Members were also required to file in the office of the Bureau what was known as a "contract card" showing the amount at which the contract was closed. They were further required to file with the Bureau a monthly report showing all shipments made during the preceding month and the amount of stock on hand on the first day of the month in which the report was filed. The option cards were open to inspection of all members. (4) Sand, Gravel and Broken Stone. The New York City market for sand, gravel and broken stone was found to be absolutely within the grasp of a small clique of wholesalers and dealers in these commodities who in turn were at the mercy of two producers the one, the Goodwin-Gallagher Sand Corporation, dealing in sand and gravel, and the other, the New York Trap Rock Corporation, which had a monopoly in broken stone. The former company was organized with a nominal capital of $8,000,000. In the year of the investigation it did a business of about 1,350,000 yards, amounting to $1,800,000. This Company was the outcome of the absorption of six or more smaller concerns which prior to their elimination were engaged in healthy competition. The control of the market was effected through the instrumentality of The Sand and Gravel Board of Trade, a New York corporation organized in June, 1919, at the instigation of these two leaders of the respective industries. The Sand and Gravel Board of Trade embraced in its membership all the dealers in the Metropolitan district. Directly with the members of this Board of Trade, or indirectly through the Board of Trade, the members were tied up with two agreements by which it was made compulsory for them to buy all broken stone from the New York Trap Rock Corporation and all sand and gravel from the Goodwin-Gallagher Sand Corporation or from wholesalers who purchased their supplies from the latter. There being but one principal producer of sand and gravel and only one producer of broken stone, it is obvious that the market for these commodities was at their mercy. The dealer's price for sand to the consumer was fixed by resolution of the Sand and Gravel Board of Trade at stated periods. The membership of the "Board" were subject to inspection and visitation by its officers and their books were open to examination. They paid a fee in proportion to the business done by them. Under these conditions it was inevitable that the prices of these commodities should be and they were more than doubled and their exactions were becoming more and more intolerable when your Committee began its exposures. They were indicted in the Federal Court, and before the Counsel for your Committee knew that they had been indicted they pleaded guilty and were let go with a fine. At least 95 per cent of their business was within the State of New York, as their sand pits were mainly in Long Island and their deliveries were in New York City. All this occurred in 1920. The investigation of the Trap Rock Company was suspended almost at its threshold. It is the understanding of your Committee that it still maintains a monopoly for the furnishing of broken stone not only to the City of New York but to all the cities and towns along the Hudson River and in neighboring sections, and it is the intention of your Committee if its powers are continued to resume that investigation in the hope and expectation of restoring and enforcing competition. (5) Marble Industry Employers Association. This Association consisted of 36 members. It operated under a Constitution and By-laws and a Code of Practice which together constituted the most arrogant and fiagrant illegal set of regulations that has been brought to the attention of your Committee. It was a local body affiliated with and part of a Central or National body which was governed by a National code similar to the local code and equally arbitrary and irregular. Under an arrangement between the local and the national bodies the entire country was divided into zones. The local organization was given exclusive jurisdiction over all territory in the City of New York and within a radius of 25 miles whilst the remaining part of the country was allocated to the National Association. Under this arrangement the members of the local organization were prevented from estimating on work or doing any business outside the 25-mile limit whilst the members of the National organization were forbidden to invade the territory over which the Local Association was given exclusive jurisdiction. The respective districts were thus placed under the subjection of the two monopolies, the one included in the parent Association and the other in the local organization.. A contractor or dealer in marble located in the City of New York or within a radius of 25 miles from the City, could not estimate on work outside that territory. In like manner a member of the National organization whose business was located outside the 25-mile limit could not compete for a contract within the 25-mile limit. The members of the local organization thus entrenched against competition, proceeded to force every dealer within the City limits into its association and to practice the most extreme forms of extortion by the following, among other, devices: (A) It entered into an agreement with the Building Trades Council on May 1, 1920, adopting a schedule of wages to be paid its workingmen, all of whom were required to be members of the Building Trades Council. It adopted a resolution fixing the price that the members must charge to owners or builders for the various classes of labor covered by the agreement made with the Council and the latter on the other hand undertook that the Association might charge and that it would do its share toward enforcing the payment of this tribute by builders, contractors and the public at large. According to this schedule the Council fixed per diem rates of wages that would be paid by the Association members to its members and the latter in turn fixed the rates that the public must pay. The schedule is a long cue but the following illustrates the extent of the extortion thus practiced: The Association was to pay to Union workmen : Foreman cutter and helper $16. Charge the customer, $28. Helper, $7. Charge to the customer, $11.25. (B) The Code of Practice of the Association required each member to file with the Secretary all requests for bids on work. These estimates were made subject to the inspection of all members, the manifest purpose being to stifle competition. (C) The members were forbidden to sell material exceeding a certain range of cost unless the purchaser coupled his purchase with a contract for the setting of the marble. (D) If an owner or builder called for bids on a job and rejected the bids because they were too high or for any other reason he was precluded from thereafter letting the work to any other than one of the original bidders. On this subject Mr. William K. Fertig, secretary of the Association, testified as follows: Q. by Mr. Untermyer: "I am trying to find out what conceivable justification there is for such an arrogant and arbitrary regulation as that, whereby, with 36 members in your Association, if a man asks for four bids and he finds they are greatly exaggerated, he cannot reject those bids and ask for 4 more from other members of the 36 members of your Association? Why should he be prevented from doing that?" A. "The code of practice is the custom in our trade." Q. "Don't you see that paralizes competition?" A. "It may." Q. "Don't you see it ?" A. "It may appear so." (E) In order to more effectively carry out its unlawful purposes, its agreement with the Labor Unions was utilized as a powerful weapon. By the terms of that agreement any person, firm or corporation engaged in a similar business who was not a member of the organization or any member who had been dropped from its rolls found it impossible to do business. The Unions would not supply men to them cr if they had theretofore supplied the men they would withdraw them. As evidence of the close collaboration between the Association and the Union, the following episode taken from the testimony of Joseph G. Siegel is illuminating: Siegel is a builder. In May, 1920 he was engaged in altering a hotel and an office building. He asked for six bids for the marble work. All the bidders except Daniel M. Rader, who was the lowest bidder, were members of the Association. Rader's bid was $5,700 against the bid of Charles M. Gray, Association member. of $9.700. After Rader went to work the delegate for the Marble Cutters Union notified Siegel that if Rader went ahead they would stop the job and call off all the mechanics in the other trades, although it was admitted that Rader employed only Union men, Siegel continued as follows: 66 The following then occurred. R. Dahaney (delegate for the Marble Cutters' Union) said: 'I am sorry, Mr. Siegel, but we warned you two weeks ago not to allow Mr. Rader on the job. In spite of that you went ahead and proceeded.' Two days later Mr. Dahaney pulled all the other trades off the building. I called Dahaney and he said 'I have got orders from Mr. Brindell to pull this job.' The best thing for me to do was to go out and get one of the men who belonged to the Association to do the job. He gave me a little book which contained the names of all members of the Marble Trade Industries Employers Association. They all said they were too busy or did not care to bid on the work. Mr. Gray said that he was willing to do the work at the price he submitted originally ($9700). I told Mr. Dahaney, that it was not fair that I could not get competition and that I was being held up. He said that I would have to take one of the Association men. I got in touch with the owners and they decided to plaster the walls and omit the entire marble work in the building. I told that to Mr. Dahaney and asked him if he would allow the other trades to go back as we were not going to use any marble. He said, 'You intended to put marble in this job and you are going to put it in, otherwise you will have a monument on your hands instead of a building.' I told the owners and they said the best thing was to give it to Charles M. Gray and I closed the job with him. I told Dahaney that I had given Gray the contract. The next day the trades went back to work." (F) The Association went so far in its arrogant and monopolistic acts after prohibiting employers who were not members from securing Union labor as to refuse membership in this organization to employers who were thus forced either to join or go out of business. Morris H. Petigor having established the Oceanic Marble Company for the purpose of disposing of the products of another corporation (tile), in which he was interested, took contracts for marble work on various buildings throughout the city. In each instance he was notified by delegates from the various Unions connected with the Council that he could not have Union men because he was not a member of the Employers Association, or of its constituent Associations. |