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belts from overhead shafts. In many cases the ceilings were low and the belts scarcely more than head high. Most of the looms were antiquated and appeared to be in need of repair. Often these looms, not tightly secured, slid, shook, and moved about on the wooden floors. When the looms were running the entire floor space to which they were attached shook visibly. The constant pounding caused many of the walls as well as the floors to vibrate, and in some instances the floors definitely sagged with the weight of the machinery.

The condition may best be illustrated by description of some typical shops. These shops were located in one area. As a background there is this to consider: Six buildings, each four stories high, were in one block. Several of the buildings were connected hy later built annexes. Seventy tenants, sixty-one of which operated silk mills, were housed in this honeycomb.

On the fourth floor of one of these buildings there are seven shops (shops 18-24). The space is divided into two sections by partitions of half wood and half wire netting. Five shops operating a total of 26 looms occupy one of the sections, with a total floor space of 3,500 square feet. This section is very crowded; the aisles are littered with boxes, weights, and warp beams. The looms are spaced so close together as barely to allow the operator to stand inside and work. In no case is there more than 2 feet between breast beams. Take-up weights extend into this space. The looms are belt-driven from overhead shafts and none of the exposed machinery is guarded. The floor is in bad condition, many loose boards making walking hazardous. The floor sways and the walls vibrate perceptibly. Exit to the fire escape is blocked and there is only one outlet to a narrow stairway.

There are but two toilets for the joint use of the five shops. As in most cases, they have been built in at a much later date than the buildings in a minimum of space and are dark, dirty, and poorly ventilated. There is no rest room or wash room. There are no chairs or seats of any kind available for any worker. Drinking water was not provided. The entire floor space has but 14 windows. The lighting is bad; artificial lighting is obtained by the usual 50-watt bulb handing over each side of the loom. All working conditions in this loft were below proper standards.

These are not exceptional situations; rather in the shops canvassed are they the rule. Except in a very few instances where conditions were somewhat better, description of any of the shops would present the same picture.

(1) Hours worked. -Although the Paterson silk industry is one of small shops, during the months of February and March while approximately 60 percent of the looms in the broad goods industry were running,1 few looms among those studied in Paterson were idle, and those were in the larger shops. Only 10 firms were not running all their looms; 7 of these had 30 or more looms, the rest were smaller. Although many of the smaller firms kept no record of hours worked, they did not, in fact, run one shift of 40 hours, but, instead of employing additional workers, worked the same shift of workers 50, 60, and 70 hours. Such excessive hours can easily be worked in a situation where the members of a family are the only workers, where no labor organization exists, and where the workers, being also owners, are more interested in the total plant production than in the rate paid or hours worked.

Seven family shops with 52 looms reported 13 workers employed for 60 hours; in other words, in seven cases the firms made no attempt to conceal the fact that they were working long hours in violation of the code. In many instances, the investigators called on firms at 6 o'clock in the evening to find them still running, although, upon answers to the questions asked of them, they reported working only one shift of 40 hours. In one case (firm 56) a man running an 8-loom shop with his wife boasted that he worked as long as he pleased. Much of the information concerning hours was obtained because the individual interviewed wished to impress the investigators with the difficulty of earning a living in the silk industry. The complaint, “I work 16 hours a day and can't make a living' was frequently heard.

Figures on actual hours worked for the month of February were obtained indirectly from another source. One group of firms paid rent, including power and light for 8 hours a day and 1 cent an hour per loom for every hour of overtime. The firms reported the rent paid for floor space and 8 hours, and the total rent paid for the month. Knowing the number of looms in operation, the number of hours' overtime was computed. From these calculations, it was found that a number of firms were working as much as 60 or 70 hours a month overtime, even in excess of two shifts of 40 hours each per week.

1 National Federation of Textiles, A Timely Summary of Operations in Rayon and Silk Weaving Mills, Four Weeks' Periods Ended Feb. 23, 1935, and Mar. 23, 1935.

g. Ease of entering silk business. It is not difficult to enter the silk business in Paterson. Rents are cheap and floor space is readily obtained. Often, power and light are secured as part of the rental contract. The fact that no leases are required encourages the small firm with little capital to manufacture silk. Secondhand looms in various stages of wear can be obtained with a relatively small down payment. By operating on commission for another mill or for a converter no investment in raw material need be made.

1. Availability of floor space and rental terms.-Only a handful of the Paterson manufacturers own their buildings. A study of the Paterson city tax records indicated that only 15 silk mills in that city owned the building in which they operated. Not only did they not own their buildings, but practically all of them operated on a month-to-month tenancy. Of the 150 shops first canvassed, only 16, or 11 percent of the shops, had leases. Only 4 of the leases ran as long as 5 years; 12 were for 3 years or less.

The mill building owners, with no other tenants in sight, offer the small silk manufacturer a further incentive in the form of low rents. Table 6 indicates the cheapness of rents. Since most of the space is rented on terms which include light and power for one shift of 40 hours, estimates of power had to be made in some cases to make the figures comparable. In other instances, rentals were paid jointly by three or four shops and their respective shares had to be prorated. The average monthly rent with power and light for 40 hours for shops of 4 looms was approximately $20; for shops of 8 looms, $30; for shops of 12 looms, $45; for shops of 16 looms, $60; and for shops of 20 looms, $85. (See table 6.)

TABLE 6.- Average rentals including power for one shift 1

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"Taken from a survey of 118 Paterson firms that supplied information.

Despite the low rentals, oftentimes tenants are far in arrears. One shop of 20 looms (firm 8) owed as much as $680 back rent, although its monthly rental was only $110. Another shop of 24 looms owed $565, another shop of 26 looms, $620 on a monthly rent of $104, a fourth shop of 20 looms, 00 on a rent of $56. This information was obtained from the records of a landlord of one of the buildings occupied solely by silk mills. Had such information been available for all of the shops visited these examples could doubtless be multiplied many times. With no other tenants available, a landlord prefers even a tenant who is in arrears with his rent, to having the floor vacant.

2. Price and supply of second-hand looms.-With factory space easily obtainable at low rentals, a worker can open a family shop with little investment. The only equipment needed is second-hand looms which can be purchased very cheaply. There is always an ample supply of such looms on the market. Among the mills covered, practically no new looms have been bought during the past 3 years. The canvass indicated that most of the looms had been purchased through second-hand machinery exchanges.

Data on purchases of looms were obtained directly from the firms canvassed and from the Passaic County chattel mortgage and conditional sale records. The data obtained directly from the firms was spotty and of little value. Many of the firms had forgotten from whom the looms were purchased, or what price had been paid. Although there was some indication that looms bought directly from mill owners in distress were purchased more cheaply than from machinery exchanges, little such information was available. One of the mill owners complaining about the threat that the family shop offered to the legitimate firm in Paterson, admitted that he had sold 10 looms to a weaver at $20 each to start a family shop.

The other source of information on the purchase of looms was far more satisfactory. Information on the machinery bought through second-hand exchanges on conditional sale agreements was obtainable from the county chattel mortgage and conditional sales records. A tabulation was made of all such purchases by 150 of the firms covered in the canvass.

In the 5-year period beginning January 1, 1930, and ending March 1, 1935, a total of 1,232 looms were purchased on conditional sale by the 150 firms considered (table 7). If the purchases of looms by these 150 firms through the second-hand silk machinery exchanges is a representative picture of the turn-over of second-hand looms in the entire city of Paterson, it is estimated that approximately 5,000 looms were purchased during the 5-year period in this manner. As table 7 indicates, 422 looms were purchased in 1930–31, 189 in 1932, 191 in 1933, and 430 during 1934 and 2 months of 1935. The tremendous increase of such purchases in the last year is too marked to go unnoticed. About twice as many looms were purchased as in any of the previous 4 years. Table 8 indicates more clearly the effect of the depression on the purchase of second-hand looms. In the 14-month period, 1934–35, 49 separate purchases were made by firms included in the group of 150. This was more than twice as many as 1933, four times as many as in 1932 and twice the average of 1930 and 1931. TABLE 7.Distribuiion of prices paid for second-hand looms purchased from the

machinery exchanges by 150 Paierson shops, 1930–35 1

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1 Taken from the Passaic County conditional sale and chattel mortgage records.
• Record for 24-month period from Jan. 1, 1930-Dec. 31, 1931.
* Record for 14-month period from Jan. 1, 1934-Feb. 28, 1935.

TABLE 8.—Purchase arrangement on second-hand looms purchased from the ma

chinery exchanges by 150 Paterson shops, 1930-351

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1 Taken from the Passaic County Conditional Sale and Chattel Mortgage records.
? Record for 24-month period from Jan. 1, 1930-Dec. 31, 1931.
3 Record for 14 months from Jan. 1, 1934-Feb. 28, 1935.

While sales of looms were increasing, relative prices were somewhat less. The average price paid per loom was $262 in 1930-31, $193 in 1932, $112 in 1933, and $164 in 1934–35. The looms were bought on easy payments with very little cash. The average down payment per loom was $56, while 13 monthly payments were required in 1934–35. In some cases no down payment at all was required, woile terms of 24 monthly installments were not uncommon.

A few examples will indicate the ease with which looms were purchased. In one case eight looms were bought for a total of $724. No down payment was required. The first installment of $44 was due 1 month after the purchase. The price was to be paid in 17 further monthly installments of $40. In another case four looms were purchased for $50 each. A cash payment of $50 was made. The balance was payable in six installments of $25 each. In a third instance six looms were purchased for $195. Sixty dollars was paid on account. The balance of $135 was divided into three monthly installments.

With no capital necessary for the purchase of raw material, a weaver has the added inducement of cheap rentals and easy terms for purchasing looms to aid him in opening a small commission weaving shop. At any time a person can start a 4-loom shop with a capital of $250. An 8-loom plant can be started with $375.

h. Income of commission weavers.-An estimate of actual income of the workers in the small Paterson shops is extremely difficult. To compare the earnings of these workers with those of employees in standard mills, it would be necessary to get the gross revenue of the shop and to deduct from it all costs other than labor. To make wages ultimately comparable, it would be necessary also to deduct whatever would be fair wages for the time put in by the owner-workers in excess of regular working hours to take care of the work involved in management. In the small shops having employees in addition to family members, while there is always the claim that regular wages are paid, there is no certainty that this is done and the closeness of relations between owner and employees would make enforcement of even the code minimum provision practically impossible.

The problem of arriving at actual worker income is further complicated by the fact that the proprietors of these small shops are ignorant of most of the prin. ciples of accounting. They are apparently unaware of the fact that such items as depreciation are actually being incurred and in one way or another must be paid by the owner of the mill. To arrive at a fair estimate of net labor income per worker some deduction would have to be made for this and similar overhead items,

Some examples of the operation of these family shops may serve to clarify the picture. Shop 8 has 20 looms. It runs one shift and employs 5 weavers, 2 quill winders and I loom fixer. A father, son and daughter, and 5 outsiders work there. Looms had been bought outright 3 years before at $500 per loom. Rent, power, and light costs $110 a month, but the shop owes $680 in back rent. On the week before the investigator called the shop had been busy. It had produced 2,500 yards of 50/64s and received 5 cents a yard without warping and winding, from à New York converter. The gross income received was $125.

The father running the shop reported that he drew a wage of $30 a week for weaving and managing the shop; his son, also a weaver, received a weekly wage of $25; his daughter, a quill winder, received $14.40 a week, the outside quill winder $13 a week, the outside loom fixer $25 a week and the three outside weavers received 3% cents per yard for weaving 400 yards each a week in 40 hours. The weekly expenses amounted to $186.78. 1 weaver (son).

$25.00 1 weaver (father)--

30. 00 3 weavers (342 cents per yard—1,200 yards).

42. 00 1 quill winder (daughter)

14. 40 1 quill winder.

13.00 1 loom fixer..

25. 00 Twisting expense.

8. 00 Mill supplies

2. 00 Expressage

2. 00 Rent..

25. 38


186. 78 These figures obviously do not balance. Excluding the incomes of the father Bon, and daughter, the expenses incurred in this week's operations total $117.38. This calculation leaves out several real expense items. The looms were depreciating at a rate difficult to determine, but none the less actual. On the assumption that the life of a second-hand loom is 10 years, these looms must be depreciated at the rate of $50 per loom per year, or $4.25 per loom per month, approximately $1 per loom per week. This depreciation cost, because of the unusually high prices paid for the looms, is somewhat more than the average would be. Neglecting other overhead costs and adding this depreciation item to the expenses incurred by the shop, the total cost for the week's operations was $206.78; deducting "wages" of the family leaves $137.38. With a gross income of $125 a week, the deficit of this shop for the week in question was $12.38. These figures allowed only

$14 per week for three outside weavers when the standard wage in Paterson at the time was approximately $20 per week for weavers.

This shop, during the week in question, if it produced, as the owner stated, 2,500 yards of cloth on 20 looms, must have been running more than 40 hours. The owner's family received no income whatever unless either rent or the wages of other workers went unpaid. When it is recalled that this quality, 50/64's, is the standard Paterson product and that the great bulk of the output in the shops covered was paid for at between 5 and 6 cents without warping and winding, it can be seen that the figures for this shop are typical of a large part of this section of the industry.

Shop number 11 started in business 3 months ago. All of its workers are members of the same family; three brothers and a sister are the entire work force. The family bought 12 second-hand looms on the installment plan and opened a commission weaving shop. During the week before the investigator called, the shop had been running one shift of 40 hours and had produced 1,300 yards of 50/64's on a commission weaving basis. For this cloth, the family received 534 cents per yard, a total of $74.75. Rent for this mill is $10 a week; mill supplies, $1; expressage, $1.50; and loom installments, $12 per week. A part-time twister is employed whenever necessary at a cost estimated to average $4 a week. The actual outgo of this shop is, then, $28.50, leaving a net income of $46.25 to be divided among the family.

Although the family shop makes no further analysis of its costs they may be approximated somewhat more closely then the figures given above. It may be safely assumed that a 12-loom shop running one shift requires one-third of the time of a loom fixer. This item would cost $10, estimating the loom fixing wage rate at $30 per week. The price of the looms was not given by the family but on the assumption that they did cost the average paid for installed second-hand looms in 1934, $175 ($164 plus $11 installation charge), the loom overhead charge would be approximately $4 per week. The deduction to be made from the gross income before the net family income can be calculated would thus be $30.50. Rent.

$10.00 Mill supplies

1, 00 Expressage.

1. 50 Twisting expense.

4. 00 One-third loom fixer..

10. 00 Loom overhead..

4. 00

$30. 50 This deduction from the gross would leave for the family, $44.25. There are four members of the family working; the remaining income, divided among these four people, would be $11.06 each, per week.

These cost analyses are based upon the assumption that the shops will run 40 hours per week, 52 weeks per year. Any reduction in this activity would, of course, increase the overhead costs and decrease the real net income to the workers. In the very nature of the case, exact calculations of the average net earnings of these workers are impossible. It may safely be estimated, however, that the average earnings are considerably below the code minimum.

V. SUMMARY OF PATERSON SITUATION The board has thus found to exist in Paterson the condition in which neither minimum wage nor maximum hour provisions of the Code of Fair Competition are enforced or enforceable. A large number of unemployed workers, a supply of looms available for small down payment, factory space and light and power not difficult to secure, and an easy outlet through the converter-commission weaver method of marketing, all tend to encourage the establishment of many small mills. The size of the shops, their high mortality, and their mobility make direct enforcement of the code provisions against them virtually impossible; the particular characteristics of the family shop also make it difficult to determine where owner income ends and wage income begins. Thousands of looms are operating in Paterson upon this basis; no small part of the commission weaving done outside Paterson is being forced toward the same levels as those which prevail in the family shops.

Anyone familiar with the rayon and silk industry or any other industry in which similar basic conditions have produced similar competitive situations, will understand the serious danger now confronting the industry. This danger is no less present to the rayon and silk workers than it is to the mill owners. Wage

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