History of the Code of Fair Competition for the ladies handbag industry

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Title:
History of the Code of Fair Competition for the ladies handbag industry approved code no. 332
Series Title:
Work materials ;
Physical Description:
iv leaves, 609 p., vi leaves : ; 27 cm.
Language:
English
Creator:
United States -- National Recovery Administration
Pearson, Oliver W
Publisher:
National Recovery Administration
Place of Publication:
Washington, D.C
Publication Date:

Subjects

Subjects / Keywords:
Industrial policy -- United States   ( lcsh )
Handbag industry -- United States   ( lcsh )
Genre:
non-fiction   ( marcgt )

Notes

Statement of Responsibility:
Oliver W. Pearson.
General Note:
"Robert C. Ayers, Chief, Histories Unit."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 020508854
oclc - 55214977
System ID:
AA00018842:00001


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OFFICE OF NATIONAL RECOVERY ADMINISTRATION

DIVISION OF REVIEW



















HISTORY OF THE CODE OF FAIR COMPETITION

for the

LADIES HANDBAG INDUSTRY




O A A .








WORK MATERIALS NO. 71
w


Administrative Section

March, 1936























































































































-. > -A







































































































- -' -1* - -- ".









HI S T 0 R Y


of the

CODE OF FAIR COMPETIT:CN

for the

LADIES HANDBAG INDUSTRY

Approved Code No. 332











Author: Oliver W. Pearson

























Robert C. Ayers
Chief, Histories Unit


9R11




y W. r.






FGO E7ORD


This history of the Code of Fair Competition for the Ladies
Handbag Industry is mimeographed in order to make available a
sample of the code histories prepared by the Division of Review.
A similar service will be rendered in connection with certain
other code histories.

In order to get a complete picture of National Recovery Ad-
ministration materials applicable to a given industry, one must
visualize such a documented code history as this supported by
the three volumes of evidence which were sent to the President
at the time the code was recorm-ended for his approval, plus any
studies in this field either by the Division of Research and
Planning or by the Division of Review of the National Recovery
Administration, plus the vast amount of material in National Re-
covery Administration files which was developed in connection
with the formation and administration of the code. These con-
stitute a veritable treasury of information concerning the
operations and problems of industry.

This history contains a documented account of the formation
and administration of the code; the definition of the industry
and the principal products thereof; the classes of members in
the industry; and 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 organization and operation wf the code authority, the dif-
ficulties encountered in the ad&-inistration, the extent of com-
pliance and non-compliance, and the general success or lack of
success of the code; and an analysis of the operation of the code
provisions dealing with wages, hours, trade practices, and other
provisions. These and other matters are canvassed, not only in
the terms of materials to be found in the files, but also in
terms of experiences of the Division Administrators, Deputy Ad-
ministrators, Assistant Deputy Administrators and others con-
nected with the code formation and administration.

At the back of this history will be found a brief state-
ment of the studies and work undertaken by the Division of Review.



L. C. Marshall
Director, Division of Review


March 14, 1936

.I


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Page
Letter of Transmittal
Preface
Code and Amendments

I. GENERAL I1IFOP5ATION

A. Definition of Industry ................................. 2
B. Definition of Industry Member ........................... 4
C. Statistics of Industry .................................. 6

II. HISTORY OF CODE FOWMILATION

A. Sponsoring Organization ................................. 14
B. From submission of first Draft .......................... 21
C. Public Hearings ... .. ............. ...................... . 23
D. From Public Hearing to Approval ......................... 25

III. CODE ADMINISTRATION

A. General Preliminary Discussion ................................ 45
B. Organization ................ ............. ..... ............ 51
C. Budgets and Bases of Assessment ....I.................. 63
D. Administration of Code .................................... 67

IV. OPERATION OF CODE PROVISIONS

A. Definitions ................ ... ........... .......... .... .. ... 82
B. Wages . . . .. . ................... ............................... .. . 83
C. HEours .......... ...... . ................... ............. .. 85
D. Other Labor Provisions ........ .. .... .................... 86
E. Administrative Provisions ........................................ 90
F. Price and Accounting Provisions ......................... 90
G. Trade Practices ........... ...... ..... .... .. .. .. ... .. .. 92
H. Other Provisions ...................... ................. . 96

V. RECOMME1D ATIOIlS

A. Undesirable or Unenforceable Provisions ................... 98
B. Compliance ..... ... ............... .. ...................... .. 98
C. Limitation on Production ................................ 98
D. Possible Consolidations ........................o....... 98

VI. PERSOINEL

A. Personnel connected with Code ..............o......... 101
B. Administration Member's Report
Appendices Exhibit N

VII. APPENDICES

A. Exhibits A to Z and Al to G1.


VIII. INDEX





. ,* A* . .











January 7, 1936.


MEMORA IUM


TO:


L. C. Marshall,
Director, Division of Review

Oliver W. Pearson


FROM:


SUBJECT:


History of the Code of Fair Competition
for the LADIES HA:iDBAG INDUSTRY.


There is tra.ns-nitted herewith the History of
the Code of Fair Competition for the Ladies Handbag
Industry.

This History was compiled in this office and
was written in accordance ivith the model outline
issued on July 10, 1935.

It is believed that this record, as submitted,
adequately reflects the History of the Code of Fair
Competition for the Ladies Handbag Industry.






Oliver W. Pearson


Approved:



Walter Mangum, Director,
Industry Section #3.


- iii -


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P R E F A C

The Ladies Handbag Industry was founded in this country some fifty
years ago Pnd entirely mo.nrned. by imported craftsmen. It continued for
many years as a craft trade and only of quite recent years had it evolved
into one of mass production with an increasingly large use of machinery,

Prosperous for years, alr:ost beyond belief, net returns to owners
very large, workraen or craftsmen earring $150 $200 and in many cases
$300 weekly it is not difficult to understand the mental condition that
came into leing, when machinery case u,.cn the horizon, mass production
threatened, labor became restive, and finally the depression arriving
with its consequent loss of profits0 To all of these factors can be
ascribed the unrest that existed when I.I.R,A. was placed upon the statute
books, but notwithstanding the disagreeing view points all had a belief
that a Code was necessary, and would prove as it later did, of great
benefit.

Reviewing the eighteen months I spent with the Ladies Handbag In-
dustry and its Code Authority as its Administration Member, looking back
over the other industries, some ten in number, to which I was accredited,
I realize today the outstanding quality of the work done by the Handbag
Group.

Perhaps other industries gathered more complete data, such for in-
stance millinery and L!en's Hats, but none better welded together con-
flicting interests, none accomplished more in finding the common ground
upon which to stand then did this sorely beset handbag Group.

Beginning with the days immediately preceding the enactment of the
I.I.R.A. hearts and minds of industry were filled with malice, hatred, and
all uncharitable-ess. This st-,.te of mind. continued throughout the code
negotiation period rnd did not .isqppear until some three months after the
code went into operation, and the last months of the Code era found man-
ufacturers more cohesive, more thoughtful in their relations with each
other, more inclined to look at their problems from the view point of in-
dustry at large.

I would not have it believed that the millennium arrived but certain
it is a degree of intelligence was injected into what had been a purely
selfish outlook and all bade fair to profit accordingly.

In those l-st days one eould feel in the air the different atmosphere
that pervaded deliberations, one trade organization had come into being
instead of several who hitherto had been at each others throats, and from
what I was told by a number of manufacturers the industry at the end of its
first code year was able to show at least some financial statements in
black ink, the first in several years,

Close study has been made of records in our files as well as those of
the code authority in New York. Many things stated are of necessity based
upon my own recollections, but checked with officials of the late code
authority, and I believe the following chapters represent a fairly com-
prehensive history of this code.


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0TNj RL I: TO-I_ TION

Definition of Industry
Princi-oal Products
Products under other Codes
Definition of Industry Member
Classes of Members
Statistics


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-2-


I. GENERAL ILTGRi.iATI CIT

In cominling this history references were m.de to all available
material in -.e.aslington amnd New York. This included:

1. PRINTED CODE
2. Volu-aes I, II and III of Code
3. Volumes I, II and III of Amenclidents
4. Volumes A ahd B, Central Records Section
5. Administration Orders
6. Deputy's Files
7. General Files
8. Research and Plannin;, Files
9. Government Agency Reoorts
10. Code Authority Reports in re Budgets
11. Code Authority files in ITew York
(.ow in possession of the ieticna1 Authority
for the Lolies >endbrg Industry, 347 Fifth
Avenue, ITew York.)
12. Administration le'.-.bers Files, New York City
(iTow in process of incorporation into General
Files, Washington, D. C.)
13. Personal contacts with lte Code Directors
14. History of Industry by Ab. iittenthal, Code
Director and filed witi Dr. L. C. lJarshall
about Septer.mber 15, 1935.
15. Bulletins issued by tie Code Authority.

A. Definition of Industry

The Code as originally proposed August 11, 1933, by the
Associated "iTndbag Industries of America, Inc. submitted the following
as the definition: -

"The term 'handba industry' Ft.s used *erein is
defined to mean the rrmnufacturo and/or whole-
sale distribution of l.dies handbags, pocket-
books and purses."

"The term 'person' as usec. herein s-arll include
natural persons, partner::.,i)s, associations
and corporations."

"The term femployce' as based 'Perein sh.ll include
every )erson actively engaged in the production
and/or wholesale distribution of products of the
h1i-andbag industry as herein defined."

(Ex-.ibit A part 2, Page 1.)

As defined in mimeogra-,-ed Revised Draft Tovember 6th,
1933 it read: -


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"The term 'Industry' as use'. herein includes
the mn.nu.acture of ladies' handbags, pocket-
books and purses."

(See _7xLibit A- Pa-rt 4.)

As Revised 1T',..vemaber 24, 1933 it read: -

1. "The tern *L-.7ut.L'l ,.s used. h'.erein includes
the a nufafct-are of ladies' misses, and
children h:oidba.s, pocketbooks, and plurses,
manufactured of any material of any kind or
nature."

In the drafts of December 8, December 12, December 21, 1933,
it remained without ch',.- ne.

(See Zxiibit A -rt 6, page 1: part 7, page 1: part 8, page 1.)

The ap_ r-.ved code Article II, Section 1, reads:

"The -term industry' as v-sec. herein includes the
mranula cture of ladies', misses', and chilCLren's
',.an -.,s, pocketbooks, and. purses, manufactured
of any material of any kind or nature. The term
'industry' s-i.ll not include, however, the
manufacture of .ndbas, pocketbooks, nursess and
mesh br.,s manufactured in whole of metal."

The cmm.aesmade resulted from warrioas conferences and upon ob-
jection by A. J. Barrenboim end MPIr. iTemi:-.n of the Legal Division,
counsel to the Division (see general files Code Record). They served
to clarify the definition in that t-.ey more clearly specified the
lines sought to be governed, and by eliminating the term "wholesale"
prevent overlap ini with distributing codes.

The generally accepted meaning of the Code definition included
shoppiIg bags, bathing b<.;s, h?.ndrerc'.ief bags,, vanity boxes,
cosmetic bags, nd knitting bas. however, to remove doubts and be-
cause of rep eated requests from indCuztry for a still clearer defini-
tion tie section was at the close in process of being amended to read:

'"T1e term industryr' as used herein includes
the ma inufacture of ladies', misses' and.
c_-ili.'rens' handbags, pocketbooks mand purses,
..L.. ; baz.s, bathin. ba s, :h.-.nd2:erchief
ba-.gs, 1,iddy bagsT, vanity boxes, c.:.m.i.tic b._.gs,
knittin:g ba-., manufactured of any mat rial of
any kind or nature. The term, h:wcver, .all
not include articles co:i.mnonly manf-'Qi by
LuL.,a.e and. ranc%, Tn t' er o- Ii t ; __. r
trc.veling rurpose*, nor cver-n i g tPr


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whatever iJurcse used, nor e.n'- article
rw.nuf-ctured for minens' use only, nor
i.ina.f;cture of hanc'b. s, pochetbookls,
-uarses, vanity cases,rnd iiie bags manu-
f-.ctured in whole of met;.lI."

Note the inclusion also of "1:i4i, bags". These are products of
a group of some 75 manufacturers w.-D at the ti:.ne of dissolution were
being transferred from the Lug,:.e and Fancy Leather Goods Code to
this Code.

(See lIinutes Lieeting No. 25 J:n. 3, 1935 rnd
corres.crndence general files)

Considerable opposition t.c, this last )ro-.sed definition was
raised by the Smanitary ''. 'ater roof Secialties Industry, because of
the inclusion of "bathing bass" and "cc s.ietic ba-s"; for meny such.
were strictly of waterproof cor rubberized nmaterials. After several
conferences witi l.'ir. Kenlricih of t e Saniitory, .'I.ter)rocf Specialties
Code Authority, this difference a': smoothed out. There was only one
large manufacturer, (Kleinert C;.i.Lnyx) and three sma.ll ones affected
and all but one, who had not yet been contacted, had agreed to use
Ladies handbag labels, in all ite..is Vhic- bordered on this code. (See
Code Record files)

1. Principal. Product s

Ladies Misses COhildrens

I':ndbagR

Pocl:etbooi:s

Purses (See Article II, Section 1 of Code)

2. Products also under ct-er Codes

Kiddy B-igs (LuTp..e and Fancy Leather Goods)

Bathing Bags (Sanit;-ry C. .7aterprcof SEpecialties)

B. Definition of Industr., iL ember

In the dr.ft of August 11, 1933 the term was stated:

"Thie term persont as used herein shall
include natural .persons, partnerships,
associations and corporations.

"Te term employer' as. used herein shall
include every person actively engaLed in
the production and/or wholesale distri-
bution of products of the -.rndbag indus-


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try as herein defined."
(Exhibit A Part 2)

In the August 18, 1913 draft it remained as stated in August 11
form, but in the Nov-.mber 6, 1933 form it read: -

"The term 'employee as used herein includes
any oerson -nra-ed in any phase of the industry,
in any capacity, receiving compensation for his
services, irresp-ective of the nature or method
of payment of such compensation."

"The term employerst as used herein includes
anyone for whose benefit or whose business
such an employee is engaged."

"The term member of this industry' includes
enyone engaged in the industry, either as an
employer or on his own behalf."
(Exhibit A Part 4)

In the revision of Novpmber 24, 1933 it read:-

"The term temoloyee' as used herein includes
any person engaged in any -ohase of the indus-
try, in any capacity, receiving comoensa-
tion for his services, irrespective of the
nature or method of payment of such comoen-
sation."

"The term 'Emrloyer' as used herein includes
anyone for whose benefit or in whose business
such en em-oloyee is engaged."

"IThe term 'member of the industry' includes
anyone engaged in the industry, either as
an employer or on his own behalf an' either
as manufacturer, manufacturing jobber or
contractor."
(Exhibit A Part V)

In the December 8, 1933, December 12, 1933 and December 21, 1933
revisions (see Exhibit A, parts 6-7-8) and in the ap-proved Code,
Article II, Section 4,- it- remains as above and quoted below:-

"The term Imember of the industry' as used
herein includes anyone engaged in the in-
dustry, either as an employer or on his own
behalf and either as manufacturer, mnnnufac-
turing jobber, or. contractor."


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Note: The definition of industry member includes in addition to
rrar-ufacturer "manufacturing jober or contractor." The ianufactur-
ing jobber is one who generally uses a contractor to m.rke goods for
him end to whom he supplies all or r.rt of the materials used in the
making of bags.

Contractors "were of the usu-1 type who did various operations on
bags, and erxe such as may be found in -all Lar.rnent industries. Some of
these contractors, however, made.e cc.aplete bags Eand some re-let -ortions
of this work out to homewor!:ers. T-iese contractors were subject to
the provisions of the Code, but were not assessed for t:Le expense of
administering the Code.

(See classified list of Industry Exhibit B rpart 3)

I1 Classes of -lieribers

There is to be found in E,-.ibit B, P-rts 1
1 and 2 a classified list of manufacturers
showing .the kind and character of goods
manufactured.

C. Str.tistics of the Indutry

Prior to the adoption- of their Code this Industry had never
attempted to gather. factual -datan, and in fa-ct had seemingly no idea
of the value of such. Under a code and because of an appreciation
by Code Directors of the value of such material there begon the
collection of data that at t'..e close promised to be of great service.
Progress was naturally slow because of industry' s inertia, due to
their lack of understanding, anmd it is also to be believed,to a fear
of disclosing and facing facts.

Department of Commierce figures bulletined by Code Authority
Vol. II of Bulletins issued No.',our, under dA.te of December 21, 1934
shows: .

1933 1931 1929

No. pf establishments. 218 260 290

Cost of materials,fuel $15,298,920.00 ."22,600,817.00 $35,351,605.00
etc.

Value of products 28,299,004.00 43,147,053.00 68,627,515.00

Value added by manu- ,
facture 13,000,084.00 20,5346,336.00 33,275,910.00


(Indicating a sharp decline from 1929 to 1933)
See Exhibit C.


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Comr.rr?.tive Corts of L-.bor between Xew York area eand. outside
Tew York area. Coi_-iled in Sprin, 19C5 by the Code Directorate.


1:117 Z0IC AR-A


Bags to retail at 30-'"
(imitation leather)


;15.00 to ,133.00 ,ross


Bags to retail at ,1.00 oo30.00 to ?36.00 gross
(imitation leat2er)

Bags to retail at l;l.95 "51.00 to ;57.00 ross

Bags to retail at -A2.95 :72.00 to ;84.00 ross

Bags to retail at ".4.95 3596.00 to 130.00 gross


CUT0IDE .:.; YC_: APSA

S9.00 to $12.00 gross


'13.00 to :24.00 gross


;33.00 to '39.00 gross

,)45.00 to $51.00 gross

$60.00 to 1'72.00 gross


These figures are based. on the present l.bor rates now being paid in
the industry. Any changes in rates because of the semi-skilled
definition or increase in wa.ges due to % Union agreement, may alter
the conditions.

The National Authority for the Ladies 7anCdba-g Industry
successors to the Code Authority under date of
Septe.ibOer 19J5 grve me the following: -


Units Enhgaged
Contractors
.7orhers en:aed (est)
CCapitvl (est)
Totea volume (est)


379
146
15,000
$10 ,000 ,000. 00
4 0,0001000.00


ancd rerarh that five years a.; fifteen units each did in
excess of $'1,000,000.00 annually whereas in 1935 but one
will reach tat fi-,ur-.

In answer to an inquiry to the National Authority dated
September 12, 19Z5, we are given the following:
Figured on dollar value it is believed that


50, of bags are made of Leather
50,J of bags are made of Cloth
(Imitation Leathier)


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*(b)
(c)
(e)
(e)




-8-


Figured. on units engr.ted

30o; icixi-ufacture LCeather
70, mnr-nufr.cturo Clot.- (i..iit:-.ticn leather)

(See Exliibit D)

Research aind PirIning files disclose in ,. report prer.red
by Jaries P. Davis, February I, 1934: -


Source: Bureau.
Report


of Census
from Industry


1923 1031
1932 1933


Annu.l volume apprcx.


1929
;iC7,000,000


1931 .nd 1932
.'33,000,000


El iPLOYi E!NT


,.7.je E-.rners


.71 5
-5?513)
6326
3 370
10 '30
87,17
12000
1 7000


Vp-ue of
Products
(T-ic.u snds)


$!13,083
32,732
43,105
37 ,435
68,828
4 .9 147
35,000
35,000


ITITE: Above 7% should be deducted to cover production
of lien's pocketbooks and bill folds. (These aPre
not included under this code.)
(See Exhibit E, pre? 1 ?1nd 2)


C6de Authority Report, liarc'i 19,"5, s-iows: -

* Y-umber of est-blismnents
* t to be assessed
Annual sales for 1934 & 1935
Amount of sales upon which -ssess-
ments have been collected
Volume of Sales upon whic.ih .ssess-
mrnents will be collected, aEprox.
Number of employees as of December
31, 1934
Total payroll of industry


500
325
$35,000,000

$26,093,664

$ 7,000,000

15,000
$ 9,000,000.00


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1921
1923
1925
1927
1929
1931
1932
1933





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Geogr-hiic.IL Diztributiorn of' ,-nufa.cturers:


Eastern

Southern

Iicidwestern

Pp.cific. Coast


',). 873 650.00

601,481.00

1,392,490.00

226,043.00
26 ,093, 664.00


91.50

2.30

5.33

0.87
100.00


Areas Defined


Eastern: New York; lMiassacusetts; Connecticut;
P'aod.e Island; New Jersey; Pennsylva-nia:

Southern: L.aryland; Virginia; Florida; and Texas:

liidwest: Illinois; Wisconsin; l:is'souri; sand Ohio:

Pacific: :7s..ington and California.

(See Exhibit F, page 1. Budget)






i[0TE: The seeming disparity is to be expl:r.ined in
one case by giving a total without breakdown,
in the other by separating manufacturing
units from contractor units.


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Files of L.abor Advisory 3oard foune. in Gener.1 Files:

PCCIKETBO0KS, PURSES, CA.M CASES (Primarily Lea.ther)

(u.S. CSlJS rIGtJR3S)




Pocketbooks arses c.rdl crses 1929


"Jage Earners
Ave. for year


10,430


40 hrs.
under


(7) 18,.'.


Over 40
Under 45

(176) ,243


45-48 -irs. Over 48 but
Inclusive not over 54

(58) 2,185 (32) 1,755


c:'DiTI,,-r: 3-2 IIDUSTRY


No. 7;.je
Estr'b. Enin-t.

1931 253 8,545
1929 290 10,':30


1927 257
1925 207


8,570
5,518


10,086,605
1 ,229,422

13,169,309
7,291,112.


Ccst
of :.t.


2-1,'17 931
35,1. ,603


129, 213, 524
16,235, 32


V-.lue


"-:1 ,926,190
63,6- 7,315

57,344,655
32,731,725


Added
Value


20,008,359
33,275,910

27,726,131
16,495,843


DISTRIBUTI*-7 1929


New York
Pennsylvrnip.
das sachuisetts
Tew Jersey


192 Est.
17 "
17 "
8 "


6,101 workers
1 ,0.10
300696
800


10,952,801 w-'es 47,631,431vclue
957,711 4,306,827 "
709,779 3,540,411 "
962,623 3,656,966 "


Then Ohio, Illinois, l.issouri, C-liforni-., T7isconsin, rnd smell Pmounts
in other str.tes.

AVERAGE AITTIJAL .7AGE


U. S.


1931 )1,180

1929 1,460

1927 1,536


No. of
3st.


290


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'J ges of certain women on various opoer-tions in a Springfield, LIass.
factory:


Se-ot. 1925


R. te

"1.
37.,

36

28

34K;

351

4-1


Change

in

1926

from

dry work

to

piece work


.ours

156

169

170,

163

1381-

174k-


Se-t. 1928


Earnings

91.43

72.412

58.03

80.48

66.40

85. 34


loM.ien' s LBureeau

Pro-ortion of' i. Y. State -rod-uction to total production

19h2"


(68,627 515


47,631,431


value of products


it i1 II


66.31/, of the total number of establisijnents
53. '.9/ of the total number of vwgae earners

:.f 1.3 plants in N. Y. State, 167 are in New York County
9 are in Kings County
5 are in Queens Countyr


-f 17 plants in Penna., 13 are in Philadelxp.iia.


9811


.:ours

1721

16 -

178

1651}

104.;

U-1^


i-,nin r s

64.60

61.26

49.85

57. 36

37.19

76.05


.ou rl y
Rate

58i

43

34



48

49


Total
U.S.

Y:. y.
State




-12-


Picture of '"rnd Ba. Industry

As given cf July 1, 1934 compiled by Co.e Directors: (See G-eneral
files)


In 1904


- 7e entire n-.ticn d.i .';C,500,000 worth of business


In 1929






As of July 1s
1934


11 11


S.';67,000,000 in leather bags
1,000,000 in evening and
fabric bags
4,000,000 in bags to retail
for .1;. 00


Tie volume o' basi-nes- wvas )4j0,000,000., out of
which .23,000,000. covered ba.-gs to retail fi'om
200 up to )$1.00, ,.nCL the b,.l."ice for begs from
(.19.5 up to '23.O ea.ch.

35J of th.e N1 ticril s retail business in hpnibags
is done between ThPmks-ivin, Da.y and December 24th.

B igs at )2.95 r-nd. u. -Lre made by hind in New York
City.

Bags from 20.! to $1.00 f re made by the newv and
modern machinery in t-:.e out-of-town factories.


PRC.DJOgTIOI: II: UiITS


Je proOuced ?L ..0C0,000 units


In 1934 as of
July 1st-


7e produced 70,000,000 units from 20A up to :1.00,and
OO,500,000 2.93 and up


Code Authority 1ionthly Reports

(See Exi.ibit F) W-.ge Reports Sales Volume -
Unit Voluie Cl .assificc.tim of workers engr.aged.


9811


In 1929

































HISTORY OF CODE FOR RILAPIIOTT


Sponsoring' Organi zations
Officers, Code Committees
First Draft to Public Hearing
Public He .rings
Aopproval


9811




-14-


I. BR ZZ 1S 72-] ;A ,A- TO:

1. Commercial. Agencies no cvr-i".able mrteriol.
2. De-oartment of Commerce ceni-us o mLanufpcturerv, no segregated
material.
3. Department of Commerce ce;-.-us of distribution no segregated
material.
4. Reser.rch rnC Planni-m bulletiiFs .ond recordQ.
5. Coee Authoritr files.
6. Code Authoritry ulletinci (E:-ijit C)
7. Administration members' file.
8. IT:tional Authorit-r of the L-C.ies 'n0rdbvg Ineustrv, 347 2ifth
Avenue, NeT7 Yor':. (Succo-"::or- to Code Authorit-.)
9. General Files.

10. Lonthlv '.eoorts Code Auto,--ri -- ( -hibit F.)

II. HISTORY 0o COD._ 70Oj.ULUIcri'

A. SPU0SOFRI C OP.TjIATIC"TS

1. Statc-cnt re t -i.e rp. vt.'entption, ,ze nnd objectives.
Code i.'.et" .,I etc.

1. While t'ie first "o6c, :-hibit A, part 1 and 2, iith its
covering letter of trcnsmittal -r 'r -.entod b,r the Associated L{andba.-
Industries of America, Ind., ~}ev Yor'k Cit--, Auiast 8'th, 1933, it -as not
the document entered for the first onn on.jl- 2urlic hear-ing. December 8,
1933.

ianyr conferences vere il. o- i-.Custr-r !:roups th;.,n ellves, rnd riith
Deputies, both in I's Yor'. and. We i:i '-ton, before r -vi-io.E '7ere a reed
uoon and the inst.-nuent -out into i -.,r'rctor- r-'oe ro- that hearing.

The revised document 7-2rJ "irn: 11 soonsoreC by:

Associated -Ijdb'-; Ind*us~'Vie- of America, Inc., i1ev York
ilidrest Thn bi', -. :n(c' Sr i'.[ Le;.t.ier 7aros Association Inc.,
Chic.I:o.
Industrial Cour cil o.: the Lacies 4;ndb.a- IndustrT,, .'ev
York.

Clairin.- to represent ir thoiDi cornoine@ membership 75', of the
industry 's volume, (See trrnscrint of ,.ea:-in- December 8, 1953).

It vils mair.ly through the efforts o:f- .r. A. ]iittenthal, Chair-
man anid Vice President ind inr. .. .oses-o-., Executive Secretary of the
first nnauied As,-ociation that the CoCe "-v. nut into usaule shape for the
public hearing and that the s-oonsorir- Associations came together to
jointly appear before the ACmii-istr: tion.

The objects of the first sponsoring or,-_anization that presented
the first code are set forth in the paragraph belo'7:


9811




-15-


.-Le obj-ct of this Association shall be to secure
r.nC provide cooperative arnd united effort in all matters
relating to the -orowresc, development, -'elfare or im-
provement of conditions in the Hcndba.; Industiy and in-
dust'-ies correlated. nd contribibuting to and affecting. the
welfare and 1o'o-'mss of the iandba Industry in all its
branches, to foster thec trade anC commercial interests
of its members; to secure freedom from unjust and unlav-
fful exactions; to inculcate and maintain just and eouit-
able princioles; to eliminate unfair or imp-roper practices;
to establish and maintain uniformity and eouitr in the
customs and commercial usnae. :; in' the InC idistry; to acouire,
-preserve, collect, and disseminate business information
deemed "ise'ul, advan.rita.;eous or vcaluoble to its members
reg-'rding the handba' Industry; to reform, correct and
prevent arn- abuse and adjust commercial controversies,
misunde-.strndin,-s or grievances between -umbers or be-
twreen its members and the trade; to enforce its said ob-
jects and purposes among its members ", such disciplin-
ary and other measures as rna'r be reed upon by them and
as nay be provided by its by-la'7s; and in general to do
all matters tending to the improvement of the 'T.,ndbe"
Industry in all its commercial aspects."
(See o*-aOraoh 3, -oage 1, letter of transmittal E-diibit
A, part 1.)
%
This organization came into beir.r before the Code era. (see ppe 19,
this histor-.).

.hils there is no C.ocume-ntary evidence of -Ihat transpired at the
various meetin.-i. and conferences, members of industry preferring, I am
told., not to have written records of their maw- bitter fights, the T'riter
is full-" a-"e.re of the conditions that existed lon,1 prior to the enactment
of the iT.I.R.A. anC. of -hose that obtained during the ensuing months.

The arguments oresenteC ,-ere b&seC upon the labor situation obtain-
ing in 1933, a situation caused by the migration of industry from its
first an principal home base iVev Yor'k Cit-, and other contributing fac-
tors uoon 'Vhich I will touch later. (Page 16, this history)

The shifting of industry from the hietro-oolitan City started about
1928 "nd 1929 nsid .ps caused, it is claimed and I believe cannot be dis-
*:'ut2, by- the *he.vyI handed. tactics of the labor leader'hin then in -oo'-er.

As more and. more manufacturers located their plants in cities anC,
towns outside the Mietropolitan area, taking avnte of the cheao labor
taere to be found, naturallyr those remninin,- in 1'e-', York and under Union
agreements founr.d competition, which .iac laroely based uoon labor costs,
almost un-neetable. It was not ioT7e-;sr until -7 'ere 7rell into the de-
pression yeal.?, '7ith a consistent loveri;:...: of price floors that real bit-
terness camne into e:-istence.

The N.I.R.A. ]L.in- been v:ritten and mvan-r, nen- row. York City manu-
facturers believed the-r ss3 an opportunity to even up conditions if they
9811








were allowed. tovrite into code for tneir ir.'.-..t.-, l'bor classifications,
wape scales and hours that would mak:e iore c.ifficu!t the -ath of the out-
of-town manufacturers.

To give a clear cut picture of tae cor;J]itio1? that lee to the then
existing{ situation, I quote from a 1oc',mennt ile on or nbout September
13, 1935 with the Administration (Dr. i'rrnha!1 revie,-: Division) anC ore-
pated by the former Code Director I-'.. iittent.L I. (:L'.ibit O)

"Up until the year 1929, more th1,n 8'` ; of th-e indusct--.. ''as located.
within the Metropolitan area of Few.7 York. The industry loc-ted in New
York has been in contractual relations :ith the Union for almost twenty
years. In the year 1928, the first mrnrrufc'cturer moved a'-ay from the
unionized centre of L'etropolitan i-ev York, a510 bean manufacturing in
Allentown, Pennsylv-nia, under non-union conditions. At thi, time the
Union minimum wagess filed byr Prreemen. vith the manufacturers in 1ew York
were $45.00 a week for skilled -`orkers. Acunmission of Torkers to the
skilled branches were controlled by Lile Tnio-n, so that in some of those
branches of the industry- workers .ei'nec on a noiece '-ork brei- from $100.00
to $200.00 in a 44 hour week. Those amnr-.ifc turers :,ho moved from ie,' York
were unable to obtain -1killed v worker in their re.s'mcctive localities.
They were compelled to em~lo-.- workers withoutt an" previous e::oerience in
the industry. Machinery heretofore little used in industry ,,r a- invented
to take the place of manr of the operations )erfor edc. by skilled .-orkers
in the E'ew York factories. 7orke-xs in these neo. localiti'o r'ere oaid
$6.00 or $7.00 oer -eek, and they- worked from 48 to 54 hou-irs a -!eek. "

"7ith the tremendous difference in labor costr, thiosc maniufcturing
outside of re'r York, vere .ble to giv? greater p.alues or sell for less,
with the result that the minufa.cturers oer.tin- in 'ew York under Union
conditions '.ore forced to meet this competition by s.-crificir' their pro-
fits. The success of the fen ,Jho --ov-d r'a-, offered the incentive for
others to follow. In the year 1.933, oinly., oout 50? of the industry still
remained in the "etrooolitan are. of iJe' Yor.::. Those T.io iove3. or opened
new factories located in the eastern states, a fe" in the Cicago area,
and a few small units were scattered throuhfiut the countrvr, chief, on
the Pacific Coast. The Union was unable to ect.iilish Union conditions in
these factories outside of ,.E' York:." (Some out of torn factories were
and are unionized but under different conditions then those of i1er York
City).

"The factories remaining in !e"' Yor!k -ere chiefl-' those making the
high grode handbags which required the most .killful workers."

"At the time the Code w:s bein.- Cra.fted, the industr,- was about
equallv divided bet-.',een those manufacturers havin, contractual relations
with the Union located in iew York, and thone without Union conditions
all of whom were located outside of lTevr Yor'.-. Factories in re'I York
were paying first class workers (by Union AJ.reement) $35.75 a week, and
second class workers $:32.00 a week. "eneral ha.lp about $18.00 a week
for a 44 hour ,eek. Factories outside of Pew Yor'k were -oaring their best
worker, about $20.00 to $22.00 a w.;ek enrK rier- 1 hel') from $6.00 to $8.00
a week for a 48 to 54 hour week."


9811








"Bitter struggle resulted because of the efforts of the Unionized
factories to establish in the Code a classification of the workers ac-
cording to their -kill and the operations performed at vTa e scales c-
proximatinT those that vwere being paid in Union factories. Those manu-
facturers not unionized, fought to prevent the clasificrtion of the -or-
kers an.-' the eptablishing of ajge scales in the Code aoove the minimum of
$14.00, claiming that their workers were not skilled, that the system of
work em-oloyed in their factories, k:.now7n as the "section system" (not p-er-
mitted in a Union ,-.ctorr) did not recuiro c-ny -:sill; that new machinery
and. ne-' mrethod6' revolutionized the manufacturing of ladies handbn.s, par-
ticularl.: in factories mr-ing low price bags of cloth, (imitation leather)
to retail at one dollar or les. At this time 80 of the manufacturers
making these cheap bags were located outside of Nietropolitan Iteu Yor:."

"At the tine the Code for the industry was adoote, the wage scales
in the industry resembled '.nmne'"he.t a 'toboggan slide, going from $5' .75 a
week (the minimum demanded by the Union for skilled workers) down to
16.00 a week paid in same outside factories."

Meetings were so frequent, discussion prolonged and acrimonious,
almost to the point of blows, that one wonders how those taking part
found time to attend to their production and selling operations.

Through the refusal of the Administration to -rite into the Code the
asked for classification or "-:_w-e scales above the minimum, labor clauses
were at last ironed out, but only to a degree, for there was inserted a
provision, Article IV, Section 2, for "semi shilled", end a ,age set for
them. This was stayed in the President's order of approval and became
the subject matter of a later hearing, proving to be a constant thorn in
every one's side.

Having arrived at some semblance of peace, dissensions broke out
anew over the set up of the Code Authority, the method of selection, and
the division of membership, as bet':een out of to0wn and lew7 York. This
was finally settled, although not to every one's satisfaction, and the
Code Authority was finally set up as provided.

Of the sponsorinr- or-anizations, tio placed no restrictions upon
membership an,` dues were not large. These two were the Associated Hand-
bog Industries of America, Inc., :Tevr York, anC the vlidrest Handbag and
Small Leather "Jares Associstion, Inc., Chicago. The membership of the
third. rouo, the Industrial Council of the Ladies 'TTndbaj Industr-, "iew
York "-.s confined to manufacturers having contractual relations with the
Union. Particulars of these three groups will be found in the succeeding
para.- roohs.

2. Officers Code Committees, Interested G-rou-ios

T'ie officers of the various Industr rou,''.s who s-oonsored the Code
were: -

Associated Handba Ind'o tried of .meric.-, Inc., e" York, N.Y.
(Succeedin the Leather Goods Association.)


9811




-18-


Julius Ilichel
A. Mittenthla]
S.muel Gold mrnith
lIorris Immerman
iEaurice S. liosesson


Presic'Lent
Chywi rian ,V 7. Press.
Tree curer
Secretary
Exec. Secrete...-


li 'ik & elcinen, Inc., U.Y.
'-31..1'L 8: i"tenthal, 1 "N .
Cc.l. mitn BJros., i.. Y.
2e crsft .if-., Inc.
^._oc. r-0n6bae Industry of
..-i3rica, Inc.


Incorporate. June 14th, 195 '"LrmcLr the '.a -* of the State of eien York.

Hag membership of 100 concerns th'Aou hobt the Unitec. States.

,I"idwest Fan'.ba.- and Small Leather :Tohe? A'sociatio:n, Chica:-o, Ill.


President
1st Vice Pres.
2nd Vice Pres.
Treasurer
Secretary


IHar.-y ILorris
7m. A. Tanner
Ser.uel Lialov
Ben. D. Levine
Ear. M. Luce


ILort is 'ann qeill-, Inc., Chlic-.o, Ill.
Royal LeatlLe- Goods Co., St. Louis, l:o.
Crlytal Leather Gorods Co., Chicaro, Ill.
Mir-o Leathlier Goods Co., Chicago, Ill.
320 71. Adam? St., 3nicago, Ill.


Approximate Membership 15.

Industrial Council of the Leather Goods 1i-uufscture.'s Inc., Fen York, T.Y.

President MLichael Eienen Bier.en D-avis Inc., Ner York
Vice Pres. Samuel A. J. Rosenthal Rout Rosenthal Co., New York
Sec. & Tress. Milton J. Lefcort
Appro.iiui.te Iembershio 50.

One other importJnt- Trde Association came into bein.- during the
first days of code writin-7. This was ::no'.n as the NTtional Association of
Ladies Handba- I.anufacturers (first knownn as Poo-i'-,_r Priced HK-ndba- ianu-
facturers Association).

I quote the followvring letter to em 'ha!]F.z t.ie position taken byr this
association, through its couns1, enL'k to ill1L,-trtite the feclin7 e-'irting
between the contending grouis.

SCHLESIiIGER & A:RI:SxY
C0[IT'SELLORS AT LA.


270 Broaduwry
lNev York City


Se-tember 22, 1933


James C. 7orthly, Eso.,
Assistant Deout'r A6ministrator, IT. R. A.
Department of Com.-ierce Building
Tashin'rton, D. C.


Dear Sir:


Re:. Ladies {ane a:.' Industry Coc'e.


In this connection may we be permitted to advise you that 1e represent


9811





-19-


the National Association of Ladies T,-.ndbi' F'nnufacturers formerlyy Popu-
lar Priced Tandba;. Manufacturer- Association n,.nme ch-.n.ed Seotember 11,
1933) v"hich has a present membership of fortyr among rhich are included
practic1ll- all of thile largest r..?nuiFcturers in the industry. The mem-
bership of this Association will be considerably vu-mented by the affilia-
tion therewith of the h'idpTest Iiand 3B J, Siiell Leather '7ares Association,
havin- a membersnlip of tventyr-t o and to ao-'ove such affiliation a special
meeting, of the .i--est Hand B--, & Small Leather '.6res Association has been
called for Sentombpr 23re, 19J7-, at Chica.o and relative thereto the
Secretary thereof under Cate of September 20, 193., vrites us -
"I believe after that meeting, in fact I am almost sure,
vie can send. you our formal acceptance of your propositions
a.nd ha'.e you enroll as a subsidiary."

The present membership of the ITrtionel Association of Ladies Hand-
bag manufacturersrs (exclusive of the Liid--est Hand 33Z & Small Leather Uares
Association) is representative of the entire industry, controls a majority
of production and employrs a large majority of the employees engaged in the
industry. lUan;T of the members of this Association were formerly members
of the Associated Handbar: Industries of America, Inc., the "submittin;
association," and recently found it necessary to sever their relations
therewith, because the interests of and the problems affecting the members
of the As-ociation we represent and those in control of the "submitting
association" are conflicting if not diametrically opposed to each other.

The purpose of this letter is to advise you, as Te are informed, that
the "submitting association" is not representative of the industry and
that it is not authorizeC to speak or act for the members of the Associa-
tion we represent and to respectfully suggest that, in light of the infor-
mation nerein contained, it miht be advisable to have its representative
particiocte in the preliminary hearing on September 28th.

Very tr.ly :o'rs,


SCiHL7ISiGER & X?_INSKY

By (Si,-ned) I. E. Schlesinger

IZS:IG
Encs.

The officers of the rTational Association of Ladies Handba. manufacturers
were: -

President Ira Rosenzweig
Vice Pres. Morris Aarenau Aarenm and 7olfInc., Fall Piver, Mass.
Treasurer Henr-,T lerers i.eers JIfg. Co., r- Connecticut.
Secretary Ethel IYEel

Appro-iimate lember.hip 40.


9811




-20-


This Association too'-: exception. to the Code al.. )'.es;.nted and remained. in
oDposition long, sfter approval.

The Midwestern Group and the s-i&Ull local i .27ch.1sett., Grouo (Haver-
hill Ladies H.ndbag Association) vTer-e -.ot Fcti';e ,-.articipants in these
fights, in fact were Trade Asaci:.tir3' harry! rio- than in n-ne, onl-y
coming into beir-n about this time. rC- the la.t nimneoe. Association, vie
have no record ube-rnd mention here and. there -.t tLie he..rin,- cnd no -oar-
ticulars are at present available.

The following wTere the Committees formed: -

For Associated iancoba?.' In:'ustries oL' Aeirica, Inc.

A. Mittenthal, Chairman
M. PR. Biennen
H. Schoenfield
IM. Imme eman
M. S. H"osesson
W. Green'j aun
S. Mutterper!
~. ji ^^d
S. R. Golc smith ...
C. MHoss

For InL.strii?! Council of Leather .ooc: ..nuf'cturi:.- Inc.

I. Schkwenholz
M. Lefcort
'.v'. -einman
J. I.ichel

For LIidvest Harhbc:- and Sm'll L:A -a "'ar re A.rsocition, Inc.

Samuel lc.low
3d". I1. Luce

For national Association of Ir.itttion and Le.r.Kce: To-,.e-ties

(There is confusion in records as to correct :mm3 of this
Association, sometimes it is -:eferrer' to hiere given,
sometimes as national Associa'ion of '[nd Bag :.cnufFcturers.)

Hyman Burstein
Irving I'i .-ors
Murra-.r 'Resnick

Snuruel -. Goldsmith
Isidor Z. Schlesinger
Sol Mutterperi

For Ha-eriill . ea.dec.d Ba,- A gociation

Crest Sc.annitiles
9811




-21-


3. FPR.Or.i SUB.ISION OF FIRST DRA'T CODE TO P'FBLIC :EA7jFj '

1. 3rief Snummary of ConferenceF an4 fiegotiations

CoAistant reference is found in thile --?neral files, Volume A and the
transcript o' the first hearing as to conferences, proposed and held.,
both in the several months proce-dir.-, and follovwin; the first hearing,
but no record of these are to be found in the files., Ireither is there
anr record of the many conferences held byr industry for I am told that
because of the bitterness of the fightin: it i.as not deemed politic to
keep such.

In the lirht of my own kno'2led(e it is however not difficult to
piece together the hav.eni.-.-s of that time and to at least form an idea
of the orinci-al points at issue.

It wis maintained by the iajor dissenting 7roup nationala l Associa-
tion of Ladies Hendbs- I-nr.facturers) that the sponsors of the first code
raft submitted were not representative, therefore it followed their
vie",s '',ere not as so,._nI and. constructive as they should and myi.-ht have
been. Thi- it -,:7s felt, 'Tas particularlyr the case with respect to clas-
sificationr of workers, which 1iew York wanted, and representation on, ancd
method of selection of the Code Authority.

naturally Y'ational's conclusions (see brief incorporated. in trans-
cript of Public Hearin-, poa.es 238 to 263 inclusive) led to frequent con-
ferences, corresoondenne and telegra-,, which last are to be found in the
general files. In addition, Col. Lea's files, Vol, me A, shove that meet-
ings and correspondence were held with officials of the nationall detail
Dry Goods Association ','ith respect to the discount and term provisions
proposed by industry. A c-lance over the many communications received
gives an idea of who's who in the Department Store field, and definitely
expresses unalterable opoositioi to ,n", changes in terms over those in
existence for some years.

Here as in other industries it "as a case of i-er York vs. the rest
of the country, co-apled with a particularly- bad labor situation intensi-
fied by the mi ration movement.

Both labor and manufacturers were in the pre-depression d.,-s suffer-
ing fror too much financial fat, inability to think clearly, and refusal
to consider and find the sensible approach to their problems. Labor, as
re'ore3.ntec'. by Union Officials then in power, refused to discipline their
o.'n oeo olo- so th't rank and file ran riot. In this connection it is in-
terestirn- to note that, as is often the case it was a small thin, that
led to the first Te,- York mr.-iuf'acturer leaving the Lletropolitan area.
This ma.nu'acturer complained to Union officials that one of his ':.orloien
had. scat in his face and called him unprintable nr-r.eq. The manufacturer
nsturall' e-:mected the offendinC 'orkman would. be edisciplinede. Failing
to -et redress from the Union he came to the conclusion thot he could no
lon-er live in hprmon- i with the Union and decider to find factory accomo-
dations outside the cit-'r limits, movin.- to P n:n.-Ivania. Little byr little
industr-y ].eft Ieir Yox City, anc the *epre.:ion setting in in full force
the situation became* denu-erousl-7 acute.
9811




-22-


In the -oeriod -i-neictel-- -,rocce.'.in,r the C..de, mass production came
in and the average orice-for .iFan.OE .,s nad .fE.len front $2.50 and $3.00 to
$1.00 or les Daring ";hat time, hE.-iri- rc,: c'.ecr t.1? bottom of competition
brnsed upon labor, incu'-.t-;'- be :-n to r-.d to t.iir productst, gadets of one
sort or another, a character of b.-, ;'.cc(..!-oris .icr_-tofore found only in
the hiiaer price ran"-es .. n.rmstin., the ranze o. -ac'.ets in the domestic
markets, there be.7an a combine of forei-n mar.'et.- zo that at the beginning
of the Code era, ind.istrv '7as in Cespoer.t.3 straits, for obviously there
must be an end to such a'competitive r,?e.

Pre-code ConferenceE ouicklv develooec taP.t i1evi York manufacturers
sv, in the Code, an opportunity to at lkast )artielly even u-o vTrith- out of
tow'n industi7 by -ritin.i- into the inst,:-ment, provisions for cla7sifica-
tion, etc. In conferences with the Administrftion it developed that al-
thou.h classification had. been allo..ed in certain industries it had been
declsre8, as contrary to policy. (x-_iibit J.)

Durin,- this period labor itself *7as not idle ?nd it too v'as insistent
upon classification vn.i at the public hearing. of December r C, 1933 -oresented
a comprehensive brief covering this. (Se2 pa..ces 50 to 99 transcrint
Public Hearin. of that date.) Ratura-ll-v these a' imnentcs ere resented by
manufacturers outside of the ;-ei Yorl: area, aence t.le fights. Summed uo,
the main points at issae wTere 30 hours against 40, classification vs. non-
classification, discounts and representation. A-r-romenits were not reached
and the proposed code went to public h'earin,: an:. 'Icpited points not even
then settleC.


9811









C. PUBLIC KEARI:GS ON CODE

1# Dates: major personnel: results

The only public hearing held took place on
December 8th, 1933 at the Carlton Hotel, Washington, D. C.
It was n-resided over by Dr. Earl Dean Howard, Deputy Admin-
istrator, who had as advisors:-

Mr. Max Berkowitz, Industrial Advisory Board
Hiss Rose Schneiderman & W. E. Bryann, Labor
Advisory Board
11r. Fred Huhlein, Consumers Advisory Board
Mr. J. P. Davis, Division of Research and Planning
Mr. G. H. Barrenboim, Legal Division,

and the principal witnesses heard were:-

Vr. A. -Mittenthal, Associated Handbag Industries
of America
Mr. I. Schoenholz, Industrial Council of Leather
Goods ManiLfacturers '
Mr. E. M. Luce, Secretary, Midwestern Handbag
and Small Leather Wares Association
Mr. Isadore E. Schlesinger of Schl-esinger and
Krinsky, 270 Broadway, New York, Counsel for
and representing National Association of
Imitation and Leather Novelties.
Mr. C. A. Newton, representing Meeker & Co.,
Joplin, Mo.
Mr. Irving C. Fox and Yr. Samuel W. Reyburn
representing the National Retail Dry Goods
Association
Mr. Lewis2Waldman, Counsel for and representing the
International Pocketbook Workers Union
Affiliated with A. F. of L.
Mr. Maurice 1,agid, Associated Handbag Industries of
America
Mr. M. R. Bienen, Industrial Council of Leather
Goods Manufacturers.

Mr, Mittenthal of Associated Handbag Industries of America,
the first witness heard stated that his association together with
the two affiliated organizations, Industrial Council and Mid-
western represented about 75% of the entire industry.

This figure was disputed however by Mr. Schlesinger, ap-
pearing for National Association of Imitation and Leather
Novelties, basing his figures on the Census report of 1931. Later
he incorporated in the record a brief covering this. (Pages 238 to
263 transcript Public Hearing December 8, 1933).





-24-


The other witnesses were heard in about the order given and as
the hearing progressed it became clear that the sharp division evidenced
in pre-code conferences still existed among the manufacturers themselves,
between manufacturers and labor respecting basic wages, classification
homework and hours, further that industry as re-oresented from the eastern
States fell into two camJs-and that in their various meetings had not
been able to find a common ground, and still further that the only major
proposal upon which there was a meeting of minds, insofar as manufacturers
were concerned, was that of the terms under which industry desired to
sell goods,

As stated in the foregoing chapter, labor wanted 30 hours specified,
as against 40 hours pro-oosed by and agreed to by manufacturers (see para-
graph 2 page 55 transcript of public hearing, December 8, 1933). The
argument presented by labor was that only by so doing could the unemployed
workers be absorbed. manufacturers on the other hand pointed out that the
out of town manufacturerss at least, accustomed to working 48 to 54 hours
could not meet such a demand and live and were making quite a sacrifice
as it was. Labor also insisted that home work be abolished. The principal
group using Homeworkers, Beaded jag I'anufacturers, insisted thnt they could
not operate without such -or'-ers. Labor insisted they must have classi-
fication. Out of town industry refused to consider this and it was later
ruled out by the Administration as contrary to policy ]laid down by the
Policy Board. (Exhibit J.)

Manufacturers particularly those of the East were at odds among
themselves over representation, since the out of town nen felt thqt having
the bulk of production they should have a majority on the new Code Authorit
This was disputed by the Associated group, the principal sponsor of the
code who insisted, that re-recented in the National's figures were a number
of Associated members. Either could agree upon this point. (See brief,
pages 238 to 254 Transcript Public Hearing).

There was also voiced by Mr. ITewton, representing !eeker Cob, Joplin,
Mo., an objection to the proposal covering learners or apprentices, and
pointing out their need for a differential. (Page 27, Transcript Public
Hearing, December 18, 1933)

It was also brought sharply out that the retail world as represented
by Messrs. Fox and Reyburn were opposed to any change in terms. These
gentlemen gave the Administration to understand that the discounts at
present in use had always obtained, should be retained, and the new terms
would mean advanced prices to the consumer. On the other hand industry
insisted that the present terms were of but recent origin, that depression
had been largely responsible for them, and that for many years prior, term
had been substantially as proposed in the code.

(See Exhibit H, which although proposed long after, states
the "Selling Terms" case from the viewpoint of industry also
Transcript of Hearing, pages 134-162.)

The other trade practice -orovisions were discussed but no serious
irreconcilable differences developed.


9811





-25-


The hearing closing at 5:35 p. m. settled none of the major problems'
presented, all being referred to conferences.

D. FROM PUBLIC 1aJUIIUG TO APPROVAL

Eight days after the hearing, the following letter indicated that
final drafting was to be plain sailing, for while it was admitted there
were still one or two important matters in controversy, Mr. Mittenthal
expressed the belief that all were pretty much in agreement. It is un-
fortunate the modifications referred to in this letter cannot be found
in the files, but the Administretion's then proposed "set up" for the Code
Authority is to be found on nage 6, part 7, Exhibit A.


New York, N. Y.
December 16, 1933.


Mr. James Worthy, Deputy Administrator,
National Recovery Administration,
Commerce Building,
Washington, D. C.

Dear Mr. Worthy: -

After a number of conferences had with the National Association of Leather
Handbag Manufacturers, and other interested parties in our code, I find that
we are agreed upon practically everything in the code as it was rewritten
in your draft of December 12, with these few exceptions.

We all urgently request modifications of the following articles, in order
that they may be clarified and prevent the unscrupulous manufacturer from
evading the fair trade practice rules. In most articles the addition or
commission of even a single word may make the entire trade practice rules
innocuous, and by requesting theseslight modifications, we are seeking to
protect the interests of all the manufacturers against the chislers.

I am enclosing a copy of these suggested modifications with a few comments
setting forth the reasons for these. Of course, there is a great deal
more than I could add to prove the necessity for these changes.

There still remains the two main controversial matters that cannot be en-
tirely agreed upon, namely the Code Authority, and the classification of
basic rate.

I still feel that the Code Authority as suggested by the administration is
fair to all parties concerned. It is true thap.t the Associated Handbag
Industries of America feels that it should have been accorded more re-
presentation, however, they will accept the Code Authority as set up in
your draft of December 12 as fair and equitable, and I see no reason why
the National Association of Leather Handbag Y'anufacturers, should not do
the same.




-26-


The Industrial Council still clings to the hon-oe that classification of
basic rates can be included in the Coae, n-oprticularly since the Millinery
Code has just come out with such classifications. However, I. believe
that if you will again assure them that it cannot be done, they will
accept this as final.

I have lo-rned that the national Association of Leather Handbag Panufac-
turers, has objected very strenuously to the interpretation of the Metro-
politan Area, and that they are requesting a change from thirty-five miles
to fifteen miles from Columbus Circle.

I think this could be accorded them withoutt any serious objection on the
part of the other groups.

7ith the modifications granted and the controversial matters compromised,
there is nothing' really left in dispute and there is nothing further in
the way of the Code being arnroved.


Very truly yours,

A. Mittenthal:ABJ

Unfortunately those hopes were not altogether well founded for on
December 28th, 1933 a telegram was sent to Mr. A. I'ittenthal calling for
a conference with the Division Administrator on the matter of selling terms
and still later other wires sent calling for other conferences. See
following.

CO] d CE

JCW: G INDUSTRIAL RECOVERY
4320


DECEI.3R 28, 1933


MR. i iITTEHITHAL
ASSOCIATED HAINDBAG INDUSTRIES OF AMERICA IIIC
303 FIFTH AVENUE
NE74 YORK CITY

IF CONVENIT TO YOU 7ILL ARRANGE APPOINTMENT WITH WHITESIDE FOR
TUESDAY NEXT 77EEK RE HANDBAG DISCOUNTS HAVE SI ALL DELEGATION OILY IN-
CLUDING YOURSELF BURK'OWITZ AMD PERHAPS OIE OTHER PERSON SEASONS GREETINGS



JAIIES C WORTHY
ASSISTANT DEPUTY ADNINI STRATO0
DIVISION FOUR


. 9811





-27-


WESTERN UNION


1933 DEC 29 PMH. 9 59
NA 1284 21 NL NE7 Y01I' NY 29

DR EARL DEAN HOWARD
DEPUTY ADLINISTIATOR NATIO1KAL RrCOVWRY
ADTIITISTRA.TION COc:i-RCI BLDG WAS.: DC

7ILL BE IN 7AS}iII:GT01I UEDiLESDAY FOR APPOINTI:EET .7ITH ADMINISTRATOR
WHITESIDE PLEASE TELEGRAPH HOUR OF APPOINTi EIIT BEXOWITZ SCHLESING
AND L.0SESSON WILL ATTEI)

A .ITTEITTHAL


COI.';ET1CE

JCW:G INDUSTRIAL RECOVERY
4320

COUiHFIBiATION SHEET

THES:ATTC;:AL RECOVERY AD:TIKISTRATION, COMMERCE BUILDI'IG, SENT YOU A TELE-
GRAM THIS DATE, OF WHICHH THE FOLLOWING IS A CORRECT COPY:


JAIUARY 10, 1934


IRA ROSENZWEIG PRESIDEIiT
NATIONAL ASSN LADIES HANDBAG I.'FRS
1182 BROADWAY
NEW YORK CITY

CONFERENCE ON HANDBAG CODE CALLED TEN A0 FRIDAY ROOM FORTYTHREE
TWENTY DEPARTLIETT C0i:-ERCE EXPECT TO 1AKE FINAL DECISIONS REGARDING
CONTENTS OF CODE IMPORTANT THAT YOU BE PRESENT WIRE REPLY

JAMES C WORTHY
ASSISTANT DEPUTY ADMINISTRATOR

SAME AS ABOVE TO:

Julius Michel, 501 7th Ave., N.Y.C.
Michel R. Bienen, 307 Fifth Ave., N.Y.C.
Irving Schoenholz, 56 Test 35th St., N.Y.C.
Abraham Iittenthal, .1115 Broadway, N.Y.C.
Morris Immerman, 30 East 33rd. St., N.Y.C.
H. Burstein, 325 Fifth Ave,, N.Y.C.
S. R. Goldsmith, 38-7est 32nd St., N.Y.C.


9811




-28-


L. S. -ettels, 303 Fifth Ave., IT.Y.C.
Iilton Lefcort, 130 Test 3lst St., TI.Y.C.
T'aurice Aarenvu, 14 7est `2nd St., N.Y.C.
H. !'argolin & Co., 1237 Broadry., 1.Y.C.
Sol rutterperl, 330 Fifth Ave., N.Y.C.
George 1Teyers, 1133 Broadway, N.Y.C.
I. Schlesinger, 270 Broad-ay, N.Y.C.
E. 1<. Luce, 320 rest Adams St., Chicago, Ill.

It will be seen thit with the exception of. the first there is not any
indication as to the particular phases of the.code tlipt were to be dis-
cussed.

Following these conferences it become '.nown that a finished document
had been prepared and, was awaiting signature for immediately there came
in a flood 3f protests, I quote a few only, taken from the files, for all
are pretty much of the ssne tenor opposition to representation, terms
discounts and wages.


POSTAL TELEGRAPH

T.A 714 384 IlL 5 Extra 1934 Feb 9 P; 7 42

RK iE7. YORK NY 9

COLO.-EL ROBERT LEA

DEPUTY ADLIINISTRATOR OF IIDUSTPY DEPT OF C01MI BLDG WASH DC

RE CODE COVERING, LADIES HAiDBAG IifDUST1.Y THIS 7IRE TO CO0TFITM TELEPHONIC
CONVERSATION OF TODAY STOP '7E PRPRrSEi:T THE NATIONAL ASSOCIATION OF LADII
HANDBAG MjAIUIFACTURERS STOP PAPERS ON :'ILE WILL INDICATE MEMBERSHIPP ETC O0
THIS ASSOCIATION STOP WE UIDERSTA:.D COD'_ HAS BEEN DRAFTED BY DEPUTY AND
ADVISORS AND IS aBOUT TO B3E SUBMITTED TO YOU FOR APPROVAL STOP SINCE
SUBMISSION OF CODE TO COVEr. THIS INDUSTRY THIS ASSOCIATION HAS CONTENDED
AND STILL CONTENDS THAT THE SPONSORS OF THE CODE ARE NOT TRULY REPRESENTS
OF INDUSTRY STOP THE !IIBERS OF THIS ASSOCIATION REPRESEI'T N:T LESS THAN
HALF THE VCLUIE OF BUSINESS.D01TE BY THE EiITIRE INDUSTRY ATD EMPLOY
CO 0NIDERABLY I.:0:E THAN HALF OF ALL 7;ORKERS EIIGAGED THE-EIN STOP THE ISSUI
7ITH RESPECT TO rLEPRESENTATION HAS BE2N TENDERED RIGHT ALONG AND DIRECTLY
AT THE PUBLIC HEkRING BUT HAS NEVER BEEN PASSED UPON AID E BELIEVE NO
ADEQUATE INVESTIGATION IN THAT DIRECTION HAS BETN MADE STOP 7E HAVE
LEARNED BUT ONLY FROi; THE PUBLIC PRESS THAT T'ITHIN THE LAST `EEK CONFERENCE
HAVE BEL HELD AT '7ASHI'GTOI RELATIVE TO THIS CODE ATTENDED ONLY BY PARTII
AiD ASSOCIATIONS -HOSE INTERESTS ARE ADVERSE AND IN DIRECT CONFLICT t7ITH
THOSE OF THE 1.KZBERS OF THIS ASSOCIATION STOP WE WERE'NOT IIVITED TO
PARTICIPATE IN THESE CO'ZFRE;:CES STOP THE EIGHTEEN DOLLAR OR FORTY-
FIVE CENT PER HOUR !:INII.JUM WAGE.FROyVSIONS IN. THE PROPOSED CODE REPRESENT
THE D.:A!MDS OF NE7 YORK ILAJFAQTUREFS AND THE IINTERNIATtONAL POCKETBOOK
WOR.1_ERS UliIO1! AiD 7ILL PROVE DESTRUCTIVE TO A LARGE NM.BER OF THIS
ASSOCIATION 'ITH PLAIITS LOCATED: OUTSIDE OF THE NEWI Y6RK CITY AREA STOP
THESE WAGE PROVISIONS WERE IIICORPORATED .WITHOUT ANY .APPROPRIATE SURVEY
OR INVESTIGATION TO ASCERTAIN WHETHER OR NOT THEY ARE FAIR AIM EQUITABLE
TO THE OUT OF TOWN I.IANUFACTURERS AFFECTED THEREBY STOP THE CONTROL OF TIE3
CODE AUTHORITY IS PLACED IN THE AIDS OF ITEW YORK LiANUFACTURERS AND THOSE


9811




-29-


IN CONTRACTUAL RELATIONSHIP ":ITH INTERNATIONAL POCKETBOOK ORDERSS UNION
WHOSE INTERESTS SO FAR AS LABOR IS CON!CERED ARE IDENTICAL ATD ADVERSE
TO TH3 OUT OF TON LMI.AUJFACTTURE'S STOP WE WANT TO GO ON R7COP1D AS OPPOSING
THE EIGHTEEN DOLLAR OR FORTY-FIVE CE1T PER HOUR MIINIT-I WAGE PROVISIONS
CONTAINED IN THE PROPOSED CODE AND THE PROPOSED CONSTITUTION OF THE CODE
AUTHORITY AMD ASK FOR FURTHER HEARING WITH RESPECT TO THE MATTERS COVER
BY THIS TELEGRAMi

SCHLESINGER & KIINSKIY 270 BROADWAY NT! YORK CITY

DA'-' LETTER


February 10, 1934


Colonel Robert Lea
Deputy Administrator of Industry
Department of Cc.imerce Building
Washington, D. C.

Re Ladies Handbag Code STOP Our wire last night was based on
telegram received from James C. Worthy Deputy Administrator STOP We
have just received copy of latest proposed Code STOP In the previous pro-
posed Code prepared by the Administration the Associated Handbag Industries
of America Inc was given a representation of three members on the Code
Authority STOP The Industrial Council of America one and the National
Association of Ladies HT-ndbpEg manufacturers three STOP Even to this ap-
portionment we objected and novr we find that without our consent without
notice to us and without being heard with respect thereto the proposed
Code forwarded to us allots to the Associated Handbag Industries of America
five representatives and to the Industrial Council of America two and to
the Association that we represent also two although the members of this
Association do at least one half the volume of business of the entire in-
dustry and we employ more thqn one half the wor-ers enfr~ed STOP 7We
again ask that all definite action with respect to this Code be postponed
until the members of the -.Tptional Association of Ladies Handbag Fanufac-
turers have been afforded a further opportunity to be fully heard

SCfLESI1,,GER & KRIITSKY
Attorneys for National Association
of Ladies TTandbag Manufacturers







GOLDSI.'ITH BROTHEEIS

E.nnufacturers of Lndies' Hand. ngs

38-40 West 32nd Street

ye:'. York City


February 14, 1934.


nationall Recovery Administra.tin,
Colonel Robert Lea,
Deputy Administrator of Industrr,
Department of Commerce Building,
7ashington, D. C.

Dear Colonel Lea;

We wish to enter with you our oDotest against the Code of Fair
Competition for the Ladies1 'handbag Industry, as submitted to you in
its present form, in view of the fact that the Code as written is benefi-
cial to the certain few of the 'Tew York manufacturers.

e bse our protest on the follow-in., and rrhich we ho-oe and have
no doubt'that in view of your fairness will gi-e it every consideration:

Statistics rill confirm our contention that seventy percent of the
handbags manufactured in the United Sta.tes are riade outside of Ne" York,
and only a small portion of hanncdbags are nide in TTew York City, namely,
the high style and high priced bngs, where a few dollars a week more to
an employee does not hurt the price of the unit in any way. The manu-
facturers, who are in Yew York must have skilled helo with many years
experience in order to manufacture their lines. Today, out-of-town
manufacturers find it very difficult to compete with ?ew York manufac-
turers mailing the same type of merchandise, dup to the increase in wages
made by the out-of-town manufacturers, namely, about 601, which is made
up in the shortening of hours and the minimum scale und.r which the 1'A
permits you to operate.

We were obliged, in order to coonorate with the President's 'Emergenc;
Fedcsures, to advance our help who were receiving t8.00 and .9.00 a week
to .12.0C per weok, and those getting $12.00 per we, k and over were ad-
vanced proportionately, as also their hours of labor shortened to conform.
with the N. R. A. thereby adding many additional help to our payroll.

ToWe estimate that the out-of-town manufacturers emnloy approximately
10,000 workers whereas the Ncr York manufacturers employ approximately
2,000.


9811


-,In





-31-


The out-of-town manufacturers must continually each new help
the art of making bags, thereby incurring tremendous expense to the
manufacturer, and the ITe York manufacturers, according to the code
submitted to you, ask you to have us pay the same amount to our em-
Dloyees, who, as stated above, must be taught the business from the
beginning as against the ITer York Manufacturers' employees who have
a number of years of experience, as the Union membership in New York
has been closed many years for learners.

We are employing in our plant approximately five hundred
People. Would it be, and would we be justified in shutting down
our plant and the five hundred families supported thereby become
public charges in order to satisfy a very small percentage of the
industry?

If the code is adopted in its present form, we will have
no other alternative than to move our plant back to New York, which
we might mention (is the'sole object of the New York Union) thereby
ruining the thousands of families dependent upon the out-of-town
handbag manufacturers.

To the cost of the out-of-town manufacturers' labor must be
added the tremendous expense involved in breaking in new help. The
tremendous expense involved in the continual travel of their De-
signing Staffs to the Ne. York market. Trucking expenses add mat-
erially to the cost of our manufacturing (and at the same time
give employment to hundreds of people. Our office personnel is
double that of our New York manufacturers due to the many details
necessary for out-of-town manufacturers and which also adds hundreds
of -peoDle to our payroll. And, the many other incidental items
which add greatly to the cost of manufacturing out of the New York
market.

In conclusion, we again wish to voice our protest of the Code
in its present form, and as above stated, that if the Code is signed
as it is now written, bags will not be able to be manufactured out-
of-town and manufacturers will be obliged, in order to profitably
compete with INew York manufacturers, move their plants back to New
york, or else go out of business entirely, as the ITew York market
does not have enough skilled labor to take care of the entire in-
dustry and learners have not been permitted in the Union for sever-
al years.

Yours very truly

GOLDS !ITH BROTHERS
MANJFACTURIITG CO., INC.

LJB FB

P.S. Whereas we no"- employ over five hundred in our plant, if
we were to move back to New York we would only need approximately
two hundred to produce the same amount of units.


9811







WESTERN UNION

1934 FEB 15 PM 10 18

001375 50 NL WIAUKESITA WIS 15

COL ROBERT LEA -

LEATHER DUPUTY ADMINISTRATOR WASH DC -

VERY MUCH OPPOSED TO CONTROL OF HANDBAG INDUSTRY BEING
INVESTED IN HAND OF ONLY UNIONIZED MANUFACTURERS IN
NEW YORK STOP DUE TO GREAT DIFFERENCES IN CLASSES OF
LABOR BETWEEN NEW YORK AND MIDWEST A HOVE OF THIS KIND
WOULD FORCE US TO DISCONTINUE OPERATION STOP \iE PLEAD
FOR CONSIDERATION OF THESE CONDITIONS-

MASTERCRAFT LEATH-R GOODS INC.


POSTAL TELEGRAPH

1934 I1AR 21 PM 3 27

WB48 DL 5 EXTRA-RK NEW YORK NY 21 219P
GEN HUGH S JOHNSON
DEPT OF COMMERCE BLDG -

RE LADIES HANDBAG CODE STOP THIS ASSOCIATION AT A
MEETING LAST NIGHT ADOPTED A RESOLUTION EXPRESSING ITS
DISAPPROVAL OF THE PROVISIONS OF THE CODE WITH RESPECT
TO THE CODE AUTHORITY STOP IT IS THE OPINION OF THIS
ASSOCIATION THAT THE MATTER OF REPRESENTATION OF THE
CODE AUTHORITY HAS NOT BEEN DISPOSED OF OJT ATEQWITABLE
BASIS AND THAT THE QUESTION AS TO "WHETHER THE SPONSORS ARE
TRULY REPRESENTATIVE OF THE INDUSTRY HAS NEVER BEEN
ADEQUATELY INVESTIGATED TO JUSTIFY THE CODE PROVISIONS
STOP WE HAVE CONTENDED SINCE THE SUBMISSION OF THE CODE THAT
THE SPONSORS ARE NOT REPRESENTATIVE OF THE INDUSTRY
AS THE PAPERS ON FILE WILL INDICATE 'STOP IT IS
OUR WISH TO COOPERATE WITH THE 'ADMINISTRATION BUT '."E
FEEL THAT NEITHER THE SPIRIT I1OR THE LETTER OF THE RE-
COVERY ACT HAS BEENIT FOLLOWED IN CON1TECTION WITH THE DES-
IGNATION OF THE CODE AUTHORITY AND RESPECTFULLY ASK
FOR AN IMMEDIATE HEARING OF THIS MATTER AT '..HICH ALL
INTERESTED PARTIES 1,AY SUBMIT FACTS AND FIGURES PRIOR TO
THE EFFECTIVE DATE OF THE CODE -
THE NATIONAL ASSOCIATION OF LADIES HANDBAG MANUFACTURERS
270 BROADWAY NEW YORK CITY.


9811


-32-




-33-
N IGHT LETTER

February 8, 1934



Miss Frances H. Robinson
c/o General Hugh S. Johnson
Department of Commerce Building
Washington, D.C.

AS FOPJIER LIEUTETAITT COLONEL AGD UIDER MCCAIN AID HARRIS
I RESPECTFULLY PRQUEST THE FOLLO'!I.TG I.ESSAGE JE DELIVERED
WITHOUT DFLUY TO GETRAL JO-TSOIT QUOTE ,.ETAILTRS CAN NOT
KEEP PRICES DO..I ON LADIES "-A1DBAGS AS YOU B7SEI-CHED
THEM AT OUR COIVEITTION IF YOU Ui.1.ITTIITGLY CONDOIFE A
NEEDLESS HIDDEII PRICE IIICREASE 3Y APPROVING A CODE WHICH
IS II.TE1DED TO EXACT A PROFIT OF TWO MILLION DOLLARS FROM
CONSU'[ERS IN A FORTY MILLION VOLIE IITDUSTRY TiROUGH A
REDUCTION IN THE PREVAILING CASH DISCOUNT OF EIGHT
PERCEITT TO THREE PIERCE { T SINCE THE CODE PROPO1EiTS HAVE
NOT AGREED TO A COVEPE1ISATING REDUCTION IN WHOLESALE PRICES
OF THEIR PRODUCT STOP IF CODE I'UST BE APPROVED TECO1i1END
A STAY OF DISCOUNT PROVISION UNTIL COMMITTEE OF PROIITE'iTT
RETAILERS CONSISTING OF MESSRS ROTHSCHILD STRAUS REYBURP.
I1'ITTEU PRIDDAY AND OTHERS CAN PRESENT TO YOU OR YOUR
APPOINTEE FACTS THAT ',1E BELIEVE WILL FULLY JUSTIFY OUR
OPPOSITION TO PPRSEITT LOW DISCOUNT PROVISION STOP
WHITESIDES RECENT IITERJiiEDIATE REPORT TO YOU ON CAUSES
OF NEDLESS RETAIL PRICE INCREASES IT.TIONS REDUCTION OF
PREVAILING CASH DISCOUIVTS AS 01E OF THE IMPORTANT FACTORS
UNQUOTE

P. J. Reilly
I.ember, Retailerst Protective Committee
National Retail Dry Goods Association
!

February 12, 1934


Mr., Irving C. Fox
National Retail Dry Goods Association
225 West.34th Street
New York, ,.Y.

Dear Mr. Fox:

This letter is in reply to yours of February 7, to General
Hugh S. Johnson.

The Code for the Ladies Handbag Industry has already
been recommended by me to the Administrator for aunroval.

As you already know, at the time of the He-ring, provis-
ions standardizing the discount at 3/10 E01.1 received very
thorough consideration.


9811




-34-


Moreover, a joint committee of manufacturers and
retailers under the chairmanship of lMr. Reyburn was
anupointed but unfortunately they were unable to come to
an agreement.

In order to break a deadlock which had existed for .
several weeks, I authorized the Deputy to proceed in,
drafting a Code which woald be satisfactory to the-manu-
facturers and which would contain the discount provision
of 3/10 EOM.

The action taken in the drafting of this Code seemed
necessary if they were to have a Code at all.


Yours very truly

A. D. Whiteside,
Division Administrator.-



INGBER & CO1PAJNY

I MANUFACTURERS OF

FABRIC HAND BAGS -

1307-09-11 Market Street

Philadelohia, Pa.

..... February 12, 1934

National Recovery Administration,
Colonel Robert Lea,
Deputy Administrator of Industry,
Department of Commerce Building,
Washington, D.C.

Dear Colonel Lea:

We received unofficial information that the Government
is about to present a Code for the Ladies' Handbag Industry,
in which there will be an $18.00 minimum. We wish to
protest against the inclusion of this paragraph in the Code
for the following reason, which we believe applies to every.
manufacturer outside of Ne." York City:

All manufacturers, outside of-New York, are handicapped
in competing with the New York manufacturers. To begin
with, we do not have the skilled help that they have. Most
all mechanics tn New York haye* been in this Industry at least
five or six years. The main reason being that the International


9811





-35-


Pocketbook Union, with whom the New York Manufacturers are
in contraction, does not permit them to take on any new
help. For the last few years, there has been an over
supply of help in this trade, due to the depression. Be-
sides that, we are compelled to buy our goods in WJew York, as
that is the market -olace. and maintain an office in New York
for the sale of goods, as buyers will not go outside of New
York to purchase. To maintain a New York office, and ship
everything to New York City and East of New York ore-aid to
New York, also entails an expense. Coupling this with the
average out of town help, which is usually not as skilled as
New York, we are at a disadvantage.

Besides, ITe- York City has what is kno-m as a Clearing
House for workers When they need ten extra framers for
a day, they can phone to the local office, and this is done
for any other department. Whereas when they take help out
of town, nnd lay them off when they don't need them, they
thereby stand a chance of losing them, because they usually
drift into another trade. It therefore neans that br the
time we weed additional hel-o, we have to start training
them again.

To avoid this, we try to keep them on. If a framer
has no work, we give him something else to do, and do
likewise in any other department. This is how we manage
to keep them, although there is a loss in doing so.

For example, this is what happened to our Company:
During the latter part of August, and the early part of
September, we had a strike, when we brought in some new
people, paying them the minimum wage. They have only been
in our employ now for about six months. The National
Labor Board, who was instrumental in settling the strike,
asked us to make all employees back, which we did. Sufficient
proof can be furnished that we are not discrimination :, and are
dividing the work as evenly as possible between the exper-
ienced and inexperienced help. We believe this is what the
Government wants. To keep everybody busy instead of a full
week to some and nothing to others.

From the above facts, you can readily understand that
if an $18.00 minimum is put into the Code, we will Drobably
be forced to shut down, or else eliminate all inexperienced
workers. We know the Government does not have this ouroose
in mind, as it would mean so many more people to resort to
charity. Therefore, we-protest against the insertion of this
clause in the Code, and as mentioned before, we believe that
if it should be enforced, we would have to close the plant
and move to New York, where it will be possible to do
business under the Code,

Now what is to haDoen to the people in Philadelhia?
Our com-nany is employing about two hundred to two hundred and


S 9811





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ten people, and the rest of the Industry in Philadelphia is employing
about one hundred and seventy-five. Considering the families dependent
on these People's ages, it would necessitate about twelve hundred
additional people going to the Relief Board.

We are awaiting advice whether or not yrou %7ill have a meeting in
Washington on Wednesday or Thursday of this 'cek. If so, -.e expect
to be there to lodge our protest in person.

7e hope it will hot be necessary to put this Industry in Philadelphi
out of business.

Yours very truly,

IITGBER & COMLPAITY

(Signed) D. A. INGBER, President

[WESTUT UNION

(02)
KA 423 101 NL 1 EXTRA JOPLIN MO 14

GENERAL HUGH S. JOHRTSON -

ITRA ADI-IIISTRATOR WASH D C -

THE LADIES HAITD BAG CODE -ECENITLY PLACED IN YOUR HANDS FOR APPROVAL
IS VERY UNFITAIR TO US AS A SMALL TOWN AU UFAC URER IT CONTAINS NO WAGE
DIFFE--,i:TIAL AND LITTLE COTSIDEPATION FOR THE ACTUAL CONDITIONS SURROUNDI
US AS AN ISOLATED MANUFACTURER WONT YOU BEFORE DECIDING ON THIS COE3 PLEA
REVIEW OUR BRIEFS AID) CORRESPONDENCE IN THE FILES OF DR. HOWARD AND MR J
WORTHY ASSISTANTT DEPUTY ADI.IIISTRATOR WE EMPLOY ONIE HUNDRED FIFTY TO TH3E
HUNDRED PEOPLE WHO WILL BE WITHOUT EIPLOYEINT IF WE ARE FORCED OUT OF
BUSIIIESS WHICH IS ALMOST SURE IF CODE AS NQ0 WRITTEN IS PUT THROUGH.

THE MEIER C01PANITY INC

C I73 ER PRES

WESTERN UNION

VP 138 5 1 XU PV NEW YORK NY 14 526P

HUGH S JOHNSON, ADLIIITISTRATOR
CAPE OF LISS ROBIiTSON DEPT OF COMiRCE
COREY IEZER ONE OF OUR MI ISSOURI LiANUrACTURERS WILL BE GREATLY INJURED BY
NO WAGE DIFFER-ETTIAL HAND BAG CODE HE HAS SUBMITTED BRIEF TO HOWARD BUJT
HAS 110 UORD rLGARDI1G IT STOP APPRECIATE GREATLY IF YOU WILL HAVE SOME01
WIRE &E LAMBERT C0.LPAITY TWO FIFTY PARK AVENUE NEW YORK WHAT STEPS CAN BE I
TAKEN-

ROBERT L. LUND (03)

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WESTERN U1.TNION

1934 FEB 15 PM 6 11

QB 604 135 NL 5 EXTRA 1.IIAI.II FLA 15

COL01,EL ROBERT LEA DEPUTY ADIIiTISTR',TOR IITDUSTRY-

WASH O -

INFORLIATIOIT LEADS US TO BELIEVE FOURTEEN DOLLAR I.ITIJIUl, WAGE FOR IMITATIONS
LEATHER WORKERS EHINEINT STOP ,E ARE OPPOSED TO THAT LiINIMIU.I AS IT 1IEAIiS
IMiv]EDIA-E CLOSING OF OUR PLANT E.IPLOYING APPROXIMATELY HUNDRED PEOPLE STOP
NINETY PERC.IET OUR WO7RY-RS IIT7LERIE7CED AiND IF THIS CODE IS ADOPTED IT WILL
POSITIVELY THROW THEI.i ALL OUT OF WORK IN FACT OUR DIRECTORS HAVE SERIOUSLY
CONSIDERED CLOSING THE PLANT AS rE CAITiTOT ILIANUFACTURE OUR ilERCHAIIDISE
ON PROFITABLE BASIS UNDER PRESENT NRA CODE STOP EI.IPLOYEES WORKING IN
OUR PLAUT APE WELL ABLE TO SUSTAINII THEMSELVES AID ARE TPRSEi.INDDUSLY THAITKFUL
FOR OPPORPTUTITY TO BE ABLE TO DO SO STOP PRESENT CODE MAY AND ADOPTION
OF FOURTEEN DOLLAR -.IINIlU.u WILL MAI IT CONCLUSIVELY NECESSARY FOR OUR
PLANT TO CLOSE AND I.IATY OTHERS THROUGHOUT THE COUNTRY LOCATED GEOGRAPH-
ICALLY SII.ILAR -

HARRY I MAGID VICE PRES STYLE CRAFT BAG CO INC

HERZ AND KORY

Makers of

LITTLELADY CHILDREN'S & :.ISSESS BAGS

230 Pine Street

WILLIAMSPORT, PA
February 16, 1934

Colonel Robert Lea

Dear Sir

We have just been informed that the ladies handbag code contains
a minimum wage proposal of 18 per week and wish to say that if same is
adopted will necessitate our removal to New York City, as ie would be
unable to compete, considering all other disadvantages and extra ex-
penses.

Yours resp.


HERZ AND COMPANY




-38-


J-nuary 5, 19Y4 De-uty Ir,..l Dea.. toward writi-i., the following
mcmorr-..idii to Division Aijni.:istr;itor A. D. W7hiteside was evidently
incli.icd to LErce with two of his advisors thrt the rmanjority faction
should meet with the Administrator and write a Code based unon the
Division AdAinistrator's ultimatum viz:

A "a,.e minimum not to exceed ($18) eightec.n dollars "er week and a
discount provision of 3',.
1-2-34'.


I.;r. A. D. Whiteside

Earl Dean Howard

Messrs. Eillma-:i and 3url:ow.itz, Labor and Industrial
Advisers, respectively, on the -.rbao Code have )etitioned
me in the matter of the deadlock on that code.

They are convinced that the atteim-t to '.ct -n arree-
ment between the two factions in the industry has entirely
failed since the last nro-osition to arbitrate their
differences has been rnfused by the minority.

They therefore recornie:n'd that we authorize the major-
i- faction, consistin. of at least seventyr-five per cent
of the industry, to ,ieet with the Deputy and -.dvisers and
formulate a code on the basis of your ultimatum -o them,
n'.mic-ly: two wa e minima not to exceed eihteen dollars
per week and discount -r'ovision of three er cent.

Mr. Hillmn-I is not satisfied with the wa.,e *.-:id hour
provisions of the code submitted by the majority, but there
is no doubt that these differences can be reconciled if ve
hold the conference which they recommend. This would involve
a decision on your -,art to aP-rove a code against rhich there
was a minority on-)osition of probably twenty-five -)er cent.

Ea-r1 Dea.I Howard
Deputy Administrptor
On this memorandu.i are to be found question narl-s against
the fibu'res quoted in the second line of third -arara-)h and the
last two lines of the l-st iar..a--.. At the bottom is also a -encile


9811


I





-39-


presumably made by the Division Administrator, A. D. Thiteside, and
in view of the conflicting claims made by the Trade Association
one can well understand his doabt of accuracy of statements.

All of that month and through February and March, the battle
raged and sporadic references are to be found in the general files
to meetings with the Division Administrator, the Deputy, the re-
presentatives of the Labor Advisory Board and Colonel Lea. Fol-
lowing what appeared to hpve been the rule, insofar as this Code
wps concerned, no record was made of these conferences but from want
I rec:ill it seemed as if each faction was determined to rule or
ruin, and could not or would not agree on the disputed points.

A comparison of the dr-ift submitted at the hearing (see pages
270 to 285 transcript of Public Hearing) with the approved code
gives light upon what must have been the subject matter of the
various meetinigs. I auote in the following the major points at
issue:

Proposed Code: Article II Definitions not sufficiently
clear, and without reservation, all em-
bracing.

Approved Code: Article II Definition clarified more specific.

Proposed Code: Article III 40 hours in any one week and
not in excess of 8 in any 24 hour period
for factory and office help.

Approved Code: Article III 40 hours per week except that shipping,
clerical or office forces were to average 48 hours
over a monthly period.

Proposed Code: Article IV 351 per hour for greater New
York, 30 outside New York area.

Approved Code: Article IV A flat 350 rate per hour.

Proposed Code: Semi-skilled not provided for.

A-oproved Code: Provides for seuai-skilled at 45 per hour rate.
(Stayed in order of approval)

Pro-osed Code: Leaners to be paid not less than 80% of
minimum wages and must not exceed 15% of
total number of employees..

Approved Code: The Administrator may under exceptional circumstan-
ces permit employment of learners.

Pronoosed Code: Classification None.

Approved Code; Section 6 provides that uoon recommendation by the
Code Authority and after full study the Administrator


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may establish basic rates for the more
skilled classes of employees.

Proposed Code: Article VI Administration provides
Code Authority of eleven (I1) to be
selected by various associations.

Approved Code: Article VI Administration provides eleven
(11) selected from industry:

5 by Associated
2 by National Associption
2 by Industrial Council
1 by Midwest Association
1'.by"Pacific.Coart: .Manifacturers
1 by Labor Advisory Board.

Trade Practice Provisions were essentially the same.

It will be noted that the "age provisions uonroved were a com-
promise and as already stated became a fester s-pot and -orovocative of
great dissension and widened the rift between lbor and manufacturer.

It will also be noted that representation provided in Article
VI of approved code is auite different from the one contained in draft
used at the public hearing and revised immediately thereafter (Exhibit
A, part 7, page 6; part 8, page 4.)

The Code was approved by the various Boards without comment
except that of Research and Planning. Mr. James P. Davis of that
Board pointed out that since the establishment of classified wage
scales under codes is contrary to Administration -oolicy it would seem
wise to eliminate this provision.'
*
He further points out that the discount provision might be the
cause of much criticism unless it conforms closely with the well es-
tablished practice of the industry.

(See Exhibit E paragraph "Comnents Section 2", Section 12)

It was forwarded by Deputy Earl Dean Howard iiarch 5, 1934
to the Administrator for his approval.

3. Date of Aopproval

The Code was approved March 14, 1934 under Admin-
istrative Order 332-1 and became effective under Article
XII of the Code on the second Monday after approval by
the President.

4. Conditions in Order of Ap-oroval: Industry Reaction

The Order of Approval provided:
"1. That Section 2 of Article IV be stayed until


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such time as the Code Authority shall present to
the Administrator a definition of the term 'semi-
skilled employeet, which received the approval of
the Administrator."

The two subjects, semi-skilled and classification while
treated in the Code as separate and distinct matters, semi-
skilled in Section 2 and classification in Section 6 of
Article IV approved code, are in effect mrt and parcel of
e.ch other.

There is no documentary evidence in the files which
indicates when Section 2 of Article IV was written into the
approved Code. Certainly it.was not in the various sub-
mitted drafts or a subject of discussion at the Public
Hearing, although referred to .by industry in the Public
Hearing. (See pages 191-196 Transcript of Hearing, Decem-
ber 8, 1933.)

However in the drafts of Novenber and December there
appears a Drovision for basic wages. (See Exhibit A, Dart 5,
paragraph 5, page 3; part 6,Daragranh 5, page 3; part 7,
paragraph 5, page 3; part 8, paragraph 5, page 2.

Since labor was so insistent that classification be
included in the wage provisions (See Transcript first
Hearing, December 8, 1933 pages 61-65) and since the non-
unionized portion of industry who did not classify their
workers as is done in union agreements, following the sec-
tion system, (oage 3, paragraph 1 Appendix G) seriously
objected to its inclusion in the Code, and further that an
examination of Union Agreements contained in Volume A and
a reference to the statement of the Code Authority Labor
member dealing with this subject (See Exhibit K, page 10)
discloses that the term "semi-skilled" does not appear to
have been used in the industry but instead shows the use of
the term "Second class helpers", it is reasonable to sup-
pose that the Administration injected this clause as a com-
promise measure, providing however that the provision be
stayed until the Code Authority should present an accept-
able definition.

To sup-oort this conclusion is a statement by Code
Director ITittenthal made to the writer September llth,
1935 that since industry could not agree upon classifica-
tion He" York wanting and out-of-town opposed to its in-
clusion, the subject was referred by the Deputy, Dr. Earl
D. Howard, to Mr, Sidney Hillman of the Labor Advisory
Board. He told manufacturers, so- the Director states, that
he offered this clause and industry had better accede to
it or suffer a worse fate by having a code imnoosed upon
them by the Administrator.

The Director further states that Colonel Lea opposed


9R11






-42-


its inclusion on the ground that such a clause could not
be defined, satisfactorily at least, a4d would lead to
endless trouble. Colonel Lea was eventually won over hence
it found place in the -age -provisions.

Could ones foresight been as good as hindsight, the
provision never would have been made for it led, as stated
in the previous chanter, to endless discussion and friction
between the manufacturers themselves, r.nd made wider the
existing rift between labor and industry.

It was and is now ry firm belief that it is impossible
to justly determine where the line should fall as between
skilled and semi-skilled.

'hen months after it was made the subject of -public
hearings June to July 1934, (See Transcript of such), the
Assistant Se-outy David Barr and the Division Administrator
Sol Rosenblatt finding that no one could agree, drew an
order setting up a commission to study the industry (the
ex-oen-ise to be borne by iarustry) and make a finding. (See
Exhibit K, r,.m'es 22 to 25). Since industry would not con-
sent this order was hor'eve'r never consummated.

Proposals were then np.de by the Administrator to
vacate the stay in the c -5'r of approval and to amend the
section by deleting the term"semi-skilled" and the words
"made of any materials other than imitation leather".

On this the -ooint of l1 lity "as raised by the Deputy,
Colonel Harry Berry, to 7ho-i tle code was transferred in
August 1934, and J. G. Latimer," Division Counsel, rendered
an opinion (see Exhibit L) stating that such could not be
imposed over the objection of a majority of industry.

Colonel Berry and his Assistant, Mr. Leigh Ore,
Colonel Walter !!ann= succeeding Colonel Berry and his
Assistant, Mir. Dana Hill, made endless effort in the
succeeding tea months to settle'matters but without
success and there it rested when the curtain was rung down.

The order of rouroval also contained the following
provision: ( Paragraph 4 Order of Aporoval Code 332)

"2. That, in addition to other members of the Code
Authority, there may be appointed by the Administra-tor
S ,'r-lected by such method as he may prescribe, in his
discretion, not more thax three additional members with
voting privilege to be chosen from members of the In-
dustry who are not, in the opinion of the Administrator,
adequately represented on the Code Authority."

Industry itself having been unable to agree unoon the
constitution of a Code Authority, the Administrator found


9811




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it necessary to write one that in his judgment would meet
the needs of the case. However, it is evident fearing it
might later be found in a disclosure of further data that
his conclusions were not 1011o correct the provision stated
above was written in the order. I think this was wise for
it later proved of value in the first steus taken toward
re-uniting this industry, .

Volunes A and B and General Files are filled with
petitions P&airlqst and protests from Ilembers of Industry,
Chambers of Corn erce, L.bor Unions, Retail Stores and Trade
Associations, not to forget lawyers tih-t "ere sent in dur-
ing the months of October, Hovember and December, 19 5 and
January and February, 1954.

The protests f,.ll into four n-jor groups, objections
to Discounts Lrbor Classification, lack of wage dif-
ferentials, representation.

Anpprently almost every one wvs exhausted ,by the
anoroval date f)r Out eight protestnts came forward under
Executive Order 620F. B, and these were heard in public
hearing May 7, 1934. The follo-ring Pre the names:

Hudson Leather Goods Inc., 11yack, ITew York
G. R. Godfrey Company, Gardner, IHassacnusetts
Paragon Irovelty Bag Comnany, Inc., Tlewburgh, flew York
Uneeda 2elt Comuany, lie-burgh, Hfew York
flewburgh Handbag Comuany, lewburgh, flew York
Licht & Kaiplan Inc., Ne'.vburgh, flew York
Strand Leather Goods Company, Inc., I'ew York City
Virginia Art Goods Studios Inc., Lynchburg, Virginia

There was doubt ss to the validity of the last named
protest, Virginia Art, but Division Administrator Rosenblatt
allowed them to be included in the public herring held May 7,
1934 before Assistant Deputy Worthy,-. (See Transcript Public
Hearing and vrith reference to action upon Virginia Art see
page 85 of same. Also see Appendir IA for digest of Protests.)

These .'rotc-:ts were CA st llo'.'ed in 0-( er. ITc. .32 -
5- 6 7 vith thie ex-cL,,tion of Vii iiila Art "'hich wa', n paDD'-
-*clA left in r-beyancc -1c. l thiii I 3holl trcat later.


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CODE ADi.I1ISTRATLIN


Or .-:2nizn-tion
Personnel
Field O --,nization
The Code Authority as a governing body
Budge t s.
Effect on Industry


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III. Code Administration

A. General Preliminary Discussion

Reading the foregoing chapters it was obviously difficult to
launch the new governing body, indeed it seemd for a time doubtful
if an organization meeting could be held. However, the first official
meeting was held, April 3rd, 1934. (See couy of telegram dated April 7,
1934, Exhibit N) Ferusel of the minutes of that meeting (General Files)
indicate that tro prior meetings were held 1Iarch 23rd and larch 29th, 1934.

As was to be-expected two distinct camps were evident, out of town
manufacturers sitting on one side of the Council table, New York placed
opposite. Tnat custom wrps followed until peace was declared in June 1934.

Labor representatives not having been appointed were not present.

The first business was that of election of officers and the
following were elected, remaining in office until expiration.

H. Schoenfeld Chairman
Sol Mutterpel Vice Chairman
George Mvleyers Treasurer
I. Schoenholz Secretary

Following, the Chairman and Code Directors (these last two in
number, then not officially appointed although agreed to by the Board)
were authorized to name committees to immediately consider the
important subject of:

Defining semi-skilled pursuant to Article IV, Section 2,
Report on HandicapDsd persons pursuant to Article IV,
Section 7 (e),
Provide Minimum Standards pursuant to Article V,
Section 6,
To study question of Homework pursuant to Article V,
Section 10,
To draw up Contractors agreement pursuant to Article V,
Section 12,
To draw up Constitution and By-Laws pursuant to Article VI,
Section 8 (b),
To provide coordination with related Codes pursuant
to Article VI, Section 8 (e),
Pl-nring and Fair Trade Practice pursuant to Article
Vi, Section 8 (g),
To draw up Uniform Cost System pursuant to Article VI,
Section 8 (i),
To provide regulations of Style Piracy pursuant to
Article VI, Section 8 (j),
To draw up Label Re-ulations pursuant to Article VII,
To draw up Regulations of Selling Below Cost pursuant
to Article VIII, Section 14,
Finance and Budget,


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This was a fairly comprehensive committee set up and later minutes
show that on the whole, appointed members'tock their v'ork seriously,
approached problems earnestly and intelligently, not sparing themselves
or their time. Oft tiaesthey worked long and late, vnillingly giving
up Saturday and holilays, and the A6;ministration member being present
at m sy of these Committee meetings can speak with knowledge as to
proceedings.

If we d-'ell upon this matter unduly it is that, although perhaps
unwittingly, the Division Administrator was unjust, in the charges
made by him at a public hearing held June 7th, 1934. He at that time
took occasion to c'enly rebuke the industry for lack oi diligence and
for not functioning as well, as caoEbly, as efficiently and as intel-
ligently as it could (see Transcript Public Hiearing June 7th, 1934,
pages 2 and 3).

These remarks had far reaching repercussions for the Code Authority
keenly felt their injustice and deduced that the Administrator and
his Assistant Deputy were irrevocably committed to labor regardless
of the verities, and were not to be trusted. Thus wPs still more
intensified the feeling between labor and manufpcturez, and the Ad-
ministration's problem in attempting to settle highly controversial
matters made more difficult.

At this first official Code Authority meeting it wvs decided that
a meeting of industry should be called so that it might look upon
its new Board and I was asked to be present and explain to industry
just w-hat the Code, if used properly and conscientiously, spelled for
them.


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SOL UTTEiPE:L, INC.
Ihanufacturers of

FA:'Ci" LEATHER GOODS
330 Fifth Avenue
New York



April 12th, 1934.


Mr. O.W. Fearson
New York City

Dear iMr. Fearsor:

This is a reminder that in your address to the .aanufrcturers this
evening, you do not overlook to emphasize strongly the absolute nec-
essity of adhering strictly to the code in order to derive the benefits
that it affords to everyone in the industry.

I suggest that you plead with them for their own interest to put a
stop immediately to the price war started since our code was signed.
This price-cutting now is '-'orse than ever before in the history of
our industry, <^nd that, on top of higher wages and shorter hours. Such
Action on the part of some unscrupulous manufacturers kills tne entire
morale of, the industry and defeats the very purpose of the Code.

Urger every one of them to have a little patience and courage until
the Code is put into operation. and with the assistance and cooperation
of all concerned, we will all get the benefit that the Code and the
entire Recovery Act offers.

Ask them not to weaken nor falter, but stand together like men who
have a perfect right and just claim to a legitimate and honorable exist-
ence in their business.

By doing this we will gain the respect of those we come in contact with
in our daily business dealings, and meet with much less resistance than
"i? do now, and at the same time eliminate the abuses that are heaped
upon us when we lack unity between ourselves and mistrust each other
with no good end to anyone, either to the manufacturer, retailer,
consumer or worker.

Sincerely yours,


/s/ Sol Mhtterpcrl.


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This I did and one of the larF'st pttendances kno'-n was had at the
McAlpine Hotel, eew York, inonuflrcturers coining in irom 11 parts of
the c.1untry. Tnis ,Letting was defiritely tht first step in consolidating
the warring elements and pacd a iart in thte pepce pact signed some
time later,

The effect of the ne"l code's "Terms" provision ws brought out at
both the Code Authority mcetin, one the latcr one of Industry, end it
developed that P Retail Buyers strike was thrertcned if recession from
the Codes Terms wvas not made. (See Exhibit I1. Section dated April 7.)

As the weeks passed feelings ran still higher, the old bu;aboo
"Rcpresentetion", always to the fore, preventing to o degree a sane
approach to problems from time to time prLs, ntcod. In May I found it
necessary to halt a Code Authority nmeting as uuch, and tackle the
questions underlying the re presentation problem. (see Exhibit ]- Section
dpted iL:a y 25) and few "e-E'-s I'ater decision "'Ps 'irde to unite all
trade associations into one.

Criticism of this move r-ps mpc'e by labor -s oeirg designed to
better fight the moot-sen'i-skilled-shortt-r hour Pnd clasEiiicntion
problems, losing, siacht of the frcet that the npnuf -cturers' side of
industry had still other bpttl,.s f,-cin_- tein anc' needed unity if they
were to rehabilitate themselves.

The Code Authority selected an d 1.at( L-lected t-o former members
of their or'n industry to heec up the Code Authority inpmchine. These
two men were unusually '-ell equipped for their vork, for in addition
to having a first hand knowledge of processes nrd materials used, an
understfndinn-of style, all important to an industry of this character,
an apreciation of the difficult cositior tie industry was in, nnd
knowing all the tricks of the tyade, had tact, r sy7!1rthy' with and
understanding of the 'ipnuiacturers s1ke--L- tnrt wrs to stpnd them in
good steal, in the troublous months heand. Tiapt thi.ir rccomolisr-minents
rere great is to be found in a reading o. maptripl cort:ined. in the
Complipnct and Generrl Files, for they -pleed an ii:iport'nt part in
bringing into and keeping recalcitrant me ibers in line.' (See Exhioit
Nv Section of June 6, 1934.)

To cite on particular instance, thpt oi01 Virginip Art Goods
Companywhere notable n'or-: v-s done, This coi.i p'ny referred to on
ppgt43of this history applied for exemption on "ht industry felt
was en unjust cleim. As pointtc out Vir'-inin stated they ha.d taken
no Part in the mckir:; of the Code and izere ertitlt.d to exemption under
b205 3. Industry denied that this was so, and v'hether so or not, the
company lived under a wpge scale based uton their claim for P differential
but which wps never authorized at least, formally oy the Administrator.
The Cook Directors acting upon the good counsel o0 Deputy ",;lter Mangum
finally visited the factory in Lyncnburg pnc thor.: developed that was
the basic trouble in m-kini- Vir.einip Art iEel their need for s differ-
ential. Their ooerstive irpctice was th.n capn :eco pnd tie co.-ippny was
brought into obedience. .ie shall have occasion totreat of this more
fully in a later chapter.


9811




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It will thus be evident that the new body, anproaching its
nroL!..-s in 7,od spirit, Iaid out -, -airly comprehensive pro-rPmr and
no one, cEn with justice, chvrs- lrck of cili ence or conscientiousness
in tackling their problems. The strides made toward finding the
answers will be noted as r'e progress.

The two chief difficulties facing the Code Authority were
Representation and Labor relations, other questions were relatively
of minor Importance. Time w.s perhaps the principal factor necessary
in ironing o.t th.e question of fair representation. Of course common
horse sense hpd to be brought into play but since all tried to use
this, -e begPn to see as the months passed a disappearance of the
suspicions existing at the beginning and the Code Authority leading
the way, industry became united almost lUO percent, with one major
trade asEociation .xhich is today continuing and lookir- for the execu-
tion of a voluntary agreement. Hrd the governing body not approached
its problems as it did re would not today see the glimmer of light
leading toward a better state of affairs.

The second major difficulty, Labor Relations, proved to be our
greatest stunimbling block. On pages 14, lZ, .16,
of this history we have touched upon these briefly and it will be seen
vwhpt the surface reasons were that constantly kept the. problem at
boiling point. However, my own feeling is tnat they were secondary
and -contributory.

Years of soft living led to the same type of thinking and for
many years labor relations were purely those of the bargain counter.
'No one stopped to consider that the welfare of lauor did not begin and
end with bargaining over wages and hours, no one felt that labor was
an integral part of manufacturing, none cared as to conditions surround-
ing their factory employees. Naturally when a group is made to feel thay
are pariahs, demands are perhaps not always made with good sound sense
and are not based upon existing realities. Such, here as elsewhere
was the fundamental trouble with labor relations an6 the situation
obtaining was to be expected.

Complicating the matter still further w-s the internal condition
of the Pocket Book IMakers Union. Strife had existed for a long while,
finally resulting in a complete over tun. of the officials and the
turning over to, so it was stated, the Comnunists.

Further contributing to the situations complexity was a mistake,
that as Administration Member, I made. The appointed representative
of labor was a Phillip Lubliner a quite likable man, an official of
the union, and one who knew his business. He was not overly strong
physically and was faced with a possible serious operation, or so I
was told, and therefore asked me to urge the aproirtment of an alternate.
This I did, and in due time Mr. A. Stein, :4arnger of the Union appeared
on the scene. He was the direct opposite in type to Mr. Lubliner,
much inclined to bluster, given to name calling, not however in meetings
but afterwards, and generally objectionable in his manner. While
Mr. Lubliner was not a well man I came to the, conclusion that was used


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as a subtL-r'f c to have a second labor rerrestntative present, one
only voting. It wps realized thrt tnt alternate should only be
present vrhen the sitting member ras absent but it was not considered
wise to offer serious objection. This situation did not ma:e for a
peaceful anrcroacfi to questions involving labor aniL I fe, that all
drew a si.xh of relief when as a result of tne union election .uoset
a Mr. Laderman was appointed. He hobrever was not warmlyy welcomed for
it was definitely felt that he hpd the Coxmaunist tpint.

.With both labor and manufacturing groups torn with internal
strife it mpy be seen that it '-Fs difficult to i.nprove the relationship
between the two factoi-s, and in fnct at the end not ';iuch of accomplish-
ment in this direction may be creeit.-d to either side.

Subordinate to these two chief difficulties yet rprt of then was
the utter lack of factual knowltdge oossesscid by the industry. The
industry has been in existence for about filty years with never an
attempt made, prior to 1934, to gnthcr together any I-rcts respecting
itself and uron which both lpbor'ner industry might have formed some
just conclusions.

By Mafoy 1935 the basis of a statistical and. factual structure was
in existence and at the end we began to see something of p picture.
(See pages 6, 7, 8, 9, 10, 11, 12, ofthis history, also Exhibits
3, F page 1 G H -o prF 4 Section dated July 10, 1935.)

The matter of Home-ork ras a collateral part of the labor problem.
Prior to 1934 there was but a Vague idea of the question and of its
possible effect upon the industry. apy 1935 found completed a first study
that offered a partial solution of the question (See Exhibit 0 4
parts.)

Additional to the before mentioned problems 'as that of cost
figuring. It is safe to say that prior to 'the advent of the Code not
a baker's dozen had ever seriously considered a scientific or ordered
approach to this matter. In the first six months of 1935 great progress
was made in this direction and there was presented to the Administration
for consideration Exhibit P, a. plan which although never finally
approved indicated first steps at least taken toward the imposition
upon industry of a usable system that must in the end have helped
financial positions.

A constant thorn in the creative mpnufacturers' side was his
loss to Style Pir-cv, and for the first time a real attempt was mede
for possible solution of this problem. (See Exnibit Q.

Compliance with anything did not'exist before 1934 for no 'ne
had ever attempted to show a manufacturer the tolly of some of his
competitive practices. 'Strah.&e as it may seem in the light of this,
compliance presented no great problem for although at swords points
as they were, every one realized the need of rcme such instrument as a
code to put a stop to the foolishnesses practiced. Every one


9811




-51-


therefore welcomed the Code -nl' lImost ll believed they must make
or attempt to live up to it, not of course 100-o, that would have been
too much to expect from any humnn agAlre.?-tion but in the main they
did so. The well known chisler of coarse was always in the picture
out co^aorrd to other industries. of this type fe'- c.rie- to our attention.
Hour end wg'e corirlaints that rep:cned the Y.RL.A. were small in number
-nd trade practice violations almost non existent. (See Exhibit R.)
'* etings were many in number (see pages 56, 57, 58, .) ane invariably
long drr-,n out.

No industry member of the Board haed had previous knowledge of
nprlimFn-rtary procedure, hence protracted discussions and vociferous
beyond -'ords, and yet with all 'a keen desire to govern industry justly
Prd wisely.

In an earlier paragraph is listed the committees set up at the
first official meeting. The com-oosition of these groups was widely
made end reports in the appendix (See Exhibits C, G, H, K, 0, P, Q)
sho-- the thorough and painstpkin,- care exercised in deliberations.

Industry of course felt that "ith the coming of the new code era
miracless would occur and if our own procedure could have been quickened,
nfr- -ps seeming -airacles vould have come to pass. -Be that as it all
mnpv, certain it is, -'hen the end came, industry had begun to believe in
and feel that their Code Authority -"ere endeavoring to rebuild a newer
and better industrial view point, a truaer perspective and the horizon
hrd become clearer with promise of better things to come.

For those who did not live with the industry during the hectic days
of 1933 and 1934 it is difficult t understand just v'hat if anything of
a definite nature was accomplished by all the long drawn out noisy
meetings of this Board and of industry itself. ror that matterr I,
mnysel.f, find it had to put thu finger upon concrete things and say this
was started, reached this point, and was concluded'satisfactorily or
otherwise. Specific things were done as referred to above and found
in the appendix, but I feel the most important accompl-ishment of all
,as a rebuilding of the spirit, re-examination of values, a weighing
of position, and a clinching of the determination to fight 6n and win by
f-ir mepns. None of these can be or are put down in records of
mLetings, they are not always or perhaps'oiten expressed but living
'"ith it one 'feels it in the air, and that 'was the condition at the end as
against the early days of fighting and refusal to consider the other
fellow and all that that entails.

The memorandum written by the Administration memberr in July 1935
should, I think, be referred to (see Exhibit N, Section dated July 10,
1J35) for it gives a summary of this Code Authoritv's activities and
the picture s I saw, it.

B. 0r:Fnization

1. '.nile Article VI, Section 1 of the Code called for a Code
Authority of eleven (11) representatives of industry and the order of


9811




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aDrovpl specified the bDoointment or election of three additional
members to be chosen from members of industry vho erec not in the
opinion of the Administrator adeqaptely represented but ten were
approved byr the order of September 6th, 1934 (Order 332-16). The
eleventh member was-to have been selected by the Lpdies Handbag
,ienufacturers of the Pacific Coast but Ppparently no association
existed, end as far as the Administration member knew manufacturers
from this region never communicated with the Code Authority nor
attempted to elect a 'enresentative. The Code provision in pArt.
follows:

"Five (5) members shall be selected by the Associated
Handbag Industries of America, Inc.

"Two (2) -nembers shall be selected by the National
Association oi Ladies Handbag larufpcturers

"T,-o (2) members shpll be selected br the Industrial
Council of Leather Goods manufacturers Inc.

"One (1) member shpll be selected b' the iiidvest
Handbag and Small Leather ares Association, Inc.

"One (1) member shall be selected by trie Ladies' Hendueg
Lianufpcturers of the Pacific Coast."

In addition to Industry Members provision was made for one
member to represent labor and such other additional members without
vote to represent such r-rouns or interests or such governmental
agencies and for such periods as the AdninistrFtor night designate.

Industry members were to be selected by and from the four active
associations (See paragraph 2 of Article VI of the Code above) and
in fact were elected, first by the several boards of governors and
ratified by the Associations.

One labor member, Phillip Lubliner, wrs rn-oointed Aoril 27th,
1934 (Order 33--2) but on account of ill-health ',Ps permitted to have
an alternate, Dissension breaking out in th. ranks of the Internatioh-
al Pocketbook makers Union, Mv!r. Luoliner and his alternate, Mr. A. Stein,
"ere superseded January 2nd, 1935 (Order 332-20) by Mr. I. Laderian.

The Administration member, O.1,. Peap son, serving vith the exception
of about t'o weeks throughout the Administration of the Code, was not
however officially appointed until "ay 10th, 1934 (Order 332-3). In
April 1934, Dr. Paul Abelson --ps designated, serving at t"o meetings
of the Corde Authority and one committee iaeetin,. Upor objection
by out of towvnmanufacturers 'his Pppointmunt '-,Ps not confirmed and
Mr. Pearson's designation became official.

The various associations or their Boards of Governors having met,
made their selections end presented the selected names and credentials
to the Deputy Administrator and in due time the Code Authority vas


9811












officially approvedd under 0rder:332-16 dated September 5, 1934.

In ,i[ay 1934 evidence of trouble in the IMidiest Association's
ranks came to the:-3ode Authority's attention, various resignations
took place and a ner" election of officers and deleg-tes to the Code
Authority was held. In June 1934 ir, iM. H. Blumenfeld, i :rro Leather
Goods Company, 42 South .iPrket'Street, Chicago,, Illinois, was seated
(See minutess Code Authority eetin!s Yos. 8, 9, 10, 12, held respectively
iiay 24, 31, June 6 and 21, 1934).

As minutes of meetings are studied one notes the presence of
industry alternates. Such w-ere provided in the 3y-La-'s of the
Associations and considered necessary because most members of the Board
had f-ctories located in places other than Ye-, York City and in
addition many "-ere acting as their or,'n salesmen, Pnd thus often on
the road. The practice w-s followed until late in 1934 hen the legal
division pointed out its illegality. (See Generrrl iiles-Correspondence
Leigh L. Ore, Assistant Deputy, September 26, October 17, December 12,
1934).

June 23, 1934, notice of hearing 'rPs wa5ished for the purpose amonG:
others, of determiiirin whetherer the Code Authority ,as truly representative.
hearings -ere held, lasted one da', adjourned and re-opened July 9th
and 10th. Immediately prior to the June hearing a committee of '-'arring
manufacturers had come to an agreement to consolidate associations, (See
P.xhibit Y, Section dated July 2, 1934i and shortly thereafter it -as
ratified at an industry meeting.

At the before mentioned hearings a ner .rouo of 68 small Ne" York
manufacturers cpme to light, rtr'r set-ted uy Archibald .Palmer, 2 Laayette
Street, Ner York, Attorneypt Lav'. They filed, July 6th, 1934 certificate
of incorporation under the naxae Ner- York cabricoid and Leather Handbag
manufacturers Association Inc. 7-ith

-iax S. einman 40 est 20th St., N.Y.C.
iviax H. Kesno-itz 202 Crnel St., N.Y.C.
Julius 'allenzweig 2 est 29th St., N.Y.C.
.illipm A. T-irschbornr 5100 15th Ave., Broroklyn, N.Y.
Ed'--rd R. Lo.yr 38 .est 32nd St., N.Y.C.
liorris .;unthal -9 .est 31st St., '..Y.C.
Herman R.osenz'-eig 258 St., Brooklyn, N.Y.
Phillip Lichtenstein 1605 Nelson Ave., Bronx, N.Y.
Hermpn Feller 1349 57th St., Brooklyn, N.Y.

as directors. (SLe General Files and Transcript, Publ'ic Hearing of June
7, and July 9 and 10, 1-9 4). This group, also seeking representation,
'"-Ps composed mainly of small m-nufpcturcrs, in fact the charge -'"as made
that they w'ere.-contractors posint- as manufacturers and set uo by the
Union solely for the purpose of creating trouble and sentiment pith
the Administration, that Industry did not altogether see eye to eye vith

9811





-54-


the Code Authority.

However, this may all hpve been, within a ',eck or t,"o after the
hearings, nothing more wrs heard of the group as such.

The Code Authority set up question vPs the first subject of the
June 7 hearing. Industry unounlifiedly said tney preferred to have
the Administration Member make the selection of the additional
members. (See rPges 13 to '22 June 7, end 279 to 333 July 9, 1934
Transcript of Hearing.) However nothing 'y"Ps done -oout this rt that
time', it seeming to be i'mpoalitic. During that su.-:,imnei and early fall
a strike wes called resulting. in rmany znore manufacturers leaving
Yew York. Consummation' of"'the consolidation move "'es not considered
feasible and not until January 17,' 1935 vas the appointment of
additional new members of the Code Authority pressed to a conclusion
and recommendation made to the Administretor. (See Exhibit N, Section
dated January 17, 1935.)

iachconaideration vas given this by the Administration but it
--Ps not until some fer days before' closure that trese '-ere Pporoved.

fiarch-8th, 1934 the Code Authority aporoacning the close of its
year in office the Administrption member Tote to the Deputy recommending
that the body should be continued until the expiration of the N.I.R.A.
June 16th, 1934, (See Exhibit N. page 3 o0 Section dated .;rch 8, 1934.)

In December 1934 and Jpnuary 1935 a series of conferences -ere
held bet-'een the Imitation-Leather Novelties GroUp oi the Lufggsge
Code end the Ladies HPndba g Code Authority Directors looking toward
the absorption of the first named by Hancbngs. A deputption ,as
received at the Handbag Code Authori'ty meEting held January 3rd, 1935.
(See :iiinutes Meeting ,25, General !iies, end Atministration membersrs
report January 4th, 1935, Exhibit N.)

Consolidation was in essence agreed to anc had it been confirmed
would have brought to the Handbag Code Autnority an' dcitional two
members to represent that group.

..ith the exception of the changes noted in this chapter the
Code Authority re-iPined as originally constituted until tne Supreme
Court's decision.

2. Personnel oLf the Code Authority

The folloinp were the'members certified by the Associations
as.having been elected:

By the Associated Han6bag Irdustries of Ameiicp Inc.

Harry Schoenfeld President Schoenield & Wolf Inc.
14 East 33rd St.', N.Y.C.
Morris Immermsn P- President Bagcraf't Mfg. Inc.
30 East 33rd St., N.Y.C.


9811





Richard Koret

i.lr.-.ricc I "pj-lcl

*Sol iiutterperl


-55-
President Koret Inc.
3& East 33rd St., IT. Y. C.
Partner A. I. IM'.:id & Co.
14 East 33rd St., Y. Y. C.
President Sol Mutterperl Inc.
330 Fifth Ave., N. Y. C.


By tie ic...i.sUrial Coiu-.cil of Lcrthr Goods U'rinf._,cturers, Inc.


Irvin.- Schoenholz

*Willi,;rn Kacin


President Schoenholz & Weeks Inc.
15 Vast 32nd St., N. Y. C.
Vice Pres. & Trens. Radin Bros. Inc.
132 West 36th St., N, Y. C.


By thc ,tiuia.l Associrtion of Lc-..ies Handbrg ', Ianufa.cturtrs


*Samuel R. Goldsmith

*George L. Meyers


President Goldsmith Bros. Mfg. Co.,Inc.
38 West 32nd St., N. Y. C.
Partner Leyers i-.fg. Co.
330 Fifth Ave., N. Y. C.


By the LIidkest Hai;dbap c: Smr-.ll Leather Wnres Association

*S. iIalow (Position not stated) Crystal Leather Goods Co.
34 So. Wells St., Chicago Ill.

Administration Iei-embers

Dr. Papul Abelson, 11 West 42nd St., I!. Y. C.
0. W. Pearson 45 Broadway, 'I. Y. C.

Dr. Abelson, a lawyer, hos been for many years impartial chairman
of several incduxstries notably Furs and Millinery. No connection with
Hand Bpgs.

0. V7. Pearson an advertising m-Tn connected with Dry Goods Pub-
lications an-a quite familiar with the distributive problems of consumer
goods ;oin2 through Tholesale and retail dry goods and department stores.
Accredited to ten different industries as Administration Member but had
no connection financial or otherwise with any. First appointed as rep-
resentative of Dr. 'Howard the latter part of March he was not made offic-
ial until i!ay as stated in the foregoing paragraphs.

Representing Labor Advisory Board

Phillip Lubliner

Code Directors and Executive Secretary

A. Iittenthal
M. Berkowi tz
Maurice I:osesson, Executive Secretary

(See Exhibit T for breakdown into types of merchandise and size uf Code
Authority.)


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The comroosition of the B-ard followed the rule laid down in
Article VI, but it is interesting to examine Edxhibit T., compare with
the co:-,rmonly accepted groupings of price ranges ana sue that each
was fairly represented.

The addresses given are those of the selling offices which are
located in 1ew York City4 Those marked with an asterisk are out of
town manufacturers and regardless of Ass-ciation affiliations it will
be s)on that the out-of-t-wners obtained fr-m the Deputy in charge a
fair consideration.

Thirty-one meetings of the Code Authority and thirty-seven meetings
of Committees were held, Administration being represented at all oode
Authority gatherings with frequent attendance at committee meetings.
Three industry mass meetings also took place.

File show copies of minutes of but twenty-one meetings and there
are missing many reports from the Administration member. The administrat-
ion I.[embcrbs reports are contained in Exhibit N.

RECORD OF CODE AUTHORITY JZTI!GS


I IETI -G IiU EER
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31


DATE OF 1LET.I 'O
March 23, 1934
:,.arch 29, 1934
April 3, 1934
April 11, 1934
April 26, 1934
May 3, 1934
Hay 10, 1934
Lay 24, 1934
Hay 31, 1934
June 6, 1934
June 14, 1934
June 21, 1934
June 23, 1934
June 28, 1934
July 5, 1934
July 9,1934
July 20, 1934
August 2, 1934
August 23, 193
Sept. 4, 1934
Sept 27, 1934
Oct. 25, 1934
lHuv. 8, 1934
Dec. 6, 1934
Jan. 3, 1935
Feb. 19, 1935
March 11, 1935
April 4, 1935
May 21, 1935
June 3, 1935
June 11, 1935


PLACE
N1ev: York City
ii
11
I te York City
1I
!!
I!

I1

!!
Washington, D. C
Hew York City
Ii
N


Washington, D. C
New York City
11
I!


'Ievi York City
R


New York City
Hi
n



Washington, D. C.
New York City
!1


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Ri-OON OF CO.IITTEE iIETI-GS


LDA.i0' OF KZETIl.G

March 28, 1934
April 16, 1934-
April 1S, 1'39,-
April 28, 1934
April 30, 1934

.ay 7, 193:

June 22, 193Z:
June 25, 1934

July 18, 1934
July 31, 1934
July 30, 1934


COI.:I TTZE


Finance Cormit tee
Finance Committee
Beaded Bag Group
Finance Committee
Finance Committee

Beaded Bag Groizp

Steering Committee
Steering Committee


Beaded Bag Group
Emergency Committee
Curmmittee to study exist-
ing conditions in the
industries


August 1, 193z
Augftst 24, 1935
August 28, 1934;
August .0, 1934


September
Septembr.r
SeptembE.i
September
September
September


4, 1934
6, 1934
13, 1934
17, 1934
21, 1934
2., 1934


Small Committee
Beaded Bag Group
Beaded Bag Gioup
Label Committee

Labor Committee
Label Committee
Labor Committee
Label Committee
Labor Committee
Labor Committee


October 2, 1934
October 9, 1934

October 15, 1934
October 31, 1934

November 7, 1i,34
November 13, 1934
Novumb.-r 16, 1934
ilovember 20, 1934
November 21, 1934

December 3, 1954
December 15, 1934
December 13, 1934
December 27, 1934

March 2, 1935
March 7, 1935
March 11, 193.5


Labor Committee
Trade Practice Complaints
Committee
Uniform Cost Formula Committee
Special Committee

Sqmpcial Coiimittee
Label Committee
Style Piracy Committee
Style Piracy Committee
Label Committee

Homework Comminittee
BeadCed Bag Group
Cost Accounting Committee
Design Piracy Committee


Budget & Label Committee
Budget & Label Committee
Budget & Label Committee


The above meetings took place in iew York City




-58-


3. Chan es in Code Authority

The following summarizes the changes made from original personnel
as set forth in the foregoing paragraphs:
1. Dissension in ranks of Hidwcst Association of Chicago led to the
election of
Mr. H. Blumwnenfeld
1.irro Leather Goods Company
402 South HIarket Street
Chicago, Illinois
in place of the original member from that area,

I,:'r. S. IvMarlow.
Certified to the Code Authority and the new member, lir. Blumenfeld,
recognized with the other members September 1934 (Order 332-16).

(2) A complete overturn in the International Pocket Book Workers Union
brought about the unseating of all officers and

Mir. I. Laderman

succeeded Mr. Phillip Lubliner (Order 332-20) as Labor represent-
ative.

(3) Dr. Paul Abelson was appointed to succeed 0. W. Pearson as Admin-
istration !ember but the appointment was not confirmed and as prev-
iously stated with the exception of two meetings Dr. Abelson never
functioned. (SEE Exhibit U).

(4) Agencies of the Code Authority

There were none, all work confidential or otherwise being conn-
ducted by the staff of the Code Authority.

(5) Field Organization

There was maintained a staff of six field investigators reporting
to the co-code director Mr. Ilax Berkowitz who was responsible
for all compliance activities.

These men were retired manufacturers, practical men of age, ex-
perience and standing and respected by all.

Additional to following the usual policing procedure of most code
authorities, examination and study was made to find the answer to
the oft voiced plea that it was difficult if not impossible to
meet code requirements and industrially live, in many cases the
answer being found in bad sloppy factory practice.

Frequent visits were made to almost all factories except those
on the Coast, in Texas and Florida.

The code Directors took great pains in the selection of their
staff and I can safely say they were of much higher grade than
those employed by many other industries.


9811





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hTnile no attempt was made to condone failure to live up to the Code,
Seorc'irn; constructive examination was made to disclose the weak spots of
...ctory -iractice and to strengthen them,

These men did not consider themselves as policemen but rather
as cooisellors and friends and their work took them far afield of the
usual activity of sur.ch men.

Their first concern was naturally the scanning of payroll and
time records but they also took time to study merchandise on the
counters of retail stores, checking of labels used, and as practicall
men deterluinii-_ or at least gaining an idea, from the price and values
offered if manufacturers s were misbranding or underpaying their employees.

SoLUie manaufEcturers were not always honest in their record keeping,
and an analysis of their product sometimes disclosed that at the price
offered, they were so c oing, and rechecking proved the point.

Poins were taken by the Code Directors in checking false adver-
tising of Eetailers and much was accomplished in this direction.

In earlier chapters of this history mention has been made of
the disse.ision existing and the causes thereof. This staff by its
unifor;i painstaking care and fairness, its willingness to counsel,
unquestionably played a part in the peace pact that was made and
Industry begaA to get, at least a glimmering of appreciation and
understanding of what a code was designed to and could do.

Naturally there were some who could not see the light. The out-
standin2 instance of this in the first months was the manufacturer
referred to in the Administration 7.lemberts reports. (See Exhibit N.
Section C.ated April 5, 1935) and in the following letters from the labor
union.

"NEW Yi7:d JOI.T COUNCIL

I:7TLCTUTAIr01TAL POCO-'T300J: WOFK.ZS Ub0ON
Affiliated With

American Federation of Labor.

May 22nd, 1934
L.r. Oliver W. Pearson,
Code Authority, Ladies' Handbag Industry
N. R. A.,
45 Broadwa-,
New York City.

Dear Mr. Pearson:

The Styl-ccraft Leather Goods Co. located in Bridgeport, Conn., a
subsidiary shop of the Morris White manufacturing Co. of New York
has openly challenged the authority of the code authority of the
industry and. has hired close to twenty-five apprentices in violat-
ion of our IHaidba, Code.




-60-


The Union h-1 already registered several complaints for violations of the
Code with tht Code Authority as well as with the N. R. A. Offices in the
State of Coninecticut against the Stylecraft Leather Goods Co. but the firm
instead of p/iing any attention to our complaints, is openly defying the
Code Authority.

Isn't it stranw;e that the .Iorris White ifg., Co. nricd the Stylecraft Loathe
Goods Co,, which firms hadC received at the "beginning of the year a loan in
the amount of 100,00 from the R. F. C. to cond'.tct their business,
should challenge the Code Authority and defy the IT. R. A.? The situation
is more .nenaciig because of the fact that LMorris White is openly boasting
before other :r'Lanufacturers of said daring exploits of taking on numerous
apprentices in defiance of the Code Authority which rakes for general d6e-
mNoralization of the entire trade.

Your irtL,,ec.ite attention and action is most urgent.

Waiting to hear from' you, I am

Very truly yours,
(Signed) A. ST*'IT

BSL-AU i.an ajer"
12646
A~oL.

The situation here referred to resulted later in the matter being
brought before the Compliance Board and restitution made. Of this we
shall deal later.

A few others, generally small in size also proved troublesome but
in:'the main industry reacted spendidly.

Coiiplaint .-as :nrde that the Code Authcority and its Directors were at
times stiff necked, that they were Eastern Manuf;cturers arnd without
nationr.l viev- oint or ability to .-et one. T--o outotstrn&.in- instances of
this -eke the :-ceker Co..ipany of Joplin, i1.: ouri, and the Virginia Art
Studios of Ric'-imnnd, Virgiiia. The files are replete with their volum-
inous co:rmluni cat ions.

Exhibits V and-W indicate the care exercised to answer and explain
positions takerl in a refusal of the seekerr Cmpany s plea, and the
Virginia Art file shows a complete reversal of the position consistently
taken by them in their pleas for differentials through the first year.or
fourteen months of Code life.

Other manufacturers frnm time to time complained, for a moment
or two at any rate, of the consistent position of refusal taken by the
Code Authority with respect to individual requests ard pleas, but almost
invariablyr decisions made were gracefully accepted. These pleas were oret.
much of the sae tenor, applications for over time, twv. shifts, a-pren-
tices and wa.-e differentials.

Reference was made above to false advertising by Retailers. An in-


9811




-61-


stance of this was a long drrwn out controversy with one of the large
New York Department stores. Checking of metropolitan advertising indicated
that at the price offered goods could not be of the material described and
finally led. to withi-'a'',Pl. The administration member was quite familiar
with this andL co'rrobor.-.tive. evidence of this and other simrilc.r trans
actions ma: be found in the late Code Authority files now in the hands of
the succeeding organization.

Statistical reports in Exhibit F and included in pages 6, 7, 8,
9, 10, 11, 12 of this history are by no manner of means complete but they
give a picture of the character of work done.

6. Discussion of Operation of Code Authority as ai
Indr.str_. Governing Body.

In considering this subject one must constantly keep in mind two
factors thLUt for several months after the induction into office of this
Code Authority were ever in the foreground of industry'ls consciousness.

First: A considerable proportion of production was in the hands
of factories located outside the city limits of New York, who were paying
wages much below New York unionized factories.

Second: The Code Authority's own sharp division in membership, as
between ITe-'. York ald out of town, with the outlander element feeling
chagrined and wQrse over the division of representation mn.de by the
Administration

Obviously,this situation !ide matters difficult, for each group
found it almost impossible to rise to their opportunity of self
government and weight dispassionately the problems given birth to in,
and by the Code.

The feeling existing from these factors could not be treated light-
ly and had if -os biblee to be smoothed out. The problem cut several
ways. Out of town factories paying an average of considerably less than
ten dollars per week: found themselves raised to a code requirement of
fourteen dollars minimum, a raise upsetting their equilibrium and
assuming a size in their mental reckoning out of all proportion.

The ITew York faction felt, naturally so perhaps, that the out of
owners would, find ways to beat the Code, not yet realizing the searching
quality of the police machine that was about to come into being. Ex-
pressed openly or not, the out of tovmn men sensed this suspicion and
did not take kindly t.,o it... After all their honesty of purpose was being
impugned before they had a chance to prove or disprove their good intent,
in other worC.s were condemned before being tried.

The representative question then became of greater importance than
ever, for out of town without a majority, were certain in their minds,that
they could not hope for a fair break and did not hesitate so to say.

Ergo: -Confusion- suspicion distrust openly arrived at- openly
expressed,


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The first thi:ig to do was to finci n co;. ion around aned work from th; t
Administr tion in L ;,'shbiniton had unmuccessfully tried it, industry haC'.
tried it in lcIC York neither without aipjarently getting anywhere, but the
Administration member realized that un,.'.eri-e.-th all the strife, there was
a feeling, th-t given a fair chance, the Code was a heaven sent gift and
could help all a long way upon the roiL. oi' renewed success, such as they
had once known. It ''as upon this premise thi t renewed .:.d continuous
effort was uav.e by all concerned and resulted i.- the"let together" of the
sunmler and fall of 1934.

iNew Yor: a unionized city had classification, they wanted such in-
cluded in the GoC:'., they were unsuccessful, the open shops did not want
such, cour.ld not see it, as applied to their own pr..ctice. All felt that
Section 2 of Article IV which treated cf semi-skilled taken in conjunc-
tion with -arzgraph one of the order q...; the hand writing on the wall
that classification was the death's he C. at the feast, the ogre to be
feared.

SNotwithstanding these fears, the A'ministrator and his Deputy to
the contrary notwithstanding, the openly made statement of labor that in-
dustry was dodging the issue and deliberately so, the knowledge :that
Colonel Lea, had opposed its inclusion because of his realization of the
impossibility of writing a definition, the Code Authority did rmkce an
earnest, sincere effort to set up and define the term. It is unfortu-
nate that mere written reports cannot gi-e a true picture of the labor
and turmoil that went into this, the time consunied. Code Authority ramem-
bers felt they were charged with a dut,- which they tried to carry out. Un-
successful, of course the.. were, nevertheless they tried.

Good came from it all, for more thi.n any othcr factor it brought to
pass a greater respect for each other and a willin-gness to see the other
fellow s viewpoint.

Discussion of this and other labor problems resulted in the public
hearings of June and July 1934 and the )rotractnd negotiations respect-
ing hours, classification and wages thct never were settled at the time of
the Supreme Court's decision on N. l. A.

It also had hearing upon the strike celleL in the summer of 1934
which gave great impetus to the migration from iner' York started some
years earlier.

This migration brought in its, traii charge. by the labor union again-
st two ia..-uf.cturers under Section 7 (a) of N. I. R. A., in th:t the
owners had refused collective bargaining. These complaints caused fur-
ther distress and consumed a great amount of time upon the part of the
Code Authority and other interested parties. It w'as felt that the
charges were not justified for the collective agreement had expired and
the Union to enforce its demands had called a strike.

In one of these two cases it developed that the partners of the
concern, because of their financial situation which prevented the obtain-
ing of s-.ifficient banking accommodation iLi hew Yori:, hF.d been negotiating
elsewhere for some two years for factory sites anm. financial help. The


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strike h.vi-w been called, n ;otiations with the union stopped being off-
ered, b.r-: accoi:r.odation provided they take some 200 workers off relief
rolls, ,ai. -;ooC factory acccnoC.ation manned by experienced workers, it
was np.tural to move, in fact there seemed nothing left for them to do,
if they were to continue their business. This case was finally disposed
of by t:.ie "-ctional Labor Relations Board as being "no case" at least
th, t is Ihe recollection of the Administration Member. The other case
somewhat different and flagrant was decided against the manufacturer.

Hore work in the Beadcled Ea7 section of the industry was always in
ones consciousness and much was done by the Authority and its Directorate
in an attemot to ameliorate home workers' rates of pay. Exhibit 0 gives
indication of the thought and time devoted'to the problem. The matter was
not settled but had the Code continued it was hoped that the plan laid
dwn would have been tried out and possibly have been successful at least
to the extent that half a loaf is better than none.

Coi.pliance work was as has been stated in Parlier paragraphs of a
character that was constructive, and positive rather than negative in its
nature and. General Files, Compliance Files, Code Authority Files give a
clear picture of this. Statistics give only an indication of work done
(Exhibits ?. and S), one had to live with the responsible officers to
appreciate the sympathy, understanding, tactfulness without condonation
of misbehavior, with which this work was done.

Trad.e Practices in general, discounts and dating, misbranding by
manufacturers and retailers, style piracy, cost figuring, retailers ad-
vertising and offerings, general welfare, relationships with related
industries, received much of the Authority's thought, time and attention,
and results were showving in the last few months of its life. (See Exhibits
C, F, UI, K, Q,, P, 0, S. X and. paes -48, 49, 50,951, 52, 58, .59 and60
of this history),

At no time in the memory of the writer was there discrimination shown
against Iorge or small, out of town or in town, south and north, east
or west, nor, although labor will not altogether agree, against labor it-
self, and this last in view of the tense situation of some years standing
was rather remarkable.

To sum up briefly; perhaps the best evidence of the success of the
Cede Authority, its paid personnel and particularly its two Directors is to
be found in the fact thot just prior to the Supreme Court's fateful de-
cision a dinner was tendered to the Directors by the entire industry. From
far and near several hundred manufacturers came to pay tribute and to
publicly state their belief in and knowledge of the success of the work
done and to express their feeling that all had been fair and just in their
deal ns,

C. Budget and PAsis _of Assessment

1. Section 6 Article VI of the Code provides that: "MJembcrs of
Industry shall be entitled to participate in and share the benefits of the
activities of the Code Authority and to participate in the selection of
the .embers thereof by assenting to and complying with the requirements
of the Code and, sustaining their reasonable share of the expenses of its




-64-


administration. Such reasonable share of the expenses of administration
shall be determined by the Code Authority subject to review by the Admin-
i-strator on the basis of volume of business and/or such other factors
as may be deemed equitable."t

Article VII.- N. R. A. Labels Section. reads "All merchandise
manufactured subject ot the provisions of this codeo shall bear an N. '. A.
label, or authorized substitute therefore, to symbolize to purchasers of
said merchandise the conditions under which it has been mnnufoctured. "

Section 4 of the same article states in part thift: "Any and all
members of the industry may apply to the Code Authority for n permit to
purchase and use such N. R. A labels, which permit shall be granted to
them, but only if, and so lom, as, they comply with this Code."

Section 6 of the same article provides: "The Charge made for labels
by the Code Authority hall at all times be subject to supervision and
orders of the Administrator and shall be not more than an amount nec-
essary to cover the actual reasonable cost thereof, including actual print-
ing distribution administration and sirvervision of the use thereof as
herein above set forth".

Thus leaving financing of Code Authority activities somewhat indef-
inite, hence there was approved July 3, 1934 Amendment No. 1 to the approv-
ed Code providing for mandatory collection of assessments for finmancing
purposes. Order N,'. 333-13 approved. by Sol A. Rosenblatt, Division
Administrator, Hugh S. Johnson, Administrator.

First financing was by small loans from individual members of the
COde Authorityr.. Money so raised served to pai the small costs of temporary
quarters but did not suffice for salaries so that employees worked fo.
some considerable time before being paid. Later a temporary bank bjan was
arranged which served until revenue from assessments and labels came in.
From that point the Authority was always solvent aaid operating under reason
able costs.

Three budgets were submitted. The first was approved but stayed, the
second a revision of the first, covering one ye,'r frnm I.arch 26, 1934 to
March .', 1935. The' third for one year from March :6, 1D35 to March 25,
1936. Of the last submitted, but a portion covering the period from
March 26, 1935 to June 16, 1935 was approved, and subject to an extension
of the Code by operation of the law, conditionally a'ipr-ved from June 17,
1935 te March 25, 1936.

Period of
Budget s Amount Date Approved Order iTo,
1. 3/26/34 $140,180.00 May 28,19Z4! 333-8
to Stayed -
3/26/35 June 9, 1934 333-11

2. 3/26/34 133,540.'0 July 16, 1974 333-14
to (Resubmitted)
3/26/3-5


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Period
o f Buc-,-Lets Amount Date Approved Order ITo.

3/ 3/20/35 $lO,641.00 May 24, 1935 332-25
to
3/25/36

Basis of Contribution

Bucket No. 1. 1/3 of 1$ of the dollar sales volume
BuC.et ITo. 2. 1/3 of 1( of the net dollar sales volume
B tL'.et ITo., 3. 1/4 of 1% of the gross sales volume

ESTI! J4TD I 1-COIh

Bucak.et !To. 1......................... $149,999.00
BuC.:'et No. 2. .... .. . ............. .. .. 149,999.00
BVlLet Ho. 3......... . . ...... .............. 1,641.00
(1st period) $31,540.00
(2nd period) 79,101.00

(See pages 1, 2, 3- Exhibit Y.)

At the end of the first budgetary period, finding a substantial
surplus in excess of $40,000 in its treasury, the Code Authority con-
cluded to refund $30,000 to industry and passed on March 7, 1935 a formal
resolution so ordering, and by May 3, 1935 approximately '$23,000 had
been -aid. (See page 5, Exhibit Y.)

It v'ill be seen from the foregoing that the Code Authority and its
paid officials were cautious and watchful in financial operations and
my own feeling as Administration member was that in some directions they
were overly so, for they needed the services of a least two extra.men to
cover the South and far West, and of statisticians to enable a proper
and full statistical study of inCustry te be made.

2. Termination of.Paragraph 3 of Administrative Order X-.36

July 27, 1934 Acting Division Administrator William P. Farnsworth
signed Order 332-15 terminating the exemption conferred in Paragraph
III of Adrministra.tive Order X-36 dated May 26, 1934. Opportunity
to be heard had been given in notice No. 236/1/01 dated June 15, 1934
and no objections were filed. There was at the time considerable over-
lapping in the bag industry particularly with the Luggage and Fancy
Leather Goods Industry and to some extent with the -Womans Belt Industry
and if the e:':ei-qtion granted under X-36 were allowed to stand the Hand
Bag Industry bade fair not to meet budgetary requirements

3. Effect of other Administrative Orders.

Iz it necessary to point out that the constant delay in the issu-
ance of Administrative Orders approving budgets were to say the least
disturbing and gave rise to much bitter criticism? Industry recognized
the right and need of checking, but certain questions raised, were deemed


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nont: o: the ACninistrationt s business, were resented and this militated
ajainnt ..,jt:, functining.

It v', c-,I.tanitly pointed out th-t what was being done was for the
:-ritcction w' the Code Authority itself, but none the less the answer
A c t_',-:- llthe Cod
evcr i-. i--, .we ':v;n' our irnustry, either we ,re trAsted or we are not
antC *, s!ill thirLk Adiinistrationf is over -reachin" itself and in any
tvei-r.t tLe'c. c-n be no excuse for the delays." It is to be rermembecred
th t in tic latter Ca's there was less delay than formerly but there
still rc..i;-.:e( the v.onC.er, How Lon.- oh Lord, How Long)

4. _ir_ .If..1 .

It i'cs originally propose-. that labels should be sold at a profit
sufficient to finance' the operations of the- Code Authority. Preliminary
cnniifercics were held 'by the Deputy and his 'advisors with the Directors
rcspectin- this anJ upun objection it was determined that a levy of 1/3
of 1' s..i ales would be preferable and ti,.t labels should, be sold at
coAst plu'. It was consequently so ordered in Administrative Order 332-8
-nd the later Ord'er 332-14, 332-25. Proper regulations were set up, under
which i :...:try ordered and were supplied for c:.sh, sufficient for not
more than three week's operation.

1'r. A, A, Fisher in his report to the Deputy made part of this his-
tory, JCe 3, Ixhibit Y states in detail that the total sales of labels
were 37, '32,Or00 and that these were purchase( after bids from several source
of su,:,pl; at a -rice of $14, 84.00. (iOME: Reference is made to sticker
labels; tcsc were only to be affixed to merchandise already in stock on
July 2, 1'.4) Industry was req-.ired to file with the authority a monthly
statement cnd without such, labf.ls could not be issued. The use of labels
was salutary serving as a compliance weapon, and to further the laying of
iound.ti i;.: of a statistical structure,.

Pa:c 4 exhibitt Y gives in detail the income received during the
period coveru-d fro.r. :."arch 26, 1934 to FebrBary 28, 1935. This totaled
IC5,7'..... uWit?- a total expense of '"651,574.44 leavi .; a surplus of in-
ccrele $-,,..?..85. This as statc.%: in a previous paragraph and on page 5
Exhibit Y ''a. in part c.istriiutcd pro rata to industry, creating an ex-
cellcnt i")rcession.

5. ProTprticn of Ac scss!:ients Cnllecte&

The collection of assessments .wrs a sim-rnle matter, for the label
rcjul tions .rovidcd for a filix,;: of sales reports with the Authority
and unie..s the pprovcd percenta,-e was paid labels did not issue.

At -- bc.i-.'inj t-iere was some confusion, or -,:-rhaps a slight
holdi bL.c:, -'itil it was found that distributors would not accept
m .crc.au 'ie ,ithi.c.ut labels. Frnr.T then on, there wes no trouble, col-
lectiinc, : "made frrm, 1.;r of industry, with a small amount, $600,
thbt .'. ., v.-c,'ll cctible, and this held all the way to 'the end.

1 -.,r ."J Jsrati.ons r-f Co-e Autliority i ,el-tion to its Other
nc r7. ti to Other


D811







In am earlier paragraph of this chapter it was remanlr.od that the
Directors were overly cautious in their financial operations. This per-
hrps should be qualified by adding, that they needed to be because of the
make up of the Cede Authority. At the bei inini of this history it -'Ls
pointed nut that never at any time had the industry thought it necessary
ti really linov itself, to obtain a knowledge based upon facts. Nert having
been accustomed to the idea, one had to ap-proach the matter circumspectly,
with a feeling that cne had perforce to crawl before attempting to walk.
It must not be thought that over caution to the point of hamstringing was
the order of the cday, -but neither must it be forgotten that a start from
scratch, -.ecessarily entails much greater energy than keeping a going
machine lovingng. On the whole the financial set up was good and did permit
competent and fairly adequate operation.

D. Ad:iniitr.:.tion mf tho Code

1. Aineidnd.ients

There were a number of Hand Bag MIsnufacturers making products
other thn Hand Bags, principally luggage and fancy leather goods. These
claimed that jurisdiction belonged to the Luggage and Fancy Leather Goods
Code since from their point of view it was a more advantageous code under
which to opncrate. With the somewhat indefinite financing provisions of
the Ladies Hand Bagg Code it was necessary to clarify the situation. After
discussion with the Assistant Deputy it was determined wise to move for an
amendment to the Hand Bpg Code and such amilendment No. 1 was written, passed
by the Code Authority, submitted to the Administrator, opportunity to be
heard -;iven Order 332-12, and finally proved by Order 332-13.

In preparing the order for approval the Assistant Deputy noted
tnet t'f- hilmad Baj Code Authority would be unable, due to overlappin-:, pDro-
vide sufficient revenue to meet its budgetary requirements. From that
point on there was no trouble in financing.

The constantly recurring question of the semiskilled defi-
nition coci.in'- up for public hearing in June, a special meeting of the Code
Authority was held on the day oaf" the adjourned meeting in *ashington, July
9, 1934. There was introduced a resolution, later carried, that there
be deleted from the Code Section 2 of Article IV, and further that Section
6 of Article IV like wise be removed. (See minutes of meeting No. 16 July
9, 1934 General Files) Labor made% strenuous objection to these resolu-
tions anc continued so to do in the ensuing months. An order covering this
was drawn up later in the year, 1934, but never consummated due to the
interlocking question of wages and hours not having been settled, and the
matter drag-ed along until the winter of 1934 and 1935. February 7, 1935
notice of hearing was issued (No. 367-F) and. this subject was included
with other proposed amendments submitted by the Code Authority (See Trans-
cript Public Hearing- February -2 1935 pa.es 86 to 224).

A serious problem affecting all consumer goods industries
particularly 0'ere such are distributed through department .stores, is
that of vhoat is known as "Return Goods". Apparently orders placed by re-
tail merchants h].ve not altogether been considered "firm" orders, the re-
tailer, if so be he had changed his mind or found his judgment as to






-68-


snlabilit- not so, -nok rezervin...: the rijh't to return goods ,t will. At
one time, this Zocis not to h,-ve been the c-se, no-Ae returning .oods, unless
for the s-.b.tantial c.-.--:e that they were not up to ample. Of late years
howcvLr rnc'c..A,-.Jnts ave not hesitated to return 0oo0Ls for almost any cause
iotwith' t.-..(1.' t:-.ey were C.,.'e up b:' the "r. ',.u acturer iin .good faith
Z-1nd shi ) e.' according to iiLstrctiois. ,crchants, if they found busi-
ness in a slI.*n, a -)eriodic occurence, had no compunction over passing
the buck to the manufacturer, in other words expecting the manufacturer to
:)ay for his, the retailers sins of omission or commission. In the good
.'-cwrs with .producers, retailers could seldoii get awa. with the pirr&ctice
nd never with the well organized mid financed Manufacturer, but in times,
suchl.s we have b, en havin" the practice of returning goods by even the so
c.'lled re .,,table outlets has reached. mon-trous proportions.

The ITEn. Bag Code Authority trcliled the problem in earnest, and were
desirorus of ,.lendin.- their Code so that it would be prohibited, but found
it an impossible task to find a satisfactory '-ins:er so thM-t no actual
jirienjacnt covering, this wns ever presented. (See ou e 2 minutes, meeting
1.O. 12.. Gerierrl Files).

Ai<-st 2, 1934 the Code Authority at meeting 1.:o. 18 passed the
follo--'iin. resolution!

resolved d that Section 1 of Article II be
*z.c..Lecd by inserting the w7ords 'shopping
ba];s, bathing bags, handkerchief bags,
vcanity bo:.cE, cosmetic bags, utility br-s,
niitt Lig bag:' in the first sentence after
the ro-r. 1 i:ur.ses' so that Section 1 of
Article II w.ill reoc as follows;

"The tern ?iV.-stry1 as \used herein included
the max_-2,-.ct,.re of Ladies', hirses, and
childre'es hL-ndbr s, -jnc- :et books and purs- s,
shopping ba,;s, bathing br,!s, hnndl:erchief
bags, vanity boxes, cosmetic bags, utility
bags, knitting bags, :.ianufactured of any
iriaterial of any kind or nature,. The term
iUnCaistryl shall nat include ho'..'ever, the
.:an--:.f.eture of hendbacs, pockctbooks, purses
mnC. .mesh bn.gs inmnufactured in whole of metal. "

This '7as submitted to the Ad.inistration and after much discussion
.ith the interested parties was noticed for hearing (367 E December
19, 194j) andC heardJanuary 9, 1935.

At this hearing, it is to be noted in the Transcript, that as an
agreement 's -bout to be re.chcd between the opposing parties as to
which of the ,-nv, articles brought in as evidence should be included in
the proposed nevw definition, it was found necessary to seck Colonel
Brady's opinion. (See pae 48, Transcript, Public Hearing, January 9,
193), To o.ee:- oaes sec -ni^v surprise, Colonel Brady rendered a sweep-
in,- decision that all bajs on ex-hibition were Hand Bag,:s. Thi3 broad
state:-ient rvas cdsconcerting, created !uch disc.,.ssion, brought about many

9811





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conferences nc.. it was not until almost the close of the Code that a
spti factory c.efinitibn tns prepared and submitted for a.pr-val. This reach:

"TTe term "industry as used herein includes-the
mai'uf'.ctu.re of ladies, misses, and children's hand-
bags, pocket-books and purses, shopping bags,
b.thi- bags, handkter'chief bags, kiddy ba-s,
vprnity boxes,'cosmetic ba;s, k-nitting bas, manu-
fL.ctred of any material of any kind or nature.
"The term lindustryl, hov'ever, shall not include
articles commonly manufactured by the Lu -.,age and
FFMcy Leather Goods Industry used for traveling
pu",oses, nor over-night bags for whatever pur-
pose used, nor any article manufactured for men's
only, nor the manufacture of hand bags, pocket-
books, purses, vanity cases bnd. mesh bags manu-
factured in whole of metal,-"

The Schechter case decision having been made the matter naturally
dropde d.

The miinc.tes of meeting No. 18 also note that the Code Authority ex-
pressed itself in favor of anmending the Code wvrithiespect to Price Groupings
The followjing excerpt from minutes of that meeting, page 2 and 3, and
Exhibit E indicate the reason u'g applied as does a later brief written
by the code Director .viittenthal. (See Exhibit Z).

At this sEjne meting No. 18, the follovriig resolution was presented
and passed:

"RESOLVED that the Code of Fair Competition for the'
Ladies' lHandbag Industry be amended by
inserting a trade practice rule which
shall be Imknown as Section 16 of Article VIII
to read as follows:

"I'lo member of the irnd.ustry shall repair bags
without r.iaking a reasonable charge for such
repairs, when such bag's show that they have
been in use, No member of the industry shall
pay any forwarding charges for such repairs. "

This proposp.l led to considerable discussion and opposition but
was finally, presented in the following form

"i.o member of the Industry shall pay for or rebate forwarding charges
incidental to the return of used handbags, or repair used handbags without
making a charge for same based upon the cost of labor and materials required
for makiv, such repair. This provision shall not apply, however to repairs
attributable to defective workmanship or materials. Actual forwarding or
transportation ch-rges shall be separately itemized oi, invoice."

noticed for public hearing (367 E December 19, 1934 heard Jpnuary 9, 1935
approved lpy 23, 1935 and to be known as Section 16 of Article VIII Order
332-24).


9811







The reasons back of this move are interesting. Irn the relationship
between producer and seller, there has been a feeling that much buck
passing was taking place.

Times being good,. profits with the producer excellent, not much
attention is paid to such matters. Retailers finding merchandise move-
ment slowing up, take advanitae of every thing possible, no matter what,
to ouicl:en sales and more particularly when it can be done at some one
elses ex-ense. Undoubtedly in good times retailers would not return mer-
chandise to a manufacturer for repair unless it were palpably faulty, but
of late years faults obviously developed as a;result of wear or careless-
ness -ere charged to manuf .cturers. The retailer however, it is claimed,
charged his customer for "repair-but on the other hand asked the original
producer to make such at no cost to the retailer. If these statements
are correct, and we are assured their are, one must admit it to be a repre-
hensible practice and anything of a legitimate nature looking toward clean-
ing the stable of bad practice is to be desired.
(Refer to pages 98 to 103 Transcript Public Hearing January 9, 1935.)

Design Piracy is an evil we have always had with us. The brains
of the creative world as well as those of the legal (patent) fraternity,
have been turned over and over looking for a check upon the light minded
gentry, who hesitating to illegally take ones money or property, have
not thought it amiss to steal ideas from their more creative brethren.

All governments have over the years tackled the subject, and as far
as one can quickly determine, have not'been altogether able to find a
satisfactory answer. Certainly the public hearing held January 9, 1935
developed the difficulty of obtaining a meeting of minds. (See pages
68 to 98 Transcript of Hearing) and it is well to look at Exhibit Q,
which gives an outline idea of the time and thought put into this by
the Code Authority and its officials.

The Administration had not made their decision as to the advisa-
bility of including this as an amendment when the act was declared void
and so the matter rested.

The minutes of Code Authority 11eetings indicate that at meeting
1o. 21 held September 27, 1934 a proposal to amend the Code by adding
a section to be known as Section 8, Article VIII coverirg Destructive
Price Cut.ting was made but Code Authority officials state this was
never pressed to a conclusion.

The minutes of this meeting are not apparently in our own files,
but the following was taken from the Code Authority Minute 3ook.

"Proposal to amend the Code by adding a section to Article VIII
to be known as Io. 8.

."Destructive Price Cutting by means -of covering any metal
center frame, pocket and coin purse with fabric materials or


9811






-71-


leaGher, or the lining : of any framepochet
or 1.i're Vwith leather in handbags selling
oat 16.3. th.an ",24.,'O pecr C',ozen i3 unfair
colIv)ti tion. "

Earlier in this history it w.-s anointed out that manufacturers having
gone as far as thej cold with competition based upon labor costs, bc--.n to
add gadgets, thui starting a race, destructive of sound practice. The
above :)ropcZ.r.l v-ajs a first step loolcink: toward the building of a sanor
view point. i.aturally the differin- view point among manufacturers
themselves offered difficulty in reconciliation and it was decided tn lar
the subject over in the hope that as time went on industry v.,ould come to
a realization of better manufec.Luring end selling practice.

Hoiievwor'., here as in all other industries where the practice is
followed, was quite troublesome, although but a relatively small part
of the industry operated in this manner, viz: handbeading, hlndcrocheting
handembroidering aid until July 1, 1934 handsewing, After July first this
last was to cease.

One does not.need to enlarge upon the indecencies existing in this
character of inc'.u.stry, nor the diffiuclties surrounding attempts to
govern it. Labor insists it cannot be done and therefore should and rnu.st
be outlawed, which is easier said than done.

The Code Authority and its Directors made great effort to meet
the situ-atio,-i and presented to the Aajministrr tion a rather comiIprehensive
program lookin- toward at least a partial attem.:t to bring decency and
order into being.

In the files of the Legal Division there is a copy of a tentative
amendment to Section 8, Axticle IV for the purpose of establishing a
commission which shall establish muiniarun piece work rates for handbeading,
handcrocheti-nv and handembroidering. This is dated June s8, 1934 and sets
up that "1no memberr of the industry shall compensate home workers at less
than the ;iece vcrk rates established by said Commission, said Cnianissiun
shall est-.ablisn1 piece work rates which shall be equivalent to a minimum
hourly rate of 25- for workers continuously engaged. Said Conmmission shall
be supported by members of industry engaged in the manufacture if handbags
by means of handbeading, handcrochetinc: and handembroidery, such members
of industry shell contribute to the support of said Conmmission by a method
of assesi.s.ent to be approved by, the Administrator, "

There is to be found- in Lx.:hibit 0 a rather comprehensive brief and
other C.oc-U.jents covering the subject and a discussion of it on pages 123 to
132 Transcript Hearing of February 28, 1935.

June 21, 1934 the Code Authority passed a resolution adopting the
report referred to in the preceding paragraph and instructed the Director
to prepare the necess-ry resolution and forward to the Administrator. (ilinutes
meeting No, 12, page 2, June 21, 1934)

While these minutes are not definite as to the intent of the Code
Authority with respect to preparing an amendment to the Code, it was so
..intended and the matter camine up at the Public Hearing adjourned from
^ -_____________________,__________





-72-


June 7, 19' to July 10, 1934 and reference to it is to be found in
pages 339 to 112-1447 to 1,52 c-.nd in the supplement (complete) of the same
he;riao

Labor strenuously opposed the proposal on two grounds first, home
work in r-.n-r form is iniquitous and ca.-.Lot be controlled and second the pro-
posal set u-. an ho-..r rate of pay lower than called for in the Code.-

A representative of the' Woments Bureau, Dep-artinent of labor also
appeared in opposition, particularly with respect to the so called I"myth-.
ical rate of 250 per hour" jrnposed, ,nd on, the further ground thet their
records and investigation showed, that many of the skilled home working
women were earning a rate higher then that, further that home work
cannot be policed and ought to be abolished. (Pa.-;es 374 to 379 Transcript
Public HIeari-., July'10, 1934)

The mi-tter never retched a conclusion bein-' more or less interwoven
with the entire labor provisions, nevertheless the Code Directors made con-
sistent effort to bring about a better state of affairs.

February 7, 1935 notice of hearing was published(No.-367 -F)
and the heri:,; tool'pl-ce befor- Colonel Walter ILan.-un, Deputy Admninistrcto:
February 28, 1935 to consider the following proposed amendments:

article III Section 2 shell reid as follows:

"iTo erson emr'ln.ed in shipping, clerical or
of-ice vior>, unless he is employed in a man-I
a-crial or executive capacity and e-rns .not
loss than thirty five (,.i35.00) dollars per
vwek, shall be permitted to work in excess of
forty (40), hours per ;7eek averaged over any
one month period, provided, however, thrt a
partner, officer, director, or stockholder or
a meraber of the i.'i(c.stry enjoyed in productive
Labor, shall be considered an c.,,rlo'-ee for
the 11urposes of this Code, and shall be subject
to the labor provisions thereof".

Article VI Section 8 (c) shall read as follows:

"Zpch' member of the Industry shall keep accurate
an IC complete records of his, their or its trans-
actions in the industry in respect to wages, hours
of labor, conditions of employmentnumiber of em-
lo-ces and other matters' necessary for the ef-
fectlIPtion of the Code, and Title I of the National
Inc'.ustrial Recovery Act. Each member shall furnish
accxrsete reports based upon such records covering
v'ch matters when required by the Code Authority
or the Notional Industrial Recovery Bord.,. If the
Code Authority or the Tational Industrial Recovery
Bocrd sLall deternin3 tr.at doubt exists as the
r.ccurvcy of any such report, so much of the per-

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tinent bookG, records and papers of such member
e.s may be required. for the verification of such
re ;ort may be examined by an a ency agreed upon
between the Code Authority and such member, or in the
ab.-ence of an a,-reement, by an agency appointed by
the Code Authority and approved by the 1National In-
u.istrial 1,ecovery 3oerd. If a member of the Industry
shall fail to furnish occuirate reports, covering any
of the foregoin. matters when required. by the code
Authority or the iN'tional Industrial Recovery Board
sJ.ch member shall mLake'- available to an agency
t_-ointed by the Code Authority with the approval
of the national Industrial Recovery Board. so much
of the pertinent books records and papers of such
1.enber as may be required by the Code Authority
',ith respect to ages, hours of labor, conditions'
of employment, number of employees and other matters
necessary for the effectuation of this Code".

Article VII Section 11 to read as follows:

"Lo member )f the industry shall grant cash
discounts in excess of 3/10 E. 0. M. Exception on
jooc.s sold up to and including $27.00 a gross, no
members of the industry shall grant cash discounts
in excess of .-2/10 2. 0. M. Anticipation may be allow-
ec". at the rate of 6, per annum. No mmber of the
industry shall grant quantity and/or volume discounts
of any nature".

Add a new section to Article VIII to be known as Section 16 to read
as followc:

"Free Deals Combination Deals no member of the
Industry, shall directly or indirectly give what
are 1mown as 'free deals' or 'free merchandise'
or combinationn deals' whereby a joint total price
is charged for handbags along with other merchandise
All bills -mcd invoices in vhich hanc.ba-s are one of
the items, shall set forth separately and definitely
the charge of the hand" g alone ".

Neither of these Amendments were ever approved and were still "in
process" when the act ceased.

In ean earlier chapter mention wvias rnmde of strife within Union Ranks
resulting in complete overturn of officer personnel.

The !ort colorful of these officials, the most persuasive left Union
ranks to teke chrrge of Labor Relations for the then largest manufacturer,
iMcrris 71hite later Stylecraft Bag Company at a salary of $52,000 per annurL.
He lIter rejoined Union ranks and after thle break in his Uniondecided! to
open a factory, financed and operated by men of the craft and fellow union-
ists. Zl.ch of the men underwrote a portion of the capital needs, and each





-74-


*ow ;>, yi o."ire' o7 t: conmny an.~ the shoo a's conCucteC as a coopera-
tive. Still others .i8 liO e'ise anr the ii:Custr- --as faced -'ith a
brea2,k'on of hour sciheules by the subte'.ue of men claimin,. to be com-
pany officers. -Rnce the JurT)ose of the first )roposol.

Agnin in an earlier chW other it is pointed out that this industry
vas not statistically fnct minded, nor realize thie value of such material.
The Code in its e--oroved, form vas not' ecniLte-, not a.s eX:plicit in this
respect as it 'mi 7ht have been, maina- it difficult to obtain necessary
pertinent infoQrmtion. It ': s felt this 'Oro oo sedc. chen.e -as necessary.

A chi-nie 'as -oenCin- in tU. set' u- of this Coee's definition, also
ne.-otiations for a cor:solidation of a -roaop thi-t -had oeen -oart of the
Lu,;' :e Industrr '.ith the. Hpn".bL.- Code Auithorit. ha been -.bout concluded.
In th.t group sellin.- terms 86 been estnblished oPl withoutt chan-e for
me.n,2,T veers. It -'as, necessrirr thn.t thle -ro.'osed. -mencemnt respecting
terms o0 brou.Tht before tie AcministrTtor for ,r-,roml. This served. to
ro.)en the '-hole cuostion of Disco.aints see pages 10 to 83 of Transcript
of TerinTr., ?ebrL1r-r-.- 283, 193:5.

Th'e 7ree Deals Combir.tion Deals prbOos ,-1 P f"elt necessr-.r be-
cnuse of the .-o"in: deri nrds Q-' retailers for all. sorts of free thin-s,
iritials for -:::aQ-le. It was but another form of, hi vin --- the C.evil
aro-n.. the stump. See oa *es 83 to 86- oQf the Trai.scriot Public Hearing,
eo,'ru.- 28, 1935.

In concl-cinr: this chzoter it is ";ell to state that the t"o amend-
ments a'oroveO. nd those -oroloseJ had ao .-oo. effect uipoo. indi1st-ry. It
'"rs made ':io n to ineustr- b o-iblication and ,ord. of mouth, '-hat the
Code Authority ras doing and there cane about a fe.-lin:, that their Code
Authority iwas on its toes, tc:cklinf troublesome -)roblems in a -oainstaking
thought ful manner. All dii not aree in detail rith conclusions reached,
but it :as felt and believed that -ri.ht thinin ha.d oeen develonee 17ith
a quieting stabilizing effect.

2. Interpretations

(a) There vTas but one interpretation made under this Code
(Administrative Order Ho. S32-10), .Aated June '6, 1934 signed Earl Dean
Ho"ard, De.-ut, Arministretor and Sol A. Rosenblatt, Division Administra-
tor, Division io. 5. (See 2S.-ibit S.)

The question raised ras that of the inclusion of a certain
process of manufacture, the lin'zin,. together of niunerous nieces of lea-
ther, under the term "'and crochetinc". Could it Leave been so included l.t
followed that under Section 10 of Article V, such ork wouldd have been
permitted' in the hoqe.

Sirce the irterpretotion didA not include it under "hand
crochetin-" it bee'-ne a process Forji6'Cen for home or-..

(b) Effect on Indust ., ;

I believe some question 7as later risee' Ps to the sound-
ness or this opinion. Some thought it a vise thing to have included it
9811




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under Hand Crochetin-, it being a natural operation for home ,ork. On
the other .irnd it is difficult to see hovw b- any stretch of the imaginn-
tion it could be considered as "hand crocheting" or as com;in.- under such
a general headin.-, for it is a totally different process.

(c) Discuasion of Value

The Orcer is e:-plicit end there seems no further comment
needed.

3. E':em--tions an'. Stars

I'o exer'.jtionF "ere gr-.rnted under this Code. Thile minutes of Code
Authority nc-etines and our orn -eneral files, contain rin-r' references
to, ano- -jo-)licc.tions for e::emotion! and oermissions to -'ork overtime,
emolo-- learners, v.e-;e differentials, oarticularl-r a Southern rate, ap-
orentice", snli to -ork: t'o shifts, out the Code Authority rejected all
such on the broaC -?ner1l -round that conditions in the industry did not
.arront approval.

One -oublic hearing vas held Layr 7, 1934, (no. 367-A), upon apolice-
tions for e:-:emotions b- :-

Hudson Leather Goods Co., Inc., .' J ck, W.Y. exemption Art. III, Sec.
2, PnO for )ermis-ion to employ learners in accord vrith Article IV, Sec-
tion 3.

G. R. Godfrey Companr, Gardner, Less. xem-ntion from Article III,
Section 1, and Article IV, Sections 1 and 6.

Paragon 1 ovelty Ba:- Co., Inc.,
Uneeda Belt Co., Inc.,
Nexber1 Handbag Co., Inc.,
Licht & Kaplen, Inc.,

all of ier7bur.-, i. Y. Exemption from Article IV, Section 1 and to em-
ploy learners, Article IV, Section 3.

Strand Leather C-oods Co., Inc., ievi York, 17. Y. to employ learners,
Article IV, Section 3.

Vir: inia Art Gooc.s Studio, Inc.,
Lynchbur-, Virginia.

"a-e Differential.

Under orders 332-4-5-6- and 7, signed by Earl Dean Howar6, Deput-,
all of these )etitions were denied e:-ceot Virginia Art Goods Studios.
The situation '-urrounding VirCinia Art vnas ali'ays difficult and somewhat
becloudeC. Vir/inir. claimed ecxemotion within ten days after approval of
the Code, in that they --ere not parties to it. The Code Authority pointed
out their membership in the major sponsoring organization and failure to
resign made them oarties to the Code. In the public hearing of H8ay 7,
1934, theT- vere permitted to file briefs. As far as the files disclose,


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-76-


action -rr. wit.iel. on their petition, all others heard. beinr denied.

Yo evi-.ence can be foan6 that formal action 7'-s ever teken u-oon
Vir2-i'ia Art but it is clear that a tacit .'v;roval to e:em-ption 7E.s
-iven. This ga.ve rise to much bitter criticism by the Code Authority
whichh flared un rather bcdly. ,"hen in Julyr 1934 it was made nmo.n that
a further hiearin7 '"as to be openec.. lTothin,. definite came from tais and
the matter tl.r,-ed along all tiiroa-:h fall and '.inter of 1934 and 1935
with, at almost every CoCe Authority meetin n', bitter resentment being
voiced over the fact that Virginir Art '.ere oreratin- in their ov.:n Vay
without t re-.-:,'d to Code reouirenents. The Code Authority insisted that
undue influence had been and 7as beir e:ercisec, and found themselves
in a difficult untenable position since the case as constantly used as
an e'amp.le by offenders in e:-tc?-uftion of their or,'n misdeeds. The Code
Authority and its Directors felt their could do nothing and it r'as not
until Deput}r Colonel I.*nunum and his assistant Dan, Hill took hold, that
successful steps were ta-en to iron out the situation. Thro'),h the
good offices of the De-outy, the C,:de Director, :_: 3er'oritz proceeded
to Lynchbur- en. made a stiic' of operations. He made certain recom-
mencations '7ith respect to plant operations ann the installation of a
cost system andC found evidence of the ability of Vir.inia Art to pay
code d;oes. Reference to AZ:hibit A. 1. portion rated April 20, 1935
lives s indication of the success attendirgthelast, as %7ell as a history of
the case.

4. Other Administrative activities anc e.-encies

a. Tro6e Practice Comolaints Committee

On Seotcrmber 27, 1934, Order Ifo. 332-17, a plan of organi-
zation an.? groceduire covering, 7r-rc'e Practice Conplsints and. the appoint-
ment of a Committee ,ase anorovec'. 0b the Administration. The personnell
of the Committee consisted of the follo7in-r:

.illiam C. Rath, President
Jilliam C. ?.,th Co., Inc.,
31 :at 32nd Street,
ilew York City.
'e-; York manufacturer r nailiri, b---s ran.n-in- in
retail price from ,1.95 up to and over $4.95.

Hirmnnn 3urstein, ?resident
Ciarles 3iarstein & 3ros., Inc.,
325 1'ifth Avenue,
.ev:. York Cit-r.
An out of to'.:n m.-nm. .ctur:r i'ncing bars ranging
in retail price front $.0'. to $4.S 5.

[I0 " ilai: .-cr'.c.uer, Inc.,
5" .esft 52nd Street,
Ve-. Yorl: City.
A beadec Oa, mrianiufacturer of T. 7. Ci tv.


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L"- rence o.s, President
Tnteriri e kccos5ories, Inc.,
35 :'ifth Avenue,
,e' Yor:.- Cit-.
A 1e'- York i:anufrcturer making a one price line
t:' retail at "4.95

Ay).lication for approval of this committee vwas first mace
under authorit- of a resolution raassed byr the Code Authorit7 at meeting
17o. 4 held A)ril 11, 1034 (see Kinutes in .-:hibit 3.1) but it was not
aonrovec. until the fo.lo,-ing September and the committee held but one
meetin.--, October 9, 1914.

There a ilso submitted, at that time a plan of -rocedure,
ihich v-ith some change -as also a-oproved (Exhibit B.l). The plan called
for a National Committee s "-ell as regional Divisional and aibdivisional
committees for specified territories and. purposes. 3ut one committee,
the National, -as ever set uo and for reasons stated belo'"- never actually
functioned.

Th.ie oair; personnel of this Code Authority-- held a broader vievw-
point of their functions .nd their opportunity to serve, than vas the
case in other industries, coupled .!ith, as ex-manufacturers of handbags,
hrvin- a )rimer-, k':no"led:e of their industry, its problems and pitfalls.
It '.;as in their vie -: -oint, right -nd proper to tpke up all compliance
matters themselves, 'ere they trade practices, or hours and 7ages, study
each situation, -opply nnr remedy necessary and report to the whole Code
Author t-r.

*At no time within n the knowled.to of therriter rere trrde prac-
tice com-olaints made at first hand, knowledge of seeming violations corn-
in- to of icials, as ;' result of study of the retailer's buying and
selling ofr merchc-.ndise. .H-ving obtained. in this :way, fccts upon which
to act, meetirs ere ii:-' ith the -oparties involved and it was generally
found theta violrtionF- occurred through lack of proper understanding and
-'ere rerdilv straiIhtened. out.

(b) Labor Compl.aints'Committee

At a meeting of the Code Authority- held June 14, (Eeeting NTo.
11, see minutess E::hibit C-l) a resolution vas pas-ed appointing a rational
Labor Complaintn Committee consisting of three members of industry, and
also that the Labor Advisory Board should appoint three members and that
the Administr.tion :ember should be a member. The following industry
members ",ere appointed:

David A. Ingher, President; Ingber Co., Inc.,
347 Fifth Ave., NTew York
David Norgenstern, President, Morgenstern & Brossear, Inc.
26 ITo. 17th St., New York
Sol iutteroerl, Presidfent, Sol 1:utterperi, Inc.,
330 Fifth Avenue, Iew York, I.Y.

The names of this committee, together with plan of procedure was submitted


9811







to the Acminizt--tion Jul., 6, 1934, but never approved and therefore did
not function.

(c) B3,r-La'"s

By-La-s (See Exhibit D.I' vere first submitted June 28, 1934,
having been passed by the Code A.u.orit Uieeting June 14, 1934 (See min-
utes meeting 1"o. 11, Generel F1i.1

NATIOIAJL PTECOVE-'Y ADi1.:I STATION

7,ASHICTO, D. C.


45 LroaC.va-wr
Few York City

Digby 4-2324 June 28th, 1934



Mr. David Barr
Assistant Deouty Administrator, Div. V, 1RA
Department of Commerce Ljuilding
7ashington, D. C.

Dear I;r. Barr:

SUBJCCT: Constitution -n(" b--l" s of the LrEdies' Handbaf Code
Author t-'

I transmit herewith for your o.-orova.l thr,-e copies of the constitution
end b--la' s for the Laiec' H-ndbF- Co.e ut.iorit,. I have ?one over
these ca-re-ull': and se-: nothing_ o cjectionoble in them. However, I am
'7orderin.- if it is not ,os'ib1a for tner-: ,nd al.l other b,-laws to
include r provision clerrl- ,tatin- tn--? cities of the Code Directors.

I merely make this sui-estion because of the habit Code Authority mem-
bers have of hiring and firing re.-ardless of a Code Director.

I have upon a number of occasions at Code Authorit`'r meetings emphasized
to members, the necessity of :lacin. full responsibility upon the shoul-
ders of their Chief Executive Officers and that this cannot be done un-
less they refrain from foisting upon the payroll of the Code Authority
their ovn peculiar pets, or appointees. This situation has existed in
liillinery ever since they first opened their office and it is one I have
not succeeded in righting. .

Yours sincerely,

**(Signed) 0. '7. PEARSOI]
07'P:DAR'O. ,,.' PEAP.SOIT
07P: DAR ADI IINISTRATION I.JE 3ER


9811


-7W-




-.79-


By-Laws (cor.tinu.cd)

L'r. '.ia- 3crkovitz
Ladies Hancbc;a Code Authority
303 Fifth Avenue
Iev, York City

Dear 14r. Berkov.-itz:

I am enclotin_- here'-ith a copo of the By-laws
of the Ladies -Hando-,- Industry Code Authority with
pu.-estc.d revisions to meet the objections of the
Le..,ol Division.

Year attention is called to the following ch-nies'

Article III of the c'ri,;inF.l, has been deleted. Cer-
tificates of Com-i ,irce3 are provided for in Adminis-
trative Crder X-'3, cdel.n: vith label relations.

Article IV, Section 1 ha s been amended. by the insertion of
the w:ort "Industr," rb,-ore the vord memberss" in the
thirc Enentence thereof.

Article IV, Section 2 has been -,menled to set forth,
the .irovicioiins of the Code "ith reference to the
method of election of the Code Authority.

Article IV, Section 4 has been amended by the inser-
ti)n of the "or',T "Industry" before the words "H.ember-
shin" and "Rerres-.-.t.,ives".

Article V, S'sction 4 h'L 'been amendedto make provi-
sion for the oostin- of a bond by the treasurer.

Article VII, Sections 1 and 2 have been deleted, and
the provisions of Sections 1 and 2 of Article VII of
"Sum-.ections for 3".-La..s for Code Authorities (Re-
vised edition) heve been substituted.

Article VII, Section 3 has been revised to conform
to the "Suggestions".

Article VIII, Section 3 has been deleted. Itemized
budgets must be submitted annually to the Administrator.
..'hen so submitted a separate annpproval of the Budget and
Plan of Assessment may be given by the Administrator.

If these Byr-La','s, as revised, are satisfactory
-ill you !-indlv forward, as soon as possible, six
copies of the certific-ition of their aCoption by the
Code Authority.
Very truly yours,


David Barrt
Assistant Deputy 'Administrator
_M AlIl_ g1..... . Q <_____,__,__....... ... . ..





-80-


I
For some reason not disclosed this matter ras dormant until October
19'4, .Then on the fifth da" of thet month the cMneniced by,-La'-s were re-
submitted and. approved undcer Order ;.3?-19.

(d) Other

There were no peculiar admiiAstrative actions or r.7encies
utilized.

5. Other -,hag.es of Core A'fmrnini-trtion nrict covered above.

A Tra.e Associrtion of concrete positivee vclue has be-en unlkno.n in
this Industrv e'-ce' -oerhaxps the one dealing only vith collective egree-
ments. Just 1'-r they existed even in nriL me is hard, to understand, for not
being herd minded so to soeah, this industry -o-.i' not f.deouately support
a for'7ar'-d loolting ,..tivit'' of this character.

The hand bo,% Code Authocitr- directorate-.ent far afield in their
woiz, appreciating the need of building a close!ry '-nit industry, cement-
ing reletionshipos between sources of supplI7 and tfaeir own grou., and be-
t-ean wholesalers, retailers and. themselves. They keot close watchc h u-oon
advertising of offerin..'s by retailers, both regular: and sneci.al, `:ept
closel'r in touch w.ith fashion, style and color tr-nds, const-ntly met
,ith trr.de association executives and leadii-,. men of indust,-r, closel-
allied to or impiniin; upon their ovn, for these men havinT a vision,
realized 1hov much ni-'it and could. be accomplished under their Code set
up.

The Code Autho:'itP- itself ihile appreciative of the value of such
work when told of it, could not carry on, were not mentally geared to
it, and without the leadership of men such as the t7,o directors, Tould
never have thought of such tings, least of all realized their need.

Given another year of o eration this group wouldd have found itself,
would have knovn itself, T"ould h,-v.? intrenched itself, would have become
fully conscious of their need of such knowledge and of the unity that
sprin,-s from it. Evidence in the Code Authoritr files clearly indicate
the gsins made.


9811l




-81-


OPERATION OF CODE PROVISIOITS


Labor Provisions
Hours
Wages
Administrative Provisions
Trade Practices




-U L --


IV. OPERATION OF CODE PROVISIONS

A. Definitions

As stated in Section a, Chanter One of this history (.Page ._3).
the following definition included in the approved code left something
to be desired for constant requests come in for clarification.

"The term 'industry' as used herein includes the manu-
facture of ladies', misses' rnd children handbags,
pocketbooks, and nurses, manu-ac-tured of any material
of any kind or nature. The term 'industry' shall not
include, houiever, the manufacture of handbags, pocket-
bookE, purses and .iesh bags manufactures in whole of
metal."

1. Overlapping

The trouble lay in the fact that many articles falling generally
into the handbag category, were made by two other industries not con-
sidered as handbag manufacturers viz:- Sanitary and Wateroroof
Specialties Industry and Luogage and Fancy Leather Goods Industry.

As the first named title indicates, that ground were producing
many articles that because they were mace of waterproofed materials,
naturally fell into their production line, and yet which to a degree
belonged to hand bags, since they were designed to be carried in the
hand for various utility purposes. Naturally such manufacturers did
not wish to operate under more codes than necessary and onnoosed their
inclusion under Rnndbags, and it became necessary for the Ladies'
Handbag Code Authority to move for an amendment.

The problem with the second group was involved with both Sanitary
Snecialties and Handbags, Almost since time began --romen have used
some form of a reticule in which to carry their small belongings, money,
etc., and the controversy here narrowed down to the dividing line
between hand luggage and hand bags.

The feeling on the rart of the Dewuty Administrator indicated at
the public hearing January 9, 1935 was that Handbag and Luggage Code
Authorities should get together and agree uoon the division, with
perhaps a consolidation of the two, so closely allied industries, as
being the best answer. In the case of Sanitary Specialties the
Assistant Administrator made the ruling referred to on Page 86 this
hisotry. The amendment nronosed vwas in process of settlement at the
close (Notice of Public Hearing No. 367 D.) but in the meanwhile the
officers of the Code Authorities involved, agreed upon a modus vivendi
that kent affairs moving on an even plane.

In future consideration of codes, should that time ever come,
greater care must be taken in scrutinizing proposed definitions and
see that each is Prooerly embracing, but at the same time determining
where and what are dividing lines. These cannot be determined satis-
factorily in industries such as these, unon merchandise departments in


9811




-83-


the retail outlets, for there, they either follow custom of their own
convenience. Here you are concerned with production and all that is
involved therein, and such must be kent unon a fairly even cost lane.
To do otherwise keens the labor rot boiling and of course makes for
friction and trouble on the labor side, and can well make for destruc-
tion of a well established industry. Perhaps an answer is to be found
in minimum wages and hours being made similar in all closely related
industries. That at least 'iould eliminate much of the controversy
that takes place in all such cases. In thiF 1ist, one cannot of course
overlook the difficulty involved, and yet so long as an uneven situation
exists, troubles with related industries arise and are magnified and
since you are bound sooner or later to have trouble over these matters
you might just as -ell take the larger dose at the beginning and have
done with it.

3. Wages

1. 7age Levels; !!inimp, Averae

Section 1, Article IV, nage 31 of the code states that exceptt as
hereinafter provided no em-oloyee shall be oaid at less than the rate
of thirty-five cents (75t) ner hour."1

Section 2 of the same article states "that no semi-skilled
emroloyee engaged in cutting, framing, raring, pocketbook making and/or
operating (except lining operating, cementing and/or posting) employed
in the manufacture of any of the products covered by the provisions of
this Code, made of any materials other than imitation leather, shall
be raid at less than the rate of forty-five cents (454,) per hour."

These are the only two rates of ray provided Pnd since the last
was stayed in the order of arnroval we need only at this noint be
concerned with the first named.
Exhibit G, rage 1, paragraph 2; page 2, paragraph 2; rage 4,
paragraph 2 of the Mittenthal memo on the industry, gives a picture
of the wage situation obtaining prior to the code.

Exhibit F gives a statistical break-down of present day distribution
of the industry, disclosed in Code Authority reports.

If, as claimed by out of town manufacturers, the.large majority
of their employees were not skilled, the effect of the code wage scale
in increasing purchasing rower, must have been very marked, for they
jumped from an average of $6.00 to M8.0O per week, to a minimum of
S14.00 weekly.

Taking the manufacturers statement in this respect, with a large
grain of salt, my own observation of processes used in out of town
factories, leads me to conclude that a full 501 of those engaged were
definitely affected by this increase, and the classification break-down
included in Exhibit F bears this out.





-84-


2. Industry Compliance

Of the 87 labor complaints made, but 37t were of wages, and well
over 50% of these from one state .Iassachusetts. See Compliance
Compilation by Colonel Walter Mangum. (Also see Exhibit R.)

3. Skilled Wpges

Section 2 referred to in Paragraph one of this chapter was as
noted, stayed, in the order of annroval. As pointed out in Chanter
2, page' of this history and as may further be seen by examination
of Exhibit K, much time and effort was spent upon this subject and all
without avail. It was a compromise clause placed to placate labor
and New York Manufacturers, and in the hone, that from it, would come
a substantial increase in earnings to a fairly large number of employees.
Coupled with it wps section six nrovidinp for a Dermissive classifi-
cation and basic rates for the more skilled classes of labor.

Exhibit G, ages 1-2-3 and 4. gives concisely the labor situation
obtaining in the industry orior to the Code's adoption.

4. Adjustment of -7ageo above the minimum

There were no provisions for an upward adjustment of wages.

5. Mal-Adjustment with other industries

In paragraoh A, page .82 of this chanter, reference is made to
the difficulty existing between the Sanitary and Waternroof Specialties
Manufacturing Industry, Code No. 342 and the Luggage and Fancy Leather
Goods Industry Code No. 42.

The Luggage and Fancy Leather Goods Industry Code provided for a
differential in the Southern tier of States of 32 1/2 cents for male
and 30 cents per hour for females as against 35 cents for male and 32 1/2
cents for female in the Northern States. It also made provisions for
learners to be paid during a six weeks period not less than 80% of the
minimum.

The Sanitary and Waterproof Specialties Manufacturing Industry
Code made provision, that the rate be 35 cents per hour, except that
Apprentices be paid not less than 28 cents per hour for the first six
weeks and thereafter at 35 cents ner hour.

The Ladies Handbag Code provided a rate of 35 cents per hour, with
no exceptions and a permissive clause for learners with no specified
rate.

Obviously when questions of jurisdiction over certain products
arose as they did, these rates became disturbing, and more especially
with Luggage for it was felt that that industry had not an efficient
Code Authority machine set up.


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