ing of strikes by the Council. This pressure was exerted with apparent harmony of action between the Employers Association and the Council. Indeed, the term "recommend recommend" appears to have been mere camouflage in the light of the construction placed by the Association, upon this provision in circular letters that were spread broadcast among the members of the Association, of which the following is an example:

"Your attention is called to Article 12 of the Members Constitution. It is essential for the best interests of the Building Trades Employers Association that this clause be lived up to by the members more strictly even than the clause requires. And the surest and quickest way of doing so is to carry out the simple conditions mentioned in Article 12 of the Constitution * * You are therefore urgently requested to investigate the question of membership in the Building Trades Employers Association before awarding your contract and request and insist that your respective sub-contractors join the Association if they are not already members."

The situation thus developed whereby the Association monopolized to itself, largely through the influence exerted by the Council, all the building business in and about the City of New York.

There was still another step: Delegates or Business Agents of certain of the Unions in the Council were actually hired by these constituent Employers Association to force their competitors into these combinations under threats of strikes. Business Agents of the Plumbers Union were tried and convicted and served prison terms for that offense. Business Agents of the Steam Fitters Union are now under indictment and about to be tried for the same offense. Many employers members of constituent Associations of the Employers Association who have since been indicted and brought to trial for their participation in these combinations have proven by way of extenuation of their offenses that they were thus driven into membership in these Associations and into the perpetration of these illegal acts under threat of ruin.

Other similar activities on the part of Constituent Associations of the Employers Association with the knowledge and approval of the Association will be referred to in another place. Among the many unfinished duties of your Committee is the completion of the investigation of the Employers Association.

CHAPTER 8.

OPEN PRICE AND OTHER ASSOCIATIONS IN RESTRAINT OF TRADE.

The following is a brief sketch of the activities of certain of the manufacturers of and dealers in materials connected with the Building Trade:

(1) Masons' Supplies; General Conditions.

Lime, brick, cement, plaster and sand are among the most important items entering into building construction. These five materials were supplied in the City of New York by and were under the control of a group of manufacturers and dealers classed generally under the head of Dealers in Masons Building Material Supplies. The operation of this group in relation to these five items are typical of the practices of the concerns engaged in supplying other materials necessary in the building industry. The recent history of the business of lime, brick, cement and sand is to some extent similar to the history of all the business connected with the building industry.

Mr. Hugh White, Vice-President of the George A. Fuller Construction Company, testifying in December, 1920, showed the market conditions in these five staples in the months preceding his testimony. He testified that in June, 1920, he asked for and received quotations from eleven different concerns for brick. The uniform price bid by all eleven was $30.75 per thousand at the building site and $25 per thousand alongside the dock. On account of the conditions imposed on the trade by the various interlocking associations requiring that purchases must be made only from the dealer and that the merchandise could not be had from the manufacturer although his goods were at the dock exposed for sale, Mr. White could not buy alongside the dock.

He was compelled to deal with the middlemen. On the same job he received quotations from eleven different concerns for cement, ten of whom quoted $4.50 per barrel and one $4.60. Other witnesses and important builders who asked for various bids for cement at about the same time received in every instance uniform bids. It made no difference from what section of the country the cement was to come or what was the quantity required the price

was the same. If a builder required cement at the city or town where the cement factory was located he would have to pay the same price as though it was transported 500 miles by rail and handled three time. Whenever the price rose it rose automatically all over the country and whenever it fell it fell with automatic uniformity regardless of the quantity, the expense of delivery or of any other consideration.

Mr. White testified further that the builder cannot buy cement from a manufacturer but must take it through the dealer; that he must make his purchase from dealers within his district and that he must buy his cement from the dealer from whom he purchases the brick. This was found to be true throughout the East.- An owner, builder or contractor cannot buy brick from one manufacturer or dealer and cement from another; in fact he can buy neither brick nor cement from the manufacturer and he cannot buy either from a dealer without buying the other, demonstrating not only a combination between the manufacturers of and dealers in cement and another combination between the manufacturers of and dealers in brick but a further combination between the manufacturers of and dealers in cement and the manufacturers of and dealers in brick.

He

On white cement Mr. White asked for and secured quotations from ten dealers. He received a uniform bid of $7.20 per barrel from each and all of them, showing that there was no competition whatever. On hydrated lime his experience was the same. secured eleven quotations, all at $20.50 per barrel. (The Committee has not yet reached the investigation of the manufacturers of lime.) On white sand there were nine quotations each at $5 per yard.

On another job in September, 1920, Mr. White received the following quotations for the respective materials:

On brick thirteen quotations at $22.70 and one at $22; on cement fourteen dealers quoted uniformly at $5.10 per barrel. These fourteen firms were scattered all over the United States. It would have cost some of them many times as much to deliver the cement as it would have cost the others. On white cement there were eleven estimates, each at $8.20 per barrel; on hydrated lime there were fourteen bids, all at $23 per barrel and on white sand eleven dealers quoted $5 and one quoted $6.

Estimates on other jobs that Mr. White's Company had under construction showed the same result.

Mr. Louis Horowitz, President of the Thompson Starrett Company, recounted the same experiences concerning the rigid uniformity of prices on jobs on which his Company had asked for and secured estimates from all the leading dealers in the only district in which he was permitted by the combination to secure estimates.

It is beyond question that there was absolutely no competition. in these commodities. The market was rigidly locked as in a vice by arrangements between the manufacturers and dealers. that eliminated from the field of competition all except those who were parties to the combination. As to some of these items, this network extends over the entire country. It is buttressed, not only by price-fixing understandings but by district or zoning agreements and other rigorous conditions regulating the conditions of purchase and sale.

How ruinous was this situation is exemplified by reference to prices for the same commodities that prevailed during open competition. In commenting upon these conditions your Committee is not unmindful of the higher cost of labor and of every constituent element that enters into manufacturing as compared with pre-war conditions. But allowing for all this and comparing the prices of the various commodities that we have been discussing as they prevailed in the period of stringency above referred to with the prices of the same commodities before the war, we find the following:

The price of sand and gravel had risen from 25 cents to $1.15, although dug from the same pits and although machinery is used today where hand labor was formerly employed and there is now very little labor connected with the digging of sand.

The cost of dumping had risen from 25 cents per cubic yard to 75 cents in the same period.

The cost of excavation from 95 cents per cubic yard to $4. The cost of labor in excavating from $1.75 to $8 per day. The price of brick from $8 per thousand to $30 per thousand with sporadic drops in the pre-war price where it went as low as $5.75 as against a price in excess of $30 per thousand in 1920.

The price of cement rose from 90 cents per barrel in 1914 to $5.10 per barrel in 1920.

(2) The Cement Combination.

The evidence discloses that under the title of "Cement Manufacturers Protective Association," the cement business throughout the Eastern District of the United States and in fact throughout the entire country is a virtual monoply and that the eastern branch of the combine rests in hands of 19 manufacturers who are associated together under the above title. The largest producers of the country are among its members, including the Atlas Cement Company, the Lehigh Portland Cement Company and the Alpha Portland Cement Co.

The aggregate business of this group exceeded fifty million barrels per year at the time this subject was under investigation. The Eastern organization was connected by the most intimate affiliation and exchange of detailed information with the two other central organizations controlling different sections of the country. Periodically the section groups exchanged detailed data concerning each and every transaction in each territory and thereby brought about and maintained a uniformity of trade and price conditions throughout the country constituting one of the most flagrant and dangerous monopolies in the building industry.

A complex reporting system for the purpose of controlling prices maintained by the Eastern Association required each member to make a daily report to the Association of all business done by that member. These reports were exchanged daily between all the members of the organization, each being obliged to report on a form card every contract closed. These cards were mimeographed and immediately sent to every other member of the organization. Besides this daily disclosure and exchange of the business of each member to each and all of the others, the Association issued bulky quarterly printed books or bulletins specifying every contract made by each member for specific job-work with all the details of the contract. Each of the three Associations covering various sections of the country had the same system and exchanged such information.

A comparison of the voluminous quarter-yearly reports shows absolute uniformity of price in any given period. There were wide fluctuations in the price of cement between 1915 and 1919 but it fluctuated constantly upwards and when there were price changes they were uniform and instantaneous with mathematical precision.