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BOSTON PUBLIC LIBRARY 



3 9999 06317 393 2 



OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



CODE COMPLIANCE ACTIVITIES OF THE 
NATIONAL RECOVERY ADMINISTRATION 



By 



Frank Hursey 
John B. Jago Mackenzie Shannon 
Donald Frothingham W. W. Swift 
Howard C. Dunn 



WORK MATERIALS NO. 61 



NRA ORGANIZATION STUDIES SECTION 
MARCH, 1936 



i 



i 



Girr^ICB rr- --A"^!'-- ".L ■T~"^T^-r{ -lIlr-nST^JV^in^ 



CODZ COriPLIi:iI'CS ACTIVITIES 01' ^dZ 
ITATIOlIAl ZSCCT-IT AIlnrTISTR;-^TI01-I 



3y 



John B. jBfro Kachenr^ie Shannon 
Donald ProthingOiajn 1. "J. S'^ift 
^^ToTTara C. I>unn 



WM OP.&AITIZATIO"' STIOIES SECTIO''-^ 
March, 1936 



9039 



A- 



IAjiO, abiJi^ajC ^ // u-^'>?.*.>'»^t..^'L.<i.£^ 




*( 



F H i W C T. D 



Tliis study- of the Code Compliance Activities of the 
National Recovery Admiaistrp.tion v/as prepared Iw Messrs. Prank 
Hurse;;-, vjiit chief, Jolm B. Jago, Donald Frothiao;hain, Mackenzie 
Shannon, TJ'. W. Svrift and.. Howard C^ Dunn, of the FRA Orf'anization 
Studies Section, Mr. Williajn W. Bardslej' in charge. 

It has teen the purpose of the study primarily to fur- 
nish a synopsis of the prol)leins encountered ty the Recovery 
Administration in the securing of compliance with the provisions 
of codes of fair competition, of the methods used to tring ahout 
compliance and an ap-oraisal of the results ottained. 

Such a purpose has in no way contemplated an analysis 
of the social and economic theories underlying the National In- 
dustrial Recovery Act; neither has it teen concerned with the pre- 
sentation of historical data or stntistical natter, exce-ot insofar 
as such data or material is directly concerned with NRA comr)liance 
problems and methods. 

At the tack of the renort will te found a trief state- 
ment of the subjects undertaken ty the Division of Revieyr. 



L. C. Marshall, 
March 37, 1936. Director, Division of Review. 



9839 "^" 



TaBLS of CGNTEITTS 



t 



Page 

Foreword i 

Sumraa ry 1 

Chapter I Introduction - Definition 2 

Chapter II Basis in the Act 3 

Chapter III Problems of Conpliance 9 

A. General Scope and Nature of Compliance Task 9 

1. Method of Examination 9 

2. Special Factors Affecting KRA Compliance 9 

(a ) Enforcement p0T7ers 9 

("b) Policy 11 

3. Scope of Application of KSA Regulatory 

Mea sure s 12 

4. Difficulties Inherent in Correlated Corax)liance. . 13 

(a) Labor Provisions pnd Trade Practice 
Provisions 13 

(b) Labor Provisions 19 

(c) Trade Practice Provisions 22 

B. Special Scope and Nature of Compliance Task 24 

C. Powers Limitations..... 36 

D. Policy 38 

E. Administration 38 

1. Industrial Adjustment Agencies 38 

2. Division of Responsibility and Authority 
between N5A ComTiliance Agencies and Industrial 
Adjustment Agencies 40 

3. Division of Responsibility and Authority — 

ISA 41 

4. Training personnel 45 

P. Industrial Self- Government 47 

G. Litigation 53 

1. Effect on Compliance of Litigation Itself 

and of Lack of Litigr^tion 53 

2. Effect of Court Decisions and Threats of 
Litigation on Compliance 55 



9839 



-11- 



T^m :£. c:! OcrTS^HTp 



Chapter III 
H. 



Chapter IV 
A. 

B. 
C. 



D. 



Chapter V 



Tahle 1. 



TaMe 2. 



Tahle 3. 



Tatle 4. 



"Page 
problems of Ccn^ili^-^nce - C^^ntinued 

Public Ordnion. 56 

1. Relpitirnship of Pxihlic QTiinion to CoraTjlianc'=. . . 55 

2. Interaction of IJliA CcmiTliance and public 

Opinion 56 

ComTjliance Methods oO 

Complaint System 59 

1. Field 59 

2. State Adjustment Boards 69 

Mass Compliance 72 

Adjustment and Restitution 77 

1. Basis of Administration for Ccmnliance 77 

2. The Adjustment Llethod 78 

3 . lie st i tut ion 79 

4. Less Tiian Pull Restitution Adjustments 80 

5. Liquidated Dama:5es 81 

6. Certificate of Compliance 81 

7. Consent Decrees of Injunction 84 

8. Blue Eagle Henoval Despite Adjustment 84 

InsifTda - Labels , 86 

1 . Insignia 86 

2. Labels 94 

Appra isal 99 

LABOR COlvlPLlAlTCB TABLES 

Number of investi.^-ated labor cases, number of 

resr)ondents against vhcm a first complaint was 

filed, method of dis-n.ositicn 119 

State breakdO'.-Ti of number cf manufacturing 
establisliments, and employees, total manu- 

ff'CtVi.ring payroll, and total population 120 

State breakdovm of nwnber cf service and amuse- 
ment establislunents and employees, and total 

service and amusement Toayroll 122 

State breahdo'.7n of number of retail establish- 
ments, and restaurants, and em-ployees, and 

total retail establishment and restaurant payroll.. 124 



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-111- 



LA30II cciiPiiAi'CE Tables 

(G'^ntinuec) 



Page 



Tatle 5. 
Ta"ble 6. 

Table 7, 

Table 8. 
Table S-A, 
Table S. 
Table 9-A. 

Table 10. 

Table 11. 
Table 11-A. 
Table 12. 

Table 13. 

Table 14. 

Table 15. 

Table 16. 

Table 17. 
APPENDIX 1. 

APPENDIX 2. 

APPEITDIX 2(a) 

9839 



State bren'-do-.m of r.-uinber r-f restaurant find 

employees, ^nd tctal re c tPiu-nnt ^iP7/roll 126 

Restitution of wac;'es, ar;ount of, and n-umbcr of 

enployees (paid and estimated) 127 

Sank by State in total restitution 130 

Number of violations by type 132 

Number of adjusted wages and hour cases by State... 135 

Number of cora-ilaints by source 137 

Number of comilaints by size of independently 

operated establishments 138 

Lapse between first action on and closin:^ of 

complaints 139 

Number of labor cases docketed during the year 1933 140 

Number of com;olaints by method of receipt 142 

Special table of complaints and method of 

disposition by time , 143 

Labor complaints activities by code; industrial 145 

coverage and time coverage of active codes......... -158 

25 codes receiving greatest number of labor 

compla int s 159 

Codes apiDroved nrior to A\ir"ast 8, 1934, for 

which no violations were rerjorted to state 

offices 160 

Number of productive enployees in NPlA State Offices; 
estimated industrial coverage by state , 161 

Number of PEA complaints by monthly receipt 164 

Report of California State Director regarding 

Compliance in California 166 

Trade Practice Regulations in NEA Codes; with 
Approximate Percentage of Codes containing each.... 158 

Code containing provisions concerning False 

Marking 171 

-iv- 



a?p:::~:C!23 

(aruti:-,u.xO 



page 

APPENDIX 3. Bulletin a^c . 7. Manual for Adjustnent of 

Cora;olaints. Field Letter ITo . 125, Guide for 

Pield Officers hFrndlinv:"; Labor Conplnints 173 

APPEKDIX 3(a) Establishment of System of Re^^ional Administration. 
Defines Pc'ers and Functions of Re,{5ional Director. 
Establishment of Regional Offices. Pon'ers and 
Eunctions of Regional Director. Compliance 
Council. Forms for removal and restoraticm of 
Blue Eagle 198 

APPENDIX 4. Report en Troublesome Code Provisions. Part I. 

Same listed b:," Code, Article and Section 253 

APPENDIX 4(3) Davis ReD^rt nn Cede Enforcement 272 

aPPEEDIX 5. Chert shoxring method of rf^uting Compliance 

C se s 285 



9839 -V' 



i 



-1- 



STm'JuIY 



This report is divided into five cha,pters. It endeavors 
to sho'- the pro"bleins faced ty the national Recovery Administration 
in bringing aljout compliance v^rith the codes,' the methods used to 
attain this end and some estimate of the results obtained. 

Clia-iter I defines the term "compliance" and indicates the 
scope of its meaning as it appears in this report. 

Clmpter II outlines the legislative policy '.7ith regard to en- 
forcement and compliance as they appear in the National Industrial 
Hecover3'' Act . 

Chapter III deals \7ith the field covered ty compliance, the 
geograjjhical extent and volume of the enterprises regulated "by the 
codes and the extent of the social stracture of the nation affected 
"oy them. It indicates certain difficulties inherent in industry 
regulations and the variety and complexity of the regulations imposed "by 
the codes, , It explains the difficulties arising from the attempt to apply 
certain code regula.tions to specific situations. It points cait the 
narrov.' sco o-e or rather total lack of enforcement powers granted to TvTEA 
"by the Act. It touches on the effect of legislative policy on com- 
pliance. It indicates certain pro"blems arising from the attempt to 
adj;iinister the compliance activities of NRA in accordance \7ith t'he 
policy decided upon, the division of responsi'bility and authority and 
the training of personnel. It deals vdth the difficulties encoiintered 
in the attempt to encourage iTidustry to govern itself and the pro"falems 
created for URA in its own cora-oliance 'activities "by the compliance 
activities of industry. It atteraiits to point out the effects on 
compliance of the court auctions -orosecuted under the authority of the 
Act. It deals with the factor of public opinion. 

Chapter IV outlines the methods used "by NHA in its efforts to obtain 
coiipliance \7ith the codes. It describes the procedure followed by the 
field offices of IIRA in adjiisting code violations under the passive com- 
pla.int system. It then describes the procedure for handling violation 
cases under the mass compliance system which system called for the active 
policing of industry by the Compliance Division field offices and was 
not confined to the handling of cases only after a complaint had been 
made by some person outside IIHA. It outlines the adjustment method 
of handling code violation and the policy of obtaining restitution of 
back wages in labor violation cases. It describes the manner in which 
insignia and la.bels were used by the Administration in its efforts to 
obtain compliance with the codes and to dispose of cases of non-compliance. 

Chapter V attempts to evaluate the results obtadned by the methods 
used and presents statistical data indicating these results. 



9839 



-3- 

CHAPT":? I 

I'JTRODnCTIOIT - DSFI'JITIOII 

DEFIinTIOIT 

Tae terra "Compliance" has been defined as the acting in accordance 
with, or the yielding to the desire, request, condition, direction, etc.; 
a consenting to act in comformity with; anicntle relations (between -oarties). 
(*) 

The KRA Office Manual defines "Administration for Com-oliance" as 
"the orocess of securing oarapliance and as far as "oossible obtaining 
restitution for Dast violations, without resort to the courts". 

The terra is used with respect not only to codes but also to agree- 
ments with the President and to regulations -orescribed by the Z!xecutive 
and Administrative Orders. Administration for com-oliance lar -oly relied 
on education and erq^lanation and on 'the weight of oublic opinion within 
the industry. 

The compliance problem- was. therefore,- 'that of ootrining compliance 
by persuasion, education and cooperation -insteod of o^- force. It rested 
primarily on the strength of public opinion and varied with. the rise pnd 
fall of favorable oublic opinion. 

For such .methods to secceed, it was essential to secure the co- 
operation of tne oublicand^of the industries directly affected by the 
codes. 

Tfith these two objectives in mind, iTlA. created and distributed the 
Blue 3agle which '^^s to advise the public which members of industry 
were complying with their codes; and it attempted to support a large 
measure of industrial self-government, through code authorities and their 
compliance agencies. 

It should be remembered that the National Industrial Recovery Act 
provided as a means of its enforcement Cease and Desist Orders to be 
issued by the Federpl Trade Commission, injunctions to oe issued by 
United States District Courts and criminal- actions in tnose courts. 

The other nethods used by NBA in obtainijig compliance with the 
provisions of the codes and a.greeraents, were not directly provided for 
in the Act unless they be said to have fallen witxii-i the authority de- 
lagated to the President to make rules, -^id regulations. There.'ore, with 
the exception of the rather distant analogy of- the enforcement methods 
used by the Federal Trade Commission in connection witxi the codes of 
fair competition drawn up by that body for the government of certain 
industries, the inforcement m.ethods or rather compliance . methods used 
by M.A. were originated by NHA itself. 



(*) Webster's New International Dictionar"'-. 



9839 



^'Z^ 



CKAFTi'xi II 



MS IS ii: 



When the orOf'Tam for inc'intrirl i^ej^oilption '"pc halted in May 
1935 bj'- the Schrchter decision, a major zprt of NfiA's activity vas 
being carried on under the vague heading of "Compliance", The pur- 
uose of this chapter will be to examine the National Industrial Rec- 
overy Act to discover upon what foundrtions this activity "^s based. 

It ivill be helpful, to attempt a. clciriiicaticn of the meaning 
of the term "compliance" and to limit the scope of the inquiry at 
the outset. 

Vi/ithin ITEA, at least, "compliance" vrps considered to be a broader term 
than 'enforcement". The reasTn "'as fairly obvious. vJhen the -program 
was launched, it was conceded that success would be largely dependent 
on observance uf tne ne?/ regulations by voluntary support rather than 
penal enforcement. Hence, "comiDliance" came to be regarded as inclu- 
sive of every factor which tended to harmonize the industrial activity 
of the nation with the regulations growing fro i the act. These factors 
may be briefly outlined as follows: ■ 

1, Volrditary observance, resulting from: 

a. Altruistic motives 

b. Self interest 

2. Involuntary observance, resulting from the fear of: 

a. .idverse public ODinion 

b. Lrbor troubles 

c. Loss of insignia 

d. Loss of la Dels 

e. Loss of gover'-nient business 

f. Cr-nsure by J'TC and citation thereby to 
federal courts 

g. Enforce^nent of state a^ctc in local courts 
h. Injunction, fine, or imprisor-nent under 

the IIIRA 

Some of the regulations emanating from the new statute, required 
affirmative action by members of industry; others contemplated suiner- 
visory functions by the government without designating the person or 
agency to be responsible therefor; while still others specified that 
certain violations were to De punished by well established governmen- 
tal 'jjiits. In examining the act, a weather eye mast be set for the 
three kinds of nrovisions, as they are all germane to tnis broad con- 
ception of "compliance". (*) 

(*) By "'ay of limitation. Titles II and III of the ¥IBA and section 9 
of Title 1, oealing with petroleum, '-'ill be excluded irom this consider- 
ation. 

9839 



-4- 



Section 1 of Title I declared the policy of Congress to be, pmong 
other things: 

"***to provide for the general v.elf are by promoting the cir- 
gani7^atiqn of industry for the purpose of cooperative action 
among trade grouns*** 

"***to induce and mnintain united potion of Irbor and 
management under pdeauate governmental sanctions pnc super- 
vision *** 

. "***to eliminate unfair corauetitive prpctices***" 

Such organization, supervision, and elimination contemplated affir- 
mative action by the governiaent. Here '-e find t;ie first bp-sis of com- 
pliance activity in the act . 

The President's no-er, acting throu. h the Administrator, and, later 
the National Industrial Recovery Board, to establish the Com.ijliance Di- 
vision; to arpoint, fix duties, anc compensate its iiersonnel, vas found 
in section ? (a) : 

"To effectuate the policy of t.iis title, the President is 
hereby authorized to establish such agencies, to .^copt and uti- 
lize such voluntary and unconnensated services, to appoint 
without regard to the T^rovisions of the civil service lavs,' 
such officers and emtiloyees, as he may find necessary, to pre- 
scribe their authwrities, duties and responsibilities, and 
tenure, and without regrrci to the Classification Act of 19?.3, as 
amended^ to fix the compensation oi any cificers and eraoloyees 
so appointed, " 

His very oroad -oo'-'er to delegate "any of his povers" 'to subordinate 
appointees '^as set forth in Section 2 (b): 

"The President raTT di legate any of his functions and pov;ers 
under this title to such oific<.rs, agents, anc emnlovc'es as he 
may designate or a-o-noint, and may establish an industriail 
■olanning and research agency to aid in carrying out nis functions un- 
der this title. " 

Section 3 (a) provided tue machinery foi thi. creation of voliintary 
codes. The part we are intrrested in ^"-z added as a provise; 

"The President may, a^: a condition oi his approval oi' any 
such code, impose such conditions (including reouirt-mt nts for 
the making of reports and the keeping of accounts) for the 
protection of consumers, cora'i-^etitors, employees, and others, 
and in furtherance of the public interest, -nd ma-'' provide such 
exceptions to and exemptions from the provisions oi' such codes, 
as the President, in his discretion deems necessary to effec- 
tuate the policy herein declared. " 

9839 



-5- 



Thus, in vplicipting p code, the President could reauire the a-ppli- 
cant industry to ktep books ■■ nd rocords - the hctttr to check said in- 
dustry's complipncc v^itu it/, code. It -ill dtvelor that the reference 
to other conditions ur tin.- orotection Ji "c.-niraners, corn-oetitors, 
era-Dloyees" and to exctntions nnc exe.Tntions was the basis lor much 
compliance activity tiiat wai,; to fulluvf : 

Section 3 (b"' obsignated ti.e provisions oi any approved code 
as. "the strndrrds of fair coinretit Ion" for the trace or industry con- 
cerned. Certain violations "/ere to be -mnisheo by the Federal Trade 
Comraission. Thus v;ps provided the first of four penalties to be meted 
out by pv. exictinf/; govtrnmental a-^-ency. The provision is pro-oerly class- 
ified under "enforcement". 

"After the "resident shall have approved any such code, the 
provisions of such code Siall oe the standards of fair coupetition 
for such trade or subdivision thereof. Any violation of such 
standarcs in arv transaction in or affecting interstate or for- 
eign commerce shall be cetued an unfair method of competi- 
tion in C0!'imerce ?;ithi^ the meaning of the Federal Trp.de Commis- 
sion Act, •- s amended; but nothing in this title shall be con- 
strued to impair the ■^c^'ers of the Federal Trade Comminsion 
under such Act, as amended." 

The second designation of an existing governmental agency as an 
enforcement unit was found in Suction 3 (c), wherein the district courts 
of the United State? ^'ere given jurisdiction to prevent and stop code 
violations at tae instance of the Attorney G-eneral and his assistaJits. 

Section 3 (d^ provided for th.- imposinj of a eode by the President 
where certain factors r.ppearid. As a matter of fact, this power was 
nev( r exercised. However, tue proDlems of corarliance m connection with 
an imposed code would have been the sane as those affecting tne so- 
called voluntary codes aoprovt d under Section 3 (a). 

Section 5 (e) is interesting I'ro'.a our point of vie"' because it is 
one of the V(U"/ few places in the entire act where the word "complied" 
is to be found. Briefly, it empowered the President to limit imports 
where they endangered the '':aaintenance" of any code and any group which 
had "complied" witxi its code could move him to talcu such action. 

Section 3 (f^i fixed a penalty of $ 500 a day for a code violation 
in or affecting intt.rstate commerce. As the offense wa.; made a mis- 
demeanor, it was handled by the regular law enforcing agencies of the 
federal government. This is the third instance where the responsibility 
of enforcing a code was placed on an existing agency. 

Tht: agreements with or jetween trade ;-roups, ac provided for in 
Section 4 (a) were subject to the same conditions as a voluntary code 
under Section 3 (a). It stands to reason that such agreements were not 
made to be broken. But compliance with them had to be maintained through 
other means than enforcement because viol.-tions of the agreements were 
not violations of law, as iiari been provided in trie case of codes. The 

9839 



most effective -oenalty for these violations was worked out on the theory 
of liquidPted dfimpges, thpt is to spy, parties to the agree- 
ment bound themselves to ray a stated amount if tney broke the agree- 
ment after entei;ing into it. 

Section 4 (b) gave the President the povrer to license business 
enterurises to make a code effective. 'lis regulations ''ere to be final 
and a s--evere penalty wps specified for carrying on a business subject 
to license without having first irrocurec one. There vas ample founda- 
tion in this subsection for eifective compliance activity, but; fortune- 
ately or unfortunately, it expired on June 16, 1934 "dthout hhving been 
exercised. 

Section 5 exempted actions in compliance with a code from the re- 
quirements of the anti-trust laws and provided further that no code should 
operate to prevent anyone from selling or trading txie product of his manual 
labor or his farm. 

Section 6 gave the President the rigat to ascertain pertinent facts of 
a trade group before a^provin.^; its code. He '"as authorized tj lav down 
rules by v;hich the representative ctiaracter of tue arrolicarts was to be 
established and to have the Fcdtral Trace commission make an investigation 
where such information was not readil"' forthcoming. 

Section 7 (") contained tue '"ell knovrn "cellective bargaining" clause. 
Compliance with its provision ^"fs a jumbled up afiair when the act went 
into operation because no one was; saddled vjith the res-oonsibility of en- 
forcing it. A group within FRA. assumed this responsibility out soon found 
it necessarv to turn the problem over to a special "rational Labor Board". 
The National Labor Relations 3oard w^-s an outgrowth of the organization 
and was set up entirely independent of ITEA. The collective bar 'aining 
clauses, of course, fell with the codes in ,-'iay, but the technioue that had 
been developed in the pioneering, stages, was taken over by the ¥.■ tional Labor 
Relations Board when it assumed the res'oonsibility of guidin.; tne destinies 
of the nev7 Wagner Labor Act, which is substa-.tinlly ti:e same as old Section 
7 (a) of the NIRA. 

Section 7 (b) directed the Fresicent to encourage, e.aployers and em- 
ployees to enter into voluntary agreements for collective bargaining and 
provided that when he had approved such agreements, t.iey should have the 
same effect as a code ap-oroved under Section 5 (p\ 

Section 7 (c' authorized the. President to "'.rencribe" a liHiited code 
of labor provisions n-here nis "investigation" had revealed that such a code 
would effectuate the policy of the act. The efforts for compliance as 
well as the penalties for violations of such li lited labor codes were to 
be the same as tnose -rovided for regular codes approved unde.- Section 3 
(a) of the act. 

Section 7 (d) defined "^-)erson", "interst- te"_, and "foreign" commerce 
for purposes cf jurisdiction. 

Section b atteaipted to clarifv the apparent overlap of the NIRA and 
tne AAA. It lorovided that the President could delegate any oi his po'^ers 

9839 



-7- 



■undfcr the former to the Si-^cretnry of Agriculture, v'here a code for an 
agticulturel coinmoditv was conct rnt. c. 

Section 9 concerned r,otrol,eu:n. As if was aoministered bv an in- 
dependent agency, it '•'ill not bfc considered here* 

Section 10 is rrob^bly the 'nost imirortr'nt of all as far .is com- 
pliance is concerned. 

Subsection (a) authorised the President to prescribe such rules 
and regulrtions as might be necessary to carry out the TDurposes of the 
title. He was r-lso e.rrcowered to set fees for licenses and for filing 
codes and agreements. As the licensing po'-ver i^as never exercised, no fees 
were ever collected on this score, and the rolicy of collecting a fee 
for filing a code was never adopted. The punishment for violating any 
such Dresidential mile or regulation was a fine, not to exceed $500 or 
imorison.aent to exceed six months, or bcth. As a criminal offense against 
the federal government was concerned here, violations were handled in 
the usual way by t..e federal courts. This is the fourth and final 
instance of enforcement by an existing federal agency. 

Subsection (b) made it mandatory that the follo'-ing provision be 
included in every a^vreement, code or license which w?s approved, pre- 
scrioed, or issued under tnis title. 

"The Fresicent may from time to time cancel or modify any order, 
approval, license, rule, or regulation issued under this title," 

Many administrative actions concerning compliance were founded on 
this provision. 

Our examination o:. tne f.tatute reveals four instances Fhere enforce- 
ment PC'e^'s were delegated to existing agencists. . They are: 

(1) Code violations in interst--tt commerce were also de- 
clared to be unfair methods of competition in commerce, 
within the meaning of the federal Trade Co-nraission Act, 

. ana subject to the usual cease and desist orders. In 
practice, however, the Federal Trade Commission did not 
movo against a violator unless NEA requested such ac- 
tion, 

(2) The Attorney General "fas cnarged T"ith the duty oi di- 
recting the District Attorneys to prevent and restrain 
code violations in the District Courts of the United 
States. 

(3) Code violations in transactions in or affecting in- 
terstate co;nmerce were made misdemeanors, subject to 
a fine of $500, As such, it was contemplated they 
would De routed tnroU(.;h tht- la?' enforcement channels 
of thL government which handle other federal mis- 
demeanors. 



9839 



(4) Violations of presidential rules and regulations "shall 
be punishable" by fine o.f not more tnan 3500, or impris- 
onment for not longer tnan six montns or Doth, These 
penalties were also to be handled by the law enforcing 
officers of _,tiie government in tne federal criminal 
courts. 

The bcci:i for coimjliance activities otner than enforcement is 
harder and. more elusive to track down, l/^e finr many direct and in- 
direct references to them x'vithout a direct designation of their ad- 
ministration to anyone. Their administration had to be executed ov some- 
one, however, and as a result "^e find such units as tne Compliancy 
Division;, the National Industrial Appeals Board; the Compliance 
Councils, and the regional and state .organizations. If these units 
are traced back to their leir:?l origins through administrative and 
executive orders, one invariauly corae.s out at Section 2 wnich gave 
the President" the power to delegate apy of his functions to such agencies 
as he found it necessarv to e.staolish to effectuate the policy of the 
act. . ■ 

The actions of those units, that is to sa,y, orcf.rs withdrawing in- 
signia, labels, and government contracts; orders approving amendments, 
exemptions, interpretations, code authorities, and assessments can onlv 
be traced to Section 10, therein th.e Fresjioent was authorized to pre- 
scribe- such rules and re.'-ulations ai- were necessary to carry out the 
purposes of the title. 

Excluding the enforcement activities vrhich have been treated above, 
we are led to the inescapable conclusion tnat tne raa,in ba^sis for compli- 
ance appears in Sections 2 and 10 of the act. 



9839 



-9- 

CHAPT3R II I 
PH03LE1.IS CI 3CI.;?LIMa 



A. GZH5Z&L SCCPS -VrlD i:!\::"U13 OF OOi.ip-^JAgJE TASK 

1, i.iET_r:D CF EXA,.INATI':K 

Tlic 2,.noral scope end nature of the compliance task is 
"best rcaliz-d after brief consideration, first of the field of 
activity which t!ic National Industrial Recovery Act sought to 
hrinj within its scope, second of the typus of enforcement dif- 
ficulties inherent in the code sustems as a whole rather than in 
the individual regulatory provisions of the Codes. 

S-;fore considering these questions, it must he stressed that 
a vast number of interrelated and interlocking psychological 
and -ocial conditions should riglitly he considered in the course 
of sn attempt to evaluate the general scope and nature of any 
comiliancc task. 

It is not possible \7ithin this report to deal with all of 
the motivating causes which made for or against compliance. 
Suffice it to state that a thorougli understanding of compliance 
problems necessitates an intimate knowledge of behavioristic 
principles, since compliance is a state resulting from human 
action. . 



2. 



SPECIAL FACTOHS AFFECTING IIEA COI'APLIMCE 



In tae special compliance field of HHA, preliminary attention 
must be addressed to two fundamental phases of the Act - policy 
and enforcement powers cr lack of enforcement powers, as both 
effected the extent of LHA activity. 

(a) Enforcement Powers. 

Tlie question of the extent of the enforcement powers accorded 
by the Act is a subject to be more fully discussed under the 
heading of 'Powers Limitations'. At this point it is only necessary 
to cell attention tq the fact that the violation of a Code provision 
in a transaction in or affecting interstate commerce was declared 
a misdemeanor and that the district courts were empowered to enjoin 
code violatins (by suppostion but not so-stated expressly this 
power was limited to tra,nsactions in or affecting interstate com- 
merce) •— ' also under certain conditions the President was given 
power to license businesses in or affecting interstate commerce. 
Furthermore, Section 10 (a) of the Act authorized the President to 
prescribe rules and regulations necessary to effectuate the pur- 
pose of Title I of the Act, 1ihe violation of suoh being punishable 
also as misdemeanors. 



0839 







-10- 

The Act containod no provisions relating to c-"T;iliance macliinui-S'- 
r to e,u:dliary enforcoment aids — such as the subpoena power. 



It sh,:uld he remembered in the attempt to measure the legal 
worth of t .0 enforcement powers accorded NHA. that Ihe federal 
government possesses only restricted enumerated pOT/crs. Therefore, 
it may he sa,id with reference to a particular transaction that the 
constituti:.nal validity or final test of enf orceahility depended 
first :n the validity of the formation jf the Code governing tae 
operation to he controlled, secondly on how far such Code could 
be said to apply within constitutional limits to the particiilar tran- 
saction c,t hand, and thirdly, v/hether the provisions were or iver., 
not in themselves arbitrary. On ^-iay 37, 1935, the first two questions 
were answered by the higb.est c:urt in thu land, when it decided first, 
that the Cales were not validly formulated as, among other reasons, 
the policy declarations in Title I, Section I .were so sweeping in 
naturo as to delegate legislative discretion prohibited save to 
Congress and second, that the application of the regulatory provisions 
of Codes even validly formulated was necessarily restricted to 
transactions in or directly af f ecting .enterstate commerce. 
Witn this decision compliance came to an end and with it coll'^psed 
the theory held by the government that since virtually all trpjis- 
actions couae within the commerce clause of file Constitution the 
applicator;/ scope of Codes otherv7ise valed was unlimited. 

Tlic decision is of interest for the purposes of t/iis rep-.rt 
only from the viewpoint of its anticipated effect on comopliance — — 
that is^o of its predictability by the public and by the legal pro- 
fession. Thus measured, it cleai'ly appears that the task of comp- 
liance becai'ne increasingly difficult with the lapse of time. Lit- 
igation fi,^xires do not properly reflect the correct import of the 
decisions since the effect on litigation of newspaper publicity 
and of other imponderable factors of growing im"Dortance with the 
passage of time require equal if not primary consideration. With 
the lihchood of a Supreme Court prcDUOuncment becoming stronger the 
feeling of resistance to compliance grev;, since it was felt that 
a possiole or probable adverse opinion' would soon result, that the 
uncertainty was about to be resolved, that refusal to comply would 
not entail a long and costly legol battle. 

Yet it V7ould be an error to suppose that compliance was pov/er— 
less to effectuate its desired ends because of insufficient legal 
sanction. ]?ev/ cases were broUi^Lit to the District or State Courts 
in the earlier stages of compliance activities, (it will be so^n 
later that the result of this policy was disastrous particularly 
in its influence on public opinion. Very fev; were appealed to 
higher c.urts and not until the end ca^ne was the "oosition of the 
highest court clearly revealed. 



-11- 

UnCui-tainty as to the final outcome of governmuntal litigation 
and t.io expense attendant on coiirt proceedings wore two of the 
most potent weapons at tiic disposal of compliance. An attempt will 
be me-de later to trace tho ^'omev;hnt erratic course of public opinion 
in relaticn to ITRA enforcerajnt activities and to follow some .of the 
results of non-compliance on compli:-nce. 

(b) Policy 

G?urning to tne question of policy, the extreme paucity of 
standardized and particularized legislative, as distinguished 
from adiiiinistrative policy is apparent after, perusual of the ^olicy 
declaration contained in Section 1, Title I of txie Act. This reads 
in -;3.rt that it is the "policy of Congress to remoTze obstruction 
from the free flow of interstate and foreign commerce which tend 
to diminish the amount thereof; and to provide for the general wel- 
fare by promoting the organization of industry for the purpose of 
eooporativs action among trade groups, to induce and maintain "united 
action of tabor and nanagement under adequate governmental sanctions 
and supervision, to eliminate unfair competitive practices, to pro- 
mote the fullest possible utilitization of the -present productive 
capacity of industries, to avoid undue restriction of production 
(except r?,E ma.y be temporarily required), to increase the consump- 
tion of industrial and agricultural products by increasing purchasing 
power, tc reduce and relieve unemployment, to improve standards of 
labor, ajid otherwise to rehabilitate industry and to conserve 
natural resources." 

•'■t mould seem at first glance, at least, that rehabilitation 
or recovery ( and not necessarily reform ) is the avowed aim of the 
Act. Cf cou-rse, the sanctions imposed to effectuate recovery migiit 
at tie some time accom/iish reform. It would appear that the relief 
of unemployraent and the improvement of labor standards are conceived 
of primcirily as a, means cf rehabilitating industrj'' since the phrase 
"and otherwise to rehabilitate industry and to conserve natural 
resources"' is used directly in connection with these two more 
specific cf the purposes which the Act denotes as expressive of its 
policy. Closer jo"bserTatioTBmay indicate that this surmise is not 
entirely correct as the Act was entitled "an Act to encourage 
j.,lTati:nal Industrial Hecovery, to foster fair competition, and to 
provide for' t'-ic construction of certain useful pablic works, and 
for other purposes," It may be stated, however, that the paramount 
motive wj,s the realization of industrial recovery, and that the 
accoraplisliment of this realization was to be reacned through compl- 
iance wif.i regulations which .are commonly considered to be of a 
reformatory nature. 

How f<?.r reform legislation can or should be divorced from leg- 
islation destined to succor the economic ills off" capitalism , ^nhether*- 
the t\TO are or are not coincidcntrJ.ly parallel, and if not, whether 
the gop2 of reform, as such, should have b.jen preferred to that of 
recovery uare uJ.terior questions which lie apart from the subject 
under consideration. 

9839 



-13- 

Thc gaestion .of whether rcojalatinns of the National "llccovery 
Administration conform to pclicios expressed in tlio Act is also 
without t:.:j scope of tnis report. 

Tlic legislative policy expressed was v/orth little or nothing 
to compliajice as, a necessary guide or standard. Because it wps so 
vagiae, it hccame imperative for administrative or semi-legislr; tive 
policy ( it was precisely to this aspect of the system that trie 
SuproiVie Court objected) to redeter)nine the width in scope and, tlja 
extent of ^tlie regulatory measures enacted under the 3tc.,tute. 3eing 
delegated the pov;er to forimilabe refiulaticns or legislative policies 
of almost unlimited variety, aiainistrative policy decided (with 
possibly one exception) tha„t the regulatory measures to "be made effect- 
ive shoilld operate to include and affect in detail virtually the iivliole 
cf Anerican industry and trade as distinguisli ed from agriculture. 

3. SCOPE OF APPLICATION OF 1J3A REGULATOHY IvEA>?Ul^"]3. 

Hajilcing in population after China, India and the Soviet Union 
and in size fifth among nations, with over 120,000,000 persons scat- 
tered througiiout its territory, 70 per cent of whom live to the east 
of tiie Mississippi, the United States enjoys a value, production 
quantity pzid variety of industry not exceeded by any of the world' s 
nations. 

GTae most cursory examination of the size and extent of industrial 
life in this country must give the imagination pause, particularly 
v/hen considered in relation to the regulation of industrial activities 
undertook: on on any expanded scale. 

In its compilation oi" manufacturing industries, it has been 
estimated by the Bureau of Census th.-it in June 1933, th^.re were in 
such industries 6,055,736 wage earners, 80.3,473 salaried employees, 
141,766 est a.blisliments; that wages paid amounted to $5,251,576,029, 
and the salaries paid totaled $1,356,532,770.5 that cost of materials, 
containers and purchased electric energy equaled $16,748,438,977. and 
value of products $31,358,840,392.; further that the value add.,d by 
manufacture was represented by the figure $14,610,401 ,^'15. (* 



(*) Vihile noting these figures it is to be remembered that the Bureau 
of the Census did not classify industries in the same manner as did 
NRA, th't cstablisliments reporting the value of their products as 
less th^n $5000, were not included in the tabulation, that salaried 
corporation and central administrative officers are omitted in the 
survej'', that duplication in 'the figures covering cost of materials 
and products is inevitable since the product in one industry may 
constitute the materials of another, that certain industries, incl- 
uding coffee roasting, spice grinding and nut processing are not 
presented in the final list. 



9839 



Tlijsc ii3,urcs, indicativa of industrial manufacturing, fail to 
revoal the extent of the service industries and the distributing 
trades vriich the National Becovcry Administration also souj^it to 
resudate. 

Viewed from the sta^i.d ocint ri geographical area, the Act was 
effective not only in the Unit-.d States ornoer but also in the ter- 
ritories of Alaska and Hawaii o.s well as in Porto Rico. The langaage 
of tae Act was broad enougli to include other insular possessions of 
the United Statos with the exception of the Phillippine Islands although 
regulaticn? v;ere not proposed for tne former. In terrirorial mileage 
thoreior^j MA enactments embraced over three millions of square miles, 

Sach an extended field of activity serves to point the formidable 
natui'o of the task from the social viewpoint. Tlie foreign elemaat 
in the larger cities, negro labor in the South, the Oriental population 
in Havraii, orgtinized and unorganized workers, handicapped and debilitated 
work>'rs, endless varieties of custom, tradition and conflicting interests 
resistive of innovation and collective social action, individual notions 
as to the f^,irness and desirability in general or under special circ"uiT>» 
stsjices of certain practices now regulated for the first tim.e, the div- 
ersity 0'2 conditions influencing the supply and demand of goods or labor, 
unite with a variant ebb and flow to create of compliance administra-tion 
a problem of ever shifting and- interlocking relative values. 

4. DIPFICULTIS? IITGEIIEKT IN C0R?3LATED CC:;iPLIANCS 

(a) L'.bor FwjvisiiDns pjid Trade Provisions 

E:e great mass of NRA labor re.gulations presented a comparatively 
more homogenous, closely icnit and non-varying structure than did the 
body of trade practices. Many of the latter were entirely new and for- 
eign to tho- l^-'^-' 3-^^'- 'to the public, and due to inherent complexities of 
scope and standard, they exiiioited a? a whole a hetrogeneous structure 
which oould only from a compliance standpoint, be compared unfavorably 
with the associated labor standards. jTurtnermore, the casual observer 
who comprres the two ty]P'es of NHA regulation will perceive that comp- 
liance mtist encoixnter more serious dif fie j.1 tics of proof when dealing 
with trade psractices the^n when confronting labor standards. 

The average business nan recognizes that the regulation of labor 
conditions and the supervision of the rights of other humaji beings 
are fit "subjects for governmental enterprise. But such requirements 
as sellin^;^ st fixed prices, open price filing, registration with code 
authorities, ;oaymci-its of assessments, sales above cost, restricted re- 
bates and discoxonts, totally apart from the question of economic des- 
irability, S.VO widely, although perhaps not rightly, considered in vary* 
ing degrees to be infringements of personal riglits and property ri&its. 
Again, when scrutinizing certain trade practices of major significaxice, 
such, as those dealing with price, it is conceded at once that the cons- 
umer or buyer reaps what appears to be a direct or immediate advantage 
if he is su.ccessf"'al in procuring the prohibited sale below cost or below 
recorded price list. 

D839 



■L'i- 



Various degraded later conditions may rusult also in quotation of 
lov/cr prices but the connection is not so visible to the customer. 

Al t-icut^l". lalaor conditions ar,- capable of affecting the margin of 
available profit and hence sales prices, such an effect is not so ap- 
parent to t~:e buyer as is the proximate action of the seller, who of 
his ovm direct initiative, decides to sell below cost, below recorded 
prices or below fixed prices. The buyer, who thus beholds such potential 
immediate advantage accruing to himself, la only too often, in his 
desire to so"'-icit low prices, placed in the position of accom-'oiicc to 
the seller. On the other hand, established la,bor standards not only 
operate to establish fair standard'-' of competition ainong members of 
industry, but accord also pr^^cious personal benefits to an enormous class 
and fail to subtract directly from .the efforts of the buyer to acquire 
goods at reduced levels. 

Further, soles b^low an established price limit do not enlist 
th.at degree of sympathy towards those of the induatry suffering there- 
from ,as is manifested towards employees rega.rded as exploited and 
victimized, j^gain, it may be said that it is easier to obtain evidence 
of most Irbor violations than of most types of tra,dc practice violations. 
It is apparent that the employee enjoys closer personal contact with 
his employer than does one member of the industry with another and thus 
is better enabled to present clearer testimony of violations of labor 
standards th'pn is a member of the industry to offer evidence against 
another of trade practice violation. 

■jlien considering trade practice regulations as a group by itself, 
division is to be effect-jd between those: 

1. VHiich prohibit practices to b^ describ.^d as evil in them- 
selves, or as malum in se, the prohibition of which may have 
been approved by judicial sanction. (These are the more easily 
enforceable. 

2. T/iiich are made unlawful only because prohibited by the codes 
and which introduce the new legal concepts for the first time. 

The degree of enforceability of the latter (such as provisions 
dealin;:^ witi trade-ins, accounting methods, capacity control schemes, 
cash discounts, customer classifications) although in general low, 
varies with the type under consideration. 3o for example, price fixing 
provisions arc not as easily put into execution as those dealing with 
open price schedules, largely because of the difficulty of setting ad— 
equo.te prices to meet the circurastances and because of the attendant 
difficulty of prohibiting sales below the established price which may, 
nevertheless, yield a profit to the individual seller. Again, provisions 
forbidding secret rebates or discounts are probable more difficult to 
enforce than open price filing requirements as violations of the former 
rules do not lend themselves to facile detection. 



9839 



-15- 

Cnce aoro it must be repeated tli-.t tlie practicability of securing 
passage ox' lalicr legislation v/ifuout trade practice legislation is not 
under consideration, a:-; is not tlie cconcinic desirability of either. 
Of 0:11^-30 it is truu tii;.t aadiructl.y the economically undesirable 
gradually becomes increasingly diificult to enforce. It should also be 
pointed o"at that thu inclufian of trad^. vr-:ctice provisions may strong- 
ly a?sist labor compliance activities granted that the former are 
themselves eni'orceable. N2A autl.orities in Louisiana in communicating 
their views -m this matter state: 

"The most difficult provisions to enforce, naturally 
es'Q those trade practice provisions v/hich had to do 
with price fixing and cost determination. V/e do not 
believe, tailing the situation by and large, that price 
fixing as such is practical and price cutting below 
the determined cost should be regidly and strictly 
enforced and adliered to in the future development and 
(iirnges of codes. Very few, if any, of the codes give 
a simple, practical method of cost determina.tion which 
can be followed and adopted by the smallest of ind- 
ustries, operated by the more ignorant tyge of empl- 
oyers, *fncn such method of cost determination is dev- 
eloped aiid iTE,de a part of the codes, we believe prices 
below that cost, or below filed prices, can and siiould 
be punished or prevented. 

'.Te have noticed considerable agitation in newspapers 
of recent date, to tne effect that trade practice 
provisio.ns of this sort are to be eliminated. 'He are 
frrnic to say that if such should be the case, we believe 
th.ere would result vvholesale violations of the labor 
provisions, which v;ould require a police force of pro- 
hibition days to detect. It is our belief that indus- 
try , insofar as it is made up of smaller local links, 
as contra,sted with the v^ry large national concerns, 
will not talce kindly' to a code system which says to 
them 'You siiall pay your labor so nuich and wort them 
not more than so ms.ny hours, or suffer criminal pro- 
ceedings for your violations' v.hen, at the same time, 
the govei'nmint says to those members of industries, 
''.To will give you no protection whatsoever on cut- 
throat price cutting or other unfair business methods 
of your com^jetitors. ' To our minds, the adoption of 
only labor provisions is to place purely local concerns 
e.t the absolute mercy of those strongly capitalized 
or fincjiced concerns, whicn dea,l nationally, or at 
least state v/ide, in that these la, rger and better 
financed concerns can operate at a loss, so far as 
cost is concerned, indefinitely and, at the saiae time, 
live up to the wage and hour provisions of tne codes; 
the poorer finacned companies, however, will be utterly 
unable to meet such com'Outition and pay code wages or 
work code noiirs. 



9839 



-15- 



Thoy v/ill oo left, therefore, with the r:^co^arst; of going 
out of husiness or taking a chance on being prosecuted in 
the criminal courts of the United States. Nor is it any 
ansv/er to my. mind that tliosa trade pra.ctice provisions will 
be turned over to .the members of the industry themselves, 
on the theory thpt they are rich enoUj^i to supply tne money 
to secixre code enforcement. Litigation is expensive and, 
if the expense of such litigation is thrown on smr.ll ind- 
ustries, or the weriker financed ones, such provisions v/ill 
afford no .relief whatsoever."' 

In connection \7ith the statement above ouotel, it should be borne 
in mind that cancellation or abstractin of trade practice would have 
a more serioixs effect on labor standards than if the former had never 
be.jn enacted — firstly, because those apparently beriefitting by the 
provisions would be inclined to resent their abro,j:ution particularly 
if the labor stfoidards were at the same time left intf.'.ct. 

Stc.temonts such a s these, if accepted, throw no li^it on the en- 
forceability of sale at cost and similar regulations but ber>r rather 
on the question of separate enforceability of the labor provisos. Ex- 
cluding legal considerations, a variety of circumstances, among them, 
time Ox enactment and niBJiner of enactment (for example, necessity for 
inclusion of certain trade practices because of bargaining procedure 
adooted in code formulation) may obscure the fundemental question of 
whether the labor standards themselves could or could not be properly 
maintained, xiitli or without the addition of trade practices. 

Conceding the existence of these problems, there is, nevertheless, 
reason to believe successful compliance with appropriate labor stand- 
ards could orobablj'' be assured, even tnoUtf,ii such standards remain un— 
accom:panied by trade practice rules. 

As an indica.tion of the potentialities of such a program, when 
completed and in tie shape of regulatory enactment, attention is dir- 
ected to the President's Eeemployment Agreement entered into pursuant 
to tile terms of Section 4 (a) of the llational Recovery Act. It is sub- 
mitted thrt both experience and logic show the Agreement when compared 
to the Codes constituted a superior complisjice weapon. Tliis is true, 
because vrith certain exceptions it was comparatively simple and un- 
complicated in scope and expression and did not introduce the large 
mass of novel material later introduced by the NRA regulations; second- 
ly, because it enjoyed the immense advantage of initial public support; 
thirdly, beccuse it was probable legally enforceable as was not the 
case v/ifci the codes. 

It lias been pointed out that public support accorded much sanction 
to the Agreement, It does not lie within the scope of this report to 
outline the history of either the Reemployment Drive or the Seemploy- 
ment Agreement. In terms of public opinion, the two succeeded because 
of the intense desire,, due to economic stress, of the people for a 



9839 



-17- 



Cha.n;;G fro.a the govcrnraental policy of laissez fairc, "because it 
was felt tli:\t the employment situation was rapidly 'beCGraing a 
menace and that positive curntive mea-juraa inast bo undertaken, 
because of tie President' £■ iiiimense 'popularity, because of the feel- 
ing' -thai - mass measui'o3 should be adopted to combat in a mass 
ma,nncr a national problem. Cvorwhelmin,^ ontuusiasm of public senti- 
ment, combined wita fear of popial;.r criticism and, sincerity of 
belief to persuade 2,317,838 establishment?, (*) to sabject thera- 
s^ilvos by signature to the obligations entailed by the Presidatit' s 
Reemployrri^nt Agreement. Tliese establishments employing over four- 
teen million, seven hundred thousand employees agreed, therefore, to 
forswear ciiild labor, put into effect minimum wages and maximum 
hours and in the majority of cases, to keep wages constant not- 
with&tandinj;^ the reduction of hours. Approaching the question of the 
anfor ceabilit5'' of the Agreement, it must be remembered that the 
Eeeraplopnent Agreement was not the ultimate end of the mapped pro- 
gram. The Agreement itself constituted a stop gap pending-; the tims 
that a code for the particular industry should be approved. Further, 
approval of submission of a Code by the Gtovernment operated to allow 
the industry to conforiii to the provisions of the President' s Re - 
employment A.'sreement as modified by the provisions submitted and 
8,pprovod. Many ox these ;nodif ications indicate a necessary con- 
cession to the principle of non-radical departure from established 
usage. 

As already stated, approval of the Code as dl stinguished from 
approval of submission of the Code terminated the contractual ag- 
reement. The Agreement itself was to expire on December 31, 1933. 
At t--.at time, by executive order, continued display of the Blue 
Bi.gle insigiiia was proclaim-od to indicate acceptance of the offer 
to extend the Agreement for a renewed period. 

Tlae statement has already been made that the trade practice 
provisions of NHA proved more difficult to enforce than did they 
labor provisions. It W",s intimated tiiat one of the advantages of 
the President* s ..Reemployment Agreement,! rom the compliance stand- 
point, T/as the fact that it deadt in the main with generalized 
labor stand8.rds. With the exceptioH.- of tile two paragraphs dealing 
respectively with anti-prof iteeriAg and cooperation (also with 
sellin^ price adjustments in c6::3nection with contracts entered 
into prior to the signature of the Agreement), the Agreement 
was restricted to the esta.blishment of labor standards as dist- 
in,2uislied from trade practice standards. Eliminating the provi- 
sions outlawing child labor 'and requiring equitable readjustment, 
the la.bor standards tecognized only two ca.tegories of workers 
^y type of work performed. Exceptions to the standards, other- 
wise .?,pplicatory,only affected the hours in certain small estab- 
lishments, certain professional occupations, managers and execu- 
tives receiving started wages, emergency maintenance and repair 



(*) These figures indicate the number of signatories of the Reemploy- 
ment ..^reement. They do not properly reflect the number of establish- 
ments beyond by the a.greement, since a head establishment raiglit or migixt 
not sign fcr its branches. 



•>839 



-18- 



wo 



rkers and special process workers. 



Sucli trade practice provisiuns as were fcm'bodied in paragraphs 
9 and 10 may be virtually ignored as they were so vague as to he non- 
administrahle. Paragraph 9 reads: 



"Not to increase the price of any merchandise sold after 
the date hereof over the pried of July 1, 1933, by more 
than is made necessary by actual increases in production, 
replacement, or invoice eosts of merchandise or by taxes 
or other costs resultine: from the action taken pursuant i . ■ 
to the Agricultural Adjugtra:;nt Act, since July 1, 1933, 
and in setting such 2orice increa.ses, to give full weight 
to pi-obable increases in sales volume and to refrain from 
tairing profiteering advantages of the consuming public." 

Paragraph 10 reads: 

"To support and patronize establishments which also have 
signed tliis Agreement." 

These paragraphs tj'pify to an extreme degree the enforcement 
difficulties presented by many other ;.IEA trade practice regialations 
as coiincxed to labor reg^olations. Paragraph 9 reveals its own 
limitations, TJith regard to paragraph 10, the proposition may be 
advgnccd that an obligation which depends on the wishes, calcu- 
lations and inter-pretations of the individual, without clarification 
by stsjidard, is no obligation. In the law of contracts a promise 
which depends on the wish or caprice 'of the promisor is illusory and 
cannot serve even as consideration - let alone as an enforceable 
promise. It nay be urged that the force of moral suasion or of public 
opinion through the removal of the Blue Sagle from establishments 
held to have violated the President' s Reemployment Agreement was dem- 
onstrated in the earlier days of the program to be a most powerful 
means of securing compliance witii the boycott policy "deal only with 
others under the Blue Eagle" — i.e., the official version of the 
obligation imposed by paragraph IQ of- the Agreement. Questionable 
in the eztreme, however, ( as shown, later) is the compliance worth 
of a regulation which depends entirely for enforcement on fortuitous 
vocr.tion of public opinion, a force, which tremendously pov/erful as 
it may be, ir not satisfactory implement to use in the application of 
a law or enforcement of a legal obligation, both of v.'hich necessitate. 
a higli precision of standards. 



9839 



-19- 

From the standpoint of euf orce;:'bilit:.-, and, enforceability must te 
understood to mean f^'overrirnental enfoi'ceability, paraf^raphs 9 and 10 
were not enforceable becauie of irnpracticalit.v of factual determina- 
tion and impossibility of ;-.pplyin,.-: reasonably definite ^standards, 
although removal of insir.'nia rxiid the attendant milita.nt recruiting of 
public opinion to sustain a -jtrjined and unsujyportable version of para- 
graph 10, (whicn version v/,':s necess,-\ril;- prO'nul;~;\ted in order to 
establish some sort of stanaard oth rwise 1 Gkinf.;.';) was a temporarily 
effective anri dra;natic laethod of calling for public support of the 
pledge as so intei'preted. 

Thsre is reason to suppose that this provision vrauld not have 
been enforceable had it meant "De; 1 only with others 'under the Blue 
Ea"le' ", which v'a_s the official explanation mr de of the pledge. In 
its actuc.l shape it presented such a complete lack of standard as to 
be actually worthless for all p\u-poses except moral suasion, a fact 
vhich those who drafted the provision undoubtedly realized. 

It '-'as undoubtedly the concept of ITRA to obtain compliance even 
with the Reemploy ient Agreement's more enforceable provisions through 
the sole sanction of public opinion. As, will be shoi-n under another 
heading, there are many reasons for believii:ig that this was a major 
error of iiolicy. (*) 

(b) Lnbor Provisions 

Turning to the question, of inherent enforceability of the more ' 
than 20,000 trade practice rnd labor regulations introduced by the 
Cones, the variety and complexity of the same im^nediately strike the 
attention as inherent enforceability cannot but be affected by diffus- 
ing compliance activities along a greate- or lesser nui'iber of directio- 
nal lines. 

At first glance it • ould appear that tne Code labor standards 
were comparatively simple and standardized as the bulk of them deal 
with minim-am wages, Vv'ages above the minimum and raa.xinium hours. Closer 
examination, howev-r, reveals the f-und.amental structural intricacy of 
these standards. 

With respect to wages it may be said - 
In the y/ords of the Brookings Report: 

"There is complexity, lack of coordination, and 
conflict growing out of plural m.inima, some so- 
called mini-uim rates that are in no accepted 
sense of tiie term minimum v/ages, several t^rpes 
of , divergently stated subminimal rates, astonishing 
spreads of the minimal rfjtes within groups of re- 
lates industries, varying struct\u-es in competing 

industries and all these in a m[ultiplicity of 

detail and ch' less variety of co~.bination." 

(*) The information furnished, in this remainder of this section has 
been obtained largely from the reports of Research and Planning 
Division of ICIA. and from the Brookings Institution Reports on IJRA. 

9839 



-20- 

Ad': roxim,- tely one-half of the codes provide r.qininiLi v!H{^e niff rentials 
but four-fifths of all employees are subject to these same coues. 

Variety of coiTibination is evidenced by such a v/ide dispai'ity as 
12i(^ fm hour for voikers undex- the Code for iTeedle Xlorl: in Forto Rico, 
14<# an hour for certain southern workers unr.er the Lrmidry Code (^-ith 
tolerances on this amount) , 70^^ an hour and 60(^ an ho\u' respectively 
for unskilled workers oper:;tti:i,7 und-.;r the Wreckin.: ai.d Salvage and 
Household Storaf^e Codes. 

Variation by ;:;eogra]'Iiical area is v -ry common as is variation 
accorcin;"; to the populrtion of the tovra in whica the w02-k is undertaken. 
These tivo types of variation are frequently combined so that there are 
many ^^radations or steps in the mininu'i war;f-: rate payable to the saiae 
class of workers. Also, superimposed, there is much variation of wage 
by class of work, particularly between clerical and production vrorkers. 
Furthermore, there are many exceptions to the catej-rories and sub- 
categories established. A f;reat number of different occupations are 
exempted under the several coc'es. Sem.i-standardized are the exceptions 
for learners and apprentices, the old and the handicapped, office boys, 
j-uniors, messengers, but even here the degree of standardization is 
slight and the cod wage provisions themselves, oscillate beti^^een 
number limitations, and pei'iod of learning. There are numerous ti.ne 
differentials which ref -r the minimui'ii \7age to the war-'es prevailing on 
an antecedent base date witji the further provisions that, in no event, 
is less to be paid than a specified rate. 

It, therefore, appears that there -'re minima possessing different- 
ials as well as v;idely differentiated minima. (*) 

Other common wage clauses of a special nature inclvide rules that 
the mini morn rate must be paid irrespective of m.ethoi-1 of payme .t, that 
more strii.gent lavi/s hold, that employees shall not be r^iclassified or 
jobs be reclassified to evade code provisions, that there shall be no 
wage differential on the same t^/pe of work, that wag'^ payments must 
be made in certain specified v/ays or at certain designated times, that 
home I'ork is to be regulated or jjrohiuited. Prom the standpoint of 
enforceability some are easy to maintain, others, such as those dealing 
with reclassifications and "i th regulation rather than prohibition of 
home work present difficiilt administrative problems. 

Concerning the question of wages above th^ minimun, the Brookings 
Institution in its report on NHA writes, — "The variety is so great 
and the minor shadings so subtle and at times so cryptic, as to almost 
defy classification and generalized description." Detniled v/age 
schedtiles appear in a few codes such as the Graphic Arts, Te.-:tile 

(*) Several detailed studies have been completed by the former 

I^esearch and Planning Division of HHA \/hich present in an ana- 
lytical manner statistical data shov'ing such fi(..;ures as average 
wage rates by Industrial category as Vi'ell as differentials of • x- 
various groups and weighted averages consicered in relation to 
the number of coties and to the mimber of emiployees affected. 
In addition numerous charts have be-^n dra^/n v/hich joicture gra- 
phically the complex nature of these provisions. 

9839 



kpvnxel and Anrajement Coi'es. The ConGtinicticn Cor'., provided, for later 
regional collective 'uarjaining ei-"^ctin, , the ni-'^hor vage scales. Other 
codes maintain th.j v/eekl;- wa^\e scale rticiier alon-: with additional 
safegxiards such tu- di.rTerouti",! continuance, or i'dt;iout such safefOLards; 
partially maintain tho for-'ec v.';ekly eai'nin.-;s, .■^-•intain differentials 
either with the mini.'ium or Kith tiie wa^^es above tne minimum; maintain 
only equitable or fail- diffei-'Citials; pr'^scrioe enuitable adjustments 
upwards in accord ■.ince v>;i tl': p,'ira.;:'"ph 7 o:' the ?.er-m,.lo;/ment Agreement 
and its interpretations; prescribe equitable adjustment together with 
no reduction of hourl-' rates; indicate simply that it is the policy 
of the industry to adjust or that adjustment be effected to the extent 
practical; provide for r^^ports concernin-; action taken v;ith relation to 
the vafjes above the rainiim.i.m; maintain entire^' silence on the subject 
of wa,:,es above the minimum. 

The Y'hole sti'ticture of the NHA hour provisions is closely related 
to the wage structure and even more strictly so in terms of compliance 
policj''. A great many codes contain provisions for overtime on condition 
upon paynent of overtime wages. Further, -onauthorized overtime treated 
by the NRa Compliance Division as a code violation which necessitated 
restitution for hours worked at some rate in excess of the worker's 
hourly rate. All the complexities of the wage scale, therefore, present 
themselves with rec^oubler force in the adjninistration of the maximum 
hour clauses, to hich there were far more occupational exceptions both 
partial and complete than for the rainirauin wage clauses. 

Between the 27 hour work week of the Cast Iron Soil Pipe Code 
and the unlimited v/eek of the Ptot Trapping Contractors Code, are 
placed the bulk of codes with a commonly expressed 40 hour vae'k limi- 
tation. In nearly all cases, hov/ever, the.'e is a displacement of 
uniformity by permitting averagin.g of tne hoiirly provisions for periods 
ranging from 2 weeks to 52 \-;eeks, (*) by providing for unlimited hours 
or limited overtime witn fi proviso in virtually all such cases that 
overti e pa^mient at v-rious rates be made. 

In numerous instnrces the nujfcer of hoxirs worked per day is the 
object of limitation. Exception from the hour limitations is found in 
the great majority of codes for peak and seasonal periods, emergency 
repair and maintenance, or och'^.u- emergency periods. These excepted 
periods may a.pply to all employees or to certain groups such as main- 
tenance groups, and repair and inventory groups. Again, certain employees 
are wholly excepted from the maxirnim hour r .-strictions. > 

Specirl labor clauses relating to hour provisions occurring more 
than 18 times, are: 



(*) The averaging provisions are often difficult to enforce because 
of the length of ti e which must elapse before the existence 
of the violation can be determined. 



9839 



-22- 

State laws to be conpliecl i-itli 547 

Excess ho-urs to be reported 152 

Employers subject to labor provisions of code.... 93 

Overtime for holidays 89 

L-uiic.i interval provi3ions 59 

Special report on hours 69 

Hours of rorh consecutive 66 

Kunber of shifts li :4te!i 47 

ViTaitint^ tirn >. counts 39 

G-eoE-Taphic or population differential in hours... 39 

Lost-time clause .: 27 

Maximum sh^rin^;; of Avork 24 

Stretch - out forbidden 21 

lTi-.cht vork for women forbidden ";") 

EetTulatin;, start and finish .-'0 

Maximum continuity' of eraplo^^Tnent 13 

Judicial ?nd- interpretative problej.is aside, a cursory evnluation 
of the labor provisions of the coi'es reflects a multiple n twork of 
complexities and e:;ception3 rrhich seriously prejudiced compliance. 
Later an attempt v/ill be m,ade to sho"; the natux'e of the influence 
thus brouj.ht to bear on the labor compliance machinery. It is question- 
able whether these complexities, were necessary to prevent to radical 
a departiire from establish-^d custom, particularly, with respect to 
similar occupational tasks. It is doubtful if the difficulties 
encountered i-dth provisions > hich :.\p-j have split off too abruptly 
from established custom or fron existin;j econoinic concicions, such as 
the 40(# minimum, for unskillea construction labor in those southerrik 
areas vhich had been accustomed to a ratn of 15i^ or PDf^ an hour for 
similar v;ork or such as certain ill-drawn sectional zone lines which 
passed through competing a.reas-, occasioned., the. compliance problems 
that the mass of complexities caused. As already pointed out, the 
balance between standardization and simplicity." on the one side and the 
proportionate revision of econo.'iic cojiditions on the other could hj^ve 
been better assured. 

(c) Trade Practice Provisions 

,A distinction has already been pointed out rel-tive to the 
comparative enforceability of trade practice provi-iions and labor 
provisions. The very width of scope andi variety of the traae practice 
rules of iiPiA was a ne :ative compliance factor and. is onii of the ii"nportant 
elements mal<:ing for comparatively gre^iter potential enforceability of 
the more compact labor provisions, which complicat.ed as they '''ere, diid 
not extend over as an immense ranje as die. the trade practice provisions. 
Estimates have been m.-'de th,v>t, '-ithout bein"; broken d,o-'n. into various 
t;;,'pes and classes, the number of trade practices regulnted am.ounts to 
at least 100. (*) 



(*) The classification of the' trade practice provisions of the 
Research and: Plannin.; Division appear in Appendix llo. 2 



9839 



-22- 

Lach of spDC'! pi-events citation orJ the vrcj^ing individual regu- 
lations, liberally m,-'riaa in . iff ■r.i-in;;; t^fpe. 

Sven provisions, at first ..'Imcri esjstintinll;- the sa?ne, reveal 
textual vr--ieties of l-,:;* ra;. o fix- .-.in: j ■■•hich ;-x'e of t-xie utmost sif^xii- 
ficance to coraplinrice. (*) 

iiilx.-mples similar to t_iat appe-nrinj^' in the Appendix mi ht 'be 
multiplied, ad uauseam. Enou^di, however, has heen said to indicate 
that in terms of corniJliance i3A trado practice r'-'sgulations, considered 
as a "hole, (an'."^ the ^ajn< mji^,'- he said in lesser degree as to labor 
regulations) even without the stag-'ei in^; jurisd.ictional and applicatory 
proble-ns presented, offered trerrendous difficulties because of com- 
pltixitj?' and variation of ill-defined standard, because of vddely un- 
related px'ovisions of a too novel character and because of intricate 
puestions of factual proof occasioned by the legislation. 



(*) As an e:cample, Apy.endix la shors t.ie varir^tions in the provisions 
dealinj \ ii,h false laarkinti" or branding. 



9839 



-24- 

CIIAPJI"! Ill 

FRC3ii:::s of coipliaitce 

E_._ S PECIAL SCOPE Al-D lL4'TT.TRi; 0? CO^TLIAITCE TASK 

Ag rlready stated, the taclc of compliance consists in tlie seciiring 
of conformity v/ith ccrto-in rej.'^latory stsjiclards. To a large dejj'rec 
the mcignitude of the task depends ;n the c onT[Tle::it7 rnc extent of the 
field of operation covered hy such 3tanda.rds, as also, on the acasiji-e 
of departure from established usa^^'e effected by such regulations. 
Certain special "applicatory" difficulties attendant jn the enforce- 
ment of standards arc, in addition, of peculi..r interest to compliance. 
All of these special ap'"'licatory problems reltttc to clarificati jr. of 
meaning or extent of api^lication of th: standanrds and not to prohlems 
r3.ised in the attempt to enforce th:. standards after the. a-pplicatorj" 
acopc thereof to the partict^lar fncts has "been determined. In other 
words, these prohlems relate to the choice of ap licaole standards 
and/or the meanin;';;s of such standr.rds. 

Among the most important of such special a^^plicatory difficulties 
may he listed proolens of : (a.) classification, (o) amtiguity of 
rdgulatory language, (c) lolural a-o" licahility of irrcconcilahle 
standards, Tor purposes of convcuicncc , as will he s^"n, certain of 
these prohlem.s may he sogrngated hecause they deal in the roain v/ith 
difficulties created hy the application of regulatory standards to 
general categories of sit ^.:. ; ions or even to all situati-.ns, rather 
th£in with those created hy the ■ ap^^lication of standards to speci£ll 
factua.l sit-QTitions of relatively infreq\ient occurrence. 

The question may arise as to vhy regulations v.'hich stand in need 
of clrrif ic^tion or interpretation should present a particular prob- 
lem to comjpliance, since it is not the funcion of compliance agencies 
either to seek to a" 'ly such standards hefore administrative clari- 
ficotion, or to ftirnish soluti:;ns to the lorohlems they raise, hut 
rather to a"oply the solutions vfhen furnished. Assuming the highest 
degree of effectiveness and perfection of proced-ore to have existed 
in the method n.sed to arrive at these solutions (an asstunption un- 
happily •--^T i ju.e in the cg.se of I'I.r..A,) the fact rci'iains that a ha,sic 
uncert-Mi' t;;- aa to applicability underlying any item of legislati ,>n is 
impossibifi bo overcome, Season3,ble certainty of th ^^'^ ndard itself is 
a prerequi'jite to establishing conformity with the standard. If the 
uncertainty can be cleared only throw/h a laborious procedure of issuing 
ntimberless interpretations and other classificatory pronovncements the 
undermining influence of non-compliance on cora^jliancc as well as o f 
contem;-t for the lav/ must ensue. The orderly processes of compliance 
are halted, for until tho interprotation or pronouncem^:-t is issued 
the regul.o.tion can:.ot be auplicd. Yet, presumahly it must mean some- 
thing even before the interpretation is offered. 

An aoministrative intei'pretation can never cari-y the same respect 
as the standard itself, for an interpretation presup' oses reasonable 

9839 



-25- 

doulDt ,:,nd ihe interorctation liioos not remove completely the reasjnatleness 
of other constructinn^,, A rei^ailati on clarifiocl hy' means jf administrative 
interpretation is, therefore, PAorc oifiicult to onforce than o_ne eirpressing 
the same iiurpjrt tuv, v/hich is clo:-:.'- i:. ar.-nir.'. to all rGasonatle persons. 

It is n^t .'.leant to ii.voly t.i.u :.>^curj-:x o;y far interpretation or admin- 
instrativc rulln/"; should 'Dl, climili-'.tc-rl in all i-Arvfances^ As will 'be pointed 
ou.t , sit"ai?.ti")nB can anc. do arise in which eyon.'cho clearest language maist 
he constr-acd, Langtuagc , hov/ove'*., whidh callr. for construction v,'hen the 
more usiJ^al or conmon .?;roup situitions are applied to it, is undesirahle. 

The act-jaL difficulty encountered by the KEA field at;cncie3 of 
comjiliance, not only in securing proper interpretations and rulings with 
rcasoj:ia.ble speed, hut in cecui'iig any sort of answers a.t all to many 
quectiViVs, is considered at length in. other reports^! These procedural 
difficulties served to aggrandize immeasurably the nature of the diffi- 
culty. 

The apvlico,tory problems themselves, (presented by IIRA regulations) 
cveii oeforo being ansv.'cred by rulings arc of imusual significance as they 
serve to illustr.te in exag;, erased form the usual classificatory processes 
of coraroli.ance \'.hich are proi^erly and inescapablj/' part of its routine. 
A clear iindcrst?nding of these -problemiS is of invaluable aid to those v;ho 
would stiid^,'" the functions of complie.ncc, For it may be ipostulatcd t ha,t 
since the function :'f comnliance is to effect conformity with stand^ards, 
the fir'?t ;-tep in the fulfillment of such function after determination 
of -.pertinent facts, is the apr-lica ion of the governing standards thereto, 
■in order that conduct may be brought into liarmony vath conduct prescribed 
"by the standard,. The applic.i ion of standards is, therefore., a problem 
com;aon to "che conrplicincc agencies and cho agencies charged with the 
function of interprctati rn. The nature of such a,ppliCo.tion should, there- 
fore, be clearly understood by those seeking to vmdcrstand the problems 
and functions of complio-nce. So, in ordev to ap'oly a stands.rd-, it nay be 
necessary,' for eooom'ole, to o^oterminc v/hcther powdered onions constitute, 
a spice, or whether three ond one ii:?.lf percent beer is intoxicating; 
o'r whether o,n earring is r.,n .article of ioersonal adorni-ient , or whether 
mercury is a metal, T/hilc it may be conceded tli?-t some of these questions 
require inteo-^oretation becs.u3e there may be reasonable doubts as ta the 
answers, it may also be conce.-.ed that others do not, sincJ the ans'^T^oo ^^ven 
by all reasonable persons v'ould be the same, and therefore > the ag..ncioS 
of compliance may ansvrer the question. Yet the process of applying the 
facts, to the definition or st;,,ndard remains the same in all the examples 
citedj 

These o,nd like questions involve a problem of classification, of 
fitting a st.andard or a statutory provision to the particular facts pre- 
sented. It is to be empliasizcd tlia.t the application of any standard to 
any fact (the primary f-unction of compliance) implies classification, 
but the special difficulties of classification removed from the sphere 
of complipjice do not appea.r unless in relation to the particular facts 
presented, bho accepted meaning of the standard does not of necessity 



9339 



-26- 

convey to all reasona'blG persons the same sense, (*) That the application 
of the standa,rd to special factu3.1 sitioati^ns may prove to "be an extremely 
nincc task irast "be conceded. This is true in varying degrees of all stand- 
arcs in some cases, no i:ip.tter whiit the degree of clarity or precisi:n of 
accepted meaning c?n-/cyed Toy the standard; 

For the standard, emhracing a centr?lised area closely within its 
purvicT^, also extends itself out over a darlrer region and finally roaches 
a field v;here the area covered is so enshrouded, as it were, that the herder- 
line ?/hich must Toe traced through such area in order to determine tjKT't v/hich 
conforms to the standard and that, v/hich does not, is veiled i'.i an o"bscr\iity 
which -permits of vdde latitude of choice. 

The process of classification, since it connotes comioari'on of stand- 
ard with fact is essentially inductive. It requires tli^it the facts in 
question 'be compared y-ith the nearest similB.r set of irna.ginary facts ad- 
mi ttodl.v coirrpriscd within the stavidard. The degree of perceived simil- 
arity 3f the one to the other is- usually the controlling factor of the 
result reached. So for example, Ir. order to determine i.hether a hitherto 
unlmovm jpla,nt is a memhor of the rose f?mily, its charcteristics may he 
compared v/ith those of the rose or of some other ncmher adinittedly 'in- 
cluded in the family and, i'f the resemblance in the view of the classi- : : 
fying authority is sufficiently striking, the nev/ plant m.ay he includer^ . 
in the family, , 

A wide variation of sexection rn3.y he -■-'Ossihlc even within the 
centralized aree of accepted significance covered by the standard. In 



(*) S^ich a distinction betwe-n th^ tvfo types ' of classificatior. W9,s rcc- 
Ot-,nized' b'y HRA. in its differentiati rn betv/cen intcrpretati'ons and; ©ir' 
planationSi Office Manual III, 5100 et seq. prescribes -thiit an interore- 
toti->n mtist be' rendered "where a Imov/lcdgc of su:^'rounding circumstances 
of xTPJ. policies fails to remove ths necessity for decision uiider which 
rea.sona'bie, pion equally conversant v;ith the circwustancas and policies might 
differ,"' An explanation might be furnished by any informed person, "where 
knowledge of the surrounding circumstances removes the .necessity fpr de- 
cision on which rea.sonable m.on equa.lly conversant with ,bhc circumstances 
and policies might differ". The I'anual furthc"- states th\t where there 
is cf'oubt sT-.to v.'hether a request for the clarifico.tioh of language ca'lls :• 
for an interjoretati on or an explanation the doMbt estohlishes the necessity' 
for an interpretation, Intcrpretati ns coMld not be rendered by the fie'ld- 
compliance agencies., but^ vi/ere to be referred for ap'"ropriatc ' faninistrative : 
action. In this connection, it should r,1go be noted that the dividing, line' 
betv/ccndment and interpretation follow somewhat along the same path as a 
meaning attributed to lang'udge I'mlch no reasonable person familiar 1"ith 
circumstances and policies' could .consider attributable thereto w'liich is 
officially described to be at'tributable only- through arncncaiiont. 



9839 



-27- 

this coiincctipn it imy tc stated that it is hi^:hly important to the 
successful efforts of compli?>.nco that api^lication of the standard 
be facilitated hy percision of accepted raeaninjr; and elimination of 
wide latitudo jf choice as t:: accepted significance in codes where 
generally occuring factual sit-imtions present themselves. So for exarrrple, 
it is far more difficult to apply to various factual situations such as 
"to the extent practicptle (*), or sjmc of the "equitable adjustment" 
clauses of the codes than it is to determine v/hctKr a given substance 
is woDd, or whether a particular fabric is a textile. 

The question -^f legality and of the effect of unexpressed intent on 
language otherwise clear in accepted general meaning is only indirectly 
germane, but it may be mentioned, in passing, that the legal worth of 
interpretive administrative prono-uncements in this field, is questionable 
at begt, Tiarticjlarly in those cases which reveal a more extreme departure 
from well established customary understanding of Judicial precedent. 

Closely related to classification itself, is the process of vrhat 
may be referred to for want of a better description as the creation of 
sub-standards or the specialization of standards. Usually a narrowed 
concept of the accepted meaning 'f the standard is adopted in order to 
perfect its application in the light of assumed legislative intent or 
administrative policy. Here again, a zone of shadows is approached 
since the legal line "Ijetvfeen amendment and interpretation must be dravm. 

An illustration of the principle of creation 3f sub-standards may 
be seen in the construction sometimes accorded by NHA to the expression 
"equitable a.djustment" by which a supplemental mathematical standard 
was established in order to determine the limitations, of th^ expression. 
Again, tahen literally, the mandate "interest shall be paid" might mean, 
in the absence of contrary usage generally accepted, one hundredth of 
one percent or less. If ,it should be decided tlirO.t, in order tofiilfill 
the obvious 'ourpose of the mandate, a special rate should be the basis of 
the requirement, a secondary standard or sub-standard, such as the legal 
rate of interest, the prevailing rate in similar transactions, etc, must 
be' designed as a criterion. 

As an illustration of the sec:;nd type of difficulty, i,e. that arising 
because of lack of clarity concerning which of several basic accepted 
meanings the standard serves to express, there maybe cited Article VI, 
Section 8 jf the Ectail Food and Orocery Code, "Wlien any State law 
prescribes for any class of eiiiployee of either sex a higher minimum 
wage than that prescribed in this Article, no employee of such class 
of either sex employed within that State shall be paid less than such 
State law requires," 

In the event that a State law prescribes a minimum for women higher 
tlian the minimum prescribed for both sexes under the Article in question 
of Retail Jood and Grocery Code, the question would then present itself 
and actually did present itself, of whether such higher minimum for 
women under the State law was incorporated by Article VI, Section 8, 
as the code minimum for vromen, or whether such higher minimum for women 
was incorporated thereto not only for women but also for men. In other 
words, the questijn to be solved is v/hethcr the second "either" in the 
1*) Stone, Sand and Gravel Code, Article I, Section 1 (e) 

QQ-XQ 



. -26- 

Scction cited should "be taken as nerely repetitive of the textual sxq- 
nificaaice of the first use cf the v/ord, or whether the sec-nd "either" 
should he interpreted in the conjunctive - disjunctive sense. 

The close relationship of the prohlcms of classification to those 
created by ambii^uitj'- of laneuace, is ap"iarent. The process of classi- 
fication, as already noted im-nlies comparison of fo.ct with the acccioted 
significance of a sts,ndard. Only in special case? is there difficulty 
encountered — cases whcr'^ torcerline fa.cts must be fittec' to a sto.ndard 
of relatively precise accepted ir.eaning* Ambiguities usually relate to 
choice of one of more than one or more tlian one potential accepted 
meanings conveyed by a standa.rd. 

The plural applicability of contracdctory standaTds constituted 
another type of difficulty. 

The jurisdictional conflicts raised by claims of the Dress Manufactur- 
ing Code and the Cotton Garment Code over certain types of dresses, and 
many other similar cla,shes illustrate this difficulty which was technic- 
ally termed "overlap". The reiiiedy did not lie v/ith compliance. 

Within the category of plural ap' licability of contradictory standards, 
the second tj'pe rela.ting to ap licability of. dif-:ering but closely inter- 
related operative fo.cts v;as of far, commoner occurrence. In most instances, 
this tj'-oe 01 difficulty presented itself in cases v/here a single estab- 
lisiiment conducted several varieties of enterprise, each of v;hich v/ere 
subject to separate codes. Wliere segregtition by department or otherwise 
was feasible, plural Code aroplication was possible. Eut where segreg- 
regation was not possible or feasible, as where "swing" employees worked 
indiscriminate!' and alterno..tel3" on operations governed by separate codes 
with differing labor provisions, ap;: lico.tion of the various UEA reg- 
ula.tions presented many problems. 

In the event of segregation not being feasible, i-THA "oolicy oiitlined 
various alternatives, such as compliance with the Code more favorable 
to the employee, exemptions, etc. The directions, however, were vague and 
unsa.tisfa.ctory to the highest degree as they failed entirely to outline 
situations where the various types of solution should have been employed. 
It is submitted tha.t segretation by field compliance agencies, of operations 
of the clTa.racter mentioned v/as feasible and proxtical in a grea.t many cases 
in v/hich it was not attempted. Many questions on this general subject 
remained unansv/cred, Eor example — no formal decision vjas ever rendered 
on the question of whether an employee working on wholesale food and 
grocery operations coixld work the 44 hours allowed by the Code governing 
such trade, and then work 4 extra houi-s as a retail food clerk since the 
Retail Food and Grocery Code peraiitted a 43 hour work week. 

As to different examples of this ty:oe of problem - teclinically laaown 
as multiple code covera.ge, see Report entitled - "Problems of Adminis- 
tr.ation in the Overla;voing of Code Definitions of Industries and Trades, 
Multiple Code Coverage, Classifying Individ-ual Members of Industries and 
Trades, uultiple Code Coverage, Classifying Indivic'ual liembers of In- 
dustries and Tra-des." 

Another ty^ie of difficulty perhips ap:;ositely included in the category 

9859 



-29- 

of apilic-;,,tory cor;;:lio,nce pnlilGms, wie ■ ■rer-en'^ed "by tho fairly coniionly 
occurring ty>e of retaliations v/liicn :-ct v. i cstr.nda'L'd to be determined v/ith- 
in a specified fut"'are tine "by sone entity or body designated or wMch 
rendered the "-■re-deterraiu;..,tio:;. of soue f-act -.rercrxLi^ite to the enforce- 
ment of the standard. Until such dctermiuation, t";ie standard could not 
be applied and wcs uselesr-. It wan the sad e:cnerience of compliance that 
numbers of such determinatioris ::ect:'-!::;,ry to completion of the standard 
were never made. 

So for sxfu'q'^lc, ohe suppler.ientary code for the CAli-omia Sa.rdine 
Processin^i Industry stated in Article III, b 2, "Subsequent to August 
1, 1934, no other employee sliall be permitted to worh in excess of the 
naximura liours established for him in accordance with the provisions of 
Article VIII, Title C, Section 1, pa,raf~raph (e), hereof, ■' "Article VIII, 
Title C, Section 1, para^^-raph (e), puthorized the Code Executive Committee" 
to i'orniLUa'.e a schedule of labor, hour, and wa.f'e provisions to become 
effective Au^just; 1, 19?.4, for employees of raembers of the California 
Saruine Processing I^^dustry other tlia.n ofiice employees; and to submit 
ssjne to the Administrator fov Ms approval on or before July 1, 1934," 

The labor standa.rds of Article VIII \7ere not enacted so tliat the 
hour a s v/ell as \ie.-^:e provisions of t,he Code rem;..ined. a nullity for many 
months until fina,liy the la.bor provisions of the basic Tishery Code were 
sub s G i tut e d the re f o r . 

A very striking example is afforded by Article I, Section 21, 
Paragraph 3 of the G-ra;ohic Arts Code which reads: " "'ithin 30 days 
aftor this code becomes effective, any rate increa.ses under Paragraphs 
1 and 2 must be further aug.mented, if necessary, to bring the average 
hourly corroensation p.caid in each establishment up "co 90 pe^^ccnt of the 
hourly rates prevailing on July 1st, 1933, in the same locality for those 
base classes of slriiled labor naj.ied in the sche.'ule set forth in Paragraph 
1 hereof." 

Article I, Secti-n 1 (o) :f 'chc sar.ie Code in defining the expression 
locality states, "The terai 'locality* y-.z used herein, is defined to meaji 
a village, to mi or city and its im-'iediate s-'orrounding local trade area as 
dGt^iTTilnel by the Ha.tional Code Authority concerned," 

The Na.tional Code Authority failed, during the life of IIRA to divide 
coxuitry into localities, and as the prevailing v/age v/ould differ with the 
size of the locality considered, the important provisions of Paragraph 3 
remained inop erative tliroughout the life of the Code, (*) 

The complexity of the NRA -rc/;-ru.lation3 v/as reflected in the intricate 
mechanical r.rocedure necessa.r^," to effect restitution for violation of 
oblige ti.-.:is, Altho"a£;h such difficulties vrere properly the problem of 
compliance and could riOt be avoided, and although they cannot properly be 
termed applicator^- difficulties, since the ap"'licn,tion of the standards 
was not in cfaestion, it often lia.p"'"ened i:h~t these ;iechanical difficulties 



(*) Only in a few instances was there an possibility of enforcing the 
Parrgra-oh - i.e. in those cases v/here all concerned agreed on the 
boundaries of the locality, 

9ft.39 



of coiirpiite.tion and of determine.tinn of fact coirilDined themselves with 
protlems of ?n interi^retive or classif icatory nature. An example of this 
close interweaving can "oe seen in certain cases v/hich arose out of the 
1335 Soot and Shoe Manuf<'^cturing Code mass conipliance drive, launched in 
order to dr rniine the state of conpliance in that Industry. The aim of 
the drive xr-.s , v/ithout regiard to initiation by complaint, to "bring all 
those suhject to the code into coi'npliance with the laho- Torovisions of 
the Code, and to effect proper adjustments in favor of employees prejudiced 
as a result of such non-coroiDliance, The issuance of detailed i?rocedural 
instructions to the field staff and the fui'nishing of standard forms to 
assist the investigators, undoubtedly facilitated the meciianical solution 
to the problem presented, tmt of determining the exact situation with 
respect to compliance with the Boot and Shoe Manufacturing Code, Yet, 
despite these valua.'ble aids to the field v/orkers, despite the concentration 
and organization of the survey, certain evidentiary a.nd mechanical diffi- 
cultierf in the face of complete and satisfactory adjustment were so 
formidable tliat candor impels the unq-ua-lified statement tiiat in most 
cases proper adjustments could not have been obtained. 

The following exajnples, illustrative of the complex problems offered L 
is prefaced by citation of governing sections of Article V, of the Boot 
and Shoe Manufacturing Code, 



9839 



CODE 0? 7AIR COi.iFETITIO^T 
FOil TT^ 
BOOT A.:D SlOE 

APPliOVED 'OIT OCTOBEH 5, 1933 

ARTICLE V SECTIOU 1. 

Ho einplo3''ee, including office workers ( exce-ot as hereinafter 
provided), shall work more than 40 hours in one week: Provided, 
hoirever, That during any 8 weeks of a 6 months' period (the first period 
to hejin on the effective date of this Code) , employees ma.y work not more 
thaai 45 iiours a vreek. Time in excess of 8 hours per day shall be paid 
on the tasis of time and one third. The foregoing maximum hours of 
labor and overtime payment, however, shall not samlj to outside salesmen, 
watch-Lien, firemen, cleaners or to employees in a managerial or executive 
capacity who receive more thp.n $35 per week. Said maximum hours of labor 
shall not aror^lj to emoloyees doing emergency, nointomance, and repair 
work, or vorl: where restrictions of hours of workers on continuous 
processes would \inavoidably reduce nroduction or interruut employment, 
but in any su.ch cases, at lepst time and one third shall be paid for 
tiiio v/orked in excess of 8 hours per day or 45 hours per week. 

ARTICLE V SECTIOII 2. 

Ho male em-ployee shall be paid less than 37-3 cents per hour or 
female employee less than 32i;" cents per hour in any city over 250,000 
population; nor male omployec less thaji 36— cents per hour or female ■ „ 
emploj/ee less than 31-5 cents per hour in any city between 20,000 and 
250,000 population, inclusive; nor male employee less than 35 cents per 
hour or female employee less than 30 cents iDer hour in cities or to^Tns of 
less than 20,000 Do-Dulation; except that the miniimim of 35 cents per 
hour for males and 30 cents per hour for females shall a.pply to all cities 
ajid towiis, regardless of size, in the following States: Virginia, West 
Virginia, Horth Carolina, South Carolina, Georgia, Florida, Kentucl-cy, 
Tennessee, Alabama, Mississippi, Louisiana, Arkansas, Oklahoma, and 
Texas, There shall be no discrimination in wages by resoan of sex, and 
where in any case women do substantially the same work, or perform 
substantially the same duties as men, they shall receive the same rate 
of wa.ges: Provided further. Apprentices during a 5 weeks' period may 
be paid at a rate not less than 80 percent of the minimum ra^te; such 
ap-orentice class, however, shall not consist of more than 5 percent of 
all employees in any establishment. 

ARTICLE V SECTION 4. 

Unskilled employees receiving in excess of the foregoing minimum 
rates of pay shall not be reduced; and equitable adjustments in all 
pay schedules of employees receiving more than the minimum rates shall 
be made not later than 30 days a.fter apioroval of this Code by any em- 
ployers in the Industry who have not heretofore made such adjustments 
under the President's Reemployment Agreement. 



-32- 

ARTICLE ? SECTIO-J 6. 

Piece'-'orkors shall "be -oaid at lervst the miniiTium amount 'Der hour 
prescrihecl. in Section 2 of this Article for the tine emplo/ed. 

It is seen from pjn examination of Article V, Sections 1,2,4, and 6, 
that not only must the Torescribed nininian rates a-oply to both piece- 
\7orli:ers and time workers for hours permissibly worked in accordance 
vrith the maximum T/or!: week clause, but also tnat \inskilled wa^es exceed- 
ing the mi^.inum are not to be reduced a.nd that equitable adjustment 
in all pay schedules of employees receiving more than the minimum are 
to be made if such adjustments have not already been made under the 
president's ?ie employment Agreement'. 

It was found in mpjiy cases, that although pro-oer hour records had 
been kept for the time workers (the number of hours worked a week by hourly 
wor]-ers would appear immediately frojn an inspection of bona fide \7ee'':ly 
salary records) records of hours worked by piece rate wage earners were 
not kept for a considerable -leriod of tine after the effective date of the 
code. So where the weekly wa.ge earned and hours worked by piece rate workers 
appeared for the period subsequent to April 1934 ~- (i.e. the period " 

subsequent to the first period designated by Article V, Section l) it was 
possible to calculate the aver-^^e hourly rate, 'q-j dividing the weekly earn- 
ings by hours ?;orked. By relating such average hourly rate back to the 
weekly wages earned during the period from October ICoK to April 1954 for 
which period hourly records were unavailcible, hours worked eacn week dur- 
ing such period by each class of piece-worker could be established with 
some reasonable degree of certainty. 

Allo'/ance would then have to be made for the 8 weeks tolerance per- 
mitted b.y Article V, Section 1, a.nd excessive weekly hours were tlms svis- 
ceptible of computation. But, in order to determine whether more than 8 
hours wer'^ worked during a particular day, it woiilci be necessary to com- 
pare the average hourly rate already predetermined to the daily wage total. 

Furthermore, (a.ssuraing the ao'olication of the minimum male rate of 
37y- cents per hour) it cannot be argued that the piecewo'rker earning $15 ^ 

for a 40 hour week, is pa,id correctly simply because forty times 372 cents 
an hour equals $15. For Article V, Section 2, ost?~blishes an hourly end. not 
a weekly minimum. If .a. jjieceworker should be found to have worked five 
8 h.ov.T days in the w^;ek, earning on the first day $3.15, on the second 
$3.05, on the third $2.65, on the fourth $3.75 and on the fifth $2.75... 
the total earned would be $15.35. But the am^ounts earned on the third 
and fifth day do not equal $5 (i.e. 37-g- cents taken eight times) a.nd a 
difference under the code of 60 cents is owing the piece worker. 

Let it further be supposed in the particular exajnple, that the 
piece v/orker is an unskilled workman. a.nd that the Boot and Shoe firm 
did not sig]i the president's Reemplojinent Agreement. In order to determine 
the aroplication of Article V, Section 4, comparison of the predetermined 
average hourly rate during the period before the effective date of the 
Code with wages earned would reveal weekly periods worked by a piece 
TTorker. If a wage higher than the code minimum as ea.rned during the 
earlier period because of hours worked at such time beyond the Code 
maximum, Section 4 would necessitate the carrying forward of the higher 
earnings to the Code work week, .and the effectuation of an equitable 
adjustment on the ba.sis of comparison. Biit the compensa^tion earned "oy a. 



-33- 

daily or -Teei^ly \rorker for the lon;'^cr hours could not, under the langaa.ge 
of the first cl"'Use of Article V, Section 4 (See Interpretation Ko, 20, 
concerning Paragraph JTo. 7 of the President's Reen"oloyment Agreement), (*) 
be reduced and the s'i;.ie total '/ould aave to he -oaid for the Code maz- 
imum v/ork period iroon the adootion of the code ~ or if a lesser code i7ork 
period were used, tiicn the amount prooortionate to the amount 'Thich 
TfOu.ld liave to te ;oaid for the maxinrun '"or'- -oeriod. The intricacies 
of such calculations forcihly B.r)pear '-fhen it is realized that the code 
rnaxiimiin work week is, ujidtjr ordinary circumstances for -the ordinary 
worker, not forty hours "ocr v;eek, hut forty hours with an eight weeks ' 
tolerance of forty-five hours during any eight wee'-s out of the part- 
icular si-^ months -oeriod. Computations over an extended period of time 
woiild he necessary in order to resolve rightly any particular case. There 
are fui-ther difficulties, for, in order to determine total wages earned 
"orior to the code, a period must be agreed upon to serve as a "basis for 
the computation. Since tho total wages are to he compared to total wages 
under the Code, it i7ould seem logica,l to compare the code work period of 
sir. iionths (forty hours a week \7ith the right to work forty-five hours for 
any eight weeks during a particular si?: months period) with a similar 
period before the Code. But there are qiiestions of fluctuation of earn- 
ings ?nd hours '"'orked because of seasonal activities, because of variation 
in the tyoe of work performed, or in the degree of skill possessed during 
the periods which are to be compared. Further, it may be asked whether 
the period iriinediately preceding the Code should be considered in the 
determination of preexisting compensation or whether the corresponding 
iperiod of the prior year should control. 

(*) President's aeemplo;'nent Agreement, Paragraph 7. 

"ITot to reduce the cnmxiensation for em-olo"TOent now in excess of the 
mininiLTm wages hereby agreed to (notwithsto.nding that the hours 
worked in such er.ralory'ment may be hereby reduced) and to increase the 
pa;~ for such euployment by an equitable readjustment of all pay 
schedules. 

Interpretation No. 2C (Concerning Paragrarih 7) . 

Paragraph 7 prevents the reduction of compensation in excess of the 

■.■.linirr.m, whether it is paid by the hour, day, week, or month. 

Therefore, an employee previously paid by the da,y, week, or month 
will receive as much for the shorter day, week, or month. 

All emvloyee 'oreviously paid by the hour will receive as much per 
hour, but as shortening his hours will reduce his actual earnings 
jper day or wee^, his compensation per hour is to be increased "by 
a;! equitable adjustment." 



9839 



other difficulties raiser! in connection '-ith thf; adrninistr-^.ti'^n of 
this Code are legion and yet the Code is not coiFiderer] to te one of the 
poorer ones framed. 

The ahove example is given nerely as a sairrole of sone of the difficult- 
ies encountered in adninistering conplicince '"'ith the lahor provisions of 
this Code, '."'hich of all the Codes n".s the only one '7hich '-ras enforced 
throughout the country in a manner '.vhich could in an;'' -'ay be terned stan- 
dard or complete. (*) 

The field covered "by probluris of such a:o"ilicrtor:- tyoes as those 
alrea,dy considered, is not easily determined. The nui^her of intemre" 
tations, e>rplanations, stays, ercorrotions and amendments issued is not 
a criterion of great value. Whereas inter-nretations nere issued primarily 
to resolve doubts of a classification nature and to indicate through 
elimination of other applicable standards, the -orc-jsr existing standards 
governing the facts under consideration, this latter function rras onl;'' 
incidentally that of such devices as stays, exermtions and amendments. 
Stajrs and. exemptions vfere usually cuvloyed. for one m.otive or another 
to eliminate in varying degrees, standards 'Thich in the common run of 
cases, did not raise any difficulties because of conflicting jurisdiction 
vdth other strndards. The same m.ay be said corresno ndingly for the 
changes and modifications effected through the use of the amenta.tory -oouer. 
A careful study of the motivating causes giving rise to stays, exenptions, 
and amendments \70uld be necessary before conclusions could be drarm. That 
this would not be a simple ma.tter is evident from the fa.ct th^at the texts 
of such rulings reveals in only very rare instances the motive for the 
issue;nce thereof. 

Furthermore, it is notorious that the substitution of exiplanations 
for interpretations was so tremendnu.sly frequent as to cause most persons 
to believe that vastlj- more intemretations were issued in the quise of 
esqjlanations than through the -orecedure reserved for interpretation. ITo 



(*) The writer does not suggest in any way that the equitable adjustment 
provisions of the Codes should have been eli'iinated. In his opinion, 
they constituted the bac',:Done of >TRA. labor regulations. Fall^ure to 

i. 'enforce them contributed also very greatly to breaicdo'TO in the en- 

forcement of other regu.lations. However, the scope and applicatory 
meaning of the adjustment iDrovisions should have been defined more 
clearly in some resiiocta (particularly in regard to degree qf ad-^ 
justments of hourly wages and in regard to neriods to be used in 
comparison of preexisting and code v;ages). Such clea,rer definition 
would have been of considerable c'ud to the cause of compliance al- 
though other potent disintegrating influences, notably failure on the 
part of the field compliance officers either to understand or a-pply 
the understandable and ai^olicable equitable adjustment provisions, 
played perhaps a major role in the breakdown of equitable adjust- 
ment compliance. 



!839 



-35- 

check on cioolanations t/ps, of cc rso, ever '■-n.de since any informed official 
of rIBA \7as privileged to offer an e-cnlanation. For '.vera the field 
enforcement agencies entirely to blanC; for this state of affairs in 
view of the scandalously dilatory nanner in '7hich requests for rulings 
and interpretations v/ere frequently handled. (*) 

Again, the -oressurt^ -oiit on fjoriously understaffed field s.gencies 
to adjust effectively as Many casen in as short a time as nossihle 
placed an understandable tenptation in their path to er-rolain instead 
of refer for interpretation. 

Again, it is reasonahle to suppose that the short life sioan of NEA 
failed, to permit of disclosure of a great numher of various applicatory 
problems uMch '70uld h^ve been revealed v/ith the passage of time. 

Ho check rras ever made of imiltiple code, cover-'^ge problems as it was 
not roauired that a specific report "be made covering multiple code cases. 
Even sn examinp.tion of all State office files wotild not completely an- 
sv;er the. question, as in a great number of cases, the files do not 
describe in detail the na.ture of the respondent's business or the method 
of com"outing restitution ■^here restitution was recovered. 

In conclusion it mn,y be said that serious as was the problem pre- 
sented by the ap'olicatory difficulties already mentioned, their exist- 
ence vrps not the -oaranount obstacle to the effectiveness of the activ- 
ities of comnliance. Methods of adjustment, lack of training of the 
enforcement officers, and failure to enforce ITRA in the early days 
presented greater obstacles. 



(*) Substantial but not satisfactory improvement in this regard was 
obtained v/ith the inauguration of the r.ail control system intro- 
duced by FRA in the latter part of 19 o4 in order to expedite 
rulings. 



9839 



-36- 
C, Po\/ers Limitations 

]?ron the "beginning, iJRA. ^.ived ^ritli tlie discotiraging -prolDlein of secur- 
ing co:.roliance with codes r/itliout the help of anv direct enforcement pouers 
of its orn to ap'oly against \7ilfiLl violrtors of the codes. By "direct en- 
forcenent poner" is meant actual pov;er to naJ:e effective administrative 
decisions uithout the need for enforcement process through outside agencies. 
For e::a:.iple, licensing pouer, including withdrawal or cancellation of licenses 
by administrative decision after "oroperly -oroven violation of license con- 
ditions, as distinguished from enforcement hy legal process with the penal- 
ties of fine and/or imprisonment. That this lach of power was not widely 
understood or realized throughout the raix'-s of industrj'- and lahor was of 
advantage, in the battle to obtain sup'-iort for and voluntary compliance with 
the codes, But this toothless condition put an additional burden on the 
Compliriice Division, which faced the increasing volumes of complaints of 
non-enforce]i3nt of code provisions and yet dared not admit their own power 
limitations. 

Tliere were legal ^^enalties for "iolation of the Act, which operated 
as a threat, but which in actxial practice were shov/n to be of insufficient 
effectiveness, in coping with code violations. It must be remembered that 
these penalties, as given in Section 3 (c) and 3 (f) of Title I could be 
-invoked onl-"', through Federal District Courts through injiinctions obtained 
.or prosecutions initiated b^r United States attorneys at the behest of iffiA's 
Litigation Division, - or "by appeal to the Federal Trade Commission for 
supplementary hearings and the issu.ance of Cease and Desist Orders. Slow 
notion v/as the characteristic of both procedures. Tney failed to meet the 
requirement of quich and effective action to curb real recalcitrants. 

This lac]: of direct enforcement power for i'RA.'s own use was neither 
an omission nor an error, desoite the burden imposed by such lac^: of admin- 
istrative authority. A review of the planning of the recovery legislation 
indicates that no such police power was seriously contemplated for direct 
administrative use, unless special circumstances had forced recourse to 
license industr^^ authorized in Section 4 (b) of Title I. Ho emergenc3r 
sufficie.itly acute ever came to the surface to justify placing industry'- 
under license control. The power to ta!:e su.ch drastic action, in case of 
need, v;as never used; the threat inay have been sufficient to quite poten- 
tial revolt. 

Full reliance was placed on the strength of an awnkened public senti- 
ment rather than on any inclusion of direct enforcement powers. Persuasion, 
education, and public support were to be the Jceys to code compliance, rather 
than the threat of coercion and p-unishment. Tliis plan of action was out- 
lined in President Roosevelt's statement at the time of his signature of 
the Act, from v/hich comes the q^iotation: 

"This .... can siicceed only if those who .... restore 
jobs have aggressive p\iblic support and those who lag 
are made to feel the fvC L l vjelp-ht of public disa-ooroval . " 

In fact, I'JRA's limit in the line of direct action was the removal of 
its own created -oroperty, the Blue Eagle insignia (a design-patent register- 
ed in the Paten Office) for proven violations of the codes. At the outset, 

9839 



-37- 

the state of public sentiment :aade tliis action decidedly formidable, in 
that Blue lHagle removal vith publicity coiLld and frequently did result in 
"boycott action by the buying; public. The threat of insignia withdraual 
\7as often aore effective than. that of legal prosecution. 3ut this nas 
only during the bab^diood of 'Jlik, when public support was at full strength. 
Later on cane the usual troubles of linitod oolice power, with the cases 
of wilful recalcitrants whose violations v:ere intentional and continuous, 
and where ad.justment efforts were imavailing. In these cases, removal of 
the IIEA Blue Eagle was a-ctuelly but a gesture, and in the absence of sup- 
porting public sentirient, v/as completely ineffective, 

Sinple loss of the Bluie Eagle, therefore was no real punishment for 
the wilful code violations in the overwhelming majority of cases, and the 
threat of litigation lost force as legal delays cuaijlated and puntitive 
actions through Eederal Courts became less and less of a factor. 

Later on, as code violators became more assertive of their rights and 
their attorneys began challenging ^IRA's powers, particularly in intrastate 
businesses, the Compliance Division faced the additional problem of lack 
of ;power to even require submission of books, records, payrolls, to e:canine 
businesses (e::cept bj' consent or thro-ugh ignorance of the owners), or to 
obtain the attendance of essential witnesses at hearings. Only in the 
label trades f,nd with government contrsictors was compliance directly en- 
forceable, for the e:vcellent reason that removal of the Blue Eagle and 
witliholding of labels Wtis equivalent in effect to the loss of license to 
contin"ae in these particular business activities. Consequently, threat of 
court action was unnecessary'- in these two exceptional classifications where 
failure to couvIy spelled loss of btisiness. 

Sturima-rizing, NllL's only direct enforcement power, in actual practice, 
was the removal of the Blue Eagle for proved violations of the codes. Its 
whole enf orceri,ent -oroblem v/as that of obtaining compliance by persuasion 
and without an;'- coercive power. (*) Litigation was but a threat, ineffec- 
tive "-altimately because of legal delays, and also because of the increasing 
n'umber of successful "unconstitutional" defenses to ITHA code violation 
cases in court. Furthermore, in the work of fact-finding following viola- 
tion complaints, WRL had no actual joower to enforce attendance of Witnesses, 
produ.ction of records or even to mcJ:e examinations through field investiga- 
tors. I'his impotence contributed handsoiaely to the progressive brea!:dovm 
of co; ipliajice, once public enthusiains a.nd support su.bsided. 



(*) Bearing, Eoman, Lorwin and Lj'-on, The ABC of IIRA (Brookings 
Institution 1935), 37: 

"Tlie setting for the enforcement problem is seen- in, the fact 
that neither the i!M nor an;'- agency established bj'- i-t has any legal 
power to coerce any business enterprise into complying with the terms 
of a code. All its elaborE,te mechanism of compliance is therefore 
desig-ned, first, to esta.blish the fact of violation of a code, and 
second, to 'persiiade' the violator to mend his ways and to 'adjxist' 
comxDlaints. Only at the end of the procedure is the case passed on 
to the Be-oartment of Justice or the Federal Trade Commission for the 
e::ercise of the government's power to coerce. To siam the matter up, 
the violator of a code is violating the law, buit the Recovery Admin- 
istration has no power to enforce the law. The Word 'compliance' is 
not therefore a mere euphemism for 'enforcement.'" 
9839 



D. POL I CI' 

Slie tern "pdlicj''" enoraces t'TO categories: the legislative end ad- 
ministrative. 

The rational Industrial Recovery Act declared the legislrtive policy 
in terns caiite general, this declaration hein^ foi"jid in the opening para- 
graph Trhich rna-7 he su-'irnarized as expressin,'-;: t'-.'O otjectives: one, to in- 
crease mass pijjrchasing po^.'er; and, the other, to elininate unfair competi- 
tive practices. Beyond this general declaration of pxirpose, the Act pro- 
vided methods of enforcement through the District Courts of the United 
States "b;'" injanction and hv criminal prosecution ?j.id also required the 
Federal Trade Comiiission to malce such investigations, rrhen called upon "b^^ 
the Acmini strati on, as rii-^ht he necessary to carry out the provisions of 
the Act, IPujrthermore, code standards \rere also made unfair methods of 
competition rrithin the meaning of the Pederal Trade Conuisfeion Act, there- 
by rendering then enforceahle loj the Coiinission through cr'-nsQ and desist 
orders. 

Il~cept in the -toarticiolarG mentioned ahove, there rras nothing in ".'.I. 
R.A. T;hich served as a guide to the nethods ^hich might he folloned in 
administration and in secvjring compliance. Such "being the sit-jation, the 
formulation of policy was felt alm.ost entirel3r to those charged r;ith the 
administrp.tion of the la-j. It follows, that the legislative policy as 
expressed in r.I.pL.A. had little, if any, effect on conpliance natters. 

The trend of policy in the pirrel^y administrative field can "best he 
determined h;?' exploring the methods used hy 1J?A in its efforts to ootp.in 
complir-ice vith the codes. These are set forth in Chapter IV, Compliance 
Methods. 

S. AnMIITlSQSATIQl" 



1. Industrial Adjustment Agencies. 

■Tlie national Hecovery Administi^ation considered as fundamental nithin 
hoth the letter and intent of the national Industrial Hecovery Act, ths-t 
industi-- should govern itself. This concept of Industrji-'s self-govei'n.ment 
was not a narrow concept extending to onl;'' a partnership with the Govern- 
ment in the formula,tion of the code hut a concept sufficiently hroad to 
include in the self-government, supervision over the adlierence to the code 
regulations 'hj the menhers of the industry/- suh.ject'to them. (*) Part one. 
Section 1 of Bulletin xTo. 7 defines the prohlen of code administration as 
an insujTcaice that the public he protected under a regime of industrial 
self-govern;.ient, to wit: "After a code has heen approved, there remains 
the prohlem of code administration. The responsihility of insuring that 
codes are adjinistered and the puhlic is protected lies with the Adxiinis— 
trator; out the aim of IIRA is to give to Industr', through its Code Auth- 
orities, the widest possihle range of s elf-go vernji.ent, suhject to the 
ultimate responsihility of the Administrator." This responsihility for 
the protection of the puhlic was of fundam.5ntal importance equal to, if 
not paraiiiount over, the basic idea of industrial self-government, [This 
protection was provided' for hy the presence of a representative of the 
puhlic at all Code Authority meetings; this representative was known as 

(*) Part one. Section 1 c, Bulletin ITo. 7 



-39- 

the Acu.iii-'.iGtrMtion i;Iein"ber of the Code Authority. He acted as an adviser 
to the De^outy Administrator to v/horn the responsihility for efficient ad- 
ministration of the code liR.d been assigned. 

The sv.hrnission of a code r:as evidence of a certain amount of organ- 
ization of the induGtr,7 suhnitting it. The su.hscription of the sponsors 
to a code and the forTn-a].ation of the code nhich preceded its approval as 
an active set of regulations is evidence of organization. Many indust- 
ries had been organised for several years. Some were new organizations 
horn with the code. The idea of industrial self-government grew out of 
desires and objectives which trade associations were formed to achieve, 
Tlaese desires and objectives were similar to the desires and objectives 
of the ITIEA. Both sought to encoixrage fair trade practices. The I'iBk, 
therefore, planned with the thought in mind that here were organizations 
already'- set uo and trained in the work to be done. A Trade Association 
Division wp.s established in NEA to cari-y out the policy "to build v.-p and 
strengthen trade associationa thro'jghout all Commerce and Industry so 
that they may perform all code administrative functions." (*) The trade 
associations had, prior to the iIRA, used educational activities as a 
means of accomplishing complionce with fair trade practices. Codes of 
Ethics were ado-oted by scae as moral restraints (many unfair trade prac- 
tices were not illegal). Some associations educateci members to fair trade 
practices through the nedium of studies of practices. Statistical analysis, 
or logical deduction from information- reviewed v;ould indicate the profitabie- 
ne« s or- falla-c;r of pixrsuing a practice. The trade association's fitness, 
from the standpoint of training or e:cDerience to handle trade practice 
complaints seems beyond reasonable doubt, but to obtain compliance as a 
law adriinistrative agency was outside their e:cperience. This was recogniz- 
ed by the ITPA. (**) 

Tlie field of administration for compliance was an entirelj'' new one. 
The piu'pose of trade asr.ociation activity was to enhance the welfare of 
its member:;. If a conflict of interest arose between the members of the 
trade associa.tion and comyjetitors in the industr;^ who were not members of 
the trade association, or bet^/een the interest of the trade association 
and the public, a trade association, or its representatives sitting in 
jiidgment on a complaint might be biased in favor of the association — yet 
the parallel interest of the association and the government in eliminating 
unfair trade practices, and the existence of an organization alreadj/ formed, 
made the trade association the seemingly logical organization to utilize 
for trade prstctice compliance work. 

Tlie utilization of the trade association for labor compliance work 
was not so seemingly logical; trade associations were composed of employers, 
Code trade practice regulations governed the relations of the employer and 
his customer; code labor provisions governed the relations between the em- 
ployer and his employee. The latter was a field of eirperience oiitside the 
activities of the trade association. They were not q-ua.lified therefore to 
act as compliance agencies for the code labor provisions. Industrial self- 
govermnent, as the term is used by tradesmen, always has connected govern- 
ment of competitors on trading practices, not labor employment practices. 

(*) Po.rt one, Section II E, Bulletin llo. 7 
(**) Part one, Section II a, Bulletin ITo. 7 

9839 



•In order to protect the interests r.nd rights of an employee under a code, 
there mist "be agencies convenient in location and functioning so as to 
protect the interests of the employee. (*) 

Hov,- could this he done so that the aim of I'lHA. to have industr" 
govern itself could he attained and the responsihility of tJie Goverm.ient 
to protect the interests of the puhlic he discharged? This was the 
prohlem, 

IffiA. net these compliance prohlems with a field organization set uo in 
fifty-three strategic cities; each office was under the direction of a 
State Director of the National Emergency Council. This field organization 
was a ps.rt of the Compliance Division of KM under the direction of the 
National Compliance Director in Washington. Tliis organization was to "fill 
the gaps in industrial self-governi,ient" hy acting for industry to the e::tent 
required, "while the Industry was organizing to hai'.dlc compliance prohlems 
for itself; or where an Indus tr^^ in a certain territory ha.s no Industrial 
Adjusti.ient Agencies; or where an Industry, tho^igh organized to handle 
trade practice complaints, has no machinery to handle labor complaints; or 
where the Industry fails to cany throu^gh its efforts to adjust a complaint; 
or where for any other reason it is necessai-y for the governjient rather 
than the industrial system to act," "Until an Industry is organis- 
ed to perform this function (compliance) tI3A will have to perform it, hut 
it is the policy to pass this f-'iznction on to all. Industries as rapidly p.s 
they are reo,dy to receive it." (**) 

2. Division of Ites iponsihili ty and Authority Between ^'IRA Com^" ' iance 
Agencies and Indu strial Ad,1ustraent Agencie s. 

'The tecimique of adjusting compl;jints proposed hjr the ¥Rk to Indus- 
trial Adjustment Agencies for their guidance and use was identical to the 
technique prescrihed for the I'lPA. Com-pliance offices. The adjustment of 
complaints was, theoretically, a fundeimental function of industrv in its 
self-government . Compliance activit:' by I.'BA was principally a stop-gap 
pending the time when indxistry would liave organized itself to ta!:e over 
those functions. It acted also as a training school and as an assistant 
to the e-r-.enr'itious and efficient execution of the job. 

ICRA assumed full responsibility for effecient code a.drainistration 
and delegated authority to carry it out to code ari.thorities as they qua.lifi- 
ed themselves to receive it. The first qualification required Y/as the 
establishment by the Code Authority of a Trade Practice Complaints Coriimit- 
tee. Again, membership on this Committee had to meet certain qufilifica- 
tions, to-wit: "Its membership should be representative of different 
grou;os and interests in the Industry, and should be persons of high repute 
for character, intelligence and fair-mindedness. As this committee will 
have important responsibilities it should be small enough to function 
activsl"-, and its members should be persons who are free enough to give 
to the Committee as much time as its work may require. " It was required 
also, that the Committee have sn.ch machinery as v/as of primary necessity 
to insiire proper functioning on the procedure of handling com^^laints, 



(*) Part one, Saction II-D, 3.illetin 'j'o. 7 
(**) Part one, Section II, D'olletin ITo. 7. 

9839 



-41- 

to-v.'itt "'riie Cor.r-iittee sanuld hr.ve a legal adviser (unless one of its 
memters is q-oalified to act a.s lega,l adviser and asswnes the o'bligation 
to do so) and an executive secrptar" \7l:o vrill oe charged with the re- 
sponsibilit;'- for all routine correKoondence and records, " (*) A similar 
proced"ai-e vns required to q-.-.alifv for adjusting la^bor conplaints and 
latior disputes. 

After the qualifications for nenhership r/ero net and approved, and 
after the Coraniittee was aooroved and authorized to handle complaints, 
the Comi.iittee performed the procedure of adjusting complaints under the 
close supervision of the approrjriate Statf; Compliance Director. Com- 
plaints v;ere referred to the Committee ty the State WRk. Office "on refer- 
ence". I'iie strict adherence to the proceduTe prescribed as the technique 
of adjustnont was cjieched hy a progress report on the case requested hy 
the State Compliance Director at frequent intervals, such as five ac-'-s or 
one \:ee/:, etc. On June 15, 1934, Committees authorized to handle com- 
plaints T;ere relieved of this supervision by the State IvHlA. Office and 
allowed to adjust complaints without being checked by progress reports. 

Tiic presence of the Deputy Adininistrator was provided for at all 
meetings of the Committee by the attendance of his representative, the 
Administrative Member. The Deputy Administrator was responsible for the 
efficient adiainistra-tion of the code assigned to him; the Administrative 
Member xras responsible to the Deputy Administrator for the proper function- 
ing of the Committee. Theoretically, industry was to govern itself but 
under the supervision of IIRA.. Practically, the problem of efficient admin- 
istrfi-tion and proper functioning was more difficult to solve than its 
solution vould seem pro jectivel^'- as a plan. Efficient administration of 
the code and proper fxinctioning of adrninistra-tive agencies depended upon 
a thorotigh loiowledge of the code provisions and all administrative modifica- 
tions and reg^jiations, not by one person but by both the Deputy Adr.iinistra- 
tor and his Administrative Member. Another fundamentaJ requisite to siic- 
cessfT.ll discharge of NEA's responsibilit:/ was alertness to the details 
prescribed in the procedure technique of a.djustuent, to the hax-mony in 
IjRA. polic 7 of oolicies in the liaJ-^irig at Committee meetings. Accurate and 
adequate reporting by the Adninistrative I'ember was also a requisite to 
the Do'-jut-^- Adr.iinistrator if he v/as to efficiently discharge his responsi- 
bilitjr as a supervisor a,cting through a, prox". Efficient administration 
of the codes and proper fujictioning of the Committees were therefore as 
varied, as the efficiency of the lirJcs in the chain varied. 

2 . Divi sion of R esp onsibility and A uthority — IIRA. 

The cnforcei.ient agencies were the Department of Justice and the Federal 
Trade Gomnission. The Sta,te tlRA Compliance officers and the Industrial 
Adjustment Agencies were rdjustiient agencies only. Tlierefore, "final rul- 
ings on interpretations, exceptions, exemptions and modifications are to be 
made by the Neotional Recovery Administration, not by Code Authorities or 
by State Directors." (**) The delay inherent in the centralization of 
authorit" for issuing exce'ctions, exemptions and interpretations was of 
major importarce £is an a.dministrative problem of compliance. This aiithority 
was centralized in the administrator. Regulations required that advisory 
bodies a-lso -oass on the question, to-v/it the Industrial Advisory Board, 
the Labor Ad.visory Board, the Research and Planning Division and the Legal 



(*) Part three, Section II a, Bulletin i"o. 7. 
9 (**) Part one. Section V, H, J, and K-2, Bulletin No. 7. 



Division. IBach ua.s a potentipl delp.y. The Aduinistrp.tive Heinoer re-iresen- 
ed the Devout;' Admi'.iistretor in sivoervirinr the policy nalcinc f^no- fiuiction- 
in.5 of cor;initte'3G as an ojipire on the groujid where self-govornr.ient \' in- 
dustrry v:r-s taJring p].ace. Adnird titration as a connliance problem night have 
been niitiv;ated if the Adininistr.',tor could have "been represented in a like 
manner on these attrih'ates of solf-goveriunent technique. 

T-ie prohlens of compliance "began with the President's ?.e employment 
Agreeni^nt c8-:.roaign of August 1, 1935. When signed, the President's Heern- 
ployment Agreement was treated as a legal contract. 

In recognition of the fundai.ieutal polic" of industrial self-^overnnent, 
the enforcer.ent of the contract (the PPA) war provided for through local 
ad.justj.ient hoards organi?;ed in cities, villages, towns, a,nd counties. The 
hoards were composed of leading citizens, business men, selected by respon- 
sible bodies, such a,s the Chamber of Commerce, or a group of citizens 
organized for the --.Tar-oose. The members served without pay and could act 
only after authorized 0^/ the 'i^Ji.. The Board followed a procedure outlined 
by the iJRfi. consisting of a notification to s, respondent of a complaint, 
informing him of the essence of the complaint and citing the parag'raph of 
the agreement violated. The facts of the complaint were investigated by 
corresoondence, or b^' contract with the resoondent by a.n adjuster, either 
at the respondent's address or at the offices of the local Compliance 
Board. Hearings were held whenever necessary, or desired, before the 
assembled Board. After the facts were developed aiid the Board's dicision 
rendereo. on the case, the violations were rectified by bringing tne compli- 
ance of the respondent up-to-date 'bj payment of restitution (the difference 
between the aiaount paid and the minimum required o^r the agreement )where 
restitT\tion was due- and a certificate of compliance insuring futiire com- 
pliance, ITiiere the violation cov.ld not be rectified by restitu.tion, a 
certificate of compliance only, was the price of adjustment. When a case 
was una.djustable the case was referred to the State ERA Compliance office 
in whose territorial j^irisdiction the local complip-nce boa,rd was located, 
with a recommendation that the Blue Eagle be removed. 

Tlie President's pLeemplo^Tiient Agreement cam.paign was promoted ener- 
getically-; patriotism was worked Ojo to a fervent pitch by a-oxiliary organ- 
izations, sucli as women's clubs in ho^j'.se-to-house solicitation of Blue 
Eagle window display insignia, identifying those who agreed to, trade only 
with tradesmen displaying Blue Eagle meiabership insignia, and spealcers 
before liuich3on clubs, rallies and other meetings. The resiilt of this 
campaign wa.s to create an avalanche of inquiries by mail, inc^iir^rs in 
person, complaints Isy mail, corn'olaints in person, administrative questions 
by local compliance boa,rds, com'olaints from respondents of acts by boerds 
in excess of their authority, complaints from complainants that justice 
had been denied them, comiolaints from complainants the,t action was too 
sIot;, or th^it the investigation was inadeqioate, complaints from business 
men anci respondents of op-nressive regilations, ar.d many other problems. 

An immediate problem of ad:iiinistration was the imrediate need for 
interpretations of the articles of the President's Reemployment Agreement, 
Scores of otiestions arose in the adjustment proced\tre of the local compli- 
ance boards that required information beyond that in their possession, 
i.iany interiiretations were required to clarify ambiguities. The State 17SA 

9839 



-43- 



office coiild e:cplain twt couJ-d not interpret agreements, therefore cornr.u~ 
nication with ¥ashin'-":ton r/ac freqiient - alnost constant at times. The 
vol^rae Oi requests o^" this sort hp-Ci the tine reqiured to £;et throuj^h the 
reauired a.pprovals often dole^'^ed for several da"'G vast should have teen 
immediately availatlc to have done an efficient job of complipjice. Tnese 
delays jeo-oardized the morale of hi.^hlj^ e-otionalized persons among hoth 
the parties of a complaint and the local compliance Taoard. It encouraged 
local compliance hoards to do their ovai interpreting and consequently 
create a serious problem in morale for the supervising HEA Compliance 
office T.'hich ofttimes had to repudiate the loca-1 compliance "board and 
v.'cal<:en therch:/ their standing and prestige as Administra,tors. 

iurother -.lajor problem in ad-ninistrating the supervisory responsibi- 
lities of the State ITRk Compliance office Tas .the lack of interest of the 
individr.al ner.ibers of the local compliance boards in familiar izing them- 
selves uith the details of procedure and of the PEA, the modifications, 
interpretations, etc. I'lElA instructed the State LIRA Compliance offices by 
bulletins and field letters. The State KRA offices instructed" the local 
compliance boards, similsrlj- by bulletins and individual letters. Problems 
were created often "oy failtu'e to heed these instructions; failure to keep 
informed s":"stenatically. In the beginning a problem of NBA administration 
from a -oersonnel stanc-ooint was to have sufficient persons who could inter*- 
view callers; correspond with inquirers and answer 'phone inquiries. Tlie 
callers re^^resented various interests; some were potential complainants 
inqiiiring in detail the basis for complaint; some called to recite the con- 
ditions of their employment; some were business men inquiring the meaning 
of provisions; some came to recite their situation and the oppressive 
character of certain provisions, come called to sign up an agreement; 
some to" give' information on, .violations; mail inquiries and phone inquiries 
covered:'a very similar range. An attornej^ was an ij-nportant staff requi- 
site at that time. All questions of ambiguity arising from inquiries or 
from compliance activities, pertaining to provisions not explanable in 
themselves, or by official interpretations were referred to the office 
attorney. The attorney was a counselor. A State l^lEA Compliance Director 
acting as Chief Executive, an office raariager acting as business manager, 
or administrative assistant, cleri.:s maintaining a file of PRA. executed 
forms, supplies, etc, a telephone exchange operator who also acted as a 
receptior.ist or information clerh,- a messenger, and stenographers made 
up the office staff. The division of duties differed with the need of 
the office; in small offices some of the dtities outlined were consolidated, 
in large offices greater speciodization wan necessary. 

Ulien a code was approved, tlie industrj'' covered by the code automati- 
cally became subject to the code as of the date and under such conditions 
as it become effective - and at the sajne time any PRA. which a member of 
that industry load signed became nv3.1 and. void. As the number of codes 
increased the -oersonnel handling interviews, correspondence, and inquiries 
was gradually transformed into field a.justers. The nature of their duties 
remained the same except for the introduction of s. new procedure which ad- 
ded to their work as interviewers or correspondents under the PRA., namelj'-, 
the technique of adjusting com-^laints relating to alleged code violations. 
Codes were a'iproved in considerable ntimbers - figuratively, daily; in a 
short time the interviewers became adjusters excl^"lsively, either of cases 

9839 



-44- 

involving code violations, or of cases involving "EBA violations. The 
administrative problems of compliaiice remained similar in character and 
arose from the sama causes as descrilDed during the FHA period. 

The division of duties ana. responsitilities in the ffilA State 
Ccmpliance Organization remained the same in character. The change 
"br-iught by code administration was largely an addition of a supervis- 
ory responsihility. The code compliance organization contained a Later 
Compliance Officer, His duties rere on assumption of responsibility for 
the proper and prompt adjustment of cases involving violations of code 
labor provisions (exce:.t 7-a provisions regulating labor disputes). In 
large offices, where greater division of duties was necessary, or ad- 
visable, a similar supervisory position was maintained for cases invol- 
ving violations of trac^e practice provisions. This position was filled 
by a Trade practice Compliance officer. TiVherG such specialization was 
tuawarranted, the u.uties of tnat position were consolidated with those 
of the Executive Assistant. 

The procedure for adjusting complaints was designed to accomplish 
compliance by education; to stop non-compliance by persuasion. Under a 
procedure so built, dealing with a type of crime that represented con- 
tinuous damage to all su^jefct to the law during the period of trans- 
gression, speed in adjustment (the cessation of the transgression) was 
the keystone that held the arch of compliance together. Decentralization 
of responsibilities an-^ authority might have been a solution. The pro- 
blems of administration created by the continued centralization of author- 
ity, or duties, in the Deputy Administrator on interpretations, exemp- 
tions, etc. , has been cited in a preceding portion of this report. 

The work of adjustment began when the adjuster first notified the 
respondent of the complaint filed against him. Before this step in the 
procedure had been reached, the complaint could have been seriously 
delayed going through the routine, preliminary to the assignment of the 
case to the adjuster. 

Specialization of adjusters on codes was found to be conducive to 
more efficient ana more rapid adjustment. Specialization of adjusters 
on trade practice cases and on labor cases was also found, to be desirable. 
Each was a separate fielu of interest, A^i adjuster whose range of exper- 
ience was as a tradesman aaid whose field of interest was trading could 
investigate the facts in a trade practice case more proficiently and 
adjust the vi-latious more promptly and more justly than an a,djuster 
without such background. An adjuster whose ran^e of ex^:erienc-' liad been 
in union activities, or as a factory em^^loyje, or produrLion "■-'.-; --.ial 
EUid whose field of interest was social justice was a mr,:",: vr- ': o, p.nt 
adjuster on labor cases. An av-juster w.-O had an equal exp'^rlaic-t; c^id an 
eo;ual interest in both fields was the exception; rather than clie rule. 
Such a person was ideally qualified for use in a teix-itory covered by a 
traveling adjuster handling all cases from such territory. (*) 

( *) Tiiis represents the opinion of the author, gathered from personal 
experience as executive assistant in the State IIRA Compliance 
Office for Illinois. 



9839 



-45- 
4 . Training personnel . 

The mass of information with which the adjusters and supervisory 
officers had to he currently familiar poured in from Washington daily and 
often in considerrhle volume; new codes were almost daily receipts, so 
also were arnendments to code v:rovisions, ariendiaents to codes, iniserpre- 
tations of code ambiguities, instinictions in Wadiii:igton Compliance 
Division field letters, new or ciianc--ed procedure, etc. In adjusting a 
case, the latest interpretations of a provision in question had to he 
known. All modifying regalationr,, such as Executive Orders and 
Administrative Orders that transcended all codes effective up-to-the- 
minute had to bo known also. 



The mass of information referred to above, accumulated at a rapid 
rate. It presented a. problem to new adjusters and supervisors and often 
bewildered them the first few days. It was necessary to train new 
adjusters by first familiarizing them with what had gone before in the 
developement of WRA. and its codes and modifying provisions and regula^l 
tions; then to work into the actual work of adjusting under the tutor- 
ship of a veteran adjuster. 



Members of trade practice complaints committees were elected 
from the inaustry itself. Their training and experience was in the in- 
dustry, and therefore the problems of the industry were daily subjects 
of their thought and concern. These subjects probably occupied a major 
portion of their thinking and defined the boundaries of a considerable 
portion of the world in which they lived, mentally. These men would be 
apparently ideally qualified to act as technical advisors to a judicial 
body, but present a potential problem when consiaered as nembers of a 
judicial body per se. 



The same reasoning may be applied to the full iime secretaries 
employed by tne Committee to perform the routine functions of procedure. 
Many secretaries were former trade associ..tion secretaries whose salary 
and experience came from the industry employing them as custodians of 
compliance. When enployeu by the ERA as custodians of compliance (the 
phrase "custodians of conpliance" is used here for clarity of comprehen- 
sion; it does not refer to an official title) the trade ar.aociation ex- 
perience provided the field adjuster on trade practice oasse a technical 
education on trade practices that helped him to comprehend the essential 
factors of the adjustment problem of his case. The adjustment procedure 
was designed to depend largely on education as the instrument of com- 
pliance. When the adjuster had a techical knowledge of the practices 
regulated and of efficient business administration, his success as a 
field adjuster was enhanced. His role as an educator was strengthened. 
The cinfidence of the respondent in the adjuster's recommendation was 
materially higher under such circumstances. The adjuster had to know 
the practices judged, to be competent to weigh the evidence submitted. 
The efficient adjustment of a complaint depended also on the aijuster 
having a detailed knowledge of the code provisions of the code governing 
the case in hand, and of all modifying interpretations, adriiristrative 
oraers, executive orders, exemptions, stays, etc. A very small percen- 
tage of the codes approved and in effect accounted for a majority of 
all complaints filed. This favored specialisation as a solution to the 
problem of "knowing the code" by the adjuster. Certain codes could be 
9639 



-46- 

assigned. to certain adjusters aail "both speel aii.l efficiency on the part 
of the a-ljuster iiaproveJL as a result. (*) 

At first, adjusters invite:, parties to a complo-int , to the office 
of the adjuster for an informal iuvesti£:ation of the complaint. All 
investigations i;?ere made at that time in the a.-juster's office. The 
proce.lure griidually change:, as experience was gained, to a cora'bination 
of inside and outside investigations. Kany times the inforektion that 
coul . "be obtai^isd. ty the adjuster from a personal call on the respon- 
dent at the respondent's place of Irusiness woul .. facilitate the adjust- 
ment, thereby shortening the tine period of adjustment effort an- _ 
increasing the a.guster's output. Certain corresponv.ence was necessary 
in connection with every case, aa.. a meeting in the adjuster's office 
was advisable when the investigation require^., both parties to the case 
(the respondent an.' the complainant) to be present at the same time. 
The adjuster's working time might be roughly divide: at 50'fo in the 
office and 50^ outside. It shoul- be understood at this point that the 
practice describe", here, although believed to be typical, varied with 
State Officers within the range of freedom allowed for individual office 
policy in interpreting and applying the fixed procedure prescribed by 
NEA Bulletin No. 7, or Compliance Division field instructions. The 
evolution and structure of the organization for complia,nco is treated 
comprehensively in the history of the Compliance Division. This 
review is therefore confine - to viewing in retrospect the problems that 
arose from practical experience tnat might suggest subjects for consid- 
eration by a reaJ-^jr int:;ff^sted in building or improving exp'erimen^;^l 
experiences. 



(*) This is the opinion of the author taken from his experience as 

Executive Assistant in the State NEA Compliance Office for Illinois. 



9839 



-47- 
I roUS TE I AL S jiLF-aOVEHiil :Ei,-T 



Under the iIHA plan the self-eovernini-; functions of Indus trv were 
many and vnried; the. t.rad>^ ar.KOciritionG or code committees participated 
in the draftin^;; of theco.;ies; the Code Ai.thorities gathered information 
and performed many other functions. In this study we are concerned 
only with the functions performed hy industry in securing compliance 
with the codee after they were promulgated. 

The i'Jational Industrial Recovery Act included in its declaration 
of policy the following; — - "...it is herehy declared to he the policy 
of Conf^resb to ... provid.e for the ijeneral wi3lfare hy promoting the 
organization of industry for the purpose of cooperative action among 
trade ,croups, to induce and maintain united action of lahor and manage- 
ment under adequate goyernmentf>l sanctions and supervision ...". 

Title I, Section Z (a) of the Act em.powered the President to approve 
codes of fair competition suomitted hy trade groups and provided that 
he might as a condition of approval, impose such conditions including 
the maicing of reports, etc., as he might deem necessary. 

Title I, Section 10 (a) of the Act empowered the President to make 
such rules and rfe.mlations as were necessary to carry out the provisions 
of the Title. Tlie Act exem.pted those who complied with the codes from 
the operation of anti-trust lav/s insofar as actions which were in comi- 
pliance with the codes were also in violation of the anti-trust laws. 

It would appeal" from these provisions of the Act that Congress in- 
tended to permit and encourage industry to exercise a larger measure 
of self-government by cooperative action than had heen possible under the 
anti-trust laws and thp.t it delegated to the President the authority 
to set up the machinery which vns to bring about self-government by in- 
dustry. 

Chapter III, A (O-eneral Scope and Nat-ore of Compliance Task) 'of 
this study points out that NHA was faced v;ith a vast adjninistrative 
problem in securing compliance with the codes. It welcomed the assist- 
ance Y;hich it believed industry v/ould afford in this connection. 

A great many members of industry were fearful that the Nationa In- 
r'ustrial P.e-overy Act would give rise to entirely too much governmental 
interference in the conduct of business. The declaration on the part 
of yRA of its intention to permit industry to govern itself, no doubt 
tended to assuage this fear on the part of industry. 

These v/ere the main reasons for enlisting the aid of industry in 
securing code compliance. There were, of course, arguments to be ad- 
vanced against permitting industry to have a hand in this work but it 
is sufficient for the study of the topic under consideration to accept 
the fact that a policy of industrial self-government, insofar as code 
compliance was concerned, v.'as aoo-nted and then to determine the pro- 
blems created by such a policy. 



9839 



, -48- 

Aside from th^ maiidntes of the Act, IIRA sponsored the idea of in- 
dustrial self-go-vernment insofar as compliance vfas concerned, hecause it 
hoped that ''b-'j the cooperation of at least a majority of the individual 
m-emhers of industry, voluntary compliance vdth the code for a particular 
industry -.rould be obtained and the force of public opinion within the 
industry would be of great assistance in Lringin^; ;)bout compliance on 
the part of those members of industry v.'ho would not at first voluntarily 
comply vi'ith their code. 

In theory industrial self-f;overnment is a beautiful idea. In 
practice it "'as something else ,-igain. 

In adrition to the control which industry wrs permitted ''oy NHA 
to exert over the writinfV of the codes, the various Code Authorities, 
after they v/ere set up, rere repeatedly encouraged to talce steps to 
esteblish agencies of industrial self-government which were to be charg- 
ed v.'ith the responsibility of obtaining compliance with the code for 
their particular industry. This was '."'irectly in line with the declpjred 
piolicy of Congress and it may be said that under the national Industrial 
Hecovery Act, the primary duty of IIRA insofar as compliance is concerned, 
was to see that industry governed Itself, that is to say, that each in- 
dustry having a code obtained compliance with the cod.e tliroxigh its ovm 
agencies and. that the compliance efforts of the C-overnment should be 
merely supr. lementary to bhe compliance activities of industry itself. 

At the beginning of the HHi program, the majority of the m.embers 
of trade and industry v-iere entirely unorganii',ed. Tho-.'-e vAiich xiere organ- 
ised in trade associations had never openly attempted to enforce definite 
rules or rerjulations for the government of the industry. 

During the preceding thirteen years, the Pedural Trade Comrrdssion 
had established some one hundred .and fifty codes of fair competition em- 
bracing trade practice, but not labor, regulations. Some of the ind.us- 
tries for which these codes were written established 5''air Trade Practice 
Conference Comm.ittees which were to assist the Federal Trade Commission 
in enforcing their code and report to the Commission cases they were un- 
able to adjust. 

In a letter dated October 24, 1935, Henry Miller, Member, Trade 
Practice Board., Federal Trade Commission, states, "For reasons stated 
above I do not have available the nuiKber of com.plaints considered or 
adjusted biy these committees, or the number of such com.plaints which 
the committees may have reported to the Commission." It is safe to say 
that these committees reported very few violations to the Commission 



9839 



and from this f;ict the Comrnir.sion dvexi the inference that violationG 
were correspondingly few. (*) 

NRA' s experience with mass compliance raetliods proved beyond a doubt 
that the fact that it received few complaints of code violations in a 
particular locality or in a particular industry was not proof that vio- 
lations were correspondintclr' few. Tlie fact th.-.t complaints of violations 
of the 'Federal Tr-ule Coiinission codec were so few vfould indicate that 
the industrial committees were inactive, hence industry got little com- 
pliance experience in its venture into Federal Trade Commission codes. 

The great majority of the industries having Federal Trade Comimission 
codes were either small or else only a sectional port.ion of a particular 
industry. Prior to the National Industrial Recovery Act, the Federal 
Trade Commission codes represented the only legal efforts looking toward 
cooperative industrial self-government, thsrefore, ,:r£uiting for the sake 
of argument that those industries affected by the Federal Trade Commis- 
sion codes were able through industrirl self-government to obtain com- 
pliance vrith their codes, it remains that the vast majority of industry 
had no experience in obtaining through its own efforts, compliance with 
any definite set of rules and refgiilations for its own government. 

At the ti-^.e the ilational Industrial Recovery Act became a law, there 
existed some four hundred trade associations, approximately one-half of 
which exerted influence only over a limited area, which were fairly suc- 
cessful in obtaining complaince with certain rules ,and regulations agreed 
upon by the association members. Hor/ever, these rules and re^culations 
which were not announced to the public; usually had to do with price 
and production control; and the methods used to obtain compliance with 
these rules and regulations were of a sub-rosa nature about which the 
least said the better. (**) 

There was not a loiovTi example of an industry attempting to enforce 
definite wa~e and houi" standards on its m.erabers through trade associa- 
tions or cooperative action. 

Thus it may be said that industry as a whole had very little or no 
experience in obtaining compliance with any legal set of rules and re- 
gulations for its own govermnent through its 'own legal efforts. 

(*) Letter dated October 24, 1935, from Henry Miller, Member, Trade 

Fr' ctice Board, Federal Trade Commission, "Our experience, however, 
has been that the fair trade practice riales promulgated under the 
auspices of the Commission through its trade practice conference 
procedure are adhered to with little exception, -Reports of viola- 
tions have been comparatively few. Compliance was never much of 
a problem but has been readily forthcoming once the i-ules ^:ere 
adopted and promulgated. Moreover, it was a rare instance in which 
legal proceedings were necessary in order to bring about compliance." 

(**) These statements were made on the authority of a member of the 

Bureau of Joreign and Domestic Commerce of the Department of Com- 
merce. 



9839 



-5C- 

In this totall;" nev/ field of industri,?.! ^elf—'ov eminent there were 
no precedent b or "aides to oe followed ercept tho?:-e extra ler:;r.l methods 
which had "been us ;d Idv trade associations and the like to whip recal- 
citrant memliers of industry,- into line. A nuinher of Code Authorities 
and their Inc'Ustrial Adjustment Agencies mac e the mistake of atteraptinti; 
to use these swae methods to force compjliance v^ith the codes. ITaturally 
such methods caused animosity'" tov/ards the v/hole codn structure on thn r.art 
of those members of industry who felt that they ha;~ no direct representa- 
tion on the Code Authority and that the codes were "bein-;; used oy tneir 
povrerful competitors who did have representation on the Code Authorities, 
for their private j-^ain. 

I'IRA constantly urtjed and finall,; required each Code Authority to 
suljmit a plan for settintT up Industrial Adjustment Ardencies to obtain 
compliance v/itii their particular code. (*) 

Tile ori^ani^ation of these Adjustment Agencies Sins rushed alon^,' as 
quickly as was possible, i^o time was .;;iven these Adjustment Agencies 
to train employees and no reserve of trained personnel existed. As 
soon as these Ae^encies were set up they were authori:-^ed by !MIIa. to handle 
complaints and given as a fjaide to the method of handling these com- 
plaints, NRA Bulletin No. 7 which contained rather va:Tu.e and >veneral 
instructions but was of little or no assistance to the Industrial Ad- 
justment Agencies in formulating a technique for handlirij^; complaints. 
Adjustment technique was gradually developed by HHA but a large number 
of Industrial adjustment Agencies were established and operating long 
before K2A had worked out definite instructions even for its own field 
agencies. Blunders were made which resulted in antagonizing members 
of industry against whom complaints were made and those persons who 
made the complaints because these were improperly handled. 

Code Authorities and the Industrial Adjustment Agencies set up 
by them were usually composed of the members of the particular industry 
involved. Y/hen tiie industry memb- r against whom a complaint was lodged 
appeared before an Industrial Adjustment Agency in ansv/er to their notice 
that a complaint had been filea, he was confronted by his competitors 
who were to act in a quasi- judicial or at lease quasi governmental capa^ 
city in adjusting the complaint. A large portion of such' respondents 
(persons against whom a complaint was lodged) felt that they would never 
be able to get a square deal from their own competitors. In fact, it 
must be recognized that it placed a great strain on human nature to ask 
a member of industry sitting as a member of an Industrial Adjustment 
Agency to divorce himself entirely from his o^Am business interests rjid 
handle complc?into made against his competitors in an entirely impersonal 
and fair manner. Inevitably, personal differences arose and charges of 
persecution became rife. 

(*) Office Manual: P.-iragraphs III 1400; III; 1500, Administrative 
Orders No. X-12, Nc . X-69 



9839 



-51- 

NRA maintained a compliance system which was to supplement the 
efforts of the Code Authoriti.rs and their Industrial Adjustment Agencies 
and when an Industrial Adjub-traent Agency was unahle to adjust a complaint, 
it was to refer this complaint to NVIA. In a larre nuin"ber of cases, 
however, N2A found that the manner in v/hich the Industrial Adjustment 
Agency had handled the complaint had so antagonized the respondent that 
he was totally unresponsive to aiiy efforts to ainic-ibly adjust, tho cora- 
pla.int and 1-IRA' s compliance efforts failed in such cases. 

A great numoer of the industries which had codes vjere composed of 
a small nvunter of units, others xrere ra de up of units the majority of 
which were located in a small section of the United States with only a 
few units scattered here and there over the cO:.:ntry. Under these con- 
ditions, such industries found that the expense of maintaining com- 
pliance machinery to cover the entire industry was great and because 
of the expense the industry was unwilling to maintain adequate compliance 
machinery. 

An examination of the budgets submitted to ITHA by the Code Authori- 
ties indicates that industry did not approach the compliance problem 
realistically. Despite the fact that by far the most important and 
difficult task confronting the Code Authorities was the code compliance 
work assigned to them and their agencies, the majority of the monies 
appropriated by the budgets v/ere earmarked for other purposes where any 
earmarking or recapitulation of the budgets was attempted. 

Each Code Authority was instructed to set up Trade Practice Com.--- 
plaints Com.mittees and later Labor Complaints Committees and they must 
have, in the majority of cases, formulated their budgets with 1-mowledge 
of the fact that the burrlen of obtaining compliance with their parti- 
cular code during the period covered by such budgets devolved upon 
them. Nevertheless, it is apparent that a minor portion of the funds 
to be raised by the Code Autriorities was apportioned to the compliance 
functions v/hich were the most important and, if properly performed, the 
most expensive of the functions of the Coi\e Authorities. 

For some reason the Code Authorites and their Industrial Adjust- 
ment Agencies failed or refused to cooperate with NBA in their compliance 
activities, failed to follow such regulations as v;ere promulgated by 
NRA for the guidance of such agencies and failed to report to iIHA con- 
cerning their activities. For example: The Com.pliance Division re- 
quested all Code Authorities which were authorised to handle complaints 
to report at regiilar intervals on the number of complaints received, 
the number adjusted, etc., on blank forms v;hich were furnished to the 
Code Authorities but despite the fact that the Code Authorities were 
repeadedly urged to file these reports, in one report period in April 
1935, at a time when four hundred and ninety-three Code Authorities 
were authorized to handle trade practice complaints and twenty-one 
were authorized to handle labor complaints, only one hundred and thirty- 
two authorized Code Authorities reported on their trade practice com- 
plaints and six on their labor complaints. This unwillingness to cooperate 



9839 



-.ith the C-overnment vmen the^-e Agencies were exercising quasi-govern- 
mental authority, regardless of where the fault nay 1^^:-/^,^^^^^ .^J^ 
greatly reduced, efficiency in the compliance eflorts of Dctn the Code 
Authorities and 1I?A. 



9839 



-53- 

a. LITI&ATIOI-T 

In the eorl.7 days of IIEA, as has been more fully discusred else- 
where, the policy wo.s to secure compliance if possihle throu£;h methods 
of conciliation and education. Later, and near the end of March, 1934, 
a change in policy took place when the idea of punitive measures was 
advanced h ecause the earlier methods had failed to produce desired re- 
sults. As a result, litigation and prosecution activities gained in im- 
portance and increasinr-;ly became a major concern in administration ac- 
tivity. 

As has been seen, iIRA charged the Department of Justice (Attorney 
General) aiid the Federal Trade Conmission with the enforcement of its 
terms. (*) 

However, HEA bein^ charged v;ith the administration of the Act, 
regarded enforcement as being a necessary duty incident to administra- 
tion. Therefore, "NHA tool: upon itself, the latter part of Ilarch, 1934, 
the burden of coordinating enforcement efforts among those branches of 
the Government which were specifically charged with enforcement respon- 
sibilities. 

1. EFFECT on COriPLIAI-ICa OF LITIGATION ITSELF AL'ID 
OF LACE OF LITIGATIOK . 

It was of necessity hignly desirable taat ilRA should have some 
voice in the selection of those cases arising -onder the Act, wherein 
adjustment efforts had failed, and upon" which court action or prosecu- 
tion should be undertal^en. 

Obviously, great confusion would have arisen if the Department of 
Justice had proceeded indiscriminately with the prosecution of cases, 
as the Act expressly empowered the Attorney General and District At- 
torneys to do, while iIRA was concurrently attempting through its com- 
pliance machinery'' to adjust the same cases and bring recalcitrants into 
cooperation with the code program. This problem, v/as resolved by a 
circular from the Department of Justice instructing District Attorneys 
generally not to accept any cases under NEA from any other source than 
NRA itself. (**) 

In conformity \7ith established compliance policy, attempts were made 
in all cases to obtain compliance from the violator through conciliatory 
methods before court action was decided upon. Except in unusual cases, 
very few in number, no court action was taken if compliance efforts were 
successful. However, each case had its ov,-n peculiar facts, and it was 
necessary to decide at wha.t point in the handling of a case compliance 
efforts should be abandoned and tne case referred to the Department of 
Justice for action. 

A Litigation Division had been organized by IIEA -.Tithin its Legal 
Division under the supervision of a Director of Litigation who, in turn, 
reported to the General Counsel, and it became a primary duty of the 

{*) Section 3(b) ; Section 3(c); and Section 3(f), HIEA, the latter making 
violations a misdaaeanor. 

(**) Department of Justice Circular No. 2538 dated April 9, 1934 
9839 



-54- 

Litigation Division to select the cases upon which court action vias to 
be tai:en. Under the procedure, cases were received by the Litigation 
Division fron the Compliance Division with the reconmendation that 
court action he tal.-:en tnereon. However, not all of the cases referred 
by the Conpliaiice Division to the Litigation Division were actually 
prosecuted, many being deemed too weak on the facts, others being re- 
turned for the development of additional facts and further investigar- 
tion, and still others "oeing held in abeyance pending court decisions in 
pending cases involving similar questions. 

The selection of cases upon v/hlch court aci^ion was to be tal^ien was 
not, however, the sole concern of the Litigation Division or the General 
Counsel, but also that of the Director of Enforceiuent whose office was 
established by Office Order T.o^ 85, dated April 9, 1934, his duties being 
to supervise "policies ,;cverning _ compliance, enforcement and litigation 
(this latter in conjunc-oion with the General Coiinsel)." 

!Ihe Litigation Division in discharging its functions was immeasurably 
handicapped because it had no investigatory staff of its own and depended 
almost entirely on the field person.Lel of the Compliance Division to 
gather the evidence upon which the crses were based. It was unnecessary 
at the start of an investigation, for the field force to gather evidence 
which would conform to court roauirements, since the first object was to 
obtain voluntary conrpliance. Therefore, only e small percentage of the 
cases received and handled by the Compliance Division ever reached the 
Litigation Division for court action. 

As time passed, the question with ever increasing frequency arose 
as to whether a field worker should spend time and, if so, how much 
time in attempting to gatiier legal evidence in tne cases while he was 
endeavoring to adjust them. The jud?ment of the individual field work- 
ers tirroughout the couiitry upon these matters varied greatly and, in a 
substantial percentage of cases, re£;ulted in insufficient lega,l evidence 
being gathered, wnich necessarily caused long delays when, later on and 
after adjustment efforts had failed, it was decided to prosecute. 

Such being the procedare under which decisions v;ere made to 
prosecute, and such being the jiroblems confronting the compliance and 
enforcement agencies, it is well to now consider the effect 'on compli- 
ance of litigation and lack of litigation. One very readily reaches 
the conclusion tliat litigation and lack of it had a decided effect on 
securing compliance. Statistics reveal tliat 2C64 cases were referred by 
the Compliance Division to' the Litigation Division v/ith recommendations 
for court action, and t.iat of these only 564 cases ever reached court. 
These figures demonstrate clearly t'nat tiiere was a pronounced lack of 
litigation '.vhich should have been instituted in support of the compli- 
ance program. This failure to litigate, hardly chargeable to the 
Litigption Division, because it had practica.lly no facilities for in- 
vestigation, had a very depressing effect on compliance and contributed 
in a material degree to the failure of code administration. On the 
other hand, such little litigation as was attemT)ted, contributed its 
mite to help compliance and prevent the absolute and utter failure of 
the enforcement program. '. '• 



9839 



2. EFFEC T O F COURT DECISIOI-IS .AlID Z-SEATS OF LITIC-ATIOH 

OK coI'.'Ipl"i;J'CE . 

Code Autlaoritios quite .-generally were constantly urging the 
p.rosecration of allstjed violators within their respective industries so 
as to provide exc-oriples for others, and State Directors were similarly 
concerned about alleged violators located in the coirimunities under their 
respective juri sdictione. Hence the Compliance Division had to keep in 
aind the effect of liti§:ation on compliance in (general in making decisions 
as to what cases should he sent to the Liti:,;ation Division for court 
action. 

It is a:donatic tl:Lat the successful prosecution of a violator, 
under a penal statute, will substantially aid the enforcement of that 
law. This w-'is true not only of prosecutions -under iJHA, hxxt of all 
court actions txiereunder. 

The successful prosecution of a case under an IIRA code or agree- 
ment had a compelling effect on ot.^er persons engaged in tnat particular 
industry, axid thereby was an effective influence toward securing com- 
pliance. And, this was notably true also of persons in the respective 
industries who were operatin,.; in localities ¥vhere the prosecutions 
took place. 

On the other hand, it was a self-evident fr.ct that the failure to 
prosecute consistent and flagrant violators in a particular industry 
or in particular loca,lities had the effect of causing others in that 
industry or locality to feel thctt they could also flout code provisions 
with impunity. 

Nevertheless, the threat of court action was, in some instance, 
a powerful deterrent on code violators or at least on prospective code 
violators and was a successful weapon in obtaining the satisfactory 
adjustment of cases' of past violation. This was especially true in the 
early days of compliance efforts. The question of whether the possibility 
of future court action should be called to the attention of a violator 
and at what point in the course of the complianco procedure it should 
be mentioned becausp a problem of compliance. 

It is inpossible in a discussion of this subject to review the 
manifold decisions which were obtained in the courts on alleged 
violations of the codes, but 'it should be said that wherever success was 
had in' the courts, the favorable decision had a stimulating effect on 
compliance and served as a powerful deterrent to otners who might other- 
wise have felt inclined to commit violations. It is regrettable that 
the Litigation Division, due to lack of staff and. facilities for 
investigation, was unable to institute a larger volxmie of litigation, 
because the failure to promptly institute litigation had a depressing 
effect on compliance and gave persons inclined toward violations the 
icipression that they could disrer;ard code provisions with verj'' little 
ri sk. 



9839 



-56- 
H. P UBLIC OF IN I OH 

1. KgiATIOIISHIP 0? PUBLIC OPINIOH TO COIvIPLI.flITCE 

Concerning the relationship of public opinion to IIHA coinpliance, 
it may be aptly asked '."hether the foiiner affected the latter to the 
same extent that compliance or non-compliance may have motivated pub- 
lic opinion. Undoubtedly it is true that the significance of adherance 
to tne vast body of regulations vynich constituted. UHk cannot but have 
had profound influence on conceptual thought. The effect of IIEA and 
of NEA administration (it is reco^inized that the expression "I'EA admin- 
istration" may be termed a tautology) on the personal affairs of the 
nation, and the general importance of the activities touched, amply 
explain this influence. On the other iiand, public opinion must certainly 
have exercised a potent effect on compliance. Indeed, compliance with 
law, as also law, itself, is dependent on public opinion since the 
function of law is the representation of crystalized e;q)ression of such 
opinion. 

2. BITEHACTIOIT OP HHA COMPLIAtlCE A:TD PUBLIC OPII-TION 

Possessing the initial advantage of favorable public opinion the 
problem faced by NEA Compliance in dealing with public reaction v/as 
the maintenance of this favorable opinion. The continuation of the 
solidarity of approving popular thought was vital to the cause of com- 
pliance as the compliance administration, especially in its earlier 
daus, relied on the cooperative force of public opinion to enforce its 
mandates. 

Passage, itself, of the statute by Congress betokeried the large 
degree of public support bacld.ng the moasuro. The Congressional 
debates preceding its enactment demonstrated the signal degree of 
friendly unanimity with which it was received. Only here and there an 
isolated voice questioned the wisdom of the new law. Assuming that 
Congressional sentiment reflected the opinion of the country at large, 
the chief explanation of public endorsement of the measure is attribute 
able to the intense desire of the country for a change from threateing 
current conditions. 

It is a matter of history how, whipped to a fevered pitch by the 
leadership of the President, by the combined efforts and drives of the 
various public aiid administrative agencies, public enthusiasm surged 
forward to a point at which it could almost be termed hysterical. 

Yet the seeds of danger, to coiiTpliance, as well as to all other 
phases of NRA, lay in the- very excess of popular ap..robation which 
looked to IIEA for deliverance. It was but natural that the pendulum 
should seek to retrace its course from the extreme of the arc reached. 
It was but natural that disaffection should spread to the extent that 
the eji^jectatioi-is held failed of realization. The ei^ectations, them- 
selves, largely because of extravagant suggestions, assumed a form com- 
pletely out of proportion to any results which might logically have been 
aiiticipatod. It was felt that the panacea of the milleni-um was at hand, 
that a planned new structure and the benefits of organized economy were 

9839 



-57- 

about to wipe out current evil social conditions and eliminate all 
eventuality of future depressions. 

Such results as were obtained, or even as could have been obtained 
by NBA could not but have adversely compared vdth the sanguine hopes 
entertained. Therefore, disillusioraiient to a certain de~ree was in- 
evitable — and to that extent compliance efforts were prejudiced. 

It is, moreover, questionable whether the public ever became fully 
aware of many of the far-reaching benefits of a reformative nature which 
LIRA sought to induce. Tliat this is true, is probably attributable to 
the empiiasis laid on the purely recovery benefits expected. Indeed, the 
great bulk of adverse newspaper criticism directed against !IEA was 
aimed at what isrere conceived of as interfering efforts of ill-considered 
reformative nature which operated to retard recovery . Fev; even of the 
more virulent editorials attacked the measures as detrimental to the 
cause of reform. The preponderance of critical onslaught sought to 
assimdlate recovery with reform by suggestions that the latter would 
be attained with the former. The vp.lidity of such a concept is neither 
disputed nor conceded in this report as it lies outside of the field 
under consideration. It is, however, to be stated that, if the two 
goals must be dissociated, the odd confusion resulting from the merger 
of the two was largely stimulated not only by certain wording in the 
Statute itself, but al^io by a conscious administrative effort to shape 
public opinion in the mould of recovery anticipation. 

Fnen complete recovery failed to come as a result of NRA, or, 
which cimounts to the same thing, if the people thoxight it had failed 
to come as a result of NRA, it was too late to "talk reform". Any 
such attempt would have been looked upon as rationalization after the 
fact, or worse still, as "face- saving". Weighed in the crucible of 
public opinion, iIRA was found unproductive of tangible recovery benefits 
rjid hence wanting as a recovery measure, and therefore unsuccessful— 
the unforgivable sin. For if it is true that, .to the public, nothing 
succeeds like success, it is eqiaally true that nothing to the public 
is so terrible as lack of success, parti culf?-rly anticipated success. 

This negative disenchantment with respect to results obtained 
traced itself- out in a pattern gradually widesning with the passage of 
time, although there is reason to believe tliat the process had commenced 
as early as ir.iddle September 1933, But if the results obtained presented 
to the public any difficulties of assessment, the methods employed by 
KRA to attain them, because factually clear, did not. The discrediting 
of the means adopted was, of course, a potent influence in bringing 
into doubt the worth of the results. 

It is safe to say th^t the full import of the potential adminis- 
trative power accorded oy the loosely worded statute did not, at the 
start, fully impress itself upon public consciousness. As the realiza- 
tion began to take outline, as the method of administrative regulation 
began to unfold, dissatisfaction began to manifest itself — a dissat- 
isfaction strengthened by dissipation of fears once widely held of the 
impending social and economic collapse of America. 



9839 



This dissatisfaction G:<rpressed itself variously with the personal 
rule of General Johfison, the threr-tcned boycott -md "crack-dovm" 
methods, the multiplicity of Board and Corariission, the complexity of 
administrative ref',ulation and policy, the conceded incompetence of a 
portion of the administrative personnel, charges of unequitable practices 
and bureaucratic intolerance, code arijninistration by industry members, 
the pronouncements as to unconstitutionality and with a hijuidred other 
things. Such dissatisfaction foun'd ample pasture upon which to 
fatten in the various "incidents" occurrini2, such as the lacl: of 
cooperation evidenced by Henry Ford, such as the fulminations of cer- 
tain well known politicians, such ps the reports of the so-called-; ■ 
"Darrow Board" and of the Brookings Institution. 

The adverse effect of nou- compliance on compliance through the . 
medium of public opinion cannot be overestimated. The curious vicious- 
ness of the circle effected appears when it is realized how fully 
compliance relied upon public opinion as a weapon of enforcement. It 
may be stated, with some dee;ree of confidence, that failure- of compli- 
ance at an early date to resort to positive compliance methods of 
legal and semi-legal nature and the resort instead to public opinion 
to attain the desired end, operated disasterously to alienate the very 
force to which appeal was made. Aside frora the fact tliat public 
opinion is not a suitable insti--ument to draw the precise lines of 
demarcation necessarj^ to the effective adiiiini strati on of law, there is 
the further difficulty of presenting the case effectively before the bar 
of public opinion. 

The direct effect on individual conipliancG cases of v/ide non-con>- 
pliance fostered by failure to adopt proper enforcement measures is so 
obvious as not to be needful of further elaboration. NEA experience 
showed that the most common excuse for not complying was the failure 
of one's neighbor to comply. 

Equally important, however, v/as the effect of non-compliance on 
group or public opinion, so that it is correct to speak of the strange 
paradox of public opinion, compliance's whip, as being turned against 
compliance. 

That some of the attacks delivered on KRA proceeded from reasoning 
after the fact, some of it sincere, gome not, does not alter the 
fundamentals of the picture. Of them all no generalization can be made 
save that the great majority deemed to proceed from emotion or emotional 
self-interest rather than from logic. 



9839 



CKAFTSE IV 

COi TLIAHCE METHODS 

A. C GIlFLAIITT SYSTSi; 

1. Field 

T'-'ie orig:ini8.1 "Hegulations for the Adjustuetit by District Coiapliance 
Directors of Conrclaints of Code Violations" estpblished the procedure to 
te iollo\7ed by the field in carrying out its functions. ' Under tnis -prO" 
cedure, aiid that promulgs.ted for the Locrl Co/nplirince Boards in h0;iidling 
the Presic-.ent 's Re amp lojonent Agreement, ( *) the sole basis for activit:'" 
in obtainin:; compliance was the filing of complaints by emoloyees, com~ 

( *) i2A liulletin 5, "Kegulations on Proced.ure for Local I^HA Compliance 
Eoax-ds" (Se^jtember 12, 1933), PF. 2-6 inclusive. The procexaire 
provided briefly v/as as follows: When a complaint of violatim 
T/as received, it v;as examined for legal sufficiency by the le.^al 
neraber of the Board. In t .e event t.\e comolaint stpted a pri la facie 
violation, notice that it hr.d been filed was given the emploj'^er. 
The notice might be eitner Trritten, tele-ohonic or personal, and 
rn.s supposed to GS£;ume coDioliance and. that the complaint was aue 
to e. misunderstejP-d-ing. Together with the notice, the respondent 
was frj:'nished v/ith copies of the PEA and official explanatory" re- 
leases. The -orovisions of the F3A were then explained to the em~ 
y.'loyer by a meinber or a representative of the Board in an informal 
personal interview, and the respondent was alloweo. to explain the 
facts alleged in the complaint ? nd tu maJce any necessexy adjust- 
ments in "v'orking conditions. 

In the event the complaint I'as not adjusted by the foregoing pro- 
cedure, the respondent was given a,n opportunity to appea.r before 
the Board a.nd state nis case. Kotice of opportunity to be heard 
before the Board was not in a prescribed form, but liad to be sent 
on official l\iIlA stationery in a franked, envelope, and wa.s to in- 
clude copies of the PEA and official explana.tory releases, unless 
previously furnished. 

Hearings were to be conducted by tne Board on an informal tone, 
for the purpose of educating the employer and influencing him to 
comply voluntarily. The Boards viere instructed- that they had no 
power to compel the attendance cf the employer end witnesses, the 
prod-uction of books end papers, or the giving of testimony. 
Questions were to he confined to the single purpose of determin- 
ing the validity of the complraint, and were to be used chiefly 
to aid. the respondent in ma!;ing his vol^ontary statement. If the 
respondent refused to 3.ns?rer a material cuesticn it was ex;plaaned 
to him ths.t such was contrary to the spirit of the Agreement, 
gold such refusals were noted by the Boa.rd in making its report to 
l^A. 



9339 



?ootnote (continued) 

Tlie Board then decided ty majority vote vrhether or not 
tiie complaint was valid. TTnere. no viols.tion was found tiie 
case was di^opped. Where a violation was found, the employer 
Tras given an opportunity to rectify conditions. In either 
event, vjhether the complaint was adjusted or rejected, the 
respondent was given a Letter of Compliance which he niight 
display near his insignia. 

TThere the respondent refused to ?djust, the Board forwarded 
a report to ]:TtlA. through the Secretary of the District Recovery 
Zosj-d, signed "by all mechers, with their votes indicated, 
'..'hich included: the original conplEint; a signed certificrte 
"by the legal meiater or other representative that the ■orocedtire 
outlined li£.d teen followed; a sumaary of the employer's state- 
ment; pjiy additional pertinent facts; a recOTosiendation for 
further action. 

rTogress reports were nade from time to time to the Secretarj- 
of the District pLecovery Board. 

JJ.1 complaints had to he in writing and signed hy the com- 
plaining party. The Beards ' jurisdiction extended to all ?2A 
conrolaints against employers in their particular communities. 

Two cardial rules of procedure were laid down: (l) coth the 
fact that a complaint ha,d "been filed against an employer and 
the complainant's identity were to he icept confidential; (2) 
The Board was not an enforcement agency in any sense of the 
word, out was to gain complisjice through education, explsjiation, 
and conciliation. 

The Board had no general investigatory or inauisitorial 
functions, hut to the contraz'y. ^as instructed not to use its 
representatives as invest ig3.ting agents (p. 10). 

Second offenders, where the action appeared to "be wilful, were 
to he given no opportunity to adjust complaints . 

(Note the similerity hetween the ahove descrihed procedure 
riid that employed hy District Compliejice Offices under the 
October 13 Regulations and hy the State Offices under Bulletin 7, 
v/hich is discussed in the tody of the twXt ths,t follows. This 
is uade especially interesting hy the following quotation from 
Bulletin 5, p. 4, which tring^^ he differing hases of the 
_PRA and the codes, " 1} • ent's Reemployment Agree- 
ment is not a statute to oe . hy le.w hut 3 voluntary in- 
dividual covenant.") 



9&S9 



-51- 

petitors or other interested ;?j.rties charging the paxticiilfj: respondent 
with committing a violation cf a code or the PEA. 

Under the procedure cre?.ted, coin'olaints of code violations hsd to oe 
in vrritin^, rrefergbly on the officiallj" prescrioed fora. (*) The in- 
structions also stated that where possihle, ccmplainta should "be 
sworn to "before a notary cr witnessed hy at least one person faailir-r 
with the facts. Howeven, this last was never followed extensively- dj 
tne field offices "because , for the most part, corpla.inig employees ueve 
financia-lly unahle to pay notaries' fees and fesx of their identities 
as complainants ■becoming IcQOwn precluded the practica."bilit7 of reccLir- 
ing vritnesses. Likewise, nany complainants were relativel;/ -anedi-.cated 
and ui.aole to cope witn any technical rsc"iireme;-its attached tc the 
f ilin~ of complaints . 

The District Offices were given j-'orisdicticn over all complaints 
charjjing violations of a/cproved codes hy eL:ployers sit"uated within their 
respective districts, (**) except ^here a code authority for the 
partic'iLfX industry h^d been organized and authorized tc handle the 
type of complaint filed. 

IHien a complaint was received, it vras docl-eted end examined by 
the Legal Adviser to determine whether or not the facts alleged there- 
in, if true, were sufficient to. state ?, violation. If the finding 
we.s in the negative the complaint was rejected aiid closed and the com- 
plaiiitnt so notified, together with the reasons for holding it in- 
va,lid, (***) However, if the complgint was determined to state a 
prima, facie case of violation, it was accepted and put through a, re- 
gular procedure, described below. 

It is importsnt to note here the emphasis which was placed on 
legal sufficiency, form, and a set procedure, since the tendency" of 
the field was to interpret these instructions literally. This emphasis 
on form was not without its prupose . The field offices were very much 
understaffed, and even the limited personnel was largely untrained for 
the vork, so that some device was necessary to conserve compliance 
facilities "oy eliminating groundless and crank complaints. However, 
the -pla,cing of formal requirements proved to "ce a two-edged sword, 
for man;" really had cases of non-compliance went untouched, onl;- to 
hoh up an.d plague the field offices at a later date. 

(*) "Regulations for the Adjustment" etc. (October 19, 1935), p. 1. 
(**) "Regulations for the Adjustraent", etc., p. 1. 
(***) "Regulations for the Adjustment", etc., p. 1. 



5839 



— D4.-;— 

An illustre.t iO:i of this ves tlie zflanner of treatment of anonj^ous 
co:nplaints. As ji-ointed. oxit in the footnote "beginning on the first "^i.^e 
of this chapter, the -ins.t met ions to Local Compliance Boards hajidliniT 
the PHA required, all complaints to "be in vriting and signed "by the con~ 
plainant. (*) This was changed in the instructions to District Com- 
pliance Directors to the rule that anonvaious comola.ints mij^ht "be acted 
on at the discretion of the Directors. (**) This resulted in the 
im.jorlt-j of such complaints "being rejected, hovever, since the District 
Offices vfere lookin/^ for every p.ossi"ble way to lighten their own leads 
so ths,t they could operate with some degree of efficiency. Althoi.'^li 
this trea.tment of anonymous comolaints was dicta.ted "by immediate 
necessity, it later was proved to have been an iindersira'ble method 
. cf approp.ch. Wlille logic concluded that if a complaint Tfere well~ 
grounded and made in good faith the complainant would sign his ngine, 
exroerience showed that many comolaints v/ere filed anonymously and many 
violpticns Trent unreported "becaaise the employees 'v/ere afrf;,id tliat the 
signing of their najnes on a complaint form meant proha'ble discharge, 
or at least discrimination on the part of the employer. ( ***) 

However, "before going further Into the gradual modification of the 
complaints "basis of compliance activities, it is well to examine into 
the procedure created for the handling of code complaints once they 
had "been accepted by the Legal Advisers. 

It was originally provided that a complaint valid on its ft\ce 
should t^Ice one of two courses of action. If the Code Authority had 
been .authorized to hgjidle the particular type of complaint, a copy 
was referred to the authorized agency for adjustment within a specified 
time and the parties were so notified. (****) Tnere the Code Authoritry 
made a report to the District Con:pliq,nce Director within the time lijiit, 
frou which it appeared a, satisfactory adjustment of the complaint had 
been made, the case was filed as adjusted. (*****) 

(*) Office Manual, V-B-22, Section 1, Paragraph 2. 

(**^ "Regulations for the Adjustment" etc., p. 1. 

(***) This fa,ct was recognized, at least in part, at an early da.te, 
Liaison Circular 64 (October 5, 1933), paragraph 3, quoted a 
memorandum purportedly from the Compliance Division relative 
to instructions to Local Compliance Boards, which reads as 
follows: "The instructions in Bulletin I'0 . 5 sts.-ce that 'all 
complaints shoiold be in writing and signed by the person raaZ-ing 
the complaint.' This is intended to protect the Compliance 
Board from following up malicious and annonymous complaints. 

"If a Board-wishes ■ to receive anonymous complaints, it may do 

so ." 

(****) "Regulations for the Adjustment" etc., p. 1. 
(*****) "Regulations for the Adjustment" etc., p. 1. 



9839 



If_ uitiii'i the time soecif ied the case vrp.s not reoorted "bach as adjusted, 
"the District Compliance Director proceeded to handle the complaint as 
thoiVi'h no Code Authority had been authorized to handle tha.t particular 
tine of com;olaint. 

If the District Compliance Director had not been specifically in- 
structed to refer the particular type of complaint to a Code Authority'', 
it \7as handled in the follorinf: manner. (*) A letter of acknowledgment 
v/:.:,3 sent the complainant, and the respondent v/-p.s informed of the nature 
of the complaint, wa.s furnished a copy of the code and an explanation 
of pertinent provisions, and ivas invited to state his side of the 
case. (**) 

In the event the first letter to the respondent failed to evoke a 
response, or the reply '^as unsatisfactory, a second letter was sent in~ 
vitinj the employer to the office for a personal interview. If this 
method proved fruitless of adjustment, a, form letter T/a,s sent infor-:ing 
the respondent that the case would be sent to the liational Compliance 
Director if satisfactory evidence of compliance was not furnished in a, 
stated nrinber of da^ys. Another letter \7as then sent notifying the re~ 
spond.ent the case was be in;;; forwarded to iYashingtcn. After allowing 
sufficient time for a r^ply, the file was for';'ard.ed to the I'ational 
Compliance Director for further action. (***) 

District Compliance Directors were instructed to treat all com- 
plaints confidentially, becau.se of the dander of the complainant's 
discharge on one iia,nd, . nd the disastrous effect of a.dverse aublic 
opinion on a. res'Dondeiit 's business on the other hand. (***=^y 

Lihev.'ise, it W8,s ern'ohasized that the field officers were not en- 
forcer.exit a£ents but were to a.ttain conjjlia.nce through educa.tion, 
e:qDl -.nation and adjustment. (*****) The enforcement arms of the 
G-overrjaent were specified in the Act as being the Department of 
Justice a.nd the federal Trade Comnission, (******) and cases went 
to these two a?:encies through the Ifotional Compliance Director and 
the lla.tional Compliance Board. (*******) 



( *) Form letters covering both courses of action were attached to 

these reg-alations. 
(**) "Regulations for the Adjust^ient" etc, -p'p. 2, 3. 
(***) "Regulations for the Adjustment" etc., pp. 2, 3. 
(****) "Eeg-alations for the Adjustment" etc., p. 3. 
(*****) "Reau.lations for the Adjustment" etc., p. 3. Liaison Circular 

75, p. 2. 
(******)".:IHA, Title I, section 3, paragrs.phs (t), (c), and (f). 
(*******)Office Order llo. 4*^. 



9839 



-64- 

The treatment of second offenders was not mentioned in the "Regxila- 
tions", tut in Liaison Circul--,:' 75 tne District Compliance Directors 
we:;e told only to sulsstantiate the facts in these cases, where they 
felt the violations weie wilful, and to give no ocportuiiity to the 
respondent to ac'just. (*) 

This procedure contained no place for field intarviev/s or real in- 
. vesti-:&.tion. Nor vrere the field offices eqniP'^ed to cxoeriment in 
this direction. It is little wonder, therefore,, that snail improve- 
ment, except in isolated offices, v/as .aade in compliance procedure 
during the earl:' dr?ys. 

On January 22, 1934 there vas issued KilA. 2ul-:.etin llo . 7, "Manual 
for the Adjustment of Complaints by State Directors and Code Authorities", 
v/hich uodified and exoanded the previous procedure. About a, week -orior 
to the issTiance of this "Ivlanual" the State Directors vere appointed 
and the Compliance Division's field organisation v/a-s changed from a 
syste;i of twenty-six District Offices, headed hy the former District 
Maiiagers of the Bureau of Foreign and Domestic Coromerce, to one of 
forty-eight, and later fifty-three, State U fices headed "by the new- 
State 1T2A Compliance Directors. 

The nei'^ procedure ?/as broader, and contemplated the use of Field 
Adjusters, hut still remained more or less inflexible and contained 
several objectionable features from the stand-point of rractical 
application. 

The underlying theory of all com.pliance procedure was the speedy 
elimino-tion, by adjustment, of such non-compliance as vras due to mis— 
understanding, and the prompt prosecution of all cases of wilful 
nonr-compliance . ( **) Bea^ring this in mind it is interesting to note 
the chajiges broioght about in Bulletin 7. 

A single procedure wa,s esta.blished ostensibly for all t;y'pes of 
Cc.ses. However, the organization of the office with separate Com- 
pliance Offices for labor and ti-ade practice, and the application of 
the idea of industrial self-government (***) chiefly to trade practice 
cases, may be said to have -split up this single system in reality, into 
two separate procedures which over-lapped to a certain degree in com- 
plaints arising under individual codes. 

(*) Liaison "Cirbulai- 75, p. -2. 

(**) KRA Bulletin 7, p.' 7. 

(***) Bulletin 7, p. 3 stated :the purpose of the Complia.nce Divi- 
sion to be to fill in the gaps of industrial Belf-^governraent, 
which was the ultimate aim to be accomplisjied. Thus (Continu— , 
ihg on pp. 5 and 6) IJEA would "act ;for axi Industry while 
the Industry is organizing to handle compliance problems for 
itself; or where an Industry in a certain territory has no 
Industrial Adjustment Agencies; or where an Industry, though 
organized to handle trade practice complaints, has no machinery 
to handle labor complaints; on wnere the Industry fails to 
carry through in its efforts to adjust •::. complaint; or where 
for ar^ other reason it is necessary for the governmental ra,ther 
than the industrial system to axt." 

9839 



^65- 

This "brings us to n crnsid^ration of th° d/=finition of th=! t^r^is 
^TTOlov^ci to •Dresnrir^'^ th=> limits of ^ach division of Droopdur^!. Com- 
•olaints '^hich d'^r^lt '^ith violations of th<^ lal^or -nrovisions of th=! 
cod = s, i.'^. th=^ regulations conc^rninf^ minimu"! ■^ag'^s, Tna:^ininTn hours, 
hora^^wor^c, and othT terns and conditions of "imDloy^ent, including the 
■orohibition of child labor, ^-^re d°signat"d as "lal)or coTDlaints". 
Conv'^rs^l;''-, "trade tjractice cormlaints" were c'.efin'=d to include those 
cas=^s involving violations of all other Tiro-srisions, such as, production 
control, cost d^ternination, re,Talation of trade t°r-ns, and other 
pr'=scri'b'='d ru.l°s of conduct of meTti'b°rs of industry among th'^mselves. 
This last class included provisions for th'^ a.dnini^tration of the 
codes hy the -Dsrticular industries, (*) 

Th° d'^finition of a third class of corp^laints, "la'bor dis-outes", 
is net germane to this discussion hecaus^' the-"- ^oro oprlv removed from 
the jurisdiction of ^^EA. and -olac^d under the National Lahor Board or 
other ipGcial ag^nci'^s. (**) 

Under Bulletin 7, co'rclpints had to he in ^--riting, preferahly on 
the IIBA cormlaint forn, but ^■"=r^ not reouir^d to he notarized or 
witnessed. Anonymous co^rolaints night h'= pct^d unon t?t the discretion 
of the State Director. (***) 

CoTTOlaints '^ere routed, according to th°ir n^^tur^, to the Labor 
Corm-jlifince and Trade Practice Cora-nliance Officers, res-oectively. At 
this -Doint comes a.n essential de-oa.rture froT th^ original -orocedur". 
A competitor making a labor comolaint aga.inst another oimloyer might 
elect to have it treated as a trade Tiractice comrolaint, and it ™as 
thereafter to go through the -orocedure for the latter t:rc^, of cas^^. 
It '-'Ould thus be r°ferr'^d to a Code Authority authori'^ied to handle 
trad° -Dractic°, although not authorized to handle labor violations. (****) 

If a. Cod.o Axithority (*****) oxigtRd in the Industry and -^as 
authorized to handle th= -oarticular t^n^e of cormlaint in the first 
instance , the original coTiolaint '-'as r'^f erred to it ^-'ithout further 



(*) Bulletin 7, -1?. 5. 

(**) Bulletin 7, -0. 12. 

(***) Bulletin 7, 13. 11, 

(****) ' Bulletin 7, b. 1?. 

(*****) The term "Cod^ Authority" is un°d herein in order not to 

confuse the r^^ader, although th° correct title -oerhaps should 
be, "Industrial Adjiistment Ap'encv", -"rhich is th'^ name given 
by Bulletin 7, n, 4 to an agejicv of an industry for obtaining 
comnliance. 



9R:^9 



-66- 

action "by th° Strf-t^ Office, iml^ss it aTTD^?r°d frovi the substnncn of 
th'= coTolaint that it war, iDuroPS'^l^^ fil°d -ith th^^ Jtate T'ir'^ctor. (*) 
A conrolainant always had th" risht tc file a ccnrilaint with the IIRA, 
rather than with an aiithori^°d Code Au.thority, in order to. Tjifotert 
his o-^ th^ -nuhlic interest. 

This nrocc^iir'^ ""as Tritioh jr^r"^ characteristic of trade rjractice 
cas^s than of lahor conrolairts. While- after Jim--^, 1934 co^Tplaints 
rei'err*^d to Cod'= Authorities in the first instance -^'^v^ not doc'^eted 
hy tho State Offices pjid hence no co'rol^te fi^air^s on the mimh^r of 
cas'^s so referred are aVailahle, general °xneri°nce showed that the 
TDr'=-Donderant majority of such complaints dealt with trad^ pra.ctice 
violations. In fact 493 Code Authorities wopo authori-zed to handle 
•trade -oractice comnlaints dixring the life of th= codes, whiio -^ut ?1 
w<=re giv^n jurisdiction over lahor corniDlaints. 

Conrolaints which ca^ie und^r th^ initial jurisdiction of the 
State Directors were examined for legal sufficiency, all douhtful 
questions 'b<='ing referred to th° Lega,] Ad.vi?;ers.. This examination did 
not differ from that nrovid'^d in the original froc^dur'^, °xcerit that 
wh°re a com'olaint indicated a cod° Torovision might have beoji violated, 
hut failed to state sufficient facts, i:istead o.f h°irg r'=j°ct<=d the 
comTjlainant was reguest'-^d to ftirnish the necessary additional 
information. (**) 

^^ore a Cod-^ Authority hacl "b-^^n authorized to handle cnmDlaints 
oh r°fer°nc° (usuall?'- lator), a di£:°st of .the allegations wg.s referred 
to that hod-"" for adjustment '-'ithin a, sti-oi-ilated ■n<=riod not' to 'exceed 
two wee]-g^ pyi(f the Tjprties --ere so notif i'^d. If no rei^^ort wpo made 
within th= time suecified a Progress He-cort war, requested "by :'^eturn mall. 
If. no satisfactory rexily was th=n rereived, th" Sta.te I^irector a.dvised 
the Code Authority he would -oroceod to adjust the n.ps^ on the asstimotion 
it had heen una.hle to do so, "nnless imm~°dia.te Tmr^r was received to the 
contrary. Sufficient time for a re-ply was then a.llow<^d to ei^Qso 
hefore action was actually started. If the com-olaint was rer^orted haclr 
to the Sta.te Director as u.nadjusted, it w^s then -out . through a second 
course of "orocedure descrihed helow. On th^ oth^r hand, if the Code 
Aiithority re-corted the case as adjusted, the S4;a,te Of-fice closed the 
case and so notified the comol ainant. (***) 

The difficulty with this arrangement wnr, that, since the Code 
Authorities --ere not -iinder the full, su-oervision and control of the 
field offices or eyen the Comr)liance Division in Washington, their 
policies of adjustment and "oroc^dure natural! y- '-'ere different. An 

(*) Bulletin' 7, ^o. 1?, 

(**) Bulletin Ho. 7, v. 13. 

(***) Bulletin 7, T,-o. 13 - 14. 



-67- 

alarninf' nv^'n1:)'=r of r-.p s^s hpd to 1t^ r'=-handl<=d p.ft'^-y "b^inf r'^ported 'back 
to th^! S!tat=^ Offino.. a^ adjuster'. Th--^' ■niiro'^P^ of th=^ -clan was -orobalDl:/ 
to trgin tli^ Cod-^ Aiithcriti=^s to b" in a. -position to hendl-^ labor co't- 
plaints in th^ first instarc^.. (*) 

Til" bill": of oo-^-olaints fil^d in Stpt= Offic°5, ^nd not in-n'^dipt^ly 
troncnitt^d in toto to anr th°r pi^^-ncy, '"^r^ handl^id by th^n without 
rofoi.°nc^ to Cod*^ A-^.-thoriti^.s. Th" frllo'-'inp ■•jroc'=!dur° r^latinr to 
cas-^s hanr'l=!d direntlv by Stpte Offic'--'s, (**) thp-'"=f or^, -'ill form the 
i^enter of the remainder of this discussion on cC'-ioliance Drocedure in 
th- fi=:ld. 

Thp initial st°-os ^-^ere virtually th'' ?o,me as "orovided in the 
orifinpl "Eec:ulations" issued to District Conrilipnoe Dir-^ctors on 
October 19, 1937. The res-oondent ^-'as inforned of th^ nptur<= of the 
conrolaint; t?ie priplicnble riart of th° rod'^ ••■^ps erolained to hin; he 
was as'ied for a stat'^^-ient of his "oosition; and he ^-ps furnished ''^ith 
a co'o""" of the code and a i:ri'^''t'='c' sta.tei^nt entitled, "Information for 
Persons Ch^rf^ed -ith Viol?.tion of rn I-iA Code," whicri set forth in 
simple lang'j.age a bri^f outline of th" -orocedure and th° r^spond'^'nt ' s 
ri|?hts. If no reoly ^^as r^ceiv^'^ in a reasonable timf^, a, duT)licate 
letter 'fith enclosures '^rs s°nt to the res^onrient by registered mail. 

If the res-Dondent admitted the violp.ti-^n but fixmish^d satis- 
factory evidence of TDr-'sent coTrmlianc^^, -'i]" inrness to comply in the 
futur°, and equitable restitution for ri^st violations, the case -rras 
considered as adjusted and th^ -oarties so notified. , 

In cose the r'^G-oond^nt denied th^- facts, or ndnitted the facts 
and denied they con'rtituted r viol-'^tirn, or failed to satisfy the 
Co-roliance Officer thpt an acjustm^^nt had b^en made, he ^as invited 
to b° -nresent at an office intervie--. If this method v^ere not feasible, 
or if it failed to oroduce an adjustment, a Field Adj\:ster '^as some- 
times sent to visit th^ r^s-oondent. This tardy use of the Field 
Adjuster indica-t^s tha.t field irtervieT:'s "-ere considered as of only 
secondary imTDortence, 

If the Fi=>ld Adjuster's r^nort sho"-"'" r\o violation, th" com-ol ainant 
"'a.s notified. If no further '^ord '-'as received fro'ii the complainant 
T^ithin a reasonable time (usually ten riays to t'^o '-•e'^ks) the case i^as 
filed as adjusted, ^i^re the Field Ar'Juster's re--.ort shewed a willing- 
ness on th° "nart of th^ res'oondent to coirrol" and to make equitable 
restitution, the case i-as closed on r-cei-pt of evidence that that had 
been done. 



(*) Bulletin 7, 0, 14. "The State Tjire^tor ^in voo-r, a record of all 
com^jlaants sent tc Irdustrial Adjustment Afre^ir-ies on reference 
and "heri he believes that anv jvi'^h Agejir-v is nua.l if ied to handle a 
■pFi-rticular t-"^:)e of comi^laint in th° first instance he i-'in make 
such a. recommendation to the Ka^tional CcToliance Director." 

(**) The proced\iTe degpribed in the text ^as contained in Bulletin 7, 
pT). 1-^- - 18, inclusive. 



-58- 



Unadjusted r^ps^s of violations •■•°t'=. for-^prd°d to thp- National 
Co^^liajice Dir'^ctor in th'^ sst^ manner a.s sn'^r-.if i°.d in the original 
procedure under the "Hegulations for th^ 'Adjustment "by District 
Conn^liance Director'?;" etc. 

Bulletin 7 further provid'^d that in cas" c-ither the corrolainpnt 
or res-oondent "^s dissatisfied '^ith the decision of the CoTTpliance 
Officer, he should he pf forded an i-i/toi /ie'-r '^ith the Strte Dir°ctor. 
If he -r^as still dissatisfi'^d, -he had the right to ap-oeal the case to 
the State Adjustment Board, '^hich "lade its findings in the form of a 
recommendation to the Stpte Dir°ctor- 

All co'-n.'laints had to h'^ treated confidentially ss to tc'h 
parties. (*) In the '^vent sn interpretation of the cod^ wp.s -eoded to 
"Droce^d '^ith a cas°, a r'^auest for a ruling had to he mode through the 
Washington office to the -oroiDer Industry Division. (**) There -^as no 
pc^er to continue pction on th° co-n^laint fjitil such interor^tetion 
was issued, sonietinei? Tiionths later. 

During th^ late sx)ring of 1934, coir-^irentally ^'ith the develon- 
nent of adjustment Toolicies and staff organisation, some of the fiel,d 
offices hegan to cast ahout for and to find inproy°-nents in nrocedure, 
'"hich finally cem^ to he riass'^d on to the rempinoer of the field through 
the nedium of 5'ield Letter 125 and .the travelling ?ield Representatives. 

Before passing on to a discussion of th°se d°partures frcm the 
procedure, there should he not°d t'-o shortcnj.ts -^hich '-'='re provided, in 
order to ta're care of ■'jmi^.s^aa 1 cases r°oii.irin£- s"oe<=dy action. 

Bulletin 7 provided thp.t 'Whenever the Stnte Dir°ctor '"'^s 
convinced that a cbnolaint conclusivelv set forth a violation, '^hich 
the respondent showed no disposition to correct or adjust, th°n the 
State Director ini~ht imT=diptely refer 'the entire record to the 
National CoTrolianc" Director •■'ithoilt follo"dng the reg-olar procedure. (***) 
This procedure applied only to ■'jjiusupI c^.ses and did not vary the 
regular procedure as to the gr-^^at hul^': of th° conrolaints received, 
l-'oreover, this provision for p. shortcut erron°ousl7 presupposed an 
adequate investigating staff to immediately prepare the evidence for 

(*) Bulletin 7, p. 7. 
(**) Bulletin 7,- p. 8. 
(***) Bulletin 7, p. 17. 



th<=! fi]^, sincf^ o"b"-ioiisly Biilletin 7 could not -n^an th^ nonplaint vras 
to l)^ r=f°rr'^d tP th'^^ National CoTplipnc^ Director '-without aiv inves- 
ti^rtion, Th"^ larj- of a cl°ar -nolicy of action in ^asliim^ton, th-^; 
mechanical difficulties of advancin,^ p ccnplaint to tho stage of Blue 
Epgle removal and reference to the enforcement agencies, and the even 
greater ■nro'br''bilit7 of th^ case being xiTomotly and effectively 
litigated, all comhinei? to oomt)l°te -th^ task of turning this -"ell-neant 
short-cut of nrocedure into a mere -Daner -olan. 

Of more va,lue --as Acljninistrative Order -"o. ^^14, issued 
Afiril 6, 1934, '^hich amended th° -nrovisicn in Bulletin 7 just mentioned, 
hy allo'-'ing th° State Directors to r^f^r cp.ses direct to United States 
Attorneys, rath-^r than tc th^ ITationnl Com-nliance Director. (*) At the 
time of the ref°r°nce, th^ resT)Ondent '"as notified and a transcript in 
tri-olicate rrps s^nt to the Contol Section of the ComDliance Division 
in Washington. 

This ne-^ icioner --as °xercised in varying riecrees hy different 
offices, hut "as gen°rall''' found to h° of -ora,''ticpl us'=. It eliminated 
to som"= extent the cliff iculti°s of m'^chanicpl c^elay in Washington and 
th" ahsence of a. definite ilan of action. It ^as th^ first major step 
in th" d=c°ntrplizption of th° Com-^liance Division, and ther'^fore of 
Torime imnortance. 

Incidental to th= i-^rovement in ■oroc-'^riure as to ■'onadjusted cas^s, 
Administrative Order ^T. ^^14 had the -Dractical asuect of placing th" 
State Offices in direct contact "ith the various District Attorneys. • 
Through this medium th^ fi=ld a.dded to its eiv^oeri^nce in the rirorjer 
investigation and pre-naration of cases intended for action "by the 
D=>t)artment of Justice. But, through these conta.cts also there ^as 
"brought home to th" St^'^te Office iDersonnel i-rith increasing forc° the 
constitutional Treaknoss^s and the legal difficulties involved in the 
'^hole comoliance nrogran, 

l"'oreover, th<= amended rjrocedure of Administrative Order Ko. X-14, 
h'"' its ver3'' t^rms, —as limited to a small -Dro-oortion of the cases 
handled. The vast majority '-'as still suoj^ct to the reg-jjar -orocedure 
laid do'-TL in BuJlstin 7. 

2. STATE ADJUS?:-3NT BOAaZ'S 

The il.ational Industrial H,°covery Act authorized the President "to 
^stahliah such agencies, to accent and utiliz° such voliintary and uncom- 
To^nsat°d s^rvic^s" as he might diearr, neo°ssa.ry. (**. Under this 



(*) This constituted Amendment 1 to Biilletin 7. Ord°r ^^^14 also 

contained Amendment 2, granting a similar tio^er to code authorities, 
and Amendment 3, providing that cas^s to h" referred to th° United 
States Attorneys under X-14 might he first su.hmitted to th^- State 
Adjustment Boards for advic° and. recommendations. The -no'-'er granted. 
State Directors hy this order -^as to all intents and -ourt)oses 
r°voVnd after the creation of the Ro^ional Office svstem hy 
Field Lptter ITo. 196 (Fehruary 2, 1935). 

(**) l^ational Industrial Hecoverj.r Act, Title I, Section P (a). 



-70- 

aiithpri?a.tion, th^ Local Coirrolianc'^ Boards ^'^lios'^ s'^rvioos '-'pr-^^ volun- 
tary and unf^O'TD^nsat'^d wor*^ •atiliz'=!d in ?ll&. r;o'TOliano'=! work. 

Aft'^^r th'^! Stat-^ Offices -or" o-staTDlish^d, it ^ps ann^unc^d. that a 
Statp AdgnstniRnt Board '-'ould t" established in ^pch. Stat^ as a, x)art of 
the TD^r'nan^nt co'roliance syst'^ra. Thos^^ Boards ^''^r-^ to act in an 
advisor;'' na.x>acity to thp Stat°. Directors, to h°ar cas^s r^f'^rr'^d to 
thpTn hy th'=^ Stat^ Directors and a.ppeals jy Dartios dissa,tisf i'^d ^^ith thfl 
d'^cisions of a State Director or his staff. (*) The -nerahers of th^se 
Boards rec^iv^d no conroensation for th'^ir services, and th=^ir staffs 
iTPpo dra-'-n on a iDa.rt tirao basis fron the T^ej-Honn'^'l of th^ Sta,t^ 
ConDlianc^ Offices, 

Their nimher and location '^as to de-opnd on the, volune of cas^^s 
suhinitted and on local npefl^s. Inasniich as thes'=^ ^oards '-rej-e to s^rv? 
as a foruTTi T^h'^re those dissatisf ie.d with the State Officers' decisions 
miffht he heard, it ^a.s inipera.tive that th^^'- he tralv itroartial. 
Therefore, they "rere coriDOsed of eq-y^pi re-oresentation of eToloyprs and 
workers vith an irmD-^rtial chairman to rer)res°nt the rj-ahlic, a.frreed 
UDOn hy the other members and aDnoi'-.ted by the President, (**) 

The majoritv of the cases referred to the Adjustment Boards 
concerned violations of th^ wr'ge and hour nrovisions of the codes. 
They may be divided i^to the follO"'infr general tjn^es, 

1, Where the complainant or reanordent was dissa.tisf ied with 
the findings of the Stat° Office, 

2, There the Field Office felt it ^as advisable to Fa:.bmit 

a ca.se to the Boa.rd to solve g, difficult factual situation 
or determine a method of arbitration, 

3, Where the State director felt that the psi^^cholofical effect 
of a hearing before an imDa.rtial Board would, facilitate 
ad.justment. 



w 



4, Where it wg^ felt that the amount of restitution due might 
be reduced beca.use of "oeculiar conditions or because of 
the financial inability of the respondent to pay back wa.ges 
in full, 

5, Wliere it was felt that a hearing before the Board, would 
strengthen the c.a.se for its later reference to the 
appropriate Comoliance Council or United States Attorney. 



(*) Bulletin ITo. 7, pp. 15-16. 
(**) Bulletin ¥o. 7, p, 16. 



-71- 



Fi^^ld Lpttpr 1\^'^, 1?5 r°quir°d th?it all cps^^s arijustf^^d on a T3a.sis 
of l°ss thp.n full r'=istit-ation should -r^iC^ivR th'^ a-oT)roval of th'=? Stpt<^ 
AdjustTT=nt Eonrd 'b'^'for'^! tii'=^ adjustrr^nt '-as 'nPid^^. (*) Fi^ld L^tt^r 
l^To. 1?5 also rf^quir^d tl.at a,lT cas°s which could not "b'=^ adjusted in 
accordance "-ith the standards set forth in that Field Letter as ^ell 
as c^^ses in "'hich a "ide conflict in th^ sta-teTnont of facts existed 
should oe referred to tli'= Stat'=> Adjustraent 'Boards. 

Fi^Td Letter No. 1?5 also la.id do'T. the -orocedure to he follo'^ed 
in hearings "before th° State Adjustment Boards. Arranfre^ient s were 
made for cases to be heard according to a fixed schedule. Soth 
resoondents and com'olaina.nts ^ere invited to !)» r,r°f-°nt a,nd "bring their 
'^itn^sses, exce-ot where it r^as deeded °7:D'^'^i'=nt to hear the -oarties 
at different tirnes, A "brief outlin<= of th^ cas-^ '^as TDre-oa.red and 
giv°n to each ^."ra'ber of the Board orior to the hearing. In a.ddition 
to the factual outline, th^ Field Adjuster or La"bor ConT!lianc° Of:^ic^r 
often a-opeared "before the Board to give additional relevant infornation. 
After the Board had "b°co"ie acqua.inted -"'ith the general facts and 
issues involved in th° cas^, th° -oarties and their ^''itnesses '^ere h'^ard. 
Some Boa.rds heard °ach -oartv and ^ach ^itn'^'ss se-oarately and some 
allowed the witnesses to testify in '^acli other's 'oresence, "but the 
majority folloi^ed hoth courses d^TjencHng unon the conditions arising in 
each -particular cas°. Ther'= '■f^s, of covirse, no authority for the Board 
to require testincnv under oath and no fornal rv.les of evidence ^-^ere 
follo'f°d. The d=cir,icns of th° Boarc' --"^'r^" in th'= natur"^ of advice to 
the State Director. Ko"'ever, their r°conm=-ndrtions ^°-r<=- nearly a,l-'ays 
follo-^ed. 

(*) This requirement was removed "by field letter ilo. 194 



(*) Tliis requirement was removed by field letter Ho. 194, 



9839 



-72- 
B^. rjlSS COl'iPLIAlTCE. , * 

As exiperience grev/ in the handling of cases, grad"ual changes were 
made in the procedure for a,ction on complaints. As these changes hecame 
estahlishcd in practice they v/ere us~aa.lly niade toiorn to the field as a 
whole in the form of. instructions in Field Letters sent out Dy the Cbm- 
pliance Division to the field offices. 

Thus, in Field Letter No. .48 (janua.ry 24, 1934) experience with the 
handling of ejionymous complaints reflected itsel.f in the following clari- 
fication of Bulletin 7: 

"Anonymous complaints v;ill t'-- subjected to a more searching 
analysis "before they are acted upon than v/ill 'signed complaints. 
If, h^-, ever, after close examination on anonjAnnous complaint appears 
on its face to be genuine and to state a Code violation it should be 
handled as any other cor.mlaint ." (*) 

The field staff soon learned the value of thoroughly investigating 
and fully adjusting a- Case, Adjustment depended to a large measiire on 
investigation. If the activit;;- of the office v/as restricted to a single 
employee who had filed a complaint, there were likely to be later complaints 
by other employees, which would necessitate tiie retracing of steps. 

Accordingly, it became the practice, ap the use of Field Adjusters 
increased, to investigate the entire payroll, so a"s to discover all the 
violations- v;hich migjit exist. The various offices grev; to require a com- 
plete adjustment of bad: wages due all employees. This widened scope of 
investigation and adjustment helped to' alleviate some of the evils of the 
compla.ints system by removing the necessity for more than one investigation, 
except in particul.p.rly difficult cases a,nd where the employers were per- 
sistent violators, and by furnishing an effective medium for educating 
the employers to bring their opera.tions into continued compliance. This 
new procedure vi^as also characterized by the placing of more emplia^sis on the 
use of Field Adjusters, 

It was also found necessary to mahe investigations on what appeared 
to be bona fide rumors and strong suspicions. This was brought about by the 
strong insistence of respondents that their comj^e titers be m^ide to conform 
also and by the realization that a permanent compliance program must be 
based on a thorough educational program among members of industry and the 
protection of the complj^ing business men from his competitor who viola,ted 
the code. This vifas the germ of a, new ide^i of operation Imomi as "mass 
compliance", (**) that is, the direction of conipliance activities against 



(*) Field Letter, Ho, 48, p, 1. 

(**) While mass compliance is s-ooken of here as a nev/ ide-p, it fo-'Oiid ample 
precedent inthe administrative effort? of the State Labor Departments , 
many of which used the inspection system in enforcing labor laws, U.S. 
Dept. of Labor, Women's Bureau Bulletin 61, yn. .5S8-289, 307-308) and 
in the Trade Practice Conference Procedi.u-e in vogue v,?ith the Federal 
Trade Commission, (Aiuiual Re-oort of Federal Trade Connission, 1932, 
pp. 51-54), 



r\ ri ry r\ 



-73- 



a group as a self-initiated ";;roject, rptl^er tlvan a single proceedinjg againct 
one employer on the 'basis of a coiTrolaint filed oy some third party. 

In audition to mass compliance activities, which wore usually in the 
form of a curvoy, another variation fron the complaints plan v/as oliservable 
in isol-^ted investi^^ation, not connected v/ith a survey or planned project, 
and originating vdthout ':he formal filin;, of complaints. 

Thus, there might come to the attention of tlie field office a rumor 
that a certadn ermDlcyer was in vinlat^on, o"'- the office might feel strongly 
fro:i it? ;^,'eneral Imovi/ledge of indu-^try conditions tliat a condition of non- 
comT^lirnce e:>-isted. In such caces, the ap!."irop:'iate Coraj^liancc Officer 
caused investig?.tions to he nade "by Field Adjusters, even though no formal 
complaint ho.d ever hecn filed. The procedure followed in adjusting vio- 
latioviG found "by these met'nods was the same as that used w'here action was 
the result jf coi'plr.ints "beip.g filed. 

An interesting sidelight on t"r.e decreasing enr/uiasis on the strict 
complaints procedure at this juiicture is fo-.md in instructions to the 
field regarding so-cal"led "multiple complaints." (*) This term was de- 
fined to include situcitions vrhcrc more thrn one cor.vplaint v&s filed against 
the same employer charging the same general violation, i. e. failure to 
pay the minimum ¥/agc to pieceworkers-, etc. Suc'h m-iiltiple complaints" , undei 
the instructions, were to ""oe horjid together in one file and docheted a.s a 
single case . 

Iim-n.ediately following tliis dnstructi n ra "multiple com.plaints" , the 
experience of the field with bhe complaints plan of procedure, and the 
modifications of the system mentioned a'bove, wore crystallized and a 
definite breol; was »::ade away from, the strict cor.Tplaints 'basis 'by the 
issuance of Field Letter 125, As -ips been mentioned before, Field Letter 
125 under •;o:-'.-: to esto,blish a co.plete, new froraeworlc for coirvpiliance 
activities . 

T"nc c>-an^;ed pr"ced\ire thus created recofTiized the need to discard 
the complaints basis, and rpcom>.nended strongly the use of office complaints 
to initiate activities. (**) Tliese office complaints differed from'.tie 
earlier conception of complaints, in that the latter were filed by third 
persons presumably having a first-litmd Icnowledge of the violations alleged, 
v/hilc the fonner class of cormDlaints originated with m.embcrs of the com- 
pliance staff and were based -n hearsay, rumors and suspicion. While the 
use of office complaints was manifestly open to abiise by over-zealous 
members of the staff, -sufficient safegua.rr"'. existed in the practical 
limitations of the invertiga'ti "ual facilities of the various offices. 

Among t'ne occasions where the use of ':''fiice complaints was suggested 
v/ere: v^here an employee repf)rted a violation but refused to sign a com- 
plaint for feo.r )f discharge; where a coii^'laint had been rejected but the 
office considered the sit-ua.ti:.n alleged- sriotild be investigated; where the 



(*) FiclcT Letter^ 119 fj^iie ¥,3934) , p. 3. 

(**) Field Letter 125,- pp. 9-10 

9329 



-74- 

comp.laint having tc-en sutotantiated the admstsr 'believed thrt violations 
probc/bly e;:isted in otlier estatlishmeiitE ■under the same niana.gement ; vflier' 
repeated r-umors exi'jted as to violatior.s in an CEta"bli<;hnent , ind-astry, 
or locality ; where an eiriployer seeking information indicated the existence 

of a violation. 

The sr-iftiiiQ of this ne-,v type of co::Tnlaint on the old "oroced-ore served 
as sufficient indorsement of nas? compliance. The ne^7 theory of operation 
continued to exjoand with practice a,nd the number of itr~ adherents grew 
larger, so that "by the time the Ee,!5ional Off ices- began to function in Jan- 
uary, 1975, its use as a nethod of ap- roach to the solution of compliance 
problems had attained fairly v<ride popul^-rity and was well-established 
among the various field offices. 

Closely allied with this departure from the complaints basis v/as a 
grcv/inji' emphasis on the use of Jield Adjusters, The value of this tyoe of 
personnel v;as recognizee, by the national Compliance Boo.rd as early as 
December 4, 1955. The minutes of the nineteenth meeting, held on that date, 
contain the fol Lov/i-rg statem.ent: 

"Mr, Posner once more raised the question of procedtLve where 
employees v/ere disclia,rged for entering complaints against 
their employers. Dr. Altiueyer (vaio was Second Assistant 
Secretary of Labor and at one time Chief of the Compliance 
Division) ur^-jed that field representa-cives were necessary 
for this tyoe of work. He adaed th::,t considerable tact and l,o.bor 
experience are necessary." 

In May and early June, 1954, the Compliance Division began to ap""oint 
"Resident Field jdijusters", who vrere stationed at various strategic points 
oxitside the cities in which the State Officers were located, Wiiile 
these Resident Field Adjusters were attached to the various State 
Directors' staffs, it was contemplated tha-t they should exercise semi- 
executive functions, in addition to the regular duties of Field Adjusters, 
(*) Thus they were gener-ally given a comparitively free hand in the 
planning of their ovm compliance activities and in cngagir^g in public 
relatiovis work, Beca.use ;f the physical distance between their official 
stations and the State Of. ices, there was necessarily a larger reliance 
on thpir individual discretion than i'n the case of ordinary Field Adjusters. 

The. significance of the ap--! ointment of Resident Field Adjusters in 
connection Y/ith the departure from the complaints basis of procedure is 
to be found in the following excer(it fro.-. Mr, Sv/ope's letter of June 2, 
1934 to State Directors on the -subject: 

"Undoubtedly a reside-nt Field Ad,juster will hear mp.ny rumors 
of viola,tion fxlthough no written complaint may hiave been filed. 
If the rumor a.ppcnrs to have substance the Field Adjuster 
should m.al;e an investigation even in the absence of a specified 
compl.aint. In only rare instances should the Field Adjuster 
attempt to adjust it by writing a letter .... 



(*) Lettei- of J^^ie :^, ^19^4 .fro.a J.olm Swope > .Chief of .Field Branch to all 
State Compliance Directors, pp, 4-5, "Filing and Ha,nling of Gom- 
- -plaints by Resident Field Adjusters," 



9839 



"The (Resident) !Fielc Adjuster, must spend the greater portion 
of his time on outside work, contacting the employers and invcsti- 
itating not only filed coiTTjilaints ,' out also rumors of violation 
whic'h may come to him," (*) 

This statement was followed eleven days later "by the issuance of 
Pield Letter 'Ho. 125 and Supplement iry Memorand-um No . 1 to Bulletin 7, 
v/hich le.tter, in modifying the earlier Uanual for State Directors, said: 

"The State Director must use his own judgment in determining 
the procedi^jre which willhe most ef'ective and expeditious in a 
pa.rticular C3,se. Bulletin 7 does not lay down a set procedure that 
must be ri. idly ohserved in all case s. For example, instead of 
carrying on prelim.ina,ry correspondence, it may he "better to send an 
adjuster to interviev; the respondent or to ask the respondent to 
appear at the office of the State Director." (**) 

Jield Letter ITo . 135 stressed the value of office and field inter- 
views in adjustment work. It further suggested the elimination of a 
formal mtice to the respondent giving the substance of the complaint, 
and the suhctitution therofor of o letter containing merely a hrief 
invitation to call at the Comi^liance Office. It likewise recommended 
the practice o'f dispensing v.dth all jjreliminary correspondence, and 
making the initial contact with the res2:ori;'.ent by means of a field 
interviev, (***) In this Cjn.ecti.ni Field LetT,er Ko, 125 said, 

"The Compliance Officer is uader no obligation to establish 
the fact that a cOi.iplaint has been filed, Por the protection of 
the complainant it is advisable in many instances not co inform 
the employer tlia,t a specific complixint has been filed against him," 

Field Letter Ho . 125 also "provided, a gui,ce for the thoroughness 
of investigo.tion, A detailed account of the proper contents of case 
files vi/as given, and a questionnaire form for interviews with employers, 
as v/oll 3s a form for abstracting payrolls, were included, (****) 



(*) Letter of June 2, 1954 from John S'7ope, Chief of Field Branch to 
to all State Compliance Directors, PF. 4-5, "Filing and Handling 
of Com.plcints by Resident Field Adjusters." 

(**) "Sup lementary Mem.orandum N\miber One Relative to Adjustment of 
ComiDlaints" . , p. 1 (-underlining STO;lied). This v/as clearly an 
attempt to rationalize a.nd to reconcile this memorandum. Field 
Letter Ho. 125 (both issued by the Compliance Division), and the 
actions' of various field officials with the procedure created 
by the Administrator in Bulletin 7. 

(***) Field Letter Ho. 125, p. 11 

(****) Field Letter Ho. 125, pp. 19-2C, 24, 27, 



9339 



-76- 

Thiis , it is seen that, oeginning vdth ?ield Letter Uo. 125, J-one 
15, 1934 and in the period of development thjn.t follovred, there v;ere 
marlted departiires fro::i the cunihersome , inf leiiitle , and lar;2;ely ineffective 
procediTxe established by the pLSgulations of Octoher 19, 1933 issued to 
District Compliance Idrectory and "by I:JR4 Bulletin 7, covering State 
DirecGors and Code Authorit;Les, Under the old procedujre a.ll compliance 
activity was supposed to "be jjredicated on complaints, which had to ful- 
fil'- certa,in teclmical requirements, and almost the enti--e "'ourden of 
proof, as well as the initiative, ^.vas throv/n on the corripla-iv-ing employees 
and competitors. 

The new procedure was developed out of the necessities of exioerience, 
influenced greatly by the pov/erful psychological fa.ctor of a new report- 
ing system whereby field offices felt tliat their efficiency, value and 
rep\itations were constantly being judged by the number of violations 
discovered ana ac:justed and the amount of back wages collected . Less and 
less stress was la,id on the filing of co".rplaints and the inijoortant place 
of the complainant in procedure, except .as one source of informa.tion; but 
the use of complaints as the basis of proceedings was never entirely 
eliminated. Hovrever, it should be noted in illustration of the final 
relative unimportance of complaints that 'n Llay 21, 1935 in a letter 
to all Regional Directors the Chief of the Compliance Division placed 
a virtual statute of limitations on the filing of corqolaints , leaving 
each office to exercis-- its own discretion, according to certain standards, 
in 'determini]% vriiether or not the complainant ^lad been guilty of laches 
in failing to report the violation promiTtly, (*) 

One more modification of Bulletin 7 should be mentioned as having a 
noticeable effect m the movement to discard the complaints basis. By 
Administrative Order the practice of sending complaints to Code Author- 
ities "on reference" for adjustm-ent v/as abolished as of June 15, 1934 (**" 

The order further provided tha.t Code Authorities which liad been autho] 
ized to handle particular tyiies of complaints "in the first instance" woulc 
continue to operate in the same manner under the designation "officially 
authorized". This was important because the Code Authorities which had 
been authorized to handle labor complaints 'Were miainly organized to oper- 
ate on an inspection or mass compliance ba,sis and therefore indirectly 
additional impetus v/as given to the movement av/ay from a strict complaints 
system. (***) 



(*) This let^^er stated that the offices should be guided by the 
follov/ing general rules of thumb; ordinarilj'", a complainant 
still employed ought to report the violation within 60 days 
after it had occiirred; and emplo: ee who had been discliarged or 
dismissed should file complaint within 30 days thereafter. 

(**) Administrative Order X-29 (May 12, 1934). 

(***) Section A & B of Chapter IV were taken almost wholly from the 
History of the Compliance Divisions to be found in KHA files. 



9839 



-77- 

^<njs™z;iT Aim iffiSTiTUTioi 

1. Basis of Adninistration for Conrliance. 

The National Industrial Recovery Act orovided for the establishment 
hy the President of adr.inistrative agencies to effectuate the policy of 
the Act. (*) It further provided that the President should fix the 
duties and responsiliilities of, and that he might delegate p.ny of his 
functions under the Act to, such officials as he might artnoint. (**) 

The poT7er to promulgate rules and regulations was also given to 
the President. (*=*<*) 

It is evident tnat .an extensive governmental agency or "bareaii to 
administer the Act was contemplated. 

The ejrperience of other governmental agencies cliarged with the duty 
of administering various lows hp,d demonstrated that puolic opinion was a 
vital factor in the success or failure of such laws. That is to say, 
that those laws which had the support of the general public and the 
groups directly affected "by them had heen successfully administered. (****) 
On the other hand, those laws wl^ich ] a,cked. such sup;oort had teen 
failures, (*****) 



(*) National Industrial Recovery Act, Section 2 (a) 

To effectuate the policy of this title, the President is herehy 
authorized to estahlish such agencies, to accept and utilize 
such voluntary f.ind uncompensated services, to appoint, without 
regard to the lorovisions of the civil service laws, such 
officers and employees, and to utilize such Federal officers 
and emplc3''ees, and, with the consent of the State, such State, 
and Local officers and employees, as he may find necessary, to 
prescribe their authorities, duties, responsibilities, and 
tenure, and, without regard to tiie Classification Act of 1923, 
as amended to fix the compensation of an;'- officers and 
employees so appointed. 

(**) National Industrial F:ecover:'/ Act, Section 2 (h) 

The President may delegate any of his functions and powers under 
this title to such officers, agents, and employees as he may 
designate or appoint, and may establish a.n industrial planning 
and research agencir to aid in carrying out his functions under 
this title. 

(***) National Industrial Recover;- Act, Section 10 (a) 

The President is authorized to ^I'escribe such rules and regula- 
tions as may be necessary to carr','' out the purposes of this 
title, and fees for licenses and for filing codes of fair compe- 
tition and agreements, and any violation of any si,\ch rule or 
regulation shall be punishable by fine of not to exceed $5C0, 
f"r imprisonment for not to exceed six m.onths, or both. 

(****) Interstate Commerce Act 

(^*****) Prohibition 

9839 



-78" 

This fact r.'as recognized "by NHA at leact in the puj] ic declarations 
of its officials. It vas uiidouotedly the reason for the adoption of the 
adjustment method of handling complaints of code violations. (*) 

2. The Adjustment I'ethod. 

The adjustment method served tvo pui-poses; first, the code, violator 
was educated regarding his responsihilities under the code, and second, 
the violation was supposedly corrected and the violator thereafter com- 
plied with the code. 

Punk & Wagnalls Standard Dictionary defines the torm , 'adjust' as 
meaning, "to arrange in order"; "regulate"; "settle"; etc." IClA's first 
adjustment efforts were aimed at regulating the practices of the industry- 
member so that they conformed with code standards. La.ter adjustments 
also involved settlements for ;oast violations. 

At the heginning of lIEA's compliance efforts, the adjustment of code 
violation cases looked towards the futvire and stress was laid on efforts 
to huild up future voluntary com-oliance on the part of the violator. (**) 



(*) Release Fo. 1847, Novemher 23, 1933. Statement hy the 

Administrator. "The term 'administration for compliance' is intend- 
ed to include: (a) the instruction and edaca.tion of those subject 
to the code as to their responsibilities thereuiider so as to 
anticipate and avoid complaints of non-comi:)liance; (b) the adjust- 
ment of comiDlaints of r.on-compliance by education, fair findings of 
facts and the pressure of opinion within the Industry; (c) the 
adjustment of complaints by arbitration, conciliation and mediation." 

Statement by national Compliance Director, December 5, 1933, 
"Like the temporary arrangement this lolan (nermanent plan for a,djust- 
raent of complaints) provides for a regional system to aid in the 
adjustment of complaints of violations of apDroved codes. There is 
no provision of enforcement by these agencies. The enforcement 
agencies of government under the National Industrial P.ecovery Act 
are the Attorney General and the Federal Trade Commission. Like 
the tempora,ry -arrangement, it is based uiion the hypothesis that the 
grpat majority of complaints are due to misunderstandings which can 
be adjusted by education and information, by correspondence and 
conference. It is also bared upon the hypothesis that to effect 
this, there must be well informed agents in the field to adjust the 
case where it arises and to make fair findings of fact." 

(**) l-Hlft. B^J.letin No. 7, Page 7, H. "The system outlined by 

this manual is designed to insure the speedy elimination, by adjust - 
ment , of such non-compliance as is due to misunderstanding, and 
the prompt "orosecution of all cases of vdlful non-com-oliance. 
Through the various Industrial Adjustment Agencies mid the State 
Directors, all persons against whom complaints have been lodged 
will be given ample opportunity to cooperate and to make restitu- 
tion for any violation due to misunderstanding and ignorance." 



9839 



-79- 

The approach V7as conciliatory and little n.tt'^ntLon rr.s r~iven to the 
penal features of the law and the ruleR and regulations thereunder. In 
fact, no agency to handle criminal or injunction "oroceedings under the 
law was set u^ within l^aA u^atil March 19o4. (*) It is significant that 
even when e Litigation Division was set up it "as not to -oroceed with 
indiscrimina.te prosecution or other court action on all ca-sec coming to 
its attention "but was to "present cases to the National Conriliance Board 
for its recoTimendations on policy and disposition". Thus court action 
was intended. merely to supplement the efforts of i^Jl to ohtain voluntary'' 
compliance with the codes throagh educational methods. 

The policy of adjusting cases by securing a -oromise of future com- 
pliance led industry members to assume that they could pursue a course 
of code violation and reap the benefits thereof until KRA found them out; 
then a promise to "be a good boy" in the future was sufficient to prevent 
any further action being tal:en. This situation gave rise to the policy 
of requiring restitution before a code violation ca,se was closed as 
adjusted, 

3. Restitution ■, 

Restitution contemplated a settlement or indemnification for damages 
occurring because of a code violation. The requirement of r estitution 
was based on the theory that a code violation did injury to other members 
of the industry involved or to the employees of the viola,tor (in labor 
cases) or both and that a code violator should be required to rectify 
such damages in addition to regulating his future loractices to conform 
with code standards. 

No apiaroved form of restitution in trade practice violation cases 
was ever devised, i.i fact it was foiind that in most cases it could not be 
determined who the injured parties were. 

In labor cases the problem was much simpler and restitution was 
taken to mean the ps,yment of all back wages due, so tha-t the employees 
of the violator would receive in the end, code wages for all work performed. 
As in trade practice cases, this method did not, of course, indemnify the 
industry, or rather the other menb'ers thereof, for any damage they may 
have sustained. Neither did it act as a sifiicientl;"^ po^/erful deterrent 
to future violations since the violator was only required to pay what he 
would have paid had he comiDlied with the code provisions in the past and 
no penalty was involved. 



(*) Office Order No. 74, Marcn 26, 1934. 

"The Legal Division Tfill organize a Litigation Division under a 
director of Litigation who will report to the O-encral Counsel. 
This Division will: (a) Coordinate all NEA litigation; (b) Examine 
and review transcripts of all ca,sf s which ha.ve been turned over to 
the courts; (c) In the name of the Department of Justice prepare 
ajid carrj^ through litigated cases; (d) Furnish information at 
any time on the esact status of litigation on eny point; (e) Present 
cases to the National Compliance 'ooard for its recommendations on 
policy of disposition." 

9839 



Such a situation v?as extrenely favorable to the cliiseler. He paid 
less than code vyages, worked his employees longer than code honors, there- 
by gaining a competitive advantage; if he was not caught he pocketed the 
results of such a policy and if he was caught he merely paid to his en- 
plo;/ees miat vras rightfully theirs in the first -olace; he had the use of 
the money in the interim and in the end had lost nothing. 

As a partial remedy for this situation, KRA added to its restitution 
policy "by requiring the payment of overtime rates (*) for all overtime 
VTorked in violation of code provisions and tiie payment of the expenses 
of an audit in cases requiring an extensive inspection of the books and 
records of a violator. (**) The overtime requirement provided damages 
to the employees of a violator and acted as a deterrent to future viola- 
tions. The payment of the ejcnense of an audit served to assist NRA. and 
the Industrial Adjustment Agencies in determining the extent of a viola- 
tion without undue expense to themselves and also acted as a deterrent 
to future violations. 

These were the only measures which might be considered as b eing in 
the nature of a penalty for a past violation which ITRA ever adopted, 

4. Less Than Ivll Hestitution Adjustments. 

TTith one notable exception, N3A's restitution policy was strengthened 
as NSA's experience grew. The cases in which so-called "less than full 
restitution" adjustments occurred constituted this exception. TThere a 
violator made a showing that the payment of the full amount due his 
employees as bad: wages under the code provisions would be ruinous to 
his business or ras a financial impossibility, NEA. frequently adjusted the 
case by permitting the payment of a compromise amount based on the 
violator's ability to pay. (***) 

(*) Field Letter ilo. 135. " TTorking Hours in Excess of the Code Maximum . 
The anployer should be required to pay for overtime at a higher 
rate than the rate paid for regular working hours. If an overtime 
rate is specified in the code, ths.t rate will apply to overtime 
which is permitted by the code. For all overtime which is not per- 
mitted by the code an employer shall be required to pay a rate in 
excess of the overtime rate for permitted overtime. " 

(**) National Compliance Board minutes of Jsbruary 9, 1934. 

"The national Compliance Board regards payment of cost of audit 
by respondent as a fair s.nd necessary/' part of the restitution." 

(***) jjo adjustment made ^ay ITHA affected the civil rights of the 
persons involved. K3A instructed Field Officers to make this 
fact clear to all parties concerned. 

Field Letter Ilo. 125. "It should be clearly understood that 
any civil rights an employee has as regards payment of back wages 
are not prejudiced by the State Adjustment's approval of less 
than 100 percent restitution." 



9839 



-81- 

While the authority to make such adjustments was centralized and 
hedged about ty certain ;orecautions, a substantial number were made. (*) 

Sucn procedure carried the policy of conciliation and education to 
the extreme and we have the' spectacle of an agency of the Federal Govern- 
ment failing to talce steps to impose penalties for lav violation because 
the violator pleads that his violation has not been sufficiently profit- 
able for him to make good the damage he has done. 

It must be remembered that vrhat has been said in this section has 
to do only with adjusted cases. In those cases in which the violator re- 
fused the adjustment offered to him, the penalty of removal of the right 
to display the Blue Eagle and the possibilitj'^ of prosecution applied. 

5. Liquidated Damages. 

Liquidated damages provisions requiring the payment of money damages 
in a specified manner in cpses of code violations on the part of those • 
persons agreeing to the provisions were written into a fe"^ codes. These 
provisions were to supplement KSA's adjustment methods. 

5. Certificete of ComTDliance. 

The -oronise of future compliance took the form of a written 
instrument which cpme to be know as a "certificate of compliance". (**) 

POHl/. POH CSI'TIZICkTE OF COl.'lPLIANCE TO 3E USED IN ADJUSTt.--ENT OF 
THADS THACTICE COr.IFLAINT 

The following form should be used in a.djusting a trade practice 
complaint by securing an agreement to comply in the fut-Jirc, While it 
may be varied to fit individual cases, it should be followed as closely 
as possible: 

Being desirous uf cooperating with ITHA in administering the 

■ Code of Fair Competition far the Industry, and 

of removing as.y ground of complaint of violation of the Code, I 

(we) , (Name of individual, partnership or 

corporation) certify and agree that I (we) em (are) now complying 
and will in the fut-jxe comply with the letter aJid spirit of all 

the provisions of the Code of Fair Competition for the 

Industry: and particularly with Article , Section , Paragraph 

_ (supply numbers of Article, Section, Paragraph, Etc., resp- 
ondent is found to have violated) fxth regard to , 

(Supnly short summery of provision violated, such as : with regard 
to the filing of pric^-s and other data with the Code Authority). 



(*) The Compliance Division Statistical Section advises that the 
exact number of such adjustments is not known, 

(**) Pages 249-11, 249-12, 249-13. Field Letter No. 193. 



Qor^Q 



-as- 
Signed: 

This dry of . 19_ 

JOmi DOE, IHC. 
3y: 



T/itness; 



All certificptes of coinplipnce shoulc te addressed to the State "' 
Director unless special circu istr nc. s require fnotxier addressee, as the 
Code Authority or the 5,egiun?l Director, The respondLnt's nr-mo and add- 
ress, shoir'ing res-pondcnt is pn individurl, partnership or corporation, 
should appear at the top of tht- certificate. 

If the respondent is an individual, the certificate should oe sign- 
ed fcy him, if a partnership, "^jy one of the partners; and, if a corporat- 
ion, ty an officer of the company. 

If the respondent has agreed to do certain specific things, such as 
file back reports with the Code Authority, a statement wherein respcnd- 
end agrtes' to do these things should be added. 



POHM OF CEETIPICATS Oz'' COivIPLlAIJCi. Ai\iD AGHKLl;iENT TO lOZE DESTITUT- 
ION TO BE USED IK ADJUST. lENT 0. LA30H COiiFLAINTS 



The f oiler ing foria should he used in adjusting a labor coaplaint 
by securing restitution and agreement to comply in the future. 7/hile i t 
may be varied to fit individual cases, it should b^ follo?/ed as closely 
as possible. 

Being desirous of cooperating with KBA in ac ministering the Code 

of Pair Competition for the Industry, and of removing 

any ground of complaint of violation of the Code, I ("'e) 



(name of individurl, partnership, or corporation), certify and agree to c 
do ' the folloifjing things: 

1. I (vre) agree to make full restitution of pll ^ages due 
my (our) employees under tne said Code so that after such r^sti- 
tution'they shall np^b received all the amounts due them as w^gus 
under the said Code, If an3/ of them have "'orkcd overtime hours 
not permitted by the said Code, I (wu) arrn. that the total rate 

9839 



-8S- 

of pay for such overtiae shall bt ono pnd oru-hplf times tne rpte 
rt I'^hich the re.-ptctive employees were ppid-in the pay period in 
question (or one and one-half times tht rainimura rate' under ftic Code 
if said minimum is greater than tne actual rate of pay), and I 
(we) agree to make restitution for such overtime hours accoirdingly. 

2, I ('"e) agree that the amounts of said restitution are -to 
be determined by the State NEA Comx)liance Director for . 



5. I (we) agrf e tc &ake payment of ijuir rest-itiibion a-! 
time sot and in the r.anncr sricciflcc' hy the State Director. 



the 



M 
ct- 

CD 

^§ 

m 

4=' 



4. So that the State lirector may determine the amount of 
back wages due, I (we) agree to permit a full examination of my 
(our) books, accounts and r-.'Cords by the office of the StatL Dir- 
ector, If they are unsatisfactory I (we) agree to permit an exam- 
ination of my (our) employees. 

4. So that the State Director may determine the amount of 
back wages due, I (we) agree to permit a full examination of my 
(our) books, accuunts and rtcords by a. public accountant to be 
selected by the State Director and emiDloyed by iik^ (us). If they 
are uiisatisfactoi-y I (^'e) agree to permit an examination of mv 
(our) employees. I (wt) agree to pay all the cost and expens^^s 
of the examinations by the public accountant. 

5. I (we) certify and agrt.e that I (we) am (are) now com- 
plying and will in the future comply with tht letter and spirit 
of the Code cf ?air Competition for the Indus.try. 



Signed: 



This 



day of 



., 19 . 



V/itness: 



JOHN DOE, IITG. 



Any of the follo'^'ing paragrarihs may be used in rer.titution agree- 
ments in appropriate cases: 

In order to secure iDrymtnt of the amounts pug as restitut- 
ion hereunder, I (we) agree to -post a bond, certififid chcdc or 

other ace ptable security in tlu, amount of with the 

State Director on or before , payaole to such person 

or persons as the State Director may direct. Upon satisfactory 
proof to the State Dirtctor of payment of all amounts due as rest- 
itution it is understood that the bond, or other security posted, 
shall be iumediately released. 



QCZQ 



-84- 

I (we) 9.{^ree to reinstate in their former positions r>.nd. 
duties r.ll my (our) enroloyoes dosignatcd 'oy the Office of the 
St?te Director as havinf: been diccliarged or r.emoted for submitting 
complrints of code violation. 

I ('.7c) a;];ree to koop 3,C3urate and pen:r-nent records sho'ring 
tlie hours i--crl';ed by, and the wages paid to, ray (our) ornpl-'yeos. 



IIHA. recognized that there certificates of compliance v;ero r/icrely 
promises to comply with the law which the maker oi the instin^^.'ient \;as 
already bouiid to do and that there was no consic oration ' for such a 'orom- 
ise other tnan the implied promise on the pa.rt of 1I3A not to -jrosecutc 
if the vicla.tor signed siich ^n instruir^ent. The certificate, therefore, 
Imd no legal significance. ITHA attejipoted to standardize those certific- 
ates and couch thorn in the sinTiolcst possible terms so that the violator 
would not be frightened by a ma.ss of legal lonoUage into calling vvoon 
his attorney -vho would probably advise him that tiie 'certificate was not 
binding uoon him. Doopite the lack of a binding legal contract it was 
felt tliat if t'he violator signed a written promise to corrrply in the fut- 
ure, he would be more likely to abide by it:.> terras than he would the 
terms of a more verbal -o realise. 

7. Consent Decrees of Injioiicticn 

In certain cases of code violation ^-hich I'jad caused great damage 
within the particular industry or where because of the circumstances 
in tne case, a bare promise of future comrTliance was thought insuff- 
icient, NEA required the violator to enter into o.n agreement tc the 
effect tlia.t he would consent to the entry of an injunction in a coLirt 
of competent jurisdiction barring him from futuro violations. While 
it cannot be said that an injunction against future violation of a code 
constituted restitution for a past violation, nevertheless it was 
thought of as a sort of penalty. Undoubtedly, the publicity attendant 
upon the entry of such an injunction and the continuing threat of 
prompt punish-nont in case it was disobeyed was in the nature .of a pen- 
alty and certainly was cff-ctive as a deterrent to fut-ore vialrtion. 

8. Slue 3agle Removal Despite A-justmont. 

KRA. mr.intained that it could and would -oaidor certain circumstances, 
remov?e the Blue 3agle and refer a case to the Litigation Division for 
court action despite the fact that the violator' made tr.e adjustment 



-35- 

offered ty NHA.. (*) 

In a fp.v! trn.de -oractice cases (less than a half dozen) the Blue 
Eagle wr!s removed either for a limited time or outright (**) and the 
ca,se referred to the Litigp.tion I^i vision even though the violator agreed 
to comply in the future, hut there was not a single case in which the 
Blue Eagle v;as removed or litigation resorted to after restitution was 
made in a lahor case. This is true even of second offenders. 

It is ohvious that the adjustment -policy persistently followed a 
path intended to curry puhlic favor and not to antagonize those memhers 
of industry '^ho r?.n afoul of the la^ hut rather to -oersuade them to 
voluntarily hring themselves into comr)lis,nce with the codes, -he much 
heralded and long awaited "crack down" never materia.lized. 



(*) Field Letter 'Jo. 125, "In making adjustments of complaints of 
code violations it should always he home in mind that such ad- 
justments are made hy 13^ so that the employer may continue as a 
memher in good standing in his industry, he privileged to display 
IdA. insignia; use KRA Ishels in ari-oropria.te cases; and he quali- 
fied to hid on government contracts. It should he distinctly un- 
derstood in all cases that such adjustments do not foreclose the 
possihility of action hy the law enforcement agencies of the 
government. 

"Adjustment of a. complaint hy an employer will naturally he taken 
into consideration hy IvIHA. in determining whether prosecution will 
he resorted to; hut an adjustment shoul-d not he looked upon as an 
agreement hy NEA not to refer the case for prosecution, and em- 
ployers should he informed of this fact. This is particularly 
true in the case of a deliherate violation, and more particularly 
when the employer has attempted to conceal the violation, Re- 
peated violations should he presumed to ha,ve heen deliherate." 

(**) In 194 cases after the Blue Eagle was removed, it W3,s restored 

upon application of the violator hased upon a showing that he had 
made an adjustment satisfactory to I'THA, 



9839 



-db- 



D^ n.siG^;iA - la:^ils 

The o-jroose, uethoa. -f i.Listri.>itiun and etaer gener-^l' aspects cf ITRA. 
insi^inic'. .and .'"!a code 1- bels r^re tT-q&:%ed. in thd: ^studies "NjL4 insignia" 
and the "1I.RA Code Labels" respectivel'V^..:; This .secfion has 'to ' do oril'^" v^ith 
the fnethods by which i isigniT. ana. labels were used e.s coranlir'nce wea-ociis. 

1. Insi ^ia 

Actjiiinj-strati^-e Regula/-ions •:!' October- 17, 1.933,-. having to do with the 
Blue Eagle, 3rcyided .thut the Administrator .:aip>it ■ reriiove the right' to e.is- 
"olay tile Blue Zagle . from any -oerson. who viol- te^l his code.' ■■(*'V' ACuninis- 
t'rative Order 'Jo. ..X-r,22, dated April. 19, 1934, e-atitleo. "Blue ^agl a regu- 
lations", created an individ-oa.l 31-ae l]a ;le for ei c;") code and also -orovided 
for its removal by the Administrator. (**"^ The uossibility that the right 
of a code violator to displav txie Blue 7agle might be rer.iovsd was -orssent 
in the handling of every code viol- tion ca.se repcjr.ted to any 'agency for 
handling coiaolaints of code.vio-1. tion. 'The iaain pur':)0S8 of every step taken 
by such .-in agencv in hojidling a cc^-olaint, was t.-. oring ab-out a' satisfactory 
adjustment of the .Ci-.se but sinultaneously f> record -v.^os bixi3t u-d to be used 
as a basis for _future removal of tne Blue -Eagle-, if the case was not adj-asted. 



{*) Administrrtive Re.-rul tions, 6. te . Octob'^r 17, 19.^. "'.,'hpn;, in the 

judgment of the said AXainipt atoi- or his r.ulv nn.thori'^ed reT^resenta- 
tiyes., . any ■oerson has, failed tc cora-oly v/ith s-^.id a'=,Teeme-.^t or code, or 
■v^hen anv oerson. .has imarooe.rly oot.-^ined s'-.;i-d .e'lbleM, such -lerson shall 
s-orrender said erablem- on.-.dema.id.- .of the sa.id' Adiirais-tratOj or his duly 
authorized reorese.itative, and s.iall ni:'t ti-iPl^eaf t^r' dis-o". ly or use the 
same Yfithout the vrittei o'-irraission o.."..-the said Idminis fcrator. " 

(**'' Adipinistrative Order lib . X-22, "Blue Eagle" 'feg'vil'.t ..ons" 

", 1. -Ah i-ndividual Blue '^agle,' ■orc-oert"'- of the' Unit'?d States Govern- 
ment, is herebv created for each trade or industry under an-ao- 
proved- Code of j^air Competition. 
2.- Subject to -tile -oen-alties cf Section 1^ (a*) of 'an orders and re- 
gulations under saio liif, no' -.-erson sarll disolnv and on finding 
by I-T.T.A. 8Jiy oerson may be publicly deirivec" of the right to 
display any Blue Eagle or other ' "lA i isi "nia if he violates any 
provisions or the s-oirit and intent of any code, Pre-;idental 
or re;_gulation, duly prescriDed r ao-oroved." 



9839 



-87- 



Becaiise of tnis fact the riroced^ire for tne handlin^c of cora-nlaints becomes 
c'lt the yai.ie time tno oroceclure for hanaling the Blxie Ea.^le removals. In 
Sections A and 3 of this Chapter, the I'lethoCi of hsndlin.:;; complaints by the 
State Offices has b*. ei outlined. Vhsse rere the orelirainar^'' steps looking 
toward the removal of the Blue "agle as v/ell^ as attermts to adjust the case. 
This Sectiiu will trac*^ the nro-;ress of a ca'pe Jifti-r it had been forvarded 
by the State Officer or Goae Authority to tae Compliance Di""'ision in '.Tash- 
inj-:ton or to a "^.egicnal Office. 

Charts depicting' the channels throu :h which coce violations loassed 
are to be found in Appendix 3 hereto. 

The authority to reiaove the Blue Eagle was first dele^rted bv the 
Aclministrr-'tor to tne i'lational Compliance Board. (''VALt this time the State 
Offices had not been set up ond co'rolaints of '^iol tims of the codes were 
being handled by the District Conpliance Directors. IT^ specific procedure 
to be lollowec; bv tiie l-;' ticn.':l Co.,r-'liance Bc-^rd in hondlin]; compla.ints of 
violr-^tions or in removiu.?; th^ ri:f;ht to displc.y the Blie Bagle was prescribed 
in the ord^r creatiig the Board and it was left free to develop its own 
procedure. Office Order fo . 4"" alno created within tiie Compliance Division, 
Trade Practice, L' bor .id Bl .e 7.' ^^Ic oraiche'^, the latter wa,s amalF."amated 
by Office Order IJo. 45 with the f/co oth'-r branches. Soon after it was 
set UP the Eationol Conpliance '^osr'" be.?;aJ^ to hole, herrings on copliants 
of vicl'-tions of tae PBA which had b:^en f crvr/rd^jd. to '.,'ashin:';ton by the 
Local Compliance Bo-rdis in those instances in '-vhich they had failed to ad- 
just such complaintn. Telegraohic notice of a ne^ring was sent to the 
respondent (person against v;hcm couolaint was n&de') about ten days before 
the hearing was scheduled, '"^his notice advised him what provisions of the 
PPA. he was char^-ed with violating and st ted that he might appear in per- 
son or be reoresented at the hearing. Tne he-ring itself was informal 
and was more in the nature o"" a disci.ission of the facts in the case as 
gleaned from the' 'file sent in to the Comolinjice Division, thaji a trial. 

The Boeru also began to hear code violation cases in tne same manner. 
These were complaints of code viol ti.as which the Code A.uthoritxes or Dis- 
ti'ict Coiiioliance Directors hac' oeen uiiable to a.'ljust, and in conseouence 
thereof had f orwai ded to the Compliance Divi.;ioa. '."nen they reached the 
Cem-oliaace Division m '..'ashington, tiie','' 'vere rcut-.N7 to the appropriate 
branch, i.e., ""r de Practice or Lrb>,r, sua tnere erC'-^mined to determine 
whether the file coitoined su f icieat eviaence •. f the violation charged. 
If sirfficient evioe.ice of tr.e viol^ tion did not appear in the file, a 
request for furtht r ir.formatii n wt-is sent to the forwarding agency. If 
siff icient evidence did ap-oear, a hearing r^as scheduled before the Board. 
Unless the violation was fla/^rant and the respondent had shown no dis- 
position to adjust the case, the Bora d uspxilly 'offered the respondent one 
more OTDoortunit" to adjust the case, b"' ":ail if he v^s, not aresent nor 
represented at tne he- ring. 



{*^ Office Order xlo. 4', October 2C , 19.3b. 

"It v7ill be the dut^' of the "Bati. nal Co.nalirnce Board, on ref'^rence 
of coMolaints from t.ie national Cor.;olia'ic3 Dir-ctor, to -undertake 
further atten'ots at a justme'nt, recoommend exceptions, remove the 
Bl'de 'Sagle or rocom.mend reference to the Federal Trade Commission or 
the Attornev General for aoorooriate a,ction." 



-88- 

If the case was not adjusted the Board in neariT o.ll instances voted 
to rnmove the rest)Ondent' s ri^ht to disnlav the Blue ^a^^le. The resDondent 
wrs notified of this action bv v/ire, directin/i' him to surrenc.er all of his 
l-^lue "/exiles to his local Postmaster aiic- not ^o dis-olr;"- anv Blue j]agles 
thereafter except upon Fritt-'n. oermission. '^his -^ction vas ta'cen in the 
nr'ine of the Aoministrator: 

In the lattf'r part of Jr-Jiuary, 19o4 the Compliance Division set ud 
Stat-- Offices in e--.'ch state. These took over and extended the v/ork of the 
JDistrict Couoliance Directors. 

The Compliance Division, with its "^rade Practice and Labo.- branches, 
coatinued to handle all code viol- ticn cases sent to it b^^- the Code Author- 
ities and the State Offices in the msiiner outli'^ed abovj until uarch 26, 
1934. On that o.£.te, Office Oro.c;rs .'o. 74 aiid Jo. 79 set up a -le" method 
for h.'.ndling code violatiin cases. 

Office Order ITo. 74 created the office ^:f irst Assistant Aojainistrator 
and made him responsible for compliance, enforcement rnd other iiroblems of 
code aoministration. (*) It created a Liti ;-.tion Division vmich was respons- 
ible for all i'lHA litigftion. (**) It nlso restcteo the functi-ons ano, duties 
of the national Compliance Board. (***'' 

(*) Office Order Wo. 74, c,-ted - arch Vc, 19,34. 

"Seorganiz- tion for Code Aioiini^.tr- ti. n. In order to concentrate the 
efforts of tne or.f^anization on the oroblems of co.le ao.ministration and 
to Toromote more effective ■ organization a.nd nethois. for code adminis- 
tration, the follo'.7ing orcers a:'e effective ira'iedi: telv: 
A. Office of the Jirst issisto,nt Administrator. 

1. The First Assistant Aaministratcr ^riill sutjervise and co- 
ordinate the reorg.'inization and functioning of I-IA for code aJjninis- 
tration. This will include reorganization for; 

(a"" Compliance ;:nd '^Enforcement 

(b") Coae Authority cauthorizati on, org"'niz.ation and orocedure. 

(c'' Other arcDlevis of coae ; drai '.istration. 

2. The First Assistant Adjninistrator will ar)~!Oiat an 
assistant for each of these functions. 

3. It is cont--^ iTDlated that as soon as cert-:iin phases of the 
reorganization for code administration •^,-e co voleted and function 
smootnly the' will be tr^ isf erred fr'.nu the Of ^'ice of the First Assist- 
and A' ninistrator to the ■3xocutiv3 Offic'=; for normal cobraination and 
general supeivision. " 

(**) Office Order lo. 74, 3. ComTDli.nnce and Enforcement, dat d ; arch 26, 1954. 

(***") Office Order Jo. 74, o.ated arch 26. 1934. ?ara'^;;ra-nh B. 2. 

"In adcitiou to carrying on the remainder of the work in connection 
with the President's P.eem'Dloyra-ent Agreement as provided in Office 
Order Jo. 4 \ (October 26, 193o) it vfill be the duty of the Jational 
Compliance Board to consider all cases referred to it by the Industry 
Divisions, the Comrliance Division ana the Litigation Division. It 
will laake recommendations to these divisions and to the l,dniinistr>-.tor 
as to the fin; 1 disposition of oarticiil^^r cases and ar, to Dolicies 
governing; cornliance and enforcement activities in general." 



9839 



-t';0-. 



Office Oi-aor o. 79 specified nn entirely new "orocediire . Ud to this 
tiiue no definite jrocedure for the handling of cases bv the Coraoliance 
Divisj-on in '.I'ashi ■j.^'';ton, or their presentation to the National Com-oliance 
Board had been orescribeo., nnd tne fnethods used had grovm up very much 
li'^e ^oosy. The new proced\ire v/as :^s follows: 

I. Res-ponsibil i ty of Deputies . 

Code r.dmini strati on involves esoeci lly -.j.irinistration for coraTjliance 
and enforcement. ."hile the tiiv-e of Deoutias and Assistant Counsel was 
flnost exclusively taken uo in oode mskin?;, the ourdc;n of effectinjj compliance 
with individuE'l coaes a?id. of considering rac-tters i^f enforcement thereunder 
was, to a great extent, Fssumed by tne Coimoliance Division. ."^ron the date 
of this Or der, e ach leoatv v? i ll be r esponsible to his Division Acjninistrato r 
fo r jroiot action ..n co:.rolaints of viol tion ■•'f the codes assigned to him . 

II. Field Contacts . 

^aforcernent and adjustment matters necessarily reauire a great deal 
of field contact work. Although ccntac'ts with industry in the field are 
intended to be made, so far as possible, by cede authorities and their 
agencies, (carrying out the fundanental lorinciole of 'Ulk to give Industry, 
through its code r-utlioritie;;, the v-idest oossible range of self-government, 
sulJject to the ultimate resgonsibility of the Adininistrrtor) there are, 
and i?.'ill continue to be, ^nany localities in 'f.'hich tnere is no code author- 
ity agencv and nany iadustrie;jiji '.vhich it ■ill be in-or^ctic-l to nave an 
extensive code authority field organization. It \/culd be eoually imrracti- 
cal for e;ch Deputy to have a^-ents in tne field. Therefore, the field 
offices of the Compliance Division are organized as a servic3 for all in- 
dustries wnose code authority organization is inadequate. These offices 
are the agents of l.P_A. in the field, ^''or administrative coordination they 
are headed up Dy the Field Branch ox" the Compliance Division nd all 
contacts with them should De m;-.de through t'nat office. However, it is 
not intended tha-- 1 the Compliance Division is to •'.judertake the administration 
of all codes for compliance ana enforcement. This remains the responsibil- 
ity of the Code Authority, the Acuninistration iievaber, and the Deputy .^nd 
Divsion .\.djiiinistrator for each code. 

III. Procedure . 

In order to insure -oroapt, efficient and coordina^ted action on the 
part of code authorities ana their agents, the Comoliaiice Division and 
its agents. Administration .embers. Deputy ano. Division Adi'ninistrators, 
and the Legal and Litigation Divisions, the fo Hewing procedure will be 
follO¥/ed in the hr^ndling of conpliaiice and enforcement ria.tters by UHA: 

A. The Compliance Division . 

1. All transcripts of cases in litigation, unadjusted cases and 
original co rolaints involving alleged violations of "Ri codes and agree- 
ments from whatever source will be routed .^rci the ;TRA iiail Hoora to the 
Control Section of the Compliance Division without regard to whom the 
communication is addressed. All cases of this character which reach mem- 
bers of the organization without having been tfe the Compliance Division 
will be returned to the IPJl i.iail Room with instructions to forward to the 
Compliance Division. 



-90- 



2. The Control Section '/Jill sort and acknowledge all transcripts and 
complaints ano. will' return to their source with an explanation all obviously- 
erroneous or nisdirected comDlaints. 

3. All other transcriiots and comiolaints will be jacketed and given 
a control .lumber by the Control Sec + ion which will ke-^p a record of each 
such transcript or conrolaint and will follow up the case until it is closed. 

4. The Control Section vfill forward all transcripts and coraolaints 
to the Analysis Branch where they will be analyzed and a brief digest of 
the facts and action thereon to date will be attached to the record of 
such case. If urjon analysis it is obvious that a complaint is erroneous 
or misdirected, it will be returned to its source with an explmation. 

5. In all cases which heve bee: handled by a State Director and in 
which the Comoliance Division decides that further effective action can 
be taken bv the State Director, the Coripliance Division '-'ill return the 
complaint to the State Director vfith instructions as to tiie further action 
to be taken. 

6. In all other cases the transcrrot or complaint, with the digest 
and the recoramendr tions of the Com-pli-ince Division as to the disposition 
of the case from the general standpoint of compliance attached, will be 
transmitted to the Assistant Counsel assi^n'ed to the code involved. Vi/"hen- 
ever a transcript is so referred a o.uolicate transcriot, disgest and reco-i- 
raendation will be imraediately forwarded to t.^e Litigation Division. 

7. In all cases in which a transcriot has been forwarded to Assist- 
ant Counsel a notice to this effect will be sent, by the Analysis Section, 
to the Secretary of the National Com-oliance Board who will notify the 
Assistant Counsel, the Control Section and the Litiggtion Division of the 
time when the case will be called b'/ the Board. 

B. Assistant Counsel . 

The Assistant Counsel will study the case and will oresent it, with 
his recommendation on the legal problems involved and from the standpoing 
of legal policy, to the Deputy Administra.tor . It is the duty of the Legal 
and Litigation Divisions to insure that legal policies with regard to en- 
forcement and compliance are kept uniform aiiong the various Assistant 
Counsel. 

C. Deputy and Division Ad min istr^.'tors . 

1. Transcripts . ■ ■ 

The Deputy Administrator v;ill r.dJ his recommendations, from an admin- 
istrative standpoint, (e.g., whether a case should be exoedited, retarded 
or quashed) to the record. All transcripts will be -or-^sent^d to the national 
Comoliance Board by the Assistant Counsel at the call of the Secretary to 
the Board. The Deputy Administrator may appear at the presentation and in 
all cases will auoer.r at th©'call of the Board. 



Q«'7Q 



-91- 



2. Unad.justel Corinlaints . 

a. Tne Deouty .-idriiaistrator ms,},'- decide thr-.t the case should be 
tiirnel ever for enforcement rjid/or de-oriv-.tion of the right 
to displav tnc Blue Eati;le, or that is should be dro-ooed or 
that further attempts at adjustmenb should be made either 
through the Code Authority, or the Compliance Division or 
in '.v'ashington. 

b. In any case where the recorarnend: tions of the Assistant Couiisel 
or in Compliance Division, as to the tr^'Cxtment of an unadjusted 
comiilaint (not a transcript), differs from the decision of the 
Deputy and sn f.^reement cannot be reached, and in anv case 
v/here an interested -oarty obiects to the .ecision of the Denutv, 
and in r;ny case where the decision is to reraove the "Eagle or 
turn the fcasa over to enforcerae:jt, the reccmmenda.ticn of the 
Division Administrator v;ill oe ottained by Assistant Counsel and 
the case oresented to the ITational Co r-;liance 3oard. 

D. 1-Iational Co!Toli"jice Board . 

1. The Board ^rill consider -11 cases in which there is a transcriiot 
of a case in litig-tion and v.'ill traisiiit the ca-se and make its recommenda- 
tions thereon to the Litigation Division. 

2. The Board will make final dicisions on the issue of the right to 
display tne Blue Eagle. 

3. The Board v;ill consider all cases of unadjusted corarjlaints -ore- 
sented to it by tne Assi-taut Counsel. On snch cases it may decide: 

a. That the respondent should be deprived of the right to disolay 
the Blue Ea:i;le, in which event it will make a recomraendatioa 
to this effect to the Aaministratcr . 

b. Tha.t the case should be dro jped, in which event it '"'ill make a 
recommendation to this effect to tue Division Administrator. 

c. That furth'^r sttem-ots at adjustment should be m^de cither through 
the Code Authority, the Compliance Division or in Wasnin-^ton. If 
the Division Administrator disagrees with the decision of the 
National Compliance Board the matter will be decided by the Ad- 
ministrator. 

d. That the case should be turne. over to the Department of Justice 
or the federal Trade Commission, i/i which event it will make a 
recommendation to this effect a.v: transmit the case to the 
Litigation Division. 

4. In any case, if the Division \Lv.ainistrator or the General Counsel 
fisagrees with the decision of the llptioial Coroliance Board the matter 
will be o.ecided b^'- the Administrator. 



5. in all cases. of course, a dissatisfied interested party has 
the right to appeal to the Department of Justice or the Federal Trade 
Commission from a final decision of I^Ra. 

E. Litigation Division . 

1 The Litigation Division will examine and analyze all transcripts 
referred to it and will insure that the Assistant Counsel, assigned to 
the Cole involved, is informed of the re comae ndat ions of the Litigation 
Division from the standpoint of coordination of litigation so that the 
Assistant Counsel may present this recommendation to the National Com- 
pliance Board at the hearing on the case. 

2. The Litigation Division will receive all cases in ifdiich the 
National Compliance Board has recommended enforcement and will "be respon- 
sible for the case from that point on as provided in Office Cid^r No. 74. 

F. General . 

Whenever a transcript or a complaint is transferred from one 
point to another in carrying out the procedure outlined above that fact 
will "be reported to the Control Section of the Co::roliance Division by 
the person transferring the case together with a brief notice of the 
action taken or recommendation made thereon by him so that the control 
record will show, at all times, the location and status of the case,'' 

This order now placed the responsibility for supervising com- 
pliance "Tith the individual codes upon the Deputy Administrator who had 
charge of the other phases of the administration of those codes. It 
required them and their legal advisers to take an active part in compli- 
ance work; at the same time, it provided a set procedure to be followed 
in handling cases in Washington and specified the tjrpes of decisions 
which might be loade by the National Compliance Board. 

The Board was given the authority to mal^e recommendations 
with regard, to the removal of tne Blue Zagle; these recommendations 
were made to the Administrator and theoretically at least, the final 
action removing the Blue Eagle was to be taken by hia. 

On iipril 9, 1934, the office of Director of Enforcement was 
created. (*) He was to have charge of all compliance and enforcement 
policy Three lays later the office of National Compliance Director 
was abolished. (**) On Lay 21, 1S34, the National Compliance Board 
was abolished and Its functions transferred to the Compliance Division. 
The Board continued to function under tne name of the Compliance Council, 
ani no act^oal difference in its operations occurred except that it now 

(*) Office No. 83, ::ated April 9, 1934. 
(**) Office No. 85, aate:L April 12, 1934 



9839 



— ^t>" 

made its recomnendations with regard to the handling of corapliances 
cases and the removal of the Blue Sa£;le to the Chief of the Compliance 
Division, and any action taicen upon its reconmendations was taken in 
his nams Under this arrangement final decision with regard to the re- 
moval of the Blue Zagle rested ^th the Chief of the Compliance Divi- 
sion. However, he follovred the recommendations of the Ccancil in near- 
ly all cases. This system continued in effect until Decemter of 1935 
when the Corspliance Division terran to set up Hegional Offices. 

There were nine of these Pdgional Offices, each having jurisdiction 
over a group of states and each performing the functions with regard to 
those states which had formerly "been performed hy the Compliance Divi- 
sion in Washington. The Regional Director had the authority to with- 
draw and restore the right to display the Blue Zagle after considering 
the recommendations of his Hegional Compliance Council. (*) 

The P.egional Compliance Councils performed the same duties within 
their respective regions that the National Compliance Council had pe r- 
formed for the whole country. 

After office Order ITo. 79 was promulgated, notices of hearings 
"before the Rational Cocplianca Board, and later "before the Compliance 
Council, were sent to respondents "by the Secretaries of those "bodies. 
At the hearing the evidence in the case as it appeared in the files 
sent in "by the Code Authority or State Director was presented to the 
Board or Council "by the Assistant Counsel assigned to the particular 
code in question. The respondent, if he was present or represented, 
was then given an opportunity to make any statement he desired. After 
considering the evidence, the Board or Council rendered its decision, 
and if a violation was found, usually offered the respondent an oppor- 
tunity to adjust the case. If he refused, the Board or Co'unsil then 
recomnended the removal of the Blue 2a.gle. The same procedure was 
followed "by the Regional Compliajice Councils, except tnat the evidence 
in the case was presented to the Council "by attorneys attached to the 
Regional Office. 

Thus it was that the threat of removal of the right to display the 
Blue Sagle was used "by the National Compliance Board and the Compliance 
Councils to "bring a"bout compliance wherever possi"fcle. 

These same "bodies also considered req^aests to restore the right to 
display the Blue Eagle after it had "been removed. This was often done 
in those cases in which the respondent had made a satisfactory adjust- 
ment of the violation for whicii his Blue Zagle had been removed, after 
that action had "been taken. 

This procedure for removing Blue Eagles vras followed in all cases 
except those arising under the Restaurant Code and the Local Service 
Codes. After Executive Order ITo. 6723 suspended the trade practice 
provisions of the Local Service Codes, the State Directors were 



(*) Office Manual HI 4122.C1323. 



9839 



94 

empowered to remove the Blue Ea^jle for violation of the ?v.esta\-!Tant Code 
and for violation of the laoor provisions of the Local Service CcAies designated 
fcy the Administrative Orders issued under the a.uthority of Executive 
Order iTo. 6723. (*) HoTrever. respondents i ;i such cases coiold appeal to 
the Compliance Division in TJashirgton from the decision of the State 
Director to remove the Blue Eagle, 

2, Labels 



Various administrative orders placed certain restrictions on the 
issuance of. laljels h:,- the la-bel codes. Among these were requirements 
that an apTjlicant for labels be in com-oliance with his code before labels 
were issued to him. (**) 

Until i,Ia3r23, 1934, the removaJ of the right to use labels was 
effected in the s?jne manner as the removal of the right to display the 
Blue Eagle, On that date, Administrative Order To. X-38 was promulgated. 
This Order empowered the Code Authorities of the label codes to suspend 
the issuance of labels if, after adeqiiate hearing, such a Code Authority 
was convinced that the applicant for labels had violated his code. The 
Order required the Code Authority in such cases, to forwaj-d the record 
in the case to the Compliance Division. (***) 



(*) - Office Hanunl III 4121.151 



(** ^ 



A detailed discussion of the manner in which labels were issiied 
is to be found in the Division of Review Study, "IIHA Code Labels". 



(***) Administrative Order Ko. X-38 (dated i.lay 2B, 1934), 4(d) 

"Tlhenever the Core Authority shall have cause to believe that 
any one subject to the Code has violated ajiy orovision of the Code 
or of the Act, or of any r-ole or reg-alation duly adopted pursuant 
thereto, it shall give due notice of the charge against him and 
shall afford adequate opportunity to be heard, A substantia.l 
record of all headings shall be ma,de. If after such hearings, in 
the judgment of the Code Authority there, is sufficient evidence 
of violation to justify such action, the Code Authority may 
sus'oend the issusjice of. labels to such person or firm. Iranediately, 
and. in no case later than the day following the sus"oension of the 
issuance of labels, the Code Authority shall file a summarj'- of the 
record of the hearing with such recommendations as it may deem 
proper with the ITRA. Com-oliance Division, or such branch thereof 
as it may designate. The IIEIA Compliance Division, or designated 
branch thereof, shall have power, upon the record or after further 
hearing, to withhold the issuance of labels, to withdraw the 
right to use labels, to affirm, suspend or r-iodify the action of 
the Code Authority, or to take such other appropriate action as 
it may deem necessary. In such conferences or hearings as may 
be held by the I'^RA. Compliance Division, or designated branch 
thereof, the Code Authority shall be given an opioortunity to 
participate." 



9839 



\ 



-95- 

The Compliance Division nas •'jiven exclusive porrer to withdraw the 
ri.5^ht to use lalDels. (*) The Corapli'ince Division or its authorized 
agent v:as also given the po'.Ter to "affirn, suspend or modify the action 
of the Code Authority" in suspending the issuance of latels. 

In an Order dated August 8, 1934, the Compliance Division estao- 
lished a Label Agency in Nev' York City to nhich any interested person 
coTild ap^tieal a decision of any Code Authority sus-oending latels. The 
pov/er of the Conplia.nce Division to affirm, suspend or modify the de- 
cision of the Code Authority rras delegated to this lahel agent. 
Another such agencj?- was later set up in California. An appeal from the 
decision of the label agency to the Comj^liance Division in Washington 
uas also provided for in the August 8th order. 

As the result of rn agreement betv/een the label Code Authorities 
and the Ac'jninistration , a letter from the Division Administrator hav- 
ing jurisdiction over the label codes ras sent to all the label Code 
Authorities. They v.'ere directed therein to secure the approval of the 
Label Agencies before obtaining the issuance of labels in any case.(**) 

On Z^ebruar^r 25, 1935, Administrative Order Uo. X-135 was issued. 
This Order required that all applicajits for labels should sign a certi- 
ficate of compliance before obtaining labels; (***) that a Code 



(*) Adainistrative Order ITo. X-33 4 (d)(ftatcd Liay 28, 1934, ) 

(**) Letter from Prentiss L. Cooney, Division Administrator, 
to all label Code Authorities, dated in October, 1934. 

(***) Administrative Order ilo. X-135, (dated February 25, 1935) 
Section 8. "All applicants for labels who have heretofore 
signed a statement of Compli3.nce slia-11 be required to 
sign such a sta-ter.ent including substantially the follow- 
ing provisions before labels s?iall be issued to them: 

"The undersigned hereby certifies tha.t he is complj'-ing 

with all of the provisions of the Code for the 

industrj^ and with the national Industrial Hecover;/- Act, 
and with all the rules and re,=mlations dulj^ adopted pur- 
su.ant thereto. The undersigned further represents that 
he will use labels issued to him only on articles 
which are manufactured and sold in compliance with 
the provisions of the Code and of the Act and with 
the rules and regulations duly adopted pursuant there- 
to and only as long as he continues to comply with 
said provisions, rules and regulations." 



983S 



-96- 

Authority might, after an investigation, recoinmend to the KEA label 
agency that an application for the initial issuance of labels be de- 
nied. (*) The Order further provided for the suspension of the issu- 
ance of labels of the IHIA. Label A.^ency upon the recoii^nendation of the 
Code Av.thority after a proper hearing by the Code Authority (**) 



(*) Adjnini strati ve Order No. 135 (dated February 25, 1935) 
Section 11. "Upon application for the initial issue 
of le.bels, the NEA Label Agency designated by the Com- 
pliance and Enforce-ient Director of the I-HIA., maj' upon a shor- 
ing by the Code Authority of reasonable cause, extend such 
three day period to permit such Code Authority to determine 
the truth of the statements contained in such application and 
statement. If, after investigation, the Code Authority ha.s 
reason to believe that there have been violations of the pro- 
visions of the Code, or of the Act, or any rule or regula- 
tion d-vly adopted pursuant thereto by reason of which the 
a-pplicant should be denied the issue of labels, such Code Au- 
thority may, after following the procedure hereinafter provided 
for the suspension of the issue of labels, recommend to the 
LIRA Label Agency that the initial issue of labels to such 
applica.nt be denied. The filing of such recommendation shall 
automatically extend the time for the initial issue of la.bels 
vtntil the determination of such recommendation by such agency. 
The ICiA Label Agency shall ha,ve the power to approve or dis- 
approve such recommendation in accordajice with the lorocedure 
hereinafter provided for the suspension of labels." 

(**) Administrative Order llo. X-lo5, Sections 12, 15, 14, 15, 
(dated February 25, 1935). 

12. Whenever a Code Authority shall have reason to believe 
that anyone subject to its Code has violated anj^ provision 
thereof or any rule or ref;:alation duly adopted pursuant 
thereto or pursuant to the IMational Industrial F.ecovery Act, 
it ma;?- recommend to the hUA Label Agency, after a hearing 
conducted in accordance with the following procedure, 
that the issue of la.bels be suspended: 

(a,) Notice of hearing shall be dispatched to 
respondent by registered, mail a.t least three (3) 
business days prior to the date of the hearing when 
the hearing is held at a -olace not more than ten (10) 
hours ra.ilroad traveling distance from the town where 
the violation is alleged to have occurred, and at 
least ten (lO) days prior to the date of the hearing 
in all other cases. Written waiver by the respondent 
of such notice shall constitute sufficient compliance 
v;ith this provision. The notice shall indicate the 
nature and the principal elements of the violation of 
the code provisions with which the respondent is 
charged. It shall further state las a result of 
the hearing, the Code Authority may recommend 

9839 



Tiie foregoing has to do only T'ith the temporary suspension of the 
issuance of labels. All label cases, T/hcther there had or had not 
"been a suspension of the issuance of labels, were handled by the Com- 
pliance Division in Washin,'~:ton and later by the Regional Offices in 
the sa:ie nanner as Blue "Sagle removal cases except tliat "label cases 
rere e:cpedited and took preference of other cases. The usual hearing 
v/as held before the Compliance Council and upon its recoinmen5_ation the 
right to use labels was withdrarm or restored. 



(**) Contd. 

the suspension of the issue of labels to the respondent. 
The notice shall be accomi^anied by a copy of this Order. 

(b) The hearing ma]- be held by the Coc'e Authority 
or by any agency auth.orized by it. Couplainejits or 
persons who have xia-rticipated in the investigation which 
preceded the hearing sliall not act as members of the 
tribunal before v/hich the hearing is conducted, nor shall 
any member of such tribujial participate in the presen- 
tation of the coinplrint or testify at the hearing. The 
presiding officer of such tribunal shall not be a member 
of the ino.ustry. 

13. If, after such hearing the Code Authority or its 
agent for this purpose believes that there is sufficient evi- 
dence of violation to justify such action, the Code Authority 
or its a::ent may recomraend to the ITlik Label Agency that the 
isrue of labels to such member of industry be suspended. Such 
recom/'jendationr, slipll be accompanied b^,^ findings of fact and 
by lorima facie evidence of the violation embodied in a summary 
including the essential facts of the case and the contentions 
of the respondent. U;oon receipt and consideration of such 
s"Ji.imary and such other material as it may deem necessary, the 
IIHA Label Agency nay direct the Code Authority to suspend the 
issue of labels -pending further auction as hereinafter provided. 
In the event that such I-IP-A. Label Agency directs the suspension 
of the issue of labels, the Code Atithoritj'- shall immediateljr 
dis-oatch to resi3ondent by registered mail a cony of the summar;' 
and" of the order of the MA. Label Agency. If the W2A Label 
Agency disa-o-oroves the recommendation of the Code Authority or 
fails to act within five (5) days, the Code Authority may r.ppea,l 
to the Complia.nce a.nd Enforcement Director. 

14. If the IIRA Label Agency 3.-oproves such recommendations 
the Code Authority shall, within five (5) business days 

of such ap:oroval mail a comolete record of the case including 
the notice of hearing (or waiver of such notice), the record 
of the hearing and all pertinent correspondence between the 
Code Authority and responc'ent with reference to the a.lleged 
viola.tion to the Compliance and Enforcement Director and shall 



9339 



(**) Contid. 



simultaneoucly notify the ilP-A. La'jel A-;oncy anr' the res-poiident 
th3,t it has done so. The respondent shall ha.ve the right to 
appeal to the Corjiyjliarcc ano Enf orcet'.ent Director from an ad- 
verse decision of the iG'A Lehel AiCency and shall he given a 
hearing if he so requests. In the event that the respondent 
does not exercise such right '.of appeal the Compliance and En- 
forcement Director shall, upon the record, or after further 
hearing of v-'hich the Code Autxxority and the resiDOndent involved 
shall have notice and opoortunity to "be heard, approve, dis- 
approve or modify the action of the NPA Label Agency and -t.-ith- 
dra\7 the right to use lahels or talce such other action as he 
jnay deem necessary. The respondent may at all times prior to 
the final determination of the matter "oj the Compliance and En- 
forcement Director apply to said Compliance and Enforcement 
Director for an order directing the Coc.e Authority to issue 
lahels in such quantities a.s may he proper -oending such final 
detennination. Nothing herein contained shall limit the po'jer 
of the Compliance and Enforcement Director after a hearing and 
finding of violation to deny the initial issue of labels, to 
suspend the issue of labels or to withdrav; the right to use 
labels in e,ny case in '.'hich the Code Authority and the ICIA 
Label Agenc3'- or either of then have fa,iled to act. The Com.- 
plianco a,nd Enforcement Director is directed and authorised 
to order the initial issue of labels or the resuirnDtion of the 
issue of labels or to restore the right to use labels if he 
shall determine such action to be in the interests of com- 
pliance vith a code. 

15. Ijo Code Authority shall take the final action of 
denying the initial issue of labels, or of suspending the 
issue of labels, or of v/ithdraTTing the right to use labels, 
or of resuming the issue of labels or of restoring the right to 
use labels unless the Compliemce and Enforcement Director or the 
IIEA Label Agency shall prior to the talcing of such auction issue 
an order approving and directing such action. If the respondent 
shall hp-ve satisfied the Comr>liance and Enforcement Director tloat 
he is in full compliance ^'ith the Code and the National Industri- 
al Recovery Act a.nd a.ny rule and regula.tion duly adc^ted pursu- 
ant to said Act, the Com^Dliance and Enforcement Director shall 
forthwith issue an order directing the Code Authority to resuiTie 
the issue of labels to the resnondent and restore to the respon- 
dent the right to use such la.bels. The Code Authority shall 
comply with orders of the N^A Label Agency or of the Compliance 
and Enforcement Director. The Code Authority shall not give 
or authorize any publicity in case of a.lleged violation until 
adjustment has been effected or until the IGIA Label Agencsr has 
directed the suspension or denial of the issue of labels and 
shall, in any event, withliold publicitj'' if so ordered 'by the 
iniA Label Agency or the Compliance and Enforcement Director." 



9839 



-9';.)- • 
CEAP T"j:a V 

Aj .:vALUATIOI' OF Lii30H C0IPLIA1C2. 

lii the t-ttenpt to evrliiate conpliance vith iJIlA labor regulations, 
recourse rae;/ be had to statictical material assembled by the IIHA. Field 
Division from cases actuall'"' handled in the field — r,tatistical material 
t'f State, by code, and b;' national totals, relating to nxunoer of cases, 
ori,Tin of canes, size of cases, dis,oor.iticn of , cases and other ca'.,e 
asr'octr; (lor pdjiisted cases, no violation cases, ano. cases pending at 
the time of the Su;:)rene Court aecirion). {*) Recourse may also be had to th 
to the EU-'plementary information ^^ained from the lessens of direct e.-^rper- 
ience in comnliance ■'..•orlc. 

Tlie statistical de.ta, herein: ft jr presented, as v/ell as other ma- 
terial in the possession of the Strtistical Section, LRA. Field Division, 
do not afford a. reliable indic.-\tioi. an to the nature or e::tent of the 
actuall]'- e::i sting state of compliance (measured age.inst a, theoretically 
possible perfect conoliance) situation. It docs, however, to a certain 
d3,?:ree, v;hen broken dovm by States, reveal, as bet^.-een localities, com- 
parative or relative deficiencies in com;olia,nce, Throu~h evalue,tin;5 per- 
formances of the various state offices (both those working under approx- 
imatel;- similar and those v.'orking under entirely'- dissimilar, conditions) an 
idea may be gained as to the negative aspect of com;oliance. Such com- 
parisons- are not. made primarily to shov; variations in efficiency among the 
Sta,te offices, but, as already indicated, are undertaken ".".'ith the vie\7 of 
throwing some light on the que-^tion of non-compli,ance. Some mention will 
be made later of the more direct reasons for tliese varying performances, 
but ctu-tain ot.':er fitndr.iental re -sons relating to the general problDm of 
securing compliance v;ill not be touched unon, since the3r were enmeshed in 
the b;>sic fabric of iZlk legislation and legislative policy. The develop- 
ment of the latter does not fall vithin the scope of this reoort. It is 
hoped, however, that the reader may find in Chapter III some clue to a 
few, at lea;;t, of these fundamental, compliance problems which inhered in 
the J::?A regulations. Yet despite the- raaaj:^ intricate and basic difficulties 
v;hich such -oroblems created and, v;i thoat -minimising tiieir importa,nce 
it may be strted that the T;ritor is of the studied opinion that it 
was the administration by lIRk of compliance itself, which was the 
cheif of tne combined causes which consjired to thwart compliance, 

(*) The material hereinafter included in the shape of 

tables and citavtions is dei-ived f rom this statistical matter 
prepared by the Field Divijsion, from census reports and from 
Research and Planning Studies. Tables 7 and 1? were compiled by 
the writer. 



9829 



-100- 

Cbserved variation in tlie results of tlie p.clninistx'c%tion of adjustments 
is enout'^h, alone, to shov; concl''.isivel3' the potontialit;'- at the time of 
securing, throii^h var^'in/^ the adjuctment procedi're, incal cvilajle "better 
compliance results th'^n those obtained. 

The assertion alreadj'' mrde th:at the ta.blen appearing hereafter re- 
veal little as to the nature of actuai'.ly existing compliance compared 
.\7ith lOOfo complirnce is valicatcd bj'- man;'- considerations. 

As to niijnher of cases recorcl.ed and the sJTfirma.tive measurement 
therefrom of compliance, it ma;/ he pointec! out that a^iy gau^re adopted, 
T.'hich depends on the cai^e coimt of cases actually brought before the 
field offices, must be, to a corsiderable degree, an \ms?tisfactory 
measure of the state of compliance for the reason that the general 
method of case initiation required the filing of a complaint b^ some 
person (presiimably familiar with the facts constitv.ting the alleged 
violation) and did not usually provide for independent investigation by 
■the government of compliance conditions. 

number of cases recorded by code and method of disposition (despite 
the complaint system and the incomplete adjustment methods) if taken to- 
gether nith effective da.te of code, num.ber of erbabli shraents and cm.-olo",''ces 
of the industry, may reveal something e.sto relative compliance among 
codes (see Table 13) but little as to the general state of compliance in 
the nation. 

A sat i-sf actors'- compliance evalua.tion cannot be derived from the 
small number of mass compliance projects undertahen, Onlj'- one had ad- 
ministrative sanction and onl^ it \r,c-s effected on a nati'onal scale. (Tlie 
Boot and Shoe Code drive) (*) 

TJaiving tl:e qiiestion of fixture compliance by an establishment 
adjusting a proven violation, it is sure that little iiiformation can 
be obtained as to the state of compliance from -considefrtion of the 
recorded number of case adjustments. There v/as tremendous divergence of 
method in a'djusting"casss~pre.gented to the state office^, ^oraetiraes, " 
but vejy rarely 'the hiethod ejcploycd, ua'id6rtook...to effect i'total ailjustment 
for all umplo-^'-oes of the establishment 'vho might have been prejudiced 
'b-f a-ny violation concerning which expressed polic",'-, as of Jvaie 1934, 
and perhaps earlier, dictated the payment of restitution — such adjust- 
ment to cover the period of violation at least as far bach as 
the effective date of the cod.e in question. Oftr>n, however, 

( *) Very few relicble com-pliance estimates can be gained from results of 
this drive. The methods used in the inq-air:!- were not calculated to 
develop the existence or non-existence of compliance. See a.lso Cha"oter 
III, B, for comment on compliance under the Boot and Shoe Code. (The 
v/riter found affirmative indications of violation in all three of the 
of the existing Boot and Shoe fs-ctories in San Francisco which were 
visited as a result of the drive,) The results of the fev7 other drives 
engaged in, contibute next to nothing, since the drives wore educationa 
and explanatory in nature, or failed of comi^letion, or else exhibited 
the greatest -possible defectiveness in the exojainatorj'- method used, 
(for example, the use of imtrained SE^IA v/orlrers who, through inter- 
views with emploverc only, were chprged with the ascertaining of pro- 
bable existence of so-called "major" t:,rpes of violations). 



-101- 



adjustments '"ere consu.M-- tec. on tia- d; sin of restitution "beirif^ effected 
for onlv those persons complaining or lor ttiose persons on behalf the 
corarlaint itself '-as filed, or, ncrin, it ^- s frequintl'' the case that 
little attention '-'r.o r^'aic to cjiact or even ar)]Droxi;aate calculation of 
the oerioc oi tine during '-hich tiio violation /-'ight hrve been exis- 
tent. 

In nearl v all instances the ac' justing: officer failed to inquire 
fully, or, even at all, into the question of -possibility of viola.tion of 
each of the aT)r^licrble tri:es of labor regulations, other tlian those con- 
ce rnini£,' whicVi there may liave been s-pecific cO-Tolaint — in other vorcs. ' 
in txie ypst maturity of cases handled, Investij^ation of labor comrliance 
'• as not connlete . 

As to nuraoer of no-violation cases recorded, it will be noted that 
these sho''' a high ratio to ac.jufcted cases — (50,240 as against 47,512) — 
almost equalin,q; tnc lattc-r in tne national total of c^aes recorded. 
The comments pertinent to numb-^r of odjust:nents aioply here vith redoubled 
force. In the 'Titers eiq^erience, out of 4 or 5 hundred cases examined 
on a total acjustment b sis, — cases of all tj^pes — in not more than 
10/0 was. there no appreciable wage or hour violation ciscovered. This 
c'oes not mean, ol course, that in tne remaining; 90yc of the cases the story 
of the complain ait 'Ti.s wholly o:;- even partially sustained. It means only 
that there was convincin;?; evidence that some ot the ¥3A labor regulations 
governing a particular case had ueen violated with respec to some e'n- 
ployees. 

Even should the false assumption be adopted that the majority of 
adjusted cases recorded represented complete adjustments, little in the 
way of conclusions as to the stat^.- of cor,ipliance could be gai'ied frou 
contemplating the national totals concerning number of cases adjusted, 
recorded by types of violation. Por , example, tnf totals of adjustments 
of coniplaints dealing vith the reduction of i^'^^ges above the minimum re- 
flect an unbeli'- vablv lo-' proportion ^•'hen compared "dth other types of 
adjustment. (*) Eliminating 13 states for which precise st- tistical data 
is not available it woule appear that there were something between 87 and 
300 adjustments of this sort a violation, ;-e comprrec with total labor 
adjustments of all types of over 5C,000 cases. It is the view of the 
writer that for every 10 carts ex^uined in wnich there was found to be 
violation of KRi hour regulations, there I'^'ere 3 violations of provisions 
dealing with -Tges above the rainiimm. 

It is not possible through scrutini7ing only operatin^n: concitions 
as of the effective date of a p'-rticular code fully to realize the ex- 
tent of illegal wage reduction ert?iltd by the necessity to reduce hours. 
It has been pointed out already, elsewhej-t, that the President's reenployment 



(*) Reference is made in tuis eonnection primarily to violation 
of clauses foi bidding the reduction of wages above the 
minimum, ratiier than to violation of clauses providing for 
eoui table adjustment of the higher "ages, Tlie later pro- 
visions stood in acLasE by theinselves as a problem to 
compliance and often required special consideration by the 
central authorities. The former were, rxOwever, c^ear in mean- 
ing and fairly precise in scope. 



-1 '3r 



Agreenient forbade reduction in comr'tnpption above tiio lainirmm in casts 
other than "'here compensation wpo cffectec on an hourly brr>is (see Char)- 
ter III 3 Tpre 70),. In many cases the -iteeTi-olovrnent Afrtehiert- eithtr in 
its original shape or as amended by substitutxOr, reouired reduction oi 
hours to the same degree as the code lattr enacted wuicn ^ub&i ouently 
came togLivern the same cstfblishment. In a great nu;aoer of instances 
paragraph VII of the r.ee.'-!ploy..ient Agreement (affecting reduction of coraren- 
sation above the minimum because of rtducti^^n in hours ■ Jr'.:ed), vjpc the 
subject of videspread violation by signatories of tne Agreem.ent. jLt 
the time of the cessation of the A<p:reement, under the terms of P-ra- 
gr-Tch XIII thereof, because of ar^roval of r code governing the vft- 
ticular industry, those ertablishuK nts i^'bich had violated Frra ra-Dh 
VII of the Agreement because of tne fact that tney had countenanced 
a reduction in comr]ensatiun coincidtnt vTith necessary nour reduction, 
were placec by virtue of such i^rior violations in a oosition of not 
directly violating the numerous iDrovisions of those codes wrich sub- 
stantially reenacted the -crovisions contained in .Paragra^jh VII of the 
Agrtement. ?or the reductiur in c^'m-oensation nrd already been eftected at an 
anterior -period anc the code adjustment provisions could be only taken 
to arD'oly to action taken at the tine of, or subsequent to, the enact- 
ment 01 the code. There sbmus nev^ r to have Occn rny clear-cut or con- 
sistent TDOlicy — a.t least in the shape of field inst'ructions — either 
requiring or lorbidcing the effectuation of restitution for violation 
of the Agreement committed by an l st'blish:a( nt at one time governed by 
the Agreement, but cited only lay NSA for code violations of a superven- 
ing code (it seems generally to have been the practice to reject com- 
rlaints oi violation of the AgreeT.nt filed after the ex.piration of the 
same, as also not to have reqairLd, in the gt-neral ran of cases, at least, 
restitution under the .Agreement by an establisament r-O longer governed 
by the same because of interposition of a code), conseauently, in cases 
such as those instanced of violation of the Agreement without direct 
violation of the code a policy of not enforcing the Agieement might 
have been consid.eied to operate as a defense to a charge of ron-com- 
pliance with the wage adjustment provisions of the code, since tnere_ was 
failure to reduce either wages or hours at the time oi tx.e efiective 
date of the code. On tht other hand, if arguments as to estoppel of 
signatories oi the Agreement to set up such a defense shoulc have rre- 
vailed, or if the implication ox avrilying the ' ac justment -Drovisions on 
the subject to those -^trsons adhering to the cortrxtual obligations 
raised by the agreement and not api-ilying the sam'. code provisions to 
those persons not adhering- to the same contractual obligations had 
been carefully considered, the logical conclusion '.^ould then have been 
arrived, at that establishments, i-reviously having viola tee Paragrarih 
VII of the Agreement icould not De rllo'-ed to plead violation oi the legal 
obligation as oroof of complirnce T'ith tht code. The latter seems to 
be tne only sensible :-as "-ell as Ir.grl solution, particularly in view of 
the fact that the Govern;aent undoubtedly had the right to enforce 
the terms of the Agreement, and txius to have placed violators of "anagraph 
VII on a parity '"ith those persons coiaplying i-'ith the Agreeiaent. So far 
as the writer has been able to cliscover no attempt '^'as ever made by th-. 
compliance field agents to inouire, systematically, into tne qviestion of 
compliance Fith Paragrai^h VII of the Agreerai-nt in the process of adjusting 
code provisions of a. similar naturi... 

9839 



.1 ( '.:■;- 



It -..?;- 'op r.-ii", in ^-^sii-fj, f . t 'ci\^ iiClcr.teC. Lrnr-kdo^T-. of the higher 
waf^e r.djust;'-ent orcvisions rf the lllA laTjor regxilr'tions 17,-12 --ore instrmien- 
tal in c^Pie.- tine the cauii'"^ - novJ. 7.abor c -nli-^nce t ipji is uc-cuill;'- sap- 
■oosecl. As h.as hefni pointed c.'.i, tuese. rdjcictnent irnvisinns hore n. close 
and intii-iatt? rnl-\tioeishi;p t" na-iber r^f h^urs i.Torhed, as rrell as to the gener- 
al \7age structure, iyidecorp-id ::'. ,ilurn to eniorce tiien could not "but hring 
the \'hole systen, especially iro)-, the st vidooint of lahor, into disrepute, 

ITationrl totrls a'3 to qa-.-tity cf restitution secured "by the iI2A field 
officers reveol little. IlcstitutioM figures by code are not avpilaTole for 
all codes at the ;irese:it tir^e, Conplete restitution reports "b;- Stat° are, 
ho^^ever av-^.ilalile, •-^iic'' if, throia;,^hout the v??i'ious localities the factor of 
-jeriod of violation he tphen a? a constrnt (sine- ro.stitution relates to 
length of ti''f! of violation, as --ell as, to sco-oe of violation h-'- nunher 
of ejrplo7'-ees o'r oy nuj.ioer of violating estatlisluients) , coinparison of res- 
titutions, particularly if related to nuih^r of cases docketed and adjusted 
nay aid in the deteniination (^f thp T-oita of the adjustments secured njid 
hence of relative conoliance. Per tlie imputation nay "be nade without he- 
sitati":-. that ir. those cases vhere tota]. restit'o.tion vrs ;iot effected, the 
totality of violations t"i.nnsGlves -.ras not hroTight to the attention of the 
res-Qondents, ori:irril3^, for the reason that facts easily disclosed "but not 
actually disclosed ("because of t\:p i-ejection of theory 0" total adjustment) 
•Tould have uncovered the e::istence of furt'ier i:ifr. .ctions to' tho 'onc'-r- 
standing of a conoetent adjusting officer, i'urtherr^ore, in considering the 
state of conpliavice it v/ould aopear fiat tlie ootaining of full restitution 
for all violations '.■oul:" have been n'^re effective in producing a stote of 
conforaity Tuth the labor re;';:rdations than partial or hapha'i'ord restitution, 
for it nay be o-r,gL'.ed in the "lajority of cases, th,at payn^'-nt covering all 
violations is calculated tc lersuade the viol.ator to avoid reoetition of 
all such violati'^ns, 

Suiiuari^ing, in the atter'-^t to evalu'^te nati'^nal coTjliance, the ob- 
jections to the use of statisticrl nateri.al presented in national totals 
rather thoji in State or coce breriidoTrns, it viould a'opfar, thr.t fron the 
former nothing .but the most general sort of trends, chiefly relrting to 
compliance from the ti'ie .aspect, can be secui'ed, (*) 

To repe-at, t/^e method of case initiation, itself, n,as so conceived 
as to preclude, for the most '^.art ■ independent investigo.tion on the -oart of 
the Federal G-overnment directed tovcx(. the disci ver;' of t';e nature of the 
sto.te of conplionce. Consequently, there is little or no indication on the 

conplia.nce question as to establish lents not cheched. (**) 

(*) Prin.arily significant aion p the gent^ral trends, are the national trends, 
which mo^'' be developed iCroi the .o.tional totals on nuaiber of cases, 
source of cases, ajad restitution — considered in -ooint of tin.e, 

(**) It ca:":iot be siroposec' i: , the .absence of iiidependent investigation that 
in most cases complaints, in e-ivr event would have issued ago,inst a vi- 
olating establish .ent a.c. that est-^blishnents n t comolained of were 
generally conplj'-ing. The peculiar e:roloyer-eT-ployeo relationship 
;olayed an important part in discouraging even secret denouncement, po.r- 
ticularly in the case of smaller establis'.uients, Also, the widespread 
eristence of non-compliance, operated, with the passage of time, further 
to discourage recourse tr. ITIA. (See in this connection, the subject 
of "Mass CompliaJice" ciscusred in the "Histoi';^ of the IIRA Con.pliance Di- 
vision",) 



-104- 

Secondly, the ntunlier of adjusted or no violaticn cases cannot 
■fae viewed es any criterion of great value since the methods of adjust- 
ing were, in general, not directed tc\-ard the obtaining of complete 
compliance. 

Thirdly, confusion as to exactitude of legal obligation makes 
it difficult to assess statistical results translated in terns of 
such confusion. 

To these objectims must he added a fourth, n-^mely, the failure 
of the State offices to maintain adequate records even as to those 
violations actually adjusted. This fact rendered very difiicult the 
problem of compiling the statistical material. A large amount of g^uesswork 
must, necessarily have heen indulged in for the Tnuriose of comuleting the 
statistics. 

In connection with the question of records and evaluation of the 
results of compliance activities, it should he horne in mind that com- 
pliance procedure required that the -oerson charged with the adjustment 
of a case should, not only seek to. obtain conformity v/ith KELA. regulations, 
hut should also in a quasi-judicial manner make findings, of f-^ct. 
This merger of functions, while -lerha ts necessary and ejnedient at the 
time for practical reasons, was not conducive to the attainment of high 
Compliance, since there was no obligation, on the -o^rt of those initially 
handling a case, to perfect a record of fact, which vrould satisfy even 
tlie most rudimentary principles of administrative fact finding procedure. 
It was only after the -oorscn first handling the case had found it im- 
possible to adjust it in a manner satisfactory to him that f^n attempt 
was made before some such body as a Regional Oom'oliance Council to 
establish some sort of reasonably acciirate factual record. The very 
great majority of cases handled in the field never re?>ched the stage of 
being transferred to a Regional Com-oiiance Council or a State Adjustment 
Board. An examination of a large nu'aber of original files px'epared 
by the field adjusted or other persons first i;orking on the cases, sho-TS 
an absolute lack of recorded factual material which any satisfactory ad- 
justment must have revealed. In an extremely large group cf ether cases 
the file d'^es not show the method by which the mathematiC/al formula for 
restitution procijired was obtained. In other cases a rather detailed 
factual account of certain circumstances considered pertinent is dis- 
closed but no atterapt is made to shov/ that each labor provision of the 
particular code had been considered in relation to the respondent's bu- 
siness. In short, failure to keen proper records and failure to insist 
on obtaining all facts which wuD.d show a violation of, or compliance with, 
each of the regu.lations cf the particular code under which e case was 
filed, aided most greatly in •■perpetuating the various unsatisfactorj'^ methods 
methods used, which at best could only be said to be adapted to obtaining 
partial adjustments. 

In a search for an explanation of the causes which make accountable 
the existence of the many flaws in the proced\u"o of the com" i'.iance 
agencies, especially the partial adjustment procedure, many contributing 
causes must be considered. Undoubtedly, one of the chief causes was 
the failure of compliance policy to organize its problems. Instructions 



given ths field, in the shn.oe oi field lottei'a v/ere not ^r/ell organized. 
Emphasis T/as not laid on the total adjustnent procedure so necessary to 
compliance. The coiiipliance pclic:/, itself, vacillated and failed to 
cover laany ooints, rjarticv.lfvrlj- on the subject of restitution and the 
manner of its calculation, (*■ 

Another cause vi'-^is the lack of sur'ficient persons char<-:;ed yrith the 
duty of case a.djustnent. Delicate f-nd difficult as wa.s the task in- 
trusted to the latter, the enormous volujie of work (particularly if any 
mass compliance program '^ere undertaken) rendered it almost impossi'ble in 
many of the larger offices for these persons to carry out their task sat-- 
isfactorily rithout being swamped oy a continuously increasing backlog 
of accumulating cases. (**) 

A very great contributing cause, was the lack of proper training 
afforded the field adjusters as well as other productive officers and 
im'prc'oer selection of the sane. It is appa?-'ent from what has already 
been said that such officers should necessarily have undergone a thorough 
and intensive period of training during '.^hich they should have been ad- 
vised as to problems of code jurisdiction, interpretation, explanation, 
approach to employee and emolcyer, g-^.thering of evidence and the many 
other special loroblems which rendered their task so difficult. In very 
many cares the ignorance, revealed not only by the field adjusters but 
by their superiors, on matters of this nsitiore we.s such that it can only 
te termed shameless. The writer is relcctantly imtpelled to state from 
personal experience that the ignorance and inefficiency on the part of 
persons charged with adjustment vas from many standpoints one of the 
more crushing of all the many blows aimed at compliance. 

Despite all the objections advanced ^o the use of statistical mat- 
erial -nresented, it is apparent, as heretofore indicated, that the data 
when considered by State ( and,, to a lesser extent, by Code'^ totals show 
results which raav be translated into terms of comparative local com- 
pliance. There is no reason to su-n-oose that relative paucity of number 
of complaints and adjustments, and of quantity of restitution, revealed 
a high state of compliance. On the contrary, ilRA experience clearly 
indicated that the op'oosite ;/': s true ( see infra page 238 ) , and 
it may be taken as trae that in jurisdictions v;here number of com- 
plaints and adjustments and ouantit:/ of restitutions were below 
what might be reasonably expected, the lack was largely attributable 
either to the effect of widespread non-compliance in di s c'ouraging ' com- 
plaints or to the methods of aujustment pursued, or to both. It is a 
fair assumption to ma-ke the t violations were very current in nearly 

(*) A thorough com-orehension of the various policies and their chron- 
ological sequence is absolutely necessary in order that compliance 
results attained, or not attained, or expected to be attained may 
be understood in the light of the cevelopment of 'IRA compliance 
activities. 

(**") This vas particular I;'- true of the Ivew Jersey State Office, but 

it may te said th-t the nuaber of field adjusters throughout 
the United States should easily have been doubled in order to 
produce effective results. (See Table 16^. 



9839. 



-106- 

all jurisdictions but wer^^ particularly frequent in localities where 
labor conditions -orior to KRA were comparatively debased, and in indus- 
tries in wnich llEA regulations effected a relatively great denarture 
from -orevailing labor standards (See Chapter III, a) . 

Comparison of results of the various State offices, (weighted by 
appropriate industrial coverage allowances), is, tnerefore, a method 
whereby comrjarative compliance between Stat^^s may be determined, at 
least in a rough manner ,(*") . 

For example, if a larger State (:. .e. larger by number of establish- 
ments or by -DODulation) docketpd a fewer nuc:ber of cases or a lesser 
porportionate volume of cases (i.e. porportionate to establisnm.ents or 
population) than a smaller State — if weight is attached to the reports 
of adjustments and no violation cases as to particular types of violation 
actually investigated, even, tnough, com^olete investigation of the es- 
tablishment as to all types of violation had not be^n undertaken, so 
that the establishment exarained could net have been certified to b-^ in 
complete compliance — the inference would be that a larger number or 
a larger porportionate nujnber of cases nad, at least, been partially 
(i.e. as to one of certain types of violation exarained) certified to be 
in compliance in the smaller State tnan in the larger one. (* Such 
greater porportional partial corripliance ratio indicates a hit ler degree 
of total compliance in the smaller stat^ (***) since it may be accepted 
on the basis of experience, if not, that the number of violations in un- 
checked and uninvestigatf-d r-r,t,-i.blir,firr. -nts r^^man ns fairly constant by 



(*) Subh comparison does not necessarily Tndi'c ate precise degree of 
the efficiency of the various State offices since the vitally 
important factor of qp.al i ty of investigation and adjustment, of 
no violation cases and adjusted cases c;\nnot b^ compared by usin^ 
the- statistics and information available (except by inference 
from the reported relative _quaii_ti^ti_e_s_ of cases handled by types 
of labor violations). Furthermore, it snould be remembered that 
■ the various State offices operated und^^r a variety of different 
economic and social conditions, although the experience of the 
writer aas demonstrated to him tnat this factor should be dis- 
counted, largely, in tne attempt to measure efficiency sinse it 
was possible to obtain sup'?rior complianc-^ results, "-ven under 
the most trying conditions. 



' ** 



) 



The great bulk of docketed cases were either adjusted or rejected 
for lack of violation, save in the New York State office, so that 
the sum of adjustments and rejections for lack of violation fair- 
ly represents the total of docket':'d cases. 

(***) By "compliance" is understood compliance by establishr mt and 
, compliance by type of labor regulations rather than cofapliance 
■ computed on the basis of number of employees aff-'^cted by the same 
general type of violation in the same establishment. ''Compliance" 
is taken to mean not only compliance existing without governmental 
intervention but also compliance effected througn such interven- 
tion. 



<>RT;q 



-1'7- 

Stqtp (*), Ht lepso, that ta-i''^ was not less nro-Dortionate total viola- 
tion (i.^. violation fit^ur-d by -sii.Hblisriiri-nt for both checked and un- 
checked astablishm-^nts or violn/uiou comr)ut'-d en tn-- basis of number of 
emnloyees affect-d) in the- lar.,' r Stat'^^s tnan in the small--r States. 

The ratio of adju^t.-nr-nts to no violations wh-^n comoared by State 
is of significance, innsmiicn as a nign ratio of no violations uo adjust- 
ments indicates a lesser degree of even partial adjustment, since>, as 
■oreviously stat^Q, th-^^ rather considerable experience of the writer in 
the effecting of "total adjustments" nas indicated tuat the gr^at 
majority, at least, of dock^'ted cases, would, after complete investiga- 
tion, reveal somp' substantial wage or hour violation. (See a.nnendix 1 -' . 

Before -oresi nting tne statistical information, som^ comments on 
general experience of the writer may b^^ of value as aids to its int°r- 
■oretation. 

In considering the three chi = f divisions of NEA labor reg^alations , 
i.e., minimum wages , maximum hours, retention of wages above the minimum 
despite necessity for hourly reduction, it may be stated as the exper- 
ience of tne writer ttiat rainimixin wages in Region 9 (comprising tne States 
of Arizona, California, Idano, Montana, Nevada, Oregon, Utan, Washington) 
were very usually' adh'^-red to in the case of manufacturing industries, 
generally adnered to in tnt cas^ of tn-^ distribution trades, and in far 
more than a majority of cas-s, adhered to in tn- case of the service 
trades. 

Maximum hours, however, were the subject of most comm.on violation 
(a conservative estimate being probably 40^0 compliance in all industry 
and trade). In the service trades tne percentage of hour violations 
was far high^^r tiian for the total of all trades snd industries. 

As to tne sc-called adjustment provisions dealing with retention 
of wag^-s aoove tne pr'-'Scribed minimum, it may only be stated tnat there 
were a great many estaolisriments in violation. As tnere was consider- 
able variation in thi- expression of pr^;scribed equitable adjustment and 
retention of wages above tae minimum among tne various codes, it is not 
easy to comr^are them by groups in this respect (set- Cnapter III A). 
However, since th-se provisions wer== generally more drastic in codes 
for industries and trades otu^r tnan for the service trades, it cannot 
be stated tnat tnere were more violations perpetrated in respect of this 
subject by establishments falling under the service codes. 



(*) Int^r- sting conclusions mignt b^^ drawn oy comparing the number of 
code- establishments by State and numbf^r of compliants by code and 
by State with numb--r by Statp of docketed, adjusted and rejected 
cases. Unfortunately, tue number of complaints by State and by 
code are not immediately available, altnough, th-= code national 
totals by num.ber and disposition nnye bepn compiled. (See table 13) 



9839 



-1C8- 

Concprning retention of wag^s o.bov'= tne minimum, it can only be 
said tnat, vague and unsatisfactory as may nave been many of ta- Dro- 
visions dealing with this subject, inadi^quate , also, as may have been 
the compliance -oolicy formed as Vv'ell as th^- instructions given to the 
fi-ld offices on thxs question, th'^y were, in the main, susceptible of 
enforc=mf-nt and might well have been enfoxced. It is the sober con- 
clusion of th'= writ-^r tn^it over 95*^ of the violations of tnese provis- 
ions wer^ never adjusted, largely becarS" of failure in many cases of 
tne -jerconnel charged with the- adjustment of cases to understand tnose 
crovisions wnicn a study of instructions and internretations mignt have 
clarified, and alao largely because of failure due to faulty adjust- 
ment 'mesthods to' apijly to the facts those provisions not in n-ed of 
clarification. 

In considering tne measure of relative com-oliance with resrject to 
the tnree types of labor regulations m^ntion^d, tn^" -^rimiary considera- 
tion to be rem'=mbered is the degree of d'^-oarture from -nrior labor stan- 
dards effected by the particular Code or in th= -oarticular locality. 
(*) (See Chapter III A) 

As to adjustments and ability i;o secure them, the experience of 
the writer is that over 9b% Lf all violations could nave been adjusted 
by use of proper technique adapted to suit the ■ si tuation confronted. ( **) 
It may be stated, as a general proposi oion, that sei'vice industries pre- 
sented special adjustment difficulties. This was true because of lack 
of responsibility, dearth of capital invested, lack of organization of 
labor employed, keen competition and otner reasons arising f]'om tne in- 
herent nature of these trades. Only intnes<= trade's, in similar trades 
presenting like conaitions, and in a few otn^r trades or in/^^ stries, 
was it markedly more difficult to secure proper adjustments. Ev-n in 
these instances it was, by no means, unfeasible or imoractical to rbtain 
restitution and assurance of futur-' compliance, particularly in those 
States which had enacted Ipgisiation adopting NRA regulations as State 
law. 



(*) Such consideration "xplains to a large extent the experiences out- 
lined concerning types of violation by types of Codes. So for ex- 
ample, therp- were relatively few minimum wage comx.'laints in the city 
of San Francisco — where wage scales before NRA, in the majority 
of cases equalled or exc-lled th^- code minimiim scales. So, again, 
service trade complaints were particularly common in the same local- 
ity because of the great reduction effected by tne codes governing 
the service industries in number of nours customarily worked. 

(**) In this connection may be mentioned, among many otn^rs, persistence 
of purpose-, educational explanation, presentation (without r-sort 
CO extortion) to the attention of tn*-- respondent of the many pos- 
sible cons-^quehces of failure to adjust (from publicity to prosec- 
ution) , assurances of impartial application of code regulations to 
all competitors, vdllingness to accept time payments as restitution 
from respond'^nts financially unable to meet iranir-diately the payment 
required. The restitution difficulties created by poverty of res- 
pondents must not be exaggerated, as experience nas shown that near- 
ly all but bankrupt establisnments can restore money owed for viola- 
tion of IIEA wage or hour regulations, at least, ov»r an extended 
period of time. 



-1C3- 

Expf^rionce as to t'a^ number of violations in cas<^'5 r^ioorted has 
already be^n d>^tnil>:d. Ac ncint.'d out, tnis exDerience does not agree 
with the st-itisticTl data ou tn- Gub.j'Ct, because of tn- method of 
partial investigaiionr. nnd r;f.rti--il adjustffl':=uts em loyed. 

In conclusion, it may be 3;i,id tuat tn- grf-ntest of all the truths 
taught by experience is tnat l^ick of -prorier enforcem'^nt on a wid- front 
was tap outstanding and main r'-'ason for the shoddy situation witn regard 
to the state of general labor compliance. As has been said so many 
times, ttie adverse effect of non-coratiliance on compliance cannot be 
ov'^rrated. Excluding legal difficulties, for the moment, the writer 
stat-^s that it is his emphatic view that the lack^ of proper enforcement 
as exhibited only in two aspects (tnere were many other aspects) — i.e., 
lack of initial enforcement efforts under the Presidf-nt's Reemployment 
Agreement and in the early days of NRA, and method of "adjusting" cases 
employed in its later days — were, alone, enough to undo compliance. 
Many believe tnat the battle was all but lost because of non-enforcement 
s>ven before the end of December 1933. (*) 

So much for experience. Its t°aciiings must be borne in mind and 
its warnings oDserved, if proo^-r conclusions and opinions are to be 
deriv-^d, from tn'^- staticticfil material assembled. (**) 



(*) In consid'^ring tue cours'^ tnat NFA snould have adopted with regard 
to its Ipbor r^gulaoions from tae standpoint of compliance, careful 
consideration of l^gal as well as of practical questions impels the 
writer to believe tnat tue Agreement snould have iDeen enforced by 
the, C-overnment through a mass compliance program as a civil contract, 
that it should have been framed to endure for a more considerable 
period of time, in order tnat during sucn time, ways and means might 
have be^n sought by the Federal Gov-^rnment , (buttressed in its ef- 
forts by s\iitable Stat'^ legislation) to enact appropriate and con- 
stitutional labor regulations, the same to btr tested in the courts 
before being declared valid to sucn an extent as to merit replacing 
the terms of the Agreement. 

(**) It will be rememoered from wnat has already been said that the chief 
value of the statistical material is the information which it conveys 
by state and by God^. Physical difficulties render impossible the 
inclusion cf all but two tables showing State breakdowns. These 
tables in the possession cf the Statistical Section, NRA Field Div- 
ision, are available for use. Only certain significant figures for 
individual States have been cited-. Lack of available time has pre- 
vented analysis and comparison of Code breakdowns. However, it is 
hoped that some inform.ation of value in this connection may be gain- 
ed from examination of Tabic 13; Unfortunately, as already pointed 
out, statistical totals, by Code and by State, are not immediately 
available so that the comparison of Code breakdowns -.vith State 
breakdowns cannot be made. 



0839 



-110- 

A cursory pxamination of Tabl^- 1 (a) reveals tne striking ratio 
of 50 to 47 as between adjusted cases and "no violation cas-;'s" . The 
no violation cases included thcs^ docketed cases in wrdoh the investi- 
gation failed to reveal the existence of violation, or in vmich tne 
evidence of violation presented was not strong enoiign to justify the 
assumption of violation. It is felt that tnp largf^ percentage of no 
violation cases is largely due to the failure, uPon the rec-ipt of 
complaints, to inquire into the state of compliance as to all pertinent 
labor regulations with respect to all employees. As already stated, 
more thoro-ogh investig/^tion v?ould -undoubtedly have shown tnat a great 
number of violation cases did not indicate compliance with all govern- 
ing labor regulations or restitution for all past violations. 

I.t is of interest to note tnat the ration of 50 to 47 ic in no 
wise indicative of the performance of the individual Statp offices. 
So, for example, New York adjusted 3,571 labor cases and found that 
tnere was no violation in 7,153. Minnesota, on the oth-^r hand, ad- 
justed y,251 cases and found no violation in 678. Nevada reports 471 
adjusted cases and 131 no violation cases whil'=^ Idaiio pr'^sents 163 
adjustments and 347 no violations. 

In connection with Tabl- 1 (a) , tne total numb? r of docketed cases 
should be compared witii tiie total of adjusted and no violation cases. 
So, for exc'unple, the Stat- of Delaware with a docketed case counts 284 
cases adjusted 70 cases and f'oimdro v-ioL at ion in 97 complaints, w'ith 
this result should be compared tne figures for Nevada (a Stat- with two 
and a half times less population, and far fewer establishments than 
Delaware. 5p<^ Tabl^^ 2) wnich s>^curf^d 545 cases and as above stated, 
adjusted 471 and r^^jected for lack of violation, 131. Compare also 
Arkansas, wnich, out of a Case co-ont of 9B9, adjusted 355 and rejected, 
becaus- of no violation, 559. As to cases dropped for policy reasons, 
not--' Nebraska witu 77 cases out of 2,335, Minnesota with 76 out of 
3,049, Montana witn 9o out of 860, Virginia witn 38 out of 2,25b. 

Tne case count by Stat^^s of adjusted, rejected and docketed cases 
should be related to Tables 2, 3, 4 and 5, which ar- designed to give 
information witu respect to population by States, number of employees 
and n-ornber of establishments as well as siz" of payrolls. Table 2 is 
to bp used for the manufacturing industries. (The Census Report from 
which tnis table is t-^ken limited thp survey made to establishm-^nts 
witn gross earnings of ov^r 35,000.00 See report of C-nsus of Manufact- 
urers 1933 for other d--tails as to scope of surv-y undertak-n) Table 
3 pres^^nts tap came information as contained in Table 2 but covers in- 
stead service and amusement establishments. Tables 4 and 5, respect- 
ively, refer to retail establishments (including r-staurants) and to 
restaura,nts. Lack of available opportunity has prevented inclusion of 
data as to wholesale distributing trades. (See, however, c-nous com- 
piled on this subject by CWA for tne year 1933.) for adjusted cases, 
and estimated restitution for dropped and pending cases. 

Table 6 shows total restitution figures. Table 7 shows rank of 
State in total restitution (effectec; through con.bining PRA, restitution 
with code restitution). The restitution figures together with statis- 
tics given in Tables 2 to 5 inclusive, should be compared witn Table 
1 (a). The results of sucn comparison seem remarkable in many cases. 
Consider for example 'Washington CgOth in population, 6th in restitution, 






with 2,507 manufacturiri:?- er>tal:'?-ir.":rnor!.ts and with 2,307 cases docketed), 
Illinois (3rd in pop-ulation, Icih in rcstit-ation, with 10,740 manufac- 
turing estaDlishraents and with 5,072 cases docketed), Nebraska (32nd 
in population, 9th in rectituti,:)n,. Tfrith 992 nanufacturing estahlishments 
and with 2, 335 cases docketed), Idaho ( 43rd in population, 43th in res- 
titution, with 347 manufacturing^ estahlishments and with 510 cases dock- 
eted), Nevada (49th in population, 47th in restitution, with 36 manu- 
facturing establishments and with 646 cases docketed), Loni r.iana (22nd 
in population, l_2th in restitution, with 1314 manufacturing establish- 
ments and with 1573 cases docketed), Utah 4uth in population, 26th in 
restitution, with 440 manufacturing establishments and wi'th 385 cases 
docketed), Vermont ( 42nd in population, 49th restitution, with 530 
manufacturing establishments and with 152 cases docketed), and many 
others. 

As to whether number of cases handled and restitution varied with 
number of employees rather than with number of establisliraents, compare 
Kentucl<y ( 17th in population, 31st in restitution, with 1274 manufactur- 
ing establishments, with 1155 cases doclceted, with 56,685 manufacturing 
employees and $44, 292,327 total manufacturing payroll), with Kansas ( 24th 
in population, 17th in restitution, with 1272 manufacturing establishments, 
with 1221 cases docketed, with 52. 603 manufacturing employees, and 
$31.142.855 total iDayroll). 

It is of interest to comoare total restitution by case coiint as well 
as by number of establishir.ents. So, for example, ¥est Virginia with 434 
adjusted code cases, Kent^icky with 509, Maine with 260, New Hampshire 
with 547, Rhode Island with 455, District of Columbia with 582, South 
Carolina with 536, Florida with 407, Mississippi with 559, Alabama with 
581, South Dakota with 259, Wyoming with 244, Arkansas with 555, Montana 
with 555, Nevada with 471, Arizona with 252, may be compared with Utah 
which adjusted only 220 cases but which secured more restitution than 
any of the States nf.med. Compared also Mississi"n':)i with 559 code adjust- 
ments and $29,547.94 in restitution and Louisiana with 502 adjustmencs 
and $92,556. in restitution. Compare also iiontana and Louisiana. 

The bi-weekly field re-'Dorts of the State offices, not used in the 
statistical analysis, show restitution by time as of June 24, 1934. The 
State of Utah shows 36 cases adjusted between June 24, 1934 and January 
14, 1955, with a total restitution of $1195.39, 

The following results for the State are tabulated for the period 
subsequent to Janua,ry 15, 1955. 

End of Bi-weekly Perio d Adjusted Cases Restitution 



Jan. 


19 


Feb. 


o 


Feb. 


16 


Mar. 


2 


Mar. 


15 


Mar. 


30 


Apr. 


15 


Apr. 


27 


May 


11 


May 


25 



5 


$ 621.15 




10 


5,075.52 




16 


8,178.98 - 


$119.70 PEA 


12 


7,440.25 


Restitution) 





3,052.53 - 


$1,198.37 PEA 


9 


4,502.77 


Eestitution) 


10 


1,530.41 




8 


2,049.09 




14 


2,587.20 




12 


2,862.27 - 


$81.90 PEA 
Restitution) 



9839 



The exrlanation of tiiese r-sults is nttribut.-^'ble to th^ regional 
policy of sending on Jaxiuary 15, 1035, to tvvc region?! q dj'usters into 
the State in order to effect adjustments. Tiie .vriter, as one of these 
adjusters, is pr-'oar'rd .to state, that the same results couia most 
certainly nave been secured before January 1935 by using a different 
method of case adjustment from that actually tfflDloyed. Tnorougn es- 
tablishment cneck combined with- -nersistence cf purpose and an adjustment 
technique calculated to adaT^t itself to the situation to be coped with 
were the chief reasons for. th- success cf tne regional adjusters. This 
statement is, in no wise, to be construed as in indictment of the Utah 
office which, with the exception of Nt-vada, was as efficient as, if rot 
more efficient t.ian, any other State office in the region, including 
California. At the time of the visit of the r-gional adjusters, it was 
found tnat the Utnh office was operating with only tw:) productive off- 
icers — a State Director and a Labor Comtjliance Officer — b-^ta of 
whom had many ctaer functions to perform besides engaging in th- adjust- 
ment of cases. The expressed reluctance of State officials to cooperate 
■witn.KELA. in enforcing the Utari State cod-^s as w^ll as lack of 'training 
of and instruction given to, the Federal Officers as to method of ad- 
justment, amr>ly exfn^rate txi- office. Purtu-rmore, it is to be Tjointed 
out that tne apnointment of tv/o trained Stat- adjusters v/uo begsji to 
perform tneir duties after the departure of tr.e last regional adjuster 
in the latter -oart of ?-bruary refl-ct-d its-lf naturally in tne r-sults 
snown aft^r F^'braarj'- 1955. 

The T/riter -oarticiFated in a similar experience in Arizona. Tnat 
State nad secured $2,173.46 in restitution out of a total of 55 cases 
handled between July 24, 1934 and Aoril 13, 1935. The restitution and 
cases adjusted b-ginning witu the bi-weekly oeri'^d ending March 2, 1935, 
follow. 



End of 3i-weekl.y Period 



Adjusted Cases 



Restitution 



Mar. 2 
Mar. 16 
Mar. 30 
Apr. 13 
Apr. 27 
May 11 
May 25 
Reported J^jne 8 



3 

2 
1 
6 
8 
13 
1 



80.25 

30. OC 
3.25 

1,444.56 
2,376.29 
3,491.22 

812.99 



* $697.65 

PRA Ree.]) 



(*) Restitution covered oy Regional visit. 



9839 



-113- 

Conditions in Ari^^oii?) aT)rroxirr,?.t^d those in Utah, but were in some 
respects even more -auf '^.voraoZ.e for tne cause of ccmijlianc^, although 
the Phoenix office rjcsspssei a considerably larger staff than the Salt 
Lalce City offic--. Tne sam^f >'x-oir(iiation, i.e. metaod of cas-= adjustment, 
is the exDlanntion of the results attained. It snould be noted in con- 
nection with thri Arizona and Utaii visits that the regional rfficers 
were in a position somewhat mrr« advantageous tc '^nfcrce NRA regulation? 
than wer^ the local NRA officers who wer" well known in localities long 
used to non-enforcement. 

The Arizona restitution figures should be noted, narticularly from 
the time standpoint as thp adjustments came at a period immediately an- 
terior to the 'Supreme Court decision. Restitution figures for nearly 
every other Stat- indicate' a decided falling off (together witn a lesser 
number of cases received) for this period. 

Neither in Arizona nor in Utanwas a mass compliance drive under- 
taken but, in many cas°s, th" rf^gional adjusters, in' "rd-r to secure 
cases, proceedf^d on information procured by active questioning of emr 
ployees and employers. 

In connection v.'itii restitution and adjustments in point of time, 
note Vermont whicti adjusted no cases and secured no restitution from 
June 24, 1934 to the first week in Januarj' 1935, with the exception 
of one case entailing restitution of $38,36 v/hich the Rutland office 
reported on September 1, 1934, and on^ case involving a $10,60 resti- 
tution creditird to the bi-weekly period ending December 8, 1934. 

Table 8 shows types of labor virlations by case count and method 
of disposition. The national totals, again, in no manner reflect ade- 
quately tne State results. Go, of labor adjusted cases, Colorado re- 
parts 341 adjustraents of cas-_3 involving failure to -Tpaj/- overtime .wages 
prescribed by a particular C'-'d^, Alabama 6, Nf-w York 388, Iowa 305. 
As to violating provisions relating to metuod and time of payment, 70 
adjusted cases ar^ credited to t;.p District of "Columbia, 74 to New York 
State, 43 to Onio, 19 to Micnigan, 5 to .Vest Virginia, none to Georgia. 
Minnesota reported adjustments of 55 wage reclassification cases, San 
Francisco none. 

Com-naring total wage violation adjustments to total hour violation 
adjustments, see Fiiode Island wita 280 hour violations and 474 wage 
violations and Nebraska with l,3-i2 hour violations as against 740 wage 
violations. 

As to employers working mrrp t'nan code maximum hours, note Oregon 
with 46. adjustments and V.'isconsin witn none. Violation of the six day 
week, Georgia 118, T-nnessee, Alabama, Louisiana none. Kansas reported 
adjustments of 23 cases in which daily hours limitations werp infringed, 
308 w'nere weekly hours were not observed, while Indiana shows 357 daily 
limitation cases adjusted and 73 weekly limitation cases. As to split 
snifts Connecticut 40; South Carolina none.. Failure to post labor prw 
visions were acted upon successfully 1,093 times in Massachusetts but 
Nebraska and Alabama snow no adjustments. As to discharges or discrim- 
ination practiced for filing complaints New Hampshire 16, Florida none. 
The records from Oklahoma show 28 adjustments of cases relating tD the 

9839 



violation of regulations concerning nermitted homework, Nevr York 4, 
Oregon none. Region 4 adjusted no child labor cas-s v/itri the exception 
of Georgia (l^- cases) and Tennessee (3 cases). 

The equitable adjustment (reduction of wages above tae minimum) 
reports of tne Gtates showed first tnat onlj'- 87 cases throughout the 
nation were adjusted. Hov;ever, there was some confusion in the com- 
TDilation of tae report and the States were asked to file sur)"Dlementary 
estimates. 13 States (including N^w York and Pennsylvania) failed to 
submit such sup-olementary estimates. 

Tnree hundred cases submitted on an estimated percentage basis 
of all cases handled (including oases ri-corded in the first re-nort) 
were reported in the sup -ol erne ntary report. Thes^ three hundred cases, 
however, include not only adjusted but also no violation, dropped, and 
pending cases. It is reasonable to suppose that if trie estimate be 
accepted at its face value', one half of the cases reported among the 
three hundred did not constitute adjustment cases inasmuch as, in the 
first report, tn^»re were 87 adjusted cases and 117 rejected or pending 
cases. Of the total reported and estimated, San Francisco' reported 107 
Cases, 30 adjustments and 72 no violations; Utah 24 cases, 16 adjust- 
ments and 6 no violations; Nebraska 1 caSf and 1 adjustment, Kansas, 
Mfiiup, Vermont, Massachusetts, Htiode Island, T-^nnessee, no cases dock- 
■eted, adjusted or rejected (ei trier by estimai^e or by report). Even on 
the basis of complete estimated pex-ceiitages , San Francisco was first in 
equitable adjustment cases. On the basis of the first report Utah was 
second. (Again, only tne national totals are snown) . 

Table 8 (a) shows relation by States of adjusted wagf^ and hour 
Cases . 

Tables 9 and 9 (a) show State office complaints hy source and "by 
size. Disparity as to source of com.plaints "riianating from the various 
States is, yet again, apparent. Virginia records 308 present employee 
complaints adjust^^d as against 76 former employee cases. Minnesota, on 
the otnf^r aand, shows adjusted 457 present employee cases and 1,109 
former employee cases. It is submitted that Table 9 is defective as a 
representation' of source of complaints as tne San Francisco office re- 
ported 1,G52 present employ^^e cases as against 5 former employee cases. 
The writer nas personally adjusted at least 20 cases in that jurisdic- 
tion wuicn werf initiated by farmer employees. 

Tahle 10 indicates time elapsed between first action and closing 
of cases. Tne tahle, if hroken down by States shov;s extreme variation. 
So, out of 2,271 cases Minnesota adjusted 793 immediately, 667 in the 
first week and with the increase of time progressively fewer cases. 
Nebraska shows the same tr^^nd, while Kansas adjusted tne bulk of cases 
in the first week after taking first action and no cases immediately 
upon first action. Philadelphia and New York closed the majority of 
Cases between the 46th and 90th day subsequent to first action. (*) 



(*) It is submitted tnat a hign percentage of immediate adjustments does 
not indicate a desirable tendency. Inquiry concerning extent of viola- 
tion as well as contacting of persons authorized to effect restitution 
and other essential time consuming moves, including the arrangement of 
appointments, often elaborate computation and gathering of satisfactory 
evidence incline the writer decidely to the view that the majority of 
wage and hour violations could not have been satisfactorily adjusted at 



-11.J- 

As to time elansed bptween first action and closing in the no 
violation cases, it n/riy b<,- cnii tu'nt tii^^ sa.ae gi-aernl tend'^ncies as to 
closing at an earlier or later dat'- ra?inifest themselves in the same way 
and in the same States as in tiie adjusted cases. Only Iowa, Minnesota 
and Houston, however, reveal tiie greater nart of their no violation 
cases to have b-en cl.sed immeiiat-lyo 

The question of number of cases received in rn-int of time is of 
interest in studying the question cf historical progress of enforcement 
and adjustment. In this connection, the reader is referred Table 11-A 
and to Tables 11, 12, tn" data in which has been taken from complete 
charts covering all States. 

Table 13 shows number of complaints docketed by code but not by 
Gtate, method of disposition and size of the industry. (*) 

Some relative idea, however, of compliance by size of industry 
may pernaT>s be obtained frsm an examination of this Table. Table 13 
snould be supplemented by the use of Table 14 showing Codes under which 
the greatest number of labtr comx)laints v/er'= registered. Tlrie 25 Codes 
listed accounted for ap-nroxima cely 754 of all comT)laints docketed by NEA. 

Table 15 shows codes approved -Drier to Code Nc . 500 the labor nro- 
visi:,ns of which no State office reports as having handled. 

Table 16 shews as of a fixed date, number of prjductive adjusting 
officers in State offices. 

Table 17 shows number of P.P.. A. cases received by the month. 

General tendencies indicated by tables, prepared for Region 3 and 
Massachusetts and Minnesota, but not included in this report indicate that 
labor violations -oerpetrated by establishments emnlcying loss than 25 em- 
ployees usually affected all oi- nearly all emt)loyees, while establishments 
having more than 25 em-nloyees rarely showed violations as to all employees. 
On tht: other nand, large establisnments (those emt)loying over 25 employees) 
were more prtne to commit violations v/itii respect to a small niimber of 
their employees than are small establisnments (those employing less than 
25 persons). As mdght be expect':'d, it nas been shown also that former 
employees were mere apt to complain in establishments with more than 25 
employees. As might again be expected, more time was consumed in adjust- 
ing complaints against larger estaolishm-nts tnan was in adjusting small 
establishment complaints. Of perhaps notewortny significance, is the 
fact that the former employee complaints wnich in tne beginning were 
less in number tnan present employee complaints incr'^^ased, with the 
passage of time, at the expense of tne latter. This trend continued 
until the end. The former employee complaints began to equal and then 
exceed tae prei ent employee complaints in July of 1934. 

(*) In the search to determine comparative state of compliance by local- 
ity and by industry, it v/ould be of undoubted value if an attempt 
were made to break down Table 13 by State and relate such breakdown 
to the num.ber of tnp various code establisnments in eacn State. This 
operation nas not be^^n attempted by the Statistical Section of tne NRA 
Field Division but sucn a tabl- could be created if a great deal of 
time and labor were expend-d. 

9833 



TjlBLES 
.:0-E: These tables cover oiJ;' 
coae (and not PE,A.) '.tici^ 
ures unless other"! se 
specif icallj' st-.tec'.i 



9S39 



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CO 
!>s rH 

.Q Cfi 

o 

Td -H 

CD -)J 

fn cn 

C^ -H 

ft -fJ 

O .. 

In +^ 



U5 
rA 
CA 



•H rH 
> 

IT—) r-* 

CD 



CD 



Ph 00 F=, r-=( 



-130- 



State 



TABLE 2 
lviA.>]UmCTU.rJ-TG- SSTA3LIS" 



rTS 1933. 



Rank in Total Rank 

UiiLiter of U-uin"ber of ITu'iber Total State in 

Estatlisii- Establish of En- Pa"roll Po-ou- PopuL* 

ments. nents. "oloyees lation a.tion. 



Maine 

H. H. 

Vt. 

Mass. 

R. I. 

Conn . 

N. Y. 

N. J. 

Pa. 

Del . 

Md. 

D. C. 

Vir.-i'inia 

N. C. 

S. C. 

Ga. 

Fla. 

Tenn 

Ala. 

Hiss. 

LP. 

Mich. 

Lhio 

W. Va, 
3839' 



29 


995 


59,518 


35 


678 


49,255 


35 


530 


15,083 


5 


8,145 


398,592 


26 


1,254 


92,512 


14 


2,410 


183, 322 


1 


25,979 


733,432 


7 


5,759 


295, 574 


2 


12,093 


716,598 


41 


328 


15, 825 


14 


2,476 


100,235 


38 tie 


386 


7,959 


19 


1, 864 


100,673 


18 


2,084 


200,202 


31 


686 


104,335 


15 


2,223 


138,736 


21 


1,474 


44;p78 


20 


1,561 


94,909 


22 tie 


1,358 


"34^966 


34 


746 


27, 833 


23 


1,314 


53,052 


9 


4,633 


350, 266 


6 


8,101 


472,599 


33 


887 


67,950 



$45, 857, 147 

58,784,073 

12,456,113 

354,523,524 

76,123,742 

157,607,614 

757,356,881 

283, 242,4].4 

599,591,440 

13,934,691 

83,563,281 

11,185,041 

70,443,749 

113,533,150 

54,750,752 

67,415,287 

24,450,105 

60,871,247 

48,417,371 

13,635,982 

35,643,072 

346,110,871 

439,752,573 

60,399,840 



802,000 

439,^00 

361,000 

4, 316, 000' 

702, 000 

1,646,000 

12,965,000 

4,193,000 

9,787,000 

241,000 

1,653,000 

495, 000 

2,441,000 

3,275,000 
1,748,000 
2,911,000 
1,554,000 
2,664,000 
2,697,000 
2,047,000 
2, 155, 000 
5,043,000 
6,798,000 
1,774,000 



35 
42 
45 



29 

1 

9 

2 

47 

28 

41 

21 

12 

27 

14 

32 

16 

15 

23 

22 

7 

4 

26 



1.1AFJ?ACTUHI1ICt "STA3LISHMEWTS 1933 





jRan'r in 






Total 


Total E,ank 




ilMnboi" of 


mi:nbor of 


llV.^^CT 


Pry roll 


State 


in 


State 


'Estat>lish- 


Ustablishn 


^nt s of 




Popi- Po^m- 




ments 




Enployecs 


l-ation 1 


at Ion 


Ky, 


24 


1,274 


56,085 


'S 44,292,572 


2,648,090 


17 


WiE. 


8 


5,409 


158,750 


132,845,521 


2,992,000 


13 


Ind. 


12 


3,373 


198,940 


172,055,471 


3, 291, cor 


11 


111. • 


3 


10,740 


420,334, 


403,682,236 


7,825,000 


3 


Mo. 


10 


3,813 


141,176 


120,466,648 


3,568,000 


■10 


Minn. 


13 


3,312 


59,533 


64,023,712 


2,594,000 


18 


loua 


17 


2,217 


52,137 


• 45,227,773 


2,482,0'"C 


19 


N. D. 


42 _ ■ 


3,103 


3, 103 


3,290,441 


687, goo 


38 


S. D. 


39 


348 


4, 731 


4,507,523 


702, 000 


57 


Net. 


30 


S92 


19,433 


. 18,872,032 


1,392,000 


. 30 


Kan. 


25 


1,272 


32,508 


31,142,855 


1,900,000 


, 24 


W3'. 


44 tic 


150 


O5 000 


5,004,518 


231,000 


48 


Obi- 


28 


1,067 


Si» 287 


2O,,060,158 


1,052,000 


33 


Ark. 


33 


819 


25,955 


14,039,389 


1,872,000 


25 


Okla. 


27 


1,155 


22,504 


20,746,700 


2,459,000 


20 


Tex, 


11 


3,648 


91,374 


73,426,750 


5,023,000 


5 


IT. ii. . 


44 tic 


150 


2,995 


2,332,598 


434,000 


45 


Montana 


38 tie 


386 


8, 244 


8,800,112 


537, 000 


39 


I daho 


40 


347 


7,682 


7,032,110 


447,000 


44 


Utali 


37 


A,)0 


10,213 


9,298,801 


518,000 


40 


Fev. 


45 


86 


1,417 


1,755,155 


93,000 


■49 


Ai-iz. 


43 


223 


4,181 


. 4,153,025 


453,000 


43 


Wash, 


15 


2,307 


67,752 


62,116,862 


1,599,000 


31 


Ore. • 


22 tie 


1,358 


41,052 


34,786,851 


983,000 


54 


Gal. 


4 


8,429 


191,851 


l'jl,86B,310 


5,062,000 


5 



Source; Bureau of Census. 



983S 



—122— 



a 



Table III 



Service Estrblishments rnd Aiousement Establishments 

1933 



DIVISION AND STATE Number of Total Fay- 
establish- roll, 
ments. Is I 
Eank~" 

unite;; states total 502. 416 : $701, £94 
new england 5 6.769 t' 53,005 



Average no. Aver-ge no, 
full time •• - paxt time 
employees em-nloyct. s 

Rank Eank Rank 



657.481 



45, 665 



202.519 



14.17 



Connecticut 


6,755 


22 


9,22b 


16 


8,056 


26 


2,759 


18 


Maine 


3,613 


35 


2,975 


35 


3,517 


56 


1,185 


33 


Massauhusetts 


19,720 


8 


33,269 


6 


27,092 


7 


7,972 


7 


New Hampshire 


2,090 


41 


2,100 


39 


1,974 


41 


690 


42 


Rhode Island 


2,841 


36 


4,007 


33 


3,312 


57 


1,114 


34 


Vermont 


1,750 


4^ 


1,406 


45 


1,720 


44 


470 


45 


MIDDLE ATLANTIC 


122,350 




217,090 




168.702 




47.975 




New Jersey 


20,012 


7 


24,624 


7 


20,654 


10 


7,165 


9 


New York 


66,196 


1 


150.206 


1 


108,995 


1 


27,281 


1 


Pennsylvania 


36,14£ 




42,260 


2 


36,653 


4 


15, 509 


4 


EAST NORTH CENTRAL 


108,243 




152.545 




139,363 




46.984 




Illinois 


34,173 


4 


66,229 


3 


53,024 


2 


18,588 


5 


Indiana 


13,029 


11 


11,256 


13 


12,705 


12 


4,276 


15 


Michigan 


18,580 


9 


24,149 


9 


24,334 


9 


7,586 


6 


Ohio 


29,925 


5 


38,840 


5 


37,325 


5 


11,292 


5 


V/isconsin 


12,536 


12 


12,069 


12 


11,995 


15 


5,4^2 


11 


VEST NORTH CENTRAL 


61.346 




60,061 




64.436 




19.418 




lova 


11,. 566 


13 


8,509 


19 


9,686 


20 


5,565 


16 


Kansas 


8,617 


15 


5,473 


29 


7,234 


27 


2,512 


21 


Minnesota 


11,037 


14 


13,071 


11 


13,537 


11 


5,808 


14 


Missouri 


17,091 


10 


24,587 


8 


24,361 


8 


5,962 


10 


Nebraska 


7,649 


19 


[5,4^6 


30 


6,065 


30 


2,517 


25 


North Dakota 


2,603 


38 


1 , 444 


44 


1,687 


42 


555 


45 


South Dakota 


2,783 


37 


1,571 


42 


1,866 


43 


720 


40 


SOUTH ATL^JJTIC. 


44.969 




59,713 




72,034 




19.449 




Delavare , ■ 


961 


46 


1,096 


46 


1,092 


48 


405 


48 


District of Colunbia 


2,413 


40 


8,5C3 


16 


8,849 


24 


1,095 


35 


Florida 


6,270 


25 


8,486 


20 


10,716 


16 


2,270 


28 


Georgia 


6,389 


24 


7,221 


24 


10,739 


15 


2,275 


27 


Maryland 


6,825 


21 


9,829 


15 


9,356 




2,868 


17 


North Carolina 


6,227 


26 


7,107 


25 


9,956 


19 


2,595 


20 


South Carolina 


3,854 


33 


3,374 


34 


5,207 


52 


2,735 


19 


Virginia 


7-^405 


20 


9.159 


17 


10,976 


14 


3,607 


15 


West Virginia 


4,645 


31 


4,334 


32 


5,.189 


55 


1,401 


32 


-a/Resturants not inc 


luded. b 


Ir&x 


ik by St.-' 


te. 











Troje III (con't.) 



DiVISIO" AID S^ATIJ lvii-.oe;' :,:? 



'c-'.n.. 



it-r: 



AverT-:e no. Avcr^-je no. 

'.•: -lo'/e.-iG e'..rolovees 

.'.Irn:: . Ifenli 



EAST SOUTH Gi:i7J?AL 2":;.: 



)0.2lU 



7.991 



Alr.br.-.a 
r.entuc]::,' 
r.i'oSissiir>i 
Tennessee 



■,3P. 



'-Z> 



3,771 y 
3,721 2: 



5,252 31 

G.SlT 2b 

2,3'":o 37 

7,':-2fr 22 



7.^77 
5,^S7 



S33 
,307 



3,53-^ 



17 



2,253 

2,39£ 
i,oS3 

2,277 



23 

2U 

37 
23 



WEST SOUi'I 



PAL 3:^.^0; 



Ul.372 






:;U 



I 70 r 



Aii:r.nr,r-s 
Louis ir.nr 
OlclPiiOJ'iP. 
Te::rs 

:.oui:taii: 



'^2^^5 
5,S53 

21, "'.10 
ip,3oO 



27 



r 
o 



2,ooS 
7,S02 

7 , 2")£ 
23,SUU 

1 ■' pli-r 



jb 
21 



U,R7^ 

S.131 

S,^^3l 
30,014 



i?,li3 



3U 
23 



i,0S3 3- 

2,UUs 22 

2,212 30 

3,0)15 3 



r-. r, 



00 b 



Arizona. 
Colorado 
Idaho . 
l.Iontr.nr. 
Uevada . 
llerr ;ie;:ico 
Utaii 
Wyoning 



l.^Ub 
3,52s 

1,^73' 
2,UG0 
sUl 
1,25c 

1,37'-^ 
I.ISO 



23 

Us 



2,0oo 
6,053 



Ul 
27 
^^3 

^10 



39U Us 






2,1.:: 

1.13- ' 



3£ 



U7 



o , -.oJ. 
1,^72 

2,079 
002 

J- , I -^ ,' 
2,300 
1,20s 



35 



U3 
Uo 
Us 
U5 
3S 
U7 



uss 

1,735 
S32 

233 

U"'.lU 

757 
^lU 



UU 

31 

Ul 

33 
Us 
U3 

39 
^'.7 



FACinc 



Ug.'^:28 



iSr. 



o!a-ii 



23.101 



Cali3"oi''nia 

Oregon 

T7aSiiin';ton 



- 9 



■ ( 



3l,2-;0 

3,013 

11,213 



2G 
lU 



J 



50 064 

'5', 370 31 
10,271 IS 



IG.SIS 2 
2,U27 23 
U,S53 12 



Source : C.'J.A. Cennus of A^ierican :^uiinesp Activities. 



=39 



-134- 



■ Reta.il Estaolislinentc ;.un''. Pufst^.uroxitr, 

lars 

Division rnd Sts,te ITuinbcr of Avera;:G Average Total 

Establish- Fan'^er of IT-aj^lDer of Pay 
nents JYill Tirac part Time Roll 

Baployens Employees 
Panha,/ Brnl'l Panl: 



Rani: 



UITITED STATES 


1,5:^6 


,119 




2,703,325 




730 


, 287 


$98 


,710 


,445 




am EI^GL/JID 


.105 


,6<i-6 


J 


232,7.x7 




57 


,902 




243 


,852 




Connect icfi.t 


22 


, 047 


25 


4 . , 508 


15 


11 


,124 


20 


53 


,485 


14 


Maine 


11 


,429 


35 


17,735 


56 


A 


,392 


37 


18 


,715 


34 


Llassachusetts 


52 


,430 


9 


135,358 


5 


' 33 


,047 


5 


136 


,224 


6 


NeT7 H<?xn shire 


6 


,368 


40 


10,520 


33 ' 


2 


, 948 


41 


11 


,377 


39 


Rhode Island 


8 


,iS8 


37 


19,080 


C-x 


4 


'.-1-17 


36 


21 


, 242 


35 


Vermont 


4 


,934 


44 


7,546 


43 


1 


9 'A 


45 


7 


,809 


45 


MIDDLE ATLAi-TTIC 


35S 


489 




690,536 




15^^ 


,275 




811 


,903 




Neu Jersey 


6-^. 


,190 


7 


95,938 


9 


25 


,794 


10 


119 


,927 


7 


ITevr Tork 


178 


,514 


1 


577,320 


1 


71 




1 


464- 


, 707 


1 


Pe:ins3-lvania 


115 


,685 


2 


217,328 


2 


58 


660 


1-^ 


227 


,259 


2 


EAST EORTi: CEIITPAJ, 


327 
.■ 98 


,771 
,370 


3 


587,762 
198,293 


5 


131 
54 


,578 
,572 


3 


633 


,401 
323 




Illinois 


3 


Indiana 


. 41 


256 


12 


63,665 


11 


21 


,842 


12 


63 


315 


13 


I.iichigan 


57 


121 


8 


104,880 


8 


29 


808 


7 


108, 


969 


8 


Ohio 


85 


951 


D 


159,406 


5 


50 


755 


,/1_ 


172, 


264 


5 


Wisconsin 




553 


11 


61,517 


IS 


24 


721 


9 


57 


530 


11 


WEST ilORTPI CENTRAL 


ICO 


307 




233,928 






201 




261, 


835 




Iowa 


34, 


645 


13 


49,182 


14 


15 


962 


15 


47, 


020 


15 


Kansas 


26, 


779 


16 


34,724 


24 


12, 


172 


19 


22, 


313 


32 


Minnesota 


33 J 


879 


14 


62,195 


12 


16, 


125 


1-i 


64, 


783 


12 


Missouri 


49, 


247 


10 


39,166 


10 


23, 


451 


23 


90, 


132 


10 


ITehraslca 


19, 


212 


28 


29,085 


28 


^^i 


967 


26 


23, 


0---3 


31 


North DaI:ota 


7, 


981 


38 


9,487 


42 




463 


44 


9, 


30] 


42 


South Dakota 


C< 


566 


36 


10,039 


59 


3, 


082 


33 





393 


41 



a/ Rank means rank hy State. Rank figures refer to j-irecedin-; column. 



J 839 



-125- 
TA3L2 :; (Continued) 
Hetail Esto-jli sklents .'uiu r.e-tax-.rar-ts 

T '•■ •■/ r: 
... .: ».>*_- 

Divinion rnd St-to l-riuaci- oT .'.vei-.-re Avcra-^e 

Ilijt.:?,L)lir;Ii- .'-^UjOT 01 

•■ic:.-tG I'ol.l ?i;;e Part Tine IRoll 

"^jL-nlo'-'C-e!? Sm^-ilo'^eep 



To til 



"■'.uiber Ox Paj^ 



-len:- 



Rsni: 



Pian.': 



Haiik 



SOUTH ATLAivITIC 



IdL',200 



277, S13 



GO, 067 



262,956 



Delaware 


■^,^20 


^7 


5,673 


i:-6 


1,S30 


46 


i,?31 


4s 


District of Col, 


6,156 


1+1 


2S,50S 


29 


'i,337 


35 


23,6si 


30 


Plorida, 


21,697 


26 


33,Usl+ 


20 


9,^53 


25 


30,S13 


23 


Ceorgie 


26,631 


17 


1+2,111+ 


17 


12,312 


IS 


35,763 


20 


liar;.^land 


23, ^S7 


21 


1+2,721+ 


16 


12,576 


17 


^5,707 


16 


Horth Caroliiir?, 


27,652 


15 


39.131 


i_S 


14,000 


15 


33,165 


19 


South Carolina 


15,52S 


31 


20,21s 




7,^^:-^ 


22 


16,961 


35 


Virginia 


26,1+51 


IS 


1+1, lis 


IS 


io,S57 


21 


40,065 


IS 


^'est Tirginir 


17,12s 


29 


2^4,793 


;;i 


7,137 


29 


2l+,l+70 


27 


EAST SOUTH CEi^TllAL 


S3, 270 




116,939 




33 , 662 




100,843 




Alabama 


20,oU5 


07 
'• 1 


29,962 


27 


S,6S6 


27 


23,7SS 


29 


Kentuclcy 


25,672 


20 


32,503 


26 


S,Si+7 


2I+ 


30,220 


25 


Kississippi 


1^^772 


32 


16,906 


37 


l+,S3l 


3H 


13,271 


37 


Tennessee 


22,777 


22 


37,56s 


21 


10,29s 


23 


33,564 


22 


WJiJST SOU'TK CElTilAL 


132,505 




20l+,3Sl 




50,020 




182,053 




Arkansas 


15,91s 


30 


1^,323 


35 


5,59^ 


33 


15,299 


36 


Louisiana 


• 22,239 


2k 


36,370 


23 


6,331 


32 


30,411 


24 


Oklahoma, 


26,U3U 


19 


32,00s 


20 


10,76s 


22 


3i+,620 


21 


Texas 


67,91^ 


6 


111,030 


7 


27,277 


S 


101,720 


3 


{■ioui:taii? 


4!!-,301 




73,150 




21,030 




- so, 163 




Arizona 


^,7^19 


1+5 


7,3^5 


1+1:- 


2,471 


'+3 


S,U55 


U3 


Colorado 


13,700 


3^ 


25,Sl6 


30 


6,623 


30 


27.17^ 


26 


Idaho 


5.133 


U2 


7,153 


■ ^ 


2,666 


1+2 


7,9^0 


44 


Montana, 


0,732 


39 


10,147 


i:-o 


2,55s 


39 


11,313 


33 


Nevada 


1,1+63 


ks 


2,43 s 


'43 


737 


49 


3,317 


49 


Eew Mexico 


)|,2l+b 


1+6 


5,321 


^7 


1,504 


^7 


5,351 


U7 


Utali 


5,103 


U3 


9,S14 


41 


2,352 


40 


10,336 


40 


Uyoraing 


3,169 


Us 


4,9S6 


Hs 


1,169 


l+S 


5,777 


46 


PACinC 


125,630 




236,017 




6S,4!+2 




2S2,1+31 




Calif 01-nia 


S3. 55^ 


h 


176,192 


I;. 


HJ.3S0 


5 


216,105 


1+ 


Oregon 


13,769 


33 


22,335 


32 


6,1+40 


31 


24,oS4 


2G 


Uashington 


22,307 


23 


37,U9i 


22 


12,622 


16 


42,262 


17 


SOURCE: C.T.A. ".e:i 


'ru.G of A^Tiericr.n 


3^j.si?iess A 


ctivi 


ties 







3339 



-126- 

TA2LE 5 

Restaurants 
1933 



State 



^.■urr^ber oi 
Hesta.urrnts 
ar.d Eatin,^: 

Places 
2anl: 



j^all Tine 
Erroloyees 



District of Coran'bia 

Alabaia 

Arizona 

Arkansas ' 

California 

Colorado 

Comiectic-at 

Dela'.7are 

Florida 

Georgia 

Idaho 

Illinois 

Indiana 

loua 

Kansas ' 

Kentucl-^r 

Louisipjia 

Liaine 

I.iar;;'land 

iiassachusetts 

liichijan 

Minnesota 

lvlississi;^-ipi 

i.Iissouri 

liontana 

ITetraska 

Hevada 

Keu Hampshire 

'Sei Jersey 

IJew i.iexico 

ITew York 

North Carolina 

Ilorth Dakota 

Ohio 

Oklahona 

Oregon 

Pen:--S"^lvania 

Ehode Island 

South Carolina 

South Dakota 

Tennessee 

Texas 

Utaii 

Vemont 

Virginia 

Washin;:;ton 

West Vii-ginia 

ITisconsin 

Wyoninr; 



844 
1,391 

657 
.1,765 
13,528 
,1,706 
: 2,714 
- 372 
■ 2,784 

545 
16,317 
5,409 
4,305 
5,119 
3,021 
2,903 

972 
3,160 

5,281 
7,387 
5,320 
1,300 
7,398 

912 
2,590 

308 

616 
8,287 

459 

23,439 

2,470 

1,033 

11,311 

3,351 

1,693 

14,289 

1,087 

1,301 

1,011 

2 , 557 

9,091 

352 

391 

2,206 

2,851 

1,923 

10,687 

483 



40 
29 
41 
30 



22 
4.'; 
21 
23 
4i 
2 
11 
14 
17 
13 
19 
33 
13 
13 
10 
13 
33 

■-» 
J) 

39 
24 

49 

42 

8 

45 
1 

23 
36 

5 
15 
32 

3 
35 

37 
25 

7 
43 
4? 
2V 
20 
23 

6 
4r. 



Jiask. 



,1 


,321 


17 


2 


,899 


30 




945 


43 


r 


,7^1 


35 


26 


,337 


3 


3 


,164 


29 


4 


,565 


19 




446 


49 


4 


,939 


16 


3 


,590; 


24 




799 


45 


29 


,669 


2 


7 


,177 


12 


5 


,755 


14 


3 


,706 


22 


3 


,518 


25 


4 


,660 


10 


1 


,632 


36 


4 


,452 


20 


13 


,205 


6 


15 


, 033 


7 


8 


,566 


11 


1 


, 556 


34 


11 


,746 


9 


1 


,532 


37 


3 


,2-5 


27 




606 


43 


1 


415 


40 


10 


,891 


10 




675 


4G 


71 


,208 


1 


3 


2^14 


28 


1 


368 


41 


19 


936 


5 


4, 


400 


21 


2, 


892 


31 


24, 


458 


A 


1, 


637 


35 


1, 


4/.6 


38 


1, 


4-:.3- 


39 


^1 


656 


23 


13, 


523. 


8 


1, 


172 


42 




664 


47 


3, 


416 


26 


5, 


002 


15 


2, 


423 


32 


6, 


421 


13 




921 


44 



Total 




Pay 




Roll 






"^F^i 


$ 3,537 


16 


1,234 


33 


63U 


43 


833 


37 


23,538 


2 


2,036 


25 


3,748 


15 


297 


49 


2,563 


19 


1,794 


30 


559 


46 


21,785 


3 


4,497 


13 


3,497 


17 


2,034 


24 


2,131 


23 


2,483 


20 


1,054 


36 


3,050 


19 


15,126 


5 


7,932 




5,926 


11 


643 


44 


8,120 


8 


1,209 


34 


1,998 


28 


629 


45 


1,055 


35 


9,531 


7 


390 


43 


52,561 


1 


1 , 84^:- 


29 


737 


39 


13,653 





2,233 


21 


2,238 


22 


17,136 


^x 


1 , 314 


32 


691 


42 


772 


40 


2,078 


25 


7,753 


10 


005 


33 


424 


47 


1,999 


27 


4,208 


1-. 


1,396 


31 


4,793 


12 


692 


41 



Source: CW.A. Census of Araericaii Business Activities. 



-127- 
T.-L'le 6 

IIEA ST.iTS OFPICS COiPLi'jrT STATISTICS 

AJicuiTT OP HzsiiTUTioi; A:,;j3 irj":Z..::-L o:? etployehs PaIL 

La^bor A.d.1ustud CqcLo Cr.sos, Tot.il of vll OiTicen, October 19, lS33-rin.y 27, 
1935 ny 



llviih or of C r s c s 

Totrl case count - - - - - _ - 50, 67 

I'ot reijortin;; niiou-.it or 3nr)loyoes - - _ _ 17,414 

Reportin;,' riio-utnt or e^nloyeos _ _ _ _ 33,153 

He-oortinfi cnoirit "Jicl e;:5loy3cs _ - _ 32,058 

Re'Dortinj; r;iouut only _ _ _ _ 140 

Seoortin-^ enlovcss only _ _ _ _ 955 

JL-iount (l)oll;:,rs) of Hestitutioii 

'Total mount - - - _ - - -5,311,439.81 

In Cases Reporting a-iount "nC en:)loyecs - - - 3,570,173,12 

In Cases He Dortia;: a:MOu.it only - _ _ - - 41,251,59 

Enployoss Prid 

Total nunber of e-i )loye--u^ - ' - - - - 154,378 

In Cases Repiortin;;; a:icunt and eniloyecs - - - ., 148,455 

In Cases Re JO re in; J e-roloyej'; only - - - 5,212 

Avera'-e (Dollars) 

A:.ioui:it per crse - - _ - _ _ _ _ 112,15 

JL~iOL-_nt "oor o ■-)loyae - - - - - - 24.05 



a/ Tiie offices rero of f ici- 11 - ;"ctivo fron Octo >-.n- 19, 1933 to May 27, 
1935, Also inclitded aro 14 c-~sc3 receipted -jrior to October 19, 1933, 

Prepared by: 

Statistical Se'^tion 
Field Divisioji, '-'TA 
February 14, 1935 



9339 



-128- 

Table 6 

ii?LA ST^i:: 0?-JICB COMPLAr.IT STATISTICS 

ZSTlVuJZ-D A.;0U1TT OP xCSTII'UTIOII .1:3 laF'Gil OP Z :"^L0Y3I3 O'TSD 

Lrtor Dro-yied Cr.ses, Total of all Oificos, Octojcr 19, 1933 - ;:ry 27, 
1935 nj 



lTur.i"btir of Cp.ses 

Totrl case coiuit _ _ „ _ _ 14,325 

Hot re^orti-.v; amount or en'oloyees - - 11,392 

Reoortinf o.'^cxnt or enolo/ees - = = 2,435 

. Re-Tortinr rjiount rnd. en^loyees - - 1,739 

Re-^ortiug; anoaiit only _ _ _ 75 

P.eoortin,^' enol c;'-e o s onl" - - - 539 

Anount (ZJollars) of Restitiitioii (Lsti'iated) 

Total a:;o:vit _____ 5.. 5, 443. 78 

In Ca,se'3 roportiiv: a-ioimt a::d e;.i )lovoes - 537,132.34 

In Ca.se s reTiorting a.-iojuit only- - - 13,251.44 

Enplo'/ees Oi7ed 

Total nuiibar of onployeos _ _ _ _ 12,177 

In Cases reioortin;; a'^'-mt and e nlo'^ecs - 9,151 

In CaGGs re-)ortin,; ftmployecs only - 3,026 

Average (Dollars) 

Ai.ioirit jer case _ _ _ _ _ 301.58 

Aiiiount ler e^n^loyoe - - - - - 58.70 



a/ The offices -.'ere of-:"icia.ll- active fron October 19, 1953, to J!ay 27, 
1335. Also i:i.cluded are 43 cases accented -i-irior to October 19, 1933. 

'Dro-o-'ed' cf^ces do not reorcse it i'lvosti -ated rejects but cases droi:)'>- 
ed for 'Olicy reasons. 

Prepared by : 

Statistical Section 
Field Division, '■IRA 
Fel)ruary 14, 1935 



9839 



-120- 
Taole 6 

;:ra statu op tc:: co--^lah:t statistics 

ZSTIll/iTZD A OlTjiT OP IiZ IT I TUT mi; AID "."J/LV^R 01? ZT'LOYE S O'TED 
Laoor Pending Code Cases ' : -/ 27, 19j'5, Total of nil Offices, a/ 

XiumDer of Gases 

Total case count - - _ - _ _ 6,516 

Hot re Dorting pp.ount or enloyees _ _ _ 2,508 

3e-oorting rjio _mt or e.uloyces _ _ _ _ 5,970 

ile^^orting ruo^ont fnd en^loyeeG - - - 3,512 

P.CTorting raiiCont only _ _ _ _ 173 

Reporting e)roloyees op.ly - - - - 285 

.4.mount (lioll-^rs) of Restitution (estiirted) 

Total a:io-ant - - _ _ _ ^ 1,595,958.38 

In Cases Rsportin;: pjioiint and e':;jlo;-ees - - - 1,5J9,920.99 

In Cases Re^Dorting pjiojJit only _ _ _ _ 107,037.39 

Hrroloyees 0'.7ed 

Total nnxiber of e::nloyees 37,835 

In Cps^s Rcporti: .g' ' : lount nnd e .^loyees - - 35,533 

In Cases Rei^orting enDloyees onlj'" - - 2,303 



Iverage (Dollrrs) 



A-i-Ount 'er case 



450.50 



AnoTUit 'ler en-.ilo^ree - - - _ _ _ 44.74 



a/ The offices 'jere officiall,- active frop. October, 1933, to "r.y 27, 
1933. 

Prepared ijy: 

Strtistical Section 
Pield Division, PRA 
Peoruary 14', 1935 



9839 



-ISO- 



TABLE 7 
R AIIX 0? STATE III TOTAL RESTITUTIOIT 

FRA ZF.STITUTIQ?' PLUS COSL RESTITUTIOi: a/ 



State 

Texas 
Penns;,-lv£ 
ilevz Yor:: 



ni£ 



Total in xu?,nlc 

1 
2 
3 



Anoiint 



California 

Ohio 

Washington 

,,iin::e30ta 

jiissouri 

Nelirasha 

Oklahoma 

Michigan 

Louisiana 

Indiana 

Mas s achus e 1 1 s 

Illinois 

North Carolina 

Kansas 

Wisconsin 

Marylfuid 

Ne^7 Jersey 

loua 

Colorado 

Connect j-cut 

Tennessee 

Georgia 

Oregon 

Utoh 

Alabama 

Virginia 

Arkansas 

Kentucl::^;- 

South Carolina 

Mississippi 

"Jest Virginia 

Florida 

Delaware 



Rhode Islaiid 
Neu Hampshire 
North Dalcota 
Wjroming 
Ne\/ ue::ico 
Arizona 



6 
7 
8 
9 
10 
11 
12 
13 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 
26 
27 
28 
29 
30 
31 
32 
33 
34 
35 
36 



37 
38 
39 
40 
41 
42 



$ 410,927.20 


403, 61b. 30 


(Exact figures una- 


vailable - but be- 


tween $390,000 and 


$400,000.) 


341,892.58 


195 


679.90 


133 


776.50 


154 


209.74 


122 


479.19 


100 


187.95 


94 


307.37 


93 


361.69 


92 


626.42 


68 


255.55 


84 


158.95 


81 


908.84 


71 


888.51 


67 


638.12 


67 


629.99 


66 


995.55 


60 


332.72 


59 


069.80 


49 


924.37 


49 


554.05 


49 


494.07 


44 


898.48 


44 


021.89 


42 


371.58 


41 


424.51 . 


40 


958.45 


35 


439.19 


35 


307.94 


33 


133.95 


30 


501.54 


28 


168.61 


18 


415.04 


14 


723.19 (I ten of 


$10,000 reported 


unaccounted for.) 


14,395.53 


14,228.64 


11,532.89 


10,493.07 


9,733.78 


9 


397.45 



9839 



-17,1- 



State 



TABTuF, 7 (CO-JT. > 
Tota.1 in Hank 



i,iontc.na 


43 


liaine 


44 . 


District; of Coluin'bia 


■ 45' 


South Dalcoto 


46 


Nevada 


47 


Idalio 


48 


Verraont 


49 



Araou2.t 



$ 6,558.35 
6,276v77 

6,158.4U (Sup-ole- 
nentar^'- itRms not 
reported. ) 
5,131.57 
4,539.81 
3,976.47 
922.04 



Note: a/ . . ■ 

P. Pi.il. totals for Li.^. , K'.K. , N.l.i. , Ohio, Va. , 111., - computed only ,:,s of 
June 24, 1934. Such P.E.A. restitution as is unreported for these states 
is veir-r small. 



9839 



^132- 
TABLS 8 

NEA STATE OFFICE COi.PLAINT STATISTICS 

VIOLATIONS OF LABOR PROVISIOITS 

Total of all Offices - October 19, 1933, to May. 27,1935 a/ 



Total Adjusted Drot)ped Pending 



TOTAL MIvEBER OF GASES 71,50V b/ 

TOTAL NmfflER OF VIOLATIONS 121,157 

TOTAL HOUR VIOLATIONS ^ 57,684 

Maximum hours (if no more 
definite information is 
available) 17,29C 

Exceeding daily limitation 9,435 

Exceeding weekly limitation 24,551 

Failure to average down or 
exceeding limitation of more 
than one week 

Sunday work 

Saturday work 

Violation of six-day week 

Working during hours of the day 

not permitted by code 218 

Employer working more than code 

maximum v/here prohibited ,391 

Exceeding permitted number of 

Dersons working unlimited hours -.^S^ 

Srlit shifts ..-SvpO 



50,311 14,731 6,465 

85,235 23,506 12,416 

39,769 12,011 5,904 

10,213 4,941 2,136 

6,707 1,740 988 

18,233 3,997 2,321 



201 




1C6 


71 


24 


'; 947 




670 


189 


88 


■ use 




198 


73 


59 


3,635 


2 


,608 


798 


229 



142 

312 

77 
593 



61 

66 

6 
69 



15 
13 

3 

28 



9839 



105 


87 




11 


7 


26,226 


19,629 


4 


,086 


2,511 


1,306 


1,000 




165 


141 


660 


483 




136 


41 



-133- 
-2- 



Total Adjusted Dropped Pending 

TOTAL WAGE VIOLATIONS 58,039 4j,754 11,045 6,240 

Minimum wage violation (if no 
more definite informetion is 
available) 20,394 12,608 5,289 2,497 

Equitable adjustment, mainten- 
ance of weekly wage, etc. cj- 

minimum wage (definitely known) 

Failure of piece rates to equal 
minimum 

Deductions not authorized by 
the code 

Failure to pay ovp-rtirae rate 
specified by code for per- 
mitted overtime 6,963 5,212 900 851 

Learners, ap^Tenticec or 
junior cmnloyees in excess 
of code allowance ';338 262 37 39 

Employing handicapped workers 

without certificate 104 ■ 85 7 12 

Exceeding permitted number of 

handicapped workers 25 14 6 5 

Violation of handicap^^ed 
workers' certificate 

Violation of provisions dealing 
7/ith method of payment, time 
of payment, etc. 674 467 159 48 

Female discrimination 

Reclassification, imioro-Der 

classification and miscellane- 
ous subterfuge 873 634 173 66 

Waiting time not paid for 256 191 52 13 



37 
; % 


28 


5 


«• 






674 


467 


159 


78 


54 


19 



9839 



-134- 
-3" 



Tntal Adjusted Dro-orjed Pending 



TOTAL GENERAL PROVIGIONG 5,434 4,712 450 272 

Child Labor 316 254 43 19 

Failure to post labor 

provision:^ 4,470 . 4,C12 259 199 

Employment and payroll recr>rds 
(see Trade Practice Classifica- 
tion) d/ 2 2- - - 

Homewark, permitting homework 

v/here prohibited 204 154 24 26 

Violation of homework regulations 

where permitted 62 36 18 8 

Discharge or discrimination for 

filing complaint 352 229 104 19 

Miscellaneous 28 ' ■ 25 2 1 



a/ The offices were officially active from October 19, 1933 to May 27, 
1935. Also included are 14 adjusted and 43 dropped cases accepted 
prior to October 19, 1933, 

\l Total case caunt includes 70 adjusted, 68 drm^ped and 3 pending 

cases transferred from Trade Practice reports, not listed in Table I. 

c_l See supplementary Table XIII-A fer revised figures. 

d/ State Offices generally reported this item as Failure to File Labor 
Statistics wliich is included in Viol."tions of Trade Practice Provi- 
sions, 



Prepared by; 
Statistical Secti»n 
Field Division, NEA, 
February 8, 1936 



983P 



TA}?LE 8A 
IJRA STATE OFFICE COtffLAINT STATISTICS 

Lj\B03 .aJUItsted cases 

LMCEH- OF WAGE CASES AilD KOUH CASSS. 

October 19, 19r.5 to May 37, 1935 



I'lo . f No. of 



Total Wa, 


£;e Cases 




U. S. Total 


40 , 754 


Retz:ionl 


3,304 


Me. 


203 


N. H. 


338 


Vt. 


36 


Mass. 


2,551 


R. I. 


474 


Conn. 


622 


Se£,ion 2 


5,139 


Albany 


416 


Buffalo 


812 


N. Y. 


1,911 


Region 3 


6,280 


N. J. 


995 


Fhila. 


1,931 


Fittsb-orgh 


1,204 


Delaware 


57 


Maryland 


528 


D. C. 


519 


Va. 


563 


N. C. 


383 


Region 4 


3,405 


S. C. 


283 


Ga. 


917 


Fla. 


452 


Tenn. 


685 


Ala. 


364 


Miss. 


205 


La. 


499 


Region 4 


4 . 8r4 


Mich. 


1,963 


Ohio 


2,230 


W. Va. 


346 


Ky. 


345 



Total Hourj Cases 



39,769 

4,022 

169 
345 
42 
2,497 
280 
689 

5.179 

371 

833 
1,975 

5,274 

836 
1,572 
910 
12 
469 
554 
550 
371 

3,436 

259 
1,028 
353 
559 
321 
339 
477 

4,104 

1,485 

1,987 

290 

344 



9839 



-136- 



ITo. of 
Total ''!-iB:-;e Cr.ses 

He^-ion 5 4 , 8 o4 



Mich. 


1,953 


Ohio 


2,230 


W. Va. 


346 


Ky. 


345 


Region 6 


4,461 


Wis. 


667 


Ind. 


1,25;:; 


111. 


1,676 


Uo. 


656 


Region 7 


5,056 


Minn. 


1,912 


Iowa 


881 


N. D. 


129 


S. D. 


138 


ITet. 


740 


Hans. 


34-1- 


Wyo . 


114 


Colo. 


798 


Hegion & 


5,537 


Ark. 


293 


Okla. 


595 


Dallas 


952 


Houston 


1,523 


N. K. 


69 



Hegion 9 5.689 



Mont. 


122 


Idaho 


66 


Utah 


194 


Nevada 


ICl 


Arizona 


155 


Wash. 


1,159 


Ore-^on 


426 


L. A. 


2,211 


S. ?. 


1.245 



No . of 
Total Hours Cases 

4 , 104 

1.485 
1,987 

290 

344 

3, 855 





591 




747 


1, 


,879 




516 




,273 


1, 


,823 




764 




94 




216 


1 


,342 




352 




154 




528 


4 


,819 




265 




889 


1 


,534 


1 


,932 




99 


5 


,829 



186 ' 
118 
211 ■ 
532 
230 

1,072 
528 

1,999 
943 



9839 



-137- 

N..H.A. STaTE 05TICJ] COt'I^LAIKT Sl'AiTsn^ics 

SOinCB OF COl'iFLAIlITS 

Lator Code Cases, Total of all Offices, October 19, 1933 - 

iviay 27, 1935 a/ 



Source of Complaints 



No 
Total Cnses Adjusted Violation Dropped Pending 



All sources ■; 


118,677 


50 , 240 


47,312 


14,663 


6 


,462 


AnonjTnous 


7,846 


2,021 


4,308 


1,141 




376 


Employee (status unioiovm) 


8,209 


2,928 


3,763 


1,179 




339 


Present employee 


27,794 


13,122 


10,412 


2,759 


1 


,501 


Eormer employee 


29 , 880 


13,983 


10,018 


3,545 


2 


,334 


Competitor 


2,959 


939 


1,586 


331 




103 


Office staff 


14,388 


7,885 


5,029 


885 




589 


Cod.e Authority 


6,288- 


o , odo 


2,639 


912 




449 


State agency 


1,245 


501 


512 


152 




80 


Gov't purchasing agency 


317 


142 


137 


8 




30 


Labor union 


4,085 


1,609 


1,879 


423 




174 


Trade association 


781 


272 


389 


87 




33 


Other sources 


13 , 1S7 


4,399 


6,455 


1,877 




405 


Source unlvnomi 


1,748 


151 


184 


1,364 




49 



a/ The offices were officially active from October 19, 1933, to May 27, 
1935. Also included are 14 adjusted, 57 no violation, and 43 dropped 
cases accepted prior to October 19, 1935 ; 



Prepared by: 



Statistical Section, 
Field Division, IIRA 
February 12, 1936 



9839 



-138- 









tfl 








0) 








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-139-1 
TABLE 10 



N.H.A. STATE OFFICE COItPLAINT STATISTICS 
TIMS ET.APSFD ■^'niSJJ.^ ^thST aCTIOLI Al-JD CLOSING 

Labor Code Cases, Total of all Offices, OctOi,^,, ^.'j , 1933 _ U'sc.t 27 19?S a/ 



Time elapsed "between No 

first action and Total Adjusted Violation Dro-|^T3r:(^ 



closing 



Total ll'J,215 50,240 47,312 14,663 



Closed on da^ of 










receipt 


6,609 


3,968 


2,339 


502 


1-6 daj'-s 


19,414 


9,574 


8,571 


1,259 


7-13 drys 


14,587 


6,629 


6,798 


1 , 260 


14-20 da:^s 


11,454 


5 , 120 


5,398 


936 


21-30 daj'-s 


13,632 


6 ,055 


6,225 


1,342 


31-45 days 


13,485 


5,567 


5,615 


1,302 


46-90 days 


17,999 


7,827 


7,413 


2,759 


91-182 days 


9,892 


3,942 


3,603 


2,347 


6-12 months 


3,687 


1 , 293 


1,069 


1,325 


13-18 months 


151 


59 


24 


68 


Over 18 months' 


15 


13 


1 


1 


Not reported 


2,190 


183 


355 


1 , 752 



a/ Tlie offices v/ere officially active from October 19, 1933 to May 27, 
1935. Also included are 14 adjusted, 57 no viol'^tion and 43 dropped 
cases accepted -prior to Octoter 19, 1933. 



Prepared by: 
Statistical Section, 
Field Division, NEA 
February 12, 1936 



9839 



-14r. 



jLi; II 



HP.A sta~ o~'"'IC': coijl:-ji"T statistics 

La.Dor Cc-sec- Doc ;e ted Jv.ri-r.^: The Ye-r 193? 



TOTAL 

Mp-ine 

IIgy; ?lMr.psaire 

Vermo-.it 

Mas t achuse t x, s 

Rhode Isl",n;l 

Connecticut 

Alhc.ny 

Euff-lo 

lev/ Yorl; Citj'- 

New Jersey 

Philn.del :>hi^ 

Pit tsuuri; 

De lav/are 

Maryland 

Diptrict of Coluii'bi: 

Virgini.a 

North Co/rolinr. 

South Carolim, 

Georji,?, 

Ploridr. 

Tennessee 

Alr-.bcjaa . , 

MiGsispr'r'i'' ' 

Louicir.na 

Michigrn 

Ohio 

West Vir.i'inia, 

Kentuclcy 

?/i scon sin 

Indian?. 

Illinois 

Missouri 

Minviesoto. 

I Qwc. 

ITorth Dakota 

South Dokota 

Nebraska 

Kansas 

Wynming 

Colorado 

Arkansas 

Oklahoma 



■4233 (1347 adjustsci, a/PJ3V2 no violation, 
G52 dropped,, 12 pending) 



13 
7 

.1 

252 

15 

3 

50 
862 

J. 
459 

79 

7 

55 

56 

13 

23 

83 

25 

58 

126 

9 

97 

283 

204 

10 

40 

44 

109 

351 

130 

72 

PR 



13 

do 

11 

5 



(go adjusted, 339 no violation, 40 
dro23ped, 10 pending;) 
(48 adjusted, 31 no viol-^tion) t 



(l'11 cases reported adjusted) 

(48 reported adjusted, 31 no viola.tion) 



(7 .-.''i^orted adjusted, 'T.18 'no Violation) 



^ 



a/ G-rait -^majority adjusted hefor© Development of Restitution System For 
Code ConrplaintG, 



J 839 



"JBLS ir\t\~t<-±) 



Dallas .Ki? 

Houston 70 

Hew Ilexico 

Mont;ina — 

Idaho 

Utah 

Nevada — 

Arizona — 

Wasxiington 191 

Oregon 44 

Los An-geles 211 

San Francisco 77 



98S9 



-143- 
TaMe 11-A 

iNj.R.A. STaTE office COIvlPLAIIlT STATISTICS 
MONTH OF IlECEIt'T OF COIIFLAIHTS 

Labor Code Cases, Total of all Offices, October 19, 193b _ May 27, 1935 a/ 











Total 










Month of 


receipt 


number of 


Adjusted 


No violation 


Dropped 


Fending 








cases 










Total 






118,677 


50 , 240 


47,312 


14,563 


6,452 


19.33 
















August-De 


icembf 


3r 


4,283 


1,347 


2,272 


652 


12 


Prior to 


Oct. 


19 


114 


14 


57 


43 


— 


Augast 






9 


1 


7 


1 


— 


September 






,27 


3 


10 


14 


— 


October 






227 


57 


108 


62 


— 


November 






1,679 


485 


965 


222 


7 


December 






2,341 


801 


1,182 


353 


5 


1934 
















January- Jim e '. 


L5 


36,505 


14,777 


16,432 


4,980 


316 


January 






3,703 


1,473 


1,807 


403 


20 


February 






4,475 


1,838 


2,022 


597 


18 


March 






8,092 


3,106 


3,784 


1,154 


48 


April 






8,186 


O f f~^00 


3,712 


1,087 


102 


May 






8,334 


3,438 


3,589 


1,226 


81 


June 1 - 


June 


15 


3,715 


1,637 


1,518 


513 


47 


June 16 - 


. Dec 


. 31 


49 , 346 


22,704 


19,221 


5,740 


1,681 


June 16 - 


. June 30 


3,624 


1,577 


1,475 


513 


59 


July 






8,964 


4,031 


3,607 


1,176 


150 


August 






9,971 


4,363 


4,133 


1,266 


209 


September 






7,064 


3,221 


2,839 


789 


215 


October 






7,589 


3,664 


2,878 


748 


299 


November 






6,306 


3,081 


2,248 


547 


330 


December 






5,828 


2,767 


2,041 


601 


419 



1935 

January 1 - May 27 27,362 

January 7,138 

February 6,091 

March 5 , 632 

April 5,044 

May 1 - May P7 3,457 

Not reported 1.181 



11,310 

3,097 
2,586 
2,219 
2,026 
1,432 
52 



9,366 

2,736 
2,349 
1,862 
1,661 

n — r^ 

21 



2,190 4,446 



691 

533 

658 

222 

86 

1.101 



614 

623 

893 

1,135 

1,181 

7 



a/ The Offices virere officiall; 

1935. 
Prepared by: 

Statistical Section, 
Field Division, NHA 
February 20, 1936 



active from October 19, 1933 to May 27, 



9839 



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-159- 

TA3LE 14 

IIHA STATS OPPICE GOULAIOTS STATISTICS 
T'.venty-f ive Codes v;ith Greatest Itoa'ber 0£ La'bor Conplaints, 
October IS., 1C3;4 - May 27, 1935 



Total 



90 , 001 



Hanie of Code 

Total 

RcstaiUTiit Indii.stry 

Retail Pood & Grocery 

Hetsil Trode 

Construction Industry 

r.;otor Vehicle Hetail 

Hotel Industry 

Trucking Industry 

Baking Industry'- 

Motor Veh. Stg. 1 Pkg. 

Lumber & Tiraber Products 

Graphic Arts Industry 

Cleaning d- Dyeing Ind. 

i.iotion pict"are Industry 

Barber Shop Tra-de 

Boot ic. Shoe Industry 

Whse. Distrihuting Trade 

Whse. Food c; Grocery 

Retail Solio. T^.el 

Cotton Grxmcait Industry 

La.undry Industry 

Ice Industr3r 

Shoe Aehuilding Trade 

Fabricated Iletals 

Scra;9 Iron-lion Perrous Met. 

Furniture LIfg. 



Prepared by; Statistical Sc-ction, 
Field Division, iOA 
March 20, 19S6 



Adjuster 



9,930 



14 


664 


6 




13 


620 


7 


483 


10 


228 


4 


876 


6 


977 


2 


794 


6 


OGO 


3 


152 


4' 


321 


1 


534 


3 


557 


1 


421 


o 


3^i0 


a 


465 


3 


327 


1 


239 


o 


b09 




762 


2 


674 


1 


013 


2 


375 




861 


1" 


9i4 




725 


1 


620 




321 


1 


584 




583 


1 


317 




624 


1 


302 




533 


1 


275 




495 


1 


160 




546 


1 


0-^.1 




253 


1 


033 




423 




998 




356 




961 




410 




911 




380 




904 




353 



iolation 


Dropped 


34,593 


11 , 002 


5,073 


2,128 


4,432 


1,136 


4,302 


689 


2,951 


645 


2,153 


417 


1,771 


904 


1,412 


413 


1,208 


402 


1,201 


715 


1 , 445 


493 


1,058 


400 


905 


506 


888 


232 


555 


216 


770 


103 


475 


162 


571 


158 


•590 


97 


466 


127 


387 


347 


4-42 


123 


386 


225 


391 


92 


350 


106 


373 


96 



Pe:iding 



9839 



-160- 

■L\3LE 15 

L'^LZ C7 C05ZS APrT-O-.fZJ ??JOR TO CODZ 110.500. lA.OR PROVISIOIIS 
OP \.\p:iCr; HO STATE 01h'FIC3 REPORTS -\S HAVIIIG H.U\[V)LZ3 

(Code ilo. 600. AT>-3roved August 8, 1934) 
Air Valve 

Athletic Goods Mf^. (254) 
Baking Industry in Puerto Rico (?) 
Bulk Drinking Straw, \;rar3\ied Drinking Strar^, "Jrap-:)ed Tootlnjick, & 

Wrapped Hanicure Stick (331) 
Canvas Stitched Belt (4J.'?) 
Card Clothin^^ Industry (222) 
Clay Mpchinery (543) 
Cloth Reel Industry (289) 
Cold Storage Door (479) 
Collaosible Tube (345) 
Co-onter Tyce Ice CT-eaa freezer (418) 
Cylinder Kould e-. Dandy Rod (S58) 
Daily Newsriaper (238) 

Expanding & Specialty Paoer Products (369) 
Feldspar (20g) 
Flexible Insulation ( 409) 
Horseshoe & Allied Products (325) 
Imported Green Olive (491) 
Industrial Oil Burning Eouipment (493) 
L'ilk Filtering Materials, etc. (396) 
He^spater Printing Press (319) 
Kon-Ferrous & Steel Convector (27l) 
Oyster Shell C-mshers (452) 
Photograp-iic Mount (290) 
Plumbago Crucible (53) 
Processed or Refined Fish Oil (500) 
Railroad Special Track Enuipiaent (385) 
Sanit.ary iiilk Bottle Closure (371) 
Sanitary Napkin cS: Cleansing Tissue (200) 
Secondary Steel Products Warehousing (458) 
Shorter Door (435) 
StereotjHDe Dry liat (4J2) 
Tauioca (323) 

Water-oroofing, Dampproof ii-.g, etc. (240) 
welt I.;fg. (227) 
Wire Hod & Tube Die (250) 



9839 



-161- 
T A5L^ 1 6. 

FJIiBSR OF PP.ODUC'TIVS EI.1PL0YEES li: TRk STATE OFFICES 

Foil TIIE 4 WZEKS PSRIOB ElIBZD TEBIvJARY 16, 1935, 

T7EIGHT2D 3Y IlTDUSTfllAL CO^/EHAGE 



Offices 
He;P:ions 



Productive 
Area, Water IISA Industrial Prodxictivc Volunteer 
Land (sq.mi.) Coverage (Est.) ITFA Staff Staff 



TOZAL ALL OPFICES: 
7ater 
Land 



53,024 
2,973,774 



22,589,384 



545 



125 



EEGIOII 1, Total 


4,448 










61,975 


1,854,655 


44 


3.5 




3,145 








Maine 


29 , 895 
.310 


155,332 


3 





IT en Hanp shire 


9,031 
440 


100 , 505 


3 





Vermont 


9,124 

227 


60,875 


2 





Massa,cixUsetts 


8,039 
181 


983,532 


20 





P.hode Island 


1 , 067 
145 


155,710 


7 





Connecticut 


4,820 


383,701 


9 


3.5 




1,550 








EEGIOl-I 2, Total 


47,554 


2,953,564 


58 


108 




1,550 








Alopn^, :JT. Y. 


47,654 


2,963,564 


8 


10 


Buffalo, !'. Y. 






11 





'Eevr York, I.". Y. 






39 


108 



HSGIOII 3, Total 



9,856 
155,514 



4,405,321 



103 





710 










l!er,' Jersev 


7^514 




990,729 


11 





Philadclr)iiia, Po.. 


294 










FiiiladelT)hia, Pa. 


44., 832 




2,230,736 


26 





Pitts our gh. 


405 






22 





Delairare 


1,965 
2,386 




47,778 


5 





Maryland 


9,941 
10 




359,023 


11 





Dist. of Colv-viDia 


60 
2,365 




100,297 


4 





Virginia 


40,262 

3,586 




341,660 


13 





Horth Carolina 


48,740 


(Con 


355,098 
tinued) 


11 






9839 



-152- 
IA5L S 16 fCcnt'd ^ 



Offices 










Productive 


C7 


Area, Water 


liEA 


Industrial 


Productive 


Volunteer 


P.e^ions 


Land (sq.iai. ] 


Coverage (Tst.) 


imk Staff 


Staff 




9,493 










HZC-IO:^ 4, Total 


323,518 


1 


,831,121 


62 


r 




494 










Soutli Carolina 


30,495 
540 




180,719 


6 





Georgia 


58.725 

3,805 




539,758 


8 





Florida 


&^,861 
3S5 




252,119 


6 





Tennessse 


41,687 




505, 533 


11 







719 










Alabaaa 


51,279 

5C^5 




311,533 


12 





liississippi 


46,362 

3,097 




151,150 


8 





Louisiana 


45,439 




290,399 


11 


c 




1,365 










3ZC-I0I7 5, Total 


162,425 


3 


,202,969 


55 


3 




500 










'fichigari 


57,480 

3.00 


1 


,108,274 


16 





Ohio 


40,740 

14S 


1 


,455,219 


25 


3 


TTest Virginia 


24,022 
417 




318,524 


7 





Kentracii;- 


4..\181 




322,952 


7 







2,434 










HEC-ION 6, Total 


215,071 


3 


,474,749 


67 


3 




310 










TJisconsin 


55,256 
309 




521,466 


16 





Indiana, 


35,045 
622 




629,572 


8 





Illinois 


55,043 
693 


1 


,698,256 


27 





I'lisso-ari 


58,727 




625,455 


16 


3 




7,538 










HEGIOK 7, Total 


643,283 


1 


,482,504 


54 


5.5 




3,824 










Minnesota 


80,858 
561 




388,156 


11 


1 


IOT7a 


55,561 

654 




329,606 


8 





ITorth Dakrota 


73,183 
747 




53,761 


3 





South Dakota 


75,868 
712 




61,077 


4 





IT eh re ska 


76,808 




179,310 


8 


4.5 




(Cont 


inue 


d) 






9833 













Offices 

by 

Herior.s 



Kanses 

TTyoTTiing 

Colorado 



-162- 

TA3LE 16 (C ont'd) 

Productive 
Area, TJater iJEA Industrial Productive Vol-juiteer 
Land ( sq. mi. ) Co verag e (Zst.) ITRk staff Staff 

384 
81,774 266,773 9 

366 
97,548 35, CIS 4 

290 
1^3,658 167,793 7 



5EG-I0a 8 , ?otal 



5,082 
506,840 



1,299,136 



4A 



Arkansas 
Oklalioma, 
Dallas, Texas) 
Houston, Texas) 
New Mexico 



810 






52,525 


154,227 


5 


543 






69,414 


314,845 


10 


3,498 






262, o98 


772,088 


12 
14 



51 



.22,503 



47.973 










HEC-IOK 9, Total 



Montana 

Idaho 

Utah 

ITevada, 

Arii^cna 

Washj ngton 

Oregon 

Los :\zl-sj1^s, Calif. 
San ?^rauc.isco, " 



11 , 248 
853,395 



2,075,365 



69 



366 








146,131 


85,138 


3 


1 


534 








83,354 


59,745 


3 





2,806 








82,134 


78,318 


2 





869 








109,321 


20,987 


6 





146 








113,810 


74,666 


4 





2,291 








66,836 


347,272 


13 





1,092 








95,607 


198,373 


5 





2,645 








155,652 


1,212,365 


17 


1 






15 






DEPIKITIClTSi 



Industrial Coverai;e figures derived 'Hj Research and Plannin.g 
from Census of Occupations, 1930. Represents gainful workers 
in industries vrholl;' or partiall-'- su'bject to N.E.A. Codes. 
P. P. A. coverage also included. 

pHOL'UCIIl/'E STAFJ . tho;^e actuall;r enge,ged in complisnce activity, 
either field or office. 



9839 



^Ip4- ... 
State Office Series Tr-Me 17 



i^.H.A. STAC'z orncr co:jlaii:t statistics 
:i0HTi: or :z:c2I?t 

Total rfiv.foer of Cases imc.er rresic.ent's ?.oe:n_jlo-Tae:it 
A-reene-it, OctoDer I5, 1S33 - ys.y 27, 1535 ^/ 



i'onth Ho 

r.eceivcd "^otal Acgustec! . Violrtion Dropped rending 



5,9?8 


c 


.315 


3,3>'-3 


331 


9 


l:-,i6o 


1 


.^-3 


2,275 


192 


b 


1,013 




593 


5S5 


3^ 


1 


2,270 




S29 


1,212 


125 


U 


l,Ul2 




5U7 


7SS 


S7 


2 


030 




271 


Use 


65 


1 


'^^73 




175 


2G1 


3S 


1 



A-a:'u.st,is33-;:c.:- 27,1535 totri 12,3'':3 ^,3S5 -',':-30 so6 762 

1533 

Au^iist - Decerfier 
Prior to October I9 

Au^Tas t 

Septer-.lier 

October 

lTovey.iber 

Dece-nber 

153^' 
Janiiary - June I5 

J;:.nu.ar;' 
Febraary 
liarcii 
April 

June 1 - June I5 

Ju-.e lo - December 31 2,7lU 55S 1,^75 ?0S 73 

June 1^' - June 30 
July 
Auf^.st 
Septenber 
October 
Kovenber 
December 



712 


£31 


1,212 


20U 


4 05 




171 


277 


uu 


3 


1^-b 


117 


15s 


27 


UUi 


32q 


139 


lUs 


37 


u 


375 


156 


152 


25 


2 


'4q5 


153 


2S7 


Us 


11 


271 


55 


1U9 


23 


4 



310 


116 


157 


23 


U 


53^^ 


156 


250 


36 


S 


V-yZ 


l£l 


253 


Ui 


7 


Uli-b 


159 


2U1 


30 


12 


3oS 


lUi 


207 


27 


13 


275 


tU 


InS 


26 


7 


297 


101 


153 


19 


2U 



9£;39 



-165- 



Table 17 (contiiared) 



.onth 
r.eccived 



Total. 



i'JO 



Acjustec- Violation D;.'op"ed rent.ing 



1^35 

J-', rr.ai'7 1 - ■'rj'- 27 

Jr.nur.ry 

?iarcli 
April 

:ia-; 1 - .:ay 27 
l\"ot rpoorted 



oiS 

25U 
219 
182 
lb9 



30 


3SS 


5S 


213 


gb. 


132 


IS 


20 


Sb 


-•5 


17 


51 


U'S 


25 


13 


-n 


^ ." 


r r- 




r— — 


M-j> 


CO 


7 


0^ 


pk 


IS 


U 


i+S 


11 


u 


1, 


2 



1/ The offices '7ere.:of.:ici'all- active fron Octo'oer I9, 1- oj), to uay 27, 1S3'5. 



Prepare! ty: 
Statistical Section, 
Pi eld Division, i-T3A 
iiarch U, 1936 



SS3S 



-166- 

Appendix 1. 

HtmlDoldt 3r.nl; "iuildin;;, 
San 7r,-incisco, Crlif orni.-^,. 



Decenlier 20, 1934. 

Hr. H. n. iicICnight, 

Special Assistant GenerrI Counsel, 

Liti,^;p.tion Division, IIRA, 

Lenox Building, 

Washington, D. G. 

Depr ;"r. McKnif;ht: 

Your letter of Decen'ber 14 reaches me 
a fe^f hours before ly departure for Los Angeles. How- 
ever, as you asked for an early reply, I hope that the 
folloi^ing will te of some assistance to you: 

(l) Voluntary compliance is oro'bp.'blj'' not 
more than fifty oercent. That is to say, I doulit if 
more th-^Ji fifty •:iercent of the eir^loyers are o"bservinf^ 
all the 'orovisions of the codos. This xiav sound strrtlius, 
"but the fact remains that it has not yet hecoiie ^lO'^ular 
for the i^tfolic to re-:>ort corTol.-ints. Ue are encouraA'ed, 
ho'-ever, at the oro.^^iresa ve are nakin.-]; in that respect. 

(S) In our ooinio:, our state co nliance 
machinery is sufficient to talce care of the ordinary com- 
plaints. It requires, howe.er, constojit supervision and 
we are continually,'- freed with tne necessity of improving 
our technioue to meet changin, ; conditions. The oresent 
plan of decentralizing by T7ashi?igton should help us a 
great deal. 

(o) The cooioera.tion which we have received from 
the Li ti: nation Division of the ilEA in regard to court action 
has "been s-olendid. I crnnot too hi.;hly cormend the efforts 
of ;ir. Pinloiey and his assistants. The Federal District 
Attorney in Los Angeles has heloed us rirterially. In San 
Francisco -'e hrve not had that sane degree of cod^err'tion. 

(4) TThile we have received assistance from 
some of the Code Authorities, there a.ro many fron v/hoa we 
have received no assistajice whatever. As vre see it, the 
werlcnesses of the Code Authorities coiie from their great 
desire to collect assessnents, fron their desire to build 
up membership in tra.de rssocirtions, and fron their desire 



9839 



-167- 

to cn.Tvy ove" i;ito tho '-or]- of the 13A the feuds ;v.i(L 
oitteruesses of ot'iRr "errs. 

(fi) The hour .-••il Ir.hor -trovisiov.;- of other 
than the Rorvice co'.eg pro the or,'3iest to e iforce, The 
hour and Ir-.oor iro'^isic/ns iOj" ;^:h;eivs^pjr_'Kice coue-s- r-.rs' -difficult 
to Oiiforce r:id nost o" the irica-contrcl ••ro-'isions for r,ll 
co:'.jb rre lil:e"'ise 'lif-'ioult.-,'. It is ,cmr. o ■'i;\ion thrt -th.e:^ : • 
-Drojle.i of e-iforce lent r.dll bo irertly si^iilifie" if the 
lrn;;a''.;e of the code -nr.s chpnsod--3a a"-.;-to do r;??;/ nith 
Pioi^juity oJ' :ieri:iin^;. 

( o) Our enf orco'ieut orocedure^ ■•ould ut decidedly 
oru eff Liia.:.t .if. .3,a'.Vi. .qalc lutho'.-: .could he .devi;^-sd "o-y 
■'hicii _uOv.e.r.n le \t c.ontxrctr, .'".oul:, ^G: 'jre v,a;ited fron;.-,^'0.iT\.'5 to-;..\ 
code vioLr.t.Qr,y., . .Tiii'i T-Gul.d . U'o' T'.bly xe,qui.r'.i the .t.rp;\g.fQr ,. 
to the st-^.te. or .r/(?,;';lonr,l dir.e.at .ir of sone of the ai.i.tvtOrity 
now ve'st&o. dn ■ the G-ove:,-n:,ie:\t contrr.ct s&ctio.n.- :I* .T-oro-ld ■• • 
also f.r-'ci.i-it..\ta -ejif arcejient, ,if. .rAquested raliiTJ^-jG .a-l■d••i.■ntel'- 
.>retFtion;■i ,f ran .",'>. iihi..v,-tiXii ,nere hradled -•i'th- ;^grer-t r-or.on )t- 
ness, fip.d if the natior-.r.l code .■•uthor.itios -Tea-e re.gtrrdned 
fron :)ii'.tti:>" .out .rulLra ;a r.nd driteroiTetationn of itJieir O'/n. 



... .(.7-)- • ." j. .ar.e .C'ai?.-',iuaad .th.-^.t -w-o'lic o i.xion .'-ov.ld 
suo )ort a 'Stronij -eL-ifarce lanit ■jro^^ir'a;!,' n.s.3.v?,cl:: of enforce lent 
is the o'Vi - ^;ane.;.rd cr.iticrsn thr.t. is. directed ■•:3y;!ri;\S't 'the 
liSA. " . . /, . . , ■ 

.....; ..; .'Ilhei .C.-.lif QrnL'^ .ntr.tQ .v.e.QO.'r.A'-'i'' SiC^ A'irz hol'oed. 
us p. .'jreat deal, ■:)~rt-i.cttlr'.rl;,":.'"ir...;e tiae;:&t.r',te.'-.;G-.^Vrt. of: 
A'p-Jopls liooQAtly. .haXd .it vto ,aa ,Gonsti1iuti,an.fv),.. . JTq JiQi^.-.th-pt 
at the covjT,'! , -T-oss-ion .of .tha ,le dsIntiiXQ .r.. ;o.6r'. ■•F-ct .i^ill ■■.he 
■3PS3ed "hic'i ."'ilL -var'thor .stv.r:;. ;'uhQ:i .our • c'-f crcei'^ent 'iro^^ra:!*. 

. . ■ . . . -In .our .o-rji'iion,. .enf QrG<5^ ie^'i'ii veould hq ia- 
Troved if. f ■»..■.. ir.tte- of .jolic,.:, .i^i; .rerc .-decided tli.y'c in; 
rll inut^:■!.Ge•3 .Tl.-.shin-vton .-'vould .lQ'.:'J.fQi;':p,rd:^fco su^.'Ort the 
rctio^i-s .■^.:id -decisions of .the .ijicjld -offices.-. .•. 7o.. do -Ao-t -i-ier'n 
to infer -thTt .": ." :t:-.n cohscTiously-:aoes '©ther^/'i'se, hov- 
ever , .-thsve .niTO •inr.^t Ti^iss .vhere, r;fter."3ra5;oedin. ;- ■irp.cticr.lly 
to the noint-o'f set'tlf^.-ient, ■''?e r'S^irdvised :to hdld ut .-■ction 
on th.i-G, ••feh.Tt .read .-fchs .othe" ,:.int'.e:c .until .TT". shin ton c- n re- 
vietv the ■ffc'ts. "'Sh&e.o !e ".sos ■,tead to-jnr-.is.- liesfjeninj;. tli-e ' ■ 

res ye&t iij..=:-ii-ioh. ''*e:-rr-f! he^.d. ■ ■ . . ■ ■ ■ ■ • 

Ye 7' brul '■ /ovirs , 



' "^r 



ZjOP.i IV. . lensh"'-', 
oCP'le- h'lA.- Co^i ilinnce 
~'i:-:QCtGT, : 



)d:hL..^ .- ■ • ■ i 

58S9 



-168- 



APPEKDIX 2 



TRAES PRACTICE REGULAT IO NS IM imA CSDSS 
Tilth Approxima to Percentage of Codes Containing each 

I. Requirements 



Practices tending to effect mininnim price., 79 

Uniform methods of cost finding 72 

Open prices 59 

Specified disount and credit terms 43 

Specified standards for industry products or services... 38 

Specified transportation terms 27 

Standard forms or terms of contracts 22 

Specified forms or terms of, or conditions surrounding 

the making of, hids and quotations 18 

Classification of customers 17 

Specified forms of ar'bitration 13 

Limitation of machine and plant hours. 12 

Sp'RO-ifif^i terms for government purchases 9 

Control of capacity 8 

Charge for supplying of specified non-industry products 

or services 4 

Specified classifications or descriptions of industry 

products 3 

piling of sealed hids 2 

Specified production quotas. 2 

Charge for estimating 1 

Control of inventory 1 

Specified hours of business i 

Specified invoice forms i 

Compliance with codes of suppliers - 

Piling of individual standard forms for guarantees - 

Specified charge for and use of dies _ 

Specified conditions for and terms to be used in the 

making of appraisale.' - 

Specified manner of dispensing products directly to 

a customer's patient for the account of a customer _ 

Specified qualifications for bidding contractors „ 

Specified use of trade acceptances „ 

II. prohibitions 

Misrepresentative and deceptive advertising... 72 

Commercial Bribery 71 

Defamation of. competitors 65 

Interference with cantracts. 62 

9839 (°°^*'^) 



-159- 
AFPEiroiX 2 (Conttd ') . 

False marking or brandin',, 43 

False invoicin"; 48 

Unwarranted threats if li t i=^r.tlo:i.-. ....'.■ 29 

Espionage of competitors...' ■...'..... 24 

Imitation, of trade marks- or- desii^^ns '. '. 24 

Discrimination, in price, • ete;'. :.........,..,....... 22 

Substitution -. .:;.......'.... 20 

Sale of one. product beinfi; raad^^-in an^v ':7ay co-.itin,^ent 

upon tiie sale of another product. ;;:;... 19 

Style .piracy 13 

Lump ?um or combination prices, 15 

Enticenjent of emploj'-ees .' H 

Financi.ng .purchasers. .• .■ 11 

Conspir^^cy, aiding or abetting unfair trade practices.... ic 

Rgpudi,ation .oi". contracts 8 

Coercion. 5 

Blacklists., ' 4 

Trumping. ■ ■ ■..'... ..'.'. . . .'.' 4 

Specified types of- ad-v-erti-sitit?;. ,' . .' 2 

Deceptive prices'. ■..•.'.• 1 

Fales receipts. . . .• -.■.....■.'..... 1 

Fee splitt ing. ■.......■ ...■.'.',. i 

G-iving. of options. .....-.- ......'. , 1 

Sales with reptirchase- agreements 1 

Use of false meas-ures. :..;.........:.,...... 1 

Certification of industry products by' others th?.n the 

makers of the products — 

Dealing in- specified- types of 'proofei^ty "on 'a' speculative 

basi s. . . , . i . . . ; ; : - 

Fail-are to display information corid^rhing ' tlie ' 
insurance .provided -for the -property of customers 

while -in the hands of mem be i*s. ■.•.■..■.".■.".■. ,' - 

False classification of -industry pi'oducts - 

Furnishing of display cases at i'e'ss than specified 

charge. •. . . . . . .' _ 

G-uaranteexng of accounts. . . .■.', .'.•.■.....' _ 

Guaranteeing of re-tail turnover;'.'. . '.■...'.'.'.', _ 

Loaning or trans fer-r-ing of- licenses _ 

Maintenance of stocks in the hands of salesmen 

other than exclusive employees: '...;*. ■.'.■.'..• _ 

Purchase of stolen goods. . .'..;;;.;;;; _ 

Reversal of ch-^rges for phone, ietc _ 

Selling from samples- of -coTipetitors: ;...'.' _ 

Shipment . wi thout order .•.•..;;.. _ 

Solicitation' of - a -oustaTier ■ (by "aifiOnument 'retailer) 
V7i thin. 14. days after the -death 'Of a member of the 

customer ' s family.. ...•..••■..■.■.■..'...■.■ _ 

Split shipments at a price based on shipment of entire 

order at one time - 

Supplying goods to customers who engage in destructive 
practices at prices which will enable them to con- 
tinue such practices 

Unauthorized use of equipment of competitors 

(Cont'd) 



-170- 
APFEITDIX 2 (Cont'd) 

III. Other Groups of Regulations 



Rebates ' . . ; 73 

Consignment salas 43 

Price guarantees 4 25 

Premiums '. . . 22 

Special services 22 

(Quantity discounts......' 17 

Advertising allowances ^.. 15 

Allowing -return of goods 15 

Specified resal?. conditions 14 

Free deals ..».•. 13 

payment or acceptance of commissions 13 

Product guarantees 12 

Allowance or making of claims for adjustments i<< 

Sampl e 3 . .■ , IP 

Seconds. , 10 

Trade-in allowances 8 

Marking or tranding. . 7 

Sales with deferred delivery..... 7 

Direct selling ' 5 

Warehousing and storage 5 

Affiliate .sales 5 

Extending or exceeding contracts 5 

Installment sales. 5 

■ Retroactiye. settlements 4 

Specified types of packages and other containers 4. 

Demonstrations , 2 

Use or sale of second-hand goods 2 

Affiliate cost 2 

Installations of material sold o 

Leasing to customers g 

■ Letting, goods out on trial p 

Sales of reconditioned goods 2 

Sales to charitable institutions o 

Allowances for shortage, etc ^ 

Furnishing drawings . .• -^ 

Gifts to charitable institutions 2 

Inclusion, of taxes in announced prices -^ 

Loans to customers -, 

Purchasing from customers -. 

■Specified mediums of payment for industrj' products -1 

Bonuses and penalties.' _ 

Missionary.'- sales help to customers „ 

Payment of brokerage , __ 

Sales of non-industry products _ 

Sa.les to delinquent accounts _ 



9839 



-171- 
AFFEIJ)IX 2 (a) . 

rEOvisiONS cofc::::rn inq- false iLAxiici^g oa sHAi -TDiyo 

19. Wall Paper Kf °:. ; Unfair prnctice: The false marking 
or brandin;^ of products of the industry. ; (VII, f) 

36. Gasolind pump Mfg. : , The raarkin^^,. branding, or failure 
to mark or brand a product for the purpose or vjith the effect of mis- 
leading or deceivin;.^ purchasers or prospective purchasers, '7ith respect 
to the quantity, quality, size, grade, or substance of product purchased, 
(VII, a) 

29. Artificial Floorer & Feather; to member of the industry 
shall brand or mar:< or pack any gooes in an:/ manner ^■^hich is intended 
to or does deceive or mislead purchasers vrith respect to the brand, 
grade, quality, quantity, origin, size, substance, character, nature, 
finish, material, content or preparation of such goods, (VII, ^■) 

48. Silk Textile; l"o employer shall use advertising, whether 
printed, radio, or display, or of ar^r other kind, and/or labeling and/or 
selling methods, V7hich .tend to deceive or mislead the purchaser or con- 
sumer. (Amd. 1. division of Sroa,d Goods, Hat Bands, etc) 

7.0. Gas Cock; There shall, be no .., misbranding for the 
purpose of misleading purchasers or prospective purchasers. (X\^, 3). 

78. Nottingham Iiace Qurtj.in: Merchandise misbranding; Mis- 
representation as to the weight, qijantity, quality, size, or grade of 
any product sold, or offered for sale, is an unfair trade practice. 
(VIII, 11). 

80 Asbestos ; Unfair practice; To misbrand material or to 
imitate the trade marks, trade names, slogans, or advertising matter of 
a' competitor. (VII, 4d) , 

90. Funeral Supply; Unfair practice; To resort to indulge 
in practices which are prefudicial to the public interest such as mis- 
branding, misrepresentation in branding, labeling, selling and adverti- 
ing. (IX, r) 

94. Men' s G-arter; No member of the industry shall brand or 
mark or pack any goods in any manner which is intended to or does de- 
ceive or mislead purchasers with respect to the brand, grade, quality, 
quantity, origin, size, substance, character, natijre, finish, material 
content, or preparation of such goods. (And. 1, 1314), 

234. Macaroni; To sell or otherwise introduce into commerce 
any macaroni product that is misbranded. A macaroni product shall be 
deemed to be misbranded if it fail to conform to the following standards 
and requirements; (a) If it purports to be or is represented as a ma- 
caroni product for which a definition of identity has been prescribed by 
this code and fails to comply therewith. (b) If it purports to be or 
is represented as a macaroni product for which standards of quality have 

9839 



-172- 

been prescribed by this code and fails to state on the label, if so re- 
quired by the regulations prescribed or falls belo'^ the standard of 
quality in terms as such re^julations specify, or falls belo'^ the stan- 
dard stated on the label. (VII, 2). (For further label requirements, 
see Amendment 4). 

245. Corrugated & Solid Fibre Shipping Container; The certi- 
fication of corrugated and solid fiber boxes as required by the published 
schedules of the carriers, by others than the box maicers who actually 
made the oozes, deceives the carriers and the consuming public as to the 
name of the actual maker of the box, and is condemned as unfair competi- 
tion. The certification of corrugated and solid fiber boxes as complying 
fully Tvith the published rules of carriers, vrhan in fact such is not the 
case, misleads the buyer, deceives the consumer, and is condemned as un- 
fair competition. (Rule 4, 5, Art. X) . 

254. Athletic Goods Mfg.: ^o member of the industry shall 
mark or brand merchandise or the wrappings or packages thereof, for the 
purpose, or '^ith the intent, or having the effect of misleading or de- 
ceiving the purchaser or consumer in respect to the quality, size, 
':7eight, or grade of the articles so marked or branded, or use materials 
or workmanship different or inferior to that claimed, stated, or implied 
in any mark or brand, label, ^Trapping, package, or advertisement. 
(VII, 11). 

487. Importing ■ Trades ; ITo importer shall brand, mark or 
pack any goods in any manner "hich is intended to or does deceive or 
mislead purchasers ^ith respect to the brand, grade, quality, quantity, 
origin, size, substance, character, na,ture, finish, material content, 
or preparation of such goods;- nor shall any importer sell or offer for 
sale any imported merchandise labeled, marked, stamped or branded in any 
manner vrhich misleads jr tends to mislead the pijrchaser; nor shall any 
importer knc^ingly initiate, or sell or offer for sale any name, slogan, 
or any other mark of indentif ication of a product of domestic manufacture 
when such domestic marks,- names or slogans have been in actual use prior 
to their use in the case of imported goods, if such device has the capa- 
city to mislead a purchaser or prospective purchaser. (Vll, 1) 



9839 



-173- 



AP:'E";1DIX Z 



(B-ulletin #7, "ilpji-'j.r'l for the AdjastnGnt of Conplaints", 
is not here reproduced since it is av-ilablo in 

printed form thrc-Uf;h the G-overniuent Printing Office.) 



FIZLD LETTZH HO. 125 
JUllE 13th, 1934. 



To: state NPJi. Compliance Director 
From: Chief, Field Branch 



1, CGMPLAIIIT i.IAlfJAL ; For the guidance of Fiuld Officers 

in the handling of labor complaints under a'n )roved codes, and in order 
to insure a uniformit;- of procedtire in all offices, '.to have prepared 
a Manup-l for the Handling of Labor Com-il.aints. 

This Mcjiual calls for more decisive h?jidlin^2 of compla-ii^'ts and 
broader action in securing compliance , and '..dll aid the offices in a 
more effective proj^ram for compliance. 

Te are sending forward to :-ou a suiTicient supply of this llanual 
so that each officer engaged in the handling of complaints may have a 
copy. 

It is not desired tho.t this Mrnual hpve circulation outside of 
our own organization. 

2. HEVISZI) 3ULi:STIl' 7. .UP SUPPLSl EI^ TjjL LjEliOHAirDTJU 

have been prepared and will be sent to the Field Offices within the 
next few days. 



Jolin Svio'ie. 

Chief, Field Brajich, 

ComplirJice Division. 



9839 



-174- 
HA5DLI-"G OF COipLAICTS AS TO 

VI OLATIONS OF THE 

LABOR PBOVISILNS OFT^f COM 



Types of CcraiDlaints 

What Constitutes S-^tisf actory Adjust-nent of Complaints 

Payment of wages a,t less than minimum 
Working hoars in excess of ma::im''am 
Discharge of an employee for filing a complaint 
Failure to post Labor Provisions 
Exceeding the number of Lf~:S.rners 
Exceeding the number of Handicapped. 

Rating as Substandard 'workers for whom no certificates have been 
obtained 

Violation of Cnild Labor, Horaeworlc, Safety and other labor pro- 
visions 

Opera.ting in excess of prodaction nours 

Failure to keep prooer records -mie.re trie Code requires the keen- 
ing of SUCH records 

Saggestions as to Technique of Adjustment 

Office Comulaints 

Obtaining Complainant's Statement 

Wage and noar Complaints 

Dismissal Gomnlaints 
Personal contact with employers 

Outline of Information to b? sacured from the employer 
Attorneys representing employers 
Adjustment of Wage and Hoar complaints 
Collection o-f back wages for discharged emplo-'-ees 
Reinstatement of discharged employees 
Posting of labor provisions 
Evidence of compliance and adjustment 
PRA cases 
Prosecution of Code violations 

Case Records 

Suggested forms 

1. Office complaint 

2. Information on Hoars and ""ages 

3. Dismissal Information 

4. Employer Information on 7feges and Hoars 

5. Eecord of Interview 

fc. Statement of Compliance 
7. Payroll Form 



9839 



-175- 

Or^^^-'nizfltion of St-^ff 

St 'iff meetings 
S'oeci-5.1i?ing on Codes 
Adjuster's reports 

D"ily record forT 
Adjuster's Itineraries 

Form 

Tiie Use of St=^te Adjuutnent Bo'^Lrds 

I^TX' of cses to b-' i^-indl(-d 
Frocedare of State Adjustment Boarci 
Publicity on 'hearings 

Cooperation ■ itn Otaer Agencier: in Securin^^^ Compliance 

TIE HA^ID LI^IG OF CO! F LAIrTS 

VI0LATIL:'£ tT" LA50R ;^^'.UVISlL "S a T'K ClDES 



T yoes of Co' 'plaints . 

Under -11 tri« Codes tne folio- 'in^ conoitions conrtitute Code vi- 
ol=itionG: 

Payment of '7-:£:es at less taan tiie Code -inimam., 

T:'orking hours in excess of the Core maximum. 

Emplo^inent of Child L^.bor. 

Violations of Section 7 (a). 

(To be referred to Regional Labor Board.) 

Under £-ecutive Orders tne following conditions are made Code 
violations under all Codes: 

Payment of less tnan ^ode minimum to an excess percentage 

of Ifearners or handicapoed persons. 

Failure to post Labor Provisions. 

Discharge of an emplo"''ee for filing ^ comnl-^int ^Tith T'fRA. 

Undei special Codes tne follovang conditions also constitute vi- 
olations: 

Violation of nome "Tork Provisions. 

Violations of Safety Regulations. 

Loer-'tion of Dlant in excess of Productive ioars permitted. 

Fote: Vftiile orimarily ^ violation of Trade Practice, the on- 

eration of a plant m excess of permitted productive hours 

involves th-' workers and the Labor Compliance Officer will 

ordinarily make the adjustment. 

Failure to keep proner hoar and '^age records, 

S839 



-176- 
WHAT CLi'TSIITUTES SATISFACTOR Y A DJUSTrg'TT CF 

VIOLATIO;^l OF LA50H PVH^YlSILiSS OF T'-li CODES 



Pa yment of T^fes at Less Th^n Code " "i:iimurn. The eTnolovpr should he re- 
quired to "lake full restitution of Dack vr^x^es due, cilculatec' on the 
oasis of the correct wn£,'e s-oeci'f ie'^ in the Code, back to the date of the 
adoption of the "^ode. 

i.i'here th'^re is uuebtion as to tiie financial abilitv of the 
eiToloyer to rmke full restitution tne case- snould be referred to 
tae State Adjustment Board. 

In these cases the aim snould be to oht^'in as nearly as ijoss- 
ible the full amount due trie erriployee. It nay sometimes be necess- 
ary to comoromise on less tnan tne full amount ratner than create 
a situation ^'7herf=' the employee lay obt'^ln even less, or nothing. 
Horreyer, in such cases it is better to permit payment in install- 
ments rather than "oerrait a reduction in the total amount to be paid. 

Wliere records are incomr^lete or disputed a,nd the amount of 
back waffes fiue cannot oe calculated definitely the case should be 
referred to tue State Adjustment loarc. 

uorkin^ Hours in EAcess of tne Code i axim-Oiii . The employer snould be 
requ-ired to oay for overtime at a nigner rate than the rate -oaid for 
reigula.r working nours. If an overti if rate is soecified in the Code 
tnat rate wxll apply to overtime wtiicii is oprmitted by tne Code, i^'or 
all overtime waich is not oerraitted by tne Cod.e an .employer snould be 
required to pay at a rate in excess of the overtime rate for permitted 
overtime. 

where the payment of an excess rate for overtime involves 
und.ue hardship on" the emoloyer, or ?/here the nature of the vio- 
lation suggests an exception from tne above stand.ard of adjust- 
ment, the case '7ill be referred to tne State Adjustment Board. 
The decision of the Board 'e'ill depend tipon the provisions of the 
Code involved, whether the violations '-■•=re deliberate, and the 
degree of hardship that would be impo; ed upon the employer in 
requiring payment at a higher rate. 



LISCH'VF.G-? OF A.^1 EI'TLOYEh. F0^:FILI -Q- a C0'"^LAI'TT 7ITH ATRA. 



The employer should be persuaded to r^^instate the emplovee and an 

understanding should be effected '"nich •■ill insure continuance of the 
eraploj'-ee's job. 

If this lunder standing cannot be effected by the adjuster the 

case should be referr-'d promptly to the State Adjustment Board 
for adjustment, or for prosecution. 



98.39 



-177- 
FAIUrRE TC POST LAJ^CH rPOVISlO^TS 



The employer, of coarse, rill Oe i-eqairecl iiri'nec^i -lively to post tup 
labor orovisions. Thetuer prosecation faould be- recomr.ended for fail- 
are to post official copies of tae l?bor ■'^rovisicns o^ g Code, ^*rhen tiiey 
nave bef=n issued for any industry, will de-o.^rid u.jon the conditions in the 
case. If an employ. t is complying vitli t;ie Codr the failure to post the 
Labor Provisions xay be considered as ^onintenticml. If the employer is 
not complying vith all Code requiref.ents the failure tc oost Labor Pro- 
visions may be evidence of diiiber-^.te intent not to coroly. 



EXGEEDIXCr THi- HII]:3£.^ OP I:£APR£-"S PEP.l'ITTED UiOET^ T'^^ CODE 



The employer shoald be required to make restitution of back wages 
to the excess number of learners, "^no snould- be c=iid the difference be- 
tween the amount actually oaid and the ainc"a2it they shoald have been paid 
at the minimum rate for experienced workers. Seniority in length of ex- 
perience can usually be t^ken as a. t;aide in ;',etermining -vhich individuals 
sha]-l receive back Day. 



SXCEEDIFG WK Fin.iBER OF HAiTriCAPPFD ■.VORJ'TE'.RS PFT^:'ITT.""D ■■^JNT)'^^ '^'-•E CODE 



The employer shoul'd be required to make restitution of wiges to the 
excess number of substandard worker, who should.be paid the difference 
between the amount actually loaid and the amount they shoald have been 
paid at the miniraom rate for standard workers. The actual earning cap- 
acity of the substandard workers may be used as a gaide to determine 
which individuals shall receive back pay. Enough of those who have been 
earning -nearest the Code rainira'oip. shoald be conpensated to bring down to 
the proper figure the total n-omber receiving less than the minimum. 



RATI1:G as STJ3STAI\!DARD './0RKE3S 



FOB VHOK Nu CERTIFICATES lAVE .:£:r 0?TAr'J£D 



An employer 'vho has emnloyed. a worker as hancicaooed, at w^ges less 
than the minimam, subsequent to_ £--ecutive Order dated Feb. 17, 1934, with- 
out obtaining a certificate siiould be reauired to m,a!<:e ri^stitution at the 
full minimum rate for standard workers specified in the Code, unless he 
can establish , the fact that the violation wp.s unintentional, and unless a 
certificate is later obtained indicating tiiat the wages riaid '■^ere coirmen- 
surate with the handicapjjed person's earning capacity. 



9839 



-176- 

VIOLATION OF CHILD LABOR. HOMEY/QRK. S^gTSTY A..D OTHBR IaBQR PROVISIONS 

No hard and fact rules can bs laid dov;/n for cases of this kind, First 
violations that are net deliberate, should usually carry a re-orimand and 
admonition that anv subsequent violations will be oresuaed to be deliber- 
ate and the burden of riroving otherwise ■'"ill rest entirely on the emvlojer. 

OFEHaTIITG in 5XG5SS 01' PPX'DUGTIVB HOIHS 

',hile technically a trade or^^ctice violation, o-oerating in excess 
of i^roductive hours, is closely allieC. to a labor violation, an adjust- 
ment eaui table to the worlcers, e-s well as to the industryas a whole, 
should be nade. The industrv as a whole cnn best be compensated by requir- 
ing the offender to reduce his -oroductive hours in a. future period by the 
nunber of excess hours he has o^ierated in the Dast. If all the eraxjlovees 
worked the excess houiS, this is simple; but if only a part of the em- 
ployees, or if an extra, shift, worked the excess hours com-oli cat ions may 
arise due to the fact that employees vrho. did. not benefit by being paid 
for the excess hours will be required to work a reducdd number of hours 
at the ti;ae the redviction in productive h^-urs is made, a Dart of this 
difficulty may someti;aes be solved by reauiring that such employees be 
T3aid for the time lost due to the enforced reduction of productive hours. 
The amount paid to e:nDloyees for the time thay do not v/ork will deioend 
upon the orofits accruing to the eijployer bv reason of the excess pro-, 
ductive hour;;, and ?/hether all or only a vsrt of his employees benefited 
by the excess time. 

F.iILlE-3 TO KSSP PROP E?. ?.BC03I)S. 

VfHBRE T HE CODS REQUIRES THB I-SIjPIIjG- 0? SUCH R-aCORCS 

'iThere the code requires that certain records be '-:ept and the employ- 
er has failed to keet) such records, the ourdeji of disproving the allegations 
of a complaint for wage or hour violation shuuld be placed upon the em- 
ployer. The failijxe to keep -Droper records creates a particularly diffi- 
cult problem in the case of piece workers, nnd the burden of establishing 
that a -oiece worker did not vrork the full pla.nt hours should be placed upon 
the e'-ioloyer in s\ich a case. 

In other words, a piece wor^:er should be -oaid the mininum rate for 
the Tjlant hours during which he was on the premises and available for 
work, unless the eMployer af lirvartively establishes that the piece worker 
v/as not required to be on the premises during all of these hours, and thali 
the riiece v?orker had prior notice so that he was in fact free and in a 
position to take advantage of the o-ooortunitv to leave the -oremises. ITo 
deductions from workin-; ti;ae should O" -.ermitted for oeriods of time so 
brief that the^'oiece worker coula not leave the oremises. 

jhere -oro-Der records have not been ke-ot the follov.'ing quiestions must 
be considered; dees such failiu-e constitute a violation of the code; was 
such failure deliberate; and oarticul-j.rly, was such failure intended to 
conceal violations of substantive labor -orovisions. 



9839 



-170- 

SUG-aESTIOMS. AS TO TECHNIQ.IB OIi^ aDJUSTI»3:MT 

OFIi'ICB COI.IP L A.I:TTS 

Complaints laay be filed Dy -n.-'iabers of the Com-Dliance Office on 
the basis of inf orLia.tion indic-tiag Code violations. Office coniolaints, 
when approved for investigri.ticn by the Lfbor Gom-oliance Officer will 
be docketed and followed uid in the sane manner as other complaints. 

Office com-nlaints mp,y be filed for t:^,'rjes of cases such as the 
following: 

V^hen an era-oloyee reoorts conditions which if substantiated would 
constitute a Code violation, but refuses to si:^n a coirplaint for fear 
of discharge. 

Where a complaint -is rejected as deficient out the office considers 
that the situation should bo investigated. 

Where an individiicxl complaint has been suDstantiated and the ad- 
juster considers thrt violations orobablj'- exist in other establish- 
ments under the saie Taanageraent. 

.Vher- reprea,ted r-amors exist as to violations in an establishment, 
industry or locality. , 

■/here an employer, seeking inf or:iatio:i, indicates that he is not 
complying with the Code. 

Office complaints will be entered on the suggested Form. 

03 TAIII I'JG C Ot.lPI^IdMT ' S G TATELffilTO 

WAGE AtlD HOUR COiviPLAIi^iTS . Iiost comolaints relat-; to violations 
of wage or hour -provisions of the Codes and, if subst':ntipted, constitute 
claims for restitution of back v:a.ges. These cases can be handled more 
definitely if at the tine of filing complaint, the complainant f-urnishes 
snecific infor;nation as to t"^pe of work perf ori.ied, oeri-od of employment, 
hours workea and wages received. The suggested form IKEOHMATION OT' HOUHS 
AND WAGES, provides for information n'?cessary for computing the comolain- 
ant's claim for back wages and for checking wage and hour conditions 
affecting other enplovees in the establishment. 

If the complainpint comes in oerson to the office to file complaint 
he should be assisted in filling out this form, which will be attached 
to the coranlaint. If a W.age or Ko"ai' complaint is received by mail, 
which does not contain the necessf.ry information, the blank can be mailed 
to the complainant for the additional" information, along with the usual 
acknowledrTQent of receirjt of the complaint. 

DISLISSAL COi'.iPL«.IiITS. Complaint that an employee v.'as discharged 
for filin-^ a complaint with "Qa, or for sixsoicion of having filed such 
a complaint, should contain information as to the length cf ennoloyment 
"orevious to dischrrge, date of filing original co;;rolaint, date of dis- 
missal, and circumstanc's of dismissal. 'The suggested form, DISMISSAL 
SUlvILiAElY, should be filled out and attached to the complaint. 

9839 



-l&O- 



PEESONAL CONTACT V^'ITH EMPLOYEES. In actual practice most adjust- 
ments of comiDlaintr- are effected through personal contact v^fith emDloyers, 
either at the CoToliance Office or in their o*Jn establishments. Complaints 
against esta~blishmonts within reasonable distance of the Compliance Office 
will be handled direct from the officf^. More distant territory rrill be 
covered either by field adjusters stationed in other cities, vrhere the 
volume of activity 7/ej*rants, or bv adjusters making field trips. 

Correspondence with an employer in connection with a comiDlaint is 
ordinarily only preliminary to a personal conference. Particularly in 
small establishments it has been found that the receipt of a letter from 
the Comioliance Office notifying the employer that a complaint as to wages 
or hours has been filed against him, has frequently resulted in unfortun- 
ate consequences. Employees have been questioned and the source of com- 
plaint discovered. An inharmonious situation has been created which ul- 
timately results to the disadvantage, if not in the dismissal, of the com- 
plainant. 

To avoid this situation a number of the offices have found it advis- 
able either to send a field adjuster to call on the employer without pre- 
liminary correspondence, or to make the first letter ot the employer 
merely a brief invitation to call at the Compliance Office. In the result- 
ing interview hours of work and scale of wages are discussed and the situ- 
ation can be cleared or adjusted frankly and without resentment, since the 
adjuster has the op-oortunity to seek the employer's cooperation before he 
has built up an attitude of resentment and defensiveness. 

The Com-pliance Officer is under nc obligation to establish the fact 
that a complaint has been filed. For the protection of the complainant 
it is advisable in nany instances not to inform the employer that a 
specific complaint has been filed r gainst him. It is desirable also never 
to allow discussion of the source of complaint but to concentrate on a 
discussion of the facts as to Code requirements and the conditions in 
the employer's establishment. 

The einplover cm be told that experience has disclosed that code vio- 
lations hpvQ been committed by many employers through inadvertence or mis- 
understanding of code provisions. In order to prevent inadvertent vio- 
lations from occurring, the office is making an effort to insure that em- 
ployers know both the provisions of their codes and their responsibilities 
under their codes. The employer ca.n be asked if he understands his code, 
if he has posted the Is-tor provisions of his code, if he maintains a sys- 
tematic record of the hours ajid wages of his employees. In conducting the 
interview, it should be assiJimed that the a-nployer is complying until prov- 
en otherwise. Under this assumption it is entirely proper for the Compli- 
ance Office to ask the er.tployer for a certified copy of his hours and 
wage record, or other evidence that he is complying. 

If the facts w^irrant the statement, the employer can be told that 
there are frequent rumors of violations in the enplover's industry, that 
such rumors are harmful to business and that the office is accordingly 
undertaking an independent investigation in the interest of employers in 
the industry. The enployer can also be told that now after several months' 
operation under approved codes, the office is making a survey to secure 
affirmative evidence of compliance. • 



QR^^q 



-131- 



OUTLIME OF IKFOR;.iATION TO BE S EC URED FBOM HVIPLOYER 

In offico interviews the use of the sug.a;ested form, Emiolover Inter- 
view on Wv-iss and Hours will be found helpful in securin-; desired inform- 
ation find in keeping the enoloyer from digressing into irrolevant dis- 
cussions, w'aere necessary he may be reminded courteously that he is wander- 
inf: avray from the outline of infor:Tiat ion needed to clear the situation. 
Also, a record of the salient points in the statement of the employer should 
be "lade. The notations to be mace on this Outline are brief and the definite 
information thus secured will be found basic to establish the fact of com- 
pliance or to adjust the complaint. In certpin industries additional items 
may "be needed and outlines for those special industries nay be developed 
as found desirable. 

In all interviews at the establisiurient the adjuster should of course 
seciore the information called for on the Adjuster's Report Form (10-2137') 

ATTORIJEYS REFRSSEi'T gia S.'.PLOYTiSlS 

Most of the field of*'ices h ve found it d.esirable to discourage the 
■oracticc of having attorneys represent e .plovers in cases where the em- 
ployer is chp.rged with Code viola.t±on. The disadvantages of dealing with 
attorneys are they many times have no first-hand knowledge of the fa.cts, 
or they wish to debate questions of law, cr they otherwise imx)ede the ascer- 
tainment of the facts and securing of adjustment in their desire to protect 
the "legal rights" of their clients. 

Several of the field offices have practically eliminated attorneys 
by eiophasizing the fact that they desire to discuss cases on the basis of 
facts, by refusing to discuss constitutional points, and b^r suggesting 
that an emiolover who is not violating will not employ an attorney to raise 
legal issues. 

ADJUSaiEl^TT OF 7fAG-S AICT) EOUR COIffLAIKTS 

If it apnears that the emDloyer is accurately informed as to Code 
provisions governing conditions in his establishment and his statement 
as to the scale of hours and w; ges in his establishment conforms to Code 
standards he can be reauested to' file a copy of his c'tLrrent payroll as 
evidence of compliance. If this payroll indicates no violations, and if 
the complainant has no informal. ion to orove that the oayroll is inaccurate, 
the case may be closed as "no violation." 

If in the interview the employer indic-.tes th; t he is not accurately 
informed as to Code provisions or as to wages and hours prevailing in his 
establishment, or if he admits non-compliance, or if the payroll which he 
files indicates violrtions, it will be necessary to have his payroll checked 
back to the adoption of the Code, and a proper accounting made as to all 
back wages due. The State Director will use his judgment as to whether 
this computing and payment of back wages should be supervised by the Com- 
pliance Officer. In flagrant cases it mav be necessary to have the wage 
restitution computed by a certified public acco^xitant, at the expense of 
the employer. 



9839 



-182- 



COLLEGTIOi-I OF 3aCK u'AGES FOR DIGCHARGSP ELIPLOYEES 

A large portion of the cases in every office relate to collection 
of back \7ages for discharged e:.i"Dloyees. In such cases it is frequently 
difficult to establish the facts, oarticularly as to hours and length 
of time worked by the conplinaiit, since the records are incomplete and 
the s tatements of employer and employee differ widely. 

The. most expetitions manner of handling cases involving a wide dis- 
crepancy in statements as to the facts is to have a hearing before the 
State Adjustment Board, rmd have the Board make a judgment. In these 
hearings, the Board can frequently, raaJice its judgment as to the facts most 
satisfactorily by hearing both employer and employee together. 

It should be clearlv understood that any civil rights an employee 
has as regards payment of back wages are not prejudiced by the State 
Adjustment's approval of less than 100^ restitution. 

E5IHSTATEl.iEMT OF BISC'iARGED EMPLOYEES 

Under the snecial order of the President dated May 15, the dismissal 
or demotion of an employee for filing a complaint is made a violation of 
the Code and subject to penalty. The..possibility of bringing suit will 
aid materially in flagrant cases. 

In numerous cases the employer claims that discharge was for in- 
efficiency or other justifiable cause said, the facts cannot be determin- 
ed with certainty. The State Adjustment Board, as a body representing 
industry and labor, ca:i usually handle these cases m.ore effectively than 
can an individual adjuster. The judgment of the Board as to the motive 
for the discharge will carry more weight with the employer, and the Board 
can more effectively ask the cooperation of the employer in establishing 
harmonious conditiois which will make reinsta^tement more than temporary. 
In some cases where it seems impossible to reinstate the employee on a 
harmonious basis the employer will cooioerate inassisting the employee 
to secure other work by givinp; recommendations, or otherwise. 

Decision by the Sta.te Adjustment Board will enable ca.ses to be closed 
which otherwise are burdening the active file. It is suggested that a 
summary and analysis be made of all- cases of discharged employees and the 
Board b.; asked to give special consideration to the subject. In prepar- 
ing a summary. Dismissal Summary forms should be used. 

POST IMG 0? LABOa FROVISIONS OF THE CODES 

Definite knov/leLige of the 1 bor provisions cf the Codes is fundament- 
al to observance and the posting of the labor provisions is a practical 
means to secure coraoliance with Code regulations. Employees knew what 
hours they are expected to work, and the minimum wage they are to receive, 
and the fact that the matter is \anderstood tends strongly to prevent vio- 
lations. 

Posting of labor provisions should be notea in connection v/ith all 
complaints and investigations. Failure to post is not only a violation 



-185- 

in itself but also an indication of looseness of operation which may read- 
ily iead to violation of -nrovisions. 

EVIDENCE OF CO!vI ?IJ.M:CE A ^ID ADJUS^IEMT 

Some of the offices have been closing cases on receipt of a general 
statement from the employer to the effect that he is complying with the 
Code. In some instances fiirther investigation has revealed the fact that 
violations existed at the time the employer made the statement and the em- 
ployer then pleaded ignorance of Code provisions or if condition- in his 
own plant. Even when the sta.tement has been in the form of an affidavit 
this has happened. 

If the complaint sets forth a condition that constitutes a violation 
it is best to examine the original records, or secure a certified copy of 
the original records, or at least secure a written Statement of Compliance, 
covering the points ^numerated on the suggested form - 

In all cases where a violr:ticn has been foiuid in addition to adjust- 
ment assiorance should also be given by the emoloyer that proper ste-os have 
been taken to prevent violations in the future. This assurance should cover 
the points enumerated on the form for Statement of Compliance. The State 
Director will use his judgment in asking that this statement be sworn. 

No case v/here a violation ha,s been found shoula be filed as adjusted 
unless the record includes satisfactory evidence that all of the terms of 
a settlement ha.ve been fully complied with. Thus, if the settlement includes 
payment of back wages in installments the case will not be considered ad- 
justed until proper evidence has been submitted that the final installment 
has been paid, or unless sufficient security has been furnished to insure 
full payment . 

HAlg)LIH& OF F5a CASES 

With the retirement of the loca.1 Comx.iliance Bosrds the responsibility 
for handling cases under the PEA devolves upon the State Compliance Offices. 

Coranlianffcs of violation of PEA will be entered upon regular comi^laint 
forms and will be handled in the same manner as Code complaints, except that 
they will not bo docketed. 

Violations of PRA are subject ot the penalty of the removal of the 
Blue Eagle by the IJaticnal Compliance Division, but may not be referred >y 
State Director, under Adrninistra-tive Order ilo. X-14, for prosecution to 
the United States \ttorney. 



9839 



-184- 
FROSECUTIOU OF CODE VIOLATIONS 

All cases of repeated violo,tions, '"'hich seem to indicate that 
the em-j)loyer does not intend to comyil" nith the Code to which he is 
subject, should ".Te referred to the State Adjustment Board, the Compli- 
ance Division at Uashington, or the appropriate U. S. District 
Attorney, -.-hichever of these a-jencies the Strte Diractor deems 
proper under the circumstajices. 

In making adjurtmentr, of complaints of Code violations it 
should always be borne in mind that such adjustments are made by 
NRA so that the emnloyer ma;'." continue as a member in good standing in 
his industry, be privileged to display NRA insignia; use NBA LABELS in 
appro-oriate cases; and be qupJ-ified to bid on government contracts. 
It shovild be distinctlj- understood in all cases that such adjustments 
do not foreclose the possibility of action by the lav enforcement 
agencies of the covermnent. 

Adjustment of a comj-.laint by an employer rill naturally be 
takc-i into considerstion by NEA in determining whethsr prosecution 
vdll be resorted to, but an adjtxstr^ent should not be looked upon as 
an agree- lent by NRA not to refer the case for prosecution, and em- 
ployers should be informed of this fact. This is particularly tine 
in the case of a deliberate violo-tion, and more particularly rhen 
the emplo;-er has attempted to conceal tliC violation. Repeated vio- 
lations should be presumed to have been deliberate. 

CASS RECO?J)S 

The ca.se record of a cora--ilaint should include the necessary 
papers covering the following: 

It The facts in the case 

2, The details of the adjustment 

, 5, The evidence that the terms of adjustment have been com- 
pletely carried out. 

The use of certrin forms insures a systematic handling of 
cases end furnished the necessary record at a minimum expenditure of 
time caid effort. The following series of records have been developed 
from the errperience of the field offices. Each case record should 
include the following: 

1, Complaint, printed form or Office Complaint fon.i 

2, race sheet 

3, Letters and carbons of letters exchanged 

4, Record of interviews aad telephone conversations 
5« Employer's statement of compliance 

Wage rjad Hour complaints should also include: 

1, Information on Hours and r/ages (from complainant) 

2, Employer inte view on Hours and !7ages, or Adjuster's 
Report. 

9839 



-165- 

3. P-iyroll 

4, Receipt or other evidence of peymentr 

Cases of Disi-nissj.-.! for ITM corrolaint should include: ' 

1, Dismissal SumTtiary 

Tlac Offices have lieen suoplied rith the follo\7ing forms: 

Conplaint 

Adjuster's Heport 

Pace Sheets 

Specimen copies of additional c?se record forms c?.re ^iven on 
the iollov:ing pages. These can be mimeographed by offices 'tiich ha.ve 
not already developed corresponding forms. 

Office Comrjlaint 

Information en Eours and ^ages. 

Dismissal Summ.ary 

Employer IntervicT on ''?iges ma Hours 

Record of Inte^vie^"' 

Statement of Compliance 

Payroll Form 

NATIOITAL RECOVERY AK.IIiIIST'^TIGU 
Office Co::rolaint 
of Violation of Code of Jair Competition for the 

Trade/ Industry. 

Date 



Est abl i shment_ 
Address 



IJaturc of 3uEineEs_ 
Code 



•Staote;ient .of tha in.dicatio.ng of. .Co.de violation: 



Adjust e J 
Approved for investigation — 



L. C. 0. 
9839 



IH^O B^j.IIKI ON HCUILS JUS IIAGSS 
(Por Conridertirl Use of Corapliance Office Only] 

Date 



E s t abl i shr.ient _ 
Ac.r.ress 



Business 



Loes emplover disT)la:/ Blue Ee.3le?_ 
Eri"o 1 o ■; ■ e e ' s n an e 



i.:".c.re !3 c Tel ephone_ 

T:,-De ox' -orV loerfomed? 



Date eu-;,loyed Still enMlo:-ed7_ 

If no longer einplo--ed, did er.olorpee Guit?_ Di-;charged? 

Da,te of ceasing eintilo-- r.ent ^ 

Length of tine ern ilo;red „'"'"s. tnoj,. j.ks. 

Hours rorked by emoloyee n^-e'.zl;/ 



Ho'-; injrjiy veeks have 70U '"'orI.;ed there hours ?_ 
TTages received '^eekiy 



Hoij many v/eeks have 70U received thir rate of pa;'?_ 



Do Wr/jB and Hour violations p.'otjI-- to other 'Torkers in the estnblishi3ent?_ 
If so, to -niat groups? ^ 



Con^Tlainant' s sif^nature 
(To he filled out o,y Corroliance Office) 
Code I^ffsctive date 



'.ourc -icrnitted • 'ee' Ij 

Excess hours ^'orh.ed '-eekl.y 

ITumjer of '"eeks excess hours ^"0rk3d_ 
T7a.;^os 

Cor.e ninirTcm 



Difference betr-een mininum and v"as'?e received_ 
"J-Qi-iber of v'teks '-orked ut lest; than raininu-n 



BaJoncc due connlainant Intervie-.7er_ 

983S 



-187- 

E I a.: I S SAL STj..;iA?.Y 

Case llo, Est.abliGhnient_ 

Code 



Complfanpnt: 



Occvnation 



Length of emplojinent previovis to d.ischar;7;e_ 

Date of filing complaint 

Date of dismissal 



Emplo^-ee' s statenent as to dis!:isErl_ 



(To te filled out ty Cohipliance Oifice) 
v/ere charges of comnla.int substantiated? 



ITo t e : Under Executive Orosr the disiniss-"a,l of complainant is a vio- 
lation of thi Code, regai'dless .of verification of charges. 

Emplo'/er's e>-;olanr.tion cs, to disynissal 



Adjuster's 02')inion as to this explajiation_ 



Has complainant secared other i.-ork since dis'nisGa.l?_ 
IIOTES OR EEC0}£3:KDATI0II: L.C.O. 



9839 



-1-88- 

SLiPLOYIR Il'T"iiVi::7f OS \!kG'£.S Ai'D HOURS 



E '3 1 ao 1 i slim en t 



Person Intervieved ?osition_ 

Coc.e (s) Aiplicable 



Is en;-)loyer fariiliar '"ith Goie liotirs cOid •.Tr,;.sf--?_ 
Is general scale of '"sz-es at Code rainira-.? 



Is general scale of '^ajes atove Code rQlni:'ir:?_ 



If there are er:ce'itions fvo',! tlij Code, esr ,'lo-"er' s explanation. 



H0U:3 ; 

Is genero.l scr.le of hoars at Code L:r:-.i:a-ar: 



Is i'eneral scale of houx"? less thpn Code ■iPizii.i'uai? 



If there p.re exce^itions to Code ina'cintt" : , emolo^er's explpjiation_ 



Tlhat s;-stei:i of ti'-ne recordin'^? 



!7ho is res-oonsihle for seeing that no viola'';ions occur? 



Payroll req^Liested for rjeriod to be filed r'ith 

Conylicuace Officer Dexcre ' 

Renarhs 



Intervie'-'er 



)839 



-139- 
EECOiffi OF IFT::nVIE7 



Dnt e : 

If relative to a case give identification: 

Personal call_ 
Docket IIo. Tole;ihone C8ll_ 

CoLvolainant 

Em^i lover 



PERSOn INTERVIETJED: 



Connection r;ith the crse: 



Statenent; 



Interview'- tal.eii br 



9839 



-190- 

S~ATIMI3T? OJ COIZ?LIJU"CS 

liiis stateEent ir- to "be written on Est?"blishi:ent letterhead 
L-r-d addressed to the State CoKplirnce Director. 

ihir estafiisliinent is engr^sd in the 



business, '-hich is governed c;- the ^Code. 

I f-all7 understand the provisions of the cbove Code, 

The '.7a,je and riour provisions of the Code have oeen posted in a 
place -rrhere rll euj-^lo-ees mp-r have access to the~. 

Ai: a.dequate s^steTn of ^-a;e and hour recorde is in operation, 
covering all en-lo'-ees. 

Paj-rolls have been checked b'lci: to the d?."e of adoption of the 

Code, , aiid all pait violations have been corrected. 

(dcte) 
i have instracted ^j.! subore-ina.T;es in charge of emr)l03Tient con- 
ditions to comol:" T'ith sill Code p-ovisions; and I rill he personall" re- 
s'oonsihle for Code con-olience in the future. 



Signc tui-e 



Position 



qp.'^q 



-ISl- 
PAYROLL TOIL. 

Docket llo. 



Estalilishnent Addreiss 



Indus tr-,- 



Ps^Toll for veek ending_ 



Ser ' Code Code Difference 

i.; Total Rate Total I'.r'x.. :.an. To. between 

or TT^cl-r of TTlvl^ "Ji'-l:/. TJage Hours liin. -2. 

iMPjne ]? Classification Eours Pay Earnings Hours Hate O.T. Amt.Paid 



In the nia/i-g-in cneck Learners "L" , and rlandicapped workers "H" 
Atove jar'roll checked by 



5839 



-192- 

Organization of Afeustinent Staff 

STAFF liEETIlTGS 

Regular meetings of the adjustment staff provide a means of pooling 
experience, develorjing effective practices, and keeping the staff atreast 
of ne'7 developments. Meetings should usually he held once a week. To 
secure uninterrupted attention staff conferences Fill have to he held 
outside of regular working hours. The Later Com-oliance Officer shorid 
organize the staff conference so that discussion can he made most -orofit- 
ahle. Discussion of adjusted ceses hy a skilled and experienced adjuster 
offers a practical means for familiarizing the less skillful adjusters 
with successful methods of adjustment, and group discussion of a diffi- 
cult pending case often develops suggestions for handling the case. 

SPECIALIZING ON CODES 

In offices employing a nwaber of adjusters it i7ill usu.ally he foun.d 
effective to have some at least of the adjusters specialize on certain 
codes. Selection should he made on the tasis of previous exoerience or 
special fitness. 

By this concentration of attention an adjuster r/ill gain familiarity 
with the special practices, methods of operation, seasonal variations 
and general emplojinent conditions in an industry. He will become person- 
ally a.couainted with officials in unions and trade associations affecting 
the industry-, and will gain other sources of information, 

ADJUSTER'S DAILY RECORD 

In the organization of adjustment work the Lahor Compliance Officer 
will he assisted by having a daily record of the work of each adjuster, 
whether in the office or in the field. For this purpose the use of the 
accompanying form is suggested, and notations on this form can he made 
hy the adjuster with little expenditure of time. 

These summaries will indicate to the Lahor Compliance Officer how 
he can help the individual adjusters to more effective use of time. 



5839 



-ISS- 



adjuste:i's daily hecoki) 



D^-te 



(^•ases .. Letter to : 


: Office : 


Teleohon^': 


:Field In- 


: Case 


Other 


Handled . 




: Interview ; 


Conversa-: 


:terview 


Closed: 


: Ac- 


(List docketed 




• • 

• • 


tion : 






: tion 


cases by no. : 




• • 










PEA. cases "by :Cornplain~ 


.Res-oon-: 


• • 










resnondent.) rant 


dent : 


: C R : 


C R : 


: C R 







h 


















• • 




; 






























































:■ . : 


























) 


































































Approxiinr:,t( 


3 time siiei 


it on tpki 
or PRA' ca 


ng conr)laint: 
ses 1 


' or ^ 
lOurs. 


"ork 


ther_ 1 


:.han h 


andlin.^ 


docketed 



Adjuster 



9S39 



-.194- 



ADJUS TTJl'S IHT II-IEB A5IES 

To save time and travel e;qoense field tri-os of adjusters should te 
planned s;^steraatically. For scattered complaints a, well map mounted on 
"beaver toard uill be found helpful, and colored pins may "be used to mark 
localities T-^iere a field visit is required. 

TThen an o.d.justor leaves on a field trij the office should have a 
record of the cases he is to work on, the city Fhere he vrill "be working 
each dry fnd a specific address where he may "be rea.ched each night. If 
developments in the field make necessary changes in the adjuster's itin>- 
erary after he has started on his trip he should inform the office of the 
change s» . 

Adjur.ters stationed in the field shovld file. with the office each 
rreek a record of tlieir e:cpected activities .for the coming week. 

The accompanying form provides soaces for the necessary notations. 



UZLD ADJUSTER'S ITIIJEEAEY 



T/eek Beginning^ 





'City 


.Specific 
Address 
that night 


Cases to "be investigated 




Sun. 










Mon. 










Tues. 










Wed. 










Thiirs. 










Fri. 










Sat. 











TIE USE 01' STATS ADJ USTl.JEKT BOj^^ .XiS . 

It is recommended that the State Adjustment Boards "be asked to hold 
regular meetings. &,'■ reserving a regular dr.te, time can "be given "by the 
memhers with less inconvenience. The latter part of the afternoon is 
usuallj'' the j.iost advantageous time, Ceses should "be scheduled for prompt 
and "businesslike hea-ring so that the time of the Board mem"bers may "be 
utilised vithout waste. 



9839 



TY PE OF CASES TO 3B HIIAHP BY S T>.-T-^ ADJUSTMSET BOiUlDS 

All cases which cannot "be adjusted in accordance ^jvith the standards 
set forth under "What Constitutes Satisfactory Adjustment" as v'ell as 
cases in v/hich there is wide conflict in statements of facts shall be 
referred to the State Adjustment Board, 

Where the numlDer of cases \7hich should he presented to the State 
Adjustment Board is more than the Board can reasonably he asked to hear 
the Board may delegate the hearing of a portion of these cases to the 
Labor Compliance Officer. A summary of the adjustment made in all such 
cases shall he presented to the Strte Adjustment Board at its next meet- 
ing. 

PUBLICITY AS TO ACTIOi-T Qg THE STATE ADJUSTi.iHNiT EOiLRD 

Hearings of the Board are ordinarily, conducted in private but open 
hearings may be held in the discretion of the Board. Information as to 
action or recommendations of the Board v^ill be given out only by order 
of the Board, 

pp.ocedupj: in referhiks cases to ■■^djust!.;mt boards 

In order that cases may be most expeditiously disposed of, the 
following procedure is suggested: 

Arrangements should be made for cases to be heard according to fixed 
schedule, Tlie resrjondent and complainant in each case should be requested 
to be present at a specified time unless the complp.inant ' s presence at 
the hearing would be detrimental to his interests, 

A brief typewritten outline of the salient facts in the case should 
■fee submitted to the members in advance of the hearing. 

The labor compliance officer (or th? adjuster who handled the case) 
should make a brief fact-statement to the board before each case is heard 
if it seems necessary to sup'olement the information given in the outline. 

The Board should thereuoon interview the respondent (and) complain- 
ant) at the conclusion of which the Board, in executive session, should 
make its determination, Tlie decision should be made a matter of written 
record. 

If the State Director is available and accepts the recommendation 
of the Board the case can be corroleted immediptely. The respondent and 
complainant (together or separately at the discretion of the Board) 
sho-old be recalled, the decision read to them and their assent secured. 
If the case involves restitution of back wagies, payment, preferably ''oy 
checks, should be made immediately if posj^ible in order that final ad- 
justment of the case can be effected without further negotiations. 

The condxict of the hearing should be orderly and dignified, but in- 
sofar as possible it sho-old be in the nature of a. conference rather than 
a trial, 

9^39 



■ -196- 

COOPIIuLTIOr '.'ITE OTIIM AQZrCIIS 

In order to ssctre tn3 observance of Code standerdr. it ir. essential 
tnat the Tield Of"icos ;naint&in active coo^ierative relationships T7ith 
public end vrrivate agencies. T^ie Recover" Frofrrejn is a national under- 
taking and its success depend;- laa-gely upon the active participation of 
the general; ""jublic. Wiile the correction of violations is the s-oecific 

task of the Coapliance offices, the State Director EhorJ.d not overlook 
the posoihilities for establishing pro-^er labor standards and thereby 
preventing violations of the Codes, 

C00P3Il..2I0:i -J ITK ]?E DSE.aL. stats. COUITTT iilJI) •;iIi::iCI?i^ C O-TTm CTI HG aGSIICIS S 

By ErcPcutive Order Fork under governnent co-itracts shall be per- 
formed in accordance v'ith era :ilicable Code standards. Active cooperation 
with Horn;- Or'ners Loan' Corporf-t ion, Public Works Administration and other 
emergency services o:"fers oooortunities for assisting these agencies to 
better adaini strati on of the Sxecuti\-e Order. 

In vs,rious states cooperation vith St'te, County and Municipal 
agencies, such as Purchasing Departments and Highv;ay Commissions, has 
secured the adoption of "rA clauses in their ourchaFe contracts and 
o^;ierations. This Tsractice shonld be made general and the local govern— 
raent authorities mav be assisted in secioring effective administration 
of such -orovisions. 



C OOPbL:A? IOr GP EI.PL OYMSKT AC-EJCIZS 



To secure compliance with Code standards it i-, essential that em- 
ployment agencies should not supiolv workers for jobs at rates lower than 
■provided mider the Code. 

The Federal Ee-emolojTnent Service is instructed net to fill jobs 
at rates lower than the Code minimiuiT, aJid many ^orivate agencies have 
volunteered to observe, the same pra,ctice, 

Tho State Director may properly ask this cooperation of emplo:,Tnent 
agencies in maintpining standards. Usually this may be done most easily 
by first contacting the larger agencies individually and gaing their 
promise to cooperate, and then by calling a conferep.ce of all agencies 
in the coy.i -.unity i-hich i-ilace workers in jobr, covered by Codes. 



COOPEHATIOS! UITH STATS LaBOR DE PAaaiMTS 

In certain states close coo-oeration relationships have been develcoed 
between the lillA. offices and the State Labor Deportments,' and inspectors 
of the State Department aid materially in furnishing general information, . 
reporting violations, and securing information relative to specific 
comolaints prrticnlr.rly in localities distant from the I'HIA. office. Studies 
have been made by the State Departments of wages and hours in special in- 
dustries '.-hich fT-irnish basic data a,s to working standards, Code compliance 
and violations. 



COQ gEBATIO!: .."ITH REC-IOTIAL LaBO?. B0AH3DS 

Code violations frequ'^ntly occ-ar in connection with laljor disputes. 
Cooperation uith the Ref:ional Labor Board and an exchange of information 
will be helpful to both g^encies. 

coop^. kTio:: 'tith code autho hitiss 

Close contact bet'jeen the Field Offices and the C.ode Authorities 
located in their areas is essential to effective administration. Assis- 
tance by the Field Office in the organization of Code Authorities, general 
meetin^-s -'ith Code Authorities and conference ^^rith specific groups T7ill 
aid in "ironoting \inder standing and securing compliance. Where an effect- 
ive rela.tionship exists the Coda Authorities have oroven ver;-- nelpful in 
educating their nembers as to labor rrovir.ions , in assisting the offices 
to secure conmliance end in r- porting violations over which they hai'-e no 
jurisdiction. 



CO0PEa:.TI;'C '.'IT.! I'DUSTEIaL MX L;30R G50 1IPS 

Contact T7ith industrial and labor grouos offers and op-oortunity for 
educating their Jijembers as to Code provisions. Trade imions particularly 
are in a position to f-'ornish information as to current wage and hour 
rates, and to reiiort violations "'hich an individual worker may be reluc- 
tant tore-oort. 



9339 



-iyb- 



-APFENLi:: 3 (a) 
NATIONAL 3EC0VE2Y AUMIlIIS^i'RA^TOrT 

December 3, 1934 

MEMOrLfVlIDiai 

'If: Gliief of tlie Compliance Division 

PSOM: Compliance and Enforcement Director 

Subject: EGto.tlicliment of a System of Eeti'ional Administratior.. 

Proccdin-e to be followed, in ¥ithdrav/al ana Registoration 
of "^.if^ht to Display Blue Eagle and in Certain Cases 
tc Ob to. in or Use l^THA labels. 

1. 3egicnal Administration 

( 

In order to increase the effectiveness o:^ Compliance 
Administration find Enforcement, I hereby authorize you to take all ster)S 
necesrary to establish and administer a system of Regional Administration 
along the follov;ing lines, subject to my general supervision and direction: 

As soon- as is pi-acticable , you are to divide the United 
States into regions. The ntunber and bo-ondaries of the regions and the 
location of the Regional Office in each are to be determined by you, 
and you may thereafter change their boundaries and the location of the 
Regional Office. Each Region will be headed by a Regional Director, to 
be appointed by me but subject to yovor fJirect supervision. The official 
residence of each Regiona.l Director :7ill be in the city in v;hich his Regional 
Office is located. To the extent v/hich you CDnsider desirable, each Reg- 
ional Director will lia.ve the follov/ijig generp.l powers and functions with- 
in his Regi m on behalf of ilRA: 

(1) To direct and be resy-onsible for the activities of 
HEA with regr.rd to coniiDliance ac'ministration and to cooperate with the 
Litigation Division in its activities. 

(2) To withdrav7 and restore the right to display the 
Blue Eagle. 

(3) To refer to the i-'ro:Dcr United States Attorney, 
through the member of the Liti^.ation Division assigned to the Region, 
cases of noncorarpliance with the request that civil or criminal proceedings, 
or both, be instituted pursiia.nb to Section 5(c) and 3(f) of WIRA. 

(4) Such other functions and powers as may be conferred 
upon him. 

You may in your discretion vifithhold any of the above 
futictions and powers, and you inay grant seme Regional Directors more 
povi/ers and functions than others. Yoix are to appoint the necessary 

9839 



( 



-19S- 

executive staff find personnel for co.cli Rtftional Office. You may maintain 
the existing system of State NRA Coirpliance Offices, with authority to 
alter them and the functions and powers now possessed "by all or any State 
NEA Compliance Directors, to the extent you deem necessary. 

II. Withdrawal and Restoration of Blue Eagle and in Certain Cases 
NBA Labels. 

» 

I hereby authorize you to prescribe and administer,, subject to my 
general supervision and direction, a procedure to be followed by NEA 
Regional Directors, and if you deem it necessary, by certain State Di- 
rectors, in withdrawing aiid restoring the right to display the Blue 
Eagle. The right to display the Blue Eagle may be withdrawn or restored 
in any case by me or by you on my belialf when I so instruct you and any 
procedure prescribed by you under this paragraph shall in no way restrict 
my freedom of action. 

Whenever there is a finding by the National Labor Relations Board 
that any person has committed any act constituting a breech of the con- 
ditions upon which he is entitled to display the Blue Eagle or to obtain 
or use NRA labels, you are authorized to talcc on my beiirlf all steps, 
including withdrawal of the right to display,'' the Blue Eogle or to obtain 
or use NRA labels, which you consider necessary to carry out the decision 
which I make after a consideration of the ca,se and the finding. You 
may thereafter on my behalf restore any such right to such a person 
whenever you think such action is in the interests of soiind adrainistra^.' .1 
tion. 

Whenever there is a finding by the Chief of the Compliance Divi- 
sion, or by the Contributions Section thereof, the.t any person is in de- 
fault in his obligation (as defined in Executive Order No. 6678 and 
Administrative 'order No. X-35) to make payment of a contribution to a 
Code Authority, you may on my behalf deprive such person of the right 
to display the Blue Eagle and to obtain or use NRA labels and may take 
any other action deemed necessary by you. You may thereafter on my be- 
half restore any such right to sucli a person whenever you think such 
action is in the interests of sound administration. 

Communications withdrawing or restoring the right to display the 
Blue Eagle and to obtain or use NRA labels, and other communications 
signed by you on my belialf hereunder shall be signed: 

By direction of the Compliance and Hiforcement Director! 

(insert Name) 
Chief, Compliance Division, 

Nothing herein deprives State NRA Compliance Directors of the auth- 
ority heretofore conferred upon them to withdraw and restore the right 
to display the Blue Eagle in cases of violations of certain service 



9839 



-300- 

codes arid the Restaurant Code. However, you are authorized to deprive 
all or any of the State Directors of sudi authority whenever you deem 
such action advisable. 



(Signed) Sol A. Rosenblatt 

Sol A. Rosenblatt 
Director of Compliance and 
Enforcement » 



>^ 



C 



-201- 

SPECIAi Jiiaroilfel^DUIvi NO. 

ITo venter 16, 193^1 

TO: L. J. MiHTIil, Chief of Compli-ncc Division 

PROM: W. A. HAREIMill, Administrative Officer 

SUBJECT: Authority of the Chief of the Compliance Division 
with Reference to Blue Eagles and Labels 

Tlie authority of the Chief of the Compliance Division with reference 
to removal and restoration of the Blue Eagle or other NRA insignia and 
the issuance and use of IIRA labels, including the authority heretofore 
delegated to the Chief of the Compliance Division "by the Assistant 
Administrator for Eield Administration and otherwise, will "be exercised 
until further notice as follows: 

The Chief of the Compliance Division may designate a Compliance 
Council, to sit in one or more Parts, each Part to "be composed of an 
equal number of representa,tives o.f industry and labor and each Part to 
include an impartial chairman if the Chief of the Compliance Division 
considers it advisable. The powers and duties of the Compliance Council 
will be to hear and consider the evidence in cases in which the Compliance 
Division or en Industry Division recommends removal of the Blue Eagle 
or other NRA insignia or withholding the issuance or use of NRA labels; 
to make recommendations to the Chief of the Compliance Division as to 
findings of fact and as to action v?ith respect to such cases'; and to 
consider and make recon'mendations with respect to such other matters as 
may be referred to it by the Chief of the Compliance Division, 

Whenever there if a finding by the Chief of the Compliance Division, 
after consideration of the recoinmenda-tions of the Compliance Council, 
and whenever there is a finding by the National Labor Relations Board, 
that any person has committed any act constituting a breach of the con- 
ditions upon which ho is entitled to display the Blue Eagle or other 
NRA insignia, or to obtain or use NRA labels, and whenever there is a 
finding by the Chief of the Conpliance Division or by the Contributions 
Section thereof that any person is in default in his obligation (as 
defined in Executive erder No. 6678 and Administrative Order No. X-36) 
to make payment of a "contribution to a Code Authority, the Chief of the 
Compliance Division nay notify such person that he has been deprived of 
the right to display any Blue Eagle or other NRA insignia or to obtain 
or use NRA labels and may notify the appropriate Code Authority to with- 
hold the issuance of labels to such person. The Chief of the Compliance 
Division, without hearing or recommendation by the Compliance Council, 
may thereafter give notice of the rcstora.tion of any such right to such 
a person and may give notice to the appropriate Code Authoritj' to resume 
the. issuance of labels to such a person, whenever he thinks that any 
such action on his part is in the interests of sound administration. 



9839 



NATIONAL EECOVEHY AH'IINI STRATI ON 

January 1, 1935. 

MEMORANDUM 

TO: Merton Bnerson, NRA Regional Director, Region 1. 

PROM: L. J. Martin, Chief, Compliance Division. 

SUBJECT: Junctions and Powers of the Regional Director. 

Pursuant to authority vested in me by the Compliance and Enforce- 
ment Director, I hereby confer upon you the follovdng functions and 
powers to he exercised within your Region. 

1. To direct the activities of HRA with regard to compliance ^ 
administration aiid to cooperate with the Litigation Division in its 
activities. 

2. To direct the activities o.f the State NRA Compliance 
Directors in your Region with authority (in addition to the other powers 
herein conferred upon you) to exercise any of the powers that have here- 
tofore •heen conferred upon State Directors. 

•3. To vdthdraw and restore the right to display the Blue 
Eagle, after consideration of the recommendations of your Regional Com- 
pliance Council. :..,-.. 

4, Through the member of the Litigation Division assigned to 
your office, to refer cases of non-compliance to the proper United States 
Attorney, with the request that civil or criminal proceedings, or both, 
be instituted pursuant to Section 3(c) end 5(f) of the NRA. This does 

not deprive, State Director's of the authority heretofore conferred upon ( 

them in this regard. 

5, To direct the activities and personnel of the Regional 
Office for your Region, which Regional Office shall be located at 
Boston, Massachusetts. Your official residence will at all times be 
in the city in whicli the Regional Office is located. 

Nothing herein deprives State NRA Compliance Directors of the auth- 
ority heretofore conferred upon them to withdraw and restore the right 
to display the Blue Eagle in cases of violations of certain service 
codes and the Restaurant code. 



L. J. Martin, 

Chief, Compliance Division. 



9839 



-203- 

All such notifications shall "be signed: 

By direction of the National Indastrlal Recovery Board: 



Chief, Compliance Division 
By direction of the National Industr^ial Recovery Board: 

(signed) W. A. Harriman 

W. A. Harriman 
Administrative Officer 



9839 



-204- 

JaxLuary 1, 1935 

Mr. Merton Emorson 
Room 1200 
80 Federal Street 
Boston, Massachusetts 

Dear Mr. Emerson: 

I her at 5'- appoint you KM Regional Director for Region 1. This 
Region, sutject to change, consists of the States of Maine, New HaRip- 
shire, Vermont, Massachusetts, Rode Island, and Connecticut. Your 
f-unctions are, within your Region, to direct and "be responsible for 
the activities of NRA with regard to compliance adrainistration and to 
cooperate with the Litigation Division in its activities. The Chief of 
the Compliance Division will confer upon you the powers necessary to 
the execution of these functions and you will he under his direct super- 
vision. 

Very truly yours, 



Sol A. Rosenblatt 

Compliance and Enforcaaent Director 



9339 



-205- 

HATI OKAE ■RErOVEFI-ADKI KI STRATI ON 
Yfesl'iington, D. C. 
Decerrfo'er 2?, 13'M.- 



TO: ALL CODE AUTrJ-ITISS 



In order to increase the effectiveness of field administration and 
and enforcement, and in accordance v/ith the previously announced policy 
of decentralizing the activities of the Compliance Division, the follov/- 
ing Regional Offices for Compliance and Enforcement have "been establish- 
ed: 

Region 3\To_. 1 M^.^l'tonit. Jl"l?.-l?.'l^' Regional Director 

80' federal Street, 
Boston, Massachusetts. 

Stcites: Massachusetts 
Maine 

Hew Hampshire 
Rliode Island 
Vermont 
Connecticut 

Re^iqn_No_i__2 (riot yet set up) 

States: Nev/ YoriC 

iNlev,' Jersey 

Re£io^n lIo_. _5 (!"ot yet set uo) 

'Washington, D. C. 

StR,te?: Delaware 

District of Columbia 
Maryland 
Pennsylvania 
ITorth Carolina 
Virginia 

Region No. -y- !iFilliam L. I'.itchell, Regional Director 

635-'^37 Citizens I Southern l^ational Sanlc Bldg. , 
Atlanta, Ga. 

States: Al ab aina 
Florida 

Mississi'ppi 
Tennessee 
Louisiana 
South Carolina 



9839 



Ee£iq.n Ko_. .5 Benedict Crov.ell, Regional director 

Bulkley Building 
Cleveland, '^hio 

States: "Centuc':}/ 
Michigan 
Chic 
Test Virpdnia 

^^esiqn No. _n C. F. Eunely, Regional Director 

^r i f 1 ey 3ui 1 di u^ 
Chicago, Illinois 

States: Iliimis 
Indiana 
Missouri 
Wi-sconsin 

Segion Fq._7 ■ A. F. Cook, Eegiom.l Director 

511 Federal Building- 
Omaha, Febraska 

States: Colorado 
Io?/a 

:'e'brasl:a 
i'orth Ba cota 
South Dakota 
Minnesota 
V/yoming 
I'Za,nsas 

£e£io_n i'o . 3 Ernest L. Tutt, Retlonal Director 

Republic Ban!-: Builuin;: 
Dallas, Texas 

States: Ar^cansa s 

'Jevi Mexico 

O-clahoma 

Texas 

Region JTo_. 9 Donala RGnshaw, Re::5i,Taal Director 

Humboldt Bank Buildino: 
San Francisco, California 

States: California 
Arizona 
Idaho 
■:"ontana 
I-"evada 
Ore(-;on 
"'ashini^ton 
Utah 



9839 



-2C7- 

It will te noted from the above ohat P.cgionc 2 and 3 have not, ao 
yet, been set up and states under thece two regii.'nc v/ill continue to 
handle all mattcrr, with Washington, D. C. 

The Regional Director for Compliance and Enforcement v/ill have the 
following f-ujactiuns and powers on hchalf of iIRA within tncir Regions: 

1. To direct and "be responsible for com-oliance administration. 

2. To cooperate with the ITRA Litigation Division. 

3. To cooperate with the regional offices for code adminis- 
tration. 

4. To direct and supervise the State KRA Compliance Directors . 
in their Regions, v/ith authority (in addition to the other 
pov/ers mentioned herein) to exercise all the povrers here- 
tofore confcrrea upon State Directors. 

5. To withdraw and restore, after consideration of the recom- 
mendations of their Regional Councils, the ri,::ht to dis- 
play the Blue Eagle. 

^, Through the Litigation Division Attorney assigned to the 
Region, to refer cases of non-compliance to the proper 
United States Attorney v/ith the request that civil or 
Criminal procecdinr.s, or "both, he instituted pursuant to 
Sections 3 (c) and 3 (f) of FIRA. 

7. To direct the activities and personnel of the Regional Of- 
fices for Compliance and Enforcement. 

Subject to the direction of their Regional Director, State NRA Com.- 
pliance Directors retain. all the authority heretofore conferred upon them 
including the authority to v/ithdraw and restore the right to display the 
Blue Eagle in cases of violations of certain Service Codes and the Rest- 
aurant Code and the authority to refer cases to the proper United States 
Attorney with a request for proceedings in court. Cases which the Strie 
Directors are unab.le to conclude 7/ill be forv/ard-ed to their Regiona.1 Dir 
rector instead of to iIRA in 'Jifasnington, with exceptions mentioned belov/. 

Cases of non-compliance not disposed of at an earlier state of handr- 
ling will 'le referred by the Regional Directors to their Regional Com- 
pliance Co-oncils which are composed of a representative of employers, a 
representative of employees \ and an impartial chairman. Hearings will 
be held by the Councils in substantially the same manner as hearings here- 
tofore held ov the Compliance Cmncil in Washington, D. C. The Regional 
Compliance Councils v/ill raaicc recorrimendations to their Regional Directors 
of findings of fact and of tr.r- action v/hich the Cmncils thinlc the Reg- 
ional Directors should ta:e, including remcva.1 o'f the Blue Eagle. The 
decisions of the Regional Directors, made after jconsidering the recom- 
mendations of their Councils, will be filial. Regional Directors for Com- 
pliance and Enforcement have pov/er to remove the Blue Eagle. 



9839 



All •iinad justed casPb now ppnding ia .IRA in .('asuinfi-ton wnich arose in 
any of tne States now const it^j.tiuf' t:\e sevt^r?.! r!ef;ions -'re "beina; forvrard- 
ed to tne aiJorcpriate Reg'ional Directors of Compliance and Enforcement 
for dis'ocsition, and + le toarcf i'roM .iicn t.iP file c^-ne to IJ^A is being 
informed that furtner correspondence sncald Of 'icdr'-ssed to tlie "^egnional 
Director for Compliance and £nf orc^^mt- nt. 

Complaints nnndled uy Industrial Ad j j..-tient Agencies '^T.iich the high- 
est Industrial Adjustment Agency in pn induttrv nas Deen unable to adjust 
should he forwarded to tne Regional Director of Compli-nce qnd Ehforcem.ent 
for tne Region in which the resoondent's estatli;;hmi-nt is loc^ited or in 
which the respondent nas his principal office, if it opera,tPs more than 
one establishment. If the Region has not "be-n set uo, such cases should 
be forwarded to I'FA in ■■Jasnington. 

The following tj/pes of cases ".'ill not be handlpQ by the Regional Di- 
rectors' offices: 

1. Unadjusted cases which n-^ve been n-^nrlled b " Code Autnorities 
under codes naving m.andatory label orovisions. These Code 
Authorities ''ill h-:7ndlp sucii cases t.irou^h the L^bel Review 
Officers and the Comoliqnce Division in '7qshin^ton. 

2. Cases of failure to '"ake equitable contribution to r Code 
Authority. Sucn cases snould bf=. certified as heretofore 
to the Contributions Section of the Compliance Division 
in lashington. Action on removal of the Blue Eagle will 
be taken in ..Rshington. 

3. Cases involving a violation in connection with govern- 
ment contracts, under Executive Order 6646. Such cases, 
as heretofore, snoald be referred by the Complainant or 
by the Code Authority for the complainant's industry di- 
rectly to the Cnief of tae G-overnraent Contracts Branch, 
NRA, "/asnington, D. C. 

You will be notified 'vhen Regions 2 and 3 have been set up. 



Sol A. Rosenbl.Ttt, 

Complaince and Enforcement Director 



9839 



-309- 
lATlO'-AL lEC0T3.i.Y AD .IFISTILiTIOE 

Deceinoer 10, 1954 

i.;Ei:iORiii:Du:: 

TO : lIHil Rerdonal Directors 

FSOi;: L. J. i.artin, Chief, CoiiTOlirnce Division 

SUEJZGi': Procedi-'.re to be Follored in 'Vithdrawins; and 

r.estoring' the Right to Display the "Blue Eagle. 

I. ProcedTijre of Segional Coioncil. 

Cases of non-com-Dli,''nce in which withdrawal of the right to dis- 
play the Dlue Eagle may he advisable ^dll he referred "by ""■ou to ■"•oior 
Regional Conpliance Council for its recom-^endation, which will be made 
after a hearing held in accordance '-'ith the following iDrocedure: 

A. Notice to rlesoondent 

The respondent must, by telegra-oh or registered mail, be given 
rensonable notice cf the hearing, with due regard for the time required 
by hin for travel and preparation of the case. The notice should state: 

(a) The person or body charging violation by the respondent 
(s^i.ch person or body will be either a National or Local 
Code Authoritv, a State Director or the I.egional Diroctor) ; 

(b) The Code -nrovisions alleged to have been violated and 
the basic elements of the charge; 

(c) The date, place and hour of. hearing; 

(cL) That if the respondent is found gi.iilty of violation the 
■i-'^-egionel Director nay \,'ithdraw his right to disr)lay the 
Blue Sagle and refer the case to the United States 
Attorney; 

(e) Thf'.t the respondent ;.ia'"' a^ooear or be reioresented at the 
hearing or file a written stateraent before the hearing; 
and 

(f) The.t the respondent shoiild state v/hether or not he 
v/ill apoeer or be re^oresented. 

A forn of such notice if sent by telegre-m is attsched. (Torrn A). 

E. Postponements. 

Requests for oost^^oner'^ents should be considered by the P.egional 
Council and may be granted or denied in its discretion. The resoondent 
should be given every reasonable op-iortunity to appear but undue dela^'' 
or stalling tactics should not be -Dermitted. 

9839 



C. Procedijre of Hearing. 

Before the res-oondent enters the hearing he should "be given a copy 
of Anne:: A hereto, setting forth the rules of "orocedure of the Council. 

The hearing "by the Council is n ot a puhlic hearing, hut the Council 
may allou interested parties to attend. The heai-ing should he inforinpl 
in the sense that it should not he mode? 3d upon coiort proceditre nor resem- 
hle a trial or prosecution. Horrever , it should be conducted in orderly 
fashion \7ith strict regard to the following rules of 'orocedure and any 
others adopted hy the Council, and not along the lines of a conference 
or conversational meeting. The Chairman should announce the purpose of 
the hearing. Ee shoijld also inform the respondent that no stenograpnic 
transcript of the proceedings Y,'ill be made unless the respondent desires 
to have one and to pay half the expense, in ^^hich case arrangements for 
such a transcript will be made by the Council. Ee should then request 
the Legal Adviser (or the member of the staff assigned to that duty) to 
present the case. If the coraplainant is present and desires to present 
his complaint, he should then be given that opportunity. The respondent 
should the.n be requested to present his case. Any other person or bodies 
who desire to be heard should be allo^ied. to state their views if the 
Council feels that they have a stxfficient interest in the case. The 
Legal Adviser and the com'olainant are to be given an opportunity to repl]''. 
to the statements of the respondent. The Coioncil should admit all evid- 
ence Trhich it deems proper. Witnesses may be presented by either side 
and nay be cross-examined, the extent of the cross-examination to be 
subject to the discretion of the Council. The respondent shorLd be given 
full opportunity to present any proper evidence he mav care to offer. 
The names of the complaining employees or other complainants should not 
be directl""" or indirectly disclosed to the respondent even though re- 
quested by" hill, unless thgir free consent is first obtained. Aside 
from that restriction, the respondent must be given full opportunity to 
examine the evidence presented against him and must be permitted to be 
present during the presentation by the Legal Adviser and during the sub- 
mission of evidence. Minutes of the hearing should be kept, in the form 
of a brief sunmary of what occurs in each case. The respondent should 
be informed at the outset that no stenographic transcript of the proceed- 
ings \7ill be made unless he desires to have one and pay half of the ex- 
pense, in which case arrangements for such a transcript ^'ill be made by 
the Council. During the course of the hearing the Chairman should endeavor 
to ascertain (unless the file already sho?,'s) whether the respondent opera- 
tes only one or more than one establishment vrithin tlie Segion and the 
location of the respondent's head office. If the respondent does not 
attend, ' the Council may nevertheless hold a hearing and shotild follo^^ the 
above procediire as fully as is possible in view of the respondent's absen- 
ce. 

D. Decision of Coiuicil. 

If the Coup-cil concludes that, on the evidence before it, there has 
been no violation, its decision will consist of a finding of fact to that 
effect, and such a finding is binding on the Regional Director. If the 
Council comes to any other concliision, its decision will consist of a 
recommendatio n to the Regional Director of findings of fact and of action 
to be taken by him. 

9839 



-211- 

Tlie findings of fact should te tased only on evidence heard by the 
Council. Thej'- should "be sufficiently detailed to give a clear picture 
of the Council's view of the facts, and shcild cover such points as: 
the nai'iie, address and fori of business of the respondent (i.e., whether 
an individual, corporation, etc.). the provir^ion alleged to have "been 
violated, cited "by Article and Section, the natrxe of the alleged viola- 
tion, end. the finding on each char.'^-e. In case of a finding of violation, 
the nuin"ber and location of the respondent's esta"blishiaents and the loca- 
tion of hir. head office should also "be stated. In making its recommenda- 
tion of action to be tcJcen, the Council should consider such questions 
as whether an adjustment should be accepted and on what terras, whether 
the right to dis-olay the Blue Eagle should be withdrawn, whether the 
case s/iould be referred to a United States Attorney, .whether a further 
investigation is necessary and if so by what agency, and whether loublicit^r 
should be given to whatever action is talzen. The Council may, in its 
discretion, inform the respondent of the recora.aendation it will make to 
the Regional Director, The Council may also offer the respondent an 
opoortriiitj'' to adjust the case before it makes a recommendation to the 
Regional Director. The Council has authority to accept an adjustment of 
the case in the course of the "nearing, in which event no recommendation 
to the E.egional Director need be made. 

If the Council finds that on the evidence before it there has been 
no violation, its findings are final and no recommendations will be made 
to the Regional Director. The complainant should be advised by letter 
of such findings. 

2. Renoval of Blue 3agle. : ■ 

Except in the situation mentioned in the imnediately preceeding 
paragraph, the Coimcil will make a recommendation to you of findings of 
fact rjid of action to be taken by 3''ou. Such a recommendation is to be 
carefully considered by -^''ou. However, it is not binding upon you and 
you maj'- me,ke such other findings and take such other action as you be- 
lieve are warranted by the evidence heard by the Co-oncil and by other 
circumstances. If the action finally determined by jou is withdrawal 
of the right to display the E-lue Eagle, you will telegraph the respon- 
dent (in a.ccorda.nce with Eorm B) informing lia that after consideration 
of the reconmendation of the Regional Compliance Council you have found 
he has violated stated -orovisions of the Code and that on such finding 
his right to display the Blue Eagle will be withdrawn five days from 
date. At the end of the five days period, if no factors have arisen 
which make you think that withdrawal of the right to display the Blue 
Eagle v/ould be undesirable you are to telegraph the respondent (in accord- 
ance with ITorm C) withdrawing his right to display the Blue Eagle. Youjr 
decision removing the Blue Eagle is final. If the case arose in a state 
other than that in whicli vour Regional Office is located, you should 
also telegraph the State Director of that State a,dvising him of your ac- 
tion in re:.ioving the Blue Eagle. (Form D) You may youi'self give publi- 
city to such action after '^aiting twelve hours following your telegram 
to t"ne State Director in order to give prioritv to local oublicity. You 
should •'■^rite the aporo^riate postmaster (in accordance with ?orn E) 
advising hin of the disoosition he sho'Lild make of any Blue Eagles surrend- 
ered to him and requesting a reoort on whetner such sijxrender was made. 

983S 



You should telegraph the avviropriate Code Authorit,/ (in accordance vith 
Form j) advising of your action. 

If the respondent asks for a rehearing; on the £TOund of additional 
evidence or for any other reason, you ■nay grnjit or deny such a rehearing 
in your discretion, 

3. Restoration of Blue Eagle. 

All petitions for restoration of the ri^ht to display the Blue Eagle 
should be filed vfith the 'appropriate Regional Director. Such petitions 
filed '7ith you are to be referred by vou to the Regional Council for its 
recommendation. If, after considering the recommendation, you decide 
that the right to displav the Blue Eagle shotild be restored, you may re- 
store it b"/ notice in accordance with Eorn G. The appropriate Postmaster, 
Code Authority and State Director should be advised by telegram of vour 
action. (Forms H. I. and J.) If, after considering the Regional Council's 
recommendation, -/ou decide not to restore the right to display the Blue 
Eagle, ;"ou are so to advise the respondent, and your decision is final. 
If the case is one in vrhich the Blue Eagle nas removed by orcier fr^m 
Washington and. you a.re in doubt as to 'whether it should be restored, you 
are to refer the matter to Washington. 

4. Special Procedure '"lere HesTjcndent Has ilore Than One Establish- 
rdent . 

The foregoing procedure for removal end. restoration of the Blue Eagle 
applies only to cases in vrhich the respondent operates only one establish- 
ment. It vast be modified as hereinafter set forth "hen the respondent 
o-oerates riore than one establishment. In suc h a case, you will proceed 
as above with the following. changes: 

(a) At the time, of sending your telegran (?orm A) notifying 
the respondent of a hearing, you will also send a 
telegram to the respondent's head, office (Form K) 
advising it of the hearing and stating that any resulting 
order removing the respondent's Blue Eagle may apoly to 
all his establishments. If the fact that respondent 
operates more than one establishment is not discovered 
until the hearing and you find a violation, then, at the 
time of sending your telegram advising respondent of your 
finding (Form B), you will also send a telegram to the 
resplendent 's head offic e notifying it of the finding and 
that any resulting order removing the respondent's 

Blue Eagle may apply to all the respondent's establish- 
ments. (Form L. ) 

(b) If the resr^ onden t 's head office is in your region, then 
at the time of sending your telegrar'. re;noving the re- 
spondent's Blue Eagle. (Form C), you will also send a 
telegram to the respondent's hea.d office (Form M) de- 

'■ priving the resoondent of his right to display the Blue 

Eagle at any of his estpblishments. 

9839 



( c ) If the ren-:)Ondeno 's head o ffice is not in yoiir region , 
then at the'time of seiidin^ your telegram (Form C) 
reinovinf; the res-oondent's Blue Eae-le, you will also 
t el erra-oh Wasl'dno-'ton stating: 

(i) thtL rosDondent ' s name; 

(ii) the address of Ms head office; 

(iii) the ac'c'ress of the establishment where the 
vi-.^lation occurred; 

(iv) the code orovision violated; 

(v) the nature of tno viol.^tion; 

(vi) the 'approximate nunher of establishments 
inside' and outside your Region; 

(vii) that 5''0u have deprived the res-oondent of 

his ri.=;'ht to display the Blue Eagle at the 
establishment at which the violation occurred; 

(viii) your recoinnendation as to whether your order 
should be extended to adl the respondent's 
establishments . 

'The Gom-nliance and Enforcement Director may then, without a 
hearin.<^, sup'oleraent your order, which applies to the establish- 
ment '■'here the violation occurred, by a further order removing 
the Blue Eagle from all the rosoondent's establishments. . 

5. Gases in Certain Service Trades and the Restaurant Industr^y. 

Reference to the Regional Cora-oliance Council is not necessary if the 
case is one in which a State Director has heretofore been authorized to 
remove the Blue Eagle - i.e., cases involving certain service codes and 
the Restaurant Code. If there has been no hearing by the Regional Coruicil, 
any telegrams sent by you in such cases should be modified accordingly. 

6. Violation of Executive and Administrative Orders and of the P.R.A, 

Removal or restoring of the Blue Eagle in connection with violation 
of Executive and Administrative Orders, or of the P.R.A. by any person 
subject to its provisions, is to be in accordance with procedure prescribed 
above. 

7. Relation to Industry Divisions and Industrial Apioeals Board. 
Petitions for Relief. 

If the respondent contends that he cannot maj-re restitution and comply 
with the code or certain of its provisions (or ar^ administrative rulin,'~;s 
thereunder, such as interpretations or clascif ications) on the ground that 
they are i^iifair or discriminatory, tend toward monopoly, or work undue 
hardship upon him, the Council should proceed as follows: 

9839 



-214- 

(a) If it decides that the contention is made in good 
faith and is supported ty enough facts to warrant 
its consideration "by the proper authorities and 
that it would he unfair- to remove the respondent's 
Blue Eagle until the respondent's contention has 
been considered oy the uroper authorities, the 
Council should advise him of his right to petition 
the ERA Division Administrator for relief and of 
his right to appeal from the decision of the Divi- 
sion Administrator to the Industrial Appeals Board; 
and the Council should suspend action in regard to 
the Blue Eagle and a reference to the litigation 
attorney pending a final decision of such petition, 
if it is filed within a time fixed hy the Council. 

(b) If it decides that the contention is not made in 
good faith or is not supported bj'' enough facts or 
that it would not be unfair to remove the respond- 
ent 's Blue Eagle if he fails to malue restitution 
and comply pending decision on a petition for re- 
lief, the Council should advise the resoondent of 
his- right to petition for relief and inform him 
that unless he makes restitution and complies pend- 
ing a decision on sucu petition his Blue Eagle will 
be removed. 

8. General. 

The above merely prescribes the procedure that should be followed 
by yof- in regard to withdrawal or restoration of the right to display 
the Blue Eagle. It. does not establish an exclusive procedure or in any 
manner bind the Compliance and Enforcement Director or the Chief of the 
Compliance Division. The right to display the Blue Eagle and other ITM. 
insignia ma3'- bs v/ithdrawn or restored in any case by the Compliance and 
Enforcenent Director,: or on his behalf by the Chief of the Compliance 
Division, even though the case may be before a Regional Council or 
Hegional Director, whose jurisdiction will cease at the direction of 
the Compliance and Enforcement Director or the Chief of the Compliance 
Division, 

L. J, Martin 

Chief, Comjjliance Division 



9839 



-215- 

ai:i\!e:c a 



Important Information to Persons Charged "/ith Violation of an IIEA Code, 

Order or Agreement 

Procedn-re oefore the Regional Compliance Council. 

Read Carefully 

Hearings tefore the Regional Compliance Coujicil are informal. They 
are not modeled upon Court procedure and do not resemtle a trial or iirose- 
cution. However, they are conducted in orderly fashion in accordance 
with the Co-oncil's rules of procedure. The hearing is not a. pv."blic hear- 
ing, out the Council may allow interested iDarties to attend. Y.o steno- 
graphic transcript of the hearing will he made unless you desire to have 
one and pay half of the expense, in which case you should make proper 
arrangements with the Secretary to the Council "before the hearing. 

Tlie Chairman will announce the ;our-oose of the hea.ring. The charges 
against ^'•ou will then he presented hy the Legal Adviser to the Regional 
Director or "b3^ some other memher of the Regional Director's staff. The 
person who filed the complaint against you and any other persons with a 
proper interest in the case will "be allowed to present facts or make 
statenents. You will then he requested to present your side of the case, 
which you ma;'- do yourself or through a lawyer. The Legal Adviser (or 
other mem'ber of the Regional Director's staff) and the complainant will 
then "be given an opportunity to repl",' to vour statements, 

Tlie Council will admit all evidence whic'n it considers proper. 
Witnesses may "be presented hy either side a,nd may "be cross-examined, the 
extent of the examination to "be subject to the discretion of the Council. 

It is the fixed polic"^ of the National Recovery Administration not 
to disclose the nr'jnes of cora"olaining employees or other persons without 
their consent, as experience has shown that disclosure of their names 
may mean serious injury to them. For this reason, the names of complain- 
ants will not "be disclosed to you, directly or indirectly, unless the 
complainants consent. 

If the respondent does not attend, the Council may nevertheless 
hold a hearing and will follow the atove procedure as fully as possi"ble 
in view of the restiondent 's ahsence. 

If the Council finds that on the evidence before it no violation 
is proven its findings are final. If the Council finds a violation is 
proven, its decision will consist of recommendations to the Regional 
Director. If the Regional Director aoTiroves of the finding of violation 
he ma3^ remove the Blue Eagle and refer the case to a "United States 
Attorney. 



9839 



-216- 
FOEivI A 

TELEGIU:. TO P.SS?OFDLrT iroTIFYIlia HIi; OF HEA.RING TO BE HELD 
3Y THE EZaiO.JiL COiIPLIA^ICE COUNCIL 

(national Code Authority or Local Code Authority or State KEIA 
CorflTolir-nce Director or ITriA. Hegional Director) HAS CHA.2GED YOU HAVE VIO- 
LATED SZCTIOIT 0? ARTICLE OF CODE BY (state 

alleged violation hriefly tut with sufficient particularity to inform 
the res:Jondent of the charges) STOP REaiOHAL COLiPLIANCE COUl^^CIL WILL 
HOLD HSAailTv Olv^ TlilS CFAllCrE OK (date, place, and hour) STOP YOU I-^iAY 
APPEAP. Oil EE HEPEESEHTED AT HK4.riI^'-TG- 0}; PILE I7SITTSH STATElSrT BEFORE 
HEA-RIUG- STOP IF GOmiCIL 7IFDS VIOLATIOI« HEG-IOFAL DIBECTOH i;AY IITH- 
DEA?/ YOUR PIGET TO DISPLAY AIT BLUE EkGLE AilD iAY REFER CASE TO UlIITED 
STATES ATTOiy/EY STOP PLEASE ADVISE rHETEER OR EOT YOU V;iLL APPEAH OR 
BE- REPRESLETED AT HEiiRIEG 



SECRETARY 

KRA REGIOEAL COKPLIaECE COUi'CIL 

REGION 



9839 



-217- 

lomi B 

TELEGRA;.: IROU REGIOlIiiL mTGCTO'Ix TO RESPONDENT NOTIEYING HIM THAT 

VIOIATIOIT HAS BEEI-I FOUND 
(To "oe cdcressed to the Establishment where Violation Occurred) 



A]?TK1 CONSIDERING la^COKHEtrDiiTIOF OE -SGIONAL COIIPLIaNCE COmiCIL 
FOLLOUIl'G- ilEAlJNG 01' YOT.IR CASE I FI!^ YOU HATO VIOLATED SECTION 



OF ARTICLE OF CODE STOP ON THAT FINDING YOU 

WILL, 3E DEPRIi.rED Fl^ra DAYS FROIvI DATl:; OF THE RIGHT TO DISPLAY THE BLUE 
EAGLE 



IIEA REGIONii-L DIRECTOR 
REGION 



9839 



-318- 
FOHi^ C 

TELEGRAivi PHOM REGIOHjUL EI-=12CT0R TO ZSSPOiOENT 
REfffiVIKG BLUE EAGLE 
(To be addressed to the establishment where violation occurred) 



01\r I TELEGRAPHED YOU THAT AFTER CONSIDER- 

IIIG HECOMJ/iElvIDATIOi-T OF lEGIOl'AL C0L3=LIAiICE COUIICIL I FOUITO YOU HAD 

VIOLATED SECTION 0? ARTICLE OF 

CODS STOP ON THAT FIIHDIHG YOU ARE HEREBY 

DEPRIVED or THE RIGHT TO DISPLAY AIIY BLUE EAGLE Aim YOU WILL HEREAFTER 
REFRAIN FROIv: USING AITT BLUE EAGLE AT YOUR ESTABLI SiaiENT OR IN ADVERTIS- 
ING OR IN ANY OTHER liAlPNER STOP YOU ARE DIPJICTSD TO SURRENDER IMME- 
DIATELY TO YOUR POSTivASTKR ALL BLUE EAGLES IN YOUR POSSESSION 



NPJl REGIO:JilL DIRECTOR 
REGION 



9839 



-•219- 
FORi.'i D ■ 

TELEGRAI.! FHOM HEGIONAL DIRECTOR TO STATE DIRECTOR ADVISIMJ 
HIL OF BLUE EAOLE RELOVAL 



(Name and Address of State Dix-ector) 



THE FOLLOWIKG- TELECrRAi.: HAS 3EE1I SEHT TO 



Quote (Here copy Torn C) Unquote 



STOP YOU I.LA.Y GIVE THIS MATTS]^. SUCH PUBLICITY AS SEEtlS ADVISABLE 



IIRA REGIONAL DIRECTOR 
REGION 



(The Re,^'ional Director ma^'' add to this telegrciin any details of the 
ca-se which he thinks may "be of interest locally) 



9839 



-220- 

FOPJ; E 
LETTEP. TO POS'ri:Lft.STER IN CITY OF 2S3P01©ENT 
ADVISIkG HIi.. OF 3LU2 EACrLE KELiCVAL 



Postmaster, 



Dear Sir: 

(enclosed) 
The (following) telegram has 'been sent tod -17 to 

(Enclose ) 
. (Quote Form C) 



Kindly advise us vdthin ten days what actioji is taken "by this 
concern toward complyin;^; v/ith this telegram, statin.^ in particular 
whether the Blue Ef,gle is "being displayed at the estatlishraent . All 
Code Blue Eagles surrendered to you should he sent "by you to me. 
All PHA Blue Eagles surrendered should be kept hy you. 

Youi-s very truly, 



H3A RECrlGl^Ai DI..-:ECTO:i 
3E&I0N 



9839 



-321- 
FORI.. F 

TELZGRAi^i FROI.v REGIONAL DIRECTC3 TO CODE AUTHORITY 
AJDVISIlfe IT OF BLUE EAGLE REIaOVAL 



(Name .■^nd Address of Code Authority) 



THE FOLLOWIIIG TELEGRAIa HAS BEEN SEl^T TO 



_QUOTE (Here Copy Form C) UNQUOTE STOP YOU MAY 



GIVa^THIS MATTER SUCK PUBLICITY AS SESf-IS ADVISABLE 



NEA RJiGIOlTAL DIRECTOR 
REGION 



9839 



-222- • 

Fom; G 

TELEGHAI,; FROM ZEGIOilAL DIHSCTOH TO HESFOIIDZIIT 3SST03II& 
SIGHT TO DISPLAY BLU3 SAGLE 



HAVIHG RECEIVED YOUR ASSURH'jCE THAT YOU ARE COIvlPLYILIG AMD WILL 

COKfTIiTOE TO COMPLY WITH CODE AKD THAT YOU HAVE 

(state action taken by respondent, as maJ-cin;-; full restitution of tack 

wa^es, etc.) I HEREBY RESTORE YOUR RIGHT TO DISPLAY BLUE EAGLE STOP 

(CODE) ( CODS AUTHORITY ^ 

YOU MAY OBTAIN (PRA) BLUE EAGLE FROM (POSTI-ilASTSR ) 

ADDRESS) (IT) (CODE) 

UPON FILING WITH (HIM) CERTIFICATE OF COIffLIAl^TCE WITH (PRA) 



iua regici-ial director 

REGION 



9839 



-233- 
FOElYi H 

T3LEG3AIv: FHOIi- REGIOITAI. DIRECTOR TO POSTL'iASTER 
IiIFORlaI:I& HIM OF ?tSS?OHATION OF BLUE EAGLE 



HIGHT TO DISPIAY BLUE EAGLE HS3T0HED TO 



STOP PLEASE ISSUE BLUE EAGLE TO THIS 



CONCEPT UPON ZECEIPT OF SIGilED CEHTIFIC.-^TE OF COMPLIANCE WITH PRA 



NHA iGGIOlJAL DIRECTOR 
REGION 



9839 



FORK I 

TSLEGPJU'Jl FHOM HE&ICiJAL DIRECTOR TO CODE AUTHORITY 
lilFORi'.JlIO IT OF RESTORATION OF BLUB EA&LE 



THE FOLLOWING TELEGRAM : HAS 3EE1I SEIIT TO 



QUOTE (Here copy Forin G) Ul.'QUOTE STOP 



YOU J.iAY GIVE THIS MATTER SUCH PUBLICITY AS SEEIv'.S ADVISABLE STOP 

PLEASE ISSL^E BLUE EAGLE UPOH RECEIPT OP SIGHTED CERTIFICATE OF COlitPLIA^CE 

WITH YOUR CODE 



IIRA REGICHAL DIRECTOR 
REGION 



0839 



-235- 



lom J 



TELEG-HAM FROIv, HEGIONAL DIHECTOH TO STATE DIHECTOR 
INEORI.iIH} HIM OF HESTOMTION OF BLUE EAGLE 



THE FOLLOWING TELEGOW^ HAS BEEN SENT TO 



_QUOTE (Here Copy Form G) UNQUOTE STOP 



YOU llAY GIVE THIS MATTER SUCH PUBLICITY AS SEEI'.IS ADVISABLE 



NHA REGIOrjAL DIRECTOR 
REGION 



9839 



-226- 

Fomi K 

T3LEGHAi.i FROiv; 3eGI01IA.L DIRECTOE TO HEAD OFr^ICE OE RESPOKDEl^T 
ADVISIIIG IT or Ii3i\HIlTG- £"GHE>)T.JI.SD' BSEOZE REGIONAL 
COiiPLIAKCE COUNCIL 



THE F0LL0^*VING TEL^.GILU'i HAS EEE.lf SEuT TGEAY CiUCn'E (Copy Form A 
including nai:ie and address of addres-.ee) UHQ,IjOTE ill' C2DER REMOVING 
BLUE EAGLE FROM iJiOVE ESTABL F 3HI.ffiNT MAY APPLY TO ALL YOUR ESTABLISH- 
MENTS AND BRANCHES 



NPA EI.C-TONAL DIRECTOR 
REGION 



9839 



-227- 
FOPJVi L 

TELE&EAl'i FHGI/i HEGIOIJAL DIRECTOR TO HEAD OFFICE 0? RSSFOl'TOEKT 
ADVISIlIu IT OF FlilDING OF VIOLATION 



.THE FOLLOY\fIHG TELEG-HiUw KaS BEEiJ SSiTT TODAY QUOTE (Copy Form 
B including name and address of addressee) Ui^'QUOTS AlTi OHDSR RE- 
MO VI KG BLUE EAGLE FROM ABOVE ESTABLISHI.:EHT ViaY .-^FLY TO ALL YOUR 
ESTABLISmiENTS AlID BRAITCHSS 



MA REGIONAL DIRECTOR 
RSGIOil 



9839 



-238- 

lOHM M 

TEL3CrEAIi JROlil REGIONAL DIRECTOR TO HEAD 
OFPICE OF RESPOKDEI^IT NOTIEYING IT OF BLUE 
EAGLE RE1,:0VAL 

* ON I TELEGRAPHED YOU TEA.T AFTER CONSIDERING 

RECOIU/iENDATION OF REGIONAL COKPLIANCE COUNCIL FOLLOWING HEARING I FOUND 
THAT (insert name and address of addressee of Form B) HAD VIOLATED 

SECTION OF ARTICLE OF CODE STOP ON THAT 

FINDING YOU ARE HEREBY DEPRIVED OF THE RIGHT TO DISPLAY ANY BLUE EAGLE 
Al'ID YOU VaLL HEREAFTER REFRAIN FROM USIliG ANY BLUE EAGLE AT YOUR ESTAB- 
LISHvIENT OR IN AiW BRANCHES OR IN ADVERTISING OR IN ANY OTHER I.IANNER 
STOP YOU ARE DIRECTED TO SURREl^IDER IKilEDIATELY ALL BLUE, EAGLES IN YOUR 
POSSESSION TO THE RESPECTIVE POSTLLASTERS SERVING YOUR ESTABLlSffl'IENTS 



NRA REGIONAL DIRECTOR 
REGION 



* IF FORi'i L NOT SENT, SUBSTITUTE FOLLOWING: 

ON I TELEGRAPHED (lIAi;E AW ADDRESS OF ADDRESSEE OF 

FORi'il B) THAT I FOU'ND THAT IT .JAD VIOLATED SECTION OP 

ARTICLE OF CODE STOP ON THAT FINDING ETC. 



9839 



-229- 

- NAI'IOT'/iL RECOlTiRY /JI-IITISTP,ATIOW 

December 10, 1954, as 
I"odified February 13, 1935, 

TO: I'TRA. rief;ional Directors 

B'ROr: L. J. T'.'^rtin, Chief, Compliance Division 

SUBJECT: Regional Conplianoe Councils, procedure to be Followed 
in V/ithdrawing and Restoring the Right to Display the 
Blue Eagle and to Obtain and Use ITRa Labels. 

REGIONAL GOITIIAt-ICE C0Ui\TciL3 

Each Regional Compliance Council will consist of three members 
to be appointed by the Chief of the Compliance Division. One member 
will be a representative of labor, one a representative of industrjr, 
and the third an impartial Chairman. If either the labor member or the 
industry member is unable to attend a hearing, an alternate designated 
by the Chief of the Compliance Division will sit in his stead T;ith full 
power to act as a member of the Council. If the Chairman is unable to 
attend, the labor member and tlie industry member may sit alone with full 
pov.'er to act for the Council, and the Regional Director will direct one 
of the tvro to act as Chaimnan in the conduct of the hearing. If the Re- 
gional Director believes it sdvisable, he maj^ appoint a temporary Chair- 
man vrtth full power to act as a member of the Council. Decisions of the 
Council are to be by majority vote. In case of disagreement when the 
Chairman is unable to attend and a tem.porary Chairman has not been ap- 
pointed, the Council Ficmbers v/ill present tlie case to the Regional Di- 
rector and he vn'.ll decide the matter. 

The f\mction of the Regional Compliance Council is to hear 
cases of non-compliance and other matters referred to it by the Regional 
Director. The procedure to be followed in such hearings, the scope of 
the Council's power, and the form its decisions will take are outlined 
below. 

PROCEDURE TO BE EOLLO'".rED IN ""ITEDRA'.VDTt A!ID RESTORING 
TfTE RIGHT TO DISPLAY THE BLUE EAGLE AllD TO OBTAIN 
ill^D USE NRA LABELS 

1. Procedure of Regional Coun^-il: 

Cases of non-compliance in which withdrawal of the right to 
display the Blue Eagle may be advisable will be referred Iby you to your 
Regic.'iil Compliance Council for its recommendation, \7hich -vill be made 
after a hearing held in accordance with the following procedure: 

98S3 



-330- 

A. Notice to Respondent, 

The respondent must, by telerraph or registered mail, 
be given reasonable notice of the hearing, v-'ith due regard for the time 
required by him for travel and preparation of the case. The notice should 
state: 

(a) The person or body char-inp violation by the 
respondent (such perron or bocy '"ill be e'ither 
a "ationc-l or Local Code Authority, a State 
Director, or the Regional Director); 

(b) . The Code provisions allef^ed to have teen vio- 

lated .and the basic eler-.ents of the charge; 

(c) The date, place, and hour of hearin,"?,; 

(d) That if the respondent is found guilty of vio- 
lation, the Regional Director may withdraw his 
right to displEiy the Blue Eai'le and refer the 
case to the ITnited States Attorney; 

(e) That the respondent may apnear or be repre- 
sented at the hearing or file a ■(■vritten state- 
ment before the hearing:; and 

. (f) That the respondent should state whether or 
not he will appear or be represented, 

A form of such notice if sent jj^ telegram is attached, (?orm A). A copy 
of Annex A hereto, setting, forth the rules cf procedure of the Council, 
should be mailed with the letter containing the notice or the confimia- 
tion copy of the telegram. Notice of- the hearing should be sent to the 
appropriate National Code Authority ?xid the local Code Authority, if any, 
whether or not such bodies have previously participated in the case, and 
to the appropriate State Director if he has requested notice of the hear- 
ing. 

B. Postpor_em.ents. 

Requests, for postponements should be considered by the Re- 
gional Council and m.ay be granted or denied in its discretion.. The re- 
spondent should be given every reasonable opportunity to appear but undue 
delay or stalling tactics shoulc^ not be psm-.itted, 

Co Procedure ®f Hearin'. 

The heai-ing by the Cguncil is not a public hegiring, but 
the Council mp" all<|>'? int^rtisted parties to cttcu'.'. The nearing should 
be infoimal in the sense that it shou'' d not be odeled upon court proce- 



— r-t J."" 

durs nor reseiible a trit:l rr p'ji-osec'i.tion.. However, it should be con- 
ducted in orderly fashjon .vith strict re.c':rc'. to tli-j following rules of 
procediu-e and any others udoptrjd by the Council, and not alon?j the lines 
of a conference or conYersatio;;al j!ieetir^~, 'Hie Chairman should announce 
the purpose of the hearin.':. -e shoiild also 'infer- the respondent that 
no stenofraphic transcript cf the proceeding.?. v;ill be luade unless the re- 
spondent desires to have one end to pay :''_-_lf the expense, in which case 
arrangements for such a transcript v.^ill be made by the Council. He 
should then request the Assistant Counsel for Goppliance (or the member 
of the staff assirned to that duty) to present the case. If the complainant 
is ■nrer.'-nt and desires to present his co:\plaint, he should then be piven 
that cpyortunity. Tie respondent should %hen be requested to present his 
case. Any other persons or bodies -^fiho desire to be heard should be allowed 
to state their views if the Council feels that they have a sufficient interes 
in the case. The Assistant Counsel for Compliaiice end the complainant are 
to be TAvenan op-^ortuiiitv to reply to the statements of the respondent. 
Care must be taken to avoid the attitude of a prosecutor in presenting the 
charges against the respondent. The charges should be presented in an im- 
partial manner with the object of informing the Council and -the respondent 
of their natuxe. A similar attitude should be maintained in questioning 
the respondent or in replying to his statements. The Council should admit 
all evidence vhich it dee-i.s proper, 'Vitnesses may be presented by either 
side and nay be cross-examined, the extsnt of the cross-examination to be 
subject to the discretion of the Council. The respondent should be given 
full opportunity to present any proper evidence he may care to offer. The 
nam^es of the complaining employees or other complainants should not be 
directly or indirectly disclosed to the respondent even though requested 
by him, unless their free consent is first obtained. Aside frori that 
restriction, the responderit must be given full opportunity to examine Ithe 
evidence presented against him. and must be permitted to be present during 
the presentation by the Afjsi.'stant Counsel for Compliance and during the 
submission of evidence, ""inutes of the hearing in the form of a brief 
simmar:/- of vjhat occurs in each case should be kept by the Secretary of the 
Council -md their accu2'F!cy and adequacy checked by the Assistant Counsel 
for Compliance. Eurin.; the course of the heexing the Chairman should 
endeavor to .?.scertain (unless the file already shows) whether the respon- 
dent operates only one or more than one establishment vimthin the Eegion 
and the location of t'ne respondent's head office. If the respondent does 
not attend, the Council rn.ay nevertheless hold a hearing and should follow 
the above procedure as fully as is possible in view of the respondent's 
absence, 

I', Decision of Council. 

If t]ie Council concludes that, on the evidence before it, 
there has been no violation, its decision will consist o-f" a finding of 
fact to that effect, and such finding is binding on the Regional Director, 
If the Council comes to any other conclusion, its decision will con- 



fess 



-232- 

sist of a reconiTiericlat ion to the ■Regional Dir'ctor of fincliR::s of fact 
and of action to be taJcen' by bimo "^he findi^r;: s of fact and the recom- 
mendation of action, if any', :-hould be included in the F.inutes of the 
hearing. 

The find in ■"-;s of fact should be based only on evidence 
heard by the Council. They shoa]^d be sufficiently detailed to give a 
clear picture of the Council's viexi of the facts, and should cover such 
points as: the narie, address, and forr.i of business of the respondent 
(i.e., whether an individual, coiporation, etc.), the provision alleged 
to have been violated, cited by Article and Section, the' nature of the 
alle£ed violation, and the findinf. on each charge. In case uf a find- 
ing of violation, the number and location of the respondent's establish- 
ments and the location of his head office should also be stated, if such 
information is available. In nakinf its recommendation of action to be 
taken, the Council should consider such questions as v/hether an adjust- 
ment should be accepted and on what terms,- v;hether the right to display 
the Plue llagle should be withdrawn, whether the case should be referred 
to a United States Attornej'-, xihcther a further investigation is neces- 
sary and if so by what agency, and r;hether publicity should be riven to 
whatever action is talcen. Tlie Council may, in its discretion, inform 
the respondent of the recorniendation it r:ill make to the Pe^^ional Direc- 
tor, The Council may aloo offer the respondent an opportunity tfi) e.djust 
the ease before it r.iahes a recoi amend at ion to the ixegional Director. The 
Council has authority to accept an adjustment of the case in tb^e course 
of the hearing, in which event no recomiendation to the Hegional Direc- 
tor need be riade. 

If the Council findc t.hot on the evidence before it there 
has been no violation, its fi-xlin'/s aie fina.1 anc no recommendation ■"ill 
be made to the Regional Director. The conplai^iant should be advised by 
letter of such f indin-'-s, 

2, I^enoval of Blue Eagle. 

Except in the situation mentioned in the imm.ediately proceed- 
ing paragraph, the Council v/ill make a recorm^.endation to you of findings 
of fact and of action to be taken by you. Such a recommendation is to 
be carefully considered by you. However, it is not binding upon you and 
you may make such other findings and take such other action as you believe 
are warranted by the evidence heard by the Council and by other circum- 
stances. If the action finally deter^-iined by 3^01 is withdrawal of l^he 
right to display the Dlue Eagle, you v/ill telegra'>h the respondent fin 
accordance v/ith Form B) informing him that after consideration of the 
recommendation of the Regional Covipliance Council you have found he has 



9839 



violated' st??ted provision;:; o.r tho Code f-.c\(i that on such finding his 
right to displey tl:.c r:lT...e ■;.;..].& '.ill 'oe v-ithdravm five days from date. 
No publicity should ce {iven t.'.is telegrs:n. At trc end of the five-day 
period, if no factors havs c.risrrri v/;.;ich ■ =:■.•. e you thinlc that -ithdrawal 
Q^ the rir^ht to ''.isplay the Blue Er.rle v/ould "fc- undesirable, you are 
to telegraph the i-esportdent (in accordance 7'ith Foim C) withdravrinr his 
right tG display the Blue 3^;a,::-le, Y'^'ur decisjon rerioving the Blue Eagle 
is final. If the cace arose in a state other than that in which your 
P.egional O'fic. is located, ycu should al30 telegraph the State Director 
of that Gtate advising him of your action in removing the Blue "agle 
(7orni D). You may yourself give publicity to such action but m^^ find 
it desirr.ble to dvi.y.y such publicity for twelve hours following-; your 
telegrar. to the State Director in order to give priority to local, pub- 
licity, "ou should rrite the appropri8.te postmaster (in accordance with 
Form E) advising him of the disposition he should make of any Blue 
Zagles s'ur-rendered to him and requesting a report or whether such sur- 
render rras made. You should telegraph the appropriate Code Authority 
(in '.,ccordi.anGe T;ith Forrr- IT) advisinr of your action. If the Council 
desires and you approv-c , you nay in v^Titin:' advise the respondent of a 
finding of violation and inform hiia that unless adjustment on stated terms 
is ;!isde -ithin a stated period, h_j .right to display the Blue Ea^-le ?/ill 
je -.vithdrawn without fur ther notice_ at_ the end_ of_ the stated p eriod . 
If the stated period is equal to or greater than five days, the letter may 
take thfc place of Torm B, so th^^t the .Blue Ergle may at once be removed 
upon failure of the respondent to adjust ".'ithin tho stated period and 
an additional five days' notice need not; be given, A letter signed by the 
Council v;ith reference to an .ad justrient to be made on stated terms within, 
a stated period doe?; not take the place ol' Form B, and the five days 
notice must be gi\-en prior to removal of the Blue Eagle, 

If the respondent asks for a i-e-hearinr on the ground of ad- 
ditional evidence or for an;/ other reason, you r;ay grant or deny such a 
re-hearin:' in your discretion. 

3, Restoration of Blue Earle. 

All petitions for restoration of the right to display the 
■-luB Eagle shouj.d bo filed with the appropriate Begional Director. Such 
uetitions filed with ycu are to be referred by you to the Regional Coun- 
cil and to the appropriate Code Authority for their recommendations. 
If, tfter considering such reoommenf^at ions, you decide that the. right to 
display the Blue Ba.':le should be restored, you riay restore it byhotice in 
accordance with Form G, The appropriate postmaster ('.vhether the PBA or 
the Code Bogle is involved), Code Authority and State Director should be 
advised by telegra:.: of your action (Forms E, I, and J). If, after consider- 
ing the Begional Council's recommendation, you decide not to srestore the 
riglt to display the Plue Ba;-le, you are so to advise the respondent, and 
•^our decision is final. If the case is one in v.-hich the Blue Eagle was 



remoTed by order from 'Tashinc'to-i and you ero in doiibt as to v/hethcr it 
■ should be restored,, you are to refer the matter to '.7asliin£ton, 

4. Special Procedure "There- Hespoi-de:"t T'as :"ore Than One 3stc;blishnient ., 

The f:?rrgoinr, proceujro for reriuval and restoratiuR of the Blue 
Ea^le applies only to cases in which the respondent operates o nly one 
establishraent . It must be FiOdified as hereinafter set forth "iThen" "the 
respondent onerates nore t han oiie establishment. In such a case, you vrill 
proceed as above -'ith the foilowinf, changes: 

(a) At the time of sendir.j youi- telegr-im (Form A) notifying 
the respoLident of a hearinf-, yc^.^ T?;ill also senc' a tele- 
gram to the res pendent 'a head office (Form K) advising 
it of the hearing and statin.T "ti^f'-'t any result inp order 
removing the respondent's Elue Ecf-lc may apply to all his 
cstablishjnents and that subsecueut comriiunications in the I if 
matter t^/ill be sent only to the respondent establishment. 

If the face that respondent operates more than one establish- 
ment is not discovered until the hearinr, and you find 
a violation, th-en, at the time of sending your telegram 
ac vising: respondent of your findinj? (Perm B) , you ivill also 
send a telef^ram to the respondent's head office notifying 
it of the finding and that any resulting order re?iovin£ the 
respondent's Dluc Eagle may apply to all the respondent's 
establishnbnts (Zonri L) . 

(b) If the re spondent's head office is in your K erion, then at the 
tim.e of sending yo'jrtelegrain rerioving the respondent's Blue 
Eagle, (Foim C) , you will also send a telegram to the respon- 
dent's head offi ce (S'orm I') depriving the respondent of his 
right to display the Blue Eagle at any of his establishments. 
A similar procedure, v.'ill be follovfod in case of restoration 
of the Blue Eagle. 

(c) If the responde;:t ' s h ead office is not in your Re._gion,- then 
at the time of sending your telegrarn (Form c") removing the 
respondent's blue Eagle, you vail also telegraph 'Washington 
stating: 

(i) tho respondent's name; 

(ii) the address of his head office; 

(iii)the address of the estublishjnent v;here the 
,. , violation occurred; 

(iv) the Code provision violated; 

(v) the nature of the violation; 

9829 (vi) the approximate number of establishments inside 

and outside your Region; 







• -235- 

(vii) th8.t you liave deprived the respondent of 

lus"r'i^'.ht to dis-jlsy the Blue Eafle at the 
e3tablishii.sr.t at which the violation occurred; 

(vjii) yoi;r reccT'endati^^n as to v/hether your order 
should be extended to all the respondent's 
establ isluients. 

The Compliance and 'Enforcement Director, or the Chief of the 
Conpliance Division on his behalf, may then, without a hearing, 
sujppler.ent your order, which applies to the establishjnent where 
the violation occurred, by a further order removing the Blue 
Eagle from all the respondent's establishments. A similar pro- 
cedure will be follo?red in case oT restoration of the Blue Eaele. 

5. Oases in Certain Service Trades and the Restaurant Industry. 

Reference to the Regional Compliance Council is not necessary 
(though permissible) if the case is one in which a State Director has here- 
tofore been authorized to remove the Blue Eafle - i.e., cases involving 
certain service codes and the Bestaurant Code. If there has been no hearing- 
by the Be.r-ional Council, any telegrams sent by you in such cases should be 
modified acccrdinj;ly. 

6. Violation of Executive and Adr-.inistrative Orders and of the FRA, 

Removal 01* re-torafion of the Blue Eaf'le In connection with viola- 
tion of E::ecutive arid Administrative Orders or of. the PRA by any person 
subject to its provisions, is to be in accordance virith procedure prescribed 
above . 

7. Cases Aiisinr- Under Codes Containing I'andatory Label Provisions. 

In cases of violation arising under codes containing mandatory 
label provisions, the respondent may be deprived by you of his right to 
obtain labels from the Code Authority and of his right to use labels 
T-reviously obtained and still on hand. Generally, withdrawal of the right 
to obtain labels is effective in securing cor.pliance and it is unnecessary 
also to -v'ithdraw the right to use labels which the respondent has on hand, 
Crdinarily, therefore, only the right to obtain additional labels should be 
withdravjn. In ex-ceptional cases, as v/here the respondent has such a quantii 
of labels on hand that an order denying him the right to obtain additional 
labels would be of little effect, you should also deprive a respondent of h: 
right to use labels on hand. In m.ost of the cases of violation arising unde 
these codes, the Code Authority, after a hearing by it and acting under -an 
authorization from an IT?A Label 7;8view Officer, v/ill have temporarily- susper. 
ed the issue of labels pending a hearing by the Regional Council and action 
on the part of the Regional Director. V/hers such a tem,porai*r siispension has 
occurred it is im.portant that the Council and Reeional' Director act promptly 
on the case in view of the hardship, wiiich the respondent might suffer on 

9833 



-236- 

account of delay in obtaining a hearing. If you --det ermine that the right 
to obtain labels should be withdravn, yoi;.r order in such cases will make 
-final the withdrawal temnorarily affected by the Code Authority, Your 
decision deprivin,?^ the respondent of the right to obtain labels or to use 
labels on hand is final. 

If a concern subject to two or more label cedes is found guilty of 
violation cf only one code,- it nay be deprived of the right to obtain labels 
for goods maTiufactured under that code. But it may not because of that 
violation be deprived of the right to obtain labels for goods manufactured 
under the other codes. Nor may a concern because cf a violation of a non- 
label code be ceprived of the right to obtain labels for goods manufactured 
under a label code. The rules in this paragraph apply with respect to 
labels only; ?/hen the Hue "Eagle is renoved, it is removed from all of the 
respondent's establishj-aents, even though they are operating under several 
codes and only one cole has beon violated. 

VJithdrawal or restoration of the right to obtain labels or to [^ 
use labels on hard is to be in accordance with the procedure described 
above for removal of the Blue Eafle, with the following additions: 

(a) Notice 

The notice should state, in addition to the usual inforriia- 
tion, that if the respondent is found guilty of violation the I^egional 
Director may withdraw his right to obtain or use JPA labels.- Form A should 
thus be modified, os indicated thereon, in such cases. 

(b) Decision of Council 

The Council should, in case of a finding of violation, recom- 
mend whether the right to obtain and the right to use labels should be witlh- 
dra'.7n . 



(c) Telegraphic notice of finding of violation 

If you determine to withdraw the right to obtain labels, the 
telegram notifying tlie respondent of the finding of violation v;ill also 
stpte that the right to obtain W~A labels v.'ill be withdrawn. In the 
exceptional case in which you deteimine to withdraw in addition the right 
to use MRA labels which the respondent has on hand, the telegram should so 
state. Form 3 should thus be modified, as indicated thereon, in such 
cases, 

(d) Telegram withdrawing right to display Blue Eagle 

This telegram should be m.odified in appropriate cases by 
specifically withdravv'ing the right to obtain labels and, where such action 
is determined upon, the right to use M^JA labels which the respondent has on 
hand. Form C should thus be modified, as indicated thereon, in such cases. 

98o9 







-••?37- 



(e) Order to Code Authority to cease icsue of labels. 

If you deterdne to v;ithdra'« the riFj;t to obtain labels, 
you should in j'-our t'elerron to the Code Authority advising it of your 
action order the Code Authority to cease the issuance of WRA labels to, the 
respondent, ^onrt 7 should thus be :"iodified, as indicated thereon, in such 
cases. 



(f) Restoration of rirht' to 



OP 



.\in or use labels 



If the respondent shall have satisfied you that he is in full 
compliance with the code and the F.I.^^.A. and any rule and regulation duly 
adopted pursuant to such Act (including having made restitution for past 
violations . in accordance T/ith T'IRA policy), or if you believe such action is 
in the interest of corapliarce with the code, you vrill order the Code Authori 
to resume the issuance of labels to the respondent and you ivill restore to 
the respondent the right to use labels whi^h the respondent has on hand if 
he has been deprived of such right, 

(L) I'otice to Respondent 

If you detemine to rc-store the right to obtain labels, 
your telegram to the respondent advisinp- him of the restoration of the Blue 
Earle v/ill also state that the rij'ht +o obtain NRA labels is restored, 
v/here tl\e right to use NRA labels is also restored, the telegram will so 
state. Form C should thus be modified, as irdicated thereon, in such cases, 

(2) Or'^'.er to Code Authority to r^esume the issuance of labels 

If you deteimine to restore the right to obtain labels, 
you should order the Code Authority to resume the issuance of OTA labels. 
Form I shouJ.d thus be nodified, as indicated thereon, in such cases. 



nent 



(g) Special procedure ?.'here respondent has more than one establia 



(-'-^ If 'the respondent's head office is in your Region and 
you detemine to v.'ithdraw or restore the right to obtain labels, you will 
order the Code Authority to cease or resume the issuance of labels to the 
respondent for all of his establishments, 

[2) If_ th e respondent ' s head office is not, in your Region 
and you deteimine to withdraw or restore the right to obtain labels, you wii; 
include in your telegram to ,/ashJngton: 

(ix) your reco^-rniendation that the right to obtain labels^ 
and, if you so determine, the right to ust labels v/hich the respondent has 
on hand, be withdrawn from or restored to the respondent for all of his 
establishmients. 



98Sa 



-238- 

8. Relation to Induntry Divisions and Industrial Appeals Board, 
Petitions Tor nelief. 

If the respondent contends that he cannot iiiake restitution and 
comply with the code or certain of its provicior.s (or any administrative 
rulings thereunder, such as interp'-etat ions or classirications) on the ground 
that they are unfair or discriminatory, tend toward Tnonopoly, ur work undue 
hardship .upon him, the Council should proceed as follows: 

(a) If it decides that t^e contention is made in good faith 
and is supported by enough facts to warrant its con- 
sideration by the proper authorities and that it mould 
be unfair to remove the respondent's Blue Eagle until 
the respondent's contention has been considered by the 
proper authorities, the Council should advise him of 
his right to petition the TllA. Division Adr^iinistrator 
for relief and of his right to appeal from the decision 
of the Division Adroinistrator to the Industrial Appeals 
Board; and the Council should suspend a recommendation 
in regard to the Blue Saf;le and a reference to the 
Litigation Counsel pending a final decision of such 
petition, if it is filed within a time fixed by the 
Council. 

(b) If it decides that the contention is not made in good 
faith or is not supported by enough facts or tbat it 
would not, be unfair to remove the respondent's Blue 

, Eagle if he fails to make restitution and comply pending 
decision on a petition for relief, the Council should 
advise the respondent of his right to petition for relief 
and inform him that unless he m.akes restitution and com- 
plies pendinc a decision on such petition it v.'ill recommend 
that his Blue Eagle be removed, 

9. General, 

The above merely prescribes the i:rocedure that should be folloTved 
by you in regard to withdrawal or restoration of the right to display the 
Blup Eagle and to obtain or use NRA Labels. It does not establish an 
exclusive procedure or in any marjier bind the Com.pliance and Eitforcement 
Director or the Chief of the Compliance Division. The right to display 
the Bluft Eagle and other NRA insignia and to obtain or use MRA labels may 
be withdrawn or restored in any case by the Compliance and Enfowcement 
Director, oe on his behalf by the Chief of th5' Compliance Division, even . 
though the case may be before a Regional Council or regional Director, whose 
jurisdiction will cease at the direction of the Compliance and ErJ'orceraent 
Director or the Chief of the Compliance Division. 



L, J, Hart in 
^^•^^ Chief, Coripliance Division, 



( 



( 



-339- 

A!niDC A 

nation;! Ti-lCOVTBY Airi'^IGTIvATION ■. 

Important Info rr:atior> t_o Ie-_s ons ^hart-e:! v.'ith Vio lation of an NRA Code , 

Ac'roeT:;ent or_ R egulatio n 

PROCEDURE BLFOFH 1I1E r;:TC.IO:-LAL COITLIANCE COUNCIL. 

Bead Carefully 

llecrinrs before the Regional Conpliance Council are infomial. They are not 
modeled upon court procedure and do not reserible a trial or prosecution. However 
they ".re conducted in orderly fashion in accordance ?; it h the Council^s rules 
of procedure. The hearing is not a public hearing, but the Council nay allow 
interested parties to attend. No stenographic transcript of the hearing will be 
ir.ade unless you desire to have one. and pay half of the expense, in which case 
you should notify the Secretary c-j the Council at least twenty four hours in 
advance of the hearin'' so that he may nake proper arrangenents. 

The Chair;, inn will announce the purposes of the hearing. The charges against 
you will then be pres-^^nted by the Legal ^c'viser to the Regional Director or by 
come ot'ier menber of the Fer.ional Director's staff. The person who filed the 
complaint against you and any other persons ?;ith a proper interest in the case 
will be allowe-? to present facts or malce staterients. You will then be requested 
to present your side of the case, which you may do yourself or th'":.;ugh a lawyer. 
The Legal Adviser (or other member of the Regional Director's staff) and the 
complainant will then be given an opj-ortunity to reply to your statem.ents. 

The Council will admit all evidence which it considers proper, "iitnesses 
may be presenti^d by either side and )ns_y- be cross examined, the extent of the 
examination to be subject to the discretion of the Council. 

It is the fixed policy of the National Recovery Administration not to dis- 
close the names of cor;plaini|Tg em-ploirees or other complainants without their 
conserit, as experience has shown that disclosure of their names may mean serious 
injury to ther. ?or this reason, the names of complainants will not be dis- 
closed to you, oirectly or indirectly, unless the complainants consent. 

If the respondent does not attenc" , the Council may nevertheless hold a 
hearing and will follow the above procedure as fully as possible in view of the 
respondent's absence. 

If the Council finds thnt on the evidence before it no violation is proven 
its' f iroi'17'3 a:e final. If the Council finds that a violation is proven its 
decision will consist of recomvendctions to the Regional Director as to findings 
of fact ;:nd cf action to be taken by the Regional Director. If the Regional 
Director approves the finding of violation he may rem.ove the Blue Eagle and 
refer the case to a United States Attorney. If the Regional Director decides upon 
rem.oval of the Flue Nafle, he will notify you of the finding of violation, but 
he will not remove your Blue Eagle at that time. He will '.vait five days, during 
which period no publicity will be given to the finding of violation, and will 
then notify you that the Blue La^le has been removed, 
983S 



-340- 
FOnt' A 

TELEGPay" TO ':]ESPOn)E^'T FOTIFYING HD! OE HEARING TO BE 
-. HELD EY Ti-IS REGIOjAL COITLI.ANGE GOIE'JCIL . 

(National Code Authority or local Code Authority or State 
NRA Cox.iplianoe Director or IP.A Regional Director) HAS CHARGED YOU 

HAVE VIOLATED SECTION ________ ARTICLE 

CODE BY (state alleged violation briefly but with sufficient particu- 
larity to inforr.i the respondent of the charges)- STOP ^-^EGIOFAL 
C0?':ELIA1TCE COIT^tch 'VILL HOLD HEA' I^T. OF THIS CILARGE ON (date, place, 
and hour) STOP ^-X'U I 'AY ^.PPEAR 0"^ BE REP'IESI'-ttSD AT KEARP-'G OR EILE 
V/RITTEIT STATEI1NT BEEORE' HEAREJG STOP IE COITTCIL EI^^DS ETIOLATION 
REGIONAL DIRECTOR TAY "ilTHDRA^Y YOUR RiaiT TO DISPLAY ANY BLUE EAGLE 
AI^ I'AY REEER CASE TO U^NITED STATES ATTCRT^f STOP PLEASE ADTTiSE 
V/E'ETHER OR NOT YOU "JILL /sPPEAR OR BE REPRESENTED AT HEARING 



SECRETARY" 

NRA REGIO^-^;!. CaTLIA-NCE COUT-ICIL 



1. If a case has already been referred to a United States 
Attorney the words "and may refer case to United States Attorney" 
should be omitted. 

2. In coses arising under codes containing raandatorj' label pro- 
visions, the follo'Ting should be inserted after the words "Blue Eagle" 
"and to obtain NRA Labels or to use ;tra labels on hand''. 



3839 



-241- 



7cm' I- 

TELECRAl' FROr ^W-l(r\'J- DIRECTOR TO r>E3P0"TDE^^ "'OTIFYING Ell' THAT 

VIOLATIOr HAS HEEM "FOTJND 
(To bo addressed to the Establishment ^/Jhere Violation Occurred) 

;^TEB C0"SIDEI^JFG REG Oil "E- TAT I OF OF -.EGIOJ'AL COITLIAI'CS COITI^ICIL 
FOLLO'rJETG HEARING Oil YCHR CASE I EIIT) YOU HA\T5 VIOLATiJ- 3ECTI0H 



ARTICLE CODE STOP OH THIS HUTDI'tq yOU 

'Vni BE DEPRIVED FIVE " AYS HHOr DATE OF RIGHT TO DISPLAY BLUE EAGLE 
STOP raiTIL TI-IEN -^E SHH-JX HOT GIX^ R"3LICITY TO TI-II3 HITTIHG 



NR^ PJiGIO^AL DIRECTOR 



If Regional Director deterrdnes to '7ithdraiv' the right to obtain 
labels, the following should be inserted after the r'ords "Blue Eaple" ; 
"and to obtain >r;A labels". If Regional Director detemines also to 
withdraw the right to use labels -.vhich the respondent has on hand the 
insertion v;ill read: "and to obtain IHIA labels and to use HRA labels on hand' 



98S9 



-243- 



FOK" C 

TELEGRAJV! FROM REGIONAL DIHECTOR TO RESPO^JDEITT 
RETfOVira BLUE EACIE 
(To be addressed to the Establishment vvhere Violation Occurred] 



AFTER COT'SIDERPTx RECaj'ETroATION OE REGICi'TAl GOITLIAI'TCE 

(FAPACrt^.OB PFA 
COUNCIL I FOOTTD YOI? UAL VICLATEL (SECTIOFj ARTICLE 



CODE) STOP OF THAT FI?vBI~^a YOU ARE HEREBY BEPRI"/EB 



OF THE RIGKT TO EISPL^Y ANY BLUE EAGLF' .JTj "-'GU '7ILL TiI.REAFTER REFRAUT 
FROM USIITr A^'T BLuE EAGLE AT YOUR LGTABLIS'J'F 'T 0^^; IF AD^FTFTISHTG OR 
IN A?"T OTPIER UAirt'^R STOP YCU A^'lE FIRECTSD TO Sl^^.RE^^DER U '^ 1]DIATELY 
TO YOUR F0STI7-3TER JJLL \^LUE lAGIEo III YOUR POSSEGSIGN 



FRA REGIOFAL DIRECTOR 
Tf Regional Director determines to withdraw the right to obtain labels, 
the follO¥/ing should be inserted after the words "Blue Eaele" : "and to obtain 
NRA labels". If Regional Director deterininos also to withdraw the right to 
use labels which the respondent has on hand, the insertion will read: 
"and to obtain NBA labels and to use NT^A labels on hand". 



9339 



-•243- 



roRi: D 



TELEG-RA!,' FRCI.! HEGIO'TAL DIKZCTCH TO STATE DTEECTOR 
ADVISING HW OF BLUE EAGLE ^la'OYAL 

EAC-LE FEI'DVAL (Name an.d address of 

(Pi\HAGRAPH P^i 
resnondent ) ( SECTION mTlCLE 

CODE) 



NEA REOIQI'AL DIKIGTOH 



1. The Rerional Director nay add to this teleerair. ar.y detcils of 
the case which he thinks nay be of interest locally. 

2. A State Eircctor receivinc such a telerrari should interpret it 
as follows: 

"The following telegram has been sent to 



(nare and address of respondent) Quote After considering 
recoiimendatTon of Regional Corpliance Council I found you had violated 

iParacraph (PRA) 

(Section Article Code) Stop On that 

finding you are hereby deprived of the right to display any Blue Eagle 
and you will hereafter refrain from using any Blue Za -le at your 
establishment or in advertising or in any ether r.ianner Stop You are directed 
to surrender immediately to your postmaster all Blvie Eagles in your possession 
Unquote You may give this matter such publicity as seems advisable" 

3. If the "Regional Director has v/ithc'rawn the right to obtain labels, 
the telegram will corfence as follows: "Earle labels Removal" and the 
State Director will interpret the word "labels" as indicating that the 
telegram sent to the respondert contains the pkrase "and to obtain I^IRA 
labels" after the words "Blue Eagle". If the right to use labels whick 
the respondent has on hand has also been withdrawn, the telegram will 
commence as follows: "Eagle Labels Use Removal" and the State Director will 
interpret the words "Labels use" as indicating that the telegram sent to 
the respondent contains the phrase "and to obtain ?J?A labels and to use IIKA 
labels on hand" after the words "Blue Eagle". 

98:.9 



-244- 



FOf^'' E 



LETTER ^0 P03T:A3TE!1 I^^ CITY OE rffiSPO^TE^Trp 
ADVJSIf^G FII'.': OF ELI'E EAGLE RE 'OVAL 



postmaster, 



Dear Sir: 

(bnclosL-d ) 
The (following) tclegr.an has been sent today to 

(Enclose ) 
. (Cuote ro:T.i C) 

Eindlj'- advise us vrithin te^i days what action is 

taken hy this concern tovierd conplyin." with this telegram, 

statinp in particular v/hether the Elue Eag'lc is being displayed 

at the estsblishineut. All Cede Blue Eo fles surrendered to you 

should be sont by you to ks. All FRA Blue Eafles surrendered 

should be kept by you. 

^^ours very truly, 



IJRA -^EOI0",AL. DIEICTOR 



9859 



-r:45- 



nZ'EGIW ?PCr T-Gio^'Al, DJliZCTO^: TO C(;DE AI7TT:CRITY 

AEVI-'JI""n IT 0" BLUE EA'^'LE ~iB"OV;il 

EA"TJil ES'CVAL (Na-'ne and address 

cf respondont) STCTIO:' JETICLE 



J":..A EEGIO'-TAl LIRECTCE 

1. T'^.e Reficnel Director nay cc^d to this telegrar. any details of the 
case v^hicri he thinks may he of interest to the Coda Authority. 

2, A Code Autiiority receiving such a telesrara should interpret it 
as follows : 

"The follov/in/;. telegrairi has been sent to 



(T'are and address of respondent) Quote After considering 



recor.Tnendatioh of Rerrional Co-ipliance Council I found you had violated 

Section __ _ rirticle Code Stop Cn that 

findinr- "you are hereby c'eprived of the rir:ht to display any Blu.e Eagle ' 

imd you will hereafter refrain fro-: usinr any Blue i:aa:le at your 
establisir.ient cr in advertisii-r --r in any other ■'.-'onner Stop you are directed 1 
tc surrender irij-aediate3>,'- to your -^ostnaster all Tluc Earles in your possessi j 
Uncuote You raay'rive tl-iis natter such "oublicity as seer.s advisable". j 

3. If the Viegicnal Director has rdthdraTrn the right to obtain ]TOA I 

lsb3ls th3 follovring should be added to the telef;raii: "Cease issuance of 
V~A labels t'o this concern". If the Regional Director has also withdravm ' 
the rifjht to use labels v?hich the respondent has on hand, the insertion will j 
read: "Cease isnuance of T-TPA labels to this concern Stop Right to use labe] j 
on hand also v.;ithdra''.'n". 



98SS 



-346= 



FORD.: G 



TEL.IIGRA.T'' 7R0:' ^SGIO \^i DI'iECTCR TO "lESK^'^DIlS^TT RSSTOKI'IC- 
P.IGIIT TO DISPLAY BLUE TAOLE 



HAVIITG ^ZCEIYED TOUV: AGSURAj'OE YOr ARiC Ca'FI,YIITG AITL 'TJILL 

p-A) 
CONTINUE TO GOITLY '"'ITII ( CODi) A:D T^'AT '^OU HA'^^E 

(State action taken by respondent, es r.aKin^ full restitution of back 

wages, etc.) I I-IERSBY RESTORE YOLT^. "IGHT 70 DISPLAY BWE IIASLE STOP 
(F7;A) (y:V~' poSTI'AoTEH) 

YOU I'AY OBTAIr (GODS) BLUZ EAGLE FROr ( CODE AUTHORITY-.. 

(KEO " " (P'-'A) 

-•■■XDRESS) UPO'J FILigG •IITH ( IT) CSRT3 riCA'^I: OF COFrLIANCE "/ITH (CODE) 



KRA REGIO!^ DIRECTOR 



If Re.9-ional Director determines to restore the right to obtain 
labels, the following shouDd be inserted after the words "Blue Eagle"! 
"and to obtain ;^rA lebels". If Regional Lirector determines also to 
restore the right to use labels which the respondent has on hand, the 
insertion will read: "and to cb-^ain IJEA labels and to use IZRh. labels 
on hand" . 



9829 



-:^17- 



WPZ.' H 



TZLIiGRAi.: FRCf: HAOIOivi DIHECTCH TO POST! "ASTER 
Il'Tx^ORril-IC- }{II' OF :T:.STOB.f..TIO:' 01'' PLUE EAC-LE 



ill; :r TO etgpl^l!" biue 7i£^:z i].';;jto~~) to 



■,T0? IF GOrCEKN FECIJESTS PLEASE ISSUE 



BLUE i. ';-LE UPON rurCEIPT OF GjaiTEr GE":TIFICATE OF CaTLlATTCE 
JlTi^ PRA 



NFlt^ REGIGUiiL DIRLGTOn 
REGIO:.) 



98S9 



-?4B- 



FOPJ^ I 



TELEGRi;!' I'ROi' :'iiGIO"^AL DiriLJTO- TO CO~L iUT'GHITY 

iAT70;";ri:^G it of i^estoijatic" c-^ rr:r ea^-le 

EAGUC RILSTORATIO'" (lXaT:e and ar^oross of 

respondent ) (Stats e.ction tal;,en by respondent, as 

raakinp full restitution of back wages, etc., qu otinfi exactly fron ?om G) 
STOP I'^SUS BLUE EAGLE LTCN ^EC"'IPT OE 3IGLTED CE":'^IFICATE OF GOrTIIAl>TCE 
"7ITE YOUR GODS 



'■-RA 'vZOlr'Al. DIRiI'^TOR 



1. The Regional Director .naj aCd to this telegr'-an any details of the 
case v.'hich he thinks r::ay be o-^ interest to the Code Authority, 

£. A Code Authority reccivin': such a telef^raiv; should interpret it as 
follows: 

"The fo].loifin'- teler-ron has been sent to 



(nane end addre.'^s of respondent) Q^uote Saving received ycur 







assurance you are conolyinj and .ill contirue to connly with 

Code and that you have (action taken by respondent vs indicated in telefram 
received) I hereby restore your ri;:ht to display Ulue Eaj.,le otop You ^ lay f^ 

obtain Code Llue Ea^le from Code .-aithorit;'' (address) upon 

filing with it certificate of conpiifaice -~ith code Unruote You r.iay rive this 
matter such publicity at: seenn ad^visable" 

31 If the Rerionril Director has restored the richt to obtain labels > 
the following should be inserted after the ivords "Glue Ea^le" : "and ?TRA 
Labels". If the right to use labels v.hich the respondeat has on hand has 
also been x..:itored the follor/ing should be added at the end of the telegram: 
"Right to use labels on hand also restored". 



98?9 



-?49r» 



ros 



tixeora: ■ thca: pimrTVjiLL unrcTor. tc st^^e libector 
i::nf'CRi'rTG iin: 0/ i;i:stor&.tic.; oj blue eagle 

EAGLE "iESTO'RATIOi f (Kaiie and address of 

( ?:^ 

r.is^or.di;"^t) ( CODE) (State action taken by respondent, 

as making fuLl rectitution of back wages, etc, guotinr exact Ly from 
Ecrm G) 



I'TPA PEGIGl'/i DIx^.ECTOR 

1. Tlie Pc£,icnal Director rnay add to this telegrsr.i any detaiLs of the 
case ?i;hich he thinks "lay be of interest LocaLLy, 

£. A Gtate Director rec ;ivinr: such a telegran should interpret it as 
fcllOKs: 

"The following telecran has been sent 



(Nana afid address of responde'^t) Quote }'avin';T received your assurance j'-ou 
are coi-iiplyin:;: and wi]] continue to coin,:-ly v/ith | rn'nFi 

and that you have (action ta].:en by -respondent as indicated in telegram 

received) I heiebv restore your ri-'ht to display Blue Eajle Stop You may 

obtain (?-'- ) Elue Earle froT; (Your Postmaster \ upon 

(Code) ( Code Authority *» Address) 

filing with jnin^j certii-icate of~^nliance with jg^A^j ^ncuote You may 
five this iii?tter such pi'blicity as seems advisable" 

5. If t:i& '■■...rional Director has restored the right to obtain labels, 
the telcsrara will cor.rence as follows: "Eaglo Labels Restoration" and the 
State Director v;ill interpret the vords "labels" as indicating that the 
telegran sent to the respondent contains the phrase "and to obtain l^TRA. 
Labels" efter the worda "Blue Eagle". If the right to use labels which the 
respondert has on hand has also been restored the telegram will commence 
as follows: "Eagle Labels Use Hesto ration'^ and the State Director -'ill 
interpret the words ''Labels Use" as indicating that the telegram, sent to 
the respondent contains the phrase "and to obtain NLA labels and to use IJRA 
l;..bels on hand" :..fter the "'ords "Elue Ea^le".. 



-"350- 



FOR- E 

TELEGRAI." TROV REGIO"'JL Di:;i:CTO-( TO I'ZxO) Or^lCS C? ~?E3rO'T)E:TT 
ABVI3I-'G IT OF '!Ejai^"G SCFEDUIED BEFCKT REGIC"'aL 

cc:tli'"ge gcuitcil 

FOLLO"T'G TELEGPiT^ ^IT? TODAY QUOTE (Copy Eom A including 
n.giiie and address of addressee) UiJruOTE A^T O^.DER R'?"OVr G BUTE EAGLE A 

FROr ABOVE ESTAELIStlfElTT T'AY /J'PLY TO All YOU^ E3TAB1I3I-1'E?^3 AID 
BRi-ITCIIES STOP SUESECUH'TT GOI'^TTwIOATICrS IE TI-IIG "'ATTER MIL EE SEtTT 
O'TLY TO (NaiTie ard addres? of addressee of Eorn a) 



YitiA EEGIO 'AL DIPEGTOH 
ESGIOM 



9839 



?ck: l 

TELECRAi: ?ROr ■^EOI0::iiL DI-;LCTCR TG I'lIAD 0?7IC:: C7 RESPC'DENT 
ADyi3I:;C IT CF FI'T)I^"G 0? "/ICLriTIO!^ 

FOLIO'VirO- TUIC'Rii' ITT TODAY 'X"OTS (Copy ?orn 3 including 
na::';e and address of addie.ssee) UITv^UCTS AIT ORDER "^E'OVI'tg BLUR EAGLE 
EROr ^^CRR? R3TABLIREI:ETT "AY AP^'LY TO ATX YOUR ESTABLISKHI-tTS AIT) 

bra:'Cres 



■IRA REGIO-AL DIRECTOR 
RSGIC - 



98:- 9 



-.^52- 

Fo:r i: 

TELEGRi'J' TWl' REGIO!j\l DIISGTOR TO EE/.D 
OFFICE Ol^ RE3P0"-DE?tt ''OTIFyi'G IT OF I'LUi: 
EAGLE ■"L"OY<lL 

AFTER no'SI]i:;"I--G FECO'^TC'ryLTIO^- or '?EGI0!"A1 coitliaite 
COUT^CIL I roiJl'TD T;"AT (insert pa.ne and address of addressee of Form b) 
FAJ) VIOLATED SECTION /lRTICLE 



CODE STOP ON TKA^' FINDI^'G YO^^ A^E ITEPEBY DEPRIVED OF 1^3 RIGJ^T TO 
DISI^AY Airx' BLUTi; ZATly^ A'^D YOr 'JILL NEFEA^'TEP PEFRAI'' FPOT" UEIT. AIT 
BITIS EAGLE AT YOUP ESTABLISI-inDI'JT OR IT-I AIPiT BPAI^TCTIEG 0^' IN ADVE"'-TISI'^G 
OR IN Ain OTEEP r;.J^p;;R stop you AriC DI^-:ECTZD to SFTi-!RE:DER UTEDIAI'ELY 
ALL BLUE EABLES IN YOUR POSSESSION TO TfiS PFGPECTr/"L] POSIT 'ASTERS 
GERVIII> YOUR ESTABLI^aHNTS 



KRA REGIONAL DIRECTOR 
FJIGIO'T 



Remarks on Fonn C relative to cases r/here rig?it to obtain or 
use labels has been v/ithdravm. are also applicable to Form r. 



e 



9Cr5 



"253- 

APPENDIX 4 

45 Sfoadway 
New York City 



December 8, 19S4, 



TO: Mr, William H. Davis 

Special Adviser on Compliance and Enforcement 

FROLI: Mrs. 'Anna M. Rosenberg 

State NEA Com-pliance Director . . _ 

SUBJECT : TROUIiLESOME CODE PROVISIONS - FART I 

One of the major problems of the NRA is that of compliance and en- 
forcement. In order that compliance mpy be obtained, the reasons for 
non-complipnce must be understood. They ^.re: 

1. Unfair or -unenforceable code provisions. 

2. Desire of industry to evade compliance. 

a. Because of desire to obtain greater 
profits or to actually stay in business. 

b. Natural and deliberate dishonesty. 

It is therefore necessary to .make a study of and analyze codes in 
order to ascertain which problems are inequitable and non-enforceable. 
After such a study is completed provisions which are definitely found to 
be inequitable and non-enforceable must be eliminated from codes. This 
would leave codes with a body of provisions that are both equitable and 
enforceable. At that time it would be necessary to establish machinery 
for speedy and efficient enforcement of the remaining code provisions. 
By eliminating unfair and unenforceable code provisions, the government 
would give industry the feeling that it is definitely trying to coopere.te 
with it and under.stand its problems. Industry, in turn, would feel that 
the government is 'not trying to be arbitrary and would fully cooperate 
in the problem of enforcement. There is a substantial denial of justice 
to those members of the industry who are attempting to comply honestly 
if speedy enforcement is not provided for. Speedy enforcement cannot 
be provided for when provisions are definitely inequitable and non- 
enforceable. 

The report is divided into three parts. The first part is an 
analysis of the Troublesome Code Provisions received from industries. 
Part' II lists the different Troublesome Code Provisions under their vari- 
ous headin£;s and gives the industries und^r each heading. Part III con- 
cerns itself with those industries having troublesome code provisions and 
cites the actual section of the code with which difficulty is encountered. 

Out of 68 replies received from Code Authorities only 25 contained 
pertinent information which would help in an analysis of Troublesome Code 
Provisions. A further analysis of Troublesome Code Provisibns will be 
continued and a supplementary report will be made at a later date. 



9839 



-254- 

9 or 35^ of the pertinent replies stated that their difficulty nas 
one nhich hpd to do with the " open price plan ". The industries cornpltjan- 
ing of such difficulties arei 

Compressed Air Industry Article XIII 

Heat Exchange Industry " 

Pump Manufacturing Industry " 

Floor & Wall Clay Tile Mfg. Ind. " IX 

Wholesale Confectioners' Indus. " VII - Sec. 1* 

Ruhher Mfg. Industry Chapter III - Art. IV - Sec.l. 

Household Goods Stor. & Mov. Trade Art. VII -Sec.l & 2 

Paper Bag Mfg. Industry Article VII - Sec. 3 

Hat Majiuf acturing Industry- Article V - Sec. 6 

35^ is a significant percentage and would seem to indicate that the 
difficulties experienced ty these industries are not due to difficulties 
within the particular industries, hut rather due to the faiilts and diffi- 
culties inherent in "open price plans" and "price-fixing," Before a dis- 
cussion is -ondertaken of the difficulties of "open price planning," other 
industries having problems related to "open price planning" and "price- ^ 
fixing" will also "be enumerated. * 

2 or 8^0 of the (Electric Stor§,ge and Wet Primary Battery Industry - 
Schedule 1; Section 5A, and the Wholesale Dry Goods Trade - Article IV - 
Section 2) of those industries replying, claim that their trouhlesome 
provisions relate to Consignment Selling . 

3 or 12/0 of the (Electric Storage and Wet Primary Battery Industry 
- Schedule I - Section 6, Euhher Manufacturing IndiE try - Article IV - 
Chapter III - Section 2, Paper Bag Manufacturing Industry - Article IX - 
Section H & J) of the industries complain of difficulty of enforcement 
of "Selling Below Cost" provisions. 

1 or 4)S of the (Wholesale Dry. Goods Trade - Article IV - Section l) 
of those replying have the prohlem of "Free Deliveries," 

2 or Sfo of the (Electric Storage & Wet Primary Battery Industry - /^ 
Schedule 1 - Section 1, and Concrete Reinforcing Steel Industry - Section 

1 (U) Article VIII) have the problem of " Second Hand or Rebuilt Articles .' 



.11 



Following are enumerated several of the difficulties inherent in the 
"open price planning": 

1. Most "open price planning" permit of a waiting T>«riod, This 
period permits intimidation and coercion of competitors, 

"2« It can be used as a lever to put the little man out of 
business. 

5» Opposed to the psychology of the buyer who still endeavors 
to "chisel." 

4, It is practically impossible to use in an industry having 
many competitors, since it would require a very large polic- 
ing force which would be very expensive, and might even 
then bn inadequate, 

9839 



-255- 

5. Must have goods of certain ?nd definite, quality and standards ■ 

In a questionnaire sent out to one thousand industries, 80^ replied 
that they sold below cost from time to time in order to meet prices of 
their competitors, and 20^ replied they sold belov? cost so as to keep 
their plans v/orking as near full capacity as possible. Since this is the 
actual experience of industry, competitors feel that they cannot rely 
on members of their industry to cease this -oractice and therefore evade 
the provisions of "open price' listing" "by rebates, "selling on consign- 
ment", "free deliveries", and other evasions, known to industry. 

Furthermore, "open price planning" does not do away. .with destructive 
and cut-throat competition since the waiting period incorporated in most 
"open "orice -olans" encourages competitors to find a method whereby they 
can undersell their competitors. Industry had hoped that their "open 
price plgji" prices would tend to be raised, this has not been the case, 
since it has tendered toward minimum prices in the same way that it has 
in the labor provisions of codes. 

Where price control has been sought through the limited operation 
of productive machinery, a fallacious economic principle has been in- 
troduced since there is not an overabundance of production in this 
country. Such control is based on the creation of artificial scarcity and 
the problem at the present time is one of supplying people with all their 
needs rather than to create an untrue scarcity. 



Other Troublesome Code Provisions listed by industry in their letters 



are: 



"The problem of overlapping codes." 

Overlapping codes present a real difficulty in proper code adminis- 
tration. An example of a group of industries in which overlapning codes 
prevail and which is causing real difficulty in proper compliance and 
enforcement is the Undergarment and Negligee Industry. The Undergarment 
and Negligee Industry Code has iDrovisions which cause a definite over- 
lapping uith the Underwear Allied Products, the Cotton Garment and the 
Infants* and Children's Wear Code. Very often these products are manu- 
factured under one roof and the manufacturer is bound by conflicting 
code provisions since the hour and wage rates are different for the 
above enumerated codes. If possible, cods requirements in such cases 
should be made uniform or a provision should be worked out whereby a 
manufacturer whose business is primarily in one industry should be bound 
by the code of that one industry only. However, a study of the industry 
should be made in order to sec that no injustices are being done. 

The Artificial Flower and Feather Industry is confronted with the 
problem of homework . The problem of homework is a serious one both from 
an economic and social point of view. It is a problem not only in this 
industry but all industries where homework is permitted and sanctioned. 
Where home'jork is permitted in an industry, it is difficult to check thu 
number of hours of employment, the wages paid or the sanitary conditions 
under which the work is done. If those manufacturers who have their work 
done under a homework system do not have to pay similar wages to those 
who have their work done in factories, they will be in a position to 

9839 



-256- 

undersell their competitors. The entire problem of homcTTork Should Toe 
further studied in order to ascertain if homework should "be permitted, 
and if it is permitted whether it can "be done on a hasis similar to those 
where work is done in the factory. 

The Hat Manufacturing Industry complainS' of non-use of lahels . In 
an industry where labels are supposed to he used the particular reason 
for such non-comT3liance in this industry should he ascertained since in 
most label industries this difficulty does not obtain, for without labels 
they have difficulty in selling their merchandise. The Hat Manufactur- 
ing Industry also comnlalns of difficulty of employees being worked below 
the 35<f: hoxir minimum and over the 40 hour weekly hour rate which provi- 
sion again it is necessary to investigate the -Rarticular difficulties in 
this industry before the solution can be worked out, 

3 or 12-1/25^ of the (Paper Bag Manufacturing Industry - Article YIII 
- Section 1 and 2, Processed or Refined Fish Oil Industry - Article VII - 
Title B, Hat Manufacturing Industry - Article V) of the industries com- 
plain of the difficulty of getting statistical information . They should a 
be ,^iven the power to subpoena and obtain whatever books and records are * 
necessary. However, they should of course be given the assurance of loiow- 
ing that their competitors will not have access to their private records. 
If necessary the IISA should stop in and see that the Code Authorities 
are given such records where they are necessary. 

Another necih.od of contrclling industry insofar as price is concern- 
ed, has been the "allotment of production" method used in the Glass Con- 
tainer Code. This is a very dangerous provision unless there are ade- 
quate safeouards to prevent extortiona.te ;prices. 

Other problems which do not iDroDerly come within the category of 
Troiiblesorae Code Provisions but are troublesome to the Code Authorities 
are also nentioned in this re-oo'rt. 

Used Te::tile Be,g Industry complain of the difficulty of getting 
members of the industry to com-olain of other competitors who are violat— / 
ing. This coi^ld be obviated by not only having a system whereby voliin- 
tary complaints are used to detect violations, but to have several paid 
investigators attached to the Code Authorities' office in order to in- 
vestigate possible violations. 

The Upholstery & Decorative Fe.brics Trade comiolain of the difficult]' 
of 5ajiir)le books and seasonal lines . 

The Elevator Manufacturing Company comiolains of the difficulty of 
getting snc?21er coLvoanies to su-ooort the Code Authority and the Concrete 
Reinforcing:; Steel Institute and the Processed or Refined Pish Oil Industry 
complain of the difficult'" of non-members who refuse to com-oly . This is 
a very serious problem since even if a small percentage of non-members 
refuse to co:.iply they can do vital damage to those members of the industry 
who are mailing a serious attempt to comply. If possible, penalty clauses 
should be written into their codes, although this would be only satis- 
fs-ctory in ce.ses where they sign such reciprocal agreements. If it is 
found that non-members who refuse to comply are seriously im-oairing. the 

9839 



-257- 

efficienc;- of the v-ork of a code •'onder a partici^lar industry, a hearing 
of the indtLstr^'- should be held to deter^nine v.hat methods can he employed 
to ohtain C0T;raliance. The firr,t rnethod is of course persuasion. If t'.-.is 
does not v.'ork other methods shm^ld he fo\ind. If those nho are complying 
are to continue to comply, those vrho are not conplying aust be made to 
comply quicj:ly, 

3 or 12^j of the (National Go'.inercial Vehicle Body Association, Yeast 
Industry end the Processed or Hefir.ed Tirh Oil Industry) have not been 
able to function properly due to the fact th^t their respective budgets 
have not been a-roroved . Without fu .ds they are definitely hindered in 
their adjjiini^trr.ti^in ^f the code .^md particularly in the problem of ob- 
taining conpliaiice and in their r.'ork on enforcement. 

Tlie TTaste Pr.i^er Trade objects to the fact thrt their bud,?:et v/as not 
made retroactiv e to the date of the a.rproval of the code, and, they claim 
a hardshio has be_n visited on those Biembers of the industry who bore the 
burden prior to the date of the a.rorovsa of budget. Reasons for this, if 
possible, shov.ld be given them. 

The Pov.'der FuTi Indiistry objects to the shift of the collection 
division to Uashin.-ton and the TTrecking £.nd Salvage Industry object to a 
system thereby the iffiA office obtains cQ-oies of the com-olaints before the 
Code Authority gets the co^rjy itself . A method vrhereby they receive copies 
of complaints at sane tine shOLild be rorked out. 

The Unolesale Ililliner"- Trade conplains of a very real difficult--," 
namely, that retailers return merchpndise --ithout good cause although 
their o\7n code -prohibits such rettu -n. This is again a problem of the biiyer 
who aimself is not bound by the code and therefore is not prevented from 
taking tmfair and undue advantage, Tnis can and should be changed by 
i, either an executive order or a provision in all codes stating that bU3"ers 
who knowingly induce a member of 3Xl industry who is subject to a code to 
violate such a code, is himself guiltj'- of violation of the code. A pro^ 
vision similar to this vould be helpful not only in this industry, but in 
many other industries where this problem ftrises. 

Many more codes than those above mentioned have the -problem of Trouble- 
some Code Provisions which should be either elim.inated in their entiret", 
mcdifi'^d or rewritten. Industries shoiild be placed in allied categories 
and either individual hearings for each industry or hearings for related 
industries, or -for indiistries having similar -problems should be held so 
that all of the Troublesome Code Provisions may be found, studied, and 
recommendations £'.nd sn^ggestions made \7hich will lead to their rectification. 
If such hearings rre held a threefold purpose will be served: 

1. Actual rectification of the injustices foiond -in 
the industry-, 

2. Qp.icker complifince of those provisions ^hich ere 
fair and enforceable. 

3. Code Authorities will be given the feeling that 
the government through the l'?A is definitely 
interested in the problems of industry and is try- 
ing to be as helTDfi'l as -oossible. 

9839 



-?5b- 

Industr^r end. OTvernment must l-.e tE.'U(\;ht to vrork in closer harmony 
and have a y.uitual respect for each other if the "best is to be obtained 
from the l'l?A, Indus tr:"^, labor rnd the consvner must be given the feel*- 
ing that 'the ITRA. is tn im^iartial cX-;'.e:ic~'' '-fhose des'ire is to hear all sides 
of the cxicstion and mcke decisions thr-t are r^ost fair to the .'rreatest 
number. 

Since the returns received ere inrdequate the}' crnnot be used as the 
basis for a "iroper survey. A survej'" can be vjidertalcen either: 

1, B;'- means of a questionnaire sent to industry. 

2, 37 pri-t-ate hearings of each industr"''. . 

3, 3y hearings on related industries, 

4, 3y hearings on sinilt.r or related -Trovisions of different 
codes. 

Tro'cblesome Code Provisions cm be handled in thre--:" ways: 

1, Talcing one code n,f a, tiie, stud^'ing it and making whatever 

adjustments are possible. § 

2» By stud^'ing certain t";^-Qes of ;-ro vis ions that are known to 
cause- difficLiltv such as "open price --)lan", "overlapping 
J .codes", 8Jid attem'oting to work out solutions that '-'Oiold 
work in all industries, 

3, A combination of both methods which is the really practical 
we.y since it combines the problem of "short range and long 
ra.nge" olanning, Is.ch indtistry must be helped to work out 
as coT.rolete a system of coroliance as is possible in order 
for the codes to continue. It is also important that cer- 
tain economic orinci^les be studied with r view to seeing 
'■'hether they are actually'" soiu^d rnd shovild continue to be 
incor-Qorated in the codes. 

A Troublesome Code Division choT^2d be set up to '"'hich a Code Author- ^ 
ity, a member of the industr3'', the ■'juiion or an employee may have access '- 
when the}?- have a grievance or com-olaint. The department could be helpful 
by: •; 

1. r.outin^: complainant to division having charge of such ■ 
problems, if such divisions .-re already in existence, 

2, Attempting to v/ork out a solution in those CE,ses where no 
department has been set up to take care of it bj"": 

a. Seeing if provisions is eqij.iteble. 

b. Seeing if it is enforceable. 

c. Seeing if it needs revision and- elding in drafting 
necessary changes. 

, 3, An educational program", ■^'hereby ind.ustry is shown the value 
and benefit to it of actual compliance under codes. 



9839 



TROUBLESOIffi CODH PROVISIONS _ PART II 



Price Listin.-T 



Com^resGed Air Industrj'- 

Heat 3::ciar.nge InQ:astr7'- 

Pump Ilfjiiriracturing Industry 

Electric Stora.?:e & T7et Primary Bat. Indnstr:/ 

Floor cj 'Tall Clay Tile Mfg. Industry ^ 
Wl^olesalars Confect. Industrjr 
RulDlier Iiar.ufactnxers Ass'n. 
Household Goods Storage & Moving Trade 
Parser Ba^ lifg. Indastry 
Hat Manufacturing Industry 

Consignnents 

Electric Stora -a &. Wet Prim. Bat. Industry 
ITholesale Dry Goods Trade 



Article XIII 
It 



" IX 

" VII " Sec.l 
Chap. I II"Art . I V-Sec. 1 
Article VII-Sec.l&2 

" VII-Sec.8 

" V - Sec. 6 



Schedule I - Sec.cA 
Article IV - Sec. 2 



Selling Beloi.7 Cost 

Electric Storpge & T7et Prim. Bat. Industrj- 
Rutoer manufacturers Association 
Wholesale llillinery Trade 
Paper Bag Manufacturing Industry 

Pro"blem of Free Deliveries 

Wholesale Dry Goods Trade 

Second Hand or Re"built 

Electric Storagj & ^.^et Prinar;:'- Bat, In.d. 
Concrete Reinforcinf Steel Institute 



Schedule I - Sec. 6 
Article IV - Chap. Ill 

Article IX - Sec.H&J 



Article IV - Sec.l 



Schedule I - Sec.l 
Sec. 1 (U) Art. VIII 



Difficulty of different code requirements a.s to h-^.urs and naf^es when 
under one roof 

Undergarment & Negligee Industry 

Prohlera of HoneT,'ork 



Artificial Flor/er & Feather Industry 
Productive er.TOloyees lArorked over 40 hours 

Hat lieaiufacturing Industry 
Wages "belo\T 55e? uinimum 

Hat iiani^facturing Industry 



Article VIII 



Article II - Sec.l 



Article III - Sec.l 



9839 



-!?60- 



ITon-Use of Lp/oels 

Hat I.Ianufacturing Industry Article VII 

Difficult?^ in getting; statistic al informo.tion 

Paper Bag Ilanufacturing Industry Article VIII - Sec.lo2 

Processed or defined 7ish Oil Industry " VII - Title 3 

Hat Ilanufacturing Industry ' " V 

Difficulty of getting r.iemliers to con-plain of other members of indu stry 
who are violating 

Used Textile Sag Industry ' Article VI - Sec. 23 

Difficu-lt"^ of Sanrple Books and Seaso nal Lines 

Upholstery & Decorative Fabrics Trade 
Difficult-- of .z-etting smaller coraoanieg to suQ-oort of Code Aii-thoritv 

Elevator I.Ianufacturing Conpan}'' 

Diffictilt" in -n:etting "budget a'O'oroved 

Kationo.1 Commercial Vehicle Bod"- Ass'n. 

Yeast Industry 

Processed or P.efined Fish Oil Industry 

Wants Budget retroactive to date of aT)''3roval of code 

■ Waste Paper Trade 

Ob.ject to shift of Collection Division to Washingt on 

PoiTder Pxiff Industry 
Difficult- of retailers who return merc handise v r ithout .^-ood cause 

Wholesale Ilillinery Trade Article IV - Sec. II 

Oh.lect to system of WRk office getting copy of coiTplrlnt before Code 
Authorit'r 

Wrecking & Salvage Indixstry 

Difficult-' of non-members who refuse to com-nly 

Concrete Heinforcing Steel Institute 
Processed or Refined Pish Oil Industry 

9839 



--'61- 

FroTjlem of ]zeo--, ±-fr close d S -und ar'.: -'hil e re tail code permits it to J: e_ ojeii 
Wiioles: le Automotive Trade Article VII 

TIIOUHTjESO LiS cose PIiOVISIOl'S - PART III 
PRICE LISTir'G- 



Compressed Air Industry iirticle XIII 

Her.t E::chaiige Industry " 

Purrp llanufactiirinf; Indus tr';'' " 



If the Sapervisor^'- Agenc:' determines that in any "branch or sul)divi- 
sion of the hert-exchange industry it has "be^^n the generally recognized 
practice to sell a specified -iroduct on the basis of jrinted net price 
lists, or price lists '^ith disc0".int sheets and fixed ter^s of sale and 
loaymcnt, each ina:rafacturer of s^ich nroduct shall vdthin ten (lO) days 
after notice of svch deterniinr tion file "dth the Supervisory Agency a 
net price list or a price list and discount sheet, as the case nay be, 
individually oreTared by him, shoving his current prices, or prices and 
discounts^ and terrns of sale and pa:/7nent, and the Supervisory Agency 
shall immediately send co-^ies thereof to all Itno^m manufacturers of such 
specified product. Revised price lists and/or discount sheets may be 
filed from time to time thereafter rith the Supervisory Agency by any 
manufactiu-er of s\Lch product, to become effective upon the date specified 
therein, but such revised price lists and/or discount sheets shall be 
filed with the Supervisory Agency t-7enty (20) days in advance of the 
effective dcte, unless the proper Supervisory CommitteQ shall authorize 
a shorter period. Copies of such revised price lists sjid/or discount 
sheets, with notice of the effective date specified, shell be immediately 
spnt to all known manufacttirers of such oroduct, who thereupon may file, 
to become effective upon the date when the revised -orice list and/or dis- 
count sheet first filed shall go into effect, revisions of their price 
lists and/or disco\uit sheets establishing prices or prices and discounts 
now lower than those established in the revised :rice lists and/or dis- 
count sheets first filed. 

If the Supervisory Agency shall determine that in any branch or sub- 
division of the her.t exchange industry now not sellin;-- its product on the 
basis of price lists, with or without discount sheets, with fixed terms 
of payment, the distribution or marketing conditions in said branch or 
subdivision are the same as or similar to the distribution or marketing 
conditions in a branch or subdivision of the industry \vhere the use of 
price lists, with or without discount sheets, is well recognized, and 
that a system of selling on net orice lists or price lists and discount 
sheets with fixed terras of payment should be :mt into effect in such 
branch or subdivision, each manufacturer of the product or products of 
such branch or subdivision shall within twenty (20) days after notice of 
such determination file with the Supervisory Agency net price lists or 
price lists and discount ' sheets, containing fixed tei-ms of uayment, show- 
ing his prices and discounts and terns of payment, and such price lists 
and/or discount sheets may be revised in the manner hereinabove provided. 



9839 



-262- 

The Supervisory Agency shall have porrer on its own initiative or on 
the complaint of any emploj'-er to invest iga-te any price for any product 
shown in any net price list or price list with discount sheet filed with 
the Supervisory Agency ty any employer, and, for the purpose of the in- 
vestigation therof, to reojuire such eiiplcyer to furnish such information 
concerning the cost of manufacturing and selling stich product as the 
Supervisory Agency shall deem necessarv or proper for such -Q-orposes, If 
the Supervisor;'' Agency after such investigation shall determine that such 
price is an unfair orice for such oroduct, having regard to the cost of 
manufacturing and selling such oroduct, and that the maintenance of such 
unfair price may result in unfair comr)etition in the industry and "be 
contrary to the spirit of the National Industrial Recovery Act, the Sup- 
ervisory Agency may recTiiire the employer tha.t filed the list or dit-count 
sheet in -rhich such unfair price is shown to file a new list or discount 
sheet showing a fair price for such product, which fair price shall "be- 
come effective imr,ediatelv uoon the filing of stich list or discount 
sheet. If such emoloyer shall not '-ithin ten (ij) days after notice to 
it of such determination "by the Supervisory Agency file a new list or 
discount sheet showing such fair price for such oroduct the Supervisory 
Agency shall have oower to fix a fair ;~rice .product, '--hich fair price, 
however, shall not "be more tha.n the orice of any other employer at that 
time effective for such product, and in respect of '.'hich the Supervisory 
Agency shall not theretofore have "begun an investigation or a complaint 
shall not have "been made "by any employer. vOnen. the decision of the 
Supervisory Agency fixing such fair price shall have "been filed with the 
Secretary of Heat Exchange Institute and the Secretary shall have given 
notice thereof to such employer, such fair price sl'iall "be the price for 
such emploj''er for such product until it shall have "been changed as in 
this code provided. 

No employer shall sell directly or indirectly ty any means whatso- 
ever any product of the industry covered "by the provisions of this Article 
at a price lower or at discoimts greater or on more favora"ble terms of 
payment than those provided in his current net price lists or price lists 
and discount sheets. The operation of this Article XIII shall at all 
times "be su"b.ject to review "hj the Aciministrctor. 

Floor & Wall Clay Tile Manufacturing Industry - Article IX 

A. Each mem'ber of the industry shall use an adequate cost account- 
ing system which shall be at ler.st as complete and detailed as the cost 
accounting system recommended h;^ the Code Authority and approved "by the 
Administrator as hereinafter provided. Tlie Code Authority shall recom- 
mend for use in the Industry a uniform and adeq^iate cost-accounting 
system which shall "be adapta"ble to the cost-accounting procedure and to 
the business of the Industry. Such plan shall specify the factors which 
shall "be included in determining the costs of each mera"ber of the Industry. 
Upon approval "by the Administrator of such a sj'-stem of cost accounting 
for t"ne Industry, com-olete advice concerning it shall "be distri"buted "by 
the Code Authority to all mern'oers of the ^Industry. Thereafter each mem- 
ber of the Industry shall file with the Code Authority his costs for each 
product of the Industry offered for sale by him. Thereafter no member of 
the Industry shall initiate a selling price below his own cost or sell the 
products of the industry at such price or upon such terms or conditions 
of sale as will result in the purchaser's pa;^'ment for such product less 

9839 



thnn' the cost of that nenoer of the Induatry t7ho hn.s filed Tith the Code 
Authority the lowest cost; "orovided, honever, thr.t the Code Authority nay 
approve, subject to revicj "by the Adninistrr.tor, the splo of sumlus 
stocks, belo.- such costs '-'here necessary to relieve, fin.aiicial energencies. 
A detailed record of such surplus stocks '-'ill be filed -rith md checked 
"by such iiTr.o.rtial agency as the Code Authority nay designrte at the ti:ie 
of a^volicatioi: for such airiroval. 

B« Each nenber of the industry shall publish and file r/ith the 
Code Authority within ten days after the effective date of the Code a 
price list individually prepared o'f him of all products offered for sale 
or sold by him aiid all terms and conditions of sale relating; thereto. 
Such orice list shall state for each ^rade and kind of each product sold 
or offered for sale one orice with pro iropria.te discounts therefrom, if any 
are allowed, for sales to classified types of buyers; provided, however, 
that such disco"ants shall not ercceed fifteen percent. Such price lists 
and terms and conditions of sa,le so filed with the Code; Authority shadl 
be open to inspection a.t all reasonable times by any interested party. 
Revised price lists or revised terms r-nd conditions of sale may be filed 
from time to time thereafter with the Code Authority by any member of the • 
Industry; provided, hoi-rever, that such revision^ shall be filed with the 
Code Authority at least ten days in advance of the effective da.te thereof; 
and provided further, tha.t any other member of the Industry'' may file revi- 
sions of his price list or terms and conditions of sale to meet the revi- 
sions first filed '•:'hich may become effective on the da.te when the revised 
"orice list or revised terras and conditions of sale first filed shall become 
effective. 

C. Ko member of the Indu^tr;- shall sell or offer for sale any pro- 
duct of the Industry at lorices lower than the trices noted in its price 
list, or on more fa.vorable terns and conditions of sale, thaji the terms 
and conditions of sale -oreviously filed bj* such member with the Code Au1)h- 
ority in accordance vrith the provisions of Section B of this Article and 
in effect at the time of such srle, 

D. A member of the Industry may file with the Code Authority a price 
to ap :ily between members of the Industry or other manufacturers usinj tile 
PS a oart of other manufactured articles. 

Wholesale Confectioners' Industry - Article VII - Sec. 1. 

Each member of the industry shall, within ten (lO).days a.ftcr the 
effective date of this Code, file with the Code Authority or its designated 
agency not less than five copies of ea^ch member's published current price 
lists covering all the brands and types of candy and conf ectiona.ry products 
offered for s-^le by such member which price list shall become effective not 
less than five (5) days from the date of filing thereof. All filed wrice 
lists shall contain the number of pieces or bars contained in each unit 
offered for sale by count, and the net weights of such units offered for 
sale by weight and shall include all discounts, allowances, terms and con- 
ditions of sale. After the expiration of the said ten (lO) days, each mem- 
ber shall at all times maintain on file with the Code Authority or its 
designated agency -oublished orice lists for all candy and confectionery 
products, offered for sale, end shall adhere strictly to the prices ajid 
terms of such price lists end. shall not make any chajnge in such price lists 
excer)t as herein Tjrovided. 
9839 



-264- 

Rg'b'ber IvIg..n'Lifacturint: Industr.,'- " Chapter III - Articlo IV - Section 1 . 

Every member of the Division shall file v/ith the Association, nithin 
ten days after the approvpl of this Co6.e, a, complete schedule of his prices 
and terras of nale to dealers, jreforred deplers, distrioutors, original 
equi-oment accounts, and ultimate cons'omers, as classified in Article III-A, 
Section 1, for ii.imediate distri'otition to all other meimhers. 

Household G-oods Stora;;:e '^nd. Jlovin.s Trade - Article VII - Sec. 1 & 2 . 

1. OiDen Prices - Each raenher of the trade shall file Trith the 
appropriate Adjninistrat ive Board in e.'...ch a.rea in '-'hich he solicits business 
within forty-five (45) days r-.fter the effective date of this Code a. complete 
schedule of hi's individual terms, rates, tariffs, -orices, discounts, dock 
charges, and all other conditions relatin,.^- to charges for services in the 
trade. Each such individual schedule shall he posted in a cons'oicuous ' 
Tjlace in ea'ch office of stich member of the trade -^nd shall be available at 
the agency designated by the Code Authority or a"o iropriate Administrative 
Board for the perusal of all persons interested. It shall be an unfair » 
trade practice for any neriber of the trade to sell, offer to sell or other- * 
wise provided service in accordance -vTith his individual schedijle. Any mem- 
ber may, horrever, meet the filed orice of a competitor ^hose filed price is 
lo^er I'here such competitor actually quotes rrithout collusion a price to a 
customer or oros ^ective customer, -orovided that all these facts relating to 
auch transaction are imm.ediately reported to the ap-oropriate Administrative 
Board. Any member of the trade may file a ne'-j schedule effective ten (lO) 
days after filing. 

2» Such schedules shall provide a return for each service listed 
at least equal to the- sura of the '7a.ges necessarj'" under this Code and to com-' 
pensate the direct labor required to perform such service and all items of 
expenses f nd overhead required b-/ the cost-accounting methods established 
for the trade by the Code Authority and ap Droved by the Administrator. 

The tariff rates or chrrges for ea.ch of the- sei-vices listed in the 
schedules shall be se-oarate and distinct, and shall be named in writing Ij, 
when making o^uotations, and such rates or charges shall be assessed for -v. 
each Paid every service -oerformed. 

Paper Bcr^ Manufacturing Industry - Article VII - Section B 

Except in fulfillment of bona- fide contracts existing on the effec- 
tive date of this Code, no member of the industr:/ shall sell any products 
of the Industry for domestic consom-otion a.t a, orice or prices lO'Ter than 
or upon terms or c nditions more favorable than stated in his price schedule 
then on file, provided hovjever, tha^-t discontinued lines or dajnaged goods 
or seconds of any product may be dis-josed of in such manner and on such 
terms and conditions as the Executive Authority of tlie division into which 
such products fall may arjprove, Uithin ten (lO) dcys -after the effective 
date of this Code, each member shall file with the Executive Authority of 
the interested division complete details of all such bona fide contracts 
and this information shall be a^vailable to the Code Authority, 



9839 



-pet 



Hpt Haniif act grin,"' Indunti"' - Article V - Section 5 

Each jne,:bei- o:." tlie Industr-' shall, ^-'ithin ten (lO) dpys pi'ter the 
effective drte of the Code, file 'jith the Institute a list sho':,dng the 
prices for all its n-oducts, discounts therefrom end terns of sale, and 
from and ai'ter the exi^iration of such ten (lO) day period, each raenher 
of the Industry shall at all tines maintain on file with the Institute 
a list shOT-fin^: the -orices for all its -oroducts, tof;ether rrith disco-onts 
and terms, and shall not uake any chan^^e therein e-.cei^t --s provided for 
in this Section. Each such list shall state the da,te uoon v-'hich it shall 
"become effective, -jhich date, in thf event of a price increase, shall he 
not more tha^i five (5) da^^s rfter the date of the filin": of such list as 
aforesaid, rnd, in the event of a -rice decrea.se, shall be not less than 
five (5) 6.PYS rfter such date of filing; provided, horever, tha.t the first 
list filed oy any meTibor of the Industry rs above nrovided, shall tal^e 
effect on the d?te of filin;; thereof. Hone of the prices, discounts, or 
terns, shoirn in prrj list filed by arj^.^ meraber of the Industry- as herein 
provided shall be chanried excent "0:/ the filin.^ bj/ such nenber of the Indus- 
tr:;^ TTith the Institute of a ne-' list, vrhich shall become effective on the 
effective date therein s-!:)ecif ied, v/hich date, in the event of a. price in- 
crease shall be not more than five (5) days after the date of the filing of 
such list cS aJoresald, and, in the event of a, 'rice decree- ;e, shall be not 
less than five (o) days after such date of filin,". The trices, discoi^nts 
and terms in effect prior to th;? filing of such ne-- list shall coatinue in 
effect until those set forth in such ne';; list shall become effective as 
above provided. All such listrs shall be available for inspection by any 
member of the Industry or other interested party at all reasona.ble hours. 

CO JGIGiaElTTS 

Electric Storr,;e and ITet Primary Batterv Industr?/- - Schedule 1, Sec. 5A 



There shall be no consignment of .-^oods made to rny customer except t 
a. ijholly owned subsidiary of the consignor. The tern "consignment", as 
used herein, means the su^jlyin-; of goods to a consi'~;nee for sale by the 
consignee under an airrrn.^ement vrhereb;- title to the goods remains in the 
consignor until such tine as they are rrithdraTrn from the consigned stock 
and/or sold by the consignee, and no liability for the ovirchase orice of 
the -oods arises on the part of the consignee until stich time as said goods 
have been rTithdra'Tn from the consigned stock and/ or, sold by him. 

Uholesale Pry G-ocds Trade Article IV - See. 2 

To place merchandise on consignment erccept imder circumstances td be 
defined by the Divisional Code Authority Kien ^oeculiar circumstances of 
the trade make the "oractice desirable. 







9839 



•266- 



S3LLI1IG 32L0;T C03T 



Electric Stor.-v:e rnC. "Jet P r inar:' "3 rtoP ry Indnstr^ Schedule I - Sec* 6 

The selling: of "'op.ttfrleG ■•^Jid hrttery ■^^.^t3 oeloir the ra?nuf acturer' s 
cost, except seconds rnd discontinued lines .-nd to f-olfill ohli^^ations 
under guarantees or reilacenent n.5i'eencnts , if: rr, imfrir trade practice. 
In determining violo.tion of this r^ile, the cost of the n-oduct, a-yolicahle 
to each division of the husinesa or to each -'iroduct, determined in hasic 
principles rs oiitlined in the unifora cost accoujiting procedure of the 
Association, suoject to the r-joroval of the Adninistr.- to:', shall he con- 
sidered to he the prime cost of mpterirl ond direct lahor; ^olus factory 
hxirden including ta::es, depreci-.ti i^, and ordinar;;'- ohsolescence; -olus 
selling, advertising, r.drnihistr- tive, r^rehousing, transportation, col- 
lection and rll other coots an.. e.Ti^ienses, "Prine Cost" of naterial shall 
he understood to oe the fair replacenent cost of same. 

Ruhoer nanu frctur in/: Industr:^ Articlo IV - Cha iter III - Sec. 2 

No: inemher of the Division shall sell cany Product a.t prices lower or 
on terms more favorable than the prices rnd terns iu his "orice schedules 
and price lists filed pursuant to Section 1 of this Articel, unless he has 
first filed revised schedules and lists to take effect in not less than 
fifteen (l5) days from date of filing rnd hc^i su-:>;lied hy registered mail 
sufficient cooies of such revised -orice schedules rnd lists to ijermit 
distribution thereof to all menbers of the Division, Imnediately uoon 
receipt o:" such revised irice shceduler. n:d lists t;ie Association shall 
mail a copy thereof to each neiabe:: of the Division. Aivr mei,iber of the 
Division may then file revised price schedules and lists which, if filed 
prior to the date nhen the revised price schedules and lists f-irst filed 
shall go into effect, may hecone effective on said date. 

Paper 3a/; lianufacturin-; Indigstr" Article IX - Sec. H & J 

Pay or allor; secret rebates, refujids, credits, or uncrarned discounts, 
whether in form of money, .advertising allowances, or otherwise, or extend 
to r)Urchases under like terns pnd conditions. 

Allow a discount for cash f3ayraont of more than 2;0. 

PROBLSLI Qg Pl-fflE DELI^/ZRir.S 

Wholesale Dry Goods Trade Article IV - Secu 1 

The following "Dra.ctices constitute unfair methods of competition: 

To deliver nerchandise on any brsis other tha.n F.O.'O. the city in 
which the wholesaler is located or, in crse of direct shipments, F.O.B. 
city where factor^r is located. 

Free deliveries of merchandise may be made by a. wholesaler within 
but not beyond the metropolitan area of the city in '-hich the wholesaler 
is located* The Divisional Code Authoritjr nay define the netro-:iolitaja 
area in any specific case. 

9839 



C 



-267- 

This rule does not o^roly to those items on -'hich it is the trade 
oractice of the manufacturer to TTi'e'oay trnns'iortrition ch.^.rges to tiie 
retail store on goods sold by the v/holesaler. 

SECOiro-HAia CH IgPUILT 

Slectric Storr.'^e & Tfet Primar;;/" Battery Industry - Schedule I - 
Sec. 1« 

(D) The use of oranded pnrts in connection vath "I'ebuilt" bat- 
teries, where the plates are of a brand other than that shotrn on the 
branded parts, or (2) the br.^mding a,nd/or marketin;'-; of batteries as 
"rebuilt" \7hen in fact all uaed positive plates, negative olfttes, and 
separators have not been replaced -"Titli nev ones, or (o) failure to mark 
and identify olainly rnd pernanently "rebuilt" or "re-oaired" batteries 
in such a mejiner as to clearly distin.^uish them from ne:' batteries for 
a 'oeriod longer than 90 drys; ?re unfair trade practices. 

Concrete Reinforcin;- Steel Institute - Sec» 1 (u) Article VIII. 

DIFFICULTY 0? Dlgl-^HEJIT CODE EEQ.UIEEliEIIIS AS TO HOURS AIP T7AG-E3 TIHELT 
miDER OtiS ROOIT 

Undergarment & Ifeglifcee Industr:,'" 

PR03LE:: OE HOLZEUORK 

Articiiial Flouer & Eerther Industry Article YIII 
PRQDUCIIVE ELIPLOYEES T70RICD OVER- 40 HOURS 

Hat Manufacturing: Industry Article II - Sec. 1. 

Except as hereinafter provided, no employee or member of the Industry 
engaged in manual and/or mechanical processes of manufacture, shall be 
oermitted to T.-orh in e;:cess of forty (40) hours in any one ^eek. 

Whole s.?le Dr?/ Goods Trade Article III - Sec. 1 of ITliole- 

saling or Distributina- Trade 

(?) Ho wholesaler or distributor shall cause or permit any employee, 
except as erjoloyee in an executive, supervisory, technical, or professional 
capacity T-ho receives thirty-five dollprs ($35,00) per voek, or more, in 
cities of 500,000 population or over; or thirty dollars ($30.00) per ^-eek, 
or more in cities of less than 500,000 population, and e.ccept watchmen and 
outside salesmen to \^ork more than forty (40) hours )er '7eek or to work more 
than six (6) days in- any one veek (or less as determined ^y the Code Authority 
of any specific traue|l, except tha,t anj?- member of the trade may cause or 
permit: 

(b) Ho employee exceut those exem^ited in paragraph (a) of this 
Section shall work more than eight (j) hours in any one day, except that 
on one day each ^eek each employee may work one extra hour, but such hour 
is to be included within the ma:cimum hours 'oermitted each week, 

9839 



(c) Outside deliverymen, jviaj-p.tenance nen, o-.i.tside repair service 
men and installation men to nork forty-eiL;ht (4;''.) hours per neek. 

(d) TTatchmen sIipII i.'orl: not :.ore than fifty- six (5S) hours nor 
more thaai si:: (S) days in pjij'' 7 day lei-iod, 

(e) An ernloyer mpy nork an employee such hours as mny be neces- 
sary in excess of the hours specified in paragraphs (v.) r^na (c) of this 
Section if time and oiie- third is ppid for all such rdditional" houis T^er 
week. 

(f) The hours '-rorked hy any one employee in a.nj,'- one da;"" shall he 
consecutive ^ith the e:frceotioi'. of a repsonable -period out for lunch. 

I7AGZS 3EL0TJ Zbfj i:i:iIMUl\I ' 

Ha.t Hanxifpcturinin- Induntry Article III - Sec. 1 

No enoloyee shall ho' laid rt.less than the r te of thirty-five cents 
($0.35) Toer hour. 

Hoii-usi: 01' l;gsls 

Hat Manufactu r inc-; Industry Article YII 

All ho.ts nrnufactured or distrihi^ted siibject to the n-ovisions of 
this Code shall hear an IIRA label to syjnbclize to purchasers of said hats 
the conditions under T7hich they nere nanirfactured. Under the i0'7er vested 
in it by the Executive Order of October 14, 1933, end under grrnt of the 
necessar*,'- euthorit;^ b:y the Adninistrrtor, the Code Authority'' shall have the 
exclusive ri/;ht in this industry- to issue and furnish said la,oels to the 
members thereof. 'There shall be one t^rpe of label for nen hats and one 
type for made-over used hats. Each label shall bear a registration number 
especially assigned to each erroloyer by the Code Authority and remain 
attached to such hat Tjhen sold to the retail distributor. Any and all 
members uf the industry may ap;oly to the Code Authority for a permit to 
use such ilElA label, vrhich permit to use the la.bel shall be jT^ranted to 
them, but only" if and so lonf-: as they comply -jith/or delivered prior to 
the effective date, if manufactured by a menber o:^ tl-ie industry/ Tho is com- 
plying TTith the Code at the time they are so atta„ched« 

The Code Auth6rity, subject to a;3 irovcal by the Administrator, shall 
establish rules and regulations and aporopria.te machinery for the issuance 
of labels, and the ins-oection, exai.iina.tion and supervision of the -oractices 
of em-)loyer using such labels in observing the provisions of this Code for 
the puroose of ascertaining the right of said employer to the continued 
use of said labels; to assure to each individual eir-ylojeT that the sjnnoolism 
of said label -/ill be maintained by virtxie of co;inliance with the practices 
herein contained by all other om-oloyers tising said labels. 

The charge made for such labels by the Code Authority shall at all 
ti?ies be subject to supervision and orders of the Ad;dnistra.tor and shall 
be not more than an amoimt neces3ar5i" to cover the a.ctual reasonable cost 
thereof, including actual "orinting, distribution, and administration and 
suioervision of the use thereof a,s hereinabove set forth. 

9839 



-269- 

¥ith res'^^ect to the Harvest h?.t industry, the Code Authority shall 

mpke recoiiinendations coi;C"rnin,'^ tho a;^-.ilication of this orovision so 

thpt the Adjiiinistrator, in his liiscretion, -nay mplce this section effec- 
tive '--ith respect to s-id Industry. 

DIF^'ICU LT Y III GG I TIIIG- STATISTI CAL IxIFCEIIATIOJT 

Pa-jer 3pp: ilanufg.-cturin- : Inua ' stT'- Article VIII - Sjc. I 3:",2 

Spch nienher shadl prepare rnd file v.-ith the Secretary of the Code 
Authority at such tinea sad in auch Ka.nnor .'.s it nay "jrescrioe, such 
statistics, data and information relatin::; to plriit ca.'oacity, volume of 
producti' n, voluiae of sales in units rnd dollars, orders received, unfilled 
orders, stocks on hand, inventory both ra-.; and finished, nuinher of ein-iloy- 
ees, v.-;'^'--e rates, eu-.lo-'-ee earnin.s, hours of rorh and otner natters, as 
the Code Authority or the Ad:iinir,t:.'f'tor nia;'' from tir^ie to tine require. Any 
or a]-l information co furnished hy any raenher shall be subject to checking 
for the 7ar:!0se of verification hy an examination of the hooks and accounts 
pnd records of such menher hy any .lisinterested accoiuitent or accountants 
or other qualified oerr.on or per^-io^.b dosi^jnated by the Code Authority. 

Eixe-jt ;-s other -ise provided in the Act, or in this Code, all 
statistics, data fnd information filed or required in accordance with the 
provisions of this Code shall he confidential and the statistics, data 
?jid information of one me. 'her shall not he revenJLed to another rnemher ex- 
ceTjt for the -ouriose of enforcinj;,- the provisions of this Code, No such 
data or information shall he published except in cor.hination with other 
similar data nnd in such ^. manner as to avoid the disclosiore of confiden- 
tial information. The Code Authority shall arrange in such manner as it 
may determins for the -)uolic&.tion currently to members totals of orders 
received, unfilled orders, shi-oments, stocks, of finished goods on hjind 
c-nd nroduction. 

Processed or ?.efined Pish Oil Indust ry Article YII - Title E 

(e) To obtain frci member", of the industry such information and 
reports as are required for the adninistrr ti n of this code. In addition 
to information required to be submitted to the Code Authorities, members 
of the indtistry shall furnish such stptistical information as the Adminis- 
trrtor ;\^y deem necessary for the u\r:)Oses recited in Section 3 (a) of 
the Act to such Administr-.tive r^nd./ or ciovern-'.ent ?/_;encies as the Adjr.inis- 
trator rmrj designate: Provided however, that nothing in this code shall 
relieve pjiy mem.ber of the industiy of tJiy existing obligation to furnish 
re-;orts to PiTf government agenc;-. ho individual reports shall be disclosed 
to any other member of the indtistry or any other prrty, e::ce-it to such 
government r icncies ,13 'ay be directed by the Adriinistrator. 

Ha.t I.Ir^rj-f acturin,--' Industry Ai'ticle V 

3» Por the purpose of aiding the Code Authority in judging 
as to the observnce of the Code, in g<ai:;,ging the extent to which the 
objecti"es of the Act are being a.ttained, fad considering r-\y necessary 
amendments or rdditions to the Code, each member of the Industry shall 
furnish to the institute ■:ro-:)erly certified re'oorts of such character eaid in 

9839 



-?70- 

such form as the Code Aiithority !nc'=.y -pv^ccvloe , ^^ith thti approval of the 
Adninistr^^tor, incluc.in;: — 

(p) ll\un"ber of emloyees; 
(t) Wages --laid cii ^1 oye e s ; 

(c) Hours of iTork /erforried 'or arch eR-:iloyee; 

(d) Stocks on hand, -u'oductio-.i, pjid unfilled ord.ars, 
together irith such othor statistics f.nd inforna- 
tion ?s me:j h;; required from tine to tine, 

DILTICULTY OF GETIIIvT'^ IBI/miiBS TO CO i gLAIlI OF OTr HR lEinilRS 07 r.lDUSTHY" 

WHO Axg: viol.tiij:^ 

Used Textile 2o:-. Industry Article VI - Section 2 3 

To make investigations as to the functioning and ooservance of 
any -orovisions of this Code at its orrn instance, or on conplaint "by 
any person pffected, raid to report the snne to tlie Administrator, 

DIFFICULTY OF SAilPLE BO O KS AiD 5::.h.S 'h 'AL LIliTS 

Unholstery & Decorftive F^'orics Trade 
DIFFICULTY OF GFTTIITG SIIALLEIl COIIPATTIES TO SUPPORT OF CODi: AUTHORITY 

Elevator Mpjiufacturing Com-orny 

DIFFICULTY IH GETTIII& 3UDG-ET APPROVED 

National Commercial Vehicle Body Ass'n. 

Yeast Industry 

Processed or Refined Pish Oil Industry 

TAHTS BUDGET RETROACTI^/F TO Di^^TE OF APPROVAL OF CODS 

Tfaste Pa-^er Trade 
OBJECT TO SHIFT 01^ COLLECTIOII DIVISIOH TO U.^SI^IHGTOH 

PoTfder Puff Industr:/ 
DIFFICUL'TY OF R2TAILFRS TrlO RI ^T URH I.IERCHAIID ISE 17ITH 0UT GOOD CAUSE 

yholesole Ilillinery Trade ARTICLE 17 - SECTIOII 11 

Return of merchandise - L'erchandise arch^r.ed rnd sh roped in good 
faith aaid in s.ccordance v/ith the "bu'i'-ers specif icrtions may not be returned 
for credit by any purchrser; provided, ho--evor, th-it -'here goods n.re re- 
ceived in an ap ;arent drrnaged or i:;T)erfect condition or T/hen they do not 
conform to the s-^ecif ications c'">ntained in the Jurchase order, a maxi- 
mum of three (s) successive business days rfter the recei'^t of such mer- 
chandise \7ill he al'.ov/ed for the return of sajne for credit, but provided 
further that this section shall have no a.vdication to the return of merchan- 
dise in vhich the defective conditions cannot be discovered by an ordinary . 
inspection. TTlienever a raenber of the Trade shall acce;jt the retiirn of mer- 
98S9 



-371-- 

chandise pi-ter it hris l^een in the custoiaer's ;)Ossession for laore than the 
scid three (s) day period, he shall re^iort 31-ich trpjisp.ction to the Divi- 
sional Code Authority and certify that his --.ctinu vrps in TvCcordance -rrith 
this orovision. ■ The Divisional Code Authority ua.v recaiire any ;ne. iher of 
the Trade to "oresent oroof that such returns ■-'cre acceited in .jood faith 
ano. in rccordrnce :7ith tiic -n'ovisions herein. 

0hj:xT TO SYSfPh 0? iiiu i'lGE GfiTiih-i COPY o\: CO" ::'^LAi::T ji]?gi:- code 

AUr-TQEITY 

TJrechin': and Salvs^gce Industry 

Dir'ICULTT 07 lIOIT-IEiai^IvS 'MO KlFUSl', TO Cn;PLY 

Concrete Heinf orcinr,- Steel Instit\i,te 
Processed or Refined Pish Oil Industry 

PHQBLEii OJ IGEPIl'G C LOSED SUl^ DATS TH IILD 33TAIL COD:: ?EZIIj3 IT TO :iE OPE!' 

Wholes-^le Automotive Trade Article VII 



(M) The nininuin hours of any store or service o;ierrtion in the 
ITlaolesfile Autonotivc Trade sliall be fifty-tr/o ?aours in any one ir^eek unless 
such hours -ere less tiirn 52 hours ;oer rjeelc "before July 1, 1933, in which 
case such hours less thrn 52 raay e?rjl:r» 

:To memher of the trade shall Ti^rfom any store or service operation 
or. Sundry and/or holiday.s. s-s. are generally ohserved in any ^,;i^ren district 
,as p-polyirig to tlia.t district.- ; 

Smergency sales or service majr ue oerfor;aed in hours not Specified in 
this section under such conditions as the Code Authority may prescribe, 
subject to tlie disarorovaJ of t:^e Administrator. 

AHilA U, 20SSIN3D:RG 
State ITi'A CorToliance Director 
LLP:H 



98S3 



■ -272- 
A-prondix 4 (a) 



Hovemter 19th, 1934 



To Tlie ilational Industrial Recovery Board: 



For the reasons set forth in the attached memoranduin, the follow- 
ing recoramendations are made: 

1. The development of the later compliance machinery of the 
Compliance Division into a single dut/, regional Code Lahor Enforcement 
Service. 

2. Leaving to the Code Authorities the initiation of and re- 
sponsibility for enforcement of fair competition code provisions, sub- 
ject to supervision by field representatives of a Code Administration 
Service responsible through the Administrative Divisions of IIRA to the 
National Industrial Becovery Board. 

3. Opening up oiad heeping open free channels of access to the 
statutory law enforcement agencies fx'om tlic regional agencies of the 
Code Labor Enforcement Service and from the Code Authorities. 

•■ 4. The classification of unfair compjetition code provisions 
into (a) those which forbid practices evil in themselves or the pro- 
hibition of which has been approved by firni judicial precedent and (b) 
those which are made unlawful only 'hy the prohibition of the codes and 
which have not yet received judicial sanction-; followed by the adoption 
of different enforcemezit procedures applicable respectively to these two 
classes of pi-ovisions, and aided in Class 3 cases by NEA litigation 
specialists. 

5. Recognition' that the Blue Eagle i'j not an instrument of 
law enforcem.ent, but derives- itn sanction wholly from co-operative agree- 
ment; and adoption of a Blue Eagle removal procedure in harmony with 
that principle. 



(Signed) "Til liaia H. Davis 

Willi a].! H. Davis 

Special Adviser on Compliance 
and Enforcement. 



9839 



-273- 

November l9th, 1934 

MFORCI^JG COEES OF FAIR COMPETITI ON 

I Enforcement of the wapre and, hour and related- 
provisions of the codes . 

This is a prohlem that is suhstfintially the same for all codes, 

and for which a general solution exists. It does not differ in kind 

from the problem of enforcing State labor and factory la.ws; and a like 
technique is applicable. 

■^t requires non-partisan investigation by professionally trained 
personnel (1) to detect all violations of code wage and hour provisions; 
(3) to determine the amount of back wages involved; (3) to secure resti" 
tution to the workers of the back wages so determined and (4) to put the 
name of offenders and the evidence of their violations promptly into 
the hands of the Federal district attorneys for the imposition of fines 
under Sec. 3 (f) of NIRA; or for civil actions for injunctions under 
Sec. 3 (c). 

A "Code Labor Enforcement Service" having functions 1, 2 and 3 
above, responsible to the National Industrial Recovery Board and financed 
by the KRA appropriations, is recommended below \mder Title I-A 

The statutory "Channels of Enforcement" for cari-ying out function 
4 above are discussed below under Title I-B. 

I I . Enforcement of fair competition provisions 
of the several cod es. 

This presents 'a separate problem for each industry. No single 
general solution is possible. 

A satisfactory solution of these problems is possible only if (l) 
a substantial balance is effected between the provisions of each code 
and the possibilities of enforcement, (2) adequate compliance machinery 
is effectively coupled through freely open channels tt) the statutory 
enforcement agencies — the Federal Trade Commission (Sec 3 (b) of NIRA.) 
and the local district attorneys, under the, direction of the Attorney 
General (Sees. 3 (c) and 3 (f) of NIRA). 

Initiative and responsibility for fair competition belongs to in- 
dustry. The several code authorities should assume the burden of se- 
curing compliance with the fair competition provisions of the codes, 
and they should be in direct contact with the statutory channels of 
enforcement. NRA should stri-'e to co-operate effectively with each of 
the several code authorities in code planning and revision; it should 
advise and assist in code authority organization; it should supervise 
code administration by the code authorities, and under its power of 
review should interpose to prevent monopolistic practices or discrimin^- 
ation against individuals or groups. Its compliance activities should 
be limited to (l) estahlishing and maintaining free access by the code. 

9839 



(' 



-274- 

aiithorities to the statutory enforcement agencies, and (2) interposing 
by veto to prevent abuse. 

A "Code Administration Service", within NBA, whose duty it would 
"be to co-operate with industr2^ in code revision, in code authority 
organization, and in maintaining effective contact with the statutory 
channels of enforcement, and to supervise code administration is dis- 
cussed below under Titles II-A and B. 

The "Channels of Enforcement" of fair competition code provisions 
are discussed below under Titles II-C and D. 

III. The Blue Eagle 

It should be made clear that the Blue Eagle is a mark of eompliance, 
not an instrument of enforcement. 

The relation of the Blue Eagle to the activities of the proposed 
"Code Labor Enforcement Service" and of the proposed "Code Administration 
Service" is discussed below under Title III. 

IV. Code Trovisions in Aid of Compliance 

Code provisions covering the use of Blue Eagle labels, and code 
provisions with respect to . liquidated damages are discussed below under 
Title IV. : . ■ , ■ 

. ,,. ■ I 
A>- CODE LABOR EMEORCEICSHT SERVICE 

1. It is recommended that the Compliance Division be direct- 
ed to proceed with the development of its existing labor complaints 
field organization into a single-duty code labor enforcement service 
divided into regional imits preferably according to trade areas, equip- 
ped with trained professional personnel and financed from the NRA 
appropriations. (V^ 

It is recommended that this service be definitely separated from 
the activities of the proposed Code Administration Service (Title II). 

Enforcement of labor provisions is a vital aspect, to be sure, of 
fair competition among members of an industry.; but it is also of direct 
personal concern to the workers. It therefore requires a service that 
is non-partisan and impartial as between management and labor. 

The conflict of these two interests occurs within the industrial 
planning activities of NRA, including the formulation, interpretation 
and revision of code labor provisions. This conflict is reconciled 
or terminated fo.r each code provision when that provision is approved 
by the President. It has no place within enforcement activities. (*) 



(*) Cases involving "equitable adjustment of wages" are an unfortunate 
exception. In them interpretation does devolve upon the enforcement 
agency, 

9839 



-275- 

i 
2. The duties of the Code Later Enforcement .Service would be 
the detection of violations of code lahor provisions, the determination 
of the amo\int of back wn^es involved, the restitution of those wages to 
the workers, and otherwise securing compliance. It would have of course, 
no power to modify or amend the code labor provisions. It would take the 
codes as they are written, and as they r.re interpreted from time to 
time by the proper administrative afcencies, as the law under which it 
operates. It should have the power to proceed on its own initiative by 
investigation and by mass action for compliance. It should not limit 
its activities to complaints filed with it. 

This service should function in all codified industries which now 
have no labor compliance agencies of their own. 

It should serve as a model for, co-operate with and supervise the 
activities of the labor complaince agencies in the industries where 
such agencies are now established. The extent to which it shall sup- 
plant such existing agencies, and whether other industries shall here- 
after be permitted to establish their own code labor compliance agencies, 
should be determined after full and open conference with all interests 
in the light of e:cperience as the application of the plan progresses. 

It is clear that no established machinery which is now getting 
results in any particular field of compliance should be superseded by 
new machinery until that new machinery has achieved at least equally 
good results in. other fields. 

It should noY^ be made clear, however, that the G-ovemment, either 
by direct action or by supervision, will assume responsibility for 
enforcement of code wage and hour provisions. 

In addition, the service should bo made available to the National 
Labor Relations Board and its regional boards for investigation and fact- 
finding (without surrendering any part of its autonomy under NEA and 
not for mediation, arbitration, adjustment, or enforcement) in cases 
within the jurisdiction of that Board, and it should co-operate with the 
National Labor Relations Board and its regional subdivisions in the 
handling of cases in which the jurisdiction of the two organizations 
overlap (see National Labor Relations Board Instructions of October 12, 
1934, Title III, Pages lC-13) 

The service should in like manner be available to the Special Labor 
Relations Boards esta.blished in particular industries, such as the Steel 
Labor Relations Board, etc. 

3, Tlie technique of such investigation, restitutio;n, etc., 
presents no unsolved problem. It has been developed under State In- 
dustrial Commissions enforcing State labor and factory laws in several 
of the States; by the Federal Tax Collection Service under the Treasury 
Department, and to a substantial degree by the Compliance Division of 
NEA and by some code authorities - those in the garment code group, 
for example. 



9839 



-276- 

4. The Code Labor Enforcement Service should have exclusive 
jurisdiction of lator compliance activities (except where another agency 
has teen duly authorized for a particular industry)' and it must te kept 
'as non-partisan and non-political 6.s, let's say, the kidnaping invest- 
igation service of the Department of Justice* The authorized code auth- 
ority lator compliance agencies should 'be equally non-partisan, and to 
this end, the Code Lahor Enforcement Service in the exercise of its 
supervision of such agencies should be charged with the duty to maintain 
such impartiality in accordance with general principles of organization 
and procedure defined by Nllffi. 

5. It should proceed with the technique already developed in 
the Compliance Division, constantly perfecting it in the light of all 
available experience and research. In addition to its liaison with 
the NIEB and with the administrative divisions in Washington, its 
r3gional directors should maintain like liaison with the regional rep- 
resentatives of the proposed Code Administration Service in the field; 
with the local representatives of the ' Department of Justice including 
the several district attorneys and the NRA' litigation specialists, and 
with the regional investigating agencies of the Federal Trade Commission 
which are authorized and empowered to malce investigations for NRA under 
Section 6 <c) of MRA. 

6. The Service should entertain and investigate all complaints 
from employers, from individual employees and from organizations of 
employees whatever their affiliations. 

7. Ancillary code labor provisions (minirnum age of employees, 
home work, handicapped workers, apprentices, etc.) fa,ll in the same 
category as wage and hour, provisions. 

8. Special cases of labor enforcement will occur, although 
in small proportion, in which it will be necessary to make use of the 
NBA litigation specialists. This should be handled by co-ordination 
between the labor enforcement service and the litigation division as 
in code enforconent proceedings under Class 2 fair competition code 
provisions discussed below (Title II-C). 

9. Discretion should be vested in the regional directors with 
respect to bringing "first offense" cases into court. They should al- 
ways be brought into court where there is evidence of willful violation, 
such as suppression or falsification of records, instructing employees 

to keep quiet, etc. Second offense cases should invariably be brought 
into court. 

10. Enforcement of Sec. 7 (a) of NIEA is a matter for the 
Industrial Relations Boards and needs no discussion here.- 

B - CHiimSLS OF ENFORGBJENT 

1. Through proper legal advisers associated with the "Code 
Labor Enforcement Service" (or with an approved code authority labor 
compliance agency) the names of and the evidence relating to persons 
who have willfully violated the labor provisions of any code should 
be passed on to the local district attorneys (properly instructed by 

9839 



-277- 

the Attorney G-enersl) for prosecution in the Federal Courts, in order 
that such person may be promptly and unfailingly punished by fine under 
Sec. 3 (f), or subjected to injunction under Sec. 3 (c) of NIRA. 

It should be affirmed at once, and unmistalcably, that in such cases 
mere restitution is not enough, 

2, The enforcement procedure here involves no novel problem. 
It requires no centralization in Washington. It is analogous to the 
procedure in alcohol tax cases and the like, arising in the Treasury 
Department. It needs only the understanding that these code provisions 
are to be enforced, plus easily acquired fajniliarity and technique, on 
the part of the District Attorneys and their assistants. 

3. It is clear that labor code provisions as well as fair, 
competition code provisions need revision in the light of experience 
and HRA and its administrative divisions will be continuously confront- 
ed with questions of interpretations, modification, exceptions, and 
exemptions. These are, of course, problems of administration to be 
decided in conference with m.anagement and labor and with the advice 

cf the several NBA advisory boards and divisions. It is of greatest 
importance, however, to the effective operation of the code labor 
enforcement service, that these matters should be promptly disposed of 
and that the administrative rulings should be brought promptly and 
authoritatively to the attention of the Service. 



It seems clear that if the labor provisions of the codes can thus 
be enforced, such enforcement would greatly stabilize competitive con- 
ditions; so much so that industry would want to retain its codes for the 
labor provisions alone. 

Law enforcement, finally depends. upon the support of public opinion. 
The code wage and hour provisions have been generally accepted by the 
public and by industry as economically sound. 

It is competitively important to each separate unit of industry 
that the code labor provisions shall be complied with hy other units. 
The thing that leads more than anything else to non-compliance in ttie 
rank and file of management is lack of conviction that competitors will 
comply, ^t may reasonably be expected that if the recalcitrant ten per 
cent is made to comply, the rank and file will fall in line. 

It might be expected that the support of the code labor provisions 
by employees would be universal; that an employee would invariably re- 
fuse to accept less than code wages, or to work more than code hours. 
In fact this expectation has not been fulfilled. The principal reason 
has been the employee's fear of losing his job. The experience of the 
Compliance Division has also shown, however, instances in which employees 



9839 



(^ 



— c f w^ 

have connived with raanageraent to get for thenselves an unfair advantage. 
The most effective instraineat for curbing both of these iiotives is 
hone stly-and-efficiently- run employee org.-.nization; and it seems clear 
that the difficulties of la'bor enforcement 'Till decrease, in each indus- 
tvY in the sajne proportion tlia.t honest and efficient employee organiza- 
tion increases, thereby affording to the conflicting interests in that 
industry effective mechanism "by rrhich they cpn. move along to a solu- 
tion of their common archie; is. 

II - CODE JfflinNISTRATIGH SERVICil 

A-" The varying -prohlens in different industries . 

Pair competition code' provisions v/hich =-;ive rise to prohlens 
of enforcement may he roughly divided into thr'^e classes; 

(1) Provisions which aim to "build up higher ousiness stnjid- 
ards, which are directed to practices generally recognized to he ■'jn- 
fair(such as misrepresentation, bribery, hidden rebates, etc.) and 
which ap'oly equally to all members of tne industry; and provisions, 
the legality of which has beei veW established b""- judicial precedents. 

(2) Provisions which do not iffect all members of the indus- 
try in the s'-jne •:'ay and consequently give rise to char ret; of discrimi- 
nation against individuals or groups; and provisions prohibiting 
practices which are not clearlj'- recognized to be ^mfair in themselves, 
and as to the propriety or wisdom of which there is no coriraon agreement, 
and no firmly established precedent. 

(3) Provisions which ercperiehc^ lias shor.Ti to be econoni calls'" 
unwise or unenforceable. 

CI9.SS. 1 •'nd 3 above give rise to quite different problems 
of enforcement. Provisions of Class 3 above should be eliminated by ^ 

code revision. 

The different compounding of the so throe Classes in differ- 
ent codes malces the -oroblems of enforcement a special problem for 
each code, 

B - The nature of the Code Administration Service 
necessnj'y to solve these 'problems . , 

The nature of t_iese problems malces necessar""- the r^ollo'Ting 
provisions for their solution: 

(1) Code revision to eliminate the unsound and unenforceable 
oode provisions. In general, the code revision in each industry 
must effect a reasonable Valance between what the code contains and 



"279*^ 



\i..:.s,t ceai be enforced. (*) 

(2) Tiie settint^ up oi adeqaate code authority organization, 
includiniV a full time fair co.npetxtion coiaplianee agency adaouately 
directed and financed. (**) 

(S) . Open ch.annols of prompt and effective co-operatian 
betivocn t:e code authorities and t.ie statutory enforcement agencies. 

(■':) NHA supervisory service to assist NIHB in the exercise 
of its y-vier of review, to insure that tne code authorities are 
trulj'' representative and that taj codes in operation do not shelter 
moncpclistic practices or discriminate against individuals or 
groups (Sec. 3 (a) of "ilEA) ; to advise on code araendinents, inter- 
pretat.'.ons, exceptions and exemptions; to detect any code authority 
■na-lf ef.sance, and genyrally to observe and report to iJHA on the 
fielL-. aspects of code administration. 

It is, of course, understood tiat existing provisions for 
coiTiplaint and ap^Jeal to IJRA.; to the Federal Trade Comnission; and 
to the Attorney General will he retained. 

Tlie foregoin,^,' analysis leads directly to the conclusion 
tiat t .e pro;:sed code administration service, including the super- 
vision of fair competition compliance activities, should be under 



Recalling the remark heretofore made, that no efficient 
compliajice machinery should be superseded until better machinery 
is developed, it nevertheless seems clearly unwise for the Com- 
pliance Division to prolong fa,ir competition compliance activities 
in industries which will not assume that burden for themselves. 
;iere j.couiescence by an industry in governmental compliance and en- 
forcement activities will not produce compliance; that requires 
industr]/ initiative and effective co-operation. Ineffective a:id 
therefore partial, enforcement really aaaounts' to discrimination. It 
is w:rse than no enforcement at all. 

TiO attempt is made here to suggest details of organization 
of t/ds Code A'inini strati on Service; but it is clear from experience 
that it must act by iiimiediate contact with code autliorities in the 
several industries; should include an adeouate field stsrvice througli 
the administration members, and should maintain close liaison in the 
field v/ith the code authorities; tue statutory enforcement agencies, 
including the several district attorneys, tae KfHA litigation spec.al- 



(*) Compliance Division statistiCiJ of unfair competition complaints 
in its field offices shov/ that only 32 of tlie codes are re- 
sponsible for over 75/3 of the complaints oil hand. Five of 
t'.ese 32 codes are responsible for approximately 30i of the 
complaints. It does not follow from these statistics that 
t:.ere v/as good compliance in all other codes, because in seme 
industries there is complete indifference to "compliance and 

(Footnote Cont'd on next oage) 
9839 



-280- 



ists, ;jiic. t'.i Federal Trale Gouuiisoion fieli invc3ti_.ators; and v/itli 
t-ie re^irna]- code lator enforce/nent director's. • 

C - T!.e Channels of enfjrceraent most apjro'oriate 
- t" Class (l) cases . 

1. ?or violation of fair co-.roetition code provisions of 
Glass (1) ab-.ve, it is oelieved taat tae "several -district attorneys 
if t-.e United States, in fcieir respective districts, under txie direc- 
ti.n • f t.ie Attorney General" (Sec. 3 (c) of NIJll) afford tne most 
direct and satisfactory channels of enforcement. 

2. .4,11 lec^al enforcement of t.^e code provisions s-offers 
at the moment from the .lack of a "oodyof court interpretations of 
5FI5A. It will ' gradually be made easier as /a. body of judicial de- 
cisions is built up; particuLarly when the constitutionality of the 
Act has been affirmed by the Supreme Court, and when the v/ords "in 
any transaction in or affecting interstate or foreign comiTierce" have 
been clearly defined. 

3. In the .'neanti-iie , nov.'eviir, legal enforcement of tlie code 
provisions of Class (1) ouj^ht to present no insuperable difficulty. 
Triey arc generally appiT)ved by honest mun and have the full support 
of "jablic . opinion; and the Courts and tie Federal Trade Commission 
are ._;enorally accustomed to .enforce similar or even identical rules. 
The' violations of such code provisions are generally characterized 
by an element of concealment and the principal problem of enforcement 
is detection of tae violation. 

4. how to detect, sue/; violations, and t-irou4;;li what machinerj", 
is -peculilvrly a problem to be determined "oj eac- indastry for itself. 
It is believed tuat any .industry t..iat -really desires tc enforce its 
fair competition provisjans can work out its own mac.iinery for doing 
so, subject only to.t-i<?- advisory ancL supervisory ictivities of ".••?lA set 
fort- Vjider T-tle II-3, Sees, .(s) ^xxd (4) above. Such code authorit].'' 
fair c:..rpetition coinpliance; agencies oug^it to be able to dispose of 
tie .^reo-t majority of caser-o.f Class (l) without court proceedings. 

5. It is believed t-at enforcement in cases of Class (l) re- 
quires nc centralization in .'.Vasi--ngton and no furtier assistance from 
1'?lA rn.f. fr...i the .Department of Justice tn.an is necessary to see taat 



(Footnote:. Conti' a) • . ■ 

(*) enf ■, rcement; bat t.-e ..stati.sfciCbido: give; some indication as 
• tc w ere t-.e. code revision ajai-.- overhauling cf cods autiority 
organization and 'fair competition compliance activities 
should begin. 

(**) It IS wcrtn noting, from Compliance Division experience, tiat 
any well founded cl^arge tiat a code autiority is not truly 
representative (Sec. o. (a) of III.ilA), malces practically impossible 
the enforcement of tae cde against tie unreprcssented fraction 
of the industry. . . 

9839 



-281- 

the cl.annel. s of comnronicatiori from tlie codi autirities tnrough tlie 
district attorneys to fc.e courts arj opened up aiid kept open. 

6. T::e fact if; net .:-vyrloGked tLat tne F-jderal Trade Co.nmis- 
si jn ".as a.ut"iGrity to entertain and to act on co.vrplaints of ^unfair 
CO:i'.petxticn ; and thi- pcwer i-^ not only preserved but the scope of 
the Cci-r-iissirn' ? authority is enlarged by Sec. 3 (b) of ITIRA.. Tlie 
Federal Trr.'..e Co;"miiissxon has no power to i pose a fine and is conse- 
quently net available for cases where procedure by criminal "orosecu- 
ti-:~n : s advr.sable. ?urtij.eruicre, and more important, the Federal 
Courts -ia,ve the great advantage, for cases of Class (1), that they 
are dccertralized (see also Title II-D, Sec. 5 tjage 20, post). 

7. It IS also to be reme.nbered that tie Attorney General 
alone l..as the p; wer ana t..ie duty to proceed in c,-;urt actions under 
tae Anti-Trust Laws wher-e opsrf.ticns allegedly conducted "under the 
authoriza-tion of codes lead to monopolies or monopolistic practices, 
in cor.travonti.-n of Sec. ,3 (a) of 17IHA. ~" ^ 



If enforcement of code provisions of Class 1 can be sub- 
stantially effected by some such procedure as is outlined above, 
that will add very greatly to the stabilization of code administra- 
tion and of competitive conditions. It should lead to a growing 
support of the codes by industry and by tie public generally. 

If IS believed to be supremely important that the grovTth 
of such public approval slioald not be a.rrested by ineff.ective or 
premature enforcement of code provisions of Cla.ss 2. 

The provisions of Class 2 will, however, be automatically 
traiisferred to Class 1 as a,nd wien a. firm precedent is establisned 
for c-c-ch cf them. If t.-e attempt to establish such a precedent for 
any provision of Class 2 fails, the effect will he to eliminate it 
automa,tically from the Code. The final result -.vill t.erefore be 
to transfer all retained code revisions into Class 1. 

D - Ti.ie channels of enforcement appropria. t^ 
to Class 2 cases . 

1. Everyone ccncernel witi tae enforcement of code pro- 
visions of Class 2 above must swallow, digest and assi:ailate the 
fact tl-at tie establisximent of a firm precedent of eaci type is 
the first step tov/ard general eniorcei-ient. T-iere is no by-pass 
for t.is step under tr.e Act, or indeed wonder our system of govern- 
ment. ?.-e a-vailable paths in that directi.n are tiie Federal Court^? 
and the ."ederal Trade Com;Tiission. 

2. Tlie Federal C'urts. To establish such Precedents in 



9339 



-S32- 

tne Federal Crurts reoiiires something mor.i than tne routine services of 
the (".istrict attnrnoys' offices. Similar situations 'lave frequently 
arisen- :-;i -.-ur Id story •andsr other laws, such as tlie Jbiti-Trust Laws, 
t.ie "Icvenuo Laws, and tVie enforcement of Sec. 7 (a) of FIPJV. 1!he es- 
tables -oJ practice is to aid, instnict and supple.nent the staff of t-ie 
disti--:.3t attorneys by special employees of the Demrtracnt of Justice 
and 07 G' ecial counsel. 

The i^.ti^ation section of tne Le£'"l Division of ITRA is now act- 
ing m that field in co-c . deration witi thr Department of Justice, pjid 
it is.; undei-stood tnat plans for still closer co-:peration are under 
waj''. It remain.s to establish effective contact between t^ie field 
agent-s of t"-.e litigation section and tie le.^al -idvisers of t.ie code 
autliorities, and v.-it-i the several district attorneys. It seems clear 
that t -.e v/ork of theue iitiga/oion specialists, wrhcn Lias already pro- 
duceh s:cd results, would be mere effective if t.iey were deputized 
agents of th-e Dcoartment of Justice. 

3. The Federal Trade CorriiTiission . .toother statutory channel ^. 

thr.ui;;;;-. wiiich the desired precedc;nt.^ may be established is the Federal 
Trade Co::V.ussion (Sec. 2(b) of WIBA and Executive Order of January 20, 
1934, JIc. 5469). It is believed that th.is channel affords possibili- 
ties "f action much more rapid and effective than is generally believed. 

Tlie Federal Trade Commission Act establisDes a statutory 
proceedinti designed to lead to a final co.irt decree restraining the 
use of "unfair methods of competition in ccumerce" and by Sec. 3 (h) 
of NlhA tiis includes the ocv/er to restrain tlie violation of code 
provisi.ns approved by the President. The "cease and desist" orders [ 

of tl.e Gc-.mission are irmnediately appealable, eitner by the Commission 
or by the person against 77liom tlie order is issued, directly to the 
United States Circuit Courts of Appeal whose decisions are final un- 
less reviewed by the Supreme Court upon certiorari; and the Act pro- 
vides that "sucii proceedings in tne circuit court of appeals shall be 
given precedence "Ver other cases pending t.ierein, and should be in ^^ 

every way expedited". (*^ 

There has already been establisaod, by co-:Teration between 
the ITodoral Trode Comiiiission and WPA, '. procedure under which HTIA 
reprcentinp a code authority may initiate and prosecute a case be- 
fore f. .e Gc'.amission. T^iere seems to be no reason why this practice 
conid n- 1 be extended to the initiation of complaint immediately ''oy 
the code p.utliorities if that seei.is desirable. 

In a case waere a code authority, or tl:e litigation section 
of the Legal Division of NJIA, is fally prepared for trial, tiere is 
no rerson why a case saculd n~t be initiated before the Federal Trade 
Cournissi:n with iiiimediate issuance of formal cofnplaint on proof by 
affidavit of cede voilation; set by tlio Commission for hearing at 
the end of tiiirty days after the service of a formal complaint on the 
respcndont; promptly decided and brought into tiie Court of Appeals 
where it has precedence. 



9830 



-233- 



Siis path to tile Co-art of Appeals is sliorter and quicker than 
any of-er, end it is belit;ved to have tie furtner advrntage that the 
Pedera?. Trcde CoiTiraission in its administrative caracity is eouipped 
and trainoo. to investigate anfair cciroetitive practices. It may 
safely "be F.ssiuned tliat tne Federal Trade Commission and tlie National 
Hecoverj'' Ach7i:i.nistrati;.n nave a coim-ncn purpose and v/ill he ahle to 
co-oporrte to a coniiuon end. 

T'..e Pedaral Trade Comnussicn has effective procedure for ex- 
tend hij t_. a v/hole industry its prohibition of an unfair co'apetitive 
practice wiien the precedent is once established, and its experience 
is that in such cases "cease and desist orders", if necessary, are 
Consented to by other members of the industry ;,7ithout c:)nt3"t. 



It seems not unreasonable to hope t'-.at througli these channels 
it will be possible gradually to build u: autuoritative precedents 
in Class :3 ceises, with growing, public support for the judicially 
approved cede provisions. 

It is fundamentally important that the coiantry should under- 
stand tl-at IIPJI code enforce-ient is going to be conducted within the 
law; tl\?,t it will be carried on in accordance v/ith t.ae temper of our 
people along the well trodden oaths of Constitutional procedure, 

III. t::!] slue ea^jle 

Tlie Blue Eagle (Code Sa,£le) is not a statutory instrument of 
enforcement. It derives its ^auctions v/holly from co-operative agree- 
ment. 

A member of industry ?/ho does not agree wit.i rules adopted by 
tne niaj:. rity of his industry and approved by the President, and who 
is not complying witn the code, should surrender the Blue Eagle, 
"is continued use of it is a false representation which should be 
stopped. 

It '.'.s believed, however, that a person should be forbidden to 
display tie Blue Eagle only wnen he has act'oally surrendered it or 
tacitly s..irrendered it by continued violation of a code provision 
whic-i forbids an act evil in itseli or for which a firm judicial prece- 
dent ha,s been establisj-ed (the usaal labor provisions and fair competi- 
tion previsions of Class 1). 

If there is any reasonable doubt as to tne fact of code viola- 
9839 



-234- 



tion, or i;^ t'.ie cods provision is of Class 2 above, action on Blue 
'SaQlo Mit'.i rawal should "be suspsnded ^jjitil after judicial deter.nina- 
ti.-n -f t :.c liti,gatable qaesticn. 

Irreparable injurj^ to either side of t-ie contr-versy during the 
period cf litigation may be prevented by bend or preliminary injunc- 
tion, eit_-er agreed to or i.':rpcsed upon application to the Court. 

IV. C:DE FHGVISIOi'13 III AID 0? CGl.iPLIAiTCE 

1 - Labels. Codes label provisions in one form or another -lave 
been inccrpc rated in 43 of tne 520 codes and 155 supplements approved 
up tr, October 10, 1'.534. Legality of t-ie provisions of tiie inillinery 
code has been upield b:/ Federal d'ad^e Caffey in tne Soutaern District 
of ICov.' Ycrh. Adininistrative provision _.as been made for tae prompt 
rev:.e\7 of ul"e refusal of label'; by code authorities to ^luard against 
discrivnin?,tion, and it is believed that up to date doubts have always 
been resolved in favor of the meriber of th.e industry seeking labels. 
Under continued good adiuinistration, and within the principle set 
forth "ojidev Title III above, this seems to be an effective instrmnent 
of cox:rpliance. 

2 - L i cui dated daiiage s . A provision for liquidated damages was 
in the Steel Code as approved by the President and has recently been 
incorporated in the Retail Automobile Code and in the ICacaroni Code. 
Tae form approved by the legal divisi^on is properly limited to indus- 
tr.y uefoers who have specifically agreed. If tte use of this provi- 
sion is t_ be extended, it is believed that tlie enforcement of the 
agreement should be by the usual court procedure for breach of con- 
tract and that it should be administered by an agency of the group 
who i-ave a,;jreed - not by the code authority. 

The use of liqv.idated damages can easily be turned into an 
abuse by coercing a code violator into signing the agreement. 
Neif. .or a acde authority nor IIRA has any statutory pov/er to impose 
civil penalties, and liquidated damages can be collectec' for depart- 
ure fro.i c:de provisions only by 'real iy voluntary ?.':reement (See 
the r/:i:iion addressed by the Attorney General to tie President 
datel'j-one 21, 1934, ITo. 7211). 



TT-e tendency'- is to use such cede provisions in aid of coa- 
pli?aice wl;.ere tliere aas been an excessive volui'ne of non-compliance 
with, a pc.rtr.cular code provision. But it saould be borne in mind 
that excessive volume of non-co.nvjliance indicates taat t.^ere is some- 
t ixng wr .ng witjo. tae provision, and usually indicates that it is 
di5cri--i_natory. It is a danger common to these aids to compliance 
that, unless their administration is very carefully supervised, they 
may result in the enforcement of code provisions which had better 
be amended. 



9839 



-285- 



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9839 # 



OFFICE OF THE NATIONAL RECOVERY ADMINISTRATION 

THE DIVISION OF REVIEW 

THE WORK OF THE DIVISION OF REVIEW 

Executive Order No. 7075, dated June 15, 1935, established the Division of Review of the 
National Recovery Administration. The pertinent part of the Executive Order reads thus: 

The Division of Review shall assemble, analyze, and report upon the statistical 
information and records of experience of the operations of the various trades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditions in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate review of the effects of the Administration of 
Title I of the National Industrial Recovery Act, and the principles and policies 
put into effect thereunder, and shall otherwise aid the President in carrying out 
his functions under the said Title. I hereby appoint Leon C. Marshall, Director of 
the Division of Review. 

The study sections set up in the Division of Review covered these areas: industry 
studies, foreign trade studies, labor studies, trade practice studies, statistical studies, 
legal studies, administration studies, miscellaneous studies, and the writing of code his- 
tories. The materials which were produced by these sections are indicated below. 

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

THE CODE HISTORIES 

The Code Histories are documented accounts of the formation and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of members in the industry; the history of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which were held, and 
the activities in connection with obtaining approval of the code; the history of the ad- 
ministration of the code, covering the organization and operation of the code authority, 
the difficulties encountered in administration, the extent of compliance or non-compliance, 
and the general success or lack of success of the code; and an analysis of the operation of 
code provisions dealing with wages, hours, trade practices, and other provisions. These 
and other matters are canvassed not only in terms of the materials to be found in the files, 
but also in terms of the experiences of the deputies and others concerned with code formation 
and administration. 

The Code Histories, (including histories of certain NRA units or agencies) are not 
mimeographed. They are to be turned over to the Department of Commerce in typewritten form. 
All told, approximately eight hundred and fifty (850) histories will be completed. This 
number includes all of the approved codes and some of the unapproved codes. (In Work Mate- 
rials No^ Ig, Co ntents of Code His tories, will be found the outline which governed the 
preparation of Code Histories.) 



(In the case of all approved codes and also in the case of some codes not carried to 
final approval, there are in NRA files further materials on industries. Particularly worthy 
of mention are the Volumes I, II and III which constitute the material officially submitted 
to the President in support of the recommendation for approval of each code. These volumes 
9768 — 1 . 



-ii - 

set forth the origination of the codes, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning- on the industry, the 
recommendations of the various Advisory Boards, certain types of official correspondence, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to amendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the work of the Division 
of Review. ) 

THE WORK MATERIALS SERIES 

In the work of the Division of Review a considerable number of studies and compilations 
of .-.ata (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Work Materials No . 17 , Tentative O utlines and Sum m arie s of 
Studies in Process , the materials are fully described) . 

I ndustry Studies 

Automobile Industry, An Economic Survey of 

Bituminous Coal Industry under Free Competition and Code Regulation, Ecnomic Survey of 

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

1934. 
Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part D - Exports and Exporting under NRA Codes. 

Forest Products Industries, Foreign Trade Study of the 

Iron and Steel Industry, The 

Knitting Industries, The 

Leather and Shoe Industries, The 

Lumber and Timber Products Industry, Economic Problems of the 

Men's Clothing Industry, The 

Millinery Industry, The 

Motion Picture Industry, The 

Migration of Industry, The: The Shift of Twenty-Five Needle Trades From New York State, 
1926 to 1934 

National Labor Income by Months, 1929-35 

Paper Industry, The 

Production, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 

Retail Trades Study, The 

Rubber Industry Study, The 

Textile Industry in the United Kingdom, France. Germany, Italy, and Japan 

Textile Yarns and Fabrics 

Tobacco Industry, The 

Wholesale Trades Study, The 

Women's Neckwear and Scarf Industry, Financial and Labor Data on 

9768—2 



o 



- lii - 

Women's Apparel Industry, Some Aspects of the 

T rade P ractic e S tudies 

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 Competition, Control of 

Minimum Price Regulation Under Codes of Fair Competition 

Multiple Basing Point System in the Lime Industry: Operation of the 

Price Control in the Coffee Industry 

Price Filing Under NRA Codes 

Production Control in the Ice Industry 

Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 

Trad3 Fraotice Rules of The Federal Trade Commission (1914-1936): A classification for 

comparision with Trade Practice Provisions of NRA Codes. 

Labo r Studies 

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

Earnings in Selected Manufacturing Industries, by States, 1933-35 

Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-35 

Fur Manufacturing, Commission Report on Wages and Hours in 

Hours and Wages in American Industry 

Labor Program Under the National Industrial Recovery Act, The 

Part A. Introduction 

Part B. Control of Hours and Reemployment 

Part C. Control of Wages 

Part D. Control of Other Conditions of Employment 

Part E. Section 7(a) of the Recovery Act 
i.iaterials in the Field of Industrie! Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

Administrative Studies 

Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 

Administrative Interpretations of NRA Codes 

Administrative Law and Procedure under the NIRA 

Agreements Under Sections 4(a) and 7(b) of the NIRA 

Approved Codes in Industry Groups, Classification of 

Basic Code, the — (Administrative Order X-61) 

Code Authorities and Their part in the Administration of the NIRA 
Part A. Introduction 
Part B. Nature, Composition and Organization of Code Authorities 

9768—3. 



- 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 with the 
Prison Labor Problem under NRA and the Prison Compact, The 
Problems of Administration in the Overlapping of Code Definitions of Industries and Trades, 

Multiple Code Coverage, Classifying Individual Members of Industries and Trades 
Relationship of NRA to Government Contracts and Contracts Involving the Use of Government 

Funds 
Relationship of NRA with States and Municipalities 
Sheltered Workshops Under NRA 
Uncodified Industries; A Study of Factors Limiting the Code Making Program 

Legal Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees 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 
Power 

Government Contract Provisions as a Means of Establishing Proper Economic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com- 
merce Clause, Cases on 

Legislative Possibilities of the State Constitutions 

Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- 
tion? 

State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis 

Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the United States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 

9768—4. 



- V - 

THE EVIDENCE STUDIES SERIES 

The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Scheohter decision the project was continued in order to assemble data for 
use in connection with the studies of the Division of Review. The data are particularly 
concerned with the nature, size and operations of the industry; and with the relation of the 
industry to interstate commerce. The industries covered by the Evidence Studies account for 
more than one-half of the total number of workers under codes. The list of those studies 
follows: 



Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and 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 Vehicle Retailing Trade 
Needlework Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 

Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
try 
Wool Textile Industry 



THE STATISTICAL MATERIALS SERIES 



This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment, payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qualifications that should be observed in using the 
data, the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series; 
9768—5 . 



L 



- VI - 

Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint, Varnish, ana Lacquer, Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

THE COVERAGE 

The original, and approved, plan of the Division of Review contemplated resources suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govern- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies; and the abandonment of the consolidat'ion and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be carec for under other 
auspices. 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the largest and richest single body of information 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review. 
9768—6 . 



n