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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.

May I point out one thing that, as a practical matter, would help you realize the soundness of what I am saying? The full-fashioned machine is a machine anywhere from 18 to 24 sections. That means it manufactures simultaneously from 18 to 24 legs or feet, as the case may be. The drift has been to longer sections. The drift has been very strong in recent years to 24-section machines. A machine of that size, as I said, is a very delicate machine. It contains somewhere from 120,000 to 130,000 parts. It is almost prohibitively expensive to take a piece of machinery of that kind, which cannot be moved in one unit, and transfer it to some other place. It is as long as from this wall here over to the end of that other table that you see before you. The machine has to be dismantled with extreme care and much detail. It has to be ticketed and marked with extreme care, and then it has to be packed up and has to be shipped. And then you have a task which takes weeks, if not months, to reassemble the machine and set it up on the floor. Taking a 24-section machine, there must be complete synchronization from one end of the machine to the other. It requires a very careful setting and leveling of the equipment, and that is something which takes considerable time before the management will be willing to say that the machine can now be operated commercially.

Another thing in explanation of my statement that it is not a movement of equipment, that is, second-hand equipment in a mill moving from the North to the South, is the fact that rather it is a movement of new equipment out of the plant of the manufacturer of equipment into the South where there is naturally a much more rapid growth than in the North. And that explains that shift.

The other point I wanted to make to support it is this: The fullfashioned industry was almost completely a northern industry even in the middle

1920's. There was hardly any equipment installed in the South. When they started to develop that branch of the industry in the South, part of it was by purchase of second-hand equipment in the North, partly by northern mills establishing southern branches and moving some of their equipment south, while still maintaining their northern plant, but in larger degree it was the purchase of new equipment. Those were the heydays when you could get a good price for the product and when it was easy to finance a plant and get the money with which to buy the equipment.

If the industry were primarily, if not entirely, located in the North 10 years ago, roughly, the older equipment in the industry is still in the North. The southern industry starts in with a higher percentage of new equipment. In time that condition may reverse itself as obsolescence puts the northern equipment out of use and replacement must take place. But the growth of the South is a natural growth, expended principally by new equipment and with relatively very little movement of second-hand equipment from the North to the South.

Mr. Wood. Isn't it a fact that the eastern manufacturers are somewhat in a panic now as a result of talk of migration to the South? The Philadelphia papers ran a story the other day that there are eight hoisery mills that are planning to move to the South.

Mr. CONSTANTINE. Well, Mr. Wood, we have been hearing that tale somewhat constantly for the last 2 or 3 years, I would say. Occasionally the discussion flames up a little bit stronger, and then it

dies down again. That discussion, of course, has stimulated the southern and western communities to give inducements to northern plants either to move or to install branch plants, and they are giving inducements which are quite extraordinary in character-free supply of plant, waiving of taxes, and other things, in order to attract them. And that stimulates the discussion. But the actual fact is that that type of movement is not taking place.

Mr. Wood. Where are the seamless hoisery made now?
Mr. CONSTANTINE. Almost entirely in the South.

Mr. Wood. Up to 1909 or 1910 it was almost all made in the North, wasn't it?

Mr. CONSTANTINE. Yes; that is true.
Mr. Wood. How do you account for that migration?

Mr. CONSTANTINE. That was a very easy migration, quite in contrast to the one I have discussed in the full-fashioned. A seamless machine is a small circular machine, and you can put your arms around it. You can detach it from the floor and fasten it on a crane and put it on a truck, and put several of them on one truck and truck them to the South.

Mr. Wood. Do you mean to say that none of the other mills has moved to the South; that is, none of the other mills which you mentioned before, where it is such a difficult task to move the machinery?

Mr. CONSTANTINE. No; I did not make the mistake of saying that. Perhaps you did not hear me correctly. I said that accounts for a minor portion.

Mr. Wood. Some of them left their old machinery in the North and have erected the new machinery in the South?

Mr. CONSTANTINE. There is some of that, too, where they kept their northern plants and established southern plants. They usually establish the southern plant in one of two ways: Either they move the same equipment, or install new equipment in the South.

Mr. Wood. That would indicate that as the old equipment became worn out and became obsolete the industry would go into the South, because invariably they install the new machinery in the South?

Mr. CONSTANTINE. I would be very happy to secure and transmit to the committee information showing the volume of new equipment installed in the South and in the North for the last 3 or 4 years, which would give you some indication of the extent to which that movement is taking place. And that will show you how much new equipment the North is putting in.

Mr. Wood. Will you please state what your position is?

Mr. CONSTANTINE. I am managing director of the National Association of Hosiery Manufacturers.

Mr. Woad. You are not a manufacturer?
Mr. CONSTANTINE. No; I am not.
Mír. Wood. Are you an attorney?
Mr. CONSTANTINE. No, sir; I am not.

Mr. Wood. Then you are in no way connected with the hosiery industry except through this organization; that is, you do not have any stock?

Mr. CONSTANTINE. No; I have no stock. I have no interest at all.

Mr. Wood. Nothing but in the managerial capacity? You are just representing them?

Mr. CONSTANTINE. I would like to put it in this way, Mr. Wood
Mr. Wood. Are you an engineer?

Mr. CONSTANTINE. Well, I am a man who has been a "jack of many trades” and some 4 years ago the industry invited me to take this task and help the industry with their planning job. It so happens that I did not seek the job. I have been engaged in trying to better the conditions in the industry. I had not been in that task more than a year and a half when the codes came into effect. I was chairman of the committee which approved the Hosiery Code, and I administered the Hosiery Code in behalf of the industry.

Since the codes ended I have continued with the general task of planning the progress of the industry.

Mr. Wood. It is rather remarkable that the textile industry have brought in so many of what they consider outside representatives when they will not even allow the employees to be represented by one of their own choosing engaged in their occupation, if he is not employed in their plant.

Mr. CONSTANTINE. I did not quite get that last statement, sir. I don't know whether it applies to our industry or not. They do not allow the employees to do what?

Mr. Wood. The majority of the industry will not deal in collective bargaining with the employees; that is, they do not like to, and a great many of them object to collective bargaining. They do not accord the employees the right to be represented by representatives of their own choosing, if the representative is not working in the plant. They call that outside representation by an outside union. What they want is an inside union so there will be a nice, happy family, so that they can take care of them.

Mr. CONSTANTINE. In all fairness, sir, I am not in any different position when I speak for the management of the hosiery industry than, let us say, Mr. Green is in when he speaks for the American Federation of Labor or when the president of any State federation of labor appears anywhere to present the case of labor. To my mind, that does not destroy a man's ability to do it. In fact, I have observed very frequently that they become experts in handling the case that they are presenting.

Mr. Woop. I am mighty glad that your industry deals with unions. Mr. CONSTANTINE. Let me put into the record just a word or two of fact. I would say that around 28 percent of the full-fashioned product of the industry, which is the main product, is being produced in plants operating under a national agreement with the hosiery union.

Mr. WOOD. Then those you represent are consistent?
Mr. CONSTANTINE. And may I add one more thing?
I think the committee would like to know this:

Our code was no. 16. Our code had its public hearing as early as August 10, 1933, and it was in effect on September 4, 1933. Our code was not drafted by management sitting in a back room with the blinds drawn down; our code was drafted by labor on one side of the table and by us on the other side of the table, working for 2 months in the hot summertime in Washington. Mr. Smith will bear that out.

Before the 2 months were over we only knew each other by first names, and we got mixed up around the table.

We jointly presented and advocated our code at the public hearing, and it was management, as well as labor, each trying to beat the

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