With respect to hats, some of the unfinished bodies, usually leghorns, are made by women in their homes. But men's sewed straw hats, the subject of this investigation, are produced in factories or in small workshops. The latter generally operate on a contract basis for the larger manufacturers or shippers. The workshops which own their own equipment are organized to produce from 25 to 200 dozen sewed hats per week. In the making of the shell or body of the hat the contractors are paid on the basis of the number delivered to and accepted by the principal. The contractors furnish their own sewing cotton, gelatin, and other materials, except braid, used in making the shells or bodies of the hats. The trimming of straw hats is also to some extent performed on a contract basis. The establishments visited in England generally perform all the operations of making and trimming hats in their own establishments, although at times "outworkers" are employed. _Working hours and wages._--The labor employed in the manufacture of sewed straw hats is well organized in both Italy and England. The rates of wages and hours of labor, both of factory workers and of employees of contractors, are determined by collective bargaining. A minimum wage scale for both pieceworkers and timeworkers became effective in Italy October 27, 1924. The labor of women and children in Italy is limited to 48 hours per week (decree of March 15, 1923). The employment of children under 12 years of age in shops and factories is prohibited. COSTS OF PRODUCTION _Methods of obtaining cost data._--Costs of the domestic Italian and English hats were obtained by representatives of the commission. In the United States they were given access to the books and records of the manufacturers. Domestic costs of materials, labor, and overhead are based on actual records. In both Italy and England representatives of the commission were given access to manufacturers' books showing estimates of their costs. The estimates of material and labor costs were verified from original records. Estimates of general administrative and factory expense were expressed as percentages of the combined cost of labor and materials or of sales. Access to records from which the latter estimates could be verified was not permitted. DESCRIPTION OF COST ITEMS _Material._--Material includes costs of braid, of bleaching, and of trimming materials and sundries, and also the cartons in which the hats are packed. _Labor._--The amount charged to the individual hat for labor includes all labor costs connected with its manufacture. The amount of direct labor on each hat was first determined. The indirect labor charge for each hat was determined by applying to its direct labor charge the percentage which total indirect labor for the factory bore to the total direct labor.