BOSTON PUBLIC LIBRARY
53
3 9999 06542 023 2 office of national recovery administration
DIVISION of review
m^
Sep
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WORK materia
No. 33
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Jd^RA7''^C
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THE BASIC CODE (ADMINISTRATIVE ORDER NO. X-61)
Prepared by
W. H. EDMONDS AND W. W. SWIFT
February, 1936
lOEEWOED
This study of "The Basic Code (Administrative
Order No. X-6l)" was prepared hy Messrs. W. H. Edmonds
and W. W. Swift of the NEA Organization Studies Section,
Mr. William W. Bardsley in charge.
The study presents a dependaole and fairly complete
picture of the formulation and results of the plan that
was designed to complete the code making phase of NRA.
activities. The part occupied liy this study in the entire
examination of ITEA. administrative procedure may "be seen
"by consulting "V/orlc Me^terials ITo. 17, Tentative Outlines
and S"ommaries of Stud'.es in Process."
L. C. Marshall,
Director, Division of Review,
13 My 36 g
Digitized by the Internet Archive
in 2011 with funding from
Boston Public Library
http://www.archive.org/details/workmaterials33unit
TABLE OF CONTENTS
• ■ Page
. . , • I-FTHODUCTION 1
CHAPTER I ^ ■ '
N.R, A. ■ AS A CODE-M.AKING OEGAl^IZATION 2
I. THE AUTHORITY FOR GODE-MAKIllG IN THE ACT 2
II . BEGINNING OF-GODB MAKING AND THE P.R.A. 3
CHAPTER II ^ ■■ .
FACTORS LEADING TO A CHANGE OF POLICY 5
I. CODE MAILING PROBLEMS ^v 5
II. EARLY PROBLEMS OF ADIUNI STRATI ON .' ■ 6
CHAPTER III
THE PLAN FOR THE COt-IPLETION OF CODE
. MAKING 9
I . EARLY DEVELOPMENTS IN THE. FORl.'IUIATION OF A PLAN '. 9
1 1 . THE PARTICIP.ATICN OF THE ADVISORY BOARD'S AND THE
ADVISORY COUNCIL IN THE ' DEVELOPMENT OF THE PLAN 12
III. FINAL STAGES IN FORliOILATICN OF PLAN , 13
. . ■ ' CHAPTER IV ■ ' " '
FEATURES OF PLAN FOR COI^IPLETION OF
CODE MAKING •. . 16
I. LABOR PROVISIONS .' IS
II. TRADE PRACTICE PROVISIONS , 16
III. ADMINISTRATION THROUGH G-Si^JERAL CODE AUTHORITY 16
CHAPTER V
OPERATION OF PLAN 17
I. PROCEDURE FOR HANDLING PLAN IV
II. INDUSTRIES EXCEPTED FROM PLAN 18
III. DISCUSSION OF RESULTS OBTAINED 18
9630 -i-
iPPSlTDIX I. Page
STAT5;MSNT .Oli: .SCOPE QP STUDY, I.ZETEOS OP T^EATi IlivTT ,
MP QUE STICKS EEEPItlG FuTiTilER EESEiilCH 20
APPEHDIX II.
ADMIHI.STRATI.VE OEDSE W. X-61, WITH BASIC CODE
Al^'lCEXED AS EXHIBIT "A" 21
APPEilDIX III.
ADMIIIISTRATIVE OEDER il.O.. .X-62, SUPPLELffiNTIMG ADMI5F-
ISTRATP/E ORDER W, X-ol JdU) BASIC CODE 26
APPEx'DIX IV.
ADMINISTRATIVE ORDER I\fO. X-o3, PEESCRIBING RULES
AI^D EECtULATI'^KS TO SUP'PLSlffiiTT ADl.IISIISTSATIVE ORDER
HQ, X-61 M%D BASIC CODS. .'...■.... 30 ■
APPEilDIX V.
OFFICE MEMORAHDUl^I ITG,' 251,' PRCVIDIi^JG- PROCEDURE FOR
HAMDLI;IG CCi£:'LETIOiI OF CODE ilASIKG-. ■ 31
APPENDIX VI. ■ -
ADMINISTRATIVE ORDER ITO.. X-84, PROVIDING FOR SSLEC-
TIOK OF IvEMBERS OF C-EilERAL iJRA CODE AUTHORITY 33
APPENDIX VII. ' '
ADMINISTRATIVE ORDER. NO. X-89, SUPPLEIIENT IN& ADMIN- ■
ISTRATIVE ORDER ITO. X-61 EY OITERK^G A BASIC CODE '
TO GROCERY MAtlUFAGTU'RIIIG INDUSTRIES. 34
APPENDIX VIII.
MEMORANDUI.! OF JUNE 9, 1934, FROM N.R.A. ADVISORY COWJCIL
TO THE ADMINISTRATOR 47
. . • , APPENDIX IX.
REPORT OF COMMITTEE ON COMPLETK.N OF CODE MAILING 49
APPENDIX X.
TENTATIVE . OUTLIi^, , ,.,.,.. 51
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SmiMARY OF CONTENTS. FIKDItlGS AKD RSCQMMEiroATIOMS
The title of this study conveys to those unfamiliar with .MA aciiivities
very little information as to its true nature. For these, it should he said,
in explanation, tha.t Administrative Order No, X-61 was an order issued under
date of July 10, 1934 hy General Hugh S. Johnson, Administrator for Indus-
trial Recovery prescrihing a plan for the completion of code making applica-
tle to all industries then uncodified and presenting in connection there-
with as, Exhihit A, a prescrilDed form designated as "The Basic Code",
The report on this study contains in narrative form, chronologically
treated, an historical review of the beginnings of code making, the authority
therefor, the factors which resulted in a change of policy culminating in the
formulation of a plan to complete the codification process, the stages through
which this plan traveled to adoption, its operation, and the results ohtained.
The Introduction and Chapters I and II have to do \T?ith the early days of
NEA, the authority 'for codes as contained in the National Industrial Recovery
Act, the problems which arose from code mailing and administration, and the
factors Trrhich led up to the adoption of a plan to wind up the codification
process.
Chapter III outlines in some detail, the various stages in the develop-
ment and form-ill at ion of the plan while Chapter IV discusses various features
of the plan and the basic code prescribed in connection therewith.
Chapter V deals with the operation of the plan, reviews the procedure
for handling and utilizing it, and touches upon the results obtained and
Chapter VI contains certain findings and conclusions which have been reaced
as the result of the study.
Summarizing the findings set forth in the report on the above study,
the findings are:
I
1, The basic code was unsuccessfijl in accomplishing its plan for com-
pletion of code making,
2, Its timing was ill-advised and should havo been initiated much
earlier in the code-writing process,
3, A thorough and comprehensive classification of industry for admin-
istrative purposes should have been made in connection with the formulation
of the basic code. It seems desirable, from the viewpoint of administrative
preparedness, to stress the importance of endeavoring to prepare in advance
an accurate classification before putting such a plan into operation.
In addition to these findings the following question is raised:
In the event any new legislation is enacted which contemplates the
formul3,tion of codes or some sililar documents for the regulation of industry,
showdid a plan for the grouping of the smaller industries under codes with
identical provisions, such as was contemplated by Administrative Order No. X-61
X-61
9630 -iii-
te formulated in the early stages of the administration of the new law? The
issue is whether such a plan, tira^d in this manner, would serve as an effective
complement' to the codification of the major industries and reduce the numter
of individual codes to an appreciable minimum.
I
9630 -iv-
-1-
THE BASIC CODE (ADMimSTE/vTIVE ORDER NO. X-6l)
IITTRODUCTION
On July 10, 1934, Administrative Order No. X-61 , entitled "Plaji for
the Completion of Code Making", was isstxed over the signature of G-enersi
Hugh S, Johnson, Administrator for Industrial Recovery. This order is
attached as apnendix "II". ., .
The scope of this paper is defined and limited "by the statement of
administrative policy contained in the ahove order, and supplemented by
various other orders and memoranda which will he trea.ted suhsequently.
Essential, of course, to a full understanding of the policy itself, is a
knowledge of the background against which it came into being, and the extent
to which it accomplished the purposes, for ?/hich it v/as conceived»
Accordingly, therefore, while endeavoring alwaj^'S to restrict this
study to the boundaries outlined by the substance of Administrative Order
X-61, it will be necessa,ry, in order to attain the proper perspective, to
indicate the sources of authority/ for the policy; to review earlier methods
and procedures employed by NRA in codifying industry; to investigate the
factors leading to a changp. of -DOlicy, and the circumstances under which
this plan was enunciated; to trace the various stages in the growth and
development of this DOlicy prior to promulgation, and the extent of po,rticipa-
tion in its development by the various boards and divisions of JffiA; to
survey the general IGIA situation at the time of -oromulgation; to indicate
the mamier in which the -plaJi was put into operation and the extent to v.'hich
it operated; to examine the effects of the policy upon industry, upon the
code-making processes of MA, and upon the NRA organization, and to indicate
the extent of its effectiveness in accomplishing its stated objectives;
to appraise and evaluate the plan in general as a phase of KRA administra-
tive policy, , • , ,
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'■ • -2-
CHAPTER I.
■' ' ■"'■ ■ '■• ■ ■ ' MA 'as- a "GQ]}S'MAKIU& "ORGAHIZATIDH
I. The Authority for Code Making in the Act.
An examination of the sources in the Act from which KRA derived its
authority to codify America,n industry discloses imraedia^tely the troad grant of
discretionary powdr allowed the President, .in effectuating the general policies
enumerated in Section 1.
Various alternative methods were enacted for the carrying out of these
general policies, A hrief review of the various methods prescribed, and the
extent to which each was used, is a iiecesss,ry hackground for an understanding
of developments will ch later led' to the: consideration of a Basic Code,
Section 3(a) of the Act provides f or. vpluntary codes cf fair competition,
and' prescribed the'" h'asic^'procedure fox- :the formulation of codes "by "one or more
trade or industrial associations or 'grbups, " and approval "by the President,
The President viras authorized to approve codes only in the event that he found
(l) that the association' or' groups sponsoring the codes imposed no inequita"ble
restrictions on admission to mem'bership among the groups represented; (2) that
the_ applicants were truly representative of their respective, trades or indus-
tries'; (S)' that such proposed codes were not. designed to promote monopolies
or to elimi'nate or oppress small enterprises and would not operate to dis-
criminate against the latter; and (4) that the proposed codes would, in his
Judgment, tend to effectuate the policy : of- the. Act. • .
'When the legislation \"7as being formulated, in Ju:ae, 1933, it was irapossibli
to forecast the degree to which, industry would respond "by- submitting voluntary
codes, and so, "provision, was made in Section. Z(d.) to the. effect that if in-
'diistry failed to talce the initiative- in code:making, the President might do so.
The Tre side nt was- thefe*in-'authorize.d;, upon-, his own motion, .or -upon complaint
that abuses inimical -to the 'public interest and contrary to the policy of the
Act were prevalent in every "trade or industry or; subdivision thereof, for which
a code had not already been approved, to prescribe and a^pprove a code for that
trade or industry or subdivision. Such a code would be approved by the Presi-
dent only s.fter such notice and hearing as he might specify, and would have
the same effect as a voluntary code approved ■under Section 3(a),
F"'axther powers of imposition wore to be fo^und in Section 4(b), by which
the President was authorized to license business enterprises in order to make
effective a code of fair competition or an agreement or otherwise to effectuate
the policy of Title I; and in Section 7(c), wherein the President was granted
the power to prescribe such limited codes of fair competition covering hours.,
wages, and other conditions of employment as he might find necessary to
effectuate the policy of Title I, These powers are mentioned merely for the
purpose of completing the picture. They have no direct bearing upon events
leading to the subject of this study.
A new concept, the idea of agreements for the effectuation of the policies
of the Act, is introduced in Section 4(a). Under this provision, the Presi-
dent was authorized to enter into agreements with, and apiDrove voluntary
agreements among persons engaged in a trade or industry,, labor, organization,
^nd trade or industrial organization, if in his judgment such agreements would
9630 ■ I
aid in effectua.ting the purposes of the lawj ii was -under the authority of
this section that the President pi'oraulga.ted the President's ReemplosTTient
Agreenent (PEA), asking employers to cooperate "by agreeing with him to
maintain certain conditions, particularly regarding wages and hours of em-
ployiient,
II. The Beginning of Code Making- and the PEA, -
From araong the various possihle lines of action outlined ahove, the
President selected the powers conferred upon him in Section 3--a, to
negotiate voluntary codes, as the hasis for carrying out the purposes of
the Act, and it was upon the exercise of the functions therein granted that
the early history of KELA was moulded. This course was made possihle "by the
wide~spread and enthusiastic application for voluntary codes on the part of
industry, Wliile these negotiations were proceeding, ho^^ever, on a "basis
that rras ostensihly, and in fact, voltintary, there remained in the hack-
ground the "io'>7ers of the President, above mentioned, to impose codes should
conditions require such coui'se,
Uith the submission of the earliest applications for voluntary codes,
NBA was confronted with the in lediate problem of inter-ore ting the Act,
formulating policies both of a substantive and administrative nature, and
devising varying procedures and organiz8,tio.n set-ups as the changing needs
made necessary. This assumption of resDonsibility of interDretation and
policy-making by NKA was the inevitable concomitant of the indef initeness
of the objectives sought by the Act,
It has been noted above that the President was required under Section
3(a) of the Act to make certain findings of a generally negative nature as
a prereqtiisite to his approval of a voluntary code. Positive guides to
policy, however, were few. In various sections of the Act it was indicated
that codes should include (l) provisions covering minimum wages, maximum
hours, and "other conditions of employment"; (2) .measures to prevent
"destructive wage cutting and price cutting"; (3) fair trade practice
provisions, and (4) provisions protecting certain labor rights of collective
bargaining.
Thus, on the basis of the sources of authority previously noted, and
with the gu.idance of the general policies enumerated above, NPA set, out, in
effect with s. carte blanche within the limits of the Act, on its program to
bring about industrial recovery.
In Bulletin BTo, 2 issued on June 17 , 1933, entitled, "Basic Codes of
Fair Competition", WRA outlined the ^orocedure to be observed in the formula^
tion a,nd approval of voluntary codes. It was stated that so far as
practical the major industries would have the first attention of the
Administrator, Industry was reminded tha,t: "It is not the f-unction of the
National Recovery Administration to prescrite what shall be in the codes to
be submitted by associations or groups. The initiative in all such matters
is e:rpected to come from within the industry itself,"
And so the work of codification was begun, and every effort was made
to expedite the process, and have at least the major industries covered by
codes v;ithin a few weeks. In spite of every endeavor, however, and altho
industry was responsive and made many applications for codes, the progress
9630
«4-
of ner;atiations v/as discouraalngly sl.o-.7. The rrj-,roval of Code Wo. 1 for tiie
Cotton. •Te7;;tile:;Industry,;:renuired a full month for negotiation; and o\it of
the Iraidreds -lending, , only .eight, had Deen airoroved at the end .of the second
month. It ■T-S feared th,s,t \Tnle-$s;a-,s-oee6.ier ■:;eans could te found for ca.rrj'--
ing on the •Trogra.in, a reaction might set in to offset the stimulus ':'hich had
permer.tet". the industrial structure during the early summer.
At tl-is time July 20, 1S33, the President's 2eem->3loyment Agreement
(pea), -as conceived, and the, greatest -leace-time canTjg.ign in the historj'- of
the ^'ovs-rn.ient \7as launched, a;o-;ealing to the emotions, the patriotism and
the prejudices of emioloyers^ .employees, and consumers, alike, to bring success
to the ;re."t' drive . to- reduce. ungm-.;4oyi;'ent , increase ^yages, and spread
purcliivsii'.' ■ ibrrer. It. vas' a- sim-ole plan, , conceived in .necessity, fofjided on
the po-.-.ers grr?iited the Presidsnt in Section 4(a) . to enter into :^:ad. e.]yirove
voluata.r;'. a",Teements, and cprried out "^'ith a dr iv in q;- energy.
' ■ ■ By u.tilizing the facilities of, the United States Post Office sy&.tem,
practically all employers in the country '."'e re contacted \"fithin three or four
da3'"s , end. over 2,300,000 employers si'/ned agreements '^ith the president, hy
',?hich the- -"or^-ing conditions- of. some 14-1/2. million em'olo3^ees were temporarily
controlled. Unlike the- codes of fair competiticn, no -oenalties v/ere a-ttached
■ to 'viola-tions of these agreements,. Puhlic ooinion -V'S ex'iected to Be the
persua?.siv-e force for -compliance, ■ and the Blue Eagle nas invented as the
sym'bol hy '.'hich coo-oerating em-jloyers should he knov/n.
In none sections the Blue Eagle, ^^as more effective than in others,' out
ever;,'- he le its influence ^-.-as felt. Public o ^i^ion was strongly behind the
•Pr-esident, and fe'-' were the em ^loyers- who did not -display the Bl-ue Eagle.
In this ; 'ay, with public o'oinion forcing industry into the P3A, .it ras to
the -interest of emjlo'^ers to secure s.e-'oar ate. codes by .coo:oer at ive , effort ,
and thus ,tal:-e advantage of the trade practice, a.nd price., protection irovi-
sions being offere:d- by -iJpA.,. ■ '- -
Thu.s, --ith the majprity of , industry,/- already -comuitted t.o the hour and
wage 'irovisio-ns .of. 'the PPlA,--. with_ such- modifications and s.ubstitutions as
were approved, 1\TRA was now ready to -oroceed with the --ork of codification,
and every facilit;'- of the organization was henceforth directed to that
purpose. . ]?rom time to time new ■ substantive policies were formulated and
annoimced', .on the basis of cujnulative experience; and rules and regulations,
administrative -CLevices and procedures were established with a view to secur-
ing and .:£Lintaining an orderly and ejcijeditious -nrocess of code formulation.
These '-ere prescribed either by executive order of the President or by direct
action of' the Administrator, NBA was. at all times a living organization,
growing,' developing, changing, to meet, the ever increasing demands of the
work • hich it ha.d -undertaken,
, The story of the first,' year of code-making .under NBA, and the problems
"'ith which the 'organization- '-'as. confronted, and which it tried in various
ways to ::eet, is the stor]'- of -^he factors leading to the administrative -Dolicy
with which this -0§,per is concerned, :
9630
■■ CHAPTER II.
FACTOES LEADIUG TO A CmiEGE OF POLICY.
.The growing belief among HRA officials in the desirahility of a change
of code-nia.king policy, resulting finally in the issuance of Administrative
Order X-61, was a cumulative impression lasting over several months. The
considerations upon vrtiich this conviction was based fall generally into two
cla,sses, - code-making prohlems, and early problems of adjnini strati on. It
would perhaps be well to treat these subjects separately, insofar as they
may be segregated, ■
I. Code-Making Problem.s.
On June 21, 1934, General Johnson, looking back on one year of code-
making activity, on the part of ITEA, said, in part: 17
"Once la.unched, there was no halting
the code-making process. It had to be ,
carried through so that every industry
in the country and its workers might
as quickly as possible have an even
break of the recovery program's benefit."
Thus did General Johnson describe the situation which had arisen with
'respect to code-making during a year of NHA.« Fr^^ra the beginning, ITRA had
been confronted with an avalanche of codes of all sizes a.nd all degrees of
importance. During the fall m.d winter of 1933, codes had been expedited
to approval with relative speed, Negotiations were carried on \mtiringly
by an enthusiastic sta,ff , without thought of time or energy expended.
Policies, during that period, were in an early stage of development, and
the progress of codes was not 'directed to any great extent by precedent or
by policy determinations, except for the general policies outlined in the
Act,
The trade practice provisions which found their way into codes represent-
ed, except for such generally accepted prohibitions as commercial bribery,
defamation of competitors, etc, the final outcome of negotiations between
the KRA and the representatives of the industry concerned. Likewise, the
labor provisions, as they appeaxed in the codes, were usually the result of
long, and sometimes bitter argument and controversy. Provisions were sub-
mitted, and were approved, covering almost the entire field of industrial
operations. Voluntary agreeLients of su.ch broad scope, dependent first upon
agreement between competitive groups within the industry itself,, and second-
ly upon agreement between representatives of the industry, the general public,
and the E2A, WQre necessarily arrived at only after & long series of confer-
ences, hearings^ invostig-.tions, an,d routi:ce procedure.
As the months passed, and the great majority of industry and labor were
brought undei" codes, it had been expected, or at least hoped, that there
T] KRA Release IJo. 5889,
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V70uld be p.. marked reduction in the ; ^mount— of time and energy spend in for-
mulating new codes. The earlier approved codes had been in effect and
operation for sometime, and the facilities of the staff were needed for the
\-ork of administration.
The hoped-for rel-xation in the pressure from industrial groups for the
formulation of ne-w codes, or supplemental codes, did not seem to occur. It
is true that d'oring the spring of 1934, the volume of codes decreased, hut
the v/ork of formulating each individual code was "becoming more involved and
more difficult, and the codes were proposed by smaller and smaller segments
of industry. Yet, in formulating codes for even the smallest groups, the
same controversies and arguments arose as to permissable provisions, the
same procednjre as to hearings, conferences, et cetera, had to be followed,
and due considera,tion had to be given to the opinions of the several Advisoiy
Boards and Divisions of IHA., representing every conflicting interest in the
economic picture. Frequently months were spent in trying to write even a
very small code in a manner acceptable to all parties in interest.
The intensely human and sometimes dramatic job of codifying American
industry was inevitably drawing to. a close. The long hearings and con-
ferences lasting far into the night v/ere .becoming fewer; the bickering,
compromising, and bargaining of the code-making period was occupying a
smaller part in the staff's activities, but negotiations were becoming longer
drawn out, and differences less speedily resolved. The fire and the urge
of the early months were dying out, and the Recovery Administration was be-
coming more deli'berate In its actions, more careful of its commitments,
ifflA was now ready to enter upon a more prosaic, but perhaps more impor-
taxit, phase of its activity, - that of adrainistering and enforcing the codes
It ha.d approved, and observing the effects and results of its earlier work.
For the first time in history, industry was operating under rules of ethics
- codes of fair competition; it was KSA's new job to administer and aid in
, securing compliaaice with these rules, and, in some ca.se s, on the basis of
experience, to change them,
Not only, then, was IIRA faced with the law of' diminishing returns as
regards continued activity in the realm of code-making, but a^-lso there was
developing a very real need for the organization to direct its attention to
the subject of code administration. The problem of devising a suitable plan
for bringing the work of code formulation to an end, was occupying the minds
of the highest officials of IffiA. The development of such a plan will be
traced in Section III, of this study,
II. Early Problems of Administration
Early experience in the administration of approved codes indicated a
number of ways in which all was not well with the policies previously pursued
in code-making. To as great p.n extent as possible, it was sought to coT-rect
in the new policy the mistakes and shortcomings which administrative
experience had pointed out in the old.
An unexpected development, with attendant "onexpected problems, had
been presented by the hundreds of codes presented to I'lElA. for approval, -
9630
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codes of all sizes and degrees of importance, co'des with overlapping def-
initions, codes intended to cover only a small portion of a larger industry,
vertical codes cutting through the distribution functions, codes suhmitted
"by rival associations to cover the same industrial group, et cetera. At the
outset, it had "been the olan to codify the ln,rger, "basic industries. But
the code idea had "become a fever, in which the earlier, sounder conception of
IIM "bade fair to "be lost from view; and NRA was not prepared for the work
that was thus thrust upon the organization,
, Coincident with- the imforseen deluge of smaller codes, came the gigantic
and equally unforseen problem of unforseen pro"blera of industrial classifica-
tion, ■ Of primary importance was the necessity for insuring uniformity or
similarity cf code provisions, "both la"bor and trade practice; for closely
related or directly competing divisions of industries' or trades. The in-
herent difficulty of classifj'ing American industry for administrative purposes,
talcen together with the nearly total unpreparedness of HRA for attacking the
pro"blem, presented one of the most trou"blesoiae o"bstacles in the path of
smooth-functioning code administration.
It was natural that the gains secured "by an industry through its code
might well "be o"bscured, or even lost sight of, in the light of the know-
ledge that the government had approved a more favora,ole price protection
provision, or perhaps a less onerous la'bor provision, for a competing, or
closely related industry. Keeping in mind the facts that codes were "being
approved for such small su"bdivisions of industry as "Ply Swatter Manufactur-
ing,^ "Lightning Rod Manufacturing," and the ""Jet Mop," "Dry Mop," and "Mop
Stick" Industries a.nd that the negotiations were "being carried on at
different stages in the development of KRA policy, and "by different per-
sonalities (sometimes varying widely in their opinions as to what constitut-
ed "fair competition") , it was inevitphle that some industries would "be more
favoralsly treated than others, and that consequent dissatisfactions would
ensue.
Becoming more and more bothersome, too, was the problem of overlapping
definitions. This situation was due in part to the efforts of applicant
groups to secure broad definitions, as a meajis of covering fully a given
competitive area, and to provide a broad basis for assessing the costs of
code administration; in part to the necessarily hasty procedure and the
general unpreparedness of MA in the matter of industrial classifications.
On the other hand, questions were frequently arising concerning the
code coveage of articles not clearly covered by any definition, I.Iany
products might reas.onably be said to have been included under more than one
code definition, being on the border line of each, and usually certain to
produce dissatisfaction on one side whichever v;ay it might have been
determined.
More thoutrlesome, however, and more difficult to remedy than multiple
coverage or non-coverage of particular articles, was the multiple applica-
tion of codes to single, enterprises in some cases, and other instances where
areas of competition were n-)t Included within the definition of a single
industry or trade. . ■■ ;.
A great many cases arose in which the operations of a single firm were
9630
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sutjcct to several codes. Sometimes a firm was presenteO. with, a very real
, pro'blem in attempting to isola.tc its. opi^rations on the taSis of the diffur-
ent code definitions 'onder Tuich its products had "been classified. Even
where segregation of work v.'as physically poscxhle, it was frequently, at the
cost of officiuncy and cft^n ■ujint-Gt.sS''rily disruptive of the firm's accustom-
ed nethcd of operation. ' . ,
Some codc-s, from th^. "broad coverage of th^ir definitions, reached into
unexpected places, v/-hilc others i^ore so narrow in their cover.age that
directly computing functions night te allocated under different codes.
What gave the force of reality to these questions of classification was
the ever increasing n-omlDi^r of svaall codes, each with its own Inhor and trade
practice provisions. The two developments were inseparable, -Tith a general
uniformity or similarity in the provisions of codes for the larger divisions
of industry, there would have hecn less occasion to dispute the code- coverage
on a p-rticula,r product. I
But as the cod^s increased in numher, they sJso increased in the in-
tricacy and complexity of th^ir provisions.
Another factor of code administra,tion which was "beginning to claim the
spotlight of attention iTas the assessment and collec.tion of expenses incur-'-
red'oy the code authdrities in administering codes. LIRA, had proceeded very
slowly in granting' code authorities the p).ower to institute the legal proceed-
ings 'for the collection of fujid.s for the expenses of- code administration, and
even then it Y/as apparent that; the difficulties in- financing the administration
of small codes were not' solved. The small groups desired to maintain their
authority, and operate under their own code; hut the expenses Of ad.minister-
ing their owji code ^'ero frequently more than the traffic could' Or' would hear,
From the foregoing, it is uvidcnt that there was need for a new policy
determination, directed toward the following o'bjcctivcsj
1. To hring to a,n end the period of code-making, and to
free, the orgajiization for the work of administration
and compliance, , ■■
- 2. To reach this goal with the crea,tion of as small a
numher of new codes as possihle. ■ , "
3, To strive for -uniformity or sir-iil--,rity of provisions
in codes for related, or conpetlng- industries,
4, To effect consolidations v/ith approved codes, where
possible.
5, To relieve small industries from the onerous expenses •
of code ado'-otion and ''administration,
\{o may now proceed to a study of the formulation of a plan 'by which it was
hoped to accomplish the above objectives, and the various stages and degrees
by which the plan developed.
9630
^9- ■
CHAPTER III .
THE_PEA1I FOR THE COliPLETION OP CODE-MAXING
I . Early Developments in the formulation of a Plan
The earliest documentary evidence fotind of the Iseginnings of a plan for a
general, or T3lanket code is contained 'in a recommendation "by Charles. E. Ruff,
an Assistant Deputy Administrator, eai-ly in Eehruaiy of 1934, that a "ready-
to-wear" code "be dra^wi up for small industries not already codified. 1/ It was
suggested that such a code might "be called the "President's Code for Miscel-
laneous Industries. "
To substantiate the need for such a plan, I,Ir. Huff pointed to the large
amount of time being spent "by KRA, in formulating and approving codes for small
industries, and mentioned that a num"ber of small groups, while desirous of a
code, were una"ble to afford trips to Washington to secure a "tailor made jo"b,"
The detailed recommendations were that a general code "be prepared hy NBA
and offered to small industries for acceptance or rejection as they saw fit.
Labor provisions would be established in the code, with the provision that ex-
ceptions might be granted, with the approval of the Labor Advisory Board, for
industries similar or closely related to others operating under more liberal
labor provisions.
It was Mr. Ruff's idea that the general code itself would be so fixed and
standardized that- the main work of ITRA would be in examining the industries'
proposed definiti'ons for conflicts with other codes, and in establishing true
representation. All that would remain then would be "to publish notice of the
definition and ask for protests by mail. The' code having been approved by the
Boards and Divisions would not be reviewed by them,"
Mr. Hickling replied that Mr. Raff's suggestions might prove useful in
later developments, but that in his opinion it would not be practicable to
recommend the adoption of a blanket code at that time,.
There is no evidence that there was any direct connection between the idea
put forward by Mr. Ruff, and the plan that was finally promulgated as Adminis-
trative Order X-61. That there may have been some connection is indicated by
the fact that the correspondence is to be found in the file of Blackwell Smith,
Assistant Administrator for Policy, on the Basic Code.
The matter doubtless was the subject of considerable discussion and evi-
dently culm.ina.ted in the Assistant Administrator for Policy suggesting to the
Director of Research and Planning Division, in a memorandum of date May 14,
1934, that they make a joint recommenda.tion for a Presidential Agreement to
cover small industries and that the Research and Planning Division suggest the
number of employees at Y/hich to drav/ the line. It was specifically stated
that groups logically integrated with larger industries would be excluded from
such a recommendation. 2J
1/ Undated memorandum to Deputy Administrator C. L. Hickliiig in Assistant Ad-
ministrator for Policy, Blackwell Smith's file on Basic Code, in URA files.
2/ Memorandum from Assistant Administrator for Policy to the Director of Re-
search and PlaJining Division, May 14, -1934 - BlaclOTell Smith's file on Basic
Code, in HRA files.
9630
-10-
PuTther exchanges of vie\Ypoirit dixring the next few days culminated in
a meraoi-and'um from the Administrator to Colonel G-. A. Lynch, Administrative
Officer, tuider date of Hay 21, 1934^. This memorandum 1/
\l This neiiiorandum is located in the file of the Assistant Administra-tor
for Policy, on the Basic Code, in NEA files, and is here quoted in full;
"We have got to clean this show of Code making and there is
too much consideration and fumbling in doing it, I want immediate
action along the follov/ing lines:
"1, Let's get up a 'hasic Code' containing only the following:
a, 40 hour week and child lahor,
"b. $12 to $13 per week minimum wage,
c, Provision as to exceptions, etc, which conform
with approved policy,
d, Ko sale or service he low cost,
e, Leon Henderson and Boh Montgomery's provisions
as to price cutting and cost finding.
f , Statutory mandatory provisions,
g, Provision for Code Authority and Government
right of representation in accordance with
approved policy. This could and should he :; ■
done within 48 hours,
"2, Then we will draft communication to every Industry employing .■:>'
less than 5000 people with Codes not yet approved and. sayj
"'In the interest of expedition the President would
like to have you assent to the foregoing hasic Code -
without further delay,
"'If thereafter you desire additional fair trade
provisions you may submit them and if supported
hy 75)j of establishments in your Industry and
ap23roved by the Administrator they will auto-
matically become part of your Code,
"'We will put the basic Code through without re-
ference to anybody but the Administrator.'
"3. The same proposal should be made .to all the big Codes still
hung up such as ShipTsing, Commijmiceition, Anthracite, Public Utilities,
etc, with the added remark that 'in the event this is not agreeable
to you the President will impose Codes covering only wages and hours
and child labor in any case in which he finds the labor conditions in
your Industry «below the prevailing industrial rates,'
"4. On this formula I expect to complete or abandon all Code making
. except hangovers of. administration by June 15, This organization
must be immeciiute lyre set for Code administration. The fact that all
Code Authorities are not organized and functioning is an indictment
of this Administration,"
&630
Signed - HUGH S. JOHIvtSON, ADMINISTRATOR
-11-
was the actual tieginning of the campaign to formulate a plan to end code
making, and laid down general lines along which official thinking was to "be
directed, ' "
This memorandum did not "bring action within 48 hoixrs, as General
Johnson had suggested. It did, however, serve to define the issues and
concentrate attention on the points which" had "been raised, Blackwell
Smith, in a memorandum of May 22, 1934, addressed to the Administrative
Officer, the Eeview Officer, and the Director of the Research and Planning
Division, and in another memorandum of May 23, 1934, addressed to General
Johnson, outlined a mun'ber of important points to "be clarified and settled
prior to the a.pplication of the policy prescri"bed 'by the Administrator,
Some of the issues raised "by Mr, Smith were; 1/
1, TTliether the effort should he made to "bring all industries
having pending codes under the proposed Basic Code, with a
resultant iieak load of administration and compliance work
forthwith, or whether the same thing should he done as to
terns, "but on a voluntary "basis only, that is, enforceahle
hy the Blue Eagle, ■ '
2, The difficulties which would he encountered in drawing up
exa.ct definitions.
3, TiThether or not there should "be puhlic hearings,
4, TiiTliether provision should "be made for maintenance of wages
ahove the rainim/om,
5, Should there he a Code Authority set up for each of the
new Codes or sho-old there he a voluntary Committee of the
Industry without administrative facilities?
6, _ Should the step apply to supplementary Codes?
7, He also questioned whether it was fully recognized that
the later insertion of trade practice -orovisions would mean
practically the same amoiHit of Code making as to have trade
practices in the first instance merely delaying the in-
cidence of the hurden,
8, Should the hasic Code include the standard, well-recognized
rules against various types of cheating, for example, the coni->
nercial hrihery rule?
1/ Both memoranda are to he found in Blackwell Smith's file on the
Basic Code, in NM. Piles,
9630
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Efforts \7ere now ijnder .way -in the industry divisions to speed up the
formulatioii of codes on which,' work had heen : started. On May 24, 1934,
Division Administrator A. R. Glancy re-oorted that his division was attempt-
ing to reduce the number of small pending codes chiefly loy persuading their
proponents to- accept a code already apurovsd for a closely related industry, 1/
In the meantime, George S. Brady, Deputy Assistant Administrator for i
Ola.ssif ication Policy, had heen working, on the proToer groupings and classi-
fications of industry for adiiiinistrative puTT^oses, and on June 4, 1934, the
Assistant Ad-ministrator fof Policy recommended to the Administrator that the
promulgation of the "basic code idea te held in abeyance for a few daj^-s', i
pending a report from Mr. Brady. It was pointed out; in this memorandum i
that there were only 162 pending codes before the Administration and that, 1
in Mr, Brady's opinion, all of those logically fell under an approved code
for sone other indus'try, or in a few cases, under a pending important code, 2,/
!
On the same day, General Johnson modified his original plan to the ex- |
tent of making it applicable to all uncodified industries, rather than small |
ones only, and also introduced for the first time the idea of creating a |
single code authority for all small codes, the exiDenses to be borne ^oj NBA,
but \7ith lee-way for any industry which so desired to erect and bear the ex-
penses of its o\im. code Authority. ,
The plan was now coming very much into the foreground of official thought
and consideration .and was rapidly taking definite form. The general objec-
tions and methods were nov/ sufficiently crystallized to permit of the plan
being referred to the various Advisory Boards and Divisions for their recom-
mendations, prior to promulgation. _ .
II, The'.'Participation of tiie Advisory Boards and the
Advisory Council in ; the Development of the Plan.
On June 5, 1934, the Industrial, Consumers and Labor Advisory Boards
were consulted for the first; time on the question of a Basic Code, On that
date Mr, Smith addressed a memorandum to each of these Boards requesting
their reaction, at the earliest possible moment to the following documents,
which he attached:
(1) AdJTiinistrativfe Order setting forth the plan, with
Basic Code attached,
(2) Supplementary Administrative Orders.
(0) Suoplementary Hules and Regulations, 3/
1/ Meniorand-um from A. R. Glancy to Blackwell Smith - Blackwell Smith's
file on Basic Code, in NBA Files,
2/ See Appendix II - Exliibit A, page 40. ,
3/ See Appendix II - Administra,tive Order with Basic Code attached -
Exliibit A,
SujDplementary Administrative Order - Apnendix III,
Supplementary Rules and Regulations - Appendix IV.
9630
-13-
On Jvjae 6, 1934, a meeting of the LalDor Advisory Board was held for the
piirpose of considering the documents suhraitted by Mr, Smith. At this meet-
ing the fo]. lowing resolution was passed:
"The Lahor Advisory Board recommends as a substitute for
the lahor provisions of the Basic Code, the application of the
lahor provisions alrea,dy in effect in kindred codes, the Ad-
ministrator to determine the grouping or consolida.tion, 'i
In transjjitting the ahove resolution to the Assistant Administrator for
Policy in a memorandum of the same date, Dr. G-ustav Peck, Chief of St3i"f of
the Labor Advisoiy Board, said in part;
"The Board felt rather strongly that it would he unwise
to malce public at this time, one year after the National In-
dustrial Recovery Act went into effect, a Basic Code which
might appear to he and vrould he easily interpreted as a
standard code. While we sympathize with the ambition of
smaller industries to adopt codes of their own, we are of
the opinion that the number and variety of codes already
approved, leaves ample room for the proper and fair group-
ing of all remaining industries. The approximately 500
codes which will be in effect when this Order is issued
have -been the result of fair negotiations by industry,
labor and the NBA, and comparative justice will be done if
the remaining smaller industries are requested to accept
the terms under which kindred industries are operative." l/
At the sam^e time, Dr. Peck attached to his memorandum a point by point
criticism of the Basic Code, as submitted, in the event it should still be
deemed desirable to pursue this course.
On the next day, June 7, 1934, Dr. Peck sent a supplementary memorandum
to Mr, Smith recommending the insertion of a provision to the effect that in
no case should hourly earnings be reduced and that there should be no reduc-
tion in \7eekly earnings to offset any reduction in hours up to 20^, "It is
perfectly evident," he stated that many of the industries to be included
under this catch-all code would be paying far higher rates than those con-
templated for the Basic Code, and, of course, the IxTEA does not want to
sponsor or seem to approve a Code which would permit wage reductions,"
The Be.sic Code, moving rapidly now to the final stages of formulation,
was referred to the Advisory Council for consideration and recommendation,
■ III. PI1:AL stages IIT FORlviUXATIOW OP PLAR
The Advisory Council a,cted promptly in its considera.tion of the matter
and ajjproved the proposal in a memorandum to the Administrator under date
of June 9, 1934 (See Appendix VIIl), subject to certain specific recom-
mend.a,tions which are summarized as follows:
1/ Memorandum from Gustav Peck to Blactovell Smith, June 6, 1934 -
Blaclcwell Smith's file on Basic Code, in NEA Piles,
9630
-14-
1, That the proposed 2^1an shall not apply (a) to certain
desi^ia.ted Industries vrhose codes vere nearing completion; and
(■"o) to a few major industries then -uncodified v;hose importance
seer:ed to have warranted the preparation of individual codes,
the industries referred to in "ooth instances (a) and (b) to be
desifTiated by the Administrator;
2. That industries as yet uncodified a-nd not covered
by the preceding paragraphs (a) and (b) be encoiiraged to
consult \7ith kindred industries, thereby placing them under
the coiTolete provisions of an existing approved code, the
deter:.iination of the proper kindred industry to be made by
the Adiiiinistrator;
3, That all other uncodified industries not dealt v/ith
in the two preceding peipagraphs be urged to adopt the basic
code, the jDrovisions of which (a) to carry no flat declara-
tion of hours and wages but that provisions dealing with
such matters for any industry applying for the basic code
be those in effect for kindred industries, and (b) that the
recognized standard labor provisions of existing codes be
included in the basic code;
4. That there be clarification and emphasis to avoid
possible false impressions on the following points: (a)
that the move contemplated purely voluntary action from
indu-stries, with the possible exception of important ex-
ceptional industries, if any, which failed to apply and
were found to have had sub-standard working conditions;
(b) that the proposal was not a move to force remaining
indtistries under codes; (c) that the Service Code move was
entirely separate and remained unchanged; 1/ and (d) that
the iDlrrpose of the plan was to. provide a, simple means of
giving a code forthwith to those uncodified industries
v?hich desired a code.
The approval of the plan by the Advisory Council with its modified
recommendation. Outlined above, apparently provoked renewed discussion
before the Adiiiinistrator , as no definite pronouncement was forthcoming
until one month later and on July 10, 1934, when the Administrator
announced the plan and made it effective through the issuance of Ad-
ministrative Order No. X-61 with the form of the basic code attached as
Exhibit II thereto.
An examination of the plan as embodied in Administrative Order X-Sl
and the two orders issued by the Administrator simultaneously therewith,
Administrative Orders X-62 and X-63 (See Appendices II, III, and lY |
respectively), reveals that the Adrainistra,tor to a considerable extent
follovred the above-stated modifications recommended by the Advisory Council
but strengthened the proposal by announcing that, while the plan was not
1^/ This refers to administrative action at this partictilar time on
service codes, •
9630
' -15-
intended "to force all remaining •uncodified industries ■under oodes", the
Administrator shoixld determine- 'as to any ■uncodified industry not ap'olying
for the TDa-oic code or for consolidation with a proper kindred industrsr rrith-
in thirty days, if the wages, hours and labor conditions in such in6.ustries
constituted an abuse inimical to the public interest and contrary to the
policy of the Act, the Administrator within forty days after the announce-
ment of the plan would provide for a hearing in accordance with Section 3
(d) of IJ.I.R.A, to determine whether a code covering hotirs of labor, rates
of pay and other working conditions should not be prescribed.
It is novi in order to review in detail the plan.
9630
-16-
■ CHAPTER IV.
FEATURES OF FLM FCR COtiPLETIOK OF CCI)E-MM:IN&
I. LJfflOE PEOVISIOKS
An exanination of Article II axid III of the ap-oroved form of the iDasic
code made a part of Mministrative crder X-61 as Exhi"bit "A" considered
along T-ith Administrative Order X-63 shows that ''fith respect to these
feat'-j.res the Administrator follor^ed the recomEiendations of the Advisory
Council in that no fla,t declaration of hours and wages was made, these
matters oeing left open in order that the hours and wages of kindred indus-
tries might he ap'clied and that the recognized standard lator provisions
"be flatly dfcclared.
This arrangement seems to have also taken care of the suggestions of
the Lahor Advisory Board, hereinbefore mentioned, as having been voiced "by
its Chief of Staff under date of June 6 and June 7, 1934.
II. TRADE PRACTICE PROVISIONS
An exa;;ination of Article V of the form and Administrative Order X-62
reveals that the -orice policies of MA as announced in Office Memorajidum
No. 228 ^:,-ere rigidly adhered to and that the standard provisions, common to
most codes, outlining the -powers and duties of the cjde authority were
allowed the notable exception that the plan for administration is entirely
different from that embraced in lorevious approved codes.
III. ADlIIinSTRATION THROUGH GEKSRAIj CODE AUTHORITY
Instead of a code authority set up and established by the industry it-
self, coc.es approved under Administrative Order No. X-61 were to be adjninis-
tered by a general NRA code authority at the expense of NEA with the members
thereof to be appointed by the Administrator. It is noted, however, that any
industry ap;olying for a code ■'onder the plan and desiring to do so (Article
IV. Basic Code), on apioroval of the Administrator, was allowed to elect its
own code authority which would have the same powers and duties prescribed for
the :^;eneral NRA code authority and such further rules and regulations as
the Administrator might prescribe. I
Administrative Order No. X-34, Appendix "VI" hereto, provided for the
selection of the members of the general NRA code authority. It was to con-
sist of one member appointed by the Administrator to serve as chairman and
three other members also appointed by the Administrrtor, one of whom was to
be appointed with the advice of thp Industrial Advisory Btard, one with the
advice of the Labor Advisory Board and one with the advice of the Consumers
Advisory Board. These four members were emriowered and directed to act upon
all matters considered by this general code authority; the said Order, however,
prescribed that one additional member should be appointed by the Administrator,
with the approval of the Industrial Advisory Board, for each industry whose
cod<5 wrs to be administered by such code authority, these additional members
to act only upon matters which -oertained to the respective codes for their
particular industries,
96S0
-17-
GHAPTER V.
OPEHATION O'F PLAN
I. proczduh:] lOR imiDLim plm
A^.ciif'; --itli the is£;ua,nce of Administrative Orders Nos, X-61, X-62 and
X-63, also cov.e Office Order 100 and Office Lieraorandtmi No. 251, the former
apiDointinr; a conmittee of three, raenhers to supervise the execution of the
plan pjid the latter -Drescrioin^' procedure for, handling it. The Office Order
designated l.ir, Hohert K. Stra.us as chairman of the committee on supervision
with iiessrs. Leon C. Marshall and G-eorge S. Brady completing the nemoership.
The procedure established by Office. Memorandum No. 251 was as follovs:
"1, The Con-aittee will ira'iediately distribute to each
Division liaison officer a set of documents, in-
cluding a cojjy of the Basic Code and related
Administrative Orders, for each code v/hich awaits
approval by each Division.
2. Within a \7eek of the receipt of these documents,
they will be sent out to each uncoded industry with
a covering letter v/ritten by the Deputy or Assistant
Deputy Administrator who has been handling any
negotiation with said uncoded industry, recommending
that said industry' s code be disposed of in accordance
with the principles laid down in Administrative Order
X-61.
3. As soon as these letters have been sent out, progress
reports she.ll be jaade to the Coraraittee on the Comple-
tion of Code Mahing by the Divisions, indicating to
what industries the letters have been sent, and what
the recomi;ienda.tions of the Division neve been with
regard to these industries.
4. Divisions will continue to submit weekly reports
on Saturdays to the Committee on the Completion of
Code Making as to the progress which has been made
during the days covered by these reports.
5. The Committee on the Comnletion of Code Making may
recommend to the Administrator any changes in this
procedure which it may deem advisable in order to
complete code -.laking in the thirty-day period allotted.
At the end of this thirty-day period, the Committee
' ,■ will make a definitive report, including any recom-
mendations as to fiirther action." (See An-nendix "D".)
The Committee on Completion of Code Making, as directed in the above-
mentioned office order and the said Office Meiiiorandum No, 251, under date
of AugU-st 6, 1934, submitted a report as .to the -orogress made which goes
into considerable statistical" detail from which the forecast was made that
119 codes vfould be disposed of by August 10, 1934, 73 of which were in-
dividual codes, 31 represented consolidations under Administrative Order
9630
-IS-
X-61 and 15 covered tasic codes under Administrative Order X-61. A copy
of tills report is annerced hereto as Apofindix "IX".
II. liJDUSTRISS EXGEPT3D ??.0M PLAiV
It i.dll te recalled that service trades vere exce-oted specif icall;r
from the -irovisions of AdiTiinistrative Order X-61 as well as such other in-
dustries as the Administrator for sneGific cause might desi,§nate for
different treatment. In the re-oort, above referred to, from the Comittee
on Coiipletion of Code Making it ^7ill be noted that Division VI had on hand
23 service codes in addition to the 17 shown to be in va.rious stages of
developLient in this division. It aroears that, aside from these service
trades the only exception granted from the provisions of Administrative
Order No, -X-Gl were the Grocery Manufacturing Industries which were offered
a basic code of their own under the terras of Administrative Order llo, X-39,
dated Se'otenber 21, 1934, a copy of v^hich is attached hereto as Appendix
"VII".
III. DISCUSSION OP RESULTS OBTAIivtED
It shoiild be recalled here that the report from the Chairman of the
Comv-.ittee on Completion of Code Making predicted that 119 codes would be
disposed of b;- August 10, 1334, 31 of which were estimated would be con-
solidations under Administrative Order No. X-61 and. 15 of which Yfould be
apTjrovals of basic codes thereunder. Purthernore, the estimate ^-as made
that a balance of 97 codes would be left on August 10, 1934.
It appears that the Chairman of this Committee in his predictions \Yas
too sanguine and that the results predicted were not achieved, as only 5
consolidations were made in all and only 5 basic codes were ever a-oproved
under AcUiinistrative Order X-61, Indeed, except in the single case of the
Wire P.eirif orcement Industry, a consolidation matter approved August 13, 1934,
all of these consolidations and s.xiprovals took place considerably later than
August 10, 1934.
Many factors combined to cause such a poor result. One was the fact
that a considerable nuinber of officials of NRA. did not look upon the plan
with fa,vor. This caused it, when adopted, to be not only unpopular with
the industries concerned but also with many persons in the Administration,
The movement therefore suffered from lack of complete cooperation.
Pra-thermore , the plan wa.s launched at a time when a great many submitted
codes had passed through extended periods of negotiations with the result
that the industries sponsoring them preferred to follow them through to
approval rather than accept any consolidation or the basic code. In order
to secure approval of codes in this category, instances arose of indu.stries
sacrificing and withdrawing provisions which had previously been relied on
and insisted upon as being fundamental and essential to the welfare of those
industries. This attitude was evidently based, in part, upon the fear that
N. R, A, would carry out its announced intention of imposing, in certain
circuiistances, provisions relating to hours of labor, vra,ges and conditions
of employment, and also in part because some W, 'R, A, officials in charge
of these su.bmitted individual codes, obviously reluctant to relinquish
supervision of them, attempted to persuade industries to secure approvals
of their previously submitted codes rather than accept the plan offered by
9630
-19-
Adrainistrative Order X-61,
Anothsr "umfavora'ble circumstance was the fact that the proposed "basic
code did not provide for trade practice provisions v/hich were specially
adapted to the various industries. In other vrords, this type of complaint
was to the effect that the proposed "basic code ;7as too standardized to take
care of the trade pro"blems peculiar to the varioxis industries. While K.R.A.
sought to ::ieet this ohjection with a,ssurances that amendments containing
trade practice provisions peculiarly applicable to individual industries
coul'd "be had later on, it is o"bvious that these industries were well axTai-e
of the difficulties which attended the path to approvals not only of ar-end-.
ments "but of codes.
A further o"bjection was made that the theory of industrial self-govern-
ment was replaced "by the idea of having the "basic code administered "by a
general 1^1. S, A. code authority or, in cases of consolidation, with an
administration conducted "by representatives of another industry. To state
the olDjection differently, autonomy would "be lost either "by accepting
consolidation under Administrative Order X-61 or hy securing a "basic code
thereunder.
In ffi-ddition to the diffidence shown "by industry, the failure of the
plan for the completion of code-making can in some measure be traced to
the lach of comprehensive, accurate and thorough classification of indu.stry
for adi^iini strati ve purposes. It seems desirable, from the viewpoint of
administrative preparedness, to stress the desirability and need for the
preparation of such a classification in advance of putting such a program
as the plan for completion of code-making into operation. Had this been
done no doubt some of the difficulties which beset the plan would have been
avoided,
Furthermore, the plan was adopted and put into operation too late in
the code-making process to accomplish the end expected of it, Sxperience
shows that the program would have achieved greater success had it been
formulated much earlier and used as a complement to the codification of the
major industries. It seems rather safe to say that had this policy been
adopted the number of individual codes would have been materially reduced,
the difficulties of administration lessened, and the prospects of securing
compliance greatly increased.
Prom all of which it rather conclusively appears that the plan failed
to rea,lize its objectives; that the results obtained \rere negligible; that
it was ujifavorably received by industry and consequently not utilized ex-
tensively; and that the Administration, when confronted with the failure
of the plan, never put into operation its announced intention of imposing
provisions relating to wages, hours and conditions of employment, under
Section 3(d) of the Act, in those industries found to be operating under
su1>-standard conditions.
9630
-30-
APPENDIX I
Statement of ScQ-jje of Study, Method of Treatment, and Questions
Meedinp; Further Research
This studj?- v/r^s treated very largely from a historical point of view and
is presented in narrative form. The conditions which culninated in the
adoption of a .plan to wind up the codification process have been reviewed and
'the stages by which the plan reached fraition have "been traced in detail and
in chronological order. Finally, some attempt was made to appraise the results.:
obtained, point out the failure of the program, analyze the reasons for the
failure, and present certain findings and recommendations'.
The subject "as developed in the following manner:
First, a tentative outline which is ra.ade a part of this report as
Appendix X v/as carefully prepared before anything else was attempted.
Then, some weeks were spent in searching out sources of information,
finding the material required to fill out the outline, and assembling this
necessary data, preparatory to the writing of this report.
The next step consisted in conferring with the various officials of IJEA
who participated in the formulation of the plan and had charge of its applica-
tion and in investigating conditions in IvIRA which gave rise to the need for a
new code-naking policy.
When the above details had been completed, the actual preparation of a
report to ro-ond out the outline com'-'icnccd, with the result that preliminary-
report was written and subsequently revised and put into this final form.
This report leaves little for further study. It is regarded by its
authors as being reasonably complete. It nay, however, at some future time
be interesting as well as instructive to ascertain if the industries, un-
codified at the time of the adoption of the plan for completion of code-mak-
ing, in addition to reasons given for failing to utilize the plan, did not
feel that they were being asked to adopt the hours and pay the wages requir-
ed of kindred industries without being compensated with trade practice pro-
visions designed to benefit and promote their own welfare.
It seems that the only source from which to obtain reliable informa,tion |
on this suggested question is the uncodified industries of July 10, 1934, and
their respective trade associations, if any,
A comparison of the tentative outline. Appendix X hereto, with the text
of this report will reveal a few other features which have only briefly been
alluded to, if at all, such as the details of the organization of the General
KEIA Code Authority and the departure from the plan as instanced in the matter
of the Grocery Manufacturing Industries. These fields may therefore in the
future be explored with profit, but for the purposes of this particular study-
it has not seemed advisable to treat them any further.
3630
«S1-
■ APPEITDIX II.
AEMINISTmTiVE OlffiEE ¥0. X-61,
PIAII I'OR COMPLETION OP CODE MAKING
By virtue of authority vested in. me as Administrator for Industrial Re-
covery under Title I of the National Industrial Recovery Act, and in order to
provide a simple means of giving a code forthwith to_ those industries remain-
ing uncodified who desire a code and in order therehy to free NBA for admin-
istration of approved codes, it is here'by ordered that:
1. This plan is available to any industry not yet codified under said
Act (with the exception of industries, including local service trades, for
specific cause designated hy the Administrator for different treatment). Any
such industry may ajiply to the Administrator for codification ty application
of the Basic Code (Exhibit "A", annexed) as the code for such industry. The
hour and wage provisions to be included in said Basic Code, as to any appli-
cant industry, shall be those already approved for the proper kindred in-
dustry, as determined by the Administrator, after due consideration of rep-
resentations of the applicant industrj?- and other relevant data. An uncodi-
fied industry, instead of applying for the Basic Code, may apply for con-
solidation and complete coverage l:)j the existing code for the proper kindred
industrjr, subject to stay as to applicant industry of provisions then incon-
sistent with policy.
2. If any such application is made by a truly representative body of the
industrjT- and if there be no objection to any party in material interest after
ten (10) days published notice to all concerned, such Code shall, without
further hearing, reference to Advisory Boards or other administrative action,
become effective ten (10) days after its approval by the Administrator, in
industries employing less than fifty thousand (50,000) persons, or by the
President in all other industries.
3. All uncodified industries which desire codification (excepting those
specially designated as above) are requested so to apply for such Basic Code
or for consolidation with codes for kindred industries. If, after the approval
of such application for any industry, it desires additional fair trade prac-
tice provisions or modifications as to such industry of the Basic Code, or the
code with which consolidated, such industry may apply therefor at any time and
will be accorded a prompt hearing and determination with respect thereto. Any
industry which desires to consolidate under the code of a kindred industr;?- may
do so on approval of the Administrator even after becoming subject to the
Basic Code.
4. It is not intended by this Plan to force all remaining uncodified
industries under codes, but as to any such industry not yet codified which
does not apply for such Basic Code, or for consolidation as above, within
thirty (30) days after the date hereof and in which the Administrator shall
determine that wages, hours, and conditions of labor constitute an abuse
inimical to the public interest and contrary to the policy of said Act, the
Administrator will within forty (40) days after the date hereof provide for
a hearing in accordance vdth Section 3 (d) of said Act to determine whether
9530
-22-
a code covering hours of lator, rates of pay, and other working conditions
shall not 1)6 prescribed thereiondcr.
KUaH S. JOHNSON
Administrator for Industrial Recovery,
Washington, D. C.
July 10, 1934.
<ii
9630
-23-
APFE]\TDIX II,
EXHIBIT' "A"
BASIC CODE
July 10, 1934.
-oOo-
AETICLE I
To effectuate the policies of Title I of the National Industrial Re-
covery Act, the following provisions are estahlished as a Toasic Code of Fair ■
Cotapetition which shall govern every industry applyihg therefor in accordance
with Administrative Order IJo,' X- 51, dated July 10, 1934,
ARTICLE II
Section 1. Hour s .
No employee shall "be permitted to work in excess of ■_ hours in any
one i^eek, except that for weeks in any one calendar' year, any employee
may "be permitfed to work not more than hours per week. All hours in
excess of J per day or jjer veek shall be paid for at not less than
one and one-half (1-^) times the employee's regular rate, ' ■ ' ■•
Section 2. ■ ExceiDtions. ' ' . ' ' ■ ■ ' ■
The provisions of Section 1 shall not apply to employees engaged in
emergency maintenance or' emergency repair work involving "breakdown of the'
protection of life or property, nor to persons employed in a managerial or
executive capacity who earn reg'uJ.arly Thirty-five Dollars (Jp35.00) per week
or more, nor to any other class of employees which the Administrator shall
find upQn ap'olication of true representatives of the tradd' or industry should
"be su"bjected to an exemption or ra:odif ication in accordance with N.H.A. poliqj'^;
provided, however, that employees Bngaged in such emergency maintenance and
emergency repair work shall "be paid at one and one-half (l--g-) times their
normal rate for all hoiirs worked in excess of forty (40) hours per week.
Section 3, Minimum Wages.
No employee shall "be paid in any pay period less than at the rate of
. per week for hours of la'bor, except in " in which region no
employee shall "be paid in any pay period less than at the rate o^
per week for hours of la"bor.
Section 4. Wages in General, • '. '
All wages shall "be adj'asted so as to maintain a differential at least
as great in amount as that' existing on jLine 16, 1953, "between wages for such
employment and the then minima. In no cf.se shall there "be any reduction in
hourly rateS; nor in weekly earnings foV^any reduction in hours of less than
thirty per cent.
9630
-24-
ABTICLE III.'
Section 1. Child La"bor. ■•••■.,
No 'oerson ■'onder sixteen yea,rs of ,age shall 'be employed in the industry
in any capacity. iJO person under eighteen' years of age shall he employed at
operations or occupations which arc hazardous in na,ture or dangerous to health.
The Code Authority shall suhmit to the Administrator for approval "before Octoher
1, 1934, a list of such operations or occupations. In any State an employer
shall he deemed to have complied with this provision 3.s to age if he shall
have ■'oh 'file a valid certificate or oertait duly signed hy the authority in
such State 'empowered to issue employment or age certificates or permits, show-
ing 'that" the emitiloyee is of the required age.
Section 2« Apprentices.
The hours and wages of regularly indtntured s,pprentices in skilled
trades or occupations of the industry may depart from the standards herein-
ahove prescrihed; provided that the terms of employment and the course of
instruction of such apprentices sha,ll conform to standards uniform through-
out the trade or industry and approved hy the Administrator,
Section 5« Handicapped Persons^
A person whose earning capacity is limited hocause of ago, physical or
mental handicap, or other infirmity, may he employed on light work at a wage
below the minimum established hy this Code, if the employer obtains from the
State authority designated by the United States Department of Labor, a cer-
tificate authorizing such person's employment at such wages and for such hours
as shall be stated in the certificate. Such authority shall be guided by the
instructions of the United States Di.partnent of Labor in issuing certificates
td such persons. Each enployer shall file monthly with the Code Authority a
list of all such persons employed by him, showing the wages paid to, and the
maximum hours of work for such employee.
Section 4. Safety and Health.
Every employer shall mal:e reasonable provision for the safety and health
of his employees a,t the place and during the hours of their employment.
Standards for safety and health shall be submitted by the Code Authority to
the Administrator for approval within six months after the effective date of
this Code, The standards approved shall thereafter be a part of this Code
and enforceable as such.
Section 5. Hequired Labor Clauses.
The provisions of Section 7 (a) of said Act are hereby incorporated here-
in by this reference and shall be complied with.
9630
-25-
. ARTICLE IV.
Administration.
This Code shall 'be administered "by the General 'JUL Code Authority which
shall he selected pursuant to, have the po^7ers specified in and function in
accordance with Adninistrative Order X-S2, dated July 10, 1934; provided,
however, that, on aporoval "by the Adiainistrator , any industry so desiring may
elect its ov7n Code Authority to have powers and to f-'onction in the manner
preacrihed for the General IffiA Code Authority and under such rules and regula-
tions as the Administrator may prescrihe,
ARTICLE V.
Trade Practices.
(a) It shall he an lonfaar method of coropetition for any memher of any
trade or indiistry suhject hereto to violate any rule of fair trade practice
for such trade or industry even if not herein contained when approved ty the
Administrator, or, in the case of trade practice provisions for trades or
industries under the jurisdiction of the Secretary of Agriculture when
approved "by such Secretary, on application concurred in "by seventy-five (75)
per cent of the mera"bers of such trade or industry.
(h) Prices, rehates, discomits, commissions and conditions of sale
shall "be filed as prescrihed in Administrative Order No. X-62, dated July 10,
1934, and it shall he an imfair method of competition to violate or fail to
comply with the terms of that Order.
, ARTICLE VI.
Section 10 (h) of said Act is hereby incorporated herein hy reference
and this Code is expressly male suhject thereto.
• ' -26-
APEEi^TDIX III.
ADMIFISTPATIYE OEDEH 1\T0. X-62
SUPELElffilTTirC- /LDiIIi'^IS.Tl/i.TII'E OEDSR iJO. X-61 , DATED JULY, 10, 1934, AM) THE
BASIC CODE .UvTI'ISXED TIIE3ET0.
Hi ^i ifi i^ '^ :lli ■dfi ■^ ifi ilfi
By virtue of the aixthority vested in me as Administrator for Industrial
Recover;- ujider Title I of the National Industrial Recovery Act and to sure-
plenent AoiAini strati ve Order i^o, X-61, dated July 10, 1934, and the Bs.sic
Code annexed thereto, it is herety ordered that;
A, General ^JRA Code Authority
1, The Genercal i-IRA Code Authority, provided for in Article IV of
said Basic Code, shall be a^o-nointed ty the Administrator and
shall serve without expense to the Industries subject to such
Code,
2. Such Code Authority shall have the following powers and duties;
(a) To insure the execution of the provisions of the
Code and to provide for the compliance of the trade/
industry with tne provisions of the Act.
(h) To adopt "by-laws and rules and regulations for its
procedure,
(c) To obtain from members of the trade/ industry such
information and reports as are required for the
adininistration of the Code, In addition to in-
formation required to be submitted to the Code
Authority, raerabers of the trade/ industry subject
to said Basic Code shall furnish such statistical
information as the Administrator may deem necessa.ry
for the purposes recited in Section 3(a) of the Act
to such Federal and State agencies as he may desig-
na.te; Tjrovided that nothing in the Code shall relieve
any member of the trade /industry of any existing
obligations to furnish reuorts to any Government
agency. No individual re;nort shall be disclosed
to any other member of the trade/ industry or a.ny
other party except to such other Government agencies
as may be directed by the Administrator.
(d) The General 1\TSA Code Authorit;' shall submit to the
Administrator v'ithin 90 days after the approval of
this Basic Code a list of industries covered b^r the
Basic Code, in which work on any riart of the -oroduct
is performed in the home and/or work is contracted
out. The General WRA Code Authority may also submit
a list of special problems affecting particular
industries operating under the Basic Code, and
recommendations pertaining thereto,
963n
-27-
(e) To make recommendations to the Administrator for the co-
ordination of the administration of the Code and such
other codes, if any, as may he related to or effect mem-
hers of the trade/ industry.
(f ) To recommend to the Administrator any action or measure
. , deemed advisahle. Including further fair trade practice
provisions to govern memhers of the trade/ industry in
their relations v/ith each other or with other trades/
industries; measures for industrial planning, and stahi-
lization.of eraplojniient ,
B, Open Price Filing.
As provided for in Section (h) of Article V of, said Basic Code,
prices, rehates, discounts, commissions, and conditions of sale
shall he filed in accordance with the. following provisions:
1. Each memher of the trade /industry shall file with a confidential
and disinterested agent of the code authority or, if none, then
V7ith such an agent designated hy the Administrator, identified
lists of all of his prices, discounts, rebates, allowaaices, and
all other terras or conditions of sale, hereinafter in this arti-
cle referred to as "price terms", which lists shall completely
and acciorately conform, to and represent the individtial pricing
.practices of said mem-her. Such lists shall contain the price
•terms for all such standard products of the industry as are
sold or offered for sa-le hy said memher and for such non-stan-
dard products of said memher as shall he designated hy the code
authority. Said price terms shall in the first instance "be
filed within 30 days after the date of approval of this proT~
■ ision. Price terns and revised price teins shall hecome effec-
,., tive immediately , upon receipt thereof hy said agent. Immediate-
ly upon receipt thereof, said agent shall he telegraph or other
equally prompt means notify said memher of the time of such re-
. , ceipt. Such lists a.nd revisions, together with the effective
time thereof, shall upon receipt he imm.ediately and simultane-
ously distributed to all members of the industry and to all of
their customers who have applied therefor and have offered to
defray the cost actually incurred by the code authority in the
preparation and distribution thereof and he available for in-
j- spection by any of their customers at the office of such agent.
Said lists or revisions or any part thereof shall not be made
available to any person until released to all members of the
industry and their customers, as aforesaid; provided, that
prices filed in the first instance shall not be released tintil
the escpiration of the aforesaid 50 day ■ period after the approv-
al of this code. The code authority shall maintain a permanent
file of all price terms filed as herein provided, and shall not
destroy any part of such records except upon written consent of
the Administrator. Upon request the code authority shall furn-
ish to the administrator or any duly designated agent of the
Administrator copies of any such lists or revisions of price
terms,
2, When any member of the trade/ industry has filed any revision'
such member shall not file a higher price within forty-eight
(48) hours.
-28-
1
3. ¥.0 inemter of the traxle/industry shall sell or offer to sell any
product, Bfei-vices of the trade/industry, for which -orice terras
have "been 'filed pursuant to the rirovisions of this article, ex-
cept in accordance with such price terms.
4. Ko member of the industry shall enter into any agreement, under-
standing, combination or conspiracy to fix or maintain price
terms, nor cause or attempt to caxise any member of the industry
to change his price terms by the use of intimidation, coercion,
or £aiy other influence inconsistent vrith the maintenance of the
free and open market which it is the purpose of this Article to
create.
C. Costs and Price Cutting.
■1. The standards' of fair competition for the trade/industry with
■■■■' reference to pricing practices are declared to be as follons:
(a) Wilfully destructive price cutting is an unfair method of
competition 3-nd is forbidden. Any member of the trade/ii>-
dustry or of any other trade/industry or the customers of
either may dM any time complaan to the Code Authority that,
any filed price qonstitutes unfair competition as 6.estruc-
tive price cutting, imperiling small enterprise or tending
tovrard monoiDOly or the im-pairment of code wages and working
conditions. The Code Authority shall within 5 days afford
an opportusiity to the member filing the price ■ko answer
such complaint and shall within 14 days make a ruling or ;
adjustment thereon. If such ruling is not concurred in by
either -oarty to the complaint, all papers shall be referred
to the P.esearch and. Planning Division of NBA which shall
render a report and recommendation thereon to the Adminis-
trator.
(b) When no declared emergency ejdsts as to any given product,
there is to' be no fixed minimum basis for prices. It is
intended that scand cost estimating methods should be u.sed
and that consideration should be given to costs in the de-
termination of pricing policies.
(c) '^hen an emergency exists as to any given product, sale below
the stated minimum price of such product, in viol8,tion of
Section 2 hereof, is forbidden.
2, Emergency Provisions.'
(a) If the Administrator, after investigation shall at any time
find both (l) that an emergency has arisen viithin the trade/
industry adversely affecting small enterprises or wages or
labor conditions, or tending to?/ard monopoly or other acute
conditions which tend to defeat the purposes of the Act;
and (2) that the determination of the stated minimum price
for a specified product within the trade/industry for a.
limited period is. necesseiry to mitigate the conditions con-
stituting, such emergency and to effectuate the purposes of
9630
-29-
the Act, the Code Authority may ca,use an impartial agenc?/ to in-
vestigate costs and' to recommend to the Administrator a deter-
mination of the stated minim-urn price of the product affected "by
the emergency and thereupon the Administrator may proceed to de-
termine such stated minimum price,
(Td) When the Administrator shall have determined such stated minimum
price for a specified product for a stated period, which price
shall "be reasonably calculated to mitigate the conditions of such
emergency arid to effectuate the purposes of the National Indus-
trial Recovery Act, he shall publish such price. Hiereafter,
during such stated period, no member of the trade /industry shall
sell such specified products at a net realized price below said
stated minimum price and any such sale shall be deemed destruc- .
tive price cutting. From time to time, the Code Authority may
recomnend review or reconsideration or the Administrator may
cause any determinations hereunder to be reviewed or reconsidered
and appropriate action tsicen.
HUGH s. jomjsoii,
Acuninistrator for Industrial Recovery,
Washington, D. C.
July 10, 1954
9630
-30-
■ •■ A?PEi\TDIX IV.
ADMINISTRATIVE ORDEH FO. X-63.
PEESCRIBDIG RULES MD REGULATIONS TO SUPPLEMENT ADMINISTRATIVE ORDER NO. X-61,
DATED JULY 10, 1934, A1\!D im BASIC CODE AIW'IEXED THERETO.
By virtue of authority vested in nie as Administrator for Industrial
Recovery under Title I of the Nationr^l Industrial Recovery Act the follovdng
rules and regulations' are hereby prescrited to supplement the atove-mentioned
Administrative Order and Code;
1, The jiiiniraura rates of pay provided for in Article II of said Basic
Code shall apply, irrespective of whether an employee is actti.ally
compensated on a time rate, piecework, or other hasis.
2. Female employees performing substantially the same work as male
emploj'-ees shall receive the same rate of pay as male employees.
3, No employer shall permit any employee to work for any time which,
when totaled with that already performed for another employer or employ-
ers exceeds the naxiTnxin permitted herein.
4. llo employer shall reclassify employees or ^''^ties of occupa^tions
performed or engage in any other subterfuge so as to defeat the
purposes or provisions of the Act or of said Basic Code.
5, No employer shall dismiss or demote any employee for making a
complaint or giving evidence with respect to an alleged violation
of the provisions of an;^ Code of Fair ComiDotition.
6, Code Authorities selected by industry in accordance with Article
IV of said Basic Code shall function at the expense of the indixstrj'"
in accordance with such further rules and regulations as the
Adrainistrator may prescribe.
7. No provision hereof, of said Administrative Order No. X-51 or of
said Basic Code, shall supersede any State of Federal law which
imposes on employers more stringent requirements as to age of
employees, wages, hours of work, safety, health and sanitary
conditions, insurance, fire protection or general working
conditions, than are imposed thereby,
8. No provision hereof, of said Administrative Order No, X-61, or of
said Basic Code shall be so apiDlied as to permit monopolies or
monopolistic practices, or to eliminate, oppress, or discriminate
against small enterprises,
KUG-H S^ JOHNSON,
Administrator for Industrial Recovery,
Washington, D. C.
July 10, 1934,
9630
"31-^
APFEMSIX V.
OFFICE MEMOEABDUivI NO. 251.
' July lO', 1954.-
Procedure for Handling the- Completion of Code MaMng
Office Order 5fo« 100, establishes a Committee for the Comple-
tion of Code Liaking, and charges that Committee with the supervision of
the execution of the plan emhodied in Administrative Ord.er X-61. The
Division Adininistra.tors, in accordance with this Order, will name repre-
sentatives to cooperate with this Committee. The method of coopera^tion
will he as follows: ' " '■ ■ •
1» 'The Committee will irimediately distribute to each Division
liaison officer a set of documents, including a copy of the
Basic Code and related* Administrative Orders, for each code
which awaits .ip"oroval "by each Division,
2. Within a v?eek of the receipt of these documents, they will
be sent out to each uncoded industry vifith a covering letter
written by the De;outy or Assistant Deputy Administrator who
ha.s been handling any negotiation with said uncoded indus-
try, recomrnending that said industry's code be disposed of
in accordance with the principles laid down in Adm.inis-
trative Order X-61.
3. As soon as these letters have been sent out, progress
reports shall be made to the Committee on the Completion of
Code Mailing by the Divisions, indicating to what industries
the letters have been sent, and what the recommendations of
the Division have been \7ith regard to these industries.
4. Divisions will continue to submit weekly reports on Satur-
days to the Committee on the Completion of Code Making as
to the progress which has been made during the days covered
by these reports.
5» The Committee on the Completion of Code Making may recom-
mend to the Administrator any changes in this procedure
which it may deem advisable in order to complete code
making in the thirty-day period allotted. At the end. of
this thirty-daj' "oeriod, the Committee virill make a defini-
tive report, including any recommendations as to further
action.
By direction of the Administrator:
G. A. LIUCH,
Adjninistrative Officer.
9630
-32-
OPFICE OPJER NO. 100.
July 10, 1934.
ApDointinent of Committee for the- Com-pletion of Code Making
A Committee is hereoy appointed to supervise the execution of
the plan embodied in Administra.tive Order X-61, a'oproved "by the Acjninis-
trator on July 10, 1934, Membersnip of the Committee:
Robert K. Straus, Chairman
Leon C, Marshall
' George S. Brady
Tne Committee Yirill request each Division Administrator to se-
lect a' liaison officer from their res'oective Divisions to cooperate uith
it in the execution of this plan*
The Committee will make a re-^ort to the Administrator thirty
days hence as to the progress of the plan, including any recomraenda.tions
for further action r-hich may be necessary at that time*
By direction of the Administrator:
G* A. LYWCE,
Administrative Officer.
9630
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APFEHSIX VI.
ADMIII STRATI VE ORDER NO. X-84
PROVIDING FOR THE SELECTION OF THE I;iEMBERS OF THE GENERAL
NRA CODE AUTHORITY • ■ •
By virtue of the authority vested' in me as administrator
for Industrial Recovery under Title I of the National Industrial Re-
covery Act, liy Executive Orders of the President and otherwise, it is
hereby ordered that the General NRA Code Authority provided for in
Administrative Order No, X-62, dated July 10, 1934, shall "be con-
stituted as "follows: ■'■■
There shall "be one mem"ber who shall act as Chairman,
to "be appointed ty the Administrator, and three other mem"bers
to "be appointed "by the Administrator as follows: one with the
advice of the Industrial Advisory Board, one with the advice
of the La"bor Advisory Board, and one' -with the advice of the
Consumers' Advisory Board, 'of NRA. All such members shall act
upon all matters considered "by sada Code Authority.- One ad-
ditional mem"ber shall "be appointed "by the Administrator with
the approval of the: Industrial Advisory Board of NRA for each
Industry whose code is administered "-"by such Code Authority.
Each such additional memlDer shall wherever practica"ble have a
special knowledge of the Industry which he is appointed to
represent and shall act as a mem"ber of such Code Authority
only upon matters which pertain to the code for such Industry.
HUGH S. JOHNSGN
Administrator for Industrial Recovery,
Washington, D. C. ,
Septemher 7, 1934.
9 530
I
-3^
ADMINISTRilTI.VS. OKDEH .NO. X-89
Supplementing Administrative Order No. X-61
by offering a Basic Code to G-rocery Manufac-
• '-tiiring Indtistries.
By virtue of the authority vested in me as Administrator for Industrial
Recovery, and in order to further the purposes of Administrative Order No.
■S-61, of July 10, 1934,. it is hereby ordered that:
1., The Code of Fair Competition for the Grocery Manufacturing Industries
;. . (annexed hereto and. marked. Exhibit "A") is offered to each grocery
. mantifacturihg industry not yet codified under the Act, in lieu of ths
■BaaiO Code, and to each grocery manufacturing industry now codified
under the Act, in lieu of its own code.
2.. If an application is made for said Code by any group truly represent
ative of a grocery manufacturing industry and if there be no objec~
tlon by any, party in material interest after ten (lO) days published
notice to all concerned, such Code shall, without further hearing,
reference to Advisory Boards or other administrative .action, become
effective ten (lO) days after its approval by the Administrator, in
industries employing less ^.han fifty thousand (50,000) persons, or
by the President in all other industries. . ■ . ■
3. Por the purposes of this Order, a grocery manufacturing industry is
defined as follows: I'he mraiufacturing, processing., . canning, packing
bottling and/ o.r importing and sale by the manufacturer, processor,
canner bottler,, pfipker or importer of any one or related group of
, products' commonly known as food and/or grocery products, except thos
products which are principally sold through other channels than the
wholesale and.retail grocery trades.
4. Grocery manufacturing industries are exempted from Administrative
Order X-Sl.
5. It is recognized that the policies of the Act can better be effectua
ed in the grocery manufacturing and distributing industries if all
such industries are subject to codes of fair competition containing
substantially comparable provisions. Accordingly, all uncodified
grocery manufacturing industries which desire codification are re-
quested to apply for this Code; and all codified grocery manufactur-
ing industries ars requested to consult the Administrator with a vie
to applying for this Code or adopting such modifications of their oi
codes as will result in such substantially comparable provisions
963©
-35r
6. In accordance .with the. intention of paragraph 4 in Administrative
Order X-61, hearings will ho held as to any imcodified grocery manu-
i'act-uring industry which has not applied for this Code within thirty
(30) days after the date hereof.
HUGH S. JOHNSON
Administrator for Industrial Recovery.
Order recommended!
Armin. W. Riley.
Division Adi-ninistrator,
September 21, 1934,
9630
EXHIBIT "A" TO AI FEND IX VII.
•■'•■■CODE OF PAIE COMPETITION
EOH THE
GHOCERY IvlAmJFACTUHING IlIDUSTRIES
To effect the policies of Title I of the National Industrial Recovery
Act, the following provisions are estatlished as a basic Code of Fair Competi-
tion for the Grocery Manuf actioring Industries, and its provisions shall "be the
standards of fair competition for every such industry and shall he "binding
upon every memher of any one or more thereof, as hereinafter in Article I
provided.
ARTICLE I
APTolication of Code
Section 1. The provisions of this Code shall apply to the memhers of any
grocery manufacturing industry upon approval hy the Administrator, pursuant to
Administrative Order llo. X-89., of an application to him by any group truly
representative thereof. The Administrator may mal<:e such exemptions with
respect to specific provisions herein as he may deem appropriate to avoid con-
flict with provisions in any separate approved Code of Fair Competition for
such industry; and he may approve amendments hereto with respect to any
grocery majiufacturing industry.
ARTICLE II
Definitions
Section 1. As used herein:
(a) Grocery Manufacturing'': Industry. The terms "Grocery Manufacturing
Industry" and "Industry" mean and include any industry as defined in an appli*
cation and approval thereof by the Administrator pursuant to Administrative '
Order No. X-89.
(b) Grocery Manufacturer. The term "grocery manufacturer" or "manufact-
urer" includes, but without li.Tiitation, any individual, partnership, associa-
tion, corporation or other form of enterprise wholly or partially engaged in
a grocery manufacturing industry, either as an employer or on his or its own
behalf.
(c) Employee. The term "employee" means any person engaged in a grocery;
manufacturing industry in any capacity and receiving compensation for his
services (except a manufacturer or a broker) irrespective of the nature or
method of payment of such compensation.
(d) Em-ployer. Tiie term "employer" means any person by whom any such
employee is compensated or employed,
(e) Outside Salesman. The term "outside salesman" means any salesman
who is engaged not more than twelve (l2) hours per week inside the establish-
ment, or any branch thereof, of his employer and who does not regularly de-
liver merchandise.
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(f) Wat chmaii ♦ The term "watchman" means any employee who is engaged dur-
ing at least ninety per cent (90>) of his working hoiirs in watching and g-aard-
ing the 'memises and property of any establishment of a member of the industry.
(g) Trade Buyer. The term "trade "buyer" means any commercial "buyer as
distinguished from an ultimate consumer "buyer.
(h) President, Act and Adjninistrator. The terms "President"", "Act" and
"Adrfiinistrator" mean, respectively, the President of the ITnited States, Title
I of the National Industrial Hecovery Act, and the Administrator for Indus-
trial Recovery.
Section 2. Population and trade areas for the purposes of this Code
shall "be determined "by reference to the latest Federal Census and metropolitan
areas designated therein.
AIITICLE III
Hours
Section 1. No employee shall "be permitted to work more than forty (40)
hours in any week or more than eight (8) hours in any day, with the following
exceptions:
(a) The provisions of this Section shall not apply to employees engaged
in managerial, executive, or supervisory capacities, regularly receiving not
less than thirty-five dollars ($35.00) per week, and outside salesmen.
("b) Watcimien shall "be permitted to work not in. excess of fifty-six (56)
hours in any week, . . •
(c) Engineers and firemen shall "be permitted to work not in excess of
forty-four (44) hours a week or in excess of nine (9) hours in any day.
(d) Deliverymen, outside truck drivers and chauffeurs, shall "be permit-
ted to work not :in excess of forty-eight (48) hours a week,
(e) The provisions of this Section shall "not apply to employees engaged
in emergency repair and emergency maintenance work involving breakdowns or
protection of life and property; provided that in every such case employees
engaged in such work shall be compensated at a rate of not less than one and
one- third (l-l/S) times their normal hourly rate for all hours worked in ex-
cess of the basic hours provided in this Article.
(f) During any eight (8) weeks in each calendar year, employees may be
permitted to work six (6) hours per week in excess of the foregoing maxima,
provided they are paid at least one and one-third (l-l/3) their normal rates
of pay.
Section 2. No employee shall be permitted to 'jork more than six (s)
days in an seven (?) day period.
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Section 3. All employees, except those eniimerated in subsection (a), '
Section 1 of this Article, shall be compensated at a rate of not less than one
and one-third (l-l/S) times their normal hourly rate for all hours worked on
the following holidays: Christmas Day, Thanksgiving Day, &eorge Washington's
Birthday, Lahor Day, July Jourth, New Year's Day, and such other holidays as
may be proclaimed by the President of the United States.
ARTICLE IV I
Wages
Section 1. No employee engaged in clerical, accounting or other office
work shall be paid less than at the rate of:
Sixteen dollars ($16,00) per week in cities of over 500,000 population |
or in the immediate trade area thereof;
Fifteen dollars ($15.00) per week in cities between 250,000 and 500,000
population or in the immediate trade area thereof;
Fourteen dollars ($14.00) per week in other places; except that office
boys and messengers may be employed at a rate of not less than two dollars
($2.00) below the above minim.a; provided that where any employees are classi-
fied and compensated as office boys or messengers not more than five per cent
(5.j) of all office employees shall be so classified imd. compensated, except
that each establishment may employ at least one office boy or messenger at
such rates.
Section 2. No watchman shall be paid less than at a rate of eighteen
dollars ($18.00) per fifty-six (56) hour week.
Section 3, No employee, other than those covered in Sections 1 and 2
of this Article, shall be paid at a rate of less than forty cents (40^) per
hours except that such employees may be paid at a rate of not less than
thirty-five cents {55'^) per hour in Virginia, North Carolina, South Carolina,
Tennessee, Alabama, Georgia, Florida, Mississippi, Louisiana, Texas, Arkansas,
Oklahoma, Kentucky,
Section 4. Employees engaged in light work commonly performed by female
operatives may be paid at rates not less than five cents (5«j) per hour below
the respective minima established in Section S^of this Article.
Section 5. Female employees performing substantially the same work as
male em.ployees shall receive the same rates of pay as male employees; and
where they displace male employees they shall receive the same rates of pay as
the m^ale employees displaced.
.Section 6. This Code establishes a minimum rate of pay which shall
apply, irrespective of whether an employee is actually compensated on a time
rate, piece work, or other basis.
Section 7. (a) In the event the normal full time weekly working hours
of any employee shall, under tiie provisions of this Code be reduced by not
more than sixteen and two»-thirds per cent (16-2/3/&) under the normal full tims
weekly working hours worked by said employee during the period from January 1,
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1933, to May 1, 1933, the wages of said (employee shall not "be reduced "bp^low the
normal full time weekly wage paid said employee d'lring said period from Janua-
ry 1, 1933, to May 1, 1933.
("b) In the event the normal full time weekly working hours of any em-
ployee shall, under the provisions of this Code, "be reduced "by more than Eix~
teen and two-thirds per cent (16-2/3'!^) under the normal full time weekly work-
ing hours worked "by said employee during the period from January 1, 1933, tr
May 1, 1933, the wages of said employee shall not he reduced "below the normal
full time weekly wage paid said employee during said period from January 1,
1933, to May 1, 1933, "by mere than one-half (^) of the percentage of hourly
reduction in excess, of said sixteen and two-thirds percent (l6-2/3^).
( c) In no case shall hourly wage rates be reduced.
Section 8, Wages shall he exempt from fines and rc"bates; and from charg-
es or deductions, except charges and deductions for employees' contri"butions,
voluntarily made "by employees, or required "by law, for pension, insurance or
benefit funds. No employer shall withhold wages except upon service of legal
process or other pcpers lawfully requiring such withholding. Deductions for
other purposes not heretofore stated may be made only when the contract is in
writing and is kept on file by the employer for at least six (6) months after
the completion of the contract.
Section 9. Employees shall make payment of all wages in lawful currency
or by negotiable checks payable on demand. All contracts of employment shall
prescribe pajrment of wages at least every two (2) v/eeks.
Section 10, A person whose earning capacity is limited because of age or
physical or mental handicap, or other infirmity, may be employed on light work
at a wage below the minimum established by this Code, if the employer obtains
from the State Authority designated by the United States Department of Labor,
a certificate authorizing such person's employment at such wages and for such
hours as shall be stated in the certificate. Each employer shall file monthly
with the Code. Authority a list of all such persons employed by him, showing
the wages paid to, and the maximiim hours of work for such employee.
ARTICLE V
&encral Labor Provisions
Section 1. No person under sixteen (l6) years of age shall be employed
in the industries. No person under eighteen (l8) years of age shall be em-
ployed at operations or occupations which are hazardous in nature or dangerous
to health. The Code Authority shall submit to the Administrator within nine-
ty (so) days after the effective data of this Code a list of such operations
or occupations. In any jurisdiction an employer shall be deemed to have com-
plied with this provision as to age if he shall have on file a certificate or
perm.it duly signed by the authority in such jurisdiction empowered to issue
employment or age certificates or permits showing that the employee is of the
required age.
Section 2. Employees shall have the right to organize and bargain col-
lectively through representatives of their own choosing, and shall be free
from the interference, restraint, or coercion of employers of labor, or their
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ago::.tG ill the designation of such, ropreser^t -tiA^es or in rjelf-crj'anizr^tion- or in
other concerted ectivities for the purpose of collective hargaining or other
mutual aid or protection.
Section 3. 'So employee and no one seeking' ernplo^.Tiient shall he required
as a condition of. employment to join any company union or to refrain from
joining;, oi-ganiaihg, or assisting a labor organiz tion of his own choosing.
Section 4. Employers shall comply vdth the maximum hours of labor, mini-
mum rates of pay, and other conditions of emplo^nnent, approved or prescfihed
by the President.
Section 5, Efo employee now employed at a ratie in excess of the minimum
shall be discharged and re-employed at a lov/er rate' for the purpose of evading
the provisions of this Code. ; ■ ; ' '
Section 6. No provision in this Code shall supersede any lav/ which im-
poses on employers more stringent requirements es to age of employees, wages,
hour of work, or as to safety, health, sanitary or general working conditions,
or insurance, or fire protection, than are imposed by this Code.
Section 7. No employer shall laiowingly permit any employee to work for
a total num.ber of hours in excess of the number of hours prescribed for his
occupation for each week anddny whether employed by one or more employers.
Section 8. No employer shall reclassify employees, or reclassify the
duties or occupations performed by them, or change the method of compensation
of employees, or engage in ,any subterfuge which tends to or will defeat the
purpose or provisions of the. Act or of. this Code.^'' ■
Section 9. Every employ. =r shall provide for, the safety and health of
employees during the hours and at the places of their employment* Standards
for safety and health shall be s\ibmitted by the. Code Authority to the Adminis-
trator within three (3) months after the effective date of this Code.
Section 10. All employers shall post and keep posted copies of this Code
in conspicuous places accessible to all employees. . Every member of the in-
dustries shall comply with all rules and regulations relative to the posting
of provisions of Codes of Pair Competition which may from time to' time be
prescribed by the Administrg.tor .
ARTICLE VI
Organization. Powers and Duties of Code Authorities
Part A - Organization and Constitution.
Section 1. Irmaediately upon the approval by the Administrator of an
application, pursu.ant to Article I, Section 1, of the Code, a Code Authority
shall be constituted for the applicant grocery manufacturing industry.
Section 2. Each such Code Authority shall consist of the number of mem-
bers specified in the application for this Code by the industry for which it
is to be constituted; and the members shall be grocery manufacturers engaged
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in such industry and shall be selected in the folloviring manner:
(a) ffi thin fifteen ( 15) days after the approval of such application the
applicant trade association or group shall institute an election of the memhers
of the Code Authority for such industry. If candidates are nominated "by such
trade association or group, due consideration shall be given to the proportion
of grocery manufacturers who are members and who are non-members of the trade
association or group. Members so elected shall hold office for one (l) year
or until their successors are elected as hereinafter provided. Vacancies in
membership of a Code Authority shall be filled for unexpired terms by the re-
maining members of such Code Authority subject to the approval of the Adminis-
trator.
Each grocery manufacturer engaged in such industry shall be entitled to
one ( l) vote for each member to be elected to the Code Authority, and may cast
all votes for one person. At each election the voting may be in person, by
proxy, or by letter.
(c) Any grocery manufacturing industry subject 'to the provisions of this
Code may,, under such rules and regulations as the Administrator shall pres-
cribe, change the method of selection of its Code Authority as provided for in
this Section, and such modified method of selection shall be followed in all
subsequent elections for the Code Authority of such industry.
Section 3. In adc'ition to membership as above provided there may be on
each individual Code Authority from one ( l) to three (3) members, without vote,
to be known as Administration Members to be appointed by the Administrator to
serve for such terms as he may specify without expense to the' industry.
Section 4. Efich trade or industrial association or group directly or in-
directly participating in the selection or activities of any Code Authority
shall (l) impose no inequitable restrictions on membership, and (2) submit to
the Administrator true copies of its articles of association, by-laws, regu-
lations, and any amendments when made thereto, together with such other in-
formation as to membership, organization, and activities as the Administrators
may deem necessary to effectuate the purposes of the Act.
Section 5. In order that each Code Authority shall at all times be truly
representative of its individual industry and in other respects comply with
the provisions of the Act, the Administrator may prescribe such hearings as
he may deem proper; and thereafter if he shall find that the Code Authority in
question is not truly representative or does not in other respects comply with
the provisions of the Act, may require an appropriate modification of such
Code Authority.
Section 6. Nothing contained in this Code shall constitute the members of
any Code Authority, herein provided for, partners for any purpose, nor shall
any member of any such Code Authority be liable in any manner to anyone for
any act of any other member, officer, agent, or employee of such Code Authority.
Nor shall any mem.ber of such Code Authority, exercising reasonable diligence
in the conduct of his duties hereunder, be liable to anyone for any action or
omission to act londer this Code, except for his own wilful malfeasance or non-
feasance.
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Section 7. In addition to the individual industry Code Authorities pro-
vided for in Section 1 of this Article, there shall he constituted a National
Pood and Grocery Manufacturing .AdviEOi'y- 3c -:,rd consistin,? of one memher to he
selected by each individual industry Code -Authority from its industry. In
cddition to the raemhership as ahove, provided, the Ad.niinistrator may apooint
not more than five (5) merahers without vote to serve for such time as he may
specify,
(a) The National Tood and Grocery Manufacturing Advisory Soard shall he
an advisory planning and coordinating agency mthin the meaning of the Act for
all grocery manufacturing industries to which all common matters may he re-
ferred for advice.
(h) The National Pood and Grocery Manufacturing Advisory Board shall
appoint a representative or representatives to serve on a Food and Grocery
Industry Conference Comm.ittee to he composed of representatives from food and
grocery wholesalers, retailers, and manufacturers. The -Food and Grocery In-
dustry Conference Committee I.ia'^ act as planning and coordinating agency with-
in the meaning of the Act for the entire food and grocers'- trade.
Section 8. If the Administrator shall at any time determine that any
action of any individual Code Authority or any agency thereof or of the
Advisory Board, may he imfair or -onjust or contrary to the puhlic interest, the
Administrator may require that such action he suspended to afford an opportunity
for investigation of the merits of such action a.nd further consideration hy
such Code Authority or agen,cy or Advisory Board pending final a,ct ion which
shall not he effective unless the Administrator approves or unless he shall
fail to disapprove after thirty (30) days' notice to him of intention to pro-
ceed with such action in its original or modified form.
Part B - Powers a.nd D-iities ;
Section 1, Suhj-. ct to such rules and reg-alations a,s may he issued hy the
Administrator, each Code Authority as provided for herein shall have the follow-
ing powers and duties with respect to the grocery ra'anufacturing industry select-
ing it in addition to those authorized hy other provisions of this Code,
(ca) To insure the execution of the provisions of this Code and. to pro-
vide for the compliance of the industry with the provisions of the Act,
(h) To adopt hy-la,ws and r^jles and regulations for its procedure.
(c) To ohtain from grocery nan^'of acturers such information and reports as
are required for the administration of the Code. In addition- to information
required to he submitted to the Code Authority, grocery manufacturers shall
furnish such statistical information, as the Administra,tor may- deem necessary
for the purposes recited in Section 3 (a) of the Act to such Federal and State
agencies as he may designate; -orovided that nothing in this Code shall relieve
any grocery manufacturer of any existing- obligations to furnish reports to any
Government agency. No individ^oal report shall be disclosed to any other grocery
manufacturer or any other party except to such other Governmental agencies as
may be directed hy the Administrator,
(d) To use such trade associations and other agencies as it deems proper
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for the carrying out of any of its activities provided for herein, provided
that nothing herein shall relieve the Code Authority of its duties or re-
sponsibilities 'onder this Code a.nd that such trade associations and agencies
shall at all times, he subject to and comply with the provisions hereof.
(e) To make recommendations to the Administra.tor and the National
Grocery Manufacturers Advisory Board for the Coordination of the administra-
tion of this Code and such other codes, if any, as may he related to or affect
members of the industries,
(f) la It being found necessary in order to support the administration
of this Code and to maintain, the standards of fair com.petition established
hereunder and to effectuate the policy of the Act, each such Code Authority is
authorized:
(a) To incur such reasonable obligations as are necessary and proper for the
foregoing purpo.ses, and to meet such obligations out of funds which may
be raised as hereinafter provided and which shall be held in trust for
the purposes of the Code;
(b) To submit to the Administrator for his approval, subject to such notice
and opportunity to be heard as he may deem necessary (l) an itemized
budget of its estimated expanses for the foregoing purposes, and (2) an
equitable basis upon which the funds necessary to support such budget
shall be dontributed by grocery manufa,cturers;
(c) After such budget and basis of contribution have been approved by the Ad-
ministrator, to determine and obta,in eq-aitable contribution as above set
forth by all grocery manufacturers, and to that end, if necessary, to in-
stitute legal proceedings therefor in its o^rm name.
2, Each grocery manuf ac'i'urer shall pay his or its equitable contribution
to the expenses of the maintenance of its. individual Code Authority, determin-
ed as hereinabove provided, and stibject to rules and regulations pertaining
thereto issued by the Administrator. Only grocery manufacturers complying
with the Code and contributing to the expenses of its administration as here-
inabove provided (sinless duly exempted from making such contributions) shall
be entitled to pc?.rticipa.te in the selection of memlaers of the Code Authority
or to receive the benefits of any of its volLtntary activities or to make use
of any emblem or insignia of the National Recovery Administration.
3. Each Code Authority shall neither incur nor pay any obligation sub-
stantially in excess of the amount thereof as estimated in its approved budget,
and shall in no event exceed the total amount contained in the approved budget,
except upon approval of the Administrator; and no subsequent budget shall con-
tain any deficiency item fcr expenditures in excess of prior budget estimates
except those v7hich the Administrator shall have -2 so ^approved.
(g) To delegate to the National Food and Grocery Manufacturing Advisory
Board any or all of its cowers and duties under this Code as now constituted
or hereafter amended.
(h) To recommend to the Administrator any action or measure deemed ad-
visable including further fair trade practice provisions to govern its grocery
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raan-ofacturers in relation with each other or with other industries; measures
for industrial planning and stahilizatlon of employment, and including •
modifications of this Code pertaining to its particular grocery man\rfactur-
ing industry which shall "become effective as part hereof upon appr-sval "by the
Administrator after such notice and hearing as he may specify.
AETICLE VII
Unfair Methods of Competition
Section 1. Open Price. (a) Ho grocery manufacturer shall offer to sell
contra.ct to sell, or sell (except pursuant to a mutually irrevoca"ble contract
to sell not in violation of this Code when entered into) any product to a
trade buyer except upon the "basis of an open price which is strictly adhered
to while effective. The term "open price" as used in this Section means a
price list (a) which is published or availa'ble for the equal information of ,
all trade buyers (actual and solicited) alike locat ed in the same competitive
market area, and (b) which declares all the manufacturer's orevailing prices,
and discounts, rebates, allowances, and all other terms or conditions for the
sale of such product,
(b) IJo grocery manuf s-cturer shall make or permit to be made any direct
or indirect price concession to a trade buyer. The term "direct or indirect
price concession" means any variation from t'ne manufacturer's open pries,
whether by means of a rebate, allowance, payment, free deal, gift, brokerage
or by any other means v?hatsofever«
(c) This Section shall not apply to sales of commodities customarily
sold in bulk or a bid- and-. asked basis in open competitive buying; not to salesi
for charita.ble or reli&f purposes.
Section 2. Unearned Service Payment, No grocery manufacturer shall
designate as an "advertising allowance" , e. "promotion allowance" or liy a
similar term, any price reduction, discount, bonus, rebate, concession, or
other form of allowance, or any consideration for advertising or promotion
services offered or given by him to any customer,
No grocery manufacturer shall offer or give any consideration merely for
"pushing", "advertising", or otherwise than for definite and specific adver-
tising or promotion services. Such consideration shall be given only pursuant,
to a separate written contract therefor, which contract shall specifically ant
complet'ely set forth the advertising or promotion services (in such manner
that their specific character may be understood by other members of the in-
dustry and their customers) to be performed by the recipient of said con-
sideration, the precise consideration to be paid or given therefor by said
manufacturer, the method of determining performance, and all other terms and
conditions relating thereto,
No grocery manijf acturer shall offer or give any such consideration unless
it is equally available for the same service to all competitive b-ioyers in the
same competitive market, and unless a copy of the written contract therefor is
retained on file for a period of sixty (60) days .after the expiration thereof
and in no event for less than one (l) year. In order to investigate an eJleg-
ed violation of this Code, the Administrator may require a grocery manufacturer
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,to report any such contract made "by him and/ or to produce a copy thereof for
inspection, ;. ■ ,
Section 5. Destructive Price Cuttini^;. Wilfully destructive price
cutting is an unfair method of competition and is. forhidden. Any grocery
manufacturer or merater of any other .industry or the customers of either may
at any time complain to the appropriate Code Authority that any puhlished
price constitutes unfair competition as destructive price cutting imperiling
small enterprises or tending toT/ard .monopoly or the impairment of code wages
and working conditions. Such Code Authority shall within five (5) days afford
an opportunity to the manufacturer puhlishing the price to answer such com-
plaint and sriall within fourteen (14) days make a ruling or adjustment there-
on. If such ruling is not c6nc\irred in hy other party to the complaint, all
papers shall he referred to the Research and Planning Division of ERA which
shall render a report and recommendation thereon to the Administrator,
Section 4, Quantity Price. No grocery manufacturer shall offer or make
a quantity price unless it is Dased upon and reasonahle measured "by a saving
resulting from a substantial difference in the quantity sold and delivered.
Section 5, Unearned Discount for Cash. No grocery manufacturer shall
allow a discount for cash which is not earned hy payment in accordance with
the cash discount terms specified in his open price list.
Section 6. Payment or Diversion, of ■Brokerage. No grocery manufacturer
shall pay or permit to "be paid a "brokerage or commission to a trade "buyer.
Section 7. Fra.udulijnt Prizes or Premiums. ■ No grocery manufacturer shall
offer or give prizes, premiums, or anjrthingof value hy any of the following
methods;
(a) In ways ".'hich involve lottery in any form, the term "lottery" as used
herein including "buj: without limitation, any plan or o,rrangement where"by the
premium offered involves the element of chance and/or differs su"b st ant i ally
and inequitahle in value from "buyer and buyer of the same quantity and/or
distri"bution class;
("b) In ways which involve .mi srepresentati on or fraud or deception in any
form, including, "but without limitation, the word "free", "gift", "gratuity"
or langu,age of similar import in connection with the giving of premiums for
the purpose or with the effect of misleading or deceiving "buyers;
(c) By giving premiums to any "buyers when such premiums are not offered
to all customers of the same class in the trade area.
Section 8. Unfair Su"bstitution, No grocery maiiuf acturer shall substitute
without due notice and consent of a trade buyer another product for that order-
ed from him.
Section 9. Commercial Bribery. No grocery manufacturer shall give,
permit to be given, or directly offer to give, anything of va,lue for the pur-
pose of influencing or rewarding the action of any employee, agent, or rep-
resentative of another in relation to the business of the employer of such
"46-
eraployee, the principal of such ageiit or the represented party, without the
knowledge of such enployer, principal) or party. This provision shall not
he construed or prohihit free and general distribution of articles cominonly
used for advertising e::cept so -far as such articles are actually used for
commercial hrihery as hereinabove defined.
Section 10. False Label or Advertisement on Ccntainer. No grocery manu-
facturer (a,) shall sell a product falsely or deceptively labeled or marked;
or (b) falsely or deceptively advertise a product; or (c) use a deceptive
container or give short v-veight or raeeisure or coijiit.
Section 11. Unfair Interference vdth Competitors' Business. Ho grocery
manufacturer shall unfairly interfere with a competitor's business, t^ utter-
ing false statements about his business or by unfairly disparaging his business;
or products or by inducing a breach of his contracts,
•■■ iETICLE Yin.
Modification
Section 1. This Code and all the provisions thereof are expressly made
subject to the right of the President, in accordance mth the provisions of
subsection (b) of Section 10 of the. Act, from- time to time to cancel or modify
any order, approval, license, rale, or regulation issued under Title I of
" said Act,
Section 2, Such of the provisions of this Code as are not reqxiired to
be included herein "by the Act may, - with the approval of the Administrator,
be modified or eliminated in such manner as may be indicated by the needs of
the public, by chaxges in circumstances, or be experience,
' . ARTICLE IX
Monopolies
Mo provision of this Code shall be so applied as to permit monopolies or
monopolistic practices, or to elimina^te, oppress, or discriminate against
small enterprises.
ARTICLE X
None of the provisions of this Code relating to prices or terns of selling;
shipping, or me^rketing shall apply to export trade or sales or shipments for
export trade, "Ejroort Trade" sha.ll be defined as sa,les or shipments outside
of the continental United Sta,tes,
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AFPEITDIX VIII.
.June 9, 1934.
TO: THE ADMINISTMTOR
PHOM: IIRA ADVISORY COIWCIL
SUBJECT: EASIG CODE ' ''. •
The Advisory Cotmcil tinsjiinously apT^roves your proposal for the speedy
codification of industry, if adjusted to care for the following specific
reconnendations :
1, That the proposed plan shall not apply (a) to certain in-
dustries to "be designated "by the Administrator (or the
Advisory Council) whose codes are nearing completion; and
(h) to certain few major industries as yet uncodified whose
importance warrants the preparation of individual codes in
accordance with existing procedure, such major industries
to "be designated "by the Adrainistrator (or the Advisory
Couiicil).
2, That industries as yet uncodified and not covered ahove
he encouraged to consolidate with kindred industries,
thereh^/ coming \inder the comDlete provisions of some
existing approved code. The deterraina^tion of the proper
kindred industry shall he "by the Administrator,
3, Th3,t all other industries now -uncodified and not dealt
with hy the ahove provisions he urged to adopt the Basic
Code, The provisions of the proposed Basic Code he modi-
fied as follows: '
A, That no flat declaration of hours and wages he
m.ade, hut that the hours and wages for any in-
dustry applying for the Basic Code he those
already approved for kindred industries, the
Administrator to determine the proper kindred
industry. The provisions of the kindred in-
dustry code shall also apply with regard to
daily and weekly maximum hours, permissihle
overtime and overtime wages.
B, That the additional lahor provisions set forth
in Exhihit "A" hereto annexed, and now recognized
as standard provisions, shall he included in the
Basic Code,
4, That there lie clarification and emphasis to avoid possihle
false impression (received hy all memhers of the Industrial
Advisory Board) on the following points;
9630
A, That this move contemplates Tjurely volimte.ry action
froiQ industries, v;ith the possihle exception of im-
portant exceptional industries, if any, i^,-hich fail
to apply and are'foimd to have su'bstanc^ard working
conditions;
S, That this is not e. ?nove to force all remaining in-
dustries under codes;
C. That the service code uove is entirely/ seioarate and
reiains unchanged;
D. That the purpose of this move is to provide a simple
means of giving a. code forthwith to those remaining
industries who desire a code, so as to clear the deck
for administration of ap^iroved codes.
ERA ADVISOai COIMCIL
Per Willard L. Thorp
Jl
-49-
APPENDIX IX
Augast 6, 1934
To: Col. G. A. Lynch ■
From: ■ Ro"bert K. Straus
Subject: Completion of Code Making
In accordaXLce with your request for information as to the
progress of the drive to complete code making "by August 10, I "beg to
submit the following tabulation:
Td
H
I
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H
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11
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23
0
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0
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■36
II
11.
7
5
1
0
0
0
1
0
24
III
18
9
0
5
1
0
4
0
0
32
IV
3
3
4
4
0
0
3
0
1
14
V
7
1
4
5
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0
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17 1/
VI
21
6
0
59
•0 ■
0
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0
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86
VII
2
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2
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0
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7
Totals
73
31
15
97
3
22
68
2
2
216
l/ In this Division there are 23 Service Codes in addition, which will be
hrjidd.ed under Executive Orders
2/ Of comment on Division Report annexed
9630
-50-
You nill note that 119 codes will be disposed of by August 10, A "balance
"'^of 97 codes will be left on that date. Of these 97 no a,ction has been taken
of 22 in Division I pending the return of the Administrator. This groiTO in-
cludes Anthracite, Shipping and Public Utility codes. In addition, no deci—
sipn he.s been reached on 59 codes which ai-e charged to Division VI. In every
one of these cases a letter has been sent to the Industry enclosing a copy
of Acijiiinistrative Order X-61, but in most of these cases, the industries
have not replied. In the few cases where they have replied, they have in-
dicatfed that they will not apply for codification uader X-61 since they can-
not secure trade practice provisions at the same time from the AAA, I have
instrixcted Division VI to warn all of these industries that if they do not
apply under X-61 for co6.if ication by Au£:ust 10, it may be necessar^^ to in-
vestigate labor conditions in these industries with an eye to imposing a
code under Paragraph 3-D of NIR/i.. I have had several conversations with
officials of the Department of Agriculture, including Under-Secretary T'o^rell,
and I have told them that this i,ifill probably be necessary. They do not
object to our going ahead on this basis, and indeed, they added ths.t they
see no reason why an industry should expect -to receive trade practice provi-
sions at the same time as they receive labor provisions, I do not recommend,
however, that action be taken immediately on August 10 with reference to
these indtistries in Division VI* It would seem to me preferable that the
Administrator should make a statement, after conference with the Secretary
of Agriculture, giving these industries some twenty days more (up to
September l) in which to apply under X-61, but warning them that if they
have not applied by September 1, investigation of labor conditions in these
industries will start immediately.
If we except the 81 codes which have been held up because of the si^ecial
situs-tions described above which exist with reference to them, and if we
except the 23 codes which have been transferred to Division V as Service
Codes, and to which the Executive Orders apply, some 18 industries only will
be left on Au^Toist 10 which must be codified. These will be reduced, I am
sure, within a few days after August IC.
At this point I wish to call attention to the situation which exists
with reference to supplemental codes. Code Record reported on August 3 that
141 supple:;ental codes awaiting apjjroval. In my judgxient, it was not the
Administrator's intention to include these in the drive to complete code
making. These industries are already codified in that they are operating -•
under labor provisions of basic codes. If the Administrator wished to cease
approving supi:ilemental codes as of August 10, he could do so without in-
flicting any injury on labor since the employees of these industries are \
already thoroughly protected under codes,
I would like to call attention. to the status of Division II, As of
August 10, it will have only one code awaiting disposition, and it is
probable that this industry will be a 'candidate for a nrescribed code, since
it has been unwilling to come to an agreement, I think that much credit is
due Ilr, Ileal Poster for this excellent record. The efficiency and thorough-
ness with which he has cooperated with me in this drive to complete code
making has indeed been gratifying,
Robert K, Straus, Chairman,
Committee on the Completion
of Code Making, Ai
9630
APPEiraiX X.
Tentative Outline
A. BASIC CODE (X-6l)
I. CODE-MAKING- AS FIRST PHASE OF NBA
A. Period of intense activity -■,
B» The Code-mal-cirig process
1. Authority
2. Objectives ' '
(a) Industry urged to take initiative ■'
(t) Major Industries given first attention
3. Procedure
(a) KEA Bulletin #3 (Basic Codes of Fair Competition)
C. Industry siDonsored 3 (a) Codes
1. Kumber suhmitted and approved to 7/l/34
(a) Major Industries (over 50,000 employees)
ill) Minor Industries (less than 50, COO employees)
(c) Service Trades
2. Wumter pending as of 7/l/34
D. igreements under 4 (a)
1. Promulgation of PHA ■ ■
(a) Effect on Code^making
E. Imposed Codes
1. Powers of President under 3 (d) and 7 (c)
2. Extent used
(a) Imposed Code Amendments
(l.) Cotton Garment (36 Hour maximum work Y/eek)
(2) Other instpnces
II. PACTOHS LEADIKG TO CHA]<IG-E IN POLICT ■
A. Code-making Torohlems
B. Most of industry codified
1. Small groups left mainly
C. Heed for concentration on other problems
1. Administration of approved codes
2. Clamor for compliance and enforcement
III. PLAN FOR COMPLETIOK OF CCDE-MAKING-
A» General Theory
1. Expeditious method of codifying remaining uncodified trades
and indtistries desiring Codes
2. Free KRA from initial codification of industries for adi-iinis-
tration of approved codes
3. Relieve smaller industries of expenditure of time and money
involved in the adoption and administration of an individual
Code.
B. Steps tpken to carry out plan.
1. Administrative Order No. X-Gl
2. " " " X-62
3. I' I' " X-63
9630
-5,0-
4. Office Order No. 100
5. Administrative Order Wo. X-84
C. j^plication
1. Industries excepted
D. Optional methods of codif icp.tion available
1. By application for the liasic Code
2, By application for consolidation with approved code for
kindred trade or industry
E. Time limitation on applications
P. Procedure for handling applications
1. Truly representative tody of the trade or industry must
apply
2, Notice and hearing
5. Approval of applications
(a) Industries employing less than 50,000 persons
(b) All other trades or industries
4. Committee for completion of code-maJcing
(a) Functions
(l) Supervise execution of plan
IV. ^IvilKISTRATION OF PLAN
A. General NEA Code Authority
1. Members and how appointed
2. Poirrers and duties
3. Use for purposes other than administration of basic code.
(a) Cotton G-arment Industry Code
(b) Retail Solid Fuel Code , . ,.
(c) Other codes
4. Questioned legality of functions .. • .
V. ACTOAL OFERATIOT OF PLAN ' ;■':■'
A. Nuiiiber of Applications for Basic Code
1. Those ap-nroved and. disapproved ....
B» Number of Applications for Consolidation
1. Those approved and disapproved
2. One joint AA&.-HRA Code consolida,tion
(a) Terminal Grain Elevator Industry placed under Grain
Exchanges Code
C. Deviations and Modifications Desired by Industry
D. Code-making Continued
VI.' DEPARTURE FROM PLAN
A. Administrative Order No. X-89 (Basic Code for Grocery Manu-
facturing Industries)
1. Main purposes:
(a) To facilitate the program outlined in Administrative
Order No. X-61
(b) To bring different ind.us tries engaged in manufacture of
food and grocery products, to greatest extent possible,
under comparable code provisions
9630
-53-
VII. CONCLUSIONS
A. Did Plan Accomplish the Desired Objectives?
B. Was Plan Practical?
C. WoLild Better Results Have Followed Earlier Adoption of Plan?
D. Was T^rpe of Notice Used Sufficient?
E. Did the Act Contemplate that Groups Could he Codified in
Siich Manner?
E. Delegation and Redelegation of Power.
9630#
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