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3 9999 

06317 383 3 



P. J. Duff icy 


March, 19 56 

Division or RhVIiiW 


F. J. Dofficy 

Vj^rch, 1S56 


"• «. U9mt OF CONQIttsS 

NOV 30 1950 

F ^ £ ./ P D 

This study of The Code ! ai:in:T Profirram of the ITRA in the 
Territories was prepared by ;'r. F. J. Duff icy of the MA Grf^qn- 
ization Studies Section, \..v. TJilliam "^. Bprdsley in charge. 

The report is a review? and analysis of the various aspects 
of the adninistrative policy and orocedure of l^IRA with respect 
to the codifying of industries and trades in Alarka, Ha^«7a,ii and 
Puerto F.ico and cf the effect of^the appli-fc.-ttion of policy and 
proced'ore. There is a condensed statement .©•f'- the contents of the 
report in the Summary immediately fbllo-»7ing the Table of Contents. 
Brief statements as to r.ethodology and fields for further study are 
to be found in Apoendix I. The more iraport-'.nt subjects under the 
title of the study for further research are the previsions of the 
territorip.l codes, their ad^iinistration in the territories and 
the effects of such provisions and administr^'tion. To some ex- 
tent these subjects are covered by code histories pret)ared in 
the Division of Review. 

At the back of this report will be foLiJid a brief statement 
of the stud^ies undertaken by the Division of "Review. 

L. C. I>rshall, Director 
Division of l^e-^ie'? 

March 9, 1936 





SUl'I'AH iv 

chapt:::^ i iirr?.ODrcTioiT i 

II EASES 1¥. LA'.T 2 

Constitution 2 

iI.:.tiona,l IiKustrial Recovery Act 2 

III EAiiLY te:.pjtciiial rOLICY 4 

No special provinion at 'bGginning 4 

Decision to accoro. sioecial treatnent .... 5 


Alaska 7 

Il8r?ai i 9 

Puerto Pico 11 

V P'npjor OP cciiTusioii 14 

In the territories. 14 

In '7ashin;;;ton 14 


The apv.rovecl -jlan (providin.':: national coces do 

cov.jr territories; industries in territories 
iiav r.p'ily for necessary' ar.ienc'jnents; may apply 
for rerjarate code only "here nationrl code 

erce-iy ts territories) 16 

Procedure 21 


Alaska Gonf oms 22 

EaT/aii departs fron policy 23 

Puerto P.ico departs partially 31 


Adrainisti"a.tive Order X-6Q -^emitting industries 
in Ha'.Taii and Puerto liico to ap-oly for separate 

codes 33 



Alaslra 48 

HaTTaii 48 

Puerto JUco 49 


9753 -ii- 

^PEiroiX I ~^ 

Method of Treatment and Future Research 51 

9758 -iii~ 



In the very betinnine; of th^ adninistrn.tion of th^ National 
Industrial Rt^covery Act, the Administrator pstablished the general 
policy that all codes should be national, a.nd not sectional, in their 
f;eo.°;r-^phical conpass. This oolicy was not to be departed from unless 
some very stroni^ and inpellinf^- reason could be shown in justification. 

The plan ultimately adopted for codification 0"f trades and 
industries in the territories constituted a departure from that 
general policy. 

It is the purpose of this study to review the history of ter- 
ritorial codification; to investigate the circiim stances which prompted 
the adoption of tiip special policy for the territories oermittin'^ 
trades and industries in Puerto Rico and Haraii to apply for separate 
codes; to review the results of the special policy and -orocedure 
adopted; and to appraise in the lig-ht of experience, such policy 
and procedure, 

I: ACES i:t LA.7 

The Constitution of the United States gives Congress plenary 
pover over the territorial T)Ossesi-ions of the United States. There 
is no division of auticrity such as existed between the Federal 
Government and the sever-sl St-ite goverments. The general la'^s 
of the United St'^tes not locally inapplicable, have been e:^tended 
by statute tc Alaska, Hawaii and Puerto Eico, but not to the 
Philippine Islands or other possessions. The ITational Industrial 
Recovery Act apolied only to Alaska, Hawaii and Puerto Eico, 

Under the terms of the Act, the President was authori2ed 
to apr)rove Codes of Fair Competition for trades and industries 
or sub- divisions thereof; it was within his discretion to bring 
territorial trades and industries under codes either (n) by means 
of inclusion in national codes, or (b) by means of separate codes, 


in the beginning no special thought was given to the problem, 
due to concentration on the vastly more important larger problems 
pressing for solution. Territories were looked upon the same as 
any other geographical section of the country, and treated in the 
same manner. 

Late in Aug-ast, 1933, the Administrator, General Johnson, announced 
that different economic conditions in the territories it impossible 
to apply the mainland standards and special provisions therefore 
would have to be made for trades and industries in the territories. 

9758 "^'^" 



Alaska is p. v.qst territory, sparsrl:'/ inhabited. Its two 
principal industries are fishin^'r and f^old minini;,-. Alaska imports 
almost all of its economic goods from the mainland and sells its 
products almost entirely to the mainland. The cost of living and 
prev.'dlin"? wi.t-es are higher than in the States. 

Hawai 1 

Hawaii is predominantly agricultural, its t^o major industries 
being sugar and pineapviles. These products are sold almost exclusively 
to the mainland, and Hawaii uarchases nearly all its economic goods 
from the mainland. The cost of living and prevniling wages are about 
the same as in the states, 

Puerto 'Rico 

Puerto Kico is also predominantly agricultural, its chief 
produc*"- being sugar. Outside of agriculture its only industry of 
any importance is the Needlework Industry, which nroducts are sold 
on the mainland. Puerto Hico's trade is almost entirely with the 
United States, "ages in general are lower than on the mainland, 
and the standa.rd of living for the bulk of the dense population 
is below that e-i sting on the mainland, 


After General Johnson made known that he felt mainland 
standards could not be applied to the territories, trades and 
industries there were confused as to whether or not they should 
comply with the PP.A ana the national codes already approved. 
Ko effort at enforcement was being made, and the status of ter- 
ritorial trades and industries was left up in the air. 

^n 7<ashington, similar confusion existed. Doubts as to 
whether the territories were properly represented by proponents 
of a.pproved codes, together v/ith G-eneral Jonnson's sta.tement, 
made it appear inadvisable to hold that territorial trades and 
industries should comoly. 


A plan was therefore worked out which recognized the principle 
that territories were subject to ap-oroved national codes but which 
further recognized that economic condition in the territories might 
be such that compliance with the approved codes was impossible and 
therefore the territories were to ap^oly for necessary amendments, 
pending which time no effort at enforcement i^ould be made. 

The procedure laid down was similar to that prescribed for 
negotiation of raa.inland codes. 




Alr'.slK'. i'olloTTed the ;)0lic7 l^i.i'i doTTn and operr ted under inainlfind 
codes, but did not seek oneadiAonts inasnuch p.s they '-'ere eJready paying 
laore than the codes required as rainiraiua r:ri-:o3, jm;! they could readily 
cc'jnli'- ■^ith tlie code requirements. 

HaiTaii departed fron -oolicy, due hoth to /lisunderstandinr of poli- 
cy and insistence of trrles vnl industries on seprrate codes. SePfj^- 
r.-te codes vere proposed for alD. industries (e::cept cniining and can 
msnufacturi ij.-;) end. public hearings held. 

Puerto P.ico found conf ornrnce •7ith polic"'" iajracti cable in the 
ITeedleuorl: Industr-, the lrr^:eflt industry'- o\it3ide of agriculture, and 
sought Bn3. received ■oerriission fron T7?,shin,.;';ton to nrite 3, separate code* 
Attempts to rrnend other codes ^'eve •'juisuccessf-xL. 


For practical reasons it va,s deened e:q3edient to lerrnit Harraii to 
continue negotiation of separa'oe codes and Adi.iinistr.-tive Order X-60 of 
July 3, 1S34, formally aux)rov9d thrt policjr. It extended the sane 
privilege to Puerto Hico for sinilr.r practicpl reasons. 

■This 'oolicy v/as necess-r7 to prevent co-.-nlete collapse of the ef- 
forts at bringing HaTraii nnd Piierto P.ic under s.ctive operation of the 
Act. I'"ilure to "Ttrnit sep;i,rate codes quite certrinly ^•'ould have re- 
SLi].ted in both Ha„vraiian ajid Puerto Hican industries challenging the 
validity of national codes as p-nplied to them, principally on the theory, 
that they rrere not represented in the negotiation of national codes and 
had not hfd adequate notice. 


'Trades and industries in both Ilavaii pjid Puerto Hico used as models 
for their proposed codes the n: tiono.l codes -oreviously approved, national 
policy TT-as changing ccnstnaitly. As a result, the pro-oosed codes uhen 
received in Uashington, contained provisions xrhich vere against the ner; 
current nationrJ. policy, 021C. could not be ap-oroved. Thoy r-ere therefore 
returned for correction. 

Proposed codes -Then received in Uashington ^7ere handled by main- 
land deputies 'nr-ndJing the cori^esponding industries on the mainland. 
Already overburdened •.:'ith Tork on their OTm mainlrnd codes, these de- 
puties iia.d no time to devote to -oroposcd territorial codes which rrere 
permitted to lie rxound v/ithout ctjt .-^ction being taken on them. 

As a resiilt, only 5 of the 25 sf.bnittcd r'a-'aiian ce-or.rate codes 
vere finally approved before the Schechter decision and these at a ver;^'- 
Ici.te de.te. Only tvro out of t'Tclve nro-oosed separate codes for Puerto 
Rico "ere approved. 




Ac'Lministration from TTashirif^ton, of codes effective in Alaskn. rith 
a deputy stationed in Alaska, iro/od satisfactory excei^t in the natter 
of exeia;otions. Here ^-rer.ter speed was nectissary, and this was accomnlished 
by delegating to the deputy tho pov/er to grant excrrotions, suoject to 
re vie-,; aaid disapproval in TTa-Ehin^'^ton. 

In Hawaii the e:oproved separate codes required action "by the ilational 
Industrial Recovery Borrd on raany questions. Administration frora 
T7ashin£:ton proved irnprccticatlo. In order to periiit promiot action and 
"better adroinistration, authority vrz delegated to the deputy to take re- 
quired action under appr."'ved codes in the npjno of the ifational 
Industrial Recovery Beard, subject to revieu ajid disapiaroval in TJashin,/;ton. 

Puerto Hico, i-^-nliko IlaT/ali and Alaska, has good air mail service to 
Uashington, and for that rea.son and "because the only a.ioproved Puerto Rican 
Code of ;iny iraportrnoe, the ITsodlework Industrj'-, ues engaged in active 
co!J->e uition rith mainland industries, it vies considorei inadvisable to 
delegate cny s^^ecial adninistr, tive ^authority to the deputy there, 


Th.e pl?ji adopted vnr. prooahl", under the clrcunstances, the only 
prudent co-jj-se to pursue. But it failed to accoi.ijlish the goal desired, 
and demonstrated the difiici-ilties to oe encountered in any effort at 
separate codification. 

If the pro"blein rgain pre-jents itself, the difficulties that ne- 
cessitated the ccj^so r.'hic"h w.q follor/ed, caji "be eliminated in the 
beginning by having the territories properly represented in the ne- 
gotia.tion of national codes as a xjart thereof. They 'rill then be codified 
as a part of the national codes ^ith such special ^'I'ovisions es their 
econonic conditions reqnire, and cpn be simply and effectively ad- 
ministered as such. 

-VI 1 1- 





It is not the uurDOss of this study t^^ investieate the various 
individual codes and. a.^reeTi-^nts TDroiDOsed or apT^roved for the terri- 
tories. This study is c«ncerned rrther ■^ith a review and analysis 
of (l) the reasons which -DroinDted the adoption of the administrative 
Dolicy to accord STD'='Cial tr^atmert to the territories and permit 
trades and industries therein to aDt)ly for separate codes, (2) the 
method laid down for the execution of that policy, (3) the effect of 
the application of such policy and procedure and (4) an appraisal of ; j 
the merits of the poliqy and method. 

The general policy adopted at the' very beginning of the admin- 
istration of the Act, before the territorial problem had presented 
itself, was that only national codes would be considered and that 
no coda would be approved which was limited in its application to a 
geographical subdivision of the country. This policy was firmly 
adhered to throughout the lifetime of the Administration, with very 
fe-" exceptions. 

In this study, we shall att?mpt to discover why the exception 
was made in the case of territories, how it '^'orked out, an'T whether it 
now, in the light of experience, aopears "to have been good policy worthy 
of reoetition in the event the problem ap-ain presents itS'-'lf for deter- 
mination, or whether experience has shown a better plan of action which 
would be more effective. 





The Constitution of t h'' United States, Article IV, Section ,3, 
-orovides that "The Congress shall have the "o^wer to disiDOse of ^and make 
all needful nil es and reeulstions resiDSCtine t.he Territory or other 
ProTDerty DsloniSrin^- to the United States." The T)Ow=r of Congress to 
govern the Territories has never be ^n qus'^tioned. (*) 

There is no division of authority "between the United States 
and its territories and possessions as there is "between the United 
States and the several states of the Union. Congress has the loower to 
regulate all trade and co^nerce within the territories; there is no 
"interstate" and "intrastate" ■Dro"blem involved. 


Alaska and Hawaii are the only t^resent territories which have 
"been incoriDorated into the United Strtes and are integral Darts of the 
United Stat-s. The Constitution and th- laws of the United States, not 
locally inaniDlicahle, he-e te'-n s-oecif ically declared "by statute to have 
the sfirne force and effect in those territories as tlr-y hav^ in other 
narts of the United States. 

The statutory laws of the United States, not locally inaDuli- 
ca"ble, have "been e>-oressly decalred, hy statute, to "be in full f^^rce 
and effect in Puerto Rico. 

The National Industrial Recovery Act, therefore, atJTDlied to 
those three territories — Alaska, Hawaii and Puerto Rico. 

Congress has -orovided, "by statute, that no law of the United 
States aiDT3lies tn the FhiliTj-oine Islands unless it sr>ecif ically so 
Torovides. The Att-^rney General held that the National Industrial 
Recovery Act, insofar as it prescri"bed the formulation, aTDuroval , and 
enforcement ■"f codes, was not aT)iDlica"ble to .the Phili-b-oin Islands. 

There is no law extending the fceneral statutory laws of the 
United States to the Virgin Islands, Canal Zone, Samoa, or Guam. The 
National Industrial Recovery Act, therefore, did not aiDDly to those 
territories. (**) 

Since the statutory laws of the United States, not locally 
inap-olicahle, do apoly to Alaska, Hawaii and Piaerto ".^ico, and since 
there was nothing to indicate that the National Industrial Recovery Act 
was not locally inaiD-Dlica"ble, but on the contrary there was abundant 
evidence to show that the Act was locally aoiDlicable, it follows that 

(*) See Willoughby, Constitutional Law of the United States, Section 181. 

(**) See N.R.A. Legal Research Memorandum of Law No. 227 on "Aoclicability 
of Codes to Territorial Possessions", June 27, 1934. 


the nrovisions of the Act :?Tantin? to the Presirfent the -nc^er to aTjiarove 
codes and ae;reern'='nts included th'; T?ower to atj-orove codes and a-^reements 
which included those territories, as weT 1 as th'c' several states of the 
Union and the District of Colurptia. 

Section 3(a) of the Act i^rovided that "Uxjon the application to 
the President by one or more trade or industrial associations or groups, 
the President may approve a code or codes of fair competition for the 
trade or industry or subdivision .thereof (underscoring supplied) , repre- 
sented by the applicant or aiDPlicants, if the President finds, '-tc." 
There is nowhere in the Act a definition of the term "subdivision" of a 
trade or industry. In the absence of any expressed or implied special 
meanin.';, it must be taken that .the meanin- intended by Congress was the 
commonly understood and e-en=rally accepted ra-aning of <:he term, namely, 
a part or som.^thing less than *he whole. That it could properly be 
looked unon as a geo^ronhical loart as well as a functional part seems 
to be borne out by the language contained in Section 7 (c) of the Act, 
where in speaking of the President's power to prescribe limited codes of 
fair competition, the Act provides that "the President may differentiate 
accordina- to the exp;^rience and skill of the employees af^^ected Pnd ac- 
cording to the locality of employment" . (Underscoring supplied) . The 
Administration from the beginning interpreted the terra "subdivision" to 
mean a gpngraphical subdivision as well as a functional subdivision, as 
is evidenced by its approval of geographico.l wage and hours agreements 
under Section 7 (b). It would therefore appear that the Administration's 
general policy to approve only national codes was a decision based solely 
on administrative discretion and not on legal reauirement, and that if 
the Administration so chose, it was free to amDrove se-oarate codes for 
geographical subdivisions of an industry — and therefore to aiDorove 
separate codes for any or all of the territories of Alaska, Hawaii and 
Puerto Rico, 




I . HO srsci.j. PROvisiQi ' AT 31]' .-.iigr^G . ' .. ' ■ 

I;/- ec.i.-'.tely after tlie IT^-tional Industrial Recovery Act VYas 
p.pT;rovec. "by the president, the rn.chinery for af''nrinisterin'; the Act 
T'ps set \i;p and. started to fuuction. The uiajor and most ini.iediate 
purpose of the Act was to sti lUlate purci'.asin : power hy increasing 
■ eriT-)loy.:ent sjid thus to speed ujd the wheels of industry by increasing 
the c.e.-.?aC- for industry's tj-.o due t s , v^hich vrould in turn result in 
still further increase in erapl orient. To acconplisn this major 
purpose sneed in puttin;; tiie Act into effect we^.s of the essence. 
The ouic::er the process noald be out into motion, the quicker the 
goal vrould he reached. 

Title II of the Act providin;-; for public works was placed under 
a se;oarate administration independent of the A'^ministration pro- 
vided for Title I, but each v/as to be complimentary to the other in 
accom-olishin/; t':e coaiaon r^oal. In this study we are concerned only 
wit- the administration of Title I which deplt yntli industrial 

A relatively small number of industries provide by far the 
bulk of employment in this country and itwa.s obvious that the first 
step should be an effort to codif;.' those lar^^e industries. This 
txie Administra.tion imj^iediately set out to do. Industry responded 
enthusiastically. However, codes were something''; ne\i and there was 
no unojnimity of opinion eit;'.er arnon,;^ the members of a paa-ticular 
industry,- as to what should be embraced in a code, or betvfoen in- 
dustries riid the national Reco'^ery Administration, aijd despite 
heroic efforts on the part of both members of industry and the 
Adninistration, with both workin_%' feverishly from early morning 
until late at ni;f<ht, it yips impossible to formulate rjid approve codes 
as quickly as desired. In order therefore to accomplish the /-joal 
of stimulatin.': em;,.>loyment .-nd increasin.;- purchasin/?; power iramediate- 
ly, President's Seemplo/mient Af.'reemeut, providing for increased 
war;es and shorter hours, was introduced to serve until such time as 
industries could be codified. The PRA w^s enthaisiastically accepted 
by trades and incbastries t:irou.,hout the country. It was an excellent 
stop--:ap device and served its purpose very well. ^-lowever, it was 
simply a stop- ^'ap device a^id nothin;; more, £yid its introduction and 
acceptance did not in any v._y relieve the si'eat pressure to ;3et 
trades and industries codified. 

It is not sunprising, therefore, that the territorial problem, 
a minor one v/hen coraoared witl- the whole problem of codification, 
should not come up for consideration durin;; the early hectic ciays. 
The Ad.iinistration had to concentrate its time and effort on the 
major problem, ;md this necessarily left very little time for the 
lesser ones such as the territories. The most pressing task before 
the Ad-amistrFtion at the time v.-as to get the greatest possible 


ntunber o-'-' -orliers turner r.s rarickly n.s posL^itle. A coniprricon of 
&e nn-:iev of eiraloyable workers on tlie niainl.-nd -jicl t...OGe m tac 
t.e--i^o^---es v/Ut' -e.-'dil^ Gho'.^' the advisability of concentrntiiiS on 
■:]"inl-iv; co(:.ificr.tion. The 1950 Census s::ovrs t]in.t there -.Tcro rou.:::ily 
48,000,000 e.vrolo-r.l3le vrorkers on the .•.■ninlpx/l -nd -bout 700,000 m 
the territories ox Al"slcr, ■'i's.'P.xi a-id Puerto Rico co:::lDinec' . Pot all 
of th.o£,e ■■•orkers, however, rere to "be covered by tne -Jatior-nl In- 
durtri"l hecovery Act. The Ad-inistr-^tion exe;r.pted all of t.iose 
v'orke-.'s e-.-- r.-ed in agriculture, vj.blic service, profcssicial service, 
doaestic service, and railror.ds. This left about 20,000,000 employ- 
able workers on the mpinland fco be covered by codes, rmcl about 
250,000 ir. t'-.e three territorios coaibined. 

T-.e Adrh;i£.tratic.n c.t he vesy bc-innin-i; sa-v the necessity for 
codifyin- industries by iieau? of national codes only, for itvvas 
apparent tl-^.t if codes were j-.reuiitted for -fjo.-raol^icpl divisions of 
an industry it v;ould t.^ke a>i endless ti^ae to coihfy industry bec-uso 
of the confusion that would result from the multitude of codes pro- 
posed for any one industry -uid because of the dii'-icii-T ty of coordmat- 
in:i thds iiiultitude of codes. H.-ch :->eosraphical sectiou of ^the 
co^antry -.-.'as T^roperly looh'ed upon ;\s a part of the whole and t/ie code 
for an industry was to cover th.e whole, ^"ith special provisions if 
necess.r.r:,^ to take care of any special section=>l reouircuicnts. 
Experience ..las sho-Ti this to be b far the wiser course and has 
shov.-n that it worked out very well. Since codes were sr^onsored and 
proposed by associations or r-;roups nationally representative of an 
industry, all sections of coiintry were ,;iven a voice in tiie ^ 
a.eter-nination of what was to o into a code and had an opportunity 
to object to any provision of the proposed jode w^ach tiey felt was 
unfair to t-ioir interests. 

At t-e he:;innin:;, t.:or(-;fore, no thou ht war. -ivcn to t:ie idea 
of sub;-it;:in, ser.prate codes for the territories, and it was assui;ied 
that they v.-ould operate binder th-e national codes .lust as any otl'.er 
fjeographical section of the United States. 

II. h::isj:ch fj ;_3X/j:i ^PhCXAi T^hATiEhT 

I.e --^ec^iliar reouirei.ients of t..e territories \"/-:lch called for 
s-oecial t--ept:.ient were -^robahly first brou;;nt to the attention of the 
Ad.ninistr'tor for Inrhis trial r.ecovcry in Auust of lP?.o, shortly -fter 
the PPA. hcf becone effective. In a letter to the "onorable harold L. 
Idces, Secretary of tne Interior, (the Division of Territories and 
Island Possessions is a cure -u of the De o/'.rtaent of Interior), dated 
Au::ust -;P, 1933, GeneraJ Jo.;dison said: 

"Di-ie to the entirely c.ifferent hours of labor 

cj\(. "■".,';e r-tes nrevilinf m our territorial 

possessions, we are not rdpjininr, to extend to 

thera the President's ?.ee,-:ployraent A 'ree.-ient. 

It is obvious that th.ey cannot be re ult.ted 

on the S-' rie basis a.s industries in the United 

Stc-.tes. Of course. Section 3(?) of this law 

a.p'plies to the Insular ijossessions. If any 

code is presented froni ti:ie, we s..all iirvc to 

act on it." 


At t,":f,i: tiie tne needleworlv inc'.ust"^:/ in "uerto ?aco ^ its 
factory ■•oii;ers an avero, :e of B.9c per l.our, (*) iTl.ereps tne F3A 
provide:", for a, :nini ■.viv, rr.te of SOr' -oer I.oiir for ^mc-^ r;orkers. It 
¥,'■^.5 oovr.oxis tliat nn increase iron S.Cr.'' to 50;^ r^er Lour coulcT not be 
put into effect ahru;ntly v,7-i.t.-out vorlJ.;-"- ;re.-i,t -ifi,rcls-.'-i"o on tive 

T:.'.e ^essaye contained in tlie letter fro.i C-euerr,l Johnson to 
Secret?ry Ickes soon found its -jay to tie teriitories ajid resulted in 
a .yre-'.t de -■1 of confusion in ".^^?f-,ii and A"' arka, where tlie P3A d.n.s al- 
ready Lee:: introc'uced and been si ^ned by Sitp.xi^^ raanoers of tne 
trades ar.d industries in t/..ose territories. [Tlie prevailiny vfa^es in 
both j;j.aE/:a and "awaii \7ere not :reatly ■ ifferrent from tj.iose existinj; 
on the "iainland, and the "Trovisiors of tlie P~iA '.?ere not looked upon 
with fe-.r oi hp.rdship in those ter'.-itni'ies .-^s tLiey :-'ere in iusrto 

(*) Depart ent of Labor, urepu of Labor Stntistics, onthl-: Labor 
hevie'.f, Octolier 1953, Paye v'rS . 




Eco::0::iG co""iJiTio;'s ii' ^T-rritorizs 

In order to better .ir.derstpaa the ;)ro"jlera which v/as presented to 
the Adnii.iistrator at that time, it would be well for us to taVe a loo]c 
at the economic situa-cion exisTiiii^ in each of the Territories. 

I . ALASiC-!!. . 

The 1930 Census shov/E that the Territory of .-.lar,]:;^- vith a ^.ross 
area of 3G6,400 square miles had a -50-Talation of 59, 27n, or l/lO of 
1,) persons to a souar? mile. The lar^^est tovrn was Juneau i7ith a -000- 
ulation of 4,04". There v.ere onl"^ six other towns with a 00-oulation of 
more than 1,000. The j-iopulation of the territory was divided about 
evenl;" between \/hites anJ. Indians. 

The nuiaber of em-iloyable workers in all industries was 27,75.3, and 
uhe lar^.est ^^roUTjs of these \,orkers were: forestry and fishing 5,187; 
mines and ouarries, 4,667. Over 5,000 of the ootal \ieTe en^jaged in 
domestic service. Only 1,19}J were engaged in a,^riculture. 

The nrinci-icl industries of Alaska are thn fishing and mining, in- 
dustries. (*) To^rether they constitute year in and year out over 90 
->er cent of the territory's production of wealth. Fisheries,- ad one ac- 
count for about two-thirds of the total, end the canned salmon industry 
constitutes about ninety ;->cr cent of the fisheries, ('old produccion 
re-)resents about gO'/i of the total -production of the mining industry. 

The trade of Alas]:a is almost entirely with the United States. In 
193?. AlasJia iiiii:)orted $19, ■'373,000 worth of nroducts from the United States 
o.nd only $30^,000 worth from other • countries. In the s year Alaska 
ex-50rted bo che United States $40,145,000 worth of products and e:roorted 
only $23.3,000 worth to other countries. Its principal items of export 
to the United States were $?5,464,000 woroh of fish and $9,261,000 of 
^old. Its irinci^ial ii.iports from the United States were: animals 
and animal products, $2,321,000; vegetable food -oroducts- a.nd beverages, 
$2,695,000; ve^.etable •-.roduc!:s, inedible, exceot fibers and wood, 
$935,000; textile?, $1,223,00:"'; wood and ;)ai:)er, $1,069,000; non-metallic 
minero.lE, $1,696,000; met? Is and manufactures exce;)t machinery and 
vehicles, $5,. 287, 000; .-mchinery and vehicles, $2,547,000; chemicals and 
related products, So66,000; and miscellaneous, 3934,000. 

In his annual report to the Secretary of the Interior for the 
fiscal year endin,^. June 30, 1933, the Governor of Alasj;a said: 

"The unemployment situation in the Territory durin,^ the 
fiscal year was one of the major ^oroblems confronting 
Federal and Territorial officials, as well as local 
commmiities. Local public welfare pro,irams were inaugu- 
rated in several districts durin.,; the winter of 1932-33 
to relieve this condition. Unsatisfactory market con- 

ditions for fisher?^ -products and for base metals caused 

(*) De-;artment of Com^aerce, Scatistical abstract of the U.S. 1933, Pages 



wi dec .read unemlo./.ient araon^ -giTvOns usua,lly eiiea^ed in 
these iiidMstries. ovever, toward the lattei^ mrt cf 
the fiscc:! -ear an ir-ward trend of nrices for products oj. 
these indnRtries ^ave promise of enahlin^ them a^aiu^to on a -irofitable hasis with a normrd suo^y of 
Ic^hov e.T'iloyed. 

"Durin. 193? there './ere a;Tiroxiimtel.v K754 men -mployed 
in thf^-iinin^ industry, v/nich is an increase of ahout 
21:_ over the number em-oloyed durin^ 1931. This is due 
to increased activity in ..old minin^, and the reoT^eninj 
of the laarblp ouarry at Tolcecn durin^^ the year, 'i'here 
was further curtailment of operations at copper mines, 
where there were only 145 men employed in 1932 com-oarcd 
wnh 208 in 1931. Of the ..len em-oloyed in the rainin^^ 
industr- during 1932, aixu^osi.nately 2,180 were en^a^ed 
in connection vith ^I'cer minin^-, 70 in coal mining and 
1,496 in lode minin^:,. 

"IJhe '■or::in- season in the fisheries industry, generally 
s-oeaMn., lasts from four to ei^ht months, de-iendini 
upon the locality and the nature of the fishery. U is 
conf- ed enerally to the coastal refjions of the first 
and third judicial divisions. From 35 to 50 -oorccnt of 
the labor era-.loyed in this industry in the first aivi- 
sion, rhich embraces all of South Alaslca, is secured 
local].y fro 1 the resident nopulr.tion. About 10 ;,5ercent 
of those who arc employed are Indians. The balance of 
the employees are imported from the States for the 
fishin,, season only. 

"In the Fishin: Industry the reduced scale of we.-es a- 
dopted in 1931 'v/as a^.ain in effect durin,,, the season of 
193^. paid .eneral cannery labor secured locally 
in the first division r^n^ed from $1.70 to ''3.00 per day 
for ro.Aen and from ^3.00 to $4.25 per day for men. In 
\,he thir:. division wa^^es for wor.ien ranae^from q>.1.70- 
to ^53.40 per day, and for men from $2.15 to $4.25 per 
day. All" otner labor is -^aid on a monthly or a seasonal 

"La^3or in the i.Iinin,: Industry of Alas.:a is eirmloyed under 
widely varyin,. conditions, cortrolled booh by location 
of the operacion and the nature of the wor"':. It is 
difficult to upke .^^'eneral strte.ients rec^ardins wa-e 

"In dacer minin. for ,,eneral labor ranged from 
50 to oO cents Per hoar and board. The hours of labor 
per shift ran,,e from 8 to 10, pnu the cost of board Pcr 
man -ier da;- ran,,es from $1.50 in the Cook Inlet Resion 
to $4.00 in remote districts such as Shushcna and 
I-oyi-u-u^'. Uages for skilled wor^cmen ran^e from aS.OO Per 
dav ana board for oilers in che Yentna District to 513.00 

-)er da.y and board for dr-edge /.lastprs. 

"'I'he v/3,i,e scale for coal uuners is quite wniform. Under- 
ground coal miners and tivauermen 'receive '^38. GO per day; 
undePt^round laborers, traiTiiners, and ro e riders, $7.80 
per day; and outside la-bor $5.50 -er daj--. ?ire bosses 
are -paid $350 -ler month a,nd foremen from $250 to $300 
■oer raonth. Deductions fron the above wp-^^es are 
for beard at r; tes at fron $1.50 to $2.00 per day." 

II. ?:a;:aii 

The 1950 Census shows that the 'jerritory of Hawaii v/ith a ^ross 
area of 6407 square r.iles had a ■■^0 mlation of 368, 3S6, or an avera^^e 
of 57.5 persons ner square mile. There ^Tere only two' urban rjlaces of 
over 10,000 ■'lo-oulafciou in the Territory, namely Fonolulu City (on the 
island of Oahu) v.dih a -oomlation of 1S7,58?, and Ililo City (on the 
island of Hawaii) wlt3-i a no-rulaticn of 19,468. 

The Territory it- divided into four counties. Eav.'aii County with 
an area of 4015 sQuare r.iiles had a po-mlatio;. 01 77-, 325, or an average 
of 18.3 ■^ersons per square mile. Honolulu County with an area of 600 
square :iiles had a -oo-'r.ilation of jO^g.^S, or an average of 338.2 per- 
sons ">er square .nile. hfuai County with ah area of 620 square niles 
had a -io;nulcnion of rs'3,942 or an average of 5C.0 ;oersons per square 
mile, liaui County with an area of 1172 square railes had a population 
of 56,146 or an average of 47.9 "ierson^ -)ei- square mile. 

Classified by race the ■oonulati-:--! consisted of thp follov/ini-,. 

iiawa.! ii;,ns 22 , 6S6 

Caucasia-n Hawaiian 15,632 

As i at i c Hawai i an ' 12, 59 2 

Portu^^ese 27,588 

Puerto Hicans 6,671 

Spanish 1,219 

Other Caucasians ' ' 4^1,859 

Chinrse 27,179 

Ji;mnese 139 , 631 

Koreans 6,461 


Philippinos 63,052 



Other races 217 

The 1950 Census shov/s there were at that time 154,270 employable 
woricers in the Territor,;-, classified as follows: A;.,riculture 63,907; 
mai-iufacturinc; and meclianical industries 51,023; public service, 21,387; 
domestic and personal service, l-,595; trade, 13,141; transportation, 
10,780; :irofes3ional service, C,5o3; forestry and fishing l,7;.-.5. 

Hawaiian trade i-^ chiefly with the United States. (*) In 1932 

(*) "j. S. De")E:,rtrnent of Cora:erce, 3';atistical Abstract of the United 
States, 1933, Pa.^es 51G-523. 



Kav7c,ii,?/.: iaiorts from one United States tot-.-led ".j8,37-,000 as conipared 
v/ich 51^,0-/1,000 froiii ; 11 other coiintries. E&^vaiis.n e."oorts to the 
United States a.aounted to '^.J ^, 600,000 as com^are^L vith 5760,000 e:cTorts 
to a,ll ot.iier countries. 

Hr.v/aii is "oredoininnnuly .■■. __.vicultarc.l ics ncun "oroducts are 
sUt^ar arid ;oineeT lies. In 19C,? ".:awaii's shi ;hierits of canned ;)inea-T7le to 
the United Stj.tes -amounted to $";0, 59?,000, and its shipiaenc? of su^ar 
amounted to !-^57, 583,000 of vf^ich o5ij,6C0,000 y.-8,s \inrefined su^^'ar. 

Ha\;aii's im;-jorts from the United St'^tes in 19S3 v/ere as follov/s: 
Animals a.nd animal oroducts, ''^'3, 791, 000; ve^etalDle food products and 
bevera_,es, ^3,113,000; ve-,etable -yroducts, inedible, Rxcept fibres and 
vood, '"4,315,000; textiles, ''s/ , SCe.OOO; \^'ood and ja-jer $3,654,000; non- 
inetallic minerals, $8, :?9.?., 000; metals and laanufactures, except machinery 
and vehicles, $6,477,000; machinery and vehicles, ■';7, 000, 000; chemicals 
and reliited products, $5,370,000; miscellsneoiris, ■ ',?o8,000. 

In 1930 the 3ureai-i of Lf,bor ^trtistics of the Tnited States Depart- 
ment of Labor raade a study of labor conditions in the Territory of 
Hawaii. (*) All industries of material im-Tort; nee in nui-nber of '.7a^e 
earners were covered in the scu%-. This surve;" r.hoied there rrere about 
60,000 emjiloyees in sUi^ar -ilantations, su^ar mills, lineapple -olantations 
and canneries, as comnared wish about 5,000 in the next IS most import- 
ant i n du s t r i e s . 

Of the total of 49,671 ehnloyed on GU,_&r -jlrnoations, 47,300 v/cre 
male. Of i,he total of 5,477 em-oloyed on -jinea-yjle Plantations, 3,316 
v/ere male. The avei-at£.e full-time earnings per weeh for males, oi. the 
sUt.:ar plantations, vjas 811.04, to v/hich must be :.dded the value of 
perquisites (house, fuel, ^.'a.ter and medical and hospital services) 
furnished without cost oy the ;ilantP,tions to the em^iloyees, ;:ith an 
estimate value of "1.00 ;.:!er da;^ or '7.00 :er week. 

The avera^.e full-time e. 'rnini_^s per vieelz of ^.lale employees on 
pinea-;v)le plantations was :313.63 to wh.ich i.iust be added the value of 
the :)crquisites aaouiitin^. to ''^7.00 per v/eeh. 

In th"; pineap ile ca.nneriep 3,937 of the err-iloyees v-ere male and 
3,579 were fe.Tis,le. The averas^e full-time ef.rnin ,s -^jer wee]: for men 
was $16.36 a,nd for women ^lO.OC. 

The avera^,e full-time e.rnin.s "oer reel, for em^oloyees en,AjC<J- i^^ 
other industries v/as e.s follo\.'s: buildin,, cona truce ion, $35.10; steam 
railways, $3^.79; roadbuildin^, $34.95; longshore labor, $35.^7; steam 
laundries, S14.69; tin can . lamifacturin,^,, $";^.58; electricity manufact- 
ure ?na distribution, $31.37; street railv/ays, $3.. 63; printing; and 
mblishing, ri37.71; stock-raigin- , $14.58; machine shops, 350.14; tijas 
manufacture and distribution, $33.94; drydoc'zs, 'i^6.01; da.iriPs, $19.35; 
coffee mills, 311.74; founu.ries, ^■;33.C5; slauhiterin,, and meat -mckin^, 
$17.70; overall and shirtma" :in;, $13.74. 

(*) De-x>.rtment of Labor, Bureau of Labor Statistics, "Labor Conditions 
in the Territory of Hawaii, 1939-1950". March 1951. ■ 




Accordi-.i^ to the 19S0 Census the Island ox Puerto Rico, with a 
,ross area of 5,435 square miles hr.d a ;oo:mlation of 1,543,913, or an 
average of 449.5 ]x-rsons per square mile, ^licre vrere three url»an 
■olaces with over 20,000 no-mlation,. namely San Juan, 114,715; Ponce, 
53,430; and iiaya^;uez, 57,060. There v/ere six olaces with a rio-w-lation 
between 10 and ?0 thousrnd, nine •)laces v'ith a ;'^o-.mlation liet\7een 5 
and 10 thousand. 

The urban -oomlation of the Island was 4,.?7,2?1 or 37.7:^, and the 
rural -wralation was 1,116,692 or 72. 3'.. 1,146,719 were white and 
397,156 were colored. 41. 4'^ of the persons ten years and over were 
illiterate and 80^3 were unable to s-^ea!': Eniilish. 

There v/ere 503,805 employable worlcers in Puerto Hico in 1930, 
classified as fo"'.lovs: 

Agricultural 262,623 

Farmers (owners c; tenants) 44,710 

Parm,Aers & foremen 7,101 

Farm laborers 209,902 

Other Occu;.)ations ^■'■^ 

Manufacturing and mechanical 

Industries 111,319 

Buildin^ Industry ■ ^f'1^?, 

Cit_,ar & Tobacco Industry 15,50G 

CI thin,. Industry '^'t'^ 

Pood c. Allied Indus ories 15,606 

Textile Industry 5,903 

. Independent Hand Trades 44,903 

Ocher iiianufacturini. Industries 4,399 

Trans'Tortation 17, lor' 

Trade ^O'^f . 

Public Service 7,052 

Professional Service 12,311 

Domestic and Personal Service '^^» ^'^^ 

The Island is predominantly agricultural and the major cro'i is 

Puerto Hico's trade is chiefly with the United States. (*) In 
1932 it imported 148,7C0,00C worth of merchandise from the United States 
and $7,256^,000 from all other countries. Its exports to the United 
States amounted to $74,290,000, and to all other Gentries $2,127,000. 
The principal items in its shi'oments to the United States v/ere: 
sugar, $51^,864,000; leaf tobacco, $3,473,000; ci^ar and cheroot, 
51,668,000; fruits, ''?,948,000; cotton -;prments and handlcerchief s, 
$9,561,000; linen , isimfactures, $539,000; sill: dresses and underwear, 

(*) U.S. Deoartment of Comiiierce, Statistical Abstract of the United 
States,. 1933, Pa^es 518-523. 


-12- ■ 

Shi-nments from the United Strte^, to Puerto Djco in 1032 v.'ere as 
follo'-'s: animals and animal -orod.uctG, $7,587,000; vegetable food -oro- 
ducts ano beverages, $10,663,000; ve,5;etable iDroducts, inedible, except 
fibres £Uk; ■'ood, $3,305,000; tertile'-., $10,004,000; ^ood and "oaper, 
$2,841,000; nor.-metallic minerals, $2,218,000; metals and nan-Lifactures 
except macliiner;- pxd vehicles, $2,585,000; machinerv and vehicles, 
$3,006,000; chei-icrls nnC related "oroducts, $3,717,000; miscellaneous, 

Onl-'- fragmentary statistics "ere rvrilable in 1933 as to 'a^-es and 
hours -Drevailln;" general 1"" in Puerto ilico. 

The 19:30 Census -ho"^ed that out of a totpl of 505,805 employable 
vror;:ers in- all inoastrie;::, 282,623 ■•orhers vrere engaged in agriculture. 
A study made by the Puerto '-'dean Department of Labor in 1932 (*) of rrages 
a.nd hours of labor in sugrr erne cultivation (b^- far the largest 
agricultural occu-imtion) shoved that the average actual earnings per 
em-oloyee ras $3.80 for 54.3 hours actually ••orked. The average full- 
time hours ■-'er vee'z vere 52.6, the rverage rate ll.lrf per hour, and the 
full-time avera -e earnin-s ^er ^:'ee'- $5.84. Of the 11,525 employees re- 
ported on a roroximatel^^ 92, o vere paid les^: than 145^' per hour and about 
63 i under llr^ -er hour. Su^^ar -ororuction is a seasonal industry'' and 
most of the T'or":ers have onl"' from si:: to eight months employment per 
:'err. Tne S' me study shoved that out of the 9,628 employees in sugar 
mills reoorted on, slightly over 313 received imder 14d- -ner hour, and 
ap-oroximptel"^ 57 ■ under 11;*^ "oer hour. 

The Puerto ^^.ic n Department of Labor in 193? also made a studv of 
'^a^ges and ho irs in the leedlG vror'-: ir.dustr"'-, (next to, agriculture, tne 
largest indu-tr'^ in tie Island) (**) \?hiGh shoved that tne hour- 
ly efrnings of 4,723 employees (i.e., frctorv en-olo^^ees) ^'as 8.9rf and 
their average actual hours oer vee': vas 37.2. The average actual weekly 
ea.rnings o:^ tuese ■ 'orxers vas $3.32. The svera^ge full-time hours per 
week was 47.3. , 

The wage scales throughout the Island for all other trades and in- 
dustries vere commonl-^ ''no^n to be considerably less than the rates we- 
vailing on the mainland, but no accurate figiires vere available. 

In his annual report to the Secretary of ^.'ar for the fiscal year 
ended June 30,1933, the Governor of Puerto Rico said: 

"The Islc-nd iis.d closed t„ie previous yor r in a fairly good ec- 
onomic condition in spite of the severe depression, but during 
the vear under consideration conditions v-ere becoming gradually 
worse and the amount yi unem-oloyment vas increasing slightlj''. 
Partly as a result of the storm and oarty from other conditions, 
the situation on the Island became definitely ^-'orse from Sept- 
em.ber 27 on. After tae hurricane there was a spread of em- 
plo-nient but this soon receded, and at the close of the fiscal 

(*) U.S. De-:artment of Labor, Bureau of Labor Statistics, i-'lonthly Labor- 
Review, October 1933, Page 945. 

(**) U.S. Department of Labor, Bureau of Statistics honthly Labor Hcview, 
June, 1933, Page 1390. 


under consideration .the nuniber of unemoloyed v;as niro- 
bably hither for th.,t time of the year than ever before 
in the histor;- of the Is].a:-'.d. On June oO, the sugar 
harvest is not yet over, so that June ?0 does not fall 
within the --eriod of the highest anemployi.ient. A ^reat 
deal of employiacnt in Puerto Ilico is seasonal and for 
mar^y years th.-re has been an abnormally high -lercenta^e 
of uneraployncnt in v/hole or in ."lart. 

"The population -problem in Puerto Rico is again of 
i^reat interest from an economic standnoint. according 
• to the 1'.30 Census the population of the Island at that 
time v/as 1,543,?1G persons or an .a.vera^^e of 449.5 ;)^o^le 
to the snuare mile. The estimated ;oopulation as of 
July 1, 133? was l,S?o,!J14 persons or an avera^-'e of 
473.7 -lersons "oer square mile. 

"Wages iri i^enei-?l have decreased in percentages varying 
between 10',j and 20^. Accura.te information is not avail- 
able on the cost of livin<i but i* is believed that the 
cost of living for the middle and loner class declined 
at about the same rate. This parallel in decline does 
not mean to say by ar^' means that the avera^.e wa^,es in 
the Island are consistent 'fith a fair standard of living, 
It only neanf. thao in the judi^ment of the writer the 
relative conditions of employed persons, that is, their 
real vages, v.-ere .about the seme as in the previous year 

It can be seen from the above quiclc glance at the economic con- 
ditions in each of those . territories, that the situation obtaining in 
Alrsl:a and Hawaii v/as not :-,reatly different from that existins-, on the 
mainland. Wage scales and liours of labor in Alaska and Ka\^aii were 
rouUily about the srme as on the mainland. Wage scales in Puerto Rico, 
however, were a .^reat deal lo'ver. It is quite li]:ely chat the Puerto 
Hican situation was called to the attention of the Administrator and 
that that is what ■:ironnted him to outline the -oolicy stated in his 
letter to Secretary I ekes. 





There is pi-sctically no written record available to show the 
attitude of trades and industries in the territories of Alaska, Hawaii, 
and Puerto Hico during; the siimmer of 193G. The hest information avail- 
able ir that which was f-'irnished to the v/riter orally by the res'oective 
depiitios of those territories, who secured their information from the 
local business iien, employees and public officials after assuming their 
duties in the territories in December of 1933. 

It appears tha.t ver';'' fev/ of the business men in Puerto Rico were 
familiar with or interested in the National Industrial pLecovery Act 
dtiring the early days, ilo effort was made by the Administration in 
ITashin^'ton to inform them or to generate interest in the Act. The 
widespread interest and enthusiasm cultivated on the mainland had no 
counterpart in Puerto Pdco. The PEA ?/as never introduced there. 
After a while, however, some of the most alert business men and 
wor!:ers iiivestis;:;atGd and became convinced that the Act applied to 
Puerto Rico as T^ell as to the uiainland. They felt that the Act 
promised nucn benefit both to employer and employee. Determined to 
secure the benefits of the Act if available to them, they had their 
attorneys check into the matter. Others nov; began to talce interest 
and soon there d.eveloped two factions, one of which vas in favor of 
havin.;],- the Act apply to Puerto Rico and the other against. Wliile 
this state of uncertainty existed word reached them of General Johnson's 
decision not to aoply tlie PRfi. to Pti.erto Hico. Shortly thereafter a 
representative of the f^TOiip who were in fsvor of having the Act apply 
came to T/ashington and requested G-eneral Jolmson to have the Act 
apply to Puerto Rico. 

Ulien the PEA drive was inaugiirated on the mainland, Alaslca and 
Hawaii vrere included in the mailing list and as a result the forms were 
sent to the postmasters in those territories and instructions sent to 
the chanbers of commerce and boards of trades. These bodies immediately 
set out to the best of their ability to put the plan into operation. 
Thejr were able to generate qtxite a good response and the movement v/as 
well started when v/ord reached them that General Johnson had decided 
not to have the PRA a^oply in those territories. Those engaged in the 
effort in Alaska were puzzled by this decision and. did not Imow which 
way to turn. For the time being thej did nothing, hoping and feeling 
thn.t further instructions would shortly be sent them. In Hawaii, 
however, the movement had gotten farther under way and more interest 
had been aroTised, and sharp protest was immediately made by many of 
the business men and workers and by the press of the territory, 


The situation which existed at that time (September of 1933) was 
perplexing to the IjRA officials in Washington as well as to the mem- 
bers of trades and industries in the territories. A great nwnber of 
codes had already been ao-oroved and their definitions were so broad that 



thej'" included the territories inasmuch as they prescribed no geographi- 
cal linxtations. (Out of the first 195 codes apr^roved, 180 included 
the territories in their jurisdiction). Technically, therefore, the 
menhers of trades and industries in the territories were suhject to the 
provisions of those codes. However, in vievr of the position talcen by 
General Johnson in his message to Secretary'- Ickes, no effort at enforce- 
ment rras "being made in the territories, 

Tlien, too, there was great douht as to whether the courts would 
hold that the territorial industries were legally subject to the 
approved national codes, since it v?as apparent in nearly every case 
that the proponents of the national codes were not truly representative 
of the territorial industries and had given them no consideration in 
the foniulation of the codes. 





This confusing sit.-'jation i^eq-aired clarifying action and 
Assistajit Administrator Lea commenced an investigation so that a 
soltition night "be rrorked out. There is no written record of the early 
discussions trhich took place aVnong the MRA officials, so it is quite 
likely that they \?ere all oral, 


On October 19, 19o3 Colonel Lea submitted to General Johnson a 
plan for the administration of the Act in the territories which 
General Johnson approved on that date. Colonel Lea's memorandum to 
General Johnson submitting the plan is quoted below. General Johnson 
indicated his approval of the ;olan by writing "0..K. , H.S. Johnson, 
October 19, '33" on Colonel Lea's memorandum. 

"Attached is a plan to take cai-e of Islands and territories 
legally under jurisdiction of K.I.R.A. 

"It x3i"ovides for a Deputy Adrainistrator for each Island 
or territory. I propose appointment of Deputy Administrators 
for only Puerto Rice, Hawaii and Alaska at the present time. 
If plan is approved this will be done at once, 

"Deputy Administrators will help local industries to prepare 
petitions for amendment to a-oproved codes, if necessary - that 
is, when code provisions, particularly labor provisions, work 
\mdue hardship, 

"I believe I have covered all the angles: 

(1) Necessary representation is provided for, 

(2) Sipecifications for anendraents are ma,de to 
keeo them in line with general policy, 

(3) Code Authority representation and support is 
provided for, 

(4) Provision is made for isolated cases where 
a^^proved codes do not affect islands, 

"I think we have sirn'olified the procedure as much as 
possible. If you a-rorove of this plan I will go right 
aliead; select and secure your approval of the Depiities 
required, and get the whole plan under way, ¥e already 
have several good men in mind. 

"On account of delays that have occurred, I trust that 
this has your prompt attention. 

O.K. Sincerely yours, 

H.S, Johnson 

Oct. 19, 33. Sigd. R.W. Lea" 


• '■1 r o 


Fosszs sioi's or THPJ UITITSD _STAT_ns 

A necessit'"- is recognized for special handling of 
codes of fair coiipetition, approved "by the President 
and aiitomatically a:i'f acting the indiistrien of island 
and territorial -oossessions included •U2i,'der the juris- 
diction of the I'.I.R.A, 

The follonir.:".- -ilan provides for Ai:iendnent to 
approved codes w^ien a vital difference in economic 
structure of islands and territories justifies such, 

A Deputy Administrator shall be appointed by the 
Adriiiiistrator for each island or territory able to 
prove, by reatson of econonic necessity, that such 
Deputy Administrator is required. 

This Deputy vill represent the K.H.A. on a Board 
of three, comprised of himself, an appointee of the 
Dopart:-ient of Interior or the Bureau of Insular 
Affairs, who will be required to supply information 
on labor and industrial statistics, and an aopointee 
of the Department of Labor. These latter two members 
should be chosen from available ;oersonnel now residing 
in island or territory. 

(A) Copies of every approved code will be for- 
warded to the D:Touty Administrators. 

(B) The P.ecovery Soards will investigate the 
industries affected by approved codes. 

(C) It will be annoimced as early as possible . 
that conferences and hearings will be held 
on the above codes for the purpose of draw- 
ing up necessary amendments. The industrj'' 
will be in the position of petitioner for 
amendment, i^o petition will be heard unless 
presented by such associations or groups 
who im^pose no inequitable restrictions on 
admission to member shit) therein and who are 
truly re-presentative of the local industry. 

(D) a conference will be scheduled and held to 
which this group will be invited. The approved 
code will be discussed and provisions which 
are inapplicable as written will be considered 
for amendment, 

(S) As soon as amended provisions are acceptable 
to Recovery Board - froii points of view - wel- 
fare of territory - competition with United 
States proper and IT. P.. A Program, the amended 
code will be i^resented in public hearing all 
interested parties may come and voice pro- 
tests. Revisions of amended code may be 



indicated, tut in final forn amended code 
must conform to certain specifications. 

(7) Anended code v;ill be signed 157 authorized 
chairraoji of committee or other persons. 

(Cr) Amended code will "be transmitted to Deputy 
Administrator in Washington uho handled ori- 
ginal code, whether N.H.A, or A. A. A. In 
this latter case petitions for amendment may 
be received onl^'' from Hawaii, Puerto Hico 
and Alaska. 

There will he two t^Tpes of amended codes 
(1) those af ^ectin.^ only local industries, 
and (2) those affecting United States pro- 
per industries in the item of competition, 

(1) Codes of this tj.'pe will "be approved "by 
Deputy Administrator in Wcshington and 
cleared through ilational Association 
representing industry, more or less as 
matter of course, 

(2) Amended codes of this trpe should he 
accompanied hy statistical data showing 
probable ririces on goods ex-ported to 
the United States in competition with 
domestic products. These will be re- 
viexTed ItY Depiity in ITashington to ascer- 
tain whether competition v/ill be fair. 
The Deputy may then clear amendment 
through Trade Association. 

(H) Amended Code will be submitted by Deputy in 
Washington to Administrator for approval and 
submission to the President. 

(I) Approved Anendnents to code shall be the oper- 
ating ba-sis for the petitioning industry in 
island or territory. 

(j) In the case of industries peculiar to islands 
or territories which have no counterpart in 
United States proper, 

(1) An industrj^ as described above may apply to 
the President for a Code of Fair Competition 
provided that group or association mal:ing 
ar)nlication im-,ose no inequitable restric- 
tions on admission to membership therein 
and are trtily representative of such trade 
or industry, 

(2) Such a code shall be submitted to P.ecovery 
3oard for Review. 

(3) Informal conferences and pixblic hearings 
shall be held, 

(4) The Code (in re.gular form) shall be sub- 
mitted to Administration in Washington for 
a-oproval and submission to President. 



(K) In the case uhere Industrial Codes definitely 
specify .that thej"- are to a\:)ply only to Conti- 
nental United States, Codes for local terri- 
torial or island industries shall "be "ore-oared 
and follov: sane procediire as sot forth in (j). 

(a) Actual rages riust he raised. 

(3) Actual hours piust he shortened. 

(C) Adjiistnent must he nade to insui-e fair compe- 
tition of e:c)orted floods conpetin,-; \7ith i-^nited 
States products. 

(D) 1)0 revision of Section 7(a). 
(S) ilo revision of Section 10(h), 

(?) Amended Code must state specifically area 
affected hy amendment, 

Ho rulings shall he that representatives of indus- 
tries in islands and territories may not voice opiiiions at 
code hearings. However, this pra.ctice should not be promoted. 
If such opinion is expressed and found hy the Deputy in T7s,sh- 
ington to he pertinent, the information should he forwarded 
trith copy of aoTjroved code to De-outy in island or ■•lossession, 

(a) Due to the e:cnense of naintaining a representative 
of an island or territorial industry in the States 
as a member of a Code Authoritj^, the following 
stTggestion is made, 

(1) In the case of purely local industry, 

Such industries will appoint one nan v/ho will 
be an affiliated member of the Code Authority, 
He will act as arbiter on all pttrely local dis- 
putes; collect and distribute information of 
local interest; will receive from Code Authorit;'' 
all instructions, etc; and report all activities 
to Code Authority as a matter of record, 

(2) In the case of an indu.stry in competition v/ith 
United States proper industrj?-, 

Such industries will appoint two i-.en - both 
will be affiliated members of Code Authority, 
One will have same duties as in Case (l) - 
the other will be in the United States. He 
will hav^ no part in duties of Code Authority 
except YThen questions arise affecting his par- 
ticular industry in his -particular island or 
territory, Presumebl"'' a man will be available, 
residing in the United States who can act in 
this caoacity. Possibly he might serve on a 
Code Authority in more tlian one industry. 
The eT:penseB of both these men will be paid 
by the local industry. 

liethod of collecting funds for support of 
these Code Authority members should be estab- 
lished by the local industry'-. 




(3) In the canes of codes su'oiTiitted under Section J 
of i-irticle on Procediore, a. Coc'e Atithorit'"' should 
"be set uo in island or territor"-, nodeled on Code 
Au-thorities in United StateB nroper, 

'The plan reco.-ni^ed that t]ie Lational Industrial Recovery Act 
applied to the territories of Alas'ra, Hauaii and Rierto xUco, and that 
the rienhers of trades and industries in those territories \7ere suhject 
to the codes already approved for tlieir industries, unless a code hy its 
terns eroressly exerroted then. 

The ;ilan reaffirned the estsolished policy of the Administration 
that a sinfi:le code should auply to rll geographical sections of the 
United otates suhject to the Act, and that uhere s^Tecial provisions irere 
rea;".ired for certain geographical sections because of econonic dif- 
ferences, siich provisions should Tdc inserted in the code either at the 
time it uas originally suhraitted for a-oproval or later on "by amendi-aent, 

■The plan urovided a method for amendnents to a^nroved codes when 
a vital difference in the economic structure of any territory justified 
such amendment. 

Inasmuch as the vast majority of the codes already approved did 
not 'o-j their definition limit their geographical arplicahility, they 
covered the territories, ard this plan for amendment trhere necessary 
tool: care of the majoritj'- of trades and industries in the territories. 
Some fen codes "by their terms stated that thoy applied only to the 
continental United States, and this meant that they were not effective 
in the territories. In order to take care of these trades and indus- 
tries in the territories the plan provided that such trades and indus- 
tries might aoplj'' for a separate code, 'Tlae plan also provided that in 
the case of industries peculiar to the territories which had no counter- 
part in the United States "oroper, those industries might make applica- 
tion for a separate code. It provided for the appointment of a depiity 
administrator for each territory which was ahle to prove hy reason of 
economic necessity that anendi^.ent to a^'proved codes was essential he- 
fore its members could he ejected to comply. 

The plan itself said nothing whatever ahout enforcement pending 
application for amendment hut the Deputy Administrators who were suh- 
seouently appointed were orally instructed 'that no effort wo-ijld he 
made to enforce the codes, at least until such time as they were ahle 
to svxrej the situation on the ground. 

On Decemher 26, 1933, Assistant Administrator Alvin Brown wired 
Deputy Gullion of Hawaii as follows: 

"Legall-'- soeaking, codes which do not exceut Hawaii are 
now in force there, but we have no intention of enforcing 
them u^itil you submit suroplements, " 



Certain' sta-'TdcirdB 1761-6 set for anendnent, such a.s - 

(a) Actual wages must be raised, 

(b) Actual hours must be shortened, 

(c) Adjustment must he made to insiu-e fair compotition on 
' ^ CO-ods dealinr nith United States oroper products. 

The general oolicy of the- plan vras 'made loio'.m to all laemhers of 
the orf;a:iization hy Office iieaorandujii of Decemher. 1, l9I?.5, -which rea(^ 
as follo\7s: 

' ■ " " A'J-plication of Co des to Territorie s and ■Pos.session s . 

I'ln {jiving effect to the iriRA in territories and possessions, 
it is the /olan in general to "bring industries there located 
'under the sa^ne codes applicahie ■^o the continental United States 
rather than vrite separate codes, ■ 

"It v/ill nuch facilitate tSiis orocedure if territories and 
■ insular ■oossessions are not ericepted from_ codes or from any 
of the' -provisions thereof. 

"The codfes do' cover territories and. insular ;oossessions if 
ho s-oecific hention is nade pf then.': Therefore, unlesr some 
impelling reason for an- e:cce-otion is given, in some particular 
case, the codes should not he limited in their general geo- 
graphical application, ■ . ■ 

Tlie plan as conceived' na's- ver;'- sound (rith pjrohahly one 
exce-Ttion) and if carried out as for^aulated should have been ver],'- 
effective, '^The* section ■khich appears to' have been unsdond was 
that 'uhich provided for a separate code for the t-erritories in the 
cases where national 'codes, already approved, exempted the terri- 
tories by th3ir terms. It certainly would have been m.uch more 
consistent and nost lilteljr won2d hav3 bee'n much more effective, 
if the '-hatiohal cod6s hexl been amended to include the territories, 

fhoczdufj: ■ ■■ • 

Tlie proeed-nre outlined for the negotiation of a";endments and 
separate codes within the territories was alroost identical with that 
alread;'' established for the negotiation of codes on the mainland, A 
group, trul;'- representative of the trade or industry in the territor;^, 
was to submit to the Deputy Aoj.linistrator in the territory the pro- 
posed amendment, whereu-pon he would call a public hearing and 
negotiate the -orovisions in the same ms'-ijier as all code provisions 
were negotiated on the' mainland. '■ After the proposed amendment had 
the approval of both the industry in the territor;?- 'and the Deputy 
Ac:-iinistrator in the territory and his various local labor, industry 
and consuners advisers, it was to be for\7a.rded to w&shington for review 
b;^ the mainland de-^ut;'' handling ' the correspondin- industry on the 
mainland, who 'f/ould then submit it to the Acuministrator for a-oproval 
after clearing it through the code authoritj'' on the mainland. 





The situation in Alaska, as it was encountered ty Deijuty Administra- 
tor Wade on his arrival there, is described in a -Dreliiiinary draft of "A 
History of HRA Administration in Alaska" forwarded to Washingto-^ "by the 
3eTDUty on July 22, 1935. In it he says: 

"It was first thoueht that conditions were so different in the 
Territory of Alaska that it would be necessary to work out 
territorial codes of fair competition for the industries there. 
Investigation -oroved that this would not be necessary. Members 
of the several industries were satisfied with the lorovisions 
of the mainland codes. This was found to be especially true 
in the so-called local service industries. From the viewpoint 
of the Deputy Administrator, the applicability of the mainland 
codes to territorial industrial conditions was satisfactory 
in every way, with the exception of the minimum wage provision. 
In every industry, the minimum wage provided for in the main-' 
land code was much lower than the prevailing wage in that 
industry in Alaska. When this was pointed out to the members 
in the several industries, a small percent were willing to 
have the minimum wage provisions of their code raised, but it 
was impossible to get a majori+y of the industries to agree 
to this change. I do not beleive that the majority of the 
industry wanted to pay the minimum wage provided in the main- 
land code, but they did not desire to give their time or 
spend any money preparing amendments to their code, which 
would only result in increasing labor costs. Labor at that 
•stime-was unorganized in Alaska and, therefore, could not ef- 
fectively raise its voice in protest." 

As soon as the D?puty Administrator arrived in Alaska and establish- 
ed his office, he notified members of the varioxis industries there that 
the National Indiistrial Recovery Act and the national codes approved 
under it, were ef-^ective in the Territory o^ Alaska. He also advis°d 
them that it was their privilege, if they felt it necessary, to apply 
for exemption, modification or amendment of the mainland code that 
affected their business. As stated above, th^ majority of the members 
of the several industries were satisfied with the provisions of the 
mainland codes and preferred to op'^rate under those provisions. There- 
fore, the mainland codes wer^ thereafter effective in Alaska, without . 
any amendment. . 

On April 21, 1934, the Deputy Administrator for Alaska wired Wash- 
ington as follows: 

"Suf-gest that executive order be issued giving Administrator 
power, after proper notice, to open codes on his own motion, without 
application on part of industry so that minimum wage can be brought up 
to prevailing wage scale in Alaska. Industry will not apply for modifica- 
tion for fear an attempt will be made to raise wage provisions in codes. 
Alaska wage scale thirty percent higher than most codes provide. If the 
Administrator had power to open a code in this manner and after public 


hearing make the necessary modification industry and labor would be 
satisfied and the codes could all b^:^ made workabl:^ in thirty days." 

The suggestion of th^ Deputy Af?ministrator co\iAd not be followed, 
however, because it was definitely the loolicy of the Administration not 
to imD0?e codes cr to oijpose amendments on any industry. 

Trades and industries in Alaska, therefore, continued to operate 
under the nationtil codes, without amendments. 


When Colonel Gull ion was amDointed Denuty Administrator for Hawaii, 
he was in military service in Honolulu in the Judge Advocate General's 
office. He had had no xirevioiis ' connection "Fith NRA, and, there^'ore, was 
not so familier with NRAJs general policy and back£;round and Tjlans for 
the territories as wer~ the Deputies for Alaska and Puerto Rico, who had 
been with KEA in Washington befor° oroceeding to their -costs, and who 
had been able to discuss th'? -nroblem orplly with Colonel Lea and General 
Johnson before tlieir d?r)arturs and receive more detailed instruction 
than' was included in ^he written x)lans. Colonel Guilion, therefore, had 
to rely upon communications -from Washington for his instructions. 

An idea of the situation which confronted him '"hen he took utd his 
duties late in December, 1933 can be gain=i'' from th--^ following extracts 
from a letter he wrote to the executive offices in Washington on 
January 25, 1934. He said: 

"When PF_A was announced in July, Haole(*) business, except 
sugar and -DineaDDle, welcomed it with joy. The Jananese were 
reserved and -fatchful. Other orientals are not so important 
in economic policies. The Hawaiians, economically, are with 
the Haole. Haole (i. e. by and large i,7hites) business saw 
in PHA the opportunity to stop the sure and rapid Japanese 
competition, "'hich, due to the lower Japanese standards, 
was pushing nearly all Haole business (except sugar, pineapple 
and hotels) into the Pacific Oce?n. Sugar and pineapple 
feared PRA because of its probable eventual effect upon the 
wages paid plantation laborers. The Japanese feared its effects 
on small business men and probably disliked it as obstacles to 
their, progressive competitive success over the Haole. But, 
because of the patriotic appeal of PFuA., sugar, pineapple and 
Japanese could offer only a silent passive opposition. Some 
businesses, notably, the dairy and the bakers, saw a chance 
for raonoply and price fixing. The dairymen, as soon as they 
signed PEA, came out in a full page ad saying they had raised 
the price of milk several cents in order to support the Pres- 
ident. Some Haole business men - in about the same proportion 
to be found in any American town- were genuinely altruistic 
9758 and patriotic. 

(*) Tlie term "Haole" as used in Hawaii is a collective word prac- 
tically synonymous with "Caucasian". As used here, however, 
"Haole" denotes those people of the Caucasian race who are 
enjoying economic supr=macy in the Territory and are for the 

^/->c-+ ■piT't Wo^rli r>f" 


"The suD^orters of PRA were mainly the retail Haole business 
' . men. Under the le&dershir) of the postmeoster, ^hey won out , 
so far as li-o-service to the agreement was concerned, over 
the more wealthy interests. The si^cnin,^ of the PEA was almost 
universal and the Blue '^agle wps and remains everywhere dis- 

"Then on August 28, 1933, came General Johnson's announcement 
that KRA would not be • 'pushed' in the Territory. This con- 
gealed the ardor of the f'enuine suooorters of PSA, and nublic 
opinion as a deterrent to the chiseler became ne^li^ible, 
lon-comnliance became the rule, to the material detriment of 
a considerable number of business men who were and r'^'main 
faithful to the a.^reement. But the Blue ''^agle flies everywhere , 

"Wlien.rTith ray aTD-oointment , NHA was extended to the territory, 
it was too late to aroure here the magnificient -oublic st)irit 
which flamed on the mainland under G'"neral Johnson's leader- 
shin last su'araer. Doubt of Hawaii, rrther than confidence in 
her had been read into, if not actually e^:x)rer^sed in, the de- 
cision not to 'push' JIEA here, 

"It was necessary, without reflection on Washington, to get 
over the idea of a new deal within the Hew Deal, 

"To win the confidence of the Orientals and Toarticularly of 
the Japanese, I have held daily conferences' with their leaders, 
singly and in grouBS, in their offices and in mine. I have 
addressed also the Japanese and Chinese chambers of Com'nerce, 
retail and other trade associations, and the rural merchants 
in more or less informal talks. 

"I made the same a-D-oroach to Haole trade grouos and have ad- 
dressed Rotary, Lions, Cost Accountants, anc other Clubs. 

"In all this business I am looking at the goal . The sound 
and, fury of codification will signify nothing unless com-oli- 
ance follows." 

On December 28, 1933, Alvin Brown, Assistant Administrr3tor and 
Executive Ofj'icer, wrote Deiouty Gullion as follows: 

"The attached outline of nrocedure should be followed as 
closely- as iDOssible by the Denuty Administrator and the 
other members of the Recovery Board in Hawaii. 

"This -nrocedure does not take in1^o account the very important 

subject of compliance by Hawaiian industries with the terms 

of aDuroved codes which sre and will be effective in the Islands. 

!tlt is f'lt that a simnlified system o-^' code compliance in 
Hawaii can be evolved under your ^guidcnco '"hich will fulfill 
the spirit and -orovisions of the Act. Before this nroblem 
, f''>illy develops, infor-nation from you covering local conditions 
should nrove valuable. 

9758 "Youx comments and suggestions as to procedure will be srelcomed." 




"The foll^win/^ -Droc-dure g-overn the s-necial hardline; of codes of 
fair competition already awroTed "by the President in their a-Dolication 
to Hawaii, and also those Hawaiian codes of fair conroetition to be sub- 
mitted tc the President for his p-oioroval. 

"(A) Cor)iep of every code as ar)-oroved at War~hin?-ton will he forwarded 
to the De-outy A'irninistrstor for Hawaii. 

"(3) Tlie Demty Adrriinistrator for Hawaii, assisted by the Recovery 
Soard, rii.l investi^-ate the indn- tries affected by ar,-Droved 
codes. The Denuty Administrntor for Hawaii wil"" determine from 
such inv^sti5;etion which aiDTDroved codes cover trades or indus- 

■' tries er^iistine in Hawaii. 

"(C) The Det)Uty Administrator for Hawaii will announce as early as 

possible that conf?r=nces and h-arin^s will be held on the above 
codes for the purpose of drawing uv necessary modifications of 
eech code aisDlicable to conditions in Hawaii. The industry will 
be in the position of uetitioner for modification. Ko petition 
will be hBard unless T:iresent8d by associations or rrouns which 
imoose no insaui table restrictions on admission to membership 
therein and which are truly re-oressntative of the local industry. 

;'(D) A conference will be scheduled and held to which this gvoxro will 
be invited. The aiDnroved code will be discussed and Tjrovisions 
which are ina-o-oli cable as written will be considered for modifi- 

"("3) As soon as modified Broviraons are acceptable to Recovery Board 
from points of view: (l) welfare of territory, (2) comrDetition 
-ith United States -Dro-oer, and (?) ll.R.k. Program, the modifica- 
tion rill be -oresented in xiublic herring. To this hearing all 
interested parties may come and "Dreeent their views. U-oon the 
evidence loresented, the Code Committee, with the advice of the 
Deputy Administrator for Hawaii and the Recovery Board, ^ill 
draft the modified code -orovisions in final form. 

"KF) Modified code nrovisions will be signed by authorized chairman 
of committee or other qualified persons. 

"(G) Modified c^de proviEions '7il.l b-T . trensmitt'--'d to Deputy Adminis- 
trator in Wsshin§;toa who handled original c 0-3 e, . through the 
Territorial Section at Wa?hin.eto.n, accompanied by statistical 
data sho'-ing probable prices on g'-'ods e>nDorted to the United 
States in competition ^ith doraertic products. These will be 
reviewed by Deputy in T7as:iington to ascertain whether compe- 
tition will be fair, and the opinion and information from 
national Associations will be obtained. The Washington Deputy 
may proceed then as provided in Paragraph (H) hereof. 



"(H) Modified code Drovisions will te submitted by De-o-aty in 
Washington to Administrator for aDproval. 

In addition to modified code nrovisions there will be 
certain codes affecting; only local industries. Codes of 
thi.s tyoe, u-oon transmittal by the Deputy Administrator 
for Hai^aii 'to Washington will be reviewed by a De-out;" 
Administrator, and submitted to the Administrator for an- 

"(I) Where industries' with the a^nroval of the Danuty Adminis- 
trator for Hawaii make arnolication for a code for Hawaii: 

(1) Such an industry may a-Dr)ly to the President for a 
Code of Fair Cora-oetition provided that *:he group 
or association making ap-n"' ication imposes no in- 
equitable restrictions on admission to membership 
therein and which is truly repres -ntative of such 
trade or industry. 

(2) Such 8 code shall be submitted to Hawaiian Recovery 
Board for appropriate action. 

.(3) Informal conferences and public h'-'arings will be 
held as in the case of a national code. 

(4) The Code (in regular form) shall "be submitted to 
Administrator in Washington for approval. 

"(J) In the case where Industrial Codes definitely specify that 
they are to apply only to . Continental United Statqs, Codes 
for local territorial industries shall be, prepared and 
follow same procedure hs. set forth in (l). 


"(a) Actual wages for the territory should be raised as much as 
is consistent with economic conditions, 

"(B) Actual hours for the territory should be shortened as much 
as is consistent with economic' conditions*. „ 

"(C) ■ Consideration must be given to insuring fair competition 
both locally, and with the Continental -United States. 

"(D) Modified Code must describe specifically area affected by 

"In local codes: 

"(a) Section 7 (a) of N. I. R, A. must be inserted. 

"(B) Section 10 (b) of the N. I. R. A. must be inserted. 



" Notic-:^ ; Notice of -outlic h-^^ ring's in th^ territory 

must t^ giv-^n in the Cor.tin'sntnl United States 
■fay the Washington Denuty Ad-ninistrp-tor as in 
the case of an original Continental code. 


"(A) 7it?i reference to modified national coi'es, due to tVie ercpense 
of maintaining a reriresentative of a territorial industry 
in th.^ States as a ma'n'ber of a Code Authority, the follow- 
ing surgeption is made: 

(l) In the case of a pur:-ly local induc;try which desires 
Continentijl re-Dr--S'^ntation on a United States Code 

(?) Such industry "ill" elect such man. 

This Administration ^'ill . urge that the 
nPtional code authority ma'ce him an 
affiliated member of the code authority. 
He will heve no -Dairt in duties of code 
authority except when aue?tions arise 
af-^"ecting his ^articular indu'-try in the 
territory. Pr -•sumably a man will "be 
available, residing in the United States 
who can act in this capacity. Possibly 
he might serve on code authorities in 
mote than one industry. 

(b) ..The expenses of the Continental repre- 

sentation will be -oaid as agreed between 
the local industry and the Continental 
code authority. 

(c) The method of collecting fund-^ for support 
of code authority member or members of the 
local industry should be established by it. 

"(B) In the cases of codes submitted under Section I of 
Article on Procedure, a code authority should be set 
up in territory, modeled on code authorities in United 
States proper," 

On Jantiary-10, 1934, upon recei-ot of Mr. Brown's memorandum, 
Deputy G-ullion wired him as follows: 

"r"your memorandum December 28 re local administration received 
todays 'It contains nothing materially inconsistent with plans al- 
■ ready in process of .execution er.cept reauirements that Washington 
De-Duty Administrator must give notice^in Continental United States 
of public he.', rings in the territory. ^ 

"Because of '.Tide spread doubt of efficiency of local and 
. national administrators so far as Ha'paii is concerned due to local 
failure of PRA I have already published notice of public hearing 


for Automobile Industry for January/ 15th and Hotel Industry 
for January 19th, giving aiDorozimately two weeks advance in 
each case, 

"Recommend that if possible these hearings be held as 
advertised. Very little' if any coraxjetition between mainland 
and Hawaiian Automobile Industry. Hawaii of course competes 
as a tourist resort with Florida and other American locaMties. 

"Here follows data for possible publication by Washington 
De-DUty Administrator: Automobile Sales and Service Association 
of Territory of Hawaii, seventy-five percent of the industry, 
9:00 a.Ti. January 15, Alexander Young Hotel Honolulu; basic code 
for Automobile Industry by its terms apiDlies to following named 

Kew Automobiles 
Used Cars 
Filling Stations 
Storage and Parking 
Wholesale Tires 

Wholesale Accessories, Parts, and Batteries 
Re-oair ShoiDS 
,, Paint and Trimming 

"Hotel hearing sara? hour and -olace January 19, code TDroioised 
by Hotel Men's Association of Territory of Hawaii claiming seventy- 
five percent of the industry. Both notices contain hedge clause 
and all pertinent matter contained in your usual form of hearings. 
"Especially desirable that Automobile hearing be ncJt postponed, but 
if scheduled hearing will embarrass your Administration I can stand 
".local embarrassment result from postponement. 

"Rather than postpone can you not permit me to open hearings 
for both Automobile and Hotel Associations and then to adjourn 
them to a date fixed by you which will permit mainland notice and 
attendance of any mainland witnesses at adjourned hearings? 

"Rush reply. 

"Will soon send detailed estimate of situation with analysis 
of potential sources of symptoms," 

In reply Mr. Brown advised Deputy Gullion it would be all right 
for him to go ahead and hold the hearings provided he adjourned them 
so that they could be reconvened in Washington, thus enabling any 
interested parties on the mainland to have an opportunity to be heardi 

On February Mr. Gullion wrote Mr. Brown as follf^ws: 

"Re: Enclosed copy of Outline of Procedure, 

"To date I have completed hearings on the Hotel, Automobile and 
the Contractors' Coden. In each case I have followed the procedure 
outlined in (i) of page 2 of the enclosure. In drafting the Outline 
of Proce'^ure, you probably felt that mainland codes should apply to 


local industry end "be a^'ministered from the mtinlprid. It is my definite 
opinion that mfinlf^nd sdrainistration '"ould "b t of little value in securing 
comDliance; conseauently ' in tlie Automobile Code nine industries v/ere 
grouT^ed to-^; -ther, a code was ^'Titten an'nlica'ble to e'-ch of them, and a 
Local Code Authority e^talDlished. In the Hotel Industry the mainland code 
was acce-oted as a "basis, certnin modifications -oroTjosed and a Local Code 
Authority established. In the G^n-=^ral Contractors' Code a Local Code 
Authority is estrblished. 

"In the future I shall attempt to follo'? the Outline of Procedure 
indicated under loajra^raDhs .(a) to (h) , save in the frequent instances 
'"here related industries covered "by ser^arate codes on th- mainland are 
so few in number in the Territory that they may be combined under one 
code to facilitate administration and cora-oliance. 

"Under the ' Sx!3cif ications of Modifications' of your memorandum, 
I am attem-otinp; to raise actual wa.^es for the Territory to the highest 
■Doint at rhich compliance may be secured from the oriental business man. 
This, in many cases, is as much as 100 to 150^ over wages being t)aid at 
present. At the Same time I am insisting on inserting in all codes 
'saving clauses' which -orohibit the reduction of vag^es, by reason of 
the code schedule, below rates i^aid in June of 1933. This will maintain 
wages paid in haole (rhite) establishments and at the same time serve to 
draw the wage level of the oriental-cm-oloyed labor up to the level now 
being paid by the better establishments, 

"Consideration -eill be given to the condition of competition 
betveen territorial and mainland industry. However, such competition 
is rare save in industries ^Thich fall under the Agricultural Adjustment 

"All codes are containing the prescribed conditions mentioned in 
(d) of 'Specifications of Modifications' and Section 7 (a) and 10 
(b) of ITIRA. 

"As instructed in your ^ire of January 12, Notices of Public Hear- 
ings in the Territory have been forwarded to you by mail . 

"Local industry, with possibly tvo exceptions (haole (white) paper 
distributors and haole graphic arts) is strenuous in its objection to 
paying dues to some mainland trade association or mainland code authority, 
having witnessed the results of such practice as it occurs here in 'the 
Petroleum indTstry. I am in sympathy with its viewpoint and feel that even 
though a local trade accepts the mainland code in its entirety, it should 
be permitted to modify the administration sections of the codes to provide 
■for a purely local code authority organize-d from a. truly representative 
local trade association and of no financial or other allegiance to a main- 
land trade association. This is consistent with 'the greatest possible 
local autonomy idea' presented in my #1 wire of December 23rd. If for 
purposes of statistics and formation of trade practices, the territorial 
and 'mainland code authorities should work together, I think it '"ould be to 
their mutual advantage aiid will influence the local code authorities to that 


"In Volume II on each code which I send to Washington, I shall 
include the reports on the code of the Hawaii Recovery Board members, 
and my le-tter of transmittal will contain any rebuttal which I may have 
to offer to their suggestions. -■ . 

"I trust that these recoTimendations ""ill meet with your apTDroval 
and that the national office can sne^dily arrive at its decision so that 
these codes may go into early OToeration," 

In answer tn that memorandum from Mr. G-ullion, Mr. Brown wrote him 
on February 25th as follows: 

"This ac'<nowl edges your letter of February 3 entitled 
'■Enclosed CoiDy of Outline of Procedure'. 

"I am. very glad to learn of the lorogress you are making on 
codification. Your -provision for a local code authority under 
your proposed modifications to the Hotel Industry Code and in 
your General Contractors' Code is acceptable. 

"Your description of what, you are attempting to do, in line 
with the established outline of procedure, meets with entire ap- 
"oroval h.-'re. Modification of codes to provide for purely local 
code authorities, without financial or other allegiance to main- 
land trade associations, but subject to necessary cooperation •■ 
between them and mainland code authorities for statistical and 
trade oractice information, seems to be the logical way to handle 
this angle, 

"Every code, after its aporoval by you and submission in here, 
will, of course, have to be closely scrutinized. Your territorial 
Auto Code is being studied now and we will advise you by radio as 
to our findings. I am already advised by the Denuty here that he 
considers it a very fine job," 

It can be sfeen from the above exchanges of memoranda that the 
Deputy Administrator for Hawaii interpreted his instructions to mean that 
if trades and industries in Hawaii iDreferred to apply for a separate code 
rather than modification of th"^ mainland code, that they were free to do 
■this. Proceeding; on that assumption, he had received and acce-oted appli- 
cations for separate codes from many of ■^he industries and by March 1st 
had held public hearings on separate codes for .the following trades and 
industries: Automobile; Hotel; General Contractors; Retail; Banking; 
Trucking; Crushed Stone, Sand and Gravel; Radio Broadcasting; Transit; 
Wholesale Trade, In addition, he had held preliminary conferences, look- 
ing toward separate codes for other trades and industries in the Islands 
and had arranged publiclrearings during the month of March on the 
following: Resta\irant; Ice; Motion Picture; Air Transport;. Manufacturing; 
Laundry; 01 -waning and Dyeing, Preliminary conferences looking toward; 
separate codes fcr the following industries had also been held: Custom 
Needleworkers; Barber Shops; Beauty Shops; Fisheries; Building and Loan 
Associations; .Graphic Arts; ^.ineral.; Bottled Soft Drinks, 

When it was realized in WashirS*ton that the policy of amending 
mainland -codes had been dertarted from and the policy of separate codes 

9758 •• / ^*^ 


hod ^oeen su^ostituted and had ^iroceeded to sucli oil advaaiced stage, it 
wrs deemed better to let the ndicy of separate codification proceed 
rather to attemnt to ^ipset the plans made and put into effect, 
whicn would undouhtedly have caused great confusion and resentment 
aiaoni- the members of trade aAid indxistrv in the Territory, and possibly 
have^illed vny further chance of cooperation. 

III. PUERTO r.ico 

Tfhen De-mty Lon- arrived in Puerto Pdco, late in December, 1933, 
he found that there was veiy little l:nowled£e of and very litcle 
interest in the-lTational In^oistrial Recovery Act on the part of_merabers 
0^ f.'pees p.nd industries. Zne nuraber of business men who were interested 
in having the Act ap^ly to Puerto Hico was small when compared witn 
those who were uninterested. His first job, therefore, was to conduct 
a cajimaig-n of education among the members of tro.des and industries and 
endeavor to arouse their interest. This -oroved to be a most difficult 
tpsk. The largest industry sabject to IT.I.R.A., from the viev^omc 
of nur.^ber of workers, was the lieedlev.orl: Industrjs and inasmuch as 
their TDi-oducts were sold on the mainland, and they were technically 
under the national codes, he had more success in arousing their interest 
thru the others. According to the best infomation available, there 
w«re between 5 and 7 thousand workers employed in needlework lactories 
and .-^bout 70,000 employed in the homes. The average weekly wage paia 
to foct-ry workers was G3.32 and the average wrge paid to homewor.cers 
amouiitee to about $1.50 per week. Tliese factories and homeworkers were 
enra-ed in the r.:anufacture of products that were covered by abouc a 
dozen national codes. The minimum wage prescribed in the national codes 
averr-ed about $15.00 ^er week. It was obvious that the Puerto Eican 
indus^tries could not iiimediatply step up their wages so drastically^ 
aiid t^at a-nendrent was necessn.ry. Since it was customary for a facoory 
in Puerto Rico to maJ:e in its one factory building, products that were 
covered by -,erka,T)S 5 or 8 of the mainlajid codes, and since it would be 
obviously imtDOssible for a maAiufacturer to erq^loy 5 or 8 different wage 
scales in his one plant, the manufacturers requested that a uniform wage 
scale a-.ic -uniform hour r^rovisions for all emoloyees .engaged m pla^^^s, 
be -stnblished. iW this meant, if they were to operate under the ^ 
res-oective national codes, that above a dozen national codes would nave 
to be amended a^d this, of course, would take a long time. The Deputy 
in Puerto Rico, therefore, requested "oermission from i^asnmgton to write 
a separate code for the Heedlework Industry in Puerto Rico so as to avoid 
t>e ion." delay that would be encountered in a..-iending so many codes, axir. 
in this'naiiner to get the members of the industry much more promptly 
o-oerating under -nrovisions with which -they could comply. 

This permission was granted a;id the Deputy couraenccd negotiations 
for a separate code. On January oO, 1954, the Puerto Rican lleedlework 
Association submitted a proposed code to the Deputy and a preliminary 
hea^in- wps held on Pebruary 28th which was adjourned and later recon- 
vened in Washington to afford mainland maiiufactufers an opportunity to 
be heard. 

The ai^iount of work involved in the negotiation of the Needlework 
Code was so aepyy that the Deputy A^jninistrator and his staff had litcle 
tim.e to devote to the negotiation of other codes. 




On December ?9, 1933, an Office Meraorpjadtun had been issued es- 
tablishing a "Territorial Section" readin,/; as follov/s: 

"In order to coordinate our instructions to and corres- 
pondence with territorial deputy administrators, there has 
been established a Territorial Section in charge of Walker 
Ii. Duvall (Room 3061 - Extension 485), 

All correspondence directed to the de"outy pdrainistrators 
in Hawaii, Alaska and Puerto Rico should pass through the 
Territorial Section. Before reqiiestin;; information from 
the territorial de-puty a.dministr.-^tors, the Territorial 
Section should be consialted, in order to determine v/hether 
the information is available from Washington." 

The Territorial Section, under the direction of Mr. Duvall, oper- 
ated as a channel of corres"oondence and liaison between the main 
office and the Territorial Deputies until May 15th, 1934, on which 
date the Territorial Section was trai:isf erred to the newly created 
Division 8, with Acting Division Administrator Linton LI. Collins in 

The function of the Territorial Section in Division 8 was out- 
lined in Office Memorandum #205, dated May 17,1934, as follows: 

"Territorial Matters: Liaison with Division 1-7 in re- 
STJect to basic and supplement arj'' codes of fair competi- 
tion for the Territories, and territorial modifications to 
mainland codes of fair competition; interpretations, exemptions 
and exceptions relating to trades or industries located in 
the territories; and also any a.greeraents made by Deputy Ad- 
ministrators with trades or industries in the territories; 

(Note: Administration of matters pertaining to codes, 
modifications, etc., remains with the Division which 
handles the correspondint^ industries in continental 
United States; Div. 8 serves as a control agency and 
channel of correspondence, on all matters pertaaning to 
territorial codes)" 

^iThile Deputy Long "as here in Washington, during the month of 
Ha^/, 1934, it was thought advisable by him and by the Territorial 
Section to have a re-sta,teraent of the policy and procedure resi3ect- 
ing territories because it had, by this time, become ra,ther loose and 
disintegrated. Alaska was proceeding on one basis, Hawaii on another, 
and Puerto Rico on still another. The Alaskan situation was satis- 
f-^ctory because the industries there were complying with the national 
codes. In Ha\?aii and Puerto Rico, however, no effort wa.s being made 
at enforcement of the national codes. Teclinically, trades and indus- 
tries in Hawaii and Puerto Rico were subject to the National Codes 



which hc-^d "been ar'i^roved, and xvere legally obligated to comiDly with 
thera. The Adrr.inistration, however, had recognized the impossibility 
of secy.ring comnliance with the mainland codes, and the Deputy 
Administrators had advised the industries in both places, informally, 
that no effort would be made to enforce the codes \intil they had 
submitted amendments or separate codes. 

The Administration had alread;^-- committed itself, through the 
Deputy, to the members of trade and industry in Hawaii to grant them 
separate codas if they made application for them. It could not very 
v?ell now retract this commitment without incurring the resentment of 
the members of the trades and industries in Hawaii. It had granted 
■oermission to the Needlework Industry in Puerto Rico to apuly for a 
separate code, and the gren.t difficulty and delay encountered in 
attempts to secure approval of amendments to the Men's Clothing Code 
and the Hat Manufactiiring Code made it annear inadvisable to grant 
xjermission to trades and industries in Puerto Rico to apoly for sep- 
arate codes. The Legal Division, moreover, had doixbts as to whether 
or not the courts ^ould sustain the national codes as ap'olying to 
trades and industries in the territories, inasmuch rs jmost .codes, 
while technically including the territories, showed in their con- 
tents, that they had given no consideration whatsoever to the condi- 
tions existing in the territories. It was questionable whether the 
proxionents of the national codes could be said to be truly repre- 
sentative of the trades and industries in the territories. 

Members of trades and industries in Puerto Rico were openly 
challenging the validity of the codes as applied to them. In nearly 
every case it was very questionable if the proponents of the national 
code could truly be said to be representative of the industry in 
Faerto Rico. It r-as a close ouestion and could not now be settled 
except by a court ruling. 

If attempts were mrde to enforce the national codes in Hawaii, 
and Puerto Rico, the members of trades and indu3tries would unquestion- 
ably have gone to the courts. This would have greatly delayed putting 
the Act into effect in those territories. It was therefore deemed ad- 
visable to recognize the situation as it actually existed, and it was 
thought that much better results could be obtained if .tirades and in- 
dustries in both places were permitted to apply for separate codes and 
thus remove any doubt as to the truly representative nature of the 
proponents of the code. 

Therefore, on July 2, 1934, the Administrator issued Administra- 
tive Order X-60 whicii veaA as follows: 



3y virtue of the authority vested in me tinder Title I of the 

National Industrial Recovery Act Ly 3xecutive Orders of the President, 
including Executive Order llo. 6590-A, d?ited February 3, 1934, and 
otherT^ise, it is hereby ordered: 

(l) Trades and industries in 'the Territory of Puerto Rico 
and in the Territory of Hawaii shall be exempt from codes of 
fair corivoetj.tion heretofore aiD'oroved until September 1, 1934, and 
from '^odes hereafter a."m:".-oved for a 'oeriod of six weeks fulloT/ing 
the dates of such a^D'orovals* Such an exemxitior. may be terminated 
or extended for a trade or industry, or subdivision thereof, in 
such Territory, as hereinafter provided or as the Deputy Adminis- 
trator for 3-uch Territory shall order. 

(£) This Order' shall not affect: 

(r. ) Any exception or exemiDtion of a specified trade 
or industry, or subdivision thereof, in a Territory, 
or of a specified person or oersons, heretofore or 
hereafter granted; 

(b) Any, code of fair competition or modification of 
a code for a brade or inciustry, or subdivision thereof, 
in Haraii or Puerto RicOc 

(.3) At any time before the expiration of ;in exempt ion 
under Paragraph (l; of this Order, application may 
bo made by one or more trade or industrial associa- 
tions or groups ^7hic'h irroose no inequitable restrictions 
or admission to membership therein and are truly re- 
presentative of oucn' trade or industry, or subdivision 
thereof, in the Territory of Hawaii or the Territory of 
Puerto Rico, for: 

('.,; iJodif ication of such code in its application to 
such i'erritorys or 

(b) The ap-oroval of a separate code of fair conDetition 
for or including thr.t trade or industry, or subdivision 
tb.f ."eof, in such Territory. 

'•/here such ao'iolicntion is so made the exemption provided for by 
Paragraph (l) of bhis Order shall be ?-jid remain in effect unless 
and until such prop? ication is denied. 

(4) At an;,, time before the expiration of an exei^iotion from 
the code of fair competition under Paragraph (l) of this Order 
any person directly affected who clairas that application of the 
code in the Territory will be unjust to him and applies for an 
exception to or an exemption from the code shall be given oppor- 
tunitjr for a, hearing and determination of the issues raied prior 
to incurring any liability to enforcement of the code and the 
Deputy Administrator for such Territory 'ihall, if justice re- 
quires, stp^y the application of the code in tho T'irritory for 
all 3inil,-;rly affected pending determina,tion of the issues, 

(5) An exemption under Paragraoh (l) of bhis Order shall, if 

the Der'uty Administrator for the Territory shr>.ll so order for 
a trade or industry, or subdivision the_'eof, in that Territory, 
te or remain in effect only as to those who enter into and 
com-oly with an agreement with me as authorized in Executive Order 
No. 6750-A, aiD-nroved June 27, 1934. It shall continue in effect 
as to those entering into and coraolying with such agreement so 
long as such agreement shall remain in effect. 

(6) Persons -oarticioating in any a-o-olication for which pro- 
vision is made in Paragraphs (3) or (4) of this Order, who re- 
quire la"bels bearing N.R.A. insignia at any time "before such 
lauels can be issued under a code of fair coraDetition or a mod- 
ification of a code for which they have made such apxilication, 
shall be entitled to obtain and use such labels if they have 
entered into and are conx)lying with such an agreement. They 
shall be entitled to obtain such labels: 

(a) From the Code Authority administering the Code 
from which such persons are exempted under Paragraph 

(1) of this Order uoon the same terras and conditions 
as a member complying with such code. A certificate by 
such person of compliance with such agreement shall 
satisfy the reauirement of a certificate of compliance 
with the code. 

(b) From the Deputy Administrator for the Territory 
whenever such persons are not subject to an approved 
code by its terms. 

(7) The Deputy Administrator for the Territory of Hawaii 
and the Deputy Administrator for the Territory of Puerto Rico 
are authorized: 

(a) To have prepared and to issue labels as provided 
for in Subparagraph (b) of Paragraph (b) of this Order. 
Such labels shall correspond in design to those issued 
by the Code Authorities for the corresponding indus- 
tries. Such Deputy Administrators shall provide rules 
and regulations governing the manufacture, issuance and 
use of labels, and shall impose charges for such labels, 
corresponding to the Rules and Regulations and charges 
for similar labels issued by the Code Authorities for 
corresponding industries in the mainland. Such labels 
issued by the Deputy Administrator for Hawaii shall 
bear the letter "K" and for Paerto Rico the letters 

"P.R. ". 

(b) To obtain such labels from the Code Authority for 
the code of fair competition covering the correspond- 
ing industry in the mainland, by agreement with that 
Code Authority. Such agreement shall be consistent with 
and serve to effectuate the provisions of this Order 
and the Rules ajid Reg-alations governing the issuance 

of such labels by that Code Authority except as such 
Rules and Regulations are notified by this Order. Such 
Code Authority is hereby authorized to issue such labels 
as herein provided. 



Any net Droceeds therefrom shall te held for use "by 
the Code Authority set up under the code of fair 
coiTipetition for the industry, or subdivision thereof, 
in the Territory, to vihich the members paying such 
charges shall thereafter "become subject." 


Washington, D.C. 

July 2, 1934. 

9209. ■ • • 

'' Supplementing Administrative Order IJo. X-60, Office Orders Nos. 102, 
103 and 104 were issued on July 14, as follows: 


July 14, 1954 


"De-Duty Administrators for the Territories of Puerto Rico 
and Hawaii shall submit for the apr)roval of the Administrator 
forms of agreement to be entered into pursuant to Administrative 
Order No. X-60, dated July 2, 1934, by persons engaged in trade 
or industry in such Territories.' 

"S' agreements shall be so fr.amed ss to be suitable 
generally to such trades and industries and shall include pro- 
visions for the estahlisiiment of the minimum WR,ges and maximum 
hours in addition to the -orovisions required by Sections 7 (a) 
and 10 (b) of the N. I. R. A. ¥hen a form of agreement for a 
particular Territoi-y has been approved by the Administrator, the 
Deputy Administrator for such Territory shall determine the trades 
and industries to v/hich it shall be available and thereafter under- 
take to have such agreement signed and complied with by all members 
of such designated trades and industries in such Territory. 

"Such Deputy Administrators may, pursuant to Paragraph (5) 
of Administrative Order No, X-60, dated July 2, 1934, make the 
signing of and compliance with such agreements a condition to the 
continuance of the exemption xirovided for in Pa,ra,5ra-Dh (l) of said 
Order. Persons signing such agreements shall be bound by the Toro- 
visions thereof, ujitil the date of ex-oiration, 'unless lorior to 
such date they become subject to an approved code." 

"By direction of the Administrator: 

Administrative Officer." 




July 14, 19^,-1 


"Any -Dorson engaged in tr^-de or indvistry in the Territor- 
ies of Puerto Rico or Hawaii desiring to use labels pursuant 
to the provisions of Administrative Order No, X-60, dated July 
2, 1934, raay obtain the right to use such labels by entering 
into an a.greenent r.'ith the Adroinistrp.tor as provided in Exec- 
utive Order No, 675J-A, dated June 27, 1934, and Office Order 
No. 102, aated July 14, 1934. Aoolicption for the use of 
such labels and to enter into such agreement shall be filed 
by such person with the De'outy Administrator for the Territory 
in which his enter-orise is located. 

"Upon receipt of such an apolication, such Deputy Admin- 
istrator shall fix a time and place for a oublic hearing thereon 
and exercise due diligence to give notice of the time, place and 
purtDOse of such hearing to all persons whose interests may be 
affected by the granting of such ar)t»lication, 

"Prior to the close o*^ such hearing, such Deputy Adminis- 
trator shall -oerrait all persons similr.rly situated, who desire 
to do so, to join in such aTDTjlicp.tion. The agreement, after 
final revision in the light of facts presented at the public 
hearing and signature of such ap'olicants shall bs forwarded by 
such Deputy Administrator together with ap-olication, trans- 
cript of testimony, re^^orts of advisers, and his own report 
thereon, to the Division Administrator for Division VIII. 

"If the latter apioroves the ap'olication and agreement, he 
shall forward a coDy thereof to the Division Administrator for 
the Division administering the dode under which labels are to be 
issued, who shall return the same to the Division Administrator 
for Division VIII together with his report thereon. Additional 
hearings or o-ooortunity to be heard may be provided in the United 
States, if the facts within the particular industry or justice 
may require. If such report of the Division Administrator for 
the division administering such code approves the application and 
agreement, all the documents sha.ll be forwarded to the Administra- 
tor for signature. If such report disapproves the application, 
the Division Administrator for Division VIII shall submit the 
complete file to the Assistant Administrator for Policy for de- 
cision, and submission by him to the Administrator for signa- 
ture, " 

"By direction of the Administrator: 

Administrative Officer. " 


-38- • 


July 14.., 1934 


"As soon as "orinted co"oies of approved codes are avail- 
able the Publication Division shall forward to the Deputy Ad- 
ministrator in ea-ch Territory, a sufficient number .thereof, to 
supply his needs for the purDose hereinafter stated, 

"Immediately-uT3on receipt of copies of an approved code 
such Deputy Administrator shall exercise due diligence to give 
notice to all members of the trade or industry governed by such 

(l) Of the terms of such code; 

,■ (2) That the Territorial trade or industry governed there- 
by is exempt from the provisions . thereof ijjitil the 1st day of 
September 1954, in the ease of codes heretofore approved and 
in the case of codes hereafter approved, for a period of 60 days 
from the date of approval. If such exemption has been made 
conditional the notice shall so state, . Conditions thereafter 
imposed shall be similarly notices; 

(3) That at any time before the date specified in the 
.notice provided for in Paragraph (2) hereof, application may be 
made fo'r: 

(a) Hodlfication of such code in its application 
to such Territory, or 

(b)^ The approval of a sepa.rate code of fair competi- 
tion for or including the trade or industry governed 
by such code, in such Territory, or 

(c) Exception to or an exe'mption from such code by 
any person claiming that the application thereof 
will be unjust to him; as provided for in Paragraphs 
(3) and (4) of Administrative Order No. X-60, dated 
July 2, 1934. 

"Upon receipt of an aiiplication for modification of an ap- 
proved code in its application to a Territorial trade or industry, 
or for approval of a separate code for such trade or industry, the 
Deputy Administrator for the Territory in question shall exercise 
due diligence to notify all interested parties of the receipt and 
contents of such: application and of the time and place where they 
may be heard with respect thereto, and shall, thereafter proceed 
as in- the case of a proposed code. 


"Bue dilif^ence shall "be deemed to have "been exercised if the 
Deputy Administrator, in addition to the steps referred to in 
Executive Order No. 6527, drited December 21, 1935, shall have 
caused such notices to be posted in post offices and other places 
in the Territory customarily recognized as proper places for the 
nesting of legal notices." 

"By direction of the Administrator: 

9361, Administr-T,tive Officer." 

The Administrator's authority to ap-orove agreements pursuant to 
Section 4 (a) of the Act with persons engaged in or industry in 
Puerto Rico, Hawaii or Alaska, was delegated to him by Executive 
Order No. 6750-A, June 26, 1934, reading as fol^uows: 

"By virtue of and -oursuant to the .authority vested in me 
by Title I of the National Industrial Recovery Act of June 16, 
1933 (Chanter 90, 48 Stat. 195), and in order to effectuate the 
purposes of said title, I hereby delegate to the Administrator 
for Industrial Recovery, in addition to the functions and powers 
heretofore delegated to aim, the power to enter into agreements, 
pursuant to Section 4 (a) of said Act ™ith persons engaged in a 
trade or industry in the Territory of Puerto Rico, the Territory 
of Hawaii, or the Territory of Alaska, if in his judgment such^ 
agreements will aid in effectuating the policy of said title with 
respect to transactions in or affecting interstate or foreign 
commerce, and will be consistent with the requirements of clause 
2 of subsection (a) of section 3 of said act." 

In accordance with Office Order 102 entitled "Administrator's 
Territorial Cooperation Agreement", the Deputy Administrator for 
P^ierto Rico, with the assistance of the Legal Division in Washington, 
prepared and submitted a form of agreement, which was approved by the 
Administrator on August 27, 1934. The order approving the form of 
agreement. Administrative Order No. X-80, is quoted below, together 
with the agreement. 



Administrative Order No. X-80 

"Being empowered by Executive Order No. 6750-A, dated June 
27, 1934, to enter into agreement pursuant to Section 4 (a) of 
the National Industrial Recovery Act with persons engaged in 
trade or industry in Puerto Rico or in the Territories of Hawaii 
and Alaska, and having in Office Order No, 102, dated July 14, 
1934, indicated a desire to approve the form of agreement to be 



entered into "oursupnt to Administrative Order To. X-50, dated 
July ?, 1934; 

I' NOff , T?ISKEFORE , I apiorove the form of Administrator's 
Territorial Coo-peration Agreement which is attached hereto and 
marked by me as 'Exhibit A' ." 

Administrator for Industrial Recovery. 

Approval Recommended: 

Linton li. Collins , 

Acting, Di\''ision Administrator. 

\/ashington, D.C. 

August 27, 1934. 



"(Authorized by Section 4 (a) of the ITational Industrial 
Recovery Act, and Executive Order of June .27, 1934.) 

"The undersigned he'^eby agrees with the Administrator for 
Industrial Recovery as folloT;s: 

"(l) This Agreement shall become effective upon approval 
thereof by the Administrator, and shall be, and remain in effect 
until: (a) A separate code, or modification of mainland code, 
for the Territory, to nhich the undersigned .is subject, has been 
apTDroved by the President; or (b) The Depiity Administrator for 

the Territoty of • shall order its termination; or 

(c) In any event, not later than June 15, 1935. 

"(2) The terra "employee" as used herein includes any and 
all -oersons engaged in the trade /industry of the undersigned 
hoi7ever coranensated. 

"(3) j\fo era-aloyeo shall be permitted to work in excess of 
hours in ajiy one week, o-" hotirs in any 

one day,, e?:cept for ^weeks in any calendar year, any 

em-oloyee may be permitted to ^TOrk not more than hours 

per week, or hours "oer day. Horrever, before under- 
taking to v'ork any emrjloyees for the hours per week, 

or , hours per day, permitted in the above exceiD- 

tion, the undersigned will notify the Dexjuty Administrator for 

^by letter addressed to him at 

_of the intention to w;..rk emuloyocs for Such period 

during specified weeks. All hours in excess of uer day 

or -ner week shall be paid for at not less than one 



and ti'.nes tha em-oloyee's rejt^ilar rate of pay. 

"(4) The provisions of Paragraph o shall not apaly to em- 
ployees engaged in e;jer.;;ency maintenance or emergency repair 
woi'k involving 'breakdown or the .protection of life or nroperty, 
nor to -Dersons eranloyed in a innnai^^'erial or executive capacity 

who earn regularly dollars per ^veek or more; 

provided, however, that eiiTOloyees en^-ap:ed in such emergency 
maintenance and enercency re'oair T;ork shall be paid at one and 

times thoir normal rate for all hours worked in 

excess of ^Ixours per week. 

"(5) Ko em-olcyee shall he oaid in any r»ay period less 

thpn nt the rate of ver week for _hours 

of labor* It is agreed that this pars 'trauh estaolishes a i^':uar- 
anteed raininum rate of ^oay regardless of whether the em-oloyee is 
connensated on the basis of tine rate or on a "oiece-work loerfor- 

"(o) Hot to ma'-ce any reduction in the full-time '-"eekly 
earnings of pny em-Dloyee whose normal full-time weekly hours are 

reduced by "oer cent, or less, oelow those existing 

for the fo^ir weeks ending . Ifhen the normal full- 
tine weekly hours of pn emnloyee are reduced by more than said 
per cent, the full-time v.'eekly wage of such eaoloyee shall not 
be reduced by more than one-half of the percentage of hour re- 
duction n.bove said -oer cent.. In no event shall hourly rates of 
pay 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 wages herein "orovided. Within 

days of the date hereof, (Unless such adjustment has been made 
theretofore) the undersigned shall adjust the schedules of wages 
of his employees in such an equitable manner as will conform to 
the provisions hereinabove set forth, .and still preserve wage 
differentials reasonably proportionate to those in effect prior 
to the date of this Agreement. 

"(7) IIo person under sixteen (16) years of age shall be 
employed by the undersigned in any capacity. ITo person under 
eighteen (13) years of .age shall be emroloyed at operations or 
at occupations which are hazardous in nature or are dangerous 
to hea,lth. The undersigned shall submit to the Deputy Admin- 
istrator for for approval before 

1934, a list of such operations or occuoetions, if any. The 
undersigned shall be deemed to have complied with this provis- 
ion a,s to age is he shall have on file a valid certificate or 
permit duly signed by the autnoritj- in such territory or possess- 
ion empowered to issue enplojnnont or age certificates or permits 
showing that the employee is of the required age, 

"(3) Leaners or apprscentices, not to exceed one in _^ 

of the total n^omber of employees, ma?'' be eraplo.yed by the under- 
signed and shall be paid not less th.^n ;'o of the 



minimum wa.^e herein provided for d\irin<5 the first weeks of 

their employment in the trade or industry, and not less than f^ 

of the rainimura ^p.-se during the second ^'^eeks of such emiDloy- 

ment. The undersi^-ned vill not lcno--ingly employ as a learner or 
apprentice any -nerson ^/ho has been employed in the trade or industry 

except for the rerarinder or the period of the weeks training 

,v.'hich has not already been served, 

"(9) A -oerson whose earning' capacity is limited because of age, 
physical, or mental handicap, or. other infirmity, may be employed on 
light i-'ork at a wage below the minimum established by this Code, if 
the undersigned obtains from the -oro-oer authority designated by the 
United States Department of Labor, a certi^^icate authorizing such 
person's employment at such wages and for' such hours as shall be stated 
in the certificate. The undersigned shall file monthly with the Code 
Authority a list of all such persons employed oy him, showing the wages 
.paid to, and the ma,Xiraujn hours of wo'^k for such employee. 

"(10) To ma!-:e reaisona.ble provisions for the safety and health of 
his employees at the place and during the hours of their employment. 

"(11) Not to use any subterfuge to frustrate the spirit and intent 
of this Agreemerit which is -^mong other things, to increase employment 
by this covenant, to remove obstructions to commerce, and to shorten 
hours, and to raise wages for the shorter week to a living basis. 

"(12) Where as the policy of the Act to increrse real purchasing 
.power will be made impossible of consioramation if prices of goods and 
services increase as rapidly as V7ages, it is recognized that price 
increases should be delayed and that then, the same should, so 
fa.r as rea.sonably possible, be limited to actual increases in the 
seller's costs. 

"(13) To support and patronize establishments which also signed an 
Administrator's Territorial Cooperation Agreement or are operating under 
an approved Code. 

"(14) To display official coi3ies of this Agreement or of the 
provisions hereof with respect to hours of labor, rates of pay, and 
other conditions of employment, and to see that such official copies 
are posted conspicuously and in sufficient number so that all employees 
may freely and conveniently read the 

"(15) That he ''ill not dismiss or dniaote any employee for malcing 
a complaint or giving evidence with respect to an alleged violation of 
the provisions of the national Industrial Recovery Act, or an approved 
Code of Fair Competition, or of this and other Agreements of the same 

"(16) E'lnployees 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 
laDor, 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. 


"(17) No ernTjloyee and no one oeekin;^ en-Dloyraent shall be required 
as a condition of einDlo;>/meut to join any conoany -anion or to refrain 
from Joinin.^-, or^ianizinf.:, or -^f. si sting a l;-Qor orfy-inization of his own 

"(18) The luidersigned sn^.H cora-oly '-ith the maximum hours o:*^ labor, 
minimum rates of oay, and oth;;r conditions of emolo^ment approved or 
prescribed 'oy the President. 

"(19) This Agreement is not intundc-d a.nd \7ill not oe permitted to 
promote uonoTDolies or to eliraina.te or ap'oress small enterprises and will 
not oe nermitted to oiDerate in a discriminatory manner a,5a.inst them but 
is intended to ef 'ectuate the nolicy of Title I of the ITa.tional 
Industrial Kecovery Act. 

"(20) This Agreement and all the Tjrovisions thereof are expressly suoject to the right of the President, pursuant to Section 10 (b) 
of the National Industrial Kecovery Act, to cancel or modify the approval 
given to this Agreement. 

"(21) It is understood by the undcrsi,e;ned that the President tnay by 
rule or regulation prescrib<: that all of the provisions of this Agree- 
ment shall be observed, in which event the undersigned in violating 
this Agreement may become subject to p-onishnient by a fine of not to 
exceed five hmidred ($500) dollars and imprisonment of not to exceed 
six (6) months or both. 

"(22) The undersigned further under stnds that in all cases where • 
an exemption has been conditioned upon the making of tais Agreement 
any breach of said Agreement by tne undersigned may operate forthwith 
to terminate both this Agreement and such e::enption, and tua,t the 
undersigned immedia.tely may become subject to the applicable Code of 
Fair Competition." 

Copy of tli^t Order and form of agreement were sent to the Deputy 
Administrator for Eatwaii for his use a,s well as for the use of the 
Deputy for Puerto Rico, 






The results obtained fron the effort at v/ritiuf separate codes were 
very disap loingint njid yhoi/ed clearly that the plan of nef'otiating and 
seeking approval of separate codes Y/as a nost ineffective way of getting 
the Eational Indastriai Recovery Act in operation in the Territories. 
Desr)ite heroic efforts on th.3 part of the Deputy Adninistrators for 
Hawaii and Puerto Pico, and their staffs, it seeraed alnost impossible to 
get approval of a separate code. Perhaps the principal reason for this 
difficulty was their great distance from T/sshington ?jid their inability 
to keep up with the constant change in policies of the national Adminis- 
tration. During the Sprins-^ and Summer of 1334 the policy was changed 
very frequently and since the inc^ustries and de-outies in the Territories 
used the already approved national codes as nodels for their territorial 
codes, by the time the proposo^d codes \7ere received in Washington the 
policy had been changed .-md it was necessary to ret^urn the proposed codes 
to the Territories for chaa'ige in order to conforr to th.e new prevailing 
policy. The trades ,and industries in the Territories insisted on incorporat- 
ing into their proposed codes provisions for price fixing and for produc- 
tion control similar to those which had been perraitted in the early nat- 
ion-il codes. They attempted also to iuclide in their proposed codes other 
trade practice provisions v/hich '.7ere definitely rf'ainst the national Admin- 
istration's policy. The codes, therefore, had to be returned to the Territ- 
ories \7ith advice that the objectionable provisions must be deleted before 
ap'oroval could be given. 

Another factor waicn contributed greatly to tne interminable delay- 
in securing approval of the codes was the lack of interest sho^m in 
Washington when the proposed codes were received there. As soon as propos- 
ed codes were received in the Territorial Section, they we're checked over 
to see that all documents liad been forwarded and then i^romptly sent to the 
Deputy Administrator handling the corresponding mainland industry, with a 
letter outlining the p rocedure to be followed hj him from that point on. 
It was at this point that the great delay took place. The Deputy Adminis- 
trators were already overburdened vdtli work on their ov.n national codes. 
They knew nothing whatsoever about the territorial situation and evidently 
thinking it was a matter which would require, caref^il study and considera- 
tion and considerable time, they put the codes aside -jjitil they coTild 
have sufficient time to check into them. The Breathing spell they were 
av/aiting in most cases never arrived. The Territorial Section checked 
v/ith them frequently urging them to speed up their review, and furnish 
criticisms if any, so that if any corrections had to be made the Deputj'- 
Administrator in the Territory could be advised. Part of the function of 
the mainland Depu.ty v;as to submit the proposed code to the various 
Advisory Boards -^nd secure their reports thei-eoni In most cases the 
Deputies delayed a long time before even doing that and then failed to 
follow up and se.; tiiat reports were furnished by each of the Advisory 
Boards. Upon receiving reports from one or two or ma;'-be three of the 
Boards and seeing that the Boards registered a number of objections to 
provisions of the code, the Deputies becaiie even more disinterested be- 
cause of the difficTilties they could foresee in attempting to secure 



approval of thr code. The fault, ho\7ever, for this lack of interest and 
the long dela;'" t!iat resulted froii it, did not properly rest on the Deputies 
for they already had their hands more than full in talcing care of their 
own national codes imd. they really did not have any tine to devote to the 
territorial codes. 

The Territorial Section seeing that this condition existed and in 
all likelihood woiild continue to exist, tine and again pointed it out to 
the Executive Office cjid recomnended tnat a special section ^^ith the 
necessary personnel he assigned to the xiorl: of review and expedition of 
the territorial codes. The ilxecutive Office, ho^rever, felt that this was 
not necessary and refused to set up such a special section or to provide 
additional personnel to h,a:idle territorial codes. The Territorial Section 
consisted of only one person, an Assistant Deputy, and he was simply 
snowed under a volune of detail at all tines. 

The Deputy Administrator for HavJaii had sub^-iitted 25 proposed codes 
which had been assented to hy the members of the indu.stries there. The 
first code to be approved was the Retail Code, which was ajiproved on 
October 15, 1934. Almost all of the work necessary to secure approval of 
that code was done by tiie Territorial Section of Division 8, because the 
mainland Assistant Deputy, whose Job it was to handle the code, found it 
impossible due to his many other duties to give it anything but the very 
slightest attention. 

In January 1935 no other Hawaiian proposed codes had as yet been 
approved. Deputy Gullion in Hawaii foand himself under terrific pres- 
sure from the members of trades and industries who were strenuously 
objecting to the long delay in securing approval of their codes which had 
been submitted many months before. The situation being desperate the 
Deputy Administrator for Hawaii came to Washington in an effort to speed 
up approval. He remained here about- six weeks and, with the assistance 
of the Territorial Section, working, day and night, was able to sec-ore 
approval of the Automobile Code, the Graphic Arts Code, the Manufacturing 
Code and the Rr-staurrint Code. These were the major codes for the terri- 
tory and because the;"- were so important from the vieiTpoint of compliance 
he could remain no longer and returned to Hawaii so that he could be on 
hand to see that they got off to a good start as soon as they became 
effective, Kis success in seciiring op:oroval of the codes during the 
short time that he was here shoy;ed clearly, that, if the recommendation 
of the Territorial Section that a special section with the necessary per- 
soiinel be set up in 'Jashington to e:coedite territorial codes had been ap- 
proved and carried out, the long delays in securing approval of codes 
which resulted from the plan of leaving it up to the mainland Deputies 
co''jld have been avoided. 

The Puerto Rico situation vras somewhat different from that in Hawaii. 
Tr.ades and industries there submitted applications for separate codes in 
order to benefit oy the exemption granted in A^.mini strati ve Order X-60, 
but their efforts at securing approval of their codes were Ixikewarn in 
most cases ^jid they were not anxious to operate under codes. The greatest 
pressure for codes in Puerto Rico was that brought b;/ labor. The Puerto 
Rico ijeedlework Code had become effective in July and tiie Deputy Adminis- 
trator and his st-aff had their hands full in trying to get that code to 
work. This left them very little time for pushing other proposed codes, 

97 58 


Tublic he.aringE were held on alioiit a dozen cndes iDut there '7ere conflicts 
■between lahor and industry ref-nrding labor provisions and agreement was 
secured on only tir/o codes, the Bal'inf Indus trs?- and the Ice Industry. 

The proposed codes for those t^TO industries I'ere forT-rardied to Wash- 
ington, vrith the recommendation of the Deputy Administrator for Puerto 
Rico that they be approved, in llovembei-, 19;?4, ■;Jhile they were being 
reviewed in Washington, the Deputy Administrr^itor for Ptierto PlIco found 
it necessary to com.e to Washington in connection with some ad.ministrative 
action required on the Needlework Code for Puerto Rico. By working 
diligently with the mainland. Assistpjit Deputy on the Baking Code, and the 
Territorial Section, the Deputy Adiainistrator for Puerto Rico was able 
to secure approval of tlie Balcing Code on December 21, 1934. 

He foyjid that many of the provisions in the proposed Ice Code were 
unaccepta.ble to the national adnini strati on ,-md he could not secure ap- 
pi'oval of that code, so it wan necessary for him to send it back to 
Puerto Rico for correction. 

Ko more codes were a-pproved for the territories up until the time 
of the Schechter decision on iiay 27, and therefore there were only five 
separate codes approved for Hawaii, namely, the "etail. Automobile, 
GraTDhic Arts, Iiairof acturing andi Restaurant Codes, and only two separate 
codes aouroved for Puerto Rico, the Needlework Code and the Balcing Code. 
(See Vol XVIII, Page 1; Vol XZII , Page 153; Vol. XXII, Page 53; Vol. XII, 
Page 175 - Codes of Pair Competition as ai^proved- Goverment Prirting 

The nuriber of employees covered by each of the approved codes was 
as follows: Retail .Trad.e in Hawaii, 15,00f); Ilanuf acturing Industry in 
Hawaii, 2,500; Automotive Trade in Hawaii, 2,500; Graphic Arts Industry 
in Hawaii:,-: 1,250; Restaurant Trade in Hawaii, 1,000; i-Teedlework Industry 
in Puerto Rico, 77,0-rin (70,000 of whom were horne\-orkers) ; Baicing Industry 
in Puerto Rico, 500^ 

In Hawaii, the Canning and Can Lianufactuxing industries, with a 
total of about 10,000 employet-s, operated imder their respective national 
codes with special wage provisions for Hawaii. 

Ko agreevnents such as were provided for in Administrative Order X-60 
were negotia,ted in Puerto Rico. The Dejjuty Administrator there felt that 
the lulcewarn attitude evidenced by and i:ndu3tries as yet uncodified 
and the inability of labor and industry to agree on labor provisions made 
any attempt at the use of agreeme^.nts in.advi sable , and he therefore did not 
utilize the agreement provisions of Ordier X-60. 

In Hawaii the Deputy Administrator had a better situation to deal 
vath, inasraiich p.s there was local enthusiasm for 17.R.A. Trades and 
industries generally pledged themselves to comply with the provisions of 
their proposed codes pending approval, so he had little need to condition 
their exemption on compliance v/ith an agreement neaiiwhile. He did however 
negotiate an agreement with the alcoholic beverages industries which the 
members of the industry signed a-nd complied with p'-^nding approval of their 



application for a separate code of labor orovision'o. He did n ot use the 
form of agi-eeuent provided in Acfmini strati ve Order X-80, "but rather 
conposed an agreepent which incorporated the labor provisions of the 
proposed sei^arate code. The form of the agreenent vms found to be 
legally objectionable when revie-red in Washington :\nd. it therefore T7as 
not forraally approved. Hovrever inasrauch as the industry was complying 
with the agreement ,and felt itself obligated to do so, it was considered 
inadvisable to disturb the situation especially since it r'ould most 
likely be only a short time antil the ■'orooosed code wcolcl be approved. 
The Deputy Administi'o.tor negotiated a similar agref^v.ient ^.vith hotel re- 
staurant owners, '"';'io were exeirot from the Restaurant Cocie. The agree- 
ment incoroorated the labor pr.ovisions of the Restaurant Code verbatim, 
was signed bjr the hotel restaurant owners and was compiled with by them, 
TThen received in 'Jashington, it was foiund to be legally defective for 
the srme reason as the other arTeement, and could not be fornally approv- 
ed. Inasmuch a.s the members ^'ere actually corap?.ying with the agreement, 
and it appeared that it v;ould be only a sliort tine imtil their application 
for inclusion under the proposed Hotel Code would be approved, it was 
decided not to disturb the situation, for the deeired results were be- 
ing obtained. 



I. ALASia 

Since the mainland cc'es v^ere in effect in Alasl^a, they rare ad- 
ministered from Washington, at least theoretically. Outside of the 
Canned Salnon Industry, horrever, the only contacts the trades and indus- 
tries in Alas':a had with the ITationa] Hecovei"/ Ac'rainistration rrere 
contacts vith Dexnity Administrator TJade located in Jimeau, Alaska. He 
was their source of all H'lA. information, they m.ade their complaints to 
him and he acted as the Compliance Officer. Covrnliance in Alo.ska nas 
unifoiTiily •';ood. Occasioml].v, honever, situations o.rose \7here temporary 
exemptions were necessary. Because of the long delay involved in trans- 
mitting a request for exemption to Washington and securing action on it, 
at the end of which ti.iie the emergency prohably woulri have e:qiired. Deputy 
Wade occe-sionally fouj'id himself ohliged to grant an informal, unofficial 
exem'otion to certain ind\i.stry raenhers. To fail to grant such exemption 
in meritorious cases would have "broken do'.7n compliance and morale because 
due to the necessity of the occasion the industry nenber would have 
delionrately failed to com-nly. It v;as therefore fo^ond desirable to grant 
the Deputy Adjninistrator for Alaska the authority to grant exemptions 
where necessarsr, and this was done on ;,iay 3, 1933 in Office Ilemorandum 
IJo. 356, which read as follows: 

"The Deputy Administrator for the Territory,'" of Ala.ska is 
authorized, subject to the general supervision of, and reviev.' by, 
the IJationol Industrial Hecovery Board, but in its name and 
oy its authority, on application made by any member or members 
of a trade or industry, to exempt or refuse to exempt from any 
provision of any code of fair competition to the extent that 
such code- applies to nxij transaction rrithin the Territory of 
Alaska, with the exception that such authorization shall not 
apply v;ith respect to exemptions from any provision of any of 
the following: codes of fair competition: Canning Industry, 
Canned Salmon Industry, Lumber and Timber Products Industry, 
Pi she r.r Indus t ry . " 


Hs.waii being 2500 miles west of the P.-icific Coast, six da^'-s by boat 
from San Trancisco, it takes about two wee^:s for mail to reach Washington 
from "lonolulu. After tho Tietail Code became effective it was soon found 
that efficient and promot administration could not be secured if all the 
many detailed natters a,rising under the codes requiring action by the 
Board had to be forwarded to Washington. Such administration was attempt- 
ed in connection with the ! Code and was most unsatisfactory. The 
Deputy Adviinistrator for Hawaii had requested that power be delegated to 
him to handle tJiesc matters on the grouiid as they arose. Otherwise com- 
pliance A70uld suffer greatly. The Division Administrator on the mainland 
handling the Retail Code, after several exoeriences with matters which had 
beer, forwarded for his attention stated that he could see no necessity for 
forvrardinr; such matters to Washington inasmuch as he would have to be 
gu-ic'ecl anyiTay by the recommendation of the Demxty in Hawaii vmo Icnew 



conditions better than he. He therefore '"■as in fp,vor of cTelei'^ating the 
authoritj'- to the Iieput3'- for Hav.'aii so far ;.is the code under his super- 
vision was concerned. TThen Deputy G-ullion arrived in Washington in 
Januaiy he took tliis matter up rrith the Board and on I.Iarch 19, 1835 Office 
Meraorandura ITo, 348 was issued delegatin^^ additional authority to the 
Deputj'- for Hanaii. The memorondun readr. ar, follows: 

"The Deputy Administrator for the Territory of Kawa.ii is 

hereby authorized to ei:ercise all of the pov.'ers delegated to or 

vested in the national Ind.ustrial Recover;^'- Board by virtue of 

any Code of Pair Competition heretofore or hereafter approved 

exclusivelj' for the Territory of Hawaii, except the power to 

approve arnencljnents to, or codes svi2.->pleTnentary to, any such Code 

of Jail- Conoetition a-oproved exclusively for the Territory of 


"The Deputy Adriinistrator for the Territory of Hawaii is 

hereby authorized to grant exemptions fron, and to stay provisions 

of, and to maire interpretations of, Codes of Fair Competition 

approved exclusively for the Territory of Hawaii. 

"The authority hereinabove delegated to the Deputy Adjiinistrator 

for the Territory of Hawaii is made subject to the following 


(a) Any action ta\'.en ''oir the Deputy Adriinistrator for the 
Territory- of Hawaii must be in conformity with the rules 
and reg'alations and policy heretofore or hereafter estab- 
lisheo. by the lfetions,l Recovery Administration in ITa.shington; 

(b) All action taken bj"- the Deputh Administrator for the 
Territory of Hawaii in the exercise of the powers herein- 
above delegated shall be promptly reported bj' the said 
Deputjr Adrn.inistrator to the National Industrial Recovery 
Doard and shall be subject to reviev/ and disapproval by 
said National Ind-ustrial Recovei7/ Board. 

B:"" direction of the national Industrial Recovery Board. 

17. A. Harriman, 
Adrninistrative Officer." 


■ Puerto Rico being much nearer to Washington, only two days away by 
air mail, adj-ini strati on from. TTashington was not difficult. Only two codes 
had been approved, the BaJ'ing Code and the ITeedlevrork Code. The Balring 
Cod.e was of relatively minor importance. The Feedlework Code was the 
subject of much controvers],^ between- Puerto Rican interests and mainland 
interests. It therefore was considered, inadvisa.ble to d.elegate to the 
Deput.y for pi.i.erto Rico sinilar authorit:/ to that delegated to the Deputy 
for Hawaii. There was real conpetition between the needlework Ind.ustry in 
Puerto Rico r-Jid the mainland i.idustry, whereas there was very little compe- 
tition between the separate codes T7hich had been ap-oroved for Hawaii and 
the correspo:\ding ind.ustries on the mainland. 


••■ -50- 



The plan of separate codification for the territories did not rrork 
out as r>atisfactorily as \7as anticipated. Onlj^ five of ttrenty-five sub- 
mitted separate codes for Hav/aii ^rere finally approved; and tho e that 
finallj?- were approved did not receive approval until after long discourag- 
ine months of negotiation. The detail Code was approved Octoher 15, 1934, 
ten months after the public hearing was held.; the Ilanufacturing Code 
Fehruarry 14, 1935, the Restaurant Code liarch 5, 1935, the C-raphic Arts 
Code Ilarch 7, 1935, and the Autonotive Code Liarch 26, 1935, all more thaji 
one year after their puolic hearings had been held. 

Puerto Fdco had only tv^o out of twelve proposed cocles approved, the 
needlework Code on June 28, 1934, six months after it went to public hear- 
ing, and the BaJ-ing Code on Decenber 21, 1934, about eight months after 
public hearing. 

As a result, many of the trades and industries in those territories 
were never brought under codes, and those industries which were codified 
did not have their codes approved ujitil a late date that they operated 
under the Act for a much shorter time than did the ttrades and industries 
in Alaska which did not propose separate codes but rather worked under the 
nationa.l codes as a part thereof. 

Because there were strong legal do'ubts whether or not the trades 
and industries in the territories were m-o-oeriy subject to national codes 
inasmuch as it was ' questionoble if' the pro^'ohents. of national codes were 
truly re-oresentative of the territories, the policy adopted by the 
Administration was no doubt the most prudent under the circumstances. 
However,, the experience in attempting to negotiate separate codes would 
seem to'point out clearl?^ the inadvisability of repeating the plan should 
the -oroblem again ;oresent itself. 

If the occasion should arise for negotiating and a-oproving new 
national codes, the Administration could see to it that the territories 
were properly represented originally in the, national code, and thus each 
industry in the territories would be codified as a part of the national 
indiistry, thereby preventing the long delays of separate codification and 
the confusion and conflicts that arise between mainland and territorial^ 
interests when separate codes are approved. The problem of administration 
viould be greatly simplified, as the industries in the territories would 
then occu-oy the same position as the industries in any other geogr^a-phical 
section of the country and could be handled on exactly the same basis. 




The subject of this study lends itself naturally and logically to 
chronolo::ical treatment, and that method has been followed in the report. 

The material for the report has been obtained almost entirely from 
the H R A files. Where the files are incomplete (those up to Januarjr 1, 
1934), the voids have been filled in 'bj conferences with members of the 
staff who worked on the territorial problem at the time. Some informa- 
tion contained in the report, such as material on economic conditions in 
the territories, had to be collected from outside sources, such as the 
Department of Commerce and the Department of Labor. The sources of 
information are given in the bodj'' of the report. 


The following topics, while not embraced in this report, suggest 
themselves as wortliy of s tndy by anyone interested in delving more deeply 
into the subject: 

Analysis of the provisions of the proposed ajid 
approved sepa-rate territorial codes. 

Administration in the territories of the 
approved sepa.rate Codes. 

Effects of the provisions and their 
adraini s t rat i on . 




Executive Order No. 7075, dated June 15, 1935, established the Division of Revie*r 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 
inforiuation and records of experience of the operations of the /arious trades and 
industries heretofore subject to codes cf fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditicns in general, and 
other related natters, 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, 
leg-r.l studies, administration studies, miscellaneous studies, and the writing of cede his- 
tories. The materials which were produced by these sections are indicated below. 

Except for the Code Histories, all items itentioned below are scheduled to be in mimeo- 
graphed form by April 1, 1936. 


The Code Histories are documented of the forrpation and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of mer.bers in the industry; the history of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which *ere held, and 
the activities in connection Aith 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, 
but also in teras 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 Cojnerce in typev/ritten forji. 
All told, approximately eight hundred and fifty (850) histories will be completed. This 
nuaber includes all of the approved codes and some of the unapproved codes. (In Work Mate- 
rials No. 18. Cont ents of Code Histories , 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 voluaes I, II and III which constitute the material oflicially submitted 
to the President in support of the recommendatiDn for approval of each code. These volumes 

- 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 
recomaendations 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 amendaents, 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. ) 


In the ffork of the Division of Revie* 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 beloAf, gr;uped according to the char- 
acter of the materia] . (In Work Materials No. 17, T entative Outli ne.'^ and Sum mari es of 
S tudies in Process , these materials are fully described). 

Industry S tudies 

Automobile Industry, An Economic Survey of 

Bituninous Coal Industry under Free Competition and Code Regulation, Economic Survey of 

Electrical Manufacturing Industry, The 

Fertilizer Industry, Tho 

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 

Part B - Section 3 (e) of NIRA and its adainistration. 
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, Econoaic Problems of the 

Men's Clothing Industry, The 

Millinery Industry, The 

Motion Picture Industry, The 

Migration of Industry, The: The Shift of Tv,-enty-Five Needle Trades Frox 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 and Labor Data on 


- iii - 

Women's Apparel Industry, Some Aspects of the 

Trade P rac tice Stu dies 

Commodities, Information Concerning: A Study of NRA 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 Conpetition, Control of 
Minimum Price Regulation Under Codes of Fair Competition 
Multiple Easing 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 HRA Codes. 

Labor S tudies 

Cap and Cloth Hat Industry, Commission Report on Wage Differentials in 

Earnings in Selected r.Canufacturing Industries, by States, 1933-35 

Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-1935 

Fur Manufacturing, Commission Report on Wajes 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 

Adm inistrative Stu d ies 

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 E. Nature, Composition and Organization of Code Authorities 



- IV - 

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 v/ith the 
Prison Labor Problem under NRA and the Prison Compact, The 
rr_'_lcms 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 

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 to Enforce 

Commerce Clause, Federal Regulation of the Employer-Employee Relationship Under the 

Delegation of Power. Certain Phases of the Principle of, with Reference to Federal Industrial 
Regulatory Legislation 

Enforcement, Extra-Judicial Methods of 

Federal Regulation through the Joint Employment of the Power of Taxation and the Spending 
Powe r 

Government Contract Provisions as a Means of Ectablishing 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- 

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? 



The Evidence Studies were originally undertaken to gather material for pending court 
casec. After the Sohechter decision the project Aas continued in order to assemble data for 
use in connection with the studies of the Divisicn of Review. The data are particularly 
concerned ,vith the nature, size and operations of the industry; and ffith the relation of the 
industry to interstate cominerce. The industries covered by the Evidence Studies account for 
more than one-half of the total number ol workers under codes. The list ol those studies 

Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and Shoe Manufacturing Industry 
Bottled Soft Drink Industry 
Builders' Supplies Industry 
Canning Industry 
Chemical Manufacturing Industry 
Cigar Manufacturing Industry 
Coat and 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 Venicle Retailing Trade 

Needlework Industry of Puerto Rico 

Painting and Paporhanging 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- 
Wool Textile Industry 


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 
aata, the technical methods employed, and the applicability of the material to the study of 
tne industries concerned. The following numbers appear in the series: 
9T68— 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 Tr->.de 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 Industr^ Salt Producing Industry 

Electrical Manufacturing Industry 


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 droppi:-g 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 

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 .