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The Columbia University Libraries reserve the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of the copyright law. Author: U.S. Federal Trade Commission Title: Report on tiie woolen rag trade. June 30, 1919 Place: Washington, D.C. Date: 1920 Q^^^Hl^-fn COLUMBIA UNIVERSITY LIBRARIES PRESERVATION DIVISION BIBLIOGRAPHIC MICROFORM TARGET MASTER NEGATIVE # ORIGINAL MATERIAL AS FILMED - EXISTING BIBLIOGRAPHIC RECORD _ - 360* 5Un343' U. S. Fcdcnil trade commission. ... Report on the Aypolcn ja^ .tiadt*. June 30, 1919. Wasliington, Govt. prirTt. off., 1920. 90 11. incl. tables, diagrs. 24r"'. At head of title: I'cdcral trade commission. "Tliif* report covers certain information obtained at the rcqnest of the War iiuUistrics board, for its nsc in regulating the prices of woolen rags. The preparation and issue of this report was authorized by resolution of the commission on June 30, 1919, and the report is therefore issued as of that date. The compilation of the data, which were already on file, and the preparation of the report was subsequent thereto." — p. 3. 1. \\jool trade and industry— U. S. 2. Rags. i. U. S. War indus- tries bojud. H. Title, III. Title: Woolen rag trade, Report on the. Librar}' of Congress — Copy 2, HD9909.R3U6 1920 20-26412 ' ijii.* yMKJi RESTRICTIONS ON USE: FILM SIZE: ?f)\im\ TECHNICAL MICROFORM DATA REDUCTION RATIO: QX IMAGE PLACEMENT: lA /ha) IB IIB DATE FILMED: ^-l^-9b INITIALS : % TRACKING # : M^^ 6tlZ? FILMED BY PRESERVATION RESOURCES. BETHLEHEM, PA. > CO .<^' 4;^ 00 en 3 3 =.m ?0 ^£ (/) ^ CDX ^-< COM ID O '^. *♦ > V 01 3 > CD 0-0 o m (DO OQ CO X < N X M -^: ^. :^> > 'V^ CP e^ ^^.^ O O 3 3 > Ul o 3 3 8 3 3 en O f"i^i^pi!K|l|? U 00 b ro io 00 ro In 1.0 mm 1.5 mm 2.0 mm ABCDEFGHIJKLMNOPQRSTUVWXYZ abcdefghi|klinnopqrstuvwi» ^* fcp '^ ^^ m o -o m -D oIIti > c CO I Tl ^ 0(/) 5 m O m c^ 4^ 01 3 CD 3 3 P If 3 C "5 ? 3 % ?^ c — \ < it I* 1^ 4^ mi-' ' I » M kP IIP 9 FEDERAL TRADE COMMISSION REPORT ON THE WOOLEN RAG TRADE JUNE SO. 1919 WASHINGTON GOVERNMENT PUNTING OFRCE 1920 Columbia Winittviitp in tfie Cttp of ^eto $orfe LIBRARY School of Business *BBi FEDERAL TRADE COMMISSION REPORT ' > f. ON THE WOOLEN RAG TRADE JUNE 30, 1919 WASHINGTON GOVERNMENT PRINTING OFFICE 1920 Utt m . t ■■ J >j in ^ i^r "*^ - - f • J ^ - • • •»' • crTv^ c^. ) ^u:^^.^^^^'^ ^ JuNB 30, 1919. ACKNOWLEDGMENT. f In the conduct of the investigation and the preparation of the report especial ac- knowledgment is made by the Commission to Mr. R. R. Loening of New York. 2 (I (*• i = II LETTER OF SUBMITTAL. FEDERAL TRADE COMMISSION. William B. Colveb, Chairman, John Franklin Fort. Victor Murdock. Houston Thompson. J. P. YoDiR, Secretary. June 30, 1919. To THE Congress of the United States: The Federal Trade Commission herewith submits a report on the Woolen Rag Trade. This report covers certain information obtained at the request of the War Industries Board, for its use in regulating the prices of woolen rags. The preparation and issue of this report was authorized by resolution of the Commission on June 30, 1919, and the report is therefore issued as of that date. The compilation of the data, which were already on file, and the preparation of the report was subsequent thereto. The abnormal demand for wool created by the war, coupled with a shortage of wool at points where it was available for manufacturers, made it necessar}' to increase the use of substitutes for raw wool. The most important available substitutes existed in the ''shoddy" or ''reworked wool fiber" derived from woolen rags and from trim- mings ("clips") produced in the cutting up of new woolen cloth for the manufacture of woolen garments. The Government, to assure itself a sufficient supply of wool for military purposes, on April 24, 1918, commandeered the 1918 clip of domestic wool, and later assumed a complete control of its distri- bution. As a result of such measures there was little wool left available for civilian use. The late summer of 1918 found manu- facturers of woolen cloth for civilian use in the position where, according to Government announcements, they would have to rely on "shoddy" or "reworked wool" for their principal supply of raw material. Thus woolen rags suddenly became the chief raw material in one of the leading industries. As a result, the Woolen Rag Trade, which involves the collection and preparation of woolen rags for the making of wool shoddy, acquired rapidly a great public importance, and there developed in the trade certain Conditions requiring immediate Governmental regulation in order to protect the general public welfare. This was especially the case with respect to prices. Current prices on leading and basic classes of woolen rags showed such advances as 300 per cent, 400 per cent, and almost 500 per cent over the year preceding the outbreak of the war in Europe. The War Industries Board, through its W^oolens Section, took action durmg July, 1918, to control prices and regulate the trade 3 4 LETTER OF SUBMITTAL. by promulgating its first list of maximum prices. At the same time it requested the Federal Trade Commission to undertake an investiga- tion of the whole rag situation, for guidance in futm-e action. This report embodies most of the information thus collected. After a statement of the relation of the manufacture of shoddy to the Woolen Kag Trade, the report gives a brief account of the develop- ment of that trade, describes the origin and kinds of commodities dealt in, and the nature of the different functions performed by the various dealers, the course of prices, the profits of dealers, and also presents a comprehensive classification of grades adapted to use in the trade. Price data furnished by the Woolens Section of the War Industries Board, and price information collected by the Commission's agents directly from the records of dealers, are presented together with a detailed discussion of the nature of the dijfferent price changes. While the prices of woolen rags and clips advanced to high levels in 1917, it appears that the dealers whose records were examined made a lower rate of profit during 1917 (the latest year for which such information was available) than in earlier years when prices were materially lower. Apparently, the reason for this was the increased investment required to handle rags when prices were high. The annual rate of "turnover'' (i. e., the relation of receipts from sales to investment) dropped from five times in 1915 to three in 1917. The increase in prices went chiefly to pay for the increased labor cost of collecting the rags, before they came into the hands of the sorters and graders who prepared them for sale to shoddy manufacturers. Detailed information on the expenses of operation, and the earnings of 12 of the principal firms engaged in the Woolen Kag Trade is also given. This information, gathered directly from the records by the Commission's accountants, covers transactions for the years 1916-1917 of firms which showed on their books a total investment in 1917 of about $5,750,000, and whose sales during 1917 amounted to about $18,500,000. A careful study on the classification of grades and names of used rags and clips was undertaken at the request of the Woolens Section for its use in making further regulations. The termination of the war made it unnecessary to continue Governmental control of the industry. Since, however, in its bearing on some of the problems continually encountered this material has considerable value to the trade at large, it is included in the report. A brief analysis is given in the report of the export trade on rags, and the effect of the prohibitions placed by the War Trade Board on such exports. LBTTEB OF SUBMITIIAL. § In conclusion it may be noted that while the situation which made the collection of all woolen rags (and clips) a matter of highest importance no longer exists, nevertheless, the trade would be benefited b}' an increased degree of standardization of its product. Respectfully, William B. Colver, Chairman, John Franklin Fort. Victor Murdock. Huston Thompson. .* f 4' TABLE OF CONTENTS. 1 . Introduction n 1. Origin of InveBtigation n 2. The woolen rag trade and its relation to shoddy (or reworked wool) manufacture X4 The shoddy (or reworked wool) industry 14 Development of the woolen rag trade 17 Origin and kinds of commodities dealt in by the woolen rag trade jj Industrial organization of the woolen i»g trade 19 3. Status of price fixing at time of Commission's investigation 22 II. The Character and Scope op the Commission's Investigation 24 1. Necessary lines of investigation 24 2. Character of records 25 3. Number And nature of firms examined 26 III. Information Collected by the Commission 27 1. Price information obtained 27 Published prices 27 Prices reported to the War Industries Board 29 Prices collected directly by the Commission 29 Discussion of the price information 31 2. Cost and earnings information obtained 37 Costs of operation 37 Relation of cost of operation to sales 40 Investment ,,,,,,. 40 Relation of net earnings to investment 41 Relation of sales to investment (annual rate of turnover) 42 Relation of annual rate of turnover to annual rate of earnings . . 42 3. Classification of grades, and names of used rags and clips 43 The confusion due to lack of definite and accepted standards. 43 The classification compiled by the Federal Trade Commission. 45 The application of a standard classification to the trading in ungraded rags and clips 4^ IV. Effect op the Export qp Wool Rags on the Domestic Rag Market. 50 V. Summary and Conclusions 52 LIST OF TABLES. Table 1. Prices of "Rough cloth -" and "Soft woolen" used rags and " Fine mer- chant tailor-" clips, 1904-1911 07 Table 2. Prices of "Rough cloth" and "Soft woolen-" rags and "Fine mer- chant tailor*' clips Jan., 1913-Mar., 1919 28 Table 3. Comparison of prices from different sources, 1917 and 1918 30 7 8 y TABLE OF CONTENTS. Table 4. Comparison of the prices of ''Blue serge" rags and ''Blue senre^' ^^' clips 191»-1918 * Table 5. Costs of operation of 9 firms 1914-1917 37 Table 6. Percentage relation of cost items to total cost of opemtion of 9 finns -'■''■'■4— x9x7 ............. ^_ Table 7. Costs of operation of 12 firms 1915-1917 3g Table 8. Percentage relation of cost items to total cost of operation (rf 1*2 finna J." J.U— iJ.Jf17 ............ '\ft Table 9. Relation of sales to cost of operation of 9 firaw 1914-1917 . . . . . ... 40 Table 10. Relation of sales to cost of operation of 12 firms 1915-1917 ... ] . . . . . . 40 Table 11 . Relation of net earnings to investment of 9 firms 1914-1917 . . * . . . . . 41 Table 12. Relation of net earnings to investment of 12 fiitna 1915-1917 ...... . . 41 Table 13. Relation of sales to investment of 9 firms 1914-1917 42 Table 14. Relation of sales to investment of 12 firms 1915-1917 42 Table 15. Relation of annual rate of turnover to annual rate of e^niings 42 Table 16. Comparison of "Skirted^' products obtained from a lot of " Rough cloth " with an expert's estimate of normal contents 47 Table 17. All products obtained from a sample lot of "Rough clothi'!!.. 48 Table 18. Comparison of graded products derived from a lot of ''Soft woolens^' with an expert's estimate of normal contents 4g Table 19. All products obtained from a sample lot of "Mixed softs" *....** 49 Table 20, Exports of woolen rags July 1, 1911-Sept 30, 1919 50 Table 21, Imports of woolen rags July, 1912-June, 1918 52 LIST OF CHARTS. Chart A. Actual prices of used woolen rags 3j Chart B. Relative prices of used woolen rags '!.!!]!!!!.!!!!!!" 32 Chart C. Actual prices of woolen clips 33 Chart D. Relative prices of woolen clips .!!"........[ 84 TABLE OF CONTENTS. 9 PgarA ExHisrr VII. Order of Price Fixing Committee of War Industries Board, Aug. 21, 1918, fixing maximum prices on woolen clips 5g ExHiBrr VIII. Order of Price Fixing Committee of War Industries Board, Aug. 22, 1918, fixing maximum prices on "Reworked wool or fiber'' (shoddy) 59 Exhibit IX. Published price quotations on woolen rags and clips, 1904-1911. . 60 Exhibit X. Published price quotations on woolen rags and clips, Jan 1913- Apr., 1919 : gj ExHiBir XI. Prices compiled from reports to War Industries Board made by rag dealers July-Sept., 1918 74 Exhibit XII. Prices compiled from information collected from the records of dealers by the Federal Trade Commission 75 Exhibit XIII. Classification of woolen rags compiled by the 'Federal Trade Commission «- LIST OF EXHIBITS. Exhibit I. Correspondence between War Industries Bovd and Boston Wool Trade, Apr. 27, 1918, relating to offer of stocks of wool to the Government 54 Exhibit II. Announcement of War Industries Board in the Official Bulletin, Sept. 13, 1918, on the need to conserve wool cloth ' 55 Exhibit III. Announcement of the War Industries Board in the Official Bulle- tin Nov. 5, 1918, in refutation of rumors of wool allocation for civilian needs 56 Exhibit IV. Order of Railroad Administration, in Official Bulletin, Aug. 19, 1918, directing prompt movement of woolen rags and shoddy ' 57 Exhibit V. Order issued July 12, 1918, by Woolen Rag and Fiber Adninistiutor of War Industries Board, fixing maximum prices on woolen rags, and requir- ing certain reports j.^ Exhibit VI. Order of Price Fixing Committee of War Industries Boaid, Aiif* 19, 1918, fixing maximum prices on woolen rags 55 REPORT OF THE FEDERAL TRADE COMMISSION ON THE WOOLEN RAG INDUSTRY. ■•■'-» . ■! % I. INTEODXTCTION. U Origin of investigation. The abnormal demand created by the war for wool for the uses of the Army, Navy, and Red Cross work, and the usual demand for wool for civilian use, coupled with a shortage of wool at points where it was available for manufacturers (due to difficulties of transport from the sources of production, and to the commandeering by foreign Govern- ments of wool of foreign origin usually available to the American mar- ket), had the effect of making new wool available to American mills both unusually scarce and high priced. It became necessary to use substitutes to meet the deficit in the supply of raw wool. The most important available substitute existed in the'* shoddy'' (or "reworked wool fiber") derived from used woolen rags, and from the trimmings C* clips") produced in the cutting up of new woolen cloth incident to the manxifaoture of woolen garments. The term ''rags" is often applied indiscriminately not only to used material but to new material as weU. In this report wherever a need exists for distinguishing between these two general classes, the term "used rags" will apply to Used or worn material, and "clips" to new or imwom material. 'On April 5, 1918, the Boston wool trade offered to the Government through the War Industries Board, all its unsold wools at market values as of that date. This offer was not accepted. On April 25, 1918, they offered to the Government all their imsold wool and tops included in the offering of April 5, and also all foreign wools bought since that date and not under the Government's option, on the fol- lowing terms: July 30, 1917, prices to be paid for all wool costing dealers July 30 prices or less. For all wool shown to have cost dealers '= price in excess of July 30 prices, the Government to pay 5 per . cent above cost on all grades, this total in no case to exceed ,.., April 5 prices. .1 1 1 On April 27, 1918, the Government accepted this offer and re- quested that other trade colters whose wools were offered be notified. (See Appendix, Exhibit I.) On May 20, 1918, the War Industries Board, through its Wool Division, promulgated the Government regulations for handling the wool clip of 1918, which assumed a com- plete control of its distribution. 11 12 REPOBT ON WOOLEN RAG TRADE. The taking of such steps was to assure a sufficient supply of wool for military purposes. The need was brought home to the coimtry at large, in the course of testimony given on August 7, before the Committee on Military Affairs of the United States Senate by Gen. Peyton C. March, Chief of Staff of the United States Army. He stated, incidental to the discussion of the question of uniforms for the new Army: '/Just to give one instance, take the mere question of new uniforms for this new Army. We must commandeer— and have done so— all of the wool of the United States; and have taken the wool of the Argentine. We are going to put the whole civil- ian population on shoddy for the next year, but you can not do this tlung offhand."^ J ^ J This statement received wide publicity in the public press. A month later the chairman of the War Iiwiustries Board in urging upon the coimtry the necessity for the conservation of wool made public a statement of the woolen section of that board that there was at that time no free wool available for civilian consumption. He issued a warning that it wouki be particularly difficult to renew when exhausted the then existing stocks of cloth and clothing. (See ex- tract from Official Bidletin, Sept. 13, 1918, reprinted in Appendix, Exhibit II.) The announcement then made that there was no free wool available for civilian alk)cation was repeated by the chairman of the War Industries Board in another statement published shortly prior to the signing of the Armistice (see extract from Official Bulletin, Nov. 6, 1918, reprinted in Appendix, Exhibit III), that no allotments of wool for civilian purposes could be considered for some time to come. Definite statement to this effect was made for the purpose of removing any uncertainty with respect to the seriousness of the situation and for the purpose of impressing upon the country as a whole the urgent necessity of the conserving of every pound of wool. Thus the late summer of 1918 found manufacturers of woolen cloth for civilian use in the position where, according to official Government announcements, they would have to rely on shoddy (reworked wool) obtained from woolen rags and clippings for their principal supply of raw material. This situation was reflected in the announcement of the Railroad Administration (see extract from Appendix, Exhibit IV), dated August 15, 1918, that it was prepared to issue promptly per- mits on shipments of woolen rags and shoddy and requiring the prompt acceptance and movement of such shipment on a parity with wool. In a short space of time woolen rags had become an essential new material. » Hearings before the Committee on MUitary Affairs, United States Senate, 65th Cong., 2d sess., vol. REPORT ON WOOLEN RAG TRADE. 13 As a result of such conditions, the woolen-rag trade, which in- volves the collection and preparation of woolen rags for the making of wool shoddy, acquired rapidly a public importance unprece- dented in its history. Coincident with this growth of importance, there developed many undesirable features of such a nature as to necessitate some immediate gove;-nmental regulation of the trade in order to prevent the increasing abuses from seriously affecting the gen- eral public welfare. Chief among such abuses was the rise of prices to heights which imposed undue burdens on the consuming public. Current prices on leading and basic classes of woolen rags as com- pared with the average price for the year preceding the commence- ment of the European war in 1914 showed such advances as 300, 400, and almost 500 per cent. The situation in July, 1918, was the more acute because a year previously, in the summer of 1917, leading men in the woolen-rag trade had sought to curb the rise of prices by means of a voluntary agreement between a substantial number of dealers. The losses incurred by those who observed the restrictions, and the profits derived by those who deliberately disregarded them, rendered the attempt so unsuccess- ful that it was abandoned early in 1918. From that time to the month of July transactions were wholly uncontrolled. Prices of some grades increased 50 per cent within the two or three months, and as much as 30 per cent within the 30 days, preceding the 10th of July, 1918. At that time the United States had in field and camp an Army of over 2,000,000 men and was preparing for an additional 2,000,000. The increasing importance of shoddy (or reworked wool), not only as a partial source of wool for military purposes, but also as practi- cally a complete substitute for raw wool for civihan use, rendered it imperative for the War Industries Board to take action to control the distribution as well as the prices for both woolen rags and shoddy. Preliminary steps to this end were taken July 12, 1918. The special precautions which were taken at this time for the conservation and safeguarding for use in this country of every pound and every scrap of wool are shown still further by the steps taken to prevent exportation. The War Trade Board had, a few months preceding, placed an embargo on exports of aU woolen rags with the exception of five grades for which there was little or no demand in this country on account of the very inferior quality of shoddy which could be made from them. But the stringency of the situation was such that a trade recommendation was made that the embargo be extended to cover these five grades. Accordingly, a short time after the taking over of the control of rags in this country by the Govern- ment, a complete embai^o was placed on the exportation of woolen rags (see p. 53). 14 KEPORT ON WOOLEN RAG TRADE. The general importance of establishing maximum prices and a control over the distribution of woolen rags and shoddy was con- firmed by the action of Great Britain. .A few days after the action taken by this country, Great Britain, according to cable reports from London dated July 17, 1918, took complete control of the rag and shoddy trades and shortly after, under date of July 25, issued an order of the Army Coimcil, through the Director of Raw Materials, fixing prices on woolen rags and shoddies as of market values on March 31, 1918. One of the steps taken by the War Industries Board to render effective its control of the woolen-rag trade and shoddy industry in this country was to request the Federal Trade Commission to under- take an investigation of the whole rag situation, for guidance in future action. The Comniission, accordingly, arranged to undertake the investigation and started the work early in September, 1918. 2. The woolen-rag trade and its relations to shoddy (or reworked wool) manufacture. . Since the main use of woolen rags handl(3d by the woolen-r«tg trade is for the manufacture of shoddy (or reworked wool), a brief description of that industry is necessary, before the character of the woolen-rag trade can be clearly set forth. The shoddy {or reworked wool) industry. — The raw material out of which wool shoddy is manufactured consists of used woolen rags ,of all kinds; of the trimmings and clippings and left-over scraps or pieces (called clips) of new material accumulating in tailoring and garment manufacturing establishments; and of the head and end pieces (headings), which are cut off at the textile mills, when a ^ 'piece" of cloth comes from the loom. Fabrics which are made partly of wool and partly of cotton are first treated by having the cotton carbonized out of them by a chemi- cal agent, such as sulphuric or hydrochloric acid, which affects the animal fiber but slightly if at all. They are then, together with the all-wool fabric, passed through machines known as ''pickers" and "garnetters," which imravel and "tease" out the cloth structure until it is reduced to a fiber. This fiber is adapted to similar pur- poses as raw (or "virgin") wool, except that the staple is shorter and the resultant wool in most instances is in a dyed state. The process was originated and developed between the years 1810 and 1820 in Great Britain. While "shoddy" is its most common name, the product is also known by other names. One of them, "substitute wool," is clearly a misnomer, for the commodity is wool. It is, in reality, a substitute for new wool, being actually woole^ cloth reconverted into its unmanufactured state. Names for it more descriptive than "shoddy" are "reworked wool," "recovered wool," and "reclaimed wool." REPORT ON WOOLEN RAG TRADE. 15 As raw material in the manufacture of woolen cloths reworked wool is used precisely as new wool is used. It is not customary to use shoddy alone in the manufacture of cloth, but it is blended with new wool, wool noils and flocks, and new wool waste obtained during the manufacture of woolen textiles. It is generally used in an ad- mixture with new wool in varying percentages, depending upon the quahty and texture of the cloth to be produced. It can be used in the manufactiu-e of all goods made with wool with the exception of worsted. It is more commonly used, however, in the manufacture of heavy material such as blankets, overcoating, heavy suitings, and also in cheap suitings, irrespective of weight, particularly where cotton is used in connection with wool. Materials made with re- worked wool are stated to be invariably harder and stiffer in texture than those made solely of new wool. Its judicious use in connec- tion with new wool has often resulted in the production of cloth which is of as good a texture as much of that made entirely of new wool and is also fuUy as serviceable. It is possible for cloth made with a suitable admixture of high grade shoddy to be preferable to cloth made entirely of a poor quality of new wool. As is evidenced by the statistics of shoddy manufacture, a large part of the woolen clothing worn by the general pubUc is made of materials which in- clude shoddy to some extent. The importance of shoddy to this country at the time this investigation was instituted can be appre- ciated best when it is realized that the War Industiies Board had arranged specifications calling for the use of 50 per cent reworked and 50 per cent new wool in the manufacture of many of the woolen materials then being contracted for to be supplied to the Govern- ment for the use of the Army. In addition the War Industries Board had restricted the allotment of new wool to manufacturers to such an extent as to necessitate the use of shoddy in greatly in- creased proportions in the manufacture of aU woolen materials for civilian consumption throughout the nation. It was about the year 1850 that the manufacture of shoddy (or reworked wool) first came into use in the United States. That was some 25 or 30 years after its origin in Great Britain. It appears to have had a ready reception, for in the year 1859 there had been es- tablished in this coimtry some 30 shoddy producing estabfishments valued, according to data of the time, at approximately $400,000. From that period on various mills engaged in the manufacture of woolens procured machines for making shoddy (or reworked wool) with a view of using the product in their respective mills. To-day it is estimated that about half of the shoddy (or reworked wool) used is made by plants engaged solely in its manufactiu'e and half by woolen mills which produce for themselves the shoddy which they have occasion to use. 16 REPORT ON WOOLEN RAG TRADE. According to the United States Census of Manufactures for 1914 (the latest figures available) there were 84,836,759 pounds of shoddy- manufactured in the United States in 1914. Of this, 40,787,349 pounds were reported to have been produced for their own con- sumption, 893,373 pounds for sale by establishments engaged in wool manufactures, and 43,156,037 pounds by estabhshments pro- ducing it solely for sale. To make the shoddy a total of 1 19,450,978 pounds of used rags and cHppings was required. During the five- year period 1909-1914, both the quantity of shoddy made and of rags used increased 14 per cent. "Riere were 64 establishments manufactiuing wool shoddy for sale, using the services of 2,391 per- sons. The value of products was stated to be $7,706,843, of which $2,406,940 was the value added by manufacture (value of products less cost of materials). Of the total cost of materials ($5,299,903) rags and cHppings (amounting to 57,367,962 poimds) formed about 60 per cent. During the five year period 190.9-1914, there had been an increase in the quantity used of 32 per cent and its total value had increased 17 per cent. On the basis of certain reports obtained by the United States Cen- sus Bureau from shoddy pickers, for the years 1915, 1916, and 1917, the total production of wool shoddy in the United* States for those years is estimated as follows: Pounds. 1915 168,000,000 1916 160,000,000 1917 184,000,000 The function of the shoddy industry to-day consists in supplying to the woolen manufacturer a raw material at a less cost than new wool and in a state to adequately serve the precise piu-pose for which he desires to use it. As a matter of practical manufactiu'ing a woolen mill can, by using certain colored shoddy, save itself the expense of dyeing, which would have to be incurred with new wool. A high degree of technical experience is needed in the economical production of shoddy in special grades required for special purposes. It involves the determination as to how the grade and shade of shoddy desired can be best manufactured, if at all, out of particular grades of rags, clips, or headings available. By far the largest quantity of raw material obtained for conversion into shoddy is that derived from "new clippings" and old rags. In short, there would be no shoddy industry at all were it not for the available supply of both new and old rags which for centuries had been regarded as waste. The in- dustry is, therefore, dependent on the woolen rag trade for its prin- cipal raw material, furnished in the form best adapted to its manu- facturing needs. REPORT ON WOOLEl^ RAG TRADE. 17 Development erf woolen rag trade. — ^At the time when the shoddy in- dustry was first established, shoddy manufacturers generally pro- cured their woolen-rag materials direct from the peddlers and junk- men who collected it and from the places where tailoring clippings were produced. Sorting and grading of rags was then part of the shoddy manufacturers' business, and not of the business of the col- lector. To-day, this work has become so extensive, the demands for the material have become so large, and the refinements of grading have become so nimierous, that these functions have been joined to that of collection, and have become a part of the woolen-rag trade. Authoritative statistics are not available showing the present ex- tent of the woolen-rag trade. The census of 1910 (Vol. IV, Occupa- tion Statistics p. 422) listed 1,975 rag dealers (including also rag ped- dlers and pickers, and 1,678 rag sorters). No distinction was made between the handlers of woolen rags and those handling other fabrics. On the basis of the reports obtained by the Census Bureau from shoddy pickers, the quantity of woolen rags necessary to make the quantity of shoddy production stated above is estimated as follows: Pounds. 1915 225,000,000 1916 215,000,000 1917 248,000,000 In other words, it takes about one and one-third pounds of rags to make a pound of shoddy. Since all the work has to be done by hand the collection, sorting, and handling of about 250,000,000 poimds of woolen material, par- ticularly as in the case of new rags where the pieces are f requentl}' but an inch or two square, calls for much human labor. To those miac- quainted with the complicated gradings which have been developed in the growth of the treatment of woolen rags in preparation for conversion into shoddy, the scope of the woolen-rag trade to-day ap- pears nothing short of amazing. It is essential to an understanding of the complex character of the present trade in woolen rags to take into account the various sources and kinds of commodities in whicli it deals. Origin and hinds oj commodities dealt in hy tJie woolen rag trade. — The general source of supply of all used woolen materials throughout the United States is the heterogeneous collection of old garments, etc., collected by both the country and the cit}' peddler and disposed of by him to the junkmen throughout the country. This product has been given the general trading designation of ''Mixed country Tags." It is the elementary stock from which are derived the broad classifications into which all old woolen rags are divided. The stand- ard price of ''Mixed country rags" at the beginning of 1918 was 2 141957—20 2 18 KEPORT ON WOOLEN RAG TRADE. cents a pound. The collection consists of cotton as well as woolen rags, rubberized materials, and kindred products. The percentage of woolen rags which is obtained on the average out of 100 pounds of ''Mixed country rags" is fairly definite but varies somewhat with the section of the country in which the rags are gathered. Th<' percent- age of woolen materials ranges usually in the neighborhood of 20-30 per cent of the total weight of ''Mixed country rags." All used woolen materials are sorted first into two principal classifications: (1) Soft woolen materials, usually designated as ''Soft woolens'' or "Mixed softs," which consist of knitted materials, serges, and merinos, being chiefly clothing worn by women. (2) Hard woolen rags, usually termed "Rough cloth," which con- sist of materials used in men's wear, principally worsteds. These two classifications are further subjected to extensive subclassifica- tion and grading. In addition to these two principal classifications there are derived from "Mixed country rags," five classifications of mmor importance, which are not subjected to the extensive sorting and grading which takes place with respect to "Soft woolens" and "Rough cloth": Such classifications are "Carpets," "Felts " ' 'Haircloths, " ' 'Linseys, " and ' 'Seams. " New woolen materials, as ah-eady stated, are mainly divided into "clippings," which comprise remnants and i)ieces derived from the cutting tables in manufacturing and tailoring establishments, and "headings," which are the head and end pieces which come from mills manufacturing woolen piece goods. " Clippings " far exceed "headings "'in importance. The two general divisions of clippings are "Ungraded clips," and "Graded clips." "Ungraded clips" are roughly divided into mixed cuttings of woolen and cotton materials, cuttings obtamed from makers of men's wear, cuttings obtained from makers of women's wear, cuttings from materials used for upholster- ing carriages and automobiles, and cuttings from felts. "Graded clips" comprise as many divisions and subdivisions as there are kinds and shades of woolen materials in existence. Ungraded headings are first sold in the state originally gathered. After they come into the hands of dealers they are usually mixed with clippings of the same sorts of materials which the dealer has on hand and are graded with them. While there are but a few primary general classifications, three of them, "Soft woolens" and "Rough cloth" rags and "Ungraded clips," are subject to many further subdivisions. Thus one dealer who sold to shoddy manufacturers was found to carry 175 grades on his list, another 118, the price-fixing committee of the War Industries Board, in its price regulations issued August 19, 1918, listed 114 grades, and in the classification prepared by the Federal Trade Com- mission for the War Industries Board and revised in cooperation with REPORT ON WOOLEN RAG TRADE. 19 it, there appear about 570 grades. To one unfamiliar with the trade it is almost inconceivable that there should be so many grades of woolen materials commonly dealt in as is actually the case. Not only are there a large number of grades but many of the gi-ades have two or more designations. The result of the absence of any standard system of grades and nomenclature is that many dealers do not recog- nize material of the same grade under its various names, and that the same name is confusedly applied to two or more grades. IndustrM organizatwn of woolen-rag trade.-~When classified along broad lines the various kinds of dealers can be described roughly as— (1) The "collector" or "peddler", who gathers the raw material of the trade. (2) The "sorter", who is frequently also a junkman, and who sorts the material into primary classifications. (3) The "grader", who subdivides the primary classifications more finely than the sorter. But the woolen-rag trade is one where the different types of oper- ators or dealers are not clearly defined at any stage of the handling which woolen rags (including under this term both used rags and clips) go through in the course of being collected and prepared for manufacture into shoddy. Many of those in the business perform two or more functions with respect to the many different materials which they handle, while there are at the same time also in the busi- ness many who handle but a limited or special class of material and may perform only one, or, at most, two functions. The steps through which both used and unused materials go in the logical course of their handling are practically the same. The details of handling, however, differ because of the innate character of the material. "Used rags" are composed of worn, faded, dirty materials and come frequently in large pieces. "Clips" consist prunarily of small trim- mings, edges, scraps of material-^the residue of the cutting-table operations— are fresh and comparatively clean, and by reason of their unworn condition and the brightness of their colors constitute a com- modity which it is economically worth while to subject to more care- ful grading than used rags. From the time that a rag, whether used rag or clip, is collected to the time when it is manufactured into shoddy it passes generally through four stages, each of which may have been reached through the activities of a dealer engaged solely in giving rags that particular treatment, or it may be that one dealer may have performed at his plant two or all of the three handlings occurring after its collection. In order that this may be understood readily, the handling of used rags and clips will each be traced briefly. The first stage through which the used rags pass is that of col- lection by men popularly known as the "ragman", the "old clothes man" or the "cash-clothes man." In the trade they are generaUy 20 REPORT ON WOOLEN RAG TRADE. known as the peddler or collector. It is more true of the collection of woolen rags than of any other phase of their handling that this step is handled almost entirely by dealers who perform but one of the several functions in the trade. The second stage through which the used rags pass is tliat which is furnished by the junkman who purchases from the peddler. His task is to divide the woolen materials which he accumulates into the two principal classifications, ''Soft woolens" and ''Rough cloth, " and the minor classes of "Carpets," "Felts," "Haircloths," "Linseys," and "Seams." The "Soft woolens" are generally designated as "Mixed softs" and the standard grade thereof is known as "Best mixed softs" — in so far as there can be said to be any common stand- ard or basis used by the trade for pricing purposes. "Rough cloth" is the trade name for what might be called "hard" woolen rags, when in the condition which the jimk man usually handles them, that is, the condition in which they are purchased from the peddler. "Rough cloth" consists of old clothes worn by men and boys — coats, vests, trousers, overcoats, caps — in short, all outer garments mad<5 of wool. When these garments have had ripped from them all cotton cloth padding, lining, and buttons with which they are made up, they are designated in the rag trade as "Skirted cloth." It so happens in the collection of rags that many pieces of woolen fabric will be collected which have no other material attached. Such material is slightly more valuable than the "Rough cloth." Accordmgly a peddler may collect and sort out those pieces, and sell them sepa- rately. But generally speaking, "sku-ted" cloth in the woolen rag trade is obtained from "Rough cloth" by the ripping and tearing-ofF labor of the junkman. The third stage through which "Soft woolens" and "Hard clotlis" pass consists in being sorted into divisions based on the fabrics of which the rags are made or on their colors, or both. When bales of "Mixed softs" rags have been re-sorted or graded and their contents made into bales of straight white "Soft woolens," or "Red knits" or "Light serge" or "Coarse dark merinos," etc., they become bales of graded rags. This third stage is handled variously by dealers known aa sorters or graders. The junkman when dividing the woolen rags into the primary classifications rarely performs the tei^hnical operation known in the woolen rag trade as "sorting". If, however, he is a "big junkey," he may find it profitable to "skim" his rags with a view to selling one or two grades separately because of the increased price which such grades command. But usually, it is principally the sorter who in the first instance divides "Rough cloth" and "Soft woolens" into grades. It is to be noted next that it is the invariable result that such first sorting does not produce anything like a pure REPORT ON WOOLEN RAG TRADE. 21 grade. Where the demand, therefore, of the shoddy producer is for a bale of rags containing as far as practicable only the particular fabric, and, in addition perhaps, the particular shade of that fabric which he desires to turn into shoddy, a regrading of many bales is required to fill the order. This last function is generally known strictly as "grading" in contradistinction to the function previously described under the term of "sorting". These two functions are per- formed in some cases by the same dealer and in other cases by dif- ferent dealers. The operation of sorting is one which is handled with greater or less care depending upon the character of the demand of the dealer's usual customers, or the specific requirements of a particular order. The business of grading is a more carefully han- dled one than that of sorting, requiring more expert labor and the results produced are of as high a standard as the individual dealer desires to attain — or maintain. They depend necessarily upon tha grade of article demanded and the price paid for it by the purchaser. This function of the business is probably the most valuable from an economic standpoint. It can be said correctly that it rests in the hands of a group of dealers whose business can be regarded as the most firmly established of any in the woolen-rag trade and who are regarded as the most reliable element in the market. Particularly amongst those dealers who limit their business solely to grading and regrading and especially those dealing in clips solely, will be found the leading types of business men engaged in the trade. It should be added, however, that the mere fact that a woolen-rag dealer is in this class does not signify that his methods of doing business are necessarily any different, or any more reliable than those of the other three classes of dealers. The grader of old or new rags, or both, where he is a large dealer, invariably performs also the functions of the sorter; but in the trade he is classed as a grader. It is to be noted that the term "packer" is also currently used to designate this class of dealer. In so far as it may be regarded as subject to control by any one class of dealers, the grader rules the trade. The industrial organization of the trade presents the anomaly of a trade which has associations of dealers and yet, which considered as a whole, and in comparison with other industries, must be classed as an unorganized trade. For while there are two organizations of influence in existence they represent only a limited, though commer- cially powerful, class of dealers in the woolen-rag trade. This is a natural situation, readily enough understood when the general make- up of the trade is considered. The great number of collectors and of junkmen, both large and small, are all of them dealers in woolen rags, but the dealings of each are so small and their distribution throughout the country so wide, that it would be almost a physical impossibility to organize and control them. Then there is the large 22 KEPORT ON WOOLEN RAG TRADE. iiitormodiate class of the sorters of both new rags (clips) and old rags, whose business is of such small size, of so shifting and uncertahi a character, and so widely distributed, as to make them difficult to organize. The sorter is virtually the connecting link between the original producer of the woolen rag (i. e., the collector or junkman) and the ultimate producer — the grader — ^who is the head and back- bone of the trade. It is among the graders that the two associa- tions exist. And while not having, nor exercising, control of the industr}' as a whole, they do exercise some leadership. There are two well known associations: the National Association of Waste Material Dealers which has special sections composed of wool- en rag, wool waste, and shoddy dealers, with headquarters in Boston, Mass., and the Wool Stock Graders' Association, an organization developed after the United States went into the war. Both of these organizations had war service committees, composed exclusively of rag dealers, and comprised the main nucleus in cooperation with which the Government took up war matters pertaining to this trade. These two organizations undertook also to keep their members ad- vised of developments vitally affecting the trade; and from time to time they also presented to Government representatives recommen- dations of measures which they thought should be put into effect. At the same time, groups independent of these associations formed themselves at various times, temporarily, with a view to taking up trade matters, with respect to which, in their opinion, special action was called for. 3. Status of price fixing at time of Commission's investigation. In the summer of 1917 an informal agreement was entered into between a substantial number of dealers, mostly graders, which operated by means of voluntary regulations to restrict prices of old rags. These regulations were accepted and lived up to by the trade in general for a number of months. Toward the end of 1917, how- ever, they began to be disregarded by the dealers in mixed rags who began to refuse to sell the basic grades — ''Rough cloth" and 'Mixed softs" — at the prices which had been fixed by agreement. The result was, that the graders could not contiime to work up the rags and dispose of them at the prices fixed for graded rags with the estimated profit to the graders. In consequence this voluntary attempt to regulate the trade was abandoned early in 1918. For some months thereafter prices were wholly inicurbed and many grave trade abuses flourished unchecked. A brief reference has already been made to the serious situation which this condition of affairs in the woolen-rag trade was causing on account of the scarcity of new wool available for military as well as civilian clothing. It is now desirable to go further into detail, in REPORT ON WOOLEN RAG TRADE. 23 order to explain fully the activities of the War Industries Board, in its price regulation of the trade. Both old woolen rags and clips showed violent rises in price in tlie one month culminating around July 10, 1918. The leading grade of soft woolens, ''Mixed softs," had gone up in price from 18 to 2'2 cents — an increase of 22 per cent. I'nsorted ''hard" woolens, ' Rough cloth," had advanced in price from about 7\ to 91 cents — about 30 per cent. The graded stocks of old rags hi this period of a few weeks showed advances varying from 10 to 30 per cent, bringing them to top prices which had never been reached before. With respect to new rags the situation was even more acute. The leading class of ungraded new clips, "Fine merchant tailor" had gone up from the neighborhood of 28 cents to a quoted range of 34 to 36 cents with published rumors of sales at 40 cents. The leading graded stock, "Blue worsted" had risen in price from about 40, and 45 cents, to 60 cents. Khaki clips were largely owned by the Government and thus taken out of the rag market. But there were some grades coming into the market from manufac- turers of officers' uniforms, and sales of the best grade khaki worsted were reported as made at 80 cents and more per pound. The case of khaki worsted furnishes, no doubt, the best illustra- tion of what was possible in the way of unprecedented high prices in woolen rags. Since the outbreak of the war khaki clips had been in unusual demand for manufacture into khaki shoddy. For some months, however, prices of "Blue worsted," 'Black worsted," and "Blue serges," and "Black serges," the leading grades for civilian consumption, had been keeping pace with the advance of khaki worsted. Within the year each had risen in the neighborhood of 100 per cent, of which approximately 50 per cent took place within the 60 days prior to July 10. Details of the situation at this time are to be found in the columns of the Textile World Journal, the Waste Trade Journal and the Commercial Bulletin (Boston). Because of the events which had led up to the taking over from private control of the Base Sorting Plant by the Quartermaster Corps of the United States Army, and the extreme demoralization and distrust prevailing in the rag trade at the time, the War Industries Board, following some informal conferences with leading dealers, took preliminary action in regulating prices on July 12, 1918. This action was in the form of an announcement signed by A. L. Gifford, Woolen Rag and Fiber Administrator, statmg that in accordance with the authority given him by the War Industries Board, it was his intention " to fix and enforce maximum prices on rags entering into the manufacture of woolen fabrics. '* He stated that announce- ment of the maximum prices would be delayed, and directed that 24 KEPORT ON WOOLEN RAG TRADE. "until further notice no dealer make any sales of rags at prices in excess of those quoted in the last issue of the recognized waste trade publications previous to July 8, 1918/^ He also notified each rag grader and producer (or retailer) of rags to at once mail him a record of all sales during the week ending at noon, vSaturday, July 13, 1918. Such statement had to include the names of the purchasers, the quantity of each grade, and the price at which each was sold. The full text of the announcement will be found in the Appendix (Ex- hibit V). The names of the ^'recognized waste-trade' publications" were not stated, and there was some uncertainty in the trade as to the exact maximum prices which were thus specifically established. Never- theless, the action amounted to a temporary ' 'pegging" of prices, within certain fairly well recognized limits. On August 19, 1918, the Price-fixing Committee of the War Indus- tries Board fixed prices on a listed nimiber of grades of old woolen rags. The text of the announcement appears in the Appendix (Exhibit VI). On August 21, 1918, the Price-fixing Committee took similar action with respect to new woolen clips (Exhibit VII) , and on August 22, 1918, on a list of shoddies made from grades of woolen rags specified (Exhibit VIII) . Each of these sets of prices was made effective until October 1, 1918, and thereafter ''pending the compila- tion of data which is to be furnished by the Federal Tradt* Commis- sion. " It should be noted in connection with the prices fixed on new materials that the announcement stated that they were "based on high standard of grading and should not be paid for inferior packing.' ' On the day following the publication of the prices fixed on old rags, the Rag Administrator annoimced that on all grades of old woolen rags not contained in the schedule, the temporary prices as of July 8 (fixed in his announcement of July 13) must be regarded as constituting maximum prices. It should be specially noted that no such annoimcement was made with reference to the prices promul- gated on new rags and shoddies on August 21 and 22. Subsequently, the Woolen Rag Administrator construed all three promulgations of regulations and prices to preclude dealers in the trade from carrying on transactions in any of the commodities not listed among those on which maximum prices had been fixed. II. THE CHARACTER AND SCOPE OF THE COMMISSION'S INVESTIGATION. 1. Necessary lines of investigation. At various conferences held between the Commission and the War Industries Board, following the request for an investigation of the woolen-rag situation, it was determined that the fundamental infor- mation to be sought was the extent to which the very marked rise in REPORT ON WOOLEN RAG TRADE. 25 prices during the preceding few months was justified, if at all, by basic conditions, and to what extent it was unjustified and might be checked artificially without injustice to the trade, and yet allow to dealers profits sufficient to stimulate maximum production. Since the woolen-rag trade consists in the grading, regrading and subgrading of used rags, clippings and headings, with a view to meet- ing the requirements of the shoddy manufacturer, it was also necessary to obtain sufficient information on the character and needs of the shoddy industry to enable the War Industries Board to deal with the various problems presented. Adequate consideration of the general problem involved some study of the history of the industry as well as a detailed examination of its present operation; of the character, nature and quantity of its raw material; of the characteristics of the dealers, as well as of the class of labor engaged in carrying on the industry; and of those methods and customs of the trade which fundamentally affect its conduct and influence prices. It was apparent at the commencement of the work that some ade- quate determination of what were the grades which went to make up the commodities in which the industry dealt, and a standardization of their nomenclature, constituted a fundamental prerequisite to the making of recommendations which could be used as a basis for uni- form regulation. Accordingly, a complete survey was made of all grades of materi- als in current use, and the extent to which each was dealt in. At- tention was also given to the determination of a definite uniform nomenclature which should be established for use in the regulation of the industry. The lines which the investigation followed after the requisite pre- liminary work on classification and standardization consisted chiefly in procuring actual figures directly from the books of dealers in the industry on the actual prices at which the leading commodities were originally acquired by the dealer; how many times they changed hands, and with what variation in price, prior to reaching the ulti- mate consumer ; the prices at which they were finally sold ; and the per- centages of profit made by the dealers investigated. 2. Character of records. A general survey was first made of the various classes of dealers with a view to ascertaining what information was procurable from the records kept by them. It was found that the condition of the records of dealers varied from no books at all (paper-slip records of daily transactions being made, which were lost or torn up) to com- plete sets of books such as are kept by first-class mercantile or manu- facturing concerns. Only a small percentage of dealers of the total 26 REPORT ON WOOLEN RAG TRADE. who were visited were found to have kept records sufficiently ac- curate and intelligible for use in the investigation. It should be borne in mind that this statement refers to the trade as a whole, in which are included the small peddler or collector, the junkman, the sorter, and the grader. In general, no records were available for the first two classes. The records of the last two classes were found to be in some instances very good and in others very bad. If the business done had been actually recorded it was easily i>ossible to obtain the in- formation desired, even though the books might not, from an account- ing standpoint, have been well kept. In most instances, however, a full set of books was not kept. The result was, that only a small proportion of the dealers, primarily those conducting the larger busi- nesses in the industry, particularly in the class of graders, were found to possess adequate records. A further examination, however, showed that through the investigation of a selecte I 4 4 I 2i| lOi 11" 8 65 ^ Ix)w. High. Low. 8f 9 8 5 5 5 4 10 U 12 12 12 11^ 81 8 7 8 9 11 10 7 *• I 5 The price information used for the second period (January, 1913- December, 1918) was compiled from trade paper sources by the Price Section, Division of Planning and Statistics, of the War In- dustries Board, as far as August, 1918, and brought down through March, 1919, by the Federal Trade Commission. Quarterly and yearly prices shown for the two primary classifications of old (used) rags, and 28 REPOKT ON WOOLEN RAG TRADE. one of clips, together with the corresponding index nnmber or relative price, based on the average monthly price for July 1, 1913- June 30, 1914, are as follows: Table 2.— Prices of^^Rough cloth*' and ^^Soft. wooUri'* mgs and ^'Fine merchant tuilor*^ clips, January, 191.i~March. 1919. January- March . April-Juno Juiy-Septomber — Oetober-Decem ber . Year 1913. January- March April-June July-September — October-December . Year 1914. January- March . April- Jime July-September — October-December. Year 1915. January-March April-Juno July- September October-December . Year 1916. Rough cloth. Actual Index prices No. (base per =1.62 pound. cents). Cents. 1.79 1. 1. 1. .60 .50 .58 110 99 93 98 1.62 100 1.70 1.70 1.56 2.63 105 105 96 162 1.90 117 4.00 2.92 4.67 6.14 242 180 288 379 Soft woolens (best mixed). Actual ' Index prices No. (base Fine merchant tailor clip;*. per pound. Ctnta. 6.65 .5.54 5.14 5.31 5.66 5.54 5.38 4.94 6.54 = 5.34 cents). 125 104 96 99 106 5.60 4.43 273 8.86 6.11 5.09 6.13 548 377 314 378 8.67 7.71 10.21 12. 17 9.69 16.21 12.30 11.42 13.13 6.55 404 January- March . April-Junc July-September October- December. Year 1917 5.09 4.96 5.38 5.34 13.26 314 306 332 330 12.33 12.67 13.42 13.71 104 101 93 122 105 162 144 191 228 181 304 230 214 246 248 231 237 251 257 January-March . April- June July-Septomlx>r — October-December. 1918. Year. 5.19 5.46 6.96 8.75 7.79 7.24 January- March . 1919. 6.75 320 13.03 244 Actual I Index prices j No. (base per « 7.69 pound. cents). CtnlM. 7.25 7.88 6.80 7.83 94 102 88 102 ,44 97 7.83 8.29 7.75 9.00 102 108 101 107 8.22 107 11.. 50 12. 50 14.08 17.00 150 163 183 221 13. 179 35.00 21.00 19.50 20. 67 325 273 254 269 21.54 21.33 20.17 31.50 32.83 21.46 280 277 262 280 297 279 337 430 .540 480 14.00 17.42 21.50 19.62 446 18.14 416 16.75 262 326 403 367 337 313 'i,'). 67 28. 33 35. 83 36.33 334 368 465 471 31.54 410 2!». 67 387 The prices during 1904-1918, shown in the two foregoing tables indicate that the general trend for old (used) rags was rising in 1904 and reached a high level in 1905 and 1906. A fall then set in which continued through 1911. Prices for 1912 were not available, but in 1913 the level was below that of 1911. Prices then began to rise, the highest point reached being in 1918. The price move- ments of cHps was in general similar, except that the first rise cul- 4> j^ REPORT ON WOOLEN RAG TRADE. 29 minated in 1907, a year later than the case of old (used) rags, and there was no marked decline until 1909. Detailed monthly, quar- terly, and yearly prices for 7 grades of used rags and 6 of chps will be found in the Appendix (Exhibit X) . Prices re/ported to the War Industries Board. — The prices obtained by the War Industries Board were reported to it by dealers on signed (and sometimes sworn) weekly reports, which set forth their transac- tions during the specified periods. From its inception the Woolen Rag Branch of the Woolen Section of the War Industries Board required weekly reports to be made it by dealers in the trade, showing the quantities traded in and the prices of all sales and purchases made by all dealers, as well as their stocks on hand. . In cooperation with the Federal Trade Commission's force, these data were transcribed, examined, subjected to verifica- tion and special explanation, and then coordinated and analyzed for the purpose of determining high and low prices and also the general prevailing price of each of the commodities inquired into. A statement which summarizes for 96 grades the price informa- tion derived from these reports, for the months of July, August, and September, 1918, appears in the Appendix (Exhibit XI). The purpose of this work was to furnish the information necessary lor a proposed revision of the then existing maximum prices. This statement was drawn up to show the high and low price of each of the grades named in the maximum price lists; also, the ''generally prevailing price'' during the two months or so covered by the report. For the securing of the generally prevailing price it was necessary to study special transcripts made for this purpose of reported prices, as well as the number of transactions and the pounds of rags covered by them. The statement also shows the maximum prices in effect, and a direct comparison between them and the reported prices. Prices collected directly hy the Commission. — Price information was taken directly from the books of about 40 dealers by accountants and other representatives of the Commission covering transactions for a period of 10 days subsequent to each of six specific dates. These were January 1 and July 1, in 1917, and January 1, April 1, July 1, and October 1, in 1918. Prices at these dates were taken for 30 grades of old (used) rags and 16 grades of clips. The prices were taken directly from the sales and purchase books, together with the quantity involved in each transaction. A statement summarizing the prices obtained in this manner will be found in the Appendix (Exhibit XII). The following table presents in comparative form the prices for 11 grades from the three sources, i. e., published prices, prices le- ported by dealers to the War Industries Board, and prices collected from dealers' records by the Federal Trade Commission agents. The 30 REPORT ON WOOLEN RAG TRADE. prices from the last two sources are included under the caption "Prices collected by the Federal Trade Commission," with a ft»ot- note to indicate those reported to the War Industries Board. Table Z.— Comparison o/prwesfrom (liferent sources, 1917 and 191 f<: [All prices shown in cents per pound.] Date. Rough cloth rags. Prices from pub- lished sources. January, 1917 July, 1917 January, 1918 April, 1918 July,1918 October, 1918 July-September, 1918 5.63 3,38 5.50 5.88 8.50 8.75 8.75 Prices col- lected by Federal Trade Com- mission. 5.25 5.00 5. 25 5.88 8.00 8.88 Light cloth rags. Prices from pub- lished sources. 9.00 9.50 9.50 8.50 13.12 13.12 13.12 Prices lecttd ' V"«es Light worsted rags. Skirted delaines rags. by Federal Trade Com- mission. 5.00 5. 75 9.50 9.50 11.13 13.50 1 12. 75 from pub- lished sources. 13. 25 15. 50 15.00 16.00 22.50 22.50 22.50 Prices col- lected Federal Trade Com- mission. Prices from pub- lished sources. Prices col- le«?ted I by Federal Trade \ Com- ; mission. 11.00 11.75 14.38 17.25 i 19. 50 I 22.25 121.50 1. 25 1,06 1.13 4.13 4.t5 e.i>o 5.50 4.00 3.38 3.00 4.00. .5.00 6.00 lo.oa Date. January, 1917 July, 1917 January, 1918 April, 1918 July, 1918 October, 1918 July-September, 1918 Mixed soft rags. Blue serge rags. Fine merchant tailor clips. Blafk worsted clips. Prices from pub- lished sources. 13. 25 13.25 14.00 15.75 21.00 21.50 21.. 50 Prices col- lected by Federal Trade Com- mission. 12.00 12.25 12.50 14.88 19. 75 22.75 20.50 Prices from pub- lished sources. 18.50 16. 50 16.50 16.50 21.50 21.50 21.50 Prices col- lected by Federal Trade Com- mission. 16.25 13.25 16.00 17.25 20.63 21.63 1 20. 75 Prices from pub- lished sources. 23.50 21. 50 25.00 26.00 33.00 38.00 35.83 Prices col- lected by Federal Trade Com- mission. Prices from pub lishfii sources. 19.00 21.00 26.50 27.50 38. 50 37.00 139.00 3A. m 33. 75 4;<.75 43. 75 .52. 00 65. 00 58.17 Prices col- lected Fe Chart A shows that, as far as price levels are concerned, '^ Rough cloth" is the lowest-priced grade and ''Blue serge" the highest. Chart B shows, however, as far as relative advance of pricc^s is con- cerned, that prices of "Rough cloth" have advanced far out of pro- o o o o O 'O o »o ^0 «o «o Tt c c o o o o o o ^ INDEX NUMBEf 1 , ,^ o z o to 0) 5 - — -— . •~-a^ - ^- T "7 ^_ „ t"- =;r— j = -^ ..— -- -■ i _ L, Q ? m i — ^^""^ ^ — O J 1 — ■ ' ^»> "J — •<=a. J-i^ '""'-^ s: ►*•■•— "~"^>^ \ z \ -**" ^ o { f 9 » (/O — 1— t r"^ ^ < , ^ *- Y . k> < ^ A.^ « 1^ r" -J ^.^^ i^ ,0 Q 0) z —— — ^ ~ ^-^ o ^ > ^ < 1^ 1 =^=5h «'.- u- -fc* -3 CHffRT B. Reiative Prices -OsedlVL Rougii Clofil Rags Li gilt do til Rags Mixed Soft Rags B/ueSerae if a as c --, O 5 ^3 .^:. Z o ^ -- to < -3 ^ -- -3 ^1^^ ' < -- ^ K w -3 if Q Z o J ** -- < t"'^ f -3 1 -3 ^ Z / «'V < f n ;s: — - J l\^ -J ' r » \ % OoOOOoOoOqOOO Oio0u20iooino5,o"o 11 portion to the other grades, and that next came ''Light clotli," which is one of the grades derived from "Rough cloth." Charts A and B bring out clearly the recovery of the prices on " Rough cloth" rags, and to a less degree of the prices on "Mixed soft" i' r I i> REPORT ON WOOLEN RAG TRADE. 33 rags, from the low levels reached in December, 1918, and January, 1919, the months immediately following the Armistice. A large part of this rise during February- April, 1919, is attributable to the resump- tion of exports (see p. 51). It will be noted that tlie prices of "Blue >) serge" rags were but slightly affected and those of "Light cloth" rags not at all. Charts C and D show in graphic form the prices of " Fine merchant tailor" clips and of "Blue serge" clips and "Blue worsted" clips 141957—20 3 34 REPORT ON WOOLEN RAG TRADE. (two of the principal grades obtained from ''Fine merchant tailor'^ clips). It will be noted by chart D that "Blue serge'' clips had the greatest relative advance in prices, and that ''Blue worste,852,4')2 24,784,022 13,918,217 13,071,472 8, .532, 243 74, 1 18 222, rj-58 48, 382 07, 279 124, ISl 13.5. mn 1,012,194 3,707,117 5, 896, 254 6,619,417 1,466,973 1, 148, 125 723,068 1,931,084 2,958,626 Value. 1705,484 923,184 973,0.53 1,388,934 1,283,934 1,629,130 1,012,3.50 8.992 25, 170 29,767 It, 728 S,92G 11,971 274,4i:9 .507.0.51 1,003,129 1,240,755 274, 561 218,045 147, 123 347, 635 451, 173 1 1 • REPORT ON WOOLEN RAG TRADE. 51 Prior to the war the United Kingdom received about 75 per cent, most of the balance going to Germany and Belgium. Since 1915, the United Kingdom and Canada have received about 90 per cent, most of the balance going to Japan and Brazil. The War Trade Board, in one of its general instructions, issued September 24, 1917, in article 3, section 10, and confirmed in official announcements under October 4, and 10, 1917, placed an embargo on all wool products for the purpose of conserving wool and provided that only the following ten grades of woolen rags were to be regai-ded as subject thereto : Coarse light merinos. Coarse dark merinos. Fine light merinos. Fine dark merinos. New khaki clippings. Old skirted blue serge. Old skirted blue worsted. Old skirted dark worsted. Old sliirted light worsted. Old khaki rags. Shortly thereafter, on November 13, 1917, the War Trade Board placed a far more complete embargo on woolen rags by providing that the only grades for which export license would be granted (instead of the previous regulation barring export of a fe^v^ grades only) would be the following five grades which represent material which can be used in manufacturing only heavy, hard, dark materials which in ordinary times are not manufactured or used in this country. The five grades were: "New and old felts not woven," "Plain black dothr "Plain dark cloth," "Plain blue cloth," and "Plain brown oloth." This provision continued in effect until August 14, 1918, at which time the War Trade Board issued a ruling that all exports of wool, covering thereby all woolen rags, were prohibited unless the products. to be made of the exported goods were to be imported into the United States for its use. The immediate effect of this ruling was a rush to export in August, 1918, followed by a marked decline in exports. This was the status of the embargo on exports of woolen rags up to the time of the Armistice. On November 18, 1918, the embaroro was lifted slightly to release four of the five above-mentioned grades ; and on December 10, 1918, by article 29, part 2 of its general instruc- tions, the embargo was lifted altogether. From that date on up to the present time the exportation of rags has constituted the main source of activity in the woolen-rag marked It IS probable that a part of the rise in the prices of the "Best mixed soft" and "Rough cloth" and "Blue serge" grades of used rags may be due to the demand for export of those grades subsequent to the removal of the embargoes. Separate statistics for the importation of woolen rags are not available. The table following shows the quantity and value of woolen rags and "flocks" imported. - 52 REPORT ON WOOLEN RAG TRADE. Table 21. — Imports of woolen rags, July, 1912- June^ 1918. Period. Quantity. Value. Fiscal vertr ending June 30— 1913 Pound If. 110,252 3,911,708 2, 15<., 729 1,373,014 1,639,958 1,121,147 $29, 324 378. 006 1914..: 1915 190,331 1910 203,752 202, 778 1917 1918 222,529 Imports up to November 30, 1913, were subject to 10 per cent duty per pound. Since December 1, 1913, they have been admitted free of duty. The figures for the fiscal year of 1914 are as follows: July 1 to November 30, 1913, 22,238 pounds, valued at $7,355; December 1, 1913, to June 30, 1914, 3,889,470 pounds, valued at $370,651. The effect of the abolition of the duty is evident from a comparison of the imports for the first five months of that fiscal year with those of the last seven months. An examination of the course of woolen-rag prices, does not show any marked fall in domestic prices directly attributable to the increase of imports, though it is possible that there was some check to a poswsible tendency for prices to rise. V. SUMMAEY AND CONCLUSIONS. Subsequent to the outbreak of the European War, heavy orders for woolens were placed by the Allies in the United States. The filling of these orders necessitated the use of unusually large c[uan- tities of shoddy (or reworked wool), mixed with new wool. Fol- lowing the entrance of the United States into the war, the demand for woolens of every description was greatly increased. Due to the needs of the Army, Navy, and Red Cross work for an adequate supply of woolen clothing the United States military authorities, working in cooperation with the War Industries Board, commandeered practically all stocks of new wool, and also the wool clip of 19 18. This led to a great shortage of new wool for the manufac- ture of clothing for civilian use. To meet this shortage, much greater recourse than usual had to be made to the use of shoddy. Shoddy (or "reworked wooF') is made from used woolen rags and from *'clips,^' the tnmmings and left-over scraps of new material, accumu- lated in tailoring r.nd garment-making establishments. The busi- ness of the woolen-rag t.'ade is the collection, sorting, and grading of the rags and clips for use in the making of shoddy. As a result of the unprecedented demand developed for woolen rags, the trade underwent a mushroom growth. From the best avail- able information it appears that the quantity of rags collected in the United States increased during 1915 and 1916 about one- third over 1914, and in 1917 about half over 1914. Even this rapid growth REPORT ON WOOLEN RAG TRADE. 53 did not keep pace with the public's needs, and in 1918 the Government placed an embargo on the export of all woolen rags (including ''clips"). The prices of most grades of woolen rags and ''clips'' increased during this period from 300 to 500 per cent over 1914 prices. Comcident with this rapid growth of the trade and the price increases, there developed many objectionable features in the busmess, which, because of the sudden national importance given the trade through the war-time conditions, became a serious public menace. The War Industries Board, through its Price-fixing Committee and its Woolen Section, took action to fix maximum prices and to regulate to some extent the character of transactions in rags (in- cluding ''clips"). It was handicapped to some extent by the lack of definite information concerning the current conditions of a trade which had undergone such marked changes in so short a time. The Federal Trade Commission was therefore called upon by the War Industries Board to make an investigation of the situation. The information gathered by this investigation appears in the present report. The Commission desu-es herewith to pomt out certain general conclusions : 1. While the prices of woolen rags and clips advanced to an unprec- edented extent, it appears that the larger dealers made a lower rate of profit during 1917 (the latest year for which such information was avadable) than in eariier years when prices were materially lower. The apparent reason is the much gi-eater investment re- quu-ed to handle then- rags when prices were high, and consequently the smaller return on capital invested. The annual rate of ' ' turnover' ' (i. e., the relation of receipts from sales to investment) dropped from five times in 1915 to three in 1917. The increase in prices went chiefly to pay for the increased cost of coUection of the rags before they came into the hands of the sorters and graders, who prepare them for shoddy manufacturers. 2. WhHe the situation created by the war conditions, which made the collection of all woolen rags and clips of prime importance, no longer exists, yet it appears desirable that some measure be taken by the trade in the line of standardization of classification of its product. APPENDIX. Exhibit I. Correspondence between War Industries Boari» and Boston Wool Trade, April 27, 1918, Relating to Offer op Stocks of Wool to the Governmeni. [Taken from the Daily News Record April 27, 1918.] BOSTON RESOLUTIONS SUBMITTED. "Robert H. Brookings, War Industries Board, Washington, D. C. "At a meeting of the Boston wool trade, held on April 25, the following resolution was unanimously adopted : "Resolved, On April 5, at the request of the Government, Boston wool trade offered all its unsold wools at market values, as of that date. The Adew of the War Industries Board, having been presented to us, the Boston wool trade now offers all its wool and tops included in the offering of April 5, and also all foreign wools bought since that date, not now under Government's option, of December 15, 1917, as follows: "July 30, 1917, prices will be the prices to be paid by the Government to wool dealers for all wool costing dealers July 30 prices, or less. For all wool, which can be shown to have cost dealers prices in excess of July 30 i)rices, the Government will pay on account of overhead and the recognized excess Aalue of spot wool, an amount of 5 per cent above cost on all grades, cost to be composed of out of pocket cost, con- sisting of first cost, transportation, marine and war insurance, and interest at 6 per cent. But this total in no case to exceed April 5 prices, as per list submitted by the Boston wool trade. This is contingent upon acceptance by all interested. It is imderstood, of course, that this does not apply to imported wool on which the Goa ern- ment has an option, as of December 15. Complying with your request, we have given no information to the press. We would appreciate a prompt reply, so that we can give out a report of to-day's meeting. Abraham Koshland, President Boston Wool Trade Association. " THE WAR INDUSTRIES BOARD's REPLY. In reply to this telegram, the War Industries Board tx)-day wired back, as follows: "Abraham Koshland, President Boston Wool Trade Association, 501 Summer Street, Boston, Mass., April 27, 1918. "Your telegram of 25th received. The Government greatly appreciate the spirit of patriotism which prompted the resolutions offering your wool stock at prices named. The Government accepts the offering made in your telegram and the necessary de- tails for taking over this wool will be arranged by the office of the Quartermaster General. Please telegraph other trade centers whose wools were offered to the Govern- ment, giAdng them full particulars. Robert H. Brookings, Chairm/in, Price Fixing Committee. " o4 ^ I REPORT ON WOOLEN RAG TRADE. Exhibit II. 55 Announcement op War Industries Board in the Official Bulletin, September 13, 1918, ON THE Need to Conserve Wool Cloth. need to conserve wool cloth is urged by chairman baruch. Bernard M. Baruch, chairman of the War Industries Board, authorizes the follow- ing: While no real shortage is to be feared in the supply of woolen cloth or clothing this winter, the country is warned against a mistaken belief that there will be a surplus of free wool over Government requirements. Such a belief might arise through a mis- construction of a statement issued by Gen. Wood, Acting Quartermaster General, in summing up the needs of the military forces to July next. In several instances this was interpreted as meaning that the wool supply was above the demand. That is misleading. The statement referred to the fact that no shortage of clothing need be feared, because of the large stocks of finished clothing and cloth now on hand. WOOLENS SECTION STATEMENT. The woolens section of the War Industries Board, which has a thorough under- standing with Gen. Wood, issued a statement that there is at the present time no free wool available for civilian consumption ; and renews its warning there must be con- servation of wool and of all things made of wool to prevent serious shortage and real distress for a long time to come. This warning applies particularly to the use of cloth and clothing now made up, which will be difficult of renewal when the present stocks are exhausted . It is announced in a statement issued to-day by Herbert E. Peabody, chief of the woolens section of the War Industries Board, after conferences with experts of the wool section and representatives of the woolen industry, that no program for future ci\ilian consumption can be undertaken at this time. Wool must be imported to meet Govern- ment needs, and until there have been such importations and a surplus is disclosed no plana can be made for civilian needs. Following is the announcement from the woolens section: "The public statement of the Acting Quartermaster General, in which he has dis- closed the wool requirements for the Government for the period July 1, 1918, to July 1, 1919, brings many inquiries as to what wool may be available for civilian consumption! It may now be definitely stated that at present there is no wool available for civilian allocation. The Acting Quartermaster General discloses the fact that a large quantity of wool must be imported to meet military necessities; and until such importations have been made in amount to cover Government needs, program for future civilian consumption can not be undertaken at this time. However, in order that the woolen industry may have the closest touch with the situation, and in order that everyone concerned may be assured that careful consideration is being given the needs of the industry by men from the industry, the Textile Division of the War Industries Board has requested the advisory comittee of the War Service Committee of the Wool Manu- facturing Industry— Messrs. George B. Sanford, Henry A. Francis and Franklin W. Hobbs— to act in a similar capacity to the woolens section of the War Industries Board, and a meeting will be held September 25. " CONSERVATION IS URGED. Conservation of wool and all of the things made of wool can not be too strongly urged, and emphasis can not be too often repeated. The woolens section has already gone on record that if careful and intelligent plan- ning in buying and using articles of wool is seriously undertaken by the people of this country, they may safeguard themselves from real distress through a wool shortage for a long time to come. 56 REPOBT ON WOOLEN RAG TRADE. Exhibit III. Announcement op the Wab Industries Board in the Official Bulletin November 5, 1918, in Refutation op Rumors of Wool Allocation for Civil- ian Needs. • RUMORS OP WOOL allocation FOR CIVILIAN NEEDS REPUTED. B^M. Baruch, chairman of the War Industries Board, authorizes the following- The woolens section of the Wax Industries Board feels that it is desirable to refute rumors of the allocation of wool for civilian needs in the near future and to make the following statement: The Quartermaster General has ascertained his minimum requirements for the re- mainder of 1918 and for the first half of 1919. The Shipping Board has carefully esti- mated Its abihty to provide tonnage for taking care of the Quartermaster General's prograin ^thout interfering with the movement of troops and supplies. Due consider- ation has been given to the present stocks of wool in the hands of the Quartermaster Jxeneral to the desirabiUty of not permitting unduly large reserves of wool to accumu- late in Army hands at the expense of civilian needs; and full weight has been given to every other factor that could have bearing on the situation. All figures obtainable have been carefully weighed in the light of the available knowledge of the military and shipping situation. The woolens section would gladly make public all of the figures and facts in its hands if it were not so clearly against wise military policy will LEAVE SMALL SURPLUS. After thus considering every pertinent fact and reasonable probability, the woolens section IS obUged to conclude that stocks of wool in the possession of the quartermaster after the immediate needs of the Government have been provided for will leave a sur- plus so small as to precludeany allocation for civilian purposes in the immediate future Additional suppUes of wool for the Army and for civilian purposes are entirely depend- ent upon future importations until the domestic clip of 1919 is available for use This situation makes it clear that no allotments of wool for civilian purposes can be considered for sometime to come. Having reached this conclusion on evidence it must accept, the section considers it to be its duty to make pubHc a definite announce- ment of this fact. This announcement is made for the purpose of removing uncertainty from the situation for the next few months. The industry may rest assured that allotmente for civihan use will be made as soon as this can be done without impairing miUtarv operation. ^ ^^ ^ Requests from different sources that sufficient wool should be apportioned to manu- facturers to enable them to keep their organizations together and to continue in oper- ation are impossible to meet. But the Quartermastf^r General, having the seriousness confrontmg manufacturers in mind, has advanced his buying program and has offered his needs for bids covering the first quarter of 1919, in so far as his stocks of wool will permit. The action of the Quartermaster General provides regular employment for m^hmery in volume only slightly reduced from the deliveries now being made to With the stock of wool now actually on hand and free against new contracts and the uncertamties that surround importations, the Quartermaster General is compelled to conserve every pound of wool. The woolens section beUeves that in advancing his program the Quartermaster General has provided the only relief for the industry which may be found at present. ^ r-^ REPORT ON WOOLEN RAG TRADE. Exhibit IV. 57 Order op Railroad Administration, in Oppicial Bulletin, August 19, 1918, Directing Prompt Movement op Woolen Rags and Shoddy. prompt movement asked op woolen rags and shoddy. [Supplement No. 1 to Circular No. CS lO.J Washington, August 15, 1918. To railroads: The shortage of wool makes necessary the increased use of substitutes for wool such as woolen rags and shoddy. ' As far as practicable, shipments of woolen rags and shoddy should be accepted and moved promptly on a parity with wool. The freight traffic committee, North Atlantic Ports, is prepared to issue permits promptly on any such shipments destined to New York, Philadelphia, and Baltimore. W. C. Kendall, Manager Car Service Section. Exhibit V. Order Issued July 12, 1918, by Woolen Rag and Fiber Administrator of War Industries Board, Fixing Maximum Prices on Woolen Rags, and Requiring Certain Reports. T , . ^ , July 12, 1918. in accordance with the authority given me by the War Industries Board, through H. E. Peabody, chief of woolens section, it is my intention to fix and enforce maxi- mum prices on rags entering into the manufacture of woolen fabrics. With the desire to protect all business interests which may be affected, the announcement of maxi- mum prices will be delayed. Pending such announcement, I hereby notify each rag grader and producer (or re- tailer) of rags to at once mail to me at 334 Fourth Avenue, New York City, a record of all sales of woolen rags made by him during the week ending at noon Satiu-day, July 13, 1918. Such statement to include the names of the purchasers, the quantity of each grade and the price at which each was sold. Dealers wiU also report to me the stock of all grades of rags which enter into the manufacture of woolen fabrics, which they have on hand at noon July 13, and wiU forward me weekly a report of unsold stock on hand Saturday noon of each week, together with a record of all purchases and sales during the week. I also direct that until further notice no dealer make any sales of rags at prices in excess of those quoted to the last issue of the recognized waste trade publications pre- vious to July 8, 1918. I shall proceed on the assumption that all dealers are acting in good faith to recog- nize the desirabiUty of patriotic cooperation; but should evidence of lack of feith be brought to my attention, I shall exercise the power which has been delegated me. Herbert E. Peabody, Chief of Woolens Section, War Industries Board. By A. L. GiPPORD, Woolen Rag and Fiber Administrator, 58 REPORT ON WOOLEN RAG TRADE. Exhibit VI. Order of Price Fixing Committee op War Industries Board, August 19 1918 Fixing Maximum Prices ON Woolen Rags. ' ' m. • n . August 19, 1918. The price fixing committee of the War Industries Board has fixed the following maxi- mum prices upon various grades of rags which is effective on all sales made from Au- gust 19, and remaining in effect until October 1, 1918, and thereafter, pending the com- pilation of data which is to be furnished by the Federal Trade Commission These prices are net f . o.b shipping point and are to apply to sales made both to the Govern- ment and to the pub he. Herbert E. Peabody, Chief of Woolens Section, War Industries Board. By A. L. Gipford, Woolen Hag and Fiber Administrator. Softs: Mixed softs Cents per lb. 2H Blue seizes 25 Brown serges 32 Green serges 32 Red serges 28 Black serges 22 White softs 52 White flannels and serges 50 White knits 55 Red knits 2Th Blue knits, mixed 26^ Silver gray knits 45' Brown knits 32 Fancy knits 2I Black dressed knits 30 Light hoods 33 Light grey underwear I6 Fine light merinos 32 Fine dark merinos 25 Coarse dark merinos with serges. 16 Coarse light merinos with serges. 24 Tbibets 28^ Wool bodies 33 Wool carpets jqi Softs— continued. ^^^ Soft back carpets 41 Mixed linseys 41 Cloth: ^ Rough cloth ga Skirted cloth, ripped from rough cloth 11^ Skirted cloth, sorted from mixed rags 10 Skirted delaines •. gi Light skirted cloth 15^ Black and whites 17 Fine light skirted cloth 18^ Brown skirted 10 Dark skirted 8^ Black skirted 10 Blue skirted 10 Tan skirted 25 Light skirted- worsteds 25 Blue worsteds 2I Black worsteds 22 Brown worsteds 23 Dark worsteds 17 White linsey flannels 7 Exhibit VII. Order op Price Fixing Commiitee of War Industries Board, August 21 191 ; Fixing Maximum Prices on Woolen Clips. mi,„ : fl - . August 21, 1918. The pnce fixing committee of the War Industries Board has fixed the following pnces upon the new woolen clips and also prices for men's weax and women's weaf new chps, which are to be paid by the ntg collector to the cutter-up, effective on al s^es made from August 22, and remaining in effect until October 1 1918 and there- after pending the compilation of data which is to be furnished by the Federal Tmd^ Commission. These prices are net f. o. b. shipping point and are Led on Mgh stand! ard of gracing and should not be paid for inferior packing, and are to apply to sa es made both to the Government and to the public. "^ ^' '^ ^^^'^ ^"^ '^^^^ Herbert E. Peabody, Chief of Woolens Section, War Industries Board, By A. L. GiPPORD, Woolen Rag and Fiber Administrator, REPORT ON WOOLBK RAG TRADE. 59 V r • 'II Men's wear: p^°,g Men's black and blue worsteds. . 48 Fine clothing house clips, light- weight 39 Fine merchant tailor clips 38 Medium clothing house clips, lightweight 37 Ordinary clothing house clips, including cotton warps...... 22 All-wool overcoatings 23 Medium overcoatings, free from cotton warps 20 All-wool mackinaws 17 Mixed overcoatings, including cotton warps 10 Cotton- warp clothing clips 5 All-wool flannels 25 Women's wear: Fine cloak and suit house light- weight mixed clips, including serges 33 Fine cloak and suit house light- weight mixed clips, without serges 25 All-wool mixed serges 40 All-wool cloakings 20 Cotton- warp serges 8 Cotton- warp cloak and suit clips . 5 Graded clips: Black worsteds 65 Blue worsteds 62 Blue worsted edges 50 Brown worsteds 57 Black and white worsted 56 Light worsteds 54 Fine light worsted and clips. . . 50 Fine lights 45 Fine dark worsteds 48 Fine dark worsted and clips 47 Fine mixed clips 44 Mixed dark clips 40 Mixed clips 35 Graded clips— Continued. ^r^'lb. Medium mixed clips 32 Heavyweight clips 28 Coarse dark clips 23 Coarse light clips 25 Ordinary light clips 20 Black and white 30 Dark grey oxford 26 Plain black clips 26 Blue uniform clips, without edges 38 Fancy mackinaws 20 LTnion ._ _ 3 Light unions n Light blue serge 52 Black serges 50 Blue serges 50 Brown serges 50 Green serges 50 Red serges 50 Tan serges 60 Black and blue serge edges 35 Dark serges 35 Light serges 45 White serges 70 Blue cheviot 28 Red cheviot 28 Brown cheviot 28 Green che\dot 28 Black cheviot 28 Light blue cheviot 28 Tan cheviot 35 Light homespun 35 Medium homespun 30 Ordinary homespun 25 Light flannels 35 Blue flannels 35 Red flannels 35 Green flannels 35 French flannels 27 Mixed flannels 25 Black flannels 33 Exhibit VIII. Order of Price Fixing Committee of War Industries Board, August 22, 1918, Fixing Maximum Prices on " Reworked Wool or Fiber " (Shoddy). ' rn. . ^ . . August 22, 1918. The pnce fixing conunittee of the War Industries Board ha^ fixed the following prices on reworked wool or fiber, on sales made from August 22, 1918 to remain in effect until October 1, 1918, and thereafter, pending the compilation of data which is to be furmshed by the Federal Trade Commission. These prices are net f. o b ship- ping point and are to apply to sales made both to the Government and to the public. Herbert E. Peabody, Chief of Woolen Section, War Industries Board. By A. L. Gipford, Woolen Rag and Fiber Administrator. 60 JUEPORT ON WOOLEN RAG TRADE. These prices are to remain in effect until October 1. 1918, and thereafter, pending the compilation of data which are to be furnished by the Federal Trade Commijieion. These prices are net f. o. b. selling point and are to apply to sales both to the Govern- ment and to the public. These prices include carbonizing, picking and carding. If dyeing is added, the charge for same must not exceed 5 cents for black or O. D. (khaki) without special permit from the fiber administrator. Cents. Blue serge 48^ Brown serge 58 Green serge 58 Red serge 55 Black serge 44^ Whi te softs 86 White flannels and serges 83 White knits 92 Red knits 59 Blue knits, mixed 57 Silver grey knits 93 Brown knits 66 Fancy knits 48^ Black dressed knits 63 Light hoods 76 Light grey underwear 50 Fine light merinos 58^ Fine dark merinos 48 Coarse dark merinos, with serge 38 Cents. Coarse light merinos, with serge 50 Thibets 50 J Light skirted cloth 39 Black and white 42 Fine light skirted cloth 44 J Brown cloth 29 Dark cloth 27 Black cloth 29 Blue cloth , 29 Tan skirted 48 Light worsteds 48^ Blue worsteds 43 Black worsteds 44^ Brown worsteds 46 Dark worsteds 39 Wool carpets 30 Soft back carpets 33^ Skirted delaines 36 Exhibit IX. Published Price Quotations on Woolen Rags and Clips, 1904-1911. Price quotations on old sTcirted cloth, soft woolen rags, and new tailor clips in the United States, ^ January, 1904 to December 7, 1911. [Cents per pound.] Old stock: Skirted cloth , mixed Light skirted cloth Fine light skirted cloth Blue skirted cloth Brown skirted cloth Black skirted cloth Dark skirted cloth Black skirted worsted Blue skirted worsted Dark skirted worsted Soft woolen No. 1 Soft old red flannels Soft old blue flannels Soft old white flannels New stock: Mixed French flannels Fine merchant tailors, all colors New brown cheviots New scarlet flannels New black flannels Light cadet clips Army blue clips, pure indigo. 1904 6 6i 6 4i 4i o 4J 9 11 8 20 10 12 20 15 15 23 4| 4i 4 4 1905 1906 w 6 6 5 4i f 51 f 6 18 7 11* 19 14 14 20 5 11 1? 12i 8J 20 11 12 20 15 15 o 55 5J 5 4 4 4 8^ 5| 6 8i 10 7 18 8 llj 19 14 14 xi w 6 5i 4i if 9i 8i lOi 13^ 10 20 23 20 12 12 20 16 15 23 o 5 5 5 4i 4 1907 1908 1909 Xi 3 3 10 8 6i 9 12 n 18 9 Hi 19 14 14 20 5 5 8 5i 4i 5 4 lOJ 8i 8i 9f 13i 9 20 12 12 20 16 15 23 4 4 7 4 4 f 8i 8 7 8 4i 5J 8 5 ij 3 9 8 8? 8 12 12i 8 9 18 20 11 12 Hi 12 19 ,20 14 15 14 15 20 ,23 o 4 3i 7 3i 4 4 2i 5J 5i 5 5 10 6 I 4i 5i ^ 4i 4i 4 3 7 6J 6 61 12 7i 14 16i 10 Hi 13 10 14 20 Hi 12 15 12 18i 22 o 1-^ 4 7 3 4 3i 1* 5i 4i 4i 5 9i 6 13 1910 3i 4i 5 Si 3 4i 2i f 5 5 6i '\' 161 Hi 5 8 13i 14 8i 12 18 10 18) 18 21 3 6 2\ 2 2 li 5i 4 3 4 9i 4 15 1911 7 Hi 5 6 16 16 2| 4 6 3 3 2J 6*' 4i 3i 5i 10 6 18 12 8 12 18 8i 18i 18 o f 5 21 2 2 U 4i 3i 2i 4i 7i 4 15 lOi 5 17 6 16 16 REPORT ON WOOLEN RAG TRADE. Exhibit X. 61 Published Price Quotations on Woolen^Raqs and Clips, January, 1913-April. A. USED MATERIALS. Prices on Rags, Woolen, ''Rough cloth,'* (Market: Ne.yo*. Source: Waste Trade Jo^^a..^J,^ai.:P„u„a, Quotation: Firs. Thursday o.each ACTUAL PRICES. January February [" March MSy':;;;;;:;;:;:;-"-' June July :....l"l]]['. August ['/ September " " October *]] No v^ember '.'.'.'.'.'.'. Decem ber '.'.'.'.'." Quarters: First Second Third Fourth ." Year 1913 to. 0168 .0180 .0188 .0175 .0155 .0150 .0150 .0153 .0150 .0150 .0160 .0165 .0179 .0160 .0150 .0158 .0162 1914 SO. 0160 .0165 .0185 .0190 .0180 .0140 .0150 .0145 .0173 .0200 .0350 .0238 .0170 .0170 .0156 .0263 .0190 1915 10.0375 .0450 .0375 .0300 .0288 .0288 .0425 .0425 .0550 .0550 .0661 .0631 .0400 .0292 .0467 .0614 .0443 1916 $0.0863 .0925 .0875 .0575 .0563 .0694 .0563 .0475 .0488 .0519 .0694 .0625 .0888 .0611 .0509 .0613 .0655 1917 $0.0563 .0463 .0500 .0388 .0513 .0588 .0538 .0538 .0538 .0525 .0538 .0538 .0509 .0496 .0538 .0534 .0519 RELATIVE PRICES. [Average actual price July l, 1913, to June 30, 1914, = $0.0162 = lOO.J January February March April May June July August September October November December Quarters: First Second Third Fourth Year 231 533 278 571 231 540 185 355 178 348 178 428 262 348 262 293 340 301 340 320 408 428 390 386 548 377 314 378 404 191S 1919 $0.0550 $0.0575 .0538 .0700 .0550 .0750 .0588 : .0775 .0775 .0725 ■* .0850 .0900 .0875 .'.* .0S75 .0875 ' .0587 .0546 .0675 .0696 .0875 ■ .0779 ** .0724 = lOO.J 348 286 309 240 317 340 332 340 363 478 448 525 556 540 540 540 362 337 430 540 480 446 354 432 460 478 363 332 332 332 324 332 332 314 306 416 332 330 320 > From the American Wool and Cotton Reporter. 62 REPORT ON WOOLEN RAG TRADE. Published Price Quotations on Woolen Rags and Clips, January, i9]3-ApRiL, 1919— Continued. A. USED material— Continued. Prices on Rags, Woolen, ''Light cloth:' ^^^n'^^p^t^'n^iSr^rV ^'""■''^- ^^^l^tions for years 1913-1918, inohisive, are taken from the American Wool Qu1>t^a?[rFS'SoreiL^^^^^^^^ °' '''' '^'^ the Waste Trade Joumai. Unit: Pound"* ACTUAL PRICES. January February... March . .' April May June July August September.. October November. . . December.... Quarters: First.... Second.. Third... Fourth.. Year 1913 $0.(M50 .0450 .0450 .0435 .0425 .0425 .0425 .0412 .0262 .0287 .0287 .0287 .0450 .0428 .0366 .0287 .0383 1914 $0.0275 .0287 .0337 .0337 .0387 .0325 .0362 .0362 .0262 .0312 .0512 .0512 .0283 .0349 .0328 .0445 .0351 1915 $0.0625 .0650 .0725 .06S7 .0525 .0525 .0600 .0600 .0862 .0900 .0912 .0912 .0667 .0579 .0687 .0908 .0735 1916 $0.1050 .1175 .1137 .1125 .1025 .1025 .0950 .0862 .0862 .0862 .0862 .0950 .1121 .1058 .0891 .0891 .0990 1917 $0.0900 .08,50 .0750 .0675 .0676 .0950 .0950 .0950 .0950 .0850 .0850 .0950 .0833 .0767 .0950 .0883 .0856 RELATIVE PRICES. [Average actual price July 1, 1913, to June 30, 1914 =$0.0326= 100.] January . . . February., March April May Jirne July August September Octcbpr... November. December. Quarters: First.. Second Third. Fourth Year 149 147 147 142 139 139 139 135 86 94 94 94 147 140 120 94 125 90 94 110 110 127 106 118 118 86 102 168 168 93 114 107 146 115 204 213 238 226 17a 172 196 196 282 295 299 299 219 190 226 297 241 344 385 372, 368 335 335 311 282 282 282 282 311 362 346 292 292 324 295 278 246 221 221 311 311 311 311 278 278 311 273 251 311 289 281 1918 1919 10.0950 .0950 .0750 .0850 .1100 .1100 .1312 .1312 .1312 .1312 .1525 .1525 $0.1100 .1100 .1106 .1100 .0817 .1017 . 1312 .1454 .1150 .1100 311 311 246 278 360 300 360 360 360 360 426 426 426 426 499 499 267 332 seo 430 485 376 ^ REPORT ON WOOLEN RAG TRADE. 63 Published Price Quotation on Woolen Rags and-Clips, January, 1913-April. 1919 — Continued. A. USED MATERIALS-Continued. Prices on Rags, Woolen, ''Skirted delaines:' (Market: New York. Source: Waste ^-dejournal^^ Un^^^^ Quotation: First Thursday of each ACTUAL PRICES. January February March April May June Jiily August September October November December Quarters: First Second Third Fourth Year $0.0200 .0200 .0213 .0213 .0213 .0213 0213 .0175 .0175 .0175 .0213 .0200 .0204 .0213 .0188 .0196 .0200 1915 $0.0135 .0135 .0223 .0223 .0223 .0150 .0150 .0150 .0190 .0190 .0245 0245 .0164 .0199 .0163 .0227 .0188 $0.0263 .0338 .0325 .0275 .0275 .0275 .0313 .0288 .0325 .0325 .0350 .0375 .0309 .0275 .0309 .0350 .0311 1916 $0.0450 .0450 .0619 .0475 .0450 .0525 .0525 .0438 .0438 .0400 .0475 .0475 .0506 .0483 .0467 .0450 .0477 1917 $0.0425 ,0413 .0413 .0375 .0406 .0406 .0406 .0406 .0406 .0406 .0406 .0413 .0417 .0396 .040«j .0408 .0407 RELATIVE PRICES. [Average actual price July 1, 1913, to June 30, 1914=$0.0187=100.] January... February . . March April May June July August September. October... November. December., Quarters: First... Second. Third.. Fourth. Year 107 107 114 114 114 114 114 94 94 94 114 107 109 114 101 105 107 72 72 119 119 119 80 80 80 102 102 131 131 88 106 87 121 101 141 181 174 147 147 147 167 154 174 174 187 201 165 147 165 187 166 241 241 331 254 241 281 281 234 234 214 254 254 271 258 250 241 255 227 221 221 201 217 217 217 217 217 217 217 221 223 212 217 218 218 1918 1919 $0.0575 .0525 .0475 .0475 $0.0413 .0413 .0413 .0413 .0438 .W3.S .0475 •052.') •0650 •0650 1 .0650 .0650 1 j .0413 ' .0525 .0430 .0550 ! " .0650 ' .0510 I ". 221 307 221 280 221 254 221 254 234 234 254 281 347 347 347 347 221 2^0 230 294 347 272 64 REPORT OlSr WOOLEN RAG TRADE. REPORT ON WOOLEN RAG TRADE. 65 Published Price Quotations on Woolen Rags and Clips, Januaby, 1913-April, 1919— Continued. A. USED MATERIALS— Continued. Prices on RagSj Woolen^ "Light worsteds." [ Market: New York. Source: Quotations for years 1913-1918, inclusive, are taken from the American Wool and Cotton Reporter; and for the four months of 1919 from the Waste Trade Journal. Unit: Pound. Quotation: First week of each month, 1913-1919.] ACTUAL PRICES. 4 1913 1914 1915 1916 1917 1918 1919 JftTiiiary , , $0.0925 .1176 .1250 .1200 .0950 .0950 .1050 .1150 .1150 .1150 .1600 .1600 .1117 .1033 .1113 .1460 .1178 $0.1600 .1800 .1750 .1600 .1500 .1425 .1400 .1325 .1250 .1250 .1325 .1325 .1717 .1508 .1325 .1300 .1462 $0.1325 .1350 .1350 .1325 .1250 .1550 .1550 .1500 .1350 .13.50 .1500 .1500 .1342 .1375 .1467 .1450 .1409 $0.1500 .1500 .1500 .1600 .2250 .2250 .2250 .2250 .2250 .2250 .2500 .2500 .1500 .1700 .2250 .2414 .1967 $0.1H50 Febniary $0.0587 .0587 .0587 .0587 .0587 .0525 .0525 .0550 .0650 .0850 .0812 .0587 .0587 .0533 .0770 .0619 .1850 March..' .1860 April May June July August .1850 September October November December Quarters: First Second. .1850 Third Fourth Year RELATIVE PRICES. [Averse actual price Feb. 1 to Jime 30, 1914=$0.0587=100.] January February. , . March April May June July August September., October November. . December . . Quarters: First... Second. Third... Fourth. Year 100 100 100 100 100 89 80 93 111 145 138 100 100 91 131 105 168 200 213 204 ;s 178 195 196 196 272 272 198 176 18d 246 200 272 225 25fl 306 230 255 298 230 255 272 225 272 255 213 382 242 264 382 238 264 38) 225 255 382 213 230 38) 213 230 38) 225 255 42S 225 255 425 242 228 225 256 234 289 225 249 38) 221 246 410 249 240 334 815 315 315 815 315 Published Price Quotations on Woolen Rags and Clips. January. 1913-April 1919-Contmued. ' ^^o-a^ku., A. USED MATERIALS-Contlnued. Prices on Rags, Woolen, "Best mixed softs,** [Market: New York. Source: Waste TradeJoumal. Unit: Pound. Quotation: First Thursday of each ACTUAL PRICES. January February. . , March April May June July August September.. October November. . December.. Quarters: First... Second. Third.. Fourth. Year January February, March April May June. July August September October November December Quarters: First Second Third Fourth Year 1913 SO. 0663 .0631 .0650 .0650 .0513 .0500 .0500 .0525 .0518 .0518 .0538 .0538 .0665 .0554 .0514 .0531 .0566 1914 $0.0538 .0550 .0575 .0576 .0550 .0488 .0463 .0450 .0569 .0600 .0738 .0625 .0554 0538 .0494 .0654 .p660 1015 $0.0763 .0088 .0850 .0738 .0788 .0788 .1025 .0925 .1113 .1125 .1275 .1250 .0867 .0771 .1021 . 1217 .0960 1916 $0.1538 .1650 .1675 .1163 .1163 .1363 .1263 .1075 .1088 .1175 .1413 .1360 .1621 .1230 .1142 .1313 .1326 1917 1918 1919 $0.1325 $0.1400 .1125 .1400 .1250 .1400 .1075 .1575 .1300 1875 .1425 .1775 .1325 .2100 .1350 .2200 .1350 .2150 .1350 .2150 .1375 .2150 .1388 .1587 .1233 .1400 .1267 .1742 .1342 .2150 .1371 .1962 .1303 .1814 $0. 1575 .1700 .1750 .1775 .1675 RELATIVE PRICES. [Average actual price July 1, 1913, to June 30. 1914, - $0,534 - lOO.J 288 309 314 218 218 255 237 201 204 220 265 253 304 230 214 246 248 248 211 234 201 243 267 248 253 253 253 258 260 231 237 251 257 244 262 262 262 295 351 332 393 412 403 403 403 297 262 326 403 367 337 294 318 327 332 141957—20 5 818 k J ' 66 BEFOBT ON WOOLEN BAG TRADE. REPORT ON WOOLEN RAG TRADE. 67 p^XSH.. PBICK Q^OTATXCKS OK W^^ R^-^ O.XPB, J....... mS-APHX., A. USED MATBBIAL8— Continued. Prioei warp serges — Continued. Black. Blue. Brown. Green. Red. Shoe unions — Mixed. Light. Black. Brown. White. Shirting flannel unions — Mixed. Dark. Light. Blue. Gray. Worsted unions — Mixed. Dark. Light. Black. Blue. Brown. Mercerized. Worsted (wool) — Mixed Dark. Light (mixed) — Black and white. Free of black. Black, men's (without edges). Black, ladies' (without edges). Blue (without edges). Brown. Gray (smoke). Oxford. Edges, including serge — Mixed. Black. Blue. Silk worsteds. Mixed materials — • ' Graded for quality — Coarse dark clips, ordinary. Coarse dark clips, heavy weight. Coarse dark clips, including oxfords. Coarse light clips, No. 1 grade. Coarse light clip6,No. 2 grade. Coarse black and white clips, including gray. 87 88 KEFORI ON WOOLSS SiQ TBAOE. BEPOBT OH WOOLESr K&G TRADE. 89 Graded clips — Continued. Mixed materials — Continued. Graded for quality — Continued. Coarse brown and white clips, including tan shades. Fine dark heavy weight clips. Fine dark cloth and worsted clips — All light weight, free of edges. Light and heavy weight mixed. Fine dark heavy and light weight cloth, including some wonted. Fine dark cloth mixed, including oxfords. Fine dark cloth and worsted, including oxfords. Fine light cloth — Mixed. Black and white, including gray. Tan. Fine light cloth and worsted — Mixed. Black and white. Tan. Fine mixed clips (colors, weights, and materials) — All light weight. Some heavy weight. Heavy weight. Graded for color — Black- Mixed. Flannels and serges. Flannels and worsteds. Worsteds and serges. Worsteds, cheviots, and kerseys. Blue- Flannels and serges. Flannels and worsteds. Worsteds and serges. Worsteds, cheviots, and kerseys. Brown — Mixed. Flannels and serges. Flannels and worsteds. Worsteds and serges. Worsteds, cheviots, and kerseys. Green — Mixed. Flannels and serges. Flannels and worsteds. Worsteds and serges. Worsteds, cheviots, and kerseys. Red (same subdivision as foregoing colon). White (same subdivision as foregoing colon). Cap makers — Cap pieces — Woreteds and serges (mixed) graded for color. Woolens (mixed) — Light weight. Heavy weight. k Oraded clips — Continued. Mixed materials— Continued. Graded for quality— Continued. Cap clips-^ Mixed. Light. Wonteds (mixed) — Dark. Light. Black. Blue. Brown. Listings, wool — Mixed. Dark. Light. Wool and cotton warp mixed. . Cotton warp Miscellaneous additional materials — Astrachans. Boucleys. Fur felts. Plushes. Eiderdowns. Pants bottoms (mixed) — Woreteds and serges. Woolen. Cotton warp. Silk woolens. KHAKI AND FORESTRY MATERIALS. New clips: Khaki Wool- Mixed clips. Wonted and serge clips. Suiting clips. Overcoating and puttee clips. Cap cUps. Delaine clips. Flannel clips. Sweater clips — Wool. Wool and cotton mixed. Cotton warp wonted and serge clips. Cotton and wool puttee clips. Headings: With stitches — Mixed woolens and wonteds. Wonted and serges. Suitings. Overcoatings. Overcoatings and suitings mixed. Flannels. Cotton warp wonteds and serges. -aH •0 KBPOKT ON WOOLEN BAG TRADE, Headings— Continued. Without stitches — (Classed as khaki clips and graded accordingly.) Oily headings — (A deduction of not less than 5 per cent nor more than 40 per cent from the- maximum price of the clean grade is permissible, proportioned on the oih contained in the lot sold.) Old cloth: Rough mixed. Rough caps. Skirted mixed. Skirted worsteds and serges. Skirted woolens. Shirtings — Worsted and serge rough. Worsted and serge skirted. Sweaters and Jerseys — Wool, Cotton and wool mixed. i :/ r Date Due f •■ i 1 ' •'-> ^ MSft o6US^ i :*M i FEB 1 * 199C U/S). r.T.c . V»r«3H* (Oool or> rvoi 1 VxsJ JIJN 6 1938 \3 ii COLUMBIA UNIVERSITY LIBRARIES | 0041445244 ■■ifeviii- :-F- Sift'' Hi i * ■ ^^SJiJT f laiilii END OF TITLE