Mr. ELLENBOGEN. You say most of the seamless industry is in the South?

Mr. CONSTANTINE. Most of it is down there.

With respect to the seamless branch of the industry, most of the latest data we have are July 1933, when the first census was taken under the code. It showed 64.3 percent of the seamless equipment in the South. The census of seamless machines in place in 1935 showed 64.1 percent, there being practically no shift of any kind.

As to work hours, the restricted daily and weekly work hours. established under the code are being maintained, with few exceptions, in the plants in the industry. We had about 807 plants in 32 States. Here and there there have been extensions of the hours in furnishing operations. Here and there some isolated cases were found where some Saturday work was done, and there were some few cases where the daily shift was increased from 8 to 9 hours; but I have not heard of any 10-hour shifts, although somebody mentioned a plant this morning that was supposed to have a 10-hour shift. But I don't know of a single one that has gone beyond 9 hours a day.

I think everybody will agree with my statement that we have no problem in the hosiery industry on child labor. I do not believe we are employing any children in the hosiery industry. We had none under the code, and we had little, if any, to stop when the code went into effect.

Mr. ELLENBOGEN. Did you testify already about hours?

Mr. CONSTANTINE. Yes, sir; I did.

Mr. ELLENBOGEN. What did you say about that?

Mr. CONSTANTINE. I will quote it from here, if you wish.
Mr. ELLENBOGEN. If you will, please.

Mr. CONSTANTINE. The restricted daily and weekly shift hours established under the hosiery code are being maintained, with few exceptions, in the 807 plants of the industry located in 32 States.

Mr. ELLENBOGEN. I have here a whole list of plants which exceed those hours.

Mr. CONSTANTINE. I have the same list, sir. This close cooperation between the union and my office continues in effect, and we interchange our information.

Mr. ELLENBOGEN. What have you to say about that?

Mr. CONSTANTINE. They have reported to me up to date 64 cases of complaints or violations of hours or wages or the falling-down from code standards. I have undertaken to examine each case and advise them as to what I discovered. So far I have examined 29 of the 64, but I have not completed the study. I find that only in the minority of the cases is the violation referred to a going violation. I find in may other cases, as was true under the code administration, that when you get the facts they put an entirely different picture before you on the matter from the one you had originally.

Mr. ELLENBOGEN. We often find that to be true, but is it not a fact that as more time elapses between the decision of the Court on the N. R. A., that standards are breaking down, particularly in the seamless part of the industry?

Mr. CONSTANTINE. In the full fashioned, none at all, I would say. There have been a few extensions of hours on finishing operations last fall during the bulge.

Mr. ELLENBOGEN. That is because the union is well organized in the full-fashioned part of the industry?

And

Mr. CONSTANTINE. That is one of the contributing causes. another one is this: It is admitted by all that there is the feature of the minimum-wage structure. And in our code we did what this bill proposes. We did not set merely one minimum, but we took the bracket of skilled and set a separate minimum for that bracket. In other words, we built a series of bulkheads so that if the ship was knocked in in one bulkhead it would still float.

And we all agreed that the minimum-wage structure was noneffective in the seamless branch.

Mr. ELLENBOGEN. In the full fashioned the hours and code conditions are being complied with less and less?

Mr. CONSTANTINE. Spottedly and in isolated points you will find an increase in hours to 45 in instances.

Mr. ELLENBOGEN. The tendency to cut under the code standards has increased, has it not?

Mr. CONSTANTINE. I would say that is probably so, but I do not think the rate is rapid.

Mr. ELLENBOGEN. The fact that this bill is pending may have had something to do with that?

Mr. CONSTANTINE. It may have had. I will thank the bill for that. I do not believe any serious complaint can be made in our industry on work assignments or conditions of work. Very few instances of that nature came before the code authority in the administration of the code, and this will be borne out by my colleague, Mr. Smith.

On productive capacity may I put into the record a word or two to explain that problem in our industry? It is present and it is the major problem of the industry.

Mr. ELLENBOGEN. The provision in the bill relating to the control of production is what you are going to talk about now, is it?

Mr. CONSTANTINE. I am first going to explain why we have overcapacity in the industry. The consumption of our product is, first, by men and children, and, secondly, by women. In the women's field up until some 10 or 12 years ago, the product which was worn and consumed and which constituted the predominating percentage of our product was the seamless product, which was manufactured on the circular machines. Then came the demand for the ladies' fullfashioned product and, between the early 1920's and 1928 and 1929 two things were happening, and both of them contributed to this result:

On the one hand, the manufacturers were moving rapidly into fullfashioned manufacture because the demand was growing so rapidly, and new people were coming into the industry to get their slice of it. And, as always happens in situations like when you have a discovery of gold in the Klondike or in California, there is too much of a parade in that direction.

When they woke up with the crash in 1929, our equipment manufacturers were from a year to a year and a half behind in the delivery of full-fashioned equipment, and all through 1930, although the depression was here, installations were going on at the same rate they had been going on in 1928 and 1929. When you start a movement of that kind it is a wild stampede in that direction, and that stampede

was resulting in an overcapacity of this new equipment in just a few years. Of course, in doing that it was creating an overcapacity in the seamless equipment. Therefore, you find this overcapacity in both branches. Personally I am not familiar with any such situation in any other industry that I have ever heard about. That is the explanation of the overcapacity which exists.

Mr. ELLENBOGEN. You have read the production control section of the bill, have you?

Mr. CONSTANTINE. Yes, sir; I have.

Mr. ELLENBOGEN. Do you think it is sound? We would like to have your best judgment on it.

Mr. CONSTANTINE. When we drafted our code we put into the code a provision restricting production to two shifts. That was put in there because two shifts were not enought for some of the competitors, and they were moving into three shifts and bringing in the old graveyard shift, overnight.

Both on the score of the social aspects and on the score of the production aspect we were all in agreement, both labor and management, that we should restrict the shifts to two, with the 40-hour shift, and what we hoped to accomplish was a reduction of the potential capacity of the industry by 27 percent.

However, our studies under the code drove us to the conclusion that we had a reduction which was closer to 9 or 10 percent. And the explanation of that difference between 27 percent theoretical and 9 or 10 percent actual is to be found in the fact that there was quite a little equipment which was operating on one shift only, and with the restriction of the hours it immediately moved into the two-shift operation, and it offset about 17 percent of what we intended to capture.

Mr. ELLENBOGEN. I have here a figure that the full-fashioned maximum capacity on the 80-hour machine limitation basis is about 52,000,000 dozen pairs.

Mr. CONSTANTINE. That is not our estimate. That is the first time I ever heard of that estimate. I do not believe that is quite correct. We could not accept that. I think it is closer to 45,000,000 dozen pairs.

Mr. ELLENBOGEN. If every machine operates on 80 hours, two shifts of 40 hours a week, in the full-fashioned industry, what is your estimate?

Mr. CONSTANTINE. Forty-five million dozen pairs. That is the best estimate we have.

Mr. ELLENBOGEN. And the maximum consumption is estimated at about 32,000,000 dozen pairs?

Mr. CONSTANTINE. It went higher. It struck a new high level. It is close to 35,000,000 dozen pairs. The report is in the press today. Mr. ELLENBOGEN. There is still an overcapacity of about 25 percent?

Mr. CONSTANTINE. Yes, sir. However, there is one point that should be brought out on that score: It is a very practical one, and you will recognize it.

Mr. ELLENBOGEN. Do you mean repairs have to be made?
Mr. CONSTANTINE. Repairs is one. But that is minor.

But there is one more important than the repairs: The full-fashioned industry, year in and year out, as a normal picture, is a seasonal

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industry so far as demand for its product comes in. You have the spring season, and the demand starts somewhere between the 15th of February and the end of February. It starts about the middle of February or the end of February. However, this season it is not here yet. I talked with some manufacturers at the breakfast table this morning, and they have not yet sensed the spring demand. I encouraged them by saying that it is just about 2 weeks until February 15, and it is bound to come. It comes about the middle of February and it lasts steadily through the middle of June, and it tapers off very rapidly at the end of June. Then you have for July and August a very, very small demand. What I am saying about the drop in demand in July and August occurs equally in January and February.

In other words, we have 4 months, which is one-third of the year, where demand is abnormally low. Then you have these seasons that come on in the remaining 8 months, 4 in the spring and 4 in the fall, where they work their heads off to meet the demand and make deliveries.

An authority like Dr. Taylor, who is perhaps one of the bestinformed men statistically on industry, he being at the University of Pennsylvania, recognizes-and I think all of us do that the industry would not be able to meet its demands in those 4 months in the spring and 4 months in the fall unless it anticipated demand to a certqin degree and built up a reasonable reserve of goods in the gray while waiting for the dyeing and finishing process.

If you have a demand of 35,000,000, like in 1935, you have to allow a part of that 35,000,000 to 45,000,000 capacity for the bulges that come in the demand.

Mr. ELLENBOGEN. Don't you think that it would be possible to get away from the seasonal character?

Mr. CONSTANTINE. We are working in that direction all we can. Of course, here is the explanation of it: Ladies' stockings were just something, formerly, that covered the leg, just a piece of clothing; but now stockings are a very important part of the adornment, they are a part of the costume, and they are a style factor. Our industry cannot move on colors until the spring color card comes out, and again in the fall when it comes out. We have to wait to see what the trend is in dress colors and shoe colors and everything else that goes to make the costumes.

And when the stylist reports from Paris and other style centers, they begin to make the colors. And it is the style factor that developed that seasonal demand.

Mr. ELLENBOGEN. I would like to know what is your judgment as to the provision on production control in the bill. Do you consider it sound or should it be changed, or how should it be?

Mr. CONSTANTINE. The thing that bothers me about production control especially is the problem that faced us repeatedly under the code. We had a great deal of trouble with it, although we enforced the code right straight down the line and frequently made enemies by doing so. You either have to have rigidity, a maximum rigidity applied right down the line, regardless of the case where the manufacturer is able to use more capaicty and he feels that his right to make as much as he can create a demand for is his right.

On the other hand, you have to vest the flexible aspect of it in the hands of a body which will necessarily be remote and which will necessarily, I am afraid, have a problem almost unsolvable. And

whenever, with the best of judgment, and with the very best facts to justify it, that body imposes a different limit on one plant by recognizing the conditions there, then a howl must be expected from all the industry or a demand for the same thing.

In the enforcement of our code we found it was almost impossible to make exceptions, because, the minute you make an exception, you are immediately subjected to a situation that is hard to describe. And if you are not going to make exceptions for all of the reasons, then you should have rigid control. And under rigidity you have your problems from the other side of the picture.

Mr. ELLENBOGEN. Considering all of these difficulties, what do you think of the section as it is in the bill? I wish you would let the committee know how you feel about that section.

Mr. CONSTANTINE. I do not believe that it can be exercised and prove satisfactory.

Mr. ELLENBOGEN. You do not think so?

Mr. CONSTANTINE. I am afraid not. I will say frankly and gladly that if there were a method by which overproduction in our industry could be controlled, that it would contribute very much to the stability of the industry and to all parties engaged in it. That is a fact beyond dispute.

Mr. ELLENBOGEN. If the committee wishes to act favorably on the bill, would you like to see that section retained or removed from. the bill?

Mr. CONSTANTINE. I am not honestly prepared to say yes or no. I would want to study it and see about it.

Mr. ELLENBOGEN. I am much interested in that.

Mr. Chairman, I wonder if this gentleman could be given permission to file his views later on that matter? I think it might be helpful. Mr. SCHNEIDER. If there is no objection, he may do so.

Mr. CONSTANTINE. May I give you just one figure to show you just what this industry has done? Then, of course, I can speak only for hosiery, and I have nothing to say for or against the conditions in any other branch of the industry. But this industry, I believe, has done its part in the fundamental problem of spreading employment.

I will take, first, figures which were the figures evolved by all of the parties jointly who presented the hosiery code for N. R. A. approval, and I have explained how that code was evolved by labor and management working together. These were our estimates.

For 1928 the industry employed 120,000 people;

In 1929 we have an estimate of 129,000

Mr. ELLENBOGEN. Is that the entire industry?
Mr. CONSTANTINE. Yes; the entire industry.

In 1930 the estimate was 130,000. That is only a slight increase over 1929.

In 1931 it was 125,000.

In 1932 there was a shrinkage back into the worst period of the depression. When we struck 1932 we went down to 120,000, which was close to 1929. We wiped out the gains which had been made in 1930, 1931, and 1932.

In 1933 for the first time we had actual data under the code, and the employment had gone up from 1932 to 1933 by almost 14,000. We employed 134,000 in 1933, with the code in effect for only a part of the year. But the fact that the code was impending spread em