 
127.3 
127.9 
123.7 
127.5 
129.1 
131.9 
136.6 
136.8 
135.9 



106.8 
11.4 

112.7 
113.3 
112.7 
115.3 
109.9 
111.8 
111.2 
112.2 
115.4 
116.3 



112.3 
114.0 
113.6 
110.4 
105.1 
103.6 
96.5 
101.6 
111.4 
118.0 
120.7 
117.9 



106.9 
107.4 
105.3 
105.6 
109.2 
114.1 
114.1 
113.9 
129.7 
130.8 
126.7 
121.3 



117.5 
128.0 
133.8 
133.2 
1 "3° 4- 

130.5 
122.4 
116.2 
114.9 
121.6 
126.9 
127.7 



1.36.3 

128.6 
130.1 
130.1 
126.9 
122.5 
118.5 
125.8 



Average 



112. & 



JL.j _/ m O 



112.4 110.4 115.4 125.1 



Source : 

oj 1927-1929, Census data; 1931 to date, Table VIII times 1929 Census base 
figure (129.54). Sample covers about "15'" of the concerns and 70'"> of the 
employees of the Industry 

HUMBER 05" EMPLOYEES BY STATES 

Table XX, compiled from code authority data, shows the number of em- 
ployees in the hosiery industry by states, for one week in March 1934. 
The high concentration of employees in Pennsylvania is evident, over one- 
fourth of all the employees in the industry being in this state. 

The states of Pennsylvania, Uorth Carolina and Tennessee, combined 
account for more than one-half of the total employees in the industry. 



9823 



TAB IT, XX 

1TIMBER 0? EliPLOYEES, 3Y STATES 
OiTE WEEK II 7 MARCH 1334 



State 



ITurribe r o f 

Employees 



Total for U. S. 



137,022 



Pennsylvania 

De laware 
Yew Jersey 
Hew York 
Connecticut 



37,340 

47 

3,960 

1,872 

287 



Massachusetts 
Hew Hampshire 

Rhode Island 

Maine 

Vermont 



961 
847 
117 



Alabama 
Georgia 
ICentu^iy 
Louisiana 

Maryland 



1,526 
5,238 

1 , 144 
210 
271 



Mississippi 

South Carolina 
Tennessee 
Yorth Carolina 

Texas 



358 

584 

13,007 

27,224 

154 



Vi rginia 
'.'■Jest Virginia 
California 
Illinois 
Indiana 



2,485 



524 

1,239 

1 , ', 93 



Iowa 
Michigan 

Minnesota 

Missouri 

Ohio 



793 
531 
882 
55 
274 



Wi scons in 

Mills in more than one state 



5,877 
37,277 



Source: Code Authority Records, 
February 1935. 



9823 



- .- 



HOURS 



Average Hours per 7/eek 

The Bureau of Labor Statistics made special studies of the hosiery- 
industry in 1926, 1928 and 1930. In the first two of tiiese years, they 
found employees to 'be working an average work week slightly over 47 hours 
per week. In the latter year, probably due to the general business de- 
pression, the work week had declined to slightly less than 42 hours. 
Prior to the depression, the industry generally operated on 5^ hour 
shifts; (*) some manufacturers operated 2 shifts while others only oper- 
ated one shift or only part of their equipment on two shifts. 

The average weekly hours for specified periods in important hosiery- 
producing States in" the years 1928, 1930 and 1932, deduce 1 "from sample 
studies covering 25 per cent of total wage earners and about 20 per cent 
of number of firms, located in 18 or 19 States, are shown by the follow- 
ing table: 

TABLE XXI 

3 HOURS PER WEEK IH .THE HOSIERY. INDUSTRY 
FOR SPECIFIED -STATES , FOR CERTAIN 
TERIODS 07 1928, 0-930 and 1932. 



o w £1 u G S 



1928 



50 



Sept.- Dec. April - June 

Average Hours per 
»/ eek 



1932 
March - June 



All States 


47 . 1 


41.9 


Georgia 


46.3 


43.3 


New Jersey 


45.7 


44.2 


North Carolina 


47.9 


44.2 


Pennsylvania 


47.7 


40.4 


Tennessee 


47.8 


42.6 



41.3 
42.8 
41.2 
41.7 
40. 6 
'43.6 



Source: Bureau of Labor Statistics Bulletin 'Tos. 591-p.l0;504-p.48 

According to the accompanying tabulation of Bureau of Labor Statis- 
tics data (Table XXI I ) an average work week of 42.6 hours per week pre- 
vailed in 1932 and an even longer week was worked in the early part of 
1933. With the advent of the code the hours per week show a sharp 
decline with an average work week of 33.5 hours for 1934. 

MAN HOURS. 

Man hour data are not available prior to 1932 for this industry. In 
the years 1932 and 1933 tho man hours worked appear to have been relatively 
constant, averaging around 4,700,009 man hours monthly. (See Table XXIII). 
A noticeable decline , however, is evident in 1934 with an average of nearly 
4,200,000 man hours monthly. In all liklihood this is largely due to the 
industry's curtailment program and machine hour restrictions under its code. 
The first seven months of 1935 show about the same average man hours per 
mo nth as 1934, that is 4,183,000. 



(*) Transcript of Public Hearing, August 10, 1933, 



982. 



— D.iJ— 



Table XXII 



HOSIERY HHJUSTRY 



Average Hours Per Week a/ 
1926 1927 1923 193? 1930 1931 1932 1933 1934- 1935 



Jan. 

Feb. 

Mar . 

Apr. ) 

May )41.9 

Jim. ) 

Jul. 

Aug. 

Sep. ) ) 

Oct. )47.2 )4-7.1 

Nov. ) ' ) 

Dec. ) ) 



Average 42.6 40.6 33.5 *33.1 



42.3 


40.6 


25.9 


34.7 


45.0 


44-. 6' 


34.6 


35.6 


45.1 


41.3 


35.3 


36.1 


39.3 


42. C 


35.7 


34.2 


38.6 


45.7 : 


36.1 


32.4 


38.4 


47.2 


32.7 


30.0 


39.7 


45.1 


29.7 


28.6 


■7Q O 


37.6 


32.4 




45.2 


36.0 


32.4 




45.4 




35.3 




47.0 


VC Q 


35.5 




45.4 


33.8 


35.8 





Source: 



a/ 1926-1930, E.L.S. special study (Bui. ITo. 591); 1932 to 
date L.L.S. in cooperation with 1TRA'. Sample covers about 
45/j of the concerns and 70$ of the employees of the industry. 



(*)■ 7 'lbs. Average. 



9823 



Jan. 
?eb. 

Apr. 

nay 

Jim. 

Jul. 

Aug. 

Sep. 

Oct. 

Nov. 

Dec. 



-51- 
Table XXIII 



HOSIERY DIDUSTRY 



• Estimated Total Han-Hours (.000) b/ 
1926 1927 1328 1929 1930 1951 1932 1953 1934 1935 



4,751 4,329 3,043 

5,130 4,790 4,428 

5,124 4,350 4,637 

4,338 4,434 4,754 

4,055 4,990 4,672 

",979 5,386 4,266 

3,83l" 5,147 3,636 

3,981 4,282 3,765 

5,035 4,668 .3,723 

5,358 4,867 4,294 

5,674 4,548 4,505 

5., 352 4,098 4,572 



4,383 
4,578 
4,697 
4 , 449 
4^112 
3,675 
3,389 



Average 



4,717 4,657 4,195 *4,183 



Source: 



b/ Estimated number employed (Table XIX) times average hours 

per week (Table XXII) Sample covers about 45$ of the concerns 
and 70$o of the er.r loyees of the industry. 

(*) 7 nos. Average 



223 



-52- 

WAGES 

Payrolls. 

In 1923 the yearly payroll for the industry amounted to $78,762,000, 
which was over three times as great as that for thf whole knit goods 
industry in 1899. By 1929 it lias undergone an additional increase of 
over 90 per cent to $140,079,000 annually, or over 5.5 times that of the 
whole knit goods industry in 1899. 

The following table shows annual payrolls for the Industry, 1923-1931: 

: T-ble XXIV 

AfflJUAi- PAYROLLS III THE HOSIERY INDUSTRY 
1923 to 1933 

Year Total Annual V/ages 






1923 78,762,000 

1925 93,383,000 

1927 114,678,000 

1929 140,079,000 

1931 95,129,000 
1933 



Source: Census of Ilanufactures, 



Drastic declines in payrolls occurred in the depression, the 1933 
payroll amounting to only 57.6 per cent of that of 1929, 

The accompanying Table XXV shows payroll indexes for the industry 
calculated with 1929 as a base equivalent to 10'"> per cent. According 
to these indexes weekly payrolls declined to a low point in July, 1932 
of 41,1 per cent of the 1929 level. Since that time steady improvement 
is noted with 1934 at nearly 70 per cent of that in 1929, Average 
weekly payrolls declined from $2,693,000 in 1929 to $1,492,000 for 1932, 
since improving to $1,874,000. (See accompanying Table XXVI for details). 



9823 



-53- 

Talle XXV 



hosiery r r ustry 



Index of Payrolls (1929=100) aj 
1926 1927 1928 1929 1930 1931 1932 . 1933 1934 1935 



Jan. 62.6 58.3 45.0 50.6 72.5 

Feb . 70.2 62.9 47.7 74.4 75.6 

Mar.. 72.8 62.3 45.4 79.3 74.1 

Apr. 72.0 57.5 47.1 78.3 70.7 

May 74.5 48.7 51.2 76.3 64.2 

J-un. 71.5 47.9 54.3 72.6 57.8 

Jul. 61.3 41.1 51.2 62.0 52.5 

Aug. 63.8 44.2 62.6 62.0 67.4 

Sep. 63.6 55.6 72.8 60.5 

Oct. 66.6 64.1 76. 4 70.3 

Nov. 67.6 63.9 72.7 75.6 

Dec. 68.4 53.0 65.2 75.0 



Average 81.9 100.0 67.9 55.4 '57.6 69.6 



a/ 1927-1929, Census of Manufactures; 1931 to date, 3.L.S. in 

cooperation with ITBA and "\PA adjustment to 1933 Census total. 
Sample covers about 45"' of the_ concerns and 70','' of the employees 

of the indust ry. ^ 



9823 



Table XXVI 



JOS ESPY Il'DUSTHY 



Jan . 

Feb. 

liar. 

Apr. 

May 

Jim. 

Jul. 

Aug. 

Sep . 

Oct. 

Hov. 

Dec. 



Estimated T^eekly payroll (0 0) a/ 
19.26 193? 1928 1929 1930 1931 1932 1933 1934 1935 



1,686 
1,891 
1,962 
1,940 
2,006 
1,925 
1,652 
1,720 
1,714 
1,793 
1,822 
1,842 



1,571 
1,695 
1,678 
1,550 
1 , 313 
1,290 
1 , 106 
1,191 
1,493 
1,726 
1,720 
1,551 



1,212 
1,286 
1,222 
1,270 
1,380 
1,463 
1,380 
1,687 
1,961 
2,058 
1,958 
1 , 755 



1,363 1,954 
2,004, 2,036 
2,136 1,995 



2,109 
2,055 
1 ,955 
1,669 
1 ,"669 
1;628 
1,*395 
l;982 
2,020 



1,904 
1,729 
1,558 
1,414 
1,816 



Average 



!,205 



2,691 



1,329 1,492 1,553 " 1,374 



a/ 1927-1929, Census data; 1931 to date, Table XXV times 1929 Census base 
figure (26.933). Sample covers about 45$ of the concerns and 70$ 
of the employees of the industry. 



9923 



-DO- 

AVERAGE HOURLY 7AGE 

In the Bureau of Labor Statistics studies of the hosier' - industry, 
they found the average hourly wage rate in the industry to be 47.2 cents 
per hour in 1926, 43.8 cents per hour in 1928 and 49.7 cents per hour 
in 1930. 

Labor in the full-fashioned branch is predominantly unionized. 
Eighty-five per cent (85$) of the production of this type, it is esti- 
mated, is compensated for on a piece rate basis, which results in a 
comparatively high wage scale. The principal union is an affiliate of 
the A. F. of L. and appears to have a close contact in general with the 
principal trade associations of this branch. The -closed shop prevails. 

The seamless branch is almost entirely non-union, wages are lower 
especially in the South. There were many mills that paid "sweat shop 
wages"; in the Transcript of the Public Hearing of August 10, 1933 on 
page 18, a mill employing 600 persons with an average wage of $4.82 per 
week, is cited. 

The extent of unionization in the rorthem areas, especially in 
Pennsylvania, largely explains the vide variation in the average wage 
in this industry in different portions of the country. 

The average hourly wage rate in cents and .average weekly earnings 
in dollars, according to the Bureau of Labor Statistics. Sample studies 
covering about 25 per cent of total wage earners, and about 20 per cent 
of number of firms located in 18 or 19 states, are as follows: 



Table XXVII 



AVERAGE HOURLY '..'AGS PATES II THE HOSIERY INDUSTRY 
FOR DESIGNATED STATES FOR CERTAIN PERIODS OF 
1928, 1930 and 1932 



States 



1928 1930 1932 

Sept. -Dec. April - June March - June 
Average Hourly T/ages 



•All States 48.8 

Georgia 24.4 

New Jersey 79.6 

North Carolina 33.4 

Pennsylvania 62.5 

Tennessee 29.2 



49.7 

C O . O 

83.1 
35.9 
52.4 
30.2 



37.6 
22.5 
49.3 
29.7 
41.9 
28.7 



Source: Bureau of Labor Statistics Bulletins #591-p. 10 and 
#504- p. 43. Bureau of Labor Statistics. 



The steadily increasing wage rates in nearly all areas up until 
the year 1930 is noticeable. Drastic \:?ge cutting had apparently already 



9823 



taken place by 1933, all areas suffering from such practice. It is in- 
teresting to note that the declines were much sharper in the unionized 
areas than elsewhere amounting to 40.7 and 32.9 per cert less than the 
1930 levels in Pennsylvania and New Jersey respectively while the &e— , 
clines were only 15.0, 17.0, 5 per cent in Georgia, North Carolina and 
Tennessee respectively. However, wages in the South were already on a 
low plane. 

In general agreement with these sample studies are figures compiled 
by the Bureau of Labor Statistics in cooperation with the IIBA. (See 
Table XXVI II)' which show that the average hourly wage rate for the in- 
dustry for 1932 was 34.1 cents per hour. Some improvement is noted in 
the 1933 rate with 37.9 cents per hour the yearly average. 

By the latter part of 1934 due largely to the effects of the Code, 
the wage rate had risen to a higher level than at any previous time, 
resulting in a yearly average of 43.5 cents per hour for that year. For 
the first six months of 1935 the average was 50.8 cents per hour, an all 
time high. 

Table XXVIII 



IIOSISHY IIDUSTRY 



1926 



Average Hourly '.'age (cents) a/ 
1927 1928 1929 1930 1931 1932 1933 1934 1935 



Jan. 

Feb. 

Liar. 

Apr. 

Lia3 r 

Jun. 

Jul. 

Aug. 

Sep. 

Oct. 

Eov. 

Dec. 



)47.2 



) 
) 
)48.8 

) ' 



) 

)49.7 

) 



34.8 


32.0 


46.5 


50,6 


35.9 


30.4 


48.3 


50.4 


34.2 


31.1 


48.1 


50.5 


37.7 


32.5 




50*4 


34.3 


29.9 


47.8 


51.3 


34.0 


30.7 


48.6 


51.' 


32.1 


30.9 


48.3 


50.7 


32.8 


45.5 


47.4 


51.6 


33.0 


47.5 


49.6 




35.0 


47.7 


50.1 




33.6 


48.1 


50.0 




32.3 


47.9 


50.4 





Average 



? A.\ 37.9 



5.5 *50.l 



Source: 



*6 Mo s.Ave rage 



a/ 1926-1930, 3.L.S. special study (Bui. J T o. 591); 1932 to date, 

3.L.S. in cooperation with "JRA, Sample covers about 45,i of the 
concerns and 70'.j of the employees of the industry. 



9823 



■ -57- 

AVERAGE WEEKLY WAGES 

Although the hourly rate is an excellent measure of the skill of 
the worker, the extant of unionization, the demand for labor and other 
important factors, the worker is primarily interested in his weekly and 
yeairly earnings. There is some disagreement as to the average amount 
received, when the Bureau of Labor Statistics studies are compared with 
Census data. 

According to the former, the average earnings per week were $22.30 
in 1926 and $23.01 in 1923, while census data for the year between these, 
1927, shows average earnings of only $19.55 -oer week. In later years, 
these two sources show closer agreement, with the census data showing 
$20.80 in 1S29, and the Bureau of Labor Statistics - $20.33 for 1930. 

Again wide differences between the earnings of workers in different 
areas is noted; those in the unionized areas in 1930 earning an average 
of $36.78 and $23.20 in Few Jersey and Pennsylvania, while the Southern 
workers averaged $11.46, $15.85 and $12.87 in Georgia, Forth Carolina 
and Tennessee respectively. (See the following table for average 
earnings in the various areas). 

TABLE XXIX 

AVERAGE WEEKLY EARFIFGS IF TIE HOSIERY INDUSTRY 
FOR DESIGNATED STATES FOR CERTAIF PERIODS OF 
1928, 1930 and 1932 



State 1928 1930 1932 

Sept. -Dec. April-June March-June 

Average Weekly Earnings in Dollars 

All States 23.01 20.83 15.53 

Georgia 11.30 11.46 9.68 

Few Jersey 36.38 36.76 20.32 

Forth Carolina 16.00 15.85 12.38 

Pennsylvania 29.80 • • 25.20 17.00 

Tennessee • 13.97 12.87 12.50 

SOURCE: Bureau of Labor Statistics Bulletins 504 and 591. 



The drastic wage cuts that took place during the depression, re- 
sulted in average earnings of $15.59 in 1931, declining to $13.63 for 
1932, and $13.85 in 1933 according to the accompanying tabulations. The 
earnings were curtailed much more in the northern areas than in the South, 
the 1932 earnings being 44.3 and 32.5 per cent less than those of 1930 
in Few Jersey and Pennsylvania, while those of Georgia and Forth Carolina 
declined only 15.5 and 21.9 per cent and Tennessee hardly at all. 



?823 



During the Code period, weekly wages improved to an average of 
$16.11 for 1934. Though the hourly rate --as higher than in 1929, the 
average weekly earnings in 1934 were still 22.6 per cent "below those 
of IS 29. 

Table XXX 



HOSIERY IITJ'JSTRY 



Average 7/eekly '."age (dollars) a/ 

1926 1927 1928 1929 1930 1931 1932 1933 1934 1935 



Jan. 








15.19 


14.13 


11.73 


12.19 


17.54 


Pel). 








17.40 


15.13 


12.36 


15.45 


17.82 


Liar. 








17.84 


15.03 


11.98 


16.95 


17.67 


Apr. 






) 


17.52 


14.08 


12.43 


16.75 


17.14 


May 






)20. 


83 18.24 


12.56 


13.05 


16.79 


15.35 


Jun. 








17.09 


12.50 


13. 2<d 


15.32 


15.14 


Jul. 








15.43 


11.49 


12. 54 


14.39 


14.24 


Aug. 








15.56 


11.75 


15. 34 


15.07 


17.27 


Sep. 


) 


) 




15.60 


13.73 


15.73 


15.90 




Oct. 


)22.30 


) 




15.18 


14.93 


15.45 


17.56 




iiov. 


) 


) 23.01 




15.98 


14.55 


16. 15 


17.58 




Dec. 


) 


) 




15.98 


13.60 


15.16 


17.89 





Average 19.55 20.30 16.59 13.63 13.85 16.11 *16.56 



"7 Mos. Average 



Source: 



sJ 



1925, 1923 and 1930, 3. L. S. special study (3ul. I T o. 591); 
1927 and 1929, Census; 1932 to date, 3. L. S. in coopera- 
tion with T'RA. Sample covers about 45, j of the concerns and 
70,j of the employees of the industry. ; 



9823 



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-ou~ 

CHAPTER III 

PRODUCTION AND DISTRIBUTION 

Production 

Raw Materials 

The principal raw materials used by the hosiery industry are 
silk, cotton, linen, rayon, and wool. Although some concerns have com- 
pletely integrated plants in which all the processes of yarn manufacture 
are carried on, the majority of the industry buy their raw materials in 
the form of yarns. These yarns are generally prepared in plants special- 
izing in their production, and are sold in an open competitive market to 
the hosiery industry. The preliminary processing of these materials has 
already been discussed in a preceding chapter. 

The raw materials used by the industry come "from many local- 
ities and countries. About 90 per cent of the silk used in this country 
is imported from Japan, small quantities being imported from China and 
Italy. Cotton is crown in the South and southwestern states, a small 
amount of the finer qualities is imported from British Sea Island pos- 
sessions and Egypt. Rayon is chemically synthesized from both cotton 
linters and wood pulp bases. A small amount of fine linen is imported 
from Ireland. 

The following table shows, the relative importance of hosiery 
raw materials and what a Large part of the total production of these 
materials is used by the hosiery industry. 

TABLE XXXI . 

VOLUME, VALUE AND PERCENTAGES OF TOTAL 
CONSUMPTION OF PRINCIPAL RAW MATERIALS 
USED BY THE HOSIERY INDUSTRY Hi 1929. 



Material : Total U.S.Consump- Consumed by fo of Total Value of 

tion in 1,000,000 Hosiery Indus- Consumed by Hosiery Con- 
Pounds try, 1,000,000 Hosiery sumption in 

Pounds $ 1,000 

Cotton 5,500.0 99.5 29 $90,780 

Silk 81.5 22 26.7 123,000 

Rayon 131.3 19.5 15 26,662 



Sources: 



Census of Manufactures 1929 
Statistical Abstract 1934 
Textile Organon of Tubize Chatillon 
National Federation of Textiles 1935 



c 



-6i- 

It is seen from the above table that the hosiery industry as a con- 
sumer of textile fibres in 1929 consumed over one-fourth of all the cotton 
and silk consumed and 15 percent of the country's rayon consumption. 
Since 1929, slight shifts have occured in these percentages, with silk 
increasing slightly and rayon declining. 

Raw Material and Labor Costs 

T-hfe following table shows the percent labor and materials are of 
total value of oroduct of the Hosiery Lrdustry. 

" table xxxil. . 
total value of products, total la30r cost, 

AND TOTAL COST OF i'/iATERlALS, 
1929, 1931 -and 193 j). 





Total 
Value of 
Products 
$1 , 000 


Total. Direct Labor 
Cost 


Total Mate' 
Cost 


ials 




Per Cent of 
Amount Value of 
in $1,000. .Product 


Amount * 
in 

• 51.000 


Per Cent 
of Value 
of Product 


1929 
1931 
1933 


.528,700 

331,209- 

263,710 


$140,079 26.5 

95,129 - 28.7 
82,959 31.5' 


$248,657 

1-8,835 

• 113,689 


47.0 
44.9 
^3.1 


Source: Census 


f aanufacturers "Knit Goods." 







I n both 1927 and 1 329 fuel and purchased energy accounted for 1.7 
percent of total cost of materials. These are included in the totals 
in each ca;e. 



From this table the increasing importance of labor costs is noted, 
the percentage rising from 26.5$ of the' value of the oroduct in 1929 to 
31.5 in 1933. 

Volume of Production 



The production of hosiery of all types appears to be rola£ivel^ 
stable, the country consuming roughly about the sane number of dozens of 
hose annually. Even in the '"orst years of the depression, production 
experienced but a relatively minor decrease from the 1929 production in 
total dozens of pairs manufactured. 

For instance, in 1930, the year of lowest hosiery production, it 
wasonl".- 14.6 per cent below the 1929 level. These facts are obvious from 
the following tables showing "oroduction indexes and estimated monthly 



9323 



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-64- 

ta3ls xxxv 
volume of products, by kind ahd by state, 

1934. 



V p lume. of t rp dj let i o n_ 
(000 of dozen pairs) 



Full-Fashioned Seamless Total 



Total 30,549 73,332 103,381 

Pennsylvania 13,025 

Delay/ are 

New Jersey 1,734 

Hew York 229 

Connecticut 

Massachusetts 96 

New Hampshire 156 

Rhode Island 46 

Maine 

Vermont 

Alabama 140 

Georgia 183 . 

Kentucky 

Louisiana 

Maryland 89 

Mississippi 68 . 

South Carolina 101 

Tennessee 1,108 

North Carolina 3,561 

Texas 70 

Virginia 194 

California 177 

Illinois 131 

Indiana 594 

Iowa 233 

Michigan. 139 

Minnesota 285 

Missouri 

Ohio 

Wisconsin 1,682 

Mills in more than 

one state 6,508 9,008 15,516 



9,222 


22 , 247 


59 


59 


19 


1,753 


•2 ,106 


2,335 


291 


291 


610 


706 


504 


660 


49 


95 


1 


1 


98 


98 


838 


978 


.5,521 


5,704 


865 


865 


321 


321 


52 


141 


264 


332 


501 


602 


8,696 


9,804 


27,036 


30 , 597 





70 


2,890 


3,084 


9 


186 


1,502 


1,633 


173 


767 


386 


619 


213 


352 


33 


318 


34 


34 


328 


328 


1,701 


3,383 



Source: Code Authority Records, 



9823 



production of thousands of dozens of paira for the period J-umary 1926, 
through July 1935. 

Table XXXV shows the volume of production by type of product and 
"by states, in 1934, according to Code Authority records. It is seen 
from this table that North Carolina w; s the most important producing 
state in 1934, producing ne: rly 30 | v t of the total, next in im- 

portance was Fennsylv; La, with over 20 per cent of the total. These 
two states combined pr lc ■ little over half the total production. 

Other important producing states are Tennessee, Georgia, Wisconsin, 
Virginia, Connecticut, New York, and Indiana. 

The figures for production by type are interesting. Uorth Carolina 
was by far the most important seamless area, producing in 1934 about 
three times as many seamless hose as Pennsylvania. Pennsylvania, on the 
ether hand, is the most important full-fashioned area, with nearly four 
times as much -production as i:orth Carolina. 

Value of Production 

Although the volume of production has remained relatively unchanged 
the value has declined sharply, the total value of the product in 1933 
was less than half of the 1929 value. These enormous value changes can 
readily be seen from the following table: 



TABL3 XXXVI 

VALUE OP _?.0Ia t CTS Ii T THE H03I.HY 1 JU7UPACTU3IKG 
IKDUSTHY 1927, 1929, 1931 and 1933. 

Value of Products 
Year Thousands of dollars * 

1927 
1929 
1931 
1933 



Source: Census of Manufactures, "En.it Goods" 

Data for establishments with an. annual 
production of less than $5,000 are excluded. 

* Value is figured at prices f.o.b. at the establishment, 
Data includes Census classification: 
"Hosiery (except infants and athletics and golf hose)" 



?456 


,913 




,700 


331 


, 209 


263 


,710 



9823 



•5fi- 



TABLE XXXVII 
VALUE OF PRODUCTS, BY KI1JD AMD BY STATE, 1934, 



Estimated Wholesale Value of 
Production (OOP) 



J'ull-Fashioned Seamless 



Total 



Total 

Pennsylvania 
Delaware 
Hew Jersey 
New York 
Connecticut 

Massachusetts 
New Hampshire 
Rhode Island 
Maine 
Vermont 

Alabama 

Georgia 

Kentucky 

Louisiana 

Maryland 

Mississippi 
South Carolina 
Tennessee 
North Carolina 
Texas 

Virginia 

California 

Illinois 

Indiana 

Iowa 

Michigan 

Minnesota 

Missouri 

Ohio 

Wisconsin 

Mills in more than 
one state 



83,103 


$ 103 


,611 


£286,714 


78,062 


12 


,977 


91,039 







116 


116 


10,401 




36 


10,437 


1,380 


2 


,967 


4,347 







411 


411 


574 




859 


1,433 


935 




709 


1,644 


276 




80 


356 







2 


2 







264 


264 


838 


1 


,179 


2,017 


1,097 


7 


,772 


8,869 





1 


,219 


1,219 







453 


453 


537 




106 


643 


410 




373 


783 


604 




699 


1,303 


6,633 


12 


,238 


18,871 


21,351 


38 


,033 


59,384 


419 







419 


1,167 


4 


, Ooo 


5,233 


1,061 




25 


1,086 


783 


2 


,118 


2,901 


3,556 




344 


3,900 


1,397 




546 


1,943 


836 




301 


1,137 


1,698 




85 


1,783 







103 


103 







464 


464 


10,083 


2 


,398 


12,481 



39,004 



12,668 



51,672 



Source: Code Authority Records. 



9823 



- ■?- 

Tpble XXXVII shows r> Code Authority estimates of wholesale value of 
products by type of product ond by states. Comaring this data with 
production data shows that although the greatest Quantity of production 
is from North Crrolina the value of the Pcnns-'lvnia output is far 
greater, the respective values of the 1934 production of these states 
being $59,384,000 and $' " , '■' . '. - Ls : ' ct is largely accounted for 
by the greater unit value of the full- "; shioned • >roduct. 

In 1934 the following '. >roduced i^re than $10,000,000 

worth of hosiery, Penns Ivanii , fort] Carolina, Tennessee, Wisconsin, 
and llev: Jersey. 



IlTTZR-IIlDUSTHY G-KA1TGES 



Style Chan-es 



Despite the absence' of extremely.. wide fluctuations in total pro- 
duction, many changes have-been talcing place within the industry. 

For many years hosiery consisted mainl 1 - of staple items, made 
from durable yarns finished in a. snail ran:e of "lain colors. In 1019, 
perhaps due to short dresses which focused 'attention upon this ite:.i of 
female avoarel, the Industry became Istyle conscious with a trend toward 
lipht weight and sheer -oroducts. Since that time style chrn^es have 
been frequent, the color element ( ?lone being sufficient to rack the 
brains of the nanuf acturers, technicians and all who have a hand in the 
business. This is easily seen in tlia following table which shows the 
color trends: 

table xxxvi ii 
ecadiitg hosiery colors -1934-1929 



July. 



1924 



White 
Black 
Grain 
L. Gray 
Shell 

July. -1925 

White 



Black 
Beige 
Grain 
Nude 



Jul-. 1927 

Grain 
ITude 
White 

Atmosphere 
Sandy Toige 

Ju ly. "1930 

Nude 

White 

Grain 

Atmosphere 

Mirage 



9823 



-63- 
( Table XXXVIII, continued) 

July. 1925 July. 1929 

Grain Sun-tan 

T7h i t e L i do- s and 

llude Gra in 

Atmosphere llude 

Beige Sun Shades 



Source: "Advertising and Selling", Hay, 1929 - 
"Sun Tan liode Arrives, I.iarie Du Hois" 

It is seen that in the short period of five years the conn on 
white, "black and gray colors were completely displaced by the lighter 
tan shades. 

Other changes have cone in rapid succession - "inside-out" stock- 
ings with a dull lustre, ringless and knee lengths being anong the 
most recent changes. 

These style changes naturally brought about increased demand, in 
satisfying which, wearing qualities were sacrificed for appearance. 
The apparently unlimited demand and high -Trices attracted many to 
enter the business; expansion wa.s rapid and rea.ched the saturation point 
about 1929. 

Then cane the depression. Prices declined drastically and many 
concerns with large inventories built up during the tine of high silk 
prices, were caught, with resulting embarrassments and failures. 

Trend to Pull-Pashioned 

Undoubtedly, the greatest change within recent years has been 
in women's hosiery, the shift being from the seamless to the full- 
fashioned product. 

In only recent years, the fa.shioned type has assumed great im- 
portance, being practically confined to the manufacture of ladies' 
hosiery, with a yearly production of about 30 million pairs which is 
more than twice the annual output of women's seamless hosiery. (*) 

(*) "Significant Post-TTar Changes in the Pull-Pashioned Industry," by 
George TC. Taylor, G. A. Dash, Jr. Ind.Res. Dept. Uharton School of 
Pinance and Commerce. U. of Pa. , Phila. , Pa. Dec. 1934. 



9823 



In this connection, the figures on the production of women's 
hosiery r.re interesting. It is seen from the f ollowing table that since 
19C5j the full-fashioned type has constantly increased in its "u-ooortion 
of the total. In 1925, only slightly over one-fourth of womens hosiery 
w^s full-frshioned, "hlle by 1934 nerrly three- fourths of it was full- 
fashioned. During this ;:»eriod the v.olucticn of full-fashioned has 
increased more than 350 jer c'ent, while that of wosnens seamless has de- 
clined to 31.5 per cent of it:; 1325 volume.- 

The reasons for this phenomenal increase are -orobjibly- its better 
abearance accentuated rnd brought into prominence by short skirts, 
and a style trend towards sheernoss. 



rrfTraT.r ]CSIZ 



rlBLE 



PfiODUCTIClI 0:7 U9 31S HOSIERY 1925 to 1934 
3Y TYPH OP PRODUCT. Ill 30Z31TS OP PAIliS . 
. ~ ■■ " "(0'00" emitted) 



1925 
1925 
1927 
1923 
1929 
1930 
1931 
1932 
1933 
1934 



Pull ?PShio; : " . 
Production fo of 
Total 



12,291 


26.2 


14,614- 


36. 0* 


19,771 


4S.7 


26,980 


57.8 


29,980 


64.0 


29,365 


..''74.0 


29,127 


72.5 


30,815 


74.5 


31,287 


75.2 


31 ,326 


.71.2 





SermJ ess 






Production 


i of 

Total 


TOTAL 


■ 34,713 


73.8 


47,004 


27,140 


65.0 


41,754 


22,54-3 


63.3 


42,314 


19,715 


42.2 


46,695 


16,735 


36.0 


46,765 


10,279 


23.0 


39 , 544 


11,782 


27.3 


40,909 


10,530 


25.4 


41,346 


10,376 


24.8 


41,563 


• '10,928 


25.8 


42,254 



Source: National Association of Hosiery iianuf octurers 
"Statistical Bulletin of the Hosiery Industry" 
Stetistics for August-j 1935-; 

Shinnents and Stock's 

The accompanying tables" show estimated -ne-t hosiery shipments and 
estimated stocks on -Hand at end "of month, monthly for the period January, 
1925, through July, 1935. : 



9823 



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3823 



-72- 

Examination of the shipment data reveals its seasonal nature, a 
spring peak generally occuring in Ilarch, followed by a dull summer, and 
a longer and more pronounced fall season, ;orior to 1931 generally last- 
ing the four months from August through llovember. The summer of 1932 
recorded the lowest shronent'3 of any time since 1926. The year 1933 
was an abnormal one and had heavy shipments in Hay, June and July, due 
to increased "buying in expectation of higher costs under a Code. 

For the years 1926 aid 1927 the ratio of and of month stocks to 
average monthly net shipments "as less than two to one, the total 
stocks on hand averaging about 13,000,000 do-;en pairs monthly in 1926 
and 21,400,000 in 1927. 3y 1928 the ratio had shorn* a tendency to 
rise and had become 2.4 with an end of month stock average of 23,000,000 
dozen pairs. Conditions ''ere slightly improved in 1929, hut "by 1930 
the industry, was clearly overstocked, the ratio of stocks to shipments 
"being 3.2, June of that yeor shoving a record of 23,673,000 dozens on 
hand. Hot only that hut these stocks were accumulated at high raw 
material prices, which "by 1930, along with prices of the finished -ore— 
duct, had he gun the steady decline that was to last until the Code 
period. The Industry had apparently gotten their stocks more in hand "by 
1931, the ratio declining from that year on until 1933, the average 
monthly stocks being between 16,000,000 and 19,000,000 dozens. The 
effect of increased buying and code curtailment urograms n.re seen in the 
1933 ratio of slightly over 1.8 and average stocks of 16,352,000 dozens 
monthly. Stocks were kept well in hand during 1934, but during 1935 
have showed a tendency to rise. 



9823 



-7: - 

DISTRIBUTION 



'"hAL CHARACTERISTICS 



Unfortunately, limitations under which the study was made did not 
permit a more thorough tut a of the product. 

As :o:v the facts at ha; , following ma;- je deduced: 

1. I.. nerrl, tot )siery shipments tend 
i: follow .:enera] bu iness activity and 
the inde: f irj . i 1 production. 

2. Ecsiery retail sales are extremely seasonal, 

"ire-Christ, ias buying being t. ice the normal 
sales. 

3. Tlie retailing of hosiery is generally a 
profitable operation. 

4. The distribution of hosier;- is clearly inter- 

- oOo - 

1. In support of bhe Iact that the hosiery shipments in general 
follow industrial activity is cited a chart ar earing in the Hosiery 
Statistical Lulletin of lay, 1935. In addition such is the opinion of 
the national Recovery Administration Economic Advisor on the Hosier;'' 
Code, who in a re 'ort dated February 11, 1954, stated: 

" it is felt that the extent to which the 

prosperity of the Industry depends upon economic 
trends and the maintenance of a close contact 
with public demand must net be minimized." 

2. The second contention is re oily shown bp a grrph of ship- 
ments versus srles throughout Che pear. (*) 

Such e graph shows t small excess of shipments over sales through- 
out most of the year witl an extremely sharp pre~Christmas peak 
occurring in ITovember and December. 

3. According to the Controllers Congress of the National Retail 
Dry Goods Association, without go in... into detail as to the relation 
betwe r. marI:-on, stochturn, and prof its in the various departments, 
hosieiy, with a moderate mark-on and high stochturn, is one of the 
most 'profitable departments. 

4s That hosiery distribution is interstate in character may be 
deduced from Table XLII. 

From this table it is seen that ten leading states produced about 
ninety-two per cent of the 192S production, but there resided in these 

~J*~) Hosiery "S^bc^Ttical'Sulletin'' June, 1335. - e 5 (Hosiery 
no ^„ Industry national Association of Hosiery Lfacturers.) 





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tr~ 



-76- 



TA3LE XLII 



PERCEI7TAC-E DISTRIBUTION OF EOSPIERY PRODUCTION 
1929, AD POFJLATIOI7, 1952, 3Y STATES 



Per Cent of Total 



Per C<jnt of Total 



State 



Ho si or y 
Produc- 
tion 



Popula- 
tion 



State 



Hosiery 
Produc- 
tion 



Popula- 
tion 



United States 



100.0 



100.0 



Alabama 

Arizona 

Arkansas 

California 

Colorado 

Cc.-.scticut 

Delaware 

District of Columbia 

Florida 

Georgia 

I daho 

Illinois 
Indiana 
I owa 
Kansas 

Kentucky 

Louisiana 

Maine 

Maryland 

Massachusetts 

Michigan 

Minnesota 

Mississippi 

Missouri 
Montana 



.7 


i . 


Nebraska 


.0 


1.1 


.0 


.4 


ITevada 


.0 


.1 


_* 


1.5 


ITew Hampshire 


.9 


.4 


_* 


4.6 


3"ev; Jerse;* 


4.5 


3.3 


.0 


.8 


New Mexico 


.0 


.3 


_* 


1.3 


New York 


4.6 


10.2 


.0 


0.2 


North Carolina 


14.3 


2.6 


.0 


.4 


ITorth Dakota 


.0 


.6 


.0 


1.2 


Ohio 


_* 


5.4 


2.7 


2.4 


Oklahoma 


.0 


2.0 


.0 


.4 


Oregon 


.0 


.8 


1.9 


6.2 


Pennsylvania 


42.0 


7.9 


5.3 


2.6 


Rhode Island 


.2 


.6 


_* 


2.0 


South Carolina 


_* 


1.4 


.0 


1.5 


South Dakota 


.0 


.6 


_* 


2.1 


Tennessee 


6.9 


2.1 


_* 


1.7 


Texas 


_* 


4.7 


.0 


.6 


Utah 


.0 


.4 


_* 


1.3 


Vermont 


_* 


.3 


1.9 


t_>« D 


Virginia 


.9 


2.0 


.7 


3.9 


Washington 


.0 


1.3 


_* 


2.1 


West Virginia 


_* 


1.4 


_* 


1.6 


Wisconsin 


7.6 


2.4 


_* 


3.0 


Wyoming 


.0 


.2 


.0 


0.4 









Other States 



4.9 



S o ur c c : Census of Po-julati.'n, 1950 and Census of Manufactures. 1929 
Population data rs cf January 1, 1930. 

* Included in "Other States". Population in the states so listed amounted to 
34.4 r>er cent of total. 



OOol 



-77- 
states c'.-.l • apout forty-throe per cent cf . this, ccii try's nopulatior.i 

cor.svir.ier ' 4 poods produci 11] •'. hosier? is c.fnstm'od almost directly 
prop ■ " ' -■ ! triers, ','r.rt i~, Ci. c yulation. It is 

naturally inevitable, ther • , that these state's; having a small percent- 
age of the population y.;t produci] c- t bajority. of the hosier;- ship 
it to the nan-producing hi bly ,, populai i - cb.s. As; evidence that all 
hosiery produced in 30'iae states c-,:vc; ldy.icp.ily beCppnsuraed within those 
sta.tos, this table shows': •■ "■ '.'■' 



P nnsylvania 
i'orth Carolina 



42 ■lor cejit of -;>ro duct ion 
8 >ercc:.t of 'population 

14 ■ or c bnt j? i production 
3 ■ er cent of rwmlation 



T.'i:.cor.sin 
i 



3 ~>er cent of production 
-ner cent cf population 



rjurfherbor'e, it is a well known, fact that large mail order sellers 
of hosiery, Scars Eoebuch, Montgomery Ward, and the Real Silk Hosiery 
yor/ny/y, use, the nail's freely. 

Further! evidence of the interstate character of the industry is in- 
dicated by Table XLIII. From this table, it is seen that in 1929 in non- 
hosiery producing states, retailers made 3.6!per cent of the total 
hosiery retell sales, amounting to 07,' 705', 000. - 

Eew Tori: State's position in the hosiery picture is interesting. 
This state, although producing only 2.3 per cent of the total product, 
wholesales 77.5 per cc,:t of it and makes 13.5 per cent of .the total re- 
tail s~.le . 



Pennsylvania, on the other hand, with a relatively high production 
amounting to 25. 3 >er cent of the total, wholesales only 4. '3 per cent and 
retails 7.7 per cent of the total. ; Slmilarily., horth Carolina with 11.4 
per cent qi the production wholesales 1.0 per" cent end retails 0.5 per 
cent of the totrl. 



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The following table shows the respective channels through which 
31,000,000 dozen pairs of full fashioned hose flowed in 1933. 

TABLE XLIV 

VOLUME 0? FULL FASHIONED HOSIERY 

SALES - 1933 
ACCORDING TO DISTRIBUTION CHANNEL 



Distribution Sold Through ',j of Total 

Cliannel Designated Channel Pull fashioned 

hill to Mill 1,426,000 4.6 

Mill to Wholesale 3,430,000 8.0- 

hill to Retn.il 14,043,000 45.3 

Mill to Wholesale-Retail 11,334,000 36.4 
hills to Wholesale-Retail 

Consumer 1,147,000 3.7 

Sold to Consumer 63 0, 000 2.0 ' 

Total 31,000,000 Dozens 100.0 



It is seen from this table that sales direct to retailers is the 
most important channel of distribution for women's full fashioned 
hosiery; over 45 per cent of the product being distributed in this 
manner. 

Next in importance are srles to wholesalers who resell to re- 
tailers. This channel accounting for slightly over 36 per cent of the 
total sales. Sales direct from the mill to the ultimate consumer arc 
probably considerably higher than for other women's apparel. Such sales 
are largely accounted for by the sales policy of one large concern, the 
Real Silk Hosiery Hills. 

Sales Policies of Pull-Fashioned hills 

The sales policies of full-fashioned hosiery mills are shown by the 
following table: 

TABLE XLV 

FULL-FASHIONED HOSIERY MILLS III 1933 
ACCORDING TO SALES POLICY 



hills 

Number Selling ■'> of Machines 

Selling Outlet to Designated Total Number in mills # of total 

Outlet P.P. selling to out- P. F. 
Mills let. Machines 



Wholesale 38 8.9 1173 .8.0 

Betr.il 163 51.6 6619 45.3 

Wholesale & Retail 69 33.0 5314 36.4 

In the Grey 30 9.5 670 4.6 

Consumer 2 1.0 301 2.0 

Note: 23 Mills having 530 machines do not follow a certain sales policy 

and will sell any available sales channel. 

SOURCE: "Statistical Polder, 1934", Textile Machine Works, Reading, P a . 



It can be senr. from this tabic that over half the fullfashioned 
mi-lis owning 4. r per cent of t" e uiachin s sell direct to the retailers, 
ilext in im ortance are the mills which sell to both wholesalers and 
retailers, 22 per cent of the mills owning 36 per cc-b of the machines 
sellin;.. to boob. -;f these outlets. 

En. ■•■orts and Imports 

5:;- orts an< d . ; re a relatively uni ; cc item when 
. compared v.'i id- the total val c of domestic production. Per instance, 
total exports in 1934 amounted to only 539,000 doean pairs, valued 
at $2,023,000, which is less thar. one-tenth of one per cent of both 
volume and value of the total production for that year. Imports the 
same pear were even less important, amounting to 597,000 dozen pairs, 
valued at (".951,000. These imports consisted of novelty lisle and 
wool hose not produced in this country; a greater proportion of the 
imports, however, were cheap cotr.o.i hose from Japan. Imnorts also 
show a decline of about 40 per cent from the 19 15-1930 average of 
1,000,000 dozer, pairs, to 597,000 dcze;~ -airs in 1934. 

I'he accompanying tables show volume end value of o:T)orte and 
imports of hosiery from 1950 to 1954. 

TABLE -XLVi 
QUANTITY OP EXTORTS BY PRODUCT, THREE-YEAR AVERAGE, 1923-1930, 
AFD PY YEARS, 1930-1934. 





.- _. . 


(Thousand's" of 


'Do sen 


Pairs) 












Average 












"Product 




1928-19 30(*) 


1930 


1931 


193? 


1933 


1934 


Sill: Hosiery' 




en 


613 


416 


250 


245 


221 


' r/omen' s' seamless 


65 


32 


50 


15 


13 


20 


T/omen's full-fa 


.shione 


d 616 


492 


342; 


210 


207 


184 


Children' s 




11 


6 


l-t 


4 


2 


1 


lien Is 




119 


S3 


■ 41 


21 


23 


16 


Rr?3 r on Hosiery 




918 - 


583 


• 311 


200 


140 


121 


Ho men' s 




459 


OA~\ 


154 


101 


71 


57 


Children's 




100 


73 


27 


20 


10 


7 


Lien' s 




359 


264 


130 


79 


59 


57 


Cotton Hosiery 




5503 


2253 


1122 


709 


415 


247 


Women ' s 




1676 


1054 


593 


330 


167 


86 


Children's 




673 


552 


260 


193 


110 


58 


Hen' s 




954 


647 


269 


178 


116 


103 



(*) Pive-year averages, 1926-1930, are as follows: Sill: Hosiery, 855; 
Rayon Hosiers'-, 1035; Cotton Hosiery, 3798. 

SOURCE: Statistical Abstract of the United States, 1934, pp. 453, 455. 
Ilonthly Summary of Foreign Commerce of the United States, 
December 1934, jro, 9, 10. 



9823 



TABLE XLVII 

VALUE OF EXF0RT3 3Y PRODUCT, THREE- YEAR AVERA&E, 1928-1930, 
A1ID 3Y YEARS, 1930-1934 



(Thousands of Dollars) 



Froduct 



Average 

1928-1930 (*) 1930 1931 1932 1933 1934 



Silk Hosiery 




8546 


6170 


3449 


1530 


I? 16 


1369 


Women' s seamless 




520 


243 


171 


67 


51 


77 


Women 1 s full-fashi 


oned 


7328 


5465 


3080 


1374 


i; 2i 


1228 


Children' s 




41 


21 


12 


' 6 


3 


3 


Men' s 




65? 


441 


136 


33 


71 


61 


Rayon Hosiery 




2810 


1617 


749 


382 


252 


253 


Women' s 




1577 


771 


399 


220 


137 


125 


Children' s 




225 


160 


52 


30 


12 


10 


Men' s 




1008 


686 


298 


132 


103 


117 


Cotton Hosiery 




5618 


3634 


1687 


878 


511 


401 


Women' s 




2980 


1796 


908 


42? 


242 


143 


Children' s 




1035 


837 


353 


217 


116 


84 


Men ' s 




1603 


1051 


421 


234 


153 


174 



(*) Five-year averages, 1926-1930, are as follows: Silk Hosiery, 
8531; Rayon Hosiery, 3418; Cotton Hosiery, 6513. 



Source: Statistical Abstract of the United States, 1934, pp. 453, 455. 
Monthly Summary of Foreign Commerce of the United States, 
December, 1934. 



9823 



TABLE XLVIII 



QUANTITY AND VALUE OF IMPORTS BY TYPE, FIVE-YEAR AVERAGE, 1926-1930, 

AND" BY YEARS, 1930-1934 



Cotton Woo 1 



* 



(Thousand 


s 


of 


(Thousands 


Do: 


:en Pa 


irs) 


of Dollars) 


Average 










1926-1930 


649 






2025 


1930 


512 






1523 


1931 


600 






1534 


1932 


521 






828 


1933 


577 






683 


1934 


456 






516 



(Thousands of (Thousands 
Dozen Fairs) of Dollars) 



356 2279 



230 


1312 


247 


956 


178 


411 


218 


600 


141 


435 



Source: STATISTICAL ABSTRACT of the UNITED STATES, 1934, pp. 500, 503. 
Monthly Summary of Foreign Commerce of the United States, 
December, 1934, pp. 22, 23. 



Territorial Trade 

Exports of hosiery to the possessions of the United States, while 
not large in volume or value, are of particular interest in that they 
are evidence of interstate movement of the goods of the Hosiery Industry. 
The following tahle summarizes the volume and value of such shipments. 



9823 



-84- 

TABLE XLIX 

QUANTITY AND VALUE OF EXPORTS OF HOSIERY TO POSSESSIONS OF THE 
UNITED STATES, 1931-1954 



Quantity 
Dozens of Pair; 



Value 
(Thousands of Dollars) 



Year Hawaii Puerto Rico Alaska (*) Hawaii Puerto Rico AlaskaC*) 



1931 


82,796 


398,918 


10,181 


274,420 


606,555 


25,505 


1932' 


72,067 


364 , 190 


5,693 


199,595 


482,963 


11,983 


1933 


72,446 


387,271 


6 , 263 


181,582 


477,154 


12,962 


1934 


73,640 


381,055 


11,298 


213,558 


575,107 


26 , 277 


(*) 


Cotton ho 


siery only. 











Source: Monthly Summary of Foreign Commerce of the United States, 

December 1932, pp.46, 50, 57, 58; December 1934, pp. 37, 41, 
47. 



9823 



CHAPTB.R IV 
ADOPTION AID ADMINISTRATION 03? TIE CODES' ' 



CODE ADOPTION 

Introduction 

Industry regulation "by menns of a code was not a new idea to the 
Hosiery Industry. As long ago as 1773 a hosiery code was promulgated 
in Germany entitled "New Guild and Trade Code for all Stocking Weaving 
and Knitting Guilds in Chur-Palatinate". (*) Examination of this 
ancient code reveals that many of the present day problems of the 
Industry Here in existence even at that early date, this code having 
been established because the trade "had fallen into such condition that 
the fewest masters can make a living thereby". 

This code reouired statistical reports showing the number of dozen 
produced during the year, and contained provisions fixing minimum prices, 
and prohibiting unfair trade practices such as calling customers away 
from competitors' counters, bribing competitors' employees, and 
depreciating the quality of one's goods. 

Preliminary Steps 

At the time of passage of the National Industrial Recovery Act 
there was in existence in the hosiery industry a strong and ably. run 
trade association, well versed in co-operative industrial activity, 
which had been in existence for many years. Shortly after the signing 
of the act, the National Association of Hosiery Manufacturers took the 
following steps in evolving a code for the Industry: 

"1. An Advisory Committee was set up in each one of the 
■principal branches of the industry, embracing a total of 
fifty-nine (59) hosiery executives,, Separately and 
jointly these committees have been consulted. 

"2. A Hosiery Industrial Board of Control was created, 
consisting of the Chairman of the mentioned Advisory • 
Committees, together with officers nnd directors of the 
Association. 

"3. A Conference Committee was created within the Hosiery 
Industrial Board of Control, to confer with The National 
Recovery Administration and other partie-s of interest. 

"4. Conferences were held with the administrators selected 
by the Government. Such conferences, by prearrangement , 
included the representatives of labor. By these conferences 



(*) Daily News Record, September 12, 1935, (Eairchield News 
Service New York City) 



9823 



-86- 

substrntial agreement was arrived at between industry and 
labor, with particular reference to those provisions of 
the code which deal with hours, wages and conditions of 
work. 

"5. A preliminary draft of the code was submitted to a 
general conference of hosiery manufacturers held in 
New York July 12th and 13th. This conference was attended 
by the executives of three hundred and thirteen (313) 
hosier companies, without distinction as to membership" 
in the Association. 

• 

"6. The conference of July 12th and 13th unanimously 
approved the. Preliminary Draft of the code with certain 
amendments and additions, which are reflected in the final 
draft under consideration. The mills approving the Code 1 
represented 90fs of the full fp.sioned equipment of the 
industry, and 94f5 of the seamless eauipment." (*) 

Not waiting for the full Code to be thoroughly digested and approved, 
the Uational Recovery Administration, by Executive Order of the 
President on July 26, 1933, approved a provisional Code containing: 

1. A limitation upon the working hours of employees to 40 
hours per week and consisting of 5 days of 8 hours each. 

2» A minimum wage. ' J 

3'. Section 7 (a) of the Act defining collective bargaining 
' rights' of employees. " 

Points of View on Code 

A public hearing was held on the proposed code for the hosiery 
industry on August 10, 1933. • ' At< this hearing, the proponents, organized 
labor, and individual members 1 of the industry, expressed their views on 
the proposed code, and* suggested certain changes and amendments. 

Hours . The code proposal was for a 5-day week of 40 hours for 
productive operations 'with a limitation to 2 shifts of 40 hours each 
per week. In support there'of it was stated that: 2 shifts of 55 hours 
each had been general throughout the industry and since the proposed 
change would mean a 27 per cent reduction in productive hours it was 
hoped that production (with a reasonable protective margin) would be 
balanced against consumption which had declined only 10 per cent since 
1929. 

Furthermore, that the reduction of hours would cause the reab sorp- 
tion of practically all the deference 'between the' -number of workers 
employed and the average number of employed in the industry in 1929. 



(*) Transcript of Hearing, 'Ko'siery 'Industry, August 10, • 1953, 
pp. 43 and A4. N.E.A. files. 

9823 



- 7- 

It was estimated that during the highest activities in 1929, 151,000 
workers' were employed. . During the first six months of 1933 the 
average number of workers was! UQlOOOl The number of productive hours 
from 110 to 30 t>er .week should result in increasing the average number 
of workers from 119,000 to 14-8,C00. 

By a report of its Conference Comnittee, the National Association 
of Hosiery Manufacturers , under date of July 19, 1953, suggested that 
the week should consist of five eight-hour days and the days should be 
l!ond,ay to Friday. Full fashioned footing eauipment which is operating 
one shift should continue to operate one shift only and full fashioned 
footing eauinment which is operating more than one shift should operate 
not to exceed two shifts. 

In recognition of the intensely highly seasonal nature of woolen 
goods, and that they must meet requirements for all woolen hosiery before 
December, two-shift production in that branch was permitted by Section 8 
of Article IV of the Code until December 31, 1933, after which that 
branch would be governed by the limits prescribed for all other branches. 

A number of manufacturers protested, at the -oublic hearing, against 
the provision limiting the machine hours to eighty per week. 

■ Organized labor, while in favor of the shift limitation, made a 
strong demand for a thirty-hour week, as opposed to the manufacturers' 
proposal for forty hours. 

Mr. Emil Eieve , President of the American Federation of Full 
Fashioned Hosiery Workers , contended that if a forty-hour week were 
adopted it should be mads to apply to all employees as well as those on 
"productive operations", and suggested that a thirty-hour maximum week 
for two-shift footer operation at the same wage as for forty-hour single 
shift operation, be established instead of thirty-six hour shift for 
two shift footer operation. 

Wages . In the preliminary draft of the code and. all early industry 
discussions, all proposed wage control provided "only a minimum wage". 
The first proposal was for a basic minimum of $10 per week. Largely 
because the practice of -oaying piece work wages prevailed in the industry, 
and because of pressure from organized labor and on the advice of their 
industrial advisor, and "to prevent the minimum becoming either a 
minimum or a maximum", (*) later code proposals were for minimum wages 
classified by occupation. The code as finally approved provided a 
series of minima, one for each recognized class of skilled labor, ranging 
from. $13 .to $27„50 per week in the North, with a differential of approxi- 
mately 10 per cent lower for the South. This Southern differential was 
established "in recognition of the lower cost of living in that section". (**) 



(*) Transcript of Hearing, Hosiery Industry, August 10, 1933, 
p. 11, Earl Constantine. 

(**) Transcript of Hearing, Hosiery Industry, August 10, 1933, 
Earl Constantine, I IRA. files. 

9823 



While not objecting to the nronosed classified minima, Mr* Rieve of 
the union objected to the Southern differential, stating that a 
National Industrial Conference 3oard study showed slight differences in 
living costs in the two areas. He 'proposed a minimum of $14 and $13 
for the seamless branch; that when learners are capable of earning more 
than their minimum wage working at piece work rates, they should be 
compensated at the higher wage; that all knitting helpers be paid by 
the emnloyer instead of the knitter; and that machines run as single 
jobs prior to July 1, 1933, shall continue to be so run, (this 
principally for the purpose of discontinuance of "stretch outs"). The 
union reauested that election of department or shop representatives and 
conferences between those representatives and employers be held in 
places other than their olant rr-emises, be provided for in the code; and 
that the union should be permitted to investigate and use all data 
collected by the National Association of Hosiery Manufacturers. 

Child Labor . Although child labor had largely died out in the 
industry because of State la"s, the code coimoletely eradicated it and 
prohibited the employment of minors under 16 years of age. Indications 
are that Pennsylvania manufacturers opposed this provision in the 
preliminary conferences on the proposed code, but with the moral 
impetus given the cause for the abolition of child labor by the publicity 
given the approval of such a provision contained, in the Cotton Textile 
•Code, finally agreed to its incorporation in the Hosiery Code. (*) 

Trade Practices . At the loublic hearing on the proposed code held 
August 10, 1933, there was practically no question raised on trade 
practices except relative to stamping all hosiery sold as seconds or 
irregulars. Cases ™ere cited of purchasers procuring seconds or 
irregulars and selling them as first quality stock. If only one of a 
pair was stamped as irregular, the unstamped singles would be matched 
and sold as perfect merchandise. 

It "as claimed that the reduction in productive hours with the 
increased wage rates would naturally increase costs. Therefore, it 
.was felt that Article VIII, Section 4, was absolutely necessary, — this 
Article provided for a uniform manner in which to determine costs, and 
prohibited the sale of merchandise below cost as so computed. 

Code Approval . After the public hearing, informal conferences were 
held by the Deputy Administrator, attended by representatives of both 
the trade association and organized labor. At these conferences minor 
differences were adjusted and the final draft of the code worked out. 

The Hosiery Code was approved by Executive Order of the President on 
August 26, 1933, to become effective on the second Monday thereafter. 

A special hearing was held on Se-oteraber 27, 1933, at which all 
protestors against the code as approved were given an opportunity to be 
heard. 



(*) Recollection of James Worthy, former Assistant Deputy 
Administrator, NRA. 

9823 



ADMIUISTHATIOl! OP 133 CODE 

ADI.1IHISTHA.TI ON 07 CODE 3Y CODE AUTHORITY 

Code Ar.thority Fersonn3l 

According to Article IX, Section 1, the Coi.e Authority was to 
consist of: 

A. Total of tv;elve members. 

1. Sight Industry members appointed by the. 
Board of Directors of the Trade Asso- 
ciation. 

2. Two Labor members ayoinfced by Adminis- 
tration on nomination of the Labor Ad- 
visory Board. 

3. Two members appointed by Administration. 

Indus t ry Kle.nb e r s . 

The granting of the Trade Association the right to appoint 
the industry members of the Code Authority was based on the fact that 
it was "the only established national and representative Trade Asso- 
ciation in the Industry".; that_ It imposed no inequitable restrictions 
or. admission to membership; and that it represented over 70 per cent 
of the total volume of production of the Industry. (*) 

This arrangement of having the Association appoint the Industry 
members of the Code Authority has been severely criticised. The Lar- 
ro?tf 3oard on May 15, 10.34 found: 

1. That 40,' j of the units of the Industry were 
not members of the Association. 

2. That the Code Authority was not representa- 
tive of the small units. 

On June 14, 1334, probably as a result of this criticism two 
members of the Code Authority, owners of large plants, resigned and 
their places were taken by owners of small TDlants. At that time the 
Code Authority established the practice of rotating or partially 
changing the Cod:; Authority every six months. 

According to an opinion of the national Recovery Administration 
Legal Adviser (8/6/34) the Code Authority v/as not representative of 
the non-association members of the industry. He stated that the method 
of selection should be by industry vote, and that the close connections 



(*) Transcript of Public Hearing August 10, 1933, page 3 Hosiery In- 
dustry, HHA files. 



. . • -go- - 

"between the Code Authority and the trade association should he "broken 
up. 

Labofr Herat ers. 

It is believed that this was the first code to give labor 
representation on its Code Authority. In practice the labor repre- 
sentatives appointed by the national Recovery Administration on the 
nomination of the Labor Advisory Board wore officials of the union 
in the full fashiorod branch of the industry. These members were: 

1. Mr. Frail Riove, President of the American 
Federation of Fu.ll Fashioned Hosiery Workers. 

2. Mr. William. Smith, Secretary Treasurer and 
past President of the same union. 

This labor representation is open to criticism because 
unorganized la.bor had no representation. Mr. Rieve objected to a 
Southern wage differential. (*) A Southern wage differential would 
have worked to the disadvantage of the Northern Mills - the union- 
ized portion of the industry. Furthermore, the full fashioned branch 
of the industry is largely unionized while the seamless group is not. 

Administration Members. 

The Administration Members on the Hosier:/' Code Authority 
were: 

1. Dr. George W. Taylor, economist and leading 
hosiery expert* 

2. Stanton 3. Sanson, President of the Ajax 
Hosiery Mills, and member of the minority 
group of Industry members opposed to machine 
hour limitation. 

Dr. George W, Taylor, a professor of the Industrial Research 
Department of the Wharton School of Finance and Commerce, University of 
Pennsylvania, has given much time to the study of hosiery problems 
since 1929. He was connected with the Hosiery Code from its inception, 
acting as the National Recover;-' Administration's Industrial Advisor 
at the first public hearing; and he wrote the economic report contain- 
ed in the letter of transmittal. 

Mr. Sanson, a manufacturer, was appointed by the National 
Recovery Administration to look out for the interests of a minority 
group of the Industry holding views on production control oiroosed 



(*) Transcript of Hearing, Hosier;/ Industry, August 10, 1933, Statement 
of Frail Rieve, UFA files. 



9823 



- L- 



to those of the Code Authority. Ee was supposed to thoroughly 
study the whole problem of production control in the industry. 
After his report was rendered his Code Authority membership was ter- 
minated since this report fulfilled the purpose of his appointment. 

Trade Association Relationship 

The connections between the trade association and the Coda 
Authority were very close. Officially the code provided: 

Article II, Section 1. Code Authority members to be 

selected by the Association. 

Article VII. The Association to receive 

statistical reports. 

Article VIII, Section 1. The Association to develop 

a uniform sales contract. 

Article VIII, Section 4. Closoouts to be stamped with 

: indelible transfer ordered 
only through the Association. 

Article VIII, Section 15. Disputes re. interpretation 

of trade practice provisions 
to bo submitted to such forms 
of arbitration as set up by 
the Association. 

Unofficially, the tie-up was even closer. The Managing 
Director of the Association was also Executive Director of the Code 
Authority. The Code Authority and the 'association occupied joint of- 
fices. 

The relationship between the various trade associations and the 
national association can be gained from a special news letter of the 
national association of July 10, 1935, in which it vras said that the 
National Association of Hosiery Manufacturers is not affiliated with 
any other association. It does, however, cooperate with the Underwear 
Institute,' the Textile Color Card Association, oho Full Fashioned Hosiery 
Manufacturers, IToolen Hosiery Institute, Southern Hosiery Manufacturers 
Association, Full Fashioned Hosiery Association and -the American Federa- 
tion of Full-Fashion eel. Hosiery Workers (an affiliate of the A. F. of L.) 
The original staff of the Association consisted of approximately ten 
persons; during the last twenty-four (24) years the force has been 
steadily increased. The activities have been previously stated. 

Code Authority Committees . 

In accordance with Article IX, Section 3, eight" Branch Advisory 
Committees wore early established to loo 1 :' after the interest and to 
advise the Code Authority on problems of the' various branches of the 
Industry. 



9823 



-32- 

In addition thereto the Code Authority from time to time es- 
tablished special committees to study special problems such as 
production control, standardization of hosiery sizes- and quality, 
Horth-South differentials, 'etc. 

Committees to handle labor complaints and trade practice 
complaints were also established.. . Thes'e -committee's, although more 
or less unofficially, recognized, by the Deputy Administrators handling 
the code, where never officially recognized "o~j the Rational Recovery 
Administration. The personnel selection and procedure of these com- 
mittees in general appear to have conformed to National Recovery Ad- 
ministration regulations. 

Code Authority Financing . 

By a written agreement" the "expenses of the tra.de association 
and the Code Authority were apportioned. 

A budget of estimated. Cod:= Authority expenditures was not 
presented, to the. Rational Recovery Administration for normal approval 
during the early Code days. However, by Administrative Order Humbcr 
16-9 on February 21, 1334 a basis of assessment of l/lOth of 1 per cent 
of monthly sales volume, upon members of the Industry, to defray the 
expenses of the adjninistration of the code, was apnroved. 

Collections of monthly assessments appear to have been good, es- 
pecially during 1334 when over 90 'Oor cent of the assessments were 
collected. At no time was there any complaint from the Code Authority 
of its inability to collect assessments nor do the files show any serious 
complaints from the industry. The Code Authority adopted a policy of 
reducing or waiving the assessments whenever the amount of funds on hand 
warranted it. 



A proposed budget was submitted by the Code Authority for the 
period of July 1, 1934 to June 30, 193j providing for an expenditure 
of $183,720.00. This was tentatively approved by the administration 
on April 3, 1335. 



• 



The report of the accounting firm, Zrnst and 3rnst, dated 
August 15, 1335, of an examination of the liquidation of the Hosiery 
Code Authority shows the following: 



Period of 
Assessment 



Net Amount of 
Assessments 



Realized Uncollected Percentage 

Collected 



Feb. 1 to Pec. 

31, 1934 Incl. $226,333.84 



$205,527.41 $21,466.43 90.54 



Jan. 1 to May 
1, 1935 Incl. 



Total 
9823 



112,133.03 



333,192.87 



112,193.03 83,373.91 74.31 



288,907.32 50,285.55 85.17 



► 



r 



-9-1- 



TABLD L 



HOSIERY CODS VIOLATI01JS 
September 4, 1933, to March, 1935. 



Total Complaints Received 

of Vjclations Discovered - 
Complaints Adjusted- 
llo Violations Found- 
Unadjusted Feb. 23, 1935- 
Cases in Y'hich Restoration 

of Wages Were Made- 
Number of Employees Re- 
ceiving Back Y/ages- 
Total Amount of Back Wages 
Paid- 



Labor 



Traae practice 



Total 



903 


154 


1,067 


634 


133 


776 


195 


19 


314 


64 


1 


65 

223 

2,478 

$-.46,000 



Source: Code Authority Records 
Hosiery Industry 



According to this report, 85 per cent of complaints were 
relative to labor provisions, 70 per cent of the labor complaints and 
90 per cent of trade practice complaints received were adjusted. Of 
the wage restitutions, about $2,500 were brought about through the 
efforts of the NRA. Compliance Division, and $1Q 000 through the com- 
bined efforts of this division and the Code Authority. The assump- 
tion, is therefore, that the balance of the restitutions were brought 
about through the unaided efforts of the Code Authority. 

Compliance Activities of ITRA. 

The report of the Compliance Division of complaints docketed 
by ITRA. from April 20, 1934, to May 5, 1935, is as "follows: 



9823 



- -- 



TABLE LI 

VIOLATIONS OF HOSIERY CODS REPORTED TO COMPLIANCl 
DIVISIOIT- April 20, 1934 - Ifay 5, 1035. 



Type of Violation 

'."ages 

Hours 

Conditions of Work • 

Coordination and Administration 

Section 7' (a) 



Total 



Number of Complaints 

86 
41 

4 

7 



141 



Source: IT?A Comoliance Division Records 



The Compliance Division also reports that from November 11, 
1933, to May 25, 1935, of 431 complaints docketed, 418 were relative 
to labor provisions, and 13 were trade practice complaints. Of- the 
431 docketed, 255 were adjusted, 9 of which were relative to trade 
practices. 

Litigation . 

There were 11 cases (on:^ case may involve several viola- 
tions) reported "by the Litigation Division, 10 of which' were vio- 
lations of the minimum wage provisions, 8 were violations of maximum 
hour provisions, 4 were violations of machine hour provisions, and 
2 were failure to furnish statistical information. 

The most famous of the litigation cases was that of the 
Richmond .Hosiery Kills of Rossville, Georgia, an alleged violation 
of wage, hour, and machine hour limitation provisions of the code, 
which was filed against this company by its competitors in Septem- 
ber, 1933. This complaint was referred to the National Recovery 
Administration by the Code Authority, and was forwarded to the 
Department of Justice on March 2, 1934. The ". Richmond Hosiery Mills 
promptly obtained an injunction against the enforcement of the Code. 
At the time of the Schechter Decision, this case was pending before 
the Supreme Court. 



Violations of Collective Bargaining: Provision 

This clause, and Section 7 (a) of the Act, came into play in 
six complaints to the effect that employers bad refused to bargain 
collectively with their employees. These cases involved strikes 
requiring the intervention of the national -Labor Board and the Com- 
pliance Division. The following companies were involved: 

9823 



Harriman Hosiery Company . Harriman, Tennessee 

Real Silk Hosiery Mills Dalton, Georgia 

Bear Brand Hosiery Company Beaver Dam, Wisconsin 

Hatch Hesiery Mills Belmont, ITorth Carolina 

National Silk Hosiery Company Indianapolis, Indiana 

Fulton Hosiery Mills Indianapolis, Indiana 

The last two companies are subsidiaries of the Harriman Hosiery 
Company. The strike at the plant of the Harriman Hosiery Company 
oc cured October 26, 1933, "because of the dismissal of thirty employees, 
who were officers and committeemen of the newly organized local of 
United Textile Workers. The national Labor Board, the Atlanta Regional 
Labor Board, and the United States Labor Department, spent five months 
of futile efforts in an endeavor to settle the difficulty, so General 
Johnson ordered that the Harriman Company be deprived of the Blue 
Eagle for alleged violations of Section 7 (a) of the National Indus- 
trial Recovery Act. (*) 

The company finally agreed to bargain open-mindedly with the 
representatives of the six hundred strikers* In July, 1934, Assis- 
tant Administrator for Field Administration, A. R. Glancy, negotiated 
an agreement, and the Blue Eagle was restored. The terms of this 
agreement included the termination of the strike ^oy the employees, 
and the Company's ceasing to prosecute any case as a result of the 
strike. It was also agreed that the company, would re-employ the 
strikers in gradually increasing numbers. (**) 

A strike occured at the Bear Hosiery Company's Beaver Dam 
plant on March 19, 1934, in protest against discriminatory discharge 
of six union workers. (***) About two-thirds of the company's work- 
ers participated in the strike, forcing the closing of the plant on 
March 20, 1934. The National Labor Board held a hearing on June 13, 
1934, to discuss the questions involved, but the company failed to 
send any 'representatives to this hearing. Shortly thereafter the 
company began moving its equipment from the Beaver Darn plant to 
Hankatee, Illinois. The ITational Labor Board then charged the company 
with violations of Section 7 (a) of the ITational Industrial Recovery 
Act. Acting on these findings, the Compliance Division of 1I?A, on 
July 25,1934, withdrew the right of the Bear Brand Hosiery Company 
to use the Blue Eagle insignia. The 1TRA files fail to disclose any 
further action "on this case, or whether the company ever reopened its 
3eaver Dam plant. 

A strike occured at the Dalton, Georgia, plant of the Real Silk 

(*) Hews Release Ho. 4540, April 20, 1934, 1TEA. Publications 
Library. 

(**) Hews Release Ho. 6618, July 10, 1934, 1TRA Publications 
Library. 

(**) News Release ITo. 4540, April 20, 1934, NRA Publications 
Library. 

9823 



-97- 

Hosiery Mills in November, 1934, as a protest against the discharge 
of eight employees, who were officers of the local United Textile 
Workers Union. (*) On February 28, 1934, a complaint was registered 
with the National Labor Board that the Company had failed to comply 
with a ruling of the Atlanta [Regional Labor Board which called for 
reinstatement of the discharged workers. On February 16, 1934, the 
National Labor Board conducted a hearing on the case. As the result 
of an agreement reached on May 23, 1934, the strike was terminated, 
the company agreeing to reinstate workers who had not com:aitted any 
acts of violence. 

A strike occurred at the Hatch Hosiery Company's Belmont, North 
Carolina, plant, in protest of the discharge of eight emoloyees for 
alleged union activities. (**) The National Labor Board held a 
hearing en April 23, 1934, avowing the company to show cause why 
they should not be cited for violation of Section 7(a) of the Act. 
As a result of an agreement reached in June, one half of the one 
:hundred strikers were reinstated. 

Strikes occurred at the National Silk Hosiery Mills and the 
Fulton Silk Mills, Indianapolis, Indiana, in May, 1934, involving 
the question of Union wages. (***) The National Labor Board held a 
hearing on this dispute on June 22, 1934, after which an amicable 
settlement was made. 

Exemptions 



The machine-hour limitation seems to have been the most onerous 
code provision, sixty-one requests for exemption from this provision 
having been received. Numerous reasons for exemption were expressed 
in these petitions, the principal one being that the firm was unable 
to meet orders already on hand under the restriction of a machine hour 
limitation. Other reasons for exemption were: an unbalanced plant 
with some_ departments unable to keep \\j> with the rest of the plant 
under the limitation; style changes throwing plant out of balance due 
to necessity of removing machines from production in order to alter 
them so as to make new styles; and increased overhead due to operat- 
ing the plant equipment a shorter length of time. Forty-three of 
these petitions were filed be-fer« the effective date of the Code, Code 
approval effectually killing them. 



(*) News Releases Nos. 3200 and 8268, NRA Publications Library. 
(**) News Releases N§s. 4547 (April 21, 1934) and 5662 (June 9, 

1934), NRA Publications Library. 
(***)News Release N«. 5963, June 22, 1934, NRA. Publications Library. 



The following table shows action taken by both the Code Authority 
and the NRA on the other coses: . 

tai;ld hi 

ACTION JSL236TJ3STS .FOR MACHINE 30IIL, SORPTIONS/ 

Code Authority Action U.K. A. Action 

Recommended Denied or No Action Granted Denied Ho Action 
scommenc 
Denial 



Granting Recommended 



19 6 1 3 10 



Source: Dillingham, VJ. II., "Code Administration Study of the Hosiory Industry. 
NRA Hd'S fifty Cod? File. 

Many of these exemptions were denied by the Code Authority without 
reference to the National Recovery Administration. Some of the exemp- 
tion shown in the !, l!o Action" column of the NRA were referred to the Code 
Authority and presumably denied by that body. 

However, in spite of this fact, there appears to be & surprisingly 

lar e number of cases in which no action was taken either ~oy the National 
Recovery Administration or ~oy the Codj Authority. 

General Attitude of the Code Authority 

It is the opinion of N.R.A. employees (*) who were connected with 
the administration of the code, that Hosiery Code Authority was one of 
the most efficient, and was entitled to rank high in the sca>le of code 
authorities. • f 

It was extremely active, agressive and forceful, and made every 
effort to obtain compliance with the code. Its efforts in this direc- 
tion T/e re highly successful. 



(*) James C. Worthy, former NRA Assistant De;mty Administrator, stated 

to the author on November 18, 1935, that he believed the Hosiery 
Code Authority to have beer the most efficient of all the Textile 
and Apparel Code Authorities. .- - ■ ,'••'•■ 



9RP.3 



-99- 

The trade association had long "been active in industrial planning, 
and its activities were Carried on under the Code Authority. 

The minutes of the Code Authority meetings show there were hut 
three split votes during the sixteen meetings. At each meeting an 
average" of fifty items of business was transacted, but no discussions 
were recorded in the minutes. 

The general attitude of the Code Authority was for production 
control through industrial self-government under approval of the national 
Recovery Administration. It appearrs that important questions were 
considered in advance of meetings and that approval of these decisions 
was perfunctory and merel3 r a legal formality. 

Collection and Dissemination of Statistics 

The need for adequate factual data in the Industry was recognized 
by Dr. George VI. Taylor, who wrote; (*) 

"The most pressing need of the full-fashioned" industry is the 
development of a means of clearing vital facts." 

According to Article VII of the Code, the collection and publica- 
tion of statistical data was to be performed by the trade association. 
The results in this connection were exceptionally good. The first 
"Statistical Bulletin" was issued in June, 1934, and contained 
statistics on production, shipment, stocks, and number of wage earners, 
from November 1933, through April 1934. 

The trade association carried on this activity after the death 
of the Code Authority. 

In addition to the publication of periodical data, the Code 
Authority sent out and tabulated the returns from many special question- 
naires. It cooperated in .(*)the publication of the machinery data so 
gathered in book form by George W. Taylor and G. Allen Dash, Jr., "The 
Knitting Equipment of the Seamless Hosiery Industry", January 1, 1934. 
It is hoped that similar data will shortly be available on the Full 
Fashioned Branch of the Industry. 



(*) Taylor, -George W. , Textile World, June 1931, p. 32. (McGrah-Hill . 
Publishing Company, New York) 

(*») See Preface it id. 

Also see expense item $1,383.53, "The Knitting Equipment of the 
Seamless Hosiery Industry"; Ernst and Ernst, Audit Report of Code 
Authority, p 3, '■' 



-100- 

The Code Authorities, published statistics relative to labor data 
were not as complete as those published relative to other, matters. 

Code Authority interpretations 

The Code Authority was extremely active in interpreting code pro- 
visions. This activity was such as to bring criticism by the Legal 
Division of the national Recovery Administration, (*) 

Under the head of "Official Interpretations and Failings", the 
Code Authority issued a bulletin on October 19, 1933, interpreting and 
defining nearly every provision of the Code. This, practice was general, 
especially with reference to labor provisions, since from Article IX, 
Section 3, it might be interpreted to mean that the Code Authority had 
such right. This Section stated: 

"* * * duty of the Code Authority to: 

11 (a) Issue and distribute to all persons in the Industry, 
from time to time, such posters or notices, as in its 
judgment, shall be displayed in the plants of the Industry** 

"(b) Review all questions or disputes arising under this Code. 
It shall have the power, subject to the approval of the Administra- 
tor to dispose of such issues directly, or by such means or media 
as it may designate or set up for the purpose". • ... 

This assumption of power bv the Code Authority in the early days 
of code administration was a natural outgrowth of; the. development of 
industrial government. Labor, as technique and procedure became more 
crystallized, all proposed interpretations were reviewed by the National 
Recovery Administration, and their implications and probable effects 
were carefully studied before approval. 

ADMI1TI STRATI 01" 0? THI C0D3 BY IIRA 

Development of Codal Administration 

The hosiery industry, along with many other apparel industries, 
was quick to recognize the value of industrial self-government. Their 
code, therefore, was one of the first, being the sixteenth code approved. 
The code was signed by the President on August 26, 1933. The Industry 
had a temporary labor agreement as early as July 26, 1933. 

It is only natural that the administration of the Code by the 
National Recovery Administration passed through s e vera 1 evolutionary 
stages. At first, the technique was informal and of an experimental 
nature, in those days, Deputy Administrators fed large powers. Later, 



(*) Memorandum dated August 6, 1934, from Legal Advisor. (lIRA Files, 
Hosiery Code) 



9823 



-' )1- 

after the development of nolicy and s more detailed procedure, the 
Deputy was shorn of some of his power, and forced to obtain reports 
from the several advisory boards and t... Research and Planning and 
the Le b ?l Divisions, the whole matt r "being finally subject to re- 
view by the Review Division, which required justification for any 
actions contrary to policy or contrary to opinion of a large number 
of the Boards. This procedure had o ... severe drawback, - so much . -> 
routine was involved that considerable time was necessary to get 
anything done. Often it took several months to obtain a final decision 
on proposed amendments. 

The administration of the code by the National Recovery 
Administration- could have be in much improved. In particular there 
were too frequent changes of persons Individually responsible for the 
handling of the Code in the National Recovery Administration offices. 
The Code was submitted in July 193.':, and was approved August 26, 1933. 
The records show that from the submission date to May 27, 1935, there 
were five different Division Administrators, seven Deputy Administrators, 
four Assistant Deputy Administrators and four Aides who handled this 
Code. The many changes annoyed the Code Authority and members of the 
Industry. Such complaints were voiced personally and by letters con- 
tained in the Deputy's files. The objections were to the effect that 
the frequent changes, especially of the Assistant Deputy Administra- 
tors and Aides, required time for the new men to become familiar with 
the industry's problems and that the new men were unfamiliar with 
the operations of the administrative agencies. It also appears that 
frequently Aides acted the part of Assistant Deputies, causing 
confusion. 



9823 



CHAPTER V 

MAJOR PROBLEMS' ' 

PRODUCTION CONTROL & PRICES 

PRODUCTION CONTROL BY MACHINE HOUR LIMITATION 

As early as 1929", it was recognized that the industry was over 
capacitated, George W. Taylor in his "Significant Post-War Changes in 
the Pull Fashioned Hosiery Industry 1 ' having 'stated, "Apparently it 
(the full~fa.shioned industry) too is developing its share of over equip- 
ment." Recognizing the tendency of women's full-fashioned hosiery mills 
to produce for stock, the National Association of Hosiery and Underwear 
Manufacturers, recommending that manufacturers produce to order only dur- 
ing the dull months of July and August. (*) 

Therefore, in presenting their Code, the industry urged upon the 
administration the advisability of the inclusion of some form of shift 
limitation. Accordingly Article IV, Section 6 and 7 of the code provided 
that productive operations of a plant should not exceed two shifts of 
forty hours each. 

Admitting that the limitations on production conbained in their 
code had not curtailed production nor stocks in a letter to General 
Hugh S. Johnson on June 23, 1934, the Executive Director of the Code 
Authority stated: 

"The Hosiery Code limits productive operations to two 
shifts of forty (40) hours each per week. When the 
Code was drafted it was calculated that such restric- 
tion would impose at least a twenty-seven per cent(27^i) 
reduction in production. Such reduction is highly 
needed in the industry because it is extremely over- 
capacitated and there exists a wide gap between its 
production on the one hand and the expectable demand 
on the other. 

"The restriction sought by the present code provisions 
has been defeated to a great extent by the following 
developments: 

1. Much equipment which was formerly operated 
on a one-shift basis has "been converted to two- 
shift operations. This has spread employment 
but at the price of defeating the object of re- 
stricting production. 

2. Equipment which was idle or in storage has 
been put into production. 



< 



: ". 



3. New equipment has been installed." 



(.*)' "Textile World", June, 1931, 



9823 



mmm 



-] - 



An examination of the graph of stocks on liand and of the data 
in Table XI confirms the fact that the machine hour limitations were 
of slight if any "benefit in reducing manufacturers stocks on hand. 

LIMITATIONS ON FOOTERS 

The industry, however, was faced with a peculiar situation in 
machine hour limitations in the full fashioned "branch, since one foot- 
ing machine can amply produce enough to keep three leggers "busy, with 
a declining ration of leggers to footers in the. industry ( *) there had 
grown up a practice among some manufacturers of operating leggers on two 
shifts. 

It was "believed to "be necessary to place further restrictions on 
the footer-machine operation in ord-r to restrict production. This sit- 
uation is described in the report of the Deputy Administrator to General 
Johnson in submitting the proposed code on August 25, 1933 as follows; 

" "Abmit thirty-five per cent (35$) of the footing machine 
equipment of the industry is so balanced with complemen- 
tary legging machines as to permit the former to operate 
on two shifts. However, but ten per cent (10$) of the 
footing machines are normally operated on two shifts. 
Hitherto it has not been deemed practicable to operate 
footers on two shifts, although the possibility of so 
doing would be increased enormously on a forty (40) hour 
schedule per shift. This is true because girls are em- 
ployed as toppers and already existing restrictions on 
their hours of work have made two shifts impractical. 
Industry conferences brought out the fact that an undue 
hardship would fall upon many small concerns should sin- 
gle-shift operation of the footing machines be made man- 
datory. On the other hand, to allow double-shift opera- 
tion of footers on the forty (40) hour week basis would 
immediately result in the adoption of this method of op- 
eration by thirty-five per cent (35$) of the industry. 
In addition, other manufacturers could and would place 
themselves on the double-shift basis in order to decrease 
unit costs of production. This they could do by changing 
the balance of their equipment through the addition of new 
legging machines. To insist upon single-shift footer op- 
eration would prove unduly burdensome to mills operating 

(*) "Significant Post-War Changes in the Full Fashioned Hosiery Industry 1 ' 
- by George 7. Taylor, Page 71. (Ilcffravr-Hill Publishing Company, 
New York) 



9823 



-104 



a minority of the equipment of the industry tout rep- 
resenting a large number. of plants. To allow double- 
shift operation of footers would be to offer an induce- 
ment to manufacturers to over-equip -the industry and to 
' overproduce beyond any expected requirements for hosiery." 

The section that was finally contained in the code, therefore, 
represents, a compromise between the demands of these conflicting inter- 
ests the mills operating one shift and the two shift mills. That this 
was only a makeshift experimental provision in evidenced by other por- 
tions of this provision, namely, limiting, it to only six months, and 
providing for Code Authority study and 'recommendations- as to a permanent' 
policy. In recommending the approval of this section, the Deputy in- his 
report states; 

"Briefly, it was unanimously agreed that, for a period - 
of six. (6) months following the date on which the Code 
becomes effective, footing machines that were being op- 
erated on aouble shift on July 24, 1933, may continue 
on this basis, but that the length of each' shift shall 
not exceed thirty-five (35) hours per week. The rates 
to be paid to operators of these machines will provide 
them earnings equivalent to what, they would receive 'if 
working on forty (40) hour shift. Footing .machines that 
were being operated on a single shift basis, prior to 
July 24, 1933, are to continue, on .that basis with forty 
(40) hours per shift. At the expiration of the six (6) 
months, trial period, the Code Authority is to submit 
for the .approval of the Administrator a recommendation 
for determining a more permanent policy respecting footer 
operation. 

"The above arrangement insures that there will be no. . 
immediate and undue increase in productive capacity as 
a result of increasing the number of shifts being op- 
erated by footing machines. In addition, the increase 
of the labor cost of operating footers .on two shifts 
eliminates any urge for manufacturers so to operate their 
equipment unless this is absolutely necessary to meet 
normal requirements. Through the operation of the terms 
of the provision just discussed, the manufacturing cost 
by means of single and double footer shift operation is 
virtually identical." 

This section brought about considerable dissatisfaction. At the 
public hearing of September 27, the opposition of numerous hosiery manu- 
facturers to Article 4 of Section 7, which compels mills operating foo-t~ 
ers on double-shift basis to reduce working hours to two 35-hour shifts 
and pay footers on a 40~hour basis, was led by Stanton D. Sanson, who 
asked that the clause be eliminated from the code because it would raise 



982C 



-105- . 

production costs to a prohibitive point. Kr. Sanson submitted a cer- 
tified statement by accountants showing that, in his millj the opera- 
tions under the clause increased production costs by $58,515.05 annually. 
L : r. Sanson emphasised mainly the claim that the clause gave competing 
manufacturers an unfair advantage, and. other witnesses testified to the 
same effect. 

As a result of the. < study of this problem the Production Control 
Committee of the Code Authority recommended the revision of this section. 
Accordingly, this section Fas revised by Amendment 110. 1 approved by 
Administrative Order on February 2, 1934, to read: 

"Members' of the Industry may operate their full-fashioned 
. footing equipment either .on a one-shift or a two-shift 
basis. If a member of the Industry operates on a one- 
shift basis, the .length of such shift shall not exceed 
forty (40) hours in any one w^ek, and if he operates such 
equipment on a; two— shift basis, the length of each shift 
shall not exceed thirty-six (3b) hours in any one week. 
In the latter event, the rates paid to knitters, knitting 
helpers, : and ^toppers working on such thirty-six (35) hour 
shifts shall be such as to provide them earnings equal to 
those which they would receive if they were' working on a 
forty (40) hour shift." 

The result of this amendment was that nearly all of the footing 
equipment in the industry was immediately placed upon two shift opera- 
tion resulting in a greatly increased productive capacity. This', in 
spite of the higher labor cost required. 

Consequently the amendment resulting in no actual restriction on 
production. 

>■ 

FIVE WEEK CURTAILMENT 

In order to "beat the gun" before the codes with their anticipated 
higher labor costs became effective many manufacturers stepped up pro- 
duction. 

This was in turn partly compensated for by increased buying and 
increased shipment as seen on Chart I during the months of Hay and June. 
In spite of the fact that the net result of the action of these forces 
was a reduction in stocks on hand in the mills resulting in new lows 
for July and September 1933, the general feeling of the Code Authority 
and throughout the industry was that there were large accumulations of 
unsold goods on the shelves of wholesalers, retailers and other distribu- 
tors and that further overproduction resulting in greater stocks on hand 
was imminent. Representatives of the Code Authority pointed out at the 
public hearing of December 11, 1933, that production had been abnormal 
in 1933, that usually May, June find July were slack months but that this 



9823 



-106- 
year they were periods of intense activity. They urged upon the 
National Recovery Administration a further curtailment of machine 
hours . 

In orde r to fortify their views and ascertain the' sentiment through- 
out the Industry regarding a temporary curtailment the Code Authority, on 
November 23, 1933, sent out a questionnaire to all members Of the industry. 
Replies to this questionnaire were received from 440 of the -800 plants 
in the Industry. . 

. The results of this questionnaire showed that opinion in the in-> 
dustry was divided on this problem of curtailment. About 60 per cent of 
those replying were in favor of curtailment and 40 per cent against. On 
the basis of productive capacity 67 per cent favored curtailment and 33 
per cent were opposed. It was the larger concerns in the industry, there- 
fore, that were in favor of curtailment. The following table shows the 
results of the replies in the two main branches of the Industry. 

TABLE LIII 
QUESTIONNAIRE REPLIES ON THE QUESTION OF CURTAILMENT 

Full Fashioned No. Replies Per cent of per cent of 

Usable Replies Production Capacity 
of Designated Brands Represented 

Favored curtailment 125 60 67 

Against curtailment 84 40 33 

Unclassif iable 23 - 

Seamless 

Favored curtailment 146 60 67 

Against curtailment 79 40 33 

Unclassif iable 22 - ■ - 



Source; Transcript Public Hearing, December 11, 1933, pages 12, 13* 
NRA Files. 



9823 



-] ?- 



Since n large variety of goods are made in the seamless "branch 
of the industry the replies for this bjranch were classified by type 
of product produced. This data is. shown in the following table: 

TABLE LIV 

DISTRIBUTION OF QUESTIONNAIRE REPLIES ON CURTAILMENT 

i: ; THE SEAMLESS BRSNCH OP 

THE INDUSTRY BY TYPE OP PRODUCT I AITOPACTURED 







Favored Curtai 
ment 


1- 


Against Curtail- 
ment 


Branch 

of the 

Industry 


No. of 

Replies 


Per cent of 
' replies of 
Desig. Branch 


No. of 
Replies 


Per Cent of 
replies of 
Desig. Branch 


'./omens 


58 




67 




29 


33 


Hen's Half Hose 


87 


- 


71 




36 


29 


Ribbed Goods 


26 




60 




17 


40 


Anklets 


36 




51 




35 


49 


Golf Hose 


17 




30 




39 


70 


Infants' Goods 


10 




29 




24 


71 


Bundle Goods 


5' 




45 




6 


55 


Over TToolens 


5 
245 




100 
57 




_ 


_ 


Total Seamless 


186 


43 



Source: Transcript Public hearing, December 11, 1933 - page 16,. 
NRA files 

It is seen from this table that although in general seamless manu- 
facturers were in favor of curtailment, the makers of both infants' goods 
and golf hose were opposed to it by a vote of over two to one. Represen- 
tatives of the Code Authority explained at the public hearing that infants' 
goods were not staples, that they are mainly new designs and new colors, 
therefore, it was impossible for manufacturers to build up stocks, and that 
such goods were generally for spring delivery. 

Manufacturers of ingrain hosiery, wool bundle goods, and small manu- 
facturers objected to the proposed curtailment, claiming that the curtail- 
ment would increase overhead costs of goods now being processed, that it - 



9823 



•] - 



would work a hardship en the small mills with limited capital, that 
it would curtail earnings of workers, that inadequate statistical data 
on stocks on hand by retailers, wholesalers and consumers were available, 
and finally that many mills had booked orders sufficient to operate at 
capacity throughout this period. 

There were two ways in which production coiild he curtailed. 

1. To maintain an eight hour day, hut to reduce the 
number of days 'orked per week. 

2. To shorten the number of working hours in each of the 
five days. 

There were advantages and disadvantages to both of these methods; 
one group claimed that to concentrate knitting in 3 full length days 
leaving two days in which to overhaul machinery was the more economical 
method of operation. Other manufacturers claimed that it was better to 
run machines every day, since yarns tend to become stiff if the plants 
are shut down completed for three days. 

The following table indicates the industry's views as to the test 
method of curtailment. 

TABLE LV 

QUESTIONNAIRE HEPLIES ON TYPE OF CttRTAIUIEHT 



Full fashioned 



Number per Cent 
Replies Favorable 
Replies 



Per Cent 
of Produc- 
tion Capacity 



Favored reduction in the number of 

working days 
Favored shortening of the length of 

the work day 

Seamless 



56 



53 

47 



58 

42 



Favored reduction in the number of 

working days 
Favored shortening of the length of 

the working day 
Total for the Entire Industry 



113 



77 
23 



83 
17 



Favored reduction in the number of 

working days 
Favored shortening of the length of 

the work day 



17S' 
52 



66 

34 



73 
27 



Source; Transcript Public Rearing,. December 11, 1S33, page 15. 
NRA files . 



9823 



-109- 



Among the members of the full fashioned branch sentiment was 
about equally divided between the two methods, however, the larger 
mills favored a shortening of the work week. 

In the seamless branch the manufacturers both in number and in 
volume were over three to one in favor of shortening the work week 
rather than shortening the length of the working day. 

By Administrative Order Ho. 16-3 signed on December 14, 1933, 
a five week curtailment period was placed in effect under certain 
limitations as follows; 

"1. Hosiery knitting operations shall be curtailed 
for the period of five (5) consecutive weeks 
beginning with the week of Monday, December 18, 
1933. 

2. The curtailment of knitting operations shall be 
equivalent to at .least a forty per cent (40$) 
reduction from the maximum weekly shift and 
machine hours permitted under Article IV, Sec- 
tions 1, 5, 6, 7, and 8 of the Hosiery Code. 

3. The curtailment shall be effected by a reduction 
of the maximum weekly knitting shift hours from 
forty (40) hours to twenty-four (24) hours. Such 
twenty-four (24) hours shifts shall be distributed 
into three (3) days a week of eight (8) hours each, 
such days to be T/ednesday, Thursday and Friday, 
where the Code provides for maximum weekly shifts of 
less than forty (40) hours, the curtailment shall re- 
duce such hours by at least forty per cent (4C$) . 

4. A plant may distribute its allowed twenty-four 
(24) knitting hours a. week for each shift in any 
manner, other than that prescribed in Paragraph 3, 
provided it does not conduct knitting operations 
on Saturday, or. exceed two shifts of eight (8) 
hours each day in any one day. 

5.- A plant which elects to distribute its curtailed 
weekly knitting hours in a manner other than that 
prescribed in provision three (3) shall record 
with the Hosiery Code Authority the specific method 
of distribution of hours put into effect by it. In 
Poll cases where a plant does not file with the Hosiery 
Code Authority evidence that it is distributing its 
hours by any method other than that prescribed in 
paragraph three (3)., ijt shall be deemed to be operat- 
ing under the method prescribed in paragraph three (3). 



9823 



-110- 



6. Every hosiery plant shall post conspicuously in 
its knitting departments its schedule of knitting 
hours under the form of curtailment which is in 
effect in the plant, together frith a copy of this 
Order. 

7. llo curtailment of knitting operations shall apply 
to the knitting of infants' goods, in view of the 
fact that the manufacture of such goods is especi- 
ally active during the season covered by the pro- 
posed period of curtailment. 

8. On or "before January 17, 1934, the Hosiery Code 
Authority shall submit to the Administrator a- re- 
port on the effect of the first four (4) weeks of 
the curtailment. After consideration of such re- 
port, the Administrator may extend the period of 
curtailment for an additional period of not to 
exceed three (3.) weeks, if, in his judgment, such 
extension is desirable, 

..9. JThere a plant believes that the immediate circum- 
stances in its case are such that an undue hardship 
will result to it from the prescribed curtailment, 
such plant may petition the Code Authority for an 
exemption therefrom and shall submit to the Code 
Authority the .essential facts and -documents, in 
properly attested form, to support its petition. 
The Code Authority shall consider and investigate 
the facts submitted, and shall take appropriate 
action thereon. Pending disposition of such peti- 
tion, the plant shall comply with this Order. The 
petitioner may appeal to the Administrator for the 
decision of the Code Authority." 

Infants' goods were excepted and exemption from the curtail- 
ment could be granted where the curtailment worked a hardship. The 
Code Authority exempted manufacturers of woolen handle goods except 
from January first to twentieth, 1934. There were 56 exemptions granted 
of which only nine were complete exemptions and the majority of the 
remainder were effective only until December 29, 1933. Kany more ap- 
plications for exemption were received but were denied. 

In accordance with action taken at the Code Authority fleeting, 
January 17, 1934, the Code Authority requested that the curtailment 
order be not extended because it had accomplished its purpose. 

Although it is difficult to judge precisely the effect of this 
temporary curtailment it is interesting to examine the graph of the 
stocks on hand for this period. At the end of each of three months 



9823 



" -Ill- 
prior to the curtailment, October, November, and December, stocks were 
15,443,000, 15,'840,000, and 16,99-1,000, dozens respectively; on January 
31, they had increased to 16,563, (XX, and by February 28, had increased 
to 17,501,000. The conclusion from ^he above is obvious, therefore, that 
the curtailment resulted in no decline In stoci-:s on hand. 

The results of this curtailment therefore bring up the question as 
to whether or not tjas machine hour limitstions in the code had any real 
effect on roduction of the industry as a whole, and whether or not the 
industry was not already operating at considerably less than the machine 
hour limitations placed in its code. This in spite of the fact that cur- 
tailment greatly inconvenienced many individual manufacturers and some 
branches of the industry. The numerous petitions for exemption indicate 
that this provision was a hardship on some enterprising concerns with 
large orders but with insufficient equipment to meet their demand under 
the limitation. 

ADDITIONAL CURTAILMENT ECOn ENDED 

The Code Authority in 1934 submitted another recommendation for cur- 
tailment. At a public hearing on July 9, 1934, such recommendations were 
thoroughly discussed. The Director of the Code Authority presented the 
results of a questionnaire sent to members of the industry on the question, 
but from these results it is difficult to ascertain the sentiment in the 
Industry. Indications are, however, that a large group of the industry 
were opposed to curtailment . Directly after the noon recess of the hear- 
ing, the Code Authority voluntarily withdrew its recommendations. The 
vote of the Code Authority on this action was six to three. 

'it. 




PRODUCTION CONTROL ^ CAPACITY LIMITATION 

Since the* inception of the code, a large portion of the members of 
the industry, the Code Authority, and the Industry's Industrial Adviser, 
felt that-.the industry was over-capacitated. This element in the Industry 
consistently argued that some code provision to prevent or at least to 
regulate the installation of new eouipment was necessary. The Code' Author- 
ity appointed a special committee to study the problem. The- result of 
the committee's recommendations was the submission of an amendment by the 
Code Authority providing for the registration of all productive machinery 
with the Code Authority, and further providing that no new equipment 
should be installed in the industry without first securing a permit from 
the Code Authority which would only be issued upon approval of the Code 
Authority and the National Recovery Administration. 

A public hearing was held on this proposed amendment Number 8 to 
Article IX, Section 3, on July 9, 1934. The advisory boards of the Na- 
tional Recovery Administration, and especially the Research and Planning 
Division, generally objected to this proposal, stating that such res- 
triction upon new machinery installations wt»j,ld tend toward the creation 
of a monopoly by those already in business which would be distinctly con- 
trary to provisions of the National Industrial Recovery Act; that it would 
place a premium upon inefficiency since the tendency would be to spread 
the available business among those in business; that itffrould tend to 
keep in operation obsolete equipment, and that it would discriminate 



9823 



-112- 

against small mills, i'any members of the industry opposed this amend- 
ment with views substantially the same as the above. The proposed amend- 
ment was finally withdrawn "by the Code Authority. 

PRICES 

Almost the sole argument of the proponents of the Code in support 
of their trade practice provisions was directed at. just one thing, — 
prices . 

Their trade practice views are obvious from the following state- 
ment by Earl Constantine, the Managing -Director of the National Associa- 
tion of Hosiery Manufacturers: ( *) • • :'.-.: 

"Our Industry in the past three years has sold much of its product 
at or below cost . This has weakened it financially and brought 
about destructive competition. It is to the public interest, and 
it is socially desirable, that our goods be not sold belo-' cost and 
that our manufacturers receive a reasonable return on their invest- 
raent." 

The reasons for these views were that by the early part of 1933, 
(February, I'arch, April), hosiery rnrices had declined to 44.1 per cent 
of their 1929 values. During the code period, numerous attempts were 
made to bolster up prices, with only temporary effects, rising material 
and labor costs under the codes being the chief contributions toward 
better prices . 

Frice Movements 1926-1953 

A composite index of wholesale hosiery ■orices computed from Bureau 
of Labor Statistics hosiery indexes and adjusted to a 1929 base equiva- 
lent to 100 per cent is shown in the accompanying tables • 



(*) Transcript of Hearing, Hosiery Industry, August 10, 1933, p'i 31. 
NRA files. ; 



-113- 

TABLE LVI 
HOSIERY IHDU3T3Y 

YT.ICZ5 









I 


ndex of 


Hosie 


rv Prices a/ 






. , 




1926 


1927 


1928 


1929 


1930 


1931 


1932 


1933 


1934 


1935 


Jan 


125.6 


113.7 


10-1.9 


101.8 


97.0 


66.8 


56 a 


44.3 


65.9 


61.4 


Feb 


125.5 


113.7 


104.9 


101.8 


96.5 


66.8 


56*1 


44.1 


63.5 


61.4 


Mar 


125.5 


113.7 


104.9 


101.8 


92.5. 


66.6 


54.7 


44.1 


62.9 


59.6 


. Apr 


125,5 


113.7 


104.9 


101.8 


92.4 


65.5 


51.4 


44.1 


61.2 


58.3 


May 


125.4 


113.7 


104.9 


101.8 


92.5 


65.5 


49.2 


44.4 


62.9 


56.8 


Jun 


122.7 


'. 112.8 


104.9 


99.5 


88.4 


63.5 


46.9 


47.2 


58.9 


55.4 


Jul 


122.7 


108.8 


104.9 


99.4 


88.1 


63.4 


45.4 


58.1 


55.4 


56.4 


Aug 


122.7 


110.5 


104.9 


99.4 


83.5 


63.4 


44.5 


68.9 


54.9 


57.1 


Sep 


122.7 


110.5 


104.4 


99.2 


31.1 


63.4 


48.4 


73.7 


55.9 


58.9 


Oct 


122.7 


109.7 


104.4 


97.2 


77.6 


63.4 


49.1 


73.1 


56.9 




Nov 


118.6 


109.7 


104.4 


97.2 


74.3 


63.3 


48.8' 


69.3: 


57.1 




Dec 


117.9 


107. 5 


104.4 


97.0 


74.2 


63.2 


45.1 


66.9 


58.6 




Average 


123.1 


111.5 


104 . 7 


100.0 


86.5 


54t . 6 


49.6 


56.5 


59.5 





SOURCE: 

a/ Index computed from 3.L.S. hosiery indexes (5 series used 

except in 1926-1928, and 1931 when women's rayon was omitted.) 
Weights were determined by importance of the series as seen in 
1931 Census; the series were expressed 1931 = 100 prior to 
computation. The composite index was adjusted 1929 = 100. 



Items and Weights for Index of Hosiery Prices a/ 

Item Weight 

1. Men's cotton'hose, corded yarn .07 

2. Women's cotton hose, mercerized yarn .02 

3. YiTomen's rayon hose .06 

4. Men's silk hose .13 

5. Women's silk hose .72 

1.00 



In-'ex computed from B.L.S. hosiery indexes (5 .series used except 
in 1926-1928, and 1931 when women's rayon was omitted.) Weights 
were determined by importance of the series as ?;een in 1931 
Census; the series were expressed 1931 = 100 prior to compu- 
tation. The composite index was adjusted 1929 a 100. 



9823 



-114- 

From this table it is se n that -prior to 1930 hosiery prices 
although declining slightly, '-Lac. "been relatively stable for several years. 
Beginning early in 1930 prices began a steady decline, an index "based 
on 1929 equivalent to 100, averaging 36.5 for 1930, 64.6 for 1931 and 
49.6 for 1933. In the sum-tier of 193?,, there appears to "be no doubt 
but that prices had reached record lows for the post war period. 
Auturnn prices strengthened teroraril- , but by April 1933, hosiery prices 
had reverted to establish a nsv* low oiut of -4.1 percent of the 1929 
level. 

Comment in the trace journals throughout this period is interesting. 
In hay. 1931 (*) as. a result of the declining prices a tendency for the 
trade ,to divide i ito two. groups, one buying quality merchandise., and 
the other buying at the lowest price, irrespective of quality, was noted. 

37, June 1931, such headlines as "hosier/ Given Away." 1 were 
appearing. (**) . ... 

In a review of conditions in the Industry in 1932, Earl Constantine, 
Managing Director,, national Association of. 'hosiery and Underwear Manufac- 
turers stated: (**.*) 

"Last year was not an improvement over the previous -ear, 
Shrinkage in. volume was small,, but shrinkage in unit value 
was marked. Commodity levels were lower and showed strength 
during one short period only. Managements were concerned 
primarily with providing em-.loyment ; consequently it is not 
surprising that mills have yielded considerably under the pres- 
sure of buyers for lower prices. This condition has compelled 
wage reductions to a point below what is S'_ cially desirable. 
Buyers should realize that there is a limit below which danger 
to labor and qualit/ danger to the product " 

In hay, 1933, hosiery prices began to strengthen and by June had. 
strengthened considerably This was due to two factors, one a. reflection 
of ~rice rises in the raw silk market, and. two, increased demand in anti- 
cipation of higher costs under the iiiroending codes. 

Then care the Code. A temporary wage and hour agreement was put 
into effect in July, and the full code went into effect early in Septem- 
ber 1933. Exceedingly sharp price rises occured during this period., 
rising over 56 ^er cent, the index for September being at 73.7 per. cent 
of the 1929 level. 



(*) Textile V.'orld Kay 1931, Page 60. (Me->(Jraw - Hill Publishing Co. IT.Y. 
(**) Textile- Tor Id June 1931, Page 18. (Me-Graw Hill Publishing Co.-IT.~f.) 
(***) Textile horld January 1935, Page 40.(hcQraw-IIill publishing Co. iT.Y. 



9823 



-115- 

Indications are thvt this "boosting of rices at this time was too 
great, --.rices "beginning to decline in October. These prices, however, 
were considerably better than before the Code, well over fifty per- 
cent higher than the 1933 lows. 

In this connection the spread between raw material prices and tne 
wholesale -rices of hosier;- has been very much greater since the 
effective date of the Code reflecting the greater labor cost under code 
conditions. 

FRIGS FIXIFG 

By April 1934, the index had declined to 51.2 end one leading 
company has considerably- upset the market bv nuoting ;5.00 per dozen 
for 12 guage full fashioned numbers. 

At a Code Authority meeting on April 22, 19-31, the Executive Direc- 
tor read a unanimous resolution of the, entire Fall Fashioned Hosiery ^ . 
Association demandin g minimum -rices , for key constructions and suggesting 
appropriate prices, threatening that if the Code Authority did not t alee 
such action the Association would close its plants. After considerably 
discussion it was agreed 1 that an announcement of policy would be made 
tne following day. 

At a conference of the Industry held in Philadelphia, on April 33, 
1934,' at the Bellevue -Stratford Eiotel, Earl Constantine, iianaging Director 
for the Code Authority, announced that the Code Authority had set 15.75 
per dozen f .o.b. mill as a minimum selling price for four or seven thread 
42 gauge women's full fashioned hosiery, -packed in quarter-dozen boxes. 

It was stated that any manufacturer selling below this price would 
be -pre sun ed to be selling below cost unless definite proof to the contrary 
could be shown upon his cit:- tion, to appear before the Cpde Authority, and 
i'f, in the judgment of the Authorit -, any price is not in conformity with 
this principle, immediate investigation would be undertaken, the burden 
of oroof in each instance resting uoon the rnanufa cturer. This price fixing 
action was thoroughly published in the textile trade journals. 

In support of this policy tne Code Authority called attention to 
the PDA Office Memorandum of Februar-y 3, 1934, claiming this memorandum 
gave them such power. 

This memorandum merely stated that a standard provision for codes 
relating to limitation of -rices had been approved and that this provision 
should be recommended to industries a.s desirable in new codes, or as a 
substitute in any approved code if the industry so desired. 

The suggested provision stated: 

"".Then the Code Authority determines that an emergency exists 
in this industry and that the car.se thereof is destructive price-cutting 
• such as to render ineffective or seriously endanger the main- 
tenance of the provisions of this Code, the Code Authority may 
cause to be determined the lowest reasonable cost of the products 

9823 



-116- 

of tliis industry, such determination to be subject to such notice 
and .hearing as the .Administrator may require. The Administrator 
may approve, disapporve, or mod if -- r the determination. Thereafter, 
during the oeriod of the emergency, it shall be an unfair trade 
practice for any member of the Industry to sell or offer to sell 
any products of the industry for which tbe lowest reasonable cost 
has been determined at. such prices or upon such terms or condi- 
tions of sale that the buyer will pay less therefor than the 
lowest reasonable cost of such products. 

"TThen it acpears that conditions have changed, the Code Authority 
upon its own initiative r upon the request of any interested 
•party, shall cause tbe determination to be reviei/;ed. M 

Consequently, under date of hay 2, 1934, the Assistant Deputy 
Administrator handling the Code wrote a letter to the Administration 
Member of the Code Authority, Dr. Taylor j cautioning against any such 
promulgation. Re suggested at that time that the Code Authority make 
application for an amendment to the Code with an emergency lowest 
reasonable cost provision. Kelsons xray the Code Authority offices in 
Hew fork were not so advised directly, instead of through the roundabout 
and time consuming route of an Administration L'ember located in Philadel- 
phia, are not known. 

This -reposed amendment brought forth a flood of -protests, arinci- 
pall^ from wholesalers. Indications are that these protests were chief- 
ly inspired by a circular letter issued by Mr. Flint Crarrison of the "Ihole- 
sale Pry Goods Institute. It appears that the wholesalers objectec. to a. 
fixed minimum -.rice, in case of an emergency, unless said price establish- 
ed a wholesale differential making prices to retailers slightly higher 
than those to wholesalers, 

lay Amendment Ho. 3 approved by Administrative Order No. 15-14, dated 
June 7, 1934, the Code was modified to allow- the Code Authority to determine 
when an emergency exists, and to cause to be determined the lowest reason- 
able cost, and after approval by the Administrator, during the emergency, 
sales below this lowest reasonable cost would be an unfair practice. This 
provision, however, wa.s never invoked. 

This announcement of a fixed price had a beneficial psychological 
effect; it strengthened the tone of hosierv prices somewhat, the price 
index rising to 63.9 for hay 1934. however, after this month prices again 
declined and remained lower throughout the remainder of the year. 

LOhEST ZEASOITABLS COST 

The next point of attach by the Code Authority in their efforts to 
bolster up prices was by means of a mandatory cost accounting system. 
By Administrative Order Ho. 16-13, aaprovec on hay 10, 1934, a mandatory 
cost accounting system with, principles and. methods of determining cost 
under Article VIII, Section 4, was provided for a trial period of ninety 
da/rs. 



9G23 



-117- 

All indications are to the effect that efforts to raise prices 
b/ this method were of no avail. It is believed that the Code Authority 
decided that such, enforcement would he difficult, and used their coet 
manual mainly for educational purposes, 

PRICjS guafjl^pies 

Fair trade practices are difficult to define in an;' open and free- 
ly competitive market. Methods and practices that may he considered 
unfair bg one manufacturer may he considered perfectly ethical b - another. 

In spite of strenuous efforts of the national Association of 
Hosiery Manufacturers, to maintain standards of ethical business prac- 
tice, prior to the code, the Industry was considerably disorganized. 

This disorganisation was particularly clear in regard to prices, 
and -or ice competition through the granting of special terms and dis- 
counts. This condition was amplified and encouraged by strong economic 
pressure from buyers. Oftentimes the seller was a party to price 
reductions to meet lower prices fictitiously quoted by a buyer from 
unnamed sources. 

In a declining price market such as confronted the hosiery industry 
during the depression, great pressure was jlaced on the manufacturers 
by buyers for lower prices. Some concessions on the part of the manu- 
facturers were granted to obtain orders so as to keep their mills running 
and thereby cut their own overhead to the barest minimum. Some of these 
concessions were such that many manufacturers thought that they bordered 
on unfairness. One of these practices was that 'of guaranteeing orices 
against decline. The large well financed concerns protected themselves 
when engaged in this practice by hedging in the future's raw material 
markets. This practice of course could not be indulged in b ir the small 
concerns with limited genital. 

To cope with this practice, the Code, under Section 2 of Article 
VIII, prohibited price guarantees, Apparently means of evading this 
Section developed, for an interpretation oi this Section was iss\-.ed 
by the Code Authority on October 19, 19S3. (*) The Pair Trade practice 
Committee of the Code Authority suggested an additional interpretation 
on January 17, 1954, as follows: (**) 

"To guarantee prices against decline is an unfair trade practice. 

"To guarantee -prices against decline is prohibited. This means 
that the prices in the original contract stand regardless of any 
fluctuations in the market between then and the time the order is 

delivered or invoiced. 



(*) Minutes of Code Authority Meeting, Hosiery Industry, October 17,1933. 
("M-'A Files, hosiery Code, Code Authority Meetings Fol^r) 

(**) This interpretation never received the a proval of the national 
Recovery Administration, ppj. files. 



9RP.7 



-118- 

"To change the prices of a previous contract to lower current 
pr i c c s , or to cancel an existing order at a specif ied price s 
and accept a new order at lower -rices as a substitution, is in 
effect a guarantee against decline of prices and is, therefore 
a violation of the Code. 

"Orders should not be talc en or contracts entered which provide 
•price guaranteed up to date of delivery'." 

All indications are that this provision was extremely difficult 
to enforce. The Executive Director of the Code Authority admitted in 
the public hearing of July 9, 1934, thet a few manufacturers were 
"substituting for one contract a given bill of goods at one ;orice, 
another contract to cover the same order of goods at a changed or 
lowered price". (*) This practice defeated the guarantee against 
price decline section of the fair trade practice provisions, since it 
in effect guaranteed against price declines. 

RAW MATERIAL PHI CSS 

The following table shows an index of hosiery raw material prices, 
1929 equivalent to 100. 

TABLE LVII 
IITDEX OF HOSIERY PAW MATERIAL PP.ICES 





Inc. ex of Pr 


ices of 


Textil 


e Hosiery Ma 


terial 


s (1929=100) a/ 




1926 


1927 


1928 


1929 


1930 


1931 


1932 


1933 


1934 


1935 


Jan 


132.9 


106.9 


100.4 


104.1 


93.1 


64.8 


47.2 


41.3 


50.3 


48.3 


Feb 


130.7 


103.4 


100.2 


103.9 


94.3 


63.0 


48.5 


38.4 


50.9 


47.3 


Mar 


125.9 


109.3 


102.5 


102.6 


91.2 


GO. 4 




37.7 


50.6 


17 . 4 


Apr. 


120.2 


105.3 


101.2 


102.4 


91.3 


O i? « dj 


44.5 


36.4 


48.9 


46.1 


May 


115.6 


103.4 


104.9 


102.4 


83.0 


57.0 


43.1 


43.1 


46.0 


46.4 


Jun 


115.6 


100.3 


99.3 


98.0 


82.3 


55.7 


40.4 


45.2 


44.8 


45.7 


Jul 


114.6 


105.0 


100.7 


98.1 


76.1 


59.8 


36.6 


54.7 


44.1 


46.1 


Aug 


113.2 


103.2 


99.3 


93.4 


S9.5 


58.3 


39.9 


59.1 


45.9 




Sept 


111.0 


107.5 


100.5 


99.5 


39 # 5 


58.4 


47.5 


58.1 


45.0 




Oct 


116.3 


105.3 


104.3 


98.8 


62.5 


53.2 


42.3 


55.5 


45.5 




Nov 


109.7 


102.3 


104.9 


96.3 


0-± . u 


53.5 


43.5 


52.5 


445.2 




D3C 


105.5 
113.0 


100.1 

105.5 


104.8 
101.9 


94.5 
100.0 


61. 2 


52 . 9 


41.3 


,1 c n 


46.1 




Average 


78.7 


58.1 


43.4 


47.7 


46.9 





Items and "./eights for index of Price o f Textile Materials 



1 1 em " : eight 

Cotton yarn, mercerized cones (combed ungassecJ 50-S-2 .19 
Cotton yrrn, hosiery cones (frame spun) 10S .07 

Domestic ra--on, Viscose process, 150 dernier; 

24-50 filaments . .13 

Silk -yarn, hosiery tramn, 5 thread, crack xx-78;o .36 

Pav; silk (prices nominal) crack xx- 7 n ~j 13/15 . 25 

(*) Transcript of Hearing, Hosiery Industry, July 9, 1934. pp. 
160 - 161, Sari Constant ine. 1T.F..A. files. 



9823 



-119- 

a/ Original price series from Textile World, "eights were assigned 
in proportion to the importance of the series as determined from 
the 1929 Census of hanufactures; these were arplied to the 
various series expressed 1929 — 100, 

It is seen that prices continually declined until April 1933 at 
which time the index was at 3S.4 percent of the 1929 level.After this 
month they increased sharply during thi. period of code adoption, the 
index rising to 59.1 in August, an increase of over 60 percent above 
the April 102. Prices weakened perceptibly the winter of 1933 and 
continuec to decline through 1934. Considerable strengthening of prices 
occurred in 1935 largely due to rising raw silk prices, which have ad- 
vanced over 50 percent since September 1934. 

The accompanying chart clearly indicates the relationship between 
raw material prices and the price of finished hosiery. Every sizeable 
move in raw material prices results in a similar move somewhat later 
in the price of the finished -oroduct. The only times this does not 
appear to have ha: tended are in the -'ears. 1931 and 1932, when the 
trend of prices was continually downward. During this "time rises 
in silk oftentimes merely served to check the downward movement of 
hosiery prices. 

Strikingly shown by this chart is the spread between raw silk 
and finished goods prices, this spread being considerably greater 
since the adoption of a code in September 1933, with the higher 
labor costs resulting therefrom. 

Homework 

The homework problem in this Industry was of no serious consequence 
prior to the Code only a few companies employing homeworkers to embroider 
clocks upon men's socks. Article VI, Section 1, of the Code prohibited 
the practice of giving out work to be done in homes. Exemptions in 
special cases were granted by the Code Authority under a set form of 
procedure which the authorized by this section. 



9823 



*£0 



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-121- 
CEAPTER VI 
EFFECTS OF THE CODS 



General Effects of the Code 

The Code undoubtedly was a great "benefit to labor in increasing em- 
ployment, raising wages and shortening of the work week. These facts 
are readily seen from the following comparison' cf pre-code and code years, 

table lvi1i 
hosiery industry 

average employment, average hours per week, 
average hourly wage pate, aijd average weekly 
eapeipgs, 1922-1954 



'Smployinent 
: Index 
Year :Av. ^Chage 
: 19??-.^ 


i i 

Hours per Week 

; Av, r ': Change 
t 1972-34 


« 

Hourly Wage Sate 

: Av. fi Change 
1932-34 


Weekly Earnings 

: Av. $ Change 
1932-34 


1932 :85.2 
1934- :96.6-13.4 


: 42.6 

.33.5 -27.2 


: 34.1 
48.5 -42.2 


$ 13.63 

16.11 - IS. 2 



Source: Unpublished Hosiery breakdown of the Eureau of Labor 
Statistics "Knit Goods" group, covering approximately 
70 per cent of the wage earners and 45 per cent of the 
firms. Prepared by the . ureau of Labor Statistics for 

the IT. P. A. 



In some instances the labor benefits were considerably greater, 
evidence on record shows $5.00 per week wages being paid prior to the 
N. R. A., (*) these employees, therefore, received considerably more 
than 100 per cent wage increases. 

In the language of Earl Constantine : (**) 

"1. The Code has checked and corrected the un- 
desirable low wages which 'have developed in some 
branches of the Industry as a result of lowered 
demand and increased competition. In the long run 
such low wages were not only unsocial but would have 
produced unfortunate strife within the industry. 

"2. The Code lias checked the tendency to long ho\irs 



(*) Transcript public Hearing, August 10, 1933 -page IS. ERA files, 
(**) lulletin to Members of the Industry, April 3, 1935. ERA files 
9823 



-122- 



and "Oil duly long weeks. 



"3. To an industry as Highly over-capacitated as .; 
ours and therefore subject to extreme pressure from 
the "buyer, the Code has Drought the invaluable pro- 
vision of restricting productive operations to tvo 
shifts only. Without such restrictions much of the 
industry would immediately put on a "graveyard" shift, 
there would be a wild rush to produce, and the result 
of ail this would be ruinous prices and wide-spread 
bankruptcy. 



"4. 



The Code has furnished the industry with proper 
marking of goods, and contributed' materially to 
improved merchandising." 



Further evaluating Code benefit? in a letter dated- May 24, 1934 to 
the 'Jationai Recovery Administration Division Administrator, this 
official stated: 



"SPREAD CT EHPL0Y1: 



t-Xm 



"Our statistics indicate that 
industry has increased by 22 e /o 
Code provisions. 

" INCREASED WAGE EARNINGS 



employment in our'- 
as the result of : 



< 



"Total wages paid to workers in our industry, 
comparing the last six months of 1933 with the 
same period of 1932, show an increase of 27f.'. 
This increase is partly due to the larger number 
of workers employed, but in greater degree to 
the minimum wage pro-visions of the Code. 

"COhDITIOIJS OF INDUSTRY 

11 July-December 1953 - ly virtue of unusual buying 
which started when NBA seemed a probability as 
early as Kay, 1933, and also by virtue of increased 
buying power resulting from AAA, CWA, PWA and other 
governmental extendi tures , the volume of business 
durin^ this period was exceptionally good, and 
generally speaking, 'rices fair. This, no doubt, 
was reflected in operating statements for the year ■ 
1933, and will show generally a strong improvement 
over 1932. 

"Janua r y-Hay 1934 - business lias been distinctly 
unfavorable in this period due to the- following 
causes : 



"3. production restriction in Code theoret- 
ically reduced from 27$ to as high as 50 f $. 



-1 - 

Actually certain provisions of the Code have 
teen defeated by the manufacturers' increasing 
cnuipment to offset limited machine hour's, and 
by their placing r.mch equipment on two shift basis 

hich formerly v/as on one shift, 

"4. The condition of over-production continues 
to give u s keenest price competition of a charar- 
ter which makes ineffective that provision of our 
Code which prohibits the sale of a product below 
the manufacturers' individual courage, rather 
than encourage buying." 

Effect of Code Abolition 

Pile minimum wage structure except for a few isolated cases has been 
maintained by the hosiery industry after the abolition of its code, 
according to a "Daily II ews Record" (9/24/35) quotation of Earl Constantine 
who said: 

"The eight-hour day, the 40 hour weekly shift, 
and the five-day week are almost universally 
in effect. Occasionally during the seasons of 
heavy demand a few mills will extend the hours 
in their finishing departments to something over 
eight hours, but this is offset by the shorter 
hours which these departments operate during the 
off-season. We have not heard of a single case 
where the five-day week has been abandoned. 

"It is safe to say that the piece rates prevail- 
ing in the industr3 r last spring are still in ef- 
fect. In a few isolated cases there have been 
some insignificant changes. The minimum wage 
structure continues. * * * ' :: * 

"In scattered ana isolated cases workers are paid 
only their piece rate earnings.* * * * * I third: 
it is safe to say that in at least 90 per cent of 
plants of the industry operations are voluntarily 
continuing in a manner no different than they were 
under the code. Deviations therefrom, usually 
temporay in nature and resulting from emergencies, 
have occurred in a surprisingly feW plants. 

"The situation I have described is one which is very 
•ratifying, both to our managements and our workers. 
It would only disappoint those who might be interested 
in seeing a return of some form of regimentation of 
industry by Government." 

The above statement was issued after consultation with Taylor R. 
Durham of the Southern Hosiery Association. This statement appears to 
be substantially correct as shown by an examination of the average hourly 
wage and average weekly v/age in Tables XXVIII and XXX for June, July, 

9323 



-124- 
and Angus t of 1925 . 

However, the American Federation of Hosiery V'orkers reported to 
the national Recovery Adi.iini strati on a"bout 50 cases of violations of 
former code provisions, showing a possible "beginning of a breakdown 
in observing the provisions of the Code. 

It is likely that these wage and hour violations are of insufficient 
volume to affect the Dureau of Labor indexes. Another possible reason 
for lack of any indication of lowering of labor standards is that the 
Bureau of Labor Statistics indexes are based on a sample of the industry and 
t is sanptei probably is made up of the larger and more responsible concerns, 
who have not as yet resorted to wage cutting. 

The removal of the limitation on machine operation has resulted in 
gradually climbing stocks on hand, as seen from Table XLI . 

As of September 1935 indications were that the Hosiery Industry 
was in a strong position largely due to rising raw material prices; : 
according to the Hail;- Hews Record, (September 17, 1335, and September 
27, 1935) mills had orders on hand to run full time for two months, the 
full-fashioned mills being the busiest, with the southern mills nearing 
the sold-up stage. 

Post-Code Trade Association Activities 



After the Supreme Court decision in the Schechter Case, the 
national Association of Hosiery Manufacturers made 'strenuous efforts 
to have the Industry sign a voluntary agreement to abide by the c'ocle 
provisions. The principle behind this agreement was that the trade 
association would give full publicity to all violations of the agree- 
ment, such signers waiving their right to sue the trade association 
for libel for such publicity. 

Up until September 1935, in this effort, the Association was only 
partially successful, only the wool branch of the industry endorsing it 
with a sufficient percentage to obtain Federal Trade Commission endorse- 
ment . 

However, in spite of failure to sign an agreement, the industry 
is largely maintaining the codo conditions, according to the Managing 
Director, Pari Constantine, (*) of the National Association of Hosiery 
Manufacturers, largely through fear that if one starts chiseling the 
practice will apread like wildfire throughout the Industry. 

Ho voluntary trade practice code has been approved by the Federal 
Trade Commission since the Schechter Decision(**) 

(*) Personal interview, October, 1935. 

(**) Statement of Mr. George McCorkte, Director of Trade Practice 
Conferences, Federal Trade Commission (3/19/26) 



9822 



-125- 

FAKT C . 
THE UNTEj-^KAR AKD ALLIED PRODUCTS INDUST RY 

37 

j?rank Pouder 

CHAPTER I 

INTRODUCTION 

DEj;I> T ITION OF IFDUSTBY, ITS FRODUCTS, AKD PROCESSES 

DEFINITION OF INDUSTRY 

The Code of Fair Competition for the Underwear and Allied Products 
Manufacturing Industry -defined the Industry 

"....to mean the manufacture of - - 

(a) Knitted, '"oven, and ell other types of underwear 
manufactured from all types of materials with the 
exceptions of women's undergarments (other- than so- 
called athletic tvoe), pajamas, and negligees made from 
woven fabrics of silk, rayon, cotton or flannelette, or 
of any combination thereof, and also excepting women's 
children's and infants' lingerie undergarment manufactured 
in the Philippines or Puerto Rico fro.n woven fabrics; 

(b) Garments made in underwear mills from fabric made 
on underwear machines, excepting, however, the cutting 

• and fabrication of shirts other than undershirts, pro- 
vided, however, that the manufacture of fleece lined 
sweat shirts and other garments of like nature are not 
included in this exception: 

(c) Any and all fabrics sold or used mainly for under- 
wear purposes made on flat or warp or circular knitting 
machines; 

(d) Knitted elastic fabrics; 

(e) Knitted tubing for meat bagging; 

(f) Knitted work glove fabrics; 

• - (g) Knitted fabrics made for leggings; and 

(h) Knitted wash cloths; 

(1) Provided, however, that, any, person manu- 
facturing infants' and children's underwear and 
leggings, otner than knitted cotton and woven 

9823 



-126- 



cotton, so-called "athletic type" underwear, may 
elect to onerate under the provisions of such code 
of Fair Competition for the Infants' and Children's 
Wear Industry as :nay hereafter "be approved by the 
President's reemployment Agreement may continue to 
operate under said Agreement and such persons not 
operating under the President's Reemployment Agree- 
ment shall operate under the provisions of this Code." 

PROHJCTS - 

The underwear and allied products industry, is classified into 
two principal divisions, fabric makers and garment makers. Each of 
these may be subdivided in turn into several branches, ■• Thus, the 
fabric division is composed of the knit cotton or wool group, the 
circular knit silk and rayon group, the warp knit silk and rayon 
group, and the miscellaneous group. , „ 

Products manufactured by the fabric division include circular knit 
silk and rayon cloth, circular knit cotton cloth, warp 'aiit silk' and 
rayon cloth, warp knit cotton clotn, knit elastic fabrics, knit glove 
linings, knit beef tubing, and knit wash cloth material. 

The garment division is composed. of the knitted cotton or wool 
fabrics grouD, the woven cotton fabrics group, the knitted silk and 
rayon fabrics group. Products manufactured by the garment division 
include: 



Heavyweight Underwear 

Hen's union suits 

Women's union suits . 

30-rs 1 union suits 

Misses' union suits 

Children's union suits 

Children's sleeping garments 

Lightweight Und er wear 

.'en's union suits 

Women's union suits 

Boy's union suits 

Misses' union suits ■.. . 

Men's and boys' athletic shirts 

9823 



Ravon Underwear 

".omen's circular knit underwear 

Children's and infants' circular 
knit underwear 

Men's circular knit underwear 

W arp knit underwear 

'..omen's underwear 

Children's and infants' underwear 

Men's underwear 

Woven Underwear 

Men ' s underwear 

3oy's underwear 

Men's woven shorts 

Boys' woven shorts 



-127- 

Infants' vests, wrappers, etc. Children's woven ,7 aist shirts 
Children's union suits Women's athletic undergarments 

A. Classification Difficulties - He: Overlapping Code Provisions. 

As defined by the Code, the Underwear and Allied products Indus- 
try covers many different types of concerns, ranging from textile manu- 
facturers to cutters-up; manufacturing a wide variety of products. It is 
only natural that concerns with processes so closely similar to those of 
the other garment trades should widen the scope of their operations to in- 
clude not only underwear but also other lines of apparel. Such concerns were, 
therefore, subject not only by the Underwear and Allied Products Code , out 
also by one or more other codes. The result was a series of complicated 
jurisdictional disputes. The more important of these concerned the Codes 
for the Cotton Textile, Cotton Garment, Infants' and Children's wear, and 
Knitted Outerwear Industries. These difficulties will be discussed at 
greater length belos. 

HISTORY OF UIDSITEAE STYLES - 

At the end of the 1370' s practically all garments made in this 
country were flat garments, that is, the fabric was flat knit. In 1884 
the latch-needle ribbed garment came into vogue. This rib, however, though 
an advance over the flat type of garment, was far from satisfactory. In 
the early 1890' s the spring-needle rib made its appearance, and with its 
ascendency the flat garment declined until today the bulk of all under "ear 
produced for men, women and children is ribbed goods. The popularity of 
the spring-needle rib is due to retaining its elasticity after wear and 
washing, which the latch-heedle rib does not. The fist garment has very 
little elasticity. The only seamless flat goods produced today are the 

""'oolen and balbriggan garments. Another type of flat goods produced to a 
very limited extent is the full-fashioned, garment. Recent years have seen 
a marked change in the underwear ousiness. The tendency is toward finer 
goods and lighter-weight garments, especially'' of cotton or rayon, these 
yarns being cheaper. The three qualities generally recognized as essential 
for underwear fabrics are elasticity, porosit", and t ickness without un- 
due weight. Light-weight garments are in demand in "inter as well as summer, 
many pecole having discontinued wearing wool, merino, and other heavyweight 
fabrics, because they believe that wearing the same r, ei~ht underwear all year 
round maizes them less susceptible to colds. 

All fleeces, (which originally r -ere intended for the foundation of 
outer wear and not for underwear) have fallen into disuse, because of the 
demand for lightweight garments, and also because of the tendency of small 
fibres of the napped surface to roll into lumps and become detached from 
the fabric and to harden in lumps in washing. Where fleeces are worn, the 
inclination is for flat fleeces to be displaced by the ribbed fleece, because 
of its greater elasticity. 

Balbriggan underwear is gradually being displaced by mesh und.er- 
"ear, as the plain balbriggan garment lacks porosity and elasticity and its 
tendency to cling to the body makes it uncomfortable for summer wear* 

Knit underwear absorbs perspiration, and tnerefore from a sanitary 
9823 



-128- 

point of view . is said to "be the ideal undergarment. Underwear 
cut from light woven cloth, however, and sewed into garments has made 
great inroads into the knit underwear "business, especially the mem's 
"branch. 

PROCESSES ALT METHODS OF hAIilLTACTUP.IhG 

The operations performed in manufacturing knit underwear may "be 
segregated into the following classifications: winding, knitting, cutting, 
sewing, and finishing. The following is an itemized list of operations 
according to the above classification. (*) 

lillilg 

Winding consists in winding the yarn on to wide "bobbins, to prepare 
the yarn for the knitting machine. The large underwear will usually 
winds its yarn, but smaller mills generally purchase wound yarn. 
Poorer grades of underwear pre knit from the cap or jack bobbin, which is 
the usual form in which yarn comes from the yarn mill. Winding is essen- 
tial where a good product is desired, woimd yarn having fewer knots and 
weak places having been levealed and corrected. 

KiTITTIIG 

Unlike hosiery, where practically the entire hose is knit on the 
machine, the underwear circular knitting machine knits only rolls of 
shapeless tubular or web fabric. The tubular knitted fabric, when flat 
forms a continuous piece of goods of double thickness, the width being 
regulates by the v/idth of the garment desired to be made. In knitting 
a fleeced garment a special heavy backing or jack yarn is used which 
later is nayped to produce a. fleeced surface. Flat frame, spring- 
needle knitting maxhines, which, " with one or two exceptions 
are no longer used, knit full-fashioned garments, What are usually 
termed flat garments are knit on a spring-needle circular machine, 
having but one set of needles. 

Shirt cuffs, drawer bottoms, and rib tails are knit on a special 
ribbing machine. Fibbed cuffs and drawer bottoms are used, regardless 
of the body fabric, because of the greater elasticity and better stretch- 
ing to the shape of the ankle and wrist'. 

LOOPIIvG ALL SEAMING 

After the cuffs and drawer bottoms are knit they are joined to the 
sleeves and legs by looping or seaming. In looping, the cuff or drawer 
bottom is placed upon the points of a slow-revolving looper, anc the 
corresponding loops of a shifct sleeve or drawer bottom are "olaced right 
over the same needles. A knife first trims off the waste, anc as the 
ba.ck of the machine is pa.ssed, a needle runs through the two correspondi.i ; 
sets of loops, thus fastening the open edges together. Sometimes the 
sleeve- itself is looped onto the shirt. Looping is verv slow, and is used 



(*) (See report by E. S. Pratt of the Department of Commerce August 27, 
1915, Series Ho. 32) 

9823 



-i; ' - 

in but few mills. host of the mills seam the cuff to the sleeve or 
;er "bottom to the le.,. 

CUTTING 

The cutter usual 1 ' receives the cloth from the drying or nap- 
ping room. It is then cut off at the point necessary for test fitting 
in the :attern and sizes of the garments to be cut. Hie- cloth is 
piled up, one layer, upon another, eitner by machine or by hand, until 
sufficient cloth has been piled up. '.Vnen all tlie cloth that is to 
be cut has been laid out, wooden pattern boaras, paper patterns or 
perforated cl arts are placed upon the top layer and the pattern is 
markec. out. Styles of garments in this industry are compai atively 
standardizes, and marking is nearly nerfect. The cloth after being 
marked is either cut by hand or by an electric machine. 

The rolls of fabric for ribbed cuffs, drawer bottoms, etc., 
are slit on a special rib-cutting or slitting machin? driven by 
power. The fabric is fed through two solid wheels which cut 
accurately. In some instances, this cutting is done by shears. 
The cut garments are then.giv.en a "rough" inspection. 

i/ASEIlTG ABE BLhACIIIlTG 

The rolls of fabric or cloth are taken from the knitter and sent 
to the wash room. Cotton or silk garments are ordinarily non-absorbing 
unless blea.ched.-. "Jool contains much foreign rna.tter - dirt, wool fat, 
and perspiration - which must be removed. The usual method is to 
treat the knitted cloth with, caustic soda or some other Chemical con- 
taining alkali -U'o~nerties which will remove the natural animal or 
vegetable master. in the cloth that repels water. After washing the 
cloth is usually "cleached by a' solution of chlorine. 

HAPPInG 

'ITappinj consists of running the cloth through rollers. One set 
called "worker rollers" of short sharp-pointed wires bent at the ends, 
which lip iv" the heavy jack or backing yarn that has been inserted, the 
other set "leaaer rollers" has straight shorter -.vires which keep the 
cloth from becoming tangled in the worker rollers. 

SE.7I.TG 

The sewing operations performed in the stitching rooms of the' under- 
wear plants are similar to the general sewing operations in any garment 
factor r . The sewing operations for underwear are as follows: hemming, 
welting, seaming, cover seaming, necking, facing, button staying, 
over-edging collaretting, tacking, binding; button hole making, button 
sewing, taping, strapping, eyeleting, mending and label sewing. 
Several miscellaneous operations, which "re not in themselves sewing 
but are performed in the stitching rooms are: turning, marking, laying 
out, trimming, and neck cutting. 



9833 



-130- 

FINISHING- OPERATIONS 

After the garments are cut and sewn, the finished products are in- 
spected, pressed, folded and "boxed for shipping. These are the final 
manufacturing operations* 

KNITTING VARIATIONS 

Knit underwear may be ribbed, flat, fleeced balbriggan, or mesh. 
Ribbed underwear may be jersey (royal ribbed, which is made with a tuck 
stitch), derby or plain ribbed, or swiss ribbed. Jersey rib is used for 
men's, women's and children's underwear, the derby rib is usually for 
men's underwear, and the swiss rib for ladies' vests and union suits. 
Ribbed underwear is usually made on a circular latch-needle machine, 
though sometimes on a spring-needle circular machine (swiss ribbed under- 
wear in this country is generally made on a circular latch-needle machine) 
though the genuine swiss ribbed is made on a flat-frame full-fashioning 
machine. 

Plat underwear is not made on a flat machine, but on a circular 
spring-needle machine which produces a fabric with a flat effect used 
in the manufacture of men's, women's and children's underwear. Fleeced 
underwear may be either ribbed or flat, and is made for men, women and 
children. Balbriggan underwear is made of a hard twisted copy yarn, 
and generally of Egyptian cotton or of cotton stained to resemble 
Egyptian, It is made on the circular machine and manufactured for men 
and boys only. Mesh underwear is made on a circular machine and in a 
variety of mesh designs, principally for men and boys, but to some extent 
for women. 

Knit underwear is made of cotton, wool, merino, worsted, silk, 
rayon, or combinations of these yarns. Cotton and rayon are most com- 
monly used, though all of the other yarns are still utilized. Ribbed 
underwear is by far the most prevalent. 

CONSTRUCTION DETAILS OF UNDERWEAR, FULL-FASHIONED AND SEAMLESS 

Knit underwear may be either full-fashioned or seamless. In full- 
fashioned underwear the various parts are properly fashioned on a flat- 
frame machine and then seamed together. In seamless underwear, the web 
or fabric is knit tubular, and the desired garment is them made by cut- 
ting the tubes to pattern and then seaming the pieces together. Practi- 
cally all of the underwear manufactured in this country is seamless. 
Very little full-fashioned underwear is manufactured, usually for in- 
fants, but its costliness prohibits it from general use. Seamless 
underwear may be shaped, but underwear so shaped is not what is general- 
ly termed full-fashioned. Some seamless underwear is taken in at the 
side and seamed in order to produce a garment shaped to the form of the 
body. Fnere such seaming of the sides is employed it is generally on 
ladies' vests and union suits, though some manuf acturers employ the 
same method for shaping men's union suits. 



9823 



-r:i- 

CHAPTER II 

CHARACTERISTICS OF THE IKDOSTRY 

N0N-C0HPABA3LE STATISTICAL DEFINITIONS 

Not only did the definition of the Underwear and Allied Products 
Industry cause conflict in the National Recovery Administration as 
explained in the preceding chapter, but further difficulties are' 
encountered in a statistical examination of the Industry due to the 
lack of comparability of the definitions of the industry used by the 
different, compilers of statistics. 

The definition in the Census of Manufacturers covers only knit 
underwear and does not cover the allied products such as shorts, etc., 
made from woven materials. It was not found possible to separate the 
figures for these allied products from their other census classifications. 
Census figures have the additional limitation that they do not cover 
concerns producing less than $5000 value 'of product annually. 

The Code Authority, 'on the other hand, covers ' the allied products 
in their tabulations. 

SIZE OE THE INDUSTRY 

The size and importance of the knit underwear branch of the 
industry is indicated in Table I which shows important Census data for 
the period 1923 to 1953. 

In 1923 there - 'ere 326 establishments employing 48,552 wage earners 
at an annual payroll of $39,932,000 and producing $185,355,000 worth 
of product. This year and the following census year, 1925,- appear to 
have been at about the peak point in the industry's prosperity, • a 
decline starting shortly thereafter being continued to the present time, 
possibly due to decreasing popularity of knit underwear. 

By 1929 the industry had declined to 251 establishments, employing 
41,487 ^age earners, at an annual payroll of $32,928,000 pud producing 
$135,092,000 vorth of product. 

During the economic depression, the knit underwear branch of the 
industry further declined; by 1933 there v rere 195 establishments, 
employing 35,915 wage earners, at an annual payroll 'of $22,251,000. The 
value of product for 1933 had declined to $92,200,000 or to about 
one-half of the 1923 level. 



9823 



-132- 
TABLE I 

Knit Underwear Industry 

Establishments, Wage Earners, Wages, Cost of Materials Value of 
Products, Value Added by Manufacture 1923 to 1933 
llumber of Wage ^ Cost of . Value of Value added by 

Year Establishments Earners _ Wages* Materials* Products* Manufacture* 



1923 


326 


48,552- 


39,932 


106,760' 


182,355 


75,595 


1925 


298 


48,328 


40,145 


118,773 . 


188,570 


77,797 


1927 


285 ' 


46,22? 


39,183 


90,728 


173,423 


82,696 


1929 


251 


41,487 


32,928 


80,475 


150,842 


70,367 


1931 


218 


31,951 


22,545 


44,260- 


89,853 


45,593 


1933 


195 


35,915 


22.251 


44,194 


92.2S0 


48,006 



1 Average for year 

* Thousands of dollars 

Source: Census of Manufactures 

In 1934, according to Code Authority records{*), in the entire 
industry, both the knit underwear and the allied products branches, 
there were 531 concerns, eranloying 34,630 wage earners, at an annual 
payroll of $23,348,00°, and producing an estimated $152,488,000 worth 
of product. 

The volume of underwear production averages approximately 
35,000,000 dozens garments annually. The output of allied products 
cannot be stated definitely in physical units because of the varying 
classifications. 

The value of the industry output amounted to $115,000,000 for 
underwear, and $45,000,000 for allied products, (estimated 1934 figures). 
While the physical volume of production of underwear was less in 1929 
than in 1931, the value was more, $204,000,008 in the former year and 
$134,000,000' in the latter. Allied products approximated $70,000,©°© 
in 1929, and $45, 000, COO in 1931.. 

GEOGRAPHICAL LOCATION 

Geographically the Underwear and Allied Products Industry is nearly 
all in the northern area with high concentration in the Middle Atlantic 
States. According to a report of tho Research and Planning Division 
of the Underwear Institute of the 531 concerns in the industry, 10^ 
are located in the New England States, 62fo in the Middle Atlantic 

|fp 7 Code Authority' letter from Cheney to Sunderland, Dated 3/19/35 
NBA files. 

9823 



-133- 

States, 16)o in the Western States, and 12£> in the Southern States, 

Slightly over 88 percent of the industry, therefore, is located 
in the northern area as defined by the code. Table II lists the firms 
by geographical location and type of product produced. No great 
differences are apparent in the different branches of the industry, 
most of the mills of each type being located in the Middle Atlantic 
States. 

SIZE OF COMMUNITY LOCATION 

The following table lists the number of mills according to 
mill-town population. It is noted that 21.3 percent of all mills are 
located in tovns of less than 5,000 and 51.6 percent of all mills are 
located in towns of less than- 50,000 and 68.7 percent are located in 
towns of less than 200,000. 

Based on value of production, 26^> of the industry is located in 
towns up to 10,000 population, 23f/i in localities from 10,000 to 50,000 
population, 26$ in cities from £0,000 to 200,000, 9-% in communities of 
200,000 to 1,500,000 and the remaining 16$ in large metropolitan areas 
of more than 1,500,000. 

TABLE III 

Underwear and Allied Products Industry 
Number of mills and Mill Sales by Size of Town, 1933 



.population of 


ALL MILLS 
Number Percent 




SALES xiEPOR 


PED 




Mill Town ?jj 


Number 


Amount* 


Percent 


Sales 






of total 


of Mills 




of total 


per Mill* 


U. S. Total 


531 


100. 


399 


152,468 


100.0 


382 


Under 5,000 


113 


21.3 


91 


27,743 


18.2 


305 


5,000-9,999 


46 


8.7 


56 


11,977 


7.8 


333 


10,000-24,999 


73 


13.7 


56 


20,349 


13.3 


363 


25,000-49,999 


42 


7.9 


34 


14,737 


9.7 


433 


50,000-99,999 


26 


4.9 


23 


16,251 


10.7 


707 


5*100,000-199,999 


34 


6.4 


26 


22,678 


14.9 


872 


200,000-749,999 


31 


5.8 


21 


8,612 


5.6 


410 


750,000-1,499,999 


21 


4.0 


14 


4,673 


3.1 


334 


1,500,000 and 0verl45 


27.3 


98 


25.468 


16.7 


260 


Source: Underwear Ins 


titute, Analysis of 


the 'Underwear and All 


ied Froducts 



Industry, April 15, 1935, p. 9 
a/ Census of Population, 1930 
* Thousands of dollars 



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-135- 



FINANCIAL DATA ON UNDERWEAB LANUJACTUitlNG 

Financial data on the underwear and allied products industry is 
extremely meagre, and the making of comparisons between the available 
data and that for other manufacturing operations is difficult. 

According to the only available figures, compiled oy the Research 
and Statistical Department of Dun & Bradstreet, Inc., (*), 71 out of 202 
concerns in 1934 or about 35$& of the members of the Industry showed a 
profit. This compares with 45.2$ of all Knitted Goods .Manufacturing, 
and 66.5}i of. all manufacturing concerns shoving a profit 'in 1933, 
according to reports to the Bureau of Internal Revenue. (See Chapter 
III, Part A). 

Indications are, therefore, that chjnces of a manufacturer of 
underwear and allied products making a profit are not nearly so good 
as if they are for the manufacturing industry as a whole, and not even 
as good as in the knit goods industry as a whole. 

In spite of the poor outlook for profits, for the whole industry, 
it is extremely profitable for many concerns, and especially so for those 
manufacturers of specialties such as warp knitted rayon and miscellaneous 
fabrics such as meat bags, lastex, etc. 

Examining the concerns falling in the upper quartile, it is seen 
that in only one line of goods (circular knitted silk and rayon fabrics) 
was the return as low as 6;o on tangible net worth; in garment manufac- 
ture this group earred over 10$ return; while the specialty manufacturers 
in the upper quart ile earned over 20$ return on net worth. 

The above figures are taken from Table III A, which shows the upner 
and lower quartiles and median of net profits on sales and. the return on 
tangible net worth for underwear and allied products concerns, classified 
by important products. Note that the losses even in the lower quartile 
were comparatively small in 1934. 



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-137- 

CHAPTER 111 

PRODUCTION AND DISTRIBUTION 

STA3ILITY OF UNDERWEAR PRODUCTION 

On the basis of total dozens, the volume in underwear output has "been 
between 34,954,000 dozen in 1931, and 39,680,000 in 1927, or approximately 
14 per cent variation, an apparent phenomenal steadiness from the peaks of 
1927 through the depression depths of 1931. (*) But for accurate comparison 
it is necessary to p""ace data on the same basis. It would obviously be un- 
fair to compare dozens of vests, shirts, panties, or the like with full- 
piece units such as union suits if the relative importance of either type 
had shifted from year to year. 

That there has been a noticeable shift away from the full union suit 
type of underwear to separate pieces is clearly indicated by the fact that 
on the basis of equivalent full-piece suits of underwear, the 1931 pro- 
duction was 20 per cent less than the top of 1927. The output of 1933 and 
1934 in equivalent units was about 86 per cent of the 1927 level, but 
almost equal to the 1929 production, still denoting a remarkable stability 
of the industry. The facts show that the 1934 production index was 97 per 
cent of the rate in 1929, whereas' general manufacturing activity showed, a 
corresponding ratio of only 65 per cent and general textile manufacturing 
74 per cent. 

On the basis of dozens of equivalent one-piece suits, the average 
value of underwear would have been $9.54 in 1927, $8.94 in 1929, $5.43 in 
1931, $5.29 in 1934. There has been a general decline in prices in recent 
years, but the sharp drop in underwear prices from former levels is apparent 
from the foregoing figures. A later discussion of wholesale' price trends 
shows underwear prices to be exceptionally depressed in comparison with 
those of other textile ;orodcuts, and all commodities, as a whole. 

filth due allowance for manufacturers failing to report, and allowable 
errors during the first year of compiling statistics, it is calculated that 
underwear production in 1934 was approximately 7,150,000 do.zen. The quantity 
actually reported in 1934 was 35,378,000 dozen. 

A very interesting comparison of regional shifts within the industry 
is made possible by the records of mill sales value for 183 identical mills 
in 1929, 1932, and 1933. The total volume reported by these mills was 
$115,000,000 or 41$ of the estimated national total of $287,000,000 in 
1929, $62,500,000 or 34$ of the $182,000,000 estimated total in 1931, and 
$78,000,000 or 50$ of the estimated $157,000,000 in 1933. (**) 



(*) Under ear Institute Report - dated April 15, 1935. 

(**) Source: Underwear Institute Report - dated April 15, 1935. 



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9823 



-139- 

By regions the trends have been v riable, with New ^ngl a nd t>ercent- 
ae-e , for example, decline from 1929 to 1932 and rising again in 1933. 
The orooortion for the Middle West increasing fro~ 1929 to "V932 and 
decreasing in 193?, remaining- ■- slightlv above the nrouortion for 1929. 

The -oronortion of sales accounted for by the Middle Atlantic States 
has been constantly downward, and that of the Southern States Upward, 
which is regarded as significant of the fact thrt the industry is not 
the usual garment cutting and sewing industry gravitating to large 
metrooolitan areas, but on the contrary is v -ry largely a small mill 
town industry. The fact is established forcefully by the cistribution 
of mill "'sales by mill town size. 

STYL^ I^EiDS 

The greatest change in underwear has been the increasing demand 
for lightweight garments. This has caused the -oroducrion of heavyweight 
garments to decline. The out-out of union suits and shirts and drapers 
has constantly varied from time to time. The introduction of ravin yarn 
is the most recent change in raw materials used bv the underwear industry. 
Cotton yarn continues to be the largest source of w™. materials but 
rayon is ra-oidly coming to the fore. 

Novelty effects in fabrics st° the keynote of the 1935 year, in 
knitted under-eer, and manufacturers are exercising all nossible ingenuity 
to develon original and distinctive t^naes of stitch. Fac^d with a 
hesitant buying tone, they will rely more than ever on attractive, styl- 
ing to build business. As usual where fashion is high-lighted, this 
effort is concentrated on women's ar/oarel, and in this division indicat- 
ions are that 1935 will bring numerous decidedly different and -oleasing 
ne w fabrics. 

The nodularity of the ,r, -~ffle stitch during recent seasons has con- 
vinced knitters of the advisooility of achieving further variations in 
stitch. 

The new lines snow conservative use of color in women's underwear. 
Two-tore effects are favored and sometimes two contrasting colors are 
used. 

One of the most striving and significant of these is the tendency 
of mills toward further diversification of -oroduct. With market conditions 
so unsatisfactory, many companies are uranchin 3, into new knitwear lines, 
hooing in this ™cy to catch un slack in their established, fields and 
reduce -oroduct ion costs. Bathing suits were -dded to the lines of 
several leading underwear ■'"irms, and this has b-en fallowed recently by ' .. 
the addition of foundation ferments of the corset tyoe. The combining 
of foundation garment manufacture with underwear is viewed bv the 
industry as -oarticularly significant. In the atroarel sense, it is a 
-oerfectly logical tie-un, but early re-oorts indicate tht the corset 
industry is olannin^ a real fight to h^ld its business. 

In men's und?r" a a- generally, the trend is toward white lightweight 
two--oiece suits. End»9year sales showed a decline in th a call for colors 
and manufacturers look for this tendency to continue. 

9823 



-140- 

It is significant that, despite the problem of inferior rayon underwear, 
the sales of synthetic-fiber garments to men has held up quite well. 

Knitted underwear manufacturers regard 1936 prospects as very promising. 
The heavyweight division in particular is in a good position, due to its 
wise policy of delaying opening. 

In the heavy underwear vogue of twenty years ago rayon had little 
chance, but the underwear trade, with the trend to lighter garments, "became 
by 1927 the largest consumer of the fiber. It lost that position to the 
cotton trade in 1931, but it is still a major outlet for rayon. Underwear 
knitters, experienced in handling large volumes of the yarn and equipped 
with machines so well adapted to its use, are in excellent position to 
capitalize on the improvement in its properties. The principal retarding 
factor in development of broader consumer acceptance is the ''illful pro- 
duction of inferior fabrics to beat a price* 

RAT7 MATERIALS 

The Census of Manufactures' list the value of materials used to make 
knit underwear as follows: .1929 - $80,475,000, 1931 - $44,260,000 and 
1933 - $44,194,000. 

The materials used by the industry .are mainly cotton jam, which is 
knitted into underwear fabric. IText in importance is rayon yarn, wool 
yarn, and silk yarn. Cotton is the most important material of the knit 
underwear industry, constituting in 1929, _ 85$ by weight of all. the tex- 
tile materials used by that industry. In 1925, the knit underwear ind- 
ustry consumed 22.1$ of the cotton yarn purchased by the textile industry 
at large, but this percentage decreased to 15.7$ in 1929. In 1929 the 
knit underwear industry consumed only 1.356 of the total raw cotton used, 
compared with 2.3$ in 1919, and 3.7$ of the waste cotton used in 1929, 
compared with 6. 8$ in 1919. The knit under; ear industry in 1929 was the 
most important consumer of mixed cotton and -'ool yarn, but its percentage 
dropped from 38.4$ in 1919 to 21.5$ in 1927. The knit underwear industry 
consumes only about \ of 1$ of all the raw wool used, a little over 4$ of 
the wool waste, and about 1$ of the woolen and worsted yarn. Its position 
regarding consumption of raw silk and. silk yarn is a.s law as in wool con- 
sumption. 

The outstanding increase has been in ' the per cent of purchased rayon 
yarn consumed by the knit underwear industry, from 2.9$ in 1919 to 9.8$ 
in 1929. 

SHIFT IN MATERIALS 

There has been little shifting in the main materials used.(*) The 
great majority of garments have been all-cotton fairly uniformily during 
the whole period. In 1909 and 19.31, 38 and 8.3 per cent respectively, of 

total shirts and drawers and union suits '"ere all cotton. 



(*) American Knitwear Manufacturers Association Report, dated June, 1933. 



9823 



-141- 

The principal changes have been the dectSase in the use of cotton and 
wool mixed, and the increase of rayon. In 1919 three million dozen 
garments were made of cotton and wool mixed, hut this had decreased to 
less than one-half million' in 1931. In 1931, 1.1 million dozen were 
madfi of rayon, constituting 7.8/5 of the garments whose materials "°re 
reported. Silk increased in imoorta.nce from 1919 to 1925, hut with 
th° developing of rayon, its use "became negligible. 

There was an increase in the TDronortions of summer garments 
produced from 43.2$ in 1926 to 55.2$ in 1932. The most important 
shift was in nen's shirts and drawers. 

VALUE AND VOLUME OP PRODUCTION 

Census of Manufactures lists the value and volume of knit under- 
wear production as follows! 

(No detailed information is available for allied products.) 

KNIT UNDER7EAR 
TABLE V r. VOLUIE AND VALUE OF PRODUCTION 



Kind of Product 



Volume 


of Pro 


duct ion 




Value of Production 


(Dozs. 


000 ) 






(000 Dollars) 




1929 


1931 


1933 


1934 


1929 


1931 


1933 


8,-802 


7,959 


10,220 




37,670 


25,258 


25,369 


8,891 


6,088 


8,088 


- 


70,837 


40 , 452 


38,963 


i2,383 


1,862 


2,261 


- 


18,319 


8,073 


7,928 


259 


109 


82 


- 


2,125 


1,360 


784 


- 


- 


- 


- 


6,146 


4,786 


2,879 



Shirts & Drapers 
Union Suits 

Bloomers & Step-Ins2,383 
Slips & Petticoats 
Infants' Underwear 



TOTAL 



135,092 79,929 75,922 



Source! Ce nS us f Manufactures 



It is noted from the ahov° figure that the greatest variation 
occurred in the -production and value of shirts and drawers. Production 
for this type of garment in 1929 was 8,802,00D dozen garments and in 
1933 it was 10,220,000 dozen, a gain of 1,418,000 dozen, or 16.2$, while 
the value dropped from $37,670,000 in 1929 to $25,368,000 in 1933, a 
decrease of $12,302,000, or 33$. 

VALUE OP PRODUCTION BY STATES 

The value of knit underwear production by states, as reported by 
the Census of Manufactures for 1931, is as follows: 

(No detailed information available for allied products.) 



9823 



-142- 
TABLE VI - VALUE OE PRODUCTION PER STATE 



State 


Value 


of 


Production 




( 


OOC 


Doll; 


ars) 




1929 






1931 


Connecticut 


4,251 






1,626 


Georgia 


4,219 






1,962 


Massachusetts 


12,039 






6,781 


Michigan 


4,970 






2,828 


New York 


41,979 






22,072 


North Carolina 


7,589 






4,168 


Ohio 


4,262 






- 


Pennsylvania 


28,368 






21 , 877 


Tennessee 


- 






6,654 


Utah 


344 








Vermont 


4,013 








Virginia 


1,962 








Wisconsin 


1,992 






1,663 


Other States 


34,854 






20,222 



TOTAL $150,842 39,853 



Source: Census of Manufactures - 1931 
"Knit Goods". 



PRODUCTION BY TYPE OE PRODUCT 



Over three-fourths of the product of the underwear and allied pro- 
ducts industry in 1933 was produced "by manufacturers of garments. 
Cotton and vrool garments were the most important items produced "by the 
industry, 47.1 per cent of the value of product being in this class. 
Next in importance was rayon silk and other garments with 20.4 per cent 
of the total value, followed "by rayon, silk and other cloth with 14.7 
per cent and woven athletic underwear with 9.6 per cent of the total. 
The following table shows value of the production of the various types 
of product produced in 1933, according to the Code Authority. 



9823 



-INS- 
TABLE VII 
UUDEMEAE A1TD ALLIED PRODUCTS IFDUSTRY 

VALUE OF PRODUCTS 3Y TYPE OP MILL, 
1933 



Type of i;ill 



Value of Products (a) 
Thousands Per Cent 

of of 

Dollars Total 



Total Hills 

Total Fabric Mil] s 

'Rayon, Sill:, Cotton and/or TJool Circular 
Rayon, Silk and Other, ¥arp 
Miscellaneous ("b) 

Total Garment i.iills 
Cotton and/or lool 

Woven Athletic .Type 
Rayon, Silk and Other 



157,000 



100.0 



36 , 000 


22.9 


23,000 


14.7 


4,000 


2.5 


9,000 


5.7 


21-, 000 


77.1 


74,000 


47.1 


15,000 


9.6 


32 , 000 


20.4 



Source: Underwear Institute, Analysis of the Underwear and 

Allied Products Industry, April 15, 1935, pp. 1 and 13. 



(a) 



This includes fabrics valued at $7,000,000 and under- 
garments at $8,000,000, not readily classified, which 
have been apportioned by groups. 



(b) Work glove fabrics, elastic fabrics, beef bagging, wash 
cloths, polishing cloths and novelties. 

Prepared by Industry Statistics Unit, Statistics Section, 1TRA. 



Production per unit in the underwear industry was greater in 1933 
than in 1929, yet the total values for 1933 were 43.7 per cent less 
than in 1929. 

Production of "shirts and drawers" in 1929 was approximately 
8,802,000 dozen valued at $37,670,000, or 'an average of $4.30 per dozen. 
In 1933 production of this item increased to 10,220,000 dozen valued at 
$25,368,000 or $2.50 per dozen. This production increased 16.1 per cent 
in 1933 over 1929. The total value decreased 33 per cent. The decline 
in price was approximately $1.80 per dozen. 

The production of "union suits" in 1929 was approximately 
8,891,000 dozen valued at $70,837, 00Q,; or an average of $7.85 per dozen. 



9823 



In 1935, 8,083,000 dozen were produced valued at $33,963,000 for an 
average of $4.80 per dozen. In 1933 the value dropped 33.05 per dozen, 
or approximately 38 per cent. 

Approximately 2,383,000 dozen "bloomers" and "step-ins" were pro- 
duced, in 1929, valued at $18,319,000 for an average of $7.70 per dozen. 
In 1933 approximately 2,261,000 dozen were produced (5 per cent less 
than in 1929), valued at $7,928,000 or $3.50 per dozen. The decline 
in price for these items was $4.20 per dozen or 55 per cent from the 
1929 average. 

The production of "slips" and "petticoats" during 1929 approxi- 
mated 259,000 dozen, valued at $2,120,000 for an average of $8.20 per 
dozen. In 1933 production of these items dropped to 82,000 dozen, 
valued at $9.70 per dozen. 

The following table contains the information given above: 

TABLE VIII - VOLULS A1ID VALUE 0? PRODUCTION, BY TYPE OF PEODUCT 



Product 



Prod. 
(000) 

Dozen 



1929 



1931 



1933 



Value Aver. Prod. Value Aver. Prod. Value Aver. 

(000) per (000) (000) per' (000) (000) per 
Dollars Dozen Dozen Dollars Dozen Dozen Dollars Dozen 



37,670 $4.30 7,959 25,258 $3.20 10,220 25,363 $2.50 



70,837 7.85 6,838 40,452 5.90 8,038 38,963 4.80 



18,319 7.70 1,862 8,073 4.35 2,261 7,928 3.50 



Shirts 


8 


,802 


and 






Drawers 






Union 






Suits 


8 


,891 


Bloomers- 






Step-ins 


2 ; 


,383 



Slips and 
Petticoats 259 

Infants' 
Underwear 



2,120 8.20 109 1,360 12.50 



6,146 



4,786 



82 784 9.70 



2,879 



TOTALS 20,535 135,092 



16,818 79,929 



20,651 75,922 



Source: Census of Manufactures - "Knit Goods." 



9823 



-145- 



COST OE PRODUCT 1017 



The total cost of raw materials for the Underwear and Allied 
Products Industry in 1929 was approximately $132,167,000, or 59.3;j of 
$223,767,000, the total value of products for 1929. In 1931 the total 
cost of raw materials uas approximately $79,647,000, or o5.7 c ,o of 
$142,895,000, the total value of 1931 products. It is noted that actual 
monies spent in 1931 for materials decreased about 40;j, but the ratio of 
materials to total values only decreased 3.6$. In 1933, the total cost 
of materials used by the industry dropped to $76,433,000, or 53.5$ of 
$142,440,000, the total values of products. The cost . of mate^iglrfor 
1933 \?as 42.5fJ less than in 1929, but in proportion to total value, it 
was 53.5$ in 1933 as compared with 59.3$ in 1929, a decline of 5.8$. 



Total labor cost for the Underwear and Allied Products Industry in 
1929 was approximately $41,700,000, or 18.7$ of $223,767,000, the total 
value of products for that year. In 1931, the actual cost of labor de- 
creased to $29,716,000, or .28.5$ less than in 1929, but the labor cost 
to the manufacturers increased 1.7$ over 1929, due to the fact that the 
total value of products declined from $223,767,000 in 1929 to $142,895,000 
in 1931, or 36.5$. 



The following table is a summary of the figures quoted above: 

TABLE IX - RATIO .01/ LABOR MB IATEPJALS COSTS TO VALUE OF PRODUCT 



Year 



Total Labor Cost 



Amount 



$ of 

Product 

Value 



Total material Cost 



Amount 



$ of 
Product 
Value 



Total Value 
of Product 



1929 $41,700,000 18.7 
1931 29,716,000 20.4 
1933 28,372,000 19.7 



$132,167,000 
73,647,000 
76,433,000 



59.3 
55.7 

53.5 



$223,767,000 
142,895,000 
142,440,000 



Source: Census of uaziufactures - "Unit Goods". 



Table X, shows 1934 sales by type of mill. In that year 86.5 per 
cent of the total sales were made by garment mills. Cotton and wool 
garments accounted for about one-half of that year's sales and rayon 
silk end ether garments about one-fourth. 



9323 



-146-i 

TABLE X - UNDERWEAR A17D ALLIED PRODUCTS INDUSTRY 
SALES 3Y TYPE OF LULL, 1934 (a) 



Type of Hill 



Sales 



Thousands 


Per Cent 


of 




of 


Dollars 




Total 


117,143 


00 


100.0 


15,775 




13.5 


6,793 




5.8 


• 2,581 




2.2 


6,401 




5.5 


101,368 




86.5 


60,670 




51.8 


10,745 




9.2 


29 , 953 




25.5 



Total Mills 

Total Fabric Llills 

Rayon, Silk, Cotton and/ or Wool 

Circular 
Rayon, Silk and other Warp 
Miscellaneous (c) 

Total C-ament Mills 
Cotton and/or Wool 
Woven Athletic Type 
Rayon, Silk and other 



Source: Underwear Institute, Analjrsis of the Underwear and 

Allied Products Industry, April 15, 1935, pp. 1 and 13. 

(a) Preliminary reports of 352 member and non-member mills. 

(b) This figure does not include reports from 24 mills, 
non-members of the Underwear Institute and from 2 
member mills, all of which failed to allocate their 
sales aggregating $5,013,000. 

(c) Work glove fabrics, elastic fabrics, beef bagging, 
wash cloths, polishing cloths and novelties. 

Prepared by Industry Statistics Unit, Statistics Section, 
Division of Review, E.R.A. 

SHIPMENTS 

The 1934 shipments of the product, according to code authority 
records, are shown by the following table which also shows average 
monthly stocks on hand and rate of turnover of stocks. In 1934, 
31,025,000 dozens of garments were shipped. In that year shipments were 
large for the following garments: women's rayon underwear with 
7,310,000 dozens; men's and boy's shorts with 5,430,000 dozens; men's 
shorts - 4,892,000 dozens. In 1934 shipments of men's heavyweights 
amounted to only 2,391,000 dozens. 



9823 



-1.7- 

stoc:; ver 

Hayon underwear with an average turnover rate of 13.26 in 1934, 
moved over trice as rapidly as lightweight cotton and woolen -underwear 
and over four tines as rapidly as heavyweight underwear. The fastest 
moving product in the industry in 1934, was the elastic fabrics for use 
in the manufacture of corsets, etc. , for which the turnover rate was 
41.16 tines per year. Tubing for neat "bagging and circular knit rayon 
fabrics also showed a very high turnover rate at about 24.7 times per 
year. 

TABLE XI - UNDERWEAR AKD ALLIED PRODUCTS INDUSTRY 

AFKUAL SHIPMENTS, AVERAGE MONTHLY STOCKS AiTD RATE OE STOCK TURN- 
OVER OE UHDERYEAR BY PRODUCT - 1934 



Annual Average Rate of Stock 
Shipments Monthly Turnover (a) 
Product Stocks (Tines per 

year) 
(Thousands of garments) 

Total ' 31 , 025 4,725 6.57 

Heavyweight Knit Cotton and/or Wool 
Men's Union Suits 
TJonen's Union Suits 
Boy's Union Suits 
Misses' Union Suits 
Children's Union Suits 
Children's Sleeping Garments 

Lightweight Knit Cotton and/or Uool 
Ken' s Union Suits 
Tfonen' s Union Suits 
Boy's Union Suits 
Misses Union Suits 
Children's Union Su.it s 
Ken's and .Boys' Athletic Shirts5,430 
Infant s ' Vests, Urappe r s , Bands , 

etc. 1,760 306 5.75 

Knit Silk and Rayon 

TJonen's Rayon Underwear 
Children's Rayon Underwear 
Ken's Rayon Underwear 
T7onen* s Glove Silk Underwear 







3.41 


2,591 


648 


3.69 


283 


88 


3.23 


642 


222 


2.89 


87 


36 


2.43 


784 


199 


3.95 


224 


102 


2.18 
6.2S 


1,308 


285 


4.58 


1,140 


145 


7.88 


94 


17 


5.37 


■ 90 


23 


o.8o 


557 


100 


5.53 


,5,430 


776 


7.00 







13.26 


7 , 310 


523 


13.97 


1,233 


115 


11.13 


468 


40 


11.71 


877 


71 


12.33 



)823 



-148- 

TABLE XL UNDERWEAR AilD ALLIED PRODUCTS INDUSTRY 

ANNUAL SHIPMENTS; AVEBAGE MONTHLY STOCKS Ala) PATE OE STOCK TUR1T- 
OVER OP UNDERWEAR BY PRODUCT - 1934 (Cont'd.) 



. Annual Average 
Shipments Monthly 
Stocks 

(Thousands of gaments) . 



Rate of Stocl: 
Turnover (a) 
(Tines per 
year) 



Woven Athletic Underwear 
lien's Union Suits 
■Boys' Union Suits 
lien 1 s Shorts 
Boys' Shorts 







6.12 


723 


178 


4.07 


138 ' 


' 35 


3.93 


4,892 


734 


6.66 


544 


81 


6.68 



Source: Underwear Institute, Analysis of the Underwear and 
Allied Products Industry, April 15, 1935, p. 22. 

(a) Rate of stock turnover is calculated by dividing 

total annual shipments by average month-end stocks. 
Rate of stock turnover was computed before figures 
for shipments and stocks were rounded. 

Prepared by: Industry Statistic Unit- Statistics Section - 
Division of Review, N.R.A. 



TABLE XII - UNDERWEAR AND ALLIED PRODUCTS INDUSTRY 

ANNUAL SHIPMENTS, AVERAGE MONTHLY STOCKS, AND RATE OE STOCK" TURN- 
OVER OP ALLIED PRODUCTS - 1934 



Product 



Annual Average Rate of Stock 
Shipments Monthly Turnover (a) 

Stock (Times per year) 



Tubing for Meat Bagging 
Glove Lining', Wristlets, etc. 
Circular Knit Rayon Fabrics 



(Thousands of Pounds) 
6,092 246 
7,236 525 
6,329 (b) 439 (b) 



24.72 
13.77 
24.70 



9823 



-1 , .q- 



table xii - uihjeriear altd allied products iudustry 

annual shipments, average monthly stocks, and rats op stock turn- 
over Or ALLIED PRODUCTS - ,1934 (Cont'd. 



Product 



Annual 
Shipments 



. Average 
i .'onthly 
Stock 



Rate of Stock 
Turnover (a) 
(Tines per Year) 



(Thousands of pieces) 



Tricot and Milanese Fabrics ' 228 
Elastic Fabrics ' 473 



28 
11 



8.16 
41.16 



SOURCE: Underwear Institute, Analysis of the Underwear and 
Allied Products Industry, -April 15, 1935, p. 22. 

(a) Rate of stock turnover is calculated by dividing 
total annual shipments by- average nonth-end stocks. 
Rate of turnover ras computed before figures for 
shipments and stocks re re rounded. 

(b) Seven months, June- December, 1934, inclusive. 
Turnover is computed at annual rate. 

Prepared by: Industry Statistics Unit - Statistics Section, 
Division of Review, U.S.A. 



DISTRIBUTION 

The market of the industry is national. Ho information is avail- 
able relating to the national, regional, or interstate distribution 
range of individual concerns. 

In 1S26 and 1931 in selected groups of cities, 57$ and 54.3$, 
respectively, of women's underwear sold was knit and 43 and 47 per cent 
woven. Of the women's knit underwear sold in 1926 and 1931, 50 and 62 
per cent, respectively, were made of rayon. 

In 45 stores in a selected group of cities in 1931, 53.8,0 of the 
men's underwear sold was knit and 41.2$ woven; of the value of men's 
knit underwear sold 63$ wa.s of cotton, while more than 99$ of the men's 
woven underwes,r was of cotton. 

No information is available relating to transportation agencies 
-utilized or the customary quantity of shipments or relation of trans- 
portation cost to wholesale prices. 



9823 



-150- 

Very little information is available with respect to advertising. 
Allied products are sold almost entirely to industrial users, and those 
jiroducts, together with underwear, being mainly utility articles, ad- 
vertising has not "been so highly developed. 



The following table shows the 
State in relation to population: 



)ercentage of sales value -per 



TABLE XIII 


- perce: 


UTAGE OF P?J 


DDUCTION AND POPULATION 


PER STATE 


1929 PER CENT 


OE TOTAL 


1931 


PERCENT 


OF TOTAL 


STATE Pro- 


iuction 


Population 


STATE Proc 


Iuction 


Population 




(b) 


(a) 




(b) 


(a) 


Connecticut 


22.8 


(*) 


Connecticut 


1.8 


(*) 


Georgia 


2.3 


2.4 


Georgia 


Ct • Ci 


2.4 


Massachusetts 


6.0 


3.5 


Massachusetts 


7.5 


3.5 


Michigan 


3.3 




Michigan 


3.1 


3.9 


New York 


27.8 


10.2 


New York 


24.5 


10.2 


North Carolina 


5.0 


2.6 


North Carolina 4.6 


2.6 


Ohio 


2.8 


n A- 


Ohio 





5.4 


Pennsylvania 


18.8 


7.9 


Pennsylvania 


24.2 


7.9 


Tennessee 





2.1 


Tennessee 


7.4 


2.1 


Utah 


.2 


.4 


Utah 





.4 


Vermont 


22.6 


.3 


Vermont 





.3 


Virginia 


1.3 


2.0 


Virginia 





2.0 


Wisconsin 


1.3 


2.4 


Wisconsin 


1.8 


2.4 


Other States 


23.3 


"" 


Other States 


22.9 


— — 



(*) Included in "Other States'). 



Source: (a) Census of Population 1930. 

(b) Underwear Institute Report, dated 4/15/35. 



A consumers goods product such as underwear should be consumed 
almost directly proportional to population in states with a similar cli- 
mate.' The preceding table, therefore, indicates interstate movement of 
goods, because nearly half of the production of underwear is produced 
in the two states of New York and Pennsylvania, which contain less than 
20 per cent of the total population. Furthermore, many states nroduce 
no underwear. The movement of underwear across state lines into these 
states most occur,. 

Referring to the 1929 Census of Distribution, it is noted that the 
sales of knit underwear to have been made in the following proportions 
to these outlets: 

Wholesalers 61. 2^ 

Retailers ' 35.4 c ;j 

Manufacturers 1 own •.•hole sale branches, 
industrial and other large consumers 
9823 



-151- 

direct selling, etc. 5.4$ 

Those -product s were distributed bv_ the various sales agencies 

as follOTTS! 

By mills direct to various types of 

onstor.iers 68.2/0 

manufacturers ' agencies, selling 

agencies, brokers and commi scion 

houses . 31.8,j .. ■• 

The manufacturing units are, for the most part, medium sized; 
there being only about one-half dozen of unusual size. Those six lar? 
gest concerns account for perhaps lofo of the sales volume of the indus- 
try, so that obviously, there is no tin-eat of monopoly; For the most 
part, the industry is composed of one mill companies. 

Ho information is available on transportation agencies utilized 
or the customary quantity of shipments, or relation of transportation 
cost to wholesale prices. ■• •• 

EXPORTS ALT) II.ZPORTS 

The following tables show a summary of the production and values 
of exports and imports of knitted underwear. 

Attention is called to the fact that tshe production and values 
of exports and imports have steadily declined on practically all units 
of knitted underwear, with the exception of rayon, since 1927. 



9823 



-152- 



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9823 



-153- 

CHAPTE3 IV 

LABOH 

EMPLOYMENT . . ■• - ■ 

There are no official figures covering employment for the entire 
underwear and allied products Industry. 

Figures compiled by the Research and Planning Division of the 
Underwear Institute (*) give the number cf establishments and employment 
in the Industry as follows: 

Table XV 
Year No. of -Establishments No. of Wage Earners 

1923 474 55,784 

1925 430 54, 752 

1927 422 52, 779 

1929 201 49, 978 

1931 375 39,495 



According to this source, about 8^ per cent of the industry' s 
employees are female. 

Employment in the knit underwear branch of the Industry, according 
to census figures, constantly declined from 1923 to 1931. In 1923 there 
were 48,552 wage earners in this branch; by 1931 there were only about 
32,000. Some improvement is shown for 1933 when roughly 36, 000 were 
employed. 

The best available data concerning employment and wages in the 
entire underwear and allied products manufacturing industry during the 
pre-code, end post-code periods are for a sample of the industry compiled 
by the Bureau of Labor Statistics. These figures represent approximately 
701j of the wage earners of the industry. 

Prom this source, using the figures cf 1929 as a ba.se eouivalent to 
rOp^o, the following tables indicate the various trends of employment 
from 1929 to September 1935. The peak of employment during this time 
occurred in "November 1929, reaching a height of approximately 43,710 
employees. During July 1932 employment dropped to its lowest level. 
Approximately 25,510 employees were employed during this period or 61.50 
of the 1929 level. 



(*; Report cf Research and Planning Division of TJn;ier iiT ear Institute, 

submitted at Fublic Herring at '..'ashin -ton, August 10 and 11, 1934, 
N. R. A. files. 



9823 



- ID Jf 







TABLE 


XVI 










INDEX OF 


EJFLDYLS 


FT (1929 = 


100 ) 






MONTH 








y s a s 








1929 


1931 


1932 


1933 


1934 


1935 


January 


92.4 


66.7 


72.6 


77.3 


75.6 


74.7 


February- 


95.8 


72.5 


72.5 


75.5 


83.2 


80.5 


March 


98.6 


74.8 


74,7 


74.0 


90.6 


84.6 


Aoril 


100.5 


76.9 


73.4 


78.3 


94.1 


85.7 


May- 


101.0 


78.9 


73.4 


81.6 


94.5 


84.2 


June 


100.8 


78.8 


72.7 


90.7 


92.4 


81.9 


July 


99.7 


79.6 


61.5 


98.8 


79.8 


77.1 


August 


99.0 


80.4 


70.1 


95.7 


80.8 


80.9 


September 


101.5 


78.3 


76.5 


94.1 


71.2 




October 


103.9 


80.6 


83.1 


94.3 


83.3 




November 


105,4 


80.2 


87.8 


88.5 


78.3 




December 


101.3 


76.5 


83.7 


84.2 


77.8 




Average 


100.0 


77.0 


75.2 


86.1 


83.5 






Source: 1927-1929, Census of Manufactures; 1931 to date, Bureau of 
Labor Stptistics, in coooeration with ERA and adjusted to 
1933 Census total by NTA. 







TA3LE 


xv i i 










ESTIi 


.viATED NUMBER EMPLOYED 






MONTH 








YEAR 








1929 


1931 


1932 


1933 


1934 


. 1935 


January 


38,330 


27,660 


30, 110 


32, ^70 


31,350 


30, 980 


February 


39,750 


30, 07^ 


30, 060 


51,300 


34, 530 


33,410 


March 


40,910 


31,020 


30, 990 


30,710 


37, 580 


35,110 


Aoril 


41,700 


31,900 


30, 430 


32,500 


39,050 


35, 550 


May 


41, 900 


32,740 


30, 430 


33,870 


39, 200 


34, 940 


June 


41,830 


32,680 


30, 160 


37,620 


38,310 


33, 970 


July 


41,380 


33,040 


25, 510 


41,000 


33, 120 


31, 980 


August 


41,060 


33,340 


29,090 


39,700 


33,510 


33,540 


September 


42, 100 


32,460 


31,750 


39,040 


29,560 




October 


43,120 


33,440 


34, 470 


39,120 


34, 550 




November 


43,710 


33,280 


36,410 


36 , 730 


32,500 




December 


42,050 


31,750 


34, 720 


34,940 


32,290 




Average 


41,490 


31,950 


31, 180 


35,720 


34,630 





Source: 1927-29 Census data; 1926 to date, (Data apply only to 
Census classification ?Knit Underwear"). 



9823 



-155- 



AVERA.GE EMPLOYMENT I-ZR PLANT 

A report pr spared in June 1953 by the Anerican Knitwear Manu- 
facturers Association (predecessor of Underwear Institute) contains a 
table showing average number of employees per plant. It is as follows 

TABLE XVIII 

AVERAGE NUMBER OF EMPLOYEES PER PLANT 
NUMBER OF FIRMS - NUMBER OF EM- 
PLOYEES 



YEAR 


NUIJ3ER 




OF 




FIRMS 


1923 


326 


1925 


298 


1927 


285 


1929 


!251 


1931 


213 


1934 (a) 


531 (a) 



NUMBER 
OF 
EMPLOYEES 



WAGE EaRNERS 

PER 

PLANT 



48,552 
48,328 ■ 
46,227 
41,487 
31,360 
60,000 (a) 



149 
162 
162 
165 
147 
113 (a) 



American Knitwear Manufacturers Association, 
(a) Estimated figures of Code Authority - Letter dated 
vT T7 u_ files. 



Source 

(a) 

3/19/35, H. R. A 

EMPLOYMENT AND FAYROLLS 3Y STATES 



The following figures, taken from the reports of the Census of 
Manufacturers, presents a comparison of employment and payrolls of the 
industry by states for the years 1929 and 1931. Attention is called to 
the fact that these figures include only those of the firms reporting to 
the Bureau of Census, and therefore, do not indicate the totals for the 
industry. 

According to these fugures approximately 66 \ of all employees are 
employed by firms located in the Northern area; 1 ,<5 o by firms in the 
Southern area; and the remaining 24^ by firms in the census classification 
"Other States". The States of New York and Pennsylvania employ 30.4$ and 
16.4$ respectively, or 46.8$ of all employees. The State of North Caro- 
lina employs more than any other Southern state employing approximately 
5$ of the workers of the industry. 

Payrolls records correspond with those of employment, 69$ of the 
payrolls being received by employees working in the Northern States. Em- 
ployees of Southern States receive 8$ of the payrolls of the industry, 
and the remaining 23fo is distributed among employees in "Other States". 

The employees of the States cf New York and Pennsylvania receive 
31$ and 17$ respectively. North Carolina payrolls amounted to approxi- 
mately 5$ of the payrolls of the entire industry. 



9823 



-156- 

TABLE XIX 
EMPLOYEES MS ./AGES BY STATES 





724 




728 


p 


( 057 




963 


3, 


551 


2.. 


026 


6, 


323 


3, 


012 



STATE SJPLOYEES I ZR STATE WAGES PER STATE 

1929 1931 1929 1931 



Connecticut 1, 192 

Georgia 1, 113 

Massachusetts 2,691 

Michigan 1, 452 
New York 12,615 
North Carolina 2,458 

Ohio 1,149 

Pennsylvania 6,800 

Tennessee 

Utah 105 

Vermont 906 

Virginia 680 

Wisconsin 424 630 

Other States 9,902 6,937 



Totals 41,487 31,951 #32,928 $22,545 

Source: Census of Manufactures 

HOURS 

The following data relating to hours was prepared from the Bureau 
of Labor Statistics data. In 1932 the average hours ner week was 41.4 
hours, and in 1933 the average drooued to 39.6. The 1934 average hours 
per week was 32.8 hours. This represents a decline of 20.5^ and 17$ 
respectively from the years of 1932 and. 1933. This decrease may be 
attributed largely to the schedule of hours and the machine limitations 
provisions of the Code. 



(000) 


(000) 


$1,086 


$ 569 


671 


349 


2,560 


1,776 


1,096 


743 


10, 208 


6,370 


1,497 


1,112 


942 





5, 656 


4,749 





1,959 


75 




866 




396 




364 


378 


7,5'^6 


4,535 



9823 



-157- 
TABLE XX 



MONTH 



January 

February 

March 

ADril 

May 

June 

July 

Augus t 

September 

October 

November 

December 



AVSE? - d ! JRS : : .S" u&M 



1926 



1928 



i i; n 



40.6 



44.0 



43.4 



R 



1932 



57.9 



1y3 



1934 



4'\4 



28.9 



1935 



32.5 



41.2 


44.2 


33.3 


34.2 


41.3 


38.5 


35.0 


34.4 


38.0 


39.8 


35.7 


34.6 


37.3 


43.9 


35. '1 


33.3 


39.9 


46.5 


34.2 


31.0 


33.7 


48.0 


30.9 


32.2 


37.6 


36.8 


30.0 


34.0 


45.4 


34.6 


32.1 




48.2 


35.1 


32.5 




50.1 


34.7 


32.4 




46.7 


32.7 


33.3 





Average 



41.4 



39.6 



32.8 



Source: 1926-30- Bureau of "Labor Statistics Bulletin No. 591; 

1932 to date, B. L. S. in cootferation withNRA. ' " 

MAN-HOURS 

The total man-hours per week reached a high of approximately 
1,968,000 hours per week in July of 1933; low total man-hours per week 
occurred during July of ' 1932, being approximately 860, 100 hours. Attention 
is called to the variation between the figures for July of 1933 and July 
of 1934. 

i TABLE XXI 

ESTIMATED. TOTAL ..EEKLY iaN-HOURS 



MONTH 



January 

February 

March 

April 

May 

June 

July 

August 

September 

October 

November 

December 



YEAR 



1932 



1933 



1934 



1,141,000 
1,238, On6 
1,280,000- 
1,156,000 
1,135,000 
1,203,000 
860, 000 
I 1 , 094, 000 
1,441,000 
1,661,000 
1,824,000 
1,621,000 



1,296,000 
1,383,000 
1,182,000 
1,294, 100 
1,487,000 
1,749,000 
1,968,000 
1,461,000 
1,351,000 
1,373,000 
1,275,000 
1,143,000 



906,000 
1,15 \000 
1,315;000'' 
1,394,000 
1,372,000 
1,310,000 
1,023,000 
1,005,000 

949,000 
1,123,000 
1,053,000 
1,075,000 



1935 



1,007,000 
1,143,000 
1,208,000 
1,230,000 
1,164,000 
1,053,000 
1,030,000 
1,140,000 



9823 



-158-H. 



Average 



1,3' >5, 000 



1,414,000 



1,14>, 000 



Source: Bureau of Labor Statistics in cooperation. .viith_.NRA 
PAYROLLS 



By using the figures of 1929 as a base equivalent of lOf^o, it is 
noted that the oavrolls for the industry varied from, a lov. of 39.9 f o in 
Julv of 1932 to 84,9;1 in Aoril of 1934. The total average weekly pay- 
roll for July of 1932 was apuroximately $252*000; the total average 
payroll of • the industry for April of -1934 was approximately $537, Ono. 
This is a variation of $284j'0OO per week or 113o. During 1934 the 
average weekly payroll was- approximately $449,000 and in 1932 it averaged 
$372,000 per week; or a gain of 12'j for the entire industry. 

TABLE XXII 



I1IDJK..0X FAXROiLft 

(1929 - lOO-o) 






MONTH 



1927 



1929 



1931 



1932 



1933 



1934 



1955- 



January 

February 

March 

April 

May 

June 

July 

August 

September 

October 

November 

December 



58.4 


59.2 


53.9 


57.0 


62.6 


65.4 


57.6 


53.7 


71.6 


70.8 


68.3 


59.0 


48.9 


80.5 


74.2 


69.8 • 


52.9 


51,8- 


84.9 • 


76.6 


69.1 


: 54.2 


57.9 


. 84.7 


73.4 


69.2 


'• -54.7 


68.4 


79.4 


70.0 


69.4 


•: 39.9 


77.1 


65.1 


64.1 


71.5 


51.0 


84.6 


65.7 


70.9 


69.1 


61.7 


81.7 


58.5 




72.6 


71.8 


82.8 


70.4 




72.0 


' . 75.3 


75.4 


66.0 




66'. 9 


68.6 


70.4 


67.2 





Average 



119.0 100.0 68.5 



58.8 -67-.. 2 70.9 



Source: 1927-29 Census' of Manufactures; 1931 to date, Bureau of 
. • ' . Labor Statistics, in cooperation, with NRA, and s " adjusted to 
1935 Census. Total by NRA. 



■ ,i ■ 
ft?-' 






9823 



-159- 

TABLE XXIII 

ESTIMATED V/EEKLY PAYROLLS 



MONTH 



January 
February- 
March 
April 
May 
June 
July 
August 
September 
October 
November 
December 



1927 



1929 



A 3. 



1931 



1932 



1933 



1934 



1935 



$369, 500 
414, 200 
432, 600 
441, 700 
437, 7Q0 
437, 900 
439', 300 
452, 800 
437, 800 
459, 400 
456, 100 
423,300 



$374, 700 
364, 800 
373,300 
334, 900 
343,400 
346,300 
252, 800 
322, 900 
390, 900 
454, 800 
475,500 
434, 400 



$341, 900 
339,800 

309,600 
328,100 
366,600 
432,900 
438,300 
535, 500 
517,200 
524, 100 
447,100 
445, 800 



$36'\ 600 
453, 400 
509,500 
537,700 
536,200 
503,000 
412, 100 
416,200 
370, 300 
445, 800 
417,700 
425, 600 



$396,600 
448,200 
470, 000 
484, 800 
464, 800 
443,400 
405, 700 
449,200 



Average $753,500 $553,200 $433,500 $372,500 $425,600 $449, W) 



Source: 



1927-29 Census of Manufactures; 1931 to date, Bureau of 
Labor Statistics in cooperation with N3A, data apply only 
to Census Classification "Knit Underwear." 



AVERAGE - HOUELY WaG-E 

The average hourly wage per employee in 1932 was approximately $.273 
and in 1934 it was $.398, a gain of $.125, or 14. 6^. The average earnings 
per hour increased from $.232 in April of 1932 to $.410 j. n August of 1934. 
This is a variation of $.178 tier hour, -or 774. 

The above figures clearly indicate the wage increases received by the 
enroloyees of the underwear industry. Since the enroloyees of this industry 
are practically non-organized, wage increases must largely be attributed 
to the effects of the Code. 



9823 



160 

TABLE XXIV 
AVEHA&di .HOUZLY .<aGE (C&iTSY 



MONTH 



1926 



1928 



i9::o 



1932 



1933 



1934 



1935 



January 

February 

March 

Aoril 

Kay 

June 

July 

August 

Seotember 

October 

November 

December 



55.7 



S7.8 



35.4 



31. 3 


24.7 


39.4 


41.0 


28.8 


24.7 


39.1 


40.8 


28.1 


24.7 


38.7 


41.0 


28.2 


23.2 


38.8 


38.7 


27.2 


23.9 


38.9 


39.4 


27.7 


24.4 


38 . 5 


4 n . 1 


25.4 


25.2 


4' '.7 


39.9 


26.8 


36.8 


41.0 


40.4 


26.3 


38.5 


40.8 




26.8 


38.8 


40.4 




25.2 


38.6 


, 40.3 




25.2 


39.9 


40.5 





Average 



27.3 



30.3 



39.8 



Source: 1926-50, Bureau of Labor Statistics, Bulletin No. 591, 
1932 to date, Bureau of Labor Statistics in cooperation 
with NRA.. 

AVERAGE WEEKLY tiJJSS 

The average weekly wage per employee in 1932 was approximately $11.79, 
and in 1934 this figure was $13.15, representing an average gain to each 
employee of ll.l'o. The greatest variation during this period occurred 
between the months of July of 1932 and April of 1934. The average figure 
for July 1932 was $9.84 r>er week and in April of 1934 it was $13.97, a 
variation of $4.13 oer week per employee, or 42^ increase in the average 
weekly wage. 



< 



9823 



-161- 
IABLE XXV 

AVERAGE WEEKLY WAGE 



i .onth 



January 

February 

I [arch 

April 

May 

June 

July 

August 

September 

October 

November 

December 



YEAR 



1926 1937 1928 1929 1930 



1931 



1932 1933 1934 



1955 



14.50 



16.63 



15.36 



113.28 


$12.39 


$10.56 


$11.57 


$13.04 


13.70 


12.13 


10.68 


13*31 


13.82 


13.88 


12.04 


10.29 


13.74 


13.92 


13.78 


10.98 


10.29 


13.97 


13.39 


13.30 


11.24 


10.88 


13.89 


13.15 


13.33 


11.42 


11.57 


13.33 


13.31 


13.22 


9.84 


11.95 


12.62 


12.89 


13.49 


11.00 


13.61 


12.61 


13.68 


13.39 


12.23 


13.37 


12. ai 




13.62 


13.08 


13.46 


13.23 




13.58 


12.83 


13.07 


13.28 




13.29 


12.24 


12.84 


13.45 





Average $16.30 



$15. 26 



$1.3.49 $11.79 $11.88 $13.15 



Source: 



SEASONALITY 



1926-28-30, Bureau of Labor Statistics, Bulletin No. 591, 
1927 and 1929 Census; 1932 to date, Bureau of Labor 
Statistics in cooperation with NRA - data only apply to 
Census classification, "Knit Underwear". 



In 1929 employment in the underwear and allied products industry 
varied from 38,330 employees, or 92.4$ in January, to 43,710 employees, 
or 105.4$ in November, production for 1929 varied from 86*6$ during 
December 60 117. 5$ in October, and the shipments ranged from 79.8$ in 
January to 131. 0$ during October. 

During 1931 the low employment figures were reported in January 
when 27,660 employees, or 66.7$ of the 1929 level were employed, while 
in October employment reached a peak of 33,440 employees, or 80.6$. Weekly 
payrolls in 1931 ranged from an average of $369,500, or 58.4$, in January 
to $459,400 during October. Production during this je&r varied from 68.1$ 
in January to 97.4$ in i larch. Shipments for this same period ranged from 
72.4$ in December to 111.4$ in September. 

In 1932 employment varied from 25,510 employees in July to 36,410 
during November, or from 61.5$ to 87.8$, according to the index of em- 
ployment. Payrolls during July averaged $252,800 per week to $476,500 
in November, or a variation from 39.9$ to 75.3$. production fibres show 
that the "peak" was in November, being 106.6$ while the "low" occurred 
during July, 55.4$. Shipments meanwhile ranged from 118.8$ in September 
to 52.5$ in July. 



/-1S2- 

In 1933, employment in the month of Larch averaged 30,710 employees, 
or 74.0$, and in July it raised to 41,000 employees, or 98.8$. Payrolls 
in Larch averaged $309,600 or 48.9$ and in October reached a "high" of 
$524,100 per week. Production varied from 76.0$ in December to 130.6$ 
in June. Shipments ranged from a "low" of 61.1$ in December to 163.2$ 
in July, 

During 1934 employment in September was 29,560 employees, or 71.2$, 
while in April it reached 39,050 employees, or 94.1$. Payrolls in 1934 
averaged $360, 60C per week in January, or 57.0$, and $537,700 per reek 
in April, or 84.9$. Production figures reported the "high" in Lay, 
115.8$ and the "low" in 72.5$. 
December to 104.3$ in Larch. 



— o — O j 

Shipments in 1934 ranged from 69.7$ in 



Figures for 1935 are reported for as late as September. Employment 
figures indicate that the "high" occurred in April, showing 35,550 em- 
ployees, or 85.7$, and the. "low" in January, 30,980, or 74.7$. !7eekly 
payrolls averaged $484,800 in April to $396,600 in January, or 76.6$ or 
62.6$ respectively, production varied from 80.6$ in July to 113.3$ in Hay, 
while shipments ranged from 77.1$ in July to 105.5$ during Lay. 

The following table is a recapitulation of the maxima and minima of 
employment for the years 1929, 1931, 1932, 1933, 1934 and up to September 
1935. 

The "peaks" and "low" of employment did not always occur during the 
same months of the respective years, thus, not only is employment highly 
seasonal, but the seasons do not occur always at the same time, making 
difficult careful plaining, coordination of production, and attempts to 
smooth out seasonality and decrease the bad effects on labor from this 
cause. 



. TAdLE XXVI 
VARIATION OE SLIPL0YLE17T IEDEX 





Kish 






Low 




Average 
Index 


Index 


Year 


Lonth 


Index 


Lonth 




Index 


Variation 


1929 


Lovember 


105.4 


January 




92.4 


100.0 


13.0 


1931 


October 


GO. 6 


January 




66.7 


77.0 


14.1 


1932 


Lovember 


87.8 


July 




61.5 


75.2 


26. 3 


1933 


July 


98.8 


Larch 




74.0 


' 86.1 


12.1 


1934 


i lay 


94.5 


September 


71.2 


83.5 


12.3 


1935 


April 


85.7 


January 




74.7 


— — —~ 


11.0 



Source: Bureau of Labor Statistics in cooperation with ERA. 



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166 
CHAPTER V 

CODE AID CODE ADiJNISTRATIOF. 

FORhULATIOi" 0? CODE 

The underwear and allied jrod.ucts industry operated under the Cotton 
Textile Code for the period from July 21, 1933, until September 18, 1933. 
During this period a Code of Fair Competition for the Underwear and Allied 
Products I Manufacturing Industry was sponsored by the Underwear Institute. 
This association represented approximately eighty-five per cent (85f>) of 
all members of underwear industry. 

All of the members of the underwear industry -./ere invited to attend 
a general industry conference in Tfashington, on July 19, 1933. At this 
meeting the code, drafted by the Underwear Institute, was submitted to the 
members of the industr- present for discussion and approval, before sub- 
mitting the proposed code to FRA for its approval. Approximately 350 
members or about 50^ of the industry attended this meeting. A public 
hearing on the proposed code was scheduled and held bv FRA on August 10 
and 11, 1933, at Washington, Deputy Administrator A. D. Thiteside pre- 
siding. All interested parties were given an opportunity to be heard. 

The Code presented was similar to the Cotton Textile Code. During 
the course of the hearing of August (DOand 11, 1933, various protests were 
made, principally with respect to provisions relating to definitions and 
labor. No serious problems arose concerning proposed trade practice oro- 
visions. 

LABOR PROVISIONS 

The representative of the Labor Advisory Board of the National Re- 
covery Administration objected to several of the labor provisions of the 
proposed code. The main objections were raised concerning the provisions 
establishing a Forth-South wage differential, a 40 hour ~eek, and special 
exemption for "learners" and so-called "privileged" operators. 

The representative of the Labor Advisory 3oard stated that the Forth- 
South wage differential was granted the cotton textile industry because 
many establishments in that industry provided cheap living conditions for 
their emplo3 r ees, low rentals, commissaries, etc., and that the underwear 
industry did not furnish its employees with these facilities and. '"'ere 
therefore not entitled to such a differential. The manufacturers claimed 
that this differential should be granted in order bo offset the advantages 
of Northern manufacturers benefitted by the cost of freight shipment due 
to their nearness to large buying markets. 

The Labor Ad-visor;/ - Board representative protested against the pro- 
vision providing for a forty-hour (40) week. It was claimed that in order 
to re-employ the unemployed skilled workers of this industry it would be 
neces r ar: r to have a 35-hour work week. A recuest "as also made for a five- 
day work week. The manufacturers protested against this limitation, 
claiming that production warranted a forty-hour '"ee^ for sewing machines 
and a "eighty-hour" week for knitting machines. 



9823 






I 



fr 



-167- 

7hen the code was aporoved it did contain provisions for a forty-hour 
week for sewing operations and an eighty— hour week for knitting opera- 
tions. 

The code of Fair Competition for the Underwear and Allied Products 
Manufacturing Industry was aporoved September 18, 1933 by Executive 
Order of the President. 

ADMINISTRATION OF THE COPE 
COPE AUTHORITY REPRESENTATION 

Article IV, Section 1, of the Code provided for the establishment 
of an Industry Committee to cooperate with the Administrator. It was 
as follows: 

"1. To effectuate the policies of the Act, an Under- 
wear and Allied Products Manufacturing Industry 
Committee is herebjr set up to cooperate with the 
Administrator as a planning and fair practice 
agency for the Underwear and Allied Products Man- 
ufacturing Industry. This Committee shall consist 
of six representatives of the Underwear and Allied 
Products Industry, duly elected by the members of 
the Underwear Institute, and three members without 
vote appointed by the President of the United States. 
The Industry Committee may from time to time present 
to the Administrator recommendations based on con- 
ditions in the Industry as they may develop from 
time to time which will tend to effectuate the oper- 
ation of the provisions of this Code and the policy 
of the National Industrial Recovery Act. Such re- 
commendations, when approved by the Administrator, 
shall have the same force and effect as any other 
provisions of this Code." (*) 

Due to the many divisions of the industry the above provision 
proved inadequate and as a result the code was amended in order to 
provide equal representation. The amendment proposed by the Industry 
Committee was approved May 10, 1934. It was in part as follows: 



(*) Code of Fair Competition for Underwear and Allied Products 
Manufacturing Industry - Part IV - Section . Codes of Fair 
Competition as aoproved, Government Printing Office, Volume I, 
Page 309. 



9823 



168 

"1. (a) To effectuate the nolicies of the 
t, r Code Authority is hereby set xr to cooperate 
\ ith the Ad.ii .'. >_ tor as planning and fair trr.de 
practice r r. c for the Underwear end Allied Products 
harufacturi _ Industry, h.e Code Authority shall con- 
sist of nine ( . } rs r re - hi:: the Industry, 
ei ht (J) to be dul " elected b; the Institute and one 
(l) to be elected by the members of t" e Industry who 
are not members oC the Institute, provided that the 
method of election shall be subject to the approval of 
the Administrator. The ei /t (f) members of the Code 
Authority to be elected by the Institute shall be 
el-cted from che following groups! 

"Tv" : )ers fron Division I, which includes 
Fabric Manufacturers in Groups 1,,2, 3, ana 4, as 

led in Part III, Section 3, Sub-Section (a) of this 
Code; provided that one of said members shall be 
elected from Group ?. 

"Three members from Division II, which includes 
concerns e:v/a;ed ir mahi:v, garments fro:: various 
fabrics, provided that there shall be one member 
from Group 10,. one from Group 11, and one from Group 
12, as named in Part III, .Section 1, Sub-Section 
(a) of t~-is Code. 

"Cne member sha'H be the Mm: _.i:\_: Director of 
the Institute. • 

"One member shall be the President of 
Institute. 

"One member shal] be the immediate Past Pres- 
ident of the Institute. 

"(b) I;. : .ditio. t: .-■.'. rphip e.s rhoove 
provided, there nv bq not mqre the.:: hiree (") 
members, to serve wit] mt e:~ie::se to the Industry 
and without vote, z be c ; ciated by the Adrduis- 
trator, to serve for such term as he shall snecify." (*) 



(*) Code of Fair Competition for Underwear and Allied Products 
Manufacturing Industry - Amendment ho. 2, approved May 10,1954, 
Code Authority Cr. anizc tic: and Financin . Codes of Fair Competitic: 
as approved, Cover: j.ie:t Printiu. Office - Volume X . . .Pc e 555 



i 



982C 



Ic9 



Industry were or. rovi d 



she above Ane: ,'. sent, flic followir.., members of the 



.. rf?;;, 'j_' c;.i"' L'O: •'■ .rvUt.'O 



-•it;-: (*) 



'" > 



S.P. Eai lit - : resident ■;' ■•: : nderver-r Institute. 

Z.J. i'.ciillar - Imraedicte Past President or' the Ir.stitr 

Hoy A. Cheney - hana.yi::,. Director of tl:« institute. 

P.H. Eavies - Division I, Group 1. 

E.P.. Van Vliet - Division I., C-rou •■ 2. 
■ Ralph Jones - Division II, Group 10. 
.Arthur I.I. Reis - Division II, Group 11. 

I.E. Mueller - Division J.I, G-roup 1 :. 

ho Code Authority representative was ever elected. by t n 
members of the industry who wr s not a member of th« institute. 

r > 

• On December 11, 1933, Mr. H.3. Ludlum, Jr. , we.'s ampoir 
Administration Member of the Code Authority. He resigned February 
1934, and to take his nlace John w'. Powers was ap >ointed February 
1934, resigning effective Janur-ry 29, 1935. 



;e. 



le 



tecl 

IV, 

21, 



The Code Authority of the Underwear arid Allied Products 
Manuih cturiry Industry was, well organized, and. was composed- of able 
members of the industry. Various subr- divisions of the industry were 
organized for the purpose cf prono-ting^ .coo~>erat_io" and compliance. 
The functixa^.of the Code Auth&rity staff v.'cre under the direction of 
an executive secret ry, who war; also- hary. in ; Director of the Under- 
wear Institute. The Cole Authority staff was depr.rtnental4.zed as fol- 
lows: Compliance, Research and Plannin , and Executive. 

Although the organization of the Code Authority was in 
accord with the provisions of the code, its actual functions v/ere con- 
ducted in the maimer of an ordinary trade association. 



CODE AUTHORITY FIFAhCZS 

The code -provided that the exner.ses rl bhe Code Authority 
be borne proportionate!; - by ell members of the Industry. (* *) 



(*) Administrative Order 25-1C ap roved June 6, 1954. Codes of Fair 
Competition, as approved, Government Printing Office - Volume X ... 



(**) Amendment ho. 2, a r roved hay 10, 1S34, Part IV, Section 1, Sub 
Section »h" . suora. 



170 
The be. sis of contribution determined upon was as follows; 

CLASS AID SALES DUES FTP. Y1AR 

A. Un to $50^000 $ 54,00 

B. 350,000 to $ 100,000 81.00 

C. $100,000 to 250,000 162.00 

D. $250,000 to 500,000 . 324,00 

E. $500,000 to 750,000 4C6.00 
T. $750,000 to 1,000,000 640,00 
G. $1,000,000 to 1,250,000 810.00 
H. $1,250,000 to 1,500,000 918,00 
I. $1,500,000 to 2,000,000 1,026,00 
J. $2,000,000 to 2,500,000"' ■■ b • 1,134.00 
K. $2,500,000 to o 3,000,000 1,242,00 

L. $3,000,000 _ and. Over — 1,350.00 (*) 

In ;or ctice however, the Code Authority was financed by an 
allocation of part of the funds collected "by the Underwear Institute 
on a "voluntary" basis. To formal 1TRA approval of its budget and basis 
of assesscmeivt was therefore necessary. The institute allocrted 90 > of 
its $90,000 yearly income to the Code Authority for the purpose of the 
administration of the. Code, Such "voluntary" financing of a Code 
Authority had advantages to any industry or trade association who did 
not Hire too close i--e £j nlp„tion by the Government. 

LA3ZLS 

ilearly all of the Codes of the apparel industries had mand- 
atory clauses requiring that all garments made under Code conditions should 
bear a Blue Eagle label insignia* This device served two purposes: 

1. The Code Authority was readily financed by the sale of 
labels. 

2. The label provided ?n effective enforcement device. 
On July 13, 1934, Amendment ho. 4 was approved for the 

underwear and allied products industry. Th. t amendment contained the fol- 
lowing provision: 

" all products except knitted unden /ear, manu- 
factured and distributed under the provisions 
of this code, may bear an 1T_A label wj ich, when used, 
shall be firmly attached to such, products " 



(*) See. Administrative Order To. 23-.1S, dated hay 15, 1934. 
ERA files. 



-171- 

It is interesting to note that the above provision is in no way 
U tory, and, despite the fact that it contains permissive language, 
it nevertheless denies even the permissive use of labels to those mem- 
bers of the industry manufacturing knitted underwear. This peculiarly 
phrased amendment indicates a peculiar attitude on the part of a certain 
group in the industry. Note that the controlling factors having a pre- 
ponderance of the voting nower in the Code Authority were members of the 
knitted \mderwear division. 

COMPLIANCE 

The following re-oort lists the number of conroliance cases docketed 
with the field office of the Compliance Division of ITliA from November 11, 
1933 to Hay 27, 1935. (*) 

Trade Practice Labor 

Date of earliest complaint 

Total docketed 

Total adjusted 

No violations found 

Bookkeeping rejections 

Referred to. District Attorney 

Federal 

State 

Compliance or Regional Office 

Code Authority, prior to June 15, 1935 

ERA Insignia removed 

(service trades) 
Cases on hand May 27, 1935 

Approximately 98.5$ of all complaints docketed were those relating 
to violations of the labor provisions of the Code, the remaining 1.5fi were 
violations of trade practice provisions. 

It is noted that 249 labor complaints or 58.8^ were adjusted, in 163 
cases no violations of labor provisions were found. 

IKTSEPHSTATI01IS 

By Administrative Order No. 23-09 issued March 9, 1934, (NPA files), 
Part II, Section 4, Sub-sections (a) and (b), of the code were so inter- 
preted as to prohibit deductions bv an employer for faulty work with the 
effect of reducing an employee's pay to an amount below the minimum specifi- 
ed by the code. 

On January 11, 1935, Order No. 23-24 (ERA files) was interpreted Part 
I, Section 1 (e) of the Code to mean that members of the industry manufactur- 
ing infants' and children's underwear, and also coming within the definition 
of the infants' and children's wear code, had the right to elect which of 
the two codes they chose to operate under. Once made, however, such elec- 
tion was final and irrevocable. 

(*) NPA Piles 

9823 



2/3/34 


11/11/33 


7 


463 


3 


249 


3 


163 


1 

J- 


22 








' 








8 

















21 









-172- 

LiAJOE P203LEMS 07 CODE AH.IINISTBATIO:- ? 

On May 32, 1934 an Administrative Order (*) was issued for the 
Cotton Textile Industry curtailing the jroduction of cotton spindles. 
The manufacturers of cotton underwear who spin yarn for their own use, 
were affected by this curtailment and immediately applied for an ex- 
emption from the provisions of this order. This exemption was denied 
on June 13, 1934. These manufacturers made further application for 
reconsideration of their petition, and a committee was selected to 
hold conferences and to make recommendations. 

A meeting "between members of the Cotton Textile Code Authority and 
members of the Underwear and Allied Products Code Authority was held in 
New York City on June 27, 1934. At this meeting the respective members 
came to an agreement and transmitted it to NBA- for approval. After care- 
fully examining the evidence presented, USA issued an Order (1-80), 
dated Jul3 r 26, 1934, (NBA Files), granting an exemption to members of 
the underwear industry from the curtailment of production order mandatory 
on the cotton textile industry. 

The controversy between the underwear industry and the cotton garment 
industr - - was due to the classification of polo shirts. In order to clarify 
this problem the NBA issued an Order (23-30), dated Kay 12, 1935, (FBA 
files), -ranting limited exemption from the provisions of Part III, Sec- 
tion A of Code No. 118; and also Administrative Order No. 23-31, dated 
May 12, 1935, granting exemption to members of the Underwear and Allied 
Products Industry engaged in production of knitted -oolo shirts from provi- 
sions of Code Fo. 118 subject to compliance with all provisions of Code 
No. 23 for period from April 1, 1935 to June 16, 1935. 

These orders were merely to grant temporary relief. Definite disposi- 
tion of the controversy ^as to have been determined during the 1 ife of the 
exemptions. A hearing was scheduled to have been held June 15, 1935 to 
consider the problem. This hearing was never held because of the Supreme 
Court decision voiding the Codes. 

In oro.er to limit controversies between the knitted underwear indus- 
try, and the underwear and allied products industry, accredited representa- 
tive of the respective Code Authorities on June 1, 1934, met in the offices 
of the knitted outerwear Code Authority and reached the following agree- 
ment: 

A. The words "garments made in underwear mills from 
fabrics made on underwear machines" as used in the 
Underwear Code shall be deemed to mean all fleece- 
lined garments and cotton produced on the Tompkins 
machine. 



(*) Codes of Pair Competition, as approved, Government Printing 
ice, Volume X page 980 



9823 



173 

B. That all knitted underwear products made in under- 
wear mills are included in the definition of Industry as 
stated in the Knitteo Outerwear Code. 

C. That the problem presented by the so-called "full- 
process" mills he treated as follows: 

1. List of all mills. 

2. That these mills comply in fact with the 
wage, hour, labor, and trade practice 
provisions of the Knitted Outerwear Code 
insofar as their full process laments 
are concerned. 

S. Thro the compliance inspectors for the 
Knitted Outerwear Code Authority he 
deputized by the Underwear and Allied 
Products Industry Code Authority to 
make the necessary investigations to 
observe and assure compliance with the 
sub-division (.?,) of this paragraph. 

4. That the Underwear and Allied Products 
Industry obtain such data and reports 
from these mills as required by other 
outerwear mills, and transmit such data 
and information to the Knitted Outer- 
wear Code Authority. 

5. That an allowance be made to the Under- 
wear and Allied Products Industry out 
of the monies received from labels 
issued to these mills on account of its 
cost of supervision and enforcement as 
provided for herein. 

This plan was not formally approved by NHA, though in 
practice it provided an effective vorkin •■; basis for the settlement 
of jurisdictional disputes. 

In order to eliminate classification difficulties arising 
between the underwear and allied products Code and the undergarment 
and negligee Code, the following agreement was proposed by the Under- 
wear Code Authority, though, never formally accepted by the Undergarment 
Code Authority, nor formally approved by IIRA: 

"Whereas some of the r.iembers of each of the 
above industries, as defined in the Codes of Pair 
Competition respectively applicable thereto, are 
engaged to a minor extent in the manufacture of 
products falling v/ithin the definition of the 
Codes relating to other or said Industries; and 



9823 



-17H- 

"Thereas, it is deemed to be in the interest of 
efficient and orderly production and "business acmini-*. 
stration that such members should he subject to the 
immediate supervision of but one Cere Authority as to 
their duties end responsibilities under said codes; 

It is no 1 -', therefore, agreed that: 

1. Such members shall in the manufacture of 
such ainor prod-acts comply with any wage, hour, labor 
and trade practice provisions prescribed 'o^j the codes 
respectively applicable thereto. 

2. Each Code Authority shall report to the 
other promptly upon ascertainment of any member of 
its industry who is also engaged in the manufacture 

of products subject to the Code for the other industry. 

3. The compliance affected for each Code 

Authority shall be and are hereby deputized by the , 

other Code Authority to make, in behalf of the latter 

and at its request, as to those concerns -hose 

principal products fall within the jurisdiction of 

the former, the necessary investigation to ascertain 

compliance with said.' paragraph' 1 above. 

k. The Undergarment and Negligee Code 
Authority shall supply the Under -ear and Allied 
Products Code Authority, upon its request, from 
tine to time, with the necessary labels, Code Eagles 
and. forms relating thereto; and the latter Cod.e 
Authority, upon obtaining proper execution o:" said . 
forms, shall in turn distribute said labels and 
Blue Eagles to .members concerned, for proper use in 
connection "ith their manufacture and sale of 
products subject to the Undergarment and ITegligee 

Code, and as required by the provisions thereof; 1 

and shall make the necessary collections for same, 
and after deduction 10','.' thereof as an allowance for 
administrative cost, account for and. remit the re- 
mainder thereof monthly to the Undergarment and 
ITegligee Code Authority. 

5. Each Code Authority shall, upon request 
and. specification of the other, obtain data and 
reports from -members ''hose principal products are 
subject to its jurisdiction, and such data and 
reports relating to their minor products as the 
other Code Authority required, from concerns '-'hose; 
-principal products are siibject to its jurisdiction. 



9S23 



1 74- A 

6. Complaints of violations of any of the provisions 
of either Code from a member manufacturing only minor 
products thereunder shall "be referred to the Code 
Authority having jurisdiction over said member's major 
products, for investigation ant; report of effect ascertained. 
In case such Code Authority shall fail or refuse season- 
ably to make such investigation, then the requesting 
Code Authority may proceed directly therewith. The 
necessary and proper expenses incurred in the investi- 
gation of the complaint sc referred, together with a 
per diem proportion of the investigator's salary, 
shall be charged to and paid for by the Code Authority 
requesting the same." 

Other minor jurisdictional controversies arose concerning 
paper boxes, and manufacturers operating their own dye houses. These, 
however, were readily disposed of by the granting of exemptions. 

CIRCULAR KNITTERS CONTROVERSY 

The underwear code as originally proposed in the summer of 
1933 provided for the inclusion therein as members of the industry all 
those who knitted fabrics on circular knitting machines. The reason for 
such inclusion was because a large number of underwear manufacturers 
knitted their own fabrics on circular knitting machines. These circular 
knitters, however, who merely knitted the fabric and did not make under- 
garments, objected to coming under the code. This group was composed 
of: 

Industrial Rayon Corporation 
Tubize Chatillon Corporation 
Celanese Corporation of Anerica 
The Arcadia Knitting Mills 
Princeton, Incorporated 
Bethlehem Knitting Kills 
Stratford Knitting Mills 
Merton Rpyon Kills, Incorporated 
Weil Ralter Manufacturing Company 

These firms at that time principally objected to the code 
provision limiting machine hours to two shifts of 40 hours each per week. 

As finally written, the Code covered as members of the industry 
the manufacturers of "any and all fabrics sold or used mainly for under- 
wear purposes made on iis^s* circular knitting machines." 

The Executive Order approving the code, however, stayed the 
entire code as to all circular knitters for a period of fourteen days, 
at the end of which time a hearing on the question was held. At this 
hearing (*) the circular knitters advanced the following reasons for 
not being included in the code: 



(*) Memo 10/18/33 - M. Harned to H. B. Ludlum 
9823 



176 

1. The circular rayon knitters require longer 
machine hours than pre provided in the code, 
to fill the demand for their products. 

2. The circular knit fabric is used by other 
manufacturers besides those in the Allied 
Underwear and Products Industry. 

3. It is not fair that the underwear manu- 
facturers should regulate the activities 
of the circular knitters, because a 
customer should not be in a position to 
regulate the business of the supplier. 

4. Underwear manufacturers are not acquainted 
with the problems of circular knitters and 
so cannot intelligently regulate their 
activities. 

The Underwear Institute submitted the following reasons 
why the exemption should not be granted: 

The decision as to whether the first objection should be 
recognized as a valid reason should be based on the statistics as to 
the productive capacity of the industry. The Code Authority presented 
the following figures: 

Members Machines Per cent 

Underwear Manufacturers 1,500 30 

Fabric Manufacturers 1,708 35 

Total 3,219 65 

ITon-Members 

Yarn Producers 649 13 

Fabric Manufacturers 1. 109 22 

Total 1,758 35 

Total in the Industry 4,977 100 

The yearly capacity of the above machines when operating 
80 hours per week, with a 15'o allowance for non-use, repairs, etc., 
was estimated at 43,247,000 pounds. 

The rayon actually used by the circular knitters each year 
for the past five years was as follows: 



9823 



176 

1928- 33, 440,000 pounds 

1929 42', 320,000 pounds 

1930 40,120,000 pounds 

1931 - ; 43, 790,000 pounds' 

1932 ' 32,890,000 pounds 

Tlie Code Aut Lority claimed, from a consideration of these figures, 
that tuo 40-hour shifts are sufficient t& supply' the -needs of the industry. 

TJith reference to the second objection; it "-s "brought out in the 
hearing that approximately 80 to 90 per cent of rll circular knit rayon 
fabric, produced "by the proponents of the exemption; is used "bv the under- 
wear and allied sroducts industry. The other 10 to 20 per cert is used 
by the cutting up trade in dresses, millinery, ties, etc. 

As to the third and fourth objections, it should be noted that 30 
percent of the productive capacity o^ the circular '.cnitters is installed 
in underwear mills and 65/o in mills ' hich are members of the Underwear 
institute, and- would subscribe to the Under 'ear Code. 

It was the opinion of the Assistant Deputy Administrator, (*) that if 
the., above statistics ' : ere accurate, the circular knitters should be re- 
tained pi der. the Underwear and Allied Products Code for the following 
reasons: ,.;. .. ■;...■■■ 

1. The :>resent machine hour provisions of 80 
hours per iv eek appear-to be sufficient for the • 
industry. Lore accurate data ,r as necessary in 
regard to -productive capacity before making a 
final decision. 

2. The small percentages (10,1 to 20$) of the 
total out out of the 'cnitters, - T ,iich is sold 
outside the underwear indu try, was not a 
valid reason for exemption from the Code. 

3. kills r7 ith 65$ of the nrochictive capacity i 
_r or knitting circular rayon ■ 'ere satisfied 
to stay under the present Code. 

4. If an exemption was granted ana a- separate 
code established for circular knitters, it 
would be necessary for all under -ear. mi lis, 
which do circular knitting, to operate under 
two codes. This was. not desirable., 

Tae Research and Planning Division, on 11/13/33, (**) attacked the 
machine hour limitations orovision of this code claiming that under 



(*) Memo dated 10/18/33 from K, Harned to I. 3. Ludlum, Jr. (l T RA files) 
(**) Hemo from Victor Von Szeliski (H3A files) 



9823 



\ 

177 

the NIRA the proponents of limitation must show that such provisions 
are a social benefit to labor resulting from a transfer of volume of 
business from one group of plants to another. It was stated, the only 
social benefit from this provision was the abolition of the "Graveyard" 
shift . 

This memorandum pointed out that as rayon goods were enjoying 
rapid increase in demand, sufficient flexibility should be allowed for 
taking care of an increase in demand. Possible methods of providing 
this flexibility were suggested: 

1. Permit purchase of product from competitors at 
greater discount. 

2. A system of fines for ruining overtime, fines 
adjusted so there would be no. incentive to 
operate overtime but not too high to prohibit 
operations if necessary. 

On December 4, 1933, the Assistant Deputy reversed his 
position (*) and recommended that the circular knitting industry be 
kept entirely separate from the underwear manufacturing industry and 
that they be granted a separate code . 

Pursuant to a hearing an Administrative Order (23-2) was 
issued granting a further stay of this section for an indefinite period. 
Six months later, to wit, on May 14, 1S34, (Order 23-15), H. 0. King, 
thenDivision Administrator, lifted the stay as to everything except 
the provisions in the Code as to limitations of machine hours. Even 
that provision, however, was lifted as to the knitters of cotton on 
c i r cu 1 ar kn i 1 1 i n^ machine s . 

Thereafter, a group of the circular knitters continued to 
maintain they were not properly under the code and refused to comply 
in any respect therewith, throughout the entire code period. 

The Code Authority did, during the year 1934, succeed in 
bringing some of the circular knitters to a consent to be bound by 
the Code and did not experience much difficulty with these. In 
bringing them around to its point of view, it had to resort in two or 
three instances to filing suits against them and. obtaining certifi- 
cates of compliance and consent decrees as part of the settlement of 
such suits. About seven or eight knitters, however, never agreed 
to run under the code. 

This latter group, headed by Industrial Ivayon Corporation 
of America, includes the Arcadia Knitting Mills, who knit princi- 
pally cotton on their circular knitting machines. In March or April 
of this year, the Government brought a criminal action against the 
owners of the Arcadia Knitting Mills (**). 

(*) Memo dated 12/4/33 from Assistant Deputy M. Hamed to the Deputy 

(KRA files) . 
(**) Memo dated 5/9/35 - Acting Division Administrator, M. D. Vincent 

to Code Administration Division, Prentiss Coonley (rLRA files). 
9823 



178 

At a conference held by the Deputy the attorney for Arcadia 
suggested that the suit might be settled amicably and without further 
ado if the administration v.'ould consent to tnese circular knitters 
making their report direct to the NRA., rather than to the Code Authority 
with examination of their books and records confined to N3A represen- 
tatives, rather than to those of the Code Authority, and that in all 
other respects members of this group be relieved of the jurisdiction of 
the Code Authority and be subject directly to the jurisdiction of N3A. 

Arcadia, of course, wanted the .case settled, but they spoke not 
only for themselves, but also for the other circular knitters who 
refused to comply because they objected strenuously to making reports 
to the Code Authority and to permitting the latter to inspect their 
books and records. 

The attorney for the group stated that he believed, in return 
for such a concession, Arcadia, and other members of the group would 
be willing: 

1. To sign a consent decree in the current case. 

2. To obtain from all other non-complying circular 
knitters a written statement to the effect that 
they would permit I\TRA to inspect their books from 
October 1933 to date, with a promise that if such 
inspection disclosed the payment during that period 
of any wages. lower than the minimum set by the 
Code, that they would agree ahead of time to make 
restitution thereof. 



To obtain written certificates of compliance for 



Tc 

the future from all non-complying circular knitters, 



4, That the stay of the machine hour provisions as to 
circular knitters of rayon be lifted immediately, 
putting this group on an equal basis with other 
nievabers of the Industry. 

The Code Authority registered vigorous objection to any settlement 
of this case which would in any way restrict the jurisdiction (theore- 
tical or actual) of the Code Authority. Specifically, they demanded 
that this group of manufacturers bear the same relationship to the 
Code Authority as other members of the industry and that they file 
reports and submit to investigation. They demanded that the Adminis- 
tration have the courage to enforce is decisions. 

In addition, the Code Authority claimed that if preferred treat- 
ment were granted this group, every other group in the Industry would 
be entitled to similar treatment, and that if this course were once 
initiated and followed' io its logical conclusion nothing would be 
left of the Underwear and Allied Products Code, the industry having 
disintegrated into a large number of loosely organized groups re- 
porting in a haphazard manner directly to the NHA. 



9823 



179 

The foregoing summarizes briefly the situation. At the 
ti e of the Supreme Court decision the Administration was faced "ith 
tyro alternatives: 

1. To enforce the order of Division Administrator King, or 

2. To effectuate a conpronise settlencnt an. risk a break- 
down of the Code. 

CODE AH.iINISTEA.TIOK SHORTCOi JUGS 

By and large, the underwear code does not afford an instance 
of effective CoCe Administration, a fact mainly attributed to the, 
indifference of the Code Authority in the fulfillment of its obliga- 
tions. Compared with other apparel code authorities, labor compliance 
was especially ineffective. A very small staff of inspectors was main- 
tained and factories were inspected at infrequent intervals. Such in- 
stances of non-compliance as were brought to light were not handled 
vigorously. 

Tor was the Code Authority much more punctilious in meeting 
the obligations imposed upon it by 1THA, as indicated b- their failure 
to take proper steps to obtain IJBA approval on a large number of 
formal matters to which most Code Authorities gave prompt, attention. 
Moreover, although the institute was empowered to collect statistical 
information they were reluctant to furnish the Administration copies 
of many of their special reports. (*) 

It is the opinion of some 1THA executives that basically these 
shortcomings were a result of the fact that the underwear industry 
as a whole was not greatly in sympathy with the .aims of ITEA. many 
members of the industry used to exist on cheap labor, and URA threaten- 
ed their advantage in that respect. A significant portion of the in- 
dustry is controlled by financial interst, and many members incline 
toward extreme individualism. These groups tended to chafe under 
regulations imposed upon them. The Code Authority, largely controlled 
by the Underwear Institute, reflected this attitude. 

The situation w.-,s not helped by the handling b;* USA. Daring 
its life, this Code came under the supervision of 6 Division Adminis- 
trators, 4 Deputy Administrator-, and 3 Assistant Deputy Administra- 
tors. Continuity of policy was thus made difficult, and URA. lost 
much of its influence with the Code Authority, without whici^ little 
effective control might be exercised. 



Experience of both W. A. .Gill and George Jones of the Industry 
Statistical Reporting Unit of Research and Planning. 



9323 



ISO 

CHAPTER VI 
EFFECTS OF THE CODE 



BENEFITS TO LABOR 

Labor benefitted most from the Undenear and Allied Products Code* 
In this almost wholly unorganized industry nearly all such benefits must 
be attributed to the code. 

During the depression the pre-code employment index had declined to 
75.2$ for the year 1932 and a low of 61.5$ of the 1929 level in July of 
1932, at which tine it is estimated that there were 25,500 employed in the 
industry compared with a 1929 level of 41,490. As a result of changed 
business conditions, and even more because of shortening of the work week 
from an average of 41.4 hours in 1952 to 32.8 in 1934, under the code. 
Employment was increased roughly 10 per cent during the code period, re- 
sulting in an index of 86,1 for 1935 and 83.5 for 1934. 

Before the code, a definite trend of '-'ages toward unsocial levels was 
in progress as evidenced by the fact that in April 1932 the average hourly 
wage rate had declined to 23.2 cents per hour, yielding an average weekly 
wage of $9.84. Since these figures are averages-in many plants, wages. must 
have been considerably below these figures, it being conceivable that the 
effects of even the small amount of unionization in some areas and high 
principles of some manufacturers would have necessitated higher wages in 
many plants. 

' T /> i :*■-■■ ; 

■'. .- .TSfagss musjb have " approached $5.00' per' week in. many plants of this In- 
dustry as they had in some of the other textile and ap-oarel industries. 

The average hourly wage rate for the industry was nearly 40 cents per 
hour, yielding an average weekly wage of $13.15 for 1934. This represents 
an improvement of 72.5 per cent over the April 1932 low wage rate and 33.7 
per cent over the low average weekly earnings. Increases for some of the 
very low paid employees must have been well over 100 per cent. 

BENEFITS TO THE INDUSTRY 

In a highly standardized product like underwear in a depression period, 
prices tend to reach the level at which only the most efficient producer 
can make a profit, since they are cut to the bone in efforts to obtain vo- 
lume of business in order to keep overhead costs low. The Underwear and 
Allied Products Code in establishing a floor, represented by the fixed 
labor cost of the minimum wage, benefitted many of the higher type manu- 
facturers since the unscrupulous would hesitate longer to cut prices with 
the expectation of chiseling on labor. The code, therefore, strengthened 
prices and had a beneficial psychological effect upon the Industry as a 
whole. 

Both the manufacturers and the employees became more united because 
of the code. The manufacturers through the trade association; namely, the 
Underwear Institute, and labor through the respective trade unions. 



9823 






If 1 

The effects of, and any possible benefits to the industry Cue to the 
machine hoar restrictions were large 1; frustr I ■ by the Administrative 
difficulties arising out of poor definitio is anc! the circular knitters 
controversy, both of which c~ isiderab] •. ted the a'dmini strati on of the 
code. 

EFFECTS 07 COS. A OLITI " 

Ho tendency to reduce wa : or i then hours since the abolition of 
the Code is in evidence when the labor statistics are examined. However, 
it is known (*)• that a few mills hive already cut the wa c rate principally 
by means of lengthening hour:: without correspondingly raising wages. News 
comment in trade papers (**•) of striker;, impending strikes and differences 
between em loyers and employees indicate the beginning of a relaxation of 
labor standards, ct least some instances. 

POST CODE TEADE ASSOCIATION ACTIVITIES 

Efforts after the Supreme Court decision to obtain a voluntary code 
for the entire industry had failed u; to Octover 1935, because of inability 
of securing sufficient signers to meet with Federal Trade Com ission require- 
ments. 

According to a "Women's Wear" (***) statement of November 23, 1935, 
it was stated that officials of four concerns agreed to recommend to their 
boards of c.ir-ectors the adoption of a voluntary co'e for that industry which 
includes the abolition of child labor, elimination of hone work and the 
following provisions: 

1. Forty-hour week except bhat, for not exceeding any eigth- 
week during the calendar half year, employes may be per- 
mitted to work 45 hours in any one week. 

2. Maximum hours for repair crews, engineers, electricians 
and machine fixers to be 48 hours s week with a tolerant 
for emergencies of 30 "or cent. 

3. Maximum for firemen anc" watchmen 55 hours. 

4. Minimum weekly wage rates to be 312 in th: southern 
section and £13 in the aorthern section of bhe indust y. 

5. Minimum <- r a. e for learners and under-privileged employes 
$3 for 40-hour week. 

This was the beginning of an intense campaign to obtain assent to 
a voluntary code. 



(*) The Executive Director of the Underwear Institute in personal interview, 
October 1935, stated that one lar^e mill had adopted this practice, 

(**) Daily News Record and Women's \7orlcl (lairchild News Service ".Tew York) 

(***) "Womens' Wear" (Eairchild News Service New York) 

9823 



16S 



Additional information and additional tine will, therefore, 'be 
required to await developments on this phase of post-code activity. 
Ho voluntary trade practice code has been submit tec 1 "by the underwear and 
allied products industry since the Schechter Decision. (*) 



(•*) Statement of Mr. George McCorkle , Director of Trade Practice 
Conferences, of the Federal Trade Commission, (3/19/36). 



9823 






18b 

FART D 

THE KNITTED OUTERWEAR INDUSTRY 

By 
Willis H. Ray 

CHAPTER I 

DEFINITIONS, DEVELOPMENT, 
AND SCOFE OF THE INDUSTRY. 



DEFINITION OF INDUSTRY . 

The Knitted Outerwear Code defined the industry as follows: 

"to mean and include the manufacture of bathing suits, 
knitted or made of purchased knitted fabric and/or 
other materials, and/or the manufacture of knitted 
outerwear apparel for men, women and/or children, in- 
cluding infants anci/or the manufacture of knitted 
fabrics for outerwear purposes, but shall not include 
the products of the hosiery and/or underwear indus- 
tries and/or -the manufacture of knitted woolen goods 
in self-contained woolen mills of the -"'ool textile 
industry as defined in the respective Codes of such 
industries and shall not include the manufacture of 
ladies' and misses' coats, suits, dresses, ensembles, 
blouses, skirts, and/or other garments (except as 
hereinbefore provided with respect to bathing suits), 
made of purchased knitted fabrics or of fabrics not 
made by machinery O'-med by the garment manufacturer." (*) 

For Code purposes, it was necessary to define the industry in 
this manner ra.tner than by listing products of the industry. Classifi- 
cation of members of this industry, according to types of J-armen-fcs pro- 
duced, was found to be unsuccessful because manufacturers producing 
men's garments today may, tomorrow, if conditions warrant, turn their 
producing equipment toward the production of women's garments, infants' 
garments, knitted scarfs, knitted headgear, knitted trimmings, ■ and 
accessories, or even of mere fabrics. (**) "his indicates that the 
definitive and characterizing operation in aknitting plant is the 
knitting process itself. It can be easily understood, with this wide 

(*) Article II, Section (a) of Code Of Fair Competition for the 

Knitted Outerwear Industry, as approved December lb, 1933 and amend- 
ed on September £5, 1S54. Codes of Fair Competition, as approved 
Government Frinting Office, Volume IV, Page 199. 

(**) See page 25 of transcript of public hearing on Knitted Outerwear 
Code, dated October 16, 1933. NRA files. 

9623 



184 



range for product variety, how there would be conflict >"ith other 
industries that produce garments or other merchandise for the same 
purpose in ultimate use. 

PRODUCTS . 

The production of this industry includes the following items, 
knitted from yarns of the basic materials, cotton, silk, rayon and 
wool: 



sweaters 

jerseys 

bathing suits 

scarfs and shawls 

knit headwear 

knit neckties 

infants' knit outerwear 

dresses and suits 



wool jerseys 

silk jerseys 

sp^rt coats 

other knitted garments 

for outerwear purposes 

and some knit fabric 

for outerwear garments 



HISTORY AND DEVELOPMENT Oi KNITTED OUTERIEAR. 



The knitted outerwear industry is an outgro^'tn of the underwear 
and hosiery industries which, up until the end of the last century, 
composed the knit gouds industry except for infants' wear of mostly 
hand knit material and athletic specialties and tights. (*) 

During the early 1900' s sweaters and knitted bathing suits began 
to enjoy an increasing demand. The , Cardigan si T 'eater had begun to be 
popular at the time of the Klondike Gold Rush of 189?, and by 1910 the 
popularity of sweaters had given impetus to large-scale production. 
Knitted bathing suits rapidly displaced all other types. During the 
war years the production of sweaters, mufflers, wristlets and puttees 
for the allied armies lent much to the activity and development of the 
industry. With the development of spoits for women, the knitted outer 
garment has especial importance. The 'industry is young and still in 
a process of development. The underwear and hosiery industries, on 
the other hand, hp.ve evidently reached their lull development. 

■ l 

Yarn, being the basic element in the production oi knitted outer- 
wear, has been a leading factor in the industry's development and 
prosperity. Other factors such as the creation of new, attractive 
designs for modern needs, the development of machinery, and the pro- 
motion of this type, of product have also contributed. (*) 

As has been indicated above, before 1910 the industry was small. 



(*) See page- 22 of transcript of Knitted. Outerwear Industry Fublic 
Hearing of October 16, 1933. NRA files. 

(**) See "Knitted Outerwear Times", issue of April 25, 1933. 

Fudished by National Knitted Outerwear Association, N.Y.C. 

9823 



165 



Blouses, shakers and sweat shirts of 2/23 wool yarn and merino were 
produced on five gauge and coarser flat machines. Merino consisted 
of a bit of virgin wool with the greatest percentage of its ingredients 
clippings and cotton snun on the wool system, identical with the yarn 
today known as commercial wool and used for shakers and men's and boys' 
cheap goods. V/ith intense competition largely absent, the few factors 
comprising the industrv enjoyed a measure of prosperity. Principal 
products were bicycle jerseys and rib sweat shirts, vhich were even 
then being made on circular underwear machines. Improved roads, 
facilitating bicycle transportation, and growing interest in shorts 
tended to the market. 

Seven and eight gouge flat machines were introduced about 1910. 
Worsted yarns were used for the more expensive items. Zephyr yarns were 
introduced in 191?, coincident with the start of the sweater coat vogue, 
which had followed that of knee-length coats wru ch, after enjoying 
a brief popularity had been discarded because of their awkwardness. 

- 'The so-called accordian tie of pure silk, produced on a double 
lock, 18 gauge machine, paralleled the use of the sweater coat. Decline 
in the popularity of the tie in 1914 brought about a change to silk 
sweaters, moving from there to the two and three piece suit- field. 
These items disappeared in 1923 and have not been ot .uuch importance 
since. 

The world War greatly accelerated the growth of the industry. In 
1916 or 1917, there was imported the design of the pullover sweater 
which had been worn by the Swedish hunters. The sweater, which was the 
forerunner of the rub-bottom pullover sweater, consisted of a loosely 
fitted blouse with an eight inch tail all around, whicn clung closely 
to the hips. The introduction of this item, it is said, brought more 
progress to the industry from a garment point of view than any other. 

Home knitting, especially of sleeveless sweaters, for soldiers 
increased the oopularity oi knit. goods generaly. worsted and other 
more expensive yarns became more and more in demand. The knitted 
bathing suit came into its own during the war days and "'?s produced 
principally on flat machines. Trior to this time suits were very 
heavy and sagged, considerable. After a few ?'earings, short suits for 
men would stretch completely out of shape. women had restricted 
themselves to satin suits with knitted tights underneath. 

A constantly increasing "war period" consumer demand, which grew 
faster than the industry until 1920, plus the general desire for con- 
stantly improved merchandise, conspired to produce great prosperity for 
the industry in 1916 and 191S. Trading up continued unaDated with 
better products supplanting cheaper numbers on every hard. Prices ruse 
slightly for knit gojds through the introduction by Foepple of the 
ripply — a sweater with a ribbed, tightly fitted waistline which flared 
out below, and with sleeves similarly treated below the elbow. Greatly 
increased demand resulted in rapidly rising prices. Premiums as high 
as $24.00 a dozen for quick delivery were irquently offered. luring the 

9823 .-.-.. , 



lib 

post-war slump demand disappeared overnight, catching many manufacturers 
and leaving a trail of bankruptcies* Tnis disaster depressed the 
industry, possibly more openly than ordinarily would have "been the 
case. Accentuating the decline was the unprecedented reation against 
the colors popular in 1^20, American Beauty, turquoise, salmon, and 
khaki, in fpvor of far' more sombre black, navy, and brown* 

Recuperation from the post-war period came earlv, as the industry 
stepped into'what might be termed the second stage of its development. 
The recovery was' largely stimulated by the appearance of a ne" yarn 
kno*-n as monair. Early acceptance of the yarn oy a few hi£-h-style, 
higher nriced mills caused it to be generally adoDted. Py the fall 
of 1927, the entire industry was using mohair.- 

Introduction, in Aoril of 192", of a five stock worsted, a cheap 
imitation of mohair, carried the industry through the temporary 
recession felt in other fields — another case of a new yarn enabling 
some of the knit goods trades to operate profitably despite generally 
depressed conditions. This yarn was restricted to flat power machines 
developed during the war, thus displacing completely the links machine. 
The industry did not, however, profit by the general prosperity of 
1924' and 1925. On the contrary, prices fell precipitiously during 
these two years; qualities oi material and workmanship were considerably 
cheapened. 'The Eastern section of the industry bore the blunt of this 
recession. 

The foundations for a new period of prosperity were laid in 1925 
by the introduction of a new fabric known as balbriggan cloth and made 
exclusively on circular jersey machines. Ne ,,; attachments to these 
machines were devised ne'rmitting the production 'of new and fancy fabrics. 
Two and three-piece knitted suits ™ere marketed in appreciable 
quantities in 19c? as -ere knitted dresses. Both of these items were 
principally' the output of circular machines. 

Slightly in advance of gains in other divisions, men's and boys' 
wear started on the up-grndt late in 1924, prospering until 1930, 
when another decline set in. Pure worsted garments "ere featured the 
first few years' of this period, with especially high prices nrevailing 
for sweater and hose sets, the reigning favorites. After a few years 
of depression, marked improvement began to show in 1934. A drastic 
revision in styling, combined with the introduction of a new y?rn, 
(brushed mohair J was needed, to stimulate demand. Taking a cue from 
the popularity of the ^inch-back "and pleated-back coats and even 
Norfolks, in men's clothing, a few alert knitted outerwear manufacturers 
stimulated these garments in knitwear, abandoning the plain coat 
sweaters that they had been accustomed to manufacture. 

Returning to the mid-twenties, another factor leading to increased 
sales was the introduction of finer counts of zephyr yarn. (*) 

Sophistication in its treatment of yarns came to the industry 
as the decade waned. Astute manufacturers and yarn men 6ensed that the 

(*) See "Knitted Outerwear Times", issue of i .ay 5, 1935. Fublished by 
National Knitted Outerwear Association, N.Y.C. 

9623 



187 

public, constantly on the watch for novelty, and with money to spends 
was becoming jaded with the worsted and zephyrs. Knitwear was no 
longer an unusual product. Novel treatments '"ere- again required to 
stimulate demand. The situation was met by the introduction of new 
yarns which successfully carried the trade through the collapse of 
the stock market and through the depression until about 193?. 

Research was successful in developing the following noveltv yarns, 
boucle — a fe^' threads of twisted Rayon with a knat everv inch and a 
half or so, — was introduced in the 1924-1925 season. The debut was 
rather premafure, however, for neither the yarn nor lacilities for its 
production were ready. However, it reappeared in 1929, and; ran well 
for three years in cneaper garments. 

Ratine,, — used in higher priced garments and consisting of a 
succession of tiny loops, — was one of the earliest of the novelty 
yarns, appearing in 1927 and reaching its height in 195i». 'A later, 
lower price entrant was frill, a ravon spiral. 

Silvertone, — a combination of rayon twisted with wool, — was 
introduced in the same price ranges as zephyr numbers. 'The yarn 
was also effective when later taken over by the knit beret manufacturers 
because the rayon brightened up the hat considerably, and the knitted 
seamless headwear houses saw splendid runs on the item. Present indi- 
cations are that it should continue as a popular favorite for infants' 
wear. 

Eengora, — contributing to the success of the knitwear field 
after other industries began to experience the sharp influence of the 
depression, — was the so-called bengora yarn, in reality a fine mo- 
hair, .which was introduced in 1930. This product was utilized Darticular- 
ly for high-stvle costly garments. (*) 

COOPERATIVE ACTIVITY AMONG HAFJl'ACTTJRERS. 

In the knitted outerwear industry there is one organization repre- 
senting generally all interests in the industry, and the larger portion 
of the organized section of the industry. There are several other 
organizations of less prominence representing the minority. However, 
these smaller organizations, while they represent minority groups, 
represent minority groups, represent special industry groups with 
common interests, such as infants' and children's contractors, hand- 
knit sportswear manufacturers, hand-crochet headwear manufacturers, etc. 
There are overlapping, so to speak, into the knitted outerwear industry, 
other trade associations with primary interests in other industries. 
As an example, the united infants' and children's wear association, 
the leadinr organization in the recognized infants' and children's wear 
industry, has some members who have little interest in the kritted 
outerwear industry by reason of the iact that they manufacture, in 
addition to their principal products, some knitted outerwear. 



(*) See "Knitted Outerwear -Times", issue of Kay 9, 1955. published 
by National Knitted Outerwear Association, N.Y.C. 

9623 



185 



NATIONAL KNITTED OUTEB<EAxt ASSOCIATION: The National Knitted ■ 
Outerwear Association seems, to have a history dating hack to 191?, 
Within the limitations for research preparatory to writing this renort, 
little of the history and early development of this association has 
been disclosed. However, it has been found that the association 
emerged into prominence in the year 1916. Since that time it has 
developed into a national organization made up of regional associations. 
Its main office is located in New York City with branch offices dis- 
tributed throughout the countrv as folio- s: 

1. Eastern District (including metropolitan, area) , 
national and district office, New York City. ■ 

2. New England District, office, Boston, Mass. 

3. Pennsylvania and Southern Districts, office, 
Philadelphia, Fa. 

4. Ohio District, office, Cleveland, Ohio 

5. Western District, office, Milwaukee, ,&s, 

6. Facific Coast pistrict, office, San Francisco, Calif. 

The National Knitted Outerwear Association has as its memoers, and is 
supported by, regional and local associati .ns from these districts, 
the regional or local associations having as membership the individual 
members of the industry located in the districts. 

The association includes among its ofiicers, a president, one 
vice-president from each of the districts, and eighteen members of 
the board of directors with an equal number of alternates. Each 
district elects three directors and three alternates. The president 
presides over all of the meetings of the board and the presence of 
seven directors constitutes a quorum. The board has charge of the 
management of all affairs. It appoints the executive director and 
employs the counsel and fixes, his compensation. 

Each active member of the association is entitled to one vote, 
and a majority vote carries an' ; r resolution, unless a district vote 
be asked by any national director, or alternate, in which case a 
majority of the_ districts voting as such is necessarv. One-fifth 
of the total registered active membership constitutes a quorum. 

According to a report of the secretarv of the association made 
to the National Recovery Administration on February 1?, 1935, the 
membership of the association totals 500, representing a four-fold 
increase over the members enrolled in 1932 and a 20 percent increase 
over that of 1954. In 1933, when this association proposed and 
sponsored the code of fair competition for the industry, it claimed 
to be representative of the industry by 70 percent in dollar volume and 
by 55 percent in number of units. At that, time the association claimed 

9823 



189 



that there rere only 748 members of the entire industry, but later it 
developed, when members of the industry anplied for NSA code labels in 
1934, the nearer correct figure is between 1,100 and 1,200. This 
fact lovers considerably the represent?- tive character of the association, 
but still it is by far the most representative trade organization in 
the industry. 

Although not numerically representative of the incustr"-, the Na- 
tional Knitted Outerwear Association nas assumed responsibility for 
acting and speaking in behalf of the industry for its general "elfrre. 
It has dealt with the- Federal Trade Commission before BfiA in estaulish- 
ing fair trade practice rules for the industry, with' the U.S. Tariff 
Commission in establishing protective rates to guarc the industry's 
domestic manufactures, with U.S. Bureau of Standards in estaolishing 
standards for the industry's products, with the U. S. Department of 
Commerce in conducting studies of the industry's machines as a basis 
for their improvement, with the NBA in the formulation and administra- 
tion of a code of fair competition for the industrv, and with other 
agencies or organizations in cases where the presence of the industrv 's 
representative was necessary. It is engaged m the collection and dissem- 
ination of information on styles, manufacturing processes, ..larketing 
costs, etc., for the benefit of the industry. It -publishes a weekly 
trade paner, "The Knitted Outerwear Times", to keep- the industry posted 
on the general activity. Further, it conducts educational campaigns, 
not only among menbors of the industry but among retailers, wholesalers, 
jobbers, consumers and yarn producers. 

The National Knitted Outerwear Association appears to be active, 
comparatively efficient, and beneficial to the industry. 

HAND KNITTED SFORTSWEAE ASSOCIATION: The manufacturing center 
for the expensive, highly stylish, handknitted sportswear is Philadel- 
phia, 7a. Located here is the nand Knitted Sportswear Association formed 
in 1935, with a membership confined to the Fhiladelphia area. It is 
representative of this tyce of manufacturers in the home' ork- lanufacturer 
branch of the industry, 

NATIONAL HAND CROCHET ASSOCIATION, INC. : The National Hand. Crochet 
Association, Inc., of New York was formed after tne enactment of the 
National Industrial Recovery Act by leading manufacturers of hand knit 
and hand crochet head.wear and novelties of a vdde variety. The associa- 
tion claims to be representative of this industry group, which is another 
of the homework-manufacturer branch, 

METROFOLITAN KNITTED TEXTILE ASSOCIATION: 'The metropolitan Knitted- 
Textile Association, with heaoquarters at NewYork, -'as fou.nd.ed in 1933. 
Its membership at the beginning oi the year 1935 is given at 99. This 
association was organized by the National Knitted Outer- ear Association 
to handle industrial relations for those members of the knitted outer- 
wear industrv who were m agreement with labor unions. It became 
autonomous and independent later. It is not representative of any one 
of the industry's special interest groups anr nas in its membership all 

9823 



ISO 



types of knitted outerwear manuf acturers. 

INFANTS' AND CHILDREN'S OUTERWEAR ASSOCIATION: The Infants' 
and Children's Knitted Outerwear Association is said to have been 
established in June 1952 'under the name of the Knitwear Association of 
American including in its membership manufacturers, contractors and jobbers 
engaged in the production of knitted infants' & children's outerwear in 
the New York Metropolitan area. In 1935 it claimed membership of ?5 
out of a total of 180 of its kind in the industry. In 1935, according 
to figures of the National Knitted Outerwear Association, the membership 
was approximately 20 out of 75 eligibles. The wide difference in these 
two sets of figures makes their accuracy doubtful. This association 
was once considered representative of the infants' and children's wear 
contractor branch of the industry. In view of the fact that the National 
Knitted Outerwear Association was lent influence in this branch of the 
industry by its close connection with the code, it may be safe to sav 
that many of the contractors joined with the National Knitted Outerwear 
Association, leaving the infants' and Children's Knitted Outerwear 
Association. 

OTHER TRADE ASSOCIATIONS: There are overlapping into this industry, 
trade associations with principal memberships in other garment and 
textile industries. In most cases their interests are negligible but 
worthy of mention. . ■ 

First, there is the National Association of Leather Glove manu- 
facturers', Inc., of Gloversville, New York, sponsors of the NRA Code for 
the leather and woolen nit gloVe industry. Some of its members manu- 
facture the same type of woolen knit glove produced bv the knitted outer- 
wear industry. 

The Millinery and Dress Trimming, Briad, and Textile Association 
of New York Citv, sponsors of the NRA Code for the Millinery, dress 
trimming, braid, and textile industry has a minor interest in the 
knitted outerwear industry, due to some of its members or educing' 
fabrics and accessories similar to those produced by the knitted 
outerwear industry. 

The Somen's Headwear Group, Inc., of New York City, one of the 
organizations sponsoring the NRA code for the millinery industrv, 
has some of its members manufacturing novelty knit hats, .tarns, berets, 
etc., similar to, and to an extent, in coupetition with products of 
the knitted outerwear industry. 

Both the Underwear Institute, sole sponsors of the NRA Code for 
the Underwear and Allied Products Industry and the United Infants' 
and Children's '.'ear Association of New York, one of the sponsors of 
the NRA Code for the Infants' and Children's '.ear Industrv have as 
members some manui acturers producing garments falling "dthin the classi- 
fication for the knitted outerwear industrv. 

9823 



191 

COOFErATIT/E A C TIV ITY AMONG WORKERS 

The extent of collective bargaining and unionization by labor 
in the knitted outerwear industry is shown by the following: 

TABLE I, KNITTED 0UT&RUEAR INDUSTRY. 
LABOR UNIONS, NUMBEr. 01 ESTABLISHMENTS 
ORGANIZED AND EMPLOYEES AFFECTED (19S5) 



Name of Union 



Number of Mills 



Number of 
Workers 



ILG7.TJ 

Industrial 

United Textile "., orkers 
Millinery 'orkers 
Braiders Union 
Neckwear Makers 
Textile Trimming 
Knit Goods' Workers 
Providence Union 
"Company Unions" 
Total 



99 

54 
9 
1 
1 
1 
2 
1 
1 
22 
191 



4068 

1377 

618 

25 

4 

4 

21 

100 

41 

4915 

11193 



Source: National Knitted Outerwear Association - Knitted' Outerwear 
"TIMES", issue of March 7, 1935, supra. 



TABLE II, KNITTED OUTERWEAR _ INDUSTRY 

EXTENT OF UNIONIZATION BY PERCENTAGES 

OE MILLS AND EMPLOYEES 

(1935) 



Classification 



No. of Mills -p of Mills No. of -jo of Employ- 
Employees ees 



Outside Union Mills 169 15.14 6278 17.53 

Inside Employee Org. 22 1.97 4915 13.72 

Non-Union Mills 925 82.88 24623 68.75 

Total 1116 100.00'i ■ 35816 100.00% 



Source: National Knitted Outerwear Association - Knitted Outerwear 
"TIMES", issue of March 7, 1935. 



9823 



192 



The above tables reveal many noteworthy things. There are 191 
organized mills out of a total oi 1116, leaving 925 aills or a per- 
centage of 82,88 percent unorganized. This indicates labor weakness 
in the industry. Illustrated is strength of "outside 1 ' labor organiza- 
tions with their 6278 organized workers compared with the strength of 
"inside" employee organizations with 4915 organized workers. Note 
the relative strength of the ILGfoU (International Ladies' Garment 
Workers Union), the sCK-called Industrial Union, and United Textile 
''orkers 1 Union. Appearance of the otner unions may be due to diver- 
sified products of the industry giving them minor interests in the 
industry's labor. 

As in many other textile anc garment industries, union activity 
and labor organization has confined itself for the most part to and 
around the metropolitan area. 

In the labor organization field, the United Textile Workers of 
American is one of the unions having wide jurisdiction. While it 
officially dates back to 1901, it has a history going back to 1878. 
Being a mixture of craft and industrial unions, extended geographically, 
but not numerically strong in the knitted outerwear industry, this 
union, it is said, has experimented with union management cooperation 
in the textile industry with conservative policies. (*) Some claim 
it has had secret dealings with employers and had shown sluggish 
activity until it awoke with a strike in the summer of 1934. At the time 
of the public hearings on NBA codes of fair competition (summer and 
fall of 1953), this union had a membership of about 1000 members in the 
knitted outerwear industry and perhaps another 1000 in the trimming 
and braiding branches of the industry. 

The ILGv.U, like the United Textile Workers Union, is affiliated 
with the American Federation of Labor, Founded in 1900, it is more 
compact, having a large Italian and Jewish membership with socialistic 
traditions and background, and is probably more effective because of 
more active leadership than that in the conservative United Textile 
workers Union. In the knitted outerwear industry, the ILGWU had 
about 3000 members who were working in early 1933, Its t tal member- 
ship for the United States is given at about 150,000. 

The Industrial Union mentioned in Table I is the Knit Goods 
'.'.orkers Industrial Union affiliated with the Needle Trades Industrial 

Union. 

The Needle Trades Workers Industrial Union was formed at the 
beginning of the year 1929 by' rebelling forces from the International 
Ladies' Garment '.orkers Union. After over five years of existence, 
it is said that this Union can look back upon a course of active and 



(*) Information for the discussions was supplied by Paul Anderson, 
former NEA Labor Adviser, and the "Knitted Outerwear Times", 
supra. 

9823 



193 



radical work in many fields oi the Needle Trades, 

Of the past history and membership of the Knit Goods Workers 
Industrial Union, little is krovn. The representative at the code 
hearing in October J933 indicated that its membership was principally 
located in New York City and. Philadelphia, and amounted to*a number 
between 3000 and 5000. This representative. 1 .^ statements further 
indicated that his union was ocnosed to and, in fact, competed with 
the unions afiiliated with the American Federation of Labor. It is 
obvious, from examination of Table I, that this union has made great 
inroads in the limited organized labor field of the knitted outerwear 
industry. The other unions listed in Table. I .are, of. less importance 
and have not been investigated. 

Because of the fact that .the character of the United Textile 
YJorkers Union and the ILGV.U- gives them oroad. jurisdiction and the fact 
that in many instances' needle trades, and textile processes overlap, 
as is particularly true in the New York metropolitan area, a conflict 
between the twa was inevitable. This conflict, however, was never 
serious- until the year 1&34, w hen it became somewhat acute. 

Statements have been made that the ineffective union organization 
in the knitted outerwear industry is due to the conflicting jurisdiction- 
al claims of these tvo unions. The principal effect has been a general 
stir oi uncertainty prevailing in the New York Area. Manufacturers who 
signed agreements with one union were never certain that the 'other 
union might insist upon a similar agreement and unon organizing the 
already organized shoo. This led to "outlaw", strikes, to industrial 
unrest, to labor disputes and enmity in -'various snops, and to rigid 
resistance upon the part of the individual manufacturer. 

A typical exnmcle of the result of these jurisdictional disputes 
is found in the case of one mill. This mill, havin <■ signed an agree- 
ment with the United Textile I.urkers Union, was picketed bv represen- 
tatives of the ILOi.U.- The mill sought an injunction to restrain the 
ILG-wU from "picketing, intimidating, proclaiming and holding out 
oanners, placards or otherwise that the employees of the F 



Mills are on strike." (*) The injunction vs granted and the Union 
restrained. 

At the injunction proceedings a contract effected between the 
Metropolitan Textile Association and the ILGV*U acknowledged the 
existence of a jurisdictional dispute between the two Unions, 
Farther, both Uni'ons : agreed to aoide. by a settlement to be made by the 
American Federation of Lsbor. 

The dispute was submitted early in 1934 to the American Federation 

— — 1 ! 1 i 

(*) See "Knitted Outerwear Times", issue of February 9, 1934. 

Fublished by National Knitted Outerwear Association, N.Y.C. 

9823 



194 



of Labor which, after investigation, awarded the jurisdiction to the 
United Textile Workers Union. : 

There was immediate response. The United Textile Workers Union 
was elated. The Metropolitan Textile Association, whose members were 
involved, joyously received the decision. The ILGWU challenged the 
decision, refusing to accept it, 

Mr. David Dubinsky, of the ILGVU ordered his organization not 
to yield and make a formal protest in Washington with the American 
Federation of Labor. Finally, he succeeded in having the matter 
entirely reopened and secret negotiations began. 

At the ILGWU convention in Chicago in June, 1934, it was announced 
that an agreement h'ad been reached, bringing to a close the dispute. (*) 
In the form of a compromise, the agreement split the jurisdiction, 
awarding spoolers, winders, knitters, knitters' helpers, examiners 
of knitted cloth, knit goods craftsmen and designers to the United 
Textile Workers Union, The ILG'.U received jurisdiction over workers 
engaged in making garments from knitted cloth, specifically, cutters, 
operators, finishers, menders, crushers, pressers, garment examiners 
and packers. 

It was further agreed that in each of the garment centers, namely, 
Chicago, New York, Cleveland, Philadelphia and the Pacific Coast, all 
members of the United Textile Workers Union employed in mills making 
infants', children's and adults' knitwear were to be organized into 
one or more local unions, each of which .oust become affiliated with 
a joint council for the knitted outerwear industry. ILGiU workers were 
to be bound in the same way bv identical ties. The joint councils 
were to nave representation in proportion to their membership. This 
council was to have power over all. matters affecting workers in its 
section. It could make trade agreements and call strikes. However, 
general strikes and agreements with employers ', associations must have 
the sanction of the presidents .of the two Unions. 

Other stipulations were that there would be dues and initiation 
fees, for at least one official of each union on each joint council, 
and immediate classification and transfer of members in the New York 
area. Disputes between locals were to be suomitted to presidents of 
both unions and union disputes were to be submitted to the American 
Federation of Labor, 

This agreement, it is said, did much to strengthen labor's position 
in the industry, particularly around the fiwe mentioned garment centers. 



(*) See Knitted Outerwear Times", issue of June 8, ,1934. Fublished 
■ 'by National Knitted Outerwear Association, N.Y.C. 

9623 



IIJjLO-. .the industry 

'.able III is presented to show the s.ize of the industry during 
the l.'i-pnnusl census r ears from 1922 through 1933. 

The Knitted Outerwear Code Authority and the National Knitted 
Ou.terwear Association furnished data during NRA which, unlike the 
c ensus data, include all size establishments. 

Since the industry is known to be composed of many small units, 
it is logical to asrvume that the figures of the code authority and 
the association are more complete. These data show: 



Year 

1933 
1934 
1935 



Establishments 

1100 
1233 
1178 



[Dollar Volume 



$106,831,634 



Employees 



3b, 716 
35,816 



TYPES OF MANUFACTU RERS - 

tembers of the industrv fall within three classif ications, namely, 
contractor, homework manufacturer and machine manufacturer. In the 
first classification falls the type "'no maintain- a manufacturing plant 
and manufacture -products, or their. parts, for others who supply the 
raw materials. In the second classification fells the type who suoply 
raw material or parts of garments to homeworkers or homework-contractors 
for manufacturing ur completion, by nend labor in the home of the workers. 
In the third classification falls the type "ho manufacture products 
of the industry in their own plants by their own machines from their 
o-n raw materials. There is, of course, an overlap to some extent 
in these classifications. This overlap is due, principally, to the 
practice of some- manufacturers of performing cart of the manufacturing 
process within their plants and having the other part performed by 
homeworkers. 

SIZE OF ESTABLISHMENTS 



(*) Computation mace by the National Knitted Outerwear Associa- 
tion in 1928 on the size of firms on which capital ratings were avail- 
able show: 

8'o rere rated at $500,000 or over 

18< were rated at $126,000 to -500,000 

42$ were rated at $ 20,000 to $125,000 

33- J were ratec at less than $20,000, 

(*) Computation mare by the Association for 1932 show: 

2.4$ were rated at $500,000 or over 



(*) 
9823 



See Tra.ns.cr.ipt of Knitted Outerwear Code Hearing of October 16, 1933. 
NRA files. 



-196- 



11. 8f- were rated at $125,000 to $500,000 
44. % "-ere rated at $ SO, 000 to $125,000 
40. 9 o -"ere r=ted at less than $20,000 . 

The association claims that, cue to the fact that reports from 
many of the smaller firms were not obtainable, the above co-irutations 
are large in the higher brackets. It is significant that the majori- 
ty of the firms in the industry rated below $125,000. 

A study of Table IV "-ill aisclose in detail the relative importance 
in number of establishments,, number of wage earners, wages, cost of 
materials, value of products and value added bv manufacturers of 
establishments in size groupings based on hu uber of *-pge earners employed 
in each. 

DISTRIBUTION 0? IND US TRY B Y C-bOC-RAFHI CAL ArJJA 

Table VI, VII, and VIII show by states the number of establish- 
ments, the number of wage earners, '-'ages, cost of material, value of 
procucts, and the value added by manufacturers during the years 1929, 
1931 and 1935. 

Distribution of establishments for the year 1935 by the district 
groups used by the National Knitted Outerwear Association and the code 
authority mav be seen from the following table: 

TA3LE V - - KNITTED 0UTER1/EAR INDUSTRY 
DISTRIBUTION OF INDUSTRY ESTABLISHMENTS BY DISTRICTS (1935) 



District 



Number of Establishments 



New York ■ etrouolitan District 

Fennsvlvanie District 
(11 States) 

^Jest District. (7 States) 

Pacific Coast District 
(6 States) 

New England District (9 States) 

Cleveland District (4 States) 

Total 



700 

168 

66 

83 
126 
36 
1,179 1/ 



S.urce: "Knitted Outerwear Times", issue oi June 13, 1935. 

Fublished by National Knitted Outerwear Association, N.Y.C. 

1/ Do not include contractor-employers from the adult wear branch 
but only from the infants' wear branch. The writer estimates- 
tnat this lowers tne total number by 50 to 100, 



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199 

The industry's plants are principally located within the above 
six areas, with the Ne m York metropolitan area containing 59.8$ 
of the industry; the Pennsylvania District containing 13.6;>; the 
Cleveland. District containing 3.1$; the . esterr. District containing 
5,6$; the Pacific Coast District containing 7.1 •; and the New England 
District containing 11$. However, there are plants of the industry 
located in approximately 30 states. 

The same District groupings are used, to show the distribution 
of the industry's dollar volume of production based on code authority 
NEA label sales during 1934: 

41.63% for the ifetropolitan District (New York) 

16.05;o for the Pennsylvania District 

IE. 80 j for the New England District 

9.71,r- for the '■ estern District 

9,57$ for the Cleveland District 

7,245b for the Pacific Coast District 

It is significant Here, as in number ox plants, that the New York 
Area leads with the Pennsylvania Area following: 

Figures compiled by the National Knitted Outerwear Association 
for the years 19??, 1925 and 1928 sho" the distribution of capital 
investment by states. 



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203 

TABLE IX - KNITTED 0UTBKW5A* INDUSTRY 

PERCENTAGE Or TOTAL CAPITAL INVESTMENT BY STATES 
(1922, 1S25 and 1928) 

Number of {ills °jo Capital Investment 

State 1922 1925 1926 1922 1925 192& 



New York 


861 


598 


509 


47.5 


43.5 


35.7 


Pennsylvania 


176 


177 


175 


12.0 


14.5 


15.3 


New Jersey 


64 


79 


81 


3.3 


4.3 


5.2 


.iassachusetts 


46 


63 


63 


6.7 


7.0 


6. 6 


Wisconsin 


62 


44 


5y 


10.6 


6.9 


8.7 


Illinois 


40 


39 


44 


3. 8 


4.5 


11.5 


California 


£4 


36 


35 


2.5 


- 2.1 


2.6 


Ohio 


28 


27 


27 


7.2 


6.6 


4.8 


Michigan 


21 


24 


16 


?• c 


2.9 


1.1 


Minnesota 


1/ 


14 


15 


1/ 


1.4 


0.5 


Connecticut 


1/ 


11 


9 


1/ 


1.6 


1.2 


Bhode Island 


7 


9 


1? 


1.9 


0.5 


0.4 


'.ashington 


1/ 


8 


I" 1 


1/ 


0.4 


0.4 


Oregon 


1/ 


6 


5 


1/ 


0.2 


1.2 


Utah 


1/ 


5 


8 


1/ 


0.9 


0.3 


All Otier Stat 


es 36 


23 


36 


2.4 


2.6 


4.5 



Tot pis 



1365 1163 1108 



100.0 100.0 100.0 



Source: National Knitted 'Outerwear Association - Year Book of 1929. 
1/ Included in "AH Other States" 

DISTRIBUTI O N OE THE D'DUSTAY BY SIZE CE CITIES . 

Tables X and XI show the distribution of the industry by size of 
cities. 



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206 

chapter II 

LA30R 

e jloy: zkt 

NUIIBER EMPLOYED Ala) SEASONALITY: According to the United States 
Census of Manufactures, the number of nage earners in the knitted 

outer-rear industry "ere: 



41,503 in 


the 


year 1J23 


27,SS6 » 

24,662 " 


n 
n 


" 1925 
» I927 


2S,9$S » 


ii 


" 1329 


26,142 " 


it 


11 xc.3! 


25,308 » 


ii 


" 1533 



Figures of the Knitted Outerwear Code Authority, v.iiich are not 
strictly co:ro~rahle -rith census figures as they, unlike the census 
figures, include employees in all size establishments and employees 
engaged in production 0" knit cloth, slion ^Z,'JlG employees for 1S3^»(*) 
In March, 1935> the Code Authority presented figures snoning 35f^l6 
employees, exclusive of honcorhers. (**) 



The figures of the Code Authority are taken as the more rccurate 
totals for the industry's enaloynent. However, the census figures ma 
he used in shoeing trends as they are comparable despite their Imit- 
ations. 



The yearly and 'Monthly averages of nurfber employed during the 
period Jen-aery, 1931 ^° August, 1S35» are shotm helo ,_r : 



(*) See Knitted Giiter-rear Code Authority Budget Piles 
N. R. A. Files 



f **\ 



See "Knitted Outer^err Tines", issue of i"an 



I ■ 



Fuhlished hy Nat 1 ! Knitted Oate 



r-err .«.ssn. 



k 7, 

l 7 e-- York City 



)S23 



:07 



ESTIMATED FdKBEIl 3IL0I2D 



Month 


(000) 


(000) 


(0 0) 


(000) 


(000) 




1S35 


1S32 


1933 


133U 


1S35 


January 


2U.U3 


25.32 


26. Us 


25.3s 


2S.52 


February 


25. Us 


26.13 


25.20 


2S.3S 


29.69 


March 


2U.U0 


27.06 


19.S5 


29.97 


29. SU 


Acril 


23. GU 


2G.27 


22.03 


30.9U 


25.73 


May 


25.sU 


25. Us 


26. 22 


31.82 


2S.S7 


June 


26. £5 


26.12 


2S.U9 


2S.21 


27. lU 


July 


25.3S 


21.72 


30.50 


25.70 


26.^6 


August 


26. ok 


2U.37 


30. S5 


. 25. Ul • 


29.51 


Se"cte iter 


23.7S 


29,55 


30,98 


2S.U2 




October, 


29.59 


31.62 


30,7s 


.23.57 




November 


27. 76 


29. oU 


27.?7 


27. ss 




December 


2U.S3 


23. su 


23.75 


. 26.77 




Average 


26. lU 


26.3s 


26. S7 


2S.29 





1929 - 2S.97 



Source: Bureau 0^ Labor Statistics and EHA,-. computations 



The r.bove estimates are based on Bureau of 3abor Statistics cot; 
adjusted to census data. 



9823 



206 

The folio-Ting employment index rrc. Chart I based upon the sane 
source of material as the r" ! iove -Till ■' ive p more gr.-phic picture of 
the increase and decline of employment throughout the nonths of the 
years 1931, 1932, 1933 f-nd 193*+, and throu ;h August of 1935. 

table xiii - :::~ittsd outsikteah iheusthy 
ikdex or EiiPiiOYizara 



(k929_- ioojS) 



Honth .. 1931 1932 1933 193U 1955 



January 


s);-o 


£7. k 


91. u 


S7.6 


9S,5 


February 


SCO 


5O.2 


£7.0 


102. k 


102.5 


I larch 


£4.2 


S3.H 


bs.5 


103,5 


. 103.0 


April 


32.3 


9C7 


76,1 ' 


106. s 


. 33,2 


I lay 


S7.1 


SS.O 


30. 5 


109.9 


. 33.7 


June 


92.7- 


90.2 


9S.3 


97. L l- 


93.7 


July 


S7.7 


7^.0 


1050 


£3.7 


31.7 


Augus t 


S3. 9 


oh -, 
a-:. X 


106.5 


£7-7 


101.9 


September 


102.9 


102.0 


106.9 


9S.1 




October 


102. 2 


109.2 


106.3 


102.1 




November 


35.S 


100.3 


9^1 


96.3 




December 


S3.7 


n,. -7 


£2.0 


92. U 




Average 


90.2 


91.1 


92.7 


37-7 





Source: Bureau of Labor Statistics ?.nd llEA, computations. 



It is noted that, .according to these figures, there was a grad- 
ual increase in employment from 1931 to 1933 (30.2 to 92. 7). The 
year 153^-. during -'hioh the code existed, brought about r slightly 
larger increase (92.7 to c JJ.f). The year 1935 through August appears 
likely to maintain the gain of the year 193^. 

The peaks for the year come in the early spring and in the fall. 
The lor? level falls in July. The percentage of difference between the 
high, and 1ot7 periods for the year 1931 is 20.5 per cent, for 1932 year 
5U.2 per cent, for 193J. year 35. k per cent and for I93J4 year 22.3 per 
cent. The lorr period for 1333. accounting for the large percentage of 
difference for that year , occurred in 1 larch, before HSA's existence. 
In vie-' of this fact and the greatly decreased difference for 193H vrith 
figures through 1355 maintaining a fairly even level, it is believed 
that the IHA code for the industry had the effect of leveling out em- 
ployment during the years 193^ an< l 1935» 

At public hearings held on the knitted outerwear code during 
HEA, labor repeatedly claimed that labor in the industry rras employed 

9S23 






only about one-half of the actual uorking tine of the year. The 
tendency to spread enployrient throughout the months of the year, if it 
continues, should satisfy and "benefit labor. Whether it -Till continue 
in the absence of -orhinr; hour and machine hour limitations of the 
coc e remains to he seen. 

GE0G2AFHICAL DISTPJ3UTI0N: The geographical distribution of 

employees can he shown only for the nege earners of the years 1929 and 

1331. :: 

TABLE XIV - ISITT3D OUTEZTEAE IlIDUSTRY 
DISTRIBUTION OF ".JAGS E~HITEHS 



(1923 -1331) 



STATE 



California 

Illinois 
Massachusetts 
Michigan 
Minnesota 
ITeT? Jersey 
He 1 '.' York 
Ohio 

Fennsylvr nia 
Rhode Island 
Utah 

"Jashington 
Uisconsin 
Other States 



1929 



1.2SC 
• 511 
1,9'Sl 

157 
■ 125 

. c 7. "•' 

11,836 

.2,560 
U r 21 

295 

.130 
2J561 

2.02S 



1931 



513 
1,875 


i':-7 

967 

10,325 

2,275 

k t k&5 

105 


165 
1,650 



3,536 



TOTALS 



2S , 9 oC 



26,142 



Source: U.S. Census .of Manufactures, 



The above tahle indicates a distribution of employees, in 1931, a- s 
follows: . . 



1'ier 



Yo rl: 



39.52 



Pennsylvania .17.1$ 

Ohio * , S.7^ 
Massachusetts 1*2% 



Uisconsin 6,3$ 

"Jew Jersey 3« 7$ 

Illinois. 2.4$ 

Other States 15.1$ 



He" York , wc" Philadelphia rlone have 56.6$ of the employees. 
Employees for California were not shown for 1931 but, in view of the 
fact that they represented 4.4 per cent in 1929, they are believed to 

be st^ll noteworthy. _ ' ■' . 



9S23 



ao 



HDU2S. 



AYEPAGB EEE2LT HDU2S: The following table shows, "by nonth and 
year, the average w'eekly working hours during the period from January, 
1932 to August, 1955, inclusive: 



TALL" XV - IhHTTED OUTIDZJEAR IKDUSTkY 
AVLTAG2 HOUHS rOkXED FBIi jEEK 



lionth 



1932 



133; 



1934 



1335 



January 

Eebruary 

i larch 

April 

hay 

June 

July 

August 

Septembei 

October 

Uoveaber 

December 

Average 



42.7 


44.3 


35.3 


34. S 


42.J 


40. g 


36.4 


35,1 


43.5 


37.0 


35-6 


34.6 


41.4 


54.2 


37.2 


33,3 


40.9 


U0.6 


35-1 


33.7 


36.3 


U6.5 


33.4 


34. g 


35,1 


145.4 


34. S 


34.1 


42.0 


35,7 


56.1 


2S.g 


44.7 


36.3 


32,9 




45,5 


37,0 


30.4 




3^.2 


34.4 


33. } 4 




37,2 


35,9 


33,0 




41.0 


33.1 


35.0 





Source: Bureau of Labor Statistics and NT 



Attention is invited to Chart II, appearing at the end of this 
chapter. 

The average working hours per week of employees in the knitted 
outerwear industry are given as 41.0 for the 1931 year; 33 .1 for the 
1333 year; and 35. for the I93U year. During the year 1§32 hours "ere 
above forty per week for eight months, while for the following year 
they were above forty, during five months, and since June of that year 
up until August of 1935 they have not exceeded 36.9. The high for 1932 
of 45.5 appeared both in Slarch and October of that year. The high of 
HG.5 for 1933 occurred in June. The high of 37.2 for 1934 occurred in 
April rm\ the high for 1935, through August, • is 35*1 for February, 
The lows for these three years and eight raonths of the year 1935 are 
interesting, being, for 1932 ~ July - 35.1; for 1933 - April - 34.2; 



for I93U - Decenber - 33.0 and for 1935 



AU.SU c 



t - 26.; 



The marked decline in hours since 1933 is believed to be mainly 
due to the reduced hours under the K3A, code for the industry. 



1 .IA.K-II0UES : Data concerning man-hours for years prior to 1932 are 
not available. Bureau of Labor Statistics and SUA., data show average 



211 

- -hours pel ee 1 : in 1932 rs 1, OS 7, 000. " ro i this point to the end of 

1933, there -<as a reduction to 1,053,000. At the end cf 193 1 ', the 
average had decreased further to 950*000 and. "as followed by an average 

for the first eight ::ionths of 1935 °- 955,000a It is pointed out that 

the decline cane about in spite of an increase in enploynent over this 
oeriod. 



A nore detailed picture nay he had fron Chart III, appearing at ' the 
end of the chapter, and the follo'Ting table: 

ta:;le r;i - ::::itteb outs?;jeab iiqust2.y . 
ESHLA.T2D total :ait-eouhs pic "JSifc 



iionth 



(000) 


(000) 


(000) 


(000) 


1932 


1933 


• 193'+ 


1935 
1 


1,081 


1,173 


'29 6 


992 


1,116 


1,023 


1,070 


1,0M2 


1,231 


73H 


1,067 


1,032 


1,087 


75U 


1,151 


957 


1,0^2 


1.66U 


1,117 


573 


oUs 


1,325 


9 1+2 


Skk 


762 


i,3SU 


S9U 


906 


1,023 


1,101 


517 


751 


1,321 


1,125 


535 




1,^39 


1,139 


1,076 




1,109 


S5S 


531 




7 


a 1 


823 





January- 
Teh ruary 
Llarch 
April 
May 
June 
July 
Augus t 
Sep tether' 
Octoher 
ITove.iher 
Decernher 



Average 



1,087 



1,053 



990 



Source: Bureau of 



'.do; 



Strtic'ics and MA 



T7AC-ES . 

TOTAL FAYHDLL: In 1923, the peak year for the Knitted Outerwear In- 
dustry, the total payroll nas at its height, being $52,292,909. By 1925 
it hrd decreased to $36,332, 1 + , 43 and fron that it lowered to $22,934,000 
in 1929, to $24,744,000 in 1931 and to $19,522,709 in 1933. (*). 
The year 193^ brought ahout little change over the yer^r 1533, the 
figure being '15, r 2o,000. (**) Tliile these figures fron the U. S, 
Census of li nufacturcs and the Bureau of Labor Statistics Co not agree 
•Tith totrls subnitted by the -actional knitted outeruear association and, 
because of the census Irritations, are believed to he slightly lo". T er 

(*) U. S, Census of hanufactui-es 
(**) Bureau of Labor Statistics data., adjusted to census data 



9S23 



212 

thru the true figure, they r.re conparable end sho 1- ' the correct trend. 

Available data on average weekly payrolls include months from 
January, 1351 through August, 1935* ^hey arc outlined in the follow- 
ing table: 

TABLE XVII- KHITTED 0UTE&7EAP. IlTJJSTIff 
ESTIIIA.23D 'JESELY PAY3QLL 



(l, 000's of Dollars) 



Ilonth 1Q51 1959 1955 195^ 1955 

January 455.2 435,5 579.0 3^G.6 3^9-3 

February 490.5 k~(o.S 5 r 4.7 550. 5 423.4 

iiarch 43S.S H67.6 240.3 336.2 U13.O 

A-oril 451.9 11-20.U 267.I 409.S 5GS.2 

::ay 47s. 5 3£i.o 35^.5 1*17,8 527.9 

June 500.3 39-+- 5 3S3.9 556.5 365.5 

July H27.O 2S1.2 40S.6 325.4 351.4 

August H7U.6 384.4 443.5 344.6 kzk.fi 

September 332.1 517.5 470.0 377.2 

October 5U6. 7 529.6 431.0 440.1 

Fovenber 4s<3.£ 4l6.7 400.9 373. 1 + 

Decenber 425.2 313. 4 30R.5 35*^1 

Average 475.9 4lS.2 375« 1 + 375-5 

Source: Bureau of Labor Statistics and KBA, data adjusted to census 
data. • 



The estimated average "ee\ly payroll for the year 1929 is given at 
$556,^00. In the decline for the following years up to 1334, this 
figure lowers to' $473,500 in 1951, to $418,200 in 1532, and to 
0375,^00 in 1533. The I33U ye; r maintained the 1933 level, -ith. a very 
slight increase. 

At the end of this Chapter appears Chart I, based on the following 
index of payrolls: 



■ 



?S23 



213 



3LE XVIII - IMTTZD i SAH IiDUSTEY 

Ii©EX 07 EAYIiOLLS ( 1.325) - 100$) 



Month 


193?. 


1932 


1933 


1334 


1935 


January 


SI. '8 


78 ; 3 


6s. 1 


52.7 


70.0 


February 


rtrf <-. ■ 

GO. 


S5.7 • 


S3.S 


70.2 


7G.1 


1 arch 


82. 6" 


SU.O • 


H3.2 


63.^ 


7U.2 


April 


77.6 


73.6 • 


Hs.o 


73r5 


£3.8 


iiay 


S6.0 


6S..5 


63.7 


75.1 


S9.7 


June 


89*9" 


70.9 


63. c . 


Sk.l 


S5 ? 7 


July 


76,7' 


50.5 


73.5 


59-2 


65.2 


August 


ffc 7 - 


09. 1 


50. s 


Si. 3 


76. )4 


September 


55*6" 


93.0 • 


SU.5 ■ 


° 1 O 




October 


3S.3" 


95,2 


SS.2 ■ 


75.1 




■To veneer 


87.8- 


7U.Q ■ 


72.1 • 


S7.1 




December 


7f~ I' 

/G. L r 


56.-3 


5^.9 


OJ.O 




Average 


0_,. _> 


-7 1— 

(5* 2 


67.5 


67.5 





Source: Bureau of Labor Statistics and HHA, data adjusted to census 

data 



At no tiue since 1931 have payrolls reached the 1323 level. 
The indent fluctuates, throughout each year parallel to the seasonal 
changes in production, ^he highest level reached during these years 
is found in Septenber rnd. October of the "ears 1331 and 1332, when 
payrolls amounted to between 53 and So. 3 per cent of the. 1529 average. 
The lowest level reached was in iiarch r.rd April of 1533 -'hen the 
percentage dropped below 50 per cent of the 1929 average, 

EOUTIiY T7AC-ES: Average hourly "ages in the knitted outerwear 
industry are given by the Bureau of Labor Statistics for the year 
1952 at 3U.0 cents, for the year 1933 at 35.5 cents, for 'the year 
133U at W.V cents and for the 'first eight months of the year 1935 
at U5.S cents. Figures for previous years r re not available. 

* 

The following table presents 1.10 re in detail the average hourly, 
wages for these years. 



9S23 



214 



TABLE XIX - E1TITTED OUTEH "UAH I1TBUSTHI 
■ AVEBAGS HOT3LY "JAGS (CEITTS) 



::onth 1332 1933 193^ 1335 - 



2.k.S H3.5 H5.2 

29.7 ^3.1 L ^.l 

2S.U.-- ! ;-3.^ ^5.^ 

31.5" ^3..S 46.2 

29.2 } 43.^ U5.S 

25.5- UM- 'iS.s 

2S.4-- l :-3.3 ^5.9 

1*0.8* UH.S H5.2 

U2.7' ^5.1 ' 

Hi. 5- U5.1 

4o.S' US. 5 

U2.5- US. 6 

35. 6- 1&.H 



January 


35. 2 


February 


3S.H 


1 larch 


33.0 


Aoril 


31.3 ' 


i iay 


31. SB 


June 


Hi. ^ " 


July 


31.3" 


■AUgUS t 


3i f U* 


September 


3^.3 


October 


32.V 


ITovember 


31.6- 


December 


30; r 


Average 


3^.o 


Source: Bureau 


f Labor Stati 



sties in cooperation '.rith II3A 



Examination of the above Table and Chart II, -iiich appears at the 
end of this Chapter, reveal an outstanding fact that, since the 
"beginning .of August, 1333 > up until the end of the eighth month of the 
year 1935> the average hourly vrage has 'been rrell over Uo cents per 
hour. Prior to August 1933 the figure had "been substantially under Ho 
cents per hour, '-ith the -exception of the one month "of iiay in 1932. 
^t i,s believed that this increase is the result of code application, 
especially since the industry began conplying -'ith the shorter hour and 
minimum ^age provisions of the code in July or August of 1933. -It is 
also noted that throughout the year 193^ there uas a steady increase in 
the hourly wages ,uo to the last month of the year, and Curing the eight 
months of 1935 the level reached \7as naintained. 



ELY "'AGES: Average weekly wages, despite the decline in 
hours from 1332 to 1935> increased from $15.21 in 1932 to $16.19 in 
the first eight months of 1935« Kiere "'as a slight decrease in 1933. 
caused "by r lov average for the first si:; months of the year. During 
all months after August, 1933 » the average weekly --age maintained a. 
comparatively high level for this industry, not going below $lU. 56. 
Before August in 1333 a nd in the year 1932 there wez*e occasions 'Then the 
wage dropped to as low as $12. Hi. This indicates that the operation of 
the code and the President's Reemployment Agreement "brought about a 
vrage increase. 

Chart II and the following table may "be used in malting com- 
parisons. 



9223 



TABLE XX - KNITTED OUTERWEAR INDUSTRY 
AVERAGE WEEKLY WAGE (DOLLARS) 



J 



Month 


1932 


1933 


1934 


_ 1935 


January 


17.08 


14.38 


15.51 


16.08 


February 


17.55 


14.09 


16.03 


16.82 


March 


16.60 


12.10 


• 15.55 


16.26 


April 


15,38 


12.12 


15.84 


15.81 


May- 


14.29 


13.51 


15.81 


15.45 


June 


14.44 


13.46 


14.80 


16.26 


July 


12,41 


13.39 


15.03 


15.98 


August 


15.06 


14.56 


15.90 


17.29 


September 


16.84 


15.16 


15.56 




October 


16.16 


15.94 


17.14 




November 


13.85 


14.75 


15.35 




December 


12.88 


15.51 


15.23 




Average 


15.21 


14.08 


15.65 





Source: Bureau of Labor Statistics. 



These same figures for 1931 show a $17.58 average for the year with 
a high in February of $18.48 and a low in July of $16.20. The high 
average for this year has not been equaled since. 



9823 



216 

AREA WAGS DIFFERENTIALS: The code for the knitted outerwear in- 
dustry provided for a difference in wages paid in the Northern area 
and the Southern area t The Southern area was defined to include the 
states of Virginia, Tennessee, Kentucky, North Carolina, Georgia, 
Florida, Alabama, Mississippi, Arkansas, Texas, Louisiana and Oklahoma. 
The Northern section included the District of Columbia and all other 
states. The differential was between the minimum wage rate of 35 cents 
per hour tc he paid in the Northern area and the minimum wage rate of 
32^ cents per hour to' he paid in the Southern area. In support of this 
differential, the usual contention, i.e., labor efficiency and living . 
cost was' not as great in the South as in the North, was made by the in- 
dustry There are scattered NRA correspondence files from individual 
manufacturers located in small towns and rural communities in most all 
sections of the country which claim they have .existing around them the 
same conditions alleged to exist in the Southern area. 

Figures furnished. by the Knitted Outerwear Code Authority, purport- 
ing to show the average monthly, weekly, and hourly earnings per employee 
in 456 concerns of six industry districts during the four months of May ; 
to August of 1934, arc as follows:" • (' 






9823 



217 



L~H 

go 

s 



Eh 

a 

EH 
EH 



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3 



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ffl rH 

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9823 



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218 

The figures in the foregoing table, in total value, disagree with 
the Bureau of Labor Statistics figures in Tables Numbers XIX . and XX. 
They are used, however, to show the relative differences in wages of 
the various districts as they actually ovist. 

The wages paid in the siz districts may be better compared by using 
the following calculations which show the relative wages in each area, 
compared with' the average for the whole country: 

: Average for :Cleve-: : Few :Pacific:Phila. :Metropol» 
: All Districts: land : We stern: Engl and: Coast : : itan 

• •••••• 

Weekly : 100.05 :59.7f : 89.9$ : 85.6fi :125.8# :134.1fS: 130.7$ 
Hourly : 100. 0-i :90.8f : 88. 3$ : 92.2 : 97.1 :102.2 :118.6# 

The concentration of labor union strength 'and the recognized high- 
er living cost of the Philadelphia and metropolitan areas probably ac- 
count for the higher earnings in those two districts. 

CHILD LABOR . 

There is no evidence of a child labor problem in the knitted out- 
erwear industry. Child labor is not employed in the industry to any 
notable degree, .except possibly in the' homework branch. Here there are 
no actual facts to show its extent. Where used, it would be without 
the knowledge and control of the industry, because of the absence of 
the employer or his representative while the work is being performed. 
There is no way to know of, or prevent, the mother in a home allowing 
her children to assist her in hand-knitting crocheting, or joining. 

The NRA Code for the Knitted Outerwear Industry prohibited employ- 
ment of children under 16 years of age in the industry. Further restrict! 
tions in this respect are imposed upon the industry by-laws in some 
states. 

LEARNERS OiB APPRENTICES . 

The NRA Code for the Knitted Outerwear Industry termed an employee 
with less than C weeks' experience in tht Industry as a "learner" and 
permitted payment of 75 per cent of the code minimum wage to that type 
of employee. The code further restricted the number of learners employed 
at the reduced minimum wage to one for every twenty employees in any 
Plant. • • • ■ • .... 

During NRA, there was some argument over the length of the learn- 
ing period and the five per cent restriction upon the number employed. 
Six members of the industry made application to NRA for exemption from 
the learner provisions of the Code. Of the six, the first two were denied 
and the remaining four were granted, with limitations, 

A rigid rule for a learning period of 8 weeks appears to be imprac- 
ticable of application to all occupations within the industry. Obvious- 
ly, this is true with there being a wide variety of occupations ranging 
from a most simple one of boxing merchandise to a highly skilled one of 
adjusting and repairing a knitting machine, 

9823 



■ 



i 1. 

LABOR UNION INFLUENCE . 

The extent of collective "bargaining and unionization of the industry 
have already been shown in Tables I and II e Keeping in mind the small 
extent of unionization within the industry; it can be said that labor 
unions have exerted little influence upon labor in this industry. How~ 
ever, since the majority of the industry is located in and around the 
metropolitan and Philadelphia districts, whore almost all of the labor'. . 
union activity is found, the influence would be greater than indicated 
by the percentages showing the extent of unionization. With other factors, 
such as federal and state government legislation for labor's benefit en- 
tering into the picture, organized labor is already strongly entrenched 
in kindred industries should assist in the unionization of this Industry. 



1 



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PHOHJCTIOtf A"- DISTRIBUTION 



RAT i.ATlUIALS 

The yarns used in producing knitted outer-rear are nade of the 
■basic materials, "Tool, cotton, silk or rayon. They are made of 100^ 
of these materials or of their combinations. 

Figures presented by the .National Knitted Outerwear Association 
shoTT that: 

"In 1929 the relative amounts of materials used in Knitted 
Out errrear Industry '-'ere: 

Uool 62^ 

Cotton 34$ 

Rayon 3$ 

Silk & Others 1$ 

"In 1932, their percentages ^ere as folio- s: 

Uool 76$ 

Cotton 12$ 

, • Rayon ■ 11$ 

Silk C: Others li 

hade from the fous basic materials are a - 7 ide variety of yarns. 
There are yarns kno^m as "worsted yarns" made of ^ool. There are ex- 
pensive v too1 yarns knovin as "a.lpaca", "mohair", ."bengora" , and "an- 
gora". These '-ool yarns have been duplicated by cheaper combinations 
knovrn by the same names. There are also other yarns kno 1 ^ as "boucle", 
"ratine", " silvertone", pnd "chenille". 

These yarns are usually purchased ready-dyed, requiring only 
winding as the -orocess preliminary to knitting. There may be cases, 
ho-ever, rfhere dj'eing is done by the manufacturers. 



QJA'TITY ATP VMUZ 07 ?XD 1T GTS . 

The quantity and value of production of the different oroducts of 
the industry are sho'Ti by Table XXIII. 

Perce vt; ;es of total v; 1 e of the different production of the 
industr i- si n by t ie following table; 



9823 



=24 



TABLE XXII — EMITTED OUTERUEAR INDUSTRY 
RELATIVE VALUE--0F'TH2 DIFFERENT I"DUSTRY PRODUCTS 



(If. 2? - 1531 - 1933) 



Percentage of Total Value 
Pro ecu. ct 192? 1931 1933 



Sweaters, Coats and Jerserys 

Bathing Suits 

Scarfs and Shawls 

Headwear (except Infants) 

Dresses and Suits 

Neckties 

Infants' Outerwear 

Other Outerwear (exclusive of 

athletic and golf hose 

and knitted fabric) 5.1 4.8 5.7 l/ 



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12.0 


13.4 


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2.6 


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3.9 


7.7 


19.3 


17.7 


1.2 


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7.8 


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100.03 100.03 100.03 



Source: United States Census of Manufactures. 

1/ For 1933, "Neckties" are included among "Other Outerwear". 



It is seen from the above table that sweaters, coats, jerseys, 
bathing suits, and dresses and suits constitute the greater portion of 
the industrj-'s production. Dresses and suits have become more popular 
since 1929 and play a larger part in the industry's business, their 
production increasing from C7.7 per cent to 17.7 per cent of the total 
production. The volume of business on scarfs and shawls, headwear and in- 
fants' outerwear shows some increase. There has been decline since 
1929 in the volume on sweaters, coats, jerseys, bathing suits and 
neckties, while other outerwear seems to maintain a steady level. 



PROCESSES . 

Of each product there is a variety of types produced by several 
different processes of manufacture. 

There are three general methods of producing wholly machine- 
made knitted outerwear: 

(a) Pull-fashioned, by which the knitting machine fashions 
the fabric to conform to the shape of the body, 

(b) 33 r knitting fabrics into shape of parts of garments, 
which are joined together with other knitted parts to 
complete the garment. 

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(c) By cutting no knitted yard goods fabric according 
to pattern and sewing the cat parts into shape of 
the garment design. 

After each of the above processes cones the snaoing, sizing 
and tri'.aning of the garment. 

There are three general methods of producing wholly or aart 
hand— made knitted outerwear: 

(a) By knitting or crocheting yarn by hand into the 
complete garment, 

(b) By knitting or crocheting yarn by hand onto a 
part of an unfinished machine-made garment to 
complete the garment. 

(c) By sewing together with yarn, by hand, machine- 
' 'made parts of garments. 

After the above orocesses, there also comes the shaping, siz- 
ing and trimming of the garment. 

Since the yarn from which oroducts are made is usually pur- 
chased already dyed, the yam, as such, is usually the starting point 
of ma-.Tu.facture. 

There are instances where a manufacturer of the indxistry begins 
operations upon knitted fabrics purcha.sed from other members of the 
industry. This practice is said not to be common in the industry, 
except in the bathing suit branch. As has been stated above, for 
code purposes during NRA, manufacturers engaged in this practice, except 
bathing ?uit manufacturers, were excluded from the definition of the 
industry. 

Of the listed -products of the industry, all can be manufactured 
almost' wholly by machine. Hand-knitting and crocheting can be em- 
ployed altogether in the manufacturing of some sweaters, scarfs and 
shawls, 'knit headwear (tajns, berets, and novelty headgear, neckties, 
dresses and suits (mostly sportswear), novelties and accessories, 
and infants' wear (sweaters, sacques, booties, headwear, etc.). 



MACHINES . 

TYPES: There is little available data on this industry's 
machines. In 1930 and 1931, surveys of the industry's machinery 
were made by the U. S. Department of Commerce. The reoorts of 
these surveys are limited in .scooe and rather technical, making 
their use in preparation of this report greatly limited. 

Although the industry uses double rib, warp, Raschel, chain- 
loom, and a wide variety of other machines, for the knitting of 
fabrics, the two general tyoes of knitting machines principally 

} 

9823 



: 7 

used by the iidustry are — the circular knit machine and the flat- 
knit machine. 

The cirbulai—lnit machine 'produces knitted cloth in a tubular 
shaoc, knitted over a. round cylinder. Such- cylinders range in 
diameter: from one to aDout. thirty-six inches. The number of 
needles around the cylinder of .these machines range from ov.e to 
near sixty per inch. Smaller yarns require finer stitches, making 
the use of more needles per inch necessary. The size (diameter) 
of the cylinder, of course, determines the size of the fabric pro- 
duced by the machine since the fabric is knit around the cylinder. 

Such items as sleeves to garments, the body of a garment, and 
other tubular pieces are knitted by this tyoe of machine. These 
machines also produce knitted fabric for cutting un. 

Fabric produced in tubular form is used for cutting-up be- 
cause in standard work, where constant changes in the designing 
device of the machine is not necessary, the circular machine is 
more efficient in its operation and produces fabric at less cost 
than the flat machine. The flat machine, however, is more adapt- 
able'." when used on items where constant changes in pattern exist. 

The flat machine produces flat fabric as yardage knit goods 
or as pieces of garments, rail-fashioned or in' shape of a garment 
part. On the flat-knit machine there is a "needle-bed", perform- 
ing a function corresponding to that of the cylinder on the circu- 
lar-knit machine. The fabrics are knitted across this "needle- 
bed" which lies flat in the machines, and the width of the "needle- 
bed" determines the greatest width of fabrics that can be produced. 
The needles on this type of machine are spread across the width of the 
"needle-bed" ranging from two per inch to twenty oer inch. As in the 
case of the circular machine the number of needles ner inch and the 
size of yarn used determine the fineness of the stitch. 

For both the circular and flat-knit tyoes, there are plain, 
pattern "heel, and Jacquard mr chines. The plain machines produce 
plain fabrics or garment parts of one color. The pattern "'heel 
machines produce fabric or garment parts with a limited number of 
stripes of colors other than that principally making up the fabrics. 
The Jacquard machine allows several colors of yarn in the making up 
of the item arranged in more intricate designs than the pattern 
wheel machine. 

'Special designing and color and stitch combinations on knit 
fabrics is done by a timing. device, which acts upon the needles of 
the machine at the oroper time, causing them to nick up from the 
yarn feeders the color of yarn necessary for the stitch, or at 
the proper time to miss a stitch not needed in the stitch combination, 

EXTENT OF USE OF EACH TYPE: The following table shcs the extent of 
use of the circular type machine and the flat tyoe machine on cer- 
tain garments in the three areas covered by the survey of the 
United States Department of Commerce. 

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It is noted that of the flat tyoe machines the wc vt York area 

uses it to a greater extent than does the other areas • This is 

said to be due to the fact that constant .style ■changes, which 

make it necessary to constantly change .patterns, are more orevalent 

in this area. 

Below are percentages shoving the relative extent of use 

of various types of machines:' 

Links & Links 

Power . . . . .' 62. 55$ 

Plat Power . . ' ...... 45. 3 $ 

Circular Rib;. ." 45.2 $ 

Links & Links 

Hand 42. 77$ 

Easchel 40.6 $ 

Circular Jersey 38.41$ 

Spring Needle 33.3 $ 

Plat Hand 28. 7 ! , 

These percentages, taken from the "Knitted OuterWoar Times", 
issues of March 21, 1935, are bpsed on reports for the month of Llay, 
June, July, and August of 1934, from 433 manufacturers made to the 
statistical department of the Knitted Outerwear Code Authority. The 
figures represent the average percentage of highest potential use 
members of the industry were getting during the period of observation, 
in the case of each type of machine and represent 'mill averages not 
weighted according to number of machines in each mill.. Totals 
for the number of machines in the industry are not available. 

AGE: The industry is known to be using machines as old as 
twenty years. There seems to be a popular practice in this industry, 
as in many others, to rebuild and use second-hand machinery. 

The survey made by the TJ. S. Department of Co Tierce for 
the three areas, viz., IT ew York, Philadelphia and Cleveland, sho™, 
in 1930, the following: 

Of circular-knit machines 22$ were over 10 years old and 
59^, were less than 10 years old, '-bile' for 19> the ages 
were unknown. 

Of the flat po^er-o-oerated machines, 25$" were over 10 
years old and 46$ were less than 10 years old, while the 
age of 2 C $ were unknown. 

Of the flat hand-operated machines, 47$ were ov~t 10 
years old and 31$ were less than 10 years old,- "'bile the 
age of 22$ vrere unknown. ; 

Of the Links & Links power machines, 37$ were over 10 
■ years old, 17$ were less than 10 years old, -nii 1 e the age 
of 46$ were unknown. 



>82J 



TABLE X".V - KNITTED OUTER :E4R 
RELATIVE COST 07 '..'AGES AND iATERIALS 

(INCLUDING) 
(containers, fuel pjid nurcha.sed electric energy) 



Year 



Value of 
Product 



.,a<;es 



(GOO 



■s of 



(000's of dollars) 
dollars) 



Cost of Materials 
(including contain- 
ers, fuel, and pur- 
chased electric en- 
ergy) (OOu's dollars) 



Percentage Ratio 



'..a-e to 


Cost of 


Value of 


Materials 


Product 


to Value 




of Product 


19.6 


51.5 


22.2 


49.9 


21.2 


51. S 



1929. 
1931 

1933 



147,249 
111,573 

92,547 



28,934 
24 , 744 
19,575 



75,876 
55,571 
47,492 



Source: U. S. Census of lvianuf acturers. 



The above table indicates little change in the relative ''age and 
the relative naterial cost for the three years shown, the average wage 
cost and material cost being 21.3 ner cent and 51.1 tier cent, respect- 
ively, with a variance of not more than 1.7 -oer cent for the first and 
1.2 ner cent for the latter. Thus it follows that any change in wage 
cost would he reflected in the value of nroduct by approximately a 1 
to 5 ratio, and any change in naterial cost would be reflected in the 
value of the -product at less than a 1 to 2 ratio. For example, if 
wool yarn increases in nrice 100 ner cent, the wool suit should not 
increase in nrice mo^e than 50 ner cent, and if labor cost increases 
50 per cent, the resultant necessary nrice increase of the nroduct 
should be only 10 ner cent. 

SEASONALITY OF PRODU CTION. 

This industry, like other garment and textile industries, has 
marked seasonal fluctuations in nroduct ion. Generally, the months 
of August, Sentember, and October of each year during which fall and 
winter garments are nroduced, are the most active months, October being 
the peak. Prom the October peak there is a sharp decline during the 
months of November and December. During the months of January and 
February there is a fairly substantial increase but it does not reach 
the October peak. From this noint is a gradual decline with upward 
flurries until July, which usually has the least activity of any month 
in the year. 

In the absence of monthly nroduct ion figures Chart I has been pre- 
pared from nayroll indexes. For the years 1931, 1932, 1933 and 1934, 
and eight months of 1935, in order to show more granhically the seasonal 
changes in production. With the exception of the year 1935, which seems 
to have been an abnormal year, the amount of nayrolls of the years 
covered, indicates seasonal changes similar to those described in the 
foregoing paragraph. It is noted that the nayrolls of the peak month 
of October for the years 1931, 1932, 1933 and 1934, respectively, are 



9823 



■ ■.. 

v-er cent) 38.3, 95.2, 38.2 and 79.1 conroared -ith 
the payrolls of the least active nonth of July of 76.7, 50.5, 73.5 and 
59.2. The extent of change for e,->„ch of these years, respectively, are 

21.6, 44.7 and 19.',). 

r pot:s atd zizpcrts . 

tent to which the knitted outerwear product is imported and 
exported is sho'.m to ue negligible by what statistics there are availa- 
ble. Product classifications of the U. S. Tariff Conraission make the 
data from this one source inadequate for a detailed discussion. However, 
the data in the following table shov? generally the extent. 

'TABLE 'CCVI - KNITTSD OUTEFi.rSA? IlfflTJSTHY 
iOM-JUCf 07 PRODUCTION, I ! PORTS AKD 32P0EITS • 









3mbroid- 


, 










Cotton 


col 


erd « 
idol 


Silk 


Rayon 




Total 


Production 1/ 














1927 




2/ 


2/ 


. 2/ • 


2/ 




8124,800,959 


' 1929 


2 1 


2/ 


2/ 


1 2/ 


2/ 




145,086,149 


1931 


11 




2/ 


2/ 


2/ 




107,299,408 


: 1933 


2/ 




2/ 


2/ 


2/ 


3/ 


90,166,644 


1934 


2/ 


2/ 


2/ 


2/ 


2/ 




2/ 


Labor ts 










• 






1927 


2/ 


- 1,929,197 


2/ 


$75,255 


2/ 


£/ 


2,004,452 


1929 


2/ 


2,561,958 


2/' • 


95 , 115 


2/ 


i/ 


2,657,073 


1931 


$104,320 


2,052,510 


847,059 


36,496 


816,397 


2,236,782 


1933 


122,344 


1,439,445 


23 , £07 


7,017 


5,885 


1,599,278 


1934 


242,605 


1,086,431 


21,395 


- . ;9 -- 


10,519 


1,369,745 


1935(3 10 s) 342, 141 


510,213 


7,884 


4,788 


4,25' 


D 


959,276 


Zxoorts 






• 










1927 


412,378 


5/ 841,' 4 


2/ 


2/ 


2/ 


6/ 


754,162 


1929 


419 , 344 


5/1,094.748 


2/ 


2/- 


2/ 


6/ 


1,514,587 


1931 


101,312 


5/ 779,870 


2/ 


2/ 


2/ 


6/ 


831,682 


1933 


46 , 749 


5/ 53,t:71 


2/ ■ 


2/ 


2/ 


6/ 


105,420 


1934 


62,551 


5/ 66,836 


2/ 


2/ 


2/ 


6/ 


129,437 


. 1935( 


3nos) 48,810 


5/ 79,042 


2/ 


2/ 


2/ 


6/ 


127,852 


1/ Hot 


including athletic hosiery 










2/ Hot 


available. 














8/ Pre! 


.ininary. 














±1 rot 


including col 


;ton or rayon 


knit out 


ervear. 








5/ Tool 


. knit bathing suits only. 










* 


6/ Hot 


including silk or rayon knit outerwear. 






• 



.Sources: Production, Census bulletins on Knit Goods; imoorts and 

exoorts, Foreign Connerce and navigation of the United States, 
Deioartnent of Connerce. 

9823 



£34 

There has been k substantial decrease in imports since the peak 
year 1929. At the same' tine ther-e was a decrease in the amount of 
domestic production. Little change is shown in the proportion of 
imports to the domestic production from 1927 to 1933, the 1927 year 
imoort being 1.6 -oer cent of domestic production; the 1929 year imports 
being 1.3 per cent; the 1931 year being 2.1 -oer cent; and the 1933 year 
being 1.8 per cent. This proportion for the year 1934 is believed to 
be slightly lover because there is recorded elsewhere an increase in 
domestic production for that year. -The figures for the eight months of 
the year 1935 do not promise any increase in imports for this year. 

Exoort figures during these years have behaved somewhat differently 
from the import figures. The figures increased in 1929 to be double 
those for 1927 with the year of 1931 bringing exports back to almost the 
1927 level. The 1933 year saw a decrease over 1931 from $881,682 to 
$105,420. The following year 1934 brought the figure up to $129,437, 
and the eight months sho'wi for 1935 promised an increase over that. 
Exports for the 1927 year were only 0.6 oer cent of domestic production, 
for the 1929 1.0 per cent. It is not possible to compute these 
percentages for 1934 and 1955, but it is obvious that they cannot be 
over one-half of one per cent, if that much. 

. Despite the fact that statistics show imports to be of little 
relative^ importance, the Industry has been active in its work of 
fighting against importation of foreign knitted outerwear products. 
The 1929 Year Book of the national Knitted Outerwe-r Association reveals 
that as far back as 1929 the industry had, through the association, 
presented pleas to the Eederal Government for protection against 
foreign goods. The Ways and Means Committee of Congress, the U. S. 
Tariff Commission and the Custom Courts located in New York have records 
of these pleas. During NRA, the Code Authority for the Industry 
presented a case to the Imports Division of the National Recovery 
Administration, These cases usually involved a specific type of product. 
During TEA the hand knit beret was principally involved. Also, there 
was some controversy with the Customs Courts over the size classifica- 
tions of infants' outerwear. 

DISTRIBUTION METHODS . 

There seems to be a wide variety of methods employed by members of 
the knitted outerwear industry in the distribution of the product. 

Some manufacturers sell their product direct to wholesalers, jobbers, 
retailers and consumers. There are some who sell through brokers, 
commission houses, and other selling agents. 

There are jobbers' in the industry who supply goods to contractors 
for manufacturing and pay them for the service of manufacturing the 
goods. Goods thus manufactured are sold in the first instance by the 
jobber. 

The following table based upon the latest available figures 
indicates the extent of use o" the different methods of distribution: 



9823 



C'S C 



•■:."■ 



::■: "::vn - xitittl^qvit^VEap.: industry 

EXTEIIT 07 USE 07 DISTRIBUTION I'ETKODS 
'(1929)'. 



Total Sales. 



Sel-ling 

Value 
(?0B factory) 



'Per 
Cent 
of Sales 



Humber of Plants 
Selling 
exclusive- 
ly as in- 
Total dicated 



(*)S147,432.00Q- 100.0 (**)690 



Sales tbxoagh'jnfgrs, ' 

agents, selling agents, 
brokers or commission 

houses ' .\ 

Sales direct to sales 
b ranches, _ dealers or con- 
suns rs 



27,427,000 



13. C 



141 



69 



Total Distributed 
Sales 



120^055,000 81.4 



621 



549 



(*) 147,242.000 1 00 .0- (**)G87 



Sales to mfgrs' own 
Who 1 q sa 1 e b r an c he s ( * ' " * ) 



Sales to mfgrs' own 
r e t t i 1 branches 



4, £05, 000 



3.1 



50 



16 



Sales to Dealers 
Wholesalers -- 
Retailers 



1.81 1,000 



1.2 



18 



75,758,00 
59,041,000 



51.5' 
'••40.1 



407 
335: 



256 
187 



Sales to Consumers 

Industrial 

Household 



3,129,000 
2,B9S,000 



2.1 
•2-.0 



.31 
53 



4 
26 



Source: U". .S. Census, Distribution -of Sales -1929 

(*) Total s;leG of Industry amounted (1929) to ^147,482,000. Manu- 
facturing plants -ere able to classify $147,242,000 worth of these 
sales, according to tyoes of customers. The difference between 
these two suis (S240,000) represents the value of sales by' plants 
which reported sales to manufacturers' 'agent, selling agents, 
brokers or commission houses, with further distribution unknown. ^ 
This amount is not included in "total distributed sales. " 

(**) Total number of manufacturing nlants engaged -primarily in 'making 
knitted outer-ear is 757 of these, 67 did only contract work, and - 
3 sold entire output' to agents with further distribution unknown. 
Inasmuch as some plants. sold in more than one way, this figure is 
less than total of figures shown belo" it. 

(***)This report does not show distribution of sales of manufacturers' 
own branches. 



9823 



£36 

Sales through manufacturers' agents, selling agents, "brokers or 
commission houses made by 141 members out of a total of 690 who reported 
sales figures, represent only 18.6$ of total sales, while sales direct 
to sales "branches, dealers, or consumers made "by 621, out of the total 
of 690, represent "81.4$ of total sales. Of the 141 members of the 
industry engaged in selling by the first method, 69 sold exclusively 
by that means and, of the 621 member's enraged in selling direct, 549 
sold by the direct method exclusively. Thus it can be seen that the 
method of selling direct to sales branches, dealers, or consumers is 
used to a far greater extent than the other. The further breakdown 
shows the relative importance of sales, through both direct selling and 
selling agents, made to wholesalers, retailers and consumers. It is 
noted that sales to wholesalers amount to 51.5$ of the total for all 
sales reported, with the sales to retailers following at 40.1$. Sales 
to manufacturers own wholesale and retail branches amount to 3.1$, and 
1.2$, respectively. The sales to consumers amount to 4.1$, of which 
2.1$ is to industrial consumers and 2.0$ is to household consumers. 
It is also seen that out of the total 687 plants covered, 407 sold to 
wholesalers; 335 sold to retailers; 30 sold to their own wholesale 
branches; 18 sold to their own retail branches; 31 sold to industrial 
consumers; and 53 sold to household consumers. 256 were engaged in 
selling exclusively to wholesalers; 187 '•■ere engaged in selling 
exclusively to retailers.; 16 sold exclusively to their own wholesale 
branches; 4 sold exclusively to industrial consumers; and 26 were engaged 
in selling exclusively to household- consumers. 

Use of direct selling methods by manufacturers necessitates the 
employment of a sales force. There are exceptions, however, in cases 
where a business is so small as to permit the owner, or some other 
official, to handle the selling. 

Selling through brokers, commission houses and other selling agents 
usually disposes of the services of .salesmen, as they replace the 
salesmen and collect whatever commission the salesmen would gain. This 
type of selling agent also collects, in some cases, 'fees from retailers 
and others for whom the merchandise is purchased. 

TRADE PRACTICES . , " '-, 

REGULATORY MEASURES: The first known efforts in industrial 
regulation were made on November 21, 1929 when a "Trade Practice 
Conference" was held in Chicago under the direction of the Federal 
Trade Commission. According to a statement issued January 28, 1932(*) 
by the Commission, members of the industry, estimated to represent 60 
per cent of the industry's production, adopted at the conference 
resolutions embodying various trade practice rules. 

After consideration of the resolution, the Commission reworded 
some of the rules and divided them into two groups. Group I the 
Commission approved: Group II the Commission "accepted as expression" 
of the policy by the trade. 



(*) See Press release of F.T.C, re: Knitted Outerwear Industry, 1/28/32 
9823 



237 

Groom I rules related to rrractices such as false branding of 
v.-c'luctsi false advertising, -crice' discrimination, secret payment of 
rebates, selling goods below cost and shipping goods on consignment, 
without bona fide orders. (*)• • 

Group II rules related to the practice of usurping designs or styles, 
individual freedom in auoting sales terms and establishing prices, 
arbitration and provided for a "committee on Trade practice" to cooperate 
with the Commission. (**) 

In 1933, after a Code of Fair Competition for the Knitted Outerwear 
Industry had been proposed to NBA but in advance of its approval by the 
President, the sportswear group of the industry selling to the retail 
trade adopted voluntarily and bound itself by a set of fair trade 
practice rules. (***) 

These rules, which were to be in effect pending adoption of an 
NBA code embodying trade practice rules, related to and prohibited 
shipping goods on consignment; misbranding or -false marking of products; 
misrepresentation or false advertising; special allowances or rebates 
to customers; furnishing customer special accessories free of charge; 
payment of commissions to resident buyers; payment of customers' 
advertising costs; selling goods without profit; selling other than 
f.o.b, shipping point and acceptance' of returned goods except for defects 
or alterations, without a permit. Other of the rules provided for 
maximum discount rates arid terms of sale, for a policy of arbitration, 
for limited prohibition of 'free sampling, for absorption of taxes by 
customers, and for additional charges for special measurements of 
goods. (****) 

The NBA Code of Pair Competition for the Knitted Outerwear Industry, 
as approved by the President on December 18, U33, contained three 
articles dealing with trade practices. (*****) 

The first article - known as "Article X", entitled. "Trade Practices" 
-contained provisions specifying a "billing point" for shipments and 
sales terms with maxLjum discount rates; and providing for complete 
prohibition of misbranding, misrepresentation and secret rebates; and 



(*) See Press Bolease of F.T.C. re: Knitted Outerwear Industry, 1/28/32 

(**) See Press Belease of F.T.C. re: Knitted Outerwear Industry, 1/28/32 

(***) See "Knitted Outerwear Times" issues of November 11 pnd 24, 1933. 
Published by National Knitted Outerwear Assn. N.Y.C. 

(****) See "Knitted Outerwear Times" issue of November 24, 1933. 

Published by National Knitted Outerwear Association New York City. 

(*****) See Knitted Outerwear Code. Codes of Fair Competition as approved 
Government Printing Office Volume II page 367. 



9823 



limited prohibition of acceptances of returned goods, shipments of 
goods on consignment, and sales of goods "below cost. 

The second - known as "Article XI" entitled "Standards" -directed 
that all merchandise not manufactured in accordance' with standards to 
"be adopted by the industry and approved "by the U.S. Bureau of Standards 
be marked with a "substandard". This article also directed that all 
industry products be marked with an NRA label as a symbol of code 
conroliance. 

The third' article - known as "Article XII" entitled "Contracting"- 
provided that manufacturers of knitted outerwear should pay for contract 
service such rates as would enable the contractor or sub-manufacturer 
to Day employees at least code wages and to sufficiently cover 
overhead. (*) ... 

Upon recommendation of the industry, given through its code .' 
authority, the "selling below cost" provision of Article X of the code 
was modified by code amendment on June 2, 1934. (**) This amendment 
authorized the establishment of the- "lowest reasonable cost" of 
merchandise and directed that manufacturers not sell below it when ( 

such was established and an "emergency" situation was declared to 
exist. The provisions of this amendment were also applicable in. costs 
of payments to contractors or sub-manufacturers for contract services. 

A second code, amendment was approved September 25, 1934 on the 

basis of recommendations from the industry. These new provisions 

amended the "Terms of .Sale" provision of the code by specifying 

separate terras to be used in the sale of knit fabric; the "Returns" 

provision of the code by defining the circumstances under which returns 

of knit fabric might be accepted; and the "Delivery Charge" provision 

providing knit fabric might be sold f.o.b. shipping point or New York 

City. (***) By these new provisions was added a rule prohibiting 

manufacturers' payment of special accessories for customers and a 

rule imposing a limited prohibition of .advertising allowances. 

.' * 

Since the invalidation of ERA codes, no further regulatory measures 
have been taken as far as the writer lias been able to ascertain. 
Attempts to formulate a voluntary trade code with trade practice rules 
included were unsuccessful. 

Records available for research are found to be pitifully bare of 
facts regarding the industry's need for any of the trade practice rules 



(*) Discussion of the Contract System of Production appears in 
Chapter V. .... 

(**) See Amendment No. 1, Knitted Outerwear Code. Codes of Fair 

Conroetition as approved Government Printing Office Vol. IV pg»- 199. 

(***) See Amendment No. 2, Knitted Outerwear Code. Codes of Fair 

Competition as approved Government Printing Office Vol... XVII 
Page 193. 

9823 



.their operation within the industry. Accounting partly for this 
is the fact that during the tine when the industry dealt with I IRA. in 
drafting the cod';,., most of. the real factual data concerning the industry 
and its needs were given in unrecorded conferences. 

MISBRANDING AND MISREPRESENTATION: Designed to prevent the unfair 
use of misrepresentation or misbranding are Rules I and 2 of Group I 
of the Federal Trade Commission, the second and third rules of the 
sportwear group, sections (c) and (d) of Article X of the NBA code, and 
section (a) of Article XI of the NRA code. 

Falsely marking or branding products for the puroose or with the 
intent of misleading or deceiving purchasers with respect to the origin, 
trade harking, quality, yarn content, or construction of such products 
constituted misbranding. 

Publishing advertisements in any form which is misleading or 
inaccurate in any respect and in any way misrepresenting any credit terms, 
values, policies, services, nature or form :>f business conducted, or 
any goods with respect to their use, trade mark, grade, quality, 
quantity, origin, size, substance, character, nature, finish, material 
content or preparation constitutes misrepresentation. 

Cases involving misbranding and misrepresentation have been cited 
by the Federal Trade Commission. A case of misbranding which may be 
used as a good ezample of the practice (*) is one iT here a manufacturer 
nroduced and sold a rrroduct labeled "Persian Pelt" which was in fact 
only a knitted imitation not made of the r>elt of the Persian lamb or the 
pelt of any other animal. While this product was sold, to the 
manufacturer's customers, as an imitation,' it was so labeled that it 
was improperly represented to the ultimate consumer. The decision of the 
Federal Trade Connission recognized this practice as a violation of 
law and directed the viola'tor to "cease and desist" from the practice, 

A common tyoe of misrepresentation in this industry is the one 
where business concerns, with the ^-ord "Mills", or the words "Knitting 
Mills" added to their names, represent themselves to customers as 
manufacturers wnen, in fact, they do not Own, operate or control any 
woolen mill or other factory but only purcnase merchandise for resale. 
Cases of this type a.re common to the' Federal Trade Commission: and have 
been determined by it to be in violation of law. (**) 

Other common cases of misrepresentation are found in the practice 
of one concern employing titles or trade marks similar to the ones 
employed by another, where the tendency would be to mislead purchasers. 
This type is also common to the Federal Trade Commission. A specific 
instance is a case where one concern developed its product and made it 
known to purchasers, through costly efforts, as a standard brand of 



(*') See Federal Trade Commission Docket No. 1921 in the matter of 
Jose'oh F. Brandler. 

(**) See Fed'eral Trade Commission Docket No. 1365 in matter of 

Western '/oolen Mill's Comoany. 
98P3 



240 

high quality, marked "HYGRADE 1 ' t and another concern subsequently adopted 
the same marking for similar nroductsi The use of the mark "Hygrade" 
by the latter concern misled purchasers into buying products of the 
latter when they intended to buy the original ''HYGRADE*' product. The 
Federal Trade Commission, in its decision on the Case» found this last 
firm in violation of law and ordered it to desist from Using the mark 
"HYGRADE". (*) 

Section (a) of Article XI of the Knitted Outerwear Code was some- 
thing new to the industry as a rule to enforce the use of product 
standards. The Bureau of Standards reports that no commercial standards 
for the Knitted Outerwepr Industry have ever been approved. Efforts on 
the part of the industry and that bureau were made during NRA to 
develop standards for sweaters and bathing suits but difficulties due 
to style changes were encountered, causing the work to cease in the 
snring of this year. 

SALES TERMS: Standard terms of sale were not covered by the 
Federal Trade Commission's rules. The eighth and eleventh rules of. the 
Sportswear group and sections (e) and >(b) of Article X of the Code, 
as first approved and later amended, cover the terras of sale. 

It is believed that the 3/10 e.o.ra. discount rates for wholesalers 
and 'the 8/10 e.o.n. discount rate for retailers were adopted for 
inclusion in the code because they represent the discount terras which 
had been generally recognized in the industry as being fair and 
reasonable. 

These rates appear to have worked generally to the satisfaction 
of the members of the industry. There were movements among the resi- 
dent buyers for the allowance of larger discounts for quantity purchases. 
The National Rete.il Dry G-oods Association, at the time of the public 
hearing on the proposed knitted outerwear code, went on record as 
desiring quantity discounts. This association, on the other hand, was 
strongly opposed to the fixing of maximum discount rates in any codes. (**) 

The movement for quantity discounts had an unfavorable reaction 
in the industry. The Code Authority armed itself against the movement 
by a code interpretation that such allowance would be in violation 
of the code. The well known defense, that such a oractice would tend 
to eliminate the small business firms, was used. Further the industry 
pointed out that a rejection of requests for additional discounts would 
not inflict injury on the consuming public because the ' economies' effected 
by mass production would be spread to all purchasers rather than 
segregated to volume buyers. (***) 



(*) See Federal Trade Commission Docket Ho. 763 in matter of 
Hygrade Knitting Co. , Inc. 

(**) See letter of 10/10/55 from national Retail Dry Goods Association, 
to NBA, Central Files, NRA, 

(***)See "Knitted Outerwear Times", issue of August 17, 1954. Published 

by national Knitted Outerwear Association "T.Y.C. 
9825 



:.•: c4l . ... . . 

There is found *io'vhere or. record reasons for the rule of the 
sportswear group and of the code as first approved that merchandise 
"shall be sold f.o.b. shipnii/g >oi -i =.t, except deliveries within the 
metropolitan areas loca":. to the shipper." 

In March, 1934, members of the industry located in Philadelphia 
applied to the Code Authority for exception from or revision of the 
shipping -point rule so as to be permitted to .prepay shipments into 
New York. These members of the industry claimed that the clause put 
them at a severe competitive disadvantage and menaced them with the 
loss of their accustomed share of the New York market. New York 
manufacturers were not placed in a similarly awkward position insofar . 
as the Philadelphia market is concerned, it was stated, because 
Philadelphia buyers habitually visited New York for their purchases 
and did not confine their orders to local producers. Available data 
does not show the outcome of the application. (*) 

The addition of the sentence, "All Knitted Outerwear fabrics 
shall be sold f. o.b. shipping points or f.o.b. New York City" to the 
code rule by amendment in September 1934 was supported by a claim that 
"the use of knitted outerwear fabrics by the cut ting-up trade is so 
preponderantly in New York that manufacturers of the knitted outerwear 
fabrics in New York would be at a very great advantage over manufacturers 
of knitted outerwear fabrics in other parts of the country if they in 
New York were the only ones permitted to ship, assuming the cost of 
freight." (**) 

RETURNED GOOES: None of the Federal Trade Commission rules concern 
the subject of returned goods. Attention is called to Rules 13 and 14 
of the sportswear group and Section (f) of Article X of the code (as 
first approved and later amended) which relates to the subject. 

The operation or effectiveness of the rules on this subject by 
the sportswear group are not known. The code provisions, however, bore 
out much in the way of discussion and controversy. 

At an industry meeting of bathing suit manufacturers, held five 
months after approval of the code, possible plans for special rules 
governing the return of bathing suits were discussed. (***) 

Suggestions for plans discussed were: 

"1. A 50 per cent credit to retailers on all returns, 



(*) See "Knitted Outerwear Times", issue of March 16, 1934. 
Published by Same as above. 

(**) See Transcript of Public Hearing of June 7, 1934 - Knitted 
Outerwear Indus-try, N.R.A. files. 

[**•) See "Knitted Outerwear Times", issue of April 13, 1934. 

Published by National Knitted Outerwear Association N.Y. C. 



thereby ..'SDlit-tin-g- thccus-t .of -the .suits- between, 
manufacturer, and; retailer. ', 



,~. ■** 



"2. The establishment o 
three or nore centr-il 



regional return boards in 
located cities no as to 
■ pass judgment on the justification of returns. 
All returns would be sent to these boards which 
would be comprised of representatives of retail- 
ers and manufacturers. It was pointed out in ob- 
jection to this arrangement that it would be cum- 
bersome, slow and expensive. 

"3. The installation of some, variation of the return 
permit system whereby permission to make the re- 
turn must be> sought from the manufacturer. This 
method was developed by the National Knitted Out- 
erwear Association some years ago and has produced 
excellent results for members of the organizations 
utilizing it. ... 

"4. Stipulation of a percentage leeway permitting re- 
■: tailers to return a stated percentage of their 

annua]- purchases. Several percentages were ten- 
tatively advanced." 

The group voted to "ban the return of worn suits except for repairs; 
with unworn garments accentable for return because of defects in 
manufacture and/or material-, provided such return is made within thirty 
days of receipt." Provisions ^ere made for appeals for exceptions to 
be made to the Code Authority. 

At the meeting a dyeing expert told the group that it would be 
impossible to guarantee dye fastness exceot in cases of suits selling 
over $15.00. Basing his statements on actual test, he claimed that 
various climates and humidities a"fect bathing suits in different ways, 
causing fading at various rates of speed. 

The Code Authority, on the tenth of .April, 1934, the day following 
the meeting of bathing suit manufacturers, adopted return rules for the 
entire industry which were suDstantially the same as those adopted to 
govern bathing suit returns. (*) : 

Later, on June 15, 1934, the Code Authority mailed notices to 
retailers of the industry's products informing them of the circumstances 
under which return goods would be acceptable and of the procedure to be 
observed in making returns. 
. ...:'." 

The circumstances under which goods might be returned were set 



(*) See "Knitted Outerwear Times", issue of Aoril 13, 1934. 

Published by national Knitted Outerwear. Association N.Y.C. 



I 



£43 
forth in the notice as follows: 

"(a) Knitted outerv/ear manufacture) rs nay accept the 
return of worn garments for purposes of repair 
or for adjustment only when the return is made 
because of proven inherent defects in material 
and/or manufacture not discoverable before wear* 

"(b) Knitted outerwear manufacturers may accept the 
return of unworn garments only for defects in 
material and/or manufacture provided that such 
return is made within thirty days after receipt 
by the customer." 

The procedure to be observed, as outlined in the notice, read as 
follows: 

"1. That the merchant send the manufacturer a written 
request for permission to make such return, stating 
in detail the reasons therefor and sending a copy 
to the Code Authority : 

"2. That the manufacturer agree and be able to main- 
tain the position that the return is justified 
under the terms of this code definition: 

"3. That the written reouest of the merchant, together 
with all details relating to such returns be ore- 
served by the manufacturer and made available for 
inspection by the Code Authority upon its request." 

The notice closed with the statement that: 

"Appeals from the above may be made directly to the Code 
Authority. Your cooperation will help equitably solve a 
problem that has long been perplexing both manufacturer 
and retailer." 

Response to the notice came from the retailers in the form of 
opposition, the expression coming by way of the National Retail Clothiers 
and Furnishers. (*) 

The opposition expressed recognition of the fact that there existed 
clear-cut cases where the manufacturer had no right to accept the 
return of merchandise and the retailer had no right to demand it, but 
claimed that some knitted outerwear manufacturers distorted the 
"Return" provision of the code to their own advantage. 

The National Association of Retail Clothiers and Furnishers 
asserted that it had never condoned the unwarranted return of merchandise. 



(*) See "Knitted Outerwear Times", issue of August 24, 1934. 

Published by National Knitted Outerwear Association N. Y.C. 

9823 



For fifteen years it had spent tremendous sums 'of money teaching 
retailers how to buy, how to budget stocks, and how to maintain stock 
control systems, it was claimed, Despite this, the retailers' spokes- 
men claimed, there will always "be returns — justifiable ones and ones 
on which honest opinion might differ. In instances where there is 
controversy, the manufacturers should accept the return, it was argued, 
because the retailer is always obliged to make a satisfactory adjustment 
when the customer returns a garment that is defective or apparently so, 
and is justified in shunting the garment back on his manufacturer. 

The National Association Retail Clothiers and Furnishers further 
complained that code provisions, especially tnose of the knitted out- 
erwear code, complicated, the situation by reauiring a Tetter to be 
written the manufacturer with a copy sent to the code authority. It 
ras also pointed out that knitted outerwear is only one of many items on 
the retailers' shelves and the varied provisions of codes covering all 
merchandise carried in stock subjected the retailers to damaging con- 
fusion in attempting their observance. ■ 

When a code provision or law becomes arbitrarily nrohibitive, it 
loses all force and effect and, unless manufacturers' code provisions 
are reasonable, they will ultimately become entirely futile and useless, 
the association predicted. 

In concluding its statements, the Kational Association of Retail 
Clothiers and Furnishers announced its wish to cooperate with all 
Code Authorities but asked further consideration of returns regulations 

so as to permit retailers to make justifiable returns with a minimum 
of effort, cost and delay. 

Opposing the contentions of the retailers' groups, the Knitted 
Outerwear Code Authority said that retailers as well as manufacturers 
should take -cognizance of code requirements when seeking returns, 
instead of feigning ignorance and thereby fostering code violations. 
In reply to the retailers' argument that manufacturers should accept 
returns in doubtful cases, the Code Authority asserted that "returns" 
had become a problem only through an abuse of the privilege by the 
retailor. 

The letter requirement, explained the Code Authority, was to enable 
the manufacturer to learn of the basis of return before he had returned 
merchandise placed in his hands. 

No modifications of the return rules are found to be recorded. 

In the Knitted Outerwear Times, issue of March 21, 1935, there 
appeared an article written by the Executive Director of the Code 
Authority and the National Knitted Outerwear Association, which states 
in part: 

"Unjust returns were, as near the present as two years 
ago, one. of the most costly items confronting the 
average knitted outerwear manufacturer." 

"Times have changed, however. Most manufacturers 
9823 



245 

boast of appreciable reductions in returns. Of course, the 
Code is entirely responsible for this drastic curtailment of 
an annoying expense. (*) 

Later in the spring of 1335 through the National "nitted 
Outerwear Association, placards displaying letters stating that no re- 
turns of knitted goods would he accented were distributed to retail- 
ers for posting in stores. There is evidence that retailers accordad- 
an enthusiastic reception to the placards. (*) 

An examination of data on this subject indicates that in the 
return of merchandise, there are evils damaging both to the retailer and 
the industry, and that blame for the existence of such evils can be 
attributed to both, 

REBATES AND MMU?*CTU2EES' FaYI-ENT OP CUSTOMERS' ACCESSORIES 
AND ADVERTISING: Attention is, called to Rule 4 of Group I of the 
Federal Trade Commission the fourth, fifth sixth and seventh rules 
of the sportswear group, and to Section(g), (i) and (j) of the code 
(as first arroroved -and later amended) , which rules and sections relate 
to this subject. 

These rules, with the possible exception of the sixth rule 
(Re; Rebates to Resident Buyers) of the sportswear group, were de- 
signed primarily to prevent the payment or allowance of rebates, 
refunds, commissions, or unusual discounts to customers whether in 
the form of money, advertising, special services or privileges, 
accessories, or otherwise when done secretly, or when the effect 
would be to allow unf~ir competitive advantage to pny manufacturers 
of customers. 

General arguments from the industry point out, that without the 
prohibition of these practices, evils easily arise. Customers of the 
industry ''ould have manufacturers at the mercy of their demands. 
Manufacturers, not knowing the cost of the service accessory items, 
of advertising would not be able to calculate their cose properly. 
Improper calculating of cost would lead generally to ouctation of 
prices not including sufficient profits. The small members of the 
industry could net stand against customers' demands and would, in 
many cases, have to retire from the race because of the endurance of 
the larger and better-equipped members, 

Further, it is claimed, there -would be given to customers by 
"chiseling" manufacturers, rebates disguised as advertising and ac- 
cessories which would more quickly tend to eliminate the unsuspecting 
competitors. 

The sixth rule of the sportswear group is a type which has 
caused much discussion. The industry submitted to N.R.A; such a rule 
in its proposed code of fair competition but due to opposition of the 



(*) See ."Knitted Outerwear Times" is^ue of March - .?!", 1935 
(**) See "Knitted Outerwear Times", issue of May 9, 1935. 

Published by Nationsl Knitted Outerwear Association, N.Y. C. 

9823 



246 

Hew York Buyers Association, a group of commission residents "buyers, 
and to the finding that infliction of such a rule "ould completely 
eliminate certain types of "buyers, it never reached approval. 

Later, in June of 1334, the same rule was again proposed as a 
code amendment by the Code Authority. 

In supisort of this proposal the Code Authority oictured an evil (*) 
where commission resident buyers, employed by retailerd, collect 
compensation from both retailers and manufacturers. Such a practice, 
to which the manufacturers have reluctantly submitted, was a development 
coming from ether industries within the past two or three years and 
growing pith the depression, the Oode Authority said. It "as claimed 
that the practice was a duolicity cf functions; that it caused 
manuf acturers' salesmen to be deprived of their earnings; that the 
amount of commission to the resident buyer was sn item which could not 
be properly calculated in the manufacturer's cost; and that it caused 
a discrimination between two tyoes of buyers placing the manufacturer in 
an ambigous position. 

Opposition again came tlirough the Ne rr York Buyers Association. 
Its representative again pointed out at the hearing (**) that adop- 
tion of the proposed rule would eliminate the commission resident 
buyers who had been recognized and employed by the trade. The 
representative cited the Gavin Bill, passed by the State of New York 
Legislature in 1928 but vetoed by Franklin D. Roosevelt, then Governor 
of New York, which, if out into operation, would have had the same 
effect as the rule. Roosevelt was quoted in saying - "I think it 
particularly inadvisable to permit a certain class of buyers to be 
licensed so that they can exclude another class of buyers from carry- 
ing on their business." 

More than fifty members of the knitted outerwear industry filed, 
separately with the NRa, statements expressing their satisfaction in 
dealing with commission resident buyers and asking that they be not 
eliminated. (***) 

Because of this last evidence, the proposal for the rule was 
not entertained. 

CONSIGNMENT SELLING: Rule 6 of Group I of the Federal Trade 
Commission the first rule of the sportswear group, and Section (b) 
of Article X of the Code deal with consignment selling. 

A statement concerning the consignment selling practice in the 
industry appearing in the industry's oublication is taken to describe 
the situation. The statement is part of an article written in April 
1935 by the Excutive Director of the Code Authority and the National 



(*j See Transcript of Knitted Outerwear Fearing of June 7, 1934, 
Statements of Sidney S. Korzenik, page 89. NRA files. 

(**) See Transcriot of Knitted Outerwear Hearing of June 7, 1934 
Statement of Leon I.i. Scharf, o pi Z e 151. 

(***) See NRA Central files. 



247 



Knitted Outerwear Association. It reads: 

"Abolition cf consignment sales is another imraeostir. - 

,.ble benefit to the industry wrought by the Code -hich 
would evaporate should the National Industrial Recov- 
ery Act be allowed to lapse. 

"Consi;nment spies ••ere regarded as a vicious abuse 
b-, r members cf the industry long before the appearance 
of 2EA on the industrial horizon, Despite the fact 
that this attitude generall*- prevailed, sales cf this 
nature continued largely because there were a few who 
did comply with requests of retailers. This condition 
helped to prevent weaker competitors from abandoning 
these unsound, unsavory tactics, even though they may 
have wished to stay clear of them. 

"Co better way of undermining a market ever existed 
than through this pernicious type of selling. Retail- 
ers refusing to accept ?ny responsibility, welcomed 

merchandise en this basis and placed it on their count- 
ers. TThon it sold, they gained. '.Then the consumer 
passed it by, it ?7?s turned back promptly en the manu- 
facturer, without loss to the outlet. 

"A low figure was -olaced on the merchandise because it 
did not held the confidence of its producer, tending 
in this way to undermine the price structure, -hich was 
weak enough for other re-sons. Consignment selling con- 
tributed further instability because manufacturers could 
never be sure that the merchandise was sold until they 
actually received checks in payment. T^ e Y lived in a 
highly artificial atmosphere of ho-nes which '--ere fre- 
quently shattered. 

"Another damaging feature was the price set on the mer- 
chandise by the retailer. Risking no mark-down because 
cf forced sale later to move the garments, he could af- 
ford to write lower price tags. Conroeting retailers who 
purchased their lines outright --ere obliged to meet this 
figure, making it necessary for buyers to endeavor to 
secure better figures when they next ordered, thereby 
de-ore ssing the market further. "(*) 

S2LLIi T C- BELOW COST: Attention is called to Rules 3 and 5 of 
Group I and Rules B and C of Group II of the Federal Trade Commission 
which deal with the subject of prices. (**) Having no access to the 
records suonorting them and because of their apparent vagueness, the 
writer is unable to make an intelligent discussion of their need, 
operation and effectiveness. 



(*) See "Knitted Outerwear Times" issue of April 4, 1935 
Published by National Knitted Outerwear jr.Y.C. 
(**) See Press Release of P.T.C. in Knitted Outerwear Industry, 1/28/32 

9823 



246 

The tenth rule (He! Selling 7ithcut Profit) of the sportswear 
C-roup is called to attention. (*) Such "a rule n^y ajroear good on na- 
per but "hen put into actual operation without a specific provision 
for determining cost, it "ould pe effective to no degree. Experience 
with the original "Selling Below Cost" provision of the code discussed 
in following paragraphs is proof of this statement. 

Attention is invited to Section (?) of Article X cf the crde. 
This provision was never effective, due to the fact that no -orinci"oles 
of costing were ever formulated. 

A change in Trice and cost provision -oclicy of NBA and the need 
for a ^rice provision to protect contractors brought about the adoption 
of pn amendment on June 2, 1934 supplementing section (a) cf Article X. 
Although submitted to KHA pursuant to this provision and receiving much 
attention, a cost accounting system was never approved. Difficulties 
in defining cost and conflicts with H2A policies are believed to be the 
cause of it not being adopted. 

The subject of prices has brought forth much expression of con- 
cern by members of the knitted outerwear industry. At a public hear- 
ing held in Hpy 1934, by K3A on the code provisions last mentioned 
above, the Executive Director of the Code Authority stated that de- 
structive price cutting was then- prevalent in the industry, and h^d 
been general for the past five years, seriously affecting small com- 
peting units and labor. It was pointed out at this hearing that 
price difficulty was then b<?ing hr-d in connection with knit -bursts, infants' 
wear, men's, boys' and ladies' contract-made wear, and men's standard 
jersey coats. At the time there was also arising -nrice trouble among 
jersey fabric (yard goods) manufacturers^**) 

This trouble, it was said by the Executive Director, was not 
found in the line of embroidered ladies' dresses and styled items but 
in the line of so-called staple items of standardized merchandise. 

An instance of price cutting cited was ^here bathing suits of 
six pounds of yarn to the dozen were first ul^ced on the market at 
$12 or $13 per dozen. Sone ccuroetitor in the field c-^rne out with a 
$10.50 per dozen suit and then another came out vrith a five nound 
suit for $10 per dozen. This situation brought about further re- 
ductions in ^eights and "orices until a bathing suit m-'de of yarn, 
costing 50 cents, could be bought in retail stores for 55 cents, 
still another was cited on jersey coats. 



(*) See "Knitted Outerwear Times" issue of November 24, 1933 

Published by National Knitted Outerwear Association, New York City 
(**) See transcript of Knitted Outerwear Industry Hearing of May 12, 
1934, Statements of Harold ~R. Lhcu-e, pages 29, 43, and 49. 
NBA files. 



9823 



These destructive oractices could not be - by the trade 

association, said the Executive Director, because of the Anti-Trust 

further statements m-de 07 the Executive Director brought out 
that some cises ox price cutting h^d ceen due to an eff-rt cf manu- 
facturers to heep the product in the price range prevailing before 
the Code in order to ma';e it available in the s^me type of limited 
price range store. This, it was said, had actually been the case 
among machine beret manufacturers. Cost -account in? studies had re- 
vealed that .pertain . units •"'ere selling belcw cost. 

It -was further said that many firms, in order to. hold down 
prices or compete with the low prices set "oj others, had violated 
nage and hour provisions of the code in order to be able to produce 
merchandise and sell it at the low prices. Confused prices engend- 
ered to some extent by increase in l^bor cost coupled with desire to 
keep prices on pre-code level, was a threat to the legitimate manu- 
facturers ..and tended to induce code violations, it -'as said.(**) 

Entering into the price discussion are statements cf 'the Whole- 
sale Dry "Goods Institute, which claim the necessity cf a differential 
between the minimum prices to retailers and minimum' prices to whole- 
salers. . ^he contentions '"•ere that: 

"TThere there is downward drift of trices ta'-ing place, 
establishment of minimum price would cause this cost 
to become the maximum, as all prices would be stopped 
and held at the s^me level; in the textile field, where 
there are manufacturers selling direct to the retail 
trade who compete indirectly with ether manufacturers 
who sell through the -.Thole sale trade, both such manu- 
facturers would be forced to sell at the same minimum 
price, automatically giving all business to manufacturers 
selling to retail, forcing manufacturers selling to 
wholesale to turn to the retail trade or go cut of 
business; and there should be- customer classifications 
established which allow the necessary differential be- 
tween minimum prices to retailer and minimum prices to 
wholesalers. «(***) 

Further contentions of the "'hole sale Dry Goods Institute 
were; that, without customer classifications, small manufacturers 
or highly specialized ones, would be denied the right to allow 

(*) See Transcript of Knitted Outerwear Industry Hearing of 

May 12, 1934, Statements of Harold R. Lhcwe, pages 45, 46 
and 47, K3A files. 
(**) See Transcript of Knitted Outer-ear Hearing of May 12, 1934 
Statement of Harold Lho-e, pages 31 and 32. MA files. 
(***) See Transcript of Knitted Outerwear Industry Hearing of 
May 12, 1934, pages 8, 9 and 10. 



9823 



250 

compensation to wholesalers for performing the service which manufac- 
turers would have to do for themselves at a great cost and "bother; that 
forcing manufacturers to service retailers direct would give monopoly 
to large retail establishments, eliminating thousands of small and 
scattered retailers, who would have to purchase through larger retail- 
ers; that chain stores should not he classified as wholesalers hut as 
retailers; that quantity "buying should he given lower prices than small 
"buying} and that there should he some " ant i- dumping" provision. (*) 

At the time of its efforts, through NFA, to stop destructive price 
cutting, the industry was working separately on plans to establish 
price ranges and maintain them by purely voluntary action on the part 
of the industry members and buyer groups. Ranges were adopted but 
little is known of the effectiveness of the plan. (**) It seems obvi- 
ous, however, that the same factors leading to price cutting in the 
first place would have the same tendency in preventing the maintenance 
of price ranges in the absence of some means of enforcement. 

■From the industry's publication are taken the following statements 
which seem to express the sentiments of the industry's "better element" 
with respect to price cutting and to show the futility in attempting 
to prevent price-cutting on a purely voluntary basis. 

"Greatly to be decried is a dangerous practice rearing its head, 
unfortunately, with increasing frequency, which is being utilized 
by sharpshooters in some branches of the industry to gain business. 
The infants' wear field has been particularly plagued of late, 
according to reliable factors conversant with the situation in 
that division. 

"The term 'price cutting' in its very worst sense might possibly 
be applied to this uneconomic procedure, but it would be more 
accurate to describe it as value- cut ting, far more dangerous in 
its implications. The trick takes the form of reducing the quota- 
tions on items from their current level to the next lower range. 
Resulting, of course, is the immediate elimination of all possi- 
bilities of profit. Foolish manufacturers or distributors indulg- 
ing in this pernicious practice are blind to this apparently minor 
detail in their mad pursuit of the usual mirage of volume. 



(*) See Transcript of Knitted Outerwear Hearing of May 12, 1934, 
pages 19, 20, 21, 23, 24, 25 and 26, NBA files. 

(**) See "Knitted Outerwear Times", issue of March 23, 1934. Published 
by National Knitted Outerwear Assn., N. Y. C. 



9823 



> 



251 

"That constant application of this economic fallacy 
leads unerringly tc bankruptcy is obvious. If only 

guilty were to suffer disaster, ■• word of cau- 
tion would be sufficient. Disregarded it voul per- 

is be better for then to be out oh t , le-vi 

the field to legitim; te producers who realize that 
the industry cannot irorress unless there is a profit. 
Unfortunate, however, is the fact that the innocent 
are in constant danger, of being dra-n into this skirl- 
ing whirlpool rnd sucked dorm as prices descend. 

"Even if existence c^n somehow be iaint=>ined, danger 
threatens from another angle, It is the host diffi- 
cult thing in the world to raise prices', des;:ite the 
simplicity involved in lowering then. The consumer 
early comes to gain an exaggerated idea of the purchas- 
ing power of the dollar. Among consumers educated to 
enect excessive value, there will be no satisfaction 
with legitimate worth, rather contempt and skyro cke.t-: 
ing charges. This ne-ns that "hen prices are finally 
moved forward a notch demand -ill be lessened so that 
the heroic efforts to raise them "-ill prove futile- as 
they slide back into the bog oelow in another effort 
to sti ml ate demand in the only way that '-nitters ap- 
parently seem to knew — lowering the price." (*) 

OHDZH CaSDELLaTIG??: Svils from order cancelL <tions by custom- 
ers of the 'industrj-' are founc" tc be cenol^ined .of only once, «.nd that 
was at a wublic hearing before F3A. "here the Cede Authority presented 
for discussion and subsequent approval, an amendment to the tr-=de 
nractice .'revisions of the code. The -nrcpased amendment read: 

"ho member of the industry shall sell merchandise 
except upon condition: 

"1. That no purchase order for merchandise 
shall be subject to cancellation before 
the specified and agreed uocn shipping 
date written on said order. 

"2. That no our chase order shall be subject 
to cancellation after the specified and 
agreed uwon shipning data -'ritten on said 
order unless cancellation is in writing 
and it permits the manufacturer five ad- 
ditional vorking days from the date of re- 
ceipt of such cancellation to complete and 
ship any and all merchandise in work at 
that time. 

"3. That no purchase order which does not speci- 
fy a shipping date shall be subject to can- 
cellation unless such cancellation is in 
writing and permits the manufacturer five 

(*) See "Knitted Outerwear Tines." issue of May 9 1835 

Published by National dnitted Cuter-ear Assn. New York City. 
9323 



additional working days from the date of 
receipt of such cancellation to complete 
and ship any and a 11 merchandise in work 
a t tha t t ime . " 

This prdposal was designed to express the obligations that any 
customer would have when he obliges the manufacturer to make commit- 
ments in fabrication of material or purchase of yarns, claimed the Code 
Authority. It was pointed out that in some cases manufacturers receive 
cancellations after .entering into the process of manufacture of the 
ordered merchandise, which would be of no value for sale to sny other 
customer. 

No uniform policy existed in the industry and many manufacturers, 
rather than offend and lose a customer, would accept cancellations 
causing money losses to themselves, it was said. 

For some reason not found recorded, this amendment was not 
approved by MBA for inclusion in the code. 

STYLE PIBACY: The knitted outerwear industry depends greatly for 
its existence upon its ability to keep attractive styles upon the 
market. Constant development of new yarns has assisted greatly. 

The knitted product is placed before the consumer with the sales 
talk that it is different from commonly- used woven products, that it 
is flexible, allowing more freedom of movement to the wearer, and that 
it is unique in design and attractive. However, it is difficult for 
the consumer to get away from the traditional woven garment. 

An existing outstanding example of the necessity for the industry 
to be on constant gu^rd against competing prodiicts from other fields, 
is the knitted and ruboer bathing suit conflict. Bubber manufacturers 
are striving to create a controlling fashion for the new rubber bath- 
ing suits to replace the knitted suit commonly used for years. 
Through the creation of more appealing designs in bathing suits, the 
competition is being comba t ted a nd perhaps can be overcome. 

Apart from competing with the woven products of other industries, 
the various kinds of knitted 'to ro ducts compete among themselves in 
styles. There are the original designs in a kind which competes with 
their copies. The competing copied designs are usually of a cheaper 
quality offered at a lower price than the original design. Their 
appearance upon the market immediately curtails the demand for the 
more expensive original design. After flooding the- market and a 
flurry of sales profitable only to the copying manufacturer, the de- 
mand for the design ceases. The results always prove harmful to the 
originator who incurred the expenses of originating and introducing 
the design. 

Such copying of designs, known in this industry as in many others 
as "Style Piracy", is a recognized evil. There has never been 
regulation upon the industry to combat this evil. Although some MBA 
codes contained provisions designed to eliminate the evil, no such 



9823 



253 

means '-ere used in the knitted outerwear industry. The use of the 
patent and cc ' r ri 5J.1t laws as means of ireventing such oracticos is 
found impracticable in this industry as well ">3 in others. 

It is reported that st ,r le piracy has increased since the lapse of 
:Ta, (*) despite the fact that the J.C1& code for the industry did not 
contain provisions restricting it. One member of the industry ex- 
plained this, '-.'hen hours -'ere fairly uniform and the minimum ^age 
provided a floor for labor cost, design piracy was not so -orof it-ble as 
it is since KEL& lapsed. In appropriating the origination of another 
during HHA, the manufacturer in the industry had to imitate, usually, 
some intricate design that would not easily acaot itself to profitable 
production because of the curt-oiled hour schedule and higher wage 
structure of his mill. It was necessary that he confine his nroduction 
to simple numbers which could be carried swiftly through the oroduction 
process with less difficulty, lest his -nroduction cost be as great 
as that of the originator. An additional exo3 --motion fjiven uas that 
there oreviled during iEA a general discipline and sense of ri:;ht and 
rron^:. 



(*) See "Knitted Outerwear Times", issue of October 10, 1935. 
Published by National Knitted Outerwear Ass'n. , N« Y. C. 



9823 



254 

CHAPTER IV 

ADKINl STRATI OlJ 0? CODS 
by 

A. Herbert Barenboim 



CODE AUTHORITY 

ELECTION OE OFEICERS AIT) ORGANIZATION. The code of fair competi- 
tion, approved for this industry on December 18, 1933, provided for the 
creation of a Code Authority (*) in the following manner: 

"This Code Authority shall consist of eight (8) representa- 
tives of the Knitted Outerwear Industry ' elected by a fair 
method of selection, to be approved by the Administrator, and 
not more than three (3) members without vote and without cost 
to the industry, apoointed by the Administrator. " 

The National Knitted Outerwear Association submitted to the NRA a 
method of electing representatives. The plan as originally submitted 
occasioned many objections by members of the industry and the advisory 
boards of the NRA. The bases of the objections chiefly were that the 
plan provided that members, of the industry should be entitled to one vote 
for each $50,000 of business done by the member based uoon the reports of 
the six months prior to the adoption of the code. The complaints alleged 
that a plan such as the above would give complete control to a few very 
large manufacturers in the industry. After majr/ revisions, the National 
Knitted Outerwear Association finally submitted a plan which provided 
that members of the industry should be entitled to cast one vote for 
each $5,000 of sales made during the first six months of 1933 of merchan- 
dise produced by him up to $50,000; and 

One vote for every $10,000 of such sales in excess of $50,000 and 

not exceeding $250,000; and 

One vote for every $25,000 of such sales in excess of $250,000 and 

not exceeding $500,000; plus 

One vote for every $50,000 of such sales in excess of $500,000. 

The plan further provided that the Code Authority should consist of 
one representative to be elected, at large, and seven manufacturer mem- 
bers or members of co-partnerships or officers of corporations which are 
members of the industry, by the various a.rea,s to be specified. That for 
each manufacturer member of the Code Authorit3>- an alternate should be 
elected, that the alternates for the manufacturer members shall be elected 
in the same manner as the manufacturer members; that there be six areas, 
five of which shall select one member and one alternate and one to select 
two members and two alternates - those areas "ere: 

1. The States of Wisconsin, L'ichigan, Illinois and i/tinnesota 



(*) Code - Article IX, Section (b), Codes of Eair Competition, as ap- 
proved. Government Printing Office, Volume IV, page 199. 

9823 



255 

Penn La, ; ra It; t = as lefined in 

the 3 

3. hio. 

<L-. Maine, N ire, ir rm it, i setts, 7." ode Islai 

'. t..e State uf ITew York, not inolu-lin ' New York 3ity. 

5. Two (2) meaner i m from t .e are<? known as New York 
Dity and the State of New Je -ey. 

6. All st: t ' ■ sst of the is is:;i; i. 

The abov2 !an was a r . " 1 (*) am! t. a associati n immediately 
e&ecl t; carry out the purposes = tab.lis id. The regional officers 
of t.e hati aial Knitted Outerwear Associati -n sub mitts.", to the 17e\~ York 
office nominations for Le .uthority member and Li irnates. Lett 
were al s: sent t. members :i t. o industry n tifyiivj t'.e that they 
pculd have an : p art-unity t; sub. nit t dr rec . .en . ti n fcr t e per- 
s:ns to be nominate! for coda authority sffice. After the ti a fcr sub- 
mitting no.iiinati ns had expired, t. . " a . .■ yti~n orinted ballots, for 
each cf tie ar a containing t.e names -f t ns nominated from 

that ar .-,- , inclu in., a '"pace fcr membe -. oi t.e inlustry t; insert the 
.. yi any other person that t aey :.u~.-t desire. Tl.e ballet r aa ted 

t'.e member of aa industry t: state tie amount oi mere andise produced 
by him luring the first six mont s of 1S33 ana t. e type of merchandise 
produced. Thers were 163 ballets cast in t e New Y.-rk and New Jersey 
area; 2S in t._e Pennsylvania area; 26 in the area west :f the Miss* 
issippi; 22 in the .Tisccnsin, hichi on, Illincis and hinnesota area; 
11 in the Ohio district, end 3d in the remaining states, or a total of 
275 ballot: cast cut of the entire membership of approximately 1200 
in fr i e i n du s t ry . 

A tally of the votes cast showed that t.e foil'. win™ persons were 
elected tc the 3ode Authority: 

Liember-at-Lar.,e - h'arold h. Lhowe 

hetr -politan District of hew York; 

Member Alternate . jerraer 

August E^erer Iser ". Cohen 

Ben JFriedlander Jade Pink el stein 

Pennsylvania District: 

Member /'J. t -mate ..em b er 

'.'lilliam Portner Ingram Her.^men 



(*) Se ; Administrative Order 16d--3 ERA files 



256 

Pacific ;:r : t: 

Member Altera etc ember 

Irwin S. Alans Ja.mes ?. 3rig ;s 

Je 3 torn Di r tri c t : 



Member ,'Jt: .r.ate j:jj ~t 

Jolm J. Phoenix David Karger 

Cleveland District: 



. ieniber .11 ternate '. leva. >er 



Adolpii J Farber Ilerjsrt Goulder 

New Pno;land d honor h'ev; Y-rk: 

i.iernb er Al t s mat - . iemb ?r 



A. Paul Cohen Arthur A. Lowenthal 

TIig Code AutAcrity selected a certified public ace antant to cAecl: 
t'-.e ballots an:-. ascertain t. a excuracy cf tAe rcu_A estimates made as 
to tAe result of tAe balloting. TAe state .ent b}' tAe accountant indi- 
cates that all the '^rs-ns who were acting as 3. A A - 1 .crity members 
Aad received a majority of t.-.e vctes wit. 1 , tAe following exceptions. In 
t. .e I' T ew York metropolitan arfea Jack Finkelstein, v: c sas designated as 
an alternate, received 31 mere vctes than Ben Friedlander who was and 
continued tc act as Code Authority member. In the Cleveland district, 
Aerbert Goulder received an e^ual v r . le to that of 'A.: 1 i' J. Farber who 
was and continued to act a- Code AutAcrity member, ant in the area west 
of t..e Mississippi, 'James ?. 3rig;,s , whe ./as named alternate, received 
two more votes tAan Irwin A Adams, whe was an.', continued to act as 
C::le Aut. ::rity member. 

drotests v:er ^ registered against tl_e ..iet : ! . of selection cf tAe 
persons elected and tAe tally of the vote': cast. It was claimed by one 
member of tAe Industry that the selecti r. of t. e Executive Director of 
t e National Knitted Outerwear .o3- j cciatien as a. member A tAe Code Auth-or- 
ity was not 'in accordance with, code requirements in that t is individual 
was net a member of tAe industry. 

AA-hLECTIA; 72 OITIOiaS. Early in July of 1954 t_e 3cde Authority 
issued notice to mernjers of t'.ie industry that nominations for members 
of tAe outerwear Code Authority sh uld be received at tAe offices of the 
Code Authority en or before July 31, 193d. The notice appeared in on 
issue of the Knitted outerwear Times, an association publication. 

It would appear fr;m t .e notice tha,t certain of the rules and reg- 
ulations for the election of Code A"ut„ority membeis were changed by the 
provisions of the by-laws adopted by the Code AuL ority, especially in 

9823 



- 257 - 

reference to the number of persons necessary to endorse an independent 
nominee to the Code Authority. In the official notice to members of the 
industry to submit nominations, no mention is made of the fact that mem- 
bers of the industry shall have the right to nominate a member at large, 
despite the fact that such member at large was to act as a member of the 
Code Authority. This was brought about by a^Code Authority by-law which 
gave to the Code Authority the right to nominate such member at large, 
and setting forth that he was not to be a member of the industry and that 
he was to act as Executive Director. Thus it would appear from the not- 
ice that members of the industry had no direct choice on the nomination 
of the member at large. They did, of course, have a direct choice in 
his final selection. 

Early in August, ballots were sent by the Code Authority to all 
known members of the industry, the ballots setting forth that a member 
must return the ballot completely filled out on or before August 22, 1934, 
in order to be counted. 

A tabulation of the ballots cast as made by Joseph L. Jonick and 
Company, certified public accountants, shows the following result; 

August Egerer end Ben Friedlander were elected as members from the 
Metropolitan District of Uew York. Ben Schanzer and Jack Finkelstein 
were elected as alternates. Again, it is interesting to note that 134 
members of the industry cast ballots in favor of Ben Friedlander repre- 
senting. 2,027.03 votes, and 178 members cast ballots for Ben Schanzer 
representing 1,976.04 votes. Thus, it appears that in the New York 
Metropolitan area, the choice of 44 more members was overbalanced ~by the 
slightly larger productivity of some of the members who voted for 
Mr. Friedlander. 

Harold R. Lhowe was re-elected as member at large. At this re- 
election there were 373 members of the industry who cast ballots for the 
nominees to the office of member at large; 756 members who cast ballots 
for the Industry representatives to the Code Authority. 

In the Pennsylvania District, the nominees as selected by the 
Association, William Portner and Ingram Bergman, were selected as 
member end alternate in that order. 

In the Western district, John J. Phoenix and David Karger were 
elected as member and alternate in that order. 

In the Cleveland District, Adolph J. Farber and Herbert G-oulder 
were elceted as member and alternate in that order. The Pacific Coast 
District elected Irwin S. Adams as member and James F. Briggs as alternate, 

The number of ballots cast for member at large was only slightly 
greater than at the previous election, while the number of ballots 
cast for area members increased by 604. Much of the increased voting 
for area members was represented by the heavy vote cast in the Hew York 
-area, in an attempt to elect independent representatives of their own 
choosing. 

9823 



258 

Tiie only changes in the personnel of the Code Authority resulting 
from the re-election were the replacement oi Iser ?. Cohen as alternate 
by 3en Schanzer, an.l Arthur Li. Lowenthal a? alternate by Aertram E. 
Green. 

pr-.tasts .-Aiiact aathcds of as-el:atia' 

Many wires v rere sent to the Administ-r'at'icn elated June 30, 1934, by 
members of tl.e industry, substantially as follows: 

'- »fe urge ycur early approval plans submitted by Knitter 1 Outer- 

wear Code AutAority for election of new Code Authority mem- 
bers." 

TAe fact that the wires were all sent on June 30th indicates that 
they were probably instigated by individuals within the Code Authority. 

A letter received 'by the Ad.uni traticn, June : 27 , 1934, reals as 
follows: ■ • 

"The undersigned represent in A 63 mill owners of the Knit Goods 
business in the, .Greater New York area strongly resent and op- 
pese t-.e proposed ..> -t A A: oi election of the memoers of the Cede 
Authority for t. 3 term t: commence July 1, 1934. , r e believe 
that an election based -'upon t..e volume of sales is inequitable, 
unrepresentative, undemocratic ana net in accordance with the 
sentiment or views of the majority, of the Industry. "7e furth- 
er believe that such' election does net c-nform ' with the in- 
tent cr wording of the Knitted Outerwear Code which provides 
for a fear and equitable manner of selection, end signed by 
Josep.. G. Grobick, President of the Interboro Knit Goods Aan- 
ufacturers' Association. " 

Another letter dated Juno 25, 1934 j addressed to Assistant Deputy 
Adi.iinistrc.tor, Liark darned, and signed oy Julius Schwartz, states that 
his law firm, on behalf of the Interbcro Knit Goods Aanuiaoturers' As- 
sociation, Inc., was opposed to tie method of the selection of the Code 
Aut .ority. It was his contention that meetings ox membe: s of the indus- 
try should be A eld in the several areas in orler to afford members of 
tne industry an opportunity to 'meet and nominate candidates of their 
own choosing, stating "any other selection seems to be rather hand- 
picked end may not truly represent the feelings of the Industry." 

CODE AUThORITY FTOCTIOITS 



LEGISLATIVE: The Code Authority held its first meeting en January 
8,1934. 

The first action of the Code Authority was to elect August Egerer 
as Chairman; h'arold R. Lhowe as Executive Director; Ben 3'riedlander as 
Treasurer; S. S. Korz.enik' (not a "member of the Code Authority) as sec- 
retary, and upon the motion of "arAld R. Ihowe, H. H. Cohen of Pliila- 
delphia, and Philip Frank el of Cleveland as Associate Counsel. The mem- 
bers present adopted 3ules and Regulations for the uje f the NPA-Code 

9323 



259 

el. The i La1 ions ado t '"ere as lollovs: 

1. That members of the Inc.ustrj who were in compliance with 

Coc e provisions shoulc. on application ot entitled to the 
use of a label. 

2. I, .at labels shoulc Dear identifying letters ana only a 
sufficient number for a month 1 :- use should be issued to 
the member. 

3. That every application for leoels should be accompanied 
by a certificate of compliance. 

That the member shall pa^ for labels ordered- at -the time 
of making application. 

t. That the labels shoulc oe securely attached to the 
garments. 

6. That laoels will oe non- transferable. 

?. That the applicant agree to permit investigation and 
inspection of his plant ana his records anc that all 
information obtained by such examination will be con- 
fidential except when necessary to enforce compliance 
with the Code and regulations. 

6. That the Coue Authority may withdraw trie right to 
use the labels from r member violating the code and 
that the member be forced to return unused labels 
on uemand. 

9. That these regulations shall apply to all garments 

made on ana after January 1, 1934.' 

10. That the regulations estaolished by the Code 

Authority may be modified or amenced and exceptions 
granted by the Code Authority at an,/ time. 

The Coce Authority then established, prices at which labels would 
be sola: 

LA-.-L A - which woulc be printec or. cotton, to be issuea at a 

price equal to the cost, plus b0$ per thousand and to 
be usee, on garments selling at , rices not exceeding 
■ 6. 00 oer dozen. 

LABhL B - a woven cotton label -"it . silk or rayon lettering 
to ue issued at cost, plus -1. C per thousand and 
to be usee on garments selling at prices not exceed- 
ing ?24.00 per cozen, except in the case of suits 
ano. dresses in which case they could be usee, on 
garments not exceeding f|>42.0C a dozen. 

9823 



260 

LABLL C - a woven satin label to be issued at cost plus $2.00 
per thousand, to be used on garments selling at 
not to exceed ^81.00 per dozen. 

LABEL L - a taffeta label to oe issuea at cost plus $5. 00 per 
thousand, to be used on garments selling. at a price 
in excess of JBSl.i'O per dozen. 

The Code Authority also provided for the use of tags and stickers 
to be usee, for members of the. industry, jobbers and retailers for stock 
on hand. 

The Code Authority in acting on its first request for an exemption 
from Article X, Section (h) of the coce, which prohioited shipments 
other than F.O.B. city of origin, decided as follows - That a manu- 
facturer who makes goods in Los Angeles may not pay freight to Pew York, 
retaining his ownership of the merchandise until it arrives in Few York 
and make delivery to hi;; customer in the Metropolitan area without 
charging^ customer for transportation. They also decided that customers 
of members of the industry ;iay not return goods even though they be 
imperfect. The latter ruling was made in accordance with orovisions of 
the Code - Article X, Section (f), in terms, which orovides as follows: 

"Fo member of the Industry shall accept the return cf 
garments that have been worn or merchandise not worn 
out which ha;; been accented by a customer except in the 
circumstances to be defined by the Coce Authority." 

The Code Authority next discussed whether or not a customer could 
return worn goods whi ch were imperfect as a result of manufacture 
deficiencies. They decided that no returns of any sort coulc be 
permitted under the code until such time as they established definite 
rules for return. 

The second meeting of the Code Authority, which was held on 
January 22, 1934, was attenc eu by all memoers of the Code Authority 
except members from the "West Coast end. Pennsylvania districts. The 
members voted to incorporate the Code Authority under the rules of the 
State of Few York, the uurpose being to jjrotect the individual memoers 
from personal liability. T'i e Code Authority also revolved at this 
meeting to establish regional code authority ofiices in each of the 
cistricts; that the meeting of code 'boards consist of not mere than 
seven and: not less than lour manufacturer memoers; that each Regional 
Code Boara with the approval of the Coce Authority establish an office 
ana select a regional director, inspector-accountant and 5ther necessary 
office staff. That the regional code boarc subject to rules and regu- 
lations as may be provided by the Code Authority and suoject to its 
supervision, to have the responsibility of securing compliance with the 
provisions of the code and to make periodic investigations and examina- 
tions of the plants ana mills of the members of the industry in the 
area. 

A Dudget committee submitted to the Code Authority a monthly budget 
for the period from January 1 to June £0, 1934. 

9823 



261 

A general c iscussion was raised as to whether or not a member of 
the incustry should be granted an exemption from Article X, Section (h). 
One of the memoers in objection to the request made the following 
statement: "I don't think it proper for us in general t« grant that 
right unless you wish to grant it as a policy. " To general decision 
was made on the application. Apparently uecause of the fear of estab- 
lishing a general policy without regrrd to the reasonableness of the 
request submitted. 

A request by the Morris knitting Kills for additional time to 
operate their Eachelle department was denied without dicussion. The 
request of the Globe Knitting Hills of Boston to permit cleaning opera- 
tions after the regular 40 hours was denied. The Secretary of the Code 
Authority then reported that he haa been informed that the Jantzen 
Knitting Mills had been selling on terms of 3/10 e.o.m. to the retailer 
but permitted higher discounts by adding such adcitional amounts to the 
price. The Code Authority votea this practice may be continued, pro- 
viced no discounts in excess of 8/lOe.o.m. oe permitted. 

Mr. Mark Harned, aamini strati on representative to the Code Authority, 
tendered his resignation to the several committee's to which he had 
been appointed. 

The meeting of February 13 and 14, 1924 was held at the Hotel 
Commodore, Few York. 

A protest was read from the Cleveland manufacturers requesting a 
reduction in the price of labels. The Code Authority than provided 
that a small label be provided fox- the us-e-'in headwear selling up to . 
: 3.00 as that the charge therefor be fixed at 85^ per thousand and to- 
be known as the "AA M label; that the present A label be used for garments 
selling from 3>3. CO to $9. uO and that the charge therefor be $1.50 per 
thouse.no.. 

The Knitted Seamless Keao.wear Group requested that labels be 
gummed, to be applied with a heated iron, and that they were willing to 
pay '2.00 per thousand tor such labels, irrespective of selling price 
of the garment. The Code Authority stated that the average selling price 
was .6.00 per cozen for the knitted hats? and approved the request by 
creating a label "H" for such use. The Code Authority voted that 
members of the Incustry should pay a su i of l/5 of Vja of their current 
sales of products of any and all kind (except products for which they 
have purchased and applied thereon Knitted Outerwear Code Authority 
labels,) as their reasonable share of the expense of code administration. 

A request was received from the VRA end read to the Code Authority 
aksing that the Code Authority send its recommendations regarding the 
application of the Shawmut Woolen Mills for permission to employ 20$ 
of the apprentices. The Code Authority recommended that the request 
be denied on the basis that exceptions such as the one requested would 
be harmful to theindustry and result in a f?ooc of similar exceptions. 

A request by the Pacific Coast Knitted Outerwear As --ociation that 
its memoers be exempt from the provisions of Article IV, Section (c) 



9823 



c62 

(Providing a r fb c ,, of the minimum wage be paid to learners and that 5% 
of learners be permitted) was denied. The denial was based upon fear 
that to grant the exception woulc establish a harmful precedent. 

The application of G-rctnhirn -' Daniels for permission to work 
part of their employees overtime, was denied, without discussion. How- 
ever, members of the Code Authority authorized the Code Authority 
officials to send a lengthy letter informing the petitioner of the 
denial. 

On the second day of. the Code Authority meeting-, it was decided 
to change the decision made the previous coy, granting exemption to 
certain firms from article X, Section (h). It was Decided that these 
firms must first submit proof" that they sell to retailers on terms and 
conditions that' the retailer maintain one fixed, selling price throughout 
the country. Again the decision to c.eny this request for exemption was 
based upon the fear that a general policy would be estadlished rather 
than that' the petition was or war, not sustained by the facts submitted. 

Meeting of March 5 anu <- , 193". 

The Coue Authority at this meeting voted that members of the 
Industry may establish the maximum hours lor such employees as were 
exempt from the general provision, and to pay to their employees over- 
time for hours worked beyone che maximum established. 

A general discussion was helc on the merits and demerits of a 
prohibition of style piracy. A lengthy discussion (*) was had on the 
question of establishing fixed prices for the sale of products of this 
industry in order to maintain established trade regulations. 

The Code Authority held a meeting on April 10 and 11, 1934. 

The Code Authority discussed formulating a system of cost finding 
to be used by members of the Industry. A list of price ranges (**) at 
wnich the products of the Industry were to oe sold was discus -ed by the 
members. The general consensus was that establishing of price ranges 
was necessary since the selling price of goods in the industry had 
decreased d.esoite a steady increase in wages paid. It was explained at 
the meeting .that . approximately 60 per cent of the members of the industry 
by voluntary agreement were selling their products at definitely fixed 
price ranges and that it was necessary to formulate plans requiring the 
remaining 40 per cent of the members of the industry to confine their 
selling to the same price ranges. The members finally voted t-> table 
all discus-ion on price stabilization to be reopened in the next meeting. 
The meeting, however, die vote to submit to the Administration a request 
for an amendment of the code(***) prohibiting the selling of products 
below cost. 



(*) Se^ Minutes of ltieeting--page 1-6, TEA files. 
(""») See Minutes of meeting, pages 146-175, TRA files. 
(***) See Minutes of meeting, page 17.., 1 T SA files, 
98 P3 



263 

nulfcs ana r dilations for the inpint ining of contract system of 
procuction vert acopted at chi ... . mbi rs also approver. 
illations lor registerin i rkers in th< tend knit division of 
inoustry ano particularly those worcing in infants' pne children's 

I rs oiscus i.d the advisability of setting up a labor 
complaints committee in accordance with FRA regulations. The consensus 

against any such movement en the cl; im that this being a non- 
unionized industry, it was not proper to have labor representatives on 
the comolaints committee and accordingly it was voted not to establish 
such a committee unless th< Ao: .inistration would grant an exemption to 
tnis industry permitting them to organize a labor complaints committee 
consisting entirely of industry members. 

The Code Authority at this meeting adopted p set of by-laws to 
govern the action. s of the Code Authority. Rules and. regulations were 
also adopted for the conduct of the regional compliance offices and 
boards. On May 15 and 16, 193* , the Coce Authority held another 
meeting. The Code Authority recommended an amendment : to the code- 
requiring the labeling of substandard merchandise as such. The following 
amenament was also recommended to be adcea to the code: 

1. I'o member of the Industry shell sell or offer to sell knitted 
outerwear fabrics uoon terms greater than a maximum discount 

of one per cent for payment 10 cays after shipment or net terms 
for payment 60 days sfter .i ! ipment. Anticipation eno interest 
after cue date shall be at the rate ol nix per cent per annum. 

2. Fo member of thi Industry shall accept the return of knitted 
fabrics except for defects in material and/or manufacture and 
in such cases onl„ when return in made wit in 10 e.ays after 

receipt of gooes f.na before the same, are cut. 

3. All knitted outerwear fabrics shall be old f.o.b. 
shipping point or f.o.b- Tew York City. 

No member oi thelndustry snail sell merchandise except upon 
condition: 

(a) That no purchase order for merchandise shall be 
subject to cancellation before the specified and 
agre a unon slipping date written on said order; 

(b) That no purchase shall be. cuo.jeCt to cancellation 
after the specified and agreed upon shipping aate 
written on said order unless cancellation is in 
writin • anc it permits the manufacturer five addi- 
tional working e.ays from the aate of receipt of 

such cancellation t^ complete and ship any and 
all merchandise in work at that time. 

(() That no purchase order which does not specify a 

shipping aate shall be suoject to cancellation if 



9823 



cb4 

in writing fine permits tht.. manufacturer fivx addi- 
tional working Cays from the date of receipt of 
such cancellation to complete and ship any and all 
merchandise in work si that time. 



Upon the request of several members of the. industry for a review 
of compliance cases in which Decisions haa been rencierea against them 
by the Regional Compliance Board of i.R.A. , the Director of the Code 
Authority was instructed to obtain the reaction of the JT.S.A. on the 
practice of local compliance agency penalizing code violators by taking 
away irorn them the privilege of working overtime. The members of the 
Code Authority were of the opinion that denying any employer the benefit 
of the double shift operation would throw night shift employees out of 
employment and defeat the purposes ol the National Recovery Act. 

kuch time was spent at this meeting in an attempt to work out rules 
and regulations to stauilize the hand.' im it home work and contract 
divisions of the industry. 

On June 20, 1934, the Code Authrotiy held another meeting. A 
report was made, at this meeting that oat of the 1,087 mills listed in 
the Industry, 861 were using the code label and 150 distributors and 
jobber were using tags. The remaining 206 mills which had not ordered 
labels were manufacturers of fabrics and accessories not subject to 
label provisions of the code and would merely . ave to pay an assessment 
on the dollar volume. 

The Code Authority rules that in computing earnings of an employee 
with reference to the minimum wage provided for in the code each week's 
earnings should be considered independently and without reference to any 
previous or future earnings. 

The representative to the Code Authority from the Philadelphia mar- 
ket objected to t : is ruling claiming that employees might hold back part 
of their piece rate earnings in one week ano be plussed and earn more than 
the minimum the following week. 

A wire received from the members of the inoustrji on the Pacific 
Coast stateu that: 85' oi the mills of the Pacific. Coast Association 
desired the adoption of an amendment to Article X, Section (h) which would 
permit mills on the Pacific Coast to equalize ant /or prepay freight 
charges on shipments east of the Rockies. The Code Authority voted to 
deny .the request. 

On July 10, 1934 the Coc^ Authority h.lc another meeting. Plans 
were discussed at-tlis meeting for the new election of Code Authority 
members to be hele curing tht lollowing month. A petition by members 
of the Infants' wear division of the industry asking lor a special 
representative on the Code Authority was denied. A committee was ap- 
pointee, to specify those occupation.; in the knitted outerwear industry 
which may be deemed hazardous or detrimental to tht health of minors. 

9823 



265 

On September 20 end 31, 1934 the Code Authority held another meeting. 
At this meeting the newly sleeted members of th* Cocc Authority re- 
elected August Egerer as Chairman, reappointed Harold H. Lhowe, 
Executive Director, and Sidney S. ICorseni :, Secretary. A report was 

made to the Code /uthority oy the committee on hazaroous oc<u>;ations 
stating that there were no hazardous occupation* in that industry • _ -nd 
that no classification of such shoulci ot made 

The members votec to send a protest tr the Federal Emergency 
LieJ Administration bi cruse of its project in Massachusetts of making 
knitted sweaters and distributing them to people on relief. It was also 
votec: to send a letter to the Administration stating that the knitted 
outerwear i nous try was not in favor of a 50-hour week ana that the 
incustry could not survive under such curtailment because of the high- 
seasonal nature of its procucts. 

On October 23, 1934, another Co e Authority meeting was held. Ti.e 
members on the Pacific Coast having refused to accept the decision of 
the Code Authority oenying them the right to prepary freight to the 
Last were sent the following wire at the direction of the Code Authority 
members: 

"RE LETTER OCTOBER SECOND COLE APPLIES UNTIL YOU 
FAVE EXCEPT 1 01 T APPROVED BY NRA. ASSOCIATION ACTION 
CONTRARY UNLAWFUL. SUEPEISED YOU TAKE SUCH HIGH- 
HANDED AND DISRUPTIVE PROCEDURE. EXPECT YOU '.VILE 
COITTTERMAND YOUR MILL NOTIFICATION IMMEDIATELY. 
MILLS ENTITLED TO EXCEPTIONS V/ILL RECEIVE THEM AND 
IF DECISION Or CODE AUTHORITY DISAPPOINTING SP1 CIAL 
BOARD ORGANIZED BY ERA IN WASHINGTON TO CONSIDER 
APPEALS. RUST INSIST IRAS PROCEDURE BE ORDERLY AND 
UNDER TIE: CODE AND ERA. " 

A concern asking permission to allow one of the foremen who aoes 
productive work to work overtime was denied on the grounds that it would 
establish a harmful orecedent. 

A report was made to the Code Authority that the Hollywood Knitting 
Mills of Los Angeles which had been denied permission by the Code 
Authority to operate non-productive machinery on a double shift had 
been granted permission to do so by the National Recovery Administration. 
The Coce Authority immediately voted to protest the action of the 
Administration in over-riding the Decision of the Code Authority. The 
Secretary of the Code Authority then read the petition 'oy the Pacific 
Knitting Mills of Los Angeles requesting permission to use overtime, 
although the plant was using the double shift system of operation. 

In connection with the abo ,r e request the Coce Authority sent the 
following wire to the Administration: 

"THIS CONCERN IS LOCATED IN THE. SAME CITY AS TTTi 
HOLE WOOD KNITTING MILLS WHICH FIRM RECEIVED AN 
EXCEPTION TO THE CODE FROM YOUR OFFICE, CONTRARY 
TO THE RECOMMENDATION OP OUR CODE AUTHORITY. 



9823 



£66 

"IF VIEW OF YOUR ACTION IT WOTTLD BE FIT AIR COMPE- 
TITIOF TO REFUSE THE REQUEST OF THE PACIFIC KNIT- 
TING MILLS FOR THE RLLILF TFjlY ASK. 

"VE SUBMIT"- THIS ENTIRE MATTER TO YOU FOR YOUR 
FURTHER' ACTION IF AC ORDANCE WITH THE POLICY YOU 
'ARE ESTABLISHING OF EXEMPTIONS FROM THE HOUR PRO- 
VISIONS OF TIF, COEE, OVERRULING CUR PREVIOUSLY 
FIXED POLICY. " 

On December 6,' 1934, another Cooe Authority meeting wss held. A 
discussion was held on the advisability of establishing employment 
agencies for the industry in the several areas. The matter was tabled. 
It was voted to authorize the Executive Director to ,.;etition the 
Admini stration to exteno the contract rules and regulations previously 
approved for the infants' wear division to all branches of the industry. 

It -was voted to petition the Administration to extend the exemptions 
granted to the infants' and children's knitted outerwear manufacturers 
from the homework provisions after January 1, 1935, provided manufacturers *• 
availing themselves of the extension would permit the Code Authority 
full and complete access to books ana records in order to fully study 
conditions in that branch of the Industry. 

A request by the Clayton Knitting Company of Clayton, Thousand 
Island, Few York, for permission to employ an additional number of 
learners was granted on the basis that the above concern was a com- 
munity project, being run "olely for the benefit of some 50 or 75 
people and not in general competition with the other members of the 
industry. 

On complaint of the labor union that one of the members of the 
incustry in San Francisco was violating the cot e a special investigation 
was mace and the member was fount, to be in violation. 

The Executive Director then re?d a letter which he had sent to 
Mr. Lewis, Regional Director of the Pacific Coast district, asking him 
to make a determineo. effort to inspect all mills in his district and 
check carefully any violations of the code so as to avoid any basis for 
charges of laxity and negligence in Code enforcement. A general dis- 
cussion was held oh the advisability of establishing a Labor Compliance 
Committee in conformity with NRA policies. The consensus was that in 
the knitted outerwear industry it would oest serve the interests of all 
concerned if the Trade Practice Complaints Committee were also autho- 
rized to hear all laoor complaints, and the Director was instructed to 
confer- with the Administration in order to accomplish this purpose. 

It was decided that the CocLe Authority hold an open hearing in 
conjunction with the coming convention of the National Knitted Outerwear 
Association, to afiord the industry at large an opportunity to make 
suggestions, recommendati ins or criticisms. It was felt that such a 
course tends to promote better uncerstanuing, cooperation and good will 
between the industry and the Code Authority. 



9823 



£67 

On January 29, 1935, the Cote A tnority I i meetin in San 
Francisco, Calif. It was voted to prohibit joboers "'ho do not own 
knitting machinery to use the "'ores "knitting mill" on their pro cue t 
or stationery. It »ts vqted to oppose a reduction of hours in this 
industry to 35 per week. 

An open hearing was held at this meeting on the question of exemp- 
tions ana exceptions to be grantee' to the Pacific Coast market. The 
following facts -ere submitted: - that there are 73 mills on the Paciiic 
Coast ano only lb of these mills sell their products east of the Rocky 
Mountains; doing a ousiness of approximately $4,000,000. One of the 15 
mills does a business- of one and a half millions, leaving a balance of 
two and a half million-, which is aonc by the remaining 14 mills. Of 
the remaining 14 mills, three fir.,s doing a volume of one and e half 
millions Lave previously been granted exemptions oy the Administration 
or the Code Authority, which exemptions are substantially the same as 
the type of exemptions requested by the remaining 11 members. 

The lack of experienced employees; increased shipping costs; lack 
of a ready source of raw materials - all were presented at this meeting 
in support of the claim for exemption from the wage and hour provisions. 
The decision of the Co<?e Authority was to submit the petition for exemp- 
tion to a special committee for the purpose of making a thorough investi- 
gation end submitting the evidence discovered at the next Code Authority 
meeting. 

The Executive Director reported that at the time of the meeting, 
there were 1,041 members of the incustry who had applied for labels, 
and 141 jobbers or stores who were using tegs, despite the fact, ac- 
cording to the census figures, there were only 750 mills in this industry. 

It was reported that the regulations approved for the contract 
system in the infants' wear industry '-ere to be extender for a further 
period of three months. The Code Authority authorized the director 
to continue his efforts to have the same regulations approved for the 
adults' '-ear division. 

A report on the home work division was also made. It "'as pointed 
out that cheap hand labor wa r - a menace to factory production. Regula- 
tions would have to be established to curb these factors. The Director 
further was instructed that unless some regulations could at once be 
established, that efforts would have to be made to enforce the code 
provisions ana abolish all types of home work in the industry. 

On April 3, 1935, the Code Authority neld another meeting. There 
was a great discussion at this meeting relative to the contract shop 
regulations. Charges were made by members of the committee representing 
the infants' wear group that adults' wear manufacturers who were not 
subject to the regulations were cutting prices. It was further claimed 
that it was impossible to make a comprehensive survey of this branch of 
the industry since so many of the acult manufacturers were not submitting 
reports and information on their volume of infants' wear production. 



9823 



268 

It was further dtated at this meeting that the increased cost cf 
wages as established .by the code had in no way resulted in an increase 
in the selling price, resulting in any loss to the consumer. It was 
further indicated that average weekly earnings for an average 36 or 37 
hour week in the regulated section of the industry was approximately 
$18.00 Der week and that the average weekly earnings m the contracting 
shops was about $11.00. 

The Code Authority was informed that two types of competition were 
extremely bothersome to the hand-made divisions of the Industry. There 
were first, the small stores that buy yarn and have knit wear made by 
home workers fcr their customers and secondly, Japanese hand knitted 
outerwear which is made at prices far below those oossible in this 
country. 

The following general rulings were adopted by the Code Authority: 

1. That the Code Authority approve the granting to those 
knitted outwear mills who use the double shift for 
productive machinery, the same overtime priviledges, 
(32 hours in every six months) for their finishing 
department operating unoer the cooe on a single shift, 
as that now enjoyed by members of the industry opera- 
ting on a single shift, upon payment of time and a 
third for such overtime; and 

3- That the Code Authority approve the planting to those 
knitted outwear mills who tise the single shift, 48 
hours o+" overtime every six months instead ol the 32 
hours now provided by the Code, provided that such 
additional overtime is used in the production of 
knitted outerwear for bona fiae orders only, and that 
in the event that any member of the industry operates 
in excess ef the Inurs to which he is lawfully entitled, 
he should be required to pay his employees double time 
for such excess hours; and 

3. That the Executive Director of the Code Authority 

submit this proposed policy to the Deputy Administrator 
of our Coce and request the approval of the same; and 

^±. That the officers of the Code Authority oe authorized 
to approve any requests that may be made by members of 
the industry for overtime within the limitation of 
the policy so set; and 

5. That if experience should demonstrate the wisdon 

of this policy an. amendment to the Code be submitted 
in accordance therewith at the next general revision 
of the Code. 

1. That the Code, Authority approve granting of any members 
of the industry the privilege of employing one learner for 

every ten workers employed bj him, uncer learners' miniMum 
wages provided for in the Code, and upon the following conditions; 

9823 



269 

a. That such member report monthly the number of his 

■ end tin -. ■ iaii to th . 

b. The number >i' learners employed, ano the wa es 

i to them. 

c. Pro:.!' that unsuccessful i fj rts»have been mace 
to obtf in skillec workers. 

c. Inst the ent of learners was cue to the 
scarcity of skillec workers ant. not with the 

; o'.-e and/or eff< rt of lo v 'f ring aver; ji 
] bor costs. 

2. That the Coce Authority s >urove ;r-ntiiv: to my 
member oi the industry the privilege of employing 
a greater number ol learners than one in ten unc.er 
learners' minimum wages provided tor in the" Coce 

if extraordinary circumstances showed the necessity 
thereior, and proof that such employment is not 
with the intent and/or effect of lowering avers e 
labor costs. 

3. That this oolicy be continued for three months 
and a report be mace to the Code Authority to 
anable it to determine the further policy with 
repsect to learners. 

4. That the Executive director of the Code Authority 
submit this propose* policy to the peputy Adminis- 
trator of our Coce rnc request the approval. of the 
same; and 

5. That the officers of the Coce Authority be author- 
ized to aporove any requests that may oe made by 
members of the industry for overtime within the 
limitations of the policy sn set; anc 

6. That if experience should cemonstrate the wisbon 
of this policy, an amendment to the Code be sub- 
mitted in accordance therewith at the next general 
revision of the coce. 

The request of the Olympia Knitting Mills of Olympia, 
Washington for permission to employ adcitionaO learners was granted. 
It was further decided by the Coue Authority that the violation com- 
mitted by the Olympia Knitting hills by employing excess learners 
prior to obtaining permission be excused ana that recommendation to 
that effect be forwardec to the Ttik. 

A request from the Luoiolc , Incorporated, of Mohawk, hew York, 
for an exemption from the i reight provisions of the Code f» permit 
it to hip from its warehouse, it maintains in Sew York City, was 
granted. 

9823 



270 

COMPLIANCE WITH LABOR A':": TRAD1 PRACTICE PROVISIONS. An 
analysis (*) of ell complaints under this Coc e ior the period I'rom 
July 1, 1934, to May It, 1935, shows the following types of viola- 
tions: 

t-t complaints of violations of Article III - 
Hours Worked in Excess of the Maximum 

9 violations of Article III ( d) - Working 
Split Shifts 

16 violations of Article III (f) - Failure 

to Pay Over- Time 

41 violations of Article IV - Wages below 
the minimum 

2 violations of Article IV - Failure to 
pay Previously earned Wages 

7 violations of Article IV (c) - Employing 
an excess Number of Learners 

2 violation- of Article IV (d) - .educing 
Wage s 

2 .violations of Article IV (e.) - Paying of 
Piece Work Rates Insufficient to Maintain 
the Minimum 

1 violation of Article IV (i) - Improperly 
Classifying Employees 

1 violation oi Article V - hmploying Minors 

6 violation of Article VI (a) - Employing 
Home Workers on Prohibited. Types of Work 

4 violations of Article ^1 - Using Incorrect Time 
sheets 

5 general labor violations. 

In all, there were 150 cases of violation referred to the Acministra- 
tion for this period. Ten cases were filed with the Acministration 
alleging trade practice violations involving failure to file statis- 
tics, refusing to paj contract urices, accepting return of merchan- 
dise, failure to use the NRA code laoels, and using improper labels. 

In the period from January 1, 1335, to : ay 27, 1935, seven labor 
and two trade practice complaints were filed with the Administration. 
During the same period the Administration adjusted one trade practice 
and seven labor cases and. two cases were referred to the Litigation 
Division for prosecution. Blue Eagles were removed in two cases and 
seven cases unsettled remained at the end of the period. Throughout 

'(*) See Compliance Analysis Sheet No. 479, NBA Files 
9823 



'^!" 



271 

the entire pciioc of the thi: ode thi l r bor 

and 18 trade practice cases submitted to t Atmini strati on, 137 
labor and 9 tiect :ractice o re investi ted by the Administra- 

tion anc in these esses it was 1 ouno thi i 1 labor cases and 3 trade 

» 

practice cases were net in violation. In all, 24 labcr cases remained 
unsettled in the hands of the Administration on May 27, 1935. 

The Code Authoiity in a report submitted to the ■'. Compliance 

Division indicated that curing the operation oi the coue the Coc e 

Authority adjusted 122 cases of violat ons ; Electing 1159 employees 

snd collected fc 7, 469, 04 in the lorm oi restitution. 

The August 17, 1934 is: ; ue of the "Knittec Outerwear Times" 
contained an article which state' that: 182 memoerr of the incus try 
hau been found vicla.ting Coce provisions; 8b. <~fa oi the violations 
involved the labor provision? of the Code. 

At the meeting of April 11, 1934 the following report was 
ruDmitted: 

"The staff of inspectors in the Letropolitan District 
have made 619 inspections; 536 regular and 83 reinfected. 
In 294 of the 536 we found no violations at all. In 226 
we founu violation-. There " r eie 16 not in ousiness or 
not under our- Code when the inspection was mace. We had 
hearings on - 2 cases. There were minor offenses awaiting 
adjustment, totaling 56 anc. 128 that we considered major. 
By that we mean a labor violation or non-uayment of over- 
time or so'metnin'g oi that sort; 

"With respect to the hearings, all cases were dismissed 
and the respondents were founu guilty in^ 31. In two cases 
they did not appear. We made adjustments on all other 
cases, except one, the adjustment consisting of restitu- 
tion anc agreement to comply with the Code in every res- 
pect from that time on, ana the payment oi the expense of 
the investigation in various degrees, cepencing on the 
nature of the case. 

"We have established everj Thursday as a hearing cay 
at which time we have various members of the local com- 
pliance committee as committee, men. Last week we had 14 
cases on anc this week we are expectingtto have as many, 
trying to catch up on those awaiting hearing . 

"In regard to the two who tic. not appear, one received 
notice late anc will r :pear the following week, the other 
is a jobuer. " 

Reports of the minutes were submitted by the respective directors 
and were as follows: 



9823 



"Mr. FT. H„ Cohen reported for the Pennsylvania District that: 

"The mills in mo around Philadelphia are being inspected, 
but so far, mills south of the Mason Bixon Line have not • 
yet been visited. 27 complaints we're f ilea. Hearings were 
held on 20, and adjustments are pending. 

"The Lirector requested that records of all inspections* 
maae, all Hearings held, and inspectors' daily reports be 
sent to the main office from all districts. 

"The Director than read the report of A. Paul Cohen for 
the Hew Lngland District. ; r. Cohen requested that the 
Part of the Few Englana Distiict which was located in Tew 
York oe supervised ar a inspected from the Kew York Head- 
quarters. After ciscussion, upon motion duly mace, secon- 
ded, and carried, this change was authorized. 

"The Director then requested that each district send in 
a statement of hew they are expending their allotments. 

"Mr. Fhoeni:: reported for the Western Distiict, All 
of the mills in that section have be.n inspected once, 
about 60 in all. Ihose mills that, showed minor violations 
have had two inspections, and two mills that have grossly 
violated the Code ha' e oeen inspected three times, The 
latter aie the Lincoln Knitting hills of Warsaw and the 
Copher Sportswear of Minniapolis. 

"The Lincoln Knitting Mills have appealed to the President, 
together with their workers and the citizens of the 
community. They claim they are oenkrupt and wil] be 
forced to -hut down if they are assessed or fined. At 
a hearing to oe held s;on it is iroposec to take testimony 
and render a decision, and forward the entire proceedings 
to the Wisconsin Industrial Commission. The Lincoln Knit- 
ting Mills sell a general line of sweaters ano some sports- 
wear at a very low price and without labels. Mr. Power 
stated that such a case should be referred to the State 
Director of the National Emergency Council rather than the 
State Board. " 

The following is a report tor the Metropolitan Distiict of 
New York: 



9823 



£73 

Inrpections as of Aoril 30, 137* 

Total inspections - 8£.. 

(Active concerns inspected- 607 

Reinspections - 13 f 

Inspection? resulting in 

eliminetion from our list ■* 113) 

The total inspection? ior all cistricts 
ere as follows: 

Active Concerns 

Metropolitan Mew York 607 

Pennsylvania 6t. 

Y/estern 43 

New England 41 

Ohio and Michigan 25 

Pacific Coast 18 



Total 805 

A complete analysis of the investigations made in the Metro- 
politan area as found in the minutes of -the meeting held on May 15 
and 16,, discloses the following information. 

Number of cares heard 136 

Minor . .45 

Major 91 

Number of cases adjusted £7 

Major 41 

Minor 26 

Cases in which costs imposed 31 

Major 31 

Minor 

Cases in which no costs imposed *..... 70 

Major 25 

Minor ^5 

Cases dismissed 39 

Major 20 

Minor 19 

Number ,of cases pending adjustment 24 

Major 24 

Minor 

Number of cases forwarded to Washington 1 

Number of cases forwarded to State Director 1 

9823 



274 

Number of casts forwarded to Federal Trade 

Commission 1 

Number of cases pending further action 3 

. i An examination of the minutes of the me, ting of April 1C and 
11, 1934, contains a report by Mr. Frankel on certain hearings con- 
ducted by him on cases of non-compliance by members of the industry. 
In reply to a question by one member of the Code Authority as to 
whether Mr. Frankel sat in at the meetings, the answer was as 
■follows: 

"I oid. We gave each man a talk and then read the 
charge and then I gave each man another talk and that 
it was not a happy position for any one of them to 
sit here. We are manufacturers like them. Before this 
board sat in judgment, they checked up on themselves so 
that they were not violating the coce themselves, as 
they did not want to pass on violations if they were 
violating themselves. Then we told them we will be 
back to see you every month. This is not a first- ■ 
and last inspection. " 

The minutes of the meetings indicate that this Code Authority 
was not in favor of labor representation on any labor complaints 
committee. 

FINANCING. The organization of the Code Authority for this 
industry was carried out by slow stages of trial and need. At the 
first meeting of the coce Authority the necessary executive officials 
were selected by the Code Authority members and to those officials the 
Code Authority granted the discretionary power of hiring the necessary 
clerical force to carry out the administrative functions of the Code. 
At the second meeting of the C >de Authority plans were formulated Sor 
the establishing of regional or district Code Authority offices for 
the purpose of enforcing, compliance, and assisting members of the 
industry in best understanding the administrative, problems of the 
Code. 

Evidence of the slow, process, of organization by this Code 
Authority can be found in a statement submitted by them to the Ad- 
ministration, dated April 30, 1935 (*) which shows the expenses a£- 
administering as follows: 



(*) See copy of letter, Admin- strati ve File, Volume II, Knitted Outer- 
wear Budget and Basis of Contribution. N. R. A. Files. 



9823 



c75 

January 3,859.98 

February 6,915.13 

March 1 , : 5. 28 

April 11, LI 

May '12,213.19 

Jun e 1 2 , 6 6 2. -'• £ 

July • 14,765.99 

August * 11, 621.46 

September l-- 1 , 559. 62 

That the estimated expenses for administering the code for the 
month of January was $11,300, 

A statement submitted by the Coae Authority, to be found in Volume 
II, Budget ana Basis of Assessment, contains the iollowing information: 

"In January of 1934, the Coce Authority oeing without statistics 
upon which to compute the assessments per label, _ fixeu a schedule 
based upon its best judgment." 

The schedule is as follows: 

ISSUE 

LABEL TYPE USE COST ASSESS EI 'T CHARGE 

A Printed All product not &.47| ?-.62g $1.10 

C amori c exce edi ng $6, 00 

per ccz. 

B Woven From &6. 00 per 1.99 1.01 3.00 

Broadcloth doz. not exceed- 
ing f 24.00 per 
doz. (knitted 
dresses and 
ruits to $42.00 
per doz. ) 

C Woven Prom $24.00 per * 3.83 1.67 5.50 

Grqsgrain doz. not exceed- 
ing $11. 75 each 
(Suits and 
dresses from $42.00 
per doz. to 6.75 
each) 

D Woven All garments in 4.2U 4. 9. CO 

Taffeta excess of $6.75 

Early in -February of 1934 it was found necessary to increase the 
number of types of labels used and the following labels and the prices 
charged for them were added. 



9823 



276 



/ 



LAB 13 



AA 











ISSUE 


TYPE 


USE 


COST. 


ASSESSiiELTT 


OHABGS 


Small 


All garments u-p 




-6l| 


$ .85 


Printed 


to $-3.00 ver doz, 








Cotton 










Printed t . 


From $3.00 not 


.47-| 


1.02^ 


1.50 


Cambric 


exceeding $9.00 









LABLE 



TYPE 



•oer doz. 



USE 



COST 



ISSUE 
ASSESSMENT CHAHG3 



Woven 


Prom $9.00 per 


Broad- 


dozen not exceed-. 


cloth 


ing $24.00 per 




doz. (knitted 




sui t s and dr ess e s 




to $42.00 per doz.) 



1.93 



1.01 



3.00 



In March of 1934 at a Code Authority meeting it was decided to use 
additional types of labels which labels would embody certain descrip- 



tive words desired ^ the members 
were lettered as follows and sold 
following terms: 



of the industry. These special labels 
to the members of the industry on the 



"LABEL 



H 



TYPI 



USE 



COST 



ASSESSLSLTT 



ISSUE 
CHARGE 



BS 



BS 



BW 



BZ 



Printed 


Seamless head- 




,38 


Cotton 


wear all grades 






wi th 


and prices 






gutta 








Woven 


From 9.00 per 






Broad- 


doz. not exceed- 




• 


cloth 


ing $24.00 per 






"Fine 


doz. (knitted- 






Sports- 


suits and dresses 






wear" 


to $42.00 per doz.] 


I 




white 








background 










Special Order Only 


V>Ot 


,48 


Woven 


Special Order Only 


3< 


,84 


broadcloth 


, . 






"fine sport 


s- 






\7ear" tan 








background 








Woven 




2. 


79 


Broadcloth 








"100',i all 








wool" 








Woven 




2. 


70 


Broadcloth 








"all Zephyr 


ti 







$ 1.12 $ 2.00 



$ 1.52 $ 5.00 
1.66 5.50 



1.21 



1.21 



4.00 



4.00 



9823 



277 



During the month of J-aaea'n additi nal group of labels v/as added 
to be used by members of the industry mal i fitted neckwear "bearing 
the following serial number and being sold -t the following -Trices: 

ISSUE 
USE COST ASSESSMENT CHAPG: 



"LABEL 



KA 



IIB 



TY?5 

Printed 
avon 



Printed 

avon 



Knitted nee wear 
not exceeding 
$■3.00 per doz. 

I '. ni 1 1 ed a e clave •:•• r 
not exceeding 



$ .31 



.69 



1.69 



$1.00 



2.00 



1IC 



Printed TCnitted neckwear 

avon not exceeding 

$17.00 per doz. 



.31 



5.69 



i.00 



lie 



Printed Knitted neckwear 
avon in excess of 

$17.00 per doz. 



.31 



S.69 



9.00 



The Code Authority also adopted a printed stapled card to be used 
by the members of the industry manufacturing knitted accessories,. These 
cards were me.de at a cost of 37 cants to the Code Authority and were 
sold to members of the industry for $2.50 per thousand, leaving a gross 
$] 



assessment of $1.63. 



In August of 1934 the Code Authority had learned from expirence the 
approximate number of labels being used in each of the several divisions 
of the industry and the extent to which the different labels, were being- 
used, and revised the prices to be charged for all labels so that the 
new schedule of label charges was as follows: 

ISSUE 
CHAPGE 



LABEL 


TYPE 


USE 


AA 


Printed 


All garments up 




avon 


to $3.00 per 
doz. 


A 


Printed 


From $3.00 net 




carnb ri c 


exceeding $9.00 
per doz. 


B 


Regular 


Prom $9.00 per 




orinted 


doz. not exceed 



)03T 






.4?i 



ASSESS!®?] 



• 56p 



1.02^ 



$ .30 



1.50 



2.75 



Broadcloth ing $27.00 per 
doz. 



BS 



"Fine Sp rots- 
wear" white 
background 



3.48 



2.02 



5.50 



BS 



"Fine Sports- 
wear" tan bach- 
ground 



3.48 



1.16 



6.00 



9823 



27 b 

is sin: 

LABEL TY?3 USE COST ASSESSi.iEKT CHARGE 

BW Woven "IPO,; 2.79 1.71 4.50 

All Wool" 

BZ Woven "All 2.70 1.71 4.50 

Zephyr" 



rrinted wot exceeding 1»4? : ,- 5.02g 6.50 

(lJew) 



Grosgrain 



D woven In excess of 4.20 3.30 12.50 

Taffeta $6.75 each 

H Printed Seamless head- .88 1.12 2.00 

Cotton wear all grades 

with gutta and prices 
percha back 

WA Printed One to "be applied .87 1.63 2.50 

card with to each do 2. cuffs, 
staple wristlets, and 

anklets regardless 

of selling price. 

Special labels were provided, b'y the Code Authority for the infants' 
and children's wear branch of the industry. The prices for labels sold 
to this branch were as follows: 













ISSUE 


LABEL 


' TYPE 


USE 


COST 


ASSES Sl.EJT 


ChAPGE 


CA 


Printed 
cambric 


On i n fa ri t s ' we a r 
up to $6.. 50 per 
doz. 


C 1 . r.irl 


Oi.oi-\ 


01.25 



ICB . Printed * Prom $6.50 a .45 1.55 2.20 

broadcloth doz. not exceed- 
ing $16.50 per 
doz. 

ICC Printed From 016. 50 not ' 1.45. 2.05 3.50 

Grosgrain exceeding $30.00 
per doz. 

ICD Woven In Excess of 4.20 4.80 9.00 
Satin $30.00 per dos. 



9823 



The total isstiance of labels to the Code Authority from Janu?ry 15, 
1934 to September 30, 1934 was as follows: 

AA 12V 137, 200 

A 21,894,616 

B 24,533,913 

C 3,393,015 

D 1,024,750 

H 559,400 

3S 262,276 

3\! ' 1,242,000 

3Z 145,000 

Special 533,216 

Tags & Pin 10,309,417 ' 

Tickets 

ITA 576,000 

1TB 221,500 

1IC 73,000 

IJD 2,000 

Y/A 1,194,500 

ICA 327,200 

IC3 352,500 

ICC 33,550 

ICD 2,000 

This made the total distribution for the period 78,439,053. It is 
interesting to note that the total income from the sale of labels for 
the month of February was $23,002.56 and that the cost of these labels 
was $13,991.31 or 60.83 per cent; that during the month of September, 
1934, the gross revenue from the sale of labels was $20,807.94 and the 
cost of the labels was $5,958.39 or 23.53 per cent; that the income 
during the month of October was $24, 780.02 and the cost of the labels 
was 26.64 per cent of that sum; that during the month of November the 
income from labels was $20,002.75 and that the cost of the labels was 
26.3 per cent of that amount. The gradual reduction in the percentage 
of cost of labels as against the charge made for such labels, coupled 
with some slight changes in charges f6r labels in August of 1934, led 
to the following results. During the first nine months of 1934 gross 
receipts from the sale of labels were $175,700,38. The cost of the 
labels sold was $80,961,77, representing 46.03 per cent of the total 
not receipts. The gradual reduction of label cost toward gross income 
was due to two factors: 

(1) The price 'paid to printers for labels was lower as 
a result elf volume purchases. 

(2) The use of less expensive fabrics. 

On November 8, 1934 the Administration released a ll tice of 
Opportunity to be Heard (*) to all members of the industry on the 



(*) See Administrative Order ilo. 164-27 U.S.A. files. 



9823 



280 

"budget and basis of contribution as submitted "by the Code Authority of 
this industry. The proposed budget was for the period from October 1, 
1934 to June 1, 1935. The total amount of the budget for this period 
was in the sum of $137,047.23, the basis of contribution being the sale 
of the labels at the following rates: 

40f£ per thousand for garments sold at "'rices not exceeding 
$3.00 per dozen,. 

.'•_$1.,02 per thousand for garments sold -? t prices not exceed- 
ing $9.00 per dozen. 

$2.23 per thousand for garments sold at prices not exceed- 
ing $27.00 per dozen. 

$5.02 per thousand for garments sold at prices not exceed- 
ing $6.75 each. 

$10.50 per thousand for garments sold a t prices in excess 
of $6.75 each. 

Direct assessment of .15 per cent on non-labeled merchan- 
dise. 

On January 18, 1935 a llotice of Opportunity to be Heard (*) was 
released to all members of the industry on a supplemental budget for 
the Home Work Bureau. The total amount of the budget for the period 
from February 1, 1935 to April 30, 1935 was in the sura of $16,375.00. 
The funds were to be derived from the members of the industry on the 
basis of fifteen cents per month per worker employed by manufacturers 
and/or home work contractors. 

On March 14, 1935, Administrative Order Ho. 164-42 was signed, 
approving the budget for the industry for the period from October. .1, 
1934 to June 1, 1935. The approved budget was $176,166.83, represent- 
ing the original request of $137,047.23 plus $39,199.62 representing 
the cost of the labels to be sold. The basis of contribution as 
approved was as follows 



"Type 
Label 



Sales Price. 
Class 



Label Cost 

Per ill 



Assessment 
Per I.-i 



Label Charge 
Per U 



AA 
A 
B 
C 
D 



Up to $3.00 per Doz. 
U-o to $9.00 -oer Doz. 
Up to $27.00 par Doz. 
Up to $6.75 each 
Over $6.75 each 



.40 

.48 

.52 

1.43 

4.20 



$ .40 


$ .80 


1.02 


1.50 


2.23 


2.75 


5.02 


6.50 


10.50 


14.70 



Contribution by manufacturers of non-labelable merchandise (knitted 
fabrics and accessories) shall be on the basis of 5/ 100 of ljo of 
net sales in lieu of the above scale of label charges." 



(*) See Administrative Order Ho. 164-32 LT.R.A. files. 



9823 



. 1 

.Simultaneously" with th< ■ -. 1 of the above budget, Administra- 

tive Order ".To. 164-4: si tied, ax> rovin t . sup leraental budget 

for hand-kni't division of the industry. The. bv,d h . >t as approved was 
in the sun of $16,873.00 and the basis of contribution was at the 
rate of 15 cents per month per worker employed "by manufacturers in 
the hand-knit division and/or by home work contractors employed "by 
such manufacturers. 

On April 24, IS: 3 the Code Authority submitted to the Administra- 
tion a proposed budget for the period from June i, 1933 up to and 
including i-^y 1, 1536. The total amount of the bu .jet as submitted 
was in the sum of $203,040.00, approximately $1600.00 less than the 
previously submitted budget. It is interesting to note, however, 
that in the submission of the first budget it was estimated that 
there were 1100 establishments in the industry who were to share in 
the expenses of the administration of the Code, rage 7 of the sub- 
mitted budget contains a statemnet that there are 1233 establishments 
in the industry who were to share in the expenses of -administration. 
In the new budget as submitted it was estimate! that 0166,826.67 
would be used for compliance purposes, this one item showing a marked 
increase over the >revious budget. 

At the time of the Supremo Court decision in the Schechterr case 
an Administrative Order was in ■process of ap' roval extending Administra- 
tive Order "Jo. 164-42 for the period from Juftje 1, 1935 to and includ- 
ing June 15,1933. The 'extending order purported to permit the Code 
Authority to incure liabilities in amount equal to 57,763.50 which 
amount represented the approximate expenditures^ for s fifteen day 
period. 

The Code Authority in the eight and one-helf months from January 
15, 1954 to September 30, 1934 spent $12,267.92 for enforcement in 
the metropolitan are". The budgetary estimate for this oeriod was 
$15,925.00. 

The actual cost of maintaining the several district offices for 
the eight and one-helf months period was $23,069.10 and the budget 
estimate for the same period was $34,000.00. The actual expenditures 
for this period in both the metropolitan and district offices totall- 
ed $92,303.18 and the estimate for the period was $145,512.63. 

' Expenditures for the period October 1, 1934 to April 30, 1935 (*) 
were as follows: 

Income from label sales ■ $150,794.34 

Less Cost of Labels 59,307.00 

let Income 110,987.34 

(*) See Exhibit B, Volume Extending Order "do. 164-4.3, II.P.A. files. 



9323 



cb2 

The total expenditures for the period for both metropolitan and 
regional offices was $105,998,23, leaving a surplus of $4,903. 11. The 
income from the Home '.Tori: Divisions was &3, 878.24. The expense of main- 
taining this division was $6,569.02, leaving a deficit of ^2,238.33 for 
this period. 

The Code Authority in submitting the various budgets estimated that 
the industry did an annual dollar volume of approximately 0125,000,000.00. 
On the basis of the figures submitted by the code Authority, the cost 
to the industry of maintaining and administering the code for this Indus- 
try was approximately 2/ 10 of one per cent. 

Two items stand out in an examination of the expense of administer- 
ing this code. In particular those items are the cost of labels sold 
and the cost of maintaining the regional offices. The cost of the re- 
gional offices, which exceeds ('40,000.00 represents 20 per cent of the 
gross proceeds. Labels also bear too high a percentage to the net re- 
turns, the amount being 34 per cent of the gross receipts. Thus, this 
Code Authority, in order to effectuate a means of obtaining necessary 
funds to administer the code spent in excess of one-third of every dollar 
for the labels sold. 

iIHA AC TI CITS Oil C0D3 i.ATTBHS 

The Code as approved for this industry on December 18,. 1933 was 
the 164th Code. At the time of the submission of this code, there 
was a distinct S"ilit between those members of the outerwear industry 
manufacturing adult wear products and those manufacturing infant's 
wear products. The Administration, in order to bring harmony into 
the industry, and in order to avoid any further delays in granting 
a code to this Industry, approved the code subject to a condition (*) 
that the provisions of this code should be stayed until the termina- 
tion by the Administrator after such hearing as he may deem necessary 
as to whether or not manufacturers of knitted outerwear for infants 
and children should or should not be included in this Code, i.iany 
informal conferences and a formal hearing were held in order to solve 
this problem. On March 16, 1934, and Order (**') was signed termina- 
ting the stay contained in the Executive Order, and ruling that manu- 
facturers of knitted outerwear for infants and children should be sub- 
ject to the provisions of this code. 

On December 27, 1933, and Order (***)■ was signed appointing Mark L. 
Haraed to serve as Administration representative to the Code Authority. 



(*) See Executive Order of Approved Code, Codes of Fair Competition, 
As approved Government Printing Office Volume IV page 199 

(**) See Administrative r der 164-5 Codes of Fair Competition as Approved 
Government Printing Office Volume VIII page 869 

(***)Sae Administrative Order 164-2 ISA files 



283 

Mr. Hamed was appointed to the coda in order to afford the Administra- 
tion an opportunity to 1 :is;d of .all actions talren by the Code 

Authority, and to assist the Code Authority in best performing its ad- 
d listrativo function. 

On karch 2, 1034, because of ? policy ruling that no member of the 
administrative staff should bo a representative to the Code Authority, 
Administrative Order 164-4X was signed accepting the resignation of 
Mr. Mark L. Hafned. Immediately thereafter Administrative Order 164-6 
was signed appointing John 17. Power to succeed wir. Earned as Administra- 
tive representative. ' During the first three months of the operation 
of this code, the Administration approved recommendations of the Code 
Authority establishing a machinery to investigate and regulate all home 
work problems and adjust difficulties between the adult and infant's 
and children's wear groups. Shortly after the code for this industry 
had become effective, 41 members of the industry located in the 
rhiladelhiiaarea had oetitioned for exemption from the hour provisions 
of the 'code, and after a full investigation of the facts in the case, 
the application was denied (*) on June 5, 1934. 

The Code Authority for this industry, iri accordance with a re- 
quest of the Administration, submitted a set' of By-Laws to govern the 
a'ctions of the Code Authority. These By-laws were to be approved by 
the Administration and only to take effect when and as approved. 

On June 11, 1934, a conditional letter '{**') of approval was sent 
to the Code Authority, and contained the following exceptions . to the 
By-laws adopted: 

(1) Deletion from the Code Authority By-laws of -any re- 
strictions of the use of the Code label, because the 
By-law provision predicated the use of the label 
pending an agreement' to comply with the' Code. 

(2) That the By-laws contained a provision providing for 
means of the election of the Code Authority in a 
manner other than that which had previously ''Dee-j. 

roved by tae Administration. This correction also 
cautioned the Code Authority to insert in the By-laws, 
a method of election in accordance witn the approved 
plan. It also informed the Code Authority that the 
terms of office of Code Authority members, must be for 
a specific period rather than at the whim of the Code 
Authority members. ' 



(*) See Administrative Order 154-11. 1T.H.A. files. 
(**) Sep Administrative Order 164-12. 1T.H.A. files. 



9823 



284 

(3) Instruct the Code Authority,' that the 3y~Iaws should 

provide for a committee "to establish standards of 

: 

safety and health in the Industry. 

(4) Requested deletion of Section 13 of the By-laws 
which created Regional Compliance Board. Since no 
Administrative approval of the organization; of 
compliance agencies had been given,, an organization 
of that type would have to be submitted to the 
H.R.A. for approval in a separate document. 

(5) Requested the deletion of Section 15, and requested 
the submission of a budget in a separate document 
for the examination of the Administration and its 
approval. 

(6) Requested the delation of Section 15, Subsection 

A.. , which empowered the Code Authority to require 
•reports other than those authorized under the Code. 

In accordance with the instructions contained in the conditional 
letter of approval of by-laws, the Code Authority amended and resub- 
mitted the by-laws for further, a "rovrl and on September 12, 1934, ? 
letter (*) of unconditional approval v 7as sent to the Code Authority. 

The Code Authority fqr s the knitted outerwear industry early in its 
existence began the <ractice of acting upon requests far e xemptions from 
code nrovisions. Later the National Recovery Administration decided " 
that the power to grant exemptions was not one that the Code Authority 
should be allowed to use and issued Administrative Orders prohibiting 
the Code Autnority from passing on exonntions, stating that the Code 
Authority should forward all exemptions to Washington with their recom- 
mendations for action. The Knitted Outervear Code Authority continued 
its pr?ctice of ecting upon exemptions. The Code Authority in doing 
this disregarded Administrative Orders which had been issued in Decem- 
ber, 1933, and February, 1534, specifically reserving the newer of 
approving or denying exemption applications to the II. R. A. On October 
23, 1054, the Administration, over the, objection of the Code Authority, 
granted an application (>*) of the Kolly-ood Knitting hills, Inc. for 
exemption from the provisions of Article III, Section D of the cede. 



(*) See Administrative Order 164-22. IT.R.A. files. 
(**) See Administrative Order 1(34-25. h.R.A. files. 



9823 



The Code Authority was very much incensed at the Administration 
as a result of the approval of th ove i itioned order, claimed that 
the Administration in disregarding the wishes of the Code Authority 
rere injuring the Code Authority'-, stand: in the industry and was 
establishing a precedent that would be harmful. The Administration 
immediately informed the Code Authority it was the duty of the Ad- 
ministration to review ?.ll requests for relief, and that the Code 
Authority had no power to grant or deny application of relief, and 
that in accordance with Administrative Order X-27, the only power tha.t 
the Code Authority had was to receive the applications in the first 
instance and to submit it immediately with the Code Authority recom- 
mendations to the Administration. 1I.R.A. policy regarding exemptions 
was a basis of a conference held in the office of Irentiss L. Coonley, 
.Division Administrator, at which '-ere representatives of the advisory 
boards and Mr. Lhowe on behalf of the Code Authority. The facts of 
all cases -ere discussed at great length. Mr. Lhowe criticised the 
Administration for its action in ap p-'ovin applications for relief 
after such applications had been denied by the Code "Authority! and 
again Mr. Lhowe was informed of the requirements 'of Administrative 
Order X-27, and instructed that thereafter his Code Authority must 
examine all applications and forward the, application to the Administra- 
tion accompanied by the Code Authority recommendation for or against 
approval. 

The Code Authority apparently was well aware of the Administra- 
tion ruling that the 'Code Authority's power in matters of applications 
for exemption was confined, to. .that of recommending to ITHA what action 
should be taken. This fact is evident from an examination of the 
files on the Lample Sport Rear Company^ Dunitz & Lubatkim Company, 
Administrative Order 164-49, Langor Knitting hills Company, and many 
others in which the Code Authority either accepting or rejecting the 
application for relief forwarded the application to the Administra- 
tion with its recommendation. Vfhen these cases are examined, it is 
found .that the Code Authority adhered to Administrative policy, 
however it acted contrary to "policy in other cases acted upon r-t the 
same time or shortly thereafter. 

The Administration acting upon exemption applications ~"oj r members 
of this Industry, granted 22 applications, denied 45 and had 4 pend- 
ing on May 2V. Of the 4j applications denied, 42 represented one 
application by 42 manufacturers in the Philadelphia market requesting 
overtime. The applications granted were 4 for additional learners; 
11 for overtime, 4 for the right to additional shifts; 1 the right to 
change e.o.m. dating, and 2 the right to change the working hours. 
Those denied in addition to the one application by 42 manufacturers 
for additional overtime, were 2 for ddditional learners, and 1 for an 
additional shift. The cases pending on May 27 — 1 was -for additional 
learners; 1 for additional overtime; 1 for a change in the discount 
rate; and 1 for the right to sell* on consignment. 

It may be argued that legally Code Authorities had the power to 
issue interpretations of the provisions of their Codes. This practice 
of interpreting code provisions was adopted by many Code Authorities 
early in their existence. As codal administration ..developed the Ha- 



266' 



tional Hecovery Administration decided to reserve this power to itself 
and frovmed upon the interpretations of coded provisions by Code Author- 
ities. In connection with the issuance of interpretations the Knitted 
Outerwear Code Authority, using the Knitted Outerwear Times, as associa- 
tion paper for its medium, published interpretations established "by the 
Code Authority with the statement that they were effective against all 
members of the industry. This practice "by the Code Authority occasioned 
a memo which was sent by Mr. Dillingham objecting to a publication in 
the Knitted Outerwear Times of September 21,1934, expressing the inten- 
tion of the Code Authority to institute public action against both manu- 
facturer and buyer for violation of quantity discounts. 

In the March 16, 1934, issue of the Knitted Outerwear Times, there 
appeared an item headed "Provisions of Terms of Sale" interpreted. This 
item purports to interpret all of the "Terras of Sale" provisions as de- 
cided upon by the Code Authority. Again on April 20, 1934, an item ap- 
peared in the Knitted Outerwear Times headed "Changes in Return Provi- 
sions" explained. This article also tends to interpret the "Returns" 
provision of the Code. Again on April 27, 1934, an article headed "Code 
Explanations Contrary to Policy" appeared covering the general provisions 
of the Code, and tending to interpret what can not bd done under code 
provisions. This practice of publishing interpretations under the 
name of "Explanations and Answers" was continued by the Code Authority 
for the greater portion of the code period subject, however, at all 
times to the criticism of the Administration. 

The Administration endeavored to correct this apparent wrong, and 
whenever possible examined the interpretations made by the Code Authority, 
and either affirmed or rejected the interpretation. 

' There was much criticism of the Code Authority based upon the acts 
of the Code Authority appointing regional .complaince agencies. composed 
entirely of members of the industry. A letter contained in the ITRA 
files dated February 19, 1935, from Arthur P. Moolau states: 

"That Regional Directors of the Knitted Outerwear Code Authority 
demand an audit of books and records of Knitting Mills, and if 
they find a violation, fine the manufacturer for such violation 
and in addition force the manufacturer to pay from $100.00 to 
$200.00 for the cost of the investigation." 

The letter asks this question - • ' 

"What I am trying to find out is whether or not a Regional 
Board lias .power to step in as a court -and judge — the other 
members of the Code were our competitors in Los Angeles — 
some of the larger manufacturers — have the right to impose 
large fines on these smaller individuals. I, like all the 
smaller manufacturers, am very much in favor of the 1T.R.A. 
and upheld it to the fullest extent. I do not believe that, 
the Knitted Outerwear Code Authority should have the author- 
ity to step in and run our business, and which is practically 
what they are doing." 



9823 



■ 7 

The writer in conversation with representatives of the individual 
grouos of the outerwear industry was informed that the members of the 
industry manufacturing infants' and childrens ~.ro ducts had not been 
satisfied with the functioning of the Code Authority, and that if a 
revival of the 1'PA is ever accomplished, or some new form of industry 
regulation is adopted, that they will strongly resist any further 
regulation by the same "body of men who acted as the Code Authority 
for this industry. The group was dissatisfied because they believed 
there was no community of interest between themselves and the manu- 
facturers of adult wear products. The underlying, but seldom disclosed, 
difference was the fact that homework is an important factor in the 
making of infants' and children's knit products and only infrequently 
used in adult wear production. Any action by Hie Code Authority, which 
was composed of adult wear manufactuers, pertaining to homework regula- 
tions was looked upon with apprehension and fear. There likewise was 
fear that through Code regulations the adu.lt wear manufacturers could 
enter into the infants' wear field in competition with the existing 
infants' wear manufacturers. 

In spite of all these shortcomings it is the opinion of the 1T.7A 
officials handling the Code that it was one of the most active and 
efficient of Code Authorities. (*) 



(*) J. C. Worthy, Asst. Deputy Administrator. M. D. Vincent, 
Division Administrator. 



9823 



288 



CHAPTER V 

MAJOR PROBLEMS 
CONTRACTING AND HOMEWORK 

CONTRACT SYSTEM OF PRODUCTION . 

THE SYSTEM: The contract system of production is 'a system there- 
by members of the industry manufacture garments using raw mater- 
ials not their own but furnished by others for whom the manufactur- 
ing service is rendered. The manufacturers of goods in such a man- 
ner are known as "Contractors". The ones for whom the manufacturing 
services are performed are known as "contract-enroloyers".. 

Contractors usually have limited financial resources and often- 
times are not able to purchase their own raw material. Materials 
are usually sent to the contractor by the jobber. Title to the 
goods usually remains with the jobber. In nany cases these contrac- 
tors have less than fifteen employees and even employ members of 
their families without placing them on the payroll. - 

The contract-employers are usually joboers who have no manu- 
facturing plant of their own but are engaged in selling merchandise 
to wholesalers, retailers, or are industry manufacturers who find it 
profitable to have .contractors manufacture some of their products. 

THE PROBLEM: The evils which clearly made this a major indus- 
try problem are found in the relationship between the contractor and 
the contractor-emnloyer. A vast difference in financial rating makes 
the contractor susceptible to pressure from the contractor-employer 
in the bargaining for nrices for contract services. Contractors often- 
times accept prices for work below their actual cost of production, in 
the hope of chiseling on labor or of making other savings. There 
naturally follows the lowering of labor's wages, increased working 
hours, deterioration of machinery and plants, and an income to the 
contractor which does not even permit a decent living for hinself. 

It can be understood how, once a lowpri'ce is established for the 
contract work, no higher price can easily be demanded. The result 
has been a disastrous downward spiral of prices for contracting ser- 
vices since the prosperous year of 1929. This was partially checked 
among the infants' wear group of the contractors by special regula- 
tions of the National Recovery Administration, adopted after the code 
f or t he industry went into effect. 

NRA CONTROL: In 1933, when submitting its proposed code of fair 
competition, the industry presented the problem to the National Recov- 
ery Administration. Realizing the necessity for a detailed study of 
the situation, and being limited in time for completion of code for- 
mulation, the knitted outerwear industry and the NRA approved the 
knitted outerwear code containing the following provision: 



9823 



2&b 
"ARTICLE VII - CONTRACTING 

"All members of the Knitted Outerwear Industry who use 
contractors or suo-mamifpcturers for knitting or 

, fabricating garments, or any part thereof, shall pay 

such rates to the contractor or sub-manufacturer as 
will enable the contractor or sub-manufacturer to nay 
his employees at least the wages provided for in this 
Code, together with a reasonable allowance f or t he 
contractor's overhead. The Code Authority shall formu- 
late regulation, with the approval of the Administrator, 
to carry into effect the purpose and intent of this pro- 
vision. " 

Experience "Droved that this provision alone, without further 
regulations, could do nothing to relieve the situation as it was bind- 
ing only upon the contractors and only of the contract-employers who 
were also manufacturers of the industrj' - . The jobbers were left free 
of obligations under the code. Further, in the absence of minimum rates 
of pay for contract services, it was impossible to determine viola- 
tions of the provisions. 

Contractors not having the prices for their services increased by 
the code were unable to raise, v in many cases, wages and thus were 
forced, in those cases, to be in violation of the code. 

Amendment number one of the knitted outerwear code was approved 
on June 2, 1934, at the request of the Code Authority, as a means of 
declaring minimum rates to be paid contractors. This amendment pro- 
vided that during an emergency due to destructive price cutting, the 
Code Authority could set minimum prices for contract services. 

As a result of pressure from the infants' wear group contractors, 
and pursuant to the above emergency provision, the knitted Outerwear 
Code Authority made a determination of the "lowest reasonable cost" of 
work and services rendered by Contractors of Infants' and Children's 
Wear and recommended such determination to the National Recovery Ad- 
ministration for approval. 

The "lowest reasonable cost", instead of being a^prc^d , as pro- 
vided in the provisions of amendment number one, was incorporated in 
a set of "Regulations for Contract System of Production of Knitted Out- 
erwear for Infants' and Children's Knitted Outerwear' Industry" as 
minimum rates to be paid contractors. These regulations were approv- 
ed by the National Recovery Administration and became effective Sep- 
t*mbnr 18,1954. (*) 

The Administrative Order approving the regulations made them ef- 
fective for a period of sisty days, and specified a condition that the 

(*) See Administrative Order No, 164-19 raid appended documents 
NRA files. 



9823 



Code Authority submit to the ERA Division of Research and Planning 
bi-weekly reports showing the restilts of the -operation of the regu- 
lations in the industry. Fur-trier Administrative Orders, issued pur- 
suant to the industry r s request, extended the regulations until the 
time of the cessation of ERA activities, in May., 1935. 

Later an additional classification of articles and contract rates 
were forwarded "by the Code Authority to the Administration. These 
additions were never approved by formal order of the Administration but 
were moraly received and =ixamined. However, th°y '"iro effective after 
tho datn ropo-rted. , 

The Code Authority, immediately after, the approval of the regu- 
lations, set up an Infants' and Children's Wear Contract Bureau. This 
bureau. distributed forms for weekly reports of transactions between the 
contractors and contract-employers, of wages paid, of hours worked, 
of numbe- of employees, etc. The bureau kept persons who were subject 
to the regulations informed of their reouirements. 

The findings of the bureau and the effect of t he regulations were 
reported bi-weekly to the ERA. The reports of the bureau are in the 
LIRA Division of Research and Planning files. ( ' 

It is unfortunate that no data, comparable to that gathered by 
the bureau, was collected prior to the operation of the regulation. 
The figures of 'the bureau, when compared to the figures for the en- 
tire industry given by the census and Bureau of Labor Statistics, show 
that this group was as active and as well off as the average in the 
industry. 

' ' i 

(Then the regulations were first approved the contractors af- 
fected acclaimed them as their savior from extinction. 

The bureau, sometime during November . 1934, sent Questionnaires 
to one hundred and thirty-seven firms — contractors, contract-employers 
and direct manufacturers — asking for an expression of their opinion 
regarding the regulations. Sixty-four firms returned replies which 
the bureau, in its report number five to ERA, summarized as follows: 

" REPLIES TO QUESTIONNAIRE 

"1. QUESTION: Do you believe a continuation of the 

contract regulations governing infants' 
wear production is advisable? 

REPLIES: Fifty-five answered in the affirmative. 
Nine answered in the negative. 

"2. QUESTION: In your opinion, should the minimum 

rates as they are now established for 
infants' wear contract production be 
continued? 

REPLIES: Fifty-three answered in the affirmative,' 
9823 



»3..Q,UEST1 

REPLIES: 

"4. QUESTION: 
REPLIES : 



"5. QUESTION: 



REPLIES: 



i 



•"Affirm," tive:- 



2W1 

l.ve answered in the negative. 

Or should some other nethod be adopted? 

Thirteen answered in the affirmative. 
Forty-nine answered in the negative. 

If the answer to No. 3 is 'Yes' please 
state what method you would suggest. 

Twelve answered received to nuestion No. 4. 
Consensus of opinion to this Question No. 4 
is as follows: 

•There should he an increase of at least 
10$ in the minimum rate as established. 

Weight of garment should be consideration 
in the adjustment of these -orices as now 
established. 

Rates should be established on rounds con- 
tained in a garment as against rates now 
established. 

Do you think that these regulations have 
helped or hurt business, and why? 

Fifty-eight answered that they helped 
their business. Six answered that they 
hurt their business. 

Consensus of opinion to this Question 
No. 5 is as follows: 

The regulations have helped, insofar 
as the contractor is no?/ able to meet 
his obligations to labor. 

They have helped because they have per- 
mitted wages to be increased and stabil- 
ized to a" greater extent than ever before. 

They have 'helped because they are prevent- 
ing so-called cut throat competition. 

They have 'helped because the contractor- 
employer now has his orders scrutinized 
by the Code Authority. This prevents'him 
from making hard-driven bargain rates. 

They have helped because the minimum rates, 
have put order into a branch of the indus- 
try that has, in the past, been terribly 
disorganized. 



9823. 



292 

It' has helped because if it were not for 
these regulations many of the Contractors' 
plants would have been sold under, the hammer. 

"Negative:- They have hurt our business because produc- 
tion costs have increased. 

■ They have hurt our business because they 
throw out of range, numbers in the lower 
end goods. 

"NOTE:- This questionnaire was sent to 137 firms - 
contractors, contract-employers and direct 
manufacturers, Sixty-four concerns returned 
replies. " 

Compliance with these regulations was reported by the Contract 
Bureau to be exceptionally good. There were, of course, violations 
but they were never considered to be of the open flagrant type. Mostly 
they were due to ignorance. Jobbers who were contract-employers ac- 
cepted the ^regulations and caused little difficulty. 

Several protests that the rates were too high or too low were 
made by contractors and jobbers during the period of the regulation's 
operation. In each case the bureau had its cost engineers make studies 
to determine the actual rates. The bureau reported that the cost en- 
gineers failed to confirm the claims of the protestants. 

Taken from the bi-weekly reports of the bureau and given below are 
the percentage of garments paid for at over the minimum rates, and 
the value of excess over the minimum rates: 



TTCO ~7EEK PERIOD 


T? 


NDING 


Sept. 


29, 


1934 


Nov. 


10, 


1934 


Nov, 


24, 


1934 


Dec. 


8, 


1934 


Dec. 


22, 


1934 


Jan. 


5, 


1935 


Jan. 


19, 


1935 


Feb. 


2, 


1935 


Feb. 


16, 


1935 


Mar. 


16, 


1935 


Mar. 


30, 


1935 


April 


13, 


1935 


April 


27, 


1935 


May 


Hi 


1935 



PERCENTAGE OF GARMENTS 
OVER MINIMUM RATI 



VALUE OF EXCESS 
OVER MINIMUM 



5.95$ 


0.92$ 


17.83 


2.S3 


17.10 


5,30 


31.91 


7.42 


58.00 


18.00 


51.39 


17.26 


26.49 


6.61 


46.12 


13,24 


60.71 


16.38 


47.16 


11.21 


42.97 


11.42 


27.82 


6.22 


25.90 


5.50 


29.71 


5,49 



Scurcn: NBA files. Contract Bureau, Code Authority. 



9823 



a3 

Responsible, ta a great extent, for the low -oercentages given 
above as average for all cl** 3 if ications is the fact that about a 
third of the garments were manufactured a t tne fixed minimum rates. 

Pressure from contractors of other than V^e* infaht-eJ Bna..cmld- " 
ren's apparel, brought about, in the beginning of 1935, a proposal 
by the Code Authority that the regulations be extended to cover all 
contract production in the industry. The ioronosal was a set of reg- 
ulations for all contract production substantially tWo aama as t.he 
ones governing the infants' and children's contract production* The 
minimum rates for contract services othe^ than infants' and children 1 , s 

* * 

garments were not included in the regulations but an immediate study 
for their determination was provided for. These regulations were ap- 
proved with conditions on Hay 11, 1935 by NBA. Before they were effec- 
tive, however, the Hay 27 cessation of activities occurred. 

Several months before the expiration of ITBA, the contractors in 
the knitted outerwear industry expressed themselves freely and em- 
phatically in favor of a continued NBA regulation. They claimed the 
end of NBA would mean the returning to the old "chaotic state" as the 
contractors many times called it. The proposal to extend the regula- 
tions to cover contract production in all fields is clearly indicative 
of t he industry's recognition of the benefits of the system. After 
May 27, 1935, various groups of contractors representing practically 
all in the industry made great endeavors to preserve the standards 
created by the operation of the regulations for the infants' and Child- 
ren's wear group. Standard cost accounting systems and cost formulae 
were proposed, as well as regulation with standards similar to the ones 
of the NBA regulations. Effectiveness of such plans, where they would 
of necessity be voluntary and mutual agreements without some means of 
enforcement, is doubted. Furthermore, there would be no longer a means 
of bringing the always common recalcitrants into line; nor would it be 
easy to stay clear of the law in fixing prices. 

EXTENT OF THE SYSTEM: The following table shows the extent of the 
contract system in the knitted outerwear industry: 

TABLE XXVIII - KNITTED OUTERWEAR INDUSTRY 
NUMBER OF CONTRACTORS AIT) CONTRACT-EMPLOYERS 
BY INDUSTRY GROUPS 



NUi/BER OF 

NUMBER OF CONTRACTORS CONTRACT- 
EMPLOYERS 



Infants' & Children's 

Wear Field 103 H3 

Ladies' & Misses' 

Wear Field 79 54 

Men's & Boys' Wear 

Field 



33 31_ 



TOTAL 215 198 



Source: Knitted Outerwear Code Authority, NBA files. 



9823 



294 

According to the reports of the Contract Bureau, ail average of 
1164 workers were enroloyed during the eight months of the Bureau's ex- 
istence. The Code Authority, when applying to the IJRA for extension of 
the regulations, furnished figures showing 1754 workers employed in the 
adult field. Total workers enroloyed by the industry's contractors would 
then be 2918. ' 

Report Number 18 contains a summary of unit "production figures from 
the date of two weeks before the effective date of the regulations (Sept- 
ember 19, 1934) .through the week ending Hay 11, 1935. 



9823 






This summary is as follows: 



TABLE XXIX, PUTTED OUTEFVrEAR INDUSTRY 
SUMMARY OF WEEKLY PRODUCTION 0? INFA'TS' AND CHILDREN'S 

knit wear contractors 

(Prom September 8, 1934 ■ to May 11, 1935) 







INFANTS' 


AND CHILDREN'S WEAR: 


SUPPLEI'!ENTAL PRODUCTION 




Orders : 


Orders : 


Oders : 


Orders : 


Orders : 


Orders 






Rec'd. : 


Shipped : 


Unfilled: 


Rec'd. : 


Shipped: 


Unfilled 






Dozens : 


Dozens : 


. Dozens : 


Dozens : 


Dozens : 


Dozens 


September 


8: 


10390 : 


7780 : 




4434 : 


3630 


— . - ■■ ■ ■ 


September 


15: 


10245: 


8C50 : 


41750 : 


4323: 


4340 


12643 


September 


22: 


• 10118: 


10476 : 


— : 


3258: 


3365 





September 


29' 


10360: 


109S3 : 


4075.9 ' 


5977: 


4680 


18832'' 


October 


6: 


8597: 


10752 : 


: 


5787: 


5261 


1* "* 


October 


13. 


, 9703 


' 9347 : 


3896.0 


5748: 


• ■ • 6041 


19065* 


October 


20: 


.. 9951: 


10611 : 


__•__„ 


6111: 


• ' 6133, 




October • • 


27: 


8193: 


11425 : 


3506.8 


4584.' 


6352 


17065 


November ■ 


3 


7839' 


10095 : 





4390.: 


6171 





November- ■ 


10 


6884' 


10219 


31950 


5516: 


6149 


12641 


November 


17 


5605 


11072 





5479 


7817 





November 


24 


12539 


• 10321 


28259 


3837: 


4847 


7343 ' 


December ■ 


1 


13681 


' 6838 





2565: 


3466 





December ■ 


8 


3808 


' 7995 


31384 


5564 


4658 


7414- '■ 


December 


15 


6921 


5421 




4892 


4719 




December. 


22 


5607 


4693 


33796 


5375 


5051 


7911 " 


December 


29 


4361 


' 3379 




6597 


2942 


— : — ■ 


January ■ 


5 


12842 


' 4983 


42639 


3997 


2863 


12700 


January 


12 


12966 


6588 




8824 


584,9 





January ■ 


19 


7721 


8131 


48607 


7051 


5807 


16889 


January ' 


26 


9288 


9253 




9799 


71C5 





February 


2 


: 11202 


11593 


54568 


10369 


7964 


24061 


February ' 


9 


: 10879 


: ■ 11107 




6374 


9603 





February 


16 


: 11611 


11593 


54353 


8373 


8644 


22775 


February 


23 


18247 


9354 




3980 


9612 




March ' . ' 


2 


: 11944 


: 13540 


61150 


: 6148. 


9160 


14131 


March . 


9 


: 12245 


: 14583 


. -- 


: 3238 


8279 




March 


16 


: 8918 


: ' 16472 


• 51158 


: 4062 


6202 


• 6950' 


March 


23 


: 12579 


: ' 18246 


■ , — 


: 5892 


4770 


! 


March 


30 


8294 


: ' 16952 


36833 


: 6975 


4630 


10417 


April 


6 


: 15217 


: ' 16264 


■ 


: 3779 


4929 




April 


13 


: • 30010 


: 14163 


. : 51633 


: 9569 


3972 


■ 14864 


A^ril 


20 


: 8744 


: 15503 




: 2647 


3326 


: 


Aoril 


27 


: 32938 


:.. 14598 


: 63209 


: 3151 


3899 


: 13437 


May 


4 


: 22071 


: ' 13893 




• 2173 


4683 




May 


11 


; 24943 


: ' 13222 


: 78108 . 


: 2060 


; 5474 


: 7513 


TOTAL . • 


!_ 427,961 


: 395,715 


: 195,962 v 


202,434 




Weekly 








: - . . 








Average 




: 11,888 


10,992 




: 5", 443 


: ' 5,623 





Source: Contract Bureau 0/ Knitted Outer/ear Code Authority, NRA files. 



296 
Chart IV pictures the rise and decline throughout the entire xj^riod for "both 
the Infants' and Children's Wear production and the sunnlemental -oroduction. 

Report Number 18 contains also a summary of the- employment figures from two 
weeks before the effective date ©f the regulations through the w=ek ending May 11, 
1935, This summary is as follows: ''■■ " 

TABLE XXX', KNITTED OUTERWEAR INDUSTRY 
SUMMARY OF WEEKLY NUMBER WORKERS EMPLOYED, TOTAL WEEKLY HOURS WORKED, 
TOTAL WEEKLY PA^TIOLLS, AVERAGE WEEKLY HOURS, AVERAGE WEEKLY WAGES, & 
AVERAGE H0URL v WAGES,' IN INFANTS' & CHILDREN'S CONTRACT BRANCH - FROM 
_ SEPTEMBER l.. 1934 to iiAY 11. 1935. 



WEEK 
ENDING 



NO. OF WORKERS 
EMPLOYED ' 



TOTAL TOTAL AVERJGE AVERAGE AVERAGE 
MAN HOURS PAYROLL HOURS WEEKLY HOURLY 

PER WK. WAGE RATE 



September 1 
September 8 
September 15 
September 22 
Setjt ember 29 
October 6 
Octsber 13 
October 20 
October 27 
November 3 
November 10 
November 17 
November 24 
December 1 
December 8 
December 15 
December 22 
December 29 
T anuary 5 
January 12 
January 19 • 
January 26 
February 2 
February 9 
February 16 
February 23 
March 2 
March 9 
March IF 
March 23 
'larch 30 
*t>ril 6 
usril 12 • 
5mril 20 
voril 27 
ay 4 
\dey 11 

TOTAL 

Weekly Av. 



1,099 

913 

1,041 

1,025 

1,096 

1,139 

1,096 

1,127 

1,115 

1,142 

1,136 

•1,121 

1,000 

: 925 

956 

: . 906 

: 902 

; 815 

• 860 

1 ,005 

1,121 

1,285 

■1,334 

■' 1 , 343 

• 1 , 382 

: 1,444 

: 1,419 

: 1,361 

■ 1,560 
: 1,333 
: 1,299 
•' 1,234 

■ 1,268 
: 1,226 

1,284 

1,440 

1.409 

42,961 

1161 



39 


,634 


*32 


,878 


.**37 


,031 


37 


,961 


41 


,705 


***40 


,358 


*40 


,808 


41 


,949 


42 


,522 


42 


,212 


42 


,281 


40 


,815 


35 


,646 


*26 


,804 


30 


,484 


28 


,588 


30 


300 


*22 


257 


24 


,617 


37 


019 


41 


676 


47 


532 


49 


894 


51 


128 


51 


527 


*50 


886 


52 


433 


49 


•266 


47 


•371 


45, 


275 


43 


522 


41 


470 


40, 


524 


42, 


289 


41 1 


9 C 5 


46, 


437 


49, 


055 


1,508-, 


140 



$19 


,893.36 


15 


,944.51 


18 


,387.64 


19 


,046.06 


20 


,702.72 


20 


,572.59 


20 


,299.46 


20 


,696.27 


21 


,013.53 


21 


,224.47 


21 


,520.31 


20 


,736.22 


13 


,334.70 


14 


,185.81 


16 


,135.76 


15 


■084.87 


16 


,016,36 


11 


,815.66 


13 


492.52 


19 


026. 6^ 


20 


961.56 


23 


550.12 


24, 


325.77 


25 


021 . 84 


25., 


446.28 


2: 


637.24 


25, 


776.41 


25, 


106.50 


24, 


148.99 


23, 


883.06 


21, 


949.91 


21, 


152.44 


21, 


108.68 


.22, 


169.15 


21, 


593.87 


23, 


729.46 


25, 


269.48 


764, 


996.19 



36 

36 
35 
37 
38 

36. 

37' 

37 

38 

37 

37 

36 

36 

29 

32 

32 

34 

27 

29 

37 

37 

37 

37 

38 

37 

35 

37 

36 

35 

34 

33 

34 

32 

34 

33 

32 

35 



18.10 

17.67 

17.66 

18.58 

13.89 

18.07 

18.52 

18.37 

18.85 

18.53' 

18.94 

18.50 

18.3" 

14.29 

16.88 

16.85 

17.76 

14.50 

15.69 

18.97 

18.70 

18.33 

18.24 

15.63 

18.41 

17,75 

18.17 

18-. 45 

17.76 

17.92 

16.90 

17.14 

16.65 

18.08 

16.82 

16.4* 

17.93 



35.10' 17.81 



.50193 

,48496 

,49655 

.50173 

.49641 

.50975 

. 49744 

.49337 

.49418 

.50281 

.50898 

.50805 

.51436 

.52924 

. 52931 

.52766 

.52859 

. 53087 

.54810 

.51494 

.50296 

.49546 

.48755 

.48939 

.49384 

.50382 

.49161 

.50961 

.50978 

.52751 

.50431 

.51006 

.52089- 

.52423 . 

.51432 

.51001 

.51512 

.50725 



jource: Contract Pureau ef Knitted Outerwear Code Authority, N.R.A. files. 

Chart 'IV Also pictures in detail the. rise and decline in number of workers, 
ours, total payroll, average hours, and weekly and hourly wages. 



523 



2: 17 



% 



^ 



. __ , ..... , „_... : — 







I : I ■ ~~t m 



F-7 7/A > 






ariaHiV^-Tririnini'r'TTnr h.i 



md 



-S-s. 






m 







i^ : 



£s 



tii'Mi 



35 = 



9323 



::9£ 

HP...EWORK SYSTEM OF PRODU CTION 

■ 
THE PROBLEM - In this industry, as in many manufacturing industries, 
there exists the homework system of oroduction. 

The operation of a homework system of -oroduction results in the ex- 
ploitation of the homeworkers through unsocial rage levels; the creation of 
tendencies toward lowering labor standards generally among factory workers; 
alleged menaces of the health of ultimate consumers of the homework oroduct; 
and ootential menaces to standard macnine made merchandise. 

To abolish homework would deprive a?ed, crippled and widows of funds 
oftentimes urgently needed by them for existence. Also if homework were 
abolished, there would orobably result the elimination of businesses that have 
been in existence for years employing this system. 

In suooort of its abolition, evidence of low wages was introduced in 
arguments by various persons and grouos interested in homework at the time of 
its consideration by NRA. Earnings, which in homework can only be paid on 
piece-work basis, were represented to be as low as two and three dollars per 
week Der worker for a work week o^ forty or fifty hours. In very few cases 
w=-re there paid in excess of eight or ten dollars per week for the work. (*) 
Hourly rates of pay were said to be from three to nine cents, with only a 
few exceptions. 

MA CONTROL - The National Recovery Administration recognized the system 
o^ homework oroduction in the knitted outerwear industry as one of the 
industry's major problems. 

NBA Administrator, Hugh S. Johnson, on December 5, 1932, in his report to 
the President recommending the approval of the knitted outerwear code stated: 

". it was evident that more time should be allowed 

for study of the probl=m. Accordingly a Homework Com- 
mittee has been provided for in the Code to set eauitable 
niece rates and to study the oracticability of elimination 
of homework, insofar as possible". 

Pursxiant to Administrative Order Number 164-9, issued on Aoril 30, 1934, 
seven persons were appointed as members of the hand knitted division committee 
and charged with the responsibility of making a study and report , within six 
months, "upon the proper minimum oiece-work rates in the industry and noon 
the oracticability of discontinuing homework in the industry, or setting up a 
system of control for homeworkers". 

The personnel of the committee consisted of the three members of the 
industry representing machine manufacturers, thre - members of industry 
representing homework manufacturers, (of which one represented manufacturers of 
hand-knitted and hand-crocheted infants' and children's wear, the second 
represented, manufacturers of hand-knitted and hand-crocheted berets and 



(*) See Transcript of Knitted Outerwear Public Hearing- of October 8, 1934, 
Day and Night Sessions. N.R.A. files. 



9823 



novelties, and the tnird represented manufacturers of hand-knitted adult 
sportswear), and an NHA Assistant De-out y Administrator, who acted as chairman, 
reoresenting the'NRA Administrator. 

This committee submitted its report to the National Recovery Administration 
at a oublic .hearing of October 8, 1924. (*) The report, UDon which the com- 
mittee itself failed to agre - ' unanimously, recommended the continuance of 
homework for an indefinite length of time under regulations to be administered 
by a "Homework Control Committee of the Code Authority". The reoort even set 
forth proposed hourly mage rates to be paid homeworkers. 

After the hearing when the reoort and all other evidence submitted was 
considered, the Administration made a finding that the report of the com- 
mittee ras inadequate, that it failed to establish facts which would warrant 
the continuance of homework in the industry, and that it failed to oresent 
any ade -uate plans for f he control of homework. (**) The resoective -roues 
representing homework production were advised of these findings,- whereuoon 
they presented to the National Recovery Administration petitions for a stay 
of the code provisions which orovided for the termination of homework at the 
end of one year from the effective date of the code. 

' Following the receiot of this -oetition and after numerous conferences 
with industry representatives, the Administration decided to stay the home- 
work provision of the' code for those homework manufacturers and homework 
contractors who would agree to comely with the code and soecial reguTations 
to be adopted to govern homework production. 

On February 4, 1935., there was issued an order appending homework 
regulations. (***) 

The report if the Division Administrator and the Deouty Administrator 
in charge of the Knitted Outerwear Code which accompanied the above mentioned 
order and regulations when presented to the National Industrial Recovery Board 
for aooroval stated, in part: 

"It was decided in arranging this Stay not to provide 
for minimum wage as it was felt tnat without proper 
regulatory provisions and adequate statistics any^ 
attempt at establishing minimum wages would result 
in creating wholesale violations and in addition would 
upset Industry as rates would be increased at a time 
when members of the Industry had contracted for their 



(*)' See Transcript of Knitted Outerwear Industry Hearing dated October 8, 
1S34, Day and Ni^ht Sessions, N.R.A. files. 

(**) See Report of Prentiss L. Coonley, Division Administrator, and M. D. 

Vincent, Deputy Administrator, contained in Order Volume No. 164-36 of 
N.R.A. files. 

(***)See Administrative Order No. 1S4-36 and appended documents. N.R.A. files. 



9823 



.yarrx and sales for- the season. The Knit Wear Associations 
\ involved, stated that their season usually runs ^rcn the 
end of December until «f ter. July 4, but April "i , would p-.ive 
them sufficient time to work off their present commitment. 

"This stay -period, however, is intended as a transition 
period, during which the 'Snorts Wear', 'Hand Joined', 
and 'Beret' branches of the Industry may adjust themselves 
to Code trorovisions by bringing their work to inside shops 
or factories* Some members are or^paring to do this and 
the Code Authority will be advised as to the purpose of 
the Stay if the Order is signed. If at the e-coiration 
of the Stay, some members are still in process of trans- 
ferring '"he work to shops or factories, it mav be necessary 
to ^rant reasonable^ addition of time to those who show need 
. .., . for it. t • • 

'"The 'Infants' and 'Children's' branch -orients a more 
difficult Toroblem of transition and will r^^iire further 
consideration." 

As provided in the order and regulations, the homework commission, 
through the homework bureau, registered homeworkers, homework manufacturers 
and contractors; and was in the -orocess of collecting, assembling, and ana- 
lyzing data i.n order to make its reports and recommendations to the National 
Industrial Recovery Board when the order for cessation of all NBA activities 
were issued. 

The cessation of this activity, just when it was getting such a good 
start, was unfortunate, since it would have produced reliable information on 
homework, a region where there is such a paucity of data. 

Subsequent information on this subject in this report is from the Knitted 
Outerwear Homework Bur =au. Although the information is incomplete and covers 
a very short period of ti-^e, it indicates '"hat miffht have been obtained on a 
much larger seal--' had the code system continued.. 

NUMBER AND LOCATION OF ■HOMEWORKERS - The records of the Knitted Outerwear 
Homework Bureau, show 20,300 registered homeworkers in the Knitted Outerwear 
Industry, (*) 

In all probability this figure is lo w due to failure of many homeworkers 
to register with this bureau. 

Although knitted outerwear homeworkers are scattered through 31 states, 
over 90$ of them are located in the following four states: New York (33.2$), 
Maine (29.3$), Pennsylvania (14.2$) .and New jersey (13.9$). 



(*) This and subseauent information on homework taken from "Report on 

Homework in the Knitted Outerwear Industry, for the eight week period 
beginning April 1, 1935, and ending May 25, 1935. N.R.A. files. 



9823 



EATUIi'GS OF HOMEWORKERS - According; to this Bureau, during the eight 
Weeks from April 1, 1935, to May 25, 1935, only 13,265 (*.) of these workers 
received -oayments. Their total earnings am -unted to *1 27, 622. Ho-neworkers, 
during this oeriod, therefore, averaged $1.20 per week-. 

A breakdown of their earnings sho^s; 60$ of then- earned less than 75</ 
a week, 16$ earned from 75d to $1.25, and only 23$ earned amounts above $1.25 
roer week. 

Of the total homeworkers receiving -oayments, 54.7$ were located in rural 
areas. This grouo averaged $4.96 for 'the entire eight week -oeri^d or 62^ -oer 
week. Only 7.9$ of tnem earned amounts upwards of $10 for +he entire -oeriod. 

The Metropolitan workers, averaged $16.42 for the eight week -oeriod, or 
$2.05 ner week and 45. 7 C ' of them earned above $10 for the -oeriod. 

PRODUCT CLASSIFICATION OF HOME'ORKE^.S - Three' lnbor classifications 
include most honeworkers. • 

The hand-knitted or crocheted group, takes 68.. 3$ of" the workers, who 
received 40.2$ of the total -oayments. 

In the headwear grouo are 12.1$ of the workers, earning 16.5$ of the wage 
-oayments. 

Engaged in making women's sportswear were 7.3$ of the homeworkers earning 
12.3$ of the total earnings. 

PAYMENTS TO HOMEWORKERS ACROSS STATS BORDERS _ payments to homeworkers 
across state ."borders are of interest since they indicate interstate movement 
of goods oftentimes even while in -orocess of manufacture since narts of in- 
complete garments are often joined by homeworkers. 

Schedule XIV from the homework 'report shows the extreme minima of such 
payments. According to this report : 

"It is also interesting to note that out of the total 
amounts -oaid by manufacturers, ""28,181.81, to home- 
workers outside o-f their states, $25,732.09 was -oaid 
for hand made infantswear. This is due to the nrohibition 
in New York State of homework on infantswear in tenements. 
It is likely that further regulation in New York which 
would affec f homework on headwear, or in Pennsylvania -affect- 
ing ladies sportswear, would force those tyoes of work 
also into states where there is no restriction on home- 
work. 



(*) This does not mean that the 7,034 workers wh^ received no -oavraents during 
that time were not working, merely that no complete work was returned 
by them to the manufacturer or -oayments made. 



9823 



• 



302 

"The state where manufacturers made the greatest 
number of out-of-state payments was New York, where 
•*26,108.27 was paid to 5,365 workers in 26 other 
states (91.5$) of which was for wholly hand-made 
ir.fantswear as above noted.) These payments for 
infant swear were the only ones recorded for 13' 
of the states. 

"Next comes Pennsylvania, with $1,286.11 loaid to 
174 workers outside state limits, and New Jersey 
with .*401.02 to 60 workers, and lastly Wisconsin 
with a small' am Tint to workers in an adjacent 
state for the hand finishing of knitted outerwear." 

HOMEWORK EMPLOYERS - Although there were manufacturers employing con- 
tractors registered with the homework bureau from 13 states, 64$ of the total 
were located in New York, 10$ in Pennsylvania, 8$ in New Jersey. New York 
City firms em-cloyed 91$ of the contractors and 68. 7^ of the registered home- 
workers. 

HOMEWORK CONTRACTORS - Contracting has crept into even the homework field 
of the knitted outerwear industry. Here it is particularly harmful since it 
tends to lower the already too low earnings of homeworkers. Homework con- 
tractors are essentially middlemen between the manufacturer and the homeworker. 
He receives 'the materials from the manufacturer, which he farms out to the 
homeworker to be made into garments. He then -pays the homeworker, goes to the 
manufacturer, turns in the completed garments and receives payment for all 
services performed. Thus it is seen that he deducts from the total amount 
received for performing the services a certain cut to pay himself for his 
share of the service (the distribution and collection function). Since often- 
times no direct contact exists between the homeworker and the manufacturer, 
abuses can creep in with the contractor deducting a disproportionally lare:e 
portion of the total payment for his share. The already too low ^age of the 
homeworkers is thereby fur'ther curtailed. 

According to the Knitted Outerwear Homework Bureau, 303 contractors were 
registered with the Bureau. This Bureau in speaking of the contractors and £ 
their reports said: 

"The contractors were' an illiterate group, and it 
was with great 'difficulty that they were made to 
unders f and what was required. ' Personal explanations 
• had to be made. Reports were not correctly made 
out, and were difficult to decipher. In fact, 
only 1,430 out of 'he required 2,424 weekly reports 
for the 8 week period, were sent ih by contractors, 
and it is obvious that if results are to be obtained 
by any system of regulation, full responsibility 
should be placed upon the shoulders of the manu- 
facturers" . 

Contractors paid out 37$ of the total payments made to homeworkers anr their 
o-'n commissions amounted to 19.5$ of the total payrolls. 



9623 



5.3 
TABLE XXXI 

KNITTED OUTERWEAR INDUSTRY 



HOMEWORK MANUFACTURERS, HOMEffOEKBRS AND PAYROLLS OF 
HOJfSWOHKERS , CLASSIFIED' BY STATES FO ; , TH* EIGHT WEEK 
PERIOD, APRIL 1, 1935 to MAY 25, 1935. 











Total 








Location 


Reg. 


i 


Payrolls 


£ 


Registered 






Mf grs . 


Total 


Reported 
$185*997.55 


Total 
79.4 


Workers 




New York 


Ill' 


64.3 


8,445 




Pennsylvania 


18 


10.4 


.20,683.88 


13.0 


2,883 




New Jersey- 


16 


9.8 


. 5,095.31 


3.2 


659 




California 


7 


4.0 


1,305.70 


.8 


113 




Massachusetts 


5 


2.9 


358.34 


.2 


17 




Illinois 


4 


2.3 


938.05 


.6 


23 




Ohio 


3 


1.7 


679.70 


.4 


39 




Wisconsin 


3 


1.7 


950.21 


.6 


35 




Michigan 


2 


1.7 


1,667.21 


1.1 


59 




Maryland 


1 


.6 


■ 41.58 


.1 


7 




Vermont 


1 


.6 


498.78 


.3 


9 




Maine 


1 


.6 


427.49 


.2 


13 




Washington 


1 
' 173 


.6 
100.$ 


16.87 


.1 


4 




Total 


$158,660.67 


100. i 


12,306 





• 



Source: Retort on Homework in the Knitted Outerwear Industry 
For the Eight Week Period Beginning Auril 1, 1935, 
and Ending May 25, 1935, N.R.A. files. 



9823 



-3oU- 

Table XXXII 
MTITTID OUTZMJLAf: IiiDUSTHY 
Pert I 



EUIBEM 0? EOLiE/OPlZEES AND TOTAL PAYROLLS, BY -'STATES 
E02 THE EIGHT ".TEEE PERIOD - Aoril 1/1335, to 

Hay 23, 1335* 



Sta.tes 



Huiber Eone 
"formers Paid, 



% of 
Total 



Total- 
Earnings 



;i 01 
Total 



~.~.e-r York 
Heine 

New Jersey 
F enn sylva.n-ia' 
Tennessee' ,' .. 
Kentucky ,''.' 
California 
'. iassachusetts 
Vermont 
New Har.ro shire 
Michigan ,'. 
Ohio 

Connecticut 
Maryland - 
"Jisconsin 
Illinois 
Virginia 
Delaware 
Horth Carolina 
"Jashington . 
Florida 
G-eorgia 
Minnesota 
Te;cas 
Alaoa :a 
Colorado 
OMlahona 
Rhode Island 
'Jest Virginia 
Dist. of Col. 
Total 



5S4 



4,4hi 
1, 50U 
1,375 



U29 

339 
13H 

so 
7^ 
53 
50 
k 5 
Ho 

27 
25 
19 
11 
10 

r 



2 
2 
2 

cfl 

1 
1 
1 

1 

1 

2 



>,5 
33. ^ 

11.3 ' 

10.3/ 

3r2 " 

2.5 * 
1.0 ' 

.s- 

,5' 

A: 

,3 * 
.3 " 
.3 " 
.2 ' 



$57; 60S. 


,12 


21,S4o f 6S 


17,520 t 9S 


20,3^0.12 


X,329 


.72 


1,135 


.39 


1,317 


.US 


6S3 


.27 


7^5 


,4s 


235 


-95 


1.US9 


>72 


. 711 


.46 


3U5 


.29 


133 


.36 


-7U0 


• S3 


960 


M 


7S 


.si 


65 


.00 


2S. 


.09 


24 


,oli 


21 


.SO 


u. 


69 


s, 




10 


-95 





02 


h 


12 


2. 


.69 


4. 


82 


2. 


90 


5. 


56 



4S.1 . 

17.1 

13.7 

15.9 ■ 

1.1 

S' 
1.0 

' ,5 
.6 

. .1 

1.1 

• 5 
.2 
.1 



i 



c 



13299 



ioo£ 0127,622,23 



lOOCi 



Source: Report on Hbne , .7orl: in the Knitted Outerwear Industry for 
the Sight "Jee 1 : Period "beginning April 1, 1935, anc "- Ending 
May 25, 1235, II. R. A. files. 



2S23 



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30.6 

TABLE XXXIV 

KNITTED OUTERWEAR INDUSTRY 



HOMEWORK CONTRACTORS, HOMEWCRKERS . EMPLOYED BY .CONTRACTORS 
AND PAYROLLS OF H0MEW0RKE3S EMPLOYED BY CONTRACTORS, BY 
STATES - April 1, 1935 to May 25, 1935. 





Regis- 




Total 


<fo total 


Homeworkers 


Location 


tered con- 


i 


Payrolls 


Contractors 


Registered "by . 




tractors 


Total 


Reported ' 


• Payrolls' 


Contractors 


New York 


211 


69.7 


$35,290.53 


75.5 


2,445 


New Jersey 


64 


21.2 


8,954.39 


19.1 


1,038 


Pennsylvania 


13 


4,3 


1,066.98 


2.3 


153 


Maine 


7 


2.3 


1,258.42 


2.7 


218 


California 


3 


1.0 


159.50 


.3 


42 


Connecticut 


1 


.3 


53.05 


.1 


16 


Ohio 


1 


.3 


16.67 


_ 


3 


Maryland 


1 


.3 


, .- . 


. '. . - . . 


70 


Tennessee 


1 


.3 


- 


— 


18 


Virginia 


1 


.3 


6.18 


— 


3 


Totals 


303 


100.J6 


$46,805.72 


IOO.58 


4,006 



Source: Report on Homework in the Knitted Outerwear Industry 
Per the- Eight Week Period Beginning April 1, 1935, 
and Ending May 25, 1935, L'.R.A. files. 



9823 



307 

c:-jj b vi 

TIT 



COI-I 



,ljt;.:jits cr :k co:-" to la, on. 

Attributed to the operation pf the Code are the ^.p-fcye-ients revea^A 
ty the following figurest 





' Ei.r loyraent ' : " 


AVeife-ge 

Y'ee 
Hours 


!""' Employe" a 


TIarniftgs 


Year : 


. number 
Loyed 
(000) 


J 

i 


Indi 
19 '9=100 : 


: Hourly : 
: Average 

j 


?eekly 
Average 


1934 
1932 


28.29 

26.38 




• 
4 

97.7 : 
91.1 : 

»-" w — 


35 


: V 

: 44,4i - ; 

I 34., l 


a _ l B '. -t j" 1 . 3 
15,21 

— — J — > r- c T. C" 



These figures allow a comparison between, the average erployr\er$| 
average weekly hours, average hourly wage§, and ayeyage wckly wag*$ 
for each of the two years -- rne a "; e -res si. on' yea? $$$ enp a #$%$.$$ W*^ 

The increase of employment fj»§n -;6,; SO employees J.n |§$1 fcd 38^2?© 
employees in 1934 represents an insrease of & t 6 ye? sent, tig-ing the 'ISJf 
employment figures as a basis of 10 -er cent., 5 ye* 1 e$nt ©u$ of fch^s 
6.G or cent incros.se occurred between -the yea* 1 1533 an£ 'she year 1934. 

Average weekly hou" s of employees in 193"? were 4-1. In 1954 they had 
dropped to 35. Of the 6-hour redu.8_.i3n, 4.1 hour;: were droned between 
1933 and 1934. 

The increase Ln average hourly p ' Kiin; s of emplpyee from 34 A in 1*32 
to 44. 4-^ in 1934 represents an increase' ' ■. 30.5 per cent of this inprease 
25.9 per cent occurred between 1933 an,d 1934. Average weekly earnings of 
employees show slight changes fsom the pre-Gode period. 

All reports issued by the Cade authority for this industry indifcj^f 
that the industry and the e-m-loyeps in it gained substantial benefit? 
throughout the code period. An article in the October 19, 1934 issu# <?# 
the Knitted ftuterwe ar ffiraes stated th X the increase in employment from $h£ 
effective date of the code up to A ril, 1954, a period of five months f 
averaged between 8 and 12 er cent; that during the same period Jbhere sra-g 
a payroll increase ranging from 17 t'o 29 p.er cent; that the hours worke^. 
during that period were decreased fro.: 2p to 13,7 ">er ceat; that the ayes-age 
hourly wag: increased to 53f£ from i6i; that the actual aver'age hours -■->$«• 
week per employee decreased frou 43 to 35, S, The data contained! in tni* 
article was g t .ered from the answers received to 200 questionnaires itn^ 
to members of the industry, re presenting all the branphes of "lie indu try. 

An article a; earing a the Aril 1S ? 1^55 issue of the K fllttcd- Qu&ey- 
wear ' imes contained information that thejpe hac' been an incSS£*LS<e of 3Cj88 
per cent in employment • 21.13 per cent in wage 6 an* 22.06 per cant in 
dollar volume since the efiective date of the Code, The differencp between 
an employment rise of PS pg-r cent and a ware rise pf ,21 per cent is explained 



308 

by the fact that new employees v/ere paid, learners' wages, which were far 
below the earnings of skilled, workers. 

In a letter sent to the Division Administrator by the Secretary 
of the Code Authority, dated August 5, 1954, it was claimed that ?. survey 
of 649 mills had indicated that from the period of February, 1934 to 
August 1, 1934, employment had increased 50 ver cent and pay rolls 17 
per cent. It was explained that the greater increase- of -employment over 
increase Va wages was explained by the fact that \ ost of the new employees 
were hirec at beginners' rates of pay, thus increasing the overfall average. 

In a .statement by Mr. Gould (*) of the Federal Knitting Mills, a 
member of the industry in the -''Cleveland Area, it was claimed that "the 
National Industrie 1 Recovery Act has actually demonstrated its efficiency 
in the industry in Cleveland. Actual reports show that Cleveland has 
employed 28 ,p.er cent more labor and increased its payrolls 40 per cent 
during the last four months." ; - ; 

The code for this ; industry had a very wholesoiiie effect against sweat 
shop conditions in the industry; upon elimination of the use of chi^d 
labor and the downward pressure of . wages-. agains.t an unorganized group of 
employee's,. This' industry is one of the few in the apparel groups which 
has a very low percentage : bf 'unionized markets.. and, since there was no 
means of regulating wage levels, the tendency was constantly downward. 
This 'is evident from a statement .(**) made by Irwin S. Admans, member of 
the Code Authority, connected with the Jantzen Knitting Mills of the 
Pacific Coast area, as follows: 

"There are element? of criminality in child labor, 
and in the sweated labor, just as there are where a 
man robs a bank. Heretofore, the practical opera- 
tion of the system has nut a -premium on inhumanity. 
Pelievinp this, the industry litis earnestly cooperated 
to the best' of its ability.' \" 

"It welcomes elimination of the sordid adjusting 
screws of wages, long user, 'by a. subversive minority 

as a competitive "evice, with the result that empha- 
sis will be universal y in other fields where mana- 
gerial ingenuity is more properly ap; lied and rewarded 
by public favor. 1 ! 



L E1TEPITS CIT THP CO DE r "0 I1TDUSTRY fill HEPS. . 

Mr, Harold R. Lhowe-» Code Authority and Association Director, stated 
(***) in May, 1954 that "Industry failures -were about 5 per cent for the 



(*) See Transcript of Hearing held October 16 and 17, 1954, p. 64. 
; r H.S.A.. files. " ■- 

(**) See -Transcript of Hearing. on Amendments dated October 16, 1955, 
page 77. N%R.A. files. 

(***) See' Transcript of Hearing on Amendments, dated May 12, 1934, p.* 51 

H.R.A." files. 
9323 



; 9 

past ye~r but that figure w 3 t i Lcatiye'of general industry con- 
ditions because i ':■' lost of smal unite buy supplies on 
credit fro . yarn jobber , in tb years, aintained 

them in the hope of a good ami! profitable season. Credit was abnormally 
extended to all, regardles:- of fin condition. In good seasons or 
by private adjus : , debts were paid n pefha c 20 to SO cents on 
the dollar." 

Pre:, all past records in this industry, a showing such as the abeve 
indicates a helpful stride forward. 

A wire addressed to Senator Nathan Straus, Jr., from the Knitted 
Outerwear Code Authority, dated June 13, 1934, said: "Year of rT.A ".as 
been a year of progress in the Knitted Outerwear Industry toward a new 
enlightened ideal of business relationships STOP Wages and employment 
have been increased STOF Manufacturers have been awakened to a new sense 
of obligations to their employees - to each other and to the consumers 
of Knitted Outerwear." 

The results of a questionnaire which had been sent out early in April 
of 1935 indicated the following sentiments in the industry; 73 per cent of 
the members were in favor of the NRA and wanted it continued in some form 
or another; 27 per cent were in favor of the discontinuance of all regu- 
lations. A further breakdown of the figures ascertained from the question- 
naire shows the following: 67 per" cent of the smaller mills in the in- 
dustry were in favor of the NRA and 33 per cent were opposed to it; 89 
per cent of the larger mills were in favor of the NRA and 11 per cent 
were opposed t" it. The line of demarcation between the small and the 
large mills was arrived at by averaging the total number of employees 
divided by number of establishments. A truer test of large and small 
mills, however, would have been to pick those establishments which were 
predominately large and 'jy such a test it will be found- that , in this 
industry at le st, the vast majority of the small mills were definitely 
in favor of the continuance of NHA to a much greater degree than were 
the larger mills. (*) 

The Code Authority Secretary, in his letter explaining this question- 
naire, stated that "mj private .opinion is, however, that the 'nays' are 
generally most easily provoked and quickest to respond and, therefore, 
any further responses would, undoubt dly bring the percentage of 'yes' 
votes to a much higher percentage." 

The code also had the effect of reducing, and in many instnees 
completely eliminating, unethical and unfair methods of competition. 

A ent by Mr. August Egerer (**), Code Authority member and 
former president of the National Knitted Outerwear Association states 
as follows: 



(*) See "Knitted Outerwear THUS" issues of A; ril 25 and May 2, 1935. 
Published by National Knitted Outerwear Ass'n. IT. Y. C. 

(**) See Transcript of Hearing d" red October 16, 1933, pp. 7 aie 3. 

U.S.A. files ."" ' '.:.'.-:.:■ . 

°R?.3 



310 

"Laboring and suffering under a system of competition wherein 
the "business practices of the most vicious and unethical competitor 
tends to become established as the normal practice of all. Accordingly, 
this Clode aims to assist the industry in every way that unrestrained 
competition has tended to demoralize it. Thus this code lias been 
drafted with a view to reduce unemployment ?nd improve labor stand- 
ards; to protect the employee from the effect of destructive com- 
petition between employers by the establishment of a minimum wage 
and maximum hours of employment; to eliminate the sweatshop and attend- 
ant evils; to ban child labor and the farming-out of work to oe done 
in homes where labor, not subject to supervision, tends to degenerate 
in standards and remuneration; and to retain competition but to elev- 
ate it and restrict it to that region in which it properly belongs 
— in the service of the public good." 

Of no little importance is the education bestowed upon members of 
the industry by the operation of the code. Much educational work in 
the past has been done, of course, through the industry's trade as.so- 
ciations, but never was it applied generally so as to reach every in- 
dustry unit nor was it so broad in scope as the educational work re- 
sulting from the code, 

Never before had the manufacturer been in a position where daily 
he was faced with the responsibility of observing principles designed 
for the general good. Realization of this responsibility developed a 
desire to learn of industry conditions outside of one's own plant which, 
in turn, developed a sense of unit: r and loyalty beneficial to the entire 
industry. 

POST CODE LA30R CONDIT IONS . 

Examination of the data contained in the tables in Chapter II 
indicates that labor conditions have been little changed since the 
code period. 

However, strikes have occurred in isolated cases in' the industry 
showing that conditions are not altogether to the liking of labor 
in all mills in the industry. 

Additional date on post-code labor conditions seems desirable 
before drawin-; definite conclusions. 

POST CODE TRADE ASSOCIATIO N ACTIVITIES. 

Activity in the industry to revive code regulation after May 37, 
1935 is pertinent to note. 

It is necessary to go back before May 37, 1935 to see the attitude 
of the industry member? s.c the time the code v/as in operation but with 
a likelihood of being abolished. 

The April 16, 1935 issue of the "Knitted Outerwear Times" reported 
that the contractors-' group of Infants' £ Children's Wear Division of 
the industry assembled and adopted a resolution urging the re-enactment 
of the. National- Industrial Recovery Act, Declaring chat the "NRA had 

9823 



311 



been a salvation of the small business lan" , the contractors claimed 

in their resolutj "before NRA a cut-throat compe-" 

tition forced us to accept prices whjtc i .■■ so low th t we were not 
only unable to pay labor decent -'..,. nit were unable to --ay our over- 
head expenses, let alone draw a comnor living:." After the enactment 
of the Recovery .act and the institution of regulations governi.ip:' con- 
tractors, a marked improvement in the entire field to oh place with 
employment, payrolls, etc., with prices svurting, the resolution 
asserted. "We were, for the first time in the years of the degression 
able to make our businesses an instrument for employment and a source of 
livelihood for ourselves..." n.nd"...if no action is taken by Congress 
extending the life of NPJl" the resolution -predicted, "all the gains that 
have been made by the industry would be vitiated." 

On May 21 and 22, 1935 the industry joined the "march" on Washington 
to press for extension of ERA for two years. (*) 

Deleg: tions from many sections of the indsutry appeared in Washington 
to add weight to the presentation of the resolution, for the continuation 
of the NRA. 

Less than a week later, the U. S. Supreme Court issued its Schechter 
case decision which resulted in the cessation of all code activities. 
The effect of the announcement of the decision was to throw the industry 
into a wild st:te of confusion and uncertainty. 

Statements ap">e~ring in the industry news organ, the "Knitted 
Outerwear Times", (**) two days after the decision, show to an extent 
the manner in which the "death notice" of NBA was received. These' 
statements, in part, were: 

"Nullification of the National Recovery Administration. .. . came 
Monday afternoon as a startling, unexpected blow to members of the 
Knitted Outerwear Industry, leaving them bewildered and confused 
as to their plans for the future. 

"The impact was all the more paralyzing because opinion had 
generally been that the National Recovery Administration* was due 
to "^e continued in some form or other. Many manufacturers seemed 
unable to believe that bhe code which had governed "hem through 
nearly a year and a, half of improved business ethics and substantial 

gains was swept away, competely and cleanly Removal of the 

restraining bonds left them stunned with their new-found liberty. 

"Speculation was rampant that in time, in the event that no con- 
trolling legislati n at eared, the work-week would be lengthened 
ana wages reduced although unconfirmed rumors drifted about that 



(*) .".Knitted Outerwear Times", issue of Hay 23, 1935. Published by 
National Knitted Outerwear Ass'n. N.Y.C. 

(**) See "Knitted Outerwear Times" issue of May .-J 2 , 1935. Published by 
National Knitted Outerwear Ass'n. N.Y.C 



2833 



31 :- 

several producers were considering extending their operating 
periods." 



"Reports filtering in from other districts pointed to the 

existence of a similar state of bewilderment in other sectors of 
the country. ... 

"Predictions were freely made that a drastic curtailment of wages 
and simultaneous lengthening of hours would usher in throughout 
the country an unprecedented wave of industrial .unrest which would 
not skip over the knitted' outerwear field in its vicious swing 
through industry. 

"Calls fro.i members of the industry deluged the association and 
Code Authority switch boards late Monday afternoon, all of Tuesday 
and early this morning, expressing regret at the Supreme Court's 
momentous verdict and wondering in shocked fashion if there was 
not some possibility of 'continuing NRA's fundamental tenets pos- 
sibly by voluntary action." 

Hear the first of June, the National Knitted Outerwear Association 
sent a representative to a conference of apparel trade association execu- 
tives, "called to formulate methods of maintaining fair trade practice 
provisions in the apparel industries, in the face of efforts by customers 
of the various fields represented to gain concession over those permitted 
in codes of fair competition." (*) 

The Board of Directors of the National Knitted Outerwear Association, 
in June, 1935, made announcement of a program of activities of the asso- 
ciation for the coming year from July 1, 1935 to July 1, 1936, wherein 
was contained the following: 

"1. TRADE-CODE AND FAIR COMPETITIVE PRACTICES: 

"Within this group come all the varied efforts to maintain, 
so far as possible, the valuable, provisions of the former 
ITRA code and the ethical standards heretofore established 
for the Industry, through - 

"(a) Cooperation with government agencies, such as the Federal 
Trade Commission, to curb improper trade practices; and 

"(b) Spurring of voluntary action to keep high the standards 
of business conduct in a growing industry by use of 
publicity, conferences with retailers, wholesalers and 
their representatives, collaboration with other industries 
and trade associations, particularly in the apparel 
field, in resisting improper buying ta.ctics, and cooper- 
ation with newspapers , the Council of Apparel Trade 
Association Executives, the Better Business Bureau, and 
other similar agencies." 



(*) See "Knitted Outerwear Times", issue 'of June 13, 1935. 
Published by National Knitted Outerwear Ass 'n. '. T .Y.C. 



Op 2 r 



-313- 

After the great ™ave of excitement over the depth of NRA had sub- 
sided, there followed plans of action oy the industry to maintpin bene- 
fits of code rule. 

In the second week in June, 1935, the Board of Directors of the 
National Knitted Outerwear Association, >-ith "uniformity of opinion 
and the absence of dissent" approved a plan for the "maintenance of 
the vital lab.;r provisions and fair trade prrctice of the code on a vol- 
untary basis. " (*) 

Each of the various districts of the industry initiated action 
for the adoption of voluntary rules. The popular demand was for code 
continuance in some form. 

There resulted directly, from. the action of the Board of Directors 
of the Association, tne formulation of a voluntary trade Code and its 
presentation to t""0 hundred members of the industry at a general meeting 
held in Ne- York in Julv 1, 1935. (**) . 

Later the proposed trade code, through the industrv districts, was 
sent to all members of the indaistrv, together with a pledge which each 
member was asked to sign. The pledge carried the exnress stipulation 
that no signatorv would be bound to observe the ^revisions of the volun- 
tary pact unt-1 at least 70 percent of the industrv had signed similar 
pledges. 

The trade code and agreements to comply "ere to run until Julv 1, 1936, 
unless, alter sixty (60) days of operation, b5 percent of the industry 
had failed to sign pledges. 

The 70 percent goal was expected to be attained within the first 
thirty days. At meetings held in the districts throughout the industrv, 
resolutions were passed unanimously approving the new proposal. In 
fact,' nowhere were there found voices of objection. Discussion brought 
forth the use of statements: "The fate of vour industry is at stake.", 
"It is the duty of every man to do his bit to make this a bigger, grander, 
safer industry," and others indicating great enthusiasm over the trade 
codes. 

The trade code came more closely to exactlv duplicating the NHA code 
than any other textile agreement. Images, hours, chile labor, label, and 
many other provisions were induced . It is unfortunate that a copy of 
this cPde is not available lor inclusion in this report. 

Available, however, is a»copy of the trade code adopted June 24, 193 5 
by tne Board of Directors of *acific Coast Knitted Outerwear Association, 
which is believed to be similar to, or at least based upon, the trade 
code for all the industries. 

(*) See "Knitted Outerwear, Times" , issue of June 13, 19o5. 
Puclished by National Knitted Uiterwear Ass'n. F.Y.C. 

(**) See "Knitted Outerwear Times", issue of Julv 5, 1935 published by 

Nat'l Knitted Outerwear Ass'n, F.Y.C. anr Textile World", Julv issue, 
page 114, published by IvicGraw Hill Co., N.Y.C, 

'9823 



314 

code for all of the Industry, (*) 

Despite the great display of enthusiasm signed ^ledges to adhere 
to the voluntary code from individual members -<i the industry did not 
appear in sufficient numbers to' make 'the code effective. After about 
two months, only about 70 per cent, of the members had signed. 

There was no open announcement by the association of abandonment 
of the trade code plan* Perhaps none was made because oi' fear of a 
consequent competitive abandonment of code standards. 

At the beginning of the fall -,f 1935 the frequent expressions by 
the association and industry leaders of desires for continuation of ERA 
standards by trade pacts, merely ceased, anr- the "talk" employed 'oj the 
association eva&ec reference to 1IHA and \"a*s to the efiect that "Pros- 
perity is bach, smothering trade evils and all the industry needs is 
a well-supported and active trade association. 

Where an industry consists largely of .many small, ununionized, and 
highly coi.rpetitive units, as does the knitted outerwear industry,, needing (2 
standards of fair competition, it is most difficult to being it into 
an agreement for successful promulgation and observance of a voluntary 
code. Suggested reasons for this, based upon discussions coming .from 
the i ndus t ry f o 1 1 o w . 

Although the will of any group may be expressed democra.tica.lly through 
a majority., the control of unfair competition by voluntary agreement 
requires near unanimity, 'Such univerroiity of assent is hardly possible 
among business men of the ty e and in as great a number as make up the 
knitted outerwear industry. 

While it is true that 1Q per cent of an industry consisting of 
ohiselers can sabotage the effort:- of a*. 90 per cent coo'perative grpu">, 
there is another cs.use for dissension where volunt.ary codes are con- 
sidered. There are enough variations in details, of operation in every 
industry to give rise to honest differences of opinion over what might 
constitute unfair competition. In the absence of any authoritative (^ 

arbitrator, compromise becomes extremely difficult. Voluntary agree- 
ments, nowever simple, will contain some provisions on which differences 
of opinion will exist. Members of industry individually may agree on 
all provisions except one or ty/o., and base their objection to the entire 
document on some minor part which may not be entirely satisfactory. 
Other members of the indns try may have the same feeling with regard to 
pome other provision. Therefore, althoiigh each provision may be favored 
by a good majority of the industry, there may be enough objectors to 
different arovisions of the ?*greoment to result in a failure to obtain 
even a majority of support for the entire^ trade pact* 

Another difficulty arises from the very natur . of the agency -• the 
trade association - which undertakes to administer the voluntary code. 



(*) Trade code and accompanying regulations for use of labels with a 
co -;y of an agr: ernen.t to comply is filed with Work Materials for 
this study. II, H, A. Files. 

9S33 



3J! 

It . the im ; . Le, du of 3 iving to solicit aid 

and sup; ort from those ... whom it , in ition, exercise its 
strength. While, on oi rid, it must he the servant of the industry 
seeking to win sup ort \nd favor lendliness to all, it must - on the 
other hand - be the jud^e an irbitr toi t emptin to enforce rules. The 
difficulties of acting sim )usly as advocate md judge are unsur- 
mountable and obvious. 

With an associati i ting to thus straddle, there is always 
the possibility of the ere c f ieting trade associations by 
the disaffected. In some industri* Lu Lications of trade associations 
aire y irevent concerted action. Yet, even whe e there is a single 
organization, the constant fear exists of secession by those who have 
special interests. Then too, intra-industry politics are likely to be- 
come more dominating in the absence of a higher authority, creating ob- 
stacles in the way of successful operation. 

Another difficulty which, perhaps, was common in the case of the 
knitted, outerwear, industry, may be found in getting hundreds of snail 
manufacturers to affix signatures to any sort of legal instrument. 
Signing is a grove and terrifying procedure to many persons. Small 
business men, who do not have much tine to consider these matters deeply, 
find them difficult to comprehend,, or are shy of the possibility of be- 
coming involved in remote obligations by "tricky" legal phraseology. 
They are likely to call in their attorneys and accountants for advice. 
Finally, they are apt to wait and see what others are doing before 
taking action themselves. When this is general, the effects are dis- 
astrous to a voluntary, code. 

Finally, there -i*s the matter of supporting a code. An association 
is supported by membership dues. Parties to a voluntary code cannot e 
be enrolled solely from the membership of the association but must be 
from the industry at large. Yet non-association members are usually 
those who are reluctant to contribute subscription to such efforts and 
it is commonly for this reason they are not sessociation members. Since 
financial sup ort is necessary, there would follow the difficult task of 
getting non-association members to pledge observance of the code and 
agree to make money contributions. Failure to solicity adequate funds 
from this group would throw the whole expense of administration upon 
the shoulders of the already contributing association members. 

Efforts of the Pacific Coast Knitted Outerwear Association (a branch 
of the national association) were unsuccessful (*) in obtaining pledges 
to observe the voluntary code from approximately 80 to 85 per cent of the 
mills of the Pacific Coast, it was reported. This report was made, how- 
ever, after cessation of voluntary code activities by the National Knitted 
Out e rwe :.r Associati on. 

A report at the end of October disclosed that the Western Districts 
centered around Milwaukee, Wisconsin were still active in securing 
signers of pledges to observe a voluntary trade code. Nothing further 



(*) See -1935 Year Zooic Edition of "Knitted Outerwear Times", published 
October 3, 1935, by IP.t'l Knitted Outerwear Assn. IT.Y.C. 

9823 



316 

is known at the time of this writing, (*) 

Hothing worthy of note is 'mown (**) of the accomplishments of the 
Infants' and Children's Knitted Outerwear Association, the Metropolitan 
Knitted Textile Association and the bathing suit manufacturers whose 
executive bodies adopted or recognized the principal of the trade code 
at the 'beginning. 

At the tide of the general activity for adoption of the voluntary 
trade code, there were invitations open to all industries to submit to 
the federal government agreements in the form pert ' tted by the Federal 
Trade Commission Act. No such agreement was submitted by the knitted. 
outerwear industry pursuant to that invitation. Explanations, given in 
the "Knitted Outerwear Times", issue of July 18, 1935, were: 

"The trade-code for the industry lias not been submitted to the 
Federal Trade Commission, the National Knitted Outerwear Association 
made known, despite the fact that compacts are flowing into the 
Trade Commission offices from' other industries. 

. "It was explained that the Knitted Outerwear Trade-Code went beyond 
the presentations of other industries to the Trade Commission. 
These latter are being submitted in accordance with powers vested 
in the Federal Trade Commission bach in 1S29, at which time the 
Mational Association secured ratification of the fair trade prac- 
tice rules for the industry. 

"There would be no point, according to S. S. Korzenik, Association 
Secretary, in submitting a pact embodying these trade practices as 
they have already been accepted by the FTC. The projected trade- 
code, however, is a binding agreement between members of the in- 
dustry, enforceable in the coxirts." (***) 

Among the industry activities following the repeal of the N?A 
Knitted Outerwear Code were movements by the contractors to maintain 
the gain in cost accounting maae under BRA. Meetings held by this 
group, both before and after the Supreme Court decision, for the purpose 
of planning continuance of benefits of the NBA " -Regulations for Contract 
System of Production," brought forth no effective plan. The last known 
meeting of contractors was held in the middle of the month of September, 
1935. (****) 



(*) See 1935 Year Book Edition of the "Knitted Outerwear Tines" 

published October 31, 1935 by National Knitted Ottterwear Ass'n. 
N.Y.C. 

(**) See "Knitted Outerwear Tines" issues of June 13 and July 11, 1935. 

(***) The rules formerly approved by the Federal Trade Commission are 
discussed in Chapter III. 

(****) See "Knitted Outerwea.r Times", issue of September 19, 1935. 
Published by National Knitted Outerwear Ass'n., N.Y.C. 

9823 - ' ' • 



.,17 

Additional data on post-code bon itions is highly 
desirable. 

A picture of business conditions altogether different • 
from the one implied by the bare fact that the industry failed in 
its regulatory activities mi -:ht be presented by an accurate survey 
of the industry field. Even in the nbsence of post-code statistical 
data, it is firmly believe* that the failure of the industry in 
establishing voluntary regulations ,: as not due to lack of need. 

No voluntary trade practice code has been submitted to 
the Federal Trade Commission (*) since, the Schechter decision. 



( ' Statement of Mr. Go; : McCorkle, Director of Trade Practice 
Conferences, Federal Trade Commission (3/19/36). 



9823 



318 

APPENDIX I 

THE FIELD FOR FURTHER RESEARCH 

This study as first planned. was much broader than the product ac- 
tually realized. Limitation of resources made it impossible to carry 
out the investigation which was planned. For example, field work had to 
"be limited to a visit to the former code authority offices of the Knit- 
ting industries, and to an interview with their executive directors. 

In preparing this study, the authors Here confined principally to 
materials obtainable, in Washington, mainly that contained in the files 
of the National Recovery Administration. Some further information was 
obtained by special tabulations made by the Census Department and the 
Bureau of Labor Statistics, This material was of course supplemented 
by an examination of printed books and pamphlets on the knitting indus- 
tries. 

Written information was supplemented by the authors' 1JRA experience, 
contracts with these and related industries, and conferences with ERA 
officials intimately connected with the administration of these codes. 

Examination of this report reveals that it is deficient in man;'- res- 
pects. Some ways in which it could be improved by further research are: 

Uncompleted Work 

An extensive tabulation of the data in "Davison's Knit G-oods Trades" 
was begun early in the study, but only the tabulation of the data on 
machinery has been completed. Already recorded on cards now in the Sta- 
tistical Section, are data, on the raw material purchases by type, as 
of product produced ^oy each plant in the industries. Perhaps much could 
be gleaned from this material regarding the diversity of the products of 
the industries, ano the degree of specialization and overlap among dif- 
ferent products produced in individual plants. Information regarding 
selling outlets used by plants in the industries is also on these cards. 
From further data contained on these cards, it would be possible to as- 
certain the location of plants in the industries, by state and by size 
of city of location, as well as to further develop the data contained in 
the report on size of establishments. 

Machine Hour Limitations 

This subject certainly should be studied more fully, especially 
with respect to its effect upon the manufactures of special types of 
products; for example, the report contains no account of the Forest City 
Knitting Company exemption. This Company claimed to be making a very 
special type fl-f "ark, sock, and claimed that the machine restrictions were 
unfair to it. Similar investigations could be made for other special 
products, such as fancy infants' and children's wear, and other products 
requiring special treatment in machine hour limitations because of style 
and/or seasonality factors. 



9823 



Prices , 

It would 1»c interesting to investigate the actual amount of price 
bolstering that occurred due directly to provisions of the codes affect- 
ing prices, (other than labor provisions), such as prohibition of price 
guarantees, and machine hour restrictions. 

Labor 

The degree and e::tent of unionisation in the knitting industries 
should be studied in .any future examination. The effect of this union- 
ization on wages in different areas should' be studied. Seasonality 
and its effect on workers and their annual earnings should also be 
studied. 

Industrial Migration 

There is an indicated trend toward migration of the industries to 
the South and to small-sized cities. The reasons back of this migra- 
tion, and its extent should be examined. 

Trade Practice Provisions 

The effects of trade practice provisions, and difficulties of en- 
forcing these provisions, should be investigated, especially in regard 
to the ease of evading trade practice provisions through collusion be- 
tween customers and manufacturers. 

Machinery Data 

In connection with the machinery da.ta contained in this report, 
estimates could be made of the industries' total capacity to produce, 
provided all of the machinery were operated full- tin* at maximum ef- 
ficiency. It would be interesting to know to what extent overhead could 
be reduced by this procedure, and. if prices could be reduced sufficiently 
to increase the market for the products and yet have a stable market. 
The amount of old machinery, obsolescence, modernization, and adjustment 
of machinery to changing economic conditions, such as style, are further 
fields for study. 

Integration 

The possibility for developing completely integrated units, manu- 
facturing their own raw materials, as well as conducting their own 
selling agencies, (perhaps to the ultimate consumer), might solve some 
of the industries' problems. Success in this line seems already to 
have been achieved by one hosiery firm, the Real Silk Hosiery Mills. 

financi al Problems 

The field of stud-' along financial lines in these industries has 
only been scratched. Hot even the available data have been thorough^ 
studied. An examination of corporate set-ups, especially the family- 
owned enterprises in the outerwear field, the amount of profits by size 
groups, (distributed by quartiles as was done in the underwear portion 

9823 



320 

of the report), and "by products, should yield interesting information. 

Motives for Codification 

This is obviously a field for further investigation since trade 
associations had various reasons for desiring codes. In dome industries, 
the trade associations were greatly interested in strengthening their 
organizations, and spent a great deal of effort in obtaining members. 
In other industries, codification was largely due to pressure from or- 
ganized labor. On the otherhand, it is possible that some industries 
desired codes as shields to prevent government interference. Then too, 
one of the principal reasons for codes according to the viewpoint of 
some industries was the boosting of prices which they hoped to obtain 
bu use of codes. 



'( 



9823# 



OFFICE OF THE NATIONAL RECOVERY ADMINISTRATION 
THE DIVISION OF REVIEW 

THE WORK OF THE DIVISION OF REVIEW 

Executive Order No. 7075, dated June 15, 1935, established the Division of Review of the 
National Recovery Administration. The pertinent part of tha Executive Order reads thus: 

The Division of Review shall assemble, analyze, and report upon the statistical 
information and records of experience of the operations of the various trades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditions in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate review of the effects of the Administration of 
Title I of the National Industrial Recovery Act, and the principles and policies 
put into effect thereunder, and shall otherwise aid the President in carrying out 
his functions under the said Title. I hereby appoint Leon C.. Marshall, Director of 
the Division of Review. 

The study sections set up in the Division of Review covered these areas: industry 
studies, foreign trade studies, labor studies, trade practice studies, statistical studies, 
legal studies, administration studies, miscellaneous studies, and the writing of code his- 
tories. The materials which ffere produced by these sections are indicated below. 

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

THE CODE HISTORIES 

The Code Histories are documented accounts of the formation and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of members in the industry; the history of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which were held, and 
the activities in connection with obtaining approval of the code; the history of the ad- 
ministration of the code, covering the organization and operation of the code authority, 
the difficulties encountered in administration, the extent of compliance or non-compliance, 
and the general success or lack of success of the code, and an analysis of the operation of 
code provisions dealing with wages, hours, trade practices, and other provisions. These 
and other matters are canvassed not only in terms of the materials to be found in the files, 
Dut also in terms of the experiences of the deputies and others concerned with code formation 
and administration. 

The Code Histories, (including histories of certain NRA units or agencies) are not 
mimeographed. They are to be turned over to the Department of Commerce in typewritten form. 
All told, approximately eight hundred and fifty (850) histories will b6 completed. This 
number includes all of the approved codes and some of the unapproved codes. (In W ork 
Materials ho 18, Content s of Code Histries . will be found the outline which governed 
the preparation of Code Histories.) 

(In the case of all approved codes and also in the case of some codes not carried to 
final approval, there are in NRA files further materials on industries. Particularly worthy 
of mention are the Volumes I, II and III which constitute the material officially submitted 
to the President in support of the recommendation for approval of each code. These volumes 
9768—1 . 



Q 



set forth the origination of the code, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industr J( the 
recommendations of the various Advisory Boards, certain types of official correspondence, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to auendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the v.'ork of the Division 
of Review. ) 

THE WORK MATERIALS SERIES 

In the work of the Division of Review a considerable number of studies and compilations 
of data (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Work Mat eria ls lis.. 17. Tentati ve Outlines and Summaries of 
Studies in P rocess , these materials are fully described). 

I ndus try Studies 

Automobile Industry, An Economic Survey of 

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

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

1934. 
Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part L - Exports and Exporting under NRA Codes. 

Forest Products Industries, Foreign Trade Study of the 

Iron and Steel Industry, The 

Knitting Industries, The 

Leather and Shoe Industries, The 

Lumber and Timber Products Industry, Economic Problems of the 

Men's Clothing Industry, The 

Millinery Industry, The 

Motion Picture Industry, The 

Migration of Industry, The: The Shift of Twenty-Five Needle Trades From New York State, 
1926 to 1934 

National Labor Income by Months, 1929-35 

Paper Industry, The 

Production, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 

Retail Trades Study, The 

Rubber Industry Study, The 

Textile Industry in the United Kingdom, France, Germany, Italy, and Japan 

Textile Yarns and Fabrics 

Tobacco Industry, The 

Wholesale Trades Study, The 

Women's Neckwear and Sc?rf Industry, Financial aDd Labor Data on 

9758— 2 



•» 



11 



- iii - 

Women's Apparel Industry. Some Aspects of the 

Trade P ractice St udies 

Commodities, Information Concerning: A Study of NRA and Related Experiences in Control 
Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes 
Distributive Relations in the Asbestos Industry 
Design Piracy: The Problem and Its Treatment Under NRA Codes 
Electrical Mfg. Industry: Price Filing Study- 
Fertilizer Industry: Price Filing Study 

Geographical Price Relations Under Codes of Fair Competition. Control of 
Minimum Price Regulation Under Codes of Fair Competition 
Multiple Basing Point System in the Lime Industry: Operation of the 
Price Control in the Coffee Industry 
Price Filing Under NRA Codes 
Production Control in the Ice Industry 
Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

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

Labor Studies 

Cap and Cloth Hat Industry, Commission Report on Wage Differentials in 

Earnings in Selected Manufacturing Industries, by States, 1933-35 

Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-35 

Fur Manufacturing, Commission Report on Wages and Hours in 

Hours and Wages in American Industry 

Labor Program Under the National Industrial Recovery Act, The 

Part A. Introduction 

Part B. Control of Hours and Reemployment 

Part C. Control of Wages 

Par'. D. Control of Other Conditions of Employment 

Part E. Section 7(a) of the Recovery Act 
Materials in the Field of Industrial Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

Administrativ e Studies 

Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 

Administrative Interpretations of NRA Codes 

Administrative Law and Procedure under the NIRA 

Agreements Under Sections 4(a) and 7(b) of the NIRA 

Approve Codes in Industry Groups, Classification of 

Basic Code, the — (Administrative Order X-61) 

Code Authorities and Their Fart in the Administration of the NIRA 
Part A. Introduction 
Part B. Nature, Composition and Organization of Code Authorities 

9768—2 . 



Q 



Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 
Code Compliance Activities of the NRA 
Code Making Program of the NRA in the Territories, The 
Code Provisions and Related Subjects, Policy Statements Concerning 
Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Previsions in the Codes 

Part E. Agreements under Sections 4(a) and 7(b) 

Part F. A Type Case: The Cotton Textile Code 
Labels Under NRA, A Study of 

Model Code and Model Provisions for Codes, Development of 

National Recovery Administration, The: A Review of its Organization and Activities 
NRA Insignia 

President's Reemployment Agreement, The 

President's Reemployment Agreement, Substitutions in Connection with the 
Prison Labor Problem under NRA and the Prison Compact, The 
Problems of Administration in the Overlapping of Code Definitions of Industries and Trades, 

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

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

Legal Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees to Enforce 

Commerce Clause, Federal Regulation of the Employer-Employee Relationship Under the 

Delegation of Power. Certain Phases of the Principle of, with Reference to Federal Industrial 
Regulatory Legislation 

Enforcement, Extra-Judicial Methods of 

Federal Regulation through the Joint Employment of the Power of Taxation and the Spending 
Power 

Government Contract Provisions as a Means -if Establishing Proper Econcmic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com- 
merce Clause, Cases on 

Legislative Possibilities of the State Constitutions 

Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- 
tion? 

State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis 

Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the Uiited States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 

9768—4. 



THE E VIDENCE STUDIES SERIES 

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



Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and Shoe Manufacturing Industry 
Bottled Soft Drink Industry 
Builders' Supplies Industry 
Canning Industry 
Chemical Manufacturing Industry 
Cigar Manufacturing Industry 
Coat and Suit Industry 
Construction Industry 
Cotton Garment Industry 
Dress Manufacturing Industry 
Electrical Contracting Industry 
Electrical Manufacturing Industry 
Fabricated Metal Products Mfg. and Metal Fin- 
ishing and Metal Coating Industry 
Fishery Industry 

Furniture Manufacturing Industry 
General Contractors Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

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



Leather Industry 

Lumber and Timber Products Industry 
Mason Contractors Industry 
Men's Clothing Industry 
Motion Picture Industry 
Motor Vehicle Retailing Trade 
Needlework Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 
Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
try 
Wool Textile Industry 



THE STATISTICAL MATERIALS SERIES 



This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment. Payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qualifications that should be observed in using the 
data the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series: 
9768—5. 



- vi - 

Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint, Varnish, and Lacquer, Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

THE COVERAGE 

The original, and approved, plan of the Division of Review contemplated resources suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govern- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies; and the abandonment of the consolidation and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be cared for under other 
auspices. 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the largest and richest single body of information 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review. 
9768—6. 



. 






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