-202-


 Geographically, the industry is concentrated to a large extent I
in the East-New York having in 1929, 192 establishments; Pennsylvania
and Massachusetts, 17 each; Illinois, 10; New Jersey, 9; and Californi
11. The total number of establishments in the entire country was abo"
200.

Employment, Hours and Waes

 The best available figures indicate that the average hours worked
in the industry prior to the adoption of the President's 'eemployment -
Agreement were about 48 per week. The adoption of the Fresident's Re.lI
employment Agreement, giving theoretically:r an increase of 20 per cent:
in employment to offset restriction in hours, has probably produced a
increase of about 15 per cent, or a total increase in employment of
about 1,800.

 On account of the fact that most of the workers in the industry
were receiving somewhat more than the minimum set'by the President's
Reemployment Agreement, the increase in payroll corresponds roughly
with the increase in employment. It is believed that there has been
no extensive increase in average earnings. 1o definite figures are
available on this point at this time.

 The labor cost in this industry is relatively high because of thi
rather large amount of detail work necessary on handbags. For 1929
the .ratio of wages paid to value added was 45.8 and in 1931 47.7, aI
compared with 36.4 and 36.3 in general manufacturing. In a general :
way, labor cost may be set at about 25 per cent of wholesale price of|
the merchandise of the product. It follows that an increase of 4 per
cent in labor cost would be reflected in an increase of 1 per cent in.
wholesale price. If therefore hours were further shortened to 35
producing an increase of about 15 per cent in labor cost and weekly
wage scales were maintained, the effect on wholesale prices would be
approximately 4 per cent increase. Since this merchandise is usually:
sold in retail trade with a large mark-up, it seems that there should.
be no great difficulty in further restricting hours, particularly in 4
period of rising prices when the addition of a reasonable amount to ti4
retail price of a handbag would not be a serious handicap to its sale"
by the retail store. The only difficulty is that most articles of tht
type are grouped by retail stores into certain price classes such as
$1.69, $1.98, $2.54, $2.98, etc. It may frequently happen that a sli|
change in the wholesale price would make it necessary to move the art|
into the next higher price class causing a much larger mark-up. One
the largest retail establishments in the country urged this point str'
ly in the hearing.

Comments on the Code

 The Code, as now revised, is generally free of controversial pro-
visions and, with a few exceptions, no objection is seen to its appro.
as drafted.



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