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 EXhIBIT "G11"

 Prepared by A. LMITTEEiTIALJ
 former CODE DIRECTOR
 September 1935

 The principal problems confronting the ladies' handbag industry be-
 fore the code, were competition based on unequal labor standards, and com-
 petition b-sed uoon unfair trade practices. The labor problems were the.
 result of the migration of the industry from the metropolitan area of'New
 York to cities located in Massachusetts, Connecticut, New Jersey and Penn-
 sylvania. This migration began in the year 1929, and continued increasing-
 ly up to and during the period of the NRA.

 Up until the year 1929, more than 85% of the industry was locate! with-
 in the metropolitan area of Noe%7 York. The industry located in New York has
 been in contractual relations with the Union for about twenty years. In
 the year 1928, the first manufacturer moved away from the unionized center
 of metropolitan New York, and began manufacturing in Allentown, Pennsylvania,
 inder non-union conditions.. At this time, the Union minimum wages fixed by
 agreement with the manufacturers in New York were $45.00 a week for skilled
 workers. Admission of workers to the killed branches was controlled by the
 Union, so that in ome of these branches of the industry workers earned on
 a piece work basis from $100.00 to $200.00 in a 44 hour week. Those manu-
 facturers who moved from New York were unable to obtain skilled workers in
 their respective localities. They were compelled to employ workers without
 ay previous experience in the industry. Machinery heretofore little used
 in the industry, was invented to take the pice of many of the operations
 performed by skilled workers in the New York factories. Workers in these
 new localities were paid $6.00 or $7.00 a week, and they worked from 48
 to 54 hours a week.

 With -.his tremendous difference in labor costs, those manufacturing
 outside of New York, were able to give greater values or sell for less,
 with the result that the manufacturers operating in New York under Union
 conditions were forced to meet this competition by sacrificing their profits.
 fe success of the few w-ho moved away, offered the incentive for others to
 follow. In the yep.r 1933, only about 50% of the industry still remained in
 the metropolitan area of New York. Those who moved or opened new factories
 located in the eastern states, a few in the Chicago area, and a few small
 units were scattered throughout the country, chiefly on the Pacific Coast.
 The Union was unable to establish" Union conditions in these factories outside
 of New York. The facotries remaining in New York, were chiefly those making
 the high grade handbags which required the most skillful workers.

 At the time the code was being drafted, the industry was about equally
 i divided between those manufacturers having contractual relations with the
I Union located in New York, and those without Union conditions, all of whom
were located outside of New York. Factories in New York were paying first
class workers (by Union agreement) $35.75 a week, and second class workers
$32.00 a week; general help about $18.00 a week for a 44 hour week. Factor-
ies outside of New York were paying their best workers about $20.00 to. $22.0r
a. Week, and general help from $6.00 to $8.90 a week, for a 48 to 54 hour wee .
Bitter struggle resulted because of the efforts bf the Unionized factories
to establish in the code a classification' of the workers according to their