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BOSTON PUBLIC LIBRARY 



53 



3 9999 06542 023 2 office of national recovery administration 

DIVISION of review 



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Sep 



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WORK materia 
No. 33 



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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 . BEGINN IN G 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 . E ARLY DEVELOPMENTS IN THE. FO Rl.'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 AUTHORIT Y 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 

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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- 



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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 



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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 



-12- 

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- 

■ APPEI TDIX 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" 

BASI C 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 " i n 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.- 
P rocedure 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. 



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-33- 
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 FEN D 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. 



953n 



-38- 

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 

963n 



-40- 



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 

9630 



-41- 

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 
9530 



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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 

9630 



J, 



-44- 



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 Pric e. (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 

9630 



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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, Q uantity Pric e. 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. Unfa ir Interf erenc e 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, 



9630 



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AFPEITDIX VII I. 

.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: 

































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IV 




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86 


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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# 



K