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OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



THE SO-CALLED MODEL CODE 
ITS DEVELOFMENT AND MODIFICATION 



By 
Harry Mulkey 



WORK MATERIALS NO. 36 
t 



NRA ORGANIZATION STUDIES SECTION' 
March, 1936 



\ 



OFFICE OF NATIOFAL RECOVERY ABUDTI STRATI ON 



RnSTON PUBUC LIBRARY ... DIVISION OF HE7IET5 

,,, jiiiiiiiiiiiiii 

3 9999 06317 360 1 



THE SO-CALLED "lODEL CODE 
I r I'S DEYELOPilEHT AL T D iDDIFICATIOF 



3y 
Harry LIulkey 



A 0?. -AFIZATIOF STUDIES SECTIOi 
i LARCH, 19S6 



9810 



OSD 



This study of "The Development of the Model Codo and Model Pro- 
visions for Codes" was "ire-jared by Mr. Harry 3. yulkey of the 1"RA 
Organization Studies Section, Mr. Uilliam v;. Bardsley in charge. 

The subject has been treated from an historical point of view. 
The report discusses in chronological order the events which culminated 
in the passage of the rational Industrial Recover' Act, the early pro- 
blems which v/er - present relrtive to code making, the policies involved 
in the formulation of che Model Code of November -, 1933, subsequent 
issues of the Model Code and the ->r omul at ion oi model provisions 
amendatory thereof, and its reception by industry. The study methods 
pursued by the author are realted in Appendix I. 

At the bach of this report will be found a. brief statement of the 
stuaies undertaken b; r the Division of Review. 



L. C. Liar shall, Director 
Division of Review 



March 17, 1936 



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DEVELOPMENT OF TH3 MODEL CODS AND ..ODEL PROVISIONS FOR CODES 

TABLE OF CONTENTS 

INTRODUCTION 

CHAPTER I F.?.ge 

REASONS FOR PROMULGATION OF MODEL CODE, NOV. 6, 19:53 7 

I. Proposed Codas were rapidly being filed which were 

different in approach, treatment, and expression 7 

.II. Uniformity was desirable H 

III . Expedition was needed 11 

IV.. 1TRA Policy had not "been developed 12 

V. Industry would be aided in formulating codes for presenta- 
tion 12 

CHAPTER II 

FORMULATION OF kODEL CODE 14 

CHAPTER III 

MODEL CODES ISSUED 133 1IRA 32 

I. Issue of August 8, 1933 32 

II. Issue of October 1, 1933 32 

III. Issue of October 2-3, 1933 32 

IV. Issue of ilovember 6, 1933 32 

V. Issue of April 3, 1934 37 

VI. Issue of Office Manual, November 21, 1934 38 

Proposed Model Provisions. Formulated ''oy the Code Plann- 
ing Committoe (April 17 - Lay 27, 1933) 38 

CHAPTER IV 

PROVISIONS OF THE MODEL CODE 40 

CHAPTER V 

N.S.A. PRONOUNCE: IF :F AFFECTING LiODSL CODE PROVISIONS 67 

I. Commercial Bribery 67 

II. Statistical Information 67 

-ii~ 

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Page 
III. Review of Acts of Code Authorities 67 

IV. Selling Below 'Cost, Open Price Filing Accounting and 

Public Accountant Provisions 69 

V. Trade Practice Committees 73 

VI . Handicapped Workers 74 

VII . Standards of Safety e nd Health 76 

VIII. Premiums 77 

IX. Mandatory Assessments 78 

X. 31ue Eagle Insignia 80 

XI. Classification of Customers 80 

XII. Advertising Allowances 82 

XIII . Liquidated Damages 84 

XIV. Prohibiting Dismissal of Employees for Reporting Alleged 

Violations of Codes 84 

XV. Homework 84 

XVI. Son-Waiver of Constitutional Rights 85 

XVII . Posting Provisions 87 

CHAPTER VI 

RECEPTIOiT OF INDUSTRY 89 

CHAPTER VII 

COilCLUSIOITS A1ID FIITDiiT&S 91 

APPENDIX 1 93 

APPENDIX II • 94 



-lii- 
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EXHIBIT SUBJECT 

1 "Model Code" for Self -Governing Industries under "The National In- 
dustrial Recovery Act," issued by the National Association of Manu- 
facturers, May 31, 1933. 

2 Basic Code for Substitutions Before the Policy Board in FRA. 

3 Issue of Model Code of August 7, 1933, by W. F. Farnsworti. 

4 Issue of Model Code of August 10, 1933, by W. P. Famswoith. 

5 Types of Unfair Competition - Fractices Condemned in Federal Trade 
Commission's Orders to Cease and Desist. (Abstracts from the Federal 
Trade Commission's Annual Report, June 30, 1934). 

6 Confidential Report of the "L!RA-Commerce" Committee on an American 
Basic-Code of Fair Fractices. 

7 An Ideal Charter for Trade Associations, issued by the Bureau of 
Foreign and Domestic Commerce. 

8 "Model Code" or Suggested Outline for Codes, draft of November 6, 
1933 . 

9 " Model Code" or Suggested Outline for Codes - draft of October 1, 
1953. 

10 "Model Code" or Suggested Outline for Codes - draft of October 25, 
1933 . 

11 "Model Code" or Suggested Outline for Use in Code Drafting, Draft 
of April 3, 1934. 

12 Executive Order No. 6464, November 27, 1933. Rules and Regulations 
Relating to Commercial Bribery Provisions. 

13 Executive Order No. 6479, December 7, 1933, Providing for the Sub- 
mission of Statistical Information by Persons Subject to Codes of 
Fair Competition. 

14 Office Memorandum No. 228, June 7, 1934. Open Price Filing, Costs, 
Price Cutting and Accounting Provisions in Codes. 

15 Executive Order No. 6606-F, February 17, 1934, Prescribing Rules and 
Regulations for the Interpretation and Application of Certain Labor 
Provisions of Codes of Fair Competition as They May Affect Handi- 
capped. Workers. 

16 Office Order No. 71, March 14, 1934. Standards for Health and Safety. 

17 Administrative Order No. X-51, June 15, 1934. Safety and Health 

— iv- 
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Standards. 

18 Office Memorandum No. 23?, June 12, 1934. Premiums. 

19 Office Memorandum Ho. 316, December 6, 1934. Premiums .^nd "Free 
Deris" . ^ 

20 Executive Order No. 6673, A pril 14, 1934. Making Provision for a 
Clause in Codes of Fair Competition Relating to Collection of Ex- 
penses of Code Administration. 

21 Office Memorandum No. 267, July 20, 1934. Classification of Custom- 
ers. 

22 Office Memorandum No. 326, January 5, 1935. Advertising Allowances. 

23 Office Memorandum No. 331, January 29, 1935. Liquidated Damages. 

24 Executive Order No. 6711, May 15, 1934. Prescribing a Regulation 
Prohibiting Dismissal of Employees for Reporting Alleged Violations 
of Codes of Fair Competition. 

25 Executive Order No. 6949, January 22, 1935. Non-Waiver of Constitu- 
tional Rights in Connection with Codes of Fair Competition. 

26 Executive Order No. 6711-A, May 15, 1934. Prescribing Rules and 
Regulations for the Interpretation and Application of Certain Labor 
Provisions of Codes of Fair Competition as They May Affect Certain 
Homeworkers. 

27 Recommended Trade Practice Provisions Formulated by the Code Planning 
Committee, May 20, 1935. 

28 General Labor Provisions Formulated by the Code Planning Committee, 
May 22, 1935. 



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A GENERAL HE VI 5? 

This study relates the events which culminated in the passage of 
the National Industrial Recovery Act, the early problems which were pre- 
sented to the National Recovery Administration relative to the needs for 
and the policies involved in the formulation of each provision which was 
included in the "Model Code" of November 6, 1933; also subsequent issues 
of the Model Code and amendments thereto, which were issued in the form 
of Executive, Administrative, and Office Orders, and Office Memoranda. 

As implied by its title, the Model Code was a guide or a model used 
by the personnel of NRA and members of industry connected with code 
making. The model provisions were formulated in order to obtain uniform- 
ity and to expedite the approval of codas. 

The Introduction deals with some of the events which culminated in 
the passage of the Act; also the formulative of "A 'Model Code' for 
Self-Governing Industries under the 'National Industrial Recovery Act'", 
issued May 31, 1933, by the National Association of Manufacturers. 

The reasons for the promulgation of the Model Code are discussed 
in Chapter I and Chapter II treats of its formulation* 

Chapter III relates some of the facts concerning the official 
and unofficial issues of the Model Code. '. _■-'-' '-" 

Chapter IV sets forth its provisions. Policy and other N.R.A. 
pronouncements affecting its provisions are discussed in Chapter V. 

Industry's reception of the Model Code is briefly related in 
Chapter VI. 



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-VI- 



-1- 

THE DEVELOP" l./ J 0^ T T -n ".[OPEL CODE 

a.'d~:qdel :t.ovi3io:"s for codes 
i. 2rgd"g?ig's~ 



In the cc rly spring of 1935, the economic situation had "become 
very desperate and nroposals for government action nere being made by 
many O rou;?s and individuals. Direct relief for the unemployed, indep- 
endent relief for the farmer, and a large program for public works 
were among those thrown into the "public forum" for discussion. It 
was obvious that in order to decrease unemployment and to increase 
purchasing power industrial establishments should cooperate and move 
forward together in a movement for a rapid expansion of productive 
activity. 

The business degression which began in the fall of 1929 caused 
many Trade Associations to request aid from the Government. The 
degression had bro Lght forward a number of plans for price fixing and 
production control which were in violation of the anti-trust laws; 
some of these plans had become known to the Department of Justice, 
and public action to enforce the anti-trust laws was in progress. In 
the early months of 1953 many groups were working in Congress and 
through the Chamber of Commerce of the United States, the National 
Association of Manufacturers and the American Federation of Labor, to 
aid in drafting some type of legislation which would temporarily re- 
move the stringent provisions of the anti-trust laws in order to 
permit a partnership between Government and business. Industry and 
labor were sponsoring the partnership proposal, and were of the opinion 
that legislation permittin such an Act would be of great aid in 
helping business to _.et out of the depression. Certain individuals 
proposed a Government guarantee against loss to private construction 
enterprises as an inducement to stimulate activity in capital D oods 
industries. Other O roups advocated a program whereby under government 
leadership and guidance the establishments of the major industries 
by voluntary agreements amon & themselves could expand their schedules 
of production simultaneously for a definite period and at the same 
time subscribe to a schedule of minimum wages and maximum hours. 
This program was calculated to decrease unemployment, and start the 
forces of recovery moving. Advocates of tho latter view 'aided in 
drafting the earliest of the many bills which were discussed during 
the formative period of the national Industrial Recovery Act. Some 
of the bills proposed to modify the anti-trust laws with a view of 
eliminating "unfair and cut-throat" competition throu h concerted 
action by trade association. 

On December 31, 193?., Senator Black of Alabama, introduced a bill 
(3". 5267) known as the "Five Day Week and Six Hour Day" Bill (*) 

The vital provision of the bill is as follows: 

"That no article or commodity shall be shipped, trans- 



(*) Congressional Record, December 31, 193?, ?nd Session, 73nd 
Congress, p. 8?0. 

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-2- 

ported or delivered in interstate or foreign commerce which 
was produced or manufactured in any nine, quarry, cannery, 
workshop, factory-, or manufacturing establishment situated 
in the United States in which any person was employed or 
permitted to work more Shan five days in any week or more 
than six hours in any day, provided that, this section shall 
not apply to commodities or articles produced or manufactured 
before the enactment of this law." 

March 10, 1933, Senator Black of Alabama intorduced, in the first 
Session of the Seventy- Third Congress, a bill (5.153) (*) to prohibit 
shipment in interstate commerce of certain commodities and articles pro- 
duced in establishments in which vrsons were employed more than five 
days per week or six hours per day. Industry, evidently fearful of the 
Black bill, favored the proposed legislation sanctioning voluntary 
agreements. 

On May 17, 1933, President Roosevelt sent a special message to 
Congress (**), which read in part as follows: 

"Before the Special Session of Congress adjourns, I 
recommend two further steps in our national campaign to put 
people to work. 

"My first request is that the. Congress provide for the 
machinery necessary for a. great co-operative movement through- 
out all industry in order to obtain wide re-employment, to 
shorten the working week, to pay a decent wage for the shorter 
week and to prevent unfair competition and disastrous over- 
productions. • 

"Employers cannot do this singly or even in organized 
'groups, because such, action increases costs and thus permits 
cut-throat underselling by selfish competitors unqilling to 
join in such a public-spirited endeavor. 

"One of the great restrictions upon such co-operative 
efforts up to this time has been our anti-trust laws. They 
were properly designed as the means to cure the great evils 
of monopolistic price fixing. They should certainly be 
retained as a permanent assurance that the old evils of 
unfair competition shall never return. But the public 
interest will be served, if \7ith the authority and under the 
6 ui dance of ,_.overn.aent, private industries are permitted to 
..rake agreements and code insuring fair competition. However, 
it is necessary if we thus limit the operation of anti-trust 
laws to their original purpose to provide a rigorous 
licensing -lower in order to meet rate cases of non-co-opera- 
tion and abuse. Such a safeguard is indispensable." 

(*) Congressional Record, March 10, 1933, 1st Session of 73rd 
Congress, p. 116. 

(**) Congressional Record, May 17, 1933, 1st Session, 73rd Congress, 
p. 3j49. 

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~«5- 

Cn the sa;vie day, Senator Vfagner of New York introduced a bill (S.1712) 
for national industrial recovery (*). Several weeks of hearings were 
held by the eonLuttees of the Senate and House. In these hearings it 
became clear that what was contemplated was (l) concerted action "by trade 
and industrial O rou~is to end the intense competition then prevailing; 
(2) the setting up of standards of wages and hours of labor; and (3) 
bivin^ the President a degree of ower over business enterprises un- 
paralleled in previous peace-time history of the country. 

Immediately after the introduction of the National Industrial 
Recovery Bill in Congress, General Johnson, who had helped to draft the 
bill, in anticipation of its nassa 6 e called in consultation Mr. C. 
Judkins, of the Trade Association Section of the Bureau of Foreign 
and Domestic Commerce, with reference to drafting information for 
distribution to the trade associations as to "v/hat can business 
organizations do at once now the National Industrial Recovery Bill will 
soon become law?" General Johnson requested Mr. Judkins to formulate 
instructions within the boundaries of the -oronosed Act, which would 
be of aid to industry in drafting nronosed codes. 

At this time General Johnson's idea was that it would be better 
to limit code making 00 the major industries and not to nermit small 
or unorganized industries to have separate codes. V'ith this in mind, 
Mr. Judkins in conjunction with Dr. A. P. Haake of the Motional 
Associati-n of Furniture Manufacturers, Mr. John C. Gall and Mr. Noel 
Sargent of the National Association of the Manufacturers, and 
representatives of the American Federation of Labor, studied the -lending 
bill, and formulated a ^uide for use by industries in the preliminary 
draftin 3 of codes, tfhich was issued on May 31, 1933, by the National 
Association of Manufacturers as "A Model Code for Self-Governi:i_. 
Industries under "the rational Industrial Recovery Act". (Exhibit l) 
This "Model Code" included (l) a chart _ivin,_, the most important features 
of the bill; (2) a chart indicating what a trade association could do 
to prepare for the Act; (3) an introduction and notes containing further 
suggestions to members of industries; (4) "A Su c ^estcd Form of Outline 
for a Code of Fair Competition" (adapted from a code drafted by the 
National Lumber : anuf; .cturers Association); and (5) a chart indicating 
a "breakdown" of the many divisions of the Lumber Industry. 

General Johnson, on June 3, 1933, in an address to a gathering of 
business leaders called together by the National Association of 
Manufacturers, explained how he believed industry and labor would both 
be helped by the Act, and officially intorduced the "Model Code for 
3 elf-Governing Industries." He said that this"Modcl Code," seemed to 
answer their wishes for something to do at once, that they should go 
back to their industries, call together their members, draft a plan 
which would be of benefit to employers and employees, and submit it for 
approval when the National Industrial Recovery Bill became a law. 

About five thousand copies of this "Model Code" were nrintcd and 
distributed by the National Association of Manufacturers. The Bureau 
of Domestic and Foreign C o mmerce, with the -permission of the Nati onal— _ 
(*) Congressional Record, May 17, 1933, 1st Session, 73rd Congress, 

p. 3550 

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Association of Manufacturers, also printed several hundred copies and 
distributed them to industries and labor organizations. 

The introduction of the "Model Code for Self-Governing Industries", 
in part, follows: 

"This is a preliminary outline. It is designed to aid 
industrial executives adapt trade associations to the immediate 
requirements under the National Industrial Recover;/ Act. A 
subsequent outline will be issued to meet any essential changes 
which may be made in the bill. (Although this outline touches 
upon all major requirements of a 'Code of Fair Competition, ' 
the advice of legal counsel is urgently recommended properly 
to adopt the general suggestions herein given to the detailed 
requirements of each individual case.)" 

"l"o Code can fit all industries, but there are sufficient 
features in common to justify offering what may be termed a 
'Preliminary Model Code. ' This will have to be adapted to 
meet particular situations, as well as the rules, regulations 
and requirements which those charged with the administration 
e'f the Act may subsequently, stipulate." 

"The Code which follows is designed for an industry 
made up of a number of closely related divisions which 
compete with each other or otherwise come into such intiruete 
contact with each other in common markets that a common code 
and coordination is essential to them all." 

"The Lumber Industry, whose proposed form of organiza- 
tion is shown in connection with this Code, is an example 
of such an inclusive industry. The Furniture Industry pro- 
vides another example, with its sub-groups - manufacturers 
of upholstery, case goods, tables, chairs, bedding, reed and 
fibre goods, etc." 

"For such industries, the 'Model Code' may be adopted 
practically as outlined." 

A brief synopsis of the text of this "Model Code," of May 31, 1933, 
is as follows: 

Article I - "Purpose." Contains the purpose clause. 

Article II - "Participation." Provides that any member of 
industry may be extended the benefits of the code, but must 
accept his share of the cost and responsibility be becoming 
a member of the association. ITo provision is made for 
participation by non-association members. 

Article III - "Divisions of the Industry" , for the purpose 
of administration. Provides that industries shall be 
divided into divisions, each division to designate and 
establish its own administrative agency; also provides for 

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I i establishment of an Executive Comnitee 

i . each division to administer the code, receive 

idjust complaints, and consider proposed amend- 
ments to the code. 

Article IV - "Division Regulations". Sets forth 
standards for labor, including Section 7 (a) of 
the Act. Includes provision for production 
control and for the establishment of methods of 
cost accounting and prohibits sales below reason- 
able cost. 

Article V - "Emergency ..national Committee" Article 
III referes to this Committee as the one author- 
ized to adopt and administer a code for a division 
if the division fails to perform its obligation. 
It was to be the general planning and coordinating 
3, ency jf the industry. 

Article VI - "Industry Regulations," This article 
empowers the Emergency ITatiohal Committee to es- 
tablish a marketing code with respect to (a) group 
selling; (b) classification of outlets or purchasers 
and recognition of standard and economically justifi- 
able -price differentials among them; (c) division of 
consuming territory into market areas, providing for 
plants best equipped to serve particular markets, to 
concentrate sales efforts in such districts; (e) sim- 
plification and standardization of products; (f) co- 
operative advertising for the industry; (g) collection 
and interchange of credit information; and (h) co- 
operative administration of insolvent debtors. 

The Trade Practice rules suggested are as follows: 
Price discrimination, commercial bribery, misrepre- 
sentation, rebates, terms of sale, false invoicing, 
freight absorption, piracy of design, dumping, mis- 
branding, free goods, and interference with contracts. 

Article VII - "Statistics" Requires members of the 
industry to furnish, and the Emergency national 
Committee to gather, statistical information for 
the purpose of Administration. 

Article VIII - "national Control Committee" Provides 
for the appointment of national Control Committee, 
to act as an Executive '-.. ency for the Emergency 
National Committee and to be charged with the en- 
forcement of the code, and with the duty of adjust- 
ing complaints, and considering proposed amendments 
to the code. 

Article IX - "General" prohibits interpretations 
or applications of code provisions so as to:^ 
promote monopolies, permit or encourage unfair 



9810 



-o— 



competition, eliminate or oppress or discriminate 
against small enterprises. The President is given 
power to cancel or modify any provision of a code. 
The Emergency national Committee is empowered to 
submit amendments to the code. The appropriate 
steps to be taken "by each division for the sub- 
mission of a division code are set forth in detail. 

While the National Incus trial Recovery Bill was being 
debated in Congress, many industries, anticipating the passage of the 
bill, called their members together and dismissed the formulation of 
their codes. The "Model Code for Self-Governing Industries" was used 
as a guide in this early code formulation, as is apparent in the first 
twenty or thirty codes approved by the President and many of the other 
early drafts of codes submitted for approval. 



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CHAPTER I 

REASONS F0~ P:i : ICLGAT IOI: OF MODEL CODS. NOV. 6. 1933. 

I. PROPOSED CODES 'TEBE RAPIDLY BEING- FILED T7HICH ¥ERE DIFFERENT 
IE APPROACH, TREATMENT, AMD EXPRESSION. 

The National Industrial Recovery Act as passed "by Congress and signed 
"by the President on Jun^ 16, 1933, differed "basically from the proposals 
which gave impulse to the Act. The President, immediately after signing 
the Act, issued a statement in which he commented on the Act and "briefly 
explained the procedure to he used "by associations in filing codes and 
the machinery to he used hy NRA in aporoving codes. This Bulletin stated 
in part as follows '- 

"The lav I have just signed was passer! to. nut people 
hack to ™ork — to let them huy more of the to ro ducts of 
farms and factories end start out business at a living rate 
again. This task is in two stages — first, to get hundreds 
of thousands of the unemployed hack on the payroll hy snow- 
fall and second, to plan for a better future for the long 

pull." 

* # * * * * 

"As to the machinery — the practical way of accomplish- 
ing what we are setting out to do, when a trade association 
has a code ready to submit and the association has qualified 
as truly representative, and after reasonable notice has been 
issued to all concerned, a public hearing will be held by the 
Administrator or a. deputy. A Labor Advisory Board appointed 
by the Secretary of Labor will be responsible that every af- 
fected labor group, whether organized or unorganized, is fully 
and adequately represented in an advisory capacity and any in- 
terested labor group will be entitled to be heard through 
representatives of its own choosing. An Industrial Advisory 
Board appointed by the Secretary of Commerce will be responsible 
that every affected industrial group is fully and adequately 
represented in an advisory capacity and any industrial group 
will be entitled to be heard through representatives of its 
own choosing. A Consumers' Advisory Board will be responsible 
that the interest of the consuming -oublic win be represented 
and every reasonable opportunity win he given to any group or 
class who may be affected directly or indirectly to present 
their views." 



"At the conclusion of these hearings and after the most 
careful scrutiny by a comoetent economic staff the Administrator 
will present the subject to me for my action under the law." 



981C 



"Under Title I of this Act, I have appointed Hugh 
Johnson as- Administrator and a Special Industrial Re- 
covery Board -under the chairmanship of the Secretary of 
Commerce. This organization is now prepared to receive 
proposed codes and, conduct prompt hearings looking to- 
ward their submission to me for approval. While accept- 
abl e pro-posals of no trade .group will "be delayed , it is 
my hope that the 10 ma.jor industries whic h control the 
"bulk of industrial employment can submit their simple 
"basic codes at onc e and that the country can look forward 
to the month of July , as . the "beginning of our great nation - 
al movement hack to work . " ■ 

On the same day the Act was signed the Trade Association Section of 
tho Bureau of Foreign and Domestic Commerce issued a "bulletin outlining- 
the provisions of Title I of the Act, as an aid to industry in drafting 
proposed codes. 

June 19, 1933, the Special Industrial Recovery Board, appointed "by 
the President "by Executive Order No. 6173, held its organization meeting 
at the Department of Commerce. General Johnson, now the NRA Administrator, 
presented to the Board a detailed statement of action already taken toward 
setting up an organization for the administration of the statute, and 
various questions of policy in connection with the form of the organiza- 
tion and the steps to "be taken under the Act were considered. The Board 
approved the issuance as NRA Bulletin No. 1 of the President's statement 
of June 16, 1933, and also issuance as Bulletin No. 2 of a guide to in- 
dustry for preparing and securing codes of fair competition. 

It was the consensus of the Board that the procedure adopted should 
place the initiative upon industry, and that the functions of the Govern- 
ment should be primarily directed toward stimulating cooperation in in- 
creasing purchasing power "by putting additional labor "back to work while 
at the same tine protecting the consumer against premature price increases. 

The purpose of Bulletin No. 2 was to inform all trade associations 
and industrial and labor groups how to proceed 'to secure the benefits of 
the Act. Relative to the content of the codes the following was stated: 

"It is not the function of the National Recovery 
Administration to prescribe what shall be in the codes 
to be submitted by associations or groups. The initia- 
tive in all such matters is expected to come from within 
the industry itself " 

Upon the issuance of Bulletin No. 2, NRA Press Release No. 4 was 
given out, reading as follows: 

"Basic principles which will guide the National 
Recovery Administration in consideration of "codes of 
fair competition" were announced today by Administrator 
Hugh S. Johnson in offloiaO Bulletin No. 2. 



9810 



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"The Bulletin emphasizes the fact that the initia- 
tive in the recover"'' program rests upon industry itself 
and that 'it is not the function of the National Recovery 

Administration to prescribe what shall he in codes 

or to compel the organization o f either industr-'- or labor.' 

'"Basic Codes' the bulletin continues, 'containing 
provisions respecting maximum hours of labor, minimum 
rates of pay and conditions of employment, which are in 
themselves satisfactory, will be subject to approval, 
although such conditions may not have been arrived at by 
collective bargaining. ' 

"Again emphasizing the purpose of the Act to encourage 
'a voluntary submission of codes, 1, the bulletin points out 
the penalty provisions of the law applicable to industries 
which fail to comply voluntarily. 

"The bulletin invites the immediate submission of 
simple Basic Codes by the ten largest industries, as sug- 
gested by the President when he signed the' Act, the codes 
to cover 'only such agreements' as meet at once the three 
objectives of the Act, namely, 'Maximum hours of labor, min- 
imum rates of wages, and such means as each industr2 r may 
find necessary to protect its constructive and cooperating 
majority from the wasteful and unfair competition of minori- 
ties or recalcitrants. ' 

"The basic codes, it is suggested, should propose an 

'average work wee 1 : designed so far as possible to provide 

for such a spread of employment as will provide work for em- 
ployees normally attached to the particular industry. ' 

"Likewise codes should propose a minimum wage scale 
'sufficient in fact to provide a decent standard of living 
in the locality where the workers reside. ' 

"Broad protection for the interest of the public as 
consumers is assured by specific provisions for representa- 
tion at all hearings, to the end that the effect of increased 
money wages shall not be offset by too rapidly mounting prices. " 

A proposed Cotton Textile Code was submitted to the National Re- 
covery Administration by the Cotton Textile Institute the day the 
President signed the Act. The first code submitted. It was formulated 
during the Congressional debate on the Recovery Act by conferences 
among representatives of the industry with the assistance of General 
Johnson and his aides. 

A large majority of industries and trade groups desired to cooper- 
ate with the President in the recovery movement, and were preparing 
codes to be submitted under the provisions of Section 3(a) of the Act. 
The result was that NRA was soon flooded with codes of all types 
imaginable. 

9810 



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Jul- 



jisted below are some of the prominent codec filed during June and 



(1 



(7 
(3 
(9 
(10 
(11 
(12 
(13 
(14 
(15 
(16 
(17 
(18 
.(19 

(20 
(21 
(22 
(23 
(24 



Cotton Textile 
Cast Iron Soil Pine 
Lumber 

rSaSpbuilding and Shiprepairing 
Petroleum 
Coat and Suit 
Iron and Steel 
Wool Manufacturers 
Kay on Heaving 
Hay on and Synthetic Yarn 
Electrical Manufacturing 
Clothing Manufacturing 
Lace Manufacturing 
Millinery 
Cotton Garment 
Wall Paper 
Photographic 
Corset and Brassiere 
Pull Length Dramatic and Musical Theatrical 

Industry 
Dress Industry 
Automobile Industry 
Retail Dry Goods 
Pood and Grocery Dist. Trades 
Lime Industry 



June 


16 


June 


22 


July 


11 


1! 


12 


II 


13 


II 


13 


It 


14 


1! 


15 


II 


16 


II 


19 


II 


19 


11 


19 


II 


21 


1! 


22 


11 


25 


II 


27 


11 


27 


11 


27 


II 


27 


II 


28 


II 


29 


II 


31 


11 


31 


11 


31 



As of Jul]- 10, 1935, one hundred and six national and local codes 
had "been received. By August 8, three hundred and ninety-nine codes 
classified as having a national status had "been submitted. 

Prom June 16 to September 5, 1933, eight hundred and thirty-three 
national codes were filed. The breakdown as to periods of filing are as 
follows: 



Period 



Number 



June 16 - July Id 
July 15 - July 31 
August 1 - August 15 
August 16 - August 31 
September 1 - September 5 



65 
144 
262 
284 

78 



Prom September 5 to September 23, 1933, inclusive, the classification 
of the codes received is as follows: 

Classification 



Period 

September 5 - 9 inclusive 
" 11 - 16 " 
" 18 - 23 'I 



National 

95 
61 
29 



AAA. Non-National Total 



9 



12 



234 
368 
239 



338 
429 
280 



9810 



-11- 

At the close of business September 23, 1933, the total number of 
codes received subsequent to June 16, was as follows: 

National 981 

Non-National 2634 

Total 3665 

From June 16, 1933, to January 2, 1934, the total number of codes 
received was: 

National _ 928 

Local 2552 

Supplemental 263 

AAA 553 

Total 4296 

II. UNI303LIITY WaS DESIRABLE 

Bulletin No. 2 stated: "It is not the function of the National 
Recovery Administration to prescribe what shall be in codes to be sub- 
mitted by associations or groups. The initiative in all such matters 
is expected to come from within the industry itself." This statement 
apparently misled some associations into believing that it would be 
possible to secure approval of trade practice provisions advantageous 
to their particular industries only; evidently they were forgetful 
that one of the main reasons for "the act was to decrease unemployment 
and increase purchasing power. Uniformity of provisions was desirable, 
because public understanding would depend in substantial degree upon 
the adoption of simple rules and provisions in codes. Furthermore, if 
a large number of industries' were under similar provisions, the question 
of compliance would present fewer problems. 

Up to the first of August, 1933, with the aid of the "Model Code 
for Self-Governing Industries," previously described, NRA Bulletin No, 
2, the "3asic Code for Substitutions before the Policy Board in PEA", 
(See Z:±Libit 2), (*) and the provisions of approved codes, industries 
were drafting codes of many types and forms. 

III. EXPEDITION 77AS NEEDED. 

As implied in the President's message when he signed the National 
Industrial Recovery Act, the codes submitted by the ten major industries 
would be given first consideration by the NRA. The immediate task was to 
put codes through the mill, and to get people back to work. 

Bulletin Ho. 2, also stated: "It is the purpose of the Act to en- 
courage a voluntary submission of codes of fair competition and the pro- 
cedure offered by those provisions (Bulletin No. 2) for basic codes is 
intended to simplify and expedite this process." 



(*) See "The President's Reemployment Agreement" 
A Division of Review Reoort. 



-12- 

It was the Administration' s desire to have codes submitted, 
approved, and set in operation as soon ?s possible, because time was 
of the essence ii unemployment was to be relieved before winter set in. 

Nevertheless, the negotiations and approval of the Cotton Textile 
Code required about three weeks and first it seemed that the code mill 
was grinding a lowly, for only eight codes (Cotton Textile, Shipbuilding 
and Ship re-pairing, Wool Textile, electrical Manufacturing, Coat and 
Suit, Lace Manufacturing, Corset and Brassiere, and Ligitimate Full 
Length Dramatic and Musical Theatrical) were approved ''oy August 16, two 
months after approval of the Recovery Act. 

However, curing the ensuing two months 49 codes were approved and 
by Mid-October there was increasing realization in NBA of the need of 
stock taking with respect to the provisions alreac.y approved and 
daily receiving pp .roval. 

IV. NBA POLICY EAD NOT BEEN DEVELOPED. 

At the time of the establishment of the Code Analysis Division 
in ERA, about July 15, 1933, no general policies, regarding the 
provisions to be included in codes, had been announced by the Adminis- 
trator. This Division adopted its own standards for checking proposed 
codes, and these standards were established upon the Act which provi- 
ded that specific (obligatory) provisions be included in every code 
approved by the President, NRA Bulletin No. 2, and the precedent estab- 
lished b; the codes approved up to that time. It was upon these 
standards that the codes were checked and analyzed. In the analysis of 
a code the attention of the Deputy Administrator in charge of the 
code was called especially to any price-fixing and production control 
devices which in the opinion of the Division weie economically undesir- 
able. These analyses were purely advisory and were furnished to the 
Deputy Administrator in charge of the specific code; the Industrial, 
Labor, and Consumers 1 Advisory Boards; the Legal Division; and the 
Research and Planning Division. 

In October, 1953, the Code Analysis Division was abolished; 
therefore the responsibility of passing on the representative character 
of the applicant group was placed upon the Deputy and his legal adviser. 
The code checking process was transferred to the Deputy, his advisers, 
and the Code Assistants of the newly created divisions, on October 25, 
1933. 

V. INDUSTRY WOULD BE AIDED Id FORMULATING CODES FOR PRESENTATION. 

After a. few weeks of hearings on the codes first submitted, 
it became obvious that many of the provisions proposed by industry 
would be rejected by NBA, yet during the early months of code making, 
ERA had not issued any guide for code drafting that could be used 
by Industry. A result was prolonged negotiations and delays in the 
approval of codes. During the months of July through October, industry 
used as one ruide in code drafting the first twenty or thirty ap jroved 
codes. The officials of NBA. realized that in order to obtain uniformity 
and to expedite the process of code making industry should, have an 
an official guide. 

9810 



-13- 

1'TRA Press Release No 7, of June 22, 1933, carried a story of a 
tin, of Dudley Gates, Assistant Administrator, NRA, with represen- 
tatives of the United Typothetae of Anerica. The following are excerpts 
from the release: 

"Mr. Cates at the outset clarified two misconceptions 
which many business men have carried to Washington with 
them when they have come to discuss codes for their indus- 
tries. The government, he' declared, had no intention of- 
telling industry what it must do - the initiative must pro- 
ceed from within industry inself. " 



"ITor does the Admin-i strati on contemplate price- 
fixing as pert of its function. Price agreements- propo- 
'sed by separate industries are subject to aporoval, Mr. _ 
Cates explained, if they are not monopolistic in inten- 
tion ox .effect or otherwise opposed to the public in- 
terest. " 

* 

Industrie.., basing their hope- on such statements as were made 
by the Assistant Administrator, flooded NBA with many novel devices 
for price fixing and other fantastic provisions. The codes were 
generally lacking in uniformity. 

The Administrator, in a radio address of August 23, 1933, opened 
his speech with the following: 

"The first month of effort under the President's 
Reemployment Program .is drawing to a close. A' principal 
yiu - jose was to s^eed up the submission p_f cod.es. We 
are happy to report to you that it has had, effect end- 
that , '-'ith _a very few exceptions, ~:racticelly the whole 
of American industry and, commerce have submit tea co de s 
for yublic ". eaiings . In addition to these codes over one 
and onc-h.-lf million individual agreements have been 
signiecL. I'ew signatures are coming in at the rate of one 
millions aonth and the intensive effort in the various 
con 1 .' ranities cloes not begin until next week." 

As stated by the Administrator, -Industry had submit tea codes 
covering about every type of business in the United Sta.tes. However, 
these codes had been formulated without the aid of a "Model Code" from 
ERA. 



9810 



-14- 

CHAF'JBR II 
FORMULATION OF" MODEL CODE 

From the time of the establishment of the NRA, various officials 
had seen the necessity for the ■uniformity of code provisions, and a 
few attempts had "been made to formulate a Model Code. Mr. William P. 
Farnsworth of the Legal Division took the initiative in the formulation 
of the first Model Code to he used by any part of the NRA, drafted a 
"Model Code" (See Exhibit "3") , which on August 7, 1933, was distributed 
to the members of the Legal Division for their comments. Copies were 
distributed subsequently to the heads of the Industrial, Labor and Con- 
sumers Advisory Boards, and of the Research and Planning Division. The 
comments received, in reply to this memorandum were duly considered, and 
a "Rough Draft tf4 of Model Code (See Exhibit "4") was issued about 
August 10th. This draft was used only within th e Legal Division . It 
set forth the purpose of tphe Act; definitions; general labor provisions, 
including .Section 7(a) of the Act, prohibition of child and penal labor, 
maximum hours and minimum wages; provided for the administration of the 
code, the establishment of an industrial relations committee, and mod- 
ification of the code. Objections were raised by Mr. Richberg to this 
draft, and the issuance of this Model Code was held up. 

While the formulation of a model code was an NRA problem, historic- 
ally it must be noted, that in April, 1932, more than a year before the 
passage of the National Industrial Recovery Act, the Bureau of Foreign 
and Domestic Commerce of the Department of Commerce, desiring to aid the 
trade associations, which were fast losing membership and due» because 
of the business depression, issued an "Ideal Charter for Trade Associa- 
tions" (Exhibit 7) . The purpose of this charter which was in a way a 
forerunner of the NRA Model Code, to call the attention of trade associa- 
tions to the scope of co-operatives which they could carry on. Many 
groups at that time were "in a fog" as to what they could do within their 
l<?gal rights without incurring the penalties of the anti-trust laws. 
Frederick M. Feiker, Director of the Bureau of Foreign and Domestic 
Commerce, presented this charter at the April 5, .1932, session of the 
Annual Award Meeting of the American Trade Association Executives, held 
in New York City. 

The chief authors of this "Ideal Charter" were C. J. Junkin, of 
the Law Division of 'the Department of Commerce, and C. Judkins, head of 
the Trade Association Section, Bureau of Foreign and Domestic Commerce. 

The "Ideal Charter" was revised by Mr. Judkins, and on May 26, 
1533, the revised form known as the "Model Charter" was introduced be- 
fore Congress by Congressman Celler of New York, member of the Judiciary 
Coramittee of the House of Representatives. It was apparently Mr. Celler 1 s 
belief that the Government should aid business in establishing some form 
af partnership agreement to permit greater business stability under the 
anti-trust laws. 

Mr. Celler' s address to the House of Representatives and the Act 
introduced by him, are to be found on pages 4399 to 4403 of the Congress- 
ional Retford of May 26, 1933. 

9810 



-15- 

The Model Charter as referred to above was used by the Code 
Standardization Group, hereinafter discussed, in formulating the pro- 
visions of the Model Code. 

In late July, 1933, a committee, known as the NRA-Commsrce Committee 
on an American Basic-Code of Fair-Fractices , composer! of John Guernsey, 
Chairman; C. Judkins, Secretary; Blackwell Smith; T. McFadden, and H. 
Heyden, had started a survey of the many hundred Codes filed by that 
time with the NRA, the resolutions voluntarily adopted by industry 
through its various trade associations, the rules approved by the Fed- 
eral Trade Commission at trade practice conferences of approximately 
150 industries extending over a period of 15 years and agreements of 
accuracy and fair practices in advertising and selling developed by 
better business bureaus and American newspapera. The Committee in its 
report of September °8, 1933, to the Legal Division of NRA (See Exhibit 
6) recommended the adoption by NRA of 16 basic rules to be used by all 
industries in codes of fair competition. The subjects covered by the 
16 basic rules were as follows: (l) inaccurate advertising; (2) bait 
advertising; (3) inaccurate labelling; (4) inaccurate references to 
competitors; (5) claims of "We undersell everyone"; (6) selling below 
cost; (7) threats of law suits; (8) secret rebates; (9) free goods; 
( 10) selling on consignment; (ll) bribing employees; ( IS) false billing; 
(13) interference with another's contracts; ( 14) repudiating one's own 
contracts; (15) "tying" and block hooking contracts; ( 16) "black lists." 

The Committee was of the opinion that the above basic principles 
were sufficient to cover practically any case of unfair practice in 
industry or trade. 

In drafting the 16 basic principles, the Committee found that 
while unfair trade practices could be covered by these principles, 
there had been more than a thousand ways of stating them. 

Relative to enforcement of the unfair trade practice provisions 
in codes, the Committee in its report made the following comment: 

"Unfair practice provisions in any Code of fair 
competition for an industry will have little value 
unless they are feasible for practical enforce- 
ment. No industry is completely isolated. It has 
some relationship with other industries either 
through a 'vertical' association as one of the 
steps between production and consumption or through 
a 'horizontal' arrangement of industrial contact. 

"The whole code structure. is so directly balanced on 
the theory of '5USINES3 GOVERNING ITSELF' and 
prompt protection hy enforcement that unless the 
mean's of enforcement are clearly understood and 
easily demonstrated it will be practically im- 
possible to ohtain any material degree of com- 
pliance. The uniformity of provision and procedure 
in enforcement will eliminate that difficulty entirely." 

9810 



-16- 

The "Model Code" of November 6, 1933, included twelve of the six- 
teen fair practice provisions which were recommended by the NRA- 
Commerce Committee on the American Basic-Code of Fair-Practices. 



Early in September, 1933, as a result of an effort to improve the' 
effectiveness of the NRA Research and Planning Division, a committee 
was named to study the problem of the standardization of code provisions. 
The membership of this committee, known as the Code Standardization 
Group, was partly from outside NRA and was as follows: 



Alderson 

Barkin 

Compton 

Coles 

Cope land 

Cocoran 

Cover 

Culberson 

Creditor 

Edwards 

Engle 

Gates 

George 

Glasgow 

Guernsey 

Haake 

Halstead 

Hammond 

Heyinger 

Heydon 

Ho r ton 

Hunt 

Jeffrey 

Judkins 

Junkin 

Ludlum 

Massel 

Iv'eyer 

McFadden 

Rice 

Shannon 

Shields 

Smith, L.M.C, 

Stone 

Thompson 

Ward 

Wilmotte 

Worthy 

Young 



Department of Commerce 

Labor Advisory Board 

Industrial Advisory Board 

Public Relations Division 

Central Statistical Board 

AAA 

Central Statistical Board 

Industrial Advisory Board 

Executive Office' 

Consumers' Advisory Board 

Department of Commerce 

Labor Advisory Board 

Department of Commerce 

Deputy Administrator, NRA 

Trade Associations 

Trade Associations 

Office of Deputy Administrator King 

Trade Association Division 

Industrial Advisory Board 

Better Business Bureaus 

Federal Trade Commission 

Consumers' Advisory Board 

Executive Office 

Department of Commerce 

Department of Commer'ce 

Office of Deputy Administrator Whiteside 

Consumers' Advisory Board 

Research and Planning Division 

Trade Associations 

U. S. Census Bureau 

Legal Division 

Office of Deputy Administrator Davis 

Legal Division 

Research and Flanning Division 

Central Statistical Board 

Office Deputy Administrator Simpson 

Labor Advisory Board 

Office of Deputy Administrator Howard 

Office of General Hammond 



9810 



-17- 

This group was asked to formulate the provisions of n "Model 
Code" which could be released by the Administrator, and which would 
contain the results of the experience gained by tne unofficial copies 
of model cod.es previously circulated among the personnel of NP.A, other 
governmental agencies, and outside organizations'. 

It is noted that the Department of Commerce, Federal Trade Comi- 
mission, Central Statistical Board.', Agricultural Adjustment Adminis- 
tration and Census Bureau, as well as trade associations and better 
business bureaus, were represented in the Code Standardization Group. 
Some of the members were among those who aided in drafting the "Model 
Code for Self-Governing Industries" issued by the National Association 
of Manufacturers, May 31, 1933. 

Those of the group from the Bureau of Foreign and Domestic Commerce 
of the Department of Comrerce, the Federal Trade Commission and the 
trade associations were familiar with the codes of ethics of various 
industries. Many of the provisions of the codes of ethics were examined 
and some were included as fair trade practice provisions of the "Model 
Code". Tne practices condemned in the Federal Trade Commission's orders 
to cease and desist were also duly considered (See Exhibit 5). 

On October 17th the Associate Counsel directed to the Executive 
Officer the following memorandum: 

"From: Blackwell Smith 
"To: Alvin Brown 

"Subject: Folicy Questions 

"1. In general, do we wish to assume the administrative burden 
of extreme provisions .in any more codes or have we enough ex- 
periments underway with the 200 or so codes now about complete. 

"2. Fair Trade Fractice Frovisions : 

"Whether to encourage, permit or discourage inclusion in 
codes of trade practice provisions which cannot clearly be es- 
tablished in the record as necessary for protection to the 
industry. 

"(Ferhaps policy of requiring report of Code 
Authority on desirability thereof.) 

"3. Frice Control : 

"Whether to encourage, permit or discourage: 

11 ( a) any actual price fixing: 

"(b) protection of sellers stipulated resale price . 

"(c) provisions protecting ' cost' plus reasonable 
return on investment . 

9&10 



-18- 

"(d) provisions protecting sell er' s ' cos t ' , includ- 
ing all items included in that term by good 
accounting practice. 

"(e) provisions protecting produ ctio n or direct cost . 

"(f) prohibition of sales below lo west cost or lowest 
r easona bl e cost fo r the industr y or subdivision, 
(with or without aid of an impartial agency in 
determining the same) . 

"(g) open price systems (with or without periods of 
notice before changes of published prices are 
permitted and with or without distribution of 
the actual price lists to competitors) . 

"(h) provisions empowering code authorities to adjust 
published prices or suspend operations of pub- 
lished prices. 

" (i) handling of price control for service industries, and 
how. 

" 4 . Limitations on prod uct ion : 

"(a) new productive equipment 

"(b) limits on use of existing 

"(c) allocation of production 

" 5 • Investigation : 

"(a) Whether to encourage, permit or discourage pro- 
visions giving code authorities or trade asso- 
ciations full, moderate or minimum powers of in- 
vestigation (either directly or by means of 'im- 
partial agents') with reference -to members of 
the particular industry or 

"(b) Whether to limit code authorities' and trade 
associations' investigatorial powers and pro- 
vide for reference to N.R.A. of matters, re- 
quiring investigation. 

"6. Enforcement : 

(same questions as under No. 5 above) 

"7. Expenses of Administration: 

"Whether to permit apportionment of expenses of code ad- 
ministration or non-assenting members of industry (making payments 
of share of expenses a condition of right to use of code insignia 
of participation in code authority activities, or otherwise). 



9810 



•19- 



"Whether to permit code authorities to require sworn statements 
from industry. 

"9. Labels; 

"whether to permit provisions 

"(a) requiring labels fror: all who comply 

"(b) permitting code authorities to control issuance 
of label s. 

"10. Comnilation of Statistics: 



"Whether to encourage, permit or discourage code authorities 
to compile and distribute statistics, or whether to require that 
reports from industry be transmitted to Washington directly or 
through the Code Authority, with or without rights of trade Associa- 
tions to make use of the same for compilation and distribution to 
members. 

"11, Reporting Periods ; 

"whether to require reports for periods constituting multiples 
of weeks. 

"12. Accounting Systems ; 

"Whether to permit codes to require new cost accounting systems 
or whether to tie down accounting to Internal Revenue methods. 

"13. Handling; of coops ; 

"Whether to require insertion of clauses in each code - whether 
to encourage a single code or whether to provide by Executive Order 
that genuine cooperatives are exempted from rebate provisions. 

"14. Physically or i.Ientglly Disabled ; 

"(a) How best to handle competition of products of charitable 

institutions, etc. (Permit sale at not mere than fo 

below?). 

"(b) The question of the aged, cripples, etc. receiving less 

pay in codes. (except them from minimum wage provisions?), 

"15. Exoort Business: 



"How to treat in Codes; (set standards and except export 
business specifically from the inappropriate provisions?). 

"16. Impo rt Business ; 



9810 



-20- 

"17, Prison G-oods : 

^Ho-r to -handle competition of prison goods - probably in a 
compact betY/een President and States; (for"bid sale below competitive 
prices in private commerce?). 

"18, Local Situations ; 

"Whether to permit local codes or agreements - 

"IS. Labor Agreements ; 

"Where to draw line as to and how to handle labor agreements 
submitted for approval of President under S.7 (b). 

"20. Trr.de Ass'n. Functions; 

"What to provide to cover part of trade ass'ns. in code ad- 
ministration,, 

"21. Control of D is trib's. by Producers : 

"Whether to permit boycott for failure to maintain fair practices 
of producers code, resale prices, etc, 

"22. Inequitable Restrictions ; 

"Whether to permit requirements of majority vote of Boards or 
of Assoc, members for admission of new members. 

"23. U nions ; 

"Writing union contracts into codes (especially preferential). 
"24. Code Authori ty; 

"General scope of authority. 

"25. Appointment of Code Authorities ; 

"Appointment of rep's, on Code Authorities - (without vote, to 
rep. to rep. Admin, or such other groups as he may designate?). 

"26. Use of Trade Assoc. Board or Ex. Committee as Code Authority ; 

"27. Protection of minority in selection of Code Authority ; 

"Whether to require, and if so how, that minority have 'a right 
to appoint one or more representatives. . 

"23. Control of .Employees; 

* 

"By indirection yjhen practices against employers interests. 



9810 






"29; Exceptions, exemptions, etc. ; 

"what tc do about legitimate requests coding up more than 10 
days after code goes into effect. 

"30. rorvrerd Contracts : 

"(a) Whether to provide in codes for relief of seller 
as. "oer PSA. 

"(b) Policy in excepting from that provision of PRA. 
"31. Price. Increases : 

"Whether to require provisions against sane in codes. 
"32. Changes in by- la"S. of Tro.de Associations after approval : 

"Whether to reqaire submission for approval etc. 

"33. Differentials above minimum wages : 

"Ho 1 - best to ;orcvide for maintenance of same and whether 
absolutely to require such provision in each code, 

"34. Arbitration Clauses : . . • . . 

"Thetner to insert American, Arbitrary Association Clauses; 
what to do -bout facilities, rules :\nd regulations. 

"35. Po-Ters under sec. 5(e) : 

"TTkether to treat as supplemental for codes or inclusive of 
all pov/er of relief ".s to imports. 

"36. Right to give Premiums : 

"Whether to protect the concerns doing this business and where 
to draw the line. 

"37. Percentage of Industry equal to true rep : 

"38. Contents of Blanket Executive Order : 

"(a) Making reports to government confidential 

"(b) Requiring all persons having knowledge to give it 
when requested, in reports, in any investigation 
( subpoena) . 

"(c) Access of books and other sources (subpoena). 

"(d) Investigations by IIRA. 



9610 



-22- 

"39. Amendments of Codes : 

"Hot ice, formalities, assent. 
"40. Handling of codification of Industries : 

"In outlying possessio ns. 
"41. Handling of S alesmen in Codes : 
"42. Adoption and Use of Code Insignia : 
"43. Handling of Professions : 

"Encouragement of agreements with the President (?). 

"44. The North-South Differential : 

"45. Protection to the Hegr o: " 

To further develop the Administration's position on the questions 
raised in the foregoing memorandum, an informal committee consisting of 
representatives, of the three advisory "boards and of the Research and 
Planning Division and the Associate Counsel, met a day or two subsequently 
at the suggestion of the latter, and on October 20th made the following 
recommendations, among others, to the Administrator: 

" I • I r o c o dur al Re c come ndat i oxi s : 

"1. Small I n dustries 

"A survey should be made and ail efforts centered temporarily 
on codes affecting more than, say 15,0(10 employees. To prevent 
loss of time during postponement of any code, industry should be 
given Model Code and scheduler qf information to complete. . When 
reached, their codes should go through quickly if they use the time 
on these. Small industries caught in peak seasons by. PRA should be 
given exceptions rather than talcing time for codes to meet their 
problems, 

"2. Model Code . 

"The model outline for codes should be farther polished, 
given general approval (subject to HRA complete freedom in its 
application to specific codes) and made freely available. (*) 

"II, Recommendations for Uniformity on Substance of Codes . 



"l 



• fcodel Code Contents- 

"Each clause in the model code would be clearly marked as 



(*) The "model outline for codes" referred to (Exhibit 9) was dated 
October 1, 1333, See also Chapter III of this report, 

9810 



•23- 



'G-enerally Applicable 1 or 'Merely Suggestive 1 and the 'Generally 
Applicable ' class should be expected from all industries unless 
good cause is shown as to their inappropriateness. 

"2. Price Provisions . 

"II ore tine is spent on price provisions than any other single 
variety. 

"(A) Until final decision of the President's Price Committee, 
it is recommended that we oppose : 

"(a) Any real direct or indirect fixing of sales prices 
as opposed to minimum prices, except perhaps in 
wasting natural resource industries; 

"(h) Any provisions forbidding reduction by distributors 
of the producers' stated resale price; 

"(c) Any provisions forbidding sale below 'cost' when 

the term is undefined, or includes any inflationary 
items such as depreciation, return on capital, etc. 

"(d) Any provisions forbidding sale below the particular 
seller's own cost, no matter how defined, because 

"(i) separate determination of cost of each party 

complained of means hopeless morass administra- 
tively and 

"(ii) seller should be permitted to meet price of a 
competitor if latter not selling below his 
own cost. 

"(B) It is recommended we raise no objection to: 

"(a) Provisions prohibiting sale below properly defined 

costs for lowest fo of the Industry as determined 

and published by any approved impartial agency. 

"NOTE: The findings could be made on a reasonable 
but arbitrary engineering and accounting basis, 
would avoid difficulty of actual determination of 
any one concern's costs (impossible with precision) 
and when published could be directly compared with 
actual prices of members of industr?/- ; would be 
entirely self-policing if published minimum were 
freely available. 

"(b) Provisions for true open price systems, meaning 

"(i) published prices of effective within not more 
than 10 days in complex industries or 5 days 
in simple 



9810 



~24r- 



"(ii) not to be incapable of withdrawal for any- 
period of time 

"(iii) Hot to be subject* to veto or modification by 
any agency .and 

"(iv) To "be generally published for "benefit of 
buyers as well as sellers. 

"3. Code Authorities . 

"Standardization on this point would save- much time. It is 
recommended that: 

"(a) The Code Authority may be the Board or Executive 
Committee of a Trade Association or a combination of several, where 
more than one association, but 

"(b) T/here trade associations do not cover practically entire 
industry, at least two regular members of Code Authority should be 
selected by non-association members voting by themselves without 
participation by association members. 

"(c) The Administrator should be given the right (to be un- 
iformly exercised in the major industries ..but perhapd only in special 
cases among small industries) to appoint not more than three non- 
voting members. 

"(d) Power of Code Authority to be normally limited to 

"(i) administrative matters without discretion in matters 
affecting rights and property of members of industry. 

"(ii) collection of reports of all concerns and passing 
same on to Washington and to legitimate trrde 
associations. 

" NOTE : In view of desire to strengthen trade 
associations important functions such as compilation 
and analysis of report's from industry for benefit 
of members of the industry, can well be left out of 
Code Authority and be made peculiar privilege of 
Trade Associations in serving their members. 

"(iii) distributing information, interpretations, etc. to 
industry. 

"(iv) collecting and properly referring or administratively 
caring for complaints. 

"(v) making recommendations to the administrator. 



9310 



-25- 



"(e) Powers of Code Authority should not include 

"(i) any judicial functions (except as it can provide 
facilities for impartial arbitration). 

"(ii) any power to investigate into books and private 

affairs of members of industry except through ap- 
proved impartial agent. 

"4. Expenses o f Co^e Administrati on, 

"Since nc one had shown a strong ground for believing we can 
assess expenses of code administration on all, including non-assenters, 
it is recomnended. 

"(a) that exroen^es of Cede Authority be kept down, as per above 
limitations, leaning on trade associations. 

"(b) that a Code Insignia, including the Blue Eagle be devised 
at once, and mads 'available only to those who express 
assent. 

"(c) that only assenters be permitted to participate in selec- 
tion of rembers and in the activities of the Code Authority. 

"(d) That if this problem seems serious in January we put it up 
to Congress, along with other matters then requiring 
attention. 

" 5. Union Agreements in Codes. 

•"It is recommended: 

"(a) That no union agreements, existing or prospective, in- 
volving separate concerns, be written into codes. 

"(b) 'That no union agreement be permitted to be made by the 

code a standard for all, including nonparties thereto, in 
a locality, until submission to and a;or>roval by KRA. 

"(c) That no union agreement be made by a code the standard 
for all in any locality, without consent of a very sub- 
stantial majority (at least 65J5) of the industry in- 
volved. 

"6. Statistics 

"(a) In view of the practically uniform objection of industry 
to Office Order Ho. 34, it is suggested that a new clause 
be prepared to cover the entire matter of furnishing re- 
ports ~oy members of industry, whether through Code Au- 
thorities or directly to the Administr-tor, so that the 
requirement of the claure in Office Order Ho. 34 shall 
not have the ap "e^r-nce of a, purely additional require- 
ment. It may be provided that the Administrator may de- 



5810 



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ternine whether such reports are- to be furnished directly 
or through the Code Authotity, and to what government 
agencies they shall "oe sent. 

"(b) In order to reassure industry as to the protection of 

information sent through to Washington, and in order to 
add dignity to the whole natter of furnishing reports, 
it is recomnendcd that. rules and regulations on this 
matter "be prescribed along the lines suggested by the 
Central Statistical Board and Secretary Perkins at an 
earlier date,. A rough draft of such an executive order 
is available. 

"7. Labels ; 

"(a) It is recommended that provisions nay properly permit the 
use of an N.R.A. label by those complying with the Code, 
and may forbid such use by those who do not comply with 
the Code, but that we not permit provisions compelling 
the use of N.R.A. labels. 

"(b) Code Authorities may control the issuance of labels, 

but should not have final discretion to determine that 
any members of industry are not entitled to the use of 
labels. 

"8, Limitations on Production ; 

"This sort of provision is an example of the special provisions 
which should' not be permitted unless a clear showing can be made on 
the record that the needs of the industry really demand the same, as 
such limitation can only be permitted if the Administration assumes 
heavy resppnsibility to observe the operation, and a very large per- 
centage of codes already in final stages places such responsibility 
on the Administration. The sane comment applied to provisions limiting 
new productive equipment and allocating production. 

" 9 . Control of Distributors by Producers ; 

"The comments made in the last paragraph apply likewise to pro- 
visions whereby one branch of the industry seeks to control the 
practices of another branch of the industry. Such control is fre- 
quently requested and raises extreme difficulties of legislation of 
one group for another, 

"10. Exp ort Business ; 

"In general, any trade or Industry Involving exoort phases 
should be covered by the entire code, with the exception of specified 
provisions which can be shown to be inappropriate or undesirable for 
export business (including in this category, price and trade practice 
provisions, but never including labor provisions). 



9810 



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"11. Insular possessions : 

"This matter should be handled by covering in codes the entire 
United States, including all possessions, subsequently appointing 
deputy administrators for each possession, and holding hearings in 
e.-ch possession at hich the special treatment required for the 
particular possession involved may be worked out for each affected 
industry, all as set forth in a full memorandum prepared under 
direction of Mr, Alvih Erown and the Legal Division. 

"12. Prison Goods : 

"This matter should be handled by a compact between the 
President and the States, which is now in preparation, and provisions 
in codes in the meantime, if any, should be made operative only 
until the effective date of such compact. Any provisions in codes 
should probably be aimed to forbid transactions in prison goods at 
prices lower than the lowest reasonable cost or price of the same 
in private commercec 

"13. Cooperative Organizations :' 

"This matter should be handled by an' executive order as now 
prepared, providing that no provision of any code shall b a construed 
to make illegal any patronage divident of a bona fide and legitimate 
cooperative organization, as to be defined on the basis of the facts 
developed at a hearing called by the executive order. No provision 
in codes should deal with this matter in the meantime, 

"14. Accounting Systems : 

"Provisions in codes referring to new cost accounting systems 
should provide for recommendations to the Administrator and the 
adoption of the accounting systems 'should never be made mandatory 
on every member of the industry, at least without an adequate period 
of adjustment. 

"15. Forward Contract s: 

"In view of the wide-spread abuse of provisions such as that in 
P,R.A, by members of industry adding arbitrary surcharges labelled 
'3RA additional costs', or 'MA taxes', etc., with the general result 
of excessive raising of prices, it is recommended: 

"(a) That no further provisions of this sort be inserted in 
codes, rnd 

"(b) That there be a policy of free exception from that pro- 
vision of P. It, A. by any 'member of industry who is caught 
with requests for an adjustment that he cannot pass on. 

"16, Price I ncreases: 

"A provision should be inserted in codes declaring policy against 
over-pricing, perhapd in the form used in the model code, with an 



9810 



-28- 

additional declaration such as the President's in favor of relying on 
future volume as a source of profit. 

"17. Arbitration ; 

"Declaration, perhaps in form similar to the clause submitted 
to the American Arbitration Association, should be inserted in favor 
of arbitration as a method of determining disputed facts', as well as 
controversies between members of the industry, the main thing being 
the providing of facilities and rules and regulations by the Code 
Authority, Promotion of this activity can be taken on by the" 
division for promotion for trade association and Code Authority 
organization. 

"18. Premiums : 

"No provision should forbid the use of premiums in a reasonable 
fashion. The following statement by the consumers is approved; 

'"Premiums are among the most effective form of advertising 
open to many small enterprises, and may furnish additional 
value to the consumer. Deception and misrepresentation about 
their quality, value, and terms of distribution should be pro- 
hibited as false advertising but provisions flatly prohibiting 
them should be opposed. ' " 

"19. Physically or mentally disabled ; 

"This matter can be properly handled in the following manner: 

'"A person whose earning capacity is limited because of 
physical or mental defect, age, or other infirmity, may be em- 
ployed on light work at not less than (75$) of the minimum wage 
set by the Code: provided, however, that the total number of 
such employees in any one piant hall not exceed two percent 
(2fo) of the total of such plant, if the employee of the em- 
ployer for the employee obtains from the State Authority desig- 
nated by the United States Department of Irbor, a certificate 
authorizing his employment at such wages and for such hours as 
shall be stated in the certificate. Such Authority will be 
guided by the instructions of the United States Department of 
Labor in issuing certificates to such persons.'" 

"20, Local Situations : 

"No local codes should be permitted until further notice but 
in order to make minimum working conditions of any value it is im- 
portant to encourage machinery in codes for the extablishment of 
minimum requirements for regions, preferably on the basis of agreement 
between a. majority of tho momberrt of tho J n Hair try and the- employees 
involved. 



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"21* Wa^e Rates above the Minimum : 

"A clause on this should be definitely inserted in each code 
and the following method of handling the matter seems as satisdactory 
as any yet devised: 

"'All employees, except as herein otherwise provided, 
shall have their hourly rates existing on or about June 16, 

1935, increased by an amount not less than per- 

cen cent. ' " 

'"FOR THE COMMITTEE CF FIVE Oil 
SPEEDING t JP CODE PREPARATION. 

'"Blackwell Smith. 
Associate Counsel. ' " 

Some of the recommendations made by the "Committee of Five from the 
five Advisors'- Divisions and Boards" were included in the Policy Memorandum 
of October 25, 193S set forth below, and the "Model Code" of November 6, 
1933, both subsequently referred to herein. Other of the recommendations 
were later issued as policy statements in the form of Office Orders or 
Office Memoranda. 

The Special Industrial Recovery Board appointed by the President by 
Executive Order No. 6173, of June 16, 1933, approved the first policy 
announcement, Bulletin No. 2, issued by the N.R..A. From June 16, 1933, 
until September 16, 1933, there was no internal "MA board appointed to 
pass on policy. Office Order No. 35, September 16, 1933, made the 
following announcement: 

"In anticipation of working out a change in our organization 
to accommodate the gradual merger of the Blue Eagle work into the 
work of code hearings and code administration, and to free the time 
of the Administrator by a greater delegation of responsibility and 
authority, a policy board is created consisting of 

W« L. Allen Alexander Sachs 

Alvin Brown X. M. Simpson 

Thomas S. Hammond Nelson Slater 

Robert W. Lea 4 Robert K. Straus 

Edward F. McGrady Walter C. Teagle 

Charles Michel son A, D. Whiteside 

Malcolm Muir C. C. Williams 

Donald R, Richberg Leo Wolman" 
Mrs. C. C. Rumsey 

As a guide to the personnel of NRA, the first announcement of policy 
issued by the Policy Board was the "Policy Memorandum of October 25, 1933." 
The content of this memorandum was as follows: 



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. -30- 

"POLICY M Z M 3 A H D U LI 

"(Confidential) 

"At the meeting of the Policy loard on October 25 the following con- 
clusions were reached: 

"1. Order of Hand] ing Codes, To the extent pernitted by other 

consideration, effort should be devoted to those codes which 
affect the greatest number of employees. 

"2. Special Provisions, in Codes . So far as is practicable, pro- 
visions in codes designed to meet special situations should be 
excluded until a later date unless they are of great import. 
The code may provide for a report on their necessity sometime 
after the code is in effect. 

"3. Price Provisions . No real direct or indirect fixing of sales 
prices (as opposed to minimum prices) will be accepted. 

"Wo "orovision forbidding reduction by distributors of the 
producers' stated retail price will be accepted. 

"In a price provision based on cost, cost should be defined 
to the extent of indicating its principal elements in a general 
way. Cost of production may include a reasonable allowance for 
depreciation, but not for return on capital. 

"A limitation of price based on seller's cost should be 
subject to the exception that' the seller be permitted to meet 
the price of a competitor whose price does not violate the code. 

"Open price systems should be urged, provided that prices - 

"(a) shall be effective within not more than 
ten days in complex industries or five 
days in simple. 

"(b) shall "be capable of withdrawal at. the 
pleasure of the seller. 

"(c) are not subject to veto or modification by 
> • any agency 

"(d) are to be generally published for the benefit 
of buyers as well as sellers. 

"4. Code Authorities . The Code Authority may be the Board or Ex- 
ecutive Committee of a trade association or a combination of 
several, or may be' elected by such trade association or 
associations, if properly representative of the industry. 

"In general, rather than attempt to enumerate the powers 
of Code Authorities, it is preferable to provide that the duty 
of the Code Authority shall be to execute the provisions of 

9810 



£ 



* 



-31- 

the code and the act, subject to disapproval by the Administrator 
of any of its nets. 

"5« .Expenses of Code Administration . If reasonable limits are pre- 
scribed, codes nay provide for assessment on members to meet 
the expenses of the Code Authority, 

"6. The Blue Eagle . A variation of the Blue Eagle will be devised 
for the use of assenters to codes. A serial number may be 
assigned to members for use in conjunction with the insignia. 

"7. Participation in Code Administrati on. Only assenters shall 

be permitted to participate in the selection of members and in 
the activities of the Code Authority, 

"8. Union Agreements and Schedules of Wages . No union agreements 
are to be written into codes nor are schedules of wages to be 
included in codes. The latter does not forbid two or three 
basing rates. 

"9. Labels. Codes may properly .. permit the use of an NBA label by 
those complying with the code and may forbid such use by those 
who do not comply, 

"10. Exports . It is proper to e::cept exports from any provision re- 
garding price or trade practices but never from labor provisions. 

"!!• Prison-made Goods . Codes nay include a provision forbidding 
transactions in prison-made goods at prices lower than the 
lowest reasonable cost or price in private commerce, 

"12. Accounting Systems . Provisions in codes, referring to new cost 
accounting systems should provide for recommendations to the 
Administrator and the adoption of the accounting should never be 
made manfatory, at least without adequate period for adjust- 
ment, and without allowing the utmost latitude consistent with 
obtaining information on a comparable basis, 

" 13 <» Forward Contracts . No further provisions respecting forward 
contracts should be inserted in the codes. 

"14. Premiums . It will not be stated as a policy that industries 

may not forbid the use of premiums but provisions for premiums 
will be carefully scrutinized," 



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-32- 

C" T A?TER III 
?'0DEL CODES ISSUED I" iTRA 

I. ISSUE OF AUGUST 8, IE 33 

This issue of a "liodel Code" (Exhibit 4) was formulated by 1. P. 
Farnsworth of the Legal Division. The General Counsel of HRA r 'as. of the 
opinion that Article VI, which provided for the establishment of an In- 
dustrial Relations Board, was "full of dynamite", and advised against 
the general distribution of this issie; therefore, it did not receive 
the approval of the- Administrator and was used only within the Legal 
Division. (*) 

II. ISSUE OF OCTOBER 1..1933 

s ... 

This issue (Exhibit; 9) was entitled "A Suggested Outline for Codes" 
and was prepared in the Legal Division. It was the intention that its 
use was to be temporary until an official "Fodel Code" was issued over 
the Administrator ':; signature. At the time of its issuance the Code 
Standardization Group was preparing recommendations on the provisions 
which were to be included in the "i'odel Code" issued Fovember 6th. The 
Associate Counsel requested the Code Standardization Groixp to consider 
any objections raised to this draft in making their recommendations. 
This draft was to be used merely as a "stop-gap". The preface stated; 

"This form merely embodies suggestions for guidance in 
preliminary stages of endeavors to 'prepare codes, and none of 
the provisions contained therein are to be regarded as having 
received the approval of the National Recovery Administration 
or a.s being applicable to any Particular trade /industry." 

III. ISSUE OF OCTO: ER 25, 1^33 

The Code Standardization Group, through its Chairman, submitted to 
the Associate Counsel of the Legal Division on October 25j 1933, a re- 
vised draft of a "Suggested Outline for Codes" (Exhibit 10) "for legal 
refinements and general consideration." Its distribution was limited 
to the personnel of NRA. 

IV. ISSUE OF 1T0VEID3ER 6, 1933 

The Administrator, on "Tovember 6, 1933, approved the final draft 
of the "Kodel Code" (Exhibit 8) and many hundreds of copies were imme- 
diately distributed to E3A personnel, other governmental agencies, and 
industrial and labor groups. A full discussio?i of the provisions of 
the Hodel Code is contained in Chapter IV hereof. 

The foreword of the i'odel Code stated: 

"The suggestions herein made are intended to assist trade 
and industry in the preparation of codes. 

( *) This statement was made to the author by "r. Farnsworth. 
9810 



-33- 

"Except as to those provisions which are required to be included 
in all codes by the National Industrial Recovery Act (which provi- 
sions are clearly indicated herein), none of the suggestions em- 
bodied in this draft are mandatory. 

"It is believed, however, that the preparation of codes and their 
approval by the President will be greatly expedited if those who 
prepare codes conform as far as possible with, the uniform phraseo- 
logy here proposed. " 

NBA Press Release No. 1620 of November 3, 1933, contained 
the following account of this issue of the "Model Code": 

"The National Recover^ Administration today made public a Model 
Code of Pair Competition which, embracing in approximately 3,000 
words the whole spirit and purpose of. the NIRA, is applicable 
with minor variations to any industry: More than 7,500 conies 
of the Model Code are to be distributed to trade associations, 
organizations and units of industries now engaged in the prepa- 
ration of codes for submission to the Administration. 

"The inclusion of only one section of the so-called Standard 
Code — the Collective Bargaining guaranty required by the Re- 
covery Act — is mandatory (*). The other sections, the result 
of several months intensive study of codes approved by the Pres- 
ident, of pending codes and of ruli'-gs of the Federal Trade Comm- 
ission during the last 15 years are recommended by the Administra- 
tion to industries anxious to expedite the consideration and ap- 
proval of their codes. 

"Representatives of the country' s leading manufacturing, retail 
and wholesale associations, the Federal Trade Commission, the 
Department cf Commerce and the Better Business Bureaus collaborated 
with the legal division, the research and planning division and 
the industrial, labor and consumers 1 advisory boards of Adminis- 
tration in writing the Model Code designed to simplify the problems 
facing code-framers and facilitate the clearance of codes through 
NRA. 

"ITinety-nine cedes had been approved by the President as of today 
and 159 others, on which public hearings have been had, are being 
prepared for his approval, while another 5 n are scheduled for hear- 
ing within the ne t two or three weeks. In these three groups are 
included all of the largest industries of the country. But, scores 
of preliminary codes have been filed or are being prepared by small- 
er industries and the Model Code is expected to be of material aid 
to them. " 

The issuance of the Model Code brought forth prompt comment from 
William G-reen, president of the American Federation of Labor and a 
member of the NBA Labor Advisory Board, who wrote to Leo vlolman, chair- 



(*) The inclusion of Section l°(b) of the Act was also mandatory. 



9813 



-34- 

man of the Labor Advisory Board. The portion of his letter "bearing 
on the Model Code follows: 

"There was released as of November 6 over the signature of 
General Johnson a Suggested Outline for Codes which bears on the 
cover page a statement that it is intended to assist trade and 
industry in the preparation of codes; and that while none of the 
suggestions are mandatory, it is believed that the preparation 
of codes and their approval by the President will be greatly 
expedited if those who prepare cod.es confrora as far as possible 
with, the uniform phraseology of the Suggested Outline . 

"This document will, of course, profoundlj' - influence both the 
organization and the phraseology used in the codes, that are 
presented. Accordingly, certain matters in the Suggested Out- 
line for Codes arc of deep interest to the Labor Advisory 



Board. 



"1. The Code Authority . On this point the Suggested 
Outline for Codes says (page 8): 'In addition 

. . . there nay be members without 

vote, to be appointed by the President, to serve 

for a term of months from the date 

of appointment.' 

"This phraseology seems unfortunate both because 
it fails to designate the types of representation 
which should be provided for and because (prob- 
ably unintentionally) it definitely provides 
that these members shall hold office for only a 
limited period. 

"It is suggested that the following phraseology 
would be more appropriate: 'There shall be appoint- 
ed by the President as members of the Code Authority 
three members without vote; one. representing the 
Government, one representing the consumers, and 
one representing labor. The initial appointment 
of the representative of the consumers is to be 
on recommendation of the Consumers Advisory Board; 
the initial appointment of fche representative of la- 
bor is to be on. recommendation of the Labor 
Advisory Board. Due notice of all meetings of the 
Code Authority shall be given to the representatives 
without vote and they shall be afforded complete 
access at all times to all records, statistical 
material or other information furnished to the 
Code Authority in connection with or for the pur- 
poses of the administration of the code.' 

"It is worth noticing that the iron and steel code 
contains the following statement with respect to 
such non-voting members: ' They shall be given full 
opportunity at such times as shall be reasonably 
convenient to discuss with the Board of Directors 



9810 



-35- 



or any committees thereof any natters relating to 
the adnini strati on of the Code and to attend ect- 
ings of the Board at -jhich action 0:1 any such mat- 
ters shall be undertaken and to make recommendations 
as to methods or no sures of adnini storing the Code. 
Due notice of all : .ings the Board of 
Directors shall oe ;iven to such representatives 
of the Administration. The records of the Board 
of Directors relating in any nay to the adniaistra- 
tion of the Code shall he open to such representa- 
tives at all reasonable tines. Kiey shall he af- 
forded by the Board of Directors complete access at 
all times to all records, statistical material or 
other information furnished or readily available 
to the Board of Directors in connection with, or 
for the purpose of, the administration of the Code. 
The Board of Directors, acting directly or through 
one or aOre committees appointed 'oy it, shall give 
duo consideration to all requests, suggestions or 
recomneno.ations made by such representatives of 
the Administration aid render every possible as- 
sistance to such representatives in obtaining full 
information concerning the operation and adminis- 
tration of the Code, to the end that the President 
may be fully advised regarding such operation end 
administration through reports that nay be made to 
him from time to tine by such representatives, and 
to the end that the President may be assured that 
the Code and the administration thereof do not 
promote or permit, monopolies or monopolistic 
practices, or eliminate or oppress small enter- 
prises, or operate to discriminate against them 
and do provide adequate protection of consumers, 
competitors, employees and others concerned and 
that they are in furtherance of the public inter- 
est and operate to effectuate tl c purposes of 
Title I of the National Industrial Recovery Act.' 

" 2 . A Joint In dus trial Bs lation s Board. The Suggested Out - 
line for Codes makes nc provision dor such a board. 
In view oi the inroortance of implementing all codes 
for the order!;' and peaceful negotiations of all 
issues between industry end labor, it is suggested 
that sone such provision as the following should 
be inserted: 'There shall be constituted by the 
Administrator a Joint Industrial Relations Board 
of the Trade/ Industry, con- 
sisting of an equal number of representatives of 
employers and. employees, and an impartial Chairman 
elected ~oy the members of the Board, to serve as 
an adjustment agency -ith respect to hours, wages 
and general labor conditions; provided, however, 
that an existing adjustment agency may be utilized 
for this purpose if in the opinion of the Adminis- 
trator an appropriate agency exists. The selection 

9810 



-36- 

oi the representative or representatives of 
employees shall he by the Labor Advisory Board; 
the selection of the representative or repre- 
sentatives of employers shall he hy the Code Au- 
thority. The Joint Industrial Relations Board 
nay establish such aubsidiary agencies as it 
finds necescary in its worh. ' 

"3. Payment for Overtime . The Sug'-'ested Outline for 
Codes contains no -provision with respect to pay- 
ment for overtime. This omission places upon 
labor the entire burden of arguing not only for 
the principle but for the proper rate of pay. The 
Suggested Outline should contain in some form a 
provision that overtime shall be compensated at 
the rate of t ime-and- one-half . 

"4. hiscellaneous Provisions . The foregoing deals 

with the more important defects of the Su;y:ested 
Outline from the point of view of the Labor Ad- 
visors'- Board. It is to be said, however, that 
several of the labor clauses are susceptible of 
improvement. It would be desirable to have these 
improvements embodied in any new edition of the 
Sugge st ed Outl ine , and in any event standard labor 
clauses for use in preparation of briefs, etc., 
might well be approved by the Labor Advisory Board. 

"As a means of promoting the discussion of such 
standard claases, there is appended a document 
entitled Standard Labor Clauses for Codes . 

"As a means of summarizing the preceding discussion, the follor 
ing issues are raised: 

"1. Does Labor Advisory Board wish to recommend 

to General Johnson the inclusion, in a revised 
edition of the Suggested Outline for Codes , of 
clauses dealing "ith: 

A. The Code Authority 

B. A Joint Industrial Relations Board 

C. Overtime 

"And if so, what phraseology will the Labor 
Advi s o ry Board ' app ro ve ? 

"2. Does the Labor Advi no ry Board wish to 
. recommend to Genera]. Johnson any changes 
in phraseology of the other labor clauses?" 



9810 



-37- 



Dae to objections from various sources to specific provisions 
of t.ie Lodel Code, an effort was nade by the Administrator to 
recall it. Its use by the oersonnel of 17RA. was stopped for a time 
and thereafter it "as circulated merely as an aid in code making and 
on an unofficial basis. 

v. issue cr apt.il s, 1934. 

This issue (Exhibit 11) was a revised edition of the Liodel Code 
of November 6, 1933, and tras the result of criticisms of the earlier 
issue and the experienced thats«had been gained iron code administration. 
Some minor changes were made in the definitions; the hour, wage and 
general labor provisions, and the trade practice rules. The recommen- 
dations of the Secretary of Labor in a letter of 1'ovenber 11, 1933 (*) 
pertaining to the collection of statistics by the Federal Government, 
Section 7 (c) of Article VI of the ITovenber 6th issue ^ere followed. 

Another change was the revision of the "Assessment" provision, 
Section 7 (f) of Article VI, which was amended to make it mandatory in 
form. A provision was added that an itemized budget of the expenses 
of the Code Authority should be submitted to the Administrator for his 
approval. This was to permit IT5A to exercise more adequate control of 
Code Authority finances. 

A major addition was a provision for the establishment of Indus- 
trial Relations Committees. On December 5, 1933, the following memo- 
randa:! was issued to the Legal Division for future guidance: 

"17ATI0I1AI RECOVERY ADI.IKI STRAP 101! 

"Decer.iber 6, 1933. 



" :.:n .craitjui: 

"To Legal Division 

"From Bladwell Smith 

11 Sub j e c t Industrial delations Boards 

"Complaint has come from the Labor Advisory 
Board that members of the Legal Division are striking 
out from codes the following provisions which the Labor 
Board, has approved setting up an Industrial Relations' 
Board to handle labor complaints and problems: 

1,1 There shall be established hy the Jjjmin- 
istrator, a i7s,tional Industrial Relations Board 
for the Industry consisting of an equal number 
of representatives of employer? and employees to 
deal with all ma t ters in t he co " e relating to 

(*) IT3A Files. 131 "Labor Advisory Board, :etti ■ fro; Secretary of 
Labor to- Chj iman of th •'.■ bor Advisory Bor»+;d. 



9310 






-38- 

labor. Where a majority agreement of the 
Board cannot "be reached, the Board shall 
select an impartial chairman to render a 
decision. The creation and^ functioning 
of these Boards including the selection of 
representatives of employees shall be in 
accordance with Section 7 of the Act. If 
no trul3 r representative labor organization 
exists, the employee members of such Board 
shall be chosen by the Labor Advisory Board 
of the IT.R.A. The employer representatives 
shall be chosen by the Code Authority. The 
Industrial delations Board may establish 
such subsidiary agencies constituted in like 
manner as it finds necessary- ' 

"So far as I can see there is nothing in this pro- 
vision which we" should object to as a matter of legal 
policy, although there is room for refinement in the 
form. It se^ns to i.ie that it is purely a matter of 
administrative policy whether or not to include this 
or some similar provision, assuming that a workable 
method is included for the selection of the labor re- 
presentatives. The method suggested in the qpioted 
clause, i.e., nomination by the Labor Advisory Board 
seems at least workable where there is no truly repre- 
sentative labor organization, and if the latter exists 
selection by such -an organization would be workable. 

"Blackwell Smith 



Associate Counsel" 



Apparently the recommendations made by William Green, President of 
the American Pederation of Labor, in his letter of November 10, 1933, 
previously referred to, had some bearing on the issuance of the above 
memorandum and the inclusion of such a mro vision in the model Code of 
April 3, 1934. 

VI. ISSUE OP OPPICE MANUAL, NOVEMBER 21, 1934. 

Incorporated in Part II of the IT. P. A. Office Manual was an "Out- 
line for Code Making" which included changes and additions found de- 
sirable through experience. It also included the substantive requirements of 
Executive Administrative and Off ice Orders and Office L'enoranda issued 
subsequent to the Model Code of April 3, 1934. 

PROPOSED MODEL PROVISIONS. PORI.ULATZD BY THE CODE 
PLANNING COMMITTEE. (APRIL 17 - MAY 27, 1935) 

The Executive Secretary of the National Industrial Recovery Board 
on April 5, 1935, called to the attention of the Board that under any 
extension of the Recovery Act only a short period of time might be 



9810 



-39- 

available in which all codes must be revised to conform to the new 
Act. (*) 

The Board, on April 10, appointed a Co-ordinating Committee for 
the purpose of organization and control of the code revision program, 
composed ox the Executive Secretary of the Board, the Code^ Adminis- 
tration Director, and the Control Officer rith the Chairman of the 
Board as an ex-officio member. This committee drey on 1-TRA personnel 
for sub- commit tees to study code reorganization, to draft a new model 
code, to sug;:est the policies regarding codes, and to study code con- 
solidation. (**) 

For the purpose of revision, the Lodel Code was divided into three 
parts — Administration, Labor and Fair Trade Practices. A sub- commit- 
tee was appointed to revise each part. (***) 

The "Recommended Trade Practice Provisions" (Exhibit 27) was 
submitted to the Code Administration Director on ..ay 20th and the 
"General Labor Provisions" (Exhibit 28) on May 22nd. The "Administra- 
tive Previsions" were never submitted, being in the process of final 
revision when the Schechter decision was handed down. 

The author desires to emphasize the fact that the provisions for- 
mulated by the sub-committee were never used in code drafting, and he 
has included them onl" as a matter of information. 



(*) Memorandum to the He co very Board, April 5, 1935- 
17PA Piles, Executive Secretary 1T.I.H.B. 

(**) Minutes of Meeting of national Industrial Recovery Board, 
April 10, 1S55. -iffiA Piles 

(***) Minutes of Code Planning Committee, April 19 and 22, 1935. 
HSA Files, Code Planning Committee. 



-40- 

CHAFTEK IV 

PROVISIONS OF THE ::ODEL CODL 

The "Suggested Outline for Codes", better known as the "Model Code", 
issued November 6, 1933 (Exhibit "13"), '-as the first outline used as a 
guide for code drafting to receive the approval of the Administrator. 
As heretofore pointed out, various individuals within the organization 
had made attentats to establish unitormity, and at the same time speed 
uc the code making process. The "nodel Code" clearly revealed the 
provisions which were deemed desirable to be incorporated in codes, and 
gave to the -personnel of the NEA as "'ell a s to industry an official 
guide to be used in code drafting. 

The Articles of this "Model Code" are set forth below as well as 
some of the reasons for the inclusion of the specific section of the 
Article. 

ARTICLE I. 

" Purposes 

"To effect the policies of Title I of the National 
Industrial Recovery Act, this Code is submitted as a 

Code of Fair Competition for the Trade/industry, 

and upon approval by the Fresident, its provisions shall be 
the standards of fair competition for such trade/industry 
and shall be binding upon every memoer tnereof." 

This Article was predicated on the provisions of Section 3(b) of 
Title I of the Act. The inclusion of the substance in a code presented 
for approval was mandatory. 

There were variations of the wording of this Article in the first 
25 or 30 codes which were approved. Some of the provisions were brief, 
others '"ere lengthy. For example the purpose clause of the Code of 
Fair Competition for the Cotton Textile Industry '"'as as follows: 

"To effectuate the policy of Title I of the National 
Industrial Recovery Act, during the period of the emergency, 
by reducing and relieving unemployment; improving the 
standards of labor; eliminating competitive practices 
destructive to the interests of the public, employees, and 
employers; relieving the disastrous effects of over-capacity, 
and otherwise rehabilitating the cotton textile industry; 
and by increasing the consumption of industrial and 
agricultural products by increasing purchasing power; and 
in other respects, the following provisions are established 
as a Code of Fair Competition for the cotton textile industry." 

Many of the above phrases were taken from Section 1 (Declaration 
of policy) of Title I of the National Industrial Recovery Act. Later 
many of the above pnrases '"ere included in the "Findings" of the letter 
of transmittal of codes from the Administrator to the Fresident for his 
approval. 



-41- 

The Code of Fair Cora-petition for the Shipbuilding and Shiprepairing 
Industry, Approved Code No. 2, set forth the following as its purpose 
clause: 

* 

"To effectuate the policy of Title I of the National 
Industrial Recovery Act, the following provisions are 
established as the Code of Fair Competition for the Ship- 
building and Shiprepairing Industry." 

The Codes approved for the national resource industries, before the 
issuance of a guide, went into detail in the purpose clause, especially 
to explain the necessity for the inclusion of a provision for control 
of production. 

ARTICLE II. 

" Definitions 

"The 'term' Trade /Indus try as used herein 

includes the __ (State accurately what is included 

in the trade /industry, whether manufacturing, building, trans- 
porting, repairing, selling, and/or distributing at wholesale 

or retail etc.) of 

(Products, merchandise or service etc.), and such related 
branches or subdivisions as may from time to time be included 
under the provisions of this Code by the President of the 
United States, after such notice and hearing as he may 
prescribe. 

"The term ' member of the trade /industry 1 includes, but without 
limitation any individual, partnership, association, corporation 
or other form of enterprise engaged in the trade /industry 
either as an employer or on his or its o^n behalf. 

"The term' 'e____e' as used herein includes any and all persons 
engaged in the trade /industry, however, compensated, except 
a member of the. trade /industry. 

"The term ' Act ' and ' Administrator ' as used herein mean 
"respectively Title I of the National Industrial Recovery Act, 
and the Administrator for Industrial Recovery. 

""Population for the purpose of this Code shall be determined 
by reference to the latest Federal Census. (Insert only when 
needed) " 

This Article, setting forth the definitions, was one of the most 
important of the Code. The definition of "industry" was to be clearly 
but concisely stated, so as to include specifically all fundamental 
functions of the industry, and was supposed to be so worded as to 
exclude all functions of any other industry, in order to avoid over- 
lapping and misinterpretations. 

Many codes included in the definition the term "manufacture and 
sale". "Sale was construed to meaji sale by the manufacturer, or by any 

9810 



instances was def ined' as follows: 

"The tern 'Member of the Code' includes any member of the 
industry who shall expressly signify assent to this Code." 

The "Model Code" did not include the above definition because a 
member of the industry included under the defintion of a code was 
bound by the provision-: of the code whether or not he assented to it. 

The definition of the term "member of the trade /industry" was 
necessary in order to include under a code all members within the 
function of the definition o^ the "trade/industry." 

The definition of the term "employee" was included to make more 
definite the application o^ the maximum hour, minimum wage and general 
labor provisions of a code. 

Under the NIRA there we^e two Administrators appointed. One to 
administer Title I, the other to administer Title II. To avoid confusion 
and for brevity, it was desirable to define the term "Administrator" 
for Title I of the Act. 

To avoid unnecessary repitition of the full title of the. Act, 
it was advisable to define the tern "Act". 

ARTICLE III. 

"H ours . " 

" MAXIIHTM HOURS 

"Section 1. No employee shall be permitted to work in 

excess of hours in any one week or hours 

in an?/ twenty-four (24) hour period beginning at midnight, 
except as herein otherwise provided. A normal work day 
shall not exceed hours. 

"(Maximum hours for special classes of employees, if any, 
should be inserted under the appropriate paragraph, together 
with the hours applicable.)" 

Primary uunoses of the NIRA were to nut more piocle to work and 
increase purchasing power as soon as possible. NRA Bulletin No. 2 
sta.ted: 

"(7) In preparing basic Codes, the following principles should 
be given consideration: 

• "(a) Basic Code provisions relating to maximum hours 

may involve appropriate consideration of the varying 
conditions and recmirements of the several industries 
and the state of employment therein. An average 
'rprk week should be designed so far as possible to 
provido for such a spread of employment as will 
work so far as practical for employees normally 

9810 



-44- 

attached to the particular industry. 

"("o) Minimum wage scales should "be sufficient to 

furnish compensation for the hours of work as 
limited sufficient in fact to provide a decent 
standard of living in the locality where the 
workers reside. 

"(c) Conditions of employment should contain 

necessary safeguards for the health and safety 
of the workers and for stabilization of their 
employment. " 

Subsection 3 of Section 7(a) of the Act "by implication gave the 
President oower to approve maximum houT-s of labor, minimum rates of 
nay, and other conditions of enroloynent. It v;as uoon the authority of 
the Act that the principles set forth in Bulletin Ho. 2 ,17 ere established. 

The first objective which was to be aimed at was to limit the 
number of hours any emoloyee could work to a point where it would 
be necessary to employ more persons to do the same amount of work. 

Many codes contained provisions averaging the permissible hours of 
work over a period of several weeks or months. The desirability of such 
averaging was questioned by some N.R.A. officials, who took the 
■position tha.t no such arrangement should be allowed and that needs 
should be met by an exception to a straight maximum hour provision. 
However, maximum hour averaging -orovisions were commonly aporoved, 
especially in the earlier codes, and policy pronouncement was not made 
definitely against such orovisions until the issuance of Office 
Memorandum No. 272 on July 21, 1934. This set forth a policy require- 
ment of stated maximum hours, with a proviso for a definite t'olerance 
except when unlimited tolerance was justified, with payment in either 
case of overtime wage for time worked above the established maximum 
hours. Later paragraph 1222, Part II, Office Manual, incorporated 
the following policy: 

"Averaging in provisions governing hours of work has in 
practice proved unsatisfactory. Conditions of -peculiar 
seasonal or other needs of any industry, should be met by 
a definite tolerance." 

ARTICLE III (Continued) 

" HOURS FOR CLERICAL AID OFFICE EMPLOYEE S 

"Section 2. No oerson erroloyed in clerical or office 

work shall be -permitted to work in excess of hours 

in any one ,iT eek or hoiors in any twenty-four hour 

■period. A normal work day shall not exceed hoars." 

Section 2 was included to aid the "white collar" employee. 



9810 



ARTICLE III (Continued) 

" EXCEPT IOHS AS TO HOURS 

"Section 3. The provisions of this Article shall not 
apply to travelling salesmen, or to employees engaged in 
emergency maintenance or emergency repair work, or to 
persons employed in a managerial or executive capacity 
who earn "not less than Thirty-five Dollars ($35.00) per 
week. 

"(Provisions governing over time payments should be inserted 
at this noint; for example , for emergency maintenance and 
emergency repair, etc.)" 

To prevent the evasion of the maximum hours provisions of this 
article by the reclassification of the duties of the employees, the 
$35.00 minimum weekly "'age was established as the line of demarcation 
for employees' who were to be exempt from this provision and then only 
if engaged in managerial work. 

Many codes approved prior to the issuance of the "Model Code" 
exempted "outside salesmen" from the maximum hours. This term led to 
endless difficulty under the President's Reemployment Agreement and 
caused the issuance of many needless interpretations under code 
provisionsc To eliminate confusion the term "travelling salesmen" was 
therefore substituted for the term "outside salesmen". 

ARTICLE III (Continued) 

" STAiZURD WEEK 

"Section 4. No employee shall be permitted to work more 
than days in any day period. " 

To prevent the spreading over a seven day Period of the total 
number of hours per week an employee could work, and to give every 
employee one day of rest out of every seven, it was deemed advisable to 
have the above provision included in each code. 

ARTICLE III (Continued) 

" E: :PL0Y!-OTT BY SEVERAL Si iPIOYSES • 

"Section 5. No employer shall knowingly permit any employee 
to work for any time which when totaled with that already 
performed with another employer or employers in this trade/ 
industry, exceeds the maximum permitted herein." 

This section was obviously a "spread the work" provision. 



9&1C 



-46- 
ARTICLE IV. 

"WAGES" 

" MINIMUM WAGES 

"Section 1. No employee shall be paid in any pay period 

less than at the rate of cents per hour, except 

as otherwise herein provided. 

"(Minimum wage adjustments based on locality and/or 
"oopulation may be indicated here.)" 

The main objective of the minimum wage provisions of any code was 
to provide for workers in industry what the President had defined as a 
"living wage". Minimum wage rates '-eve established for unskilled or 
common laborers. It was honed that the minimum wage rate established 
by codes would provide a decent living for the employees, and at the 
time increase the purchasing power of the individual employee. 

The minimum wage adjustment based on locality or population was a 
provision which led to much controversy between industry and labor and 
within industries. 

At a -oress conference on June 20, 1933, the Administrator was asked 
questions pertaining to wages and wage differentials. The questions 
asked, and his replies are as follows: 

Question. "Will the $10 and $11 wage proposed in the 
Textile Code create enough buying power?" 

Answer. "That rate is for the lowest class of wages in 
the industry. That is the basis in all 
industries in making up the whole schedule 
of nay. " 

Question. "In effort to set up a minimum wage, do you 

contemplate a better -"'age in New York than in 
the South, for instance, for machinists, or 
a difference in wages paid to carpenters in 
Seattle and those in Ohio?" 

Answer. "There are differences in living costs. In 

the common labor rate between Moline and Chicago 
there is a difference of about 7 cents. Yet I 
think the people in Moline are better off than 
the people in Chicago. They live in a smaller 
town, better advantages for children - - there 
is a difference in the economic structure - - 
that we cannot disturb, I think, however, we 
also recognize that there are some differences 
that arise from exploitation, where people are 
living and working at less than a living scale. 
We can't have that. We can help there. The 
thing to do is to lift these wages up where it 

9810 



-47- 

is -practicable, and if we can get everybody 

to do it we v.'ill be carrying out the purpose of 

the Act as expressed by the President." 

ARTICLE IV (Continued) 

" PIECEWORK COMPENSATION - MINIMUM WAGES 

"Section 2, This article 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. " 

To prevent evasion of the minimum wage provision by the placing 
of time rate erroloyees on a piece rate basis, employees were guaranteed 
the code minimum wage by the above provision. Some industries were 
contracting with home workers on a piece work basis. It was thought 
this provision would benefit the home workers, but the desired results 
were not obtained because in some instances the employers withdrew 
their contracts with the home workers rather than guarantee them a 
minimum wage. 

ARTICLE IV (Continued) 

" MINIMUM WAGE RATES BY LOCALITY /OCCUPATIO N 

"Section 3. After the approval of this Code, the Code 
Authority may present for approval to the Administrator, 
after notice and hearing, recommendations as to upward 
adjustments in minimum wages for specified localities/ 
occupations, in order to effectuate the purposes of the Act." 

The different standards of living and the corresponding variance 
in purchasing power of the dollar in the different localities as well 
as the great variance in the standards of efficiency of southern and 
southwestern labor as compared with that of the other sections of the 
United States were the main reasons for providing for proposals of 
upward adjustments in the minimum wage rates for particular localities 
or occupations. 

ARTICLE IV (Continued) 

"WAGES ABOVE MINIMUM" 

"Section 4." 

"No employee ^hose normal full time weekly hours for the four 
weeks ending (date) are reduced by less tha n 



per cent shall have his or her full time weekly earnings 
reduced. No employee whose full time weekly hours are 
reduced by more than said per cent s_hall have his or her 
sa.id earnings reduced by more than per cent." 



: ALTERNA- 
TIVE 

SUGGES- 
TIONS 



9810 



-48- 



"There shall ^ an equitable adjustment of all wages rALTERNATIVE 
above minimum, and to that end, within ( • 

thf n°* T^ S) frpm the a PP r0v al of this Code, - SUGGESTIONS 

the Code Authority shall submit 'or the approval 

of the Administrator a proposal :or adjustment in 
wages above the minimum. Upon approval by the 
Administrator, after such hearing as he may orescribe, 
such proposal shall become binding as a part' of this 
Code provided, however, that in no event shall 
hourly rates of pay be reduced, n 

w^ R !oL ab '°r Se f ions were designed to prevent undue reduction of the 
min.Jf i enrol °y ees receiving in excess of the established 

"arnW y IT °Y f reduction of WOOTB under Article III. To reduce 
earnings would reduce purchasing power. 

Woo1 m^!ff P ? ? °f Art , icl e II of the Code of Pair Competition for the 
Wool Textile Industry, (code No. 5), approved on July 26, 1933, 
incorporated the following: 

"As to wages of employees now receiving not less than the 
minima wage established, by this Code, no employer shall, 
on or after the effective date, Day any such employee a 
wage rate which will yield a less wage for a work week 
ot lorty hours than si*fah employee was receiving for the 
same class of work far the established longer week of 
iorty-eight hours or more prevailing prior to the 
effective date. " 

hn+ tl^r"^ the flrSt auDroved Code to contain this type of provision, 
but the first two codes approved contained provisions for the 
maintenance of wage differentials. 



ARTICLE IV (Continued) 

" FEMALE EMPLOYEES " 

"Section 5, Female emoloyees performing substantially the 
same work as male employees shall receive the same rate 
of pay as male employees." 

Tnis section protected the objects of minimum wage provisions. 

ARTICLE IV (Continued) 

' • ■ " HAHDICAPPED PER SONS" 

"Sec+cion 6. A person whose earning capacity is limited 
because of age or physical or mental handicao may be 
em-cloyed on light work at a wage below the minimum 
established by this Code if the employer obtains from 
X,he State authority designated by the United States 
.Department of Labor a certificate authorizing his 
employment at such wages and for such hours as shall be 

981f 



-49- 

stated in the certificate. Each employer shall file with 
the Code Authority a list of all such persons employed by 
him." (*) 

The principal ^eason for the inclusion of this section was to 
prevent loss of employment by handicapped employees. 

ARTICLE V 

" GENERAL LABOR PROVISIONS " 

When the President signed the National Industrial Recovery Act, 
he said it was passed "to put people back to work — to let them buy 
more of the products of farms and factories and start our business at 
a living rate again. This task is in two stages - first, to get many 
hundreds of thousands of the unemployed back on the pay roll by snowfall 
and second to plan for a better future for the long pull." 

With the above in mind, the NRA was striving "to plan for a better 
future" for the employees by including in the codes general labor 
provisions which would improve the standards of employment and at the 
same time improve the standards of health under which the employee worked. 

" CHILD LABOR " 

"Section 1. No person under sixteen (16) years of age 
shall be employed in the trade /industry. No person under 
eighteen (18) years of age shall be employed at operations 
or occupations which are hazardous in nature or dangerous 
to health. The Code Authority shall submit to the 

Administrator before (date) a list of such 

operations or occupations. In any State an employer 
shall be deemed to have complied with this provision as 
to age if he shall have on file a certificate or permit 
duly signed by the Authority in such State empowered to 
issue employment or age certificates or permits showing 
that the e-iployee is of the required age." 

Though not required by the Act, a clause prohibiting child labor 
aor>eared in every approved code. There were, however, a case or two 
of limited exceptions. 

ARTICLE V (Continued) 

" PROVISIONS FROi' THE ACT (inclusion obligatory)" 

"Section 2. In compliance with Section 7 (a) of the Act it 
is provided: 

"(a) That employees shall have the right to 



(*) Section VI, Chapter V, hereof, discusses later provisions 
concerning employment of handicapped workers. 

981T 



-50- 

organize and "bargain collectively through 
representatives of their own choosing, and 
shall "be free frora the interference, 
restraint, or coercion of employers of labor, 
or their agents, in the designation of such 
representatives or in self-organization or 
in other concerted activities for the purpose 
of collective "bargaining or other mutual aid 
or protection. 

"(b) That no employee and no one seeking employment 
shall be required as a condition of employment 
to join any company union or to refrain from 
joining, organizing, or assisting a labor 
organization of his own choosing, and 

"(c) That emoloyers shall comply with the maximum 
hours of labor, minimum rates of oay, and 
other conditions of employment approved or 
prescribed by the President." 

Every approved code had to contain the above section. This section 
was designed for the interest of labor. During the ep.rly days of NRA 
many controversies arose over Section 7(a) , especially as to the 
inclusion in the codes of special clauses sanctioning, for example, the 
comoany union and the right of employers to select, retain, or advance 
e'rployees according to individual merit. A "Merit Clause" was included 
in the Code of Pair Competition for the Automobile Manufacturing 
Industry. (*) 

An instruction against approval of code provisions such as 
"Merit Clause" was given to the Administrator in a letter from the 
President, as follows: 

"October 19, 1933 

"General Hugh S. Johnson 
Administrator for National Recovery 
Washington, D. C. 

"Dear General Johnson: 

"Following our recent discussion of various misunderstandings 
and misinterpretations of Section 7(a) of the National Industrial 
Recovery Act, I wish to advise you of my position. 

"Because it is evident that the insertion of any interpretation of 
Section 7(a) in a Code of Pair Competition leads only to further 
controversy and confusion, no such interpretation should be incorporated 
in any code. While there is nothing in the provisions of Section 7(a) to 



(*) Article VII of the Code for the" Automobile Manufacturing Industry, 
Codes of Fair Competition, Volume I, page 256. 

9810 



-51- 

interfere with the bona fide exercise of the right of an employer to 
select, retain or advance employees on the "basis of individual merit, 
Section 7(a) does clearly prohibit the pretended exercise of this right 
by an employer simply as a device for compelling employees to refrain 
from exercising the rights of self-organization, designation of .■ 
representatives and collective bargaining, which are guaranteed to all 
employees in said Section 7(a). 

"Very truly yours, 

Franklin D. Roosevelt" 



Several weeks earlier, the General Counsel for NRA had issued to 
the Legal Division the following memorandum: 



"August 30, 1933. 

MEM ORANDUM 

"To: All Members of the Legal Division 

"From: Donald R. Richberg 

"From newspaper account it appears that there is likely to be some 
misunderstanding regarding the final sentence in Section 7 of the 
Automobile Code. 

"This indicates again wisdom in adhering to the policy previously 
announced that nothing should be written into a Code which could be 
regarded in any way as a Qualification, explanation or interpretation of 
the mandatory provisions of Section 7(a). 

"The National Industrial Recovery Act reauires that every code, 
agreement or license approved, prescribed or issued shall contain the 
conditions set forth in Section 7(a). This is not only a mandate that 
these conditions snail be contained, but also a mandate against includ- 
ing anything in a code which may be even misinterpreted to permit any 
variation from the requirements of the law. Even innocent or meaning- 
less statements may be distorted to give some apparent sanction to 
evasion or violation of the law. In order to avoid such a result, it 
will be the policy of the Legal Division to decline to permit the in- 
clusion in any code, not only of interpretations of Section 7(a), but 
of any statements vhich may be regarded as interpretations, or used as 
misinterpretations. The fact that a. statement construed by me as 
harmless surplusage was included in the Automobile Code, furnished no 
precedent for any member of the Legal Division to approve the inclusion 
of that, or any similar statement in any other code." 

However, a "Merit Clause" appeared in the approved Chemical 
Industry Code, but was almost immediately deleted by an Administrative 
Order dated February 17, 1934. 



981C 



-53- 

ARTICLE V (Continued) 

" RECLASSIFICATION OF EMPLOYEES » 

"Section 3. No employer shall reclassify employees or 
duties of occupations performed or engaged in any other 
subterfuge for purpose of defeating the purposes or 
provisions of the Act or of this Code," 

Some of the 'early approved codes did not contain such a provision. 
In August and September of 1933 there appeared a tendency to evade the 
President's Reemployment Agreement and the codes which had been 
approved by reclassifying workers. 

To prevent the reclassification of employees, or their duties 
or occupations performed, in an attempt to circumvent the wage and 
hour provisions of the code, the above section was included as a 
model provision.' 

ARTICLE V (Continued) 

"STANDARDS FOR SAFETY AND HEALTH" 

"Section 4, Every employer shall make reasonable provision 
for the safety and health of his employees at the place and 
during the hours of their employment, (Frovision may be in- 
serted reouiring the Code Authority to submit proposed 
minimum standards for safety and health of employees)." 

The Department of Labor for a number of years had been endeavor- 
ing to improve the conditions for safety and health, to better working 
conditions for employees and to decrease the nvmber of accidents in 
industrial establishments throughout the United States. Nevertheless, 
in 1933 there were 17,000 killed and 1,225, COO. injured in industrial 
plants throughout the United States, (*) 

At the request of the Administrator, the Secretary of Labor 
appointed a Committee to prepare Minimum Standards for Safety and 
Health, The Committee prepared and recommended "The Minimum Standards 
for Safety and Health of Workers in Manufacturing Industries" which 
were approved by the Secretary of Labor and the NRA Administrator, 
These standards were used as a guide by m'eabers of industry and Code 
Authorities in preparing such standards for their particular industry 
to be approved by NRA. (**) 



(*) Accidents in Manufacturing Industries, "U. S. Department of 
Labor. 

(**) Section VII, Chapter V, hereof, discusses later provisions con- 
cerning standards of safety and health. 



9810 



-53- 

ARTICLS V (Continued) 

" STATE LAWS" 

"Section 5. No p-ovision in this Code shall supersede any 
State or Federal law which inxooses on employers more 
stringent requirements as to age of employees, wages, 
hours of work, or as to safety, health, sanitary or 
general working conditions, or insurance, or faire pro- 
tection, than are imposed by this Code." 

No comment on this provision seems necessary. 

ARTICLE V (Continued) 

" POSTING " 

"Section 6. All employers shall post complete copies of 
this Code in conspicuous places accessible to employees." 

The above provision was included in order that an employee might 
easily obtain knowledge of the labor provisions of the code governing 
his employment. (*) 

ARTICLE VI 

" Organization, Powers and Duties 

of the Code Authority " 

" ORGANIZATION AND CONSTITUTION " 

"Section 1. There shall forthwith be constituted a 

Code Authority consisting of persons to 

be selected in the following manner: 

(Here shall be stated the manner in ^hich the 
members of the Code Authority shall be selected. 
Provision should be made so that the Code Authority 
will be truly representative of the various 
majority, minority, and other interests in the 
trade/industry. If, however, by reason of conditions 
peculiar to the trade /industry, selection by the 
trade-industry is impossible, it may be provided 
that appointment sha.ll be by the President.)" 

This section provided for the establishment of a Code Authority, 
and sets out certain standards as to its representative character. 
While much leeway was left an industrv with respect to its proposals, 
and many methods of selection or election were authorized by the codes, 



(*) Section XVII, Chapter V, hereof i discusses later provisions con- 
cerning -costing. ' 

9810 



-54- 

the N.R.A. intent was to assure the designation of a membership repre- 
sentative of the entire industry. 

ARTICLE VI (Continued) 

"Section 2. In addition to membership as above provided, 

the^e may be members, without vote, to be appointed 

by the President, to serve for term of months from 

the date of appointment. !' 

Government representation on the code authority. was for. the purpose 
of keeping the Administrator informed as to the action taken by this 
body, and also the Government member ^as to act as an adviser to the 
Code authority. 

ARTICLE VI (Continued) 

"Section 3. Each trade or industrial association directly 
or indirectly participating in the selection or activities 
of the 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, regulations, and any amendments when made thereto, 
together with such other information as to membership, 
organization and activities as the Administrator may 
deem necessary to effectuate the purposes of the Act." 

Section 3(a) of Title I of the Recovery Act granted the President 
power to approve codes, provided the applicant group imposed no in- 
equitable restrictions on admission to membership in said group. The 
above provision was based on this section of the Act. 

ARTICLE VI (Continued) 

"Section 4. In order that the Code Authority shall at 
all times be truly representative of the trade/industry 
and in other respects comply with the provisions of the 
Act, the Administrator may Tores vibe such hearings as he 
may deem proper; and thereafter if he shall find that the 
Code Authority is not truly representative- or does not in 
other respects comply with the provisions of the Act, may 
reauire an aopropriate modification in the method of se- 
lection of the Code Authority." (*) 

This provision gave the Administrator power to modify the method 
of election of the Code authority if he found that the code authority 
was not -truly representative or did not otherwise comply with the Act. 

ARTICLE VI (Continued) 

"Section 5. Members of the trade /industry shall be entitled 



(*) Section III, Chapter V, hereof, discusses the review of acts of 

code authorities 'oy the Administrator. 
9810 



-55- 

to participate in and share the benefits of the activities 
of the Code Authority and to participate in the selection 
of the members thereof "by assenting to and complying with 
the requirements of this Code and sustaining their reason- 
able share of the expenses of its administration. Such 
share of the expenses of administration shall be determined 
by the Code Authority, subject to review by the Administrator, 
on the basis of volume of business and/or such other 
factors as may be deemed equitable." (*) 

The purpose of the above section was to provide for the expenses 
of code administration by the Code Authority. 

Some members of industry and certain individuals in the NBA 
expressed the opinion that such a provision included in a code would be. 
used by the Code Authorities as a weapon to coerce non-association 
members of the industry to join the association or associations which 
^ere the applicant group of the industry for a code. 

During the early period of code making, the Question was con- 
stantly arising as to whether a code could include a provision which 
required all members of an industry to share the expenses of adminis- 
tration of the code. Some felt that such a condition had been brought 
about by a "racket" of association organizers and lawyers who were 
framing codes and who expected to collect reimbursements by levying 
the pro rata share on the members of the industry. 

John M. Keating, an Assistant Counsel of the ERA Legal Division, 
in a memorandum, August 15, 1933, to the Associate Counsel, on "Policy 
Matters of Code Administration," said: 

"Personally, I feel that there is no power In Title I of 
the Hational Industrial Recovery Act to levy a tax and 
that this would be illegal for that reason. Farther than 
this I do not believe we would have the right to delegate 
power to levy this cost to any association. 

"In connection with this matter I direct attention to the 
following paragraph which was contained in the Coat and 
Suit Industry Code. 

"The expenses of maintaining the Coat and Suit Code 
Authority shall be borne by the International Ladies' 
Garment Workers Union, the "oarties of this Code, and all 
other employers in the industry in such proportions and 
amounts and in such manner as may be determined by the 
Coat and Suit Code Authority.'" 

The Legal Division, on August 23, 1933, informed its staff relative 
to code administration expense provisions in codes, a.s follows: 



(*) Section IX, Chapter V, hereof, discusses later provisions 
concerning mandatory assessments. 

981? 



-56- 

"w"e have approve^ .the imposition of pro rata cost of 
maintenance of Code Autnority activities, as destinguish- 
ed from trade association activities, on those who accept 
the benefit's of such code Authority activities." 

The provision which was included in the "Model Code" was ques- 
tioned for the reason that wheth:r or not a concern formally 
assented to a code, it should "be entitled to participate in the 
selection of the Code Authority. Apparently some individuals did 
not comprehend the -phrase "and share the benefits of the activities 
of the Code Autnority", avid others could not contemplate any benefits 
of the activities of a Code Authority, vvhich wouldor should not 
accrue to every member of an industry. 

On September 21, 1933, the Associate Counsel of the NRA legal 
Division r eceived a memorandum from the Code Analysis Division com- 
menting on the proposed provisions that -.-ere to he incorporated in 
the Model Code of October 1, 1933 (Exhibit 9). 

The Assessment provision was questioned because it was thought 
that such provision might be construed to mean that every member of 
an industry would be compelled to pay a pro rata share of the cost 
of Code Administration of the Code through the Code Authority, and 
if such provision were included in an approved Code it would be 
legally binding and would become law for the industry. It was agreed 
that such assessments would be in the nature of taxation and would 
place an additional burden on the taxpayer. It was v.- commended that 
the responsibility of raising revenue 'for Code Administration should 
be placed entirely upon the Trade Associations. 

The model code provision for assessments when included in ap- 
proved code placed no legal liability on a member of an industry to 
pay code assessments. ' Subsequently, howevjr, the NHA permitted 
mandatory assessment provisions. 

The Code of Ea.ir Competition for the Elec-trical Manufacturing 
Industry (Code Ho. 4) was the first approved code to contain a pro- 
vision to provide for the expenses of code administration (*). 

ARTICLE VI (Continued) 

"Section 6. Nothing contrined in this Code shall 
constitute the members of the Code Authority part- 
ners for any purpose. ITor shall any member of the 
Code Authority be liable in any manner to anyone for 
any act of any other member, officer, agent, or em- 
ployee of the Code Authority. N r shall any member 
• f the Code Authority,' exercising reasonable 
diligence in the conduct of bis duties hereunder, be 
liable to anyone for any action or omission to act 
under this Code, except for his own willful misfeas- 
ance or non-feasance." 



(*) Article VII of the Code for the Electrical Manufacturing 
._ Industry, Codes of Fair Competition, Volume I, page 48. 



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The above provision was inserted as a legal protection for 
Coda Authority members. 

ARTICLE VI (Continued) 

" POVfZRS A1ID DUTI3S" 

"Section 7, The Code Authority shall have the following 
further powers and duties, the exarcise of which shall 
be reported to the Administrator and shall he subject 
to his right, on review, to disapprove or modify any 
action taken by the Code Authority. 

"(a) To insure the execution of the provisions of 
this Code and provide for the compliance of the trade/ 
industry v/ith the provisions of the Act. 

"(b) To adopt by-laws and rules and regulations for 
its procedure and for the administration and enforce- 
ment of the Code. 

"(c) To obtain from members of the trade/ industry such 
information and reports as a re required for the administra- 
tion of the Code and to provide for submission by members 
of such information and reports as the Administrator may 
deem necessary for the purposes recited in Section 3 (a) 
of the Act, which information and reports shall be submit- 
ted by members to such administrative and/ or government 
agencies as the Administrator may designate; provided that 
nothing in this Code shall relieve any member of the in- 
dustry of any existing obligations to furnish reports to 
any government agency. No individual reports shall be 
disclosed to any other member of the trade/ industry or 
any other party except to such governmental agencies as 
may be directed by the Administrator. 

"(d) To use such trade associations and other agencies 
as it deems proper 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 
responsibilities under this Code and that such trade 
associations and agencies shall at all times be subject 
to comply with the provisions hereof. 

"(e) To make recommendations to the Administrator for 
the coordination of the administration cf this Code with 
such other codes, if any, a.s may be related to the trade/ 
industry. 

"(f) To secure from members of the trade/ industry an 
equitable and proportionate payment of the reasonable 
expenses of maintaining the Code Authority and its act- 
ivities. 



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"(g) To cooperate with the Administrator in regulating 
the use of any ¥. R. A. insignia solely by those members 
of the trade/ industry who have assented to, and are comply- 
ing with, this Code. 

"(h) To recommend to the Administrator further fair trade 
practice previsions to gove.m members of the trade/ industry 
in their relations with each other or with other trade/ 
industries and to recommend to the Administrator measures 
for industrial planning, including stabilization of em- 
ployment. M 

The original idea as to code administration was that each 
industry was to be governed by a self-chosen group, with bread 
powers of administration as to all matters pertinent to the code 
with the least possible regulations ^oy the Government. Industry 
was to be its own ruler, within the limitations nf its code. 
Some 1TRA officials were of the opinion that the trade associa- 
tions were to be given all the power they needed to govern pro- 
perly the affairs of their industries. They were to be enforcing 
agencies. They were to be taught gradually to be independent of 
Government authority in administering the provisions of their 
codes. 

Each industry was to govern itself. Only in those instances 
where ignorant, stubborn, or malevolent elements of an industry re- 
fused to play the game, and were found incapable of regulations 
by the industry's self-governing agency, would the National Recovery 
Administration step in, and even then, only upon request. (*) 

Some few of the earlier approved codes contained provisions 
which enabled the members of the Code Authority, who were also mem- 
bers of the industry, to secure secret and confidential information 
as to other members' mode of operation, sales, and financial condi- 
tions. An example of powers given the Code Authority was the pro- 
vision in the Coat and Suit Industry Code which was as follows: 

"The Coat and Suit Code Authority shall have power 
to examine all bocks, of accounts and records of em- 
ployers so far as necessary to ascertain whether they 
are observing the provisions of this Code, and all em- 
ployers shall submit their books and records for such 
examination. " 

On August 15, 1933, Mr. Keating commented in a memorandum to 
the Associate Counsel as follows: 



(*) NRA Press Release N . 654, September 8, 1933. 



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•'.*-■■- 
"In a number of codes which I have examined attempt 

is made to ^ive the Cede Authority the right to ex- 
amine the hooks of the units in the industry. This 
is a field in which I feel re should go extremely 
slowly. Particularly is this true when there is no 
restriction on da ba which the Code Authority can re- 
quire from the individual unit. The tendency, as you 
know, over the United States at the present time is 
not to give this right to s toe' -.holders of a corpora- 
tion unless they desire the information for some 
legitimate purpose. I note that the Coat and Suit 
Industry Code which was approved by the President per- 
mits this practice." 

On ITovember 4, 1933, the following M Press Release (Ho. 1566) 
stated the position of the Administrator relative to the administra- 
tion of codes: 

"General Johnson today made the following statement in 
regard to the administration of codes by code authorities, 
trade associations and other agencies of industrial 
s e 1 f-go ve rnment : 

"The function of code administration lies primarily with 
the Code Authority provided for in each Code, neverthe- 
less, it is the responsibility of the National Recovery 
Administration that the Code be administered. Whenever, 
as in the Bituminous Coal Code, an industry is organized 
for self-discipline that, function will be accorded it. 
But in many instances industries are not so organized 
that they have machinery appropriate to the adjustment 
of complaints of violations of the trade practice, and 
other provisions of their Codes. 

"The organization of very few industries is at this 
time appropriate for the adjustment of complaints of 
violations of the labor provisions of Codes. While, 
in eve.."y case, where the authority is organized, adjust- 
ment of fair trade practices will be left to the Code 
Authorities, as a general rule the code provides n^ 
plan for the adjustment of their labor provisions. The 
Code Authority will be permitted to function on labor 
disputes when provision is made for adequate representation 
of labor on all committees, beards or other agencies set up 
to entertain and adjust complaints by employees against 
their employers for violations of labor provisions.'" 

ARTICLE VII. 

" Trade Practice Rules 

"(1I0TB: Sponsors of codes, in preparation of drafts for 
submission to 1>TPA, should select from the following such 
rules as are deemed applicabel to their particular trades 
or industries and. may set forth such other rules as 
may be deemed desirable, to meet conditions peculiar to 

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their trade/ industry', covering such subjects as: 

Returned goods 

Methods of leasing equipment 

Sales by sample 

Sspionage 

Trade discounts and/or selling terms 

T ran sp o r ta t i o n p rs c t i c e s 

Design piracy 

Price or special guarantees 

Advertising allov/ances . 

Ztc.) 

"Rule 1. Inaccurate Advertising. 

"No member of the industry shall publish advertising 
(whether printed, radio, display or of any other nature), 

which is misleading or inaccurate in any materiel par- ,' 

tic-alar, nor shall any member in any way misrepresent 
any goods (including but without limitation its use, 
trade-mark, u rade, quality, quantity, size, substance, 
character nature, finish, material, content or prepara- 
tion) or credit terms, values, policies, services, or 
the nature or form of the business conducted. 

"Hule 2. False Billing. 

"Ho member of the industry shall knowingly withhold 
from or insert in any quotation or invoice any state- 
ment that makes it inaccurate in any material particular. 

"Rule 3. .Inaccurate Labelling. 

"Ho member of the industry shall brand or mark or pack 
any goods. in any manner which is intended to or does 
decive or mislead purchasers with respect to the brand, 
grade quality, quantity, origin, size, substance, character, 
nature, finish, material content or preparation of such 
goods. 

"Pule 4, Inaccurate Reference to 
Competitors, etc. 

"Ho member of the industry shall publish advertising which 
refers inaccurately in any material particular to any com- 
petitors or their goods, prices, values, credit terms, 
policies or services. 

"Rule 5. Selling Below Cost,. 

"(Provisions may be inserted against selling below cost 
based upon principles of costing formulated by the Code 
Authority and approved by the Administrator. Such ">ro- 
visions should be applicable to the individual industry 



-61- 

and should take into cons i da rat ion the necessity of selling 
below cost to meet competition, to dispose of distress 
merchandise etc.) 

"Rule 6. Threats of Lav' Suits. 

"Ho member of the industry shall publish or circulate 
unjustified or unwarranted threats of legal proceedings 
which tend to or have the effect of harassing competitors 
or intimidating their customers. Failure to prosecute in 
due course shall be evidence that any such threat is un- 
warranted or unjustified. 

"Rule 7. Secret Rebates. 

"No member of the industry shall secretly directly offer 
or make any payment or allowance of a rebate, refund, 
commission, credit, unearned discount or excess allowance, 
whether in the form of money or otherwise, nor shall as 
member of the industry secretly offer or extend to any 
customer any special service or privilege not extended 
to all customers of the same class, for the -outdo se of 
influencing a sale. 

"Rule 8. Selling on Consignment. 

"No member of the industry shall ship goods on consign- 
ment except under circumstances to be defined by the Code 
Authority, where peculiar circumstances of the trede/ industry 
require the practice. 

"Rule 9. Bribing Zimiovues. 

"No member of the industry shall give, permit to be 
givem, or directly offer to give, anything of value for 
the purpose of influencing or regarding the action of 
any employee, agent or representative of another in re- 
lation to the business of the employer of such employee, 
the principal of such agent or the represented party, 
without the knowledge of such employer, principal or 
party. 

"Rule 10. Interference with Another' s 
Contracts. 

"No member of the industry shall attempt to induce the 
breach of an existing contract between a competitor and 
his employee or customer or source of supply; nor shall 
any such member interfere with or obstruct the performances 
of such contractual duties or services. 



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"Eule 11. Coercion. 

"No member of the industry shall require that the pur- 
chase or lease of any goods be prerequisite to the pruch3.se 
or lease of any other goods. 

"Pule 12. Blacklisting. 

"Ho member of the trade/ industry shall join or participate 

with other members of the trade/ industry who with such 
member constitute a substantial number of members of the 
trade/ industry or who together control a substantial per- 
cent of the business in any specific product or products 
of the trade/ industry, in any transaction known in law 
as a black list, including any practice or device (such 
as a white list), which accomplishes the purpose of a 
black list." 

As heretofore noted, an NBA - Commerce Committee on Basic- 
Code of Fair-Practices began in July, 1933, to study the work 
of the Federal Trade Commission over the preceding 14 years as 
to trade practice conferences and the resulting rules of fari 
practice. 

On September 11, 1935, a confidential report was made to 
the Associate Counsel of the ITPA Legal Division by the other 
members of the Committee which said in part: 

"We have carefully checked each of the more than 1,000 
rules approved 'oy the Federal Trade Commission since 
1919, and are able to classify all of real importance 
under six basic nrinci) les which we present herewith. 

"More than 150 Trade Practice Conferences were held 
during this period. More than 200 trade associations 
participated. As you know, there is a distinct and 
significant change in the legal phraseolog-y used by the 
Commission prior to and since May, 1931, caused by 
adverse decisions of the United Supreme Court along the 
general line of thought that the Commission and ex- 
ceeded its legal powers in its early rulings. Our 
study which was the basis of this report to you in- 
cluded both old and new rules, realizing full well that 
although the Commission felt its hands to be tied after 
May, 1931, the National Industrial Recovery Act imposed no 
such restrictions." 



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The six basic principles, and the divisions thereof, as recommend- 
ed by this Committee are as follows: 

I. INACCURACY 

(1) Inaccurate Advertising 

(2) "Bait" Advertising 

(o) Inaccurate Labelling 

II. ATTACKING- COMPETITORS 

(4) Inaccurate Reference to Competitors, etc. 

(5) "We undersell all Competitors." 

(6) Selling below Cost 

(7) Threats of Lawsuits 

III. FRICE DISCRIMINATION 

(8) Secret Rebates 

(9) "Free" Goods 

(10) Selling on Consignment 

IV. COi.iLZSRCIAL BRIBERY 

(11) Bribigg Rmployoes 

(12) False billing 

V. BREACH OF CONTRACT 

(lo) Interference with another's Contracts 

(14) Repudiating one's own Contracts 

81. COERCION 

(15) "Tying" and "block-booking" Contracts 

(16) Black (or white) lists 

On September 28, 1933, this Committee made an additional report 
(Exhibit 6) to the Associate Counsel, which was in more detail than 
the previous report of September 11, 1933, but it contained the same 
16 rules formerly recommended. October 29, 1933, NBA Press Release 
No. 1435 and the leading newspapers of the country carried an account 
of the Committee's report. The publicity given to this report gave 
to industry an idea as to the trade practice rules, which the NRA in 
the future would advocate for codes. Of the sixteen rules recommended 
by the Committee twelve were included in the "Model Code". The rules 
pertaining to "Bait" Advertising, "We undersell all competitors", 
"Free" Goods, and Repudiating one's own contracts were omitted. 



9810 



ARTICLE VI I.I 

" Sxoort Trade" 

"Section 1. Ho provision of this Code relating to -prices 
or terms of selling, shipping or marketing, shall apply 
to export trade or sales or shipments for export trade." 

For the industries whose codes contained provisions as to sales 
below cost, production control and allocation, classification of 
customers, minimum price s price cutting emergencies, and other market- 
ing and distribution devices, the above section was added for the 
benefit of members engaged in foreign trade, to enable them to compete 
with foreign manufacturers. The hour and wage provisions, however., 
continued to apply to them. 

ARTICLE VIII (Continued) 

"Section 2. Subject to the approval of the Code Authority, 
the exceptions established by this section shall apply also 
to sales or shipments of materials actually used in manufac- 
ture for export trade.* 

A-txI ujj^j IX 

"Modification" 

(inclusion of Section 1 
Obligatory) 

"Section 1. This Code and all the provisions thereof are 
expressly made subject to the right of the President, in 
accordance with the provisions cf subsection (b) of Section 
10 of the Act, from time to time to cancel or modify any 
order, approval, license, rule, or regulation issued under 
such Ac t „ " 

The inclusion of this section was mandatory inider Section 10 (b) 
of the Act. 

ARTICLE JX-Continued) 

"Section 2. This Cods, except as to' provisions required by 
the Act, may be modified on the basis of experience or changes 
in circumstances, such modifications, to be based upon applica- 
tion to the Administrator and such notice and hearing as he 
shall specify, and to become effective on approval of the 
President., " 



(*) A provision may be introduced into the administrative section of 
the Code, providing that questions relating to production for ex- 
port, not enumerated in the above section, may be submitted by any 
member of the trade/ industry to the consideration of the Code 
Authority; and that its decision thereon shall be submitted to the 
Administrator and shall not be effective unless and until approved 

9810 b y Mm «" 



-65- 

A3TICLE X 

" Monopolies, etc . " 

"Ho provision of this Code shall be so applied as to per- 
mit monopolies or monopolistic -jractices, or to eliminate, 
err? re s s , or discriminate against small enterprises." 

Section 3 (a) of the Act granted the President power to approve 
codes, "Provided, that such code or codes shall not permit monopolies 
or monopolistic practices." Though the Act did not specifically 
provide for the inclusion of this Article, it was thought desirable 
by N.R.A. to include it in each code. 

APTICL2 XI 

"Price Increases" 

"Y/hercas the policy of the Act tr increase real purchasing 
power will be made more difficult of consummation if prices 
of goods and services increase as rapidly as wages, it is 
recognized that price increases except such as may be re- 
quired to meet individual cost should be delayed, but when ms.de 
such increases should, so far as possible, be limited to 
actual additional increases in the seller's costs." 

When the President signed the Act he said: 

"I am fully aware that wage increases will eventually 
raise costs, but I ask that managements give first con- 
sideration to the improvement of operating figures by 
greatly increased saljs to be expected from the rising 
purchasing power of the public. That is gcod economics 
and good business. The aim of this Whole effort is to 
restore our rich domestic market by raising its vast 
consuming capacity. If we now inflate prices as fast 
and as far as we increase wages, the whole project will 
be set at naught. V7e cannot hope for the full effect 
of this plan unless, in these first critical months, and, 
even at the expense of full initial profits, wd defer 
price increases as long as possible. If we can thus 
start a strong sound upward spiral of business activity 
our industries will have little doubt of black-ink opera- 
tions in the last quarter of this year. The pent-up 
d;~and of this ;oeople is very great and if we can release 
it on so broad a front, we need not fear a lagging re- 
covery. There is greater danger of too much feverish 
speed." (*) 



(*) HHA. Bulletin No. 1. 



J310 



-66- 

This Article was a declaration of ilHA. policy "based on the Presi 
dent's statement. 

"AETICL1 XII" 

"Effective Date" 



"Tliis Code shall become -effective or. the second Monday 
after its approval by. the President, (unless otherwise 
stated.,) 11 ' 

To avci(? any Fiistuiderstanding : and in order that members of 
industry and the public should definitely know when a code became 
effective, this or a similar provision was included in every code 
approved. 



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CHAPTER V 

NRA PRCNOUNCEhllilT affecti::c- ,.qdel code provisions 

The irriod of code mailing overlapped that of code administration, 
and the experience gained from the latter was an aid in the formulation 
of policy for the former; therefore, certain policies expressed in the 
November 6, 1933, issue of the Model Code nere changed, and many addi- 
tional provisions were found desirable. Certain provisions made manda- 
tory by Executive Orders were added. Various Office Orders and Office 
Memoranda announced official policies to the personnel of NBA and to 
industry, which policies rere recommended for consideration in future 
code making or a,s code amendments. This chapter discusses the changes 
in the model Code provisions effected by the foregoing pronouncements. 

I. COMMERCIAL 'BRIBERY 

Due to '"idespread misunderstanding concerning the commercial 
bribery and advertising provisions in codes, and reports received by 
the Administrator that because of this misunderstanding advertising 
novelty manufacturers ^ere losing business, the president issued Execu- 
tive Order No. 6464 (Exhibit 12) on November 27, 1933. This Order 
stated that commercial bribery provisions vere not not to be construed 
"to prohibit free and general distribution of articles commonly used 
for advertising except so far as such articles are actually used for 
commercial bribery***." This Order modified any inconsistent "commer- 
cial bribery" provisions which had been included in codes prior to its 
issuance, and prescribed that all codes approved subsequently should 
conform to the model provision set forth in the Executive Order. 

II. STATISTICAL INFORMATION 

On December 7, 1933, the President by Executive Order No. 6479 
(Exhibit 13) modified all codes approved previously to provide "that, 
in addition to information reordred to be submitted to any code author- 
ity, all or any of the persons subject to such code, agreement, or 
license furnish such statistical information as the administrator may 
deem necessary for the purposes recited in 3 (a) of said Act to such 
Federal and State agencies a.s the Administrator may designate;***," 

The above Executive Order also provided that every code, license, 
or agreement approved subsequent to the issuance of this Order should 
contain the above quoted provision. 

III. REVIEW OF ACTS OF CODE AUTHORITIES 

Article IV, Section 3 of the Code of Fair Competition for the 
Cap and Closure Industry, approved October 20, 1933, incorporated the 
following jio vision: 

"In addition to the porers herein specifically conferred 
upon the Code Authority, it shall have the following porters and duties 
to .the. extent permitted by the Act, subject to the right of the 
Administrator, on review, to disapprove or modify any action taken." 

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Th e Code of Pair Competition for the Funeral Supply Industry, ap- 
proved iTovember 4, 1933, contained the following provision: 

"The Code Authority or its duly authorized committees, offi- 
cers, or agents, shall cooperate with the Administrator as a plan- 
'ning, coordinating, Administrative, and fair practice agency for 
the Funeral Supply Industry, a'-.d shall keep the Administrator in- 
formed as to the functioning and observance or non-observance of 
any of the provisions of this cede, and shall have the following 
duties and powers to the extent permitted by the rational Industrial 
He co very Act, subject to right of the Administrator on review to 
disapprove or modify any action taken by such code authority or its 
duly authorised representatives* " (*; 

Sc.ie code sponsoring committees objected to provisions similar to 
those quoted above, on the ground that such provisions gave power to the 
Administrator to modif y actions of the code authority , whereas the code 
authorities were established to promote self-government of industry and 
if the Administrator were to have power to modify their actions they 
would never know where they stood. Ho objections were raised to the power 
granted to the Administrator to disapprove actions of the code authority, 
because such disapproval would "wipe the action from the slate." 

To meet the above objections the following memorandum was issued by 
the General Counsel of NBA. to the members of the Legal Division: 

"November 22, 1933 
I.iEkOPAEDUi; TO ALL MSMBEHS OF LEGAL DIVISION 

It is not required and it is not proper, except in special 
instances, to grant in a Code any general power to the Administrator 
to review and modify actions token \>ir the Code Authority. If anyone 
insists upon incorporating such clause, you may refer to this memo- 
randum as a statement of policy to promote self-government of indus- 
try, as distinguished from political government of industry, which 
should guide the Legal Division." 

For the guidance of 1IEA personnel the following Office Memorandum 
of January 2, 1934, was issued: 

"In lieu of provisions heretofore used in codes, referring to 
approval or disapproval by the Administrator of acts of code authori- 
ties, the following provision should hereafter be incorporated in 
. . all codes: 

If the Administrator shall determine that any action of a code 
authority or any agency thereof is unfair or unjust or contrary to 
the public interest, the Administrator mas'" require that such action 
be suspended for a period, of not to exceed thirty days to afford an 
opportunity for investigation of the merits of such action and fur- 
ther consideration by such code authority or agency pending final 
action, which shall be taken only upon approval by the Administrator." 

(.*) Article VII, Section 2 of the Code for the Funeral Supoly Industry, 
Codes of Fair Competition, Volume II, page 429. 



C 310 



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Objection made to this memorandum re stilted, in its revision "by an 
OiYice Llenorandiam issued January 27, 1954, as follows: 

"In lieu of provisions heretofore used in codes, referring 
to approval or disapproval by the Administrator of acts of code au- 
thorities, the following provisions should hereafter he incorporated 
in all codes: 

If the Administrator shall determine that any action of a code 
authority or any agency thereof nay he unfair or unjust or contrary 
to the public interest, the Administrator nay require that such ac- 
tion be suspended to afford an opportunity for investigation of the 
merits of such action and further consideration by such code authority 
or agency pending final action which shall not be effective unless 
the Administrator approves or unless he shall fail to disapprove 
after thirty days' notice to him of intention to proceed with such 
action in its origin-1 or modified form," 

IV. SEL1I13G IIELOW COST, OFEil P2IGE FILIIIC-, AED 
PUBLIC ACCOUITTAITT PROVISIONS 

The "selling belor, r cost" provisions in codes were the cause of much 
dissension within industry. The 1I2A had intended that such provisions 
should be used as a preventive of destructive price Cutting, which had 
been carried on by some members of industry prior to the passage of the 
Act. It was the opinion of the Administration that they would result 
in abolishing the "loss leader" items used by retail and wholesale con- 
cerns, in the past to stimulate sales. The Code Standardization Group 
which had formulated the iiode'l Code believed that each industry could 
draft a suitable provision for its code. A large number of "selling be- 
low cost" provisions merely suggested that the Code Authority determine 
and submit to the Administrator for his approval provisions against sell- 
ing below cost. 

The Model Code of November 6, 1933, had not set forth a model provi- 
sion for " selling below cost," but stated: 

"(provisions nay be inserted against selling below cost based upon 
principle's of costing formulated ~by the Code Authority and approved 
by the Administrator, Such provisions should take into considera- 
tion the necessity of selling below cost to meet competition, to 
dispose of distress merchandise, etc.)" 

To establish a gaide and to further uniformity in code provisions the 
following Office Memorandum was issued on February 3, 1934: 

"The following has 'been approved as a standard provision for 
codes relating to limitation of prices: 

'".en the Code Authority determines that an emergency exists 
in this industry and that the cause thereof is destructive price- 
cutting such as to render ineffective or seriously endanger the 
maintenance of the provisions of this Code, the Code Authority 
may cause to be determined the lowest reasonable cost of the 
products of this industry, such determination to be subject to 

981C 



-70- 

such notice and hearing an the Administrator may require. 
The Administrator may approve, disapprove, or modify the 
determination, Thereafter, during tha period, of the emer- 
gency, it shall he an unfair tr;;d.e practice for any memher 
of the industry for which the lowest reasonable cost has 
been determined at such ;orices ox upon such terms or con- 
ditions of sale that the 'uyer wMl pay less therefor than 
the lowest reasonable cost of s'icf: products. 

,T 7hen it appears that conditions have changed, the Code 
Authority : upon its own initiative or upon the request of any 
interested party, shall cause the determination to he review- 
ed. " 

This provision should he recommended to industries as 
desirable in new codes, and of course, may he used as a 
substitution in any approved coue if the industry desires. 

Under this provision no exception to meet lower cost 
competition within the industry is necessary. ' 

Other exceptions, as to distress stocks, for export 
purposes, and to compete with lower-cost imports, may re- 
main as at present." 

Much study was given to the question of the sales-below-cost provisions. 
Finally it was referred to the NBA Trade Practice Policy Board for further 
study and recommendations. Office Memorandum TT o. 228, issued June 7, 1934, 
Exhibit 14 contained the recommendations of this Board. Model provisions 
on "Costs and Price Cutting" were set forth in this memorandum, which was 
generally concurred in by the Advisory Boards as ^ell as the Legal and 
Research and Planning Divisions. 

Another device used in the effort to prevent -orice cutting was a 
provision for open price associations or a price filing system. The pro- 
visions for price filing in early codes called for a waiting -oeriod, usually 
of 10 days, before the prices filed should be effective. This arrangement 
was open to abuse and to rectify the situation, Office Order No. 63-B, 
January 27, 1934, made the following announcement of policy: 

"As a result of the price change hearing a study is 
being made of o-oen orice associations. This study 
particularly involves the waiting ueriod before filed 
prices become effective. Therefore, any nrovision for 
a waiting -oeriod in codes not yet approved will be 
stayed in the Executive or Administrator's Order of 
approval for sixty days, or pending completion of the 
study." 

The open price filing system provisions were also referred to the 
Trade Practice Policy Board for study and recommendations. Exhibit 1 of 
Office Memorandum No. 228 incorporated the recommendations on this subject 
which were officially adooted. 



9810 



-71- 

To provide a standard provision for uniform cost accounting, the 
following clause was recommended to oe used in code drafting: 

"The Code Authority shall cnuse to be formulated 
an accounting system and methods of cost finding 
and/or estimating capable of use by all members 
of the industry. After such system and methods 
have been formulated, full details concerning them 
shall be made available to all members. Thereafter 
all members shall determine and/or estimate costs in 
accordance with the principles of such methods." 
(Office !'emora:idum of January 29, 1934.) 

It was pointed out that the advantage of the above clause was two-fold: 

(1) it was completely divorced from the sel 1 ing-belo^-cost clause, and 

(2) it introduced the ider 1 . of cost estimating, which <-as the thing some 
industries needed rather than, or in conjunction with, cost accounting. 

To aid members of industry in computing the cost of their commodities 
the code authorities had set up cost accounting systems, some few of which 
were very elaborate and expensive. Some codes provided that an accounting 
system should be drafted by a certified public- accountant". To prevent 
discrimination against other accountants the' following Office Memorandum 
was issued November 22, 1933, to clarify the situation, and misinterpreta- 
tion which had been applied to such provisions: 

"Some codes vest duties in publich accountants-,, who 
are quite generally referred to as 'certified public ac- 
countant'. This is a coimon usage which overlooks the fact 
that there are other -public accountants, equal 1 y suitable to 
perform the s-^me work as certified public accountants. When- 
ever any code provision imposes duties on public accountants, 
therefore, i t should read in manner such a.s the following: 
"by a certified public accountant or by an accountant having 
the equivalent in qualifications and ability of a certified 
public cccountant, provided, however, that as to any service 
to be performed in any particular state or governmental sub- 
division of the Uniced States, such accountant in any event 
shall have the qualifications required by law in such state 
or governmental sub ii vision of the United States for the per- 
formance of such service." 

To further clarify the above, the following Office Memorandum was 
issued January 29, 1934: 

"In answer to objections which have been raised against 
the provision referring to public accountants in office mem- 
orandum of November 22, "1933, a.s tending to prefer some classes 
over others, the following wording is suggested for codes im- 
posing duties in public accounting: 

'by a certified, registered, chartered, or any 
other practitioner of public accountancy' 



9810 



-73- 

"Of course, the industry is entitled to define what 
type of accountant it desires to use, but it is 'believed 
that industries in general have no desire to discriminate, 
and it is suggested that the above language be recommended 
to industries so that no unintentional discrimination may 
be made. " 

Office Memorandum No, 228, previously referred to, ^as undoubtedly 
one of the most important announcements in KRA administration. It estab-" ', 
Wished the policy that Fas to govern pricing practices under codes and 
amendments in the future. This policy was determined by the Administration 
after months of study and experimentation, and was generally concurred in 
by the Advisory Boards, the Legal, and Research and Planning Divisions, 
In brief the policy was as follows: To ban fixing even of minimum prices 
except in emergencies when it, was necessary to halt destructive price cut- 
ting, protect small enterprises, curb monopolistic tendencies or maintain 
code wages and working conditions; to permit price filing, where desired 
by an industry, with a confidential disinterested agency for distribution 
to all members of the industry and customers wil" 1 ing to pay for the ser- 
vice-.— -such posted prices not to be changed for 48 hours. Policy also 
announced in this Office Memorandum, was to encourage the inclusion of 
model cost finding and accounting provisions, which should, however, not 
be obligatory, but not to encourage uniform additions in the form of ■per- 
centages or differentials designed to bring about arbitrary uniformity 
in cost or prices. 

An important feature of the new policy was that machinery was set 
up to prevent cut-throat price competition between emergency periods. Any 
interested individual was permitted, to complain of destructive prices to 
the code authority, which, if it was unable to adjust the situation to the 
satisfaction of the complainant or respondent, was to refer the complaint 
to the Research and Planning Division of NRA. 

The plans of certain code authorities for the approval of elaborate 
accounting systems were hastily discarded after the issuance of Office 
Memorandum Ho. 228. Thereafter, except in cases of emergencies, accounting 
systems were approved only provided they were to be used only for educa-*- 
tional purposes among the members of the industry. 

The issuance of this memorandum was the cause of much confusion among 
members of industry. To give industry the proper interpretation of the 
purpose of the memorandum the following. announcement was made (Release 
NO. 5682) by the Administrator on June 9, 1934: 

"There seems to be widespread and misunderstanding about 
the recently announced N.R.A. price policy. The main purpose 
of that announcement was to obtain some uniformity in future 
codes and, while it is our hope that industries under approved 
codes may desire to agree to: changes, the policy order does not 
now effect them and will not unless and until the adjustment has 
been workfcd out in negotiations with .the interested code authorities. 
In no event will there be- any imposed change in an approved code or 
any change suggested without relation to the particular conditions > 



981G 



-73- 

in that industry. 

"It should he clearly understood that all of the provisions 
of apnroved coc'es. including their price provisions are in full 
force and effect and must he complied with, 

"This applies for example to those of all Retail Trades 
including Automotive Dealers, Bituminous' Coal, sCl Lumber and 
Timber Products and Building Materials, Electrical, Rubber 
Tires, Paper Industries, Graphic .Arts and Printing, Bus, 
Trucking, and Transport, Garment and Textiles, Radio and all 
durable goods industries. I mention these codes specifically 
only because this is where the misunderstanding has been most 
general. Omission to mention any other does not mean that the 
general statement just made does not apply to them." 

V. TRADE PRACTICE COMMITTEES 

To encourage code authorities of closely related industries to co- 
ordinate their trade practice rules, a model provision for the establish- 
ment of a trade practice committee, incorporated in Office Order No. 66, was 
recommended to be used in the formulation of new codes and revisions of ap- 
nroved codes. 

The text of the Office Order was as follows: 

" TRADE PRACTICE £ AFFECTING RELATIONSHIPS BETWEEN 
MEHFEi-.S U/ILJR DISF.Ti-EJCT CODES 

"Trade practices incorporated in codes usually deal ef- 
fectively with the relationships between all employers subject 
to the code. On the other hand, the equal 1 y important rela- 
tionships existing between production employers and distribution 
employers who are under different cedes have not been dealt with 
to any extent and, of course, cannot be dealt with so readily as 
in the first case. However, it is equally important that fair 
trade practices be established in the latter case. 

"It is desired that the following paragraph be recommended 
-.. to all industries who are in the course of formulation of new 
codes or the revision of approved codes for inclusion among 
the powers and duties of the code authority: 

'To appoint a trade pra.ctice committee which shall 
meet with the trade practice committees appointed 
under such other codes as may be related to the 
'. ••• trade/ industry for the purpose of formulating fair 
trade practices to govern the relationships between 
production and distribution employers Under this code 
and under such others to the end that such fair trade 
practices may be proposed to the Administrator as 
amendments to this code and such other codes. 



9813 



-74- 

"In this connection attention is invited to section 
7 (e) of the Suggested Outline of Codes which has been 
incorporated in a number of approved codes and "hich 
authorises the code authority to make recommendations 
to the Administrator for coordination of the adminis- 
tration of related codes. Under this clause any existing 
code authority may proceed as suggested above." 

VI. PROVISIONS GOVERNING EMPLOYMENT OE HANDICAPPED WORKERS 

President Roosevelt issued Executive Order No. 6606-P on February 17, 
1934 (Exhibit 15) providing that a person whose earning capacity wa.s limit- 
ed because of age, physical or mental handicap, or other infirmities could 
be employed on light work at a wage below the minimum that was established 
by a code. 

The Order was intended to clarify the question whether minimum wage 

and maximum hour provisions of codes were to prevent those handicapped by 

physical or mental defect, age or other infirmity from having their former 
opportunities of employment. 

It was ordered that no provision of any code previously or thereafter 
approved was to be so construed or was to be applied so as to violate the 
rules and regulations quoted in Executive Order No. 66G6-F. 

The following press release (No. 6557), issued July 23, 1934, gives 
the report of an N.R.A. Commission which made a study of the effect of codes 
upon employment of physically or mentally handicapped workers: 

REPORT OE NRA COMMISSION TO STUDY EFFECT OF CODES UPON 
EMPLOYMENT OF PHYSICALLY OR MENTALLY HANDICAPPED WORKERS 

Employers must be induced to hire 'a proper pro- 
portion' of handicapped persons or the great bulk of 
such workers will have to be -pensioned and kept in idle- 
ness 'at enormous cost to the public', the special com- 
mission appointed by National Recovery Administrator Hugh 
S. Johnson to study the effect of codes upon employment 
of the physically or mentally handicapped, reports in 
findings made public today. 

The report, which is signed by Oscar M. Sullivan, 
Frederic Woodward and Stanley P. Davie s, the latter 
secretary and general director of The Charity Organiza- 
tion Society of New York, calls upon industry to adopt;, 
voluntarily, 'a right minded and socially desirable 1 
attitude toward sub-standard workers and to make it 
possible for those 'who are not less than 50fo deficient' 
to receive regular employment. 

The Commission's report is based upon field studies 
made in 14 representative cities and upon an analysis 
of replies to an intensive questionnaire sent to all 
vocational rehabilitation supervisors in the country as 

9810 



■75- 



to private placement agencies for the handicapped and 
a selected list of social service agencies, T7hile the 
net results, the report declares, 'are not in the nature 
of things reducible to statistical form', the conclusions 
reached reprefi snt 'a. careful evaluation after allowing 
for varying conditions,'. 

Regarding the rumored wide-spread discharge of 
handicapped employees immediately prior to or fol- 
lowing the adoption of codes, the report declares 
that 'in many localities no instances of this were 
found at all 1 , though the report 'seemed to he well- 
founded* in Massachusetts. . . . 

Similarly, but few instances "'ere reported of 
efforts to employ efficient handicapped workers under 
sub-standard certificates, though the commission recom- 
mended, as desirable, 'a. check-up of this and other 
features' at a later date. 

With regard to the employment of handicapped 
'who are indisputably sub-standard' , the report de- 
clares that many elements of disagreement were found, 
with the most frequently expressed opinion to the 
effect that not enough of the sub-standard were ob- 
taining employment and that 'the percentage limita- 
tions on bhe number of sub-standard employees in any 
one establishment, as '"ell as the reduction that 
could be made in the minimum wage, were not flexible 
enough to meet conditions.' 

As to the extent to which handicapped workers 
have participated in the re— empl oyment program, the 
commission found a ride diversity cf conditions. In 
a number of places, notably Grand Rapids and Michigan 
in general, Louisville and Hartford, 'strong testimony 
was given that the U.S.A. had been the cause of much 
new employment' and that the handicapped 'had bene- 
fitted directly thereby 1 . In other places, tne report 
stated, ' the evidence seemed to be that the handicapped 
were no better off and no worse off than they were be- 
fore. ' 

Reporting on the proposals for bringing about in- 
creased employment of handicapped, the commission de- 
clared: 

'Some of them, although good, obviously did not 
come within the scope of the National Recovery Admin- 
istration. Of such character was the suggestion that 
the federal government and other governmental agencies 
should set the example to business and industry by 
adopting regulations which would make certain the allo- 
cation of a fair proportion of public positions to the 
handicapped. 

9810 



-76- 

'Also meritorious, though outside the "orovince 
of the N.R.A, except insofar as it related to sheltered 
workshops, was the proposal of a group of social thinkers 
that the handicapped not absorbable by industry he en- 
couraged to produce well-selected and standarized arti- 
cles that could be marketed in the government purchase 
field, ' 

'Suggestions which the commission found desirable 
were included in a recommendation that the National 
Recovery Administration 'call to the attention of all 
coded industries .... as socially desirable measures 
for their codes, either in a mandatory way or as recom- 
mended practices, the following: 1 

'(a) Every employer should, whenever the nature 
of the disability or the individual -personality does not 
negative such a step, re-hire in suitable employment 
persons who have received permanent injuries in their 
employ. 

'(b) Employers should, in the ordinary course of 
expansion call back one equal basis with other handicapped 
workers who have been in their employ within the last four 
years. 

'(c) Employers should endeavor to have a suitable 
proportion of handicapped workers, whether sub-standard 
or fully efficient, in the ranks of their employees in 
order to make certain of a. fair distribution of opportunity 
to work. This proportion in all probability would be as 
large as two percent and might even be close to five per- 
cent'." 

VII. STANDARDS FOR SAFETY AND HEALTH 

In Chapter IV of this report, comment was raad.e as to the neces- 
sity for the inclusion in the Model Code of a provision for standards 
for safety and health of employees. 

In Office Order No. 71 of March 14, 1934 (Exhibit 16) the 
manner in which the -orovisions for safety and health were to be 
drawn was outlined. 

A Committee on Standards for Safety and Health for Codes was 
appointed by the Secretary of Labor to formulate the minimum standards 
for safety and health of workers in manufacturing industries. The 
standard recommended by this committee were used by many code authori- 
ties. The standards submitted by the code authorities when approved 
by the Administrator, in accordance with Administrative Order No. X-51, 
June 15, 1934 )Exhibit 17), became part of the code governing the partic- 
ular industry, and were enforceable as any other provision of the Code. 



9810 



VIII. PREMIUMS, 

Among the fair trade practices of certain codec were provioions 
prohibiting the use of premiums. The following were some of the specific 
forms of this practice prohibited: 

Salt Producing Industry - Article IV, Section 9. 

"Offering of salable gifts or prizes." 

Cap and Closure Industry - Schedule A, Section G. 

"Free deals and/or contributions — - The offering 
or giving of prizes, -oremiums, or gifts in connec- 
tion with the sale of products, or as an inducement 
thereto. " 

Industrial Sut>t)l j q s and Distributors Trad ft - Article VI, Section 3. 

"She payment or allowance of secret rebates, refunds, 
discounts, commissions, or other special considera- 
tions or allowances, including donations, gifts, or 
premiums of any nature whatsoever to any firm or 
individual. " 

Asbestos Industry - Article VII, Section 3. 

"To subsidize buyers by special donations, give 
premiums. " 

Toy and Playthings I ndustries - Article VII, Section 11. 

"The offering or giving of prizes, premiums, or 
gifts in connection with the sale of products, or 
as an inducement thereto, by any scheme which in- 
volve lottery, misrepresentation, or fraud." 

Gas. Appliance and Apparatus Industry - Article X, Section 6. 

"Using premiums in the sale of merchandise. " 

The premium problem proved to be quite troublesome. Ther'? were 
irreconcilable conflicts between the desires of certain non-premium iar- 
dus tries on the one hand and concerns engaged in th«i manufacture and 
distribution of premiums on the other. The manufacturers of novelty 
gods which were extensively used in premiums had built up a consier— 
able industry and employed a large number of persons. 1$ addition, other 
■oroducts which were not. intrinsica 1 ly related to the manufactura of pre- 
miums were purchased for premium use. The first statement of policy 
on the subject of -oremiums was announced in the Policy Memorandum of 
October 25, 1933. Later the policy as to premiums was revised, as 
announced in pffice Memorandum of March 19, 1934, as follows: / 

7 



9810 



"The use of premiums or coupons may be prohibited 
"by an industry when the desire for such prohibition is 
general. 

"Prohibition of the use of premiums or coupons will 
not be apt) roved where a -member of the industry has been 
accustomed to make a proper use of premiums or coupons 
and objects to the prohibition., " 

Many protests were- received by ..NBA from the manufacturers of . articles 
used for premiums, and from business concerns whose businesses were con- 
ducted on a premium basis. They felt that they were being discriminated 
against and that the prohibition of premiums was not in accord with the 
purposes of the Act. 

The result of this criticism was thr>t the problem was referred to 
the Trade Practice Policy Boa.rd for study and recommendations, which 
were made public in Office Memorandum No. 232, issued June 12, 1934 
(Exhibit 18). 

The term "free deals" was used in certain codes, and to clarify 
the question whether these were to be classed in the same category as 
premiums Office Memorandum No, 316 of December 6, 1934 (Exhibit 19) 
was issued to supersede Office Memorandum No. 232. 

IX MANDATORY ASSESSMENT'S. 

Under, Article VII ,• Section ,7^f) of the Model Code of November 6, 
1933, no legal liability to pay code assessments existed unless a con- 
tractual obligation to pay had been created by an assent to the "code. 
Presumably on the theory that all members of the industry, whether as- 
senting to codes o"" not, received benefits from the operation of the 
codes, Executive 'Order No. 6678, dated April 14, 1934 (Exhibit 20) , was 
issued authorizing the code authorities Lo amend their codes by the 
inclusion of a mandatory assessment provision and provisions which would 
permit the code authority to incur leascna^le obligations necessary for 
its expenses and to. submit bo the Administratojr, f or. his approval an 
itemized budget and an equitable basis of contribution. It also permitted 
the code authority to institute legal proceedings for the collection of 
■the- equitable contribution. The mandatory assessment provision was to be 
effective only after approval by the Administrator of the budget and 
basis of contribution. 

N.R.A. Press Release No. 4434 of April 15, 1934, with reference to 
the purpose of the order, stated: 

"Under the order, which eliminates racketeering 
through provisions for prior approval of both rates 
and budgets by the Administrator, non-payment of an , 
equitable contribution is to be a code violation sub- 
jecting the delinquent to withdrawal of all Code bene- 
fits and loss of the Blue Eagle as well as to a suit 
which may be brought by the. .Code Authority." 



981") 



-79- 

S'imulta'neously with the issuance of Executive Order Mo. 6678, the 
Administrator issued Administrative Order T T o. X-20 which supnlrmented 
the Executive Order, defined the procedure under which rates and budgets 
would be approved, and emphasized that nnroloyers who were subject to 
several codes would, with certain exceptions, be assessed only for the 
support of one eode authority — that representing their principal line 
of business. To relieve members of industry operating under more than 
one code from multiple assessments. Administrative Order No. X-20 was 
supDiemented by Administrative Orders Mo. X-36, No. X-78, Mo. X-1G6, 
No. X-131, and No. X-14C. 



981 D 



~8i> 

X. BLUE EAGLE INSIGNIA. 

The revised edition of the Model Code issued April 3, 1934, incor- 
porated under the powers and duties of the code authority, Article VI, 
Section 7 (g),cthe following provision: 

"To cooperate with the Administrator in regulating the use 
of any N.R.A. insignia solely "by those members of the trade/ in- 
dustry who have assented to, and are complying with this Code." 

Some members of industry had "been deprived of the right to display 
the Blue Eagle Because they had not assented to the code for their parti- 
cular industry, although they were complying with its provisions. To 
correct this injustice Office Memorandum No. 229 was issued June 9, 1934, 
as follows: 

"It is the policy of this Administration to encourage the 
display of Code Blue Eagle Insignia "by all trade and industry 
members complying with the provisions of the Code or Codes of Fair 
Competition to which they are subject. Blue Eagles are being dis- 
tributed to sll employers ope rating under approved codes who have 
not been reported for violation; and, when issued, the Blue Eagle 
may be withdrawn only by N.R.A. for violation of code provisions. 

"Ho limitation such as assent to the code should be imposed 
upon the right of employers operating in conformity with the pro- 
visions of approved codes to receive and display Blue Eagle Insig- 
nia. Hereafter, Administrative approval will not be given to any 
code provision or any code authority by-law or regulation that 
seeks to impose such a condition." 

XI. CLASSIFICATION OF CUSTOMERS. 

An analysis of the first 500 approved codes shows that seventy-seven 
included some form of "classification of customers" provisions, inr.. 
dicating a differentiation among customers. Some members of industry 
used this classification as a basis for open price filing or for placing 
restrictions on discounts, prices or terms of sale. Other members used 
it as a means to divert products of the industry into specific trade 
channels. 

The problem of classification of customers was referred to the N.R.A. 
Trade Practice Policy Board for its consideration and recommendations 
which were made as follows: 

"The problem of classification of customers has had very care- 
ful consideration. A number ox the proposed classifications have 
been examined. The Committee has also had before it a number of pro- 
ponents of customer classification. Some of these have been repre- 
sentatives of particular codes, others, persons who have confidence 
in the desirability and feasibility of customer classification. The 
most affirmative member of the latter group has declared that he had 
not yet seen any specific forms of customer classification which he 
believes would be satisfactory. 

9810 



-81- 

"Classification of customers by interested groups has been ex- 
perimented with for a number of years. It has been tried in the 
lumber industry, and in other cases in which it has been studied by 
the Federal Trade Commission. A consideration of these studies, as 
well as the discussions mentioned above, lead to the conclusion 
that it is contrary to the public interest to entrust the serious 
responsibility of creating binding customer classifications to trades 
or industries concerned. Usually,., if not in all cases, such plans 
appear to contain some design to restrict, destroy, or otherwise 
discriminate against certain individual concerns or classes of cus- 
tomers. Such plans are, further, in a large number of cases com- 
bined with compulsory resale price maintenance provisions, manda- 
tory observation of classification by individual sellers, and uni- 
form discount requirements, all tending in the direction of a ri- 
gidity of distribution structure and of prices. 

" There is one type of customer classifi cation work which the 
1T.P.„A. wou Id be well advised to permit code authorities to carry on , 
as an educational activit y. It would consist, of determining and 
listing the trade channels open to members of the trade, pointing 
out the functions performed by various trade channels, and indi- 
cating developing trends and possible new channels of distribution. 
Such work, if conducted continuously by the code authority, should 
lead to a better awareness of market opportunities, lower costs of 
distribution, and quicker adaptation to the changing economic si- 
tuation . 

"In no case, however, should the provisions of a code or the 
work of a code authority be permitted to place restrictions on the 
freedom of an individual vender to choose such distribution channels 
as he believes will best serve his purposes. ITor should influence 
be brought to bear to bring about such a result. Nor should there 
be -permitted any classification of types of customers which con- 
tains or suggests resale price maintenance provisions, uniform dis- 
count requirements, or other features tending in the direction of 
rigidifying channels of distribution, and prices. 

"The above observations and the recommendations which follow 
are in line with the principles of open price filing set out in 
Office Memorandum 228 and, specifically, that part of Exhibit A — 
Open price Filing — which states that price lists when filed 'shall 
completely and accurately conform ato and represent the individual 
pricing practices of said member'." 

RECOMMENDATIONS 

"It is recommended: 

"1. That code provisions for classification of customers 
should go no further than to authorize code "authorities to formu- 
late and keep current classifications which include the following: 



9810 



"(a) A statement of those tyoes of customers to "be found in the 
trade/industry; 

"(h) Definitions and explanations of these several classes of 
customers in terms of their functions. 

"2. Such classifications should 

"(a) Include all known types of customers, 

"(d) Expressly recognize the right of any members of the trade/ 
industry to recognize such additional types as he may desire, 

"(c) Expressly recognize the right of any member of the trade/ 
industry to classify his own customers as he may desire. 

"3. Such classification should in no case include or be supple- 
mented "by 

"(a) Provisions contemplating' the suppression or elimination 
of certain types of distributors or competitors or individual distri- 
butors or competitors; 

"(b) Any reference to uniform prices, discounts or differen- 
tials to be used by members of the industry for the various classes 
of customers indicated; 

"(c) Any requirement or suggestion designed to bring about 
the maintenance of resale prices by members of the trade/industry or 
their customers; 

"4. Code provisions for classification of customers should 
specifically declare that it shall be a violation of the code for the 
code authority or members of the industry individually ©r collecti- 
vely to require or suggest to any other member of the industry the 
differentials, prices, or discounts to be used or employed as bet- 
ween the various classes of customers indicated, or to suggest or re- 
quire the inclusion of individual concerns in any indicated class." 

The above recommendations were duly considered by the Administration, 
and led to the issuance of Office Memorandum No. 267 of July 20, 1934 ( 
(Exhibit 21). 

XII. ADVERTISING ALLOWANCES. 

The practice of manufacturers in making advertising allowances to 
purchasers permitted secret rebates, sometimes in violation of code pro- 
visions against such rebates. NRA policy with respect to the question of 
prohibiting advertising allowances through the oodes was not definitely 
developed until lat«, but finally was announced by Office Memorandum No. 
326, of January 5, 1935, ( Exhibit 22), as follows: 

"Manufacturers or other vendors selling goods to distributors 
frequently find themselves desiring to purchase from their customers 



ail advertising or promotion service which their customers can render. 
In purchasing such services the vendors have become accustomed to 
make payment by 'allowing' a certain reduction from what would other- 
wise he the price. The nayments thus made hove become known as 'ad- 
vertising allowances'. 

Code provisions declaring the giving of advertising allowances 
an unfair practice would not change the basic facts that sellers 
must price their goods to buyers and that certain buyers have pro- 
motion services which they are desirous of selling for which those 
who sell to them are willing to pay. The remedy for such suspicion, 
secrecy, confusion, and misrepresentation as may be connected with 
advertising allowances, lies in: 

(a) Clearly separating and thus establishing the distinct iden- 
tities which are involved in giving advertising allowances. 

(b) Causing that part of the advertising allowance which is 
actually a price reduction to appear in prices - reported prices, 
if the industry or trade has an open price plan. 

(c) Causing that part of the advertising allowance which is 
actually a payment for advertising or promotion service to appear 
as such with definite description of the service for \?hich it is 
given, and with such publicity, where publicity is practicable, that 
it is unlikely that the payment will be more than the competitive 
worth of the services involved. 

Accordingly, it is H.3.A. policy that an industry desiring to 
regulate advertising allowances should not be permitted to do so by 
general prohibitions, by restrictions on the basis of products or 
types of distributors, or otherwise than in accordance with the fol- 
lowing: 

1. That no member of an industry or trade shall designate as 
an 'advertising allowance', 'promotion allowance' or similar term, 
any price reduction, discount, bonus, rebate, or other form of price 
allowance or concession, or any consideration for advertising or pro- 
motion services offered or given by him to any customer. 

2. That no member of an industry or trade shall offer or 
give any consideration for advertising or promotion services to any 
customer except for definite and specific advertising or promotion 
services . 

3. Agreements to purchase advertising services from customers 
shall be made in written contracts separate from sales contracts. 

4. Such contracts shall specifically and completely set out 
the promotion services to be Derformed, together with the precise 
consideration to be paid therefor, the method of determining per- 
formance, and all other terms and conditions relating thereto. 

5. Some arrangement for publicity may be made, where effective 
machinery therefor can be devised. In considering any .-arrangement 



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for publicity, c\re should be token to avoid machinery so cumbersome 
that its cost will outweigh "benefits t: be gained. 

The niodel provisions for advertising allowances which were to be 
incorporated in cedes are then set forth. 

XIII. LIQUIDATED DAI. AGES PROVISIONS. 

Prior to the issuance of office Lemcrraiduai Nc. 331 , J-nuary 29, 
1935, (Exhibit 23), fifteen codes were rpprcved which contr.ined pro- 
visions for liquidated damages. This Memorandum express L r PA policy 
as to such provisions and was the last expression of such policy, al- 
though the question subsequently received further consideration by 
the PEA Advisory Council, which made recommendations for revision. 

XIV. PROVISION PEC JBITIEG DISMISSAL GP EMPLOYEES POP REPORTING 
ALLEGED VIGIiATICES OF G'EES. 

It had been brought to the Administrator's attention that some 
employees were being dismissed because they were reporting code 
violations; also that many violations were not being report because 
the emaloyaes were in fear of being discharged if their employer 
learned that the employee had reported to the proper authority a vio- 
lation of a code. To correct such dismissals and fears the President, 
"oy Executive Order No.' 6711 of i.iay 15, 1934, (Exhibit 24 established 
t.._e following rule: 

"No employer subject to a cede of fair competition 
approved under this title shall dismiss or 'demote 
any employee for making a complaint or giving, 
evidence with respect to an alleged violation of 
the provision.- of any code of fair competition 
approved under this title." 

Tme above rule was t. ereafter used as ;a model provision for' codes. 

XV. hCMEV/CRK. 

After the bo.sic code? for the Garment Industries were approved 
it so~n become apparent that the provisioni; in codes eliminating home- 
work had caused severe hardships among those employed in such work. 
On the other hand it was recognized that homework offered a vicious 
type of unfair competition in many industries. 

A committee was appointed to study this ouestion, and to make 
recommendations to the Administrator, as t? regalations governing 
homework. 

Office Memorandum of Pebruo.ry 17, 1934 stated in part .as follows: 

"Pending completion of the study and solution of 
the problem, it is suggested that homework pro- 
visions be very c -refully v/eighed, and stayed 



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waere hardships may result." 

On the recommendations of tiie Commission, which had made a 
stud/ of homework, the President issued Executive Order Ko.6711-A 
on Lay 15, 1934 (Exhibit 26), "Prescribing fiules and Regulations for 
the Interpretation and Application of Certain Labor Provisions of 
Codes of Pair Competition as They hay Affect Certain Homeworkers. " 
This Order stated in part as follows: 

"1. .'. person may be permitted to engage in home- 
work at the same wage rate of wages as is paid 
for She same type of work performed in the factory 
or other regular place of business if a certificate 
is obtained from the State authority or other 
officer designated by the United States Department 
of Labor, such certificate tc be granted in accord- 
ance with the Department of .Labor, provided: 

(a) Such person is. physically incapacitated 

for work in a factory or other regular 
place of business raid is free from any 
contagious disease; or 

(b) Such person is unable to leave home be- 
cause his or her services are absolutely 
essential for attendance on a person who 
is bedridden or an invalid and both, such 
persons are free from any contagious 
disease. 

2. Any employer engaging' such a person shall keep 
such certificate on file and shall file with the 
Code Authority for the trade or industry or sub- 
division thereof concerned the name ana address of 
each worker so certified. 

This Order shall become effective imm.edia.tely 
and shall be binding upon all trades, industries 
or subdivision thereof subject to Codes of Pair 
Coup tition in which homework is prohibited, * * *; 
prov .ded, however., that this Order shall not apply 
to or affect Codes of Pair Competition heretofore 
or hereafter approved for food or allied products 
trades, industries or subdivisions thereof, which 
contain provisions prohibiting the manufacture 
and/or processing of food products in homes." 

XVI. NON-WAIVEE CP CONSTITUTIONAL RIGHTS. 

Article VII of the Code of Fair Competition for the Daily news- 
paper Publishing Business contained the following provision: 

"Those submitting this Code recognize that pur- 
suant to Section 10 (b) of the Act the President 

9310 



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rnay, from time to time, cancel cr modify any order 
approving this Code, out insubmitting or subscrib- 
ing to this Code, tne publishers do not thereby 
consent to any modification thereof, except as 
each may thereto subsequently agree, nor do they 
thereby waive any constitutional rights, or con- 
sent tc the imposition of any requirements that 
might restrict or interfere with the constitution- 
al guarantee of the freedom of the press." 

The President approved the Code with the above Article included 
with the following comment (Paragraph 3 of the Executive Order of 
Approval ) : 

"Insofar as Article VII is not repaired by the 
Act, it is pure surplusage. While it has nc mean- 
ing it is permitted to stand merely because it has 
been requested and because it cculd have nc such 
legal effect as would bar its inclusion. Cf course 
a man does not consent to what he does net consent 
to. But if the President should find it necessary 
to modify this Code, the circumstance that the 
modification was not consented to would not affect 
whatever obligations the non-consentor would have 
under Section 3 (d) of the National Industrial Re- 
covery Act. 

Of course, also, nobody waives any constitutional 
rights by assenting to a Code. The recitation of 
the freedom of the press clause in the Code has 
no more place here than would the recitation of the 
whole Constitution or of the Ten Commandments. The 
freedom guaranteed by the Constitution is freedom 
of expression and that will be scrupulously respected 
— but it is not freedom to work children, cr do 
business in a fire trap or violate the laws against 
obscenity, libel and lewdness." 

Some writers and newspapers continued to contend that the "non- 
waiver of constitutional rights" clause should nave been included in 
all cedes. Many of the early codes as proposed did contain similar 
clauses, but these were deleted in every instance before the code was 
approved. 

Evidently with the purpose of preventing further criticism the 
President issued Executive Order No. 6249, January 22, 1935 (Exhibit 
25), which read in part as follows: 

"(l) It is understood that neither the Govern- 
ment nor any member of industry waives, or can 
properly insist that the other has waived, any 
constitution al right pertaining to the Govern- 
ment or to any individual by approving, assent- 



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-87- 

ing to, or cooperating under a Code of 
Fair Co ipetiticn. 

" (.]) The approval orders of rll sue'.: codes 
heretofore approved r.re hereby modified to 
the extent necessr.ry to make this Order a 
condition thereof, and this Order shr.ll 
operate as a condition of the approval of 
my such code hereafter r.pproved. " 

XVII. ?C STING PXVI SI CMS 

Executive Order 6599-B, February 3, 1934, delegated authority 
to the Administrator of FHA to prescribe rules and regulations re- 
quiring persons subject to codes to "jest or display the terms and pro- 
visions of said codes, or otherwise "bring such terms and provisions 
to the attention of any and all interested persons, including employees. 
The Administrator was further authorized to trice such steps as he 
might deem advisable to effectuate sue: rules and regulations pre- 
scribed by him. 

Administrative Order X-6, February 12, 1934, prescribed rules 
and regulations governing the posting of labor provisions of codes 
as follows: That every person subject to any code was to register, 
within thirty days of the order, the effective date of the code, or 
the date upon which lie became subject, whichever war latest, the 
full name of his enterprise, together with a statement of the number 
of shops, establishments or separate units tnerecf and their location, 
wit: the code authority of the trade or industry of which he was a 
member. Upon registration, or as scon thereafter as was possible, 
each such person was to be furnished with official copies of provisions 
of the code to which he was subject relating to hours of labor, rates 
of pry and other conditions of employment, such copies to be kept 
conspicuously posted at all times by such person in each shop, es- 
tablishment or separate unit of his enterprise tc the extent necessary 
to make them freely accessible to all employees. The employer was 
also to secure from the code authority and to post alongside the copy 
of code provisions a certified copy of any exemption, exception or 
modification permitting him to pay lower wages or work his employees 
longer hours or establish conditions of employment less favorable to 
/lis employees then those prescribed by the subject code. No employer 
was to display incorrect copies of code provisions or exemptions; he 
was to comply with any code provisions relating to posting. 

Administrative Order X-7 of February 28, 1934, superseded 
Administrative Order X-6 concerning regulations governing the posting 
of labor provisions. The later order mr.de it incumbent upen the em- 
ployer to apply tc his code authority or code authorities for official 
copies of labor provisions witnin forty-five days of the date of the 
order, the effective date of the code or the date upon which the appli- 
cant became subject to the code, whichever was latest. In addition, 
the Administrator's power to remove the Blue Ea.gle for failure to 
comply with those regulations was set forth. 



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-38- 

Admini strati ve Order X-82, September 1, 1S34, added to the regu- 
lations governing posting of labor provisions the proviso that 
official copies, in addition to containing provisions of codes re- 
lating to hours of labor, rates of pay and ot. .er conditions of em- 
ployment were to contain such conditions, orders, interpretations, 
explanations or statements issued by tie President or the Adminis- 
trator as part or in connection with any order approving a code 
or any amendment thereto relating to labor provisions; other in- 
terpretations, orders and explanations, all to such extent as NBA 
might deem advisable to effectuate the purposes of those rules and 
regulations in the case of each code. 



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.-89- 

CHAPTER VI 
RECEPTION BY INDUSTRY 

Immediately after the passage of the Act the hopes of industry were 
seemingly lifted by the issuance of the following statement in NRA Bulletin 
No. 2: 

"It is not the function of the National 
Recovery Administration to prescribe what shall be 
in codes to be submitted by associations or groups. 
The initiative in all such natters is expected to 
come from within the industry itself." 

Many members of industry interpreted the provisions of the Act to 
mean that they would be relieved from the anti-trust laws and from the ■ 
destructive competitive practices which were raining their markets, and 
anticipated that there would be official enforcement of price control 
measures. 

-men the Cotton Textile Code (No. 1) was approved their hopes were^ 
raised further by the clauses providing for indirect control of production 
through limitation of machine hours. Anticipations of relief from destruc- 
tive pricing practices seemed well founded when the Shipbuilding and Ship- 
repairing Code (¥.o. 2) was approved with a prohibition against selling 
below cost, the electrical Manufacturing Code (Fo. 4) with a fully developed 
open price reporting system, the Coat and Suit Code (No. 5) with a grant of 
power" to the Code Authority to examine books and records of members of that 
industry, the Iron and Steel Code (No. 11) with price reporting, merchandise ■ 
ing, and minimum price provisions, and the Lumber and Timber Code (No. 9) 
with a system of price fixing and provisions for control and allocation of 
production. The result of the approval of such provisions as these was 
that many fantastic provisions, notably those of a price fixing character, 
were included in the codes submitted to NRA. 

Prior to the issuance of the Model Code of November 6, 1933, ninety- 
nine codes had been approved, including those for nine of the ten major 
industries. The Code for the Construction Industry, classified as one 
of ten major industries, had not been approved. The Model Code did not 
receive a hearty reception from certain members of the industries whose 
codes had not been approved, because the codes that had received first 
consideration and had been approved prior to November 6, 1933, contained 
many provisions which were inconsistent with the model. Members of indus- 
try frequently expressed the opinion that the NRA was reversing its 
previous policy and in advising the use of the Model Code was trying to 
place them in a straight jacket. Almost every industry had by November 6, 
1933 drafted and submitted cedes to NRA, and therefore the Model Code was 
not extensively availed of in the drafting process. However, it was used 
extensively by NRA and industry in modifying the proposed drafts in order 
to obtain approval. 

The numerous cases referred to the TTRA Advisory Council and the 
various Policy Boards indicate that much time, labor and expense would 
have been saved if the NBA had issued a Model Code before many public 
hearings on proposed codes were held. If this had. been done the Administra- 

9810 



-90- 

tion would not have been subject to the criticism previously referred 
to that provisions were permitted in earlier apnroved cedes which 
were not embraced in the Model Code of November 6th and the subsequent 
issue, and were denied to industries whose codes had not already been 
ap-oroved. 

However, experience was a valuable guide, and if a model code had 
been issued before many public hearings were held, numerous amendments 
of it to express the lessons learned through experience nrobably would 
have been necessary. 



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-91- 

CHAPTER VI I 

CONCLUSIONS AJH) FINDINGS 

The preface of the Model Code cf November 6, 1933, stated in 
part as follows: 

"Except as to those provisions which are required to be 
included in all codes by the National Industrial Recovery 
Act (which provisions are clearly indicated herein), none 
of the suggestions embodied in this draft are mandatory." 

This issue of the Model Code was widely distributed to industry, 
and some members of industry were misled by the above quoted state- 
ment and did not follow the wording of the provisions verbatim in 
drafting their cedes; however, before their codes were axroroved they 
realized time would have been saved for all parties concerned if the 
preface had stated that those -provisions of the Model Code which were 
incorporated in codes should be verbatim- 
Some members of industry expressed the coinion that if it was 
the policy of the Administration that the wording, of the model pro- 
visions should be followed verbatim the preface should have so 
indicated; also that the -preface should have specified the provisions 
which were fundamental, those most highly desirable, and those optional. 

Many of the -provisions included in a-p-proved codes varied from 
the model -provisions of the Model Code, from which it would appear 
that the Model Code was too narrow, especially the chapter pertaining 
to trade practices. 

One cf the -principal advantages of the Model Code was that it 
incorporated policies which had not heretofore been expressed by the 
Administration, and for this reason it was a very useful guide for 
the members of NRA connected with code making. Some of the officials 
of NBA immediately adopted the Model Code as their 3ible in code 
making, others took the -preface at its face value and declined to 
follow it, but they fell into line when they realized that codes 
moved forward to approval more rapidly when their contained provisions 
were patterned after those of the Model Code. 

However, it must be observed that even after changes in NRA 
-policy between November, 1933 and April, 1934 were expressed in the 
revised Model Code of April 3, 1934, policy announcements affected 
model code -provisions. Therefore, code -provisions negotiated with 
model previsions as a guide sometimes had to be reopened and this 
undoubtedly brought about some measure of exas-peration on the part of 
code sponsoring committees and members of industry and created criti- 
cism of NBA. 

From the study of the development of the nr^visions of the Model 
Code it is arroarent that: 



9810 



-92- 

1. Much time would have been saved and many mistakes 
avoided had FRA adopted an official Model Code 
much earlier in the code-making period: 

2. NRA personnel had only Title I of NIRA and NBA 
Bulletin No. 2 for use as guides in the early days 
of code drafting. 

3. A large number of approved codes appear to have 
been too hastily drafted. 

4. "The Model Code for Self-Governing Industries," a 
document issued by the National Association of 
Manufacturers under date of May 31, 1933, the 
President's Reemployment Agreement, as well as the 
earlier approved Codes, were used by many industries 
as a basis for drafting Codes which they nroposed to 
submit for approval, insisting that similar provision: 
be included in their Codes. 

5. The delay in the establishment of a Policy Board and 
the formulation of policy handicapped the development 
of an official Model Code and caused much, uncertainty . 
to exist in the minds, not only of NRA personnel but 

of members of industry as to just what provisions would 
be approved. 



Recommendation 

In the event that any new legislation is enacted which contemplates 
the formulation and adoption of codes of fair competition to govern 
industry, a policy board should be created with a personnel consisting 
of representatives of government, industry, labor, rmd consumers, to 
study the legislation thoroughly and formulate policy for its administra- 
tion, including the adoption of a model code which might be used as a 
guide in drafting proposed codes under the legislation. 



9810 



-93- 

APPENDIX I 



This study is ^resented in a narrative form and has been treated 
from an historical -noint of vie"', The events which culminated in the 
passage of the National Industrial Recovery Act, the early r>roblems 
which were presented relative t: code making, the needs for and the 
•policies involved in the formulation of the Model Code of November 6, 
1933, subseauent issues of the Model Code and amendments thereto, 
and its reception by industry have been treated in chronological order. 
The so-called basic code, promulgated under Administrative Order No. X-61 
is not discussed because it is the subject of separate study. (Work 
Materials No. 33). An attempt ha.s been made to analyze the benefits 
derived by the use of the Model Code, as well as an analysis of its 
shortcomings, and to present recommendations in event any future 
legislation, which would involve code making, is passed by Congress. 

The procedure followed in the development of this study is as 
follows: First, a tentative outline for the subject was prepared. 
Second, all available information germane to the subject was obtained 
from various files of the NBA. In some instances, where information 
relative to policy involved in the drafting of some model provision 
had not been recorded it was necessary to confer with the individuals 
who had aided in drafting such provisions. Valuable information, in 
most cases, was obtained by such conferences, and was of aid in fully 
developing the tentative outline. Third, a preliminary draft of the 
study was written and submitted. Fourth, with a few minor changes, 
the study was submitted in its present form. The author is of the 
opinion that no further research is necessary for this subject. 
However, if further work is to be carried on, it is recommended the 
study of "The 3asic Code (Administrative Order No. X-61)" (Work 
MaterialsNNo. 33) be correlated with this study. 



9810 



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APPEKDIX II 



9810 



-95- 



Liay 31, 1933. 



POREtfORD 

In the preparation of this "CODE" liberal use has 
been made of materials and assistance from the Bureau of 
foreign & Domestic Commerce of the Department of Commerce. 

I also acknowledge the cooperation in the preparation 
of this pamphlet of John C. Gall, Associate Counsel, and 
Ho el Sargent, Economist, both of the Up.tional Association 
of Manufacturers. 



A. P. Haake 



9810 



-96- 



ii"** * ' •' - **— 

,. ft. .M..I.I »™™, .tit. 
•«« 1 I TM l»ll •> • rWt. 

(■VI -Til tit . Tr»M , 
* 3 • Vn* M«el«tioM I. the 0. f. 

» » i TttMlKiimwtir mu'i. 



THE NATIONAL INDUSTRIAL 



RECOVERY ACT" 




Tbrtk* aiacla aaalas, fr** . fraa tha 

| |aOaaa I Aaaoalatloa Qi aha-*faatar*r» , 

U ■. atad St., Ba* Tor* City, cr 
Oaioe Traat BUS., »i»Ucwi, DO 

•r-tpar**! br th* abora eonfadaratlon 

of orar 400 lndva trial aaaooiatlons 

in aooparatlon nth U» 

Burtau of Tornltn * Doaastlo C o- w e e*, 

U.S^partawat of Chmni. ffuh.p,C, 




TMa la brUi till Ha, I J I Ji 
btM or a*ar*a*tlat.T*a MU 



aaawtarivf aha 

aatllc aorfca pra- 



U tuntrin iwcnl 
Imh tax rata* »o 

44 aad U* I'm*.'!. 



1MB aarpatvat* 41 vi- 



natra' tax w> li*. 

4. Ontt-MtlM ol 






i .m 

1T-W 

*3r* 



j>t i 



T3K C»a«T**a: Ut t**.«Laa. 



tatraaajaad by Snt'^r B. T. Up-r «f BW To.*-. 
faBlla toarlBCft bpfor* Itttt Kara 4 kui Oaaalttaa 
Bypart af **••-* •aaaaltti- as aa tax-ratal** wwr. 

i*a*atatlaas; <m»n wit*, tha pal Uahrd 

fci ar U M . af *04 •)■** , "■.> 
•ahlla tearlnrn Wfart tat B.B.Saa**.* riaaao* 

Ooar.lt to*. 



Vban tha 4am ta 9a*a*lttaa* » l 
aa 1U baarl***-a 1b raaac, thara Bar tb-m 
W a ra-draftiaa; af tba Mil bafora It 
U finally r-ohatttad for vot* to both 
Boumb of tha Ohltatt Et»t*t. 0oa«T*sa. 

If paasod aj 0ta«ra«s, It will 
thm at nbmittvd ta to* Pr»»xdaot, 
afaaaa o*n theathta opan tha arlfliv-1 
Bill art fivao. la part. Valoa - - 
axtrac 1 1 from Us Mar l»th M*asa«Ta 
ta tha Coot-rait. 



1344 to 1MB. 
<B*M EJwa Bill #57M) 



tbi paaicoT or «b tanm tvr\s» 



(fart X la 
pa*** 1-11) 



Oar-half af 
Mil 

'at*-*-. ass 
fart 



MOBILIZATION OF INDUSTRY 
INTO TRADE ASSOCIATIONS 



By craatlrtc — fax 2 YEA**: 

almost unllirttM y*4*ral powtT, 
if am** aaarr, ^ lf aach a *»a* « *._of 
ladastrr 4aaa art **at*o.tarilT 4o to ) 
ta arias aboat cawtrollo.. p ro daa- 
ttat.. wa«a*. hoars of laaar , 

aa-aUtlea, ata. 



"v. 







(N>t 8 u 
>•*•. li-a) 



A HUGE#5.3OO.OOfltO0O 
PROGRAM OF 
PUBUC-WDRKS CONSTRUCTION 



By t-raatlna. 



af avrtiaTirnt 

to bo obtain**! fwn atle of 
f*>f a awaraa of pabl.a atnfca. 
olaaraa« of altr Una*, aahlla 



hU»»a«. wblle Valldl 
<R\ 8( A»tBTB* ntBBi 



b«. 4tralaa- 



* • • a (Teat oaaptratlv* aawaj j t M ut a t t 
•at all lo4.Hi. u oraar tat 



Cfetaia *das n -aajlofaaat; 



lo 

B. 

5 . Pay a aaaaat aaoa far laa) 

4. pravaat aafalr aoatpotlttoB, oral 

6. Dlaaatroaa oror-prodaatlc-t. 

•ptplarara aaaaat 4o tai. tlaflr. or araa 
la inaaaliiil croups, bt^aaao aaoh aottaa 1»- 
m u i i aest aad thas pamlta «at-taroat noil 
aollla* *j aclftih onapoUtora anaUllo* to 
Jala la aaoh pahlla-splrltod aaJamai. ... 

"Oao of ta* ajraat raatrlanarai oa snefa *o- 
oparatlr* ofrorta ap ta thla -Urn* baa baaa 
oar aatt-trut laaa. . . Thj pttalic lattrtst 
•411 ba a a r aai If, alth tha authority «** 
aa4«r tha gnUaaar of oownarat, prlrat* 
laarutrloa *r* ptsilltt** to aakc oajiiaoiili 
a*4 ooaoB laamrlac fair eo*-p* titloa. 
it la aaaasaajT, If at thru Halt tha • 
tloo of atl-tmi laaa to thalr ortf^aal 
a ar poao. to pronto a rlaoroas Ueta&iaa: paatr 
U oratr to aaat sart **=»% off i 



la ladl: 



H-34WBVrg 

oh 



■mewry tm 



■ . . to start a larga an^rm of dlnct 
aaploraa&t, k cartful rurv«p eoavtaaaa aa) 
that oppraataattly $ 3,300,003.000 oaa ba 
I ■'.*•! t*4 la mtafal aa4 aoaoasarjr pablla 
coastroetloB, aa4 at tha <.«*•* tla* pot tba 
lorratt pottlbta saabor of p*«pl* to aofk. 

"BrorlBloa (hoold b* aao* to panlt StatBB, 
eonatlOB, and BKa..dpalltlat to aaoaTtafea 
•aatfal pablle vorkt; cabjaet, hoaaror, ta tba 
aott •ffecllvt poatlbla aaaas of tllalaalLM 
favorltlaa and »ait»*Vl axpaodltoiaa aa oa- 
*arraatBd trA tm-oooaoale projoett... 

*At l*oii | 220,000,000 of aldlUaaal 
rrrtmat *111 ba taqolral to aarvlea (iattraat 

aad tloklog frakda) tba eaataaclatoa bor ro t- 
lara of tb* Ooraraaaat. 

**• aaat, by pro«pt and vlcoraaa aetlam, 
ortlTid* vaaaeoMalr obatmctloas ahld. ta tha 
paa* ha*a dalayad tb* atartlac of pnbllo aorha 
prosraas. 

"Thla can ba accoapllabad by alarala tad 
direct prcta*tra." 



Oaauta By 

0, , — 



I THB 9 SBCTIOBS 0? FAftT I) 

Baatlaa 1. *Bartaralloa of (Slier* 
* 3. "AamUUtratLra actaoias* 

•f fair O oaaaut 



9810 



Ba naaaatUa frea aatl-traat Laaa 

<*. "LLalUtUaa apan iopUoaUaa 

of Tltla* 

t. Btory OBaT hvtt CaotaU Ctr- 
taU Utor 4*i-klas OaadltUai 

4. 'hppllaatUa e" .l«Tlaal-aral 
aajaataaat hot". 



Tb* Tf. S. Caaai Baaat 


of Ccaataiui baa a 


flU aa oaah ef tba 


aatlaa'a 14.000 


trada-laabu trial 


aasaaUtlOos:- 



i.300 - national 
4,400 - Stata 
Eta. 



I the 9 afacfforfS o" FAaTin 



401. Tadaral ] 

latratioa of Pohlia 1 
BOB. "yraparatlaa of tha 1 
BOB. Tloanoi**. af tha Pr*>t«t** 
404. 'OoaatraaUotl Paada to tha 

Statos* 
BOB. -Thirtr-Bour Baak (ao far aa 
praauoal) aad iaaaaa a«f-> 
floiaat far 'a ataa4ar4 of 
Unas La aaataay aad 



•Phdat aad bacalatloaj'* 
laaoa of aaoarittaa aad 



BOB. **p*aapl«raaat aad BaUaf Tare* 
_ »04. -APproprlaHoa* 
SJl-t. "BUaaaUaaataia Baatloaa 



-97- 



TW «. 3 DiUfWil 


•f .-aMtm baa « 


nil *• Nd of uw 


NlUt'l 1ft ,000 


■r»4,a-.*«wairUi 


UaWCtaileaa - 



f.JOO - MtltUl 
1. 100 . jud 
KU. 



OUST H WHAT^ CAN ^A TRADE ASSOC I AT I ON^ 00 g 

AT ONCE TO PREPARE FOR THE BILL ? 



»•*•*♦ 



• • • • 



THE NATIONAL INDUSTRIAL 



RECOVERY ACT" 



The National Industrial 
Recovery 1111. introduced 
on May 17 and passed by toe 
Souse on '.be 2b. endeavora 
to provide for a balanced 
national econoi^ through 
" eolf-rorulatlon of industry 
under Oovorament Benetton" . 
Jhe. medium, la to be, largely, 
the trade association". 

It le estimated that eome 
$ 20.000,000 waa expended in 
19?9 by the orer 5,000 nation- 
al and atata commercial organ- 
isations In the "Jnited Statea. 

There are almoat 1,000 
trade aaeoclatlona of a strictly 
lnteratate manufacturing charac- 
ter. The Bill appllea directly 
to thaaa. Sone of then hare 
long carried on successful work 
of a complete etatiatlcel nature 
and hare been active in restrain- 
ing unfair competition within 
their induatrlea. 

Such asaociationa aa thee* 
ahould he able to quickly pre- 
pare the eort of baalc Codea 
which the Induatry Recovery Act 
proridea for. 

flth the trade aaaoclatlon 
machinery theae groups have, and 
being already aupplled with such 
of 'the atatlatical data needed, 
they can promptly obtain the in- 
duatry'a composite thought ae to 
auch Heme aat 

1. Maximum hpura of labor. 

2. Minimum wag.ee (by aajor 

types of labor; and 
number employed, 
normally and now;. etc.) 
3- Production etaiietlce 

(including oapaelty data 
plua factory and total 
coat of items in various 
price brackets). 

U. The moat glaring ' unfair 
competition* practicee 
within the Induatry. 

8ueh information ahould be 
quicklv obtained through the 
u»e of queetlonnalree, aa well 
aa regional and national con- 
ferences . 

The Administration to be aat 
up in Waahlcgton If the proposed 
Bill becooea a law, will be 
chiefly concerned with the above 
major polnta. If a trade aaao- 
clatlon la truly repreaentative 
of ita Induatry, or induatry eub- 
dlvlaion, the Secretary might 
well now arrange the following: 



TOOK DTTOSTRY'S TRADI ASSOCIATIOK 

(If the sole one, or the 
moet representative one, in 
its field.) 



ITS S3CKBIART 



Informs himself fully 
on the Bill. 

Plena to make hie organi- 
sation stronger and 
of utmost helpfulness 
to both members and 
non-members. (Never 
before has he had the 
golden opportunltlee 
for unlimited assist- 
ance to his Industry 
which the Wagner- 
Doughton Bill presents) 



Secretary and President 


arrange 


for an 


immediate 


meeting 


of the 




BOARS 


OF 


DI SECTORS 



full, frank discussion. 

Means decided upon to make 
the Association more re- 
presentative; to change 
membership qualifications 
if necessary; to revise 
the constltutlou.etc. 



Appointment at once 
of a 

•COM* COUQTTIX; and 

beet means decided upon 
to quickly find the true 
consensus of opinion, of 
both employers and employ- 
ees, ae to t 

the 4 major Items 
named on this Chart 
and soma or all of 
the other Items 
named in Article Til 
(■ Statistics ") In 
Dr. Haeke's MOIEL 
OOU, issued today by 
the National Assn. of 
Manufacturers, ( Send 
for free copy. ) 



Meeting of your Board of 
Directors. 

Explanation that the Consti- 
tution and By-laws must be 
revlaad, if necessary, to 
provide for the aet-up of 
a CODE OF fAIR COMPETITION , 
and some means for having 
cer trained representation 
(perhapa one or three per- 
aona) to act for the trade 
astociation in direct deal- 
ings with the Administra- 
tion at Washington. 

The Secretavy preaenta to the 
Board the beat possible 
summary of tho present 
atatua and future possi- 
bilities of the Wagner- 
Doughton Bill as it affects 
hie and allied lnduatrlaa. 

A Committee might then be 
arranged for and authorised 
to work upon the needed 
eode. The Secretary might 
well have ready a tentative 
outline of a Code. 

(Send for a copy of the 
helpful B.A.M. booklet 
lasued today! " A MOOT, 
COIffi TOR SHJ-OOVERMTO 
INDUSTRIES" . ) 

Queetlonnalree could then be 
prepared to aand to all 
membera of the industry, 
within and without tne 
association, in an endeavor 
to learn their'exact present 
views aa to the four major 
items above-mentioned. 

Tour aim will then be to eoa- 
pile as quickly aa poaslble 
a correct atatiatioal pic- 
ture of your Induatry aa to 
such data. 

All of thaaa constructive 
efforta and reaulta will 
bind your membera cloaer 
to the Association, bring 
in new members - - -• 
perhapa even have sons 
tens diets effect as to hours, 
wages, lessening deetructlve 
trade practicee. bringing 
the "recalcitrant minority" 
into line, etc. 

Why wait till the BUI pro- 
greaaaa further through Con- 
greea before endeavoring to 
have a correct, present- 
moment report prepared - - 
on at least the above few 
(U) llnea - -, ready fpr a 
probably-soon real need' f 



XB." nSwey 
C. Jhdkioe 



9810 



-9R- 



INTRODUCTION 



Under the National Industrial Recovery Bill, now before Con- 
gress "but not yet enacted into lav;, a great many groups of manu- 
facturing and distributing establishments will immediately want to 
set up "Codes" and the necessary enforcement machinery to comply 
with the provisions of the law. Many of these, realizing something 
of the magnitude and urgent need for prompt organization, are al- 
ready taking steps in that, direction. 

This is a preliminary outline. It is designed to aid industrial 
executives adapt trade associations to the immediate requirements under 
the National Industrial Recovery Act.* A subsequent outline will be 
issued to meet any essential changes which may be made in the bill. 
(Although this outline touches upon all major requirements of a "CODE 
OS FAIR COMPETITION, " the advice of legal counsel is urgently recom- 
mended properly to adapt the general suggestions herein given to the 
detailed requirements of each individual case.) 

It should be borne in mind that , while the immediate declared ob- 
jective is to increase employment and to raise purchasing power through 
increased and wider spread wages, as well as to encourage improved con- 
ditions of employment, the fundamental and real effect of the bill is 
not revealed in its emergency character. Its eventual consequences are 
designed by its authors to be a better-balanced national economy, built 
on the premise that the welfare of all the people is a necessary condi- 
tion to the welfare of the individual; in contrast to the theory of 
Laissez-Paire, which exalts the individual, rather than the group of 
which he is a part. 

A bloodless, but nevertheless far-reaching, revolution is de- 
throning the unrestricted individual and making the group our economic 
and social unit. Whether or not this is a permanent change, it must 
be recognized in the individual points of view with which the proposed 
new organization and direction of industry is approached. 

The first step for each individual firm is to recognize the neces- 
sity of becoming "group-minded" and accept some limitation of individual 
rights for the sake of promised enlarged practical advantage. 

* If any manufacturing group has no trade association, write to the 
N.A.M., Union Trust 31dg. , Washington, D. C. , for a booklet on this 
subject issued May 23, 1933. 



9610 



-99- 

The second step for the individual members of an industry is 
to make sure that their trade association, is qualified to function as 
en effective agency in the promotion of self-government. The alter- 
native is direct government supervision and control. 

An effective trade organization must nave the direct partici- 
pation of the major e :eo itives of an industry. The major problems 
of business call for the best brains, the leadership, and wholehearted 
"followership" in an i anus try. 

The association executive, commonly known as "Secretary , " faces 
a new and far more exacting responsibility than ever before. No trade 
association executive may safely rely on what have sometimes been con- 
sidered the conventional activities of a secretary. He must understand, 
coordinate, and direct activities in costs, fact-finding and fact-hand- 
ling, production, marketing, and administrative economics. He must help 
his industry, which is but part of a far greater whole, to fit itself 
properly into the -entire picture. 

The first step for the trade association (as distinct from the 
individual member of the industry) is the setting up of a "Code,' 1 as 
provided for under the Act. It may even be necessary to alter the or- 
ganization, its constitution and by-laws, to enable it to function 
properly under the Act. 

No one Code can fit all industries, but there are sufficient 
features in common to justify offering what may be termed a "Pre- 
liminary Model Code. " This will have to be adapted to meet parti- 
cular situations, as well as the rules, regulations and requirements 
whicn tnose charged with the administration of the Act may subsequently 
stipulate. 

The Code which follows is designed for an industry made up of a 
number of closely relatea divisions which compete with each other or 
otherwise come into such intimate contact with each other in common 
markets that a common Code and coordination is essential to them all. 

The Lumber Industry, whose proposed form of organization is 
shown in connection with this Code, is an example of such an inclu- 
sive industry. The. Furniture Industry provides another example, with 
its sub-groups — manufacturers of upholstery, case goods, tables, chairs, 
bedding, reed and fibre goods, etc. 

For such industries, the "Model Code" may be adopted practically 
as outlined. 

However, in some industries having no internal competition be- 
tween divisions of the trade, the "Model Code" can be modified by 
merging the Emergency National Committee and the Divisional Executive 
Committee into one board with consequent concentration of authorities 
and responsibilities. 



9810 



-1-00- 



Later development will undoubtedly require a merging of many 
associations in' related fields, and, as far as is practical, those 
mergings should be anticipated by an immediate organization of the 
industry as a whole, as has been done so effectively by the Lumber 
Industry. 

Details as to the actual calling of meetings, submittal of the 
Code to the industry, and other matters preliminary to the actual 
submittal of the code for approval by the President, are shown graphi- 
cally in Chart II, 



NOTES 

For the adaptation of this 
Code to your own Industry:* 

Arrangement of your Code 

You may find it advisable to group the provisions with respect 
to organization, duties, and powers in one section; and to combine all 
of the regulations which are to be enforced in a section by themselves, 
instead of separating the Industry Regulations and Division Regulations 
as has been done in this Code. 

Sources of Information 

We suggest you avail yourself of specific suggestions and other 
assistance provided by the following; 

3UREAU OF FOREIGN & DOLiESTIC COMMERCE 

U. S. Dept. of Commerce, Washington, D. C. 

NATIONAL ASSOCIATION OF i/iANUEACTURERS 
Union Trust Bldg. , Washington, D. C. ,or 
11 West 42nd Street, New York, N. Y. 

CHAMBER OF COMMERCE OE THE UNITED STATES 
1615 H. Street, N. W, , Washington, D. C. 

AMERICAN TRADE ASSOCIATION EXECUTIVES 

Room 1919, 666 Lake Shore Drive, Chicago, 111., or 

Hotel Statler, Detroit, Mich. , or 

Room 1800, 386 Fourth Ave., New Yovk City. 

♦WARNING: There may be attempts to exploit lack of knowledge on 
the part of industries or groups which have no trade 
association. Protect yourself by submitting proposals 
to any of the above sources. 

The spirit of this National -Recovery measure is utterly 
opposed to any semblance of "racketeering. 11 



9810 



-101- 



A Suggested Eorm of Outline 
for a 

"GODS 0? FA IE COMPETITION" 

(Adr.pted from the Code of the national 
Lumber Manufacturers Association) 

Article I. PURPOSE 

This Code is set up for the purpose of increasing employment, 
establishing fair and adequate wages, effecting necessary reduction 
of hours, improving standards of labor, and eliminating unfair trade 

Dractices (etc. ) , to the end of reha militating the 

industry and enabling it to do its o..rt toward establishing that bal- 
ance of industries which is necessary to the restoration and mainte- 
nance of the highest practical degree of public welfare. 

It is the declared purpose of the industry 

and adherents to this Code to bring, insofar as may be practicable, 

the rates of wages paid within the industry to 

such levels as are necessary for the creation and maintenance of the 
highest practicable standard of living; to restore the income of en- 
terprises within the industry to levels which will make possible the 
payment of such wages and avoid the further depletion and destruction 
of capital assets; and from time to time to revise the rates of wages 
in such manner as '.ill currently reflect the equitable adjustment to 
variations in the cost of living. 

Article II. PARTICIPATION 

Participation in this Code, and any subsequent revision of or 
addition to the Code, shall be extended to any person, partnership 

or corpora* ion in the industry who accepts his 

share of the cost and responsibility, as well as the benefit, of such 

participation by becoming a member of the 

association or any affiliated organization. No initiation or entrance 
fees shall be charged, but there shall be dues levied on the following 
basis: (Insert here what this basis should be). Subscription fees, or 
other assessments, if any, shall be levied on the same basis, provided 

not less than per cent of the membership approve the 

amount of such assessments. 

Article III. DIVISIONS 0E THE INDUSTRY 

A. Powers 

Eor the purpose of the administration of this code the 

industry or trade shall be divided into divisions as set 

forth below. Each division shall designate or establish its own ad- 
ministrative agency or agencies. Each such division shall be independ- 
ent and self-governing in respect of all conditions and problems relat- 
ing exclusively to the said division. Proposals in respect of matters 

9810 



-102- 



affecting more than one division may be initiated by any division, 
and shall be suomitted for consideration to the Emergency National 

Committee of the industry, hereinafter described, and its 

determination shall be binding upon said division and all other divi- 
sions affected thereby. 

3 . Names of Divisions 

Divisions are hereby established as follows: (insert here the 
name of each division of your industry). 

(NOTE: The following divisions were established by the 
Lumber Industry. Their names are printed here 
through the courtesy of Dr. Wilson Compton of 
the National Lumber Manufacturers Association. 



Cypress Division 
Hardwood Division 
Northern Hemlock Division 
Northern Pine Division 
Northeastern Pine Softwood 
Division 



Redwood Division 
Southern Pine Division 
¥est Coast Lumber Division 
Western Pine Division 



Other divisions of lumber, and of manufacturers or producers of 
lumber and timber products, may be established upon application of 
any such group, subject to the approval of the Emergency National Com- 
mittee hereinafter described; such divisions to have representation on 
the Emergency National Committee of the Lumber Industry. ) 

C. Executive Committee 

Each of the above divisions, and any others which may subse- 
quently be formed within the industry, shall set up an Ex- 
ecutive Committee for the purpose of administering the provisions 
of the Code, to secure . adherence thereto, to hear and adjust com- 
plaints, to consider proposals for amendments, thereof and exceptions 
thereto (and such other provisions as you may wish to include), and 
otherwise to carry out within the division the purposes of the National 
Industrial Recovery Act as set forth in this Code. 

If a division, as named above, does not ooncur in the submittal 
of this Code; or if, at any time thereafter, a division fails to per- 
form its obligations as provided hereunder,- the Emergency National 

Committee of the. industry, hereinafter described, is hereby 

empowered to adopt a Code for the division and may provide for the 
administration of that Code as if said Emergency National Committee 
were the Executive of the division concerned. 



9310 



-103- 

Artxcle IV. DIVISION HEGULA.TIOHS 

A. Labor Code 

Each of the above divisions, end any other which may subse- 
quently be formed, shall promptly undertake the formulation of a 
labor code. 

The labor code established by the said division shall, upon ap- 
proval of the Emergency National Committee of the industry, be 

binding upon all producers of products in such division. The labor 
code of each division shall contain the following provisions: 

(a) Employees in the.. industry shall have the right 

to organize and bargain collectively through representatives of their 
own choosing, and shall be free from the interference, restraint, or 
'coercion Of employers of labor, or their agents, in the designation of 
such representatives or in self-organizations or in other concerted ac- 
tivities for the purpose of collective bargaining or other mutual aid 
or protection.* 

(b) No employee in the industry, and no one seeking em- 
ployment therein, shall be required as a condition of employment to 
join any company union or to refrain from joining a labor organization 
of his own choosing.* 

(c) Employers of labor in the industry agree to comply with 

the maximum hours of labor, minimum rates of pay , and other working con- 
ditions approved or prescribed by the President.* 

And, in addition, 

(d) A classification of kinds of labor in the industry. 

(e) Maximum hours for each class of labor, and exceptions. 

(f) Minimum wage for each class of labor, and exceptions. 

(Which may take into consideration geographical 
location of plants and varying skill of employees, etc.) 

(g) Other provisions in regard to working conditions, etc. 

B. Production Codes 

Each of the above divisions, and any others which may subse- 
quently be formed, shall promptly undertake the formulation of a 
production code. This code shall operate within the limits of the 
production quota of the division as determined ay the Emergency 
National Committee, and on such equitable basis, and for such period, 

* See Section 7 of the Act. The above lao - is mandatory under the 
bill as passed by the House. 



9310 



-104- 



as it shall determine, and shall allot a maximum* production to each 

producer of (product) in operation, 

or which proposes to operate, within the said division. 

Production of U??9W9^ I in e:;cess of his 

approved allotment,* during any period "by any producer of . . (P?9W?t , i . . . 
after having received from said established division a production al- 
lotment on the "basis approved by the Emergency National Committee, is 
an unfair method of competition. (Bote: The determination of produc- 
tion allotments Is exceedingly important; these may he based on produc- 
tion capacity, or on sales, on a combination of both or in other ways.) 

C. Cost Codes 

Each of the above divisions, and any Others which may subsequently 
be formed, shall proceed at once to provide for standard methods of cost- 
ing which shall be used by all manufacturers within that division for the 
purposes of this section of the code. 

It shall be an unfair method of competition for any such manufac- 
turer to sell belcw reasonable cost. What is statistically known as 
the "mode",** may be used as a reasonable cost, but must be so approved. 
(Note: It might instead be provided that no producer shall sell below 
his own cost production.) 

Dropped lines or surplus stocksj, sometimes designated as "close- 
outs," or inventories which must be converted into cash to meet im- 
mediate needs, may be sold at such prices as are necessary to move 
the merchandise into buyers' hands. However, all such stocks must 
first be .reported to the Executive Committee of the division, and be 
disposed of subject to the approval of that committee. 



* If the establishment of an arbitrary maximum is not practicable, the 
industry may succeed in setting a "norm" of production for each divi- 
sion and unit thereof, departure from the "norm" being penalized so 
as to discourage circumventing tactics without discouraging individual 
initiative. .Thus , it might be provided that an assessment of 2$ be 
levied on the first 25$ over the norm, o'l on the r?ext 25$ and 10$ on 
all over; receipts to go into a corumon fund for the benefit of the 
industry. 

**The "mode"* is that figure in an array of figures, according to their 
relative importance, which occurs with the greatest frequency. The 
"average" of the figures, of the "median" (Middle item) might be used. 



9810 



-101- • .. 

Article V. EMERGENCY NATIONAL COMMITTEE 

: A. Representation 

There shall be an Eaergeiiey National Committee of the 

industry to consist of a representative, or representatives, of each 
division, selected by the said division, representatives of the indus- 
try at large to be selected by divisional members, and representatives 
of other groups which v..-iy be entitled to representation, for the pres- 
ent na led as follows: (Here insert names of divisions and 

groups, and number of representative's.)' 

B. Powers 

This Emergency National. Committee shell be the general planning 
and coordinating agency for the industry. Its members selected by es- 
tablished divisions shall be empowered by the said divisions to act for 
them conclusively in respect to all matters before the committee for con- 
sideration and within i';s jurisdiction. - The committee shall have powers 
and duties as provided uerein, and in addition thereto it shall 

(a) from time to tine require such reports from divisions as in 
its judgment may be necessary to advise it adeojuately of the adminis- 
tration and enforcement of the provisions of this Code; 

(b) upon complaint of interested parties, or upon its own initia- 
tive, make such inquiry and invest igat ion into the operation of the 
Code as may be necessary; and 

(c) make rules and regulations necessary for the administration 
and enforcement of this code. The Committee may delegate any of its 
authority to the National Control Committee hereinafter provided, and 
may designate such agents as it shall determine. 

The Emergency national Committee of the industry in 

cooperation with, and subject to, the approval of the properly designated 
representative of the president under the Nation?! Industrial Recovery 
Act, shall determine, and from time to time revise, an estimate of 

expected. ....... .\ .? 1 .'9rV9t i consumption; and based thereon, 

it shall establish, and from time to time revise, an equitable production 
quota of the industry and for each division thereof. 

Article VI. INDUSTRY REGULATIONS 

(The same for all Divisions,' as distinct from Division 
Regulations which may differ from Division to division.) 

A. Marketing Codes 

The Emergency National Committee may establish a Marketing Code 
with provisions with respect to; 



S81G 



-106- 



(a) group selling; 

Cb) classification of outlets or purchasers and recognition of 
standard and economically justifiable price differentials among them; 

(c) division of consuming territory into market areas, providing 
for plants best equipped to serve particular markets, to concentrate 
sales efforts in such districts; 

(d) adoption of uniform grading of products; 

(e) simplification and standardization of products; 

(f) cooperative advertising for the industry; 

(g) collection and interchange of credit information; 
(h) cooperative administration of insolvent debtors; 
(i) and/or otner aspects of marketing. 

B. Trade Practice Rules 

The Emergency National Committee shall hold a trade practice con- 
ference at its earliest convenience to establish rules of fair trade 
practice for the entire industry. (If satisfactory rules of fair trade 
practice already exist, this section can ratify or adapt such in lieu 
of holding a new conference. ) 

(NOTE; The following list indicates some of the practices which 
have been covered by rules in trade practice conferences: 



Price discrimination 
Commercial bribery 
Misrepresentation 
Rebates 
Terms of sale 
False invoicing 



Freight absorption 

Piracy of design 

Dumping 

Misbranding 

Free goods 

Interference with contracts) 



The Emergency National Committee may authorize any one division 
to adopt fair trade practice rules relating to the practices peculiar 
to that division. 

Article ¥11 STATISTICS*. 

■ In order to provide data necessary for the .administration, .of. . . , 

the National Industrial Recovery Act, the members of the..., 

Industry shall furnish, and the Emergency National Committee, .shall 
gather, statistical information from all the members of the industry. 



* NOTE: Such data may well include;" ^ay~capacity; (b) production, orders, 
and shipments during the month; (c) unfilled orders and inventories 
(raw and -finished) on hand at the end of the month; (d) number of per- 
sons employed, wage rates, earnings, and hours worked; (e) accounts 
receivable at the end of month; (f) price, costs; (g) and other items 
at the option of the industry, In many industries, producers may pre- 
fer to give such data to an independent accountant or expert employed 
by the committee or association. The firm. of Ernst and Ernst will act 
as general advisers to the National Association of Manufacturers in 
proposing cost systems, methods of compiling and using statistical 
data, etc, 

9810 



-108- 

to effectuate within the industry or within any Division 

thereof the purpose of the National Industrial Recovery Act as administered. 

4. Amendment to this Code may he proposed hy any Established Divi- 
sion to the Emergency National Committee or may he initiated hy it, and 
when approved hy the President shall he effective. 

5. Violation hy any producer of industry prod- 
ucts of any provisions of this Code, or of any approved rule issued there- 
under, is an unfair method of competition, 

5. In order to avoid undue delay in making effective throughout 

the industry this Code of Pair Competition, the following 

provisions are adopted, and other provisions of the Code in conflict 
therewith, are suspended until such time as the Emergency National Com- 
mittee shall determine that the purposes of the Article have heen accom- 
plished: 

a. Each Established Division shall submit as promptly as possible 

to the Emergency National Committee, a complete Division code 
in conformity with the general provisions of this Code. Such 
Divisional Code, if found substantially to promote the pur- 
poses of the National Code, shall be accepted provisionally 
by the Emergency National Committee end its immediate en- 
forcement authorized. The Emergency National Committee shall 
thereupon proceed as rapidly as practicable to make such ad- 
justments of and coordination between the provisions in re- 
spect of hours, wages, production and costs* of several di- 
visional codes as may be necessary to bring them into conform^-, 
ity with the provisions of the National Code by: 

1. Consultation and negotiation between the 

Divisions affected. 

2. By its own findings after full consideration 

of all factors involved. 

b. If any Division fails to submit within a reasonable time code 

provisions as provided in sub-section (a) of this Article, 
and if in the judgment of the Emergency National Committee 
such failure is unduly delaying the effective operation of 
this Code, the said Committee is authorized to act as a 
Divisional agency for said Division and to submit on its 
hehalf the necessary code provisions which upon approval by 
the President shall be effective until the said Division 
shall have submitted satisfactory code provisions. 

7. This Code shall be in effect beginning ten days after its 
approval by the President. 

IT02E: In place of costs you may find it preferable and possible to 
deal with minimum prices. In ay judgment it is preferable to deal 
with costs. (A.P.H.) 



9810 



-107- 

Article VIII. NATIONAL CONTROL COMMITTEE 

The Emergency National Committee of the industry 

shall appoint from its own membership a National Control Committee 

of members. (One i-combar will often be enough, unless there are 

minority interests to' be- represented, in which event there might be two. 
The number should not excess tnree). Tnc National Control Committee shall 
shall exercise sr.ch authority as may have been delegated to it by the 
said. Emergency National Committee. 

AH communications and conferences of the industry 

with the president or with his agents concerning the approval or amend- 
ment of this Code or of any of its provisions, or any. matters relating 
thereto, shall be through the Said National Control Committee. ' The 
National Control Committee shall serve as an executive agency for the 

Emergency Nations I Co:r.;rm ttee of the. industry, and shall be 

charge with the enforce i-/nt of the ^revisions of this Code and with the 
duties, through agents cr otherwise-, of hearing and adjusting complaints, 
considering propolis for amendments and making recommendations thereon, 
approving recommf 'atio^is for exceptions to the provisions' of this Code, 
and otherwise a istering its provisions. Any division or any adher- 
ent to the ore . ./ ens of this Code or subject to its terms shall have 
the right of appeal to the Emergency National Committee from decisions 
of the National Control Committee and the deci^ on of the said Emergency 
National Committee on said appeal shall be final. 

'i'he function of this Committee shall be the general planning 

and coordinating for the indastry, and the coopera.. 

tion with similar bos.ro 3 of other industries to the end of effecting 
a balanced national economy. 

Article IX. GENERAL 

1. No provision in this Code shall be interpreted or applied 
in such a manner as to: 

a. Promote monopolies, 

b. permit or encoxirage unfair competition, 

c. Elimina.te or copress small enterprise, or 

d. Discriminate against small enterprises. 

2. This Code or any of its provisions may be cancelled or modi- 
fied and any approved rule issued thereunder shall be ineffective to 
the extent necessary to conform to any action by the President under 
section 9 (b) of the National Industrial Recovery Act. 

3. The Emergency National Committee of the industry and the 

National Control Committee shall from time to time make to each Division 
established or to be establisned under tli: provisions of this Code, such 
recommendations, including amendments of the Code, as in their judgment 
will add the effective administration of this Code or may be necessary 



9810 



-109- 



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9810 



-110- 

EXHIBIT 2 

BASIC CODE FOR SUBSTITUTIONS BEFORE 
THE POLICY BOARD IV P. R. A. FOP. SECTIONS 

TO 

INCLUSIVE 



DEFINITION: 

The term trade /industry 

as used herein includes "out is not limited to 



S EC T I OIT I . LABOR PROV I S I OPS : 

A. Employees shall have the right to organize and "bargain collect- 
ively through representatives of their own choosing, and shall 
he free from interference, restraint, or coercion of employers 
of labor, or their agents, in the designation of such represen- 
tatives or in self-organization or in any other concerted ac- 
tivities for the purpose of collective bargaining or other 
mutual aid or protection; 

3. No employee and no one seeking employment shall he required 
as a condition of employment to join any company union or to 
refrain from joining, organizing or assisting a labor organi- 
zation of his own choosing; and 

C. Employers shall comply with the maximum hours of labor, mini- 
mum rates of pay, and other conditions of employment, approved 
or prescribed by the President. 

SECTION II. CHILD LABOR: 

After August 31, 1933, no person under IS years of age shall 
be employed; PROVIDED , however, that where a state law specifies 
a higher minimum age, no person below the age so specified ~oy 
such law, shall be employed within that state. 

SECTION III. LIAXIMUM EOURS: 

A. Employees not covered by Section III 3 (except outside sales- 
men) may not be employed in any place or manner for more than 

hours in any one week, averaged over a 

months' period, but may be employed a maximum week of 



hours for any weeks, within any months' 

period; provided, however, that such employees may not be 
employed more than eight hours in any one day. The hours of 
any store or service operation shall not be reduced to below 

hours in any one week, unless such hours were 

less than hours per week before July 1, 1933, and in 

the latter case, such hours shall not be reduced at all. 



>31C 



-111- 

B. No factory or mechanical worker or artisan shall be employed 

more than a maximum week of hours , averaged 

over a months' period, hut may he employed a 

maximum week of hours for any 

weeks within such months' period; provided, however, that 

such employees shall net he employed more than 

hours in any one day. 

C. The maximum hours fixed in the foregoing paragraphs III A 
and III 3 shall not apply to employees in establishments em- 
ploying not more than two persons in towns of less than 2500 
population, which towns pre not a part of a larger trade area; 
nor to registered pharmacists or other professional persons 
employed in their nrof essions ; nor to employees in a managerial 
or executive caoacity, who receive more than $35.00 per week; 
nor to employees on emergency maintenance and repair work; 

nor to very special cases where restrictions of hours of 
highly skilled workers on continuous processes would un- 
avoidably reduce production (state classes and work). 3ut 
in any such special case, a.t least time and one-third shall 
be paid for hours worked in excess of the maximum hours per 
day hereinbefore -orovided; not to 



The population for the purposes of this Code shall be 
determined oy reference to the 1950 Federal Census. 

SSCTIOIT IV. iHHIMDls iVAG-ZS: 

A. Employees in the classes covered by paragraph III A sho.ll be 

paid not less than dollars per week 

in any city of over 500,000 population or in the immediate 

trade area of such a city; nor less than 

dollars per week in any city of between 2,500 and 250,000 
population, or in the immediate tra.de area of such city; and 
in towns of less than 2,500 population, wages shall be in- 
creased by not less than percent, provided that 

this shall not require wages to be paid in excess of 
per Y/eek. 

3. Iknloyees of the classes mentioned in 'oaragraph III 3 shall 

be paid not less than cents per hour. It is 

agreed that this paragraph establishes a guaranteed minimum 
rate of ~oay, regardless of whether the employee is compensa.ted 
on the basis of a time rate or on piece work performance. 

C. (List here exceptions to ant 1 exemptions from the above 

figure, if any.) 



3 " "_ : 



-113ft- 

SECTI01T V. PRESIDENTIAL MODIEICATIOIT: 

The President may, from time to tine, cancel or modify any 
order, approval, license, ruling or regulation issued under 
this title. 



9310 



-113- 

E^IBIT 3 

( ROUGH DRAFT 4g OF kOD EL C OPE) 

CODE OF FAIR COMPETITION AND TRADE PRA CTICE 

F^R TH E INDUSTRY 

-oOo- 

To effectuate the t^licy of Title I of the National Industrial Re- 
covery Act, the following provisions are submitted as a code of fair com- 
petition for the Trade/ Indus try, and 

upon acceptance by the Fresident, shall be the standard of fair competition 
for this industry. 

DEFINITIONS. 

The term Trade/industry as used herein includes, 

but is not limited to, the (building, fabricating, manufacturing, as- 
sembling, re-pairing;, reconstructing, remod el ing, sell in g and/or distributing 
at wnolesale ^r retail, etc.) of (-product -r merchandise") and (sub- 
product or merchandise^ and (their component and/or repair -p arts) and 
(accessories ; , and other related branches as may from time to time be in- 
cluded under the -provisions of this code. 

The term unit as used herein includes but is not limited to factories, 
mills, shoos, -plants, stores, offices, departments or establishments. 

The tern enroloyee(s N as used herein means all person(s) employed in the 
conduct of any -phase of the industry. 

The term employer(s) as used herein means all those by whom such 
employees are employed. 

The effective date as used herein m°ans the i day after 

this code shall hav° been approved by the President of the United States. 

Population for the p .rposes of this code shall be determined by reference 
to the 1930 Federal Census. 

I. GENERAL REGULATIONS. 



A. Employees shall ha^e the right to organize and bargain collectively 
through representatives ^f their iwn choosing, and shall be free from in- 
terference, restraint, or coercion of employers of labor, or their agents, 
in the d;signation of such representatives or in self-organization or in other 
concerted activities for the purpose of collective bargaining or other mutual 
aid or protection. 

3. No employee and no one seeking employment shall be required as a 
•ondition of employment to join any company union or to refrain from joining, 
organizing, or assisting a labor organization of his own choosing; and 

9810 



-114- 

C. Enrol overs shall company wi f h the maximum h"urs ^f labor, minimum 
rates of pay, and other conditions of employment approved or -prescribed by 
the President. 

II. CHILD LABOR. 



After , 1933, no person under 16 years of age shall 

be employed; PROVIDED, however, t.iat where a State law specifies a higher 
minimum age, no person below the a^e so specified by such law shall be 
employed within that State. 

III. PENAL LABOR. 



To penal labor shall be us =d in the trade /industry governed by this 
code. 

IV. HOURS. 



A. Employees not covered by Section IV~B (Except outside salesmen) 

may not be employed in any place or manner for more than nours in 

any one week, (averaged' over a ' months' period,) but may be 

employed a maximum week of Lours for any weeks, 

within any such months' period; ' PROVIDED, however, that such 

employees may not be employed mor 3 than eight hours in any one day. The 
hours of any store or service operation shall not be reduced to below 



hours in any one week, unless such hours were less than hours per 

week before July 1, 193?, and, in the latter case, such hours shall not be 
reduced at all. 

B. No laborer, factory employee, mechanical worker, or artisan shall 

be employed more than a maximum week of hours, averaged over a 

months' period, but may be employed a maximum week of 



hours for any w eeks within such months' period; 

PROVIDED, however, that such worker may not be employed .more than 

hours in an-' ^ne day. 

C. The maximum hours fixed in the foregoing paragraphs Vl-a and IV-B 
shall not apply to employees on emer.^encv maintenance and repair work, but 
in any such special esse, at le^st time and one- third shal 1 be paid for hours 
work-d in excess of the maximum hours per day hereinbefore provided; nor 
to 



D. Fnere a State law specifies a lo" T er maximum number of hours that may 
be worked, no employee may be worked above the maximum so specified by such 
State law within that State. ., 

E. The provisions for maximum hour^ set out in Section IV establish a 
maximum number of hours of labor per week for every employee covered, so that 
under no circumstances will such an employee be employed or permitted to work 
for one or more employers in the industry in the aggregate in excess of the 
prescribed number. of hours in a single week. 



9810 



-115- 

V. WAGES. 

A. Employees in the classes covered by oaragratsh IV-A shall be raid 

not less than dol'ars per week in any ci + y of over 

500,000 population, or in the immediate trade area of such city;- nor le?s 

than dollars per week in any city of between 250,000 and 

500,000 population, or in the immediate trade area of such city; nor less 

than dollars per week in any city of between 2,-500 and 

250,000 population, or in the immediate trade area of such city; and in towns 
of less than 2,500 population, wages shall be increased by not less than 
percent, -provided that this shall not require wages to be paid 

in excess of dollars tier week. 

B. Employees of the classes mentioned in -paragraph IV-B shall be -paid 
not less than cents r>er hour (in ^he North, and. not" less" than 

cents tier hour in the South. The South shall consist of 

It is agreed that this paragraph establishes a guranteed minimum rate of pay, 
regardless of whether the employee is compensated on the basis of a tine rat<? 
or on a piece-work performanoe, 

C. Where a State law specified a higher minimum waee , no employee may 
be p id less than the minimum so specified by such State law within that 
State. 

D. The amount o T ' differences existing prior to 19 _ f between the 
wage rates -paid various clfsses of employees receivin* more than the 
established minimum wage rate shall not be decreased. In no event shall any 
employe: pay an employee a wage rate which will yield a less wa^e for a work 

week of __^ hours than sue employee was receiving for the same 

class nf work for a hour week prior to , 193 _. 

E. (List here exceptions to, and exemptions ^rom the above wage 
scale, if any.) 

Vl/a. POLICY QIIE STICKS 

A. Policy questions on which there is no ruling at present, but which 
must be decided one way or the other in the near future - for example; 
arbitration and adjustment of existing private and public contracts. 

B. The problem of labor which is under a long term contract to the 
employer. 

C. Etc.) 

VI. TRAji PRACTICES . (Awaiting report from Federal Trade Commission.) 

A. First will be listed generally accepted provisions laid down by the 
Federal Trade Commission and about which there can be no reasonable difference 
of opinion. 



3810 



-116- 

B. Second will "be listed the special trade practices peculiar to 
the particular industry, including (if the -oolicy is so declared limi'tations 
un plant, production, or -orice.) 

VII. INDUSTRIAL SEL F- GOVERNMENT AGENCY . 

A. (l) The Constitution, and "by-laws of the 



Association having been amended in all respects and to the 

extent necessary to make them conform to the National Industrial Recovery 
Act and to the provisions of this code and the rales provided thereunder, 
the Association is hereby designated to co- 
operate with the Administrator as a Planning and Fair Practice Committee 
until such a committee is created by the Industry. Three persons may be 
appointed by the President to sit on such Committee, and shall- in every 
respect be members 'thereof , except that they shall not have the right to- 
vote, - • 

(2) To further effectuate the policies of the Act, the 



_Association, or such successor committee as may 



hereafter be constituted, may present to the Administrator recommendations 
based on conditions in the trade/industry as they may develop from time to 
time. Such Committee is also to cooperate with the Administrator in 
collecting such reports as may be required by him concerning the functioning 
and observance of any provision of this code, and to forward the same to the 
Administrator. 

VIII. INDUSTRIAL RELATIONS . 

A. There shall 'be constituted by appointment of the Administrator a 
_National Industrial Relations Board, to be composed of 



three members, one to be nominated by the Planning and 

Fair Practice Committee to represent the employer, one to be nominated, by 
the Labor Advisory Board of the National Recovery Administration to represent 
the employees, and a third to be selected by the Administrator. This 
National Board shall be provided by the National Recovery Administration 
with a per diem for actual days engaged in such work and with such secretarial 
and erpert technical assistance as it may require in the performance of its 
duties. 

B. The Administrator, upon the nomination of the 

National Industrial Relations Board, shall appoint in each State in which 

the _Trade/lndustry operates a State 

Industrial Relations Board, one of whom shall be selected from the employers 

°f the T rade /industry, one from the employees of the 

T rade/industry, and a third to represent the public. 

C. (l) Whenever in any unit of the industry a controversy shall 
arise between employer and employees as to any problem of working conditions, 
the employer and the employees may establish in such unit an Industrial 
Relations Committee chosen from the management and the employees of the 
unit, and on which the employer and employees shall have equal representation 
of not more than three representatives each. If such a committee is not 
otherwise established, the employer or the employees or both may apply to the 
State Industrial Relations Board for assistance in establishing in the unit 

9810 



-117- 

such an Industrial Relations Committee. The term of service of each Unit 
Committee shall be limited to the adjustment of the controversy or problem of 
working conditions, for the adjustment of which the Committee was created. 

(2) If the representatives of the employer and of the employees 
in such Unit Industrial Relations Committee are unable to arrive at an 
agreement and united action with respect to such differences of opinion, the 
representatives of the emnloyer or of the employees, or both, may appeal to 
the State Industrial Relations Board for cooperation and assistance in 
arriving at an agreement and united action. 

(3) It shall be the duty of the State Industrial Relations Board 
to endeavor to adjust the controversy. In cases where the State Board reaches 
agreement with respect to any controversy, such agreement shall be final, 

except that it shell be submitted to the . National 

Industrial Relations Board for review and approval under such regulations as 
the National Board may establish. 

P. (1) It shall be the duty of the State Industrial Relations Board, 
where their assistance is requested, as provided in sub-section 3, to co- 
operate with employers and employees in organizing industrial relations com- 
mittees in individual units an3L to cooperate with such 

committees in the development o? conference procedure and in the adjustment 
of differences of opinion with respect to the operation or introduction of 
any systems or other problems of working conditions. 

(2) In the event that the State Industrial Relations Board is 
unable to bring about agreement and united action of labor and management 
in a controversy submitted to it, such State Industrial Relations Board shall 
present the controversy to the National Industrial Relations Board for 
hearing and final adjustment. 

E. The National Industrial Relations Board shall hear and finally 
determine all such questions brought before it by the State Industrial 
Relations Boards and certify its decisions to the Administrator, and shall 
have authority to codify the experience of the Industrial Relations Committees 
of the various units and State Boards, with a view to establishing standards 
of q^netal practice with regard to systems and other problems of working 
conditions. 

IX. MODIFICATION OF TH2 CODE. 



Recommendations for modification of this code may be made to the 
Planning and Fair practice Commit tee by any croup 



representing industry, labor, or consumer. If the Committee approves of such 
recommendation it shall forward the same to the Administrator. If there is 
an unreasonaule refusal to act on the part of the Committee, and the recom- 
mendation be made by a substantially interested group, they may forward a 
copy of their recommendation and a statement of the Committee's refusal to act, 
directly to the Administrator, filing a copy of such communication with the 
members of the Committee appointed by the President. 

X. 



(Additional clauses, amendments, modifications, etc.) 
5310 



-118- 

XI. PETITION FOR EXEMPTION. 

During the period between the acceptance of the 

code "by the President and the effective date, hearings may be given by the 
Administrator or his designated representative to units of the industry which 
did not participate in establishing, or consent to, the code, but which 
directly affected thereby, and which claim that applications of the code in 
particular instances are unjust as to them, and which apply for an exception 
to, or exemption from, or modification of the code. 

XII. CHANGES AND ADDITIONS . 

Such of the provisions of this code as are not required to be included 
therein by the National Industrial Recovery Act, may, with the approval of the 
President, be modified or eliminated in any such manner as may be indicated 
by the needs of the public, by changes in circumstances, or by experience; 
and supplementary provisions of this code or additional codes may be sub- 
mitted from time to time for the approval of the President. All the pro- 
visions of this code, unless so modified or eliminated, shall remain in effect 
until the expiration date of Title I of the rational Industrial Recovery Act. 

XIII. PARTIAL INVALIDITY . 

If any provision of this code is declared invalid or unenforceable, the 
remaining provisions thereof shall nevertheless continue in full force and 
effect in the same manner as if they had been separately presented for ap- 
proval, and approved by the President. 

XIV. PRESIDENTI AL MODIFICATION^ 

The President may, from time to time, cancel or modify any order, 
approval, license, rule, or regulation issued under this title. 



(Date) 1933 



)810 



-119- 

EXHIBIT 4 

(HOUGH DhArT -4 Oi : LlODEL CODE) 
CODE Oj JAIH CO. ^jlTIIIOI! ANT ThADE FrJVCTICE 
^ OH THE IK3USTHY 



To effectuate the policy oi Title I oi the National Industrial 
Recovery Act, the following provisions are suomitted as a code of fair 

competition for the Trade/industry, and up or approval 

by the President, shall be the standard of fair competition for this 
industry. 

TEFTFITIOFS 

The term Trade/ Industry as used herein in- 
cludes, but is not limited to, the ( building, manufacturing;, re- 
pairing, sell in g and/or distribut ing at whole s ale or retail, etc. 
oi ( -product or merchandise d and branches or subdivisions thereof 
as may from time to time be included under the provisions of this 
code. 

The term unit as used herein includes but is not limited to 
iactories, mills, shoos, plants, stores, offices, departments or 
establishments. 

The term e anlovee as used herein means any person employed in 
any phase of the industry. 

The term employer as used herein means any employer of such 
employee. 

The effective date as used herein means the xirst -onday after 
this code shall have been approved by the President of the United 
States. 



Population for the purposes oi'this code shall be determined 
by reference to the 1930 lederal Census. 

I . C-EFEB.'_L HEC-UL AT I OF S 

A. Employees shall have the right to organize and bargain col- 
lectively through representatives of their o v, n choosing, and 
shall be free from interference, restraint, or coercion of 
employers of labor, or their agents, in the designation of 
such representatives or in self-organization or in other 
concerted activites for the purpose oi collective bargaining 
or other mutual aid or protection; 

9610 



-120- 



B« No employee and no one seeking eraplovraent shall oe recuired 
ps p condition 01 employment to join any company union or 
to refrpin from joining, organizing, or assisting a labor 
organization of his o--n choosing; pnd 

C. Employers shall comply -"ith the maximum hoars of labor, 
minimum rates of ppy, pnc other conditions of employment 
approved or prescribed by tne President. 

1 1 . CHI LP) LAPGn 

After , 1933, no person under 16- years of 

p^e shall be e .roloved in the Trade/ Industry; PROVIDED, 
however, that "-here a State la'" 7 specifies a higher minimum 
a°;e, in that respect the requirement of such lay shall 
govern within that St^te. 

III. PETAL LABOR 

Fo renal labor shall be usee in this Trace/industry 

IV. HOURS 

A. Employees not covered by Section : ; of Article IV may not be 

employed in any place or manner tor more than hours 

in any one "eek, nor be employed more than eiffht hoars in 
any one day. 

3. Ko laborer, iactory employee, mecnanic^l worker, or artisan 

shall be employed more tuan a maximum ^eek of hours, 

nor be employed -.ore than hours in any one dav. 

C. The maximum hoars i ijs.ee in the foregoing sections A and B of 
Article IV shall not apply to employees on emergency mainten- 
ance pnd repair <-ork, but in any such special case, at least 
time and one half shall oe paid for hours '--orked in excess 

of the ma xi main hoars per cay heieirauove provided. 

D. here a State la'" soeciiif s a lo^er maximum number of hours 
that may be "-orked, in that rerpect the retirements of such 
Stpte la'- shall govern. 

E. The provisions for maximum hours set out in Section IV establish 
a maximum number of nours of labor per ~'eek for each employee 

so that under no circumstances shall any employee be employed 
or permitted to vork for one or more employers in the industry 
in the a^yregate in excess of the prescrioed number of hours. 

V. AGES 



A. Employees in the clpsses covered by Section A of Article IV 

shall be paic not less tuan dollars 

per yeek. 



y&io 



-121- ' 



B. Employees of the classes mentioned in Section B of Article IV 

sh=ll be paid not less than cents per hour. It is 

agreed that this paragraph estaolishes a guaranteed minimum 
rate of pay, regardless 01 whether the employee is compensated 
on the basis of a time pate or on piece '."ork performance, 

C. ' here a State lav enforces higher minimum wage requirements 
as to pny cIpss of labor, no such employee may be paid less 
thar the minimum so specified by such State lav within that 
StPte. 

T. (The proponents of the code are expected to submit a plan for 
ecuitpble adjustment of those wages above the minimum). 

VI . IIJSUSTHIAL SBLF-COVErNmKNT AGENCY 

A. (1) The Association (the constitution and 

by-lp"-s of which conform in pll respects to the requirements 
of Title I of the National Industripl Recovery Act and of this 
code) is hereby oesignrtec to coonerpte '"ith the Administrator 
as p planring and fair practice agency until a permpnent 
committee for such purpose is crepted by the industry. 

(£) (insert mpcnirery i or erection oi such a permpnent 
Committee) . 

(3) Three oersons may be appointed by the President to sit on 
such Committee, and shell in everv respect be members thereof, 
except that the ir shall not have the right to vote. 

(4) To effectuate the policies oi the Act, the 



Association, or such successor committee 



ps may hereaiter be constituted, may present to the Ad dhis- 
trptor recommendations of his o«"n, or those of pny interested 
pprty or ?:roup, b^sec on conditions in the Trpde/ Industry as 
they ma"' develop from tune to time. Such Comaittee shall also 
cooperate ,r- ith the Administrator in collecting such reports 
as lav be reruired bv him in order to record the functioning 
or poservpnce of this code, and snpll lor^ard the same to the 
Administrator. Tne me.nbers snail furnish to the Committee 
such reports as may be rec uired by the Administrptor. 

VII. IIT'JSThlAL KELATIuNS 

A. There shall be constituted by appointment of the Ad liristrator 
a Fational Trace/Industry Industrial Re- 
lations *-<carc, to be co.;coscd of three members, one to be 

nominated bv the Trade /Indus try Planning 

and Pair Practice Committee to represent the employer, one to toe 
nominated .fey the Labor Advisory Board of the National Recovery 



9bl0 



-122- 



Administration to represent the employees, and a third to- be 
selected by the Administrator. This National Board shall be 
compensated, by the National Recovery Administration on a per 
diem basis for actual days en & aged in such' work and with such 
secretarial and expert technical assistance as it may recuire 
in the performance of i.ts duties. 



B. The Administrator, upon tae nomination of the 



National Industrial Relations Board, shall appoint in each 

State or greater geographical cistrict in vmhich'tht 

Trade/ Industry operates a St"te or District 



Trade/ Industry Industrial relations Board, one of whom shall 

be selected from the era-clovers of the 

Trade/industry, onefromthe employees of the 



Trade/ Industry, and a third to represent the puclic. 

C. (1^ ' henever in any unit of the incustry a controversy -shall 
=rise between employer and .employees as to any problem of 
working conditions, the emplover and the employees may establish 
in such unit an Industrial relations Committee chosen from 

' the management and the emplovees shall have ecual represen- 
tation of not more than three representatives each. If such 
a committee is not otaor'-ise established, the employer or the 
employees or both may apply to the State or district Indus- 
trial relations Board for assistance in establishing in the 
unit sach an Industrial relations Committee. The term of 
service of each Unit Committee shall be limited to the adjust- 
ment of the particular controversy or problem of working 
conditions, for the adjustment of which the Committee was created. 

(2) If the representatives of the employer and of the employees 
in such Unit Industrial Relations Com dttee are unable to 
bring aboat an adjustment v-ith respect to such controversy, 

the representatives of tine employer or of the employees, or 
both, may appeal to the Sta te/Bistrict Industrial Relations 
Board for cooperation and assistance in arriving at an 
ac justment. 

(3) It snail be the duty of the State/Pistrict Industrial 
■Relations Board to endeavor to aejust'the controversy. In 

cases where the State/District Board fails to bring about an 
adjustment of any controversy, such controversy shall be 

submitted to the Trade/ Industry National 

Industrial Relations Board for adjustment. 

D. It shall be' the duty of the State/District Industrial Re- 
lations Board., where their assistance is recuested, as pro- 
vided in subsection 3 of Section C, to cooperate with em- 
ployers and e rcloyees in organizing industrial relations 
committees in individual units and to cooperate with such 
committees in the development of conference procedures and 
in the adjustment of differences with respect to the oper- 
ation or introduction or any systems or other problems of 
working conditions. 



9810 



—123*- 



VIII. MODIFICATION OF THE CODE 

Recommendations for modification of this code may be made to the 

Planning and Pair Fractice Committee by any 

interested party or, group representing industry, labor, or consumer. 
If the Committee approves of such recommendation it shall forward 
the same to the Administrator. If there is an unreasonable 
refusal to act on the -part of the Committee, and the recommen- 
dation oe made by a substantially interested group, such party 
or syoup mav forward a ccpy of the recommendation and a statement 
of the Committee's refusal to act directly to the Administrator, 
filing a copy oi suoh communication vith the members of the 
Committee appointed uy the President. 

IX. CHANGES AND ADDITIONS 

Such of the provisions of this code as are not required to be in- 
cluded therein by the National Industrial Recovery Act, may, with 
the approval of the President, and shall at his request, be modi- 
fied in any manner indicated, by changes in circumstances, or by 
experience, or otherwise; and supplementary provisions of this 
code or additional codes may oe suomitted from time to time for 
the approval of the President. All the provisions of tlhis code, 
except as so modified, snail remain in effect until the expiration 
date oi Title I of the rational Industrial Recovery Act. 

X. PARTIAL INVALIDITY 

If any provision of this code is declared invalid or unenforceable, 
the remaining provisions thereof shall nevertheless continue in 
full force and effect in the same manner as if thev had been 
separatelv presented for approval, and approved by the President, 

XI. PRESIDENTIAL . .CSII-'ICATIC!" 

The right of the President, from time tO'Ume, to cancel or 
modify anv order, approval, license, rule, or regulation, 
issued under this title-, is recognised and accuiesced in. 



(Date) , 1933 



9&10 



-124- 

EXHIBIT 5. 

TYFES OF UNFAIR COMPETITION (Pgs. 69-74) 

(Annual Report - Federal Trade Commission - Fiscal Year 
• Ended June SO, 1934.) 

Practices C on demn e d in Orders t o C .^as e and Desist 

The following partial list 'shows unfair methods of competition con- 
demned by the- Commission from time to time in its orders to cease and desist 
issued under section 5 of the Federal Trade Commission Act. 

These do not include Clayton Act violations, which, under the juris- 
diction of the Commission, embrace, sxibjeet to the various provisions of- 
the statute, price discrimination (sec. 2, Clayton Act), typing and 
exclusive contracts or dealings, coi'poi-at-e stock acquisitions (sec. 7, 
Clayton Act), and interlocking directorates (sec. 8, Clayton Act). 

The list is as follows: 

The use of false or misleading advertising, calculated to mislead 
and deceive the purchasing public to tneir damage and to the injury of 
competitors. 

Misbranding of fabrics and other commodities respecting the materials 
or ingredients of which they are composed, their quality, purity, origin, 
or source, and selling them under such names and circumstances that the 
purchaser would be misled in these respects. 

Bribing buyers or other employees of customers and prospective cus- 
tomers, without the latter 1 s knowledge or consent, to secure or hold 
patronage. 

Procuring the business or trade secrets of competitors by espionage, 
or bribing the employees or by similar means. 

Inducing employees or competitors to violate their contracts and 
enticing away employees of competitors in such numbers or under such cir- 
cumstances as to hamper or embarrass the competitors in the conduct of 
their business. 

Making false and disparaging statements respecting competitors' 
products, their business, financial credit, etc. 

Wide-spread threats to the trade of suits for patent infringement 
arising from the sale of alleged infringing products of competitors, such 
threats not being made in good faith but for the purpose of intimidating 
the trade and hindering or stifling competition. 

Passing off goods or articles for well and favorably known products 

9810 



of competitors through appropriation or simulation of such competitors' 
trade names, labels, dress of goods, etc., with the capacity and tendency 
unfairly to divert trade from the competitors, and/or with the effect of 
so doing to their prejudice and injury and that of the public. 

Selling rebuilt, second-hand, renovated, or old products or articles 
made from used or second-hand materials as and for- new. 

Paying excessive prices for supplies for the purpose of buying up 
same and hampering or eliminating competition. 

Using concealed subsidiaries, ostensibly independent, to secure 
competitive business otherwise unavailable. 

Cooperative schemes and prices for compelling wholesalers and retail- 
ers to maintain resale prices fixed by the manufacturer for resale of his 
product. 

Using merchandising schemes based on a lot or chance. 

Combinations or agreements of competitors to enhance prices, main- 
tain prices, bring about substantial uniformity in prices or to divide 
territory or business, to cut off competitors' sources of supply, or to 
close T.arkets to competitors, or otherwise restrain or hinder free and 
fair competition. 

Various schemes to create the impression in the mind of the pros- 
pective customer that he or she is being offered an opportunity to make a 
purchase under unusually favorable conditions when such is not the case, 
with capacity and tendency to mislead and deceive many of the purchasing 
public into buying products involved in such erroneous belief, and/or 
with the effect so to do, to the injury and prejudice of the public and 
of competitors, such schemes including - 

(1) Sales plans in which the seller's usual price is falsely 
represented as a special reduced price made available on some pretext for 
a limited time or to a limited class only. 

(2) The use of the "free goods" or service device to create the 
false impression that something is actually being thrown in without 
charge, when, as a matter of fact, it is fully covered by the amount 
exacted in the transaction taken as a whole. 

(3) Use of misleading trade names calculated to create the im- 
pression that a dealer is a manufacturer selling directly to the consumer 
with resultant savings. 

(4) Use of pretended exaggerated retail prices in connection with 
or upon the containers of commodities intondod to-be sold as bargains at 
lower figures. 



9810 



"126- 



Subsidi zing public officials or employees through employing them 
or their relatives under; such.. circumst prices as to enlist their interest 
in situations in. which they, will he cslled/upon by virtue of their 
official position to act officially, making unauthorized changes in 
proposed municipal bond issues, corrupting public officials or employees 
and forging, 'their ■ -signatures , and u.Jng numerous other grossly fraudulent 
coercive and oppressive practices in dealing with small municipalities. 

Imitating or using standard containers customarily associated in 
the mind of the general purchasing public. with, standard weights or 
quantities cf product therein contained to -sell, to the public such com- 
modity in weights or quantities less than the aforementioned standards, 
with capacity and tendency to deceive, the purchasing public into believing 
that they are purchasing the quantities generally associated with the 
standard ..containers involved, and/or with the effect of so doing, and 
with tendency to divert trade from and otherwise injure the business of 
competitors who do not indulge in such practices and/or with the effect 
of so doing, to the injury of such competitors and to the prejudice of the 
public. 

Concealing business identity in connection with the marketing of 
one's product, or misrepresenting the seller's relation to others, e. g. , 
claiming falsely to be the agent or employee of some other concern or 
failing to disclose the termination of such a relationship in soliciting 
customers of such concern, etc. 

Misrepresenting in various ways the advantages to the prospective 
customer of dealing with the seller, with the capacity and tendency to 
mislead and deceive many among the consuming public into dealing with 
the person or concern so misrepresenting, in reliance upon such supposed 
advantages, and to induce their purchases thereby, and/or with the effect 
of so doing, to the injury and prejudice of the public and of competitors, 
such as - 

( 1) Seller's alleged advantages of location or size. 

(2) False claims of being the authorized distributor of some 
concern. 

(3) Alleged enforcement of the concern or product by the Govern- 
ment or by nationally known businesses. 

(4) False claim by a dealer in domestic products of being an 
importer, or by a dealer of being a- manufacturer , or by a manufacturer 
of some product of being also the manufacturer of the raw material 
entering into the product. 

(5) Being manufacturer's representative and outlet for surplus 
stock sold at a sacrifice, etc. 

(6) Representing that the seller is a wholesale dealer, grower, 
producer or manufacturer, when in fact such representation is false. 



9810 



-127- 

Usq by business concerns associated as trade organizations or 
otherwise of methods which result, or are calculated to result, in the 
observance of uniform prices or practices for the products dealt in by 
them, with consequent restraint or elimination of competition, such as 
use of various kinds of so-called standard cost systems, price lists 
or guides, exchange of trade information, etc. 

Obtaining business tnrough undertakings not carried out and through 
dishonest oppressive devices calculated to entrap and coerce the customer 
or prospective customer, with the result of deceiving the purchasing 
public and inducing purchases by many thereof, and of diverting and tend- 
ing to divert trade from competitors who do not engage in such false, 
misleading, and fraudulent representations, all to the prejudice and 
injury of the public and competitors, such practices including - 

(1) Securing by deceit prospective customer's signature to a con- 
tract and promissory note represented as simply an order on approval; 
obtaining agents to distribute the seller's products through promising 

to refund the money paid by them should, the product prove unsatisfactory, 
and through other undertakings not carried out. 

(2) Obtaining business by advertising a "free trial" offer pro- 
position, when, as a matter of fact, only a "money-back" opportunity is 
offered the prospective customer. 

Giving products misleading names so as to give them a value to the 
purchasing public or to a part thereof which they would not otherwise 
possess, with the capacity and tendency to mislead the public into pur- 
chasing the products concerned in the erroneous beliefs thereby induced, 
and with the tendency to divert and/or with the effect of diverting 
business from and otherwise injuring and prejudicing competitors who do 
not engage in such practices, all to the prejudice of the public and of 
competitors, such as - 

(1) Names implying falsely that the particular products so named 
were made for the Government or in accordance with its specifications 
and of corresponding quality, or are connected with it in some way, or 
in some way have been passed upon, inspected, underwritten, or endorsed 
by it ; or 

(2) That they are composed in whole or in part of ingredients or 
materials respectively, contained only to a limited extent or not at all; 
or 

(3) That they were made in or came from some locality famous for 
the quality of such products; or 

(4) That they were made by some well and favorably known process, 
when, as a matter of fact, they were only made in imitation of and by a 
substitute for such process; or 



"810 



"lpfi- 



•128- 



(5) That they have been inspected, passed, or approved, after 
meeting the tests of some official organization, charged with the duty 
of making such tests expertly, disinterestedly, or giving approval; or 

(6) That they were made under conditions or circumstances con- 
sidered of importance by a substantial part of the general purchasing 
public, etc. 

Selling below cost, with the intent and effect of hindering, 
stifling, and suppressing competition. 

Dealing unfairly and dishonestly with foreign purchasers and thereby 
discrediting American exporters generally, with the effect of bringing 
discredit and loss of business to all manufacturers and business concerns 
engaged in and/or seeking to engage in export trade, and with the capacity 
and tendency to so do, to the injury and prejudice of the public and of 
offending concerns' export trade competitors. 

Coercing and. enforcing uneconomic and monopolistic reciprocal 
dealing. 

Falsely representing that a moving picture is a pictorial record of 
an expedition in a foreign country and a depiction of travel therein show- 
ing true happenings, peoples, customs, and animal life. 

Entering into contracts in restraint of trade whereby foreign cor- 
porations agree not to export certain products into the United States, in 
consideration of a domestic company's refusal to export the same commodity 
or sell to anyone other than those who agree not to so export the same. 



9810 



—129— 

EXHIBIT 6 
September 1953 Confidential report 



of the "HRA-Commcrco" 
Committee on an 

AMERICAN BASIC-CODE 

OF EAIR-PRACTICES. 

S|c * * * * ******* * * * * * * * 



Unfair practice previsions in any code of fair competition for 
an industry will have little value unless they arc feasible for 
practical enforcement. To industry is completely isolated. It has 
some relationship with other industries either through a "vertical" 
association as one of the steps between production and consumption 
or through a "horizontal" arrrngeraent of industrial contact. 



The whole code structure is so directly balanced on the theory 
of "BUSIITESS G0V13KI1TG ITSELE" and prompt protection by enforce- 
ment that unless the means of enforcement arc clearly understood 
and easily demonstrated it will be -practically impossible to ob- 
tain any material degree of compliance. The uniformity of pro- 
vision and procedure in enforcement will eliminate that difficulty 
entirely. 



Having completed our survey we recom- 
mend that the philosophy of the 16 
■provisions on pa._.es 3 and 4, covering 
basic "cut-throat competition" evils, 
be universally adopted ; after de- 
sired refinements or regrouping by 
General Counsel Richberg and your 
ERA Legal Staff. This step would meet 
unanimous employee- enrol oyer aooroval 
throughout the United States; 



9SK 



Sept. 
1933 

1TPA LEGAL DIVISION 
Blackwell Smith, Esq, 



-130- 

Confidential memorandum 

on 
UNFAIR COMPETITION. 



Your last week's speech in Chicago "before 
the Trade Assn. Managers' annual conven- 
tion announced that 
"an unofficial NRA-Dept. of Commerce Com- 
mittee" was surveying the problem of 
FAIR PRACTICES, including the 14 years of 
trade association efforts in this field 
with Federal Trade Commission cooperation. 

The Employers' Reward : 

(The managers present, representing the 
nation's employers, stressed the immedi- 
ate need of Government help to control Un- 
fair Competition: 
"American employers' promised reward from 
EPA for the hours-wages "benefits re- 
cently given their employees.") 

Investment of Capital : 

EKA's "Hew Leal'' Program has recently 
"brought employment to some 3, 000 s 000 
American workers, of last winter's esti- 
mated total of 14,000,000 unemployed. 
The country has an aDuadar.ee of capital. 
(Our annual national income is normally 
\ that of the entire world!) Yet invest- 
ment in new labor-giving industries is 
unfortunately hesitant. 

Because of the complex overlappin g of 
industries, investors and employers can- 
not (without universal adoption of uni- 
form "basic Pair-Practices Pules) protect 
themselves against the "cut-throat minor- 
ity" of business firms. It is chiefly the 
practices of such firms that hampers busi- 
ness stabilization and national-economic- 
planning efforts to permanently reduce un- 
employment, 

necessity of White House aid: 

Your Committee believes, frankly, that 
ERA success in this field cannot be won 
without a Presidential Order blanketing 
these few basic fair-practice rules upon 
all industry and trade at the earliest 
possible date. Each business group could 
then concentrate on its "special to our 
industry" Pair-Practice problems; as ex- 
plained in attached two pages — and the 
15 page appendix. 



* 


THE 




* 
* 


16. 




* 


BASIC 


RULES 


* 






* 


* * * 


* * * 



1. Inaccurate advertising 

2. "Bait" advertising - 

3. Inaccurate labelling - 



4, Inaccurate references 

to competitors - 

5. Claims of "we undersell 



ti ~ 



everyone 



6. Selling below cost - 



7. 

8. 

9. 
10. 

• • 

11. 
12. 
13. 

14. 

• • 

15. 



Threats of lav; suits - 
Secret rebates - 
"Free goods' 1 - 
Selling on consignment 



• • • 



Bribing employees - 

False billing - 

Interference with 
another's contracts 

Repudi at i ng one ' s 
own contracts - 



"Tyiing" and block- 
booking contracts - 



16. "Black lists. 1 



ETC. 



• The jam of Hearings & clearances of ERA CODES 
30 are approved, but 1,000 others (many minor) 

9810 



will be vastly relieved 
remain in ERA. 



-131- 



Ccnfidential 



T o : E RA. LEGAL DIVISION 
From the iVslr Practices 
Committee 

Guernsey (Chr.) 

Heydon 

McFadden 

Judkins (Sec.) 



Sept., 1933 

(First 
draft) . 
Suggested basic rules for 
all industries; adapted 
from the 1919-1933 
Trade practices Con- 
ferences. 



I nac curate 
Advertising. 



"Bait" 
advertising . 



Inaccurate 
labelling. 



* * * * * * 

Inaccurate 
references 
to competi- 
tors, etc . 



The Sixtee n 
FAIR-FRAC TI CE FROVI SIOIIS 
For Inclusion i n Al l Codes. 

RULE 1 . Ho member of the industry shall use advertising 
(whether printed, radio, display or of anv other nature) 
which is inaccurate in any material particular or in any 
way misrepresents any commodity (including its use, 
trade-mark, grade, quality, quantity, origin, size, 
material content or preparation) or credit terms, values, 
policies or services. 

RULE 2. No member of the industry shall use advertising 
cr selling methods or credit terms which tends to de- 
ceive or mislead the customer or prospective customer. 

RULE 3 . No member of the industry shall brand or mark 
any commodity in any manner which tends to deceive or 
mislead purchasers with respect to the grade, quality, 
quantity, origin, size, material content or preparation 
of such commodity. 

* * * * it * * * * * * * * >;: :;::;:***** * ******* > 

RULE U . Ho member of the industry shall use advert isig 
or other representation which refers inaccurately in any 
material particular to any competitors or their com- 
modities, prices, values, credit terms, policies or 
services. 



"T7e under- RULE 5 . No member of the industry shall use advertising 
sell all or other representation which lays claim to or implies 
com-petitors " a policy or continuing practice of generally under- 
selling all competitors. 



Selling 

below 

cost 



Threats of 
law suits 



981C 



RULE 6 . No member of the industry shall sell any com- 
modity below cost or replacement value. COST shall in 
elude the cost of production in a manufacturing or pro- 
cessing industry; or the net i nvoice d eliver ed cost 
in a retail or wholesale industry. (However, any member 
may meet the price competition of anyone whose costs 
under this code provision are lover.) 

RULE 7 . No member of the industry shall publish or cir- 
cularize unjustified threats of legal proceedings which 
tend to or have the effect of harassing competitors 
or intimidating their customers. 



S ecre t 



"JJT 

Gooaa 1 ' 



Selling_qn 

Con s i nrmoiit 

******* 

Bribing 

employees 



-133- 

RTILE 8t No member of the industry shall secretly make 
any payment or allowance of a rebate, refund, commission, 
credit, unearned discount or excess allowance, whether 
in the form of money or otherwise, for the purpose of 
influencing a sale, nor shall a member secretly extend 
to any customer any special service or privilege not 
e::t ended to all custom ns of the same class. 

BUM 9. Uo member of che industry shall grant an ad- 
vertising allowance or r premium or any form of free 
goods except for a definite service rendered and in a 
form which is accountable. 

RULE 10, No member of the industry shall ship com- 
modities consignment, except under contract or bona fide 

orders. 

*^***** ********** ************* 

RJl'. E 11 . No 'member of the industry shall give, permit 
to be giving, Pr offer to give, anything of value for the 
purpose of influencing or yevording the action of any 
employee or agent of another in relation to the business 
of the employer of such' empi yec or the principal of such 
agent without the knowledge of such employer or princi- 
pal. 



False 
billing 



****** 3 

Interference 

with 

anoth er' s 
contracts. 



Repudiating 
one's own 
contracts. 



******* 
"Tying " & 



RULE 1.?. ho member of the industry shall secretly give 
anything of value to the employee or agent of a customer 
for the purpose of influencing a sale, or in furtherance 
of a sale render a bill or statement of account to such 
employee, agent or customer which is inaccurate in any 
mat erial par t i cular . 

*£ *****;,* ********************* 

RULE 13. No member of the industry shall induce or 
attempt, to irdr.ee the breach of an existing contract 
between a competitor and his employee or customer or 
source of supply; nor shall any such member interfere 
with or obstruct the p- rformance cf such contractual 
duties or services. 

RULE 14 . No member of the industry shall repudiate a 
contract entered into in good faith when the purpose of 
such repudiation is to create for such member an unfair 
price advantage. 

****** *****.;< ***************** 

RULE 15. I'o member of the industry shall require that the 



"block-booking " purchase or lease of any ccrmiodity be a prerequisite to 
contracts. the purchase or lease of any other commodity. 



"Black" 

(or white) 

lists. 
******* 



RULE 16. Ho member of the industry shall join with any 

other member or participate in any transaction known 

in law as a blacklist. 
***************************** 

THEN: any special-to-an 

industry, etc. Rules. 



9810 



1 ' 

— 1. — 



For }TRA Legal 



T7HAT IIIDUSTRIAL GROUPS WILL 3E 
HOST AFFECTED 3Y KRA. ? 



There were, in A-->ril 1930 (date of decennial Census): 

122,800,000 people i:: this count" y, with 
48,800 COO of then: \ • ' '■ 11,' occupied," 
or J'J-SyS " f the -)opul :;t- en. 

Employment is new at least 3 millions below that of 
3|- years ago. T he V'&k. h as < I ready, in 3 months, 
bro ught eaplo;Tne,: it to 3, 000,000, (September Am. Fed. 
of Labor estimates are: 11 millions & 2.3 millions). 

"Lormal" NATIONAL INCOME has, in current dollars, 

dropped from 80 to 50 billions in 1932. 

RETAIL^TRAPE from 50 to 50 " in 1932. 

WHOLESALE PRICES from 100 to 70$ of normal ( 1926), in August 

RETAIL PRICES from 100 to 75$ " " " " " 



BUSINESS ACTIVITY from ICO to 65$ " 

FACTORY PAYROLLS from 100 to 50$ " 

FACTORY ElIFLOYMEIT from 100 to 70$ " 

CONSTRUCTION ACTIVITY from~I00 to 30$ " 



It 


II 


II 


II 


II 


II 


II 


II 


II 


II 


II 


II 



>•. ■•:■ ' *$ ;. *-;:».*#:,.>'- * #*# #* =i!* *# *# ## ** * * # ##* 



* A » quick-picture" of the job NRA has * 

* before it is presented below: * 

* * -,; * * tf ;; -,'fi I:- 1*- $ * ^. Sit * * if • ■- * * if. ;,; ;.: :< ^ * * % ;,- * * V s ¥.,^:;**** * * * * 



Of all the 

48.8 

mill ion 

persons: 



The "SIX ISA" 
GROUPS of the 10 
Census Bureau 

grey:- s: 



Th ore were working, in 1930 : 
(10 yrs. or older in age) 

Including: 



(29$). 
(13$). 

( 8$). 
( 8$), 
( 2^). 



.MANUFACTURING (l) "employed 1 ! 14.1 million persons. . . 

(c; mechanical) 1,900,000 women 

DP, employed 6.1 million persons. . . 

(Oct. 1st may see" -he approval of 1,000,000 women 
the HPJL'a greatest:the 'M4.5TER RETAIL COft3'«) 

.C LERICAL employed 4.0 million persons. . . 

(not incl. store clerks) 2,000,000 women 

.T employed 3.8 million persons. . . 

300,000 women 

erroloyed l.C (practically no) 

million persons - (females employed) 

employed 0.3 (practically no) 

million persons - (females employed) 



(<3b communication) 
.MINERALS 



(| of 1$) FORESTRY 
(& fishing) 

(60$) of the nation's 

wa^e- earners, salaried 
persons & employers) 



29.3 Million persons 5.2 
millions million 



the 



48.8 



women 
& girls 



9810 



-134- 

The other 4 Census groups are 
c hi ef ly "not under USA."; they 
total 40$ of America's workers; 

(21',j) ... AC-3 1 CULTURE employed 10.5 million persons. . .900,000 women 

(10$) ... DOMESTIC SERVICE " 5.0 " " ...3,200,000 '« 
(& "oersonal sor.) 

(7'5) PROFESS IONAL SERVIC E " 3.3 " » ...1,500,000 » 

(incl. 161,000 lawyers) 

(2$) rUBLIC SERVICE " 0.9 » " 



(15.7) (5.6) 

Total of :43.8 ) of whom 10.8 million were 
millions) women or girls. 

(1) "MANUFACTUEIKG", the largest NRA 
employment group consisted of, 
roughly : 

86^o wage-earners 

13 ( .' salaried employers 
Vfa owners 

****** *:i;* ** * *;;. *****:;:**************** 

* TO WHOM IS THE NATION'S ANNUAL * 

* * 

* NATIONAL INCOME DISTRIBUTED? * 

Sfe****** *********** * ** ** ***** V ******* 

It is very unfortunate that there have been no official data in the 
past ten years, hut the U. S. Dept. of Commerce will, in December, 
issue a national survey (now "being completed by Dr. Thorp and his 
staff of the Bureau of Foreign & Domestic Commerce) on this most vital 
subject. Present estimates of "equitable distribution of wealth" and 
of "purchasing power" differ widely. 

The unofficial estimatsn of the Nat. 3urcau of Economic Research 
indicated, for 1927, of total national income: 

35,000,000 EMPLOYEES received 58$ (3 million were on salary) 

10,000,000 EMPLOYEES » 42$ (6 million of these were 

farmers; and roe'd the well- 
known very small pcr-capita 
income) . 



9810 



-135- 



Gro up "I" & "II" Rules 



List of usual subjects covered 

in the FEDERAL TRADE COMMISSION'S 

two classifications of the 

1919 - 19^3 Trade Practice Conferences ; 

C 1 early ill egal : 

being violations of Federal 

Trade Commission ACT, etc., GROUP "I" RULES 

********* '- ** ****** ** **************** 

Secret rebates. Fraud. 
Substitution of quality. False certification. 
Breach of contract. Misbranding. 
Repudiation of contract. False quantity. 
Commercial bribery. .... : ._ . . 

False defamation of competitors business integrity. 

False disparagement .of goods... 

Misrepresentation in written or spoken word. 

Deviation from established standards of the industry. 

Underbidding by offering inferior materials. 

Unjustly excluding a competitor from a market. 

Threats of Toatent, etc. , suits not made in good faith. 

Price discrimination under Sec. 2. of Clayton Act. 

Selling below cost to injure competitors or lessen competition. 

Etc. 



"Opinions Of The Trade"; being unfair 

or unsound gractices which, however, 

have not been declared unlawful by the 

Commission or Courts; GROUP "II" RULES 

****************************** 

Style - piracy. 
Ambiguous contracts. 

Guarantee against price decline or advance. 
Post-dating and prc-dating. 
Confining sales to F. 0.3. factory. 
Giving "dealer's discounts" to those not dealers. 
Selling without specification. 

Abuse of buying power to force unjust terms of purchase or a 
sale. 

.For perhaps the m*st frank 
recent studies of the 
commission, and its Trade 
Practice conference, see the 
1930 ANIIUAL REPORT OF THE 
For ISA Legal •. •. "ATAE" (American Trade Assn. 

Aug. 1933 Executives) & the Columbia Uni- 

versity Press survey( M suggested by 
9810 Prof.R.G.Tugwell"-now a leader of 

the Ag. Adj. Adm.): "THE FEDERAL 
TRADE COMMISSION", 320 pagcs-T.C.Blaisdell-1932. 



Frige in 


No. of 


H&oklet 


Rule 


unent 54 


8 


52 


3 


52 


2 


i 74 


15 


59 


9 


65 


12 



-136- 



INDEX TO LATEST REPORT OF FEDERAL TRADE COMMISSION 

Note: This brief summary (of 26 standardized Group I rules), which 
we have prepared because the booklet has no index, may be of 
value to your staff as a handy guide to the recently issued 
165 page report, "TRADE PRACTICE CONFERENCES", of the Federal 
Trade Commission. (it contains only revised rules of 96 of 
the over 150 industries which have held conferences.) 

The- first words of ficch 1931-33 
Our 6 classes Commission rule are: 

"INACCURACY" (7) 

The making or causing or permitting. . .advertisi 
The sale or preferring for sale of any product 
The false marking or branding of products 

The practice of shipping or delivering products 
Deviation from the established st.-„.*iurds 
Offering for sale merchandise at a price 
The use of the word "free" when not properly 

qualified 105 

"ATTACKING COMPETITORS" (5) 

The selling of goods below cost 

The defamation of competitors ) 

The false disparagement of the grade ) 125-2 

Securing information from. coraoetitors 
The circularization of threats o/f suit 

"PRICE DISCRIMINATION" (4) 

The secret payment or allowance 

It is an unfair practice. . .to discriminate 

The shipping of goods on Consignment 

The acceptance of orders for large quantities 

"COMMERCIAL BRIBERY" (3) • 

Directly or indirectly to give 

For any person'. ..to give anything 

Commercial bribery is immoral, against the 

public interest 153 

"BREACH OF CONTRACT" • (5) 

Maliciously inducing 

Maliciously enticing 

The wilful interference by any person 

The imitation of the trade-marks 

For any person. ..to aid or abet another 

"COERCION" (2) 

The practice of coercing the purchase 

To incite, aid or abet. . .anything unlawful 



9810 



52 


7 


55 


12 


54 


7 


59 


7 


66 


7 


52 


4 


52 


5 


74 


12 


133 


7 


53 


8 


130 


17 



52 


1 


52 


9 


2 


1 


54 


5 


144 


7 


54 


10 


156 


6 



•137- 



To Blackwell Smith, Associate Counsel. C01IFIDEITTIAL (3) 

What is a just appraisal of the 1919-33 efforts of the 

Federal Trade Commission in this field of Fair Practice? 

Many believe that a book published "in "August by the McGraw Hill 
Company, "Business Under the Recovery Act" (Chapter IV, "A Government 
Farce that Blazes the Trail"), gives a fair rnpraisil of the - commissi'ofi*s 
past work: 

"A governmental Ttrody has been attempting to do this for 
more than ten years (suppression of unfair competition)... 
almost precisely what the new HEA Act proposes to do... This 
is the Federal Trade Commission and the so-called Trade 
Practice Conferences... 

"The Commission's own legal fickleness added to the 
general legal uncertainty of the entire affair sufficed of 
themselves to make a hodge-podge of these Trade Practice 
Conferences. . .Decision to, sign and abide by the Code finally 
drafted was purely voluntary... 

"And Congress never did. ..(give that power to the 
Commission). . .not until it passed the National Industrial 
Recovery Act, which specifically designates the Federal Trade 
Commission as one of the enforcing agents. .. thus a study of 
the reasons for the failure of the trade practice con- 
ferences really throws a spot-light on the reasons for these... 
provisions of the Few Act. 

"But the (150 ) conferences. . .provide, ready-made, an 
interesting list of what industry, itself, has decided con- 
stitutes "unfair competition" .. .at each of these meetings, 
up to fifteen or more- practices were voted to be unfair 
methods of competition. . . 

"Such a list should be of utmost value . . .By reading 
the published reports of all the meetings, it is possible to 
obtain a list of unfair trade practices that will be an . ■ . 
excellent guide to business conduct in the future . . . as 
envisioned in the national Industrial Recovery r Act." 



9RI0 



-138- 

To: Blackwell Smith, Esq. 5 apt. 

IIHA Le^al D ivision. 



K - "Cut::.. :■;.. . -..oJs 

From: Judkins-G-uernsey 
Hayden-McFadden 

The Six Ma.jor 

FAIR-PRA CTI CE PROVISIONS 

For (Suggested) Inclusion in All Codes^ 

Nojtc: This preliminary report to you is the result of 
our careful studying over of the some 1,000 
rules adopted by industry itself in the 1919- 
1933 period, in cooperation with the Federal 
Trade Commission. 

I. IMC CURACY 

******** -:•*** *** 

Inaccurate Prov. 1. No member of the industry shall use advertising 
Advert ising. 

(whether printed, radio, display or of any other 
na.ture) 

which is inaccurate in any material particular or in any 
way misrepresents any commodity 

(including its use, trade-mark, grade, quality, 
quantity, origin, size, material content nr 
preparation) 

or credit terms, values, policies or services. 

"Bait" Prov. 2 . No member of the industry shall use advertising 
Advertising, or selling methods or credit terms which tends to de- 
ceive or mislead the customer «r prospective customer. 

Inaccurate Prov. 3. No member of the industry shall brand or mark 
Labelling. any product in any manner which tends to deceive or mis- 
lead purchasers with respect to the grade, quality, 
quantity, origin, size, material content or preparation . ■" v^" 

of such product. 

************ ** ***** *** * *** * * ******** ********** \ ********* ************** 



Remarks: 



Prohibition a & ainst "untruthful and mis- 
leading" advertising is included in practi- 
cally every set of trade-practice con- 
ference rules hold under the Federal Trade 
Commission during the past 14 years. 



-139- 

But it is hard to prove untruthfulness with 
its element of moral impulse or intent and 
its further element at tTUS/e 'is misleading, 
and to whom. It lias been suggested' fre- 
quently of late that the term "inaccurate" 
should be used, which provides the business- 
facts approach or measure instead of the 
moral approach. 

The worst abuses under INACCURACY include: 

misrepresentation of quality, use or nature 

of products 

offers of "easy credit" terms which arc not 

in fact extended, and 

deceitful branding or labelling of goods 

in imitation of established brands. 



TERMINOLOGY: 



It is assumed by the Committee that the legal powers of the 
ERA vastly exceed those of the Commission during the 14 year 
period we surveyed. That is one of the reasons our suggested 
terminology is so greatly simplified: another reason being the 
stand taken by the American Law Institute and its active 
sponsors of eminent jurists and lawyers that, in this practical 
business era, legal verbosity is no longer necessary in 'Law 
Merchant' acts. For example, although two of the Committee arc 
lawyers, wo believe that such a layman-simplif ication as given 
below will not weaken the provision against false advertising: 
(yet will cause NR&. to assume leadership in a lasting, needed 
business-law reform) 

Usual wording: 

"The making or causing or -permitting to be made 
or -published any false, unt rue or dece ptive state- 
ment by way of advertisemen t or othe r wise con- 
cernin the" (product of an industry) 

Our suggestion: 

"""o(mcmbcr) shall use advertising . . .which is 
inaccurate in any material -particular.... 

Wording used in FEDERAL TRADE 
COMMISSION reports, for: 

"INACCURACY" types of rules. 

***** 

"The making or causing or permitting to be made or published any 
false, untrue or deceptive statement by way of advertisement or other- 
wise concerning the grade, quality^ quantity, substance, character, nature, 
origin, size, or preparation of any product of the industry, having the 
tendency and capacity to mislead or deceive purchasers or prospective 
purchasers, is an unfair tra.de practice." 

9810 



-140- 

"The sale or offering for sale of any product of the industry by 
anv false means or device which has the tendency or capacity to mislead 
or deceive customers or prospective customers as to the quantity, 
quality, substance, or size of such product, is an unfair trade 
practice..!' 

"The false marking or branding of products of the industry with 
the effect of misleading or deceiving purchasers with respect to the 
quantity, quality, size, grade, or substance of the materials pur- 
chased, is an unfair trade practice." 

"The practice of shipping or delivering products which do not 
conform to the sample submitted or representations made prior to se- 
curing the orders, without the consent of the purchasers to such sub- 
stitutions, and with the effect of deceiving or misleading purchasers, 
is an unfair trade practice." 

"Deviation from the established standards of the industry by any 
deceptive or false means or device with the effect of misleading or 
deceiving purchasers or prospective purchasers is an unfair trade 
practice. " 

"Offering for sale merchandise at a •price reduced from a marked 
up or fictitious price with the tendency and capacity to mislead or 
deceive purchasers or prospective purchasers is an unfair trade 
practice. " 

"Use of the word "free" where not properly or fairly qualified 
when the article is in fact not free, with r„ tendency and capacity to 
mislead or deceive purchasers or prospective purchasers, is an unfair 
trade practice." 

" False and misleading advertisin g in this industry, regarding the 
nature of sales outlet, and the making of untruthful claims, intending 
to deceive purchaser or user, as to the quality of said articles, its 
source and method of preparation, is an unfair method of competition." 

"To sell products which are not plainly and accurately described 
or branded , and in full compliance with legal and trade definitions 
and requirements, is m unfair method of competition." 

" Advertising by use of the printed word, or pictorial represen- 
tation, or by radio, or otherwise, for the purpose or with the effect 
of misleading or deceiving purchasers with respect to the quantity, 
quality, grade or substance of goods purchased, is an unfair method of 
competition. " 

II. ATTACKING COMPETITORS 

Inaccurate Prov. 4. Ho member of the industry shall use advertis- 
ref erences ing or other representation which refers inaccurately 
to competi- in any material particular to any competitors or their 
tors, etc. merchandise, prices, values, credit terms, policies or 
services. 

9810 



-141- 



"We under- Prov. 6^ ilo member of the industry shall use advertising 
sell all or other .representation rwhich la3 r s claim to or implies 
conroetitiors" a policy r:'co. ciuuiiig' practice of generally undersell- 
ing all c ie titers* . 

Selling Prov, "5. Jo member of the industry shall sell any product 
below below cost or replacement value. Cost shall include the 
cost cost of production in a manufacturing or processing indus- 

try-; or the not invoice delivered cost in a retail or 
wholesale industry-, (However, any member nay meet the 
price competition of anyone whose costs under this code 
provision are lo/er.) 

Threats of Prov- 7. lie member, of the industry shall nublish or 
law suits circularize unjustified threats of legal .proceedings 

which tend to or have the effect of harassing competitors 

or intimidating their customers. 

Remarks: 

The distinction is clear between constructively 
advertising one's own goods and services and 
destru c tiv ely advertising claims or comparisons 
against competitors. It is sought to prevent 
a business concern from disparaging others in 
order to advance itself. 

This habit of attacking competitors takes the 
form of broad claims directed at competitors 
in general, no one of whom can reply specifi- 
cally, ye1 feiC'Be of rhom at least "re in fact 
underselling ov meeting the advertiser in price. 
Kb such • claims to e continuing practice of generally 
underselling all competitors can be true. 

Another form of attacking competitors is the use 
of "loss leaders", intended both as stimulators 
of sales and as misleading measures of an implied 
underselling policy as to other goods as well. 
Still another attack is to threaten legal action 
against customers of a competitor on the ground 
of alleged infringement of a patent or trademark 
when such right has not yet been adjudicated or 
established in a ccurt action against the in- 
fringing competitor. The damage here is real 
but difficult of proof because it keeps away 
prospective customers whose identity cannot be 
discovered. 

Selling below cost is universally condemned and 
it is especially vicious when one or more units 
of a multi-unit organization are carried at a 
loss in order to arive out competitors. The 

9810 



only prohlem is what is cost. It is intended 
that the lowest possible bases be used - that of 
actual replacement of the goods. When one 
member's costs are higher than another's, it is 
necessary to permit him to meet the price compe- 
tition to avoid what otherwise would amount to 
virtual monopoly. 

Price discrepancy may arise from such causes 
as: volume of purchases; purcha.se of "distress 
and bankrupt" stocks: "close-outs" (through 
discontinuance of lines); and similar temporary 
abnormal trade conditions. 

Words used 

in FEDERAL TRADE _C 02.2.11 SSI ON reports, 

for: 

"ATTACHING COMPETITORS" types of 
f *********** rule 01 

"The selling of goods below cost with the intent and with the 
effect of injuring a competitor and where the effect may be to substanti- 
ally lessen competition or tend to create a monopoly or to unreasonably re- 
strain trade i s an unfair trade practice." 

"The defamation of competitors '"ay falsely imputing to them dishonorable 
conduct, inability to perform' contracts, questionable credit standing, or 
by other false representations, with the tendency and capacity to mislead 
or deceive purchasers or prospective purchasers is an unfair practice." 

], Tn.e false disparagement of the grade or quality of the goods of com- 
petitors with the tendency and capacity to mislead or deceive purchasers 
or prospective purchasers is an unfair trade practice." 

"Securing information from competitors concerning their businesses 
"by false or misleading statements or representation s or by false imperson- 
ations of one in authority and the wrongful use, thereof to unduly hinder or 
stifle the competition of such competitors is e^i unfair trade practice." 

"The circularization of threats of suit for infringement of patent 
or trade-mark among customers of competitors not made in good faith but 
for the purpose and with the effect of harassing and intimidating custom- 
ers, is an unfair trade practice." 



One Industry's Rule: 
read: : 



"Advertising should be at all times fair and honest. It is not dis- 
creditable to becoi;e enthusiastic in print about the goods you offer for 
sale, but to imply that your neighbor is not selling good products, or to 
criticise him directly or indirectly is bad enough when practiced by sales- 
men, but infinitely more serious is it when a paid advertisement conveys 
even your own apprehension (which may be well founded) to the general reading 

9810 



-143- 

public as to your opinions of your competitor or of his wares, and it should 
not be permitted, because we consider it an unfair method of competition." 

"Disparagement of officers, employees and products of competing con- 
cerns and circulation of false rumors of financial standing of competitors 
is Gin unfair me-thod of comp'etion. . " ' 

III. PHI 03 Dl'sCRIMIITATIOM 

************************** 

Secret Pr o-. 8„ No member cf the industry shall secretly make 
Rebates any payment or allowance of a rebate, refund, commis- 
sion, credit, uu.-arnssd dlscounU or excess allowance, 
whether in the form of money or otherwise, for the pur- 
pose of influencing a sale, nor shall a member secretly 
extend to any customer any special service or privilege 
not extended to all customers of the same class. 

"Free Prov^ 9. No member of the industry shall grant an ad- 
G-oods" vertising, allowance or a premium or any form of free 

goods except for a definite service rendered and in a 

form which is accountable. 

Selling on Prov. 10 . No member of the industry shall ship goods on 
Consignment consignment, except under contract or bona fide orders. 

*************************************** 

Remarks: 



There is a proper line to be established between 
concessions on price and terms on accou n t of 
volum e, purchases; and unfair concessions ob- 
tained either with the club of macs buying power 
of othei merchandise or in conspiracy to injure 
othex actual or prospective purchases. 

Volume, purchases deserve price concessions when 
then result in production savings or less sell- 
ing and shipping expense, but not when the terms 
of sa r L3 or a multiplicity cf small shipments 
dissipates the supposed savings. Ncr is there 
any reason why price concessions (in whatever 
form) to one buyer si:. o _ ;.ld not be extended to all 
buyers under the same stated conditions. 

The shipment of goois^ on consignment is a form of 
price discrimination ivhen it is extended to some 
buyers wjth;;ut being available to all under like 
conditions; it is also a form of unfair practice 
when used as a method of promoting sales by un- 
solicited shipment of merchandise on approval or 
"consignment" in the hope it will induce the 
recipient to purchase the goods. 



9810 



-144- 

Words used 

in FEDERAL TRADE COMMISSION reports 

for: 

"PRICE DISCRIMINATION" types of rules. 
************ 

"The secret payment of allowance of rebates, refunds, commissions, 
or unearned discounts, whether in the form of money or otherwise 
or secretly extending to certain purchasers special services or privileges , 
not extended to all purchasers under like terms and conditions, with the 
intent and with the effect of injuring a competitor and where the effect may 
be to substantially lessen competition or tend to create a .monopoly jr to 
unreasonably restrain trade is an unfair trade practice." 

"It is an unfair trade practice for any person engaged in inter-state 
commerce, in the course of such commerce, either directly or indirectly, 
to discriminate in price between different purchasers of commodities , where ' 
the effect of such discrimination may be to substantially lessen competition 
or tend to create a monopoly in any line of commerce; provided, that nothing 
herein contained shall prevent discrimination in price between purchasers of 
the same class on account of differences in the grade, quality, or quantity 
of the commodity sold, or that .makes only due allowance for differences in 
the cost of selling or transportation, or discrimination in price in the 
same or different communities made in good faith to meet competition, and 
provide further, that nothing herein contained shall prevent persons engag- 
ed in selling the products of this industry in commerce from selecting their 
own customers in bona fide transactions and not in restraint of trade. " 

"The shipping of goods on consignmen t, with the intent and with the 
effect of injuring a competitor and where the effect may be to substantially 
lessen competition or tend to create a monopoly or to unreasonably restrain 
trade, is an unfair trade practice." 

"The acceptance of orders for large quantities of industry products 
and then making small delivering at quantity prices for the purpose and 
with the effect of discriminating unlawfully between different customers 
of the same class is an unfair trade practice." 



"T7e discourage and abhor all forms or secret rebates and settlements 
whereby books and accounts can be so manipulated as to cover up the actual 
conditions. For instance, we strongly condemn refunding of any amount to 
the purchaser unless it is clearly shown for what reason the refund is made, 
and that it is legitimate, and charging funds returned to accounts other 
than the proper ones, we consider unfair and unwise and it is prohibited. 
We agree that we shall not pursue the aforesaid prohibited practices, by 
reason of their being an unfair method of competition." 

IV. COMMERCIAL BRIBERY 

***.+; **** * * * * ;[;*** ****.*** 

Bribing Pr ov. 11 . No member of the industry shall give, permit to 
employees be given, or offer to give, anything of value for the pur- 
pose of influencing" or rewarding the action of any employee 

9810 



-145- 

or agent of another in relation to the "business of the 
employer of such employee or the principal of such agent 
without the knowledge cf such enplo - er or principal. 

False prov. 12 . No member of the industry shall secretly give 
billing anything of value to the employee or agent of a customer 
for the purpose of influencing a sale, or in furtherance 
of a sale render a bill -or ptate.:ent of account to such 
employee, agent or customer nhich is inaccurate in any 
material particular. 

*******************************.** * * * * 

Henarks: 

Commercial 3ribery is practiced most often between 
a manufacturer or wholesaler and the agent of a 
purchaser, the purpose being to influence the 
agent to violate the trust imposed in him by his 
principal and appear to e::ercise his judgment in 
selection or negotiation when in fact his inter- 
est is not exclusively on the side of his princi- 
pal. Both in law and in federal Trade Commission 
rulings the giving of anything of value as an 
inducement to influence the trusted agent of 
another is prohibited* 

The second paragraph is designed for retail and 
wholesale codes, to deal with the unfair practice 
of bribing servants to purchase for their employers 
at prices lower than the prices char ged to such 
employers, with the difference as the bribe . 

lords u?ed 

in PPilJPxJ, T_l.:JE CO! II SSI OH reports 

for: 

,: C0::;lE3CI*Ji IT-IIZEY" types of rules. 

"Directly or indirectly to give or permit to be given or offer to give 
money or anything of value to rge nts ; e mp loyees , or representatives of 
•customers or prospective customers or tc agents, employees, or representatives 
of competitors' customers or prospective customers, without the knowledge of thi 
their employers or principals., as an incoiofcment to influence their employers 
or principals to purchase or contract bo pu.rch.ese industry products from 
the maker of such gift or offer, or to fnfluence such employers or princi- 
pals to refrain from dealing or contracting to deal with competitors, is an 
unfair trade practice." 

"Por any person, firm or corporation to r ive anything of value to 
those employed in any cac c'] ty involvin g special trusb (such as instructor, 
purchaser, supervisor, or school official), without the knowledge of their 
employers upon the condition or understanding, empress or implied, that 
its goods be recommended or used by such per con in preference to the goods 
or equipment of a competitor or competitors of that person, firm or cor- 
poration, with the tendency to injuriously affect the business of competi- 

9sio 



-146-- 

tors, is an unfair trade practice: provided, that nothing in this resolu- 
tion shall prevent any person, firm or corporation from selling its goods 
to anyone upon whatsoever terms it sees fit but without any condition or 
understanding, express or inrplied, as to the recommendation or use of said 
goods or equipment." 

" Commercial bribery is immoral, against the public interest, and is 
an unfair method of competition." 



"We do hereby condemn the practice of giving money, premiums, or 
any other forms of gratuity to persons placing orders for the purchase of 
any products of our industries in all cases where such persons are not the 
actual purchasers, and the acceptance of the money, premiums, or other forms 
of gratuity is surreptitious and for the personal benefit of the person 
placing such order, and we hereby further register our opposition to the 
practice of giving of so-called advertising specialties bearing the donor's 
name or imprint, costing more than $2. each 

V. BREACH OF CONTRACT 
********** ****** t***** 



Interference 
with 

another 1 s 
contracts. 



Prov. 13 . No member of the industry shall induce 
or attempt to induce the breach of an existing con- 
tract between a competitor and his enroloyee or cus- 
tomer or source of supply, nor shall any such member 
interfere with or obstruct the performance of such 
contractual duties or services.' 



Repudiating 
one' s own 
contracts 



Prov. 14. No member of the industry shall repudiate 
a contract entered into in good faith when the pur- 
pose of such repudiation is to create for such member 
an unfair price advantage. 



* * 



* * * * * * * 



* * * * * * 



***** ** 



Remarks: 



Breaching of contracts for the purpose of taking 
an unfair price advantage in a rising or falling 
market, or inducing others to break contracts with '«' ,; 
competitors by false representation of facts, is an 
unfair -oractice. It is desirable to safeguard the 
integrity of contracts. 

Although legal redress is possible for damages suf- 
fered by reason of a breach of contract, in the great . • 
majority of cases the injustice is suffered in silence 
because of the fear of reprisal through the withholding 
of future business or of excessive cost and suit and 
legal del ay s 

On the practice of inducing the breach of existing 
contracts between BO"."oetiicrs and their customers the 
Federal Trade Commission's usual rule reads: 



981^ 



-1 17- 

.:. "Maliciously inducing or attempting 'i i induce 
the br ' existing contracts bpjtv^e n compe« - 

titpj ■ ai L Bir custom ers b< r any false or decep- 
tive i; ts< ever, or interfering with or ob- 
structing the perforaraance of any such contractual 
chibiec or service's by any such means, with the 
purpose and iff act of ur hily hampering, injuring, 
or embarrassing competitors in their businesses, 
is an unfair trae'e practice-.".. 

Words used 

by FEDERAL TRADE COMMISSION reports, 

for: 

"BREACH OP CONTRACT" types of rules. 
********** 

"Maliciously inducing or attempting to induce the breach of existing 
contracts between competitors a^a their customers by any false or deceptive 
means whatsoever, or interfering with or obstructing the performance of any 
such contractural duties or services ^y any such means, with the purpose 
and effect of unduly hampering! injuring, or embarrassing competitors in 
their businesses, is an unfair trade practice." 

"Maliciously enticing awa y the em ploye 3s of compe titors, with the purpose 
and effect of unduly hampering, injuring, or embarrassing competitors in 
their businesses is an unfair trade; practice. " 

"The wilful in terf erence by any person, association, or corporation, 
by any means or device 'whatsoever, v.ith any exist ing contract between an 
employer and an employee or agent of such employer, in or abort the produc- 
tion, manufacture, transportation, purchase, . or sale, of any product of the 
industry, or the performance of any contractural duty or service connected 
therewith, such interference being for the pii.rpose or with the effect of 
dissipating, destroying, or appropriating, in -..'hole or in part, the patron- 
age, property, or business of. another engaged in such industry, is hereby 
declared an unfair trace practice." 

"The imitation of the trrd;, - marks, trade names, slogans, or other 
marks of identification oi competitors, having the tendency and capacity 
to mislead or deceive purchasers or prospective purchasers, is an unfair 
trade practice." 

"For any person, firm, or corporation knowingly to aid or abet another 
in the use of unfair trade -practices is an unfair trade practice." 



" Inducing of employees of competitors to violate contracts or entic- 
ing away employees of competitors in such numbers, or .under such circum- 
stances as to constitute a conversion and an appropriation of the value 
created at the expense of the said competitor." 

"Contracts, either written or oral, are business obligations which 
should be performed in letter and in spirit. The repudiation of contracts 
by sellers on a rising market , or by buyers on a declining market, is equally 

9810 



-148- • 

reprehensible. Such actions shatter confidence, induce violent fluctua- 
tions in price, destroy stability in business operations to the consequent 
injury of the industry as well as the general public, and is an unfair 
trade practice." 

VI . COERCION 

# * *#::>::# %. # :.: $ $ * % 

Frov. ■ 15 . No member of the industry shall require that 
the purchase or lease of any commodity be prerequisite 
to the purchase or lease of any other commodity. 

Prove. 16. No member of the industry shall join with any 
other member or participate in any trans-action known 
in law as a blacklist. 

sfc:fi •,;<>;: }i :]; ■ :;: :','. :]: :]'.:',< :': -};. * ** * * * '■'.< * * * >je 5(e * * * -,'• '.< * # # * * -fi ■'.' '-'.'''fi ■:• * -'.< ■!: : .'- £#"< ^: 2fi ■■< * * # * -'■ * * * # #' * * * * * # * >!- * -!'"-!: * * :'. 

Remarks: 



"Tying" & 




"block-book: 


Lng" 


contracts. 




"Black" 




(or white) 




lists. 








Coercion by so-called "tying" contracts, "block- 
booking" contracts (of the movie industry, etc.), or 
requiring other lines of goods or products to be 
bought or leased as a condition precedent to being able 
to buy or lease the goods or products or services off- 
ered, is an unfair practice. 

Under the same subject heading, any attempt, by joint 
action to discriminate against one class, group, or 
race of customers when in fact there is no sound ec- 
onomic ground for such discrimination, is unfair 
practice. 

Thi. .-• -or-letes our list of 

STANDARD FAIR PRACTICES: Sixteen provisions, in 

Six classifications: 

I. " I IL.C CURACY" has 3 "orovisions (Rules). 

II. "ATTACKING- COMPETITORS" — " 4 " 

III. "PRICE DISCRIMINATION" " 3 " 

iv. "co::::ercial bribery" » a " 

V. "BLEACH OF CONTRACT" " 2 " 

VI. "COERCION" — " 2 » 

16 in all.' 

(See following pages for all supplementary or special-to-an- 
industry provisions.) 

VII. SPECIAL PROVISIONS 

f '■''• * :' ; * % * 'M '■'■'- ^' :': S(c Jjc J^ sj« ;H X >\: >',■• ■'■ * :■« •% i'?. $t 

("Below the Line") 
The CODE AUTHORITY (in each industry ) shall study the 



-149--., 

following proposal fair-practice provisions and from 

time to time shall make any recommendations to the \ 

Administrator for additional provisions to this Code; 

and when approved by the Administrator,, after such \ 

hearing as he may prescribe, the;/ shall become a 

part of this Code and have frill force and effect as 

provisions hereof: •• . 

(Here may be set forth fair-practice provisions which the Industry con- 
siders it is desirable to incorporate in the Code due to special con- 
ditions not covered or not sufficiently covered in our 15 "regular" ,„ 
fair~practice provisions; See list below. 

***************************** ******* 

Remarks : 

The several standard trade-practice provisions have been 
prepared with the thought in mind that they are appli- 
cable. to every code, whether the code covers an industry 
in the so-called production field or in the so-called 
distribution field. 

In addition it is recognized that special provisions may 
be required to meet conditions peculiar to a given in- 
dustry and that there should be no objection to such ad- 
ditional provisions if they are sound. However, it would 
seem to be an imposition on the N.E.A. LEGAL DIVISION nnd 
the cause of unavoidable delay if it were necessary for 
the Legal Division to inform itself on all the techni- 
calities of the industry which might be involved in its 
determination of whether or not such proposed additional 
provisions are in fact sound and desirable. It is pro- 
posed, therefore, that any provisions offered by the 
industry other than those contained in the "standard 
provisions" above should be incorporated under Group 

• VI J so that they do not become operative immediately 
and can be dealt with in due course after sufficient 

• determination of merits. 

"Special Provisions", which our 16 suggested rules may 
not cover (or sufficiently cover) include: 

Returned Goods Sales by sample 

Misuse of leased Espionage 

equipment 

Slack-filled packages Design piracy 
Trading stamps Hidden (retail store) 

demonstrators 

Trade discounts Price guarantees 

Credit terms Special guarantees 

Unfair transportation Standardization 
practices Simplification 

9810 



* '.'■ - • -.h - . — : — i .... ■ 



' " ■ . '•■' , :'■•■, 






-151- 

EXHIBIT 7 



DEPARTMENT OP COMMERCE 
WASHINGTON 



An Ideal Charter for Trade Acs point ions 



PREAMBLE 

WHEREAS in the nast the economic and! industrial development of this 
country has "been predicated uoon the arinciple of independence within 
the industry in relationship to other grouns, and T7KEEEAS at the present 
time, increasing e:cperience and wider vi'sion indicate the fundamental 
interdependence of industry, not only within the industry, hut with all 
groups in the social fabric: 

IHEREPORE, wo the (blank) industry do hereby organize' and creale the 
(blank) trade association, for the mutual benefit and advantage of those 
employed by it, of those engaged in allied industries, of those applying 
our materials, of those distributing our output, of those consuming our 
aroduct, and of all those interested in the development, improvement, 
and betterment of our methods, rnd in our place in the social and economic 
organization of the nation. 

ART ICLE I — LIEIDEIiSHIP 

This Association, recognizing the interest of other groups in the 
prosperity, welfare, development, and conduct of the (blank) industry, 
and desiring the cooperation, the benefit. of thought and research, and 
the suggestions of all those interested in that interdependent struc- 
ture which affect the welfare of those engaged in this industry, hereby 
creates the following types of membership. 

Active Membership - Any individual, firm or corporation in the 
(group) is eligible to become an active member of this Association. 

Cooperative Membership - Any individual, firm, corporation or or- 
ganization engaged in related lines, sup liers, distributors, service 
bodies, scientific grouos, representative of other tr^de, scientific 
or service bodies, or representative cf l^bor, or consumers, is eligible 
to this form of membership and may enjoy the facilities of the Secretary's 
office in the promotion of matters of mutual interest, the privilege of 
the floor at open sessions, may be assigned to committees, or if deemed 
desirable may even be elected to office, but shall not have the privilege 
of voting. 

Associate Membership - Any individual, firm, corporation or organi- 
zation memben of either of the p?jove classes of membership may enter one 
cr more associates who 'oy virtue of certain qualifications in the scien- 
tific, service, promotion, legal or social fields mazy be in a position to 
further the activities and objectives of the association, but privileges 
of this group are to be no greater than those set forth in the Cooperative 
Member shin group, 
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ARTICLE II - ECOirOi ilC OBJECTIVES 

'vTHEHEAo the welfare and. development of an industry depend upon its 
stable progress pad its planned and proper growth, and 

UEEBEAS the interest of those dependent upon or connected with the 
industry is vitally intertwined with the accomplishment of this purpose. 

HOW THEREFORE, this Association shall have for its, basic purpose a 
broad vision not only of its own interests, but the interest of those 
dependent upon it, catering to it, or dealing with it; and for this pur- 
pose this Association shall study, investigate, and make research into all 
those factors which may affect its economic stability, growth, prosper- 
ity, and welfare, 

For examole : 

1. Economic planning by the Association. 

a, Model plan for individual firm 

b» Model plan for the entire industry 

c. Model plan for interrelated industries 

2. Economic planning in its boradest aspects, cooperating with 
other trade and professional groups and the government in 
"Hational Economic Planning" 

3. Preparing surveys as to 

a. Seasonal fluctuations affecting sales product 

b. Cyclical fluctuations 
Etc. 

4. Preparing surveys as to the long-term trends of practices in 

a. Production 

b. Capital goods investments 

c. Marketing 

d. Trans o or tat ion 

e. Labor and personnel problems 

f. Trade practices and ethical standards 

g. Changes in consumer needs and demands 



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5, Statistical activities (to further planning possibilities) 

A. Current statistics of production or trade 

a» Capacity g. Shipments . 

b. Purchases h. Prices 

c. Production i. Returned goods 

d. Stocks on hand j. Inquiries 

e. Orders, Unfilled k. Bids 
Cancellations 1. Contracts 



3. Labor Statistics 

a. Number employed 

b. Pay rolls 

c. Personnel training 



C. Management or Cost Statistics 

a. Uniform cost accounting (classification of 

accounts) 

b. Cost estimating 

c. Standard forms for orders, bills, bids, 
contracts, etc. 

d. Cost studies of 

1, Budget 4. Depreciation 

2, Overheading 5. Obsolescence 

3, Production 6. Ship-ping 

7. Turnover 

8. Stock or inventory control 

9. Maintenance of a research library and 
lab orato^ 

D. Forecasting research as to sales possibilities 

a. Consumer needs, potential purchasing -oovrer, 
relation of competing products and possibi- 
lities of acceleration by advertising pro- 
grams 

b. 3-.sed on nexj inventions in production equip- 
ment, etc. 

c. 3ased o n equipment expansion. 

E. Research into cooperative buying or bulk quantity 
commitment. 



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ARTIOLE III - BUSINESS OBJECTIVES 

THERMS an industry which does not render true service to the public, 
or an industry which is without true profit to itself must eventually 
face elimination. 

IT0T7 THUHEiOES, this Association shall have for its immediate pur- 
pose the conduct of activities hooking toward the betterment of its pro- 
duct, the elimination of wasteful practices, the promotion of high stan- 
dards of practice, the development of public confidence, and the dissem- 
ination of knowledge about the industry's products — their usefulness 
and place in the economic scheme. 

For example: 



1. Cooperative advertising of products to 

a. Manufacturers and distributors in this and related 
industries 

b. Professional advisors (a.s architects, engineers, etc.) 

c. The consumer 

2. Market Research 

a. Discovering and defining logical market areas of each 
product 

b. Determining probable long-term market growth factors 

c. Determining normal seasonal fluctuations in sale and 
consumption 

d. Determining the responsiveness ia sale of each product 
to the business cycle influence. 

3. Product Research 

a. As to materials now used 

b. As to new materials 

c» As to new or improve products 

d. As to new uses for present products 

4. Industrial Standardization 

a» Standard specif ications for raw and seniprocessed materials 

b. Standard specifications for equipment and supplies 
purchased 



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c. Sponsorship of standards for articles produced promoting 
uniformity and interchangeability of parts 

d. Trr.de association certification service ("Standard Quality 11 ) 
and quality trademark 

5. Simplified Prrctice 

6. Operation Research 

a. Regarding equipment ncr used 

b. Regarding conten mlated new equipment 

c. Regarding contemplated manufacturing methods 

d. Regarding contemplated ne-' utilisation of by-products or 
waste raaterials 

7. Credit Activities 

A. Establishment of a credit bureau to 
a» Operate within the association 

b. Cooperate with other associations 

c. Cooperate with commercial credit agencies 
3. Establishment of r collection bureau service 

8. Transportation Problems 

a. Establishment of a traffic deportment, concerned with 
rrie and classification matters 

b. Cooperation with Regional Joint Advisory Boards 

c. Clarification of overseas shipping oroblems 

d. Improvement of transportation facilities 

9. Insurance Problems 

a. Securing equita>le rates nnd uniform schedules 

b. Securing more rdequate coverage or irotection 

c. Studying feasibility of cooperative insurance 
arrangement s 

d. Acting as insurance service bureau for members 



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10. Cooperative deliveries 

11. Coo-oerative warehousing 
Etc 



ARTICLE IV - SQCI. i L OBJ ECTIVES 

T7HE3EAS the economic future and progress of industry are predicated 
upon the welfare, health, safety, economic independence and freedom from 
uncertainty of those without whose services the industry could not exist. 

N0T7 THSiCrOIE, this Association shall havo for its third pur-pose the 
study and formulation of the needs, and plans for meeting the needs of 
those engaged in this industry, whether management or la.bor or produc- 
tion or distribution. 

For exaraole: 



1. Stabilization of Employment 

a. Employment surveys as to wages, hours, -oersonnel, 
efficiency, adaptability, etc. 

b« Placement service 

c. Cooperation with public or private employment agencies 



2. Unemplovnent insurance 

3. Employee Retirement Plans 

4. Training Schools for Employees 

a. Tor apprentices, namual v;orl:ers, formen, salaried 
workers, salesmen, and executives. 

5. Living and working conditions 

a. Health, hygiene and welfare provisions 

b. Plant sanitation 

c. Hospital', and medical ca.re 

d. Employee recreation 

6. Employee Safety Plans 

a. Safety campaigns or contest'; 

b. Pirst aid instruction 



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7. Savings Funds and Stock Purchase- Plans 

8. Encouragement of conciliation and arbitration in dis-outes or 
misunderstandings with employees 

9. Woman end child labor policies 
10. Public relations 

a* Press contact 

b. Government contact (local, state and federal) 

c. Public participation in problems of trade 

d. Educational projects, tributes to industrial or 
social leaders, etc. 

e. Public information bureaus 

f. Advertising 
Etc 

ARTICLE V - LEGAL OBJECTIVES 

WHEREAS new laws affect industry! and 

WHEREaS new industries and new relationships with industries result 
in laws, and 

WHEREAS it is to the interest of this industry, in seeking to abide 
by existing laws, to have a proper voice in the development of those new 
laws which ma./ affect this industry directly, or in its relationship to 
others. 

NOW THEREFORE this Association shall have for its fourth purpose the 
study of pertinent 1 ws, the dissemination of information concerning them 
and the formulation or criticism of those proposed projects which may con- 
cern it, and the development of those activities, functions and purpose 
which may properly be within its scope. 

For Examle : 

1. Objectives as to existing laws to 

a.. Study find determine le :al means to further all major 
and minor objectives 

b. Hake available information concerning laws and decisions 

c. Perform service in litigation involving association policy 

d. Assist in relations with governmental regulatory bodies 
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e. Standardize or improve forms and terminology of 
commercial and legal documents, etc., peculiar to 
t rade 

f. Defend the legality and propriety of the Association's 
established trade practices 

g. Encourage the use of commercial arbitration settling 
T?hen "best suited in misunderstandings or disputes. 

2. Objectives as to proposed legislation to 

a. Keen -posted on all legislative proposals, . State and 
Federal, affecting the industry and related indus- 
tries, 

1. Supply of raw materials 

2. Transportation 

3. Communication 

4. Production - control 

5. Etcetera 

b. Initiate desirable legislative reforms 

c. Promote uniformity of stpte legislation 



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EXKia iT 8 

SUGGESTED 0UTLIE1 COLES 

a(< sfe • ; <: * & * ■'■ '^ * * ■ ; -I- :« ■''- "' * "i ; --" ** * * 

*«oOo- 

The suggestions lie rein made are intended to .assist trade and 
industry in the •prcoTPtio:.! of codes . 

Except - s to those provisions which are require d to be in cluded 
in all co des by t he LA T ICZJAI Ii'LUSTRIA L REC OVERY ACT ( which prov isions 
aro clearly indicated herein), none of t he sure st ions embodied in 
this draft aie j ; ; 5 n datory . 

It is Relieved, however , that the "preparation of codes and their 
rjy-al "b~ r the Pre sident will "b e g reatly expedited if those v. r ho pre- 
pare codes coiifqrrn as far as possible with the u--iform phra seology 
he re proposed. 



HIKS S. JOHrTSOlT 

Administrator for 
Industrial Recovery 

November 6, 

1933 



ARTICLE I . 

pu r;-' os es 

To effect the policies of Title I of the Hationallndus trial Re- 
covery Act, this Code is submitted as a Code of Fair Competition for 

the _!rade/ Indus try, and upon - : r :val by 

President, its provisions shall be the standards of fair com- 
petition for such trade/industry and shall be binding upon every 
. iber thereof. 

ARTICLE II . 

l ef initions 

(This article on definitions is one oi the flost important in 
this Code. Each definition must "03 worded in clear and specific terms. 
Concisely state the exact cL ss or classes of enterprise included with- 
in the division or division's di the trade /industry.) 

The term " Trade/ Indus try" as used herein 

includes the _(state accurately what is in- 
cluded in the trade/ industry, whether manufacturing, building, trans- 

9810 



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porting, repairing, selling and/or distributing at wholesale or retail, 

etc.) of (Products, merchandise or service etc.), 

and such related toraiichfts or subdivisions as may from time to time "be 
included under the provisions of this Code by the President of the 
United States, after such notice and hearing as he may prescribe. 

The term " member of t he t rade / ir.dus t ry " includes, "but without 
limitation any individual, partnership, association, corporation or 
other form of enterprise engaged in the trade /industry, either as an 
employer or on his or its cwn behalf. 

The term "employee" as used herein includes any and all persons 
engaged in the trade/industry, however compensated, except a member 
of the trade/ industry. 

The term "Act" and " Admin i s t rat or " as used herein mean respectively 
Title I cf the National Industrial lie cove ry Act, and the Administrator 
for Industrial Recovery. 

Population for the purposes of this Code shall be determined by 
reference to the latest federal Census,. (insert only when needed.) 

ARTICLE III . 

Hours 

MAXIMUM HOURS 

Section 1. Ho employee s1tt.11 be permitted to work in excess of 
Jnours in any one weeS: or hours in any twenty- 



four (24) hour period beginning at midnight, except as herein otherwise 
provided. A normal work day shall not exceed _ _Jiours. 

(Maximum hours for special classes of enroloyees, if any, should 
be inserted under the appropriate ram. raph, together with the hours 
applicable. ) 

HOUTi g F'B CLERICAL A D OFFICE " PLOYEES 

Section 2» Iso person employed in clerical or office work shall 

be permitted to work in excess of _hours in any one week or 

hours in any twenty-four hour period. A normal work day shall not 
exceed hours. 

EXCEPTIONS AS TO HOURS . 

Section S. The provisions of this Article shall not apply to 
travelling salesmen, or to employees engaged in emergency maintenance 
or emergency repair work, or to- ocrsor.s employed in a fimna^rerisl or Executive 
capacity who earn not less than Thirty-five Dollars ^$35. 00) pt-. week. 

(Provisions governing over time payments skoul be inserted at 
this point; for example, for emergency maintenance and emergency repair, 
etc.) 



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STAirDAED week 



Section 4. No employee shall be permitted to work more than 
days in any _____ __day period. 



E MPLOYMENT 5Y SEVERAL EMPLOYEES 

Section 5. No employer shall knowingly permit any employee to 
work for any time which, when totaled with that already performed with 
another employer or employers in this trade/ industry, exceeds the 
maximum permitted herein. 

ARTICLE IV. 



•es 



: "i_ii:.i.: "ages 



Section 1. No employee shall be paid in \ny pay period less than 

at the rate of cents per hour, except as otherwise 

herein ; rovided. 

(llinimum wage adjustments based on locality and/or population may 
be indicated here.) 

PIECEWORK COi.iPE-JSATICU - __I__1__U_ WAGES 

Section 2. This article establishes 3. minimum rate of pay which 
shall apply, irrespective of whether an employee is actually compen- 
sated on a time rate, piece-work, or other basis. 

i_I_I___j £AGE FATES BY LO G ALI TY / CC CUPAT I ON 

Section 3. After the approval of this Code, the Code Authority 
may present for " roval to the Administrator, after notice and hearing, 
recommendations as to upward adjustments in minimum wages for specified 
localities/occupations, in order to effectuate the purposes of the Act. 

WAGES ABOVE HIlTILUIi 



Section 4. No employee whose normal full time weekly hours for the 

four weeks ending [date) are reduced by less than percent 

shall have Ms or her full time weekly earnings reduced. No employee 

whose full time weekly hours are reduced 

by more than s.id percent shall have his or : 

her said earnings reduced by more than _____„ ALTERNATIVE 

percent. : 

-I.-jTc shall be an equitable adjustment : 
of all wages above minimum, and to that SUGGESTIONS 

end, within ( _days or months) from the : 

roval of this Code, the Code authority 
shall submit for the approval of the Administrator a proposal for ad- 
justment in wages above the minimum. Upon approval by the Administrator, 
after such hearin; as he may proscribe, such proposal shall become bind- 
ing as a part of this Code, provided, however, that in no event shall 

9810 



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hourly rates of pay be reduced. 
FEMALE EMPLOYEES 



Section 5. remale employees performing substantially the same 
work ~.s male emplo; ei s shall i-eceive the same rate of pay as male 
employees. 



HAHDICAPPE: 



Section 6. A person whose earning capacity is limited because 
of age or physical or mental handicap may he 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 his employment at such 
wages and for such hours as shall be stated in the certificate. Each 
employer shall file with the Code An-thority a list of all such persons 
employed by him. 

ARTICLE V. 



C-ener-al Labor Provisions. 



CHILD LABOR 



Section 1. Fo perron under si::teen (16) years of age shall be 
employed in the trade/ industry. Fo person under eighteen (18) years 
of age shall be employed at operations or occupations which are hazard- 
ous in nature or dangerous to health. The Code Authority shall submit 

to the Administrator before (date) a list of such operations 

or occupations. In r ny State an employer shall be deemed t o have com- 
plied with this provision ~s to age if Ve shall have on file a certificate 
or ]-iermit duly signed by the Authority in such State empowered to issue 
employment or age certificates or permits showing that the employee is 
of the required age. 

PROVISIONS PROi i TI-IE ACT (inclusion obligatory) 

Section 2. In compliance with Section 7(a) of the Act it is 
provided: ^ - ..-* 

(a) That employees shall have the right to organize and bargain 
collectively through representatives of their own choosing, 
and shall bo free from the interference, restraint, or coer- 
cion of employers of labor, or their agents, in the designation 

of such representatives or in self-organization or in other 
concerted activities for the purpose of collective bargaining 
or other mutual aid or protection. 

(b) That no employee aid no one seeking em] Lovment shall be re- 
quired as a condition of employment to join any company union 
or to refrain from joining, organizi g, ir ssisting a labor 
organization of his own choosing, and 



(c) That employers shr I 1 , c imply with the maximum bmirs of labor, 



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minimum rates of pay, and other conditions of employment approved or 
prescribed by the President. 

RECIASSIFICA2I01T OT ShTLOYEES 

Section 3. llo employer shall reclassify employees or duties of 
occupations performed or engage in any other subterfuge for the purpose 
of defeating the purposes or provisions of the Act or of this Code. 

STAITDATDS ?0h SAFETY AFP HEALTH 

Section 4. Every employer sliall mal:e reasonable provision for 
the safety and health of his employees at the place and during the 
hours of their employment. (Provision may "be inserted requiring the 
Code Authority to submit proposed minimum standards for safety and 
health of employees.) 

STATE LA"S 



Section 5. Ho provision in this Code shall supersede any State 
or Federal law which imposes on employers more stringent requirements 
as to age of employees, wages, hours of work, or as to safety, health, 
saiitary or general working conditions, or insurance, or fire pro- 
tection, than arc imposed by this Code, 

POSTIHG 

Section 6. All employers shall post complete copies of this 
Code in conspicuous places accessible to employees 



ARTICLE VI. 

Organization, Powers and Duties 

of the Code Authority 

QRC-AHIZATI 01T AhD COli STI TUTIOi! 

Section 1. There shall forthwith be constituted a Code Authority 
consisting of p ersons to be selected in the following manner: 

(Here shail be stated the manner in which the members of the 
Code Authority shall be selected. Provision should be made 
so tliat the Code Authority will be truly representative of 
the various majority, minority, and other interests in the 
trade/industry. If, however, by reason of conditions peculiar 
to the trade/ industry, selection by the trade/ industry is im- 
possible, it nay be provided that appointment shall be by the 
president. ) 

Section 2. In audition to membership as above provided, there 

may be _ members, without vote, to be appointed by the 

President, to serve for term of _months from the date of 

appointment. 

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Section 3. Each, trade or industrial association directly or 
indirectly participating in the selection or activities of b" - Ce"~ 
Authority shall (1) impose no inequitable restrictions on membership, 
and (3) submit to the Administrator true copies of its articles of 
association, by-laws, regulations, and any amendments when made thereto, 
together with such other information as to membership, organization, 
and activities as the Administrator may deem necessary to effectuate 
the purposes of the Act. 

Section 4. In order that the Code Authority snail at all times 
be truly representative of the trade/ 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 is not truly representative or does not in 
other respects comply with the provisions of the Act, may require 
an appropriate modification in the method of selection of the Code 
Authority, 

Section 5, Members of the trade /industry shall be entitled to 
participate in and share the 'benefits of the activities of the Code 
Authority and to participate in the selection ofj the members thereof 
by assenting to and complying with the requirements of this Code and 
sustaining their reasonable share of the 1 expenses of its administration. 
Such reasonable share of the expenses of administration shall be deter- 
mined by the Code Authority, subject to review by the Administrator , 
on the basis of volume of business and/or such other factors as may 
be deemed equitable. 

Section 6. Nothing contained in this Code shall constitute the 
members of the Code Authority partners for any purpose, Nor shall 
any member of the Code Authority be liable in any manner to anyone 
for any act of any other member, officer, agent or employee of the 
Code Authority. Nor shall any member of the Code Authority, exercising 
reasonable diligence in the conduct of his duties hereunder, be liable 
to anyone for any action or omission to act under this Code, except 
for his "Ti willful mis-feasance or non-feasance. 

PO WERS AXD DUTIES 

Section 7, The Code Authority shall have the following further 
powers and duties, the exercise of which shall he reported to the Ad- 
ministrator and shall be subject to his right, on review, to disap- 
prove or modify any action taken by the Code Authority, 

(a) To insure the execution of the provisions of this Code and 
provide for the compliance of the trade/ industry with the pro- 
visions of the Act, 

(b) To adopt by-laws avid rules and regulations for its procedure 
and for the administration and enforcement of the Code. 

(c) To obtain from members of the trade/industry such information 
and reports as are required for the administration of the Code 
and to provide for submission by members of such information and 
reports as the Administrator may deem necessary for the purposes 

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recited in Section 3(a) of the Act, which information and reports 
shall be submitted by members to such administrative and/ or govern- 
ment agencies as the Administrator may designate; provided that 
nothing in this Code shall- relieve any member of the industry of 
any existing obligations to furnish reports' to any government agency. 
No individual reports shall be disclosed to any other member of the 
trade /industry or any other party except to such governmental agencies 
as may be directed by the Administrator. 

(d) To use such trade associations and other agencies as it' deems 
proper for the carrying out of any of its activities provided for 
herein, provided that nothing herein shall relieve the Code Authority 
•f its duties kr responsibilities under this Code and that such trade 
associations arid agencies shall at all times be subject to and comply 
with the provisions hereof. 

(e) To make recommendations to the Administrator for the coor- 
dination «f the administration of this Code with such other codes, if 
any, as may be related to the trade/ industry. 

(f) To secure from raernbersof the trade/ industry an equitable 
and proportionate payment of the reasonable expenses of maintaining 
the Code Authority and its activities. 

(g) To cooperate with the Administrator in regulating the use 
rf any il.H.A. insignia solely by those members of the trade/industry 
who have assented to, and are complying with, this Code. 

(h) To recommend to the Administrator further fair trade practice 
provisions to govern members of the trade/ industry in their relations 
with each other or with other trades /industry and to recommend to the 
Administrator measures for industrial planning j including stabilization 
of employment, 

ARTICLE VII. 

Trnde Practice Rules 

(HOTE: Sponsors of codes, in preparation of drafts for submission 
t« '_ T FA., should select from the following such rules as are deemed 
applicable to their particular trades or industries ana may set forth 
such other rules as may be deemed desirable, to meet conditions 
peculiar to their trade/ industry, covering such subjects as: 

Returned goods 

Methods of leasing equipment 

Sales by sample.* 

Espionage 

Trade discounts and/or selling terms 

Transportation practices 

Design piracy 

price or special guarantees 

Advertising allowances. 

etc. ) 



981M 



-166- 



Rule 1. Inaccurate Advertising. 

Ho member of the industry shall publish advertising (whether 
printed, radio, display or of any other nature), which is misleading 
or inaccurate in any material particular, nor shall any member, in 
any way misrepresent any goods (including but without limitation its 
use, trade-mark, grade, quality, quantity, origin, size, substance, 
character, nature, finish, material, content or preparation) or credit 
terms, values, policies, services, or the nature or form of the busi- 
ness conducted. 

Rule 2. False Billing. 

Ho member of the industry shall knowingly withhold from or inser't 
in any quotation or invoice any statement that makes it 'inaccurate in 
any material particular. 

Rule 3, Inaccurate Labelling. 

ITo member of the industry shall brand or mark or pack any goods 
in any manner which is intended to or does deceive or mislead purchasers 
with respect to the brand, grade, quality, quantity, origin, size, 
substance, character, nature, finish, material content or preparation 
of such goods. 

Rule 4. Inaccurate References to 
Competitors, etc. 

Ho member of the industry shall publish advertising which refers 
inaccurately in - .. \i terial particular to any competitors .or their 
goods, prices, values, credit terms, policies or services. 

Rule 5. Selling Below Cost. 

(Provisions may be inserted. against selling below cost based upon 
principles of costing formulated by the Code Authority and approved 
by the Administrator. Such provisions should be applicable to the 
individual industry and should take into consideration the necessity 
of selling below cost to meet competition, to dispose of distress 
merchandise, etc.) 

Rule 6. Threats of Lav; Suits. 

Ho member of the industry shall publish or circulate unjustified 
or unwarranted threats of legal proceedings which tend to or have the 
effect of harassing competitors or intimidating their customers. 
Failure to prosecute in due course shall be evidence that any such 
threat is unwarranted or ■unjustified. 

Rule 7. Secret Rebates. 

Ho member of the industry shall secretly directly offer or make 
any payment or allowance of a rebate, refund, commission, credit, 
unearned discount or excess allowance, whether in the form of money 
or otherwise, nor shall a member of the industry secretly offer or 

9810 * 



. -167- 

extend to any customer any special service or privilege not extended 
to all customers of the same class, for the purpose of influencing 
a sale. 

Rule 8, Selling on Coneignaent 

No member of the industry shall ship goods on consignment except 
under circumstances to he defined by the Code Authority, where peculiar 
circumstances, of the trace/industry require the practice. 

Rule 9. Bribing Employees. 

No member of the industry shall give, permit to be given, or 
directly offer to give, .anything of value for the purpose of influencing 
or rewarding the action of any employee, agent or representative of 
another in relation to the "business of the employer of such employee, 
tne principal of such agent or the represented party, without the 
knowledge of such employer, principal or party. 

Rule 10. Interference with Another ' s Contracts. 

No member of the industry shall attempt to induce the "breach of 
an existing contract between a competitor and his employee or customer 
or source of supply; nor shall any such member interfere with or ob- 
struct the performance of such contractual duties or services. 

Rule 11. Coercion, 

No member of the industry shall require that the purchace or 
lease of any goods be a prerequisite to the purchase or lease of any 
other goods. 

Rule 12. Blacklisting. 

Nn member of the trade /industry shall join or participate with 
other members of the trade/ industry who with such member constitute 
a substantial number of members of the trade/ industry or who together 
control a substantial percent of the business in any specific product 
or products of the trade/ industry, in any transaction known in law 
as a black list, including any practice or device (such as a white 
list), which accomplishes the purpose of a black list, 

ARTICLE VIII . 

Export Trade 

'Section 1, No provision of this Code relating to prices or 
terms of selling, shipping or marketing, shall apply to export trade 
or sales or shipments for export trade. 

Section 2. Subject to the approval of the Code Authority, the 
exceptions established by this section shall apply also to sales or 
shipments of materials actually used in manufacture for export trade. (*) 



(*) A provision may be introduced into the administrative section 

(Continued) 

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ABTIC LE IX. 

iiodif i cat ion 
(inclusion of Section 1 
Obligatory) 

Section 1. This code and all the provisions thereof are expressly 
made subject to the right of the President, in accordance with the 
provisions of subsection (b) of Section 10 of the Act, from time to 
time to cancel or modify any order, approva 1 , license, rule, regula- 
tin issued under said Act. 

Section 2. This Code, except as to "rovisions required by the 
Act, may be modified on the basis of experience or changes in circum- 
stances, such modifications to be based upon application to the Adminis- 
trator and such notice and hearing as he shall specify, and to- become 
effective on approval of the President. 

ARTICLE X. 

Monopolies, etc. 

"do provision of this Code shall be so applied as to permit 
monopolies or monopolistic practices, or to eliminate, oppress, or 
discriminate against small enterprises. 

A5TICLE XI . 

price Increases. 



Whereas the policy of the Act to increase real purchasing power 
will be made more difficult of consummation if prices of goods and 
services increase d.s rapidly as wages, it is recognized that price 
increases except such as may be required to meet individual cost should 
be delayed, but when, made such increases should, so far as possible, 
be limited to actual additional increases in the seller's costs. 



ARTICLE XII. 



Effective Date. 



This Code shall become effective on the second Monday after its 
approval by the President (unless otherwise stated). 



(*) (Continued) of the Code, providing that questions relating to 
production for export and sale for export, not enumerated in 
the above section, may be submitted by any member of the trade/ 

i industry to the consideration of the Code Authority; and that 
its decision thereon shall be submitted to the Administrator 
and shall not be effective unless and until approved by him. 



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EXTUdTT 9 

Sl 7 G-G."STLD OlTLi::. FOR COPES 

Dr-ft of October ]. , 
19 3 3. 



For temporary use - proposrls for improvement should be delivered 
to the Legal Division of U.K. A. Thir. form merely embodies suggestions 
for guidrnce in preliminary strges of enc.ervors to prepare co<es, and 
none of the provisions contrined therein pre to be regrrded as hpving 
received the r.p proval of the Mationp.l Recovery Admini stration or as 
being applicable to my particular trr.de/industry. 

oOo 

CODE OF FAIR COiiFLTITION 



FOR TILE TRADE/ IiLAJSTRY 

ARTICLE I. 

F -POSES 

To effectuate the policies of Title I of the National Industrial 
Recovery Act, the following provisions rre submitted p.s a Code of Frir 

Competition for the Trr.de/lndustry, rnd upon approvrl by the 

President shr.ll be the standard of fr.ir competition for such trrde/ 
industry -,nd shall oe wincing upon ever;y member thereof. 

Al-TILE I I. 

DLFIIIITIOrS 

The term Trade/industry r.s used herein incl\ides the 

(state r,ccu.rp„tely what is included in the trade /industry, whether 
manufacturing, building, trrnsporting, repairing, selling, rnd/or 
distributing at whole- le or retril, etc.) of (product, mer- 
chandise, or service, etc.), rnd such branches or sub-divisions thereof 
rs rary from tine to time be included under the provisions of this Code. 

Tlie term "employee" as used herein includ.es anyone engaged in the 
trade/industry in/. a fcrpr.city receiving compensation for his services, 

irrespective cf the nature or method of a yment of such compensation. 

The term "employer" as used herein includes anyone by whom any such 
employee is compensated or employed. 

The term "member of trade/industry" includes anyone en^r-G^ in the 
trade/ industry as r.bove defined, either as an employer or on his own 
behalf. 



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-170- 

The terms "President", "Act," -nd "Administrator" ps used herein 
shrll mean, respectively the President of the United States, the Na- 
tional Industrial Recovery Act, and the Administrr.tor of Title I of 
said Act. 

Population for the purpose of this Code shell he determined by 
reference to the 1930 Pederrl Census. (Insert only when needed). 

ARTICLE III. 

HOURS 



l 



I-'o employees shrll l>e permittee, to work in excess of 



Hours in any one week or h ours in r ny twenty- four (34) hour 
p. riod. 

(I70TE: Exceptions, if rny, should oe inserted here, together with 
the hours applicable to such exceptions.) 

2. The maximum hours fixed in the foregoing section shrll not 
s iply to "itj employee on emergency mrintenrnce or emergency repair 
work involving breakdowns or protection of life or property, but in 

any such special case at least times his normal rate shrll be 

o-md for hours worked in excess of the maximum hours herein provided. 

3. Ho employee shrll be permitted to work more than _days in 

rn y dap period. 

ARTICLE IV. 

WAGES 

1. llo' em loyee shall be paid at less than the ra.te of _____ 
6.0 liars per week of hours (or cents )er hour). 

wr ;'e 
(l~0TE: If there rxe to be/rates for employees rbove the minimum, 
they may be set forth here). 

2. This Article establishes .? minimum rr.te of pay, regardless of 
whether an employee is compensated on - time-rate, piece work, or other 
basis. 

3. (The proponents of the Ode are expected to submit a definite 
pirn for an equitable adjustment of those wages above the minimum.) 

Female employee- performing substantially the same work as 
male employees shrll receive the same rates of jry as male employees. 

ARTICLE V. 

Q EhEEAL I.A3C- ThOVI^IOhS 

1. ho person under yea.rs of age shrll be employed in the 

trade/industry, nor anyone under years of age at operations or 

occupations la.zrrdous in na.ture or detrimental to health. The Code 

Authority shall submit to the Administrator before (arte) a list of 

such occupations. In - ny State an employer shrll be deemed to have 

9810 



-171- 

cornpliec". with this provision if he shall have on file a certificate or 
permit duly issued oy the authority in such Strte empowered to issue 
employment or r..;e certificates or permits, showing that the employee is 
of the required age. 

2. Lm plo^^es shrll have the right to organize and bargain col- 
lectively throxigh representatives of their own choosin ;, and shnll be 
free from the interference, restraint, or coercion of employers of 
labor, or their agents, in the designation of such representatives or in 
self-or-r nidation or in other concerted activities for the purpose of 
collective bcr\- ining or other mutual aid or protection. 

3. II o employee and no one seeking employment shrll be required as 
a condition of employment to join ?:.\y company union or to refrain from 
joining, organizing, or assisting a labor organization of his own 
choosing and 

Employers shall comply with the maximum hours of labor, mini- 
mum rates of pay, and. other conditions of employment, approved or 

prescribed by the President. 

5. T .".'ithin each State this Code shrll not supersede any laws of 
such State imposing more stringent requirements on employer regulating 
the age of employees, wages, hours of work, or Health, fire or general 
working conditions than under this Code. 

6. Employers shrll not reclassify employees or duties of occupa- 
tions performed by employees so as to defeat the purposes of the Act. 

7. Each employer shall post in conspicuous places full copies of 
this Code. 

AuTICLB VI 

AJJMmSTf-ATIOIT 

To further effectuate the policies of the Act, a Code Authority is 
hereby constituted to cooperate with the Administrator in the adminis- 
tration of this Code. 

1. Organization and constitution of Code Authority. 

(a) The Code Authority shall consist of individuals, or 

such otae:_ number as may be ap rovec. from time to time by the Adninis- 
trator, to be selected as " ereinafter set forth. The Administrator, in 

his discretion, may appoint not more than; adc.itional members (with 

or without vote) to represent the Adaini strator or such groups or 
interests as may be agreed upon (with or without expenses) to the 
Trade/l ndus try. 

(b) (Here may oe set up the manner in which such Code 
Authority is to be selected, and from which rroups. ) 



9810 



-172- 

( c) Sad, trade or industrial rs"ocirtion c.irectly or indirectly 
participating in the selection or activities of the Code Authority shall: 
(l) Impose no inequitable restrictions on membership, :nd (2) submit to 
the Administrator true copies of its articles of association, by-laws, 
regulations, rnd any amendments when made thereto, together with such 
other information as to membership, organization, rnd activities as the 
Administrator nay deem necessrry to effectuate the purposes of the Act. 

(d) In order that the CotJ.e Authority shall at nil times be truly 
representative of the trade/ industry rnd in other respects comply with 
the provisions of the Act, the Administrator may provide stich hearings 
as he may c.e^m ' irojjer; and thereafter if he shrll iind. that the Cod.e 
Authority is not truly represent' oive or o.oes not in other respects com- 
ply with the provision'.: of the Act, may require an appropriate modifica- 
tion in the net" cd of selection of the Coi e Authority. 

( e) (here may be set forth any other provisions e.ealing with the 
organisation ■ iu constitution of the Code Authority or related, a encies, 
such as joint conference boards to confer with labor, etc., which the 
proponents desire to incorporate.) 

2. The Code Authority shall lave the following duties rnd powers 
to the extent lermitted ~oy die Act, subject to the right of the Auninis- 
tr-tor on review to cisrpprove or modify any rction taken ay the Code 
Authority. 

(a) (Here may oe. inserted provisions for the administration of the 
Code and the maintenance of the Coc.e Authority an. its activities, in- 
ducing the obtaining u-on employers of reports based on periods of one, 
two or four weohs or multiples thereof in respect to business, wages, 
hours of labor, etc., for the Ac'ministr-tor. ) 

(b) Members of the trad.e/inc,ustry shall be entitled, to participate 
in and share the benefits of the activities of the Code Authority and to 
pjrticipate in the selection of the members tnereof by assenting to and 
complying with the reapiirements of this Code and sustaining their 
reasonable share of the expenses of its administfrtion. The reasonable 
share of the ercsenses of administration shall be determined by the 
Coue Authority, subject to review by the Administrator , on the basis of 
volume of business ane./or such other factors as may be deemed equitable 
to be tahen into consie.erption. 

3. In addition to the information required to oe submitted to the 
Coc.e Authority, tnere shall be furnished to government agencie- svich 
statistical information as the Administrator may deem necessary for the 
purposes recited, in Section 3 (a) of the Act. 



AHTICLL VII, 



THAIS PHACTICLS 



s The followin : ractices constitute unfair methoc s of competition 
for members of the trrde/ industry enC are prohibited: 

9810 



-173- 

1. False Marking or Branding The false marking or branding of 
any product of the trade/industry which has the tendency to mislead or 
deceive customers or prospective customers, whether as to the grade, qual- 
ity, quantity, substance, character, nature, origin, size, finish or pre- 
paration of any product of the trade/industry, or otherwise. 

2. Misrepresentation or False or Misleading Advertising: 

The making or causing or knowingly permitting to "be made or pub- 
lished any false, materially inaccurate or deceptive statement by way of 
advertisement or otherwise, whether concerning the grade, quality, quan- 
tity, substance, character, nature, origin, size, finish, or preparation 
of any product of the trade/industry, or the credit terms, values, poli- 
cies, or services of any member of the trade/industry, or otherwise, hav- 
ing the tendency or capacity to mislead or deceive customers or prospec- 
tive customers. 

3. Commercial Bribery: Directly or indirectly to give or permit to 
be given, or offer to give, money or anything of value to agents, employ- 
ees or representatives of customers or prospective customers, or to agents, 
employees or representatives of competitors' customers or prospective 
customers, without the knowledge of their employers or principals, as an 
inducement to influence their employers or principals to purchase or con- 
tract to purchase from the makers of such gift or offer, or to influence 
such employers or principals to refrain from dealing or contracting to 
deal with competitors. 

4. Interference with contractual relations: Maliciously inducing 
or attempting to induce the breach of an existing oral or written contract 
between a competitor and his customer or source of supply, or interfering 
with or obstructing the performance of any such contractual duties or ser- 
vices. 

5. Secret Rebates: The secret payment or allowance of rebates, 
refunds, commissions , credits, or unearned discounts, whether in the form 
of money or otherwise, or the secret extension to certain purchasers of 
special services or privileges not extended to all purchasers on like 
terms and conditions. 

6. Giving of Frizes, Premiums or Gifts: The offering or giving 
of prizes, premiums, or gifts in connection with the sale of products, or 
as an inducement thereto, by any scheme which involves lottery, misrepre- 
sentation or fraud. 

7. Defamation: The defamation of competitors by falsely imputing 
to them dishonorable conduct, inability to perform contracts, questionable 
credit standing, or by other false representations or "by the false dis- 
paragement of the grade or quality of their goods. 

8. Threats of Litigation: The publishing or circulating of threats 
or suits for infringement of patents or trade marks or of any other legal 
proceedings not in good faith, with the tendency or effect of harassing 
competitors or intimidating their customers. 

9810 



-174- 

9. Is-iion," %'c of Competitors : Securing confidential information 
concerning the uv. iness of r competitor by r frlse or misleading state- 
ment or representation, by a false impersonation of one in authority "by 
bribery or by any other i-nfair method. 

10. Other Unfair Prrctices ; ITothing in this Code shall limit the 
effect of ray adjudication oy the Courts, or holding by the Federal Trade 
Commission on complaint, finding, rnd or> er, that any practices or method 
is unfrir, providing that such re. judication or holding is not inconsis- 
tent with any provision of the Act or of this Code. 

(iTOTL: Members of the trade/ industry may adopt any of the 
foregoing which are deemed applicable, ana may rlso 
set forth such other trade >ractices, safety and 
health provisions, and provisions reiatin to stand- 
ards, which it is desired to incorporate in the Code. 
Upon the a ;proval oi the Code, re itional trade 
practice provisions may be incorporated, in accordance 
with the provisions of Article VIII, Section 2). 



A..TICLE VIII. 



LDJJIFI'CATIOi: 



1. This Code and all the provisions thereof are expressly made 
subject to the right of the President, in accordance with the provisions 
of subsection ( b) of Section 10 of the National Industrial Recovery Act, 
from time to time to cancel or modify m-j order, approval, license, rule 
or regulation issued voider Title I of said Act and specifically, but 
without limitation, to the right of the President to cancel or modify 
his approval of this Code or any conditions imposed by him upon his 
approval thereof. 

2. This code, except as to jrovisions required by the Act, may be 
modified on the basis of experience or changes in circumstances, such 
modification to be based upon application - to the Administrator ana such 
notice of hearing as he shall specify, rnd to become effective on 
approval of the President. 

(if desired, it may be provided that upon the recommendation 
of the Code Authority provisions covering specifically des- 
cribed matters may be modified, eliminated or supplemented 
by the Administrator, after such notice and hearing as he 
shal 1 sp ec i f y) . 

ARTICLF IX 

MONOPOLIES.' FTC. 

No provision of this Coc'e shall be so applied rs to peimit monopo- 
lies or mono olir.tic prrctices, or to eliminate, oppress or discriminate 
against small enterprises. 



9810 



-175- 

ARTICLjS X. 

FKlCx, IXCICASXS 

VShereas tlie policv of the Act to increrse rerl purchasin ; power 
will be made possible of consummation if prices of goods and services 
increase as rapidly as wages, it is recognized that price increases 
should be delcyed and that, when made, the name should, so far as 
reasonably possible, be limited to actual increases in the seller's 
costs. 

ARTICLE XI. 

LFFJ.CTIF-, BATS 

This Code shall become effective of the jiay after its 

approval by the President. 



9810 



-175- 



CONFIDENTIAL 



EXHIBIT 10 

* SUGGESTED OUTLINE FOR CODES * 

* * 

* Including Some Suggested * 

* General Provisions * 

5(j * ;fc Up * sjc * l£ Jfi ;■: % >l: 5^: :;: ^; :'■ 'Jf % *;. sjc % :;: ;|; ^ : * * : . a^ :fc 

Foreword to the attached 12 
page "L iodel Cede " (a summary 
of which is given on the fol- 
lowing page) . 

Suggested "model" provisions 
for Code Authority By-laws 
will "be contained in a sepa- 
rate mimeograhi. 



REVISED * 

Draft of 
October 25th 
1933 



To: BLACIC'JELL SHITE, Legal Division, N.R.A. 
From: CODE STANDARDIZATION GROUP. 



The "model code" OUTLINE issued by the Legal Division on October 
1st, prepared by yourself, L.1.1.C Smith, and ethers of the Division, 
stated that it was for temporary u^,e and ashed for " proposals for 
improvement. " 

The OUTLIKE was the result of an insistent public request, 
and proved popular. Over 1,000 copies were called for. 
Business groups seem to heartily desire the time-saving 
effect of a basic standard framework or outline; on this 
framework each industry can effectively hang the Code 
provisions which it desires for its individual needs. 

The attached 12 pages contain the majority-opinion suggestions of 
a group of over twenty persons (listed on following page) who have met 
daily since October 12th on this matter. Practically every session 
has been attended by one or more staff members of the: 



Executive Office 
Legal Division 
Research £ Planning 



Consumers Advisory Board 
Industrial » " 
Labor " " 



U. S. Dept. of Commerce 
Federal Trade Commission 
etc. 

About 200 Codes of Pair Competition have been approved by the 
President or await his approval (these include all the largest in- 
dustries), but many times this number are here in preliminary form 
or are in process of being prepared in all parts of the United States 



3810 



-*177- 

'oy smaller industrial groups. Seldom -.re two alike as to outline 
form. limy are exceedingly voluminous. 

Yet these groups wish to receive the benefits of the National 
Industrial Recovery Act as soon as possible. Heasonabl e standardi - 
zation of the form of Codes should vastly facilitate their clear- 
ance through the U.S.A. Divisions, improve understanding of each 

Code' s objectives, assist in desired allied-industries' Code Auth- 
ority relationships, etc. 

This tentative October 25th GUTLIEE now submitted to you- for 
legal refinements end general consideration, consists of some 3,000 
words (as compared with about 2,000 in the October 1st draft). 
The present one v;a,s somewhat increased in length so as to include 
t .e ..lost desirable of the suggestions submitted by the public and 
the N.E.A. staff in response to your request for "proposals for im- 
provement" . 

In size, the present 0UTLIE3 can be summarized thus: 



Article I 








50 
. 180 

. 130 

440 
. 400 
. 560 

. 470 

. 1.30 

20 
50 
10 


wo rd s 


II 








ii 


III 










IV 










V 


General Labor Provisior 
Code Authority Organize 

" " Powers i 


t 






VI 
VI T 


Lon 

Duties. . . 




VIII 










IX 










X 










XI 


Effective Date on each 







0,020 " 

The informal CODS STAPDAPJDIZATICN C-ECU? which has worked on this 
present draft includes the following individuals, a number of whom. 
have attended all of the daily sessions: 

(Those indented attended only the last meeting; Oct. 24th) 



ALDExlSOU Department of Commerce 

BAHKIK Labor Advisory Board, 3JRA 

COhPTGN Industrial Advisory Board 

CGLB3 Press Division 

•COPELAMD U. S. Central Statistical Board 7003 2650 

COHCCPAi: Agr. Adj. Ad.;. (Atty. Frank | s office) 

9310 



...oom 


Tele'xione 


3076 


2384 ; 


3311 


362 


4821 


2128 


4514 


342 



•178- 



COVER 
CULBERTSGN 

CREDITOR 
EDWARDS 

ENGLE 
GATES 

GEORGE 

BLASGOW 

guernsey 

::aaks 

hal stead 

EALiMOND 

heyeiger 

IIEYDON 

EORTON 
HUNT 



JEFFREY 
JUDKINS 

JUNKIN 

JUDLUM 

I/IAS SEL 

MEYER 

MCFADDEN 

RICE 
SHANNON 

SHIELDS 
LUC SMITH 

STONE 
THOMPSON 

TOMPKINS 
W WARD 

WILMGTTE 
WORTHY 



U. S. Central Stat. Bd. 
Industrial Advisory Board 

Executive Office 
Consumers' Advisory Board 

Department of Commerce 
Labor Advisory Board 

Department of Commerce (and Sec, 
Filene Com, on Trade Practices) 
Deputy Adm . , NRA 

Trade Assns. (Retail-Wholesale) 
Trade Assns. (Manufacturing) 

Office of Dep. Adm. King 
Trade Assn. Division 

Industrial Advisory Board 
Better Business Bureaus 

Federal Trade Commission 
Consumers' Adv. Ed. (From Fed. 
Trade Commission) 

Executive Office, 1IRA 
Department of Commerce 

Department of Co.rm.erce 

Office of Div. Adm. Whiteside 
Consumers' Advisory Board 

Research £ Planning Division 
Trade Assns. (Producers-Iif rs. ) . 

U. S. Census Bureau 
Legal Division 

Office of Div. Adm. Muir 
Legal Division 

Research C: Planning Division 
U. S. Central Stat. Bd. 

Industrial Advisory Board 
Office of Div. Adm. Simpson 

Labor Advisory 3oard 
Office of Dep. Adm. Howard 



Room 


Telephone 


7028 


2650 


4321 


2688 


4840 


645 


4868 


619 


3860 


2170 


3315 


617 


3076 


2383 


4064 


2324 


3087 


2413 


3087 


2418 


4019 


2212 


3039 


2375 


4821 


2128 


3017 


329 


Nation 


al 7720 


4869 


2344 


4840 


2304 


3087 


2418 



3843 



2356 



4830 


363 


4869 


2344 


3412 


2164 


3087 


2413 


5804 


2601 


4055 


687 


4033 


2242 


4041 


2341 


4041 


2341 


7028 


2650 


4821 


2128 


4336 


317 


3315 


617 


4320 


2641 



YOUNG 


Office of General Hammond 3059 2575 






Dr. E. Christopher Meyer is acting as 






chairman of the group. Room 3412, Tel. 21 64. 


9810 




Mr. C. Judkins is acting as Secretary of 
the group. Room 3087, telephone 2418. 



October 25, 1933 



-179- 



ARTICLI 



Section 



A TWO -PAGE SUMMARY 

of the 

12 -oage "OUTLINE" . 



"PURPOSES" 



II 



III 



"DEFII ITIOII 



"hours" 



IV. 



".vagi 



a, 

5. 

1. 
o 

<J ■ 

r? 
O. 

4. 
5. 
6. 
7. 

8. 

9. 



."SEHEHAI LABOR PI 

1. 
2. 



3. 
4. 
5. 
6. 



(The provisions of the submitted Code, 
when approved by the President of the 
United States, are to be binding on 
every member of the individual indus- 
try cr trade. ) 



1. (Definitions of the industry, member, 
employee, etc. ) 



Maximum hours. 

" " for clerical and office employees 
Exceptions (travelling salesmen, etc.) 
Standard week, 

Employment by several employees. 



Minimum wage, 

" " for clerical and office employees. 
Piecework compensation. ! ' , 

Rates by occupations. 
Evasion through re- employment. 
Wages above minimum 
Cver time. 
Pemale employees. 
Handicapped person s . 

IOVI SICKS". . 

Child labor. 

a. Collective bargaining, 

b. Company unions and other labor organizations. 

c. Employers shall comply with hours, etc. rules. 
Reclassification of employees. 

Standards for health and safety. 

State laws with more stringent requirements. 

Posting of the Code when approved. 



VI "CODE AUTHORITY". Organization and Powers & Duties. 

OBGANIZATICH: ". . 

1. Its function. 

2. Members on tlie C. A. 

3. Participating Trade Assns. , shall have no in- 

equitable restrictions on membership. 



9 810 



-180- 



P.VTERS (1 DUTIES . 4. Maintenance of a "truly representative" 

ciiaracter. 
5. The activities of the C.A.: participating 

in them - - assenting to - - sharing 

its ex; ? n s e s . 
f>. Eon-liability of G. A. members for official 

acts. 
?. Following powers d duties, subject to re- 

V J ew : 

a. Adopt by-laws. . .for Code administration. 

b. S tatistical reports from members. 

c. Handle Cede v iolations . 

d. Utilize Trade Assn. .' other agencies 

facilities. 

e. Coordinate this Code with related indus- 

tries. 

f. Create Joint Industrial Relations Board. 

g. ..embership fees — " who accent the "bene - 

or otherwise assent" — 



h. URA Code Insignia solely to those em- 
ployers who — 

i. Establish an agency to develop Pair Trade 
Practices & Industrial Planning . 

j . Consider amendments to the Code. 

GEIIERAL ADniHISTPATIVE PROVISION 

0. Statistical data for Government agencies. 
9. Method of appealing from Code Authority' s 

actions. 

VII . . ."ThADE PRACTICE RULES" 

1. Inaccurate Advertising. 

2. "Bait" Advertising. 
•3. Palse Billing. 

4. Inaccurate Labelling. 

5. References to Competitors. 

6. Selling Below Cost. 

7. Threats cf Law Suits. 
0. Secret Rebates. 

9. Selling on Consignment. • . , 

10. Bribing Employees. 

11. Interference with Another's Contracts. 
1?. Repudiating One' s Own Contract. 

IG. Coercion. 



vlil.."l.:ODIPICATI( ,: 



IX "l/iCIIOPOLIES" , 



1. Right of the President to modify. 12 

2. Procedure of me'mbers to modify. 



12. 



rressioc - s ,1 enterprises, 



9810 



X. 



."P2ICZ LITCBSASES" 



-181- 



Tl'.e -policy of tlie Act is "t o increr.se 
real purchasing ■oower " — increased prices, 
therefore, sh:uld be limited to actual in- 
creases in seller' s costs. 



XI "EFFECTIVE DATE". 



1. On tiie 2nd Monday after its approval by 
the President of the United States. 



13. 



13, 



Our suggested 3,000 word "Model 
Code" OUTLIKE (which these two 
pages summarize) comprises 11 
Articles, including 6,3 Sections . 
Yet very few of these Sections 
are mandatory and the total 
number of Sections in many codes 
far exceeds the above total. 



9810 



(Y-? 'T'T'DF'H'FT ,V T s******************************* REVISED 

* SUGGESTED OUTLINE FOR CODES * 

* * Draft of 

* Including Some Suggested * October 25th 

* General previsions * 1933 



The suggestions in this outline are intended to assist trade and 
industry in the preparation of codes. 

Except as to those indicated provisions which the NATIONAL IN- 
DUSTRIAL RECOVERY ACT requires in all codes, none of the suggestions in 
this draft are mandatory. 

It is "believed, however, that the preparation of codes, and their 
approval "by the president, will he greatly expedited if those who pre- 
pare codes resort as far as possible to the uniform wording suggested 
in this outline. 

Circulation of this present draft is limited to N. R. A. 

Suggestions for improvements are requested . 

ARTICLE I . 

purposes 

To effect the policies of Title I of the National Industrial 
Recovery Act, the following provisions are submitted as a Code of Fair 

Competition for the Trade/ Industry, and upon approval by 

the President shall be the standard of fair competition for such 
trade/ industry and shall be binding upon every member thereof. 

ARTICLE II . 

Definitions 

The term Trade/industry as used herein includes the 

(state accurately what is included in the trade/ 



industry, whether manufacturing, building, transporting, repairing, 

selling and/or distributing at wholesale or retail, etc.) of 

(products, merchandise, or service, etc.) and such related branches or 
subdivisions thereof as may from time to time be included under the 
provisions of this Code by the president after such notice and hearing 
as he may prescribe. 

The term " member of the trade/industry 1 ' includes any individual, 
partnership, association, corporation, or other person engaged in the 
trade/ industry, either as an employer or on iiis or its own behalf. 

The term " employe r" as used herein means any employer engaged in 
the trade/industry. 

9810 



-1! . - 

The term " enrol oyee " as used herein includes any and all -nersons 
engaged in the trade/ industry, however compensated, except a member of 
t he t tp- '. e / i ndus t ry . 

The terms "Act", and " Administr ator" as used herein shall mean 
respectively Title I of the National Industrial Recovery Act, and the 
Administrator for Industrial Recovery. 

Population for the purposes of this Code shall he determined "by 
reference to the latest Federal Census. (insert only when needed.) 



ARTICLE III, 



III, 



Hours 

v **■■... s- 



MAXIMUM HOURS* 

Section 1. No employee shall he permitted to 

work in excess of (35) hours in any one 

week or (8) hours in any twenty-four (24) 

hour period, except as herein otherwise provided. 
A normal work day shall not exceed (7) hours. 



* (Maximum hours for special classes of 
employees, if any, should he inserted 
under the appropriate paragraph, to- 
gether with the hours applicable.) 



Note : 

The figures 
in brackets 
are not man- 
datory, but a 
are set forth 
for purposes 
of illustra- 
tion. 

Each industry 
mav make its 
own proposals. 



HOURS FOR CLERICAL AND OFFICE EMPLOYEES* 



Section 2. No person employed in clerical or office work, shall 

be permitted to wor 1 -- in excess of (40) hours in any one week 

or (9) hoars in any twenty-four hour period. A normal work 

day shall not exceed (3) hours. 

EXCEPTIONS AS TO HOURS 

Section 3. The provisions of this Article shall not apply to 
travelling salesmen, or to employees engaged in emergency maintenance 
or emergency repair work, or to persons employed in a managerial or 
executive capacity who earn not less than (£35.00) per week. 



STANDARD WEEK 



Section 4. ' No employee shall be permitted to work more than 
(5) days in an:/ ( 7 ) &a& period. 



Ej :?LOYIviSNT BY SEVERAL EM PLOYERS 

Section 5. No employer shall knowingly Permit any employee to 
work for any time which when totaled with that already performed 
with another employer, or employers, in this trade/ industry exceeds 
the maximum permitted herein. 
* See note at center of page on Maximum Hours 



"18 4-* 
ARTICLE IV. 



Wages 

***** 






IV. 



MINIMUM WaGE 

Section 1. No employee shall be paid less than at 

the rate of ($14.00) per week of (35) 

hours or (40) cents per hour, except as 

herein otherwise provided. 

MINIMUM WAGE FOP. CLERICAL AND OFFICE EMPL OYEES 

Section 2. No person enroloved in clerical or 

office work shall be paid less than ($14.00) 

per week. 

PIECEWORK COMPENSATION - MI NIMUM WAGES 

Section 3. This Article establishes a .minimum 
rate of pay which shall apply, irrespective of whether ' 
an employee is actually compensated on a time-rate, 
piecework, or other ba.sis. 



MINIMUM WAGE RATES BY OCCUPATION 



: -' ; ' : ' ' ' • :'''. ■'{>■ 



.... , -I 



Note.: 

The figures 
in brackets 
are not man- 
datory, '"B lit 
are set forth 
for purposes 
of illustra- 
tion. 

Each industry 
may make its 
o^n proposals. 



Section 4. Within 






_days after the approval of this Code, 



the Code Authority shall determine the occupations in this Industry and 
present for approval to the Administrator after notice and hearing a 
schedule of minimum wage rates for occupations by localities. 

EVASION THROUGH REEMPLOYMENT 

Section 5. No employee now employed a.t a rate in excess of the 
minimum shall be discharged and re-employed at a lower rate for the 
purpose of evading the provisions of this Code. 

WAGES ABOVE MINIMUM 



Sec 
the four 
percent 
employee 
(50) per 

than 

in exces 
adjusted 
class of 
whether 



tion 6. No employee whose normal full-time weekly hours for 
weeks ending (date) are reduced by less than (30) 

shall have his or her full-time weekly earnings reduced. Any 
whose said full-time weekly hours are reduced by 



cent shall not have his or her said earnings reduced by more 

(25) percent. All other employees whose hours are reduced 

s of the said (20) percent shall have their earnings 

proportionately. The principle of this section shall apply by 
worker to all other employees whose hours have been reduced, 
compensated on a time-rate, piece-work, or other basis. 



OVERTIME 

Section 7. All employees who work more than the normal number 
of hours per day in any twenty-four hours, or more than the normal 
number of hours per week in any seven days, provided in this Code for 



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the class of ror' - performed by such employees, shall he Note : 

paid not less than (1-1/2) times their normal The figures in 

rate of pay for said excess. Such overtime shall not brackets are 

exceed (6) hours in any one wee 1 -:, except in not mandatory, 

cases of emergency maintenance or emergency repair but are set 

work involving breakdowns or protection of life or prop- forth for pur- 

erty, provided that all such cases of emergency work "ooses of 

shall be reported to the Code Authority. illustration. 

Each industry 
may make its 
o^n proposals. 

FEMALE EMPLOYEES 

Section 8. Female employees -performing substantially the same 
work as male employees shall receive the same rate of pay as male employees. 

HANDICAPPED PERSONS 

Section 9. A person whose earning capa.city is limited because of 
age or physical or mental handicap 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 his employment at such wages and for such hours 
as shall be stated in the certificate. Each employer shall file with the 
Code Authority a list of all such persons employed by him. 



ARTICLE V . V. 

General Labor Provisions 

St:*********************** 

CHILD LABOR PROVISION 

Section 1. Ho person under sixteen (16) years of age shall be em- 
ployed in the trade/industry. No -person under eighteen (18) years of 
age shall be enroloyed at operations or occupations- which are hazardous 
in nature or dangerous to health. The Code Authority shall submit to the 
Administrator before (date) a list of such operations or occupa- 
tions. In any State an employer shall be deemed to have comolied with 
this provision as to age if he shall have on file a. certificate or 
permit dulv issued by the Authority in such State empowered to issue 
employment or age certificates or permits showing that the employee is 
of the required age. 

PROVISIONS FROM THE ACT (INCLUSION OBLIGATORY) 

Section 2. In compliance with Section 7 (a) of the Act, 
it is provided: 

(a) That employees shall have the right to organize and 
bargain collectively, through representatives of their own 
choosing, and shall be free from the interference, restraint, 
or coercion of employers of labor, or their agents, in the 
designation of such representatives or in self-organization 

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or in '-other concerted activities for the purpose of collective 
bargaining or other mutual aid or protection. 

(b) That no employee and no one seeking employment shall 
be required as a condition of employment to join any company 
union or to refrain from joining, organizing, or assisting a 
labor organization of his or?:i choosing, and 

(c) That employers shall comply with the maximum hours 

of labor, minimum rates of pay, and other conditions of employ- 
ment approved or prescribed by the President. 

RECLASSIFICATION OF EMPLOY EES 

Section 3. Ho employer shall reclassify employees or duties of 
occupations performed for the purpose of defeating the provisions of the 
Act or of this Code. 

STANDARDS FOE SAFETY AND HEALTH 

Section 4. Every employer shall provide for the safety and health 
of his employees at the place and during the hours of their employment. 
Standards for safety and health shall be submitted by the Code Authority 
to the Administrator within six (6) months after the effective date of 
this Code. 

STATE LAY/S 

Section 5. Ho provisions in this Code shall supersede any State 
or Federal law which impose_s more stringent requirements on employers as 
to age of emplovees, wages, hours of work, or as to safety, health, 
sanitary or general working conditions, or insurance, or fire protection, 
than are imposed by this Code. 

POSTING 

Section 6. AH employers shall post complete copies of this Code 
in conspicuous places accessible to employees. 



' ARTICLE VI . VI , 

Organization, Fowers and Duties of the CODE AUTHORITY 

ORGANIZATION 

Section 1. A Code Authority is hereby constituted to cooperate 
with the Administrator in the administration of this Code. 

Section 2. The Code Authority shall consist of members 

to be selected as hereinafter provided, and in addition thereto there 

may be members without vote, to be appointed by the President, 

to serve without expense to the trade/ industry for months from 

the date of appointment. 

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— 1l; I- 

The trade/ industry members shall be selected as follows: 

(Here should be stated the manner in which the 
members of the Code Authority shall bo selected. 
Provision should be made so that the Code Authority 
will be trulv representative of the various majority, 
minority, and other interests in the trade/ industry. 
If, however, by reason of conditions peculiar to the 
trade/ industry, selection by the trade/ industry is 
impossible, it may be orovided that armointment shall 
be by the President.) 

Section 3. "Each trade or industrial association directly or indirect- 
ly participating in the selection or activities of the 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, 
regulations, and any amendments when made thereto, together with such 
other information as to membership, organization, and activities as the 
administrator may deem necessary to effectuate the purposes of the Act. 

Section 4. In order that the Code Authority shall at all times be 
truly representative of the trade/industry and in other respects comply 
with the provisions of the Act, the Administrator may provide such hear- 
ings as he may deem proner; and thereafter if he shall find, that the Code 
Authority is not truly representative or does not in other respects comply 
with the provisions of the Act, may require an appropriate modification in 
the method of selection of the Code authority, or any sub-Code Authority. 

Section 5. Members of the trade/ industry shall be entitled to 
participa.te in and. share the benefits of the activities of the Code Author- 
ity and to -participate in the selection of the members thereof bv assenting 
to and complying with the requirements of this Code and sustaining their 
reasonable share of the expenses of its administration. Such reasonable 
share of the expenses of administration shall be determined by the Code 
Authority, subject to review by the Administrator, on the basis of volume 
of business and/or such other factors a.s may be deemed equitable. 

Section 6. ITothing contained in this Code shall constitute the 
members of the Code Authority partners for any purpose. T'or shall any 
member of the Code Authority be liable in any manner to anyone for any act 
of any other member, officer, agent or employee of the Code Authority 
exercising reasonable diligence in the conduct of his duties hereunder be 
liable to anyone for any action or omission to act under the Code, except 
for his o"Ti willful mis-feasance or non-feasance. 

P0~?.S AID DUTIES 

Section 7. The Code Authority shall have the following powers and 
duties in addition to those elsewhere Drovided in this Code, subject to the 
right of the Administrator, on review, to disapprove or modify any action 
taken by the Code Authority. 

(a) To adopt by-laws and rules and regulations for its pro- 
cedure and for the administration and enforcement of the Code 
in accordance with the powers herein granted, and to submit the 
same to the Administrator for his approval together with true 

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copies of any amendments or additions when made thereto, minutes 
of meetings when held, and such other information as to its 
activities as the Administrator may deem necessary to effect the 
purposes of the Act. 

(b) To obtain from members of the industry for use of the 
Code Authority, for the Administrator in the administration and 
enforcement of the Code, and for the information of the President, 
reports based on -oeriods of one, two or four weels, or multiples 
thereof, as soon as the necessary readjustment within the industry 
can be made and to give assistance to members of the industry in 
improving methods, or in prescribing a uniform system, of accounting 
and reporting. All individual reports shall be kept confidential 

as to members of the trade/ industry and only general summaries 
thereof may be published. 

(c) To receive complaints of violations of this Code, make 
investigations thereof, provide hearings thereon and adjust such 
complaints, and bring to the attention of the Administrator for 
prosecution, recommendations, and information relative to unadjusted 
violations; but in no event shall the Code Authority proceed to 
prosecute without notice to and approval by the Administrator. 

(d) To use such trade associations and other agencies as 

it deems proper for the carrying out of any of its activities pro- 
vided for herein and. to pay such trade associations and agencies 
the cost thereof, provided that nothing herein shall relieve the 
Code Authority of its duties or responsibilities under this Code and 
that such trade associations and agencies shall at all times be 
subject to and conroly with the provisions hereof. 

(s) To coordinate the administration of this Code with 
such other codes, if any, as may be rela.ted to the trade/ industry, 
or any subdivision thereof, and to delegate to any other administra- 
tive authority, with the approval of the Administrator, such 
powers as will promote joint and harmonious action upon matters of 
common interest. 

(f) To create as an Agency of the Code Authority, a 
JOINT INDUSTRIAL RELATIONS BOARD, consisting of an equal number 
of representatives of employers and employees, and an impartial 
Chairman elected by the members of the Board, to investigate all 
matters in the Code relating to hours, wages and general labor pro- 
visions and to report their findings and recommendations to the 
Code Authority. The designated employees representatives shall be 
truly representative of the employees of the industry and shall be 
selected by such employees. 

(g) To secure an equitable and proportionate payment of the 
expenses of maintaining the Code Authority and its activities from 
members of the industry. 

(h) To cooperate with the Administrator in regulating the 
use of the N.R.A. Code Insignia solely by those employers who have 
assented to, and are complying with, this Code. 



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(i) To establish or designate an agency on PLANNING AND 
FAIR PRACTICE to rhich shall be added by the' Administrator a 
representative instructed to safeguard the interests of the 
consumer, which shall cooperate with the Code Authority in de- 
veloping fair inter and intra, trade practices and industrial 
planning, including the regular'ization of employment and 
stabilization of employees for the industry. Any such recom- 
mended practices being amendments to the Code must be approved 
by the President. . 

(j) To initiate, consider and make recommendations for the 
modification or amendment of this Code. ,; 

GENERAL ADMIN ISTRATIVE PROVISION 

Section 8. In addition to the information required to be submitted 
to the Code Authority as set forth, in this Article there shall be 
furnished to government agencies • such, statistical information as the 
Administrator may deem necessary for the purposes recited, in Section 3(a) 
of the National Industrial Recovery Act. 

Section 9. An- appeal from any action by the Code Authority affect- 
ing the rights of any employer or employee in' the trade/ industry may be 
taken to the Administrator. 

■ . ■.-,; ' ARTICLE VII . . 

Trade Practice Rules 

(Still in Process of Revision) •■• ■ 

GENERAL DEFINITION . 

For all purposes of the' Code the' 
acts, described in this Article shall 
constitute unfair practices. Any 
member of the trade/ industry who 
shall directly, or indirectly 
through gny officer, employee,' agent 
or representative, knowingly use, 
employ, or permit to be employed, 
any of such unfair practices shall 
be guilty of a violation of tne Code. 

(Rules concerning Trade Inaccuracies) 

Rule 1. (Inaccurate Advertising . ) 

No member of the industry shall use advertising (whether printed, 
radio, display or of any. other nature.) or other representation which 
is inaccurate in any material particular or in any way misrepresent any 
commodity, (including its use, trade-rmark, grade,' quality, quantity, 
origin, size, substance, character, nature, finish, material content or 
preparation) or credit terms, values, policies', services, or the nature 
or form of the business conducted. 

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R-ale 3. ("3ait" Advertising.) 

No member of the industry shall use advertising or selling 
methods or credit terms which have the capacity or tendency to de- 
ceive or mislead the customer or prospective customer. 

Rule 3. (False Billing . ) 

No member of the industry shall withhold from or insert in any 
quotation or invoice any statement that makes it inaccurate in any 
material particular. 

Rule 4, (Inaccurate Labelling . ) 

No member of the industry shall brand or mark or pack any com- 
modity in any manner which tends to deceive or mislead purchasers with 
respect to the brand, grade, quality, quantity, origin, size, material 
content or preparation of such commodity. 

(Rules Concerning Attacking of Competitors) 

Rule 5. (Inaccurate References to Competitors, etc . ) 

No member of the industry shall use advertising or other repre- 
sentation which refers inaccurately in any material particular to any 
competitors or their commodities, prices, values, credit terms, poli- 
cies or services. 

Rule 6. Selling Below Cost 

(provisions may be inserted against selling below cost based 
upon principles of costing formulated by the Code Authority and ap- 
proved by the Administrator, Such provisions should be applicable to 
the individual industry and should take into consideration the neces- 
sity of selling below cost to meet competition, to dispose of distress 
merchandise, etc.) 

Rule 7. Threats of Law Suits . 

No member of the industry shall publish or circularize unjusti- 
fied or unwarranted threats of legal proceedings which tend to or 
have the effect of harassing competitors or intimidating their cus- 
tomers. 

Rule 8. (Secret Rebates . ) 

No member of the industry shall secretly offer or make any pay- 
ment or allowance of a rebate, refund, commission, credit, unearned 
discount or excess allowance, whether in the form of money or other- 
wise, for the purpose of influencing a sale, nor shall a member se- 
cretly extend to any customer any special service or privilege not 
extended to all customers of the same class. 



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Rule 9. (Selling on Consignment . ) 

No member of the industry shall ship commodities on consignment, 
except under contract or boar- fide orders. 

(Hale Concerning Commercial Bribery) 

Rule 10. (Bribing Fmplcyees . ) 

No member of the industry shall give, permit to be given, or 
offer to give, anytning of velue for the purpose of influencing, or re- 
garding the action of say employee, agent, or representative of another 
in relation to the business of the employer of such employee or the 
principal of such agent without the knowledge of such employer or prin- 
cipal. 

(tentative addition: 

(tentative addition provided that nctaing herein shall prohibit 

the free and general distribution of articles used solely for 

advertising. ") 

(Rules Concerning Breach of Contract) 

Rule 11. (interference with Another's Contracts . ) 

No member of the industry shall attempt to induce the breach of 
an existing contract between a competitor and his employee or customer 
or source of supply; nor shall any such member interfere with or ob- 
struct the performance of such contractual duties or services. Nothing 
in this rule shall qualify Section 7 (a) of the National Industrial 
Recovery Act or obstruct the free exercise of tne rights of collective 
bargaining therein guaranteed. 

Rule 12. (Repudiating One's Own Contracts . ) 

No member of tne industry shall repudiate a contract entered into 
in good faith when the purpose of such repudiation is to create for 
such member an unfair price advantage. 

(Rule concerning Coercion) 

Rule 13. (Coercion . ) 

No member of the industry shall require that the purchase or 
lease of any commodity be a prerequisite to the purchase or lease of 
any other commodity. 

(NOTE: Members of the trade /industry may adopt any of the 
foregoing which are deemed ap'oli cable. 
They may also set forth such oth^r trade practices , 
and provisions relating to stanu rds, v/hich it is 
desired to incorporate in the Code. Upon the ap- 
proval of the Code, additional trede practice pro- 



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visions may "be incorporated in accordance with the 
provisions of Article VIII, Section 2.) 



ARTICLE VIII . VIII. 

iic-iif ication 
*********** 

1. This Code and all the provisions thereof are expressly made 
subject to the right of the President, in accordance with the provisions 
of subsection (t>) of Section 10 of the National Industrial Recovery Act, 
from time to time to cancel or modify any order, approval, license, rule, 
or regulation issued under Title I of said Act and specifically, but 
without limitation, to the right of the President to cancel or modify his 
approval of this Code or any conditions imposed by him upon his approval 
thereof. 

2. This Code, except as to provisions required by the Act, may be 
modified on the basis of experience or changes in circumstances, such 
modification to be based upon application to the Administrator and such 
notice and hearing as he shall specify, and to become effective on ap- 
proval of the President. 

ARTICLE IX. IX. 

Monopolies, Etc. 
*************** 

No provision of this Code shall be so applied as to permit mo- 
nopolies or monopolistic practices, or to eliminate, oppress, or dis- 
criminate against small enterprises. 

ARTICLE X . 

Price Increases 
*************** 

Whereas the policy of the Act to increase real purchasing power 
will be made more difficult of consummation if prices of goods and 
services increase as rapidly as wages, it is recognized that price in- 
creases except such as may be required to meet individual cost should 
be delayed. But when made such increases should, so far as possible, 
be limited to actual additional increases in the seller's costs. 

ARTICLE XI . 

Effective Date ; . 

This Code shall become effective on the second Monday after its 
approval by the President, 



Suggestions for improve- 
ment of this confidential OUT- 



LINE will be appreciated. 
qq-jq Kindly communicate them 

at once to the acting Chairman 



-19 - 

EXHIBIT 11 

SUGGESTED OUTLINE 
for 

use, in code drafting 

Draft of April 3, 1934 
-oOo- 



It is intended that the suggestions herein contained should be 
used only to the extent that they are found suitable, and none of the 
provisions herein are reauired in this -precise form except those 
(clearly indicated) which are required by the National Industrial 
Recovery Act. 



This outline is intended nrimarily for internal use within NRA. 
Revisions of particular -provisions may- be made 1 from time to time and 
anyone in -possession of a co-oy should kee-p the same up to date as 
changes are circulated. 



ARTICLE I 

Purpose s 

To effect the -policies of Title I of the National Industrial 
Recovery Act, this Cede is submitted as a Code of Fair Competition for 

the Trade/industry, and uoon a-pnroval 

its -provisions shall be the standards of fair competition f or such 
Trade /Indus try and- be binding uoon every member thereof. 

ARTICLE II 

D efinitions 

(This article on definitions is one of the most 
important in this Code. Each definition must b 
worded in clear and specific terms. Concisely 
state the exact class or classes :' ^-orise 
included within the division rr divirlr 3 of th 
trade /industry) . 



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-194- 

The term " Trade/industry" (or Trade/indus- 
try") as used herein includes the (state accurate- 
ly what is included in the trade-industry, whether manufacturing, "building, 
transporting, repairing, selling and/or distributing at whole-sale or re- 
tail, etc.) of (products, merchandise or service, 

etc.,) and such related branches or subdivisions as may from time to time 
be included under the provisions of this Code. 

The term " member of the trade/industry " as used herein includes, ;but 
without limitation, any individual, partnership, association, corpora- 
tion or other form of enterprise engaged in the trade-industry, either 
as an employer or on his or its own behalf. 

The term " employee " as used herein includes any and all persons en- 
gaged in the trade /industry, however conroensated, except a member of the 
trade /industry. 

The term " employer " as used herein includes anyone by whom such em- 
ployee is compensated or employed. 

The term "Association" as used herein shall mean the 



Association. 



The terms " President ", "Act", and " Admi n istrato r" as used herein 
mean respectively the President of the United States, Title I of the 
National Industrial Recovery Act, and the Administrator for Industrial 
Recovery. 

Population for the purooses of this Code shall be determined by 
reference to the latest Federal Census. (insert only when needed.) 



ARTICLE III 

Hours 

MAXIMUM HOURS 

Section 1. No employee shall be nermitted to work in excess of 

, hours in any one week or i hours in any twenty-four (24) 

hour period (beginning at midnight), except as herein otherwise -orovided. 
A normal work day shall not exceed hours. 

(Maximum hours for special classes of employees, if 
any, should be inserted under the appropriate para- 
graph, together with the hours applicable.) 

HOURS FOR CLERI CAL AND OFFICE EMPLOYEES 

Section 2. No -oerson employed in clerical or office work shall be 
permitted to work in excess of hours in any one week or 



hours in any twenty-four (24) hour period. A normal work day shall not 
exceed hours. 



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-.1 9£ - 

EXCEPTIONS AS TO HOURS 

Section 3. The previsions of this Article shall not apply to travel- 
ing salesmen, cr to employees engaged in emergency maintenance or emer- 
gency repair work, or to persons employed in a managerial or executive 
capacity who earn regularly thirty-five dollars $35.00) per week or 
more; provided, however, that enroloyees engaged in emergency maintenance 
and emergency reoair work shall he -oaid at one and one-half (l?) times 

their normal hourly rate for all hours worked in excess of hours 

per day and ________ hours oer week. 

STANDARD WEEK 

Section 4. No employee shall he permitted to work more than 

days in any day period. 

E MPLOYMENT BY SEVERAL EMPLOYERS 

Section 5. No employer shall knowingly permit any employee to work 
for any time which, when added" to the time spent at work for another em- 
ployer or employers in this trade /industry (or otherwise), exceeds the 
maximum permitted herein. 



ARTICLE IV 
Wages 



MINIMUM WAC-E5 

Section 1. No employee shall he paid in any nay period less than at 
the rate of cents per hour, except as otherwise herein provided. 

(Minimum wage adjustments based on locality and/or 
population, if appropriate, may be indicated here.) 

OFFICE AND C LERICAL EMPLOYEES ■ 

Section 2. No clerical or office employee shall be paid in any pay 
period less than at the rate of ■ ________ dollars ( ) per week. 

PIECEWORK COMPENSAT ION - MINIMUM WAGES 

Section 3. This Article estahlishes minimum rates of pay which 
shall apply, irrespective of whether an employee is actually compensated 
on a time rate, piece-work, or other hasis. 

(provisions governing overtime payments should he in- 
serted at this point; for example, for emergency main- 
tenance and emergency repair, etc.) 



)B10 



-196- 

WAGES ABOVE MINIMUM 

Section 4. No employer shall make any reduction in the full time 
weekly earnings of any employee whose normal full time weekly hours are 

reduced "by percent, or less, below those existing for the four weeks 

ending . When the normal full time weekly 

hours of an employee are reduced by more than said -percent, the full time 
weekly wage of such employee shall not be reduced by more than one half 
of the percentage of hour reduction above said percent. In no event shall 
hourly rates of nay be reduced, irrespective of whether compensation is 
actually paid on an hourly, weekly or other basis, nor shall any wages be 
at less than the minimum rates herein provided. 

Within days of the effective date hereof, (unless such ad- 
justment has been made theretofore) each employer shall adjust the sched- 
ules of wages of his employees in such an eauitable manner as will con- 
form to the provisions hereinabove set forth, and still preserve wage 
differentials reasonably proportionate to those in effect prior to the 
effective date of this code, 

F1MALE EMPLOYEES 

Section 5. Female employees performing substantially the same work 
as male employees shall receive the same rate of pay as male employees. 

HAND I CAPPED PERSONS 

Section 5. A person whose earning capacity is limited because of age 
or physical or mental handicap 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 his 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 maximum hours of work for such employee. 



ARTICLE V 

Genera l Labor and other provisions 

CHILD LABOR 

Section 1. No person under eighteen (18) years of age shall be em- 
ployed in the Industry except as (list here specific occupations, such 
as office boys, office girls, messengers, etc.) No person under sixteen 
(16) years of age shall be employed in the Industry in any capacity. In 
any State any employer shall be deemed to have complied with this provi- 
sion as to age if he shall have on file a certificate or permit, duly 
signed by the Authority in such State empowered' to issue employment or 
age certificates or permits showing that the employee is of the required 
age. 



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PROVISIONS FROM THE ACT (inclusion obligatory) 

Section 2. (a) Employees shall have the right to organize and bar- 
gain collectively through representatives of their own shoosing, and shall 
be free from the interference, restraint, or coercion of employers of 
labor, or their agents, in the designation cf such representatives or in 
self-organization or in other concerted activities for the purpose of 
collective bargaining or other mutual aid or protection. 

(b) No employee and no one seeking employment shall be required as 
a condition of employment to join any company union or to refrain from 
joining, organizing, or assisting a labor organization of his own choos- 
ing, and 

(c) Employers shall comply with the maximum hours of labor, minimum 
rates of pay, and other conditions of employment approved or prescribed 
by the President. 

EVASION ithrough subterfuge 



Section 3. No employer shall reclassify employees or duties of 
occupations performed or engage in any other subterfuge as to defeat 
the purposes or provisions cf the Act or of this .Code. 

STANDARD S FOR SAFETY AND HEALTH 

Section 4. Every employer shall provide for the safety and health 
of employees during the hours and at the places cf their' employment. 
Standards for safety a.nd health shall be submitted by the Code Authority 
to the Administrator within six months after the effective date of the 
code. 

STATE LAWS ■ 

Section 5. No provision in this Code shall supersede any State or 
Federal law which imposes en employers more stringent requirements as to 
age of employees, wages, hours of work, or as to safety, health, sanitary 
or general working conditions, or insurance, or fire protection, than are 
imposed by this Code. 

POSTING 

Section 6. All employers shall post and keep posted copies of this 
Cede in conspicuous places accessible to all employees. Every member of 
the trade/industry shall comply with all rules and regulations relative 
to the posting of provisions of Codes of Fair Competition which may from 
time to time be Prescribed by the Administrator. 



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ARTICLE VI 

Organization , Powers and Duties 
of the Code Authority 

ORGANIZATION AND CONSTITUTION 

Section 1. A Code Authority is hereby established consisting of 
-persons to be' selected in the following manner: 



(Here shall be stated the manner in which the members of 
the Code Authority shall be selected and the terms for 
vsrhich they shall serve. Provision should be made so that 
the Code Authority will be truly representative of the 
various majority, minority, and other interests in the 
trade /industry. If, however, by reason of conditions 
peculiat to the trade/ industry, selection by the trade/in- 
dustry is impracticable, it may be provided thot appoint- 
ment shall be by the Administrator.) 

Section 2. In addition to membership as above provided, there may 
be members, without vote, to be known as Administration mem- 
bers, to be appointed by the Administrator to serve for such terms as he 
may specify. 

Section 3. Each trade or industrial association directly or in- 
directly participating in the selection or activities of the Code Author- 
ity shall (l) impose no inequitable restrictions on membership, and (2) 
submit to the Administrator true copies of its articles of association, 
by-laws, regulations, and any amendments when made thereto, together with 
such other information as to membership, organization, and activities as 
the Administrator may deem necessary to effectuate the purposes of the 
Act. 

Section 4. In order that the Cede Authority shall at all times be 
truly representative of the trade/industry and in other respects comply 
with the provisions of the Act, the Administrator may prescribe such 
hea.rings as he may deem proper; and thereafter if he shall find that the 
Code Authority is not truly representative or does not in other respects 
comply with the previsions of the Act, may reauire an appropriate modi- 
fication of the Code Authority. 

Section 5. Nothing contained in this Code shall constitute the mem- 
bers of the Code Authority partners for any purpose. Nor shall any 
member of the Code Authority be liable in any manner to anyone for any 
act.of any .athermember, officer, agent or employee of the Code Author- 
ity. Nor shall any member of the Code Authority, exercising reasonable 
diligence in the conduct of his duties hereunder, be liable to anyone for 
any action or omission to a.ct under this Code, except for his own wilful 
malfeasance or non-feasance. 

Section 6. If the Administrator shall at any time determine that 
any action of a Code Authority or any agency thereof may be unfair or 
unjust or contrary to the public interest, the Administrator."may require 
that such action be suspended to afford an opportunity for investigation 

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of the merits of such action and further consideration "by such Code 
Authority or agency nending final action which shall not he effective 
unless tile Administrator approves or unless he shall fail to disapprove 
after thirty (30) days' notice to him of intention to -oroceed withsucn 
action in its original or modified form. 

PC WERS AKD DUTIES 

Section 7„ Subject to such rules and regulations as may he issued 
by the Administrator, the Code Authority shall have the following powers 
and duties, in addition to those authorized by other provisions of this 
Code* 

(a) To insure the execution of 'the -orovisions of this Code 
and to nrovide for the compliance of the trade /industry with the 
provisions of the Act. 

(b) To adopt by-laws and rules and regulations for its 
■orccedure. 



(inclusion of second sentence obligatory) 

(c) To obtain from members of the trade/ industry such 
information and report's as are required for the administration 
of the Code. In addition to information required to bo sub- 
mitted to the Cede Authority, members of ' the trade/industry 
subject to this Code shall furnish such statistical information 
as the Administrator may deem necessary for the purposes re- 
cited in Section 3(a) of the Act to such Federal and State 
agencies as he may designate; provided that. nothing in this 
Code shall relieve any member of the trade/industry of any 
existing obligations to furnish reports to any G-overnment agency. 
No individual report shall be disclosed to any other member of 
the trade/industry or any other party except to such other Gov- 
ernmental agencies as may be directed by the Administrator. 

(d) To use such trade associations and other agencies as 
it deems nroper 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 responsibilities under this 
Code and that such trade associations and agencies shall at all 
times be subject to and comply with the provisions hereof. 

(e) To make recommendations to the Administrator for the coor- 
dination of tne administration of this code and such other codes, if 
any, as may be related to or affect members of the trade/industry. 

(f) 1. It being found necessary in order to support the admin- 
istration of this code and to maintain the standards of fair competi- 
tion established hereunder and to effectuate the policy of the Act, 
the Code Authority is authorised: 



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(a) To incur such reasonable obligations as are necessary 
and proper for the foregoing purposes, and to meet such 
obligations out of funds which may be raised as herein- 
after provided and which shall be held in trust for the 
purposes of the Code; 

(b) To submit to the Administrator for his approval, sub- 
ject to such notice and opportunity to be heard as he 
may deem necessa.ry (l) an itemized budget of its esti- 
mated expenses for the foregoing purposes , a nd (2) an 
eauitable basis upon which the funds necessary to sup- 
port such budget shall be contributed by members of 
the trade/ industry; 

( c) After such budget and basis of contribution have been 
approved by the Administrator, to determine and obtain 
equitable contribution as above set forth by .all mem- 
bers of the trade/industry, and to that end, if neces- 
sary, to institute legal proceedings therefor in its 
own name. 

2. Each member of the trade/industry shall pay his or its 
equitable contribution to the expenses of the maintenance of the Code 
Authority, determined as hereinabove provided, and subject to rules 
and regulations pertaining thereto issued by the Administrator. Only 
members of the trade/industry complying with the code and contributing 
to the expenses of its administration as hereinabove provided, (unless 
duly exempted from making such contributions,) shall be entitled to 
participate in the selection of members of the Code Authority or to 
receive the benefits of any of its voluntary activities or to make use 
of any emblem or insignia of the National Recovery Administration. 

3. The Code Authority shall neither incur nor pay any obli- 
gation substantially in excess of the amount thereof «s estimated in 
its approved budget; and shall in no event exceed the total amount 
contained in the approved budget except upon approval of the Admin- 
istrator; and no subseouent budget shall contain any deficiency item 
for expenditures in excess of prior budget estimates except those 
which the Administrator shall have so approved. 

(g) (This subsection has been eliminated.) 

(e) To make recommendations to the Administrator for the 
coordination of the administration of this Code with such other codes, 
if any, as may be related to or affect members of the trade/industry. 

(f) (l) It being found necessary to support the Adminis- 
tration of this Code, in order to effectuate the policy "of the Act 

and to maintain the standards of fair competition established hereunder, 
the Code Authority is authorized: 



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(a) To incur such reasonable obligations as are neces- 
sary and proper for the foregoing -purposes and to 
t ;■ Lch obligation."; out of funds which shall be 
held in trust for the purposes of the Code and raised 
as hereinafter provided; 






) To submit to the Administrator for his approval, 
subject to such notice and opportunity to be heard 
as he may deem necessary: 

1. An itemized budget of its estimated expanses for 
the foregoing purposes, and 

2. An enuitable basis upon which the funds neces- 
sary to support such budget shall be contributed 
by all members cf the Industry entitled to the 
benefits accruing, from the maintenance of such 
standards, and the administration thereof: 

( c) After such budget and basis of contribution have 

been approved by the Administrator, to determine and 
collect eaui table contributions as above set forth, 
and to that end, if necessary, to institute legal 
proceedings therefor in its own name. 

(2) Each member of the trade/industry shall be liable for 
his or its eaui table contribution to the expenses of the maintenance of 
the Code Authority as hereinabove provided. Only members of the trade/in- 
dustry complying with the Cede and making such contribution shall be 
entitled to participate in the selection of the members of the Code 
Authority or to receive the benefits of its voluntary activities or to 
make use of any IT. P.. A. insignia. 

(g) To cooper?-te with the Administrator in regulating the 
use of any N.R.A. insignia solely by those members of the trade-industry 
who have assented to, and are complying with, this Code. 

(h) To recoircnend to the Administrator any action or measures 
deemed advisable, including further fair trade practice -provisions to 
govern members of the trade/industry in their relations with each other 
or with other trades/industries; measures for industrial planning, 
and stabilization of employment; and including modifications of this 
Code which shall become effective as part hereof upon approva,l by the 
Administrator after such notice and hearing as he may specify. 

( i) To appoint a Trade Practice Committee which shall 
meet with the Trade Practice Committees appointed under such other 
codes as may be related to the trade/industry for the purpose of 
formulating fair trade practices to govern the relationships between 
employers under this code and under such other cedes to the end that 
such fair trade -practices may be proposed to the Administrator as 
amendments to this code and such other codes. 



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(j) To -orovide appropriate facilities for arbitration, 
and subject to the approval of the Administrator, to prescribe rules 
of procedure and rales to effect compliance with awards and determina- 
tions. 



ARTICLE VII 

Trade Fra.ctice Rules 

(Note: Sponsors of codes, in preparation of drafts for submission 
to NRA, may select from the following such rules as are deemed applicable 
to their particular trades or industries and may propose such other 
rules as may be deemed desirable, to meet conditions peculiar to their 
trade/industry. ) 

Rule 1. Inaccurate Advertising. 

Ho member of the trade /industry shall -oublish advertising (whether 
printed, radio, display or of any other nature) , which is misleading or 
inaccurate in any material particular, nor shall any member in any way 
misrepresent any goods (including but without limitation its use, trade- 
mark, grade, quality, quantity, origin, size, substance, character, na- 
ture, finish, material, content or preparation) or credit terms, values, 
policies, services, or the nature or form of the business conducted. 

Rule 2. False Billing. 

No member of the trade/industry shall knowingly withhold from or 
insert in any quotation or invoice any statement that makes it inaccurate 
in any material particular. 

Rule 3. Inaccurate Labelling. 

No member of the trade /industry shall brand or mark or pack any goods 
in any manner which is intended to or does deceive .'or mislead purchasers 
with respect to the brand, grade, quality, quantity, origin, size, sub- 
stance, character, nature, finish, ma.terial content or preparation of 
such goods. 

Rule 4. Defamation. 

No member of the trade /industry shall defame a competitor by falsely 
imputing to him dishonorable conduct, inability to perform contracts, 
questionable credit standing, or by other false representation, or by 
falsely disparaging the grade or quality of his goods. 

Rule 5. Destructive Price Cutting. 

(Possible protective provisions against destructive price cut- 
ting will be separately circulated.) 



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Rule 6. Threats of Law Suits. 

No member of the trade/industry shall publish or circulate unjusti- 
fied or unwarranted threats of legal proceedings which tend to or have 
the effect of harrassing competitors or intimidating their customers. 

Rule 7. Secret Rebates. 

No member of the trade/industry shall secretly offer or make any 
payment or allowance of a rebate, refund, commission credit, unearned 
discount or excess allowance, . whether in the form of money or otherwise, 
nor shall a member cf the trade/industry secretly- offer or extend to any 
customer any special service or privilege not extended to all customers 
of the same class, for the purpose of influencing a sale. 

Rule 8. Bribing Emnloyees. 

No member of the industry shall give, permit to be given, or offer 
to give, anything of value for the purpose of influencing or rewarding 
the action of any employee, agent, or representative of another in rela- 
tion to the business of the employer of such employee, the principal of 
such agent or the represented party, without the knowledge of such em- 
ployer, principal or party. This -provision shall n^t be construed to 
prohibit free and general distribution of articles commonly used for ad- 
vertising except so far as such articles are actually used for commercial 
bribery as hereinabove defined. 

Rule 9. Inducing Breach of Existing Contracts. 

No member of the industry shall wilfully induce or attempt to induce 
the breach of existing contracts between competitors and their customers 
by any false or deceptive means, or interfere with or obstruct the per- 
formance of any such contractual duties or services by any such means, 
with the purpose and effect of hampering, injuring or embarrassing com- 
petitors in their business. 

Rule 10. Coercion. 

No member of the industry shall require that the purchase or lease 
of any goods be a prerequisite to the purchase or lease of any other 
goods. 

Rule 11. Onen Price Provisions. 

(Suggested open price provisions will be separately circulated.) 



ARTICLE VIII 

Ex-por t Trade 

Section 1. No provision of this Code relating to prices or terras 
of selling, shi-nping or marketing, shall ap-oly to export trade or sales 
or shipments for export trade. "Export Trade" shall be as defined in the 
Export Trade Act adopted April 10, 1918. 
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ARTICLE IX 

Modification 

(inclusion of Section 1 Obligatory) 

Section 1. This Code and all the provisions thereof are expressly 
made subject to the right of the President, in accordance with the -provi- 
sions of subsection (b) of Section 10 of the Act, from time to time to 
cancel or modify any order, approval, license, rule, or regulation issued 
under Title I of said Act. 

Section 2. Such of the provisions of this Code as are not required 
to be included herein by the Act may, with the approval of the Adminis- 
trator, be modified or eliminated in such manner as may be indicated by 
the needs of the public, by changes in circumstances, or by experience. 
All the provisions of this Code, unless so modified or eliminated, shall 
remain in effect until June 16, 1935. 



ARTICLE X 

Monopolies , etc. 

No provision of this Code shall be so ao-olied as to permit monopolies 
or monopolistic practices, or to eliminate, oppress, or discriminate 
against small enterprises. 

ARTICLE XI 

Price Increases 

Whereas the policy of the Act to increase real purchasing power will 
be made more difficult of consummation if prices of goods and services 
increase as rapidly as wages, it is recognized that price increases except 
such as may be required to meet individual cost should be delayed, and 
when made such increases should, so far as possible, be limited to actual 
additional increases in the seller's costs. 

ARTICLE XII 

Effective Date 

This Code shall become effective on the second Monday after its 
approval by the President, (unless otherwise stated.) 



DESTRUCTIV E PRICE CUTTING 
and 
OPEN PRICES 

Provisions on destructive nrice cutting and open prices are still 
in a formative state. They will be separately circulsted for suggestions 
and will be dealt with in the near future. 
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INDUSTRIAL RELATIONS COMMITTEES 



There shall be established an Industrial Relations Committee for 
the trade/industry, which shall consist of an equal number of repre- 
sentatives of employers and employees and an impartial chairman. The 
Administrator shall appoint such impartial chairman upon the failure of 
the committee to select one by agreement. If no truly representative 
labor organization exists, the employee members of such board may be 
nominated by the Labor Advisory Board of the N.R.A. and appointed by 
the Administrator. The employer representatives shall be chosen by the 
Code Authority. Such committee shall deal with complaints and disputes 
relating to labor in accordance with rules and regulations issued by the 
Administrator. The Industrial Relations Committee may establish such 
divisional, regional, and local industrial adjustment agencies as it may 
deem desirable, each of which shall be constituted in like manner as the 
Industrial Relations Committee. 



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EXHIBIT 1? 

EXECUTIVE ORDER 



In order to effectuate the -policy of title I of the National 
Industrial Recovery Act, approved June 16, 1933, I, Franklin D. Roosevelt, 
President of the United States, pursuant to the authority vested in 
me by title I of said National Industrial Recovery Act, hereby prescribe 
the following rules and regulations which shall have the effect of 
modifying any inconsistent provisions of any order, approval, rule, or 
regulation heretofore issued under title I of said act, 

1. By reason of confusion and misapprehension which has arisen 
regarding the meaning of certrin commercial oribery provisions included 
in codes heretofore approved by me, I hereby interpret all provisions 
to mean the following: 

No member of the industry shall give, permit to be given, or 
directly offer to give, anything oi value for the purpose of 
imluencing or regarding the action of any employee, agent, 
or represent? tive of another in relation to the business of 
tne employer of such employee, the principal of such a^ent or 
the represented party, without the knowledge of such em-blovr, 
principal or party. Commercial oribery provisions shall not 
be construed to prohibit free mo general distribution of 
articles commonly used for advertising except so far as such 
articles are actually used for commercial bribery as herein- 
above defined. 

?. I further order that if commercial bribery provisions are 
hereafter included in codes they shall conform to the foregoing. 

3. This order is intended to relate only to commercial bribery 
provisions and is not intended to interfere '-'ith an industry, if it so 
desires, dealing specifically \^ith the subject of premiums in any w ay 
it may or shsll have proposed if approved by me. 

FRANKLIN D. ROOSEVELT. 

Approval recommended: 

Hugh S. Johnson, 

Administrator. 

The White House, 

November 27, 1933. 



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EXEIBIT 13 
EXECUTIVE ORDER 



PROVIDING xOR THE SUB [ISSIOK 0I< STATISTICAL I! jO.ivLA.TION BY 
PERSONS SUBJECT TO CODES OE FAIR COMPETITION 



Pursuant to the authority vested in rae by title I of the 
Fational Industrial Recovery Act, upon due consideration of the 
lacts, and uuon the report and recommendation of the Administrator 
for Industrial recovery. 

I, Franklin D. Roosevelt, President of the United States, do 
hereby order that everv code of fair competition, agree aent, and 
license heretofore approved be, and hereby is, modified to provide 
that, and everv code of fair competition, agreement, and license 
hereafter approved be upon condition that, in addition to information 
required to be submitted to any code authority, all or any of the 
persons subject to such code, agreement, or license furnish such 
statistical information as the administrator may deem necessary for 
the purposes recited in section 3 (a) of said act to such Federal 
and State agencies as the Administrator may designate; nor shall 
anvthins- in anv code, agreement, or license relieve any person of 
any existing obligation to furnish reports to G-overnment agencies. 



FRANKLIN D. ROOSEVELT. 

Approval recommended: 

Hugh S. Johnson, 

Administrator. 

The Hvhite House, 

December 7, 1933. 



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EXHIBIT 14 

OFFICE MEMORANDUM NO. 228 

June 7, 1934 

OPEN PRICE FILING , COST S, PRICE CUTTING AND ACCOUNTING PROVISIONS IN 

CODES 

The following is the r>olicy of NEA on the above matters: 

(1) Open Price Filing : Prices, discounts, rebates, allowances 
and terras and conditions of sale, shall oe filed with a confidential 
disinterested agent of the Code Authority if any and if none, with 
an agency to be designated by NRA. Immediately unon receint such 
data shall be noticed to all such members of the Industry and their 
customers as shall anclv therefor and. defray the cost thereof. No 
higher price shall be filed within 46 hours. No member of the Industry 
shall sell. or offer to sell except at filed terras and conditions; nor 
shall he enter into any combination or conspiracy to fix price or 
intimidate others either by himself or in any such combination or 
conspiracy. 

( Note : See Exhibit A for further guidance.) 

(2) Costs and Price Cutting : (a) Any member of such code or of 
any other code or the customers of either may at any time complain to 
the Code Authority that any such filed price constitutes unfair com- 
r:etit,ion as destructive price cutting, imperiling small enterprise or 
tending toward monopoly or the impairment of code wpges and working 
conditions. Such Code Authority shall within five days afford an 
opportunity to. the member filing the price to answer such complaint 
and shall within 14 davs make a ruling or adjustment thereon. If such 
ruling is not concurred in by eithei party to tne complaint, all papers 
shall be referred to the research and Planning Division of NRA "hich 
shall render a report and recommendation thereon to the Administrator. 

(b) In an emergency, declared uy the Administrator, after proper 
showing of cause, and for such time as the Administrator may determine, 
stated minimum prices may be approved by the Administrator. 

( Note : See ExhiDit B for furtner guidance.) 

(3) Accounting Provisions : Codes should contain clauses recom- 
mending principles of cost finding appropriate to the Industry and 
approved by the Administrator, but no such methods shall be obligatory 
and none shall suggest uniform additions to total sales cost in the form 
of percentages or differentials designed to bring aoout arbitrary uni- 
formity in costs or prices. 

( Note : See Exhibit C for further guidance.) 

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(4) ,- djustmrnt of Codes : Pencirv cocles and codes hereafter sub- 
mitted shall be adjusted to these policies. Divisional Administrators 
shall seek through agreements with Code Autnorities of approved Codes 
to amend them to conform with these colicies and, "herever resistance 
is encountered, the subject shall be taken up with tht Administrator. 

By Direction of the Administrator: 



G. A. Lynch , 
Administrative Olficer. 



EXHIBIT "A". 

OPEI' Pr, ICE FILING 

1. >T LA policv favors properly drawn open rrice provisions in 
codes "'here desired by the industry. The attached draft Article 
reflects approved policy and should, be substantially followed. 

8. The objective is to achieve fair competition, based on knowledge 
of competitive factors to the fullest extent possible without unduly 
curtailing private initiative or destroying incentives to any individual 
legitimately to extend his business. 

3. .here indue tries believe that some waiting period is essential 
in order to accomplish the objectives outlined, the matter "ill be 
treated on its merits as in the case ol any proposed departure from 
announced oolicy. 

"ARTICLE _; OPEN PrJCE 

"Section 1. Each member of the trade/industry shall file with a 
confidential and disinterested agent of the code authority, or, if 
none, then with such an agent designated by the Administrator, identi- 
fied lists oi all oi his nrice.:, discounts, reoates, allowances, and all 
other terms or conditions of sale, hereinafter in this article referred 
to as 'price terms 1 , which lists shall completely and accurately .conform 
to an represent the individual pricing practices of said member. Such 
lists shall contain the price terms for; all such standard products of 
the industry as are sold or offered for sale b/ said, member and for 
such non-standard products oi said member as snail be designated .by the 
code authority. Said price terms shall in the first instance be filed 

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within _ de'ys alter the date 01 approval of this provision. 

Price terms and revised nrice terms shall become effective im lediately 
upon receipt thereof by said agent.. Immediately upon receipt thereof, 
said agent shall by telegraph or oth'ir equally p. v ompt means notify 
said memoer of \,hn time of such receipt. Such lists End revisions, 
together with the effective time thereof j shall upon receipt be im- 
mediately a.id sicultaneouelv distributed to ell members of the industry 
and to all of their customers "ho have applied therefor and have offered 
to defray the cost actually incurred by the code authority in the pre- f 
paration t:j\C) distribution thereof and be available for inspection oy 
any of their customers at the office of such agent. Said lists or, re- 
visions or any part thereof shall not be made available to any person-/' 
until released to all members of the industry and their customers, was 
aforesaid; provided, that prices filed in the iirst instance sh/11 not 

be released until the expiration 01 the aforesaid day petriod 

after the approval of tnis code. r ' is code authority shall maintain a 
permanent file of all nrice terms filed as herein provided., and shall 
not destroy any part of such records except ucon written consent of the 
Administrator. Upon reauest trie code authority shall furnish to the 
Administrator or any duly designated agent of the Administrator copies 
of any such lists or revisions of price terms. 

"Section ?. '.»hen any member of the trade/industry has filed any 
revision, such member shall not file a higher nrice within fortv-eight 
(48) hours. 



o 



"Section 3. T . T o member of the trade/ industry shall sell or offer t 
sell any products/ services oi the trade/ industry, for which price terms 
have been filed pursuant to the provisions oi this article, except in 
accordance with such nrice terms. 

"Section 4. No member of the inaustrv shall enter into any agree- 
ment, understanding, combination oi conspiracy to fix or maintain price 
terms, nor cause or attempt to cause rn/ member of tne industry to 
change his price terms by the use of intimidation, coercion, or any 
other influence inconsistent with the maintenance of tne free p.nd open 
market which it is the purpose of this article to create." 



ii'XHIBIT »: " 

GOSTb ACT '..IZiL ObTTIFG- 

The attached draft Article reflects approved nolicy and should be 
substantial!, followed and admin isterec in accordance with the following: 

1. ./hen there is no emergency it is NBA nolicy to avoid price 
fixing but also to prevent destructive price cutting in accordance with 
Section 1 of the annexed Article. 

2. The following conditions may be deemed to tecuire investigation 
to determine whether an emergency exists: (a) impairment of employment 

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Qr wage scales; (b) particularly high mortality of enterprises, 
especially small enterprises; or (c) panic in an industry or otner 
Special conditions:' throught oy the Acministrator to reauire stabiliza- 
tion by means of minimum price. When the Administrator believes that 
the declaration of an emergency might oe advisaole, tne matter will be 
referred to the Research and Planning Division, notice of such fact 
being sent to the Advisory Council. 

3. The Research and Planning Division shall examine ell available 
evidence and analyze the -probable effects of various possible minimum 
prices on tot.^1 national production, general employment andgeneral 
recovery, production and consumption of tne product of the industry in 
question, other -chases of national life, and the interests of the 
industry in Question to the extent compatible. <"ith the foregoing and 
shall render a written report of its findings and recommendations to 
the Administrator and furnish copies 01 said report to the Advisorv 
Council. 

4. If on the Dasis of this report the Administrator determines that 
an emergency should be declared, he will make such declaration and 
establish the minimum price effective under the circumstances. The 
declaration of an emergency will be accompanied by a statement of the 
facts ucon which the declaration is based and an explanation of the 

plan whicn is being applied. 

5. Emergencies will be declared only for particular products and 
for a state period, not longer than ninety days, subject to earlier 
termination or toextension, upon decision of the Administrator. 

6. Remedial provisions mil be put into effect subject to a plan 
of supervision, which it shall oe the duty of the Research and Flanning 
Division to devise, i"hich '-ill include the requirement of such financial, 
operating, employment, ana other reports as shall be necessary to 
indicate the effect of tne provision. 



COSTS AND PrJCE CUTTING. 



Article 



Section 1. Tne standards of fair competition for the industry 
with reference to pricing practices are declared to be as follows: 

(a) Wilfullv destructive price cutting is an unfair metnod of 
competition and is forbidden. Any member of the industry or of any 
other industry or the customers of either may at any time comclain to 
the Code Authority that any filed price constitutes unfair competi- 
tion as destructive -crice cutting, imperiling small enterprise or 
tending toward nonoroly or the impairment of code wages and working 
conditions. The Code Authority shall within 5 cays afford an opportun- 
ity to the member filing the nrice to answer such complaint and. shall 
within 14 days make a ruling or adjustment thereon. If such ruling is 

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not concurred in by either party to the compfi^flBL all papers shall 
be referred to the Research and Planning Divisl^OTsy: NRA "'hich shall 
render r report and recommendation thereon to tue T^ftjnSfcd^rator. 

(j) hen no declared emergency exists as to any givriw -naprinct, 
there is to be no fixed minimum "basis for prices. It is intspled 
that sound cost estimating methods should be used and that consider- 
ation should he given to costs in the determination of pricing policies. 

(c) 'hen an emergency exists as to any given product, sale 
below the stated minimum -price of such product, in violation of 
Section c hereof, is forbidden. 

Section 2. Emergency Provisions : 

(a) If the Administrator, after investi :?tion shall at any time 
find both (1) that an emergency has arisen within the industry ad- 
versely affecting small enterprises or wages or labor conditions, or 
tending toward 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 industry for 

a limited period is necessary to .litigate the conditions constituting 
such emergency and to effectuate the purposes of the Act, the Code 
Authority mav cause an impartial agency to investigate costs and to 
recommend to the Administrator a determination of tne stated minimum 
price of the product effected by the emergency and thereupon the 
Administrator may proceed to determine sikch stated minimum price. 

(b) fthen 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 oi such 
emergency and to effectuate the purposes of the National Industrial 
Recovery Act, he shall publich such price. Thereafter, during such 
stated period, no member of the industry shall sell such specified 
products at a net realized price below said stated minimum price and 
any such sale shall be deemed destructive price cutting. Prom time 

to time, the Code Authority may recommend review or reconsideration 
or the Administrator may cause any determinations hereunder to be 
reviewed or reconside ed pnd appropriate action taken. 



LXKI3IT "C". 

COST FINDING- AND ACCOUNTING 

NRA will encourage proper cost finding and accounting provisions 
in codes. 'hen such provisions are incorporated they should substan- 
tially conform to the fol'o^ing: 

"Section . Cost Finding : The Code Authority shall cause 

to be formulated methods of cost finding and accounting capable 
of use by all members of the industry, and shall suumit such 
methods to the Administrator for review. If approved by the 

9610 



Administrator, full' information concerning such methods shall be made. 
available to all members 01 the industry. Thereafter, each 
member of the ihlustry shall utilize such methods to the 
extent found practicable. Nothing herein contained shall be 
construed to' permit the Code Authority, any agent thereof, 
or. any member of the industry to suggest uniform additions, 
percentages or diif erentials or other uniform items of cost 
which are designed to bring about arbitrary uniformity of 
costs or prices. " 



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EXHIBIT 15' 

EXECUTIVE ORDER 

Prescribing Rules and Regulations for the Interpretation and 
Application of Certain Labor Provisions of Codes of Fair Com- 
petition as They May Affect Handicapped Workers 

In Codes of Pair Competition which have heretofore been approved or 
submitted for approval and in such Codes which may hereafter "be submitted 
and approved, question has arisen or may arise as to whether the minimum 
wage and maximum hour provisions preclude those handicapped by physical 
or mental defect, age or other infirmity from their former opportunities 
for obtaining employment. 

Pursuant to the Authority vested in me by Title I of the National 
Industrial Recovery Act, upon due consideration of the facts and upon the 
report and recommendation of the Administrator: 

I, Franklin D. Roosevelt, President of the United States, in order 
to carry our the purposes of Title I of the National Industrial Recovery 
Act, do hereby order that no provision of any Code of Fair Competition, 
agreement, or license, which has heretofore been or may hereafter be 
approved, prescribed or issued pursuant to said Title of said Act shall 
be so construed or applied as to violate the following rules and regula- 
tions which are hereby promulgated and prescribed, to-wit: 

1. A person whose earning capacity is limited because of age, 
physical or mental handicap, or other infirmity, may be employed on 
light work at a wage below the minimum established by a 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. Such authoritj^ shall be guided by the instructions of 
the United States Department of Labor in issuing certificates to such 
persons. 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 maximum hours of work for such employee. 

2. Any approval order of a Code of Fair Competition, agreement 
or license heretofore approved, prescribed or issued pursuant to 
Title I of the national Industrial Recovery Act, if any necessity 
er.ists therefor in order to make these regulations effective, is 
hereby modified so as to permit and be conditional upon the full 
applications and operation of these regulations. 

These regulations shall become effective immediately and shall there- 
upon be binding upon all industries and members thereof unless, and only 
to such extent as, prior to that date good cause to the contrary shall be 
shown to the Administrator for Industrial Recovery by any affected party 
or parties with reference to any trade, industry, or subdivision thereof. 

FliAIiKLIIT D ROOSEVELT 
Approval Recommended: 

Hugh S Johnson, Administrator 



9810 



The White House 

Feb. 17th 1934 



-215- 

EXHI3II 16 

CFEICE OEDER ITO, 71 

■ — — r ' ■ " ' — ' ■ 

March 14, 19o4. 

STAlTpAPJS 0? HSALTH AID SAFETY . 

In exercise of the President's power -under the National Industrial 
Act to ->rescribe conditions of employment , the following provisions vd.ll 
hereafter he included in every code which has not, at this date, been 
formally submitted oy the industry: 

"Every employer 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 he submitted by the 
code authority to the Administrator within six months after the 
effective date of the code." 

Ihese provisions, 'including similar ones now embodied in most 
codes, will be given execution in the following manner: 

1. Each code authority will create a committee on safety and 
health which will study the number and causes of accidents 
-nd health hazards in the industry and report a compre- 
hensive program, 

2. In these --.rograms developed by the committees on safety and 
health consideration will be given to the following: 

(a) A statement of the average accident experience in 
the industry; a comoarision of the experience of 
employers most successful in red'acing accidents; 
and a plan for uniform accident reporting in the 
industry 

(b) Preparation of a statement showing the possible 
benefits to individual employers, individual em- 
ployees, and the industry as a whole, through con- 
tinuous organized safety efforts. 

(c) A recommended plan for organized safety work for 
various types and sizes of companies, 

(d) Einimum standards for safety and health for the 
industry. 

By direction of the Administrator: 

Alvin Erown 



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-216- 

EXHIBIT 17 

ADMINISTRATIVE ORDEE HO. X-51 

June 15, 1934 

SAFETY AltD HEALTH STAITDAFDS 

Whenever, in accordance with the provisions of a 
Code of Pair Competition, a Code Authority submits to 
the Administrator standards for safety and health and 
such standards are approved "by the administrator, the 
standards thus approved shall thereafter be part of 
?u::"h Code and shall be enforceable as such. 



Hugh S. Johnson, 
Administrator. 



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-217- 

EXHIBIT 18 
OFFICE ITEUOBJSSOtM HO. 232. 
June 12, 1934. 
Premiums . 
The following policies will govern premium clauses in codes. 

1. There should be no general provisions prohibiting the use of 
premiums, 

2. Certain uses of premiums would constitute methods of evading 
trade practice provisions; for example, provisions against selling be- 
low cost and open-price provisions. The proper way to prevent such 
evasion of any trade practice provision is careful drafting of the 
provision in question. For example, in a provision prohibiting sell- 
ing below cost, it should be provided that all premiums should be in- 
cluded in the computation of cost. Similarly, in an open price pro- 
vision, it should be required that all terms and conditions of sale, 
including premiums, must be filed. 

5. Although there should be no general prohibition against the 
use of premiums, the use of premiums in the following ways may be 
prohibited: 

a. The use of premiums in ways which involve com- 
mercial bribery in any form. 

b. The use of premiums in ways which involve lottery 
in any form. The term "lottery" should be con- 
strued to include, but without limitation, any 

' plan or arrangement whereby the premium offered 
differ substantially in value from customer to 
customer of the same class, except as a result of 
differences in quantities purchased. 

c. The use of premiums in ways which involve misrepre- 
sentation, or fraud, or deception in any form, 
including, but without limitation, the use of the 
word "free", "gift", "gratuity", or language of 
similar import in connection with the giving of 
premiums fcr the purpose or with the effect of 
misleading or deceiving customers. 

d. The giving of premiums to any customers when such 
premiums a.re not offered to all customers of the 
same class in the tra.de area. 

3y direction of the Administrator: 

G. A. Lynch, 
Administrative Officer. 

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-218- 
EXHI3IT 19 

OFFICE MEMOEAHDUI.1 

No. 31 e* 

DecemDer 6, 1934. 

PREMI UMS ANS "FREE DEALS " 

The following jOlicies '.'ill govern clauses in codes relating to 
premiums or "free detils." 

1. There should be no general previsions -orohi biting the use of 
;1 

2. Certain uses of iremiuns or "free deals" would constitute methods 
of evading trade practice provisions'; for example, ooen price provisions. 
The proper way to prevent such evasion of an" trade practice orocision is 
careful drafting c^ the prcvisior ir Question. For example, in an open 
price provision, it shoulc' be recuired that all terms and conditions of 
sale, including -lemiuns or "free deals" and conditions relating thereto, ' 
must be filed. 

3. Although there should be no general prohibition against the use 
of premiums or "free deals, " the use of "premiums or "free deals" in the 
following ways -may be prohibited: 

(a) The use of premiums or '"free deals" in ways which involve com- 
mercial bribery in any form. 

(b) The use of premiums or "free deals" in ways which involve lottery 
in any form. The term "lottery" should be construed to include, but with- 
out limitation, any plan or arrangement whereby the premium or "Free deal" 
offered differs substantially ir. vadue from customer to customer of the 
same class, except as a, result of differences in aurntities purchased. 

(c) The use of premiums or "free deals" in ,r ays which involve mis- 
representation, or fraud, or deception in any form. It should be noted 
that the use of the word "free," "gift," "gratuity," or language of simi- 
lar import in connection with premiums or "free deals" can not be declared 
deceptive in and of itself. It will be proper , however, to prohibit the 
use of this or any other language with intent to deceive, or in such a way 
that it does in fact mislead or deceive customers in some material parti- 
cular. 

(d) The giving of premiums of "free deals" to any customers wnen 
such permiums or "free deals" are not offered to all customers of the same 
class in the trade area. 

4. Office Memorandum To. 232 is hereby , siv.ie:" seeled. 

3y direction of the National Infest rial P.ecoverv Board: 

". A. liAHiilMAE 
Administrative Officer. 
(*)Note — The substance of this memorandum will be incorporated in the 1TRA 
Office Manual under "Code Making raid Amendment, Part II - 1746." 

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-219- 

EXHI3IT 20 
EXECUTIVE ORDER 



MAZING PROVISION FOB A CLAUSE IN CODES OF 
FAI3 COMPETITION RELATING TO COLLECTION 
OE EXPENSES OE CODE ADMINISTRATION 

B^ virtue of ana pursuant to the authority vested in me under the 
provisions of Title I of the National Industrial Recovery Act of June 16, 
1933 (ch. 90, 48 Stat. 135), and in order to effectuate the lourposes of 
said Title, I hereto- order that the following clause or any appropriate modi- 
fication thereof shall become effective as a part of anv code of fair com- 
petition approved under said Title, upon application therefor (l) pursuant 
to the provisions of the code relating to amendments thereto or (2) by one 
or more trade or industrial associations or groups truly representative 
of the trade or industry or subdivision thereof covered "oy the code, if 
the Administrator for Industrial Recover shall find that approval by him 
of such clause is necessa^r in order to effectuate the policy of Title I 
of said Act: 

1. It beinj found necessary, in order to support the admini strati on 
of this Code and. to maintain the standards of fair competition established 
by this Code and to effectuate the police of the Act, the Code Authority 
is authorized, svibject to the approvel o f the Admini stro tor: 

(a) To incur such reasonable obligations as are necessary and proper 
for the foregoing purposes 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 item- 
ized, budget of its estimated expenses for the foregoing -mrposed, and (2) 
an equitable basis upon which the funds necessary to support sue i budget 
shall be contributed by members of the Industry; 

(c) After such budget and basis of contribution have been approved 
by the Administrator, to determine and secure eouitable contribution as 
above set forth \>y all such members of the Industry, and to that end, if 
necessary, to institute legal proceedings therefor in its own name. 

2. Only members of the Industry complying with the Code and contri- 
buting to the expenses of its administration as "orovided in Section 1 here- 
of shall be entitled to jarticipate in the selection of the members of the 
Code Authority or to receive the benefit of its voluntary activities or to 
malre use of any emblem or insignia of the National Recover;'' Administration. 

ERANKLIN D. ROOSEVELT 
Approva.1 recommenced: 

HUGH S.. JOHNSON, Administrator 

3y G. A. Lynch, Administrative Officer 

THE WHITE HOUSE, 

April 14, 1934. 
9810 (No. 5578) 



-220- 
EXHIBIT 21 . 

OFFICE MEMORANDUM NO. 267. 

JULY 20, 1934. 

c las s if i cation of customers. 



The following clause reflects NRA policy on this matter and should 
"De substantially followed wherever provisions for classification of cus- 
tomers are included in codes: 

"The Code Autnority shall cause to be formulated and 
keep current a classification of all types of customers 
of the industry. Such classification shall he subject 
to the disaprroval of the Administrator and shall contain: 
(a) A comrlete list of all of the classes of customers of 
the industry, including a class to cover every known type 
of customer; and (b) definitions or descriptions of the 
several classes in terms of functions performed, or in 
other appropriate terms such as purchasers of defined 
quantities. 

"After submission to the Administrator, if there is no 
disapproval or request for suspension of action within 
twenty (20) days, full information concerning the classi- 
fication shall be made available to all members of the 
industry. No one shall by intimidation, coercion, or 
other undue influence cause or attempt to cause the in- 
clusion of any customer in or the exclusion of any 
customer from any class of customers, or the exclusion 
of any class of customers from tne classification, or 
the use of uniform or stipulated prices, discount, or 
differentials and each member of the industry may at 
all times classify his own customers in accordance with 
his own judgment." 

No such proposed code provision nor any classification thereunder 
shall be approved if the same is designed or would tend to fix uniform 
prices, discounts or differentials, or to establish resale price mainten- 
ance, eliminate or suppress, or discriminate against any customer or 
class of customers. 

Other proposed provisions concerning classification of customers 
are presumed to be contrary to policy. 



By direction of the Administrator: 



G-. A. Lynch 
Administrative Officer. 



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-231- 

BXHI3IT 22. 
OFFICE MEMORANDUM NO. 326* 

JANUARY 5, 1035. 
AD VERT 1 3 1 NG ALL OW ANC ES 



M,--nufacturers or otner vendors selling goods to distributors 
frequently find themselves desiring to purchase from their customers an 
advertising or promotion service which their customers can render. In 
purchasing such services the vendors have become accustomed to make pay- 
ment by "allowing" i certain reduction from what would otherwise be the 
price. The payments thus made have become known as "advertising allow- 
ances ." 

Code provisions declaring the giving of advertising allowances an 
unfair practice would not change the basic facts that sellers must price 
their goods to buyers and that certain buyers have promotion services 
which they are desirous of selling for which those who sell to them are 
willing to pay. The remedy for such suspicion, secrecy, confusion, and 
misrepresentation as may be connected with advertising allowances, lies 
in: 

(a) Clearly separating and thus establishing the distinct 
identities cf the two activities which are involved in 
giving advertising allowances 

(b) Causing that part of the advertising allowance which is 
actually a price reduction to appear in prices - reported 
prices, if the industry or trade has an open price plan. 

(c) Causing that part of the advertising allowance which is 
actually a payment for advertising or promotion service 

to appear as such with definite description of the service 
for which it is given, and with such publicity, where pub- 
licity is practicable, that it is unlikely that the payment 
will be more than the competitive worth of tne services 
involved. 

Accordingly, it is NBA policy that an industry desiring to regulate 
advertising allowances snould not be permitted to do so by general pro- 
hibitions, by restrictions on the basis of products or types of distri- 
butors, or otherwise than in accordance with the following: 

1. That ao member of an industry or trade shall designate as an 
^.advertising allowance" , "promotion allowance" or similar term, any price 
reduction, discount, bonus, rebate, or otner form of price allowance or 
concession, or any consideration for advertising or promotion services 
offered or given by him to any customer. 



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-222- 

2. That no member of an industry or trade shall offer or 
give any consideration for advertising or promotion services to any 
customer except for definite and specific advertising or promotion 
services. 

3. Agreements to purchase advertising services from customers 
shall he made in written contracts separate from sales contracts. 

4. Such contracts shall specifically and completely set out 
the promotion services to be performed, together with the precise con- 
sideration to be paid tnerefor, the method of determining performance, 
and all other terms and conditions relating thereto. 

5. Some arrangement for publicity may be made, where effective 
machinery therefor can be devised. In considering any arrangement for 
publicity, care should be taken to avoid machinery so cumbersome that 
its cost will outweigh benefits to be gained. 

There is attached a draft section (Exhibit A) suggested for use 
in codes in which it. .is desired to regulate advertising allowances. 

By direction of the National Industrial Recovery Board: 

W. A. HARRIMAN, 
Administrative Officer. 



*Note~-The substance of this memorandum will be incorporated in the NBA. 
Office Manual under "Code Making and Amendment - Basic Code - Trade 
Practices - Fart 11-3031.15" when released in Office Manual form. 



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-223- 
EXHIBIT A 



Section . No member of the trade/industry shall designate as 

an "advertising allowance", a "promotion allowance" , or by a similar term, 
any price reduction, discount, bonus, rebate, concession, or other form 
of allowrnce, or any consideration for advertising or promotion services, 
offered or given by him to any customer. 

No member of the trade/industry shall offer or give any considera- 
tion merely for "pushing", "advertising", or otherwise than for definite 
and specific advertising Or promotion services. 1 Such consideration shall 
be given only pursuant to a separate written contract therefor, which con- 
tract snail specifically' and completely set forth the advertising of pro- 
motion services (in such manner that their specific character mav be under- 
stood by other members of the trade/industry and their customers) to be 
performed by' the recipient of said consideration, the precise consideration 
to be paid or given therefor by said' member, the method of determining 
performances, and all other terms and. conditions relating thereto. 



The following. are examples, of provisions for publicity which may 
be found workable and desirable by particular industries: 

Example 1. Immediately upon the making of any such contract for 
advertising or promotion services by any member of the trade/industry, a 
true copy thereof shall be filed by said member with a confidential and 
disinterested agent of the Code Authority (as provided for in this code), 
or, if none, then with .such an agent to be designated by the National 
Industrial Recovery Board. Said agent shall maintain all copies of such 
contracts on file until .six (o) months after the termination thereof, and' 
shall make the same available at his office for inspection at all reason- 
able times by all members of the trade/j.ndustry , and all of their customers 
and shall distribute a trae copy of any such contract to any member of 
the industry or any customer who applies therefor and offers to pay the 
cost actually incurred by the Code Authority in the actual preparation 
and distribution thereof-; provided ,' that no such inspection or copy shall 
be permitted or made available to any person until permitted or made 
available to all members of the industry and tneir customers, as aforesaid. 
Upon request, said agent shall furnish to the National Industrial Recovery 
Board, or any duly designated agent of said Board, copies of any such 
contract. 

Example 2. Immediately upon the making of any such contract for 
advertising or promotion services by any member of the trade/industry, 
a true copy thereof shall be filed- with a confidential and disinterested 
agent of the Code authority (as provided for ih this code), or, if none, 
then with such an agent to be designated by the' National Industrial Re- 
covery Board. Said agent shall thereupon proceed to have copies of such 
contract published in a journal or journals or other appropriate medium of 
general circulation among members of the trade/industry. 



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, -EXHIBIT 23 

OFFICE MEMORANDUM 

NO. 331* 

January 29, 19,35 

LIQUIDATED DAMAGES 

The following policies will govern the subject of agreements 
for liquidated damages in connection with code provisions: 

1. If an industry (trade) desires such an arrangement, its code, 
should be amended to provide authority for members thereof to enter 
into a liquidate damages agreement, which agreement is to become 
effective only uoon issuance of HRA consent thereto. A suggested code 
provision to that effect is attached. 

2. The principles set forth in the Office Manual, Section 11-1626, 
should be called to the attention of such industries (trades) for 
their guidance in the formulation of such agreements, and such 
principles should be adhered to as closely as the individual situation 
will permit in the consideration of such agreements by NBA. 

By direction of the National Industrial Recovery Board: 



W. A. Rarriman, 
Administrative Officer. 

*Note— The substance of this memorandum will be incorporated in the HRA Office 
Manual under "Code Making and Amendment - Substantive Guides - Part 11-1626" 
when released in Office Manual form. 



Addenda to Office Memorandum No. 331 

PROPOSED CODE PROVISION 

Concerning 

LIQUIDATED DAMAGES 

"Any member of the industry (trade) may enter into an agreement with any 
other member or members of the industrv (trade) providing for the payment of 
liquidated damages by any r>arty thereto upon violation by him of any provision 
of the Code, provided, however, that such agreement shall become effective and 
binding on the parties thereto only after the execution thereof shall have 
received the consent of the National Recovery Administration." 



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EXHIBI T 24 

EXECUTIVE ORDER 



PRESCRIBING- A REGULATION PROHIBITING DISMISSAL OF EMPLOYEES FOR 
REPORTING ALLEGED VIOLATIONS OF CODES OF FAIR COMPETITION 

By virtue of anc< pursuant to the authority vested in me under title 
I of, the National Industrial R?coverv Act of June 16, 1933 (ch. 90, 48 Stat, 
195), and in order to effectuate the -ourposes of said title, I hereby 
urescribe the following rule and regulation: 

T'o employer subject to a code of fair competition aunroved under • 
said title shall dismiss or demote any employee for malcing a com-olaint 
or giving evidence with, re sue ct to an alleged vi6lation of the urovisions 
of any code of fair conroetition a-puroved under said title. 

All persons are hereby informed that section 10 (a) of the National ' 
Industrial Recovery Act prescribes a fine not to exceed five hundred 
dollars ($500) or imprisonment not to exceed sir. (s) months, or both, for 
tne violation of any rule or regulation prescribed under tho authority of 
said section 10 (a). 

FRANKLIN D. ROOSEVELT. 
THE WHITE HOUSE, 

May 15, 1934. 



No. 6711 



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-226- 
EXHIBIT 25 

EXECUTIVE ORDER 



NON-WAIVER OP CONSTITUTIONAL RIGHTS IN CONNECTION WITH 
CODES OP FAIR COMPETITION 

By virtue of and pursuant to the authority vested in me "by Title 1 
of the National Industrial Recovery Act of June 16, 1937 (48 Stat. 195), 
and in order to effectuate the policy of said Title and to eliminate any 
confusion or misapprehension which may have arisen concerning the effect 
on constitutional rights of assent to, or cooperation under, Codes of 
Pair Competition, I hereby order that: 

(1) It is understood that neither the Government nor any member of 
industry waives, or can properly insist that the other has waived, any 
constitutional right pertaining to the Government or to any individual by 
approving, assenting to, or cooperating under a Code of Pair Competition. 

(2) The approval orders of all such codes heretofore approved are 
hereby modified to the extent necessary to make this Order a condition 
thereof, and this Order shall operate as a condition of the approval of any 
such code hereafter approved. 



FRANKLIN D. ROOSEVELT 



THE WHITE HOUSE 

January 22, 1935. 

(No. 6949) 



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• -227- 
EXHIBIT 26 

EXECUTIVE ORDER 



PRESCRIBING RULES AND REGULATIONS FOR THE INTERPRETATION AND APPLI- 
CATION OF CERTAIN LABOR PROVISIONS OF CODES OF FAIR COMPETITION 
AS THEY MAY AFFECT CERTAIN HOMEWORKERS. 



In Codes of Fair Coerce tit ion heretofore or hereafter approved, which 
provide for the abolition of homework, the question has arisen or may- 
arise as to whether the abolition of homework has precluded certain persons 
who are incapacitated for factory work from their former opportunities for 
obtaining employment. 

Pursuant to the authority vested in me by Title I of the National 
Industrial Recovery Act and in order to carry out the -ourboses and- policy 
of said Title of said Act t and upon due consideration of the facts and 
uoon the report and recommendation of the Adminstrator , 

I, FRANKLIN D. ROOSEVELT, President of the United States , do hereby 
order that no provision of any Code of Fair Competition heretofore or 
hereafter approved pursuant to said Title of said Act, shall be eo construed 
or applied as to violate the following rules and regulations which are 
hereby promulgated and nrescribed,.' to-wit :. 

1. A person may be permitted to engage in homework at the same rate 
of wages as is r>aid for the same type of work performed in the factory or 
other regular niece of business if a certificate is obtained from the 
State authority or other officer designated by the United States Department 
of Labor, such certificate to be granted in accordance with instructions 
issued by the United States Department of Labor, provided 

(a) Such person is physically incapacitated for work in 
a factory or other regular -olace of business and is 
free from any contagious disease; or 

(b_) Such person is unable to leave home because his or 

her services are absolutely essential for attendance 
on a person who is bedridden or an invalid and both 
such TDersons are free from any contagious disease. 

2. Any employer engaging such a person shall keep such certificate 
on file and shell file with the Code Authority for the trade or industry 
or subdivision thereof concerned the name and address of each worker so 
certificated* 

This Ordir shall become effective immediately and shall be binding 
upon all trades, industries or subdivisions thereof and members thereof 
subject to Codes of Fair Competition in which homework is nrohibited, and, 



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to the extent necessary to nermit the full application and operation of 
the foregoing rules and regulations, shall onerate as a condition uoon any 
nrevious order ap-oroving any Code of Fair Competition under Title I of the 
National Industrial Recovery Act, and shall remain in effect until revoked 
or modified "by my further order or by order of the Administrator for 
Industrial Recovery; provided, however, that this Order shall not apoly to 
or affect Codes of Fair Conroetition heretofore or hereafter approved for 
food or allied products trades, industries or subdivisions thereof, which 
contain provisions prohibiting the manufacture and/or nrdcessing of food 
products in homes* 



..,. , . FRANKLIN D. ROOSEVELT 

Approval lecommended: 
HUGH 3. JOHNSON" 

Administrator for Industrial Recovery 
THE WHITE HOUSE 

May 15,- 1934, 

No. 671 i-A 



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EXHIBIT 27 

tOLiOPAITDUM 

May 30, 1935 

TO: Prentiss L. Coonley, Code Administration Director 
FROM: '.'/alter Mangum, Chairman, Code Planning Committee 
SUBJPCT: Pecommended Trade Practice Provisions. 



The following gauge was used as the "basis for the 
tentative recommended provisions on Pair Trade Practices: 

Group "A" provisions include those which, in the 
opinion of the Deputy, fulfill the following basic require- 
ments: 

1- Hot contrary to public interest. 

2- Susceptible to enforcement. 
3t Non-discriminatory. 

4- Pecognized as desirable and required 
by the industry. 

5- Sanctioned by custom. 

Group "B" provisions include the requirements of 
Group "A", with the exception cf the requirement that the same 
be sanctioned by custom. 

Group "C" provisions include the requirements of 
Group "A", with the exception of the requirement that the same 
be sanctioned by custom, and otherwise might present certain 
problems of enforcement. 

These provisions have been tentatively, approved by our 
Legal Advisors for form and content. 



Walter Liangum, Chairman, 
Code Planning Committee 



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AETICLE VII 

TRADE PRACTICE RULES 

CLASS "A" PROVISIONS 

Rule 1. Deceptive Advertising and General 
Misrepresentation. 

No member of the trade/industry shall publish advertising (whether 
printed, radio, display or of any other nature), which is misleading 
or inaccurate in any material particular, nor shall any member in any 
way misrepresent any goods (including but without limitation its use, 
trademark, grade, quality, quantity, origin, size, substance, character, 
nature,: finish-.,- material, content or preparation) or credit terms, 
values, policies, services, or the nature or form of the business 
conducted. 

Rule 2, Commercial Bribery. 

Ho member of the industry shall give, permit to be given, or offer 
to give, anything of value for the purpose of influencing or rewarding 
the action of any employee, agent, or representative of another in re- 
lation to the business of the employer of such employee, the principal 
of such agent or the represented part, without the knowledge of such 
employer, principal or party. 'This provision shall not be construed 
to prohibit free and general distribution of articles commonly used 
for advertising except so far as such articles are actually used for 
commercial bribery as hereinabove defined. 

Rule 3. Interference with Contracts. 

No member of the industry shall 'wilfully induce or attempt to 
induce the breach of existing contracts between competitors and their 
customers by any false or deceptive means, or interfere with or obstruct 
the performance of any such contractual duties or- services by any such 
means, with the purpose and effect of hampering, injuring or embarras- 
sing competitors in their business. 

Rule 4. Defamation of Competitors. 

No member of the trade/industry shall defame a competitor by 
falsely imputing to him dishonorable conduct, inability to perform 
contracts, or questionable credit standing, or by other false represen- 
tation, or by falsely disparaging the grade or quality of his goods. 

Rule 5. False Invoicing 

Ho me ber of the trade/industry shall knowingly withold from 



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or insert in any quotation or invoice any statement that makes it 
inaccurate in any material particular. 

Rule 6. False Marking or Branding. 

No member of the trade/ industry shall brand or mark or pack 
goods in airy- manner which tends to deceive or mislead purchasers 
with respect to the brand, grade, quality, quantity, origin, 
size, substance, character, nature, finish, material content or 
preparation of such goods. 

Rale 7. Secret Rebates and other Concessions. 

No member of the trade/ industry shall secretly offer or 
make any payment or allowance of a rebate, refund, commission, 
credit, unearned discount or excess allowance, whether in the 
form of money or otherwise, nor shall a member of the trade/ 
industry secretly effer or extend to any customer any special 
service or privilege not extended to all customers of the same 
class, for the purpose of influencing a sale. . 

Rule 8. Coercion. 

Ho member of the industry shs.ll enter' into any agreement, 
understanding, combination or conspiracy with any other member 
of the industry to fix or maintain price terms, or cause or 
attempt to cause any member of the industry to change, fix or 
maintain price terms by the use of violence, intimidation or 
coercion. 



CLASS »B" PROVISIONS 

Rule 1. Consignment Selling. 

No member of the industry shall sell or ship goods on con- 
signment or memorandum. 

Rule 2. Extended Dating. 

Dating invoices as of any other date than the date of shipment 
is prohibited. 

If it is desired to permit an extended dating it should read: 

"Dating invoices more than (for example 60 days) after date 
of shipment," and "dating invoices more than 60 days after 
date of shipment is prohibited." 

Rule 3. Standards. 

To be included in Codes according to the' needs and requirements 
of the particular industry desiring the same. 



9810. 



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1. Within thirty (30) days after the effective date of the 
Code, the Code Committee shall establish a permanent standards 
committee, two members of which shall be appointed by the Nation- 
al Industrial Recovery Board, to represent Government and Consumer 
interests. 

2. This Committee shall: 

(a) Make studies and investigations for the establish- 
ment of classifications, dimensional standards, stan- 
dards of quality (grades) and labeling of the products 
of this industry, in cooperation with the American 
Standards Association or the National Bureau of Stan- 
dards of the United States Department of Commerce, and 
submit recommendations based upon such studies to the 
Code Committee within six (6) months of the date of 
the Committee's appointment. 

(b) Propose appropriate revisions of approved standards 
from time to time. 

(c) Advise the Trade Practice Complaints Committee 
concerning the enforcement of all such standards as 
established and approved. 

3. Upon submission of the Committee's findings to the Code 
Committee, the Code Committee shall immediately submit such standards 
either to the American Standards Association for consideration and 
approval or to the National Bureau of Standards of the United States 
D e partment of Commerce for consideration and promulgation; provided, 
however, that in case of disagreement within the Committee the Code 
Committee shall determine, subject to the approval of the National 
Industrial Recovery Board, the nature of the standards to be submitted 
to such standardizing agencies. 

4. After promulgation and such review as the National Indus- 
trial Recovery Board may determine, these standards may be approved 
as a Fair Trade Practice to be mandatory upon all members of this 
Industry pending the approval of subsequent standards or revisions 
of standards which may be established from time to time through 
the same procedure as set forth above. 

5. It is further provided, however, that no standard shall 
be approved by the National Recovery Administration which may be 
construed in any material particular as prohibiting the manufacture 
and/or sale of non-standard industry products which are accurately 
labeled and/or clearly identified to purchasers as to their devia- 
tion from such standards, if such non-standard products are in no 
way harmful to the users. 



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Rule 4. Design Protection plan Number I. 
Manda to ry P. eg i s t rat ion 

1. Design Protection. 

No member of this industry shall take orders for, or use in the 
manufacture of any products of this industry, any design embodied in 
such products unless an exact copy thereof has been registered with 
the Design Registration Bureau of the industry and unless such mem- 
ber is the holder of the registration certificate or has obtained 
the written consent of the member making the registration. This 
rule shall not apply to such standard or stable designs compiled 
by the said Registration Bureau and on file therein, and provided 
that nothing herein contained shall limit or deprive any member 
of this industry of any rights or benefits existing under the present 
patent or copyright laws. 

(a) The term "design" as used in this industry shall mean 
and be limited to the effect obtained by a combination of such of 
the following elements as are embodied in a product manufactured 
in this industry: (l) the shape resulting from the method of cut- 
ting, sewing, draping, and pressing; (2) the combination of fabrics 
and colors, including their use and placement; (3) the decoration, 
including kind and placement; provided that the term "design" shall 
not include style trend. 

2. Power and Duties of Design Registration Bureau. 

There shall be designated by the Code Committee, subject to 
the approval of the National Industrial Recovery Board, an impartial 
agency to be known as the "Design Registration Bureau". Said Bureau 
shall have the following powers and duties, subject to such rules 
and regulations as may be issued by the National Industrial Rocovory 
Eoard: 

(a) Said agency shall compile and make permanent a list of 
all standard or stable designs now recognized as such in this indus- 
try, and upon completion of such compilation shall make such list 
available to all members of this industry. 

(b) Pol lowing completion of the compilation of such list of 
standard or stable designs the said agency shall not accept for 
registration any design, the identical design of which is contained 
in said compiled list, or any design previously registered, provided 
that whenever a design so submitted is rejected for registration 

on the grounds that it is either contained in the compiled list, or 
has been previously registered by said Bureau, the rejected applica- 
tion may be referred for determination to an arbiter agreed upon by 
the Code Committee and the member whose registration was rejected. 
Provided that any design accepted for registration must be used 
within three months after its registration, otherwise said design 
shall be classified as a stable or standard design, and provided 
further that aftor one year from the date of its registration the 

9810 



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said registered design shall "be classified as a stable or standard 
design. 

(c) The Code Committee shall have the right to require a 
fee to "be paid by the member of the industry submitting the design 
for registration^ the amount of which fee shall be recommended by 
the Code Committee and approved by the National Industrial Recovery 
Board. 

Design Protection Plan IJumber 2. 
Mo pL.e gj.g t ration . 

No member of this industry shall use in the manufacture of his 
products, nor take orders for such pro due bs, which embody a design 
previously used and owned by any other member of this industry with- 
out first obtaining written permission to use such design from said 
prior user, provided that this prohibition shall not apply to standard 
or stable designs' used in the industry s and provided further that noth- 
ing herein contained shall limit the protection or right granted under 
the existing patent and copyright laws* 

(a) The term "defligr.' 1 as used in this industry shall mean and 
be limited to the effect obtained by a combination of such of the 
following elements as are embodied in a product manufactured in this 
industry: (l) the "shape resulting florn the method of cutting, sewing, 
draping, and pressing; (.3) the combination of fabrics and colors, 
including their use and placement; (7>) the decoration, including kind 
and placement; provided that the term "design" shall not include style 
trend. 

(b) Any complaint made to the Code Committee under this provision 
shall be referred *o an impartial arbiter or commission agreed upon by 
the person complained of and the Code Committee and such determination 
made by such impartial arbiter or commission shall be subject to re- 
view by the national Industrial Recovery Board. 



9810 



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EXHIBIT 28 

MEMORAHDmi 



Hay 20, 1935 

r 

TO: Mr. Prentiss L. Coonley, Code Administration Director 

FROM: Walter Liangum, Chairman, Code Planning Committee 

SUBJECT: Wage Provisions to be used i'n Code Revision 

Attached are the Wage Provisions recommended by the Code Planning 
Committee for your consideration during code revision. 

As we are working against tine, our tentative recommendations on 
each article will be sent you as completed, rather than waiting until 
the entire draft is finished. The attached provisions have not yet 
been put into legal phraseology by the legal division, as we desire to 
receive the comments of the Division Administr; tors, the various Boards 
and other parties before malting our final recommendations. Please bear 
in mind that these are merely tentative suggestions, and should be so 
considered. 

Cur recommendations will be divided into two parts: 

(a) Provisions which we think should be adopted by 
every industry, unless extremely good reason 
to the contrary can be shown. 

(b) Provisions, which will be included in an Appendix 
attached to the draft code, will consist of those 
which are deemed not contrary to policy, but which 
pre to be used only when the needs of a particular 
industry make them practicable. 

Attention is drawn to the fact that many wages provisions heretofore 
in codes are omitted. This is the result of numerous conferences with 
various interested parties in the organization, and many hours of dis- 
cussion by the committee. We feel that simplification is imperative, and 
to that end as I will mention further on, certain provisions have been 
suggested to go into the Appendix, giving our reasons for having failed 
to recommend other specific provision's which were sent us for consider- 
ation. 

We have changed the wording of Section 1 and Sections 2-A, 3 and 
C to read "no employer shall pay" rather than the old wording "no 
employee shall be paid less than." The reason for this is obvious. 



9810 



-236- 

Section 1 with this change is the spue as in the present Model 
Code, except we have added "and/or sex". Since wage adjustments 
are presumably based on locality, and/or population, and/ or sex, 
it is thought this last should "be added. This also applies to Sec- 
tions 2- A and 2-B. 

Section 3 on Piecework Compensation, we feel is clearer than 
the present provisions, and will be more readily enforceable. The 
alternative clause is riven because experience has shown instances 
where labor is of a poor qualify, and/ or Where the labor works spas- 
modically, and an hourly minimum guarantee is unenforceable. 

Section 4 covering Payment of Fages, we feel is clearer than 
the one generally used in codes, and affords the employee more pro- 
tection. 

Section 5 follows Executive Order 6S06-F with two exceptions. 
We feel that the worker should have the right to apply for a certifi- 
cate, as we believe that would' mere readily facilitate his obtaining 
employment if the employer is not put to the trouble of obtaining a 
certificate. At present, Code Authorities are required to submit, monthly 
a list of all such employees, -and we feel that if such a list is origi- 
nally submitted, and then a monthly report made of changes, this will 
be sufficient. 

Section 6 on Learners, we believe to be simpler and clearer, 
although it is longer than the general provision now in use. The old 
provision has resulted in innumerable requests for interpretations, 
and we are hopeful that the suggested section will present this in the 
future. The apprentice section rill be covered in the general labor 
provisions. 

Since we are making our recommendations from p. practical viewpoint, 
we are omitting from the draft certain provisions about which there is 
a difference of opinion regarding enforceability. As an example, a clause 
which has proved very troublesome is "Wages Above the Minimum." We do 
not feel this should be included in the draft itself, but that a state- 
ment should be included in the Appendix to the effect that where indus- 
tries desire classified wage scales or plural minima, that it is not 
contrary to -oolicy to include them in the code. This also applies to 
provisions covering wages for new employees, part time wages and vacations. 

Other recommendations ma.de to the committee were considered, and 
failure to mention any specific provision does not mean that they were 
not given thoughful consideration, but that we felt it inadvisable to 
include them in the draft code. The committee not only considered every 
recommendation sent it, but all matter on the subject that it could ob- 
tain in the time at its disposal. 



9810 



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Provisions covering area agreements, female employees performing 
substantially the same work transportation, employment privileges, and 
provisions covering wages for certain legal holidays will all he cov- 
ered "by sections in the .Appendix* The substance of these sections is 
now with the legal division, and as soon as they are -out into legal 
phraseology will "be sent to you for consideration. 



Ualter I.langum 

Chairman, Code Planning- Committee 



9810 



-238- 

ARTICLE IV 
T7AGES 



EUNHIUM 17AGES 

Section 1. Ho employer shall pay arty employee in any pay period 

less than at the rate of cents pe r hour, except as otherwise 

herein provided. 

(Minimum wage adjustment based on locality and/or population, 
and/or sex if appropriate, may be indicated here,) 

OFFICE Ai-iD CLERICAL EMPLOYEES 

Section 2-A. ITo employer shall pay any clerical or office employee 

in any pay period less than at the rate of dollars ( ) 

per week. 

(Minimum wage adjustment based on locality and/or population, 
and/or sex if appropriate, may be indicated here.) 

Section 2-B. Ho employer shall pay any watchman or guard in any 

period less than at the rate of dollars ($ ) per 

week. 

(Minimum wage adjustment based on locality and/ or population, 
ajid/or sex if approriate, may be indicated here.) 



Section 2-C. No employer shall pay any office boy or girl less 
than (80) per cent of the rate specified in Section 2-A of this Article. 

The number of such employees shall not exceed per cent of the 

total number of office enrol oyees, provided however, that every employ- 
er shall be allowed at least one office boy or girl. 

PIECEWORK COMTEK SAT I Oil 

Section 3-A. This Article establishes minimum rates of pay which 
shall apply, irrespective of whether an ©mloyee is actually compensated 
on a time rate, piecework, or other basis. 

Section 3-3. Pay for piece rates shall be com-outed on the basis 

of not more than a day period, and shall yield not less than 

the minimum rate of pay established under Section 1. Uhere overtime 
is utilized, such piece rates shall be increased in the same proportion 
as the overtime rate is to the minimum established in Section 1 and 
shall yield not less than the minimum overtime wage. 

If shall be in accord with policy for suitable industries to have 
a piece rate clause as follows: 



9810 



-239- 

"The industry may establish piece or quantity rates with approval 
of NBA without an hourly minimum guarantee." 

PAYiSiTT OF WAGES ' 

Section 4-A. Payment of all wages due shall be made in lawful 
currency or by negotiable check or draft therefor, payable on demand 
at par, provided that reasonable facilities are available for cashing 
such check. 

Section 4-B. Time of Payment and Deductions . Except as otherwise 
provided, wages and salaries shall become due and payable at least semi- 
monthly, with not to exceed ( ) calendar days holdover. Wages 

and salaries shall be exempt from all deductions, charges or fines, 
except such as are voluntarily consented to by the employee, or author- 
ized by law. Employers or their agents shall not directly or indirectly 
accept rebates on such wages or salaries. 

HAEDI CAPPED ffOBKER S 

Section 5. A person whose earning capacity is limited because of 
age, physical or mental handicap or other infirmity, may be employed on 
light" work at a wage below the minimum established by the Code, if the 
employee or 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. Such authority shall be guided by the in- 
structions of the United States Department of Labor in issuing certi- 
ficates to such persons. If any employer employs any such person or 
persons, he shall file with the Code Authority a list within 30 days 
after the Code is approved of such employees and whenever there is a 
change in the number of such employees the employees shall file with 
the Code Authority within 30 days after any such change showing the dis- 
charge of any such employee and/ or the addition of any such employee with 
the wages paid and the maximum hours of work of such newly hired employee. 

LSAB1T5BS 

Section 6- A. notwithstanding the provisions of Article IV, Section 
1, learners, as hereinafter defined, to a number hereinafter permitted, 

may be employed at not less than per cent of the minimum wage 

specified in Article IV, Section 1, or, if compensated on a piece-work 
rate, at not less than the employer's standard piece rate for the oc- 
cupation in which the learner is engaged. 

Each employer may employ one learner for each per cent of the 

total number of employees, and in any case each employer may employ at 
least one learner. 

Section 6-B. A learner as used in this Code is an employee who 
has actually worked less than hours (consecutive or non-consecu- 
tive) at the occupation in which he is engaged. 



9310 



-240- 

Section 6-C. IPoon the termination of a learner* s employment, the 
employer shall sign .and give, him a card hearing the learner* s name, 
stating the occupation in which he has been employed as learner for 
that employer, and the number of hours so employed. 

Section 6-D. When a.lBarner has completed _____ hours actually 
worked in an occupation, in the employ of one or more employers his ■ 
employer shall sign and give him a ca.rd "bearing the learner's name, 
the occupation in which he has been so enployed and stating that he 
is no longer a learner in such occupation. 

Section 6-E. No employer shall employ a learner at less than 
the minimum wage specified in this Section and no eimloyer shall em- 
ploy a. greater number of learners than is authorized "by this Section 
at less than the minimum wage prescribed hy Article IV, Section 1. 



I < 



9810 



-241- 
UEMQRAKDUM 



Jtry 22, 1935 



TO: Prentiss L. Coonley, Code Administrr tion Director 

PROM: TJalter Mangum, Chairman Code Planning Committee 

SUBJECT: General Labor Provisions 

Attached hereto find the recommendations of the Committee on the 
above mentioned provisions. These are substantially the same , as those 
in the present Model Code, with the addition of Sections 4, 5 (b) , 8 
and 9, which are added to conform with the Executive and Administrative 
Orders issued since the publication of the Model Code. Section 2 
(Section 7 (a) ) was quoted from the so-called Harrison Bill. This, 
of course, will be amended to conform with the law as finally passed. 

The present thought is that the Sections recommended in Article V 
should be mandatory in all codes, but it is quite likely that on final 
revision, Section 8 and 9 will go into the Appendix. The. Sections in 
the Appendix are those which are not applicable to all industries, but 
which may be adopted when deemed necessary. On the same theory, it is 
quite likely that Section 1 of the Appendix will be transferred to 
Article V itself and may be , thus mp.de mandatory. 

These provisions are now in the hands of the Legal Division for 
- jroval as to phraseology. 



Walter l.iangum, Chairman 
Code Planning Committee 



9810 



-242- 
ARTICLE V 

GENERAL LABOR PROVISIONS 



CHILD LABOR 

Section .1. No person under eighteen (18) years of age shall be 
employed in the industry except as (list here specific occupations, 
such as office "boys, office girls, messengers, etc.). Ho person 
under sixteen (16) years of age shall he employed in the industry in 
any capacity. In any State any employer shall he deemed to have cormlied 
with this provision rs to age if he shall have on file a certif ica.te or 
permit, duly signed by the Authority in such State empowered to issue 
employment or age certificates or permits shoving that the employee is 
of the required age. 

EMPLOYERS AND EMPLOYEES 

Section 2. 

(a) Every code of fair competition or agreement approved, 
-prescribed, or entered into under this title shall contain the follow- 
ing statement of rights of employees, which are hereby declared pnd 
affirmed: (l) Employees shall have the right to organise and bargain 
collectively through representatives of their own choosing, and shall 
be free from the interference, restraint, or coercion of employers of 
labor, or their agents, in the designation of such representatives or 
in self-organization or in other concerted activities for the purpose 

of collective bargaining or other mutual aid or -orotection; and (2) no ■ 
employee and no one seeking employment shall be required as a condition 
of employment to join any company union or to refrain from joining, or- 
ganizing, or assisting a labor organization of his own choosing. 

(b) All employers in the trade or industry or sub-division thereof 
with respect to which any such code or agreement is in effect shall 
comply with the requirements of subsection (a) and with the maximum 
hours of labor, minimum wages and other conditions of employment set 
forth in any such code or agreement. 

SUBTERFUGE 

Section 3. No employer shall reclassify employees or duties of 
occupations performed or engage in any subterfuge, so as to defea,t the 
purposes or provisions of the Act or of this Code. 

II SI IIS SAL POR CO! PLAINS PORDIDDEN 

Section 4. No employer shall dismiss or demote any employee for 
making a. comolaint or giving evidence with resoect to any alleged viola- 
tion of the provisions of this code of fair competition. (Executive 
Order No. 6711, Llay 15, 1934.) 



9310 



-243- 
EXISTING LAUS AND LABOR AGREEMENTS 
Section 5. 

(a) No provision- thereof shall supersede any Federal, State or 
Municipal Ian or any labor agreement, which establishes more stringent 
requirements as to age of employees, wages, hours of work, or general 
working conditions than are established in this code. 

(b) Ho provision in this code shall supersede any provisions 

of a bonr—fide Labor agreement now in force between members of the trade/ 
industry and their employees which provides higher wages, shorter hours, 
or better working conditions than those prescribed by this code, or which 
provide specific arrangements as to methods of wage payments. 

SAFETY AIE) HEALTH 

Section 5. Every employer shall make reasonable provision for 
the safety and health of his employees at the place and during the 
hours of their employment. (*). Standards for safety and health shall 
be submitted by the Code Committee to the National Industrial Recovery 
Board for approval within si;c (S) months after the effective date of 
this code. After approval, such standards shall become the minimum 
standards of safety and health for all members of the industry and shall 
thereafter be a part of this code and enforciblc as such. 

APPRENI ICE SHIP 

Section 7. Every apprentice hired "ay a member of this industry 
shall be engaged in accordance with Executive OrJ.er No. 6750-C. June 27, 
1934. 

CONIRACTHIC- 

Section 8. This provision is being given further consideration 
by the Committee. 

COMPANY TOUN CLAUSE 

Section 9. No enroloyee other than maintenance or supervisory men 
or those necessary to -orotect property shall be required as a condition 
of employment to live in homes rented from or designated by the employer. 
No employee shall be required as a condition of employment to trade at any 
store or subscribe to any services owned or designated by his employer 
or his agents. 



(*) For industries with homework, insert: No work shall be done or 

permitted in tenements, private houses, basements, or in any build- 
ings unsanitary or unsafe on account of fire risks. 



9310 



-244- 



POSTING 

Section 10. Every erroloyer shall -oost and kee-o roosted the labor 
provisions of this Co fie in accordance with rules and regulations pres- 
cribed "bv the National Industrial Recovery Board* 

APPENDIX 

HAZARDOUS OCCUPATIONS 

Section 1. No person under eighteen (18) years of age, except 
'apprentices, shall he employed in operations or occupations which are 
hazardous in nature or dangerous to health. The Code Committee shall 
submit to the National Industrial Recovery hoard for approval within 
days from the effective date of the code a list of such oper- 
ations or occupations. In my state an employer shall he deemed to 
have complied with this provision as to age if he shall have on file 
a valid certificate or permit duly signed by the authority in such state 
empowered to issue employment or age certificates or permits, showing 
that the employee is of the required age. 

NOTICE OF DISCHARGE 

Section 2. , ITo employee who has been regularly emoloyed for four 
(4) weeks with any one establishment may be discharged or laid off 
without a prior notice of one week, 

H0HET70RK 

Section 3. No homework shall be allowed except as hereinafter 
provided: 

1. A person ucy be permitted to engage in homework at. the same 
rate of wages as is paid for the same type of work performed in the 
factory or other regular place of business if a certificate is obtained 
from the State authority or other officer designated by the United 
States Department of Labor, such certifica.te to be granted in accor- 
dance with instructions issued by the- United States Department of 
Labor, provided: 

(a) Such person is Dhysically incapacitated for work in a. 
factory or other regular place of business and is free 
from any contagious disease; or 

(b) Such person is unable to leave home because his or her 
services are absolutely essentia.! for attendance on a 
nerson who is bedridden or rn invalid and both such per- 
sons are free from any contagious disease. 

2. Any employer engaging such a person shall keep such certificate 
on file and shall file with the Code Committee for the trade or industry 
or sub-division thereof concerned the name and address of each worker so 
certificated. 

9310 



OFFICE OF THE NATIONAL RECOVERY ADMINISTRATION 
THE DIVISION OF REVIEW 

THE WORK OF THE DIVISION OF REVIEW 

Executive Order No. 7075, dated June 15, 1935, established the Division of Review of the 
National Recovery Administration. The pertinent part of the Executive Order reads thus: 

The Division of Review shall assemble, analyze, and report upon the statistical 
information and records of experience of the operations of the various trades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditions in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate review of the effects of the Administration of 
Title I of the National Industrial Recovery Act, and the principles and policies 
put into effect thereunder, and shall otherwise aid the President in carrying out 
his functions under the said Title. I hereby appoint Leon C. Marshall, Director of 
the Division of Review. 

The study sections set up in the Division of Review covered these areas: industry 
studies, foreign trade studies, labor studies, trade practice studies, statistical studies, 
legal studies, administration studies, miscellaneous studies, and the writing of code his- 
tories. The materials which were produced by these sections are indicated below. 

Except for the Code Histories, all items mentioned below are scheduled to be in mimeo- 
graphed form by April 1, 1936. 

THE CODE HISTORIES 

The Code Histories are documented accounts of the formation and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of members in the industry; the history of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which were held, and 
the activities in connection with obtaining approval of the code; the history of the ad- 
ministration of the code, covering the organization and operation of the code authority, 
the difficulties encountered in administration, the extent of compliance or non-compliance, 
and the general success or lack of success of the code; and an analysis of the operation of 
code provisions dealing with wages, hours, trade practices, and other provisions. These 
and other matters are canvassed not only in terms of the materials to be found in the files, 
dux also in terms of the experiences of the deputies and others concerned with code formation 
and administration. 

The Code Histories, (including histories of certain NRA units or agencies) are not 
mimeographed. They are to be turned over to the Department of Commerce in typewritten form. 
All told, approximately eight hundred and fifty (850) histories will b6 completed. This 
number includes all of the approved codes and some of the unapproved codes. (In W ork 
Materials No 18, Content s of Code Histries . will be found the outline which governed 
the preparation of Code Histories.) 

(In the case of all approved codes and also in the case of some codes not carried to 
final approval, there are in NRA files further materials on industries. Particularly worthy 
of mention are the Volumes I, II and III which constitute the material officially submitted 
to the President in support of the recommendation for approval of each code. These voa.umes 
9768—1 . 



-ii- 

set forth the origination of the code, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industry, the 
recommendations of the various Advisory Boards, certain types of official correspondence, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to amendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the work of the Division 
of Review. ) 

THE WORK MATERIALS SERIES 

In the work of the Division of Review a considerable number of studies and compilations 
of data (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Wor_k M aterials ho . 17 , T entative O utlines and Summaries of 
Studies in P rocess , these materials are fully described). 

I ndustry Studies 

Automobile Industry, An Economic Survey of 

Bituminous Coal Industry under Free Competition and Code Regulation, Economic Survey of 

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

1934. 
Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part D - Exports and Exporting under NRA Codes. 

Forest Products Industries, Foreign Trade Study of the 

Iron and Steel Industry, The 

Knitting Industries, The 

Leather and Shoe Industries, The 

Lumber and Timber Products Industry, Economic Problems of the 

Men's Clothing Industry, The 

Millinery Industry, The 

Motion Picture Industry, The 

Migration of Industry, The: The Shift of Twenty-Five Needle Trades From New York State, 
1926 to 1934 

National Labor Income by Months, 1929-35 

Paper Industry, The 

Production, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 

Retail Trades Study, The 

Rubber Industry Study, The 

Textile Industry in the United Kingdom, France, Germany, Italy, and Japan 

Textile Yarns and Fabrics 

Tobacco Industry, The 

Wholesale Trades Study, The 

Women's Neckwear and Scarf Industry, Financial aDd Labor Data on 
9768—2 



- iii - 

Women's Apparel Industry, Some Aspects of the 

T rade P ractic e St udies 

Cou-odities, Information Concerning: A Study of MRA and Related Experiences in Control 
Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes 
Distributive Relations in the Asbestos Industry 
Design Piracy: The Problem and Its Treatment Under NRA Codes 
Electrical Mfg. Industry: Price Filing Study 
Fertilizer Industry: Price Filing Study 

Geographical Price Relations Under Codes of Fair Competition, Control of 
Minimum Price Regulation Under Codes of Fair Competition 
Multiple Basing Point System in the Lime Industry: Operation of the 
Price Control in the Coffee Industry 
Price Filing Under NRA Codes 
Production Control in the Ice Industry 
Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 
Trade Practice Rules of The Federal Trade Commission (1914-1936) : A classification for 
comparison with Trade Practice Provisions of NRA Codes. 

Labor Studies 

Cap and Cloth Hat Industry, Commission Report on Wage Differentials in 
Earnings in Selected Manufacturing Industries, by States, 1933-35 
Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-35 
Fur Manufacturing, Commission Report on Wages and Hours in 
Hours and Wages in American Industry 
Labor Program Under the National Industrial Recovery Act, The 

Part A. Introduction 

Part B. Control of Hours and Reemployment 

Part C. Control of Wages 

Part D. Control of Other Conditions of Employment 

Part E. Section 7(a) of the Recovery Act 
Materials in the Field of Industrial Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

Administrative Studies 

Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 

Administrative Interpretations of NRA Codes 

Administrative Law and Procedure under the NIRA 

Agreements Under Sections 4(a) and 7(b) of the NIRA 

Approve Codes in Industry Groups, Classification of 

Basic Code, the — (Administrative Order X-61) 

Code Authorities and Their Part in the Administration of the NIRA 
Part A. Introduction 

Part B. Nature, Composition and Organization of Code Authorities 
9768—2. 



Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 
Code Compliance Activities of the NRA 
Code Making Program of the NRA in the Territories, The 
Code Provisions and Related Subjects, Policy Statements Concerning 
Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Provisions in the Codes 

Part E. Agreements under Sections 4(a) and 7(b) 

Part F. A Type Case: The Cotton Textile Code 
Labels Under NRA, A Study of 

Model Code and Model Provisions for Codes, Development of 

National Recovery Administration, The: A Review of its Organization and Activities 
NRA Insignia 

President's Reemployment Agreement, The 

President's Reemployment Agreement, Substitutions in Connection with the 
Prison Labor Problem under NRA and the Prison Compact, The 
Problems of Administration in the Overlapping of Code Definitions of Industries and Trades, 

Multiple Code Coverage, Classifying Individual Members of Industries and Trades 
Relationship of NRA to Government Contracts and Contracts Involving the Use of Government 

Funds 
Relationship of NRA with States and Municipalities 
Sheltered Workshops Under NRA 
Uncodified Industries: A Study of Factors Limiting the Code Making Program 

Legal Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees U Enforce 

Commerce Clause, Federal Regulation of the Employer-Employee Relationship Under the 

Delegation of Power, Certain Phases of the Principle of, with Reference tc federal Industrial 
Regulatory Legislation 

Enforcement, Extra-Judicial Methods of 

Federal Regulation through the Joint Employment of the Power of Taxation and the Spending 
Power 

Government Contract Provisions as a Means of Establishing Proper Economic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com- 
merce Clause, Cases on 

Legislative Possibilities of the State Constitutions 

Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- 
tion? 

State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis 

Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the United States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 
9768—4. 



THE E VIDE NCE STUDIES SERI ES 

The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Schechter decision the project was continued in order to assemble data for 
use in connection with the studies of the Division of Review. The data are particularly 
concerned with the nature, size and operations of the industry; and with the relation of the 
industry to interstate commerce. The industries covered by the Evidence Studies account for 
more than one-half of the total number of workers under codes. The list of those studies 
follows: 



Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and Sho6 Manufacturing Industry 
Bottled Soft Drink Industry 
Builders' Supplies Industry 
Canning Industry 
Chemical Manufacturing Industry 
Cigar Manufacturing Industry 
Coat dnd Suit Industry 
Construction Industry 
Cotton Garment Industry 
Dress Manufacturing Industry 
Electrical Contracting Industry- 
Electrical Manufacturing Industry 
Fabricated Metal Products Mfg. and Metal Fin- 
ishing and Metal Coating Industry 
Fishery Industry 

Furniture Manufacturing Industry 
General Contractors Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

Infant's and Children's Wear Industry 
Iron and Steel Industry 



Leather Industry 

Lumber and Timber Products Industry 
Mason Contractors Industry 
Men's Clothing Industry 
Motion Picture Industry 
Motor Vehicle Retailing Trade 
Keedlew-rk Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 
Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
try 
Wool Textile Industry 



THE STATISTICAL MATERIALS SERIES 



This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment. Payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qualifications that should be observed in using the 
data, the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series: 
9768—5. 



> 



- vi - 

Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint, Varnish, and Lacquer, Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

THE COVERAGE 

The original, and approved, plan of the Division of Review contemplated resources suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govern- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies; and the abandonment of the consolidation and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be cared for under other 
auspices. 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the largest and richest single body of information 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review. 
9768—6. 



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