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Dr. THORP. That is quite correct. The same thing is shown in the chart for "Coke Production", where there is perhaps more nearly a single pattern for most of the industry, but there is one plant which seems to have varied greatly from the general pattern.

(The chart referred to was marked "Exhibit No. 66" and appears on this page. The statistical data on which this chart is based are included in the appendix on p. 233.)

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Representative SUMNERS. May I ask, have you found anything to indicate that the right-hand plant going up to 220 may have itself very materially determined that some other plant could go down the line? You haven't been able to get into that?

1 Exhibit No. 65, supra, p. 123.

Dr. THORP. We haven't gotten into that. We are planning to make studies of this kind of record, not just for nine plants, but for a large number plants, and see what can be learned from the record.

Representative SUMNERS (interposing). Its queer behavior looks like he had some reason to boost him up.

Dr. THORP. I suspect there is some reason, but I am sorry I can't tell you what it is.

Flour production is from the point of view of the industry very stable. This heavy black line which shows the trend of the total output of the industry varies only slightly from year to year, and for many of the plants there is no great degree of variation from one year to another. Nevertheless, there are a couple of cases where the variation has been rather extraordinary and nothing like the trend for the entire industry.

(The chart referred to was marked "Exhibit No. 67" and appears on p. 126. The statistical data on which this chart is based are included in the appendix on p. 234.)

The CHAIRMAN. Now, you have one in which the variation in 1931 and 1932 runs from well below 100 to well above 400.

Dr. THORP. That is right. I suspect that something happened in this plant in 1931 which was a temporary situation, as for example, a fire or a strike, or something of that sort, so that it is hardly fair to compare that year with 1932. It had done pretty well on the whole.

EMPLOYMENT RECORDS OF INDUSTRY MEMBERS

These

Dr. THORP. Here we have a chart that is a little different. other charts are production records. This is an employment record. Now that you are used to looking at 9 lines, we show you a chart with 15 lines on it. These are 15 different plants. The lines are not tied together at a single point, but the average for 1923 to 1925 is taken at 100. In the rubber industry, as you can see, the variations have been tremendous.

This one does not have a single central line indicating the average of the industry, and I defy anyone to look at that chart as it stands there and fill in a line that would be representative of the industry. The firms in terms of employment, have shown very wide fluctuations. As a matter of fact, the industry level is just below 100 in 1936, the last year that is plotted. You can see what happened in the industry quite clearly. The indexes for one group of concerns are around 225 and for another group below 120, rather an extraordinary division taking place.

(The chart referred to was marked "Exhibit No. 68" and appears on p. 127. The statistical data on which this chart is based are included in the appendix on p. 234.)

Mr. HENDERSON. Wouldn't it be true that those below the average in 1936 are undoubtedly pretty large producers?

Dr. THORP. Inasmuch as the average for the whole is just below 100, I suspect it is not an unreasonable statistical deduction that some of the plants down in the lower levels must be larger than some of those at high levels, to get an average at that point.

The CHAIRMAN. There are certainly more plants above the line than below.

Dr. THORP. Yes; there are more plants above, and these are a good deal further above.

EXHIBIT No. 67

FLOUR PRODUCTION
FOR NINE MILLS

[graphic]

400

300

1927 1928 1929 1930 1931 1932 1933 1934 1935 1936 1937 1938 SOURCE: BUREAU OF THE CENSUS

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Representative SUMNERS. You could find the same thing among farmers and even lawyers and politicians and everybody. Some people get along well and some don't.

The CHAIRMAN. This is interesting from the point of view of employment. This purports to indicate the changes in employment,

and you have just drawn the deduction that the plants which are represented as below the line are large producers; the plants which are above the line are small producers. Would it be a justifiable deduction that the small producers have had better luck in employment than the large producers?

EXHIBIT No. 68

EMPLOYMENT FOR FIFTEEN PLANTS IN THE
RUBBER TIRE AND TUBE INDUSTRY

[graphic]

350

SOURCE: BUREAU OF LABOR STATISTICS.

Dr. THORP. I think that might be a deduction from this chart for at least some small producers among this particular group of plants. I would need to know more about the operations of these individual plants before venturing a definite statement.

Senator KING. You are dealing only with rubber?

Dr. THORP. This chart refers only to the rubber tire and tube industry.

Senator KING. You recall, do you not, that there have been very wide fluctuations in the prices of rubber during the past few years? There have been strikes in some places, notably Akron, Ohio, where they practically destroyed the industry, as well as some other places, so that those strikes or untoward circumstances would create great changes and perhaps the big industry would suffer more than the smaller one.

Dr. THORP. I had no intention of trying to explain these variations. We do hope to derive some useful conclusions from such studies. At the moment, I merely wanted to introduce it as raising a question of variation within industries.

Dr. LUBIN. If I might add at that point, before we ever had these strikes there was a tendency for certain firms to move plants into areas where labor costs were much lower, the result has been that some large firms opened plants in Southern areas and in other areas with lower labor costs. These new plants increased their output, and consequently their employment, much faster of course than was true of the same firms in their older plants which were already large. In other words, shifting business away from the larger to the newer plants.

Actually, however, such movements of tire employment cannot be be studied from this particular chart which ends with 1936 and which includes only a sample of firms that have been in operation since 1923 and have reported employment each year. It shows neither firms that disappeared or new establishments that have started since 1923.

I cannot identify the individual firms on this chart, for the reports. are received in confidence. It so happens that both the large increases. and the large decreases on this particular chart were registered by relatively small companies. However, no generalization can be drawn from this one chart other than that it illustrates the diversity of movement among business enterprises. The Bureau of Labor Statistics is studying employment changes in large and small enterprises on a broad scale at present.

The CHAIRMAN. That suggests another question to my mind. Dr. Thorp, does this chart purport to indicate that each of these plants represented by a separate line is under separate ownership or control? There is nothing to indicate how many of these plants were owned by the same large company, for instance.

Dr. THORP. We have nothing to indicate that, as far as I know. Mr. DAVIS. Dr. Thorp, in some of our studies I think you probably find that contracts made by some of the rubber companies with the large mail order houses and chains resulted in the large increase of their trade, and the relative decrease of some of their competitors? Dr. THORP. I had intended here to introduce a discussion of conflicts which appear in the N. R. A. experience as between groups within industries, but I think rather than take any further time on that, if I may just file the report of the President's Committee of Industrial Analysis which lists a series of conflicts, that will perhaps save time. May I just file that for the record?

(The report referred to was marked "Exhibit No. 69" and is included in the appendix on p. 235.)

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