Imagini ale paginilor
PDF
ePub

3. The Public Utility Holding Company Act: Because it seeks to bar from the mails matter which is not harmful or objectionable per se (American States Public Service Co. case).

4. The Child Labor Law: Because it seeks to deny the facilities. of interstate commerce for the purpose of regulating conduct beyond the control of the Federal Government (Hammer v. Dagenhart).

In the light of all the foregoing considerations, and for the other reasons presented to this committee, we submit that the pending bill (H. R. 9072) is unsound in policy and invalid in law, and we respectfully urge this committee to disapprove the bill.

STATEMENT OF EARL CONSTANTINE ON BEHALF OF NATIONAL
ASSOCIATION OF HOSIERY MANUFACTURERS

Mr. SCHNEIDER. Will you please state your name?
Mr. CONSTANTINE. My name is Earl Constantine.
Mr. SCHNEIDER. And whom do you represent?

Mr. CONSTANTINE. I represent the National Association of Hosiery Manufacturers.

Mr. Chairman and gentlemen, I have a few general observations which I shall want to make a little bit later on in my remarks, but, at the outset, with your indulgence, I would like to make some references touching the high spots of an analysis or a memorandum which we have prepared, taking up the various findings on which the proposed act is premised, and presenting the facts on each one of those scores to the extent that they are available.

At the conclusion of my reference to this memorandum I propose to present this for your records and for any further study that your committee may choose to make of it.

In the findings I quote the paragraph to this effect, that—

In recent years this flow of interstate and foreign commerce in textile products has substantially declined in value and amount, has been subject to severe price instability, has been diverted in large quantities from certain States to other States and from certain mills to other mills by reason of unfair competition in wage rates and other conditions of employment, has been interrupted and greatly burdened by strikes and other forms of industrial unrest, and has otherwise been disorganized and depressed.

I shall not say that some of these elements have not appeared in the picture with regard to the hosiery industry. However, I shall try honestly and frankly to present the facts, showing, in some cases, that those particular conditions do not exist, and, in other cases, I am showing the extent to which we find they do exist. And I shall comment as I go along.

I would like to say one thing on the matter of the value of hosiery shipments and the volume of business done by the industry.

One thing to remember in this connection is that the product that we manufacture is not only a hosiery product but it is a matter of costume and color scheme; it is a part of the clothing. You would, therefore, naturally expect to discover that the facts in the picture reveal that the fluctuation in the picture of the demand is relatively small.

Going back to 1929, the total units sold were approximately 117,000,000 dozens, which is the unit used in our industry.

Mr. SCHNEIDER. What year was that?

Mr. CONSTANTINE. That was 1929.

Mr. SCHNEIDER. How many pairs did you say?

Mr. CONSTANTINE. In 1929, 117,000,000 dozens. I will use rough figures, using close approximations.

In 1930, when the shrinkage of the buying power in the depression was first seriously felt, we went down to approximately 99,000,000 dozen pairs.

In 1931 it showed a trend upward, and went up to approximately 99,500,000 dozen pairs.

In 1932 it had progressed to approximately 102,000,000 dozen pairs. In 1933, which was the year in which we had the code in effect for part of the year, it went up from 102,000,000 dozens that I mentioned to approximately 105,500,000-dozen pairs.

In 1934, the only full year during which we operated under code conditions, it showed a recession from 105,500,000 dozen pairs to 103,500,000 dozen pairs. I would attribute that recession to the generally accepted fact that beginning with the summer of 1933 and running through the fall there was a considerable amount of abnormal prebuying and that prebuying was done in an effort to anticipate the costs expected to exist under the code, which went, in these instances, I believe, a little beyond an even balance, and it had to be offset in the spring of 1934. And that offset in the spring of 1934 doubtless accounts for the shrinkage in 1934. It would be fairer, if one were making a more careful analysis, to take the 2 years together and split them into four quarters, and study the last four quarters. That would be 4 half years. Then take the second half of 1933 with the two halves of 1934, and then you would probably get a more accurate view as to the level to which the consumption had risen.

In 1935, during which year the code was in effect for roughly 5 months and out of effect for 7 months, the increase went from roughly 103,500,000 dozen pairs to 111,250,000 dozen pairs. There was a very marked jump in consumption during 1935, reflected principally in women's silk goods.

Mr. ELLENBOGEN. On that score, Mr. Constantine, out of the 5 months of 1935 that were under the code, how does that compare with 1934?

Mr. CONSTANTINE. January and February 1935, are usually the most important in our branch of the industry in shipment and demand. However, in January and February 1934, we had an abnormal demand.

Mr. ELLENBOGEN. A very high demand?

Mr. CONSTANTINE. Yes; a very high demand for those 2 months. The result of that was that that was followed in the next 3 or 4 months by poorer months than we would have had normally. We had an offset condition. And if we should refer back to our monthly statistical bulletin those of us who are particularly interested in the hosiery industry will recall that we took note of that abnormal rise in January and February and cautioned the industry that it would be bound to be offset by a fall within the next few months. And that offset took place.

And I might add also that that most important branch using the silk commodity found silk was at a very low level for a considerable period of time. And you can see for the year 1934 and the first half of 1935 the level was approximately $1.35 per pound; beginning with June or July of 1935, silk, for the first time in several years, started

to rise quite perceptibly, and it went up, I think late in November, to $2.07 per pound, which, in terms of percentage, was a very extraordinary rise in the commodity. That rise was steady beginning late in July, it was accentuated late in August and also in September and October, and, finally, in November.

Then, of course, there was the usual reaction which comes when a thing of that kind takes place. And that undoubtedly accounts for this phenomenal increase, because it had the same effect there, because of the expected increase in labor costs and other costs in 1933. There was quite a little pre-buying again in the fall of 1935.

You can see, therefore, that so far as the hosiery industry is concerned, the picture presents not a shrinkage of shipments or of products purchased by our consumers, but the reverse.

Mr. WOOD. Have you any comparisons between the shipments in the first quarter of 1935 and the first quarter of 1932?

Mr. CONSTANTINE. It is not exactly comparable, because, prior to the code, our industry, like most industries, lacked statistical service. The statistics which were secured by the Department of Commerce were secured only from a limited number of firms voluntarily giving the statistics and the setup on which they were published was not exactly a commercial setup. The terms in which they were given were not the terms used in the industry.

Mr. WOOD. Do you have any comparable figures between the first quarter of 1934 and the first quarter of 1935?

Mr. CONSTANTINE. The first quarter of 1934 and the first quarter of 1935, you say?

Mr. WOOD. Yes; those first quarters.

Mr. CONSTANTINE. Yes, sir; I have. I can furnish those. You want shipments and production, do you?

Mr. WOOD. Yes; production or shipments.

Mr. CONSTANTINE. I will give you both of them. Do you mean for the first half or the first quarter?

Mr. Wood. The first quarter or the first half, or both.

Mr. CONSTANTINE. I will give both of them. I will have those in the mail by tomorrow.

Now, as to the value of hosiery shipments: These are taken from various sources. At best, I would say that they are honest estimates by the sources. I cannot attach to them any accuracy because of the nature of the matter we are discussing; that is, the dollar value.

In 1929 the value of the product for the industry is estimated at $528,000,000. In 1930 it went down to $450,000,000; in 1931 to $331,000,000; in 1932 to $300,000,000; for 1933 I have no figures; in 1934 it was down to $290,000,000; in 1935 it was up to $318,000,000. Mr. ELLENBOGEN. Did the tremendous drop in the price of silk have something to do with this?

Mr. CONSTANTINE. Oh, yes; it did.

Mr. ELLENBOGEN. Is that the major cause?

Mr. CONSTANTINE. There were two causes, I would say, In 1929 there were two drops. There was a drop in the commodity-taking the silk end of the industry-and there was a drop in the rates of wages paid. The wage situation improved. It began improving in 1933. The commodity situation remained low, and it picked up again in the fall of 1935.

I have this comment on that: The most important contributing factor to the decline in total value of hosiery shipped in recent years, in spite of increased volume, is the lower prices for raw materials.

To support that I present a table showing the average yearly prices of the four main commodities used by the industry, which are silk, rayon, cotton, and wool. I have them for each year, but I will take the first and last in each case, covering the span 1929 to 1935. This is the average, in each case, for the whole year.

Silk in 1929 was an average of $4.93 per pound.

In 1935 it was down to $1.63. In terms of percentage, of course, that was a very severe shrinkage.

Then rayon in 1929 was $1.25 per pound as an average price.

In 1935 the average price per pound was only 57 cents.

In 1929 cotton was 19.1 cents; in 1935 it was 11.9 cents.

Wool, of all the commodities, evidently showed the least shrinkage in terms of percentage:

In 1929 the average price was 97 cents but in 1935 it was 74 cents. To illustrate the effect of changing material values upon the total value of the finished product, it is estimated that the 1935 production of women's full-fashioned hosiery, which is the largest item in the industry, at prices of raw silk prevailing in 1929, would be $308,300,000, instead of an estimated actual value of $213,300,000. In other words, in order to make that clear, we estimate the value of our products in 1935, the silk hosiery, at $213,300,000. It is based upon all of the elements of cost, the two most important being labor and commodity, with silk at an average of $1.63 that year. Had silk been at the level of 1929, the cost of that product or the value of that product would have gone up from $213,300,000 to $308,300,000.

Lower wage rates in 1935 than in 1929 contributed, of course, in a minor degree to the decline in the value of production.

I will touch upon wages in a little while in somewhat more detail, but I think that it is safe for me to make this statement; in fact, if I did not think it was safe to make it, I would not make it.

Of all the textile industries, none is compelled to use as fine or as delicate equipment as the hosiery industry; none produces a product more delicate than the ladies' silk hosiery, particularly with the pronounced drift to very sheer gages in recent years. The result is that the skill required on our machines is much greater than in other industries. As a result of that the earnings in our industry reflect that we pay the highest wages of any textile industry, so far as I know.

On hosiery prices, there is a reference in the Ellenbogen bill to the "severe price instability." That is, in effect, a response to the fluctuations in the costs of raw materials. Along with most other products, the wholesale price of hosiery has declined during the past 6 years.

In 1929 our manufacturers were getting an average price of $9.31 per dozen. I might say that it goes down from there to as low as $4.39 in 1932, since which time it has risen gradually, in the following way: In 1933 to $4.95; in 1934 to $5.19; and in 1935 to $5.24.

These statistics are taken from the United States Bureau of Labor Statistics.

A chart on a following page illustrates the close relationship existing between raw silk and hosiery prices, presenting a monthly index of raw silk prices and full-fashioned hosiery prices.

It will be noted that every sizable move in the wholesale price of women's silk hosiery can be associated with a similar move in the price of raw silk, although the change in the price of hosiery necessarily comes later than the change in the price of raw materials. Of course, the differences between the prices of raw silk and the prices of women's silk hosiery have been much greater since the code than before July of 1933, reflecting the material increase in the item of direct labor costs effective under the code and still maintained voluntarily by the industry.

I have a chart here which will support what I have just said. Now, as to the location of the knitting machinery in the industry: The Ellenbogen bill states that the flow of textile products into commerce "has been diverted in large quantities from certain States to other States and from certain mills to other mills."

Our data shows that there has been only a slight shift of some fullfashioned machinery to the South, and that there has been little, if any, redistribution of machines in place with respect to the seamless branch of the industry in recent years. The following table shows the location of knitting machinery of the full-fashioned industry as of certain selected dates.

I take it that because the shift of seamless equipment is negligible it does not require any discussion. Of the total full-fashioned equipment in 1929, 7 percent was in the South, another 14 percent in the West, and the balance in various northern-eastern districts, principally in Pennsylvania, followed by New York and New Jersey. Three years later, in the deepest depression, in the spring of 1932, the relative percentages were as follows:

The South had 14.1 percent

Mr. ELLENBOGEN. That is twice as much.

Mr. CONSTANTINE. It was 7 percent in 1929.
Mr. ELLENBOGEN. That is double the capacity.
Mr. CONSTANTINE. It was 14 percent in 1932.

The West went up from 14.6 percent to 15.1 percent.

The balance remained in the North, principally, again in Pennsylvania.

In July 1933 which is approximately another year forward, the South had 16.4 percent, the West 13 percent, the balance being in the North, again Pennsylvania having most of it.

In those 3 years, Mr. Chairman, the Pennsylvania equipment in 1929 was 61 percent, roughly, but in 1932 it was 57 percent, and in 1935, 58 percent. There was a slight turn in the curve.

I will say that since 1933 the percentages of equipment show a further increase in the southern percentage as against the northern percentage. The southern percentage today is somewhere around 24 instead of 14, which it showed in 1932. However, that could be very easily misread.

It is our judgment and I believe the facts support it-that these changes in the relative amount of full-fashioned equipment in the South and the North are accountable for in recent years only to a negligible degree by the actual dismantling of plants in the North and movement of the equipment into the South, and principally to be accounted for by the natural expansion of the southern plants from the size that they were a few years ago in the larger and larger sizes, until the percentage shows this increase.

« ÎnapoiContinuă »