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BOSTON PUBLIC LIBRARY 

lllllllllllllllllll 
3 9999 06317 395 7 



OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



THE FERTILIZER INDUSTRY STUDY 

VOLUME I 

By 

Al F. O'Donnell 



WORK MATERIALS NO. 63 



INDUSTRY STUDIES SECTION 
March, 1936 






OITICE OP IIATIOi;j\L IIECOVLRY ADillHISTRATIOlJ 
Division 0? HEVIEU 



THE PEHTILIZEE IlIDUSTRY STUDY 
VOLUI.C] I 



Al P. O'Donnell 



Industry Studies Section 
I,:r,rch, 1936 



TITE FERTILIZER lilDUSTP.Y 



TA3LE .:P CGilTEKTS 



Page 

Foreword 1 

Suminr.ry 2 

Genercl Info miction about the Industry 2 

Conditions in tlie Industry just prior to }IRA 4 

Tlie Fertilizer Industry Code 5 

PuBsults Achieved under the Code 6 

Post Code Conditions in the Industry 8 



ChAPTEH I. 

history, Development r.nd Problems of tlie Fertilizer Indurtry 

General Industry Charr.cteristics 10 

Causes of Problems in the Industry 17 

Competitive Practices Prior to the Code 20 

Codes prior to the h.R.A. Code 23 

Impact of the Depression 32 

Organization for ojid Writing of the K.H.A. Code 33 

C'JLPTER II. 

Rav/ i.ir.terials and Production Processes 

General Characteristics and Uses 40 

nitrogen Carriers 44 

Potach Carriers 50 

Phosphate Products 60 

T.V.A. Fertilizer Activities 62 

Superohosphate? 70 

"ilixed Fertilizers 78 

CiJli^TEl-l III. 
LAB OH 

Pre-Codal Labor Conditions 79 

Demand for Labor 79 

Supply of Labor 07 



9761 



Wr.ges of Lcoor 8 8 

President' s Heem'T'loynent Agreement 101 

The K.3.A. Fertilizer Code 101 

Lr/bor Provisions 101 

Coniplirjice 11 2 

Lr^or Accomplislmients of tlie Code 114 

Post-Codal Lator Conditions 132 

Proposed Voliontr.ry Labor Agreement 124 

c::apte.i iv. 

Tne Distribution md Prices of Fertilizers 

Kinds rnd Amounts Distributed 127 

liultiplicity of C-rr.ies Sold 141 

Factors Influencing tlie Amounts Sold 149 

Distribution Channel s raid Methods 154 

Codal Provisions regr^rding Distributive 

Ch-nnels 159 

Shift froui Dealer to Agent during the 

CcdfJ. Period 159 

Farmers' Cooperatives 164 

Probable S\iture Trends 174 

Effect of the A.A.A. Program 175 

Prices 176 

Factors Affecting the Fanuer' s Price cf Fertilizer 176 

Cost cf Piaw Uaterials and of Llixing 178 

Cost of Distribution 179 

Cost of Credit 182 

'liTholesale pjid Hetail Prices 187 

Pre-Codal Prices 188 

Codal Conditions 197 

Code Price Provi-rions 197 

Sales Below Co-.t 199 

Open Price Filing 200 

Price Ch.-'Xiges During the Code 204 



9761 



CHAPTEE V 

Code Administration Ptvge 

Code Autliority Orgrjiizr.tion 208 

Zone Executive or Adiuinistrative Co:ninittees 314 

Code Rules 316 

B\\dget and Liethod of Assessment 222 

Trade Prr,ctice Conplrlnts Conirnittee 226 

Lf.bor ComplF.ints Conunittee 229 

Code CompliFUce 236 



9761 



LIST OF T.ABLES 



Tr.bles Pr.ge 

1- Percent of all Fertilizer Eouglit in 1929 by ten 

leading Consuming States 13 

2- Percentage of Ta:: Tags sold each Month in the 
thirteen Southern States on the Records for the 

Pour Seasons, 1926-27, 1927-28, 1928-29, rjid 1929-30... 18 

3- Seasonal: ility of Em;:loyinent 19 

Average Percent of Airnual I.ian-Zouvs 

w'orlced each lionth 

4- Gross Income from Farm Production 24 

(1) 1909-1934, aa-id ->om C-:yj^ (2) and Cotton and 
Cottonseed (o) for year,^ indica-ued together with 

tons of Fertil^-zer sold in next succeeding year 

5- Het Profits of Cgrtain Fertilizer Companies 25 

(Before Intere^c e,nd Dividends 1912-1935) 

6- Fertilizer Industry Income Statistics 1927-1935 27 

7- Annual Average Index of Wliolesale Prices of 

Fertilizer Materials 1926-1934 40 

8- Plcjit Food Content of Fertilizer i/Iaterials 43 

9- Production ond. Imports of Chemical Nitrogen in 

Short Tons in the United States, 1930-1934 48 

10- Estimated Consumption of Chemical Nitrogen i-n 

Siiort Tons in the United States 1930-1934 48 

11- Estimated ConsujTiption of Plmt Food in the 

United States 19S0-1932 49 

12- Exports of Nitrogen Carriers 1926-1935 50 

13- Sales of Fertilizer Potash in Uni^-ed States, 

1930-1934 52 

14- Potash Produced and Sold in the United States 

(in short tons) 1925-1934 54 

15- Potash Materials Exported from the United States 
1929-1934 54 



9761 



Tables 



Page 



16- Potash Imported for Cons-omption in tlie 

United States 1924-1934- 55 

17- Potasli L;aterials Imported for Con surapticn in the 

United States 1932-1934 56 

18- phosphates, Crude; Estimated Consumption 'by 
Principal uses in the United States and its 

Possessions, 1370-1931 65 

19- Phosphates, Crude; Estimated Reserves in the 
United Svates as of December 31, 1930, on the Basis 
of a Content of 55 percent or more of Tricalcium 

Eio sphate " 67 

20- Phosphates, Crude; Price Q-aotaticns Florida Pebble- 

68 Peroc.-.b P.r.P, hines, l?24-lV-"j 69 

21- Phosphates, C:rude; Export?;, all Grades, 1900-1934 69 

22- Superphosphates. Production in the Uni ted States, 
1921-1934^. 71 

23- Plants of Six of t.ie Larger Compcaiies, 1933 1. 73 

24- Superphosphate Imports, 1932-1934 74 

25- Superphosphates: United States Exports, 1922-1934 75 

26- Superphosphates: Price Quotation F.O.B. Baltimore, 
1928-1934 75 

27- Superphosphate Prices F.O.B. Baltimore for 

16 Percent Phosphoric Acid, 1924-1935 76 

28- Index of TJholesale Prices of Fertilizer Materials 

(1929 = 100) 1926-1935 77 

29- Wage Earners in Fertilizer Industry, licnthly, 

1919-1933 79 

30- Relative Employment by Llonths 81 

31- P.ecentage of Activity in Each Department Based on 
LirJi-rlours "Jorlced by Employees - year ended June 30, 

1933 ] 33 

32- Fertilizer Industry 'Jage Earners pjid 

Wages - 1929 cjid 1933 85 

33- Fertilizer Plants by Size cf Business - 1929 86 



Tables Page 

34- Fr,r;n Lr.lacr Saipply Ex'jiressed -^.s Percent cf 

Deninnd - 1928" - liZ5 87 

55- Production, Nwaber of TJr.ge Earners and Ir^z^s Paid 
SliCY/in:; Percentage Ch:nr;e froa Preceding Census 
• Period" and Wages Paid for Ton Produced - 1919-19S3 89 

36- pelationship of Vte^-es Paid to Value of Product - 

1919 - 1933 90 

57- Percentage of Total Activity end. of Total Wages in 

Sacli Department Year Ended June 50, 1953 91 

53- xiciirs Woriied Per Week Pull Time, Lien, S'j^ring 

Season, 1953 92 

39- Sunmary of Weigjited Average Wage P.ates Paid for 
Various Classifications of Labor in tl^e Fertilizer 
Industry During t:.e Six Mcnt'.'.s Ended June 30, 1933 94 

40- Sumnii.ry of Fertilized Indur-try Wage Jiates for Gonmon 
Labor (Lo^xling and Slii:?i:ing) in Dry l.iixing De:?art- 
ments - All ty^es of Plrjits, Sjiring Seasons, 1929 

cjid 1933 95 

41- Summary/ of Weiglited Average Weig/ts Paid Per Houi- to 
Common Labor rjid iMUiuber of LL-Ji-. lobars Worked by 
Common Labor in the Mrjiuf acture of Dry Fertilizers 

During tlie Six l.ionths Ended J-ane 30, li'33 96 

42- Comparison of Hciirly Wage Itn,tes for Common Labor in 
Dry fixing Departments at Post cjid Interior Points 

in Cortain Statev? During Spring, 1933 97 

43- Comparison of Hourly Labor R-tes for Commcn Lrbor 
in Dry Mixing Departments During Spring of 1935 
According to Popu-laticn of Ccr.im\mities 98 

44- Sumiiiary of Average Wage Rates Paid for Various 
Classifications of Lrbor in SuperpkospL.ate Depart- 
ments by States for tlie Six LicntLs Ended June ?j, 1929 

and the Six l-Ionths Ended June 50 , 1953 99 

45- Suiiiraary of Average V/age Hates Paid for Various 
Classifications of Labor in tlie Sulpliuric Acid 
Departments by States for tie Six Mcntl.s Ended 
June 50, 1929 and tlie Six Lonthi Ended Jraie 30, 

1935 100 



9761 



Tatles P?-ges 

46- Anr.lysis of 78 Lr.bor Co.-^^lirjnce Cr.ses 113 

47- Suim-iiary of Labor Complaints Handled by the 

Fertilizer Code Authority 114 

48- Fertilizer Industry "Spring Season" Employment, 
Payroll, Man-liours, a,nd Wage Hates, Before and 

During Code Period 117 

49- Comparison of Labor Conditions for Corresponding 

"Spring" Periods Before and During N.H.A 118 

50- Fertilizer Industry Employment, Payroll, I.icJi-I-Iours, 
cjid Wage Hr.tes for Corresponding Period Before 
Iv.H.A. , During P.H.A. , Daring IJ.H.A. Cede ejid 

After N.il.A, Code 119 

51- Comparison of Labor Conditions for Corresponding 
Period Before II.R.A. , Durin- P.R.A. , During IT.R.A. 

Code and after IJ.R.A. Code 119 

52- Fertilizer Industry S.iployment, Payroll ?jid Tj'age 

Rates, 1926-1935 '. 120 

53- Summa.ry of liixed Fertilizer Costs in tlie Principal 
Fertilizer Consuming Areas in the United States 

for Leading Grades, 1933-1934 122 

54- Results of National Fertilizer Association 

Questionnaire on Post Code Labor Conditions 124 

55- Consumption of Fertilizer in tlie United States from 

1910 to 1934 123 

56- Fertilizer Tonnages by Decades 1880-1930 130 

57- Commercial Fertilizer - 1929 131 

53- Cotton Acreo,ge Fertilized, Amounts per Acre, and 

Yield of Cotton per Acre, 1930 ■. 134 

59- Percentage of Each Kind of Fertilizer of the 
Total of All Kinds Re-oorted Year Ended Jione 30, 

1934 138 

60- Tonnage of Fertilizer uaterials Reported in the Survey 
e.s Sold to Consumers during the Year Ended 

June 30 , 1934 140 



Tcbles P?-Se 

61- Percent of Totr.l Fertilizers Represented ''oy 
l.iixed Fertilizers eoicI "by Various liateripls 

Year Ended June 30 , 1954 139 

62- Tonnage cf Principal Grade? of l.iixed Fertilizers 
Consumed in tne United Sta.tes in tie Year Ended 

June 30-, 1954 and Percent of Total 142 

63- Sales of Mixed Fertilizer Tax Ta^jS in Seventeen 

States in 1934 147 

64- j\nnua,l Experience for State of Texas, 1918-1925 148 

65- Gross Income Froi.i Cotton oxid. Cotton Seed rjid Tons 
cf Fertilizer used the Kext Year en Cotton, 

1928-1934 151 

66- Farm Prices sjid Incone in Helfticn to Fertilizer 

Tonnage, 1910-1935 153 

67- Smm-nary of Oiifbound S'aipraents by Fertilizer 
HcxLuf acturers According to C-eograpMc Sections and 
Percent£:,ge Lloving "by Various Types of Trrjasporta- 

tion, 1931-1933 '. '. 169 

68- Faolesale Price by Typical Grades of Fertilizer, 
1919-1954 '. 188 

69- Prices of Fertilizer, Pcunds cf Flezit Food per 
Ton, £?jid Price of Plant Food per Pound, Vermont, 
1922-1935 196 

70- Retail Prices of Grades as Specified 

Vermont, 1930-1935 198 

71- Price Indexes of Fertilizer Ife.terial s and Mixed 
Fertilizer by liontlis, 1933-1955 206 

72- Bureau of Labor Statistics Price of 5-3-3 in 
South Atlrjitic States (Dollars per Ton) by lionths, 
1933-1935 207 



LIST OF i.:aps 

Haps Page 

1- Expenditure for Fertilizer by Farmers 14 

2- Location of the Fertilizer Industry, 1935 16 

3- Cotton Acreage, 1929 133 

4- Zones Established by the Fertilizer Code 

(Revised March 10, 1934) 215 



-ix- 
9761 



LIST or C:JIHTS 

Cliart s Page 

I- Orgajiization of the Fertilizer Industry 11 

II- Flow Chart of the Industry 39 

III- Average Composition of Complete Liixed Fertilizer, 
1880-1932 46 

IV- World Production of Atmospheric iTitrogen and of 

Chilean Nitrate, 1923-1933 47 

7- Source of Nitrogen in Liixed Fertilizer, 1880-1932 51 

?I- Annus,! Average Spot Price per Unit of Nitrogen in 
Various Liaterials at Producing Points or Ports in 
Bulk, 1880-1934 53 

VII- Trends in Domestic Sales, Consuinption and Value 

of Potash, 1913-1934 58 

VIII- Sulphuric Acid, 1933-1935 61 

IX- Superpho sphates , 1933-1935 72 

X- Comparison of Costs and Selling Prices, 1933-1934 123 

XI- Summary of State Fertilizer Control Laws, P.egula- 
tions.and Ralings, September 1, 1935 ^'''2 

XII- Index of Fertilizer Prices at t.ie Factory and 

Farm Produce Prices at the Farm 190 

XIII- Comparison of the Farm Prices of Fertilizer rjid of 
Farm Products ajid of the Prices Paid by Farmers 

for Commodities Bought, 191C to 1934 191 

XIV- How Prices have Risen, llarch 15, 1933 - Jcjiuary 15, 

1935 192 

XV- Relative Cost of COiiimodities Bouglit by Farmers as 

of September 15, 1934 193 

XVI- Increased Prices of Farm Products and of 
Fertilizer, September 15, 1933 to September 15, 

1934 ~ 194 



9761 



Cli-rts Page 

XVII- Qurjitities of ?r.mi Products Sequ-ired to Buy a 
Ton of fertilizer, Jcnuar:/ 1, 1933 cjid 

Jcnuary 1 , 1935 195 

XVIII- Price Schedules Filed in the Pertilizer Industry, 

J"jiuary 1 , 1934 - Fetruc.ry 1 , 1935 203 



APPENDICES 



APPEKDIX I. Uethodology Used in this Re'jort 

rjid 
Outline of Future ^te search 



APPEiroix II. Ex:.;i3iTS 

Eidiibit 

1 Location of Fertilizer Pl^aits, 1933 - 1935 249 

2 Production Capacity of the Fertilizer Industry 250 

3 Detailed Tabulation of Consolidated Balance Slieets 
cOid Incoi-ie Accounts of Fertilizer Conip?jiies from 
Treasury Department Statistics, 19.27-1933 252 

4 Twenty Points Code 255 

5 List of Thirty-nine Indicted Ccrnpanies 257 

6 Code Sanctioned by Department cf Justice, 1927 253 

7 Code Approved by Federal Trade Comnission, 1929 261 

8 Revised Trade Practice Sales of Federal Trade 
Commission, 1931 266 

9-; Letter from the Secretary of National Fertilizer 

Association Suggesting the Abrjidonment of the Code, 
November 10 , 1932 268 

10 By-Laws of tie National Fertilizer Association, Inc. 269 

11 Code Adc^^ted b ' the Fertilizer Convention 233 



-XI- 



Exi:Libit 

13 Personnel of Fertilizer aecovery Couimittee 

(June 21 , 1933) 290 

13 Statistics on Production, Stocks, etc. of 

Sulpliuric Acid 292 

14 Production rjid VrJue of Crude Pliosil.ate by Areas 297 

15 liontlily Statistics Relating to Production, Sliip- 

nients, pjid Stock of Superphosphates 295 

16 Persons Gainfully Employed in Fertilizer Factories 

"by Occupation in 1930 299 

17' Ra-tio of Labor Costs to Liaterial in the Fertilizer 
Industry as Contrasted to all Manufacturing 
Indus tries 298 

18 Payroll Analysis Questionnaire used by Nationrl 
Fertilizer Association, 1933 300 

19 President's Reemployment Agreement Adopted by the 
Fertilizer Industry 302 

20 National I^rtilizer Association Cost Survey 304 

21 Expl£?Jiation of tlie Cost Accounting System 316 

23 Title A (Labor Provisions) of the Proposed 

Voluntary Agreement 322 

23 Analysis of Differences betv/een N.R.A. Code 

Provisions ?Jid tlaose of the Voluntary Agreement 327 

24 Fertilizer Sold by States, 1920-1930 330 

25 Crop Acreage, Tons of Fertilizer Bouglit and 
Expenditures for Fertilizer 1929 331 

26 Tonnage, Plant Food, by States, Year ended 

June 30 , 1934 332 

27 Tonnage by Grades, by States Year ended June 30, 

1934 333 

28 Maryland - Tonnage and Grades sold in 1934 334 

29 Executive Order 6355 Regarding Cooperatives 335 



^xU- 



9761 



Sxliibit 

30 Executive Order 6606-A Regardin,;: Coovjeratives 336 

31 Administrative Order X-35 Regarding Cooperatives 337 

32 Federal Trends Comnission Voluntary Code of Tre-de 

Practices and Comparison with the Code 338 

33 Description of Open Price Filing Procedure rjid 

Regulations 366 

34 Tabulation of Open Price Schedules Filed "between 

January 1 , 1934 and J.vjiuary 23, 1935 374 

35 Personnel and Experience of the Aflrainistrative 
Staff of the Fertilizer Recovery Coiruiuttee and 
of N.R.A. Officials in CLiarge of the Fertilizer 

Code 375 

36 National Fertilizer Association Budgets 385 

37 National Fertilizer Association Producer's 

Questionnaire 387 

38 Organization Ciart and Experience of 

Key Personnel 413 



FOEE\)OED 

This study of the Fertilizer Industry wps prepared by Mr. Al i\ 
O'Donnell of the Industry Studies Section, wlr. M. D. Vincent in charge. 

This study provides r revievf of the production, distribution and em- 
ployment conditions in the fertilizer industry. The objectives of the ap- 
plicable provisions in the code have been indicated and their effectiveness 
in accomplishing these objectives have been indicated, ','here the code 
fell short of its objectives, the reasons have been analyzed,- Where par- 
ticular tvTies of code nrovisions 'i\'orked well in the o-peration of the fer- 
tilizer code, the reasons for such success have been explored. 

The NliA files contained the bulk of the information from which this 
study was made. Publications of other governmental agencies such as the 
Department of Agriculture, Bureau oi Mines, Department of Labor, Federal 
Trade Commission, Department of Justice, Treasury Department and the 
Department of Commerce were also extensively utilized. Trade Associations, 
such as the American Potash Institute, Inc., and The Nationpl Fertilizer 
Association', Inc., were helpful in contributing material. 

The author's -nosition is tnat the NnA experience with the code for 
the fertilizer industry indicates that industrial legislation, such as 
the NIRA is practicable under certrin conditions. The fertilizer 
industry was sufficiently well organized and experienced to know its own 
problems, and what code provisions ^-ould be of service in solving these 
problems. The National Fert-iliz^er Association had personnel experienced 
in administering previous codes of lair practice under the Federal Trade 
Commission so that the administrative work -of the fertilizer code was 
handled with a minimum of FtJl assistance. Operating during a period when 
the demand for fertilizer was much greater than in the immediate pre- • 
codal period, the fertilizer code contributed to the stabilization of ' 
the fertilizer industry, the spread of employment and the increase of 
""ages, and the placing of the industry on a profitable basis with a 
relatively moderate increase in prices to the consumer. 

At the back of this report -'ill be found a brief statement of the 
studies undertaken by the Division of Review. 



L. C. i.feTshall 

Director, Division of Review 



March 6, 1936 



9761 



-2- 
SUMMARY 

The Farmer the Sole Consumer of Fertilizer 

. The peculiar p'roblems as well as the importance of the fertilizer 
industry are attrihutable to the fact that it has only one customer — 
the farmer. Fertilizer's are vised, to replenish or supply plant food de- 
ficiencies in the soil, feo as 'to iuprove the yield and quality of crops. 
The farmer's demand is highly seasonal and relatively inelastic in re- 
sponse to price, depending primarily on his own income in the preceding 
year and to a -lesser extent on his credit facilities. The industry's 
problems are rendered more acute because a large proportion of the fer- 
tilizer is used on a few crops such as cotton, tobacco, potatoes and 
truck crops. 

Only one- third of the farmers of tne United States use fertilizer, 
since not all soils need additio-nal plant food and some lack the water 
without which fertilizer is ineffective. Fertilizer is mainly used along 
.the Atlantic Seaboard and in tne Old South, where the soil has been de- 
pleted by the system of croppin^^. Fertilizer is a heavy material with 
low specific value-; and high freight rates have caused the concentra- 
tion of a large percentage of tne plants in the main consuming areas. 

Stcxtistics of the Industry's Importance 

In the last fiscal year so:ae 6,200,000 tons of fertilizer were sold, 
with an estimated retail value of $158,500,000. The Industry, in 1933, 
the last Census year, employed an average of 13,063 wage earners, with 
an annual payroll of $7,274,000. For the ten Census periods since 1909 
the averages have been 18,969 wage earners and $14,846,000 annual pay- 
roll. The peak was in 1919, with 26,296 wage earners and a payroll vol- 
ume of $25,353,132. 

The heaviest demand for fertilizer comes in th'e planting season, 
and a large percentage of shipments are concentrated in a few Spring 
months. The seasonal peak has been growing more acute over a period of 
years. In 1919 the minimum monthly employment was 54.9 per cent of the 
mazimum; and this has steadily declined until at the last Census of 1933 
it was only 32.8 per cent. The peak of employment occurs in March or 
April and the minimum employment is usually in June. 

TToes of Plants 

The industry as defined by the code co.iprised several different 
types of plants, each of which had different problems. The smaller ' firms 
purchase all their materials and merely mix them. In numbers these con- 
stitute 772 of the 968 plants engaged in the business. Approximately 
196 plants are engaged in the manufature of superphosphate, one of the 
constituent raw materials in most fertilizers. About 100 of thes plants 
manufacture the sulpnuric acid necessary for their production. These 
superphosphate and acid plants require a relatively large capital in- 
vestment, and the acid plants are rion continuously all year. 

Productive Capacity 

The fai'Tner does not anticipate his fertilizer requirements by ad- 
vance purchases, because of lack of money, inadequate storgge space or 
9761 



-3- 

fear of deterioration of the product. This increases the seasonality 
of -production for the manufacturer, since he does not rish to carry heavy 
inventory rnd to speculate in the rni? materials that constitute over 
50 -oer cent 'of his cost. ThuS the dry mixin,^ plants usually have a 
capacity uhich ^ill take care of the peak demajid. Statenents regarding 
the excess productive capacity of these plants and ox the industry, there- 
fore should he suhject to careful scjratiny. 

For firms uhich mojiufacture superphosphate productive capacity is 
largely a matter of sufficient cnpital rnd storage space, since sulphuric 
acid can be -our chased in the open market. 

PrincJ-oal Price Pactors not Controlled "b:-- Code 

The oredominnjit factors in the price of fertilizer rrere not ccn— 
trolled "by the fertiliser industry code. In .1934- rau materials repre- 
sented 62.3 per pent of the total cost of the manufacture of mixed 
fertilizer, sjid bags or containers re-oresont an additional 7.5 T)er cent. 
The d.TO'-) in fertili'^^cr prices over a period of years ^irs "been due not so 
much to improvements in production or distrihution as to varia.tions in 
the prices of these ran materials, resulting from their increased rrorld 
output. 

The leading nations have sought to obtain national self-sufficiency 
•Tith reference to fertilizer materials, not only because of their uar 
time value for increasijig crops rdth a smaller amount of labor, but also 
because the nitrogen materials are the basis of ex-plosives and of chemical 
T7arfare. The United States, nliile formerly dependent upon foreign 
countries for potash and for a large percentage of its nitrogen needs, 
could toda,y in bji emergency su,Dply the entire requirements of the 
fertilizer industry rrith domestic production. This is dae in large 
measure to the devolopment of the processes for the fixation of atnos- 
oheric nitrogen and to the discovery of great, ]ootash deposits in Hew 
Mexico. ITe still iiroort la.rge tonnages of fertilizer materials, houever, 
and their -prices are set in \70rld markets, since there is nO; import duty* 

Interstate Aspects of the Fertilizer Industry 

The distribution of fertilizer materials furnishes an excellent 
illustration of interstate commerce. The sonorces of these materials are 
highly concentrated geographically. Potash is either irrroorted or comes 
from Hen Mexico or California. Phosjphate rock comes -oriraarily from 
Florida and to a lesser extent from Tennessee, and is made into super- 
phosphate by using sulphuric acid, the sulphur content of vrhich is largely 
im-^orted pyrites or is derived from the Texa,s or Louisiana deposits. 
These materials are distributed to fertilizer Jianuf ac'turers, and through 
them in the form either of mixed fertilizers or nithoiit mixing, to f.-\rmer 
consumers in practically every state of the Union. 

I:inact of the De'::)ression 

Coraioetition for the farmers' fertilizer business is al\78ys keen; 
but in years folio-ring a decline in agricultural incov.ie each pr6ducer 
of mixed fertilizer has been temited to utilize every method of cor&» 



petition in the effort to maintain his volinne of 'bu.siness. This has 
produced a state of conipetition from which so-called unfair trade 
practices resulted. 

Unfair Trade Practices 

Many of these pra,ctices had to do xrith methods of price ciittinf, 
■of vf.iich the most serious iras perhaps the guaranteeing of prices 
against decline, not only as to a seller's omi prices, hut also as to 
those of competing producers. This rras especially serious hecause 
a large percentage of fertilizer sales ^nere made on a credit l)a.sis, 
due to the farmer's inability to pay tmtil he received the proceeds 
of the crop on which the fertilizer wa.s used. The farmer's settle- 
ment at the end of the season rras hased upon the lonest price at 
which any producer had offered him that partictilar grade during the 
preceding season. Variations in quality nere often ignored, and the 
sale of a very small tonnage at a low price late in the season, by 
some producer who had not been able to move his inventory, caused 
heav;^ losses to the Industr^' as a whole. 

In manjr instances retroactive settlements were made on cash 
sales, if at the end of the season prices had declined below those 
which a particiolar farmer had had to pay. Competition often resulted 
in the xmwise extension of credit to the farmer, and large industry 
losses resulted. Price cutting by rebates and trucking allovrances, 
or by offering a multiplicity of grades v/hich deviated only slightly 
from the standard, were also extensively utilized as price cutting 
vehicles. 

Industry's Code E-rperience Prior to liBA 

The industry had he.d three or four so-called codes of fair trade 
practices prior to VIM., The last of these codes had been approved 
ty the Federal Trade Commission in 1929 and had been abandoned in 1932, 
because of the demoralized condition of the industr;^. Due to the drop 
in the farmer's purchasing power the sales of fertilizer were only 
4,400,000 tons in 1932, as contrasted with 8,200,000 tons in 1930; ' 
and the resulting scramble for business led to wholesale violation of 
the code. 

Labor Conditions Prior to iIRA 

Up to the time of the ¥Ek the industry had never given any con- 
sideration to raising the level of competition as regards labor 
standards. Measured by any standard wages were low, and working hours 
were abnormally long. Employees in many plants worked as long as 84 
hours per week, with 50 hours the average in the busiest month of 
1933, Some Southern plants paid as low as fo\ir or five cents an hou-r 
for connon labor. The average wage from January to June, 1933, in 
the United States was 21. cents per hour, with common labor in dry 
mixing departments receiving an average of 16.9 cents. 



9761 



-5- 

In I'iJoS, '-i-;;h fertilizer sellin.0; at a price "oeloxi the cost of 
prodiiction, the toni-.age increpsccl only abotit 400,000 tons, thus il" 
lustratinf;; the inelasticity of the farmer's denancl. The co::-porate 
inco:ie ta;: returns nade to the ;r ■..-.sui-'^ Do j.irt ic.-t. snc'T los.^es in 
e::cess of \vrofits of $10, 757, L.?? in 19ol, $3,057,105 in 1932, and 
$2,474,256" ij.i 1935. 

Tihi] raiTiLizsiL iiiDusTHr cons 

The lliA fertilizer code contained provisions designed to raise 
the level of ccipetitx'-ii hoth as rs^ycrds Is.'^or standards and as to 
the oethods of dcing o-osi-ies. . 

Tia"b ^r P^f ylriovS 

Lahor, vfhich r'^- ^.•'-jf.v^jrLec''-- only from five to eight per cent of the 
total cost &f raaruff.ct-'-'ing r.i-:ced fertilizer, ^Tas not a serious cost 
factor. The industry, therefors, readily adopted lahor standards 
TThich, uhile not high cO;iL'ari:'d uith those of some other industries, 
neverth.eless rerorer^cnt^d a narlred advance over the abncmally low 
ones that had prevailed prior to the Code, workers were limited to 
a na;-.iuujn of .40 hours per ireok, with certain e-ceotions; and the 
Hininux-i rentes of nages V7.:ire firced at 25 cents per liour in the South, 
35 cents in the hdrth and L'idcle Yfest, and 40 cents on the Pacific 
Coar.t. 

Trade Pructi c: P r'v Isious 

As a hase from vjhich to neasur/e price cutting, the Industi^r had 
a clause -orohibiting sales helov- cost except to meet competition. 
The most important -orovision' of eill, houevar, required the filing of 
open prices, witl^ a ten-day T'aitinr period before a revised scheduie 
"beccj-ie effective. 

Code Authorit; ; 

The Cod3 Authority ^.7as a oody ap-ooi..ted t^r The llatii^nal Pcrt'.lizer 
Association, a trade association judged hy the liHA t-^ "be triJ.y 
re-ore sentative of the industry. The Code Author i-*.^, and many of those 
to \7h0n thej"" delega-.e-. authority nere men e:<periencad in administering 
this industry's r,revious co8.es of fair ti'ad: practices, such as the 
one approved "by the Piaeral xT'ide Conraisriion. 

Code C .r. i liance 

An erccellent com-^'lianc- r>-jCord nas achieved by the Code Au.thorityj 
T7hich handled 1334 cases of orade practice complaints and 90 cases of 
alleged violations of th ; labor provisions of the code. Fewer than 
20 of the trade r^ractice cori^laints were referred to the MA.. 



Code I'ever Reopened for Amendment < 

Several provisions which it would have "been desii-able in the 'ouo- 
lic interest to include in the fertilizer code, to "bring it into line 
with lalA. policies developed after the original approval, rrere never 
incorpoi'ated, even though the inductr:,'- would not have objected" to t^ien* 
The difficvilty lay in the fear of the industrjr that a reopening of the 
code might deprive the industry of privileges already erfoodied in it, 
such as the ten-da;' waiting period on ooen price filing which was 
considered to he essential for sv.ccessful operation. 

RESULTS ACHIEVED IThP^B. THE CODE 

The Code Contrihuted to the Industry Stahility 

The code was successful from the viewpoint of the Industr^>- and ■ 
contrihu-ted to its stahility. Another factor which contributed to the 
improved Industry;- position was the sharp upturn in the farmer's ptir- 
chasing power that developed d-'jxing the codal period. Other important 
factors were the removal of legal restrictions that had been hindering 
the cooperative efforts of the industr-^; the fact that the Code was 
well adapted to the industry's needs, as a result of previous ex- 
perience with similar instruments; the trained personnel with knowle5.ge 
of the industry and with experience in acLrainistering codes; and the 
location of the executive offices of the trade association and of the 
Code Authority in Washington, where they coixld closely cooperate \7ith 
IffiA, 

Limitations of Existing Statistical Data 

This study has developed the fact that the existing statistical 
information is not adequate to determine accurately either what hap- 
pened to labor, the industry and the consumer during the period 
through which the code o-oerated, or to determine what part of any 
change indicated was due to the code itself. 

Jot determining what happened to Labor v/e are dependent upon 
the Btireau of Labor Statistics, which compiles the only continuous 
series of labor data. This is based on a sample for one week of 
each month gathered from a limited n^amber of firms and extrapolated 
to obto-in estimates for the entire industr"/. The figures are, there- 
fore, only as accurate as the sample is representative of the indnstr^', 
as a whole, The results indicated are that the code did definitely 
help labor. 

Labor's Position Improved During the Code 

Under the code, the first Spring or busy season of the year, when 
contrasted with the same period for the lorevious year showed an in- 
crease in hourly rates of 41,5 per cent. Weekly earnings increased 
6.1^, The uaxiraum hour provisions of the code spread emplojrment by 
50 per cent, and purchasing power was increased by a 62 per cent gain 
in the industry's payroll. In citing these effects on labor it is 



9761 



recogiiized tliat the rise .if IS. 6 per cent in tlie Indus t ry ' s production 
tonna.:;e "betreen 193C and 1934 caused Ibj: the increase in the fanner' s 
incoMe, and tha.t the denand for fertilizer contributed to the laoor 
gains. 

Durin^ the second year of code operation production made a fur- 
ther increase of 13.8 per cent. This is reflected in the conparative 
spring ladio'r statistics, nhich shovr an increase in total man hours of 
6.5 per cent. This did not result in spreading emplojinent further, 
as the average man hours per veek increased 3.2 per cent and the num- 
ber eia-oloyed decreased 3.5 per cent, while average hourly vrage rates 
decreased 3 per cent. The individual rrorker's vfeelcly pay envelope 
decreo.sed iou.i--tenths of one per cent. 

The InL'justi7,'-' s laprovcd Pinrn.cial Position Durin/^ The Code 

The industry.- inproved its financial position during, the code 
period. Cost studies oy The National ]?ertilizer Association indicate 
that the rianufa.cturer received 34 per cent nore for representative 
grades of fertilizer in 1934 than he had received in 1S33. Of this 
gain in price 53.6 ner cent represented increased revenue to the -nanu- 
facturer. The financial statistics of incone of the industry'- frou 
the Treasurj- Departiient for the code period are not 3"et available. 
C^Lirrent fin?jacial reports indicate that the industry ha,s cone hack 
renarkahl]- du.ring the tro 3^ears of code ooera.tion, and has turned pre- 
cede losses into profits. Tigures for three of the largest companies 
sho'.T this trend: 

JTet Profits Before Interest and Dividends 
(Pi seal Tear ended June 30) 

Virginia-Carolina International Agriciil- Anerican Agri- 
Cher.ical Corvjoration tural Con:)Oratlon cultural ChenicaJ. 

Co. 

$562,787 $1,427,604 

684,317 977,119 

705,119* 408,128* 

419,242* 1,189,461* 

509,174 215,616* 



1935 


$1,277,578 


1934 


492,377 


1933 


752,828* 


1932 


783,509* 


1931 


359,606* 



Loss 



Constmer Position Buring Codal Period 



The ahove descrihed stahilization of the industry with increases- 
profits and an improved position for Lahor, xies apparently effected 
without increasing the prices of fertilizer to the farmer (as indi- 
cated oy the available statistics) any more than the increase in prices 
in general, azid only to a fraction of the increase in the prices re- 
ceived by the fanner for the things which he sells. 

The Inadequacy of statistics for deternining exactly what happened 
to the prices of fertilizer to the fermer during the T)eriod for which 



the code operated is primarily due to the Ir.ck of accurate information 
as to vhat rras really paid for fertilizer in pre-code years, because 
of price cutting and relating that were then comnon practices. Such 
fibres as are availa^Dle vere obtained "by the Bureau of Agricultural 
Economics from a questionnaire sent to dealers. They represent the 
prices that the latter say they customarily charged farmers for par- 
ticular grades of fertiliser, llo actual canvass of retail sales prices 
is available. 

Tlie index thus obtained indicates that in I.Iarch of 1934 and 1§35 
prices '-^ere only 14 and 15 per cent, respectively, above the compara- 
tive period of the pre-code year 1933. In that year, according to 
The national Fertilizer Association's cost survey, sales prices ^ere 
belon the cost of manufacture. This survey was undertaken at the 
request of II. R. A., so that farmers or their representatives who com- 
plained of prices might have the facts on cost of production. Consid- 
ering; that some 50,000 agents and dealers are engaged in the distri- 
bution of fertilizer to 2,250,000 faraers, comparatively few complaints 
of the prices charged were made during the period of Code operation. 

POST CODE COIJDITIOIJS IV THE IITDUSTRY 

The fertilizer industry has not had a busy season since the 
Schechter decision, which came at the period of minimum demand for 
fertilizer. Nevertheless, in anticipation of the intensive selling 
season which will begin in January, 1936, the industrj'- has exerted 
every effort to consolidate the gains which it 7nade under KM, and 
to prevent the recurrence of the chaotic conditions that have prevailed 
periodically. 

Appeals were made to preserve code standards; and the industry 
was one of the first to cooperate with the Government in submitting 
a Vorantary Code, containing both fair trade practice and labor pro- 
visions. 

Evidence presented at the hearings and at the Annual Southern 
Convention in llovember, 1935, indicates that some companies are de- 
viating sharply from code practice, and that they have so lov^ered 
labor standards that their labor cost per ton has been cut in half. 

The industry is one in which some advantages accrue to both 
large scale and small scale producers. With a large number of firms 
ever ready to upset the price stincture, it seems as though history 
were about to repeat itself. Previous codes have worked fairly well 
during the first year, but not so effectively in the second year; 
and then, as the volumes of business has declined, the law of the 
jungle has again prevailed. Special legislation may yet be needed 
to save the industry. 

\ 



9761 



-9- 

USEFULIIES3 OF THE PEZTILIZEil lESUSTHY' SruT.Y 



The. I'HA. e:rTcrience rrith the ■:;ode for the fertilizer industry 
dey^onDtrated that such industrial legislation is practica^ble under 
certain conditions. This industry was sufi icientl;^ -rell organised 
and eroerienced to Icnov,' its otti protlens, and :7hich code provisions 
^70uld help to solve then. It "had' availaole personnel eiqierienced in 
afeinisterin^ codes, so that the' s,&"-iinistrative vrork uas handled vith 
a niniMw.i of C-ovcmnental assistance. This code contributed to the 
stabilization of the industry-, the spread of employnent and the in- 
crease of xjpries, and the placing of the industry on a profitable basij 
with a relatively noderate increase in price to the consionier. 



9751 



HISTORY, DEVELOFI'lEJT aIID PilOBLa.iS OF TKE FERTILIZER IlOUSTRY 

DEFINITION OF THE Ii^DUSTRY 

The fer-tilizer industr^r consists primarily of the production and 
distribution of fertilizer materials in their original form or in mix- 
tures of these materials in varying orooortions. The definition of 
the industry in the code, recognized that comoanies classified as fer- 
tilizer companies normally orodu-ced only one of the constituent parts 
of mixed f ertilizer-suoerphosphate. The other principal materials, 
namely, potash and nitrogen carriers, are produced mainly by chemical 
companies, and their production did not come under the definition of 
the Industry contained in the code although their distribution wa.s in- 
cluded when sold to dealers or directly to consumers. (*). Chart 1 
gives a graphic portrayal of the organization of the fertilizer in- 
dustry. 

lOTUSTRY STATISTICS 

In the year ending June 30, 1935, there were sold some 6,200,000 
tons of fertilizer, with an estimated retail value of $158, 500, oon. (**) . 
The industry in 1933, the last Census year for which figures are avail- 
able, employed an average of 13,068 wage earners with an annual payroll 
of $7,274, OO'T. For the last ten Census years since 1909 the annual 
average number of wage earners was 18,969 and the annual average pay- 
roll was $14,846,000, The peak was reached in 1919 when 26,296 wage 
earners were employed and the annual payroll was $25,363, 132. (***). 

liVlPORTANCE OF LARGE C01viP..NIES. 

Although individual companies do not make public their tonnage fi- 
gures, a Court case in 1926 brought out the fact that from January 1, 
1924 to May 1, 1926 with more than six hundred fertilizer companies 
operating in the United States, six companies raanufact-ui-ed about 80 per- 
cent of the fertilizer sold in the country during that period. The so- 
called "Big Six" companies were: Armour Fertilizer Works, Swift and 
Company, the Virginia-Carolina Chemical Comoany, the American Agricul- 
tural Chemical Corporation, International Agricultural Chemical 



(*) The detailed definitions of the Industry as adopted by the Code 
are contained in Article II, Codes of Fair Competition, Volume 
II, p. 123. 

(**) Press release. Federal Trade Commission, IJovember 8, 1935 - 
Trade practice Conference Rules for The Fertilizer Industry 
(in Federal Trade Commission Library). 

'***) These figures were derived from the Census figures. The last 
ten Census years cover the years 1909, 1914, 1919, 1921, 1923, 
1925, 1927, 1929, 1931 and 1933. Until 1919 the Census was 
only made at five year intervals. 



11 







-12" 

Corporation and F. S. Royster Guano Com-Dany (*). 

IIvIPOHTAXE OF THE IiJDUSTRY 

The fertilizer industry is a "key" industry, im-oortant fp.r "beyond 
the dollar value of its products, since their use affects the produc- 
tion of billions of dollars worth of crops. A survey ty The National 
Fertilizer Association on fertilizer practices among 48,000 farmers 
in thirty-five states of the United States indicated that each dollar 
spent for fertilizer by these farmers resulted in an average increase 
of $3.50 in the value of crops on which the fertilizer was used.(**). 
Fertilizer is highly essential in the program for more effective land 
utilization, and as a means of reducing the cost of production of cer- 
tain agricultural crops. The leading nations have sought to obtain na- 
tional self-sufficiency with reference to fertilizer materials, not on- 
ly because of their wartime value for increasing crops with a smaller 
amount of labor, but also because the nitrogen materials are the bases 
of explosives and of chemical warfare. 

WHY FERTILIZER IS USED 

The application of plant food or fertilizer is necessary Ttecause 
growing crops consume certain chemical elements contained in the soil 
which are necessary for plant growth. It is the function of fertilizer 
to replace this depletion or to make up for original deficiencies of 
these elements in the soil by providing them in such form that the plants 
can readily assimilate them. 

FARlffiRS VIRTUALLY SOLE CONSUMERS 

It has been estimated that 98 per cent of the production of the 
fertilizer industry is sold to farmers(***) and 2,239,548 farms report- 
ed the purchase of commercial fertilizer in 1929. These farms repre- 
sented approximately one-third of the farms reporting to the Gensus(****') . 
It must not be assumed from these figures, however, that the fertilizer 
industry has tapped only one- third of its potential market since not 



(*) Information filed December 10, 1926 in the District Court for 
the District of Maryland in the case of the United States ver- 
sus the American Agricultural Chemical Company, et al. (Copy 
in N.R.A. Legal Division Piles). 

(**) American Fertilizer Practices , The National Fertilizer Associa- 
tion, 1929, p. 143. 

[***) Testimony of Charles J. Brand, Executive Secretary, The National 
Fertilizer Association, Hearing on the Code of Fair Competition 
for the Fertilizer Industry , September 6, 1933, p. 41. (Copy 
available in N.R.A. Files, Fertilizer Industry). 

"***) Fifteenth Census of the United States, 1950, Agriculture, Vol . 
II, Part I, Sumnary for the United States , Table 22, p. 53, 
U. S. De-oartment of Commerce, Bureau of the Census, 1932. 



-13- 



all soils need additional plant food and some lack the water without 
which fertilizer is ineffective. Fertilizer is mainly used along the 
Atlantic seaboard and in the Old South where the plant food content of 
the soil is either naturally low or has "been depleted by the system of 
farming. Map 1 made by the United States Department of Agriculture, Bu- 
reau of Agricultural Economics, entitled, '"Expendituj-e for Fertilizer 
by Farmers, 1929," and drafted from Census of Agriculture data, gives 
a good picture of the market for fertilizer. 

iViAEKET GEOGRAPHICALLY COKCENTRATEri 

As will "be seen from the following table, 71 per cent of the fer- 
tilizer Durchased by farmers in 1929 was bought in ten states (*V 

TABLE, 1 

PER CENT OF ALL FERTILIZER BOUGHT IN 1929 BY TEN LEADING CONSUMING 

STATES 

Per cent 

Tons per Cent Cumulative of farms 

State Bou/?:ht U.S. Total Per Cent Reporting 



1. North Carolina 


1,107,763 


14.70 


14.70 


83.47 


2. Georgia 


860,602 


11.42 


26.12 


84.76 


3. South Carolina 


708,470 


9.40 


35.52 


88.00 


4. Alabama 


646, 707 


8.58 


44.10 


80.68 


5. Virgihia 


388,937 


5.16 


49.26 


63.40 


6. Florida 


372,473 


4.94 


54.20 


66.95 


7. Pennsylvania 


348,113 


4.62 


58.82 


62.63 


8. Ohio 


330, 444 


4.39 


63.21 


59.05 


9. Mississippi 


307,693 


4.09 


67.30 


43.31 


10. New York 


287,959 


3.82 


71.12 


50.95 



Total 10 States 5,359,165 71,12 



71.12 



U. S. Total 



7,535,022 100 



35.61 



Census of Agricult\ire, 1930, Vol. II, Part I - U. S. Summary, Table 22, 
p. 53 - Tons of Commercial Fertilizer Bought bt Farmers in 1929. 

Five states, all Southern, bought approximately half (49.26 per cent") 
of the total reported. While for the United States as a whole 35.61 
per cent of the farms reported purchases of fertilizer, particular 
States showed the following oercentages: North Carolina, 83.47 per 
cent; Georgia, 84.76 per cent; South Carolina, 88 per cent; Alabama, 
80.63 per cent; and Virginia, 63.40 per cent. 

PLANT LOCATION 

Fertilizer is a heavy material with low specific value and high 
freight rates have caused the concentration of a large percentage of 



(*) Census of Agriculture, loc. cit. supra. 



14 



9761 




-15- 

the plants in the main consumin? areas. Baltimore is a central point 
for the manufactiire of fertilizer. Map 2 portrays the pla.nt location 
graphically. This map sJsc includes th' location of the synthetic 
nitrogen plants and the potash plants. The nitrogen "olants are lo- 
cated primarily near sources of electric energy and the location of 
potash plants is determined by the natural deposits of these chemi- 
cals. 

INTERSTATE ASPECTS OF THE FERTILIZER INDUSTRY 

Maps 1 and 2 indicate the widely divergent locations of the sour- 
ces of the raw materials, the manufacturing plants and the consumers. 
They illustrate not only the interstate aspects of the fertilizer in- 
dustry tut also show the great importance of transportation to the In- 
dustry. "About 25 oer cent of the coijt of the product when it reaches 
the consumers' hands is represented by in and out freight" (*). 

In 1933, 37 per cent (**) of the fertilizer business consisted 
of the distribution of fertilizer materials to farmer consumers in the 
various states of the United States. Of course, the balance of the 
fertilizer materials purchased by manufacturers are distributed to con- 
sumers after having been mixed in varying proportions to make a ferti- 
lizer adapted to the needs of the aarticular soils and crops on which 
it is to be used. While that portion of the fertilizer industry which 
consists of distribution of materials is almost entirely intrastate 
commerce, much mixed fertilizer is also shipped outside of the State 
in which it is produced. 

Map 2 indicates that the sources of the raw materials are highly 
concentrated geographically. Potash is either imported into the Uni- 
ted States or comes from California or New Mexico. Phosphate rock 
comes primarily from Florida and to a lesser extent from Tennessee. 
Map 2 does not show the sulphur deposits of the United States which are 
located in Texas and Louisiana, The sulphuric acid used by fertilizer 
raamjfacturers in converting phosphate rock into superphospha-'.e is made 
with sulphur obtained from these deposits or from imported pyrites. 

THREE TYPES OF PLANTS 

The industry as defined by the code comprised three different 
types of plants, each of which had different problems. Seven hundred 
seventy- two of the 968 plants engaged in the industry during 1935 pur- 
chased all of their raw materials and merely mixed them in the desired 
proportions. Although a portion of these dry mixing plants were owned 



(*) "For Better or For Worse — Our Indus'ry, " }ty Charles J. Brand, 
Executive Secretary and Treasurer, The National Fertilizer Asso- 
ciation, Proceedings of the Third Annual Convention of The Natio- 
nal Fertilizer Association, The National Fertilizer Association, 
June 1927, p. 40. 
(**) 3,274,000 tons of mixed fertilizer out of total business of 

5,196,000 tons— Census of Manufactures, 1933, Fertilizers . U.S. 
Department of Commerce, Bureau of the Census, p. 19. 



V;il 



Y — %v.i---wjyst,\r.i * ■/ vr—^ - \ \ _j — T" 












:.A^- 



'C^ 






'f-/^ 






ih'yi^h- ill 



I! , 1 



1 '6' 









' r 






ii Hll 



■ -•o 



-17- ■ 

by the large fertilizer manufacturers, a preponderant number were owned 
by small operators. One hundred ninety-six plants manufactured super- 
ohosphate, one of the constituent raw materials in most fertilizers. 
One hundred of them also manufactured the sulphuric acid necessary for 
the production of superphosphate. C**! . These acid plants necessitate 
a relatively large capital investi«ent and in general are run continuotrc- 
ly all year. Production in a super-ohosDhate plant is much more uni- 
formly spread throughout the -'■ear than is the case of the production 
of mixed fertilizer. The process of making mixed fertilizer is ordi- 
narily divided into two parts; the first df which ■ consists of the pro- 
duction of so-called "base" goods 'and' lirscedes by abeut-four months the 
mixing of the fertilizers into particulaf grades after the- orders have 
been received. ' , , . , 

CAUSES OF PROSLEI.iS OF THE ITffiUSTRY ' 

The problems cf the f ertili'ze'r indu'stry ari'se lar-gely b.ecause of 
its dependence on the one ccns'uJBin'g market-- the farmer. . The demand 
for fertilizer fluctuates almost directly in -proportion to .the farmer's 
income in the oreceding yealr. " The bulk of 'the fertilizer is used on 
certain of our great staple cfopg such as cotton,- ■tobacco,, potatoes 
and truck crops. The farmer ordinarily cannot pay for the .fertilizer 
consumed until the crops on which the ' fertilizer is . used.h&ve been har- 
vested and sold, which createS'a problem' of providing, credit. 

Seasonality of SeTiand 

A marked seasonal demand' is brought about because most of the fer- 
tilizer is used at planting time which is mainly in the Soring. It has 
always been difficult to get the farmer to anticipate his fertilizer 
requirements by advance purchases due to such factors as lack of cash 
or credit prior to planting time, inadequate storage space for ferti- 
lizer at the farm and fear on the part of the farmer that the product 
would deteriorate before he was ready to use it. The seasonality prob- 
lem has become steadily more acute with the advent of the automobile 
and the good roads which, together with keenly competitive conditions 
in the fertilizer industry itself, have contributed to che farmer post- 
poning his Tourchases to virtually the last minute and then demanding 
almost immediate delivery of his requirements. 

This marked seasonalit:/ is indicated by the following tabular 



(*) Compilation made by the Fertilizer Industry Study from plant 
listings in The American Fertilizer Handbook-1935, Ware Bro- 
thers, Philadelphia, Penisylvania, pp.A3-A58, and checked with 
lists of producers who'filed prices under provisions of the 
Code for the Fertilizer Industry. -This tabulation is included 
in the Appendix II and is marked Exhibit 1. 



9761 



"18- 
presentation of tax tag sales in thirteen Southern states (*^ . 

' ■ TABL2 2 

PSRCSNTAGE OF TAX TaGS SOLD S^CH LiOWTH IN THE 13 SOUTHEla.^ STATES 
BASED ON THE KSGOZDS FOH TH'5 EOUH SEASONS, l^ae-S?, 1927-38, 
■■■•;■ : ' a 1928-29 and 1929-3^ (■**) 

Per cent Far cent 

■January '. •• 9.89 

Pebruary. . . . , 17.85 

Mai-ch 36:28 

• April 20.45 

Total four months 84.47 

May 3. 92 

June . 1.30 

July ; . . . ; . . • .43 

August ..."..;.■......■.... ...1.00 

September-. .-T ...........; 2.95 ■ 

Octo'eer. .........'...... 2. 27 

November. ........"...... 1 . 47 

DecGmber. ,-.......-.... 2.19 

Total eight months 15.53 

GBMB TOTAL - 12 months 100.00 



Producers of mixed fertilizers mu^t thus obtain the major por- 
tion of their vol\ime of sales in a very limited ijeriod and this has 
led to the employment of not less than 50,000 dealers and agents(***') 
in order to book all possible available "business. 

' Production Capacity 

These buying -practices of the farmer have placed an increased 



(*) The laws of these states require that these tax tags be pixr- 

chased from, the state and attached to the fertilizer when sold. 
Their sales do not indicate shipments but Mr. Charles J. Brand, 
Executive Secretary, The National Fertilizer Association, in a 
conference with Mr. Al F. O'Donnell, Unit Chief, Fertilizer 
Industry Study,, on Oct. 25, 1935, estimated that the lag in 
shipments is from 3 to 4 weeks 'after the Durchase of the tags. 

(**) Application for., Presentation of aCode of Pair Competition to 
the National Recovery Administration, submitted August 2, 1933, 
by The National Fertilizer Association, Chart 2. (In N,R.A. 
Piles, Fertilizer Code). 

(***) IT. P. A. News, April 17, 1934, The National Fertilizer Associa- 
tion, p. 191. 



-19- • 

burden on the manufacturer. The average manufacturer lacks adequate 
storage space and in many cases cannot afford to carry a heavy inven- 
tory which would necessitate speculation in raw materials. Raw mate- 
rial costs in 1934 constituted 62.3 per cent {*) of the total cost 
of mixed fertilizer at the ma.nof acturer' s plant. 

Thus the dry mixing plants usually have a production capacity 
which will take care of their -oeak demand. It aDoears quite certain 
that if even a majority of existing olants operated for any conside- 
rable period prior to the active selling seasons, a substantial over- 
supply of mixed fertilizer could te produced. However, as with all 
seasonable merchandise, prodticers naturally limit their productive 
operations to as short a period as possible immediately prior to the 
time orders need to he shiraped. Heferences to the excess productive 
capacity of these plants and .of the industry in general, therefore, 
should be subjected, to very careful scrutiny 'as to how overproduction 
caoacity is defined. For firms which manufacture su-oerphosphate pro- 
ductive caoacity is largely a matter of sufficient capital and sto- 
rage spaue for the finished -oroduct since sulphuric acid can be pur- 
chased in the ooen market(**). 

Seasonality of production 

The following tabiilation illustrates the seasonality of oroduc- 
tion, indicating for a three-year average, 1932-1934, inclusive, the 
percentage which each'month's man-hcurs bears to the total annual 
number of nan-hours (***) . 

TA^LE 3 

SSASOHALITY OF EIvIPLOTiviElIT 
AVEHaGE per cent of AIIiiUAL ivlAil-HOQRS WORICED EACH MOUTH 

1932-1934 

Jan. Feb. Mar.' Apr. May June July Aug. Se'ot. Oct. Nov. Dec. 

8.1 8.8 10.4 16.4 8.8 5.5 5.6 6.0 7.7 7.8 7.4 7.5 



(*) A General Report On Hixed Fertilizer Costs and Sales Prices , 
Spring Seasons 1933 and 1934 in the Principal Fertilizer Con- 
suming Area in the United States, The Fertilizer Recovery Com- 
mittee, October 26, 1974. (in N.R.A. Files, Fertilizer Code). 

(**) Appendix II, Exhibit 2, contains a discussion of some of the 
allegations as to the Industry's "oroductive capacity. 

'***) ' Calculated from the figures derived from the Bureau of Labor 
Statistics data contained in Table 3, p. 8 of Exhibit A of 
the Fertilizer Industry N.R.A. Archives. 



-20- 

CO:.I'j]TITIVi: FTACT1025 F?JOR TO T""]] COD'iil 

Comioetition for the farmers' fertilizer ■business is alva-'-g keen, out 
in years f ollo'":ing. a decline in ."^ricultural income v.'itli the resultant dim- 
inished demand for fertilizer, each iDroducer of .fertilizer vras tempted to 
utilize every conceivable methpd Ojf competition in an attempt to maintain 
his volume of "business. This resulted in a state of competition from which 
so-called unfair trade practices resulted. 

Maav -of these .praqtices. had to. do '.Tith methods of price cutting, of 
which the, most se,rious V7as perhaps the guarrjateeing to the dealer or farm- 
er of prices- against decline, not only as to the seller's own prices but 
as to those, of competing producers. -This.'.vas especially serious because a 
la.rge percentage of fertilizer sales ,v.'e re, made on a credit basis, due to 
the farmer's inability to pay until he received tJie proceeds of tl^e crop . 
on V7hich. the fertilizer, y;as used. Tiie purchaser's settlement' at tne.end 
of th-e see.asGn ■ as based u-pon. the lo'.'est price, at vhich any .producer had off- 
ered, to sell hiri that p.articular grade during the, season. Yariatio,ns in 
qualitjr xrere often ignored, and t)ie sale of 9. yerj small tonnageat a lovr 
price late in the season, by some producer v/ho had not been able to, move 
his inventory, caused heav^/ losses to numerous ..other, producers.. 

In manj^ instances ret roac.tive settlements ;vere made on cash sales, if 
at the end of the season prices had declined below those trhich a particular 
dealer or farmer had. had to pa;;^. . .Competition often resulted in the unwise 
extension of credit, and large industry looses, resulted. Price cutting by 
rebates ?.nd trucking allowances, special containers without adequate 
charges therefor, or b;^ offering a multiplicity of grades Tihich deviated 
only slightly from the standrrd, 7;ere also extensively utilized as price' 
cutting behicles. TTarehouses "ere often established at strategic points 
a,nd sales made from them at factory prices. In many instances materials such 
such as nitrate of soda were used as loss-leaders, in order to influence the 
sale of mixed: fertili,zerr,(*) . ,. 

I13SULTS Oj? liJDUSTHT'S, li'STi^ILITY 

This periodic chr^os and use of so-called -unfair methods of competi-- 
tion in the fertilizer industry ho,ve repeatedly'- can.sed the InclAxstrj'- as a 
whole to. lose mone;'-. _Jieading chemical concerns noted for their mana.gerial 
ability such a.s Allied Chemical and IhiPont who are l.-rge producers of cer- 
tain of the leading rav: materials entering into the production of mixed 
fertilizers have never gone into the mixed fertilizer business. In review- 
ing the history of- the DuPor;;t Company in a. recent article in fortune iylagazine 
(**), it was said that ■ the 'IhiPont Compan;;,'- Had considered this matter in 
1913 and again in 1929 but h-^d definitely turned it down a.s being unv^illing 
to enter a' "sick" industry. , , ..,.,: ,•..., 



(*) An excellent des'cri-ption covering the above described conditions 
in the Fertilizer Industry in the pre-codal period was mrde 'hy I'.r. 
Charles J.' .-Brand, Executiv:e Secretrr-- of Tlie ICationaJ Fertilizer , 
Association, in his address entitled "Our Industr/ under the -Code", 
as reported in the Proceedings pf . the -Zl-eve.nth Annual Convention 
of The rational Fertiliznr Association . Tlie national Fertilizer 
Association, 1935, op.2-l.-2D 

(**) DuPont II: "An Industrial Empire" — Fortune , Volume X, ilo. 6, December 
1934, p. 180 



-21- 

That it has "been a sick industi?/ is best evidenced by the fact that 
each of the larger comprnies eixf^a red nrimrrily in the fertilizer business 
and v,'ho have had their seciiritios listed on the i'cT; York Stoc]: S.xchange 
ha.s been throiigh reorganization or receivernhip since 1920. A combination 
of adverse business conditions and financial losses together uith poorly 
ba.la.nced capital structures, topneav^ \:ith fimded debt, caused most, if not 
all, of these reorganizations because of inability to meet fixed charges 
T7hen profits declined. 

COOPEIL\TIVE E7F0::iTS TO'..APJ) ILDITSTHY STABILIZATIOil 

The industry, in its attempts to stop its virtual self-destruction, 
ha.d had a considerable amo'ont of eri-perience in adrriini storing codes prior 
to IT.R.A. I'n periods follonirig a year of decline in agricultural income, 
the fertilizer industiy x/ith its decreased vol^ome of business has repeated- 
ly become more conscious of the necessity for cooperative effort in curb- 
ing unfair tra.de practices and th-) result has been a series of codes of 
fair trade practices. AH the codes up to and including the one present- 
ed to the Federal Trade Comnission for .approva.l in October 1935 have been 
primarily designed to curtail methods of price cutting. The adootion of a 
code under the iJ.R.A. vras tiie cv.lnination of cooperrtive efforts begun 
long before. The first of these efforts of ^:hich ^'e have a record r/as the 
formation of the Colonial Development Company, Ltd., in 19D3. The trend of 
thought of the leaders of the industr;^ in each of these crses i.'a^s addressed 
to the matter of allocating production a.nd fixing prices. 

Price Fixing - Allocation of Production Code (1903 ) 

The Colonial Development Comoan"^, Ltd. , r/as organized under, the latrs 
of the province of Ont^irio, Crjiada as a method of allocating prodiiction and 
fixing prices. Viithout going too much into the technical details of the 
sale of stock in the Colonial Develoj^ment Company, Ltd., -to the various 
fertilizer manufa.cturers in the United' States, the following is a descrip- 
tion of the v;ay the plan operated: 

"As soon as it nas organi'zed, the Colonial Development Co., (Ltd.) 
entered into contracts with ea.ch of the parties to the agreement, 
which contracts provided that each conpany should Le allowed the 
same percentage of total srles in these States tha.t it had enjoyed 
during the year ending June 30, 1903. If it should sell more than 
this allotment, it was to be penalized; if it should sell more 
than 75 per cent of its allotment but less than 100 per cexit, it , 
sho\i].d receive a rebate for the piroportidn which :it failed to sell, 
amounting to $1.50 per ton for ammoniated goods and $l"for alkaline 

goods and a,cid phosphate. The 75 per cent minimum was inserted to 

lessen the advantage which a company might obtain ^oy overstating 
its sales for the year 1903. ■ - 

"Each company which wrs party to the agreement was reotiired to 
deposit with the Colonial Development Co. a sum amounting to 20 
cents a, ton upon its allotment, vfhich sura was to be returned to 
the comiDany at the end^ o'f the fertilizer "'■ear, provided that it 
had maintained the fixed prices. In case any com;oany did not ma.in- 
tain the established -Drt'ces, it forfeited this' sum to the Colonial 



Development Co." (*) 

The scheme seemed to work successfullj'' during the tr/o years T^hich it 
operated in spite of the fact that the American Agricultural Chemical 
Companjr and Swift and Company did not enter the combination btit according 
to the Federal Trade Commission these companies "respected the prices 
charged by the parties to the combination so that very little if any com- 
petition was encountered from the independent wet mixers" (**). An indict- 
ment was returned May 25, 1906, in the Middle District of Tennessee against 
thirty-one corporations and twenty-five individua.ls engaged, in the fertili- 
zer business who were parties to this price fixing combination charging a 
conspiracy in violation of the Sherman Anti-Trust Act and a conspiracy to 
commit an offense against the United States in violation of Section 5440 
of the Revised Statutes. On July 5, 1908 the indictment was auashed but the 
combination was effectively broken up as a result of the suit. 

1933 Interest in These Subjects 

Tha.t these same problems persisted at the time of foimation of the 
N.R.A. is indicated by the following excerpts from a fertilizer manufactur- 
er' s telegram which antedated by several weeks the signing of the National 
Industrial Recovery Act. 

II _ _ _ Unless Industrial Recovery Act has teeth in it ajid unless 
industry is permitted to allocate production and fix prices, in- 
dustry will be no better off than it is toda^'-. In fact with re- 
spect to many industries containing large numbers of irresponsible 
units the larger and more responsible units will be at distinct 
disadvantage. This will be particularly true of Fertilizer Indus- 
try. - If our efforts are to be confined to objectives of 

raising wages and fixing hours of labor, we will get nowhere in 
our industry as neither wages nor hours of labor are of primarj?- 
importance. We are deeply concerned with Question of overproduc- 
tion and with price structure. Frankly pur Industry nearly bank- 
rupt through inability to deal v;ith these questions constructively 
and legally." (***) 

Another indication that the industry T;as interested in these problems is 
evidenced by the questions addressed at a fertilizer man-ufacturers' con- 
vention to a, lav/yer viho ha,d worked on the preparation of the National Indus- 
trial Recovery Act, 

Mr. Brand: "7ould j'-ou be willing to tell us something of the attitude 
disclosed at the hearings and in deba.te as to the question of price 
fixing? " 

(*) "Report on the Fertilizer Industry", Federal Trade CoiTimission , 

August 19, 1916, in response to Senate Resolution #4l37, 52nd Con- 
gress, 3rd Session; p. 244. 

(**) Ibid p. 185, 

(***) Telegram from Horace Bowker, President, The American Agricultural 
Chemical Company, addressed to President Franklin Delano Roosevelt, 
dated May 23, 1933. (in H.R.A, Files, Fertilizer Code) 



9761 



-23- 

Mr. Long: "'Jould you cp.ve to discuss the idea of setting up production 
quotas?" (*) 

AGRICULTURAL lilCOi/IE,- i^ERTILIZER PRODUCTION AW FERTILIZER INDUSTRY PROFITS 

To assist in an understanding of the reasons for the adoption of the 
various codes, what measure of success thej;- had and why they failed, the 
following tables have teen included at this point and v.'ill te utilized in 
explaining the history of the vrrious codes: Tahle 4 - Agricultural Income 
and Fertilizer Production; Table 5 - Uet Income; Certain Fertiliser Comioanies. 

Beginning iTith 1927, we h^ave available the statistics of income for 



the Industry as compiled by the Bu.reau 
De-oartment of the United States (**)." 



of Internal Revenue of the Treasury 



Statistics selected from the above mentioned exhibit and calculations 
made therefrom are included in Teible 

HISTORY OF THE VjIRIOUS PRE-1'IRA CODES 

Resume ■- • 

The Industr}^ is one in v'hich there are some advo.ntages accraing to 
large scale and to small scale producers, "ith a large number of firms 
ever ready to u'oset the price strjicture, previous codes have worked fairly 
well during the first j'-ear, not so effectively in th-e- second :/ear, after 
which, if the volume of business declined, the "lavf of .the jtmgle" again 
preveiled. 

As the problems of the industry have remained essentiallj?- the same as 
they were at the time of the formation of the Colonial .Development Company 
in 1903, it is natural that all efforts to -orovide rules of fair trade prac- 
tice have been of the same general nature. 

It has been explained that there is a natural uniformity in the price 
ligts issued by all producers at the beginning of a fertilizer season. All 
of the trade practice rules vxhich v/ere incorporated in the various plans 
adopted by the indiistrj'- were designed to prevent a break-down of these 
prices through the offer of rebrtes and 'Special allowances. 

In the following parfigraphs we summarize the vrrious codes which at- 
tempted to accomplish these objectives none of which -for various reasons proved 
continuously successful. 

(*) . "Industrial Recoverj^", by Simon K. Rifkind of the law firm of Wagner, 
Quillinan, and Rifkind and former Secretary to Senator T/c>gner, Pro- 
ceedings of the Ninth Annual Convention of The National Fertilizer 
Association . The Rational Eertilizer Association, 1933, pp. 82-84. 

(**) A detailed tabulation of the consolidrted balance sheets and income 
accounts of fertilizer companies reporting to the Treasury Deps.rt- 
ment is contained in Appeiidi:: II of this Report and is Irbelled 
Exhibit 3. 



—.CI- 
TABLE 4 

G-rops Income from Farm Production (l) - 

end Cotton and Cottonseed (2) for years 

of Fertilizer sold (3) ne::t 



1909-1934, and from CroiDs (2) 
indicated together 'rith Tons 
succeeding j^ear. 







Gross 


Income from Farm Pro due ti 


on 












(in million dollprs) 






Year 










Year 


Fertilizer Sold 




Total 




?rom 


From Cotton and 




(tons) 






Crops 


Cottonseed 






'l909 


$6,238 




__ 


__ 


1910 


5,452,223 


1910 


6,643 




„ _ 


■; - - 


1911 


6,023,541 


1911 


6,372 










1912 


5,766,916 


1912 


6,784 




- - 





1913 


6,335,972 


1913 


6,975 




- - 


_ _ 


1914 


7,099,519 


1914 


7,028 










1915 


5,323,252 


1915 


7,395 




- - 


. 


1916 


5,124,904 


1916 


C,914 







- - 


1917 


5,925,028 


1917 


12,834 




_ _ 


_ _ 


1918 


5,465,186 


1918 


15, 101 







_ _ 


1919 


6,625,343 


1919 


16,935 




_ _ 


2,271 


1920 


7,176,754 


1920 


13, 566 




_ -. 


1,272 


1921 


4,852,931 


1921 


8,927 




_ _ 


760 


1922 


5,669,915 


1922 


9,944 




- - 


1,251 


1923 


6.442,314 


1923 


11,041 




_ - 


1,508 


1924 


6,824,911 


1924 


11,337 


6, 


,170 


1,710 


1925 


7 ,,333, 165 


1925 


11,968 


6, 


,148 


1,740 


1926 


7,328,258 


1926 


11,480 


5, 


,468 


1,251 


1927 


6,843,199 


1927 


11,816 


5, 


,817 


1,454 


1928 


7,985,019 


1928 


11,741 


5| 


,675 


1,470 


1929 


7,974,712 


1929 


11,941 


5. 


,434 


1,389 


1930 


8,153,257 


1930 


9,454 


3, 


,818 


751 


1931 


6,305,083 


1931 


6,958 


2,745 


.528 


1932 


4,379,350 


1932 


5,337 


2 


,295 


454 


1933 


4,868,540 


1933 


6,406 


3 


,032 


688 


1934 


5,532,956 


1934 


7,300 


3: 


,077 


723 


1935 


6,200,000 (4) 



(l) 1909-1934 - Crops and Markets, U. S. Department of Agriculture, 
Volume 12, No. 7, July 1935. 



(2) . 1919-1923 - U. S. Department of %riculture Yearbook, 1927, Table 492. 

Page 1146. 

1924-1934 - Crops and llarkets, on. cit. supra. 

(3) Fational Fertilizer Association - Based on tax tags sales in States 
T7hich require them. Other states estimated fro-- various sources. 
For complete details of this see- table , which gives individual 
State figures, 

(4) Preliminary. 



9761 



35" 



TABLE 5 



aTET PI10?ITS OF CZRTAIN rERTH^IZES COMPANIES 
(BEFORE i:t!TEREST AlvTD DIVIDENDS) 
1912-1935 





Virginia- 


International 


The American 


Standard 


The Smith 




Carolina 


Agricultural 


Agricultural 


Uholerale 


Agricultural 




Chemical 


Corporation 


Chemical Co. 


Phosphate 


Chemical 




Cor-p. 






Works, Inc 


. 


Year 


June 30 


June 3D 


June 30 


May 31 


Oct. 31 


ended 












1935 


$1,277,578 


$562,787 


$1,427,504 


$125,104 




1934 


492,377 


684,317 


977,119 


120,313 


$114,414 


1933 


762,823* 


705,119* 


508,123* 


157,293 


54,178 


1932. 


■783,509* 


419,242* 


1,189,461* 


128,153 


7,531* 


1931 


359,606* 


509,174 


215,615* 


333,571 


54,795 


1930 


1,407,003 


1,995,891 


2,228,375 


595,995 


155,082 


1929 


1,515,502 


1,608,922 


1,503,955 


584,557 


183,180 


1928 


2,510,702 


1,892,421 


3,519,795 


552,653 


203,542 


1927 


219,854* 


88,939 


351,962* 


249,475 


138,214 


1926 


2,541,740 


1,879,480 


3,075,115 


448,695 


119,465 


1925 


3,277,773 


1,775,338 


4,386,351 


258,443 


128,743 


1924 ■ 


1,822,290* 


382,303 


2*553,330 


197,424 


55,854 


1923 


, 403,474 


18,724* 


3,031,423 


114,018 


51,555 


1922 


1,484,780 


1,076,235 


1,452,199 


350,025 


54,390* 


1921 


13,152,875* 


1,762,020* 


4,697,780* 




114,877* 


192J 


9,251,746 


2,621,059 


5,888,767 




232,552 


1919 


8,933,335 


2,118,503 


4,943,455 ■ 




117,402 


1918 


10,193,267 


1,701,507 


8,937,424 




185,598 


1917 


5,905,250 


1,135, 112 


5,220,773 




184,327 


1916 


5,667,845 


1,955,601 


6,328,920 




475,736 


1915 


4,979,950 


793,677 


4,513,239 




208,705 


1914 


4,073,757 


- 953,497 


3,578,199 




63,267 


1913 


2,991,102 


.483,507 


5,103,958 




60,004 


1912 


4,626,203 


2,051,209 


3,085,395 




85,465 



^Loss 



-26" 

The first code on a national scale ras set up in 1921 as a result of 
the intense competition T7hich had prevailed in the Spring of that year. 
The re-emphasis of this code in 1924 was largely tied up with the bad debt 
losses of the industry incurred in 1921 but which were written off to a 
large extent in 1923 and 1924. 

Difficulty with the anti-trust Itiws in 1926, due to the industrjr hav- 
ing gone beyond the code in stabilizing competitive conditions, resulted in 
a code sanctioned by the Department of Justice in 1927. 

As members began to break away from this volimtary code it was felt 
necessary to get the Federal Trade Commission to approve the rules of trade 
practice which were enforceable at law, thus giving the code sponsors a 
better control over conditions. This code in turn broke down because of 
industry conditions coupled with modifications in the code by the Federal 
Trade Commission itself in 1931. Industrj;- leaders v;elcomed the opportunity 
provided by the 1\"IRA. to secure a measure of freedom from the -restraint of 
the existing anti-trust laws and to be able to give the force of law to the 
rules which they wished to adopt to stabilize competitive conditions. 

Fourteen. Points Code (1921) 

The above tabulations show thct during the I7orld Mp.v the total Industry 
production and the profits of the leading companies were well sustained and 
highly satisfactory. In 1920,, the gross income from farm production dropp- 
ed from $16,935,000,000 to $13,565,000,000 and in 1921 to only $8,927,000,000. 
A cori:esponding decline took place in the tonnage of fertilizer sold which 
dropped from 7,176,754 tons in 1920 to 4,852,931 tons in 1921. This dras- 
tic decrease in farm income and the resultant decline in the tonnage of 
fertilizer sold resulted in the increased use of the previously described com- 
petitive tactics with attendant losses to the industry as indicg,ted by the 
above financia.1 returns for certain of the leading companies for their fiscal 
years ending June 30, 1921. 

The heavy losses which the industry incurred in this year v/ere in large 
measure caused by unsound business judgments as to the prospective volume 
of business which would be abailable in that year. Excessive quantities of 
raw materials v/ere contracted .for at high prices, a,nd there followed a mad 
scramble for business with little regard for prices or terms of.sale and 
with the extension of much credit to purchasers of fertilizer which in the 
light of conditions as they developed proved to have been most unwise (*). 

This intensive competition for a diminished volume of business brought 
attention to the -unfair competitive practices and resulted in 1921 in the 
adoption by the industry of a so-called Fourteen Points Code which was de- 
signed to curb them. The beneficial effects of this code v/ere reflected by 
the industiy operating at a profit in 1922 as contrasted to the heavy loss- 
es in 1921. 



(*) Informations filed December 10, 1925, in the District Court for the 
District of Marj'-land in the case of the United States versus The 
American Agricultural Chemica.l Company, et al. (Copy available in 
N.R.A. Legal Files) 



-27- 

TABLE 6 

r::?-TiLizsn iidu'stp-Y ircor-B statistics 

1927 - 1935 







i7so:; TGTurjJs SHOuiiia "im iiicoiie" 






: ITuraber 


Per 


Gross 


Per 


T.et Income 


per 




of 


Cent of 


Srles 


Cent of 


Anount 


Cent of 


Year 


Returns 


Total 




2btal 




Sales 


1933 


110 


40.0 


42,602,764 


44.7 


2,007,377 


4.9 


1932 


59 


20.1 


13,504,785 


IS. 2 


359,553 


2.7 


1931 


91 


29.5 


22,419,843 


19.5 


939,505 


4.2 


1930 


177 


56.4 


110,142,387 


59.6 


6,234,428 


5.7 


1929 


211 


69.2 


170,165,235 


SO.O 


9,241,863 


5.4 


1928 


206 


70.1 


189,330,447 


94.0 


11,819,181 


6.2 


1927 


165 


61.6 


34,721,890 


56.1 


5,032,015 


5.9 







P10-- PT^^-iTI-JS Su0:7irG "ITO ircT ii"Go:-E" 






I'unber 
of 


Per 
Cent of 


G-ross 
Sales 


Per 
Cent of 


"et Deficit 


Per 




Ano''JJLt 


Cent of 


Yp^r 


Returns 


■ Total 




Total 




_Total 


1933 


165 


60.0 


52,602,857 


55.3 


4,552,133 


8.7 


1932 


235 


79.9 


70,039,185 


83.8 


8,416,558 


12.0 


1931 


217 


70.5 


92,778,923 


80.5 


11, .696, 880 


12.6 


1930 


137 


43.6 


74,767,958 


40.4 


4,964,575 


5.6 


1929 


94 


30.8 


42,574,795 • 


20.0 


1,565,342 


3.7 


1928 


88 


29.9 


12,069,749 


6.0 


1,916,133 


15.9 


1927 


103 


38.4 


65,393,318 


43.9 


6,810,275 


10.3 





coi.3iiiEiD"iiEr r.-co; e 


' AID "I'O ::TT Il'C0:iE" 






Yvcfoer : Gross 


j'^et Inco~e 


Per 




of : Sales 


or 


Cent of 


Year 


?.e turns: 


Yet Ijeficit 


Gales 


1933 


275 :■ 95,205,521 


•■2,474,255* 


2.6* 


1932 


294 : 83,593,970 


8,057,105* 


9.6* 


1931 


308 : 115,198,756 


10,757,377* 


9.3* 


1930 


314 : 134,910,345 


1,269,853 


0.7 


1929 


■ 305 : 212,740,031 


7,575,521 


3.6 


1928 


294 : 201,400,195 


9,903,043 


4.9 


1927 


268 : 151,115,203 


1,778,260* 


1.2* 



Ilotes: * Loss '■••■■ 

Gross Sales'-^ Sales xilus otlier Gross Receipts 
Yet Incone - Incone af ter 'incine Taxes 

Source: Taliui.ation Sl\eets aiicL puolished re-oorts (Statistic^ of Incone) 
Bureau of Internal Revenue 



9761 



-28- 
Tnenty Points Code (1924) 

Parm income gradually increased from $3,927,000,000 in 1921 to 
$11,041,000,000 in 1933. • Fertilizer. manufacturers enjoyed a corresponding 
increase in tonnage. In spite of the improved "business, the fertilizer 
'industry rras confronted v/ith-a lar.'je volume of tad debts contracted in the 
unnise extension of credit in- 1921., As it liecame more and more apparent 
that these dehts would never he collected and that financial adjustments 
must be nH-de on the books of the company, there was more and more, realization 
of the need for the effective operation of the code of fair trade, practices. 

In the years 19'22-2'3 and 1924 each of the companies whose financial re- 
cords are availa^ble had -to make surplus adjustments in .reco^nitio,n of these 
b's.d debts which 'a-djustments in the aggregate -ran into millions of dollars. 
Ihe losses incurred by the Virginia-Carolina .■Chemi.cal Company, one of the 
leading companies in the indUstrj'-, finally forced. that company into receiver-? 
ship in 1924. Shortly thereafter industry leaders met. to work out a new 
code of fair trade practices which would prevent the recurrence of the 
conditions which had caused these extensive industry losses. The result of | 
these conferences was the adoption of p code known as the T^-Tenty Points Code 
(*). 

The provisions included in these "twenty points" were designed to pre- 
vent or at least curtail some of the competitive practices heretofore de- 
scribed sjid have been ejccellently summarized, as consisting of three "won'ts" 
and onfe "will": , ; 

"I won.' t guarajitee. prices; I won't ship, goods without ha.ving a 
definite understan.ding as to price: I .won't mutilate ray ovm. price 
schedule by secret concessions in price or terms; and I will openly 
irivoice my goods at settlement prices and require settlement as 
invoiced." (**) 

All of the ti^'enty points were not used by all of the companies, each 
company using such as were applicable in its own section of the country. 
In the v.^estern part of the United States a code of tenand also eleven points i 
was used. In November, 1925 the twenty points were revised in some particu- 
lars and a nevif code of "twenty-one points" was adopted.' 

The adoption throughout the industry of this code of practices result- 
ed in more uniform prices and a practice of effecting settlements more in 
accordance with the published price lists and contracts (***). 



(*) A detailed description of the so-called Twenty Points Code is con- 
tained in Appendix II and is labelled Exhibit 4. 

(**) "Ann-oal Address of the President", E. L. Robins, Fourth Annual Con- 
vention of The National Fertilizer Association . The National. Fer- 
tilizer Association 1928, 'o. 15. 

(***) Statement of Ind\xstry conditions made to the Court by Willi cim J. 
Donovan, Assistant Attorney General, filed in the District Court 
of the State of Marj'-land in the case of United States versus American 
Agricultural Chemical Company, et al, December 10, 1926. 



-29- 

Tlie nethod rliich h,?.d ."been used in 1921 ri.nc' 1922 in setting prices 
in the incustr3'- rrs descriVjed as follovs: 

"All of the lai-fce ■larLufacturers iRr;ue"ririce lists ^ hich f;ive 
the l)a,r.e "orices for the differe':.t ^:inr".s ''f fertilizer sold. 
These lists rre puhlisiied in t;\e s-orinf; ar.d fall - that is, 
rrhere the conpa/iies OToerr^te in ooth the rrheat ■'^ro'-dn'-: and cotton 
sections. The companies sell in^r in the Northern States ;'-;enerall"?' 
follorj the price lists of the Anerican Ai':;ricultural Che'iicaJ Goi- 
pany and those operatifi^ in the southern territor;.' the list 
prices of the Vir;5ihia-Carolina Chenical Conr)an3'-. it ap'^ears 
that in northern territorj' the Vir.-^ania-Ca.rolina CoToany adopts 
the price list of tlie Anerican A,°:ri cultural Company rhile in 
southern territorj^ the Aierican A,^ricultural Corroany f oiler's 

the list of the Vir':;inis,-Caroli--.a Conan:/ These lists 

are adopted "oj' the smaller co-^ccrns; that is, the list "orices 
are considered maxirai;! p'^ices, tlie independent co:ipanies usua.ll;'' 
lia-vin,:^ to shade thesfe -rices h^^ a marr^in of a dollar or a dollar 
pjid a half per ton. In 1921 a.-.d 1922 price lists rere -oulslished 
as usual, tut \7ere so hir-h that the conpanies uere unrfele to 
naintain such -orices for p:.-.j lenf;th of tine." (*) 

A:'ricultural inco ne re.iained fa,irly stead''' and the Industry tuider 
these conditions achieved a volune of over 7,000,000 tons hoth in 1925 
and 1926 rith the leading conpanies all shoTunr- relativel-^ ,n;ood profits. 

During 1926, the Departnent of Justice Ijrought suit (**) against 
thirty-nine fertilizer co-ips,nies engaged in the nanufacturing of approx- 
imatel3r"S5 "oer cent of the fertiliser nanufactured in the United States, 
cha,rging a conhination in violation of the antitru!5t lavs to elininate 
competition as to terns nnd concitions of sale. (***) 

On Dece' her IS and 21, 1926, the thirt-^-seven defendajita entered 
pleas of "nolle contendre" and rere fined anounts aggregating $90,500, 
and "nolle prosequi" entered as to the tro renaining defendants, 

(*) "Pertilizer Industry", Senate Docunent IIo. 347, letter fron the 
Acti:i.g Chairman of the Tederal Trade Co'-nissio-i, transmitting in 
res'Donse to a Sena^te Resolution of June 7, 1922, a Report on 
Certain Phases of the Fertilizer Ind'.\str3'-, Governnent Printing , 
Office, 1923, pp. 36, 58 and 59. 

(**) United States versus Anericpai Agricultural Chenical Co., et al. 
District Court for the District of Maryland. 

(***) A list of the thirt3'--ni le con/oa,nies referred to is contained in 
Ap"oendix II of this Eeioort rnd is labelled Exliihit 5. 



-30- 

CocTe Sanctioned "by Denart^ient of Justice (1927'^ 

Apparently sinultaneously vith the prosecution of the above mentioned 
suit Industry nembers were preparing a group of fair trade practice pro- 
visions vrhich rrould meet the criticisms of the Department of Justice. (*) 

"Under the auspices of The National Fertilizer Association and 
"by authority of its Executive Coramittee a convention of the en- 
tire fertilizer industry, including both menbers and non-members 
of the Association, was held in Washington, January 10, 1927. 
At this meeting a code of trade practices, drafted by a special 
committee of the industry working in contact with the Department 
of Justice, was unanimously adopted by the 125 firms represented 
at the meeting, Subseo^uent to the meeting at which the code was 
adopted, 180 additional firms in the industr3'- a.pproved the code 
and. promised to live' up to it to the best of their ability." (**) 

In 1925 there was a sharp drop in the farmer's cash income, especially 
severe in the case of the cotton crop. The fertilizer industry anticipat- 
ing a diminished tonnage and heen competition in the Spring selling season 
of 1927 was anxious to forestall the development of unfair trade practices 
by the adoption of this code. Ho'.^ever, many advance commitments had been 
made by the ti -e the code we.s -oro-oosed r.nd it tool' several months to have 
enough firms sign up to observe the code so that its operation would be 
really effective. The result was highly denorali5:ed competitive condition 
which resulted in financial losses for the Industry as a whole. 

The effects of these highly com;oetitive conditions in the Srjring of 
1927 are reflected by the profit and loss figures for the industry. These 
show tha.t companies doing 56.1 per cent of the sales made an average pro- 
fit of 5.9 per cent while companies doing 43.9 per cent of the sales lost 
10.3 ver cent on this volume, a net loss of 1.2 per cent on sales for the 
entire industry. The industry in general recognized at its annual con- 
vention in the sum'ier of 1927 that a stricter observance of the code of 
fair tra-de practices was necessan^ to improve its profits. 

In the selling season of 1928, there was an increased agricultural 
income, especially for the cotton farmers.. With the resultant increase 
in fertilizer tonnage, the industry was more successful in obtaining obser- 
vance of the code. During that -/ear the income statistics show that 70.1 
per cent of the companies selling 94 -^er cent of the output of those report- 
ing made an a.verage profit of 6.'2 per cent on sales. The other 30 per cent 
of the companies which did onlj'- 6 per cent of the business lost 15.9 per 
cent on their sales, giving the industry an average retui'n of 4,9 per cent 
on sales and a net income of $9,903,048. This was the best year of any 

(*) A copy of the Code of Trac'e Practices as adoTjted January 10, 1927 
is contained in Ap'oendix II as ExJiibit 6. 

(**) Industry Round Table, Proceedi ij^s of the Seventh Annual Convention 
of The 1'ational Fertilizer Association . The national Fertilizer 
Association, 1931, p. 54, 



9761 



-31- 

year for Tr^iicii these detailad Treasury statistics are available. 

Jeclerpl Trade Co::-nicision - Traae Practice Rules (152C ') 

In s-oite of tiaese ger.evr:!!^ ,^ood conditions, a nunber of oper- 
ators in tlie Industry persisted in violating the code of fair trade iDrac- 
tices and at the pjinual convention recognition of this fact vas nade in 
the address of the presidejit of The National Fertilizer Association vhen 
he stated: 

"It might he rrise to ask the Federal Trade Connisrjion for a trade 
practice conference for the benefit of our Industry and if certain 
•-' opera.tors persist in unfair trade practice to appeal to the Con- 
inission for proper handling." (*) 

As a consequence, on x:ove--'ber 14, 1928, at the Annual Southern 
Convention of the fertilizer indur,try, held in Atlanta, it rras -voted to 
request the Federal Trade Con-iissioi to sponsor the holding of a trade 
practice conference. The conference vras held in Washington, D. C, on 
Januai^/ 29, 1S27. The rules as suhnitted fell into tr/o grouns according 
to the terminology of tiie Co-viission; G-rou;o I xrere those rules regarded 
to he enforceable as a iptter of lav?, rrhile Group II rules nere intended 
to be voluntary'- rules adopted by the industry as representing sound busi- 
ness practices but not enforceable at Ian, 

Wliile the Federal Trade Co'-mission had the apr)roval of this 
code under advisenent durin;: the Spring of 1929 the industry contin-aed to 
enjoy an increasing volurie of business due largely to an increase in the 
inco le of the far-iers v/ho ourcliase fertilizer. The business ras, hor/ever, 
done at a lor/er ma.rgin of "orofit, 3.6 per cent a.s against 4,9 per cent in 
the preceding year. This vr.s a reflection of the heener competition for 
business a:ad the alleged breahin-; do'/n of the observance of code provisions 
in the attempt to gain a larger -ocrcentage of the available tonnage. 

The rules as submitted at the Trade Practice Conference in 
TTashington, January 29, 1929, uere approved with only slight changes by 
the Federal Trade Commission on June 12, 1929 and vrere presented to and 
accepted by the Industry at its convention in rev London, Connecticut, on 
June 13, 1929. 

The effect of these rales was to modify the code as adopted 
January 10, 1929. The questi-m of revision vas submitted to the conven- 
tion of the industry in Atlanta, Georgia, November 19, 1929,. and a Special 
Committee on Prevision v/as appointed in order to -^ake the trade practice 
conference rules e,s ado-oted by the Federal Trade Commission on integral 
part of the code. This vas effected by dividing the code into t^-'O parts; 

(*) "Soiuid Business Practices, tl-.e Iley to Profit", by A. D. Strobhar, 

President, Southern Fertilizer and Chemical Company, proceedings of. 
the Fourth Annual Conven tion of The Rational Fertilizer Association ^ 
The rational Fertilizer Association, l':28, v. 80. 



Part 1 approved "by the Federal Trade Co-inission and Part 2 included the 
voluntary trade practice rioles adopted liy the industry on its o\7n notion. 
The latter in a general va.y vera 'oelieved to he rules qualified as Group 
II as suhnitted to the Co'-.nission, In Decenher 31, 1929 the revised code 
rras suh-iitted to the industry'- for acceptance and 173 filns advised the 
Executive Secretarj' of their acceptance there of (*). The Connittee com- 
pleted its tjork Decenber 31 a.nd thereafter the revised code tras suhnitted 
to the industry for acceptajice (**). 

In 1930 the fertilizer industry achieved its maximum tonnage of 
8,153,870 tons nhich is largeljr a reflection of the fact thrt the farmer 
in 1939 ha.d not yet felt the drop in incorie trhich he ras to incur in 1930. 
Competition for this tonnpge xip.s so keen that the ^orofits derived from 
this large volume of business amounted to only 0.7 per cent for the indus- 
try as a whole. 

In 1931, the impace of the der)ression vras really beginning to be felt 
and sales dropped to 6,306,082 tons, reflecting the drop from $11,941,000,000 
to $9,454,000,000 in the farriers' income. Code provisions rere ignored 
to a large extent in the attem;ot to achieve sa.les and the Industry as a 
whole lost 9.3 per cent on sales, or $10,757,377. 

r.evision of Pederal Tracle Coimission - Trade Practice Rules ('1951') 

Dviring 1930 and the early part of 1931 considerable discussion had 
developed throughout the United States concerning the authorit3r of the 
Federal Trade Corx.iission to approve and enforce trade riractice conference 
rules. The Federal Trade Coumission on llay 29, 1931 submitted to The 
rational Fertilizer Association a revision in the trade practice conference 
rules v.-hich had been oxlopted on June 12, 1929. These changes irhich vexe 
accepted by the Industry at its 1931 convention reduced the rules to gener- 
al language and in the opinion of the industiy eliminated the practical 
application of the rules to the fertilizer industry's problems (***). 



ILiPACT OF THE DEPIfflSSIOlI 

In 1932, reflecting the 1931 drop in the farmers' incoie to 
$6,968,000,000 the fertilizer tonnage dropped to 4,379,350 tons as con- 
trasted to the 1930 peali of 8,163,870 tons. The res\iltant scramble for 
business led to such a complete non-observance of the trade practice rules, 

(*) "Industry F.ound Table", Proceedin,?s of the Seventh Annual Con- 
vention of The national Fertili'zier Association . The national 
Fertilizer Association, 1931 -q. 54. 

(**) Revised and amended code of trade practices of the Fertilizer 
Industry as adopted Decenber 19, 1929, incorporating the trade 
practice rules as ap"oroved by the Federal Trade Commission, is 
contained in Ap"'>endix II of this Report and is labelled Exhibit 7. 

(***) A COT^-/ of these revised trade i^ractice conference rules is con- 
tained in AppenrMx II and is labelled Exhibit 8. 



~3Z^ 

tiie Secretar3'- of The National Fertilizer Association on ITove'-i'ber 18, 19S , 
addressed a letter to the nenlDers of the Executive Connittee of The 
national Pertilizer Association, su.'v'^esting the a.bandoninent of the code. 

The indiistr:/- lost an even la.rger percentage on its s?,les in this 
year than in the preceding year. These losses were 9.6 per cent as 
contrasted to 9.3 per cent, although the aggregate losses were onljr 
$8,057,105 as contrasted to the larger loss of $10,757,377 in the preced- 
ing jec.T due to the decreased sales volume. In this j'-ear a profit '.7as re- 
ported "by companies doing only 16,2 per cent of the business as against 
19.5 per cent in the preceding yea.r, and the profit nas only 2,7 ner cent 
as compared rrith 4.2 per cent for the profitable business of the preced- 
ing year. 

COMITIOIIS JUST PPJ]CS3I1:G tee ISA 

In ap'oroaching the Scoring season of 1933, the fertilizer industry 
did not 3,nticipate very nuch of a piclcap in busi:aess as farm incone had 
dropped from $6,968,000,000 in 1931 to $5,337,000,000 in 1932. The noi^ 
mal expectation irould have 'oeen decreased tonnee of fertiliz.er and even 
more severe competition. 

There nag, however, a change in psycholo.gj'- in anticipation of 
President Ptoosevelt's inauguration and the firm conviction that helpful 
farm aid legislation i.70uld be passed. Another contributing factor to 
an increased sale of fertilizer was the fact that many :farners were seeing 
the effects of not having used the normal amoun.t of fertilizer in the 
preceding j'-ear and made efforts to increase the am.ount used in the 
Spring of 1933. 

The net result was that tiie sales of tax tags in the 17 states re- 
porting then for the first five months of 1933 showed an increase of 
476,000 tons or 20 per cent over the comparative fi-gures for the preceding 
year (**), This then wa,s the condition in which the industry'' foiiJ:id itself 
at the tine when serious consideration was being given by the Administration 
to the passage of industrial legislation. 

IHDUSTRY OHGAiTIZATIOi: ."OPl CODI] TTHITIITG 

As" will have been noted in previous paragraphs, the cooperative ef- 
forts of members of the indu.stry to stabilize competitive conditions and 
maintain a price structure had on several occasions resulted in charges 
of alleged violation of existing anti-trust laws. Industry leaders, 

(*) A copy of this letter vrhichwas sent to members of the Executive 
Committee by the Secretary of The national Fertilizer Association 
is included in Appendix II to this Herbert and is labelled 
Exhibit 9. 

(**) Abstract from the Report of Charles J. Brand, Executive Secretar^r 
and Treasurer of Tlie !T;xtiona.l Fertili-^er Association to the Board 
of Directors, Ninth Annual Convention, reported in Proceedings of 
the Convention published by the Association, p. 94, 



-34- 

therefore, otviously nelconed the opportunity provided hy i'RA. to secure 
a neasure of freedom fron this restraint, and to "be ahle to give the 
force of Ian to the rules they risiied to adopt. TJhen it hecane apparent 
that there '-"ould he an Industrial Recovery'- law, the leaders in the 
fertilizer industry took steps to cooperate T7ith the Government irrespec- 
tive of the fom rrhich the legislation rrould finally taltfej: 

The Independent Fertilizer manufacturers' Association 

The Independent Fertilizer "I'anufacturef s' Association, rhich 
had heen organized in 1906 hy a group of manufacturers of nediirn size 
primarily for the purpose of purchasing fertilizer materials on a quantity 
hasis (*), net in T7ashington on Jlay 17, 1933. A connittee of five "as 
appointed to begin the rork of drafting a code of faior competition in 
accordance with the provisions of the Wagner Bill vhich tj^s introduced 
to the Senate on liay 17, This Bill provided for puhlic works and con- 
struction to relieve unenplojrment and for industry self-regulation 
through trade associations. This Committee of The Independent Fertilizer 
Manufacturers' Association was constituted as follows: 

A. D. Strohhar, Southern Fertilizer & Chemical Co., Savannah, Georgia, 

chairman 

C. T. ilelvin. The Gulf Fertilizer Co., Tampa, Florida 

S. P. Benedict, Darling & Co., Chicago, Illinois 

Ba^-less V. Hajmes, Uilson e^ Toomer Fertilizer Co., Jacksonville, 

Florida 

iTilliara E. Valliant, Valliant Fertilizer Co., Baltimore, Karyland (**) 

The national Fertilizer Association 

At this time the national Fertilizer Association was the largest 
and only national trade association in the industry and represented the 
tjrpe of trade association which most closely m.et the requirements of ICA 
as to representative character for the sponsoring of a code for an indus- 
try. This association was the raucleus of similar organizations which had 
existed in the industry since 1883, In 1925, a successor organization was 
merged with the Southern Fertilizer Association which had "been established 
in 1906, thus forming a truly representative organization which has since 

then heen a constructive force in industry matters (***). 

(*) "Fertilizer Industry", Senate Document 347, Federal Trade 
Commission Report, 1923, Government Printing Office, p, 55 

(**) "Report of the Fertilizer Recovery Committee" presented ■b3'- 

Horace Bowk'er, chairman; President, The American Agricultural 
Chemical Company, ProceedimJTS of ITinth Annual Convention of. 

The national Fertilizer Association . The national Fertilizer 
Association, 1933, p, 41. 

(***) At the time of presenting a proposed Code in August of 1933, 
The national Fertilizer Association claimed a membership of 
233 friras or individuals engaged in the Industry, This number, 
however, appears to include other than producers of mixed 
fertilizers, inasmuch as the Association Bj^-Laws (*) iDrovide 

Footnote continued on next page 



■35' 



On May 16 the Executive Comittee of The National Fertilizer 
Association, convenin,."; in TJashiif^ton, ari/joiatecl a cor-inittee of five 
nembers, representing the larger companies in the fertilizer i':du3tr7, 
to cooperate vrith the ahove mentioned committee of The Indepen6.ent 
Fertilizer Manufrctiirers' Association. TJie 'nenoers of this cooperating; 
committee vere: 

Horace BoTvker, The Aierican Agricultural Chemical ConiDany, Ke^' Yorl-: City, 

ChaiK'iJ'.n 

B. H. Brewster, Jr., The Baugh & Sons. Co., Bsltimore, i:d. 

C. F. Eocliley, The Davison Chemical Co-TOany, Baltimore, I'd. 
L. TJ. RoTTell, Sv.'ift & Co., Chica^ro, Illinois 

J. E. Sanford, Ar-iour Fertilizer Tfforirs, Atlanta, Georgia 

Fertilizer P.ecovery Cbnmittee 

It uas deci6.ed thrt this Cormittee and that of the Independent 
Fertilizer llanufacturers'. Assocl?tinn could i^oi-'- more efficiently'- as one 
large committee. After merging the committee ad.o-oted the name, the "Fer- 
tilizer Recovery Committee" and elected Horace r;onl-:er, chairman; A. D. 
Strobhar, vice chairman; and C. T. Kelvin, Secretary, 

'■ Designated as Official "T.F.A. Committee 

This connittee at the time of organization r,'as not official "".3^ a 
part of The national Fertili:?,er Association, although each comoany re- 
pre'sented vras a m.emher' 01 the Association. The comm.ittee fe].t that The 
iJational Fertilizer Associr.tion, heing the principal trade associati-in 
in the industry, should h:u"dle the recoverj^ nrogram. The Broad of Directors 
of the Association iTas, tVterefore, ashed to designate the Fertilizer "Re- 
covery Committee an official comm.ittee of T/.e 'gational Fertilizer As';;o- 
cio-tion anc the 3oa,rd so voted. (*) 



(***) gootnot- continued 
for tv:o classes 01 memhershipa, i.e., Active- ]'e-.hership, in- 

(*) The national. Fertilizer Association 3z'-Lvr-rG are 

included in AvoenCix II as S:Khioit 10. 

eluding producers .-^f mi:;ed fertilizers and im-oorters of fer- 
tilizer materials , aiad Associate Kenbershio, which included 
finas and individuals selli^g^ raw ma.terials (not importers) 
or saT)-olies used Iny mirred fertilizer producers. Only those 
firpis or individuals who i-ere Active henhers had a. vote in 
Association matters. 

(*) "Report of the Fertili-er Recovery Co-imittee" presented by 

Horace Bowher, chairman; President, The American Agricultural 
Chemical CoTToany, Proceoc incs of rinth Annual Convention of 
The national" Fertilizer Association . The national Fertilizer 
Association, 1233^ p. 41. , 



-36- 

After conferring with G-eneral Hugh S. Johnson, later Administra- 
tor of the national Industrial Recovery Act; vith Kr. George H. Peek, 
Administrator of the Agricultural Adjustment Act; and ■'.Tith Kr. Charles 
J. Brand in his capacity as co-adninistrator of the Agricultural Adjust- 
ment Act, the suh-committee v/hich uas charged T.'ith the responsihility 
of drafting a code, working as closely as possible with every group in 
the Fertilizer Industry; and utilizing the ps,st esq^erience of the in~ 
dustr;/ in formulp.ting and administering codes, prepared a rough draft 
of a proposed code. 

Draft of Code suhmitted. to Industry 

This draft was then submitted to various group meetings of 
menhers of the fertilizer industry in practically every geographical 
section of the country. As a result of these leetings many helpful 
suggestions were obtained and after the draft had been reworked several 
times it was presented to the industry at the ITinth Annual Convention 
of The national Fertilizer Association held at Uhite Sulphur Snrings, 
T7est Virginia, on June 19, 20, 21, 1933 (*) 

It was the opinion of every member of the Fertilizer Recovery 
Committee that the sooner they could draft their code, submit it and 
get it approved by the National Recover:/ Administration, the better off 
they would be (**). There w^re --iresented to the convention certain 
changes in the By-Laws of The national Fertilizer Association which were 
designed to fp.cilitate the recovery ■•Drogram, Because of certain teclonical 
considerations it was not possible to amend the Ej^-Laws at the convention 
because of the necessity of giving ten days' notice to members. This 
change was made on July 1, 1S33 at a special meeting at r-hich the amend- 
ments were approved. 

Authorization for Enlarged Committee 

Amendj-nent llo. 7 authorized thp.t a new Section 16 be added after 
Section 15 of Article IV of the By-Laws, to read as follows: 

"Section 16. Fertilizer Recovery Committee. The President with 
the approval of the Board of Directors, shall appoint a sTjecial 
committee to be known as the Fertilizer Recovery Committee con- 
sisting of such number of -lembers as the President may designate 
from' time to time. Such Committee shall have authority to repre- 
sent the Association in all matters relating to the national In- 
dustrial Recovery Act, including the preparation of a Code of 
Fair Competition for the Fertilizer Industry, a copy of which 
proposed Code, however, shall be submitted to each member with 

(*) The Code presented to and ad.opted by the Fertilizer Convention 
subject to revision by the Fertilizer Recovery Committee is 
incorporated in Appendix II of this Report as Exhibit 11. 

(**) "Report on the Fertilizer Recover^/ Committee" presented by 

Horace Bowker, chairman; President, The Anericpn Agricultural 
Chemical Com;oany, Proceedin-:?s of ninth Annual Convention of The 
national Fertilizer Association . The National Fertilizer As- 
sociation, 1933, V. 41 



-37- 

the privilege of his su'binittin£- objections rrithin seven days after 
subnission to hin, and the sulDinission thereof to the President of 
the United States for hi r. _a-oproval; and- including ^araong their 
things, the emplojTnent of engineers, e:?oerts and such other per- 
sons as they nay deen necessarjr to effectuate such purpose, pro- 
vio.ed that no expenditures shall he nade ''oj such committee in 
excess of amounts provided for such purpose in the "budget, author- 
ized "by the Association unless ap-oroved by the Board of Directors. 
Such committee shall have po'~er to elect a chairman from amon"- its 
raerahers fjid to designate the nuraoer of nemhers u.-iich shall con- 
stitute^a quorum for the transaction of "business. Such conmittee 
may further delegate its por-ers to such extent aw it may determine 
to one or more suhcomnittees of its orn men"bers \'hich it may ap- 
point." (*) 

Although this amendment to fne 3y-Lsxrs of The National Fer- 
tilizer Association w-s ;iot finall:'- am^roved until July 1, 1933, the nen 
Fertilizer Recovery Conmittee va"^ announced at the Sixth Annual Dinner 
I'eeting on June r?0, 1933 "by i r. John J, 'Tatson, Presic'ent, The rationa.1 
Fertilizer Association (**). 

P.esignation of Representatives of San Tateria-l Producers 

Producers of ra,T7 materials rare named "by Tr. ITatson as nem'bers 
of this Fertilizer Eecover],^ Conmittee as it T7a3 the desire of the code 
sponsors to include Trithin tae definition of the indurtry the nroduction 
and sale of such rarr naterials as phosiDha.te roc]:, nitrogen carriers, 
potash and sulphuric acid, TThile the production of nLosnhate rod: and 
approximately/ the industr.y'. reo.aire-'ents for sulphuric acid rere largely 
controlled "by fertilizer manufacturers, th.e nitrogen carriers, potrsh 
a,nd commercial sulphuric acid rhich re-nrenented tvro-t'^irc'.s if the 
sulTjhuric acid -production of the countr;- -^'ere -orodii.ced hy chemical com- 
panies rho, Mith the exceTotion of sulphuric acid -orooucers, considered 
the fertilizer industr- the chief outlet for these -ror-^cts pnd therefore 
did not desire to be u .der the code of their principal customer. 

The Deputy Administrrtor v-.s strongly of the oninion the n.anu- 
facture and sale of sulphuric axid should be covered b;"- the code for 
the chemical industry a.id at tnat time the potash and nitrogen mrodiicers 
each contemplated TDro-oosing a code of their orni. At the organization 
meeting of the Fertilizer Recovery Conmittee held on ^TJednesdp.y, Ju_ne 21, 
1933, the representatives of the nitrogen, potash and sulphur industries 
therefore tendered their resigna.tions fro": tlie committee. On motion 
duly made and seconded their resignati-ms Mere o.ccepted. 

(*) "Amendments to By-Lavs Approved", :nnth Annual Proceedin^-s of 
The rational Fertilizer Association . The ^^ational Fertilizer 
Association, 1933, p. 52. 

(*) The personnel of this new Fertilizer ?,ecovery Co-^mittee is 
detailed in A-noendix II and is labelled E^diibit 12. 



-38- 



Recovery Comnittee Authorized to Complete Code 

A resolution uas adopted "by the Industry at the Fourth Annual 
Convention T/hich authorized the Fertilizer Recovery Connittee to ccn- 
plete the code and file with the President. 

During June and July, 1933, several meetings of the memhers 
of this comnittee were held,..~and after making changes in -^he preliminary 
draft to accommodate suggestions and criticisms made hy industry menhers, 
a proposed code was submitted to IIRA under date of August 2, 1933. 

Final Approval of IHIA Code 

Changes in form and in other respects vere reqtiested hj'- IIEA 
and under dates of August 16 and 19, 1933, revised drafts were suhmitted, 
the latter draft being noticed for a Puhlic Hearing to be held on Septem- 
ber 6, 1933, At the Public Hearing certain changes in the proposed Code 
were suggested and after additional "DOst hea.ring conferences the Code was 
finally approved by the P'resident- on October 31, 1933, effective Uovember 
10, 1933.'^ 

PLOW CHART OF THE I"TDUSTRY 

Chart II is a flow chart of the industry and graphically por- 
trays which portions of the industry came under the code as written. 



9761 




! !• ill 

I M!i f 



I. I 



-40" 

CliAPTER II 

MM hiATERIALS iUv^D FECDUCTION FRCCESSES 

As indicated on Chart II, the production of phosphate rock, potash 
and nd,trogen carriers were not covered "by the Code for the Fertilizer 
Industry. 

However, in studying the fertilizer industry, it is essential that 
we give careful consideration to the sources and prices of these raw 
materials since they represent the most important factor in the cost of 
producing mixed fertilizers. In 1933 and 1934, materials represented 
63.1 per cent and 62.3 per cent respectively of total cost of manufactur- 
ing mixed fertilizer (*). 

The following tabulation gives an idea of the trend of the wholesale 
prices of fertilizer materials in recent years: 

TABLE 7 

AIMJAL AVERAGE INDEX OF WHOLESALE PRICES OF FERTILIZER MATERIALS (**) 
(19291100) 
1926 1927 1928 1929 1930 1951 1932 1933 1934 

108.6 104.5 102.6 100.0 92.8 83.4 72.6 71.8 72.8 

A review of the drop in raw material prices emphasizes the fact that 
they were the most important factor in the drop in price of mixed fertil- 
izer over a period of years rather than any great economies effected in 
the manufacturing and distribution of these product p. 

PRICE FACTORS AFFECTING HAW MATERIALS 

At the present time, priqes in the American market for fertilizer 
raw materials seem to be largely determined on the basis of supply and 
demand. This has not alv^ays been so, as certain countries formerly had 
natural monopolies of some particular fertilizer raw materials. Cartels 
still exist which attempt to control the prices of fertilizer materials 
in various parts of the world. They are not able to do this in the 
United States due to the fact that we produce a large proportion of our 
Q-<^ requirements and have a capacity in time of emergency to take qare 
of our entire demands (***). 

(*) "A general Report on Fertilizer Cost and Sales Prices", The 
■5 National Fertilizer Association , October 26, 1934. (Copy in 
N,R.A. Files, Fertilizer Industry) 

(**) The basic tabulation from which these figures are taken is con- 
tained in Exhibit A of the Fertilizer Industry N.R.A. Archives 

(***) The United States has always had an adequate supply of phosphate 

rocjk. Its independence with reference to nitrogen has been largely 
da^ to the development of processes of fixing nitrogen from the 
alt. Potential independence with reference to potash is a develop- 
ment of the past few years in exploiting recently discovered 
natural resources of New Mexico. 



-41- 

INDUSTRY t.^AIN USERS OF ^iATERIaLS 

The fertilizer ii^.dustry uses the predorrdnont portion of the 
annual output of each of the fertilizer materials which go to make up 
the component parts of a mixed fertilizer. The percentage used by the 
fertilizer industry varies from year to year' due to various factors 
such as alternative \ises of particular materials, prices, etc. An 
indication of the importance of the fertilizer industry in the con- 
sumption of these materinls is indicated hy the fact th?jt, in 1934, 
the fertilizer industry used 70 per cent of the total consumption of 
chemical nitrogen in the United States; 92 per cent of the potash mat- 
erials; and 81 per cent ' of the phosphate rock.* 

FUNCTION OF, FERTILIZER ELEMENTS 

Nitroge n , Fhosphorus. and Nitrogen 

The three main elements contained in fertilizer materials are 
each important to a growing plant for different reasons. Nitrogen 
produces rapid developm.ent of the leaf and other vegetative parts of 
the plant and hastens the blooming period of such crops as cotton. 
Phosphoric acid stimulates early root growth and is, therefore, use- 
ful in promoting the early maturity of crops. It also stimulates the 
growth of fruits and seeds as compared wifn m.ere vegetative growth. 
Potash stimulates the formation of starch, gives stiffness and rigidity 
to the stem or stalk of the plant rjnd aids it in its general healthful 
development which promotes disease resistance. 

Other ; Fertilizer Elements 

. ., Soils ordinarily contain sufficient quantities of other elements 
beneficial to plant growth although one of the points of emphasis in 
recent fertilizer manufacture is an increasing amouJit of attention to 
the inclusion of other chemical elem.ents such as magnesium., calcium, 
sulphur, etc., in which particular soils are found deficient. As yet, 
the quantities of these other elements used have not reached sufficient 
size to be an important commercial factor in the consumption of such 
chemical elements. 

FERTILIZER GRATES ; 

There were 1,053 different combinations of fertilizer materials 
sold in the United States in 1934** and easli analysis or grade has a 



(*) J. W. Turrentine, "Potash", t/ ineral Industry . 1935, McGrow Hill 
Publishing Company, New York, Tables "pp. 475-476.- 

" Crude Phosphates and Superphosphate", United States Tariff Com- 
mission, Report No. 100, Second Series, 1935, Table 1, p. 4. 

"World Production and ConsuiTiption of Fixed Nitrogen", C hemical Sc 
Metallurgical Enf^ineering . Vol. 43, No. 1, p. 54. 

( **) National Fertilizer A ssociation Iroceeding s Eleventh Annual Conven- 
tion. The National Fertilizer Association. 1935, Table II. p. 145. 



-42- 

separate desienation to irlentify it. The customary method is to express 
the percentage of different plant' foods in a given fertilizer in a ser- 
ies of numerals such as 3-8-3 which ordinarily expresses percentage and 
means respectively 3 per cent nitrogen, 8 per cent phosphoric acid 
^^S'-'S) , and 3 per cent potash (KgO) . This particular formula happens 
to be a popular grade of, fertilizer for cotton and per ton' of this grade 
would contain 60 pounds of nitrbgen, 160 pounds of availalDle phosphoric' 
acid, and 60 pounds of potash, making a total of 280 pounds of plant 
food per ton of fertilizer. 

USE ^OF FILLERS II ' FERTILIZER'S ' ^ 

Some misinformed critics assume because there is only 280 pounds 
of available plant food in the above mentioned fertilizer that the bal- 
ance consists of fillers. As a matter of fact the bulk of the remain- 
ing content of the ton of fertilizer consists of materials that are 
naturally present as a part of the chemicals used in making mixed fer- 
tilizer. Every hundred pounds of chemically pure nitrate of soda con- 
tains 83.53 per cent of natural materials that are necessarily present 
in chemical combination with the nitrogen which makes up the remaining 
16.47 per cent-. 

The customary and standard strength of this sixperphosphate is 
16 per cent or 320 pounds per ton of available phosphoric acid. The 
remaining 1,680 pounds are not materials added but are materials which 
occur naturally in phosphate rock and that in the present processes of 
producing superphosphate by the use of sulphuric acid remain mixed witji 
the superphosphate so produced. 

Similarly the potassium, although expressed in terms of potassium 
oxide (KgO) , is not used as such but occurs in the form of potash salts. 
These, salts are mixed with various chemical impurities in their natural 
state and are ordinarily used in mixed fertilizers with a large per- 
centage of such impurities still contained with the potash salts. 

It is true that fillers, that is, materials other than those 
naturally coming with raw materials used, are sometimes added to fer- 
tilizers and technically are known as fillers and conditioners. The 
fillers as such have no value as a plant food but certain materials 
such as finely ground limestone, pulverized peat, etc. are alleged to 
condition the soil. It is also alleged that fillers assist in making 
the fertilizer more readily adapted to machine spreading and are there- 
fore necessary in the manufacture. 

PLANT FOOD CO^fTENT OF FERTILIZER MATERIALS 

The following tabulation is self explanatory and gives an idea of 
the plant food content of each of the leading fertilizer materials. 



9761 



^43^ 
TABLE 8 
FLAITT ?00L C01v'TE:'T OF 3^2:WILIZS5 f;ATElIALS * 



Material 



Nitrogen Phosphoric Potash 

/iCiQ 

(N) (FpOg) (FgO) 
Per Cent Per Cent Per Cent 



Bone 1.5 - 

Basic Slag 

Superphosphate 

Triple Superphosphate 

Kainit 

Manure Salts 

Muriate of Potash (Potassivjr. Cnlori^-ie) 

Sulphate of Potash (Pot.-issium Sulrhate) 

Arnmohia 

Sulphate of Ammonia (Amrohia Sulphate 20- 

Ammonium Sulphate-nitrate 

Nitrate of Soda (Sodium iiitrate) 15.6- 

Nitrate of Lime (Calcium Nitrate) 

Nitrate of Ammonia (Ammonium Nitrate) 

Cyanamide ■ PO - 

Urea 

Calurea 

Cottonseed meal 5 - 

Dried "blood ■- 9 - 

Tarikage 5 - 

Garhage Tankage 2.5- 

Fish Scrap 6.6 

Ammo-phos 11 - 

Nitrophoska 15 - 



4 


f-\ 



("; 



o 

82.2 

21 

-16 

lp.5 

34 . 5 

25 

46 

34 
7 

14 

10 
-3.3 

10 

16.5 
-16.5 



20-25 

10-25 • 

14-20 

40-50 



























2- 3 



3,5-14 

2- 5 

4 -8 

20 -46 

11 -30 






b 



;.4-i6 

) - 30 

) - 60 

3 - 50 



















1.5-2 





.5-1 





15-26 



AVERAGS PLAIV^T FOOD C0:;T5.:T- OF !.' IXED FERTILIZE:^S 

There has "been a constant trenc! toward increasing the percentage 
of plant food in mixed fertilizer over a period of years. In 1910 the 
average plant food content was 14.1 per cent.** In 1934, the average 
plant food content v^as 18.17 per cent and consisted of an average 3.51- 
9.24 - 5.42 per cent of nitrogen, phosphorus (p205)and potassium (KpO) , 
respectively.*** 



(*) Tahle deriveo from information contained in "Code Application, 
submitted by National Fertilizer Association to the National 
Recovery Administration", August ?, 1933, p. 2. (Copy in N.^..a. 
Fertilizer Industry Files) . 

(**) "Changes in Com/position of American Fertilizers, 1880-1952" U.S. 
Department of Agriculture Bulletin 315, April, 1934, Table 3, p. 4. 

(***) National Fertilizer Association plant food survey for year ending 
June, 1934, Proceerlings of The National "'ertilizer Association 
for 1933, Table 11, pp. 196-197. 



-44- 

The figures of value per ton of mixed fertilizer sold do not give 
a true picture of the increased value to the farmer unless v;e consider 
the increased plant food in the fertilizer sold in recent years. To 
make a hypothetical calculation, 7,132,000 tons of fertilizer would 
have heen necessary in 1934 if the fertilizer sold in that year con- 
tained the same percentage of plant food as did that sold in 1910. 
Five million five hundred thirty-three thousand tons of fertilizer 
were actually sold in 1934. 

CONCEIITHATED FERTILIZERS 

In the opinion of some members of the industry this tendency to- 
ward a higher plant food content has only just begun. In a conference 
with Dr. J. W. Turrentine, President, American Potash Institute, Inc.* 
November 15, 1934, he pointed out that they have made a satisfactory 
fertilizer with as high as 85 per cent plant food content by utilising 
a mixture of ammonium phosphate and potassium nitrate.* 

The use of such highly concentrated fertilizers requires the use 
of a different method of mechanical application and new equipment for 
the farmer for its application so that we may look forward to further 
and possible revolutionary development along these lines. 

Chart III** portrays graphically the trend in the average com- 
position of complete mixed fertilizer since l&SO. 

KITHOGEN CARRIERS 

Alternative Sources of Supply 

The variety of m.aterials, both domestic and imported, used as 
sources of nitrogen have made it practically impossible for any group 
to control their price. While it is true that each particular nitrogen 
carrier has characteristics which make it especially desirable for par- 
ticular crops, they are sufficiently alike in their use as fertilizer 
to cause a substitution of one for the other if a difference in price 
makes it desirable. 

Oriicanic 'Versus Inorganic JlitrOfTen Carries 

The organic nitrogen carriers, namely, those derived from vege- 
table or animal matter and which include cotton seed meal, tankage, 
dri6d blood and fish scrap are essential constituents in fertilizer 



(*) A more detailed discussion of the production of more concentrated 
forms of superphosphate is contained in the special section of 
this chapter devoted to that subject. A more detailed discussion 
'of the consumption of fertilizer and plant food in the United States 
is contained in the chapter on Distribution and Prices. 

(**)■ Reproduced from "Progress in Fertilizer Technology Described by 
Kunsman" , The Fertilizer Review . Tlie National Fertilizer Associa- 
tion, Vol. IX. Vo. 2, p. 7. 



9761 



-45- 

used for some crops "but have alternative uses such as Cc':ttle feed. Such 
materials have been diminishing in importance as fertilizer mnterials 
as contrasted with the use of the inorganic nitrogen carriers- OriTanic 
nitrogen in general becomes available to the plant more slowlv than does 
inorganic nitrogen. Organic nitrogen carriers ai'e used particularly 
on tobacco and to some extent on cotton. 

INORGMIC IJIT^OGIN CARRIERS 

The most important inorganic nitrogen carriers are nitrate of 
soda and sulphate of ammonia. The principal advantage in the use of 
these materials over organic carriers lies in their ready solubility 
in water wnich makes their nitrogen content more quickly available 
as plant food. While for some crops a more slowly available nitrogen 
is desirable, nitrate of soda is considered an excellent top dress- 
ing for such crops as citrus fruits, cotton, sugar beets, etc. 

The production of nitrate of soda was formerly a natural mon- 
opoly of Chile, but today, due to the above mentioned development of 
processes for the fixation of nitrogen from the atmosphere, synthetic 
sodium nitrate is a very real competitor of the natui'al product. Al- 
though the United States has the cap^ncity to produce its entire re- 
quirements of sodium nitrate syntheticallly, Chilean nitrate is still 
imported due in a large measure, to the inertia of the farmer in chang- 
ing his habits. Another reason has been the effective propaganda of 
the Chilean nitrate producers who have sold some farmers on the idea 
that the impurities of the nat-ural product malce it more desirable 
than the more chemically pure synthetic product. 

Chart IV * graphically illustrates the relative world produc- 
tion of atmospheric nitrogen and of Chilean nitrate from 1923 to 1933. 

Sulphate of ammonia while it can be produced synthetically, is 
largely a by-product of the steel industry. Here the supply is de- 
termined by the extent of the manufacture of another product and the 
sales price is not the determining factor in the quantity offered for 
sale . 

Supply of Chemical Nitrogen 

The total supply of chemical nitrogen in the United States from 
the year 1930 to 1934 is indicated in the following tabulation: 



(*) Reproduced from "An Editorial", Journal of Industria l and 
Engineering C hemistry . February, 1934. 



46 



CHART III 













o 


































































r 


^ 































V, 




i 


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S 










\ 


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\ 


A 


— 


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\ 




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— 


/ 


, 


CT> 


: 






/ 














-« 


— 


^^ 








— 















































o 


AVERAGE COMPOSITION OF 
■ COMPLETE MIXED FERTILIZER 

1 1 




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CTJ 




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u 




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00 






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^ 




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47 




SNOl DldlllM 



9761 



-48- 



TA3LS 9 



PRODUCTION AND Ii.iPGHTS OF CI3;inCAL NITRCGM IN SHCRT TONS IN THE U.3.(*) 



Year 




By-Pro duct 




Synthetic 


Imports (Net) 




Total Supply 


1930 




164,250 




135,000 


136,800 




436,050 


1931 




117,130 




66,000 


118,300 




301,430 


1932 




76,300 




89,000 


65,000 




230,300 


1933 




93,000 




114,000 


105,600 




312,600 


1934 




93,000 




127,000 


99,500 




319,500 


(*) " 


'Reco 


very in the 


Fertilizer Indus 


? try ".Charles J. Brand 


.,The Fertilizer 




Review, The_ National 


Fertilizer Association, Vol. 


X, 


No. 2, p. 7. 








Consumption of 


Qiemical Nitrogen 







The followiniS tabulation shows the estimrted consuaiption of chemi- 
cal nitrogen in short tons in the United States for the years 1930 to 
1934. Since all nitrogen which is used in the United States is not 
used for fertilizer purposes, this tabulation has been broken down to 
show the amount used for fertilizer and tha,t used for military and other 
purposes: 

TABLE 10 
ESTIMATED CONSUI/IPTION OF CHEMICAL NITROGEN IN SHORT TONS IN 1ES. U.S.(*) 



Year 



1930 
1931 
1932 
1933 
1934 



' Fertilizers 


Fo: 


r Industries 
military Uses 


and 


Total 


294,000 




110,000 




404,000 


202,000 




90,000 




292,000 


162,000 




65,000 




227,000 


185,000 




90,000 




275,000 


232,000 




100,000 




532,000 



(*) Ibid 



Consiunption of Mater ial s Snp xilyin e Nitrogen 

The following tabulation shows tha various fertilizer materials 
which were used as sources of nitrogen and the respective amounts de- 
rived from each of these sources for the years 1930 to 1932 inclusive: 



9761 



-49- 

TABLE 11 
ESTIMTED CONSULIPTICI^ OF PLANT FOOD IN THE UNITED STATES, 1930-3.3 (*) 
(Including Hawaii and Puerto Pdco) 
A-NITROGEN (Short tons of nitrogen contained): 

1930 1951 1952 

Chemical Sources: 

Nitrate of soda 93,530 ' 55,750 23,750 

Sulphate of ai-mnonia 124,000 97,400 108,150 

• Calcium cyanamid 15,750 12,000 8,800 

. Ammonia 50,000 20,170 13,040 

Calcium nitrate . 7,370 4,830 1,150 

Ammonium s-ulphate-nitrate 2,380 

Urea and calurea 6,540 3,980 1,700 

.Ammonium -oliosphates 9,230 7,9 10 5,060 

TOTAL CHEIJCAL ■ " . " 295,650 202,040 161,650 

Natural Organics: ( **) 

Cottonseed meal 13,500 16,350 31,900 

Packing house by-products 8,100 5,640 3,850 

Pish scrap and meal 2,800 3,050 1,960 

Guano 3,600 3,090 3,030 

2ough ammoniates 20,500 15,600 11,230 

Other nitrogenous materials. . . . 8 , 250 4 , 670 3,060 

TOTAL NATURAL OaGANICo 56,79 47 , 400 54,080 

TOTAL NIT510GEN 350,440 249,440 215,730 

(*) Includes potash content of crganics, nitro'iioska, nitrate of 
potash, etc. 

(**) Application of National Fertilizer Association for Code. 
(Copy in NilA Fertilizer Industry Files) 



Chart V (*) graphically shows the source of nitrogen in mixed 
fertilizers since 1880 azid clearly portrays the decline in relative 
importance of the orgsxiic nitrogen. 



SXPOilTS uF NITROGEN 

The following taoulation shows tie exports of nitrogen carriers 
from the United States: 



(*) Reproduced from "Pro^^ress in Fertilizer Technology Described by 
Kunsman", Tlie Fertilizer Jteview , The National Fertilizer Associs 
tion. Vol. IX, No, 2, p. 6. 









TABLI3 12 


















EXPORT 3 (*; 


) 












Total Nit 


irogehous 


Aitmonium 


Other Fi 


trogenous 


; Nitrogenous 




Fertilizers 


Sulphi 


ate 


31iemical 


Material 


Crgajaic 'fbsU 
















Liaterial 




Tons 


a, 000 


Tons 


',1,000 


Tons 


:)1,000 


Tons .'; 


1,000 


Average 


















1926-1930 


143,105 


6,800 


127,851 


6,046 


15,254 


754 






Annual 


















1926 


190,764 


10,390 


181,125 


9,824 


9,639 


566 


U.S. 


n. s. 


1927 


147 , 643 


7,319 


138,692 


6,827 


8,951 


492 


n. s. 


n. s. 


i928 


100,707 


4,697 


93,015 


4,373 


7,772 


324 


n. s. 


n. s. 


. 1929 


169,119 


7,526 


144,761 


6,296 


24,358 


1,230 


n. s. 


n.s. 


■ 1930 


107,214 


4,069 


81,662 


2,910 


25,552 


1,159 


n. s. 


n. s. 


1931 


138,614 


4,828 


" 66,902 


2,220 


■ 65,829 


2,479 


5,883 


129 


1932 


190,650 


4,921 


■ 14,742 


480 


166,981 


4,357 


8,927 


156 


1933 


116,721 


2,729 


14,^57 


362 


91,348 


2,152 


11,157 


215 


1934 


200,357 


4,940 


25,629 


714 


158,015 


3,805 


16,713 


421 


7 mo. 1934 


92,231 


2,284 


8,554 


237 


75,009 


1,827 


8,668 


220 


7 mo. 1935 


70 , 692 


1,686 


• 25,602 


686 


39,788 


910 


5,572 


90 


n.s. Not 


specified 

















(*) Tabulated from Foreign Co'mraerce and Navigation of the United States 
and Monthly Summary of Foreign Commerce of the United States. 



Nitrogen Prices 

The great drop in recent years in prices of the leading inorganic 
sources of nitrogen is detailed in the tabulations appearing in 
Tables IX A, B and C of Appendix II, Exiiibit 2, pp. 15-10. 

Chart VI (*) graphically shows the annual average spot price per 
unit of nitrogen in various materials at producing points. Tni s chart 
clearly reveals the higher cost of the nitrogen from organic sources 
and partially explains its diminished use in fertilizers in recent years. 

PC^TASH 

Materials Containing Potash 

The potassium used in com.nercial fertilizers comes largely in the 
form of potash salts, which usually consist eitlier of the chloride or 
the sulphate of pota.sh. Certain of the lovier grade potash salts are 



(*) Reproduced from "Progress in Fertilizer Technology Described by 
Kunsman", The Fertilizer Review , The National Fertilizer Associa- 
tion, Vol. IX, No. 2, p, 6. 



Q7P;i 



SL 



CHART V 









o 


SOURCE OF NITROGEN IN 
MIXED FERTILIZERS 






o . 


: 













\ 


^'A- 


o 


- 


X 




♦— 

. UJ 


or» 





o 

(VJ 





J^ 




. ^\^ 


0} 


/ 


V 


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7 








1 ^ 






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/ 

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2 
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..... _^ 







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%) 


T 


O 

CD 



9761 



lN30a3d 



-52- 

known as manure salts and kainite. Tne chloride of potash is often 
known as muriate of potash. 

Basis of Conparison of Potash Uaterials 

Since potash salts differ widely in their purity and in their 
potassium content, a common method has "been set up to evaluate the 
potassium content of materials and fertilizers. T-iis is done hy reduc- 
ing the potassium content of a particular material to a so-called K3O 
equivalent hasis which ^ives a "basis of comparing the prices of differ- 
ent potash materials. 

Domestic Consumption of Potash 

The following tabulation indicates the sales of fertilizer potash 
in the United States from 1930 to 1934 reduced to the ICgO equivalent 
basis and designating the materials and the amounts derived from each 
particular source: 



TABLE 13 

SALES OF FERTILIZER POTAS.r: IN UNITED STATES, 1930-'' 934 (*) 
(Estimated short tons K2O by salts) 

Salts 1930 1931 1932 1C33 1934 

Muriate 209,610 121,490 83,500 151,000 149,000 

Sulphate 46,080 33,860 15,090 28,200 29,600 

Manure salts 91,125 68,495 41,500 95,400 40,900 

Kainite 15,625 10,890 6,915 6,800 23,500 

Other potash materials (a). . 8,740 20,615 17,940 10,000 13.000 

Total potash 371,180 255,350 164,945 291,400 256,000 

(a) Includes nitrate of potash, "vegetable" potash, etc. 

(*) "Potash", by Dr. J. vif. Turrentine, mineral Industry , Volume 43, 
1934, McGraw Hill Publishing; Company, New York City, p. 479. 



The following tabulation shows the potash produced and sold in the 
United States since 1925, expressed both in actual tonnage and Kg" 
equivalent together with the value of sales f.o.b. the plant: 



9761 



'35- 

CHART VI 



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9761 



N9908im JO UNO 83d SavHOO 



TABLE 14 

POTASH PfiCDUCSD Ai^JD SOLD IN THE UlIITED STATES ( = 
(In short tonr.) 
Production Sales 





Pota^ 


Equiva- 


Potash 


Equiva- 


Value f.o.b. 


Year 


Salts 


lent 


Sn.1 ts 


lent 


Plant 


1925 


51.565 


25 , 448 


52,823 


35,802 


1,204,024 


1926 


46,334 


33,366 


51 , 369 


25,060 


1,033,064 


1927 


76,819 


43,150 


94,722 


49 , 500 


2, '.••48,1 46 


1928 


104,129 


59,910 


105,208 


60,370 


3,029,422 


1929 


107,800 


61 , 590 


101, .'^70 


57.540 


2,988,450 


1930 


105,810 


61,270 


98,280 


56,610 


2,986,160 


1931 


133,920 


63,880 


133,430 


63,770 


3,086,955 


1932 


143,120 


61,990 


121,590 


55,620 


2,103,590 


1933 


351,250 


148,150 


334,417 


138,770 


5,225,646 


1934 


429,300 


150,700 


230 , 690 


113,250 


2,825.650 


(*) 


•Totash", "by Dr. J.I. Turrentine, iiinneral Industry, 


Volume 43, 




1934, McGraw Hill Publishing 


Comxany, 


New York City 


, p. 475. 



Exports of Pot^^.sh 

Since in recent years the potash industry of the United States has 
heen developed rpopidly, our exports of potash salts have assumed signi- 
ficance. The following tabulation shows the potash salts exported from 
the United States since 1929. 

TABLE 15 

POTASH MTEiilALS EXPCHTSD EHO'.i TxE UNITED STATES (*) 
(in long tons, pota?h salts) 

Fertilizer Salts Chemical Salts Tots,! 

Year Tons Value Tons Value Tons Value 

1929 15,858 :583,690 1,311 583,668 15,180 pi 166.358 



1930 


15,316 


643,367 


1,131 


498,774 


16,337 


1,142,141 


1931 


28,982 


1,267,120 


1,030 


370,955 


30,012 


1.638,055 


1932 


1,816 


70,038 


791 


241,179 


2,607 


311,207 


1933 


25,117 


910,406 


1,138 


301,596 


26,355 


1,212,002 


1934 


25,540 


918,305 


3,120 


466,393 


27,660 


1.385,098 


(*) 


"Monthly Sumimry", 3ure?.u 


of j''orei::;n and Domestic Cominerce, 




Department 


of Coumerce. 











Imports 
The following tabulation represents t.e fertilizer potash imported 



-55^ 

for consTimption into the United Str.tes frcm 1924 to 1924 expressed in 
short tons of KsC equiva.lent. 



TABLE 16 

POTAS-; li.iP'.iiTED E'.xl ClNoUuiTI :K ILI T'.E UNITED STATES (*) 
(In snort tons of lio.) 



1934 200,365 1923 

1925 258,200 1S29 

1936 238,000 1950 

1927 : . . . ■. 224,973 1931 



297,000 
335,000 
'313,900 
215,524 



1932 .... .113,500 

1933 138,760. 

1934 l''3,500 



■ (*) ''Potash", hy Dr. J. .'. "^rrentinej i.gKeral Industry. Volume 43, 
1934, VicGraw .111 Publishin^^ So.npany, OTew York Citj^ p. 478. 



?or taree ye^rs t^ese ii£,ures ar>^ oroken down to show tue particu- 
lar salts and tneir c?-.::)proxLa- te K2- content, to..^etrj.er witli the value of 
eacii of t^e salts in t-ie followin.^ tabulation. 



9761 



-56- 
TA3LE 17 . . 

POTASH MATERIALS IMPORTED FOR CONSUIv'lPTIO:^! IN T^-IE UHITED STATES (*) 



A-D-oroxi- 
mate KgO 
content 
'sed Principally (PerCent) 
n fertilizers:' 
Kainite " 14-20 
Manure Salts 30 
Muriate 30 

SulTjhate 48 , 

Mtrate ' 35 

Other Potash- 
bearing sub- 
stances 



1932 



Long 
Tons 



Value 



1933 1934 

Long Long 

Tons Value Tons Value 



49,374 $457,318 

100,927 1,254,720 

78,352 2,794,979 

28,071 1,201,571 



3,727 188,452 



101,989 3968,326 113,898 
115,121 1,329,423 79,283 
105,538 3,791,789 126,964 
.59,325 2*261,890 61,786 
25,593 880,493 31,614 



449 



352 



51,105,807 
1,039,074 
3,671,857 
1,949,997' 
1,071,496 



2,551 



260,457 5,897,040 406,015 9,238,079 413,897 8,840,784 



Domestic Production 

Percentage of U. S, Consumption Domestically Produced 

In revie^ving the various tabulations above, it is seen that the 
potash consumotion in the United States for 1934 was apnroximately 
653,000 short tons of potash salts, equivalent to 256,000 short tons 
of KgO. This figure is calculated by subtracting the exports from the 
total of imports and domestic sales. The imports represented 68 per 
cent in gross weight and 56 per cent in terms of KgO equivalent. 
Assuming that exports represented exclusively high analysis domestic 
muriate of 60 per cent KgO, approximately 40 per cent of the potash 
consumed in the United States was of domestic origin in 1934. 

Domestic Production 

As indicated previously, the domestic production is largely con- 
centrated in the States of California and ilew Mexico. The California 
plant is located at Searles Lake and is owned by the American Potash 
and Chemical Coraiany, whereas there are two plants at Carlsbad, 
New Mexico, owned by the United States Potash Company and the Potash 
Company of America, respectively. 



(*) "rionthly Summary," Bureau of Foreign and Domestic Commerce . 

Department of Commerce. 



9761 



-57" 

The first named plant has teen in operation since 1912, It 
prodxices potassi-um chloride hy fractional crystallization fro:_i the 
saturated complex hrine of this prehistoric lake. The two Hew Herrico 
pla-nts are mines extracting sylvinite which is a mixture of potassium 
and. sodi-um chlorides. It is estimated that Hew Uexico has potash 
deposits s^afficient to supply the needs of the United States for 200 
years. (*) 

History of the U. S. Sepxch for Potash 

Beginning in 1910, the Congress of the United States aijpropriated 
funds for a national survey of fertilizer resources. Under this Act 
of Congress which inaugurated the study of fertilizer resources, a 
nation wide search was made for potash. The Congress realized the 
necessity of national self-sufficiency in potash in the event of war 
since the United States was importing practically all of its potash 
requirements from G-ermany. Germany had great nc.tural deposits of 
these salts which gave that country a virtual natural monopoly, 
prices and production being controlled through the operation of 
cartels. 

The explanation of the development of the domestic potash industry 
in this coujitry is facilitated by Chart VII which shows graphically 
the domestic production, consumption and prices of potash. (**) 

TiTar Time Prices of Potash 

Clmrt VII indicates what happened to the price of potash when the 
Yforld TJar cut off supplies from Germany. The price soared from abou.t 
60 cents per unit of 120 to about $4.30 per unit, with a corr isponding 
decline in the use of KgO in fertilisers in this country, since we 
had no substantial domestic production. 

This high price of ICgO stimulated an aggressive war time effort 
to relieve our potash scarcity. It is reported that there were in 
operation or ready for prod\iction of potash, at the close of the war 
62 commercial units. Of this nxunber 29 were crj'-stallizing potash from 
the brines of saline lalces and marshes; 9 were processing kelp; ? were 
extracting potash from alunits; 2 from green-sand; 1 from leucite; 13 
from cement ]::iln fumes; 4 from blast furnace fumes; and 1 from dis- 
tillery waste, (***) 



(*) "Application for a Code, made by The Hational Fertilizer Associa- 
tion to the Hational Recover:^ Ad;.iinistration, " August 2, 1933, 
p. 9, (Copy iu H.R.A, Fertilizer Industry Files) 

(**) Price series for individual potash materials are detailed in the 

Fertilizer Industry Archives ErJiibit A, Table IX, Sections D, E, ; 
F and G, pp. 19-26. 

(***) C. A. Brown, Assistant Chief, Bureau of Chemistr;'- and Soils, 

United States Department of A^^-ri culture --"Production and use of 
Potash" — Proceedings of 11th Annual Convention of The Hational 
Fertilizer Association, The Hational Fertilizer Association, p. 93. 



o 




SNOi iWDMS JO SQNVSnOHi 



9761 



-59- 

Post Uar Conditions 

Tlie consi-umition of potasli dropped off sliaroly due to the inadeqruate 
supply and high price and \7as supplied mainly "by domestic production. 
The release of the German source of supply at the end of the i.7ar 
caused a sharp drop in price '.7ith increased consumption in the United 
States, By 1921, with the' decreased demand due to the agricultural 
depression, domestic producers of potash had heen virtually wiped out 
of the market due to their high cost of production. , By 1922, the 
price T7as stahilized around 4-0 cents per unit of KgO. 

Aritation for a Tariff 

There are no tariffs on fertilizer 'Materials or mixed fertilizers 
at the present 'time. There has been agitation for a tariff hy domestic 
producers of nitrogen and -ootash carriers at varioiis times. The de- 
velopment of the dom.estic supoly of potash caused much agitation for 
the protection of a nen industry immediately following the low prices 
after the war. The follo\7ing quotation illustrates the situation and 
gives a picture of the activities of the fertilizer manufacturers. 

"Ilainlj'- throijgh the efforts of ovr association, potash was 
retained on the free list in the tariff act of 1922. The tariff 
rates on potash agreed to in the House of Representatives on the 
first vote on that hill called for the pajnuent of customs 
duties for a period of five ^^ears ano-ontinfj to ahout $51,300,000. 
Ue shall need to he alert in siicceedinr sessions of Congresf: to 
safegu.ard the traditional wise policy of free entrj^ for all 
plant foods." (*) 

Ciu-rent Situation 

The price of potash later advjmced to s,s much as 50 cents per unit 
hut hy 1933. was again reduced to 40 cents r)or imit. It declined iron 
that level subsequently to as low as 25 cents y)er tmit in 1934, vrhich 
ig the lowest average value at the plant hoth per ton and per imit of 
KgO ever realized hy domestic pi-oducers. Incidoatally , the price ctit 
of 1934 was instituted "by one of the American corT^anies and was a 
reflection of the increased domestic ;oroduction as this was the first' 
hrea2t from the price leadership of the European cartels. Thus the 
fertilizer manufacturers have had a very lov? unit cost for the -ootazh 
constituent of their minced fertilizers, and this shoiild in the ;.long 
run. tend to increase the use of -ootash as a fertilizer material. 



(*) Report of TTashington Joint Office, Proceedings of the Third Annual 
Convention of the Hational Fe rtilizer Association , The national 
Fertilizer Association, June 1V27, p. SO. 



PHOSPHA.TE PRODUCTS 

Industr;r Financially Interested in Phos-phate 1 ianuf actm-e 

The fertilizer manufaot-urers have a more direct financial 
interest in phosphate products than in either nitrogen or potash 
materials. With regard to the latter products, the American manufac- 
turer of fertilizer is essentially a distributor huying and selling 
then, largely as adjuncts to the phosphate products vjhich he is 
actually manufacturing. As pointed out previously, not all fertilizer 
mi::ers nanui"acture superphosphate hut the industry as a whole has the 
hulk of its capital invested in manufacturing phosphate -oroducts. 

L ocation of the Superphos-phate Industry 

Tlie trend toward concentrated fertilizer is of especial interest 
to the producers of phosphate products. The indu.stry as now situated 
is in large measure set up. on the hasis of producing a superphosphate 
which contains from 16 to 20: per cent of available phosphoric acid. 
Tliis has neant that the manufacture of superphosphate has always heen 
a more or less localized industry because it is usually more economical 
to ship iDhosphate rock, containing from 30 to 34 per cent of phosphoric 
acid than to ship superphosphate containing from 16 to 20 per cent. 
Thus the plants have been located at strategic points in the heavjr 
fertilizer-consuming areas where long rail hauls of the finished 
product are not necessary. 

The reason for the lower percentage of available phosphoric 
acid in superphosphate than that contained in the raw material is due 
to the fact that each long ton of phosphate rock is treated vsrith a 
short ton of sulphuric acid (*) in order to make the phosphoric acid 
available as a plant food. The phosphoric acid in the monocalcium 
phosphate of the resultant product is therefore accompanied by a cal- 
cium sulphate (gypsum) which is of qu.estionable value as a fertilizer 
in aiii^ sv.ch quantities as contained in ordinary superphosphate. 

Sulphuric Acid 

One hundred fertilizer plants produce sulphuric acid. The 
fertilizer industry consumes approximately 30 per cent of all sulphuric 
acid ^manufactured in the United States. The fertilizer industrj'- pro- 
duces about the sane amount of sulphuric acid as it consumes but there 
is some interchange with commercial acid orodticers. Chart VIII portrays 
this situation graphicelly. (**) 



(*) One hundred fertilizer manufacturers manufactiu'e sulphuric acid. 
The Industry consumes a-oproxiraately 30 per cent of all sulphuric 
acid manv>i"actured in the United States, the Industry producing 
about as much sulphuric acid as it cons-umes, although there is 
some intercliange with commercial producers. Taken from S:diibit A 
Table 7; 'pp, 12-^13. The Fertilizer Industry, WEA Archives. 

(**) The statistics on which this chart is based are contained in 

Appendix II as Exhibit 13. Additional statistics on sulphuric acid 
are contained in The Fertilizer Industry MA Archives, "Exhibit A, 

9761 Table 7, pr). .12-13. 



FOR RELEASE ON 
RECEIPT 



61 

CHART VIII 

DEPARTMENT OF COMMERCE 
BUREAU OF THE CENSUS 

WASHINGTON 



SULPHURIC ACID 



THOUSANDS 

OF 
SHORT TONS 



PRODUCTION, STOCKS, ETC., REPORTED BY 

FERTILIZER MANUFACTURERS 

DECEMBER ,1935 

COMPARED WITH PRECEDING MONTHS 







1933 



!7ol 



Concentrated Superphosphates 

One of the chief developments in the move tonard concentrated 
fertilizers has "been the development of so-call6d douhle and tretle 
superphosphates which are products containing less gypsum per ton 
and which contain from 2-^- to 3 times as much availahle phosphoric 
acid (*) as does ordinary superphosphate, 

T.V.A. FERTILIZER ACTIVITIES 

IThile the processes of manufacturing the more highly concentrated 
superphosphates have "been known for a numter of years, little headway 
has "been made in actually getting thera into use "bj farmers. 

The matter has taken on new significance "by the activities of 
the T.V.A. The T.V.A. has not only put into operation entirely modern 
plants for the production of trehle superphosphates hut has also 
made arrangements for practical demonstration of their use under real 
farm conditions, on a series of cooperating farms in the counties 
embraced in the T.V.A, project. Thus the T.V.A. is attacking the 
problems which have retarded the spread in the use of concentrated 
superphosphates, namely, the qiiestion of educating the farmer "both 
as to the efficiency and methods of applying the more concentx-ated 
fertilizers. 

The fertilizer manufactured by T.V.A. has not been sold but has 
been given f.o.b. the factory to these cooperating farms to be used in 
developing proper methods of use. The commercial manufacturers of 
fertilizer welcome. such experimentation but are opposed to any sale of 
fertilizer by the T.V.A, in competition with private manufacturers. 

Potential Re-location of Superphosphate Plants 

If measurably successful, this movement toward increasing the use 
of more highly concentrated superphosphates will bring decided read- 
justments not only to methods of manufacturing superphosphates but also 
in the geographic location of the plants. Plants manufacturing double 
and treble superphosphates will in a.11 probability be located near the 
phosphate rock mines rather than near the fertilizer consuming areas. 
This change will be economically desirable because a treble super- 
phosphate plant ships in about 1-1/3 tons of raw material for every 
3/3 ton of finished product, whereas the ordinary spperphosphate plant 
ships in 1-1/3 short tons of material and ships out 2 tons of finished 
product. Under g-ach conditions existing superphosphate plants unless 
located in ports with cheap water rates, will be distinctly limited as 
to their potential market. 



(*) "Crude Phosphates and Superphosphate," U. S. Tariff Commission 
Re-Qort IIo. 100 . submitted in response to Senate Resolution 298, 
72nd Congress, 1934, p, 10. 



Potentia l Cpiapetition for fforld I/iarkets 

In addition to chaji(i-ing the location of the superphosphate 
industry the development of these douhle and tretle superphosphates 
should tend to give the United States an opportunity to compete in 
World Markets with these products. At the present tine, although ue 
exoort approxiinately one-third of our production of phosphate rock, 
our errports of superphosphate are negligihle. 

Pot ential Increase d ^J se in the Middle West 

One of the limiting factors in extending the use of fertilizers 
in the i.Iid-West grain a-rea lia.s "been its cost to the farmer — a large 
share of which ha.s "been the transportation costs. In this region the 
chief fertilizers used are either' superphosphate, for direct application 
of mixtures with relatively high phosphoric acid content. As i?ointed 
out in the chapter on Distrihutlon and Prices, the more highly con- 
centrated fertilizers cost the fa-rmer less ner unit of plant-food 
content. It thus a"npears reasonable to esaect that the development 
of more highlj'- concentrated superphosphates, and of proper methods 
of farm use will mean that the cost per unit of phosphoric acid at 
the farm will he so reducfed, that more grain farmers will find then 
econonical to use. The significance of these reduced costs in con- 
nection with the -oroposed retirement of considerable acreage from 
grain prod^^ction in order to build up soil fertility is at once 
appar ont , 

The Economies in the lianufacture of Concentrated Fertilizers 

The following ouotation gives an excellent idea of the savings 
of a fertilizer nanufacturer in the handling, bagging and transportation 
costs of these concentrated fertilizers as contrasted to ordinary low 
analysis nixtures. In the long run anj?- such savings should reeailt in 
lower prices to the farmers, 

"As an e:-.a:nple let n.s contrast 3-9-3 with 9-37-9, considering 
only the differences in cost of FpO^, bagging and freight. The 
PgOc^ in 3-9-3 ca.n be obtained from 17 oer cent superphosphate, 
at, let us scy, 65 cents a unit, whereas that in the 9-27-9 
will cost, say, 85 cents. The difference for 27 units at 20 
cents per unit is $5,40.' Tlie cost of bagging three tons at 
$L..OO and of freight at $3.50 amounts to $19,50 for 3-9-3 and 
to $6.50 for 9-27-9, a difference of $13.00, or, deducting the 
$5,40 expended for the concentrated superphosphate, a saving of 
$7.60 on the higher analysis." (*) 



(*) "Eigh-Aualysis Superphosphates," li:r S. L. Larison, Superintendent, 
Phosphate Plant, Anaconda Copper i.ini3-ig Company, Anaconda, 
Montana, Proceedings of li':£ I'^ifth Ar\".ar';i. Convention of Tlie 

' ■. national Fertilizer Association . Th.-; Hational Fertilizer 
Association, 1929, r;, 78. 



9761 



Potential i "anirfact nxiii ,f: Economies 

Tlie further devslopment in the use of these concentrated 
fertilizers uill, in the long run solve another of the distressing 
prohler-s nov/ confrontin-: fertilizer ; •on-'jf actu-rers and Till res-ult in 
lar£;e savings to the farrjer. As higher concentrations of fertilizer 
are -j.sed the numlnr oi anai7/ses sold are very nuch reduced. The 
elimination of nsny analyses -'ill reduce the o^jerating cost of most 
fertilizer olants. 

The follotring oLiotation is illustrative of this -ooint: 

"Anyone crai -irove the resn-lts of mimeroas changes in hrand 
during the shinpin- seaGon. I recently exarnined some figures 
shov.'ing individua-1 days' rxms. One mill working on one 
analysis shroped as much fertilizer as tT'o raills making the 
ordinary/ run of analyses. Thin, you will note, would cut the 
laoor nhippin^v cost in half £ind would cave iDOwer and repairs. 
And multiolicity of analyses continues to affect the cost of 
your "business still further — you must have more factory super- 
vision, more clerks in the factory and office to keep a record 
of the variotis analyses made and sold. Here is a condition 
that is entirely within the control of the members of the 
fertilizer ind\istry, and I helieve that the time has arrived 
for V.S to concentrate more on this opportunity to eliminate 
waste. If all manufacturers will do it, it will he easj-; if 
only a few try to do it, it will he hard, hecause the number 
of analyses sold can be laade intensely competitive," (*) 

Phosphate Hock and Su-perphos-ohate 

Sources of Phosphorus in Fertilizers 

Uhile phosphorus is obtained from bones and also from basic slag 
(a bjr-pi-oduct in the production of steel), the main source of phos- 
phorus for fertilizers is pho'^phate rock and other phosphate material, 
such as apatite; this differs from ohosphate roc]r principally in 
physical form. The phosphorus contained in phosphate rock aud 
apatite is not readily available for asc.imilation by plants and most 
of it is chemically treated with sul.phuric acid to make it more 
readily soluble for plant assimilation. 

Table 18 shows the estimated consumption in the United States 
and its possessions of crude phosphates over an extended period of 
time and shows tlia.t ap"oro:ximately 90 per cent of the total domestic 
consiix:.ption of crude phosphates is used for the production of super- 
pho s"ohiat e s , 



(*) "Change and Cooperation," by L. T.". how .0.1, Vice-President, Swift 
C: CoiOToany and President of The i'stional Portilizer Association, 
Proceedings of the Sixth Ann-gg -l Go:'.venti;.n of The National 
Fertilizer Association , The national Fertilizer Association, 
IS 29-30, p. 11. 

9761 



So^rrces of Crude Phosphates 

TliB United States is indspenuent of foreign countries with 
re^-ard to its supply of crude phospha,t,3s. Izroorts since 1929, have 
eq^^alled al:out - of 1 :;-3r cent of donestic prodaictidn. E.-;ciports amount 
to r.Toroximatel^ i3G or cent of tlie domestic production. 

At the present rate of production, (2,000,000 to 3,000,000 tons 
of phosphate rock an-in£."'.ly) the United States reserves of these 
materials uill last for an inciefinite period. The Westers sources ■ 
of EUiDply are lovr grade hut they represent a potential so-irce if the 
other high gi'ade dei^osits ever e.oproach e:aia"astion. Tahle 19 shoirs 
the estinated reserves of phosphate roch in the United States as of 
Decenher 31, ICSO. . .. 



9761 



-B'6- ' 

TABLE 18 

PHOSPHATES, CRUDE: ESTIMATED CONSUlvIFTIOlT BY PEIIICIPAL USES IN THE 
UNITED STATES AND ITS POSSESSIONS (*) 







(Long tons) 






Year 


Total consTiraecL 


Consumed in 


ConsTimed in 


Constuned in 




in United 


mp.nufacture 


mantifacture 


direct appli- 




States and 


of super- 


of chemicals 


cation to 




possessions 


Tohosphate 


etc. 


soil 


1870 


54,109 


53,369 


540 


200 


1880 


168,702 


166,102 


2,500 


100 


1890 


323,191 


314, 991 


6,500 


1,700 


1900 


1,008,307 


970,107 


30,200 


8,000 


1910 


1,593,657 


1,493,957 


79,700 


20,000 


1920 


3,034,333 


2,779,432 


182,100 


72,801 


1921 


1,334,248 


1,227,345 


93,400 


13,503 


1922 


1,704,479 


1,537,583 


150,867 


16,029 


1923 


2,185,880 


1,932,110 


243,222 


10,548 


1924 


2,065,114 


1,903,319 


147,475 


14,320 


1925 


2,614,354 


2,419,994 


162,361 


31,999 


1926 


2,478,391 


2,268,275 


180,214 


29,902 


1927 


2,280,683 


1,998,044 


249,602 


32,957 


1928 


2,648,454 


2,380,791 


225,518 


42,145 


1929 


2,663,008 


2,262,239 


339,545 


61,224 


1930 


2,733,328 


2,367,787 


323,948 


41,593 


1931* 


1,597,150 


1,383,550 


189,300 


24,300 



later data are available. 



(*) Mineral Resources of the Unitf^d States, U. S. Bureau of Mines, 



-67- 



TABL.S 19 



PHOSPHATES, CPJnE: 
mCKi'BER 31, 1930, 



SSTIiiATii:? R>:SEr.V£S I ■■".THE TJaTITeD STATES AS OP 
■Oi: 1'3.£ BASIS OP A CO;.TTEJ:JT OP 55 PlIR CEJIT OH MORE 
OP TP.ICALCI'JI- PHOSPHATE (*) 



Source 



Ectinp„ted 

re serve p 

(lun^ tons) 



Source 



Estimated 

reserves 

(lorifr: tons) 



Florida 377,Oor,,ono V/estern States—contimied 

South Carolina 9,00n,onn Utah 337,n^'0,onn 

Tennessee 93,000,000 Myouin^ 115,000,000 

western States: Arkansas 20,000,000 

Idaho 4,997,000,000 Eentuclzy l,00O,000 

Montana 391,000,000 Total 6,231,000,000 



CPTJJE PiiOSP^L4T53 COHTROLLED BY PESTILIZER i.u^uJPACTTJllERS 

Ho recent stadias have been r^ade of the extent to which fertilizer 
manLifactorers orm the sources of crude phosijhates, hut the principal pro- 
ducers of these materials are generally alleged to he the lar,<^er fertilizer 
manufacturers. This is the only one of the principal fertilizer raw mater- 
ials in which the fertilizer manufa,cturers have a controlling interest (**). 

Phosphate Pock Production 

In 1934, 80 per cent of the value of the domestic output of phospate 
rock was furnished hy Florida. The Bro^m phosphate fields of Tennessee 
accounted for aoout 18.3 per cent sjid the ivlontgjia- Idaho fiflds for about 
1.5-per cent (***), i^j^e first t'.TG fields by reason of the uniformity of 
grade of product, favorable geographic location or relatively low cost of 
production have easily n;Tintained the lead in the country's production. 
Because of the extent and rego-larity of its occurrence in Florida, pebble 
phospate has been cheaper and it reaxhes a wider m.arket than the Tennessee 
phospate. The latter, however, has the advrntp.ge of a good location, par- 
ticularly with respect to the ra,pidly growijig f ertilizer-consi^ming regions 
in the Middle West. 

(*) "Crude Phosphates and Superioho spate", F.eport No. 100, United 
States Tariff Commission, 1935, table 3, p. 5. 

(**) It is here recognized that the large packing companies have plants 
producing fertilizer and that they control a large source of organ- 
ic nitrogen carriers but they are engaged in manufacturing fertili- 
zer as a business and only use the orgajiic nitrogen carriers when 
other fertilizer m.anuf acturers wo-old ordinarily use them, namely, 
when the alternative demands for these products justify it, 

(***) E:±Libit 14, Appendix II, contains a detailed tabulation of the 
production and valae of criide phos;jliates by aren,s. 



9761 



-68" 

•The Ipjid peb'b?ve district of Florida centers in Polk Coiinty where 
the phosT3ho,te lies imder ^.n overharden of sand o r sand clay. It occurs 
as rounded granules ranging in color fron white to dark and in size from 
small grains up to pebl;les of 1-^- inches in diameter. In the early days, 
the industry vforked rich deposits of hi^h yield under generallj^ favorable 
operating conditions hut the prohlera of removing the overburden became 
one that rapidly increased in difficulty \7ith the exhaustion of the 
shallower deposits. In the early days in Florida five cubic yards of 
material per ton of finished product was the limit beyond which the miner 
ccald not go and still c-irry on sn effective carapaign to enlarge his 
market. This limit has been gradually increased until today it is not 
unusual to find operators handling fifteen to tr/enty yards of solid 
material per ton of finished product. Technical methods of removing the 
overbui'den have necessitated a large increase of ca:oital investment as 
have the changes necessite^ted by the adoption of a heavier and more ef- 
ficient mining equipment (*). Another development tending to improve ef- 
ficiency in the handling of crude phosphates is the development of floa- 
tion as a method of conccntratin.5 the crude phosphate ores. It is esti- 
mated that about 15 per cent of the total domestic outpiit of phosphates 
in 1934 was concentrated by the flotation process (**) 

Price Q, uot Pot ions for P hosphate Rock 

The following tabulo.tion on prices covers quarterly quotations on 
Florida land pebble from 1923 to 1935 as given in a trade journal. They 
are not to be interpreted as necessarilj'' realization prices, but they do 
give an indication of the high degree of stability and the price of the 
chief crude i3hospha,te sources over a period of years. ¥0 study has as 
yet been made aiid this ir the reason for this price inelasticity but 
it is highly significant that some five or six large firms control the 
balk of phosphate rock and pebble production in the United States, Accord- 
ing to the TJnited States Tariff Oomr.ission about a dozen of the large 
fertilizer nanof actiu-ers are large producers of phosphate rock (***), 



(*) A good discussion of phosphate production is contained in "Phos- 
phate Production Technology", by John T. Burrows, Vice President, 
International Agricultural Corporation, Hew York, Proce9di-if:s of 
rif th Annua l Convention of The I'-Tational Fertilizer A ssoc iation, 
The national Fertilizer Association, 1929, p. 43. 

(**) "Crude Phosphates and Superphosjjhate", U nited States Tariff Com- 
mission . F.eoort 100, 1935, p. 5. 

(***) "Crude Phosphate and SuperiDhosphatfts", U._ Sj_ Tariff Connission , 
Report No. lOO, 1955, p. 11. 



9761 



"69-- 



TiBLE 20 



PHOSPHATES, Cr.UDE: PPJCE «<^UU^I01JS FLOE IDA PiiBBLS - 68 PER CENT P. 0.3. 

i:i^:ls (*) 
(Doll.irs per short ton) 



Year 


January 


April 


July 


October 


1924 


3.25 


2.25 


2.25 


2.15 


1925 


2.10 


2.10 


2.58 


2.65 


1926 


2.98 


3.21 


3.20 


3.20 


1927 


3.18 


3.08 


3.08 


3.08 


1928 


3.08 


3.08 


3.08 


3.18 


1929 


3.18 


3.18 


3.18 


3.18 


1930 


3,18 


3.18 


3.18 


3.18 


1931 


3.18 


3.18 


3.18 


3.18 


1932 


3.18 


3.18 


3.18 


3.18 


1933 


3.18 


3.18 


3.18 


3.18 


1934 


3.03 


3.03 


3.25 


3.25 


1935 


3.4n 

Exports 


3.40 

of Crude Phosphates 


3.40 


3.40 



The extent and value cf the exports of crude phosphates fron the 
United States is indicated in the follomng' tabulation: 



CABLE . 21 



PHOSPHATES, CRUDE: E^IPOHTS," ALL GRADES (**) 



Year 


Q,uantity 


Value 


Year 


Q,uantity 


Value 




Long Tons 






Long Tons 




1900 


619,995 


$5,217,560 


1927 


918,211 


$4,731,562 


1910 


1,085,037 


8,234,275 


IS 28 


898,754 


4,453,101 


1920 


1,069,712 


10,570,175 


1929 


1,142,746 


5,386,919 


1921 


753,312- 


7,320,137 


1930 


1,225,722 


5,530,547 


1922 


719,294 


5,858,167 


1931 


951,305 


4,277,070 


1923 


327,551 


5,772,171 


1932 


613,035 


2,795,654 


1924 


818,773 


5,120,852 


1933 
1934^ 


829,059 


3,544,377 


1925 


870,200 


5,677,705 


993,493 


5,008,532 


1926 


748,963 











•Exoorts consist of varying amounts of rock of different tricalciLim phosp- 
hate content. To shoT7 uiiit values of the aggregate vrould "be misleading. 
^Preliminary. 

(*) Source - Oil, Paint and Drnog Eeporter. JTor complete prices series 
hy months, 1904 to date, see the F^-rtili^fir Industry MA Archives 
Exhihit A, Tahles IX J and K, pp. 27-3^'.. 

(**) "Crude Phospliate and Superphosphatps" , Uj_ S._ Tariff Corgrriission , 
Report Ho. lon, 1935, Tahle 7 ,\o. 9., 



9761 



-7Q- 

SlP£RPT-:oSPHATJi: 

Kanjf -acture of S u'penjnosjhate 

The follo-J7ing descri'^tior ;?iver an idea of the raanufa,cture of super- 
phosphate and mixed fertiJ.izer in a t:,rpical plant: Tl.e phosphate rock is 
received at the fertilij:er o?.<'int in carload lots and uy various mechani- 
cal methods is transferred to a t<rrinder v;here these rocks are hroken up 
into small particles. Wlien the rocks are grou^id they are carried to an 
air separator which "blov'S that portion Trhicn Jias been ground fine enough 
into an elevator for con-freyance to a storage hin at the top of the plant. 
The rock \*-ich needs further grinding is returned to the grinder. 

Sulphuric acid is Drought into tne pleat in carload lots and stored 
in tanks a/^/ay fron the plan-t. '.Ti'en tne acid is nended it is p\imppd to 
an open tank in the top of the fertilizer mill -'here it is diluted irith 
the proper ainount of wa.ter. 

The groujid phoKphate rock and sulphuric acid are then riut into a 
mixer in a^out equal rjro-oortions "by iveight. This mixer is a large 
covered vat in -'UiCii pa.c!r'les revolve ar'd tnoroughly mix the acid and 
phosphate until it hecon'^s a gunny r^isr.. The gas generated is drami off 
?:ind ahsorhed and r/hen the chemical reaction oet\.'een the sulphuric acid 
and the phosphate has proceeded to a satisfactory point the rixer operator 
discharges the material to a storage "bin "beneath the machine "before 
another charge is let into tlie uixer. 

This process generates considera'ole heat -^nd the walls of the storage 
"bin are usually thick concrete, ilornall;'- the mixture is ellowed to set 
over night. 

The engineering and ■aech'^nical pro"bloms concerned with t'ne manufac- 
ture of superphospha.te have received mn.ch attention. Mass production 
involving the hjandling of large qu-^aitities of s'olid materials ■•■..dth the 
least manual labor have iiotivated the installation of various mechanical 
devices for discharging the superphosphate from the dens. Soirfe superphos- 
phate plants discharge t'ne dens "by means of electric ajid gasoline shovels; 
others utilize overhead traveling cranes and oth^ers "nave so-ca;lled mechan- 
ical dens and e ■cavators. 

Lechanical den assistants offer the advantage of practically continxi- 
ous C'Deration vdth a minimum amount of attention and manual lahor and are 
economical of s'oace which is an important item in many fertilizer plants. 
Although -"There is considera.'ble room for improvement in tl:e mechanical 
eqaipmi=nt maaiy older superphosphate plants and many of the newer plants 
are carefully designed and equipped with efficient lahor saving machinery. 

In order to insure a satisfactory mech -nical condition and a maximum 
conversion to availa'ble phosphoric acid, sunerphosphate shoiild remain on 
the aging pile for at least a 'lontn hut it;; rtura •;(: requires a large space 
ixnd the time consujied is of importance in ::■• .Iv.t:-,. These a.^ing piles 
are usually on the "bare ground underneath a i. lec , Other fertilizer 
ma.terials are similarly stored. 



9751 



The -production of superphosphate in the United States is indicated 
in the folloTring tabulation: 

TA3L£ 22 

SUPEEPHOSPHATE: PP.OFJCTIOF IK THE IJinTED STATES (*) 
(Short Tons) 



Year 



Quantity- 



Year 



Qaantity 



1921 
1923 
1925 
1927 
1928 
1929 



3,483,704 
4,257,537 
4,096,442 
4,086,225 
4,954,240 
4,815,663 



1930 


4,595,096 


1931 


2,744,528 


1932 


1,765,971 


1933 


2,694,870 


1934 


2,868,016 



Chart IX gives a graphic presentation of the statistics relating to 
production, receipts, shipments and stocks of superphosiDhates as reported 
to the Bureau of the Census ty manufacturers producing more than 95 per 
cent of the total value of superphosphates reported at the Census of 
Manufactures for 1933 (**). 

Companies Manufacturing Saperohosphate 

There were 195 plf?jits in the United States m.anufacturing superphos- 
phate in 1934, of which 100 produced their o\"m sulphuric acid (***), the 
halance purchasing acid. The "balance of the plants enga^^ed in mixing 
fertilizer in the United States purchase their superphosphate from these 
manufacturers and the purchases of superphosphate "uy the dry mixers who 
do not mix it themselves represent ahout 60 per cent (****) of the annual 
production of this fertilizer material. 

(*) Adapted from "Crude Phosphates .\nd Superphosphate", U. S. Tariff 
Commission Report Ho, 100, Second Series, 1935, Tahle 11, p. 11. 
Based on data as reported "by the Bureaii of the Censu:.: which prior 
to 1928 are for all grades of superphosphate while those for 1928 
and later years are on a 16 per cent tasis. 

(**) The statistics from which Chart IX was prepared are contained in 
Exhihit 15 of Appendix II. 

(***) Compilation made "by the Fertilizer Industry Study from plant 

listings in The American Fertilizer Handhook — 1935, Ware Brothers, 
Philadelphia, Pennsylvania, pp. A3-A58, and checked with lists of 
producers who filed prices under provisions of the Code for the 
Fertilizer Industry. This tahulo.tion is included in the Appendix 
II and is marked Exhibit I. 



) "Crude Phosphates and Superphosphate", U, S. Tariff Commission, 
Report No. 100, 1935, p. 11. 



72 
CHART IX 



FOR RELEASE ON 
RECEIPT 



DEPARTMENT OF COMMERCE 
BUREAU OF THE CENSUS 

WASHINQTON 



HUNDREDS OF 

THOUSANDS OF 

SHORT TONS 

IS 



SUPERPHOSPHATES 

PRODUCTION, ETC., REPORTED 
BY FERTILIZER MANUFACTURERS 

DECEMBER ,1935 
COMPARED WITH PRECEDING MONTHS 







1 


r:v - -/-\ /- 


-s ^1 / T ^ 

\ STOCKS fBULK)^ J , ' \ J 


\ ""' ^ 1 ^ ^ 


\ \ ^-^ ^ 

\ ^ STOCKS \ ^'^ A ^"^ 


\ 1 (BASE AND MIXED GOODS) ' 

1 ' i\ H .'' 


ffit ? ' t ; \ „.„. 


TU^^^T ' _.___i 


zr ? r T-i-s-/- 


', PRODUCED ( \ A ,' \ / V i 


:w/ir Y 7--\Zy:. 


/ \ TO CONSUMERS4 \ ^ / l_ ^ 


j~KJ\^ \j\J \../\. 


1933 1934 1935 



3761 



"73- 

Profit r"ar,'^in in Su-nernhonphate 

It is a frequent clain of iinnuf acturers of superphosphate that the 
product is consistently sold at an unsatisfactory'- r-iar-^in of profit and, 
at times, "below the cost of prodtiction. That these claims are sincerely 
made by industry leaders is indicated hy the fact that the "inadequate" 
prices ohta.ined for su!perpho$:phate are often cited at Industry conven- 
tions as a major industry prohlen. 

To arrive at a definite conclusion regarding these claims, it iTOuld 
he necessary to have access to definite cost fig-ures of a reasonable cross 
section of the various t,-,riDes of plrints producing supRrpliosphate , a privilege 
not possible to those Tjho have conducted tnis study. There are, however, a 
number of s,alient facts having bearinj;: on the situation v?hich are iTOrths?- 
of discussion. 

Concentration of Control 

As inoicated in Table 23, six of the largest companies in the Indus- 
try own approximateljr half of the total number of the plants producing 
superphosphate. These companies are the principal producers of phosphate 
rock, fmd they also manufacture sulphuric acid in 49 of the 91 plants 
which they own and operate. As practically all of the superphosphate 
produced in this country is maiiuf actured by fertilizer manufacturers, 
and practically none of the product is imported, it is obvious that there 
is no competition from outside of the Industry. 

TABLJi; 23 

plaljts or SIX or the larger coiipa'ties (*) 

1933 



Name of Company 



Number of Plants 
lianufacturing Acid 



Superphosphate Dry 

Plants Not Manu- Mixing Total 

facturing Acid Plants 



American Agricul- 
tural Chemical Co. 

Armour Fertilizer i-orks 

International Agri- 
cultural Corp. 

Eoyster G-ua.no Co. 

Swift & Co. Pertiliaer 
"Torks 

Virginia-Carolina 
Chemical Co, 



4 


9 


25 


1 


8 


21 


18 


4 


22 


5 


5 


14 


6 


17 


25 


8 


8 


35 


42 


51 


142 



(*) Table compiled hy the Fertilizer Industry Study from plant listings 
in The American Fertilizer Handbook-1933 edition, Yfaxe Brothers, 
Philadelphia, Pennsylvania. 



9761 



These comnanier, ope r'>.te in all fertilizer consiunin.'^ areas ear.t of the 
■ Isgissin-oi Hive;-. They are the dominrnt factors in both production e.nd 
distribution, rnd it is .^enerrlly kno'''n that the resale trices for super- 
"ohos-ohate estahlished by these comorniss .-^re the prices in effect in the 
vrrious cistricts or sones. 



-Being -produce"'-, of tlie ""a'.' mrterir 1 <-. 
cost advcnta§:° ove-^ pnrller co.i'-ietito-^s ' 
rock pnd sul-Dhv.ric acif in the n-oen nirrke' 
the le.^.zev corrDrniec- rellin---- su je--oh.osoha-' 



these lai-^ge conpraiies have 
LO m"'.st -^urcl-iase "ohosphate 

Other factors being eciual, 
• £',t prices v'hich they had 



themselves estnoli' 
than roulc taeir sv 



cc, \70uld derive 
Her competitors. 



reptsr net iirofit from such sales 



Com'ostitive Position of Independent Operptors 

The SHU lie- indeoenc ent o-:De-ctor vho pu-chr.ses p-iosphate roc'c and 
sulpauric rcid ha^ r. smrller tjro >ortionr te invertnent in eouiDment and in 
some "ears sulpauric acic" cpn be oou:; it in the o-oen mrrket at a price 
oeloT? the cost of or-oduction of some of the Older acid -plants ov-ne(" ''oy 
fertilizer manufactiarers. ThroLi,gh the advrntage o^' direct rnd, in most 
causes', personal su;pervi?^ion ove ■• procactlon activities, these producers 
mav also be a.ole to effect oneratin;;^' ecompnies ^hich the Is-r.-re nroducfers 
'"ith less efficient su;iperir tendence do not attain. 

A comparison of financial statements of smaller inde-aendent com- 
panies vith those of their la.rger competitors over a. -period of years as 
contained in Table 5 sho-;s a more consistently' ;3ro.-^itable ousiness for 
the independent com^panies. This fact is in corroboration of the opinion 
gained througn the examination of a great deal of avaalaJoDe data that the 
difficulties of the larger com'oanies in deriving a profit from sales of 
superphos"ohate a.'~ ■"'ell as mi:.:ed fertilizer is due in a la.rge meo-sure to 
the liabilities the;'- hc.ve as'--ujned in s"orea,dirg plants in ■annecess-r^r 
profusion througi'iout each coii-.-ioining area. 

Im-Qorts 

Imports of ruoerohosphate are relativel";^ insignificant in comparison 
T7ith domestic ororiction a.rri a.moiinbed to onl-' 1.4 -ler cent, 0.99 per 
cent and 0.54 -per cent in liG?, 13. j3, 131.-1, i-'eB;pectivel->r of soic domestic 
■jroduc-tion. The follo^'ing tabula-tion shoTs the imports for each of these 
three years: 

TABLE 24 



1932 
Qjurntity Value 



SIIP3HPH0SPI-IATE irpo::'-Ts (*) 

(Short tons) 
1933 
'^antity V.'-.lue 



1934* 
Quant it-y Value 



24,50V 315,844 

* Preliminary 
(*) Census 3ureau 



?S,549 



n? 



18,265 245,540 



i751 



-75- 



Ex-oort; 



The e.—oo"ts of s'a^erphoffoh':ue conrdst -nainly of st-^ncprd super- 
■oiiosphp.te p,lt:iou_:h some of the ai.^iier p-Teo.es are shipped. Most of the; 
exports go to Crnadci ?.nd to Cuba F.nd the followiri'^ ta.bLilntion is indi- 
cative of the toimar^c r,Kd value of these r^U'oerpnosphate er.ports: 

TA3LI; 25 



SU?3H?v10SPHATh 



ukit; 



STATES ECPO^.TS (*) 



Year 



Quantity 
Short ton<: 



Value 



1922 
1923 
1924 
1925 
1925 
1927 
1928 
1929 
1930 
1931 
1932 
1933-, 
1934 



29,995 
47,151 
51 , 241 
73,672 
72,188 

120,40b 
99 , 247 
95,332 

125,058 
91,377 
26 , 749 
39,616 
65,248 



$372,297 

534, 446 

588, 620 

983,914 

■937,278 

1,515,456 

1,510,557 

1,489,476 

1,595,450 

940,688 

258,896 

333,966 

505,142 



Preliminary 
(*) "Crude Phosph? 
-00 rt Lo. 100, 



tes 
195L 



Su-oenohos-ohate", U. S. Tariff Conmission ^.e- 



Price "i^uo tat ions 

Price cuotatioiis for standa.-d suoero 'osihc ts i-'hich is ouoted on a 
16 per cent Po% basis, run of -oile, bv.lk basis f.o.b. Bo.ltimore in dol- 
la.rs oar short ton is shown in the folloi7inff tabulation: 



TABLE 26 



SUPERPHOSPHATE: PPJC3 QUOTATIOrs, F.O.B. BALTIhOHEC *) 



I'ionth 


1928 


1929 


1950 


1931 


1952 


1933 


1934 


Janup.r^/ 


$8.50 


$10.00 


$9.50 


$8.00 


$7.50 


$5.f^0 


$7.50 


AiDril 


8.50 


10.00 


8.50 


3.00 


7.50 


5.00 


7.50 


July 


9.50 


9.50 


3.50 


3.00 


7.50 


7.00 


8.00 


October 


10.00 


9.50 


3.50 


7.50 


7.00 


7.50 


8.00 



(*) "Crude Phos-ohates 
port No. 100, 193S 



r^T d Stxp e r ih o soh r t e " , 
, Table 17, u'. 15. 



S. Ta rif-f Corrunission, Re- 



9751 



Prices of Phos-ohoric Acid in Su'oerohosphn.te 

The following tr.ole is ba?ecl on trac'e journal market auotations of 
superphospha.te, f.o.b. i3a,ltimore for 15 per cent phosphoric acid. The 
tabular data are presented in terms of cents per unit of phos-phoric 
acid r'hich vere a-"rived at by oividir.-: the per ton auotation bv 16. 
Pour monthl^' qtiotations are given for each of the vears from 1924 to 
1935, inclusive, rnd a complete series uy months 1900-1935, is given in 
Appendi:: II, ^Ixhibit 2. 

TABLE 27 

SUPEHPH0SPHAT3 PRICES: P. 0.3. BALTIMORE FOR 16 PER CENT PHOSPHORIC ACID 



Year 


Januai-^7- 


April 


Jul-/ 


October 


Year 


JoJiuarj'- 


April 


July 


October 


1924 


50.3 


48.4 


45. 7 


50.4 


1930 


59.4 


54.7 


53.1 


53.1 


1925 


56.2 


55. 2 


60.0 


60.0 


1931 


50.0 


50.0 


47.7 


46.9 


1926 


52.5 


65.0 


50.0 


14.8 


1932 


45.9 


45.9 


45.9 


44.9 


1927 


55.1 


54.7 


53.1 


53.1 


1953 


39.1 


39.1 


44.1 


43.8 


1928 


53.1 


53.1 


50.0 


62.5 


1934 


45.9 


46.9 


50.0 


50.0 


1929 


62.5 


52.5 


62.5 


59.4 


1935 


50.0 


50.0 


48.4 


48.4 






Pa 


.rm Income a Lea 


din- P' 


rice Ppctor 







As perhpps ""'ould be expected, the lo" ;ooint of -Drices 'as reached 
in 1933. This r,o doubt nr.s r, reflectior not only of the generally de- 
prersec condition of industr-^^ but esnecir-ll:' of the sharp drop in ferti- 
lizer sales in 1932. As alrerd^'- noted aoove there v.: ^ some ertpansion 
of "e-^tilizer sales in 1935 in s'oite of the continxiec drop in farm in- 
come. A reflection of this ma- ■oe--ha"os be seen in the upturn of prices 
in Ga-oer3hos"ohate in the PaJl of 1933. 

In li'ce mprne", the u-pturn in prices in 1925 and 1925 vould seem 
to be rt least ir irrt cue to increasec demand for fertilizer as re- 
flected in the tonnr-re figures of those tvro -/ears v.diich sJioned considerable 
increase ar. comprred bo 1924. In other "ords it '-oulc rspear thrt in 
these years improved agricultural income not onl^^ made it possible to sell 
more fertilizers but also to increase t.ie price of this brsic material. 

Dem.,?nd Vers^is Cost as Price Determinant 

Certainl-- it noiild not seem that the incrersed i^rice of phosphoric 
acid during these years could be pttributeo to eivr change in the price 
of Tohosihate ijebble v;hich remained practically constant. The srme holds 
true- for the price of sulphuric acicl, the other chief ingredient in 
making superphosphate-. Tne market quotations on 55° Batine sulr)huric 
acid h<-.ve remr ined rlmost constrxtly at -plS.SO per short ton since June, 
1925 (*). 



(*) Taale IX-L, fertilizer Industry, TRA Archives, E-diibit A, pp. 27- 
30. 



9761 



-77- 



In JanuaiT, 1934 prices of superohosphate represented an increase 
of 7.8 cents per unit of ohoRTDhoric acid or 20 per cent of that of Jan- 
uarr, 193.'j. In Jexnxe.T-f of 1935 the price stood at 50 cents t)er, ijiiit as 
contrasted vdth 39.1 cents in J^nurr^r, 1933. There is no '"ray .of defi 23.— - 
itelj' determining how aach of tliis Increase, if an-'^, vas due to the oper- 
ation of the Code ra\d vha.t "oart, if an:", vas due to the xipsvini^ in busi- 
ness. 

SujTiman^ on Prices of i;ateria.ls 

As noted londer the cetoilec diFCU-ssion of the prices of individual 
materials, the t^'end of t)rices of or'Taaiic nitro^^en carriers dncT of pot- 
ash carriers over a. period of -^ea--s has "been decidedl-' dor/ni:'ard. The. 
other principal fertilizer material — superphospl'iate (the onlv one made 
b3'- fertilizer ma.nurrcture-"s) has ^lot shovn a similar trend. Certain 
organic nitrogen ca^'riers ( tank" ;:e, and cottonsee'? meal) have fluctua.ted 
rather sharDl"- from tine to tino coincident rdth, the ouajntity of sup- 
plies available and -ith the denarc for them for altema.te iises, chiefly 
in feed stuffs. rJo\7ever, as snorn in Chart V, orgrnic materials a!re '" '■' 
noi,7 relativelv unim-oortrnt as sou.rces of nitroj^/en in the majiufacture of 



'tilizer (*) . 



Price Trends 1925 to 1935 



The follordng tabulation sho'.'s hon the prices of a group of materials 
ha.ve varied during the pa.st ten year-;. The index numbers iTere calculated 
bv using vholesale prices compiled and published 'h-r the Sureau of Labor 
Statistics. -The prices of 1929 are ta.ken ?s 100 per cent in constructing 
the index of lorices. 

TABLE 28 

imm OF WHOLESALE PHICE3 07 I^P.TILIZE.11 I5ATST1IALS (1929-100; a/ (*), , ■.„,'., 

192S 1927 1928 1929 1930 1931 1932 1933 1934 1935 

Jaji. 111.7 107.6 102.9 102.7 97.5 88.4 75.9 57.5 74.3 72.2 

Feb. 112.9 108.1 102.1 102.8 97.2 88.0 75.3 56.8 75.1 71.9 

Mar. 114.0 108.7 104.8 102.8 95.8 37.7 74.5 67.2 75.5 72.0 

Apr. 112.5 107.8 105.7 102.7 95.6 87.5 73.1 63.3 74.6 71.7 

iua.7 110.3 105.4 103.7 102.2 93.9 87.4 75.4 74.7 72.1 71.6 

June 107.9 105.7 102.1 100.5 92.6 86.6 73.8 73.8 75.7 71,3 

Jul3r 105.8 101.8 101.0 98.5 91.5 85.4 72.5 74.5 73.4 71.3 

Au-. 101.0 99.0 101.4 98.3 90.4 80.8 72.1 74.9 70.4 72.5 

Sept. 105,3 100.0 101.5 97.6 90.2 80.6 69.0 72,3 72.1 73.0 

Oct. 104.0 102,2 101,8 97.8 90.8 75.2 68.8 73.4 71.3 73.0 

ivov. 105.4 103.0 102.2 97.6 89.1 76.1 58.9 73.6 70.1 

Dec. 107,8 103,1102,2 97.2 88.4 75.1 58.5 73.9 70.9 -.ui/j; 

Average l')8,6 104.5 102,5 100,0 92.3 83.1 72.5 71.8 72,8 

(*) Bureau of Lebor Statistics indexes of • -holes,-. I9 prices of "Ferti- 
lizer l.iaterials" shifted to 1929 3ase, 

( *) Prices of individual fertilizer materials over f. ueriod of '/ears is 
set forth in Tables IX-A-Q, K-hibit A, Fertilizer Industr3^ KEIA Archives, 
pp, 15-34, 

9761 



•78- 



Th.e table shor-s that in 1926 c-Jid. 1927 the prices of materials vrere 
f!firipidf!ral;j^.7 hi-.^her than even in 1929 and 1930 rrhich nere tvo of the best 
3''earB from the staiiopoint of sales of fertilizer to farmers. On the 
other hand, prices of Materials moved do'-'n'Jard in 1931 and 1932, and re- 
mained at this lovrer level tu-.til the niimner of 1933. In October 1935, 
the last month for v:hich data are avp.ilrble, the index stood at 73 as 
compared to 97,8 in October 1929, and 58.8 in October of 1932. The de- 
gree to v.'hich the orice apturn ir. the latter part of 1933 vrs influenced 
"oy renerall''- better economic conditions and/or the code, is impossible 
to determine Fith the availe-ble data.. Neither is it possible to sho^T 
ho'7 much of the price increace vrr.s due to increr.se i- one of the nitro- 
gen caT-riers (ammonium sulphate) a,nd how much to the price of superphos- 
phate rhich is m"de bv the fertiliser mojnuf pcturers. As previously'- 
noted, the price of superaiospho-te increased although the "orices of its 
trro chief ingredients, i.e., Florida land :ebble and sulphuric acid did 
not fluctuate materiall"^- (*). 

PROCESS 0? i'.;i:-:i::-G nii:; liathzeaLs to l.aiie hixzd phhtilizeh 

In the larger ;3lants mechonice-l methods are utilized to transpoi-t 
smaller aurntities of the various fertili:;er materials into different 
storrje bins pbove the mixer 'hich is practicall-;^ on the flood level and 
when ready to make a 'oarticular t':'"pe of fertilizer the mi7:er operator 
releases the pro'oer amount of each material into the mixer, "hen thor- 
oughly mixed the finished fertili'2elr is soured into sacks hung tmcierneath 
the mixer b^,"- means of a leve:^ operated by hand. 

The sacJcs are then ce^-n either o''- hand or liy machine and are moved 
by means of hrnd or electric trucks either to the freight cars or storage 
v.'arehouses. 

A preliminary mixing of base goods often tpkes place obout four 
months before the ship"oing seeison. The orepi-.ration of most finished 
mixtures does not tpke plrce except just Trior to its shiiment so that 
very little bagged fertilizer is kept in stock. 



(*) In considering' theseprice data and ^orice trends of materials, it 

must be borne in mind that they are based on market quotations for 
materials rnddo not neceflsaril"'- indicate the actual prices paio bjr fer- 
tiliser manuf.:.cturers. 



-?9- 

c:-?Ar-TEF. Ill 

LABOR 

Dni'Mr FOE la:: OR 

Hijmbcr of Enn-'-jloyees 

The statistics detailed in Table 29 indicp.te ttet for the period 
from 1919 to 1953, the nrnrarl averat_,e murrorr of employees fluct-uated 
from a niaxiiaiim of 26,296 in 1919 to a low of 14,551 in 1931. The 
maxim-um employme'it in anj' one month a.s indicated by this ta.ble is for 
the month of March 1919 which showed a peal: employment of o8,357 wage 
earners; whereas the lowest minim-um nxunber' of wa.^';e earners reported in 
any Census year occm-rec in the month of July in 193.3 when only 8,209 
wage earners vrore employed. 

Seasonal Vr-riation in Employment 

. fAEIJE 29 

Y^'AGE EARl'ILRS III FERTLIZER IITDUSTRY - UOHTHLY 1919 - 1933 (*) 

1919 1921 1923 1925 1927a/' 1929 1931 



Annual Average 


26,296 


16,898 


18,572 


19,644 18,612 20,926 


14,551 12,405 


January 


27,808 


17,736 


18,642 


17,761 • 


19,946 


13,840 10,277 


February 


31,043 


19,913 


24,958 


23,212 


25,357 


17,250 11,852 


I' larch 


38,357by' 


26,745by 


30,707b/ 


33,402b/ 


35,195 


23,118 15,637 


April 


56,465 


24,591 


25,141 


31,962 


37,767b/ 


27,379b/25,016 


Hay 


23,855 


13,475 


16,970 


16,338 


18,688 


14,867 12,581 


June 


21,071c7 


12,670 


13,610c/. 


13,916c/ 


14,347 


.9,8 21c/ 8,374 


July 


21,75f 


12,346c/ 


15,818 


14,116 


• 14,554c/ 


10,812 8,209 


August 


22,500 


13,887 


15,181 


15,321 


15,287 


11,187 8,972 


^September 


25,205 


16,542 


17,380 


18,872 


18,961 


12,567 11,430 


October 


22,028 


14,875 


15,904 


17,405 


17,941 


11,913 11,948 


November 


21,897 


15,470 


15,508 


16,655 


17,381 


10,729 11,892 


December 


23,591 


14,523 


15,142 


16,773 • 


17,210 


11,025 12,674 



Per Cent Winim-am 

is of iviaacim-urn 54.9 46.2 44.3 41.7 38.5 35.9 32.8 

From Cansus of Manufactures, B'oreau of Census 

a/ I'onthly figures for 1927 not compiled, b/ Months of maximnm employment, 
cj ::onths of ;:i.iiir;am employment. 

(*) Classification of Fertilizer Employees by the Census - The Census of 
Manufactures in collecting statistics of wage earners classifies a 
particular plant by the greatest dollar volume of its products. In- 
cluded in Census fertilizer statistics of employment are those em- 
ployees of fertilizer plants which manufacture additional products 
ether than fertilizers v/here fertilizer represented the most import- 
ant product in dollar value. On the other hand, the Census figures 
would not include employees engaged in manvifacturing fertilizer in 
those plants vmere fertilizer represi^ntcd a Mnor ooi-tion "&f' the 

9761 



(Foot-note Cont'd) -3?>- 

dollar val-ume of tliat particixlar ;Qlant, As compared with the Code, thei'e- 
fore, V7e must !:eep in mind tiiat the figures for v/age earners in the Census 
include figures of workers employed in manufactui-ing sulphuric acid even 
though the production of sulph\iTic acid did not come under the Code for 
the Fertilizer Industry. 

Limitation of the Census Figxrres - The questionnaire circularized by the 
Census of llanufactures requests th?,t the employer reioort wage earners 
eimjloyed by months giving the number o.. the payroll for a week which 
includes the 15th day of the month if this was a normal T^eek and if not, 
to give the figures for a normal week. It should be recognized in 
coisidcring these figures tliat if a worker v/ere employed part time and 
were on '-the payroll during this week, even thoTigh he were not employed 
for the balance of the month, tliat the use of the Census figures would 
"n§,ve to be qualified to this extent. This limits the significance of 
any average figiires which utilize the number of employees as leported 
by the Census since this number. . of employees is normally greater than 
the number of wa^e earners which v/ould "se required to produce the amount 
of products manufactured. In the Fertilizer Industry H5A Archives We have 
included as Exhibit B a sample of the questionnaires used by tne Census 
of Manufactures in 193o r\nd 19S5 in socurin^ reports from fertilizer plants 



Table 29 shows that the.-saasonal variation in this Industry has 
been increasing in each year since 1919 when the minimum number of v/age 
earners in' any month I'vas 54,9 per cent of the number in the maximum month 
of employment of that year. This percentage of minimum to maximum em- 
ployment ims steadily decreased to 1933 v;hen it was 32,8 per cent. 

Reasons for Increased Seasonality 

'The increased seasonality of employement is due to a combination 
of many fcctors. Improved roads and the use of the automobile together 
with keen 'corajDetition within the industry have changed the farmer's 
buying liabits. Orders are not placed imtil the material is needed and 
is rarely "purchased a/nd stored in anticipation of demand, the development 
of meclianical devices and the need, for less hand labor in the off season 
are contributing factors. 

Pattern of Monthly Employment 

For the seven Census periods shovm in Table 30, wo have cal- 
culated the average number of workers employed in each month and liave 
figured the percentage which each month's employment is to the 
average employment' for the'- e'iitijrjc year; . Thw rcfsailtte r-'Ma^ iimlud.-id- 
in the followixig tabulation. 



-81- 

TABLE 50 
RELATIVE EhJPLOri.ElIT BY mOKTHS (*) 



AvGra;-e Emploj-incnt 1919, 1921, 
1923,, 1935; 1929, 1931, 1933. 



January 18,001 

February 21,652 

Iiiarch ' 29,023 

April : 29,760 

Hay , 16,682 

June 13,473 

July ■ , . 13,655 

AWiU-st 14,619 

Septeater 17,279 

October 16,002 

Kovcmlier ,. 15,647 

DccemlDcr ' 15,349 
(*) Table derived from Bureau of Ccnsu; 



Monthly percentage 
of Annual Average 



8.1 

9.8 

13.1 

13.4 

7.5 

.5.9 

5.1 

6.6 

7.8 

7.2 

7.1 

'?'.! 

figures contained 



in Table 29-Supra, 



T,^n3c of Labor Required 

A survey of labor statistics made by tlic National Fertilizer 
Association in connection with their application for a code showed 
t:iat 66.1 per cent of the total number of iaan-.-hours worked in the 
Sprin;; of 1933 by employees in the fertilizer industry including 
sulphuric acid and superphosphate plants wa.s accounted for by so- 
called conr.ion labor in dry mixing plants including loa^iing a,nd, 
shipping employees. If we include the ordinary labor in superphos- 
phate aaid sulphuric acid plants to that in the dry mixing department, 
the total represents 67.6 per cent of all man-hours worked for the 
comparative period. (*) 

In 1930, of the 18,243 malPs classified by the Census (**) 
as "laborers" in the fertilizer factories, 15,268 or 83 per cent were 
negroes. These male "laborers" (18,243) constituted 66 per ct;nt of 
all males reputed as working in fertilizer factories. I'iost of the job: 



(*) Factual statements by members of the fertilizer industry before 

the national Recovery Administration - Code Record Section, Vol. B, 
Part 3, p. 23. .(Copy in F.r.a, Fertilizer Industry Files) 

(**) Fifteenth Census of the United States, 19S0, Population Vol. 5, 
C-eneral Report on Occupation, Table ?, p. 430. A detailed tabula- 
tion of persons gainfully employed in fertilizer factories by 
occupations in 1930 is included as Exliibit 16, in Appendix II. 



9761 



require no particular dcill and tha nature of the work is such that 
the employee is constantly exposed to dust and dirt. While a skeleton 
organization of approximately one-half of the numher of employees em- 
ployed at the time of peak production is kept throughout the year, 
muc-i of the later in the industry is employed on a part time "basis, 
althou;;h the supposition is that the saiiie workers find employment 
year after year even thoufjh on a part time "basis in the same plant. 

Trainin.-q; Period Required. 

At the time of the presentation of the code it was estimated 
that 80 per cent of the lahor employed by the industry required one 
neek' s training; 5 per cent of the employees required one month's 
trainin;^; 5 per cent, three months; 5 per cent, six months; and 
5 per cent, more thsm six months (*). 

It should "be pointed out here, however, good "business manage- 
ment v.'ould pro'bahly make it desira'ble to keep these workers requir- 
ing the longer period of training on the payroll for the entire year 
while those reqiiring shorter period of training would be employed 
on part time basis. 

Relative Importance of Different Departments 

Some indication of the relative importance of the various 
departments of complete fertilizer plants is indicated by the 
follovdng tabulation v/hich shows the percentage of the total number 
of man~hours worked in each department of the 363 plants who an- 
swered the questionnaire of The national Fertilizer Association 
for statistics on their operation in the Spring and Fal seasons 
of 1933 and 1932 respectively as well as for the fiscal year 
ended June 30, 1933. 



(*) Letter to General Eugl: Johnson, Administrator, ITRA, from 
Charles J. Brand, Executive Secretaryj The Ifetional Fertilizer 
Association, dated April 4, 1S34. (in KRA Fertilizer Industry 
^iles) 



9761 



TABLE 31 

PEHCEIJTAGE OF ACTIVITY HI EACT: DEPARTiviEi'IT BASE£ TO! IviAH-HOURS WOBKED BY 
EiiPLOFEES - YEAR EICDED JUIIE 30, 1933 (*) 





Fiscal Year 
Ended June 30, 
1933 


■ Spring 

■ Season 

1933- 
percentage 


Fall 
Season 
1932 


Dopartuent 


Percentage 


Percentage 


Siilplmric Acid 


4.4 


3.0 


7.3 


Supcrpho spliate , 


5.4 


4.0 


8.6 


Dry :;ixeo- Fertiliser 


76.6 


82.6 


63.1 


Wat clime n 


6.0 


4.4 


9.8 


mechanics 


7.6 


6.0 


11.2 


TOTAL 


100.0 


100.0 


100.0 



(*) Factual statements ty memliers of the F^srtilizer Industry 
■before tlie National Recovery Administration on the Code of 
Fair Competition for the Fertilizer Industry, ppposite 
p. 22, entitled Payroll Analysis — Code Record Section, 
Part III, Vol. B, (in NPA. Fertilizer Files) 



These percentages would not necessarily hold true for the 
entire inclnistry as it is probahly that the reporting plants include 
a good mejiy of the larger plants which have sulphuric acid and 
superpho sphate department s. 

G-eo graphic Distrihution of Lahor 

ITliile Iviap 1 indicates the geographical location of the various 
fertilizer plants, this is not indicative of the numher of employees 
in particular stat^^s. 

Tahle 32 shows for each state the average number of employees 
and the wages paid by fertilizer plants reporting to the Bureau of 
Census. It also shows the percentage which wage earners in and 
wages paid by these plants in each of the states represented of 
the United States totals. The 1929 data covered 638 plants and those 

for 1933 are for 522 plants. For some states the data cannot be shown 
since to do so might result in disclosure of fij,ures for individual 
businesses, but the data for each state, 12 in 1939 and 7 in 1923, 
are included in the United States totals. 



9761 



Siciiificant relationships arc seen in comparing gome of tlae 
soutliern states with soae of those in the IJorth and West. Thus while 
Alaha.ia in 1933 had 5.2 per cent of the total nuniter of wage earners 
the wacespaid were hut 3 per cent of the United States total and 
in G-corgia the figures were 11.7 per cent pjid 7.8 per cent, res- 
pectively. On the other hand, New Jersey had only 3.5 per cent 
of the, total wage earners . hut "between 6.5 per cent of the wages, 
and in Ohio, the reporting plants had 4.9 per cent of the wages and 
paid 7.1 per cent of ttie wages. The 1929 data siiow that similar 
relationships existed in that year. These data of course reflect 
the lov/er wage levels in the Southern states. 

Employment hy Size of Business 

Tahle 33 is self-explanatory hut indicates the degree of 
concentration of labor in the larger plants. 



9761 



-85- 



FERTILIZZ:^ 



TABLI] Z2 

iirousTHY v/AC-3 :lkk.:t?£> a:"d v,'agzs - 1:29 md 193c 

ilmilier, Ai-no'LUit and Per Cont by States 



(*) 



! 




n2^ 










1933 










V/'a^e ZJar.iers 


Ik^tl ' 


W^ 


:5c 3a 


rne rs ■■ 




Hm 


es 


Area' | 


ll-uin- 


per 


Thou- 


Per 


Uyin- 


Per 


Thoii- 


Per 




bcr 


Cent 


sands 


Cent 


ber 


Cent 


sanis 


Cent 






of 


of Dol- 


of 






of 


of 


Dol- 


of 






Total 


lars 


Total 






Total 


lars 


• Total 


U. S." Total 


20, 9.-3 '3 


100.0 


17,884 


100.0 


13 


,053 


'100.0^ 


7 


,274 


100.0 


Wortliern Area; 






















Cpnnecticiit 


171 


.8 


182 


1.0 




118 


.9 




85. 


1.2 


Elaine - 


136 


.9 


199 


1.1 




100 


.8 




70 


1.0 


I*iar.sachusetts • 58? 


- 1.8- 


4^3" 


..3.5 




250 ■ 


■ 1.9 




205 


2.8 


l^Qx: Jersey 


612 


2.9 


765 


4.3 




458 


3.5 




475 


5.5 


♦Nev: Tovlz 


235 


1.1 


283 


1.6 




192 


1.5 




157 


2.2: 


Pennsylvania 570 


2.7 


663 


3.7 




423 


3.2 




355 


4. '9 


Sbuj:liern Area: 






















Alabama 


1,403 


G.7' 


838 


'4.7 




680 : 


■ 5.2- 




221 


3.0 


Arl-ansas 


153 


.3 


115 


.6 




37 






; 13 


.2 


Delaware 


42 


.2 


31 


.2 




63 


.5 




25 


.3 


Florida 


1,084 


5.2 


979 


5.5 




937 


7.2 




.502 


6.9 


.Georgia, 


2,809 


■15.5 


1,724 


9.5 


1 


,525 


11.7 




367 


7.8 


Louisiana 


858 


4.1 


478 


'2.7 




170- 


1.3 




87 


i;2 


Mississippi 


378 


1.8 


254 


'1.4 




226 


1.7 




• 78 ' 


1.1. 


- N. Carolina 


2,140 


10.2 


1,551 


8.7 


1 


, 354 


10.4 




534 


7.3 


S. Carolina 


1,60S 


7.7 


1,:050 


5.9 


1 


,158 


8.9 




419 


5.8 


.Tennessee 


■: 638 


- 3.1" 


521 


2.9 




301 


2.3: 




.140 


1.9- 


Texas ■ 


; ■ 177 


.9 


152 


.9 




59 


.5 




24 


.3 


■ Virginia 


■2,047" 


9.8 


1,581 


'8.8 


1 


, 737" 


13.3 




755 


10.5 


MidV'estem Are 


;a: 




















- niinois 


454 


2.2 


537 


3.0 




161 


1.2 




120 


1.7 


Indi'^na 


259 


1.2 


273 


1.5 




159 


1.2 




95 


1.3 


Ohio: 


959 


4.6 


1,264 


7.1 




635 


4.9 




.519 


7. 1.. 


Wis cons in 


, 




~- 


— 




42- 


.3 




33 


.5 


Pacific Area: 












* 


* 








California 


' 302 


1.5 


391 


O _ T 




240 


1.8 




214 


3.0 


Washington 


24 


.1 


24 


.1 




16 


. 1 




15 . 


.2 


Jfeiryland 


2,855 


1T..6 


2,819 


15.8 


1 


,519 


12.4 


1 


,198 


15.4 


*Other. States 


511 ' 


2.6 


750 


" 4.2 




395 


3.t) 




• 3o7 


4.9 


mother State 


is: Inc 


ludes s 


tates for 


which 


det; 


ails 


are not 


a' 


vaila 


ble as 



{*) 1229 Census of Manufactures, 1929, Vol. II, p-o. 586-587. 

■1933 Census of IfenufactxTres, ro-iort on Chemical Industries, 
17-18. •■ ' ■ 



m a 



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-86- 



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o 


-p 


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O CT^ 


O cr\ 




cn 


W 


o 




4J 










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Bi 


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o cr> 


o o^ 


O CTl 


O (T\ 


O CTv 


m 


fi 


cn 


O cr, 


o m 


o m 


O CPi 


O CTl 










o 


O CTi 


o rr\ 


o a> 


O CTl 


o o-\ 


o cn 


O CTl 


c^cn 




tH 


^ 


o cr» 


O CTl 


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O CTi 


O rn 




o 


cii 








o'er! 


o"m 


o"cn 


o j- 


u^cr> 








° o^ 


o"c3^ 


o"cf^ 


o j- 


LOCTN 


o cr> 








<D 




Lr^r^ 


oi j- 


LOvCPl 


iH CM 


OJ^ 


ITNCTv 


rH CVT 


cvTj-" 




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9761 



■ -87- 

SUPPLY OP LABOR 

Avail aJi lity of Seas onal La'po r Su-p-nly 

The seasonality of the fertilizer industry presents a problem of 
labor suppl;; for the periods of peak enplojTnent . Most of the extra help 
hired at such tines are nerro laborers. Even without previous experience 
they can be trained in not raore than a week. In the mixing plants located 
in small torns it is alleried that these T/orfcers are workers who would 
normally be employed upon farms and that the fertilizer industry competes 
with the farms for this labor. 

Surplu s of Trained Erroloy ees 

The peaks of emplojTicnt in the fertilizer industry'- in recent years 
was 38,357 in March 1919 ,-,nd 37,767 in April 1929, and that, therefore, 
until these peaks are again reached, there should exist a surplus of 
workers trained for work in fertilizer factories in the neighborhood of 
these plants, assuraing that the industry has not migrated. 

S unplus of Parm Labor 

Llr. Tlatson raised a point at the Public Hearing (*) that to shorten 
the hotirs of labor to too great a degree in order to spread eraploj^ment 
might seriously impair the availability of labor for use on the farm. 
In this connection it is interesting to examine Table 34, showing the 
supply of farm labor for South Atlantic States in recent years expressed 
as percentage of demand, 

TABLE 34 
FAEI.: LABOR SUPPLY EXPRESSED AS PER CENT OP DEIvIAND (**) 

April 1, 1935 - 117.3 April 1, 1931 - 150.4 

April 1, 1934 - 134.0 Ax)ril 1, 1930 - 114.4 

Arpril 1, 1933 - 182.5 April 1, 1929 - 103.1 

April 1, 1932 - 173.0 April 1, 1923 - 102.9 

Pactors Affecting Labor SuT)ply 

The avp.ilability of farm labor over a period of years is tending to 
increase due to the replacement of many agricultural products by chem.ica.l- 
ly prodticed materials which take the place of the natural products dis- 
placing f8.na labor and making it available for other purposes. Tj'-pical 
of these developments is the development of rayon as a textile, to tales 
the place of cotton, v.'hich to the extent that it succeeds in replacing 
cotton as a textile, will in the long run release cotton acreage. 



(*) Transcript of Public Hearing, Pertiliser Code, September 6, 1933, 
p. 126. (Copy in !« P A Fertilizer Piles) 

(**) Crops and Markets published by the United States Department of 
Agriculture, April of each year. 

9761 



Alpha-cellulose, rrhich is the "basis of the nanufa.cture of ra^ron, can oe 
oLtr.ined fron uood pul"-) at a price not to exceed 4 cents per pound (*) 
after eli- iinatin,{" the impurities, thus placing a ceiling on the price of 
cotton for use as a textile, to the extent which rajron displades it. 

One of the largest releases of agriciiltural trorhers has come s-hout 
through the development of the autonooile and improved machinery to re- 
place horses in fam wor';, thus eliminating the necessity for the gro^^ing 
of crops for feed to' horses, ilechahical improvements on the farm also 
continuall;- tend to relea.se farr.i labor and. these factors should he talien . 
into consideration \7henever the question, is raised as to whether or not 
'.7or':ers in the fertilizer industry jeopardize the availability of workers 
on the farm. Crop reduction in the last few years is also a factor which 
has tended to reduce the number of worlcers needed on the farm. 

The pea!: d.emand for farm labor comes in the harvesting season rather 
than the planting season when the fertilizer industry needs it. Even in 
the South, the t;^'Tie of fertilizer factory or mixer using any appreciable 
amount of labor is located in relatively,'' large rather than small places. 

PRICE OF L130E 
Annual Wages Paid 

Table 35 not only shows the number of wage earners and the wages 
paid in the fertilizer industry?- for each Census year but also gives the 
percentage of change from the preceding Census year. There has also been 
included in this table figures of fertilizer tonnage in these respective 
years in order that the changes coulr' be correlated with the wage chajiges, 

Imnact of Production Decline on Wages 

Certain generalizations may be derived fi-om this tabulation. It 
seems that in years of declining production, labor has felt the burden of 
the Iceenei- competition and vrages have declined more rapidly than did 
production. Conversely as r)roduction increased there is a definite lag 
as to "age adjustments ,and even the number of workers does not increase 
coranensurately with the increased loroduction. 



(*) "The I'arm Chemurgic", I.'m. J. Hale, Chemical ToTindation, T. Y. P. 4 



TABLE 35 

PEODUCTIOJI, mJivIBER OF WAGS EAEEERS AlID WAGES PAID SHOWING PERCENTAGE 
CHANGE PROII PEECEDING CENSUS PERIOD A:!D WAGES PAID PER TON PRODUCED (*) 





production 


Ware I 


larners 


Wafi;es 


Paid 


Wages per 


Annual 




Thousands 


Per Gen 


t per Cent 


Thousanci. 


Per Cent 


Ton Pro- 


Wage pe] 


Year 


Short Tons 


Change 


:Tu:;ioer 


Chan.-e 


Dollrrs 




dticed 


Worker 


19i9 


8,285 




26,296 




25,363 




53.06 


5965.00 


1921 


6,039 


-27.1 


16,898 


-35,7 


16,026 


-36.8 


2.65 


948.00 


1923 


7,626 


26.2 


18,572 


9.9 


16,365 


2.1 


2.15 


880.00 


1925 


8,229 


7.9 


19,644 


5.8 


17 , 743 


3.4 


2.16 


903.00 


1927 


8,123 


-1.3 


18,612 


-5.3 


17,650 


-0.5 


2.17 


948.00 


1929 


9,320 


14.7 


20,926 


12.4 


17,884 


1.3 


1.92 


855.00 


1931 


6,958 ' 


-25.2 


14,551 


-30.4 


12,146 


-32.1 


1.77 


832.00 


1933 


5,196 


-25.4 


13,063 


-10.2 


7,274 


-40.1 


1.40 


557.00 



Tatle 35 indicates that there has "been a steady decline in the i-rages 
per ton of fertilizer produced. Tatle 36 shows that the value per ton of 
f.ertilizer has similarly decreased and tha,t va^es have maintained a rela^ 
tively constant relationship to the value of the product, 

Wa;:Tes as a 

The ratio of nages t.-i cost of materials, containers, fuel, and pv.r- 
chased electrical energj^ in the fertilizer industry in 1933 \7as only 33,1 
per cent of the same ratio for all manufacturing indurtries in that ■''■ear. 
In the fertilizer industry this ratio ras .101 as contrasted to a ratio 
of .305 for all manufacturing industries (**). This factor is very 
illuminating in considering xrhj the fertilizer industrj'- ■pith labor repre- 
senting such a small cost factor more readil;^ adopted certain lahor 
provisions in its code than would have "been the case if lahor had re-ore- 
sented a larger :;>ercentagG of total cost. 

Labor Conditions in pre-Codal Peri od 

-In order to deterj-;iine tlxe labor conditions in the fertilizer indn.stry 
in the pre-codal period, The rational Tertilizer Association on June 28, 
1933 mailed a questionnaire to every manufacturer in the Industry (***) 
This questionnaire was in the form of a -oayroll analysis sche6.ule. The 
reports were arranged to show the Fall and Spring seasons of each j'-ear. 
Statistics covering the number of men employed were not sought as it was 
deened that "nan-hours worked" was a better yardsticl: for the industry, 
due to the decidedly seasonal nature of the business and the great turn- 
over of labor. 



(*) 



Average number of v/age earners for the 
1919-1929, Census of i'anufactures, 1950 
1931-1933, Census of I,Ianufactur-?s, j.PSC 
Ca.lcula.tions made by Fertilizer Industr 



rear, and total wages paid 
, '"ol. II, Table, 1, p. 686. 
, rertilizer Table 1, p. 17. 
' Study. 



A detailed tabulation of the basic ctotistics and of these ratios 
is contained as Zxhibit 17 in Appendi:: II. 
) A copy of the q_uestionnaire is included as "^^idiibit 18 in Ap'oendix II, 



TABLE 36 
FJILATIOIISHIP OF UAGES PAID TO VALUE OP PaODUCT 



Value of Product Uages Paid Per Cent of Production Value 

ITages to Value (Thousands per 
of Product^ - Short Tons) Ton 



1919 


0281,144,000 


,1;25,363,000 


1921 


130,375,000 


16,026,000 


1923 


135,089,000 


16,365,000 


1925 


206, 773 ,"000 


17,743,000 


1927 


190,385,000 


17,650,000 


1929 


232,511,000 


17,384,000 


1931 


140,718,000 


12,146,000 


1933 


82,311,000 


7,274,000 



9.0 


8,235 


$33.94 


8.9 


6,039 


29.87 


8.9 


7,626 


24.01 


8.6 


8,229 


25.13 


9.3 


8,123 


23.44 


7.6 


9,320 


23.90 


8.6 


6,968 


20.28 


8.8 


5,196 


15.94 



The value of product is the price at the manufacturer's plant- and includes 
not onljr profit "biit also certain expenses such as interest on funded dett 
TThich rni:^ht not he included- in true cost of production figures. 



~" This ratio is a rough o.pproxination of the percentage that lahor cost 
"bears to the total cost of production. 



(*) 1319-1929 Census of Manufacture s, 1930, Vol. II, Tahle 3, p. 688 
1931-1933 Census of Ilonufactures 1933, Fertilizer Table 2, p. 19 



^PI- 



TABLE :-;? 



HOURS ¥OEIvED PER TTEZIi FULL TIME HEII 
SPRING SEASON, 1933 (*) 



State 



Sulphuric Acid 

Department 
H ours -n c r TTee h 



Superphosphate Dry Mixing 
DeDartnent Department 
Hours i?er Week Hours ner Teek 



Maine 

Kassachusetts 

Connect icu.t and Lon^; Island 

ITew York (except Long Island 

Hew Jersey 

Dela'jare 

Pennsylvania 

I.iarylahd ' ' ' ' 



56 



52 



Vir.-inia 






79 


I'orth Carolina 






79 


South Carolina 






80 


Georgia 






80 


Ilorida (All east and soixth of 




counties of Suna? 


lee,- Golmliia, 




Lafa-rette p.::}.d. 


■ Ta-' 


4or),. 


84 


Alabama and Plo: 


.'ida (West of 




Apalochicola 1 


liver) " 


34 


i:is'si,ssippi 






04 


Arkansas 






- 


Louisiana 






55 


Texas 






56 


T'enuessee 






84 


Ohio 






65 


EentudT 






- 


Indiana 






- 


Illinois ■ 






55 


KichiTian 






60 


California 






_ 


Washington 






- 



55 



55 



61 
59 
55 
51 
57 

52 
53 
52 
52 
54 

52 
49 



]'ortl'.ern Area 
Southei-n Area 
Mid-Tester:-^ Area 
Pacific Coast Ai 

UWITED S'TilTES 



66 



57 



(*) Corapiled fron 363 rer-,ortr: ria/e to T'-^e rational "."crtilizer Association, 



Reports nere received from 365 plants in all sections of the country 
and the folloirin;^ tables 37-45, inclusive are summaries of data revealed 
I17 t-:e analysis of the anestionnaires. 



Hourc 



La'bor 



Tahle 37 shoT.'s the hours worked per \7ee!: for full time employees 
in the various departments of the fertilizer plants in different parts of 
the United States. It is apparent from these tabulations that the 
fertilizer industr'r during the rush sea-son vrorked ahnormall.y long hours 
measured bjr the standards of most industries. 

Wage Rates 
Relative IrTOort?.nce of Different Departments 



Table 38 indicates the relative importance of trage rates in the 
differe;:t denartments of the plants of the fertilizer industry. It not 
onlAr shors the percentage of total man-hours T7orked in each de-oartment 
but also the ;oercentage of total Tvages -oaid in each department for the 
year ended June 30, 1933. , . 

TABLE 38 

PERCENTAGE OF TOTAL ACTIVITY AKD OE TOTAL WAGES III EACH DEPARTMENT 
YEAR ENDED JUIffi 30, 1933 (*) 





Srjring Sea 


.son 


Fall Season 


Year Ended 


De-oartment 


1933 




1932 




June 30, 


, 1933 




Per Gent 


Per Cent 


Per Cent 


Per Cent 


Per Cent 


Per Cent 




l.Ian-Hours 


Uages 


I.Ian-Hours 


TJages 


llan-Hours 


Wages 


Sulphuric Acid 


3.0 


4.4 


7.3 


8.5 


4.4 


5.9 


Super-ohosT^hate 


4.0 


4.2 


8.8 


7.0 


5.4 


5.3 


Dry Ilixed 














Eertilizer 


82.6 


74.4 


63.1 


55.5 


76.5 


67.8 


Watchmen 


4.4 


4.7 


9.8 


8.7 


6.0 


6.1 


Mechanics 


6.0 


12.3 


11.2 


19.3 


7.6 


14.9 



100.0 



100.0 



100.0 



100.0 



100.0 



100.0 



Wage Rates by Classifications of Labor (By Areas) 

Table 39 not only gives the veighted a,verage Tjage rates for the various 
classifications of labor in the fertilizer industr^r but also indicates the 
geographica-1 differences in these rates. 

Common Labor 

Wage Rates by States 



Since Table 38 indicated that 76.6 per cent of the maji-hours reported 
by the industr?/ vrere for common labor in the dry rai::ing department. Table 
40 has bee-A incorporated to sho\' in detail the geographical distribution 



(*) Compiled from 553 reports made to The National Fertilizer Association. 
9761 



of \J3.ze rates for this classification of conmon Ir.bor for 'ooth the 
S:orin^- season of 1929 ano. th:'.t of 193". 

Distritiution of ;;an-Hours ty V'p^e pLate Cipssif ications 

Table 41 shor/s tho cistribution of the man-hours forked "by common 
la"bor not onl;- in accorda:^ce v,-ith the rate received per hour iDut also l)y 
geographical areas. 

Wage Rater, at Ports versus Interior Points 

In connection rith the va.ge rates for common laTaor the availa^ble 
data from the questionnaires suoref. for certain States the differences 
Taetneen the A7age' rates paid at port cities and at interior points. This 
data liff.s ■bee:T included in Table 42. 

' 17age 'Pates Ijy Population of Coramimities 

JTor a f ev -States data was available shoTTin;^- the varia.tion in nage 
rates for com'ion labor 'according to the population of communities and 
those data have been presented in Table 43. 



9761 



TABLE 39 

SUl'£iARY OF TOIGHTED AVERAGE* MGE BATES PAID FOR VARIOUS CLASSIFICATIOIS 
OF LABOR III THE FERTILIZER IimUSTRY D-ORIIIC- THE SIX KOITTHS EllLEIl JUlffl 30, 

1933 (*) 

(B;'- Areas) 

Pacific United 
North South TJestern Coast States 
Cents Cents Cents Cents Cents 

per per per per per 

Hour Hour Hour Hour Hour 



MAITOFACTURING SULPHURIC ACID; 
Acid Makers 
Assistant Acid Makers 
Burn era en 
Char.ibermen 
Conmon LalDor 

LIAmJFACTURIlIG SUPERPHOSPHATE: 
ilillers 
Mixers 
Den Lahor 
Common Lator 

MANUFAC TURING DRY MIXED FERTILIZERS: 
Gan^ Foremen 
Sca,leinen 

Bag Loaders and Sewers 
Common Lal^or 

WATCHlvEN: 

MCHAinCS: 



67.2 


51.6 


68.5 


— 


57.6 


45.9 


21.2 


— 


— 


35.0 


31.7 


19.0 


24.4 


— 


21.9 


39.8 


23.0 


39.6 


— 


29.6 


26.0 


16.5 


39.7 


— 


22.2 


36.7 


IS. 8 


33.7 




26.2 


30.9 


13.7 


31.7 


— 


24.1 


34.3 


15.2 


29.5 


— 


20.2 


25.7 


13.9 


27.3 


~ 


19.5 


47.7 


33.7 


50.2 


53.7 


42.5 


32.9 


21.4 


30.2 


43.1 


25.7 


28.8 


15.6 


28.2 


39.9 


19.1 


26.5 


13.7 


27.0 


35.9 


15.8 


26.5 


20.2 


27.8 


32.0 


22.5 


49.0 


38.8 


49.9 


48.3 


42.9 



Weighted "by niomher of man-hours rrorked multiplied hy the average rate 
paid by each manufacturer reporting. 



(*) Compiled from 363 reports made to The National Fertilizer Associat: 



TA3LI: 40 

SUMMARY OFTI^RTILIZER IllDUSTHY WAGE RATES FCR COMJ'ICN LABOR (LOADING AND 
SHIPPING) IN DRY MIXING DEPARTMENTS - .^LL TYPES OE PLAIOTS (*) 



' '■ " ■ ■ ■'•----»-— .^_ . 


■" " ■ '" 


Spring Season 


Spring Season 


Decrease 




Number 


1929 Average 


1933 Average 


From 1929 




of 


Hourly Rate* 


Hourly Rate* 


Per Cent 


State 


Reports 


Cents 


Cents 




Maine 


'""7"" 


38.8 


28.2 


27 


Massaclmsetts 


4 


39.fi 


31.fi 


20 


Connecticut and Long- 










Island 


7 


<.fi.8 


28.5 


39 


New York (except 










Lon§, Island) 


5 


-.1.3 


31.8 


23 


^ New Jersey 
W Delaware 


11 ■ 


42.3 


30.3 


28 


o 


30.2 


Ifi.l 


4fi 


Pennsylvania . • 


12 


39.3 


2fi.7 


32 


Maryland 


30 


• 34. 8 • ■ ■ 


20.7 


41 • 


Virginia • 


29 


30.4 


15.fi 


49 


North Carolina 


42 


2fi.8 


13.2 


51 


South Carolina 


2fi 


• 22.5 


12.4 


45 


Georgia 


50 


21.8 


11.5 


47 


Floria (All east and - 










south of coTxnties of 










Suwanee, Col-uin'bia, 










Lafayette and Taylor) 


19 


2ft.fi ■ ' ' 


■ 18.3 


31 


Alabama and Florida 










(All west of Apala- 










chicola RiverJ 


27 ■ 


21.2 


11.5 


4fi 


Mississippi 


7 ' 


24.0 


11.7 


51 


Arkansas 


7 


24.2 


V3.5 


44 


1 Louisiana 
" Texas 


9 


27-. 1 


17.8 


35 


7 


28'. 1 


lfi.9 


40 


Tennessee and Kentucky 


8 


23.fi 


lfi.3 


3fi 


Ohio 


19 


'^1.1 


25.7 


3fi 


Indiana 


9 


38-. 1 


2fi.2 


31 


Illinois 


5 • 


40.7 


S'^^.S 


40 


Michigan 


3 


42.0 


33.3 


21 


hiissouri and Wisconsin 


4 


4fi.9 


31.1^ 


34 


Kansas, Iowa and 










Minnesote, 


3 


43.0 


38.3 


11 


California and Washington 


11 


42.9 


35.9 


Ifi 



TOTAL TOUTED STATES 



3fi3 



28.fi 



Ifi.l 



* Weighted average equals rates' paid "by each manufacturer multiplied hy 
"numher of man-hours worked," 

(*) Compiled from 3fi3'report3 made to The. National Fertilizer Association. 



-96- 



TA3LE 41 



SmaiJffiY OF WSIG-HTED AVERAGE RATES PAID PER HOUR TO COMIvIOlT LA30R* AND 
UmCBER OF MAM-HOURS WORICD BY COMi.iOW LABOR IK THE MANUFACTURE OF DRY 
MIXED FERTILIZERS DURING THE SIX MONTHS ENDED JUi-JE 30, 1933 (*). 





(3y Areas) 






Weighted 








1 


Man-Hours Per Cent 


Average 




Disj.ri_buti.on 
Cents 


^Wo^^ed _ ^ of 


^_To^tal 


K^Jl -IPX J^ea 
Cents 


NORTHERN AREA: 












2fi,5 




7.fi 


to 


12.5 


12,0fil 


.8 






12. « 


to 


17.5 


119,830 


7.9 






17. f^ 


to 


22.5 


313, -.8fi 


20.7 






22. R 


to 


27.5 


397,105 


26.2 






27, fi 


to 


32.5 


^3fi,fi27 


28.8 






32ofi 


to 


37.5 


137,231 


12.3 






37.fi 


to 


42.5 


48,352 


3.2 




TOTALk . . 


42.fi 


to 


47.5 




.im.-Q 




SOUTHERN APJIA: 








13.7 




7.5 


and less 


179,320 


2.8 






7.fi 


to 


12.5 


2,91fi,fi02 


45.1 






12, fi 


to 


17.5 


3,003,153 


4fi.4 






17. rt 


to 


22.5 


283,094 


4.4 






22.fi 


to 


27.5 


30,179 


1.2 




TOTAL. . . 


27.fi 


to 


32.5 




.1.00^ 




WESTERN AREA: 








27.0 




12.fi 


to 


17.5 


11,204 


2.1 






17.fi 


to 


22.5 


7fi,133 


14.1 






22.fi 


to 


27.5 


2fi5,531 


49.2 






27.fi 


to 


32.5 


111,130 


20.fi 






32.fi 


to 


37.5 


fi9,124 


12.8 




TOTAL* . , 


42.fi 


to 


47.5 


fi^314 
^9ii3fi 






PACIFIC COAST AREA: 








35.9 




22.fi 


to 


27.5 


5,057 


9.fi 






32.fi 


to 


37.5 


24,2fil 


-ifi.O 






37.fi 


to 


42.5 


20,297 


38.4 




TOTAL. . . 


'.7.fi 


to 


52.5 


™3J.8_3 
_52^98 


.100^.0 




UNITED STATES: 








lfi,8 




7.5 


and less 


179,320 


2.1 






7*fi 


to 


12.5 


2,928,fifi3 


3^:.3 






12.fi 


to 


17.5 


3,134,187 


3fi.5 






17.fi 


to 


22.5 


fi72,713 


7.8 






22.fi 


to 


27.5 


747,872 


8.7 






27.fi 


to 


32.5 


551,574 


fi.4 






32, fi 


to 


37.5 


280,filfi 


3,3 






37.fi 


tn 


42. 5 


fi8,fi49 


0.8 






42.fi 


to 


47.5 


7,380 


0.1 




47.« to 52.5 
* About 75 per cent of all la''jor, based 


1^133 

8^57ji,l_57 
on man-hours 


worked 


is "comiiion 


labor". 














(*) Compiled from 3f^3 


reports made 


to The 


National Fo] 


rtilizer 


Association. 


97fiY 















-97- 
TABLE 42 

COMPARISON OF HOUBLY WAGE RATES FOR COMMON LABOR 
IN DRY MIXING DEPAZ^.nGNTS AT PORT AND INTERIOR P'^INTS 
' IN CERTAIN STATES DURING SPRING, 1933 (*) 



" 








Increase 


Percentage 










Of Port 




of 




Entire 


Port 


Interior 


'"iver In- 


..3ilIplQi2ncnt*„.,^ „ 




State 


Points 


P:ints 


terior Points ■ 


At Port 


At Interior 




■, ; Cents 


Cents 


Cents 


Cents 


Points 


Points 




_ Per 


Per 


Per 


Per 


Per 


Per 




-'Hour .. 


■ Hour 


Hour 


Hour 


Cei.t 


Cent 


Nep., Jersey.. 


30.5 


: 38. E 


25.3 


. 13.5 


37 


(^3 


Maryland 


30.7 


21.9 


18.7 


3.2 


80 


20 


Virginia 


15,^ 


15.4 


Ifi.fi** 


" 1.2 


80 


20 


North 














Qarolina . 


13.2 


,14.8 


11.3 


5.5 


51 


49 


Georgia 


11.5 


12.0 


11.4*** 


O.o 


24 ■ 


7P. 



* Based nn man-hours worked "by reporting factories. 

** Includes Richmond, Petersburg, and other large interior points. 

*=** Includes Atlanta and other large interior points. Atla,nta average rate 
was 13.5 cents, 

(*) Compiled from 3^3 reports made to The National Fertilizer Association. 



97f^l 



-98- 



IA3LE '-.Z 

COMPARISON OF EOHFlLY LA30?. RATES I'OR COLEiOlC LAB OH 

IV. DRY KIXIiJG DEFAR^rHrTS DURIl'G SPRI:^ OF 1933 

ACCORDIl'G TO FOPULATIOil OR COVRUFITIES (*) 

(Cents Per Hour) 
Over to to to to Under IJntire 

lOQj-OQO iQO^og Z5^_qo sojdoo 25^00 iojooq Stat.e_ 

Cents Cents Cents Cents Cents Cents Cents 



Maryland 21.9 - . - - 17.1 .22.3 20.7 

South 

Carolina - - 12.7 12.5 9.8 10.1 13.4 



12.7 


12.5 


9.8 


11.2 


10.0 


11.- 


_ 


_ 


22.9 



Georgia 13.7 12.5 11.2 10.0 11.-^ 10.2 11.5 
Ohio 27.1 - - - 22.9 24.1 25.7 



(*) Compiled from 3*^3 reports made to The National Fertilizer Association, 



Images Paid in Superphospha-te Departments 

Table 44 presents a suianary of the average Avage rates paid for 
various classifications of la^Dor in the superphosphate .departments by 
States for the Spring seasons of 1929 and 1933, 

Wages Paid in Sulphuric Acid Departments 

Treble 45 presents a summary of average v/age rates paid for 
various classifications of labor in the suliihuric acid departments by 
States for the Spring seasons of 1929 and 1953. 



97fil 



BiL^LI, 44 

SUii.iAHY OF AArLSA^r, i.AGI H.-.TES PaID FOH V^IOUS CL^.'SIZICATIOrS G7 LiOCH 
Ii: :RL SUTESPHOSPEa^i-E DEPAE-iiZ/JS JT STATES EOu ^x" SIX nOl^THS Ei^DED 
JUHE 30, 1939 AIT THE SIX L;cr:::S E'JDED JUES cO, 1955 (*) 
(Cents Per Hour) 





Mill 


ers 


Mixers 


Dei'. Labor 


Ordina: 


ry Labor 




1929 


1953 


19 29 


1933 ; 


1929 


1933 


1923 


1953 




Centt: 


Ce: 


nts 


Cents 


Cents 


Massachusetts 


50.8 


40.0 


41.6 


55.1 


43.0 


37.4 


39.6 


2.9.2 


New York (exce-it 


















Long Island) 


50.0 


59.2 


49.4 


39.0 


48.7 


35.7 


48.5 


30.6 


Hew Jersey 


50.1 


54.7 


51.5 


34.5 


43.3 


31.7 


46.7 


31. G 


Pennsylvania 


42.0 


31.0 


44.0 


53 . 


— 


— 


42.0 


25.0 


Maryland 


52. .2 


37.5 


43.4 


29.9 


47.4 


36.9 


40.5 


25.0 


Virsinia ' 


31.6 


19.0 


53.7 


19.6 


34.6 


13.7 . 


32.2 


15.0 


ITorth Carolina 


36.9 


25,4 


55.4 


19.5 


50.7 


15.8 


25.6 


14.3 


South Carolina 


30.1 


15.1 


29.7 


17.6 


27.5 


15.3 


25.5 


14.1 


Georgia 


28.3 


16.3 


29.. 4 


16.7 


28.5 


15.5 


24. 1 


12.6 


Plorids. (All east' 


















and soutii of 


















counties of 


















Suwanoe, Col- 


















umbia, Lafay- 


















3tt & Taylor) 


33.3 


22.8 


55.2 


28.3 


?7.2 


18.0 


52.7 


28.6 


Alabama and 


















Florida (l;est 


















of Aopalachi- 


















coia P.iver) 


24.2 


17.0 


24 . 4 


13.5 


25.7 


15.1 


19.5 


10.4 


tIississi:,T^i 


27.0 


14.7 


50.9 


16.0 


25.6 


12.2 


23.2 


11.9 


Louisiana 


31.6 


17.7 


52.4 


20.6 


31.8 


17.4 


28.3 


18.1 


Texas 


42.4 


20.4 


43.1 


20.8 


40.0 


20.8 


31.9 


20.2 


Teiniessee 


35.8 


1?;. 5 


33.4 


19.3 


t52.0 


19.5 


28.5 


17.3 


Ohio 


49.1 


33". 7 


43.2 


31.9 


50,5 


29.7 


41.0 


28.8 


Illinois 


50.0 


51.3 


49.2 


29 . 5 


\4.2 


25.9 


40.6 


25.2 


Indiana 


45.1 


25.4 


48.8 


23 . 3 


43.5 


23.6 


54.6 


25.0 


Kentucliy 


50.0 


25.0 


32.6 


27.5 


35.0 


30.3 


50.5 


25.1 


Michigan 


55.0 


44'. 2 


55.0 


40.7 


50.0 


52.9 


40.0 


56.0" 


Fortherii Area 


51.5 


56.7 


44.2 


30.9 


46.8 


34.3 


40.9 


25.7 


Southern Area 


31.0 


18.8 


31.4 


18.7 


29.6 


16.2 


25.6 


15.9 


i;idv^'estorn Area 


48.6 


55.7 


48.6 


31.7 


43.6 


29.5 


58.2 


27.5 



;.'5 26'.2 57.1 24.1 34.1 20.2 52.9 19.6 



(*) Coniioiled from 56^^ report's dsAc to Tuc ■•::.tional Fertilizer Associa- 
■tion. ■ • ■ 



-100- 
TABLi: 45 



SUlJailT or AVEIU.GE WlGS i^TSS ?aID 

ii" t:-il sulphuric acid DiiP^mT. ;j£i:ts 

JUI\"i; 30, 1929 ^iTD THE SIX i 
(Genti 



:?0H VAinOUS CIASSIPICATIOITS 0? LA1.0: 
3Y ST...T3S ]?01t TI-IE SIX LONTHS .ZLLD 
.OVTHS Z-DED jmi; 30, 1953 (*) 
1 Per Hour) 



State 



Assistant 

Acid Maker ^cid Laker 3urnervien 

1929 1933 1929' 1933 1929 193S 

Cents Cents Cents 



Chamtermen Coraion LaTsor 
1929 1933 1929 1933 
Cents Cents 



Massachusetts 33.3 75.1 51.0 50.0 47.0 42.0 42.6 34.7 44.3 40.1 

I'Jew York- (e::- 
ce-ot Long Is- 
land) ■ '74.0 80. 74.0 4L!.0 

New Jersey 101.1 86.9 

Pennsylvania 67.0 

Manrland • 66.0 56.2 45.0 45.1 



48.0 ~ 50.0 40.0 40.0 52.0 

47.1 38.0 61.2 47.8 44.8 54,6 

~ 45. ~ 

48.7 29.4 62.2 40.4 44.9 25.9 



Virginia 


56.4 


48.8 





„_ 


32.8 


23.8 


39.0 


33.2 


28.8 


21.0 


llorth Carolina 


71.2 


47.8 








28.1 


19.9 


32.7 


23.5 


23,3 


14.3 


South Carolina 


67.1 


47.4 


28.5 


22,5 


29.0 


16.5 


31.0 


23,4 


26,9 


15.8 


Georr-ia 


56.3 


44.9 


29.9 


— 


24.5 


16.9 


28.4 


18.6 


22.8 


14,1 


Florida (all 






















east and south 






















of coimties of 






















Surranee, Col- 






















um'Dia, Lafay- 






















ett.e c": Taj^lor) 


66.3 


54.0 


42.0 


35.0 


32.5 


?2.3 


32.5 


22.3 


33.9 


18.3 


Alatana and 






















Florida (west 






















of A-^alachico- 






















la Hiver) ' 


50.9 


43.8 




— 


30.6' 


15.8 


37.5 


19.6 


28.5 


14.0 


MississiiT^i 


50.1 


40.0 


27.5 


— 


27.2 


14.5 


27.9 


16.6 


25.0 


— 


Louisiana 


59. 5 




47.5 


— 


50.6 


17.5 


34.3 


20.0 


29.4 


15,1 


Texas '. 


109,5 


82.0 


— 


— 


57.5 


27.8 


45.0 


35.0 


35.0 


— 


Tennesr;ee : 


119.5 


61.8 


53.3 


15.8 


30.0 


.18.6 


■ 3.,: . 9 


15.3 


25.4 


15.0 


»hio 


76.1 


65.1 







4;. 4 


.28.0 


49.6 


38.8 


40.0 


41.0 


Illi-ois 


48.2 


73.7 








45.0 


■ ,22.5 


50.0 


31.5 


42.5 


IS. 9 


Michigan 


75.0 


76.5 


— 




■ 50.0 




:-o.o 


57.0 


— 


— 


California 


01.0 


— 


~ 


__ 


62.0 


— 


64.0 


-- 


- 


~ 


northern Area 


71.2 


G7.2 


:-0.4 


'4fi 9 


48.4 


31.7 


52.6 


39.8 


44.7 


25.0 


Southern Area 


65.0 


51.6 


52.4 


'2l!2 


28.8 


19.0 


51.9 


23.0 


27.5 


lo.5 


Midi-resterr. A::ea 


72.1 


68.5 


— 


— 


46.9 


24.4 


49.7 


39.6 


40.2 


59,7 


Pacific Coast 






















Area ' 


81.0 


„ 


-^ 


__ 


62.0 


— 


64.0 


— 


— 




UriTED STATES 


62.4 


57.6 


38.4 


56.0 


55.5 


21.9 


58.0 


29.6 


58.0 


22,2 


(*) Co;T3iled fron 363 reoo 


rts nade to 


the rational 


Fertilizer Associ 


at ion. 



-101. 



P-IESLjEI'T'S REE; PLOY: 



agree;, El 'u? 



Dariiv the "Tericd in A.liich 
■oro :)Osed code to submit to "JHA, 
showed a comaenda'ble s-oirit oi c 
of I'TIRA.. 



i idnstr;/ leaderc were nre^ariHo ^ 
members of the fertilizer industry 
;oov)eration in carryin.-, out the -mrrioses 



After certain modifications vhich were deemed to be necessary 
had been made, the President's HeeirPDloyment Agreement was generally 
adopted throughout the industry. This modified agreement which was 
accepted by the industry on Au^^ust 21, 1953, is included in ApiDendix 
II, labelled Exhibit 19. 

Mayiraum Eour Provisions 

The agreement incorporated -^rovision for a basic forty-hour v;eek, 
with excer)tions for periods of araerKency and, for eir^Dloyees engaged in 
continuous operations in the manufacture of sul'^huric acid, phosphoric 
acid and superphosphate. Provision for com-^ensatine employees for 
overtime was made on the basic of time and one-chird for hours worked 
beyond the basic maximum. 



Ilinimum Via^e Provisions 

4 The folloving schedule of minimum wage rates 
the a§,reeraent : 



incorporated in 



(1) 35 cents per hour in the 'Jorthern Area of the United Staites 

(2) 25 cents per hour in the Southern Area of the United States 

(3) 55 cents per hour in the Midwestern Area of the United States 

(4) 40 cents ner hour in the Pacific Coast Area of the United 
States 

As the President's Reerojoloyraent Agreement was adopted late in the 
summer of 1933, and v.'as effective only during the months of September 
and October, a relatively inactive period in Industry operations, results 
from the operation of the agreement obviously could not be imi^ressive. 
The provisions, however, are of imroortance inasmuch as they provided 
the basis used by the oPde cpmiaittee of the industry in preparing 
their proposed code under IJRk. 

LABOR PROVISIOFS AS SUBMITTED A1"D APPRO^rED II' imA CODE 



Collective !'^ar;:ainin-g 

So far as has been ascertained, labor organizations had made 
very little projress in organizin,. the comraon lahor which makes up 
a -jredominant pa.rt of the labor erxoloyed in the fertilizer industry. 
There is a.lso no indication in the record that there were organizations 
of company unions existent at the time of the presentation of a Code 
of Fair Competition. The code, however, included in Section 1 of 
Article IV the provisions lertainin^' to collective bargaining, pur- 
suant to Section 7a of the ITational Industrial Recovei-y Act. These 



-102- 
provisions were as follows: 

"a. That employees shall have the right to organize and bargain 
collectively through representatives of their own choosing, and 
shall be free from the interference, restraint, or coercion of em- 
ployers of labor, or their agents, in the designation of such 
representatives or in self-organization or in other concerted 
activities for the purpose of collective bargainin^^ or other mutual 
aid or protection. 

"b. That no employee and no one seelrjng ei.mloyment shall be re- 
quired as a condition of employment to join any company 'onion or to 
refrain from joining, organizing, or assisting a labor organiza- 
tion of his own choosing. 

"c. That employers shall comioly v.'ith the maximum hours of labor, 
minimum rates of pay, and other conditions of employment, approved 
or prescribed by the President." 

I.'a.ximum Hours of Labor 

Section 2a of Article IV entitled "Maximum Hours of Labor" noro- 



"Ho employee in the Fertilizer Industry shall be required or 
permitted to work more than 40 hours in any one week or eight 
hcurs in any one day except as follov;s:" 

At the public hearing on the Code as iiroposed, it was stated by 
the MA Labor Advisor (*) that at thot time the Labor Advisory Board 
had no standard policy but was in favor of a 30-hour or a 35-hour 
week which had been their recommendation for the President's Ee- 
draployment Agreement. It is evident thrt the code for the Cotton 
Textile Industry, Code Tq. 1, set a precedent for a 40-hour week which 
was followed in maiay of the succeeding codes, including' the fertilizer 
code. The farm equipment code which was code Fo, 39 had also adoi^tcd 
a 40-hour week for its code. 

At the Public Hearing, David Kanlen, Labor Advisor, spedzing 
as a represQntative of the American Federation of Labor, suggested a 
36-hour week with a tolerance for the months of March and A;oril which 
would permit a 60-hour week in those months. (**) The Code sponsors 
Y/ere not persuaded to adopt the suggestion. 

(*) Transcri->it of Public Hearing on the Code of Pair Com':)etition for 
tho Fertilizer Industry, Senteraber 6, 1935, p. 144, (Copy in NRA 
Fertilizer Industry Files) 



(**) Ibid, p. 201. 



9761 



-.103- 

I xce ;ti-'ns to l'F"i::cii vi Hours -rovisions 

It r;as held necessar"/- to nr.ke exceptions to the raaxir.n.r. 
hours vrovisions of the code i: t^ie cr.sas of oarticular classes of 
no:. l:ers for v/hom it rras felt, that these ;orovisions should not he -na.c 
aoplicahle. 



Su-)e 



■isory OfrTicials 



::e"r5tions 



iii-ticle lY, Section 2, Suhsection a 1 of the code exeno 
"fore;:en, Ga:)erintendents, Managers, salesmen, chenists, and offici 
There nere no co..;,ients on the exen'otion of this class of enployees 
the ti:-e of the ouhlic hearing;, although the President's Reenoloy.:e 
Agrecnent, as adonted h"'- the fertilizer industry, had had a $35,00 
vee]: ri-r-lif ication in order to have .people descrihed in this paragr 
eligiole for exemption from the maxiv..n'm hours' of laoor ahove prescr 
Fnile it seens that the word "Officials" night have required furthe 
explmation, an ofr^icial e-r:)lanation or interpretation of this rrord 
never issued. 



als." 



per 
aph 
ioed. 



ContinuotLS Operation Exemptions 

Article IV, Section 2 (c) 4, 

"Employees engaged in p.ny continuous operation when other co:.roetent 
einployees are readil';'- a.vcilahle for s\i.ch work shall not he recuired 
or permitted to wori: nore thcii 40 houi-s in exl"^ one week, end m no 
case ::ore thrn 48 .Liou.rs in cn^,- o.^e week." 

In the President's P.eera'oloynent Agreenent continuous oporar- 
tion had heen defined "as 'he manufacture of sulphuric acid, ^ohos-Dhoric 
8,cid, £,nd superphosphate", thus linitin-^' continuous operation to those 
particular processes in a fertilizer plant. In the original presentction 
of the Code, this language was renoved h:" Br. Troxell (*) of the Lcoor 
Advisor-- Board, who stated that this linitatio^-i. was' nerlj'- an e:3planation 
and did hot limit the fertilizer in.dustr:<- to those particular departuents, 
alth'ough it is evident fron the previoiis form of the provisiO'i that it was 
the ir.tent of the industrjr to so limit it. 

At the tine of the presentation of the code there was sone 
disC-\ssion as to what was meant h"- "readily" in the "ohrase "when other 
conpetent employees are readily availahle for such work", "bu.t no changes 
v.-ere p.ade in the language as presented. 

It is interesting to note that this code as suggested and 
adopted did not contain the linitrtio"s that the employees engaged in 
continuous operation were not to exceed 10 per cent of the total nunher 
of employees in the "olant as was the cr^se in the President's ~:eemplo;-nent 
Agreement as ado'oted h"' the fertilizer industry,'-. 



(*) loid, p. 122 



-104- 

Tatle ol shov's that tlie ^jercentage of nan-hours enplo-'-ed in 
the ricJiufacture of sulphuric acid ^as 4.4 pel- cent, and in phosphoric 
acid end superphosphate 5^4 per cent for the reporting conpanies in the 
sprin;; season of 1933, but the coahined figures for these Deioartments 
are rmch higher in the fall season, so that the industr;;- prolbabl;'- found 
the restriction of the P.E.A, 'burdensome. 

There Fere no official requests for ercolsjiations or i:-_ter~ 
pretations, nor were there com-oliance cases involvin;;; this pa-:tic.--Lc.r 
section, 

liaintenance Ercerrotions 

Article IV, Section 2, Subsection a 5: 

"lle^air sho-o crews, en,?;ineers, electricians, ajid watching crev;s 
shall not be required or -oermitted ' to work nore than 40 hours 
in an7 one week, '-ith a tolerance of 10 per cent, except in the 
case of emergency. " 

Intei-pretations of Maintenance Exemptions 

It should be noted that the language of this provision as 
writte:-: is equivalent to saving that reoair shop crews, engineers, 
elactricians, and watching crews shall not be required or "oernitted to 
work :.iore than 44 hoiirs in any one "eek, since there is no qualification 
as to the utilization of the tolerance. That this was the practical 
interpretation of the Adrainistration of this phrase is evidenced 03^ the 
fact that in issuing Administrative Order #67-16, dated April 12, 1934, 
George L, Eerry, Division Administrator, in defining the word "energenc3''' 
stated:. 

"I note the.t repair shop crews, engineers, electricians, and wa.tching 
crews mav not work roore than 44 hours a week 'e::cept in the case of 
energenc;''', " 

nothing is found in the records to indicate that the Labor 
Advisory 3o?rd raised any question on this point at anj/- time. 

It was also necessary that the word "emergency" be nore 
carefully defined and in the above referred to inter-iretation "energenc:"'i 
was defined as "emergency maintenance or . emergenc3r repa.ir work ip.volvin- 
breakdowns and -protection of life or property. It does not refer to en. 
uniiD-oal amouiit of business," So far as has been ascertained there were 
no compliance cases involved, thus indicating thct the indefinite pro- 
vision made for "emergency" as set forth in this section was not abused, 

G-eneral Averaging Provisions 

Article IV, Section 2, Subsection (a) 2 read a.s follCTs: 

"During the rush of the 'olanting season the hours of labor may 
e::ceed the maximum above prescribed b^;- eight hours a week, and 
in the case of skilled key nen the hours of labor may exceed the 



-1C5- 

•;.ia::in-un alcove prescribed by. 20 ho^u-s in any week, but in no • 
event shall era-oloyees be permitted to rrork nore than an e.verage 
of 40 hoiirs a week over sjny co-isecutive f o-ai"-.7ionths ' period," 

i'Teither at the public hearing; nor in the T7ritten record 
trans;viitting the o-oinion of the Labor Advisorv Board to the depiity did 
the Labor Advisory Board go on record c-s oyoosing the averaging of 
hours provision contained above, Ko-;ever, the attitude of the Labor 
Advisory Board even at that tij.ie, and much more strongly as ERA e:c~ 
perience develoiDed, becai^ie raore and more op-?osed to the inclusion of 
any averaging provision in codes. It v^as ■ felt" that such -orovisions 
tended to vitiate the beneficial effects in spreading employment that 
night othernise have been obtained t]"irough raaximum hours -Drovisions. 
It vras also held that it wouJ-d be difficult to obtain compliance r;hen 
an averaging provision for hours of labor was extended over as long a 
period as four months, 

Interor etatio ns" of AveraA'ing Pr ov ision 

:;xi.sh of Planting Season ' 

Several phrases in this provision caused difficultjr diiring 
the administration of the code. One question \7hich arose was in defining 
the phrase, "during the rush of the planting season". That is as to 
whether or not it meant the -planting season ii the vicinit:"- of the plant 
employing the labor or whether it meant the planting season of the farmer 
to whom fertilizer was sold, Ar. official interpretation (*) vras issu.ed 
to the effect that the rush of the planting season meant rush of the 
planting season in the territor]'' in which the fertilizer wa.s sold. 

It should be -oointed on.t that the code did not set up the 
mechanics b"" which a particular plant identified rush of the planting 
season for its own plant so that from an administrative point of view 
it would be diffic^rlt to determine just when such period began and when 
it ended, ITiu-thcrraore, in the cases of those plsaits which sold merchandise 
in various sections of the United States or even in foreign countries, 
the rush of the planting season varied so that in an extreme case riish 
of the planting ser.son might have been construed to ;.iean the entire 3^ear, 

The latter iDrrt of the provision prohibited working these 
employees "more than an average of 40 hours a week over eJiv consecutive 
fotu'-months ' period", caused considerable misunderstanding on the part 
of the indiistr;;,'-. It was inserted in the code in that particular wa"'- on 
recommendations of the Advisor3^ Boards in order to prevent the Ind^^str3^■ 
from splitting. its peak season. To illustrate, if, the code permitted 
the employer to name a specific four-months' period, it would have been 
possible to have the months of March and April, which represent the 
peak of the shipping season, fall in separate fom--months ' periods. 
This is the interoretation that man;/- er:ro?_oy.?rs wished to place upon 
the provision. Tlie language, however, is specific pjid prohibits this 



(*) Accninistrative Order llo, 67-42. (In LPA Fertilizer Indtistry 7iles) 



-106- 

prj?.ctice, ejid March and April would have to be included under the Inigur.ge 
"over any consecutive f our-nonths ' period", 

Keed Por Defining "Skilled Key Hen" 

Tlie phrase "skilled key men" was olso amhiguous, altho-j^h 
there is no record at the time of the public hee^ring as to Trhat the Labor 
Advisory 3oa.rd thought was neant b-"" this provision, A later definition 
as recori-jended b-''- the Labor Advisor^;- Board, was as follows: "Employees, 
the duties of whom necessarily affect the flow of work to respective 
rroiips of other employees," (*) The Pertilizer Recovery Committee -oiider 
date of February 19, 1935 requested a definition of "a skilled Izey nrn". 
The;.' str.ted "it has oee-i o^Ji" a.:;suuiption thc.t a key man is one performing 
duties which performance restilts in fxirnishing work for other employees 
and the work of the other employees being dependent upon completion of 
the work of key men". They stated that their ■onderstrnding was "that as 
a ke;^ man would not of necessity be a foreman, different types of plcjits 
T.'oiild reo_v.ire different types of ]:ey men. We would consider as ^Jn 
illx\stratio:i the following jobs as t;rpical of hey men in one t;^'pe of 
dr;^ mi::ing plant: 

Bag sev.'ers Tractor operators 

Baggers Locomotive operators 

Oilers Crane operators 

■j'eighers Hoist operators" 
I.ii::e::s 

The requested interpretation was re-written within IIHA 
but the Heview Division vjider date of April 26, 1935 stated that they 
co-'xLd not ep^orove it as the definition of "skilled Icey man" was considered 
too broad. The Review Division offered the cojiment that "a ke;^ man is 
generally considered one upon whom, because of knowledge or experience 
not held by and not readily imparted to others, the successful conduct 
of men\ifactiu-ing orocesses is es-oeciall:' de-oendent ", The Review Division, 
however, ap-iroved the interorete.tion that "a person because of his skill 
in a partic aar operation may be considered a key man and such person 
need not be a foreman nor be directl^^ responsible for the worrk of other 
employees". This interoretrtion of the Review Division was never offici- 
ally approved. 

Office Employees' Averaging Provision 

Article IV, Section 2, Subsection a 3: 

"Office employees sliall not be requireci or permitted to work more 
thrn an average of 40 hours c wee": in an"^ f oxir-months ' period," 

At the ti 'e of the presentation of the code this v;as a six-months' 



(*) Interview of iir, Al P, O'Do-.iell, Unit Chief, fertilizer Industry 
St-u.oy, with i.ir, Tom Hunter, Labor Advisor, iTovember 1, 1935, 



9761 



-107- 

avera{^'i:\g provisiori, and Dr. Troxell of the Lo.ljor Advisory Board (*) 
at the -public hearing objected to the lack of a -orovision in the Code 
for fixing a limit on the hoiirs to be rrorked b;^ the office force. He 
contended that the provision that the office force should not exceed 
40 hours of vork in a si:c-::ionths ' period would permit of working the 
force 80 hours a xreek for three raonths end then laying them off for 
another three months. 

Although th-^ records do not disclose T>hat transpired after 
the ;Di\blic hearing, a coiToronise was apparently effected, inasmuch as 
the averaging provision was cut to foiu- months and the Labor Advisory 
Board in their final recommendation to the deputy did not' a,gain raise 
this ^articpdt.r point. There seems to have been no question raised by 
Dr, Tro::ell or at^r other interested parties at anj'- time on the fact that, 
according to this provision, there was absolutelv no limitation on the 
number of hours in any one day raich an office employee could be required 
to work. 

So far as has been ascertained there were no compliance 
cases which arose as the result of this provision. 

In s-^ite of the liberality of these terms for office enplo^^eesj 
there was one request ma.de for an exemption from this provision in the 
case of the Davison Chemical Company which was being reorganized viiider 
Section 77-B of the Corporate Eeorg-anisation' Act, which corporation was 
greJited permission to work ten accounting employees unlimited hours from 
Janua-ry 10 to June 30, 1935, inclusive (**) 

Ilinimum Rates of Pay 

Article IV, Section 3 a on liiinim.ijm Sates of Paj^ said: 

"ITo em.ployee in the fertilizer Industry slia-ll be paid less than 
the following: 35' cents an hoi-:^ in the northern Area, 25 cents 
an hour in the Southern Area, 35 cents an hour in the l.Iidwestem 
Area, 40 cents an hour in the Pacific Coast Area, and 20 cents 
an hOLir in Puerto Kico," 

The Labor Advisory Board at the time of the Public Hearing 
was able to have stric]:en fro;! the 'oroposed code a suggestion that in 
the Sou.thern Area only 20 cents an hour be paid at interior points 
which were not ports. The transcript of hearing contains a statement 
b'- liajor Eckel of the Labor Advisory Board that the ITorth, South differ- 
ential in the code as proposed was greater than in any other branch of 



(*) Transcript of Public Hearing on Code of Pair Practices and Com- 
petition -oresented by the fertilizer Industry, September 6, 1933, 
p. 149. (In IsHA Fertilizer Industry Piles) 

(**) Administrative Order li^o. 67-45, (In TPA Tertiiizer Industrj'" Piles) 



-1C8- 

the Chemical Industry (*), In trrjisnitting the recorn-:8ndations of the 
Labor Advisory Board to the Deputy, the Lahor Advisory Board (**) stated: 

"ITe cannot accept the labor provisions of this code because of the 
25 cent hourly v'age rate in the Southern area, considering tht,t 
this is practically and entirely a male Industry, and also in vien 
of the arduousness of the work and its relation to other codes 
already adopted it is our position that 30 cents an hour in the 
Soiithern area is the minimum nhich should be established, 

"This Code is also in need of a clause which would -provide for the 
maintenance of differentials for v;orkers receiving more than the 
minimum wages," 

Apparently this point of view develo'oed subsequent to the 
public hearing. 

It is interesting to observe that the records do not show 
that the Deputy Administrator in submitting this code to the Administrator 
for approval did not expla.in why he vd-s not following the recopjnendations 
of the Labor Advisory Board with reference to these Southern differentials, 

G-eof;ra:;:>hical Wage Areas 

"b. The Northern area comprises Maine, Hew Hampshire, Vermont, 
Kassachusetts, Connecticut, Ehode Island, Hew York, Pennsylvania, 
Hew Jersej"-, Maryland (exceot the Eastern Shore), Hew Castle CofJitj'' 
of Delaware, District of Columbia, and West Virginia, 

"c. The Southern area comprises Kent and Siisses Counties of Delev;are, 
the Eastern Shore of Maryland, Virginia, Horth Carolina, South 
Carolina, Georgia, Florida, Alabama, Mississippi, Arkansas, LouisieJia, 
Oklalioma, Texas, and Tennessee, 

"d. The Midwestern area comprises Ohio, Illinois, Indiana, Kentucky, 
Missouri, Kansas, Nebraska, South Dakota, Horth Dakota, Colorado, 
Hew Mexico, Arizona, Wyoming, Montana, Michigan, Wisconsin, Minnesota 
and Iowa, 

"e, Tlie Pacific 8oa,st area comprises Washington, Oregon, California, 
Idaho, Hevada, and Utah," 

These four sections set up the areas referred to in Article 
IV, Section 3 a in which the varying rates of wages were to be paid. At 



(*) Transcript of Public Hearing on Code of Fair Practices and Com- 
petition "oresented by the Fertilizer Industry, Se-itember 6, 1953, 
p. 143. (Co-oy in NM Files) 

(**) Letter from Leo Wolman, Chairman, Labor Advisory l-^oard to Deputy 

Adjninistrator Williams, dated October 24, 1933. (in HRA Fertilizer 
Industry Files) 

9761 



the time of the -oulilic hearing the main discussion centered atOMt the 
inclusion or non-inclusion of Delaware end certr.in parts of I.Iaryland 
in the Southern Zone, In earl;' drafts of the code, all of Delav/are 
and the Eastern Shore of Maryland were included in the Southern Zone, : . 
hut in the code as finally adopted and as above quoted, only Kent" .and 
Susse:: Counties of Delar/are -and the Eastern Shore of Maryland were in- 
cluded in the Southern Area, This was a continuation of conditions e-s 
they had existed prior to the code with refercnse to wage rates in those 
particular sections under consideration, as discussed hy Mr. Brand at 
the tine of the oMhlic hearing (*) 

Overtime Provisions 

Article IV, Section 2, Suhsection h: 

"Overtine shall he -oaid at the rate of one and one-third tii.ies the 
noraal rate for all work in the erxess of eight hours a day, except 
in the case of office employees." 

There seems to have "been no discussion at the time of the 
puhlic hearing or suhsec^uentl: , "by the Laoor Advisory Board or others, 
concerning payment of time and one-third for overtime, nor the exemption 
of office employees from the pajnnent of such overtime. Apparently then 
the provision of time and one-third was a heritage from the minimuxi 
specified under the President's reemployment Agreement which had "been 
adopted ''oy the majority of fertilizer manufacturers. 

Inteirpretati-ins on Overtime Provisions 

This provision, nevertheless, was amoij^XLOUs and while there 
was correspondence "between the Deputy Administrator and the Code Authority 
seeking clarification, no official interpretation was issued (**), 

It also hecarae necessary to clearly define the limits of the 
word "d^.y", and an interpretation was issued, defining the period as the 
tip.e hetween midnights (***)• 

As I'Jational Recovery Administration experience was acquired, 
and long after the fertilizer code was approved, the Lahor Advisory 
Board adopted the phrase "in any 24 hour "oeriod" to definitely establish 
an employee's right to any overtine pay. Since the code was never re- 
opened none of these later methods of handling certain phases of the 
laoor ;Droolera were incorporated. 



(*) Transcript of Hearing on the Code of E:,lr Competition for the 
fertilizer Industry dated September 6, 1933, p. 155. (in ILIA. 
ITiles) 

(**) Correspondence in KA. fertilizer IndustxT Files, LpJdot Eolder. 

(***) Administrative Order 67-49, (in "ii Eiles) 



"110- 

Tlie Labor Advisory Boerd, neither at the time of the ou"blic 
hearing; nor subsequently, raised an^^ question regarding the exemption 
of office employees fron the pajinentof overtime wa,'i'es. 

Day of Rest Provision 

Article IV, Section c stated: 

"Every employee in the Fertilizer Industrv shall "be entitled to 
one da;;- of rest a week." 

At the time of the public hearing, the Labor Advisor;'- T.oard 
did not raise any question as to the phraseology/- "shall be entitled to". 
Obviously, the V70rd "entitled" did not ins-are the "orobablo intent of the 
provision, and the la-ngiiaga should have read someTjhat as follows in order 
to be effective: "No employee shall be permitted to xmrk more than si:: 
days in any one ^leelz, " In fact the industry recognized this fact in 
their voltmtary labor agreement, suomitted after the/Schechter decision, 
and have rephrased this provision. 

Interpretation of Da;;- of Rest Provision 

In order to give clarification to the meaning of the phrase 
"one da;^ of rest a week", an interpretation \7as issiied which read: 

"Hvery employee is entitled to one day of rest each week of seven 
days; Sunday or any other day," (*) 

C hild Labor Provision 

Article IV, Section 4 — Child Labor Prohibited: 

"ITo employee under the age of 16 years shall be employed in the 
Pertilizer Industry'-," 

With the exception of substitution of the word "employee" 
for the word "worker" this provision was adopted as presented, John 
J, T/atson, President of The National Fertilizer Association, at the 
time of the public hearing stated that due to the heav;,^ nature of the 
\7ork that it was not customaxy to employ childern in the Industry (**), 

In 1930, there were 1090 male and 26 female wage eai'ners 
from 10 to 17 years of age in the fertilizer industry out of a total 
of 28,169 persons engaged in the industry, (***) 



(*) Administrative Order No, 67-18, (in NM Files) 

(**) Transcript of Hearing on the Code of Fair Competition for the 
Fertilizer Industry, September 6, 1933, p. 142, (in IIBA Files) 

(***) Fifteenth Census of the United States, Po-;mlation Volume V, 
General Re-port on Occ-opations, 1930, Bureau of the Census, 
1933, Table 2, p, 431. 



-111- 

At the time this code '7as. approved the ITational Recovery A(iinini otra- 
tion had not yet developed standard code provisions but under date of 
December 27, 1934, over a year later, the L.-^.bor Advisory Board recommend- 
ed that the iftdusiry ediapt the Standard ohraseol-o^y.^Tith reference 'to child 
labor which was 

"Ho person tmder IS yerrs of age shall be em-nlo-^^ed in the Industry 
except as (list here specific occuor.tions such as office bo3''s, 
office girls, mesr-en-er-., etc.)* iCo person imder 16 years of age 
shall be eraploj'-ed in the Industr"- in any- capacity. In an;,^ state 
any employer shall be deemed to have complied mth this provision 
as to age if he shall ho.ve on file a certificate p^r permit diily" ^ 
signed ^oy the authoritj'- in such state er.voov/ered to issue em.-oloyment 
, or age certificates or "lermits s^icving that the employee is of. the 
required age. " ' . 

The industry agreed to amend the code to incoroorate the revised -9"rovision 
providing it co'Jld be handled without a "oublic hearing ( *) . The Deputy 
tho-oght that this could be done but no action hcd been talcen' up to the 
time of the Siechter decision (**) 

It is significant, however, that the fertilizer industry was not ' 
amenable to reo-iening their code for an]?- amendments. 

Reclassifications of Functions Prohibited 

Artile IV, Section 5: 

"Reclassification of F'-xnctions Prohibited. — There shall be no eva**' 
sion of this Code by reclassification of the function of em-oloyees. 
An employee shall not be included in an:" of the exceptions set forth 
above unless the identica-l functions were identically"- classified on 
June 15, 1^'33. " 

There appears to heve been no discussion of this section at the 
time of the public hearing, although there might reasonably have been 
objection to the language because of the interpretation which might con- 
ceivably have been placed on it. Tliese might ]irve led to a misujider- 
standing on the part of an individual emplo"'-ee whose job \7as changed and 
who might therefore not fully understand exa.ctly v/hat his rights were in 
the matter of exemptions and tolerances in the natter of hours. The 
evident intent of this provision wrs to handle a reclassification of a 
job and not of an employee. Ho^r'ever, no issues were raised regarding 
the ;orovision, nor ^'ere there any compliance cases, ezplans„tions or in- 
teroretations reauested of the Administration in connection therewith. 



(*) Letter from Charles J. Brand, Executive Director of the Code 

Authority, to Ovid S. Robertr^, Jr., DGpiity Administrator, March 8, 
1935. (tea Fertilizer Indusbry Files, Labor Folder) 

(**) Letter from Deputy Adrainistrr.tor Ovid S. lioberts, Jr., to Charles 
J. Brand, Executive Sscretrr- of t.i? lode Autiiorit'''-, March 9, 1935. 
(In liRA Fertilizer Industi-' Pjle-^-, Lr.bor Folder) 



-112- 
Hr. Hockley, Receiver of the Davison Chemical Company, at the time 
of 'the pufclic hearing on the .proposed Voluntary lahor agreement, November 
8, 1935, recognized this fact and swrgested a change in the language to 
take care of it inasmuch as it had created a grea,t deal of confusion in 
the minds of eraploj'-ees at the Davison plant. 

No Provision For Adjust-ment of Wages Ahove the Minimum 

In the aforementioned letter of Leo Wolman, Chairman of the Labor 
Advisory Board, it wa.s brought out that this code did not contain anjr 
provision referring to an equitable adjustment of wages above the mini- 
mum. This is an omission which apparently;- escaped discussion at the time 
of the public hearing but which was incorporated in many codes even prior 
to the a.doption of the fertilizer code. There is no record in the files 
that the deputy attempted to have this provision inserted in the code as 
sent to the President due to the recommendation of the Labor Advisorj)' 
Board. 

Complaints of Alleged Violation of Labor Provisions 

Considering the number and type of firms engrged in the Industrj/- 
compliance with the labor provisions of the code vps uniformly good, 
there being record of onl};- 90 complaints of alleged violation. In 44 of 
these cases, an investigation disclosed no violation; 38 cases were ad- 
justed, and 8 were left on hand unsettled (*). 



(*) Testimony of Mr. Brand, National Industrial Recovery Administration 
hearing on Title A (labor provisions) of the proposed voluntary 
agreement for the Fertilizer Industry, November 8, 1935, p. 37, 



-11 Id- 
table 46 

IjALYSIS of 78 L^OR COi.^LlAlICE CASES (*) 



Kumter of Comolaints 

Violations- found '(alleged') • 

Adjusted by field office?? T.-ith restitution of 

tack wages 
Investigated Complaint'. - adjusted 
Referred to State Iiistrict Autorney for 

prosecution 
Referred to' Washington or regional offices 

for further action 
Wo violation established 
Pending at time of Supreme Court decision 



No information 
32 



Classification of QhavgeE 



Kum"ber of Goran laints 



Article IV,' Sec. 2 - Hours in excess of 

ma>".im-un 
Article IV, Sec 3 - "a^^cs below minimum 
Article IV, Sec. 2(c-)'.''jrking 7 days per 

v.e'„k 
Article IV, Sec. 2( b)-irailure to pay 

correct overtime 
Child Labor 
Reducing wages 
Article IV, Sec. 2(b) - Seeking back wages 

for overtime 
Labor Provisions not posted 
Article IV - General labor violation (only 

information) 



M ethods of Handling Labor Oornplaints 

Although not authcv^^ed by KRA to handle labor complaints in the 
first instance, 10 cas'es of alleged violation .of labor provisions 
were referred to and handled by the code authority. This work was 
taken most seriously by the code authority representatives, as indi- 
cated in the following summary of 6 of these 10 cases handled and the 
settlement obtained fron the alleged violators. 



(*) 



Letter from Ovid E. Roberts, Deputy Administrator to Walter Man- 
gum, Business Cooperation Section 3, August 15, 1935. 



9761 



TABLS 47 
SUinjiHY 0? LiiiiOS COiiPLAIirTS HalDLZD jY TIS PIlIiTILIZi::: CODZ AUTHOaiTi (*) 



EesTxLt of llature of Complaint iluraber Amoujit Audit 

Investiga- iiini- llaxi- Other of 2in- of I7age Expense 

Date t ion of • nnim murn L?„bor ployees Piesti- Paid "by 

Received Comolaint Rates Hours CoHrolaints Affected tut ion Producer 



Hov» , 1934 Pound txTie x 

Peb., 1935 All charges :c 
found untrue 

Mar,, 1935 Pound true :: 

Mr.r, , 1935 Pound true x 

Liar. , 1935 Pound true x 

Apr, , 1935 Pound true x 

Total 



- 


228 


$1,224.99 


$65.00 


Bad working 


113 


none 


none 


conditions 




none 


none 


- 


194 


676.38 


87.13 


- 


149 


511.99 


11.95 


- 


218 


854.51 


35,00 


- 


13 


745.89 ^)1C.84 




920 


$4,023.76 $209,92 



(*) Supreme Court Dec/ieijon rendered before case uas finally disposed of 
by Code Authorityo . ; 

(**) Data compiled by C. S. T/illis, after investii:::ation of Code Author- 
ity files, October 29, 1935. 



As set forth in, the Administrative Chapter of this report, the code 
authority for the fertilizer industry '--•as not successful in their efforts 
to obtain approval of a plan for handling labor complaints ^ithin the 
Industry. 

LABOR aCCOIJPLISHIIEIITS OP THE CODE 

Available Statistics 

In determining to '/hat extent the objectives of national Industrial 
Recovery Act in spreading employment aaid increasing purchasing poijer vere 
accomplished in the fertilizer industry during the period in \-'hich the 
code Ti-as in operation, it is necessary to use the labor data -orovided oy 
the Bureau of Labor Statistics,. The Bureau of Lpbor Statistics monthly 
obtains statistics of the number of employees, amount of pay-roll, includ- 
ing overtime, and number of man-hours, the data being collected each 
month for a payroll period ^fhich ends nearest the 15th of the month. 



9761 



-115- 



This is the only continuous series of laljor data (*) and this data 
is "based on a sample gathered in one neek of Opch month fron a limited 
number of firms 'in the industry and extrapolated to ohtain estimates for 
the entire industry. The statistics are therefore only as accurate as 
the sample is representative of the whole Industry. 

There has been incorporated in the Fertilizer Industry Archives as 
Exhibit C a detailed descl'iptio.i of the method used hv the Bureau of Labor 
Statistics in coiioiling niiA. analyzing-; labor data for the fertilizer indus- 
try. Some such explpnation is necessary in order that tl;ie limitations of 
these data and the qu8,lif ications in their use may be better understood. 

Misuse of Statistics 

There have been many glajrin^ examples of the incorrect use of these 
statistics by conparinf; them vrith other labor data which are not compar- 
able. For instance, there has been repeated comparison of the Bureau of 
Labor Statistics fi£U.res nhich include all classes of rorkers in the 
fertilizer industry nith the figure for common, labor in the shipping a,nd 
dry mixing de^Dartraents as determined by The ITational Fertilizer Associ- 
ation pre-code quest ion'na.ire (**)» 

Such misuse of statistics is dangerous as the indicated resiilts shou 
that the Code \7as much more effective than it really was. 

Interpretaotion of Labor Data 

In interpreting the data on employment, payrolls, man-hours and wage 
rates contained in these tabu].ations on labor statistics in the fertilizer 
industry, it must be constaJiT.ry borne in mind that what happened to labor 
during the period in which the code was in operation cannot be a^ttributed 



(*) In census years the Census of Manufactures of the Department of 
Commerce, Bureau •~''" the Census, obtains data oii persons engaged, 
wage earner? employed b;^ months, salaries and wages. This series 
is a continuous Hcries only in the sense that we ho,ve .it avail- 
able for cejsus ysars and even then the coverage is not as cor- 
rect in the bieni^ial' census as it is in the decenniaJ census. 
, The Census ga, thers its data for a week in each month of the Cen- 
sus yea,r. which includes the 15th day of the month. 

(**) Extract from hearings before the Committee on Finance, United 

States Sena.te, 74th Congress, testimony relating to the Code of 
Pair Competition for the Fertilizer Industry, April 12, 1935<> 

Transcript of the public hearing on the, proposed voluntary labor 
agreement for the Fertilizer Industry, ITovember S, 1935, p. 32. 

Proceedings of the Eleventh Annual Convention, The ITational Fertili- 
zer Association, The National. Fertilizer Association, 1935. p. 27. 

Fertilizer pLeview, July, August, Sejtei.iber, 1933, The National 
Fertilizer Association, p. 3. 

9761 



-116- 

solely to the code itself, various external fr.ctors having marked effect 
upon l-Voor. Tjr^ical of such fp,ctors is the fluctuating demajid for fer- 
tilizer and the vaxious forces vfhich tend to effect demand* As demand 
fluctua.tes, the "Dhysical volume of "oroduction also varies and it is prac- 
tically impossible to determine vhat portion of a change in emoloyment 
is due to the chrnge in oroduction. 

TOaile ve hf^ve pointed out clsenhure in this reiiort that there are 
no complete figures of •oroduction availahle for the entire codal period 
for this industrj'-, the production am "be approximated hy the estimated 
annual consunp-ition for which ve do have figures. The consumption of 
fertilizer for 19S2, 1933, 1934 vias 4,379,350; 4,858,540; and 5,532,956 
short tons respectively, whereas in 1935 it is estimated thp„t it rrill 
exceed 6,200,000 tons (*)» This increa.se in production would normally 
mean increased employment hut it is p ractically impossihle to determine 
.how much increased employment is necessitated hy a certs-in percentage 
change in production, due to the fact that various plants are mechanized 
to a different degree, tho.t plants are operating at various percentages 
of their efficient capacitjr, end that in some plants increased isroduc- 
tion will he accomplished only in a scale of diminishing returns to 
effort expended due to their relatively com^olete utilization of existing 
ca-oacity. These qualifications must he kept in inind in interpreting the 
figures of the Bureau of Lahor Statisticso 

Summa.ry of Lahor's Iraroroved Position During the Code 

The results of lahor's changed position in the first Spring season 
(the husy period of the year) of codal o;oeration as contrp.sted to the 
com'oerative period of the preceding year showed that the wage lorovisions 
of the code resulted in ah increp;se of 41,5 per cent in average hourly 
wage rates per week which caused an increase in weekly wage rates of 6,1 
per cent. The hour provisions of the code spread employment hy 50 per 
cent and i^urchpsing PO'-'er was incres.sed hy 62 per cent increase in the 
industry's payroll. In citing these effects on laoor it is recognized 
that the increase of 13,6 per cent in the Industry's production tonnage 
het^'een 1953 a,nd 1934 caused hy the increase in the farmer's income and 
demajid for fertilizer contrihuted to these lahor results. 

During the second yea.r of codal operation, production tonnage made 
a further increase of 13o8 per cent over that of the first year of codal 
operation. This is reflected hy the compara.tive Spring season lahor 
statistics which show increased total man-hours of 6.6 per cent. This 
increase did not result in further spreading employment as the a.verage 
man-hours' per week increased 3o2 per cent and the nunher employed in the 
industrj'- decreased 3,5 per cent while the average hourly wage ra.tes per 
week decreased 3 per cent. The individual worker's weekly pp^ envelope 
decreased .-4 of 1 oer cent. 



(*) Testimony of Charles J. Brand, puhlic hearing on volimtary lahor 
agreement on Fertilizer Industry, IToveraoer 8, 1935, p. 27, (Copy 
in WEA Fertilizer Industry Files). 



9761 



Comprris on of Pre-Code gjid Codal Lo."bor Data 

Since our statistics on ein^loynent sho'7 that the iionths of January, 
FebrUcary, March and April of each jrear re;)resent a, peak of eimoloj'^TiBnt 
and number of man-hours uorked for th'^ indn.stiy the lahor data for these 
months are especially siguifica.it. They provide a g°°^'- "basis of coiTorri- 
son because in 1933 they antedated the President's iLeeiaoloyraent Agreement, 
In 1934 the code had "been /;;iven a couple of months to ;;et into operation; 
in 1935 they give a basis for a second year codal ooerrtion in ;7hich it 
is alleged that the code ^as being less ri; ddly observed (*) but yet 
which was prior to the Schechter decision. 

The following; tvro tables rre self-e:oplanatoi-yP the first re'oresents 
the employment, pa^rrolls, man-hours rnd va.;'e rates for the Siirinr; season 
and thev second, the -jercentpi^e ch;-n;;;es in the various items of labor data 
for the respective periods under coji'sii^.er; .tion. 



TABnC-48 

PERTILIZi]?. lilJDUSTHY "S?r.i::a SLASOiT" S' iPLOYlElIT, PAYP.OLL, ILUI-HOinS, Aiffi 
\1AG2 ?ulTV]S, 3-Z-J()K.2 A:.D DbTJ::Cr CODE,p-,:iaOD (*) 

(Monthly Averages — ^Jpnuary, Pebruary, March rnd A;3ril of Each Year) 



"S-Dring litunber Weekly ;oay- Averr^^e TotoJL 

Season" en^lo^/ed roll (thou- man- man-hours 

(Jan.Peb. (thou- sands of hours per rreek 

Mar. Apr.) sends) dollars) per ueek thousmds 



Average TJeeklj'- 

hcjirly vrrge 

wage rates rates 
(cents) (dollars) 



192S 
1927 
1928 
1929 
1930 
1931 
1932 
1933 
1934 
1935 



26.3 
23.8 
25.2 
26o3 
27=,2 
20o3 
14.7 
14c8 
22c 2 
21.4 



456.3 
416.2 
414.2 
4i2.5 
414.4 
ol4o4 
195c- 4 
148.3 
240.8 
257 » 2 



42.4 
44,5 
33.4 
34,5 



627,4 
574.1 
692,7 
739,6 



30.8 
24.4 
34,5 
33,4 



18.35 
18.90 
17,78 
17,86 
17,71 
16.37 
12,94 
10.91 
11.57 
11,52 



(*) Evidence presented at the public hearing on the Fertilizer Industry 
Voluntary Lpbor Agreement by Al P. O'Donnell, Unit Chief, Fertilizer 
Industry Study, Division of Eevie'-', l^.P^.A. j Tr.^Jiscriot of the Hear- 
ing, ITovenber 8, 1935,' p^ 73. (Co-.iy in U.S.A. Piles) Original data 
is in the Fertilizer Industry llIA „rchives, Exliibit A, Tables I - IV. 



(*) "Our Industrjr Under the Code" b-r Chrrles J. Ijrand, Proceedings of 
the Eleventh Annual Convention of Th^ l",:-tijnal Fertilizer Associ- 
ation ., The Iiational Fertiliser Association, 1935, -p, 23. 



9761 



• . TA3LE 49 

COMPMISOII OP LABOR COIUDITIOifS FOR COREESPOL'DIITG " SPRIITG" PERIODS B30PRE 
AIID DURIIIG N*R.A. (*) 
(Based on monthly averages for January,, February, March and 
April of each yeaj-) 













1934 


1935 


1935 












per cent 


per cent 


per cent 












change from 


chajige from 


change , from 












1933 


1933 


1934 


lIumlDer emploj'-ed 










49.8 


44.8 


-3.5 


Weekly payroll 










62.2 


73.3 


6.8 


Average man-hours 


per 


ueek 


. 


-25.0 


-22.5 


3,2 


Total man-hours 










2.8 


9.4 


6.6 


Average hourly wage 


rates per 


week 


41.5 


37.5 


-3.0 


TTeekly wage rates 










6.1 


5.4 


-0,4 



(*) Evidence presented at the -public hearing of the Voluntary Labor 

Agreement by Al F. O'Donneil, Unit Chief, Fertilizer Industrj"- Study 
Division of Review, NRA, Transcript of tha Hearing, November 8, 
1935, p. 74. (Copy in l^JRA Files) ^ 



Post Codal Labor Data Compared with Codal sjad Pre-Codal Periods 

In order to determine what happened in the post codal period it is' nec- 
essary that we consider labor data for a period which is not an active 
fertilizer season. Ue are fortunate in being able to get Bureau of Labor 
Statistics figures for June, July, Aiigust, and September, 1935, and we 
can compare these figures with comparable figures for the corres^Donding 
periods of the three preceeding years. The summer months of 1932 repre- 
sent the depth of the depression in the pre-codal period. In the figures 
for the summer of 1933 the President's Re-em:ployment Agrooment had begun 
to have a psychological effect althoiog not adopted by th Fertilizer Indus- 
try until Augast 21, 1933, the code not becoming effective until IToveraber 
10, 1933. The summer of 1934 represents a comparative ijeriod of codal 
operation. 

The following two tables give us a com'3arison of the essential labor 
data for corresponding period before /IRA, during PRA, during KRA code and 
after %li© NRA code and are largely self-e:rplanatory: 



9761 



-119- 



TABLE 50 



FERTILIZES INDUSTRY EI.IPLOY; lElIT , PAYROLL, IvIM-HOURS, MB T7AGE RATES FOR 
CORRESPOlIDIIja PERIODS 3EP0RE imA, DlT:i:iC- PR^, FJ^IITG IIRA CODE AilD AFTER 

mU CODE (*) 

(Monthly avern;;es J-une, July, Aiigust fincl SeptemlDer of each year.) 

4 siinmer Ntunher Weoldy Average Total Average ¥eekly 

months employed pryroll man- man-hours hourly vrp£e 

(June, (thou- (thousands hours per neek rrage rates 

July, Aug. sands). of dollars) per neek (thousand) (cents) (dollars) 
& Sept. 



1926 


17.0 


321.1 








20.58 


1927 


14.4 


283.8 








21.36 


1928 


15.8 


294.3 








20,86 


1929 


16.8 


269.1 








20.92 


1930 


16.3 


290.5 








20,31 


19S1 


10.5 


184.9 








17,47 


1932 


7.6 


105.1 


41.6 


292.6 


33.9 


14.21 


1S53 


10.3 


116.8 


42.9 


405.1 


28.3 


12.44 


1934 


12.2 


151.5 


32.7 


368.8 


49.6 


13.28 


1935 


11.6 


164.5 


34.5 


402.1 


38.6 


13.25 



TifflLE 51 

COIvIPARISO:? OP L;lBOR COIuDITI'^ITS for COruEiESPOIiTlIilG PERIOD BEFOr^ IIRA, DURING 

PRA, DTIRIITG lEA CODE AI© AFER ISA CODE (*) 
(Based on monthly averages for Juiie, July, August, and September of each ^'•ear.) 







PRA compared 






Trith pre llRA 




1935 






per cent 






change from 






1932 


llumher employed 




35.6 


Weekly -oayroll 




11.1 


Average man-hours per veek 


3,1 


TotaJL man-hours ^Der 


week 


38.4 


Aversige hourly r/age 


rate 




Tjer week 




-16.5 


T7eekly wage rates 




-12.5 



WA compared Post IJRA Post KRA 
with pre IIRA conrpared compared 

with' D re ICIA with IIRA 

1934 1935 1935 

per cent per cent per cent 

change from change from change fr^' 
1932 1932 1934 



60.5 
44.2 
-21.4 
26,0 

19.8 
-6.7 



52.6 
56.3 
-17.2 
37,4 

13.9 



.5.0 
8.5 
5,5 
9,0 

-5.0 
-0.2 



(*) Evidence presented rt the mtlic hearing of the Voluntary Lahor agree- 
ment "by AL F, O'Donnell, Unit Chief, Fertilizer Indus tr:/ Study, Division 
of Review, iIRA, TraJiscript of the Keyring, November 8, 1935, pp, 76-77. 
Computed from Bureau of Labor Statistics data as revised ty URA and con- 
tained in the Fertilizer Industry IIRA Archives, Exhibit A, Tables I-IV. 



-12C- 



In order that com-parisons may be made for the codal period xrith a 
large number of yep.rs preceding codal operation the follotjing tabula- 
tion shows a conTparison of the relative enployraent, oayroll and \7ase 
rates of the fertilizer industry from 1926 to 1935 using 1929 as a "basis 
of comparison. . . 

iTiBLE 52 



IdS-Q 



PERTILIZEa INDUSTRY EliPLOYlffiiJT, PAYROLL AliD ^'aGE RiiTES, 1926-1935 (*) 

(1929-100) 





Monthly Average 


Monthly Average 


Monthly Average ■ 






Entire Year 


January, Feh: 


L-uary 


J\me , 


July, August ; 










March and A^sril 
llumher TJeekly T^eekly 


and SeiD tenter, . . •;. 




Numher 


Feekly Weekly 


ilurnber 


Weekly 


- Weekly 


Employed Payroll wage 


En-oloyed Payroll 


T/age 


Emioloyed payroll 


wage 


- 


(^.) 


if) 


rates % 


c;) 


Co) 


rates i 


C'o) ■ 


m 


rates ^ 


1926 


99 


109 


99 


100 


111 


103 


101 ^ 


111 


98 


1927 


89 


98 


104 


90 


101 


106 


86 


98 


102 


1928 


95 


101 


104 


96 


101 


99 


94 - 


102 


100 


1929 


100 


100 


100 


. 100 


100 


100- 


100 . 


100 


100 


1930 


98- 


96 


98 


103 


'101 


99 


97 


101 


97 


1931 


69 


68 


85 


79 


76 


92 


63 


64 


84 


1932 


52 


42 


73 


58 


■ 47 


72- 


45 . 


36 


68 


1933 


62 


41 


61 


56 


35 


61 


61 


40 


59 


1934 


79 


56 


64 


84 


58 


65 


73 


52 


63 


1935 








31 


62 


65 


69 


57 


63 


(*) 


Coraput 


ed from Bureau of 


Lphor St 


a.tistics 


data contained in 


the Per 


■tilizer 



Waf-,'es alcove tao nininiuii duriri;-; the Code 

It "-IPS teen .previously indicated that though Lahor Advisory Board 
in malcin- its recommendations to the De^-.uty Administrator, recommended 
that a clause for equital:le adjustment of uages above the minimum "be 
included in the Coue. Such a provision was not included. 

Statistics are not available to determine what haispened to the 
wa -es above the minimum durin,- tne period of codal operation. Some 
evidence is in the files to indicate that in certain instances wages 
above the .ninimuin were reduced at the time the code v/as put into 
effect to compensate for the siiorter hours for this class of employees. 
One com-olaint was that a foreman who was reduced in hours from 60 to 
40 a weelc was reduced in pay from $30.00 to $20.00 per weok (*). The 
question was raised wita The ilational Fertilizer Association at a 
meetin;^ in "iir. Brand's office, October 25, 19.35, as to whether or not 
the Association had aixy evidence as to wa-es paid above the minimum 
and as to whether or not they had ever conducted a survey with regard 
to this subject. IIo one present at the meeting; had any knowledge of 
any existin^;^' data on this subject and those present included the 
leadin:; executive officers of the National Fertilizer Association: 
i'T. Charles J. Brand, Executive Secretary and Treasurer; I.Ir. F. S. 
Lodr^e, Open price Section; L'r. Jolm laoran. Cost Accounting Section; 
and i.iiss Josep"hine Feeley, Assistsjit to l,Ir. Brand. 

Selations"hip of Increases in Wages to Increase in Prices 

Prom Table 53 it is apparent that although labor cost increased 
52 per cent from 1933 to 1934, nevertheless this increased labor cost 
represented only 5.8 per cent of the increase in the actual net cash 
dealer price received by the manufacturer at his plant. Chart X is a 
graphic presentation of the data in Table 53. 

(*) Labor Complaints against Stajidard ITholesale and Phosphate Company. 
Preferred to in Memo ran dum from District Compliance Director, 
Joseph J. Skorup, Jr., Norfolk, Va. District to i.Ir. Donald R. 
Henshaw, Field Director, dated December 22, 1933. (Copy in N.E.A. 
Fertilizer Industry Files) 



9761 



, -122- 

TiffiLE 53 

SU,..;aZY 0? i.IXED FERTILIZE?. COSTS III 'Tr.-J: PPJlTCirAL FEHTILIZER COHSUli 
lilG AEEAS n: TI3 ILIITED STATES TOT. LEADIM OIuiDES (*) 



Territories 






Increase 


Increase 


0011113 ined 


1933 


1934 


Dollars 


Percentat'e 


Cost at Plp.nt: 










Materials 


$9.77 


$11.02 


$1.25 


13 


Bags 


.88 


1.3S 


.45 


51 


LalDor: L'ixing 










s-iip'oin-, e 


!tc..61 


.93 


.32 


52 


*Otlier Costs 


4.24 


4.40 


.16 


4 



Total Cost at Plaait 

15.50 17.58 2.18 14 

Actual ret Cash 
( Deal er)p rice 
Received 'by 
lianufacturcr 
At Plpnt 15.98 16.68 4 . 70 . 34 

FHOFIT or LOSS ■ **1.52 1,00 2.52 

(*) Incluc.es ta" ta^e; lifiit, power, fuel; taxes; depreciation on 
physical property at income tax rates; office, sales, and administra- 
tive exoenses; Da.d dchts; insurance; etc. 
(**) Indicates loss. 

POST-CODE CHA^.T&ES III LABOE COIIDITIOITS 

Su'osequcnt to t:ie Scl.'ichter decision, The National Fertilizer 
Association sent out a circular letter to tlie memhers of the Industry 
requesting infomiation as to changes from code provisions v/ith regard 
to ^TaLj'es, hours and workijig conditions. The following ta'bula.tion shows 
the results of this circularization: 



(*) Tahle 53 is baseci on the -eneral report (included as Exhihit 20 of 
Appendix II) issued by Tlie l^ational Fertilizer Association as a resiilt 
of their cost survey. This survey was undertaJcen at the request of 
NRA so that farmers or their Con^^ressional representatives who complain- 
ed of prices would have the facts on the cost of production. 

T-iese cost fir^ures are bn.sed upon a. cost accounting system used 
for years hy T].ie Hational Fertilizer Association and approved with 
Modifications hy KM during the codal period. It is highly technical 
and many of its provisions controversial. The reasons for the adop- 
tion of many of the arbitrary assumptions wers explained by John Moran, 
Cost Accountant, The National Fertilizer Association, in a speech re- 
ported in the 1935 Procce '.ings of the iumual Convention of the Nation- 
al Association of Cost Accountsjits, a copy of which is included in 
Appendix II as E^diibit 21. 



122 



CHART X 



COMP ARISON OF COSTS AND SELLING PR ICES 

NINE REPRESENTATIVE GRADES OF MIXED FERTILIZER 
SPRING SEASONS 1933 AND 1934 

Cr. O. B. FJiCrOPY BASfS) 



1934 

*I8.68 



*I7.G8 



1933 




*I5.50 




» 


*I3.98 




SELLING 


ill 


PRICE 











:^^^^ 



MATERIALS 
COST 




W. 



SELLING 
PRICE 



-124- TJfflLS 54 

RESULTS OF MTIOmAL FEHTILIZE.^. ASSOGIATIOH qUESTIOrLAlHE 0¥. POST CODE 

LiL30R COimiTIO'^S (*) 

NLimber reporting 198 

llo clian£;es in vrages or hours 188 

Increased hours from 40 to 48 1 

Increased wages 2 

Reduced wages 5 cents per hour 2 

Minor changes 5 



The only additional availa'ble evidence of creaking avay from 
the cod?l lahor standards in the industry, is ine testimony of Mr. 
C. F. "Jockley of txie Davison Chemical Company (*). lie stated that 
certain fertilizer rapnufacturers had cut their wage rates so tliat 
their lahor cost per ton is only alaout 50 per cent of what the labor 
cost nould have "been were the code rates still in force in those 
plants. He did not cite specific instances "but stated that it was 
the degree in which code rates had "been deviated from rather than 
the nui-aher of people that had done it which was the vital considera- 
tion. 

'TEE PROPOSED VOLUITTARY LABOR AGREE: .EilT 

Desire of Industry to Cooperate 

The Fertilizer industry is one of the industries which seems 
to have "been satisfied with the results achieved under their code of 
Fair Conpetition. It is alleged that they had operated at a nominal 
profit for the first time in several years (*) and the industry was, 
therefore, a;.ixious to preserve the gains made under ITRAj both as to 
capital and labor. 



(*) Data contained in letters from Charles J. Brand, dated July 18, 
1935; July 24, 1935; August 8, 1935. (Copies in IIRA Fertilizer 
Industry Files) 

(**) Troiiscript of hearing of the voluntary labor agreement ijr the 
Fertilizer Industry, Ilovember 8, 1935, p. 91. 

(***) Testimony of Charles J. Brand, Secretary of the National 
Fertilizer Association, at IJational Recovery Adm.inistration Hearing on 
Title A of Proposed Voluntary Agreement for the Fertilizer Industry, 
November 8, 1935, p. 28. 



9761 



-125- 

Public Resolution No. 26 of the 74th Congress was adopted, 
extending until April 1, 1936, certain provisions of Title I of the 
National Industrial Recovery Act in setting forth the authority of the 
President to approve Voluntary Agreements which contain lator provisions 
in addition to certain concessions from anti-trust prosecution. The 
fertilizer industry immediately set atout taking advantage of this op- 
portunity afforded them "by the President. 

It so haiDpened that about two weeks after the Schechter decision, 
the annual convention of the National Fertilizer Association was held 
at White Sulphur Springs, and a tentative outline of a plan was presented 
to the nearly 500 members of the Industry attending the convention. (*\ 

Plan Considered at Regional Meetings 

Regional meetings for presentation and discussion of the agreement 
were held following the convention in all districts of the United States, 
except California. Members representing in excess of 92 per cent of 
the production of the industry attended these meetings (**). 

Procedure in Handling Agreement 

In accordance ■ with procedure which had been prescribed. The Nation- 
al Fertilizer Association submitted to NRA the labor provisions of the 
proposed agreement for consideration. These provisions were duly no- 
ticed on October 28, 1935 for a public hearing to be held on November 
5, 1935. Title A (Labor Provisions') of the proposed Voluntary Agree- 
ment is included in Appendix II of this report, and is labelled Ex- 
hibit 22. 



(*) Supra. 
(**) Supra. 



-126- 
Labor Provision's Sub staiiti ally, as iii"Cx)cle 

T'.iat it wp.s tlie general desire of tlie industry to maintain 
tlie staiic.ard of labor conditions established by tiieir code ic in- 
dicated by tlie fact that essenti.-aiy t.e spane miniriiuni hourly rates 
of ;oa.y and limitation of mp^xiiviu-a hours as contained in the code were 
incorporated in the voluntary a^^reeuient. Provision was also included 
to continue the definite privile^^'e extended employees to bargain 
colleccively, as under Section 7-a of the "i'lPiA. 

Code Provisions of Mreenent not Approved _ ;_ ' . . 

Following the public hearing held on Tovember 8, 1935, the 
labor provisi'jns a.s proposed in the voluntary agreement ^?ere talcen 
under advisement by 1"IlA offic:.als, but up until the time of 
writing, (Februar" 1, 1936) they had not been a:"iproved or made 
effective. 

gOD3 PHOVISIOhS CLiQIIIED 

It is of interest to note that certain of the code provisions 
which hp.d undoubtedly been Iiurriedly prepared, ajid which had been 
found to be ambir;aous in the cxi^erience of actual operation, were 
revised in the interest of clarification. In doing tnis, a m.ajority 
of t'j.e axibiguities pjid discreppncies which were pointed out in the 
discussion of the Code la,bor provisions in this chapter were re- 
moved (*) . 



(*) A detailed analysis of the difference between the h. H. A. 
Pertili:;er Code provisions and those of the loroposed Voluntary Labor 
Agreement are contained as Exl::ibit 23 of Appendix II. 



"127- 
Scope of Study 



This cha-oter treats of the clistrihution and --^rices of fertilizers 
and fertilizer materials. The qiia,ntity and value of the -nror'ti.cts dis- 
tributed, the marltet areis in which sold, the n-uinber, economic activi- 
ties, characteristics and pfTchasing poi-'er of the customers, - all 
have direct hearing on the distrihutive r^echanisi-; set tini to mp.rhet 
them, and the "orices at i»,'hich they fire sold. To critically analyze 
and evaluate the methods ^nc" -ractices follovref' in the ^''istrihution 
of these "orodiicts it is import-^nt to '--o" -^s f^r as ^ossih2?e I'jh:"-, how, 
and under viliaX conditions the existing st--tus has d^velo""ied. 

This cliapter also treats of the "-.inds of fertilizer and fertilizer 
materials sold, the amovnts sold annua,lly, and hy seasons, the trends 
in amounts sold, inhere and vh" cons^umed, "by i"'ho?n consumed and. under 
wiiat conditions, how and lij whom distrihuted, together vdth consir'er- 
ation of prices of fertilizers and the factors affecting them. As 
to each of the ahove there is discusser' the status quo at the time of 
the submission of the Ccc'e, the Code i^rovisions p.vj"- their effect on 
distribution and prices anc' the "^ost codal situation and the i^resent 
outlook. 

Distribution of fertilizer I'aterisls and i'ixed "fertilizers to Consumers 

Total arnuia.l S?les 

In Table 4 of Cha-ntor I, the tonnage of fertilizer sold in each 
year from 1910 - 1935 v/as tabulated. T-^ble S'^. indicates the tonnage 
by States and by geographical districts (*) 

As Fill be -noted from Table 4 i?'hich -iresents data on tonnage sold 
from 1910 to 1935 inclusive, the total tonna.go lia.s di;jring this entire 
period ranged from the lo^r of 193?, 4,379,000 tons to the high of 1930, 
8,163,000 tons. It is also seen tlmt by 1^35 the total sales lias ad- 
vanced to 5,500,000 ton" '.-rhile The "^'^ational "fertilizer Association 
estimate for 1935 is 6,:-^'J0,000 tons. In other r^ords the last two years 
business has been not far off from the pre-war five vear a.verage 
(1910-1914) of 6,135,854 tons, and that of the -eriod of 19?0-19J;4 
inclusive, 6,195,353. 

Limitations of Sales Data 

With reference to the U. ■=. totals here presented and to the 
State details in Table 5'"-, it should be pointec' ou.t that while they 
are referred to as "consumption" figures they are not strictly tliat. 



(*) Inclp-ded in Appen-'.ix II as Exhibit 34 is a tabulation of the 

detailed statistics from 1950-1930 on which a portion of Table 
55 is based. , - 



19ti 



TABLE 55 



££2, 



TT - + - T- 



























»0C>0 tONWtOOOO Ci a» W « CM t- o 

'. T ^. *i ''. ^. **. <5'. * M CM « r-_ o I - 00 r*^ c- 

ON^NM M OC •« 00 CO CO Ol C> 



r^oooooooooc-ooo as 



sss 



©oogooo oooiowooo '•«««'♦ »o»ua»oot-o ootg-wootc woo 

WWrt-^-^OO tOOO^CMOt-OO ^iflU5«00ON«Wt-00t-O eJ..-5»r:OoCJOOOO- 



5>X 

I 



" 



9791 



-129" 

As a ma,tter of fact these lii-^ires are to a cf^rtain extent estimates. 
5'ootnote, reference to the State table also sliovf that for some states 
the cLata are ';:a.sed on ^a^ sales ^^'hich in some c'^ses may re"-iresent a 
tonna/^e in excess of th-'t actTia.lljr sold. Tax tags must necessarily 
be purchased "by the man-ufactiirer in adv--ince of sales. Thus in Indiana 
iax tags sold for 1934 covered 15':, 824 tons while the actiial sales as 
nearly as could "be determined from the sales rc-norts of manuf'^ctitrers 
amounted to 140,552 (*), 

The ITationa.l Tertilizer Association iTrelimina.ry estimate for 
Indiana for 1934 was 149,003 tons (**). 

However, the dta, "^resented are the closest 3,iTiroximations avail- 
able as to c'ct-oal tonnage sold and -->roba,bly are not far from the facts. 
Further the pe rcentarcs and other rela.tionshi-ns calculated therefrom 
undoubtedly present for the .^-reater -laxit -^ true ^-licture of the 
situation. 

While as pointed out in rT^ater detail below there is a sifjnificant 
relation between prices of farm crops and the fertilizer tonnage used, 
it should a,lpo be noted that there has been a. constant trend to'"ard the 
use of more fertilizer. 

Farmers , The P rincipal ConsiJjners 

So much for the total buP- of fertilizer raovinrrc through the 
various channels of distribution from nrodticer to consun.er. According 
to estimate of She ITationa.l 'S'ertilizer Association (***), 98 ner cent 
of the total fertilizer tonnage was used bjr farmers. The Census (*''■■■■■*) 
of Agricultui'e in 1930 secureci data on the amotint of commercial fertil- 
izer bou^^ht by farmers in 1929 and the total rc-norted for the United 
States v/as 7,525,000 tons. In the same "ear the tonnage sold was stated 
by The "■Tational Fertilizer Association (**---=^) as 7,974,712 tons, ^he 
Census data would thus indicate tha.t 93 -ner cent of the totaJ tonnage 
sold in 1929 was sold to farmers. The a/'i-^arent discre-oancy between the 
two percentages, 98 and 93, is of little significance and is iirobably 
accounted for b^- the fa.ct thiD.t the sales estimates in some 17 or 20 



(*) Purdue University, Agricultural BVoeriment Station, Lafayetts, 
Indiana, Aoril, 1935, Table 5, p, 12. 

(**) The Fertilizer Review, The ■'ational f'^ertilizer A.ssociation, 
; 'arch-April, 1935, p, 16, 

(***) A-'plication for Presentation of a Coc'e of "P'air Competition, -o. 
8. (Copy in "T.R.A. "'ertilizer Industry Files) 

(**'**) Fifteenth TDecennial Census, 1930, Census of A^-riculture - 

Swnnary for the United States, Volume II, Part 2, Table 22, t5,53, 

(*****) The "^'ertilizer 'Review, ''ay-June, 1931, m. 15, The "i'Tational 
Fertilizer Association. 



-130- 

States are "based on sales of tax ta.?-s ^-'hich may anr' often do exceed the 
amon:it of tonnage actually sold. There is also a i^roha"'oility that some 
farmers did not adequately and acc\irately report to the Census. 

The points of real si£;nificance are fir=t - the total tonnar^e sold, 
in the prosperous years and second - the very high -nor cent of the 
total which was sold to fci.rners. The latter ---^oint is imiiortnnt since 
it means that the fertilizer industry is r'e-oeidcnt almost e-'clusively 
upon one class of customer. The income a.nd i^oneral -i-'-rchasin^ -novrer of 
these cu.stomors is suhiect to frequent and violent fliictuations which 
reflect directly uiDon the potential sales of ff-rtilizor. 

i^-cof'raiihic Variations in Tlse 



Knowin.fr the tonna;'^c solcT nnd the fact that farmers constitute the 
chief mar::et, the next question of prime si-Tnif icavice in analyzing the 
distrihuLtion of fertilizers are: how many farmers use them; where are 
they located; is the consnjiniDtion spread ixniformly throughout the country 
and, if not, the reasons for the roorgraphic c'lffcrcnces. The Census 
of Agriculture (*) states tha.t in 1930 there were 2,;?o9,548 farms which 
reported the purchase of co'-imcrcial fertilizer in 19^9, This constitutes 
33 1/3 -OCT cent of the 6,583,647 farms in the TTnitcd States in the Spring 
of 1930 v/hcn the Census wa,s ta'':cn. 

It m\ist not he assumed from this tha.t the fertilizer inr'ustry is 
reaching only a third of its trotential market. The total nnmhcr of 
farms a^; reported include trva-ics of farms such as ranges, on '-'hich 
fertilizers are not ncded and ms.n;'- more so located with reference to 
soil t;vn-)e and soil fertility and Droc'iicing such crons as to reouirc 
very little if any comincrcial fertilizer. 

There are, ho^'ever, numerous fprmcrs ^^ho coixlrl -"irofitahly use some 
or more fertilizer ^ho have not yet learned so to do. Or nutting it 
the other "'ay a/round, these farmers constitute the unsold marhet, ^.e- 
search on the nart of va.rious interested agencies, and the state ag- 
ricultural exoerim.ent stations, a.nd also the exneriencc of the more 
successful farmers, are gradua.ll'"" shoeing the way here !?nc- tha.t they 
have teen successful to a c'egree is sho^-n hy the constant u;^trcnd in 
total tonna.gc during depression years a,s indicated hy the following 
tahle: 

-TABLE 56 

t^HaTILIZI^H 'J'0':'^'AC-'^^5 ?Y '^f^CADT^S (*>^) 

Year ' ' ■ Total Tonna:''"e 

1880 1,150,000 

1890 1,950,000 

1900 2,5On,000 

1910 5,452,5^3 

1920 7,176,754 

1930 8,163,257 
(*) 5'ifteenth Census, 1930 Agriculture^ Vol. II, Part 2, Summary for 
the United States, Tahlc 22, p, 53, 

^ ^ (continued) 

9761 



-131- 

i-Iap 1 covcrin:'-^ the tot'-l n>?^cnditnrcp in 1929 for all hinds of 
fertilizer phows gm^.t .?-corrn.Thic variations in fn-"tili7.er cons-urrmtlon, 
Ta"blo 57 -^resents a s-ummary of sono of these variations hy rcop'rerjhic 
divi?ions. 



COI.^TE^.CIAL 



^APLE 57 

"^TILIZ"PR " 1929 f*) 



Per Cent of 

F. S. Cror^ Tons. Per Cent 

Acreage Bought of Total 



■Parms "Reporting, 
\ Per Cent 
Total All Tarms 



United States 



lO'i.OO 7,6,?5,022 



100.00 



,239,546- 36.61 



Divisions 












ITew England 


1,00 


345,303 


4.58 


68,318 


54.69 


Middle Atlantic 


3.94 


798,433 


10.60 


206,325 


57.70 


East Forth 












Central 


15.66 


773,057 


10.26 


318,594 


32.96 


West Forth 












Central 


38.39 


106,332 


1.41 


56,419 


75.07 


South Atlantic 


7 , 55 


3,707,305 


49.20 


808,175 


76.36 


East South- 












Central 


6.92 


1,185,827 


15.24 


529,175 


49,82 


' West South 












Central 


16.05 


431,885 


5.73 


219,777 


19.92 


ifountain 


5.31 


10,272 


.14 


• 3 ^ p,-!4 


1.58 


pacific 


7.68 


175,538 


2.34 


28,919 


11.05 



The South Atlantic States "dth hut 7.5 ver cent of the total cron 
acreage "of the United States consumed 49 Tier cent of th- total "tonnage 
of fertilizer with an a.verp-c of 264 -lounds per crop acre. East "^Torth 
Central States with 15.6 -oer cent of the total United States crop acre- 
age consumed only 10 per cent of the fertilizers vdth an average of 
only 26 pounds per croD acre. Still more striking ^are the figures for 
the West Forth Cental States Tfhich contain 38,3 ^ler cent of the nation's 



(**) (Continued) 1880, 18,^0, and 1900 - American Eortilizer -^andhook , 
1935, V. 18, ^^arc Pros., '^hilaclelphia. Pa. 

1910 anc 1920 - "Recent Developments on the 'fertilizer In(?ustry" , 
Proce e dings , Sixth Anmaal Convention of ghc -T^tion?! fertilizer . 
Association , tahlc 8, pi?. 102-103, The ^'ational T^rrtilizcrs 
Association. 1930 - "ertilizer Review - April, "ay, June, 1934, 

(*) Based on data in Census o:^ Agriculturo, fifteenth "ncccnnial 

Census, 1970, A-ricult'irc - United States Summary, ■"'ol. II. A 
oetniled uphulation of the State data is contained as Exhihit 
25 of A-^-.endi:: II. ■ 



-132- 

crop acroarc and used only l.^l- -ocr cent of the total 1P?9 fertilizer 
tonnage. 

Variation in ?crtilizci- ^^se on P.-^rtiCT.lar Crpips 

Even tho-uch the -^rinci"'Tal use for fertilizers is on cotton, 
tolDPCCQ, -potato -ind true''- crons , it must not ho reasoned therefrom that 
these croTis alvays req.nirG fertilizers under pll conditions. ""Aether _ 
the limiting: f^-ctors are the soil te:;tiire, soil fertility, anci -erc- 
cipitation, or at least the availahility of '-ater throu'^h irrii'^ation. 
There is a considorahle difference in the extent to which farmers rais- 
ing the same crons use fertilizers in differei^t sections of the United 
States. 

Data published hy the Dc-'-iartment of Agriculture (*) and the 'R-'oreau 
of the Census (**) show tliat large -^creasTies of cotton in some states 
are not fertilized and some of the heaviest tohacco B.nc'' -■-lotato -nroduc- 
ing areas are also only light users of fertilizers. This is grarthically 
shoT/n in ma.ps 1 and Z, with reference to cotton, 'fotc the r^ lativoly 
light use of fertilizer in the "'ississirr.ii Va.licy and "clta and the 
Texas cotton areas as corrrparcd with the cotton further cast. 

Variation in Perccnta/e of Cotton. Acreage jTertilizer 

Tahle 58 shows the total numher of acres in cotton, the numher of 
acres in cotton, the nnmbcr of co'tton' acres fertilized, the pounds nor 
acre a.nd the yield of cotton -"icr acre for n, nvijnhcr of states as of the 
-rc3.T 1950, In ^Torth Carolina (97.0 -.cr cent), "^outh Carolina (90.° 
per cent), Georgia (915.9 --ler cent) anrl Alabama (91.9 ner cent), 90 
per cent or more of tV cotton a.crea."-o ■'-'-'s fertilized T'hile in the 
states of rissi'-si'-i--i (58.0 nor cent), Ar'i-ansas (-^.9 ■oer cent), Texas 
(7,0 per cent), and Ohlahom.a (1.9 -oer cent), fr -utilizers \"crc not so 
coernonly used, T'nere is in'Mcatcd a consid'rablc variation in the 
amount used per acre on that cotton "'hdch wo.s fertilized. ^ hile it 
is tr-uc tla-at most of the states which fertilized a la.rge -percentage of 
the cotto-n acreage had a higher -ncr acre yield of cotton it should not 
necessarily be conducted from this that the fa-rmcrs in the other states 
would lis.ve been better off liax"! they fertilized more of their cotton a-nd 
made heavier ap^Tlications per acre, Hisso-iud used only 145 pounds -nor 
acre but ha.c' a higher yield -ncr acre than did Georgia anr' Alabama each 
of which fertilized over 90 -ocr cent o"^ their acreage and used P.72 and 
263 pounds per acre respectively. Missouri's ayeragc yield -ncr acre 
Y/as calculated on the basis of total acreage - not only the 7 ^-icr cent 
fertilized but also the 93 -oer cent not f-rtilizcd. 

In the casr of tobacco, an o-itstanding illustration of the same 
sort of thing is found in com-'aring the States of f^-eorgia and 'forth 
Carolina on the one ha-nd and Kentuc^.:y and Tennessee on the other. 



(*) United States De-nartmcnt of Agric-iiltiire , Yearbooh, 1931, Table 

583, 13. 1070. 
(**) Census of Agriculture, 1-^30 Vol. II, Pnrt 3 - Surawary for the 

United Sta.tes. 

9761 




97:;i 



-134- 

TA3KE 58 

COTTO'J ACREAGE FEI^TILIZED, AI:!OU>ttS ?BH ACHE, AlTD YIELD OE COTTOH PEE ACRE (*) 

(1930) 

Fertilizer Yield of Cotton 
Acres in Cotto n Used on Cotton Per Acre 
i-Ttmi'ber Per Cent Total Per Acre 

Fertilized Tons Pounds Po-unds 



Southeastern 


States 


90,000 


95.5 


17 ,54-/. 


408 




Virgiinia 




228 


Ijorth Carolina 


1,644,000 


97.0 


338,938 


425 


233 


SoutB- SaiDlinc. 


2,211,000 


90.9 


331,980 


330 


227 


. OeoTgia 




3,945,000 


95.9 


515,168 


272 


190 


Alabarar. 




3,820,000 


91.9 


450,33^ 


262 


188 


. Florida 




105,000 


91.4 


11,904 


248 


232 


South Central 


. States 












i:issisGi"ppi 




4,296,000 


58.0 


274,120 


220 


169 


Louisiana 




2,125,000 


52.0 


90,450 


180 


162 


Arlvansas 




3,985,000 


43.9 


162,152 


185 


112 


Tennessee 




1,252,000 


54.4 


75,101 


216 


156 


Missouri 




377,000 


6.9 


1,835 


145 


207 


SouthT?;e stern 


States 












Texas 




17,536,000 


7.0 


107,450 


175 


108 


Oklahoma 




4,155,000 


1.9 


7,252 


175 


106 


Arizona 




212,000 








324 


ITew Mexico 




13^,000 








333 


California 




273,000 








402 



10-year average 1919-1928 v/as 106 pounds per acre. 



(*) From U. S. Department of Ai_;ricult\urc Yoarhool:, 1931, p. 1070. 
9761 



All foiir states are heavy' procUicers of tobacco anc" while data arc not 
available to show the iiumhcr of. acres of tahacco fertilized, ■ it is a 
'rnotm fact thpt Georgia a-.d 'Torth Caroiina tohacco growers use rela- 
tively large amotuits of fertilizers while the o-yiositc is true' in, 
Kenbuclry and Tennessee. - ' , ■-. 

Soils Vary "Widely in Their "^es-ponsc to '^'crtilizcr , ; :» 

Sxich data as the a.oovc led at once to the consideration of -the, 
reasons for these variations in use even on the same cro-os. The 
National Fertilizer Association states (*) that a survey. which it i 
ms,de several years a.go (1928) indicated thp.t on the average, farmers 
estimated that they received a return of $3.50 for each .^LtOO' expended 
for fertilizer. At first thoiight it might seem as if some of the 
tohacco farmers of Kentuc^icy and Tennessee and me,ny of the cotton 
farmers of the Mississipni Valley and Delta and in Oklahoma and Texas 
were overlooking a good husiness "oroposition and the same might per- 
haps -be tho-ught of the farmers in the great corn and wheat "belt where 
still smaller ajnounts of commercial fertilizers are used. However, 
the reason for the very heavy use of fertilizers in the Middle and_ - 
,Stuth Atlantic and I!a,st Central states rests on the low fertility'- of 
the soils and conseoucnt low "orodiiction unless plant fooc' is acidcd. 

This low fertility in at least some c^ses is due to natural 
reasons and in others to continual crop"~iing imder such farm systems 
as remove from the soil much greater q-oantities of plant food, than 
are added. The following quotation is indicative of the low natural 
fertility in some of the soils in the Southeastern cotton "belt! 

"The dominant need for notrogen may he hotter understood when 
it is explained that ■'practically all soils in this territory, 
even when first cleared, ha.ve a very low nitrogen content," )**) 

On the other hand some of the tohacco soils in Kentuclry and 
Tennessee naturally conta.in a much higher uercenta.^-e of plant food, 
an outstanding illustration hein.'^ TTayette County, Kentuclcy, which is 
in the heart of the Blue Grass ■p.egion. The same is true of the Central 
and West Central cotton counties in the State of Texas., The following 
quotatioij descrihes the situation: ■ ' •" 

"These soils sometimes respond to ai?plication of nitrogen and 
■phosphoric acid, although fertilizers a,re uncertain ----- 
■ In general the use of fertilizers on these soils has not "been 
profitahle." (***) 



(*) Application for d Code *f "^air Competition for the "fertilizer 
Industry, :o.' 1, (Copy in ITU. Piles) 

(**) "Experiments with Commercial ITitrogenous "fertilizers" - Ala- 
bama Agricultural "^x-ieriment Sirati«n, bulletin ?38, August, 193S, 

(***) Texas Agricultural Ejrperiment Station (1934), Bulletin 498. 



.. ,-^136- 

• In some sections of light or scanty preci-pitation fertilizers as 
developed to date have not -.iroven satisf'-'ctory, .Thus in I'ansas it is 
stated that it is onlj'' in "the cxtror-ie coutheaptcrn section vherc it 
(fertilizer) is u.sed to any extent." (*) Further ^-'est in the state 
where 'precipitation is much lighter, fertilizers have not heen found 
to give sa.tisfactory results a? is indicated "by the follovdng statemenlj 

"The use of commercial fertilizers in the lighter-rainfall 
sections frequently results in a decrease in the yield of 
grain crops "because they stimulate early growth which uses an 
excess oriantity of moisture, thus reducing the auahtity avail- 
■ able to mature the crop. This lachof moistuxc and the more 
tender vegetation resulting from the rapid growth "lalce the 
plants more susceptihlo to 'firing'. The' same condition may 
resixLt from the use of excess auo.ntltics of fertilizer in the 
more humid sections," (**) 

Quantity of Fertilizer Cons-umed "by Ki nd i 

The annual tonnage figures of sales of fertilizer cover a_v^riety 
of kinds and also for some kinds a variety of rrp/'cs. Of the total 
.tonnage sold in 1934, 74.13 ner cent re-nresentcd mixed fertilizene con- 
taining tvfo or more of the plant food elements and mixed at the factory. 

All three of these plant food clem.cnts were contained in 70,44 
per cent of the tonnage, 3.56 per cent -"'erG mistures of "ohosohorus and 
potassium, and the remaining 1.12 ner cent consisted of nitrogen and 
phosphorus or nitrogen and Tjotassixmi mixtures (***) 

Tahle 59 contains the complete details of th: findings of this 
survey. and shows the -^erccnta^'p of each "id-nd of fertilizer of the total 
of- all kinds reported, 

G eogra-ohic Variations of Relative Importance of ?^ixed Fertilizers and 

Fertilizer Materials i 

There, are nota.hlc -'Geographic variations in the sales of mixed 

(*) Letter from C. E. Bucliaiian, "Hirector, Control ""division, State 
Board of Arf-riculture , to C. F. ^Boh^nnan, ':T^vem"ber 15, 1935, 
(Copy in I^TRA fertilizer Industry Files) 

(**) "Comii-ercial "fertilizers", report of the Fansas State Board of 
Agriculture :^or the qioarter ending ''arch,. 1930, p. 33-34. 

(***) "A Survey of Fertilizer a'nd Plg,nt Food Cons-um^-^tion in the- 

United States for the Year Ended Jiine 30, 1934", Proceedings 
.. ■■■ of tlie "Eleventh Ann-ua,l Convention of The ''Tational "fertilizer 
Association, The I'fational "fertilizer Association, 1935, t>^t, 
138-203. 



9761 



-157" 

fertilizers and fertilizer ma,tcrials not only as tn munbcr of tons 
"but alco as to the relative importance of these two classes of fertil- 
izer. 

Table 61 presents illustrations from Table 59 »n some States 
which show wide divers5nce either from the United States average, 
from one another, or both. 



9761 



138 



TABLE 59 
Percentaoe or Each Kind or Fertilizer of the Total or All Kinds Reported 



StoK 


Complete 


P-K 


All 
commercial 
miituree 


Chemical 
(3) 


OrTOoic. 


Super- 
phoephate 


other 


FoUab 


Other 

(I) 


m.:,^ 


Nea England 


78.39 
89 03 
72.06 
7403 
69 81 
81.41 
62 09 

73.68 
76.19 
85.77 
71.38 
63.56 
74 39 
49 67 

71 64 
61.79 
73.50 
73 03 
80.51 
76 11 
69.58 
66.37 
45 40 
55 29 
80 96 
60 28 
74.61 
81.78 

64.87 
63 00 
71 74 
45.39 
49 21 
76.79 
69 18 
33 27 
37 17 
44 73 
33 33 
90 00 
14 43 

20 30 

17 24 

47.25 

.67 


.03 


78.54 

89.03 
72.13 
74.13 
69.87 
81.46 
62 87 

76.80 
77.10 
86.72 
7488 
81.98 
79 29 
51 64 

75 10 
71 16 
77 34 
74 64 
81.21 
79 83 
70 36 
66 37 
66 38 
57.78 

81 02 
66.71 
77 80 
81.78 

74.15 
68.74 
85.53 
66.61 
59 19 
82.13 

82 85 
77 81 
58 55 
47 80 
33 33 
90 00 
14 43 

22 40 

17 24 

47 25 

.67 


4.64 
3.09 
6.50 
4.48 
7.26 
5.47 
4.90 

369 
504 
4.49 
206 
202 
388 
508 

11 42 

3 56 
10 87 
14 14 
12.13 

790 
15.45 
20 43 
420 
264 
8 80 
1627 

4 52 
1 34 

1 92 
1 22 
.62 
10 97 
1 61 
340 
2.78 
.67 
1.25 
1.80 
66 67 
10 00 


3.92 
.76 
2.72 
■ .57 
4.74 
1.47 
13.40 

.73 
.80 
1.75 
45 
.14 
.54 
.16 

.55 
.18 
25 
36 
21 
388 
06 
.14 


6.17 
309 

6.71 
17.83 
892 
6.28 
7.95 

1490 
1429 
283 
18.43 
1242 
11.46 
39 37 

9.19 

17 8/ 
7 21 
6 50 
4.34 
2 65 

12 40 
11 31 
26 69 
34 60 

731 

13 41 
16.16 
1602 

22.26 
28.57 
12.26 

14 21 
38 71 
13 19 
11 00 

18 66 
38 90 
4341 


1.91 
.48 
470 
.83 
308 
296 
3.59 

1.13 
1.23 
1.99 
.93 
.39 
.65 
1 24 

29 
,62 
07 

10 

1.71 

.17 

.02 

1.47 

360 

05 

1.60 

03 

.30 

.62 
.71 
23 
4.24 
31 
36 
.41 
66 
33 
6.69 


2.53 

3.04 
.82 
.23 

1.71 
.64 

3.73 

1.10 
.44 

1.01 
1.00 
2.81 

2 a) 

.63 

2.18 
.56 
2 11 
397 
1.91 
3.77 
1 53 
1 73 
.99 
1.25 
2.67 
1.08 
1 20 
.56 

.76 
.51 
1 31 
1 59 
.08 
.60 
2.60 
1.16 
.79 
20 


229 
.51 
6 42 
1 !)3 
4.42 
1,72 
3.56 

1.65 
1.10 
1.21 
225 
.24 
1.98 
1.38 

1.27 
6.05 
2.15 
.28 
.10 
.26 
.03 


21 46 




10 97 




03 
.09 
.02 
.05 
08 

2.90 
.45 
.08 

3.11 
17.42 

6.28 

1.44 

1 75 
3 72 
1 30 
.31 
.47 
.93 
.58 


27 87 




25 87 




30 13 


R I 


18,54 




37.13 


Middle Atlantic 


23.20 


N Y 


22.90 




13,28 




25 12 


Del 


1802 


Md 


20 71 




48 36 


Southern 


24,90 


Va 1 


28 84 




22 66 




25.36 


Ga 


18.79 


Fla 


20 17 




29 64 


Miaa 


33 63 




20 98 

1 28 

04 

590 

07 


.27 
.07 
.02 
.01 


33 62 


Mo 


06 
.13 
.92 

29 


42 22 




18 98 




33 29 




22.20 


Okia 




18.22 


Mid-vxH 


fl.l2 
5.72 
13.67 

20 97 
8 95 
5 34 

1366 
44 54 

21 39 


22 
17 
.05 
2.19 
.01 
.28 
.29 
.67 
16 
05 


07 
08 


25.85 
31,26 


Ind 


14 47 


III 


.19 
.09 
.04 
.07 
.37 
.02 
05 


33 39 


Ky 


40 81 


Mich 


17,87 


Win 


17 15 


Minn 


22 19 


Iowa 


41 45 




52 20 


Neb 




66 67 


S. Dak. 














10 00 








85 57 

6 11 
.86 
10 00 
60 40 
96 09 
10.72 
12.87 

379 

100 
1 00 








86 S7 


Watm. 


82 


28.82 
75 00 
42.25 
38 28 
391 
20 95 
20.71 
30 81 

22 70 
22.70 


30 57 
86 


4.21 
1 73 


1 15 

4 31 

SO 


6 74 


77.60 


Idaho .... 


82 76 


Colo 






62 75 


Arix. 


.67 




99 33 


N. Mex 








100 00 


Wadi 


36 59 

37 04 
1687 

76.14 
76 14 


36 
1 00 


40 00 
38.22 
18 34 

76 14 
76 14 


18.21 
6.64 
35 14 

06 

.06 


6.92 
338 
4 11 

.01 
01 


3 17 

'I 

09 
09 


1 03 
i->36 
7.32 


60 00 


Oregon 


61.78 








23.86 


Puerto Rico 







23 86 












70 44 


2.56 


74 12 


938 


157 


11 06 


.55 


1 78 


1.52 


25 88 







(1) The difference between the figu 
percentages of N-P and N-K mixtures, 

(2) Includes nitrate of soda, sulphi 
phate or potassium nitrate. 

(3) Includes 

(4) Includes bone 

(5) Includes 



s in this column and the sum of those in the preceding two columns i 
I of ammonia, cyanamid, calcium nitrate, etc. but does net include a 



plaster, liming materials, peat, magnesium compounds, etc. 



1761 



-139« 
TABLE 61 



PEE CENT OF TOTAL FERTILIZERS EEPRESEIWED BY MIXED FERTILIZERS AlTD BY 
VARIOUS "uIATERIALS (*) 

Materials 

Mixed Total Nitrogen Super Potash 
Fertilizer Materials Carriers phosphates Percentage 
Percentage Percentage Percentage Percentage 

U. S. 74.12 25.88 10.98 11.08 1.78 



N. C. 


77.34 


22.66 




11.02 


7.21 




2.11 


Maine 


89. OS 


10.97 




3.85 


3.09 




3.04 


Georgia 


81.21 


18.29 




12.34 


14.34 




1.91 


Mo. 


57.78 


42.22 




2.70 


34.6 




1.28 


Minn. 


68.37 


32.63 




20.57 


11.31 




1.73 


Gal. 


18.34 


81.68 




65.95 


3.79 




.49 


(*) Talccn 


from "A Survey of Fert: 


Llizer and Plant Food 


Consumption in 


the United States 


for the 


Year ended June 


30, 1934 


, " 


Proceedings 



of the Eleventh Annual Crnvention of The National Fertilizer 
Association . The National Fertilizer Association, 1935, Tahle 9, 
pp. 192-193. 



Tonnage of Fertilizer Materials Sold to Consumers 

The remaining 5.28 per cent of the sales consisted of straight 
fertilizer materials, such as superphosphate, nitrate of soda, ammonium 
sulphate and potash salts, sold cither for direct application as such 
or for use in homemade mixtures. Tahle 60 gives the details of the 
tonnages of fertilizer materials sold in the different states as 
determined by The National Fertilizer Association survey. 

This tahle shows that the greatest tonnage of any single material 
was represented "by 12 to 16 per cent superphosphate followed in im- 
portance by nitrate of soda which is now the chief chemical source of 
nitrogen for plant food. As has been pointed out in a previous 
chapter, organic carriers of nitrogen were formerly much more important 
than they are today. 

Tonnage of Plant Food Elements Consumed 

It is estimated that in the fertilizer consumed in 1934, there 
were 503,941 tons of available phosphoric acid, 255,994 tons of 
nitrogen and 255,099 tons of potash. Of this tonnage of plant food 
consumed in all fertilizers in 1934, 124,535 tons of available phos- 
:phoric acid, 110,906 tons of nitrogen, and 36,026 tons of potash were 
in materials sold to consumers (*) 

(*) "A Survey of Fertilizer and Plant Food Consumption in the 

United States for the Year ended June 30, 1934", Proceedings 
of the Eleventh Annual Convention of The National Fertilizer 
Association. The National Fertilizer Association, 1935, pp, 
128-203, Apoendix II, Exhibit 26, contains a tabulation showing 
the tonnage of plant food consumed in the year ended June 30,1934 
by States as revealed by the survey, 



TosNAuE or Kkrtiliier Materials Kei'ohted i 



TABLE 60 

I9:i4 



1 1 



KI3 43t 1.042 S53 5.30« 



>.3iO 43 473 31.151 



36.3m: 2.210 



3. 508 190 
45,9(12 5.864 



56 2»6 160 





3m: 


^-TtJ? 


84-0- 60, 


355* : 72 


35 SIM 


iti 4ir J Mj 




1 


T'. 


187 


133 


l.'0.042 






























p'v.:;: : 




























m 




121 


65 




















&■■■■■■■■■ 












5. 462 






















































<l 1 ' 


















































































5J 
























































































N. D»k 






„«„., 




,,,.| ... 


203 








1 








25j 


„ 


2,580 


27.138 


3.606 


.66.268 


1.332 


4,341 1.683 


,828i 


814| 


46' 


w\ 6. 104 


■'"9 




Moot 








r& 


1 


84 
lU 


2 










,•' ■ 


2,: 


5; 


- , 




■'\ 




06 


c^::v :::::: 


211 
































































































































1.85: 


22.8«( 


4.102 22.755 
























^:;;::;::::-;::::: 


326 


2.610 




1.2,5 


.. i% 


^ 




105 ,, 


360 


ill 


"1 


















68 


45! 


1.047^,.,| 


l.V ,, 


3i 


.1 




} 




■,1'Z 


PuwtoRico 


15 








6S| 


45 


1,047 . !_ 


15: 


51 




46 


1 


1 




. , 


255 712 


100 TOO 


43.202 128.849 


053 




345,645, 


130. MO'22. 827 10,286 30.779 


25 770' 


.785 13.0(8 43.0771 


2.576 


. 125. 248 
































285.008 






30 449 






351.378i 








.8,44 


.0„| 







(«) ToUl reportod iq (he N. F A. ([r»d( 

(7) Additional tonnafp reported by olfin 

(8) Total (oDiuce definitely account(Kl[( 



"ulphate. mniutanfsr 



, KaoAosand Calif. 



9761 



-141- 

"Principal" plant food elements from the standpoint of appli- 
cation to particular soils for the production of particular crops 
may mean something quite different. Thus for some soils and for some 
types of tobacco, phosphoric acid and magnesium give "better results 
tlian a mixture containing nitrogen, phosphorus and potassium. Con- 
tinued research on plant food problems, have, especially in recent 
years, led to the recognition of the importance of still other plant 
food elements. 

Heedless Multipli city Orrades o f Mixed Fertilizer 

There has in the past been an extreme development on the part of 
manufacturers in putting out different grades. While it is true that 
for varying crops and varying soil conditions different grades may be 
and often are desirable, there seems to be no reason to doubt that 
many of the grades have been developed by manufacturers in an attempt 
to convince farmers that their fertilizers were different from others 
and hence theoretically better for the farmer to use without any 
particular factual basis. Many of the different individual grades 
vary one f ro .n the other only to a very slight extent and often only 
by the difference of 1 per cent in one of the throe principal plant 
food elements. In the State of Indiana, according to the Re-:ort on 
Commercial Fertilizers, Circular llumber 212, Indiana Agricultural 
Ex:oeriment Station, 141 different grades of mixed fertilizers were on 
sale. 

According to The Rational Fertilizer Association survey (*) there 
were in the entire United States 1,053 different grades of mixed 
fertilizers sold in 1934. As can perhaps be expected, in the heavier 
fertilizer using states, there is a greater mult ioli city of grades 
offered to farmers. Thus, in North Carolina, there were 167 grades 
on the market; in Georgia, 108; and in South Carolina, l45. Table 62 
faives a summary of The National Fertilizer Association report (*'*') 
on the grade situation and shows that the sales of the 30 most imr- 
portant grades constituted 75 per cent of the total sales of mixed 
fertilizers while the other 25 per cent of sales was distributed over 
some 1,023 different grades. For no one of these 1,023 grades did the 
total sales amount to as much as 1 per cent of the United States total 
and the sales of many amounted to considerably less than -g of 1 per 
cent. The 16 leading grades accounted for approximately 60 per cent 
of the entire sales of mixed fertilizer. 



(*) "A Survey of Fertilizer and Plant Food Consumption in the United 
States for the Year Ended June 30, 1934", Proceedings of the 
Eleventh Annual Convention of The National Fertilizer Association . 
The National Fertilizer Association, 1935. 

(**) "A Survey of Fertilizer and Plant Food Consumption in tne United 
States for the Year Ended June 30, 1934", Proceedings o f the 
Eleventh Annual Convention of The National Fertilizer Association . 
The National Fertilizer Association, 1935, p. 143. 



9751 



142 



TABLE'62 

Tonnage of Principal Grades of Mixed Fertilizers Consumed in the 

United States in the Year Ended June 30, 1934, and 

Percent of Total 









1 


1 
NH,- 

basis' 




Percent of total 


Grade 


Rank 


states 
usinit 


N-P/)rK,0 
basis 


Total 




Actual 


Cumu- 
lative 






nvmbrr 


Ion, 


Ions 


l.m> 




3-8-3 


1 


13 


317,276 


134,206 


451,482 


13.99 


13.99 


+-8-4 


2 


29 


236,369 


117,683 


354,052 


10 97 


24 96 


3-8-5 


3 


14 


143,084 


47,476 


190,560 


5.90 


30.86 


2-12-6 


4 


22 


119,033 


8 


119,041 


3 68 


34 54 


4-8-7 


5 


20 


97,363 


186 


97,549 


3.02 


37.56 


3-9-3 


6 


6 


564 


86,743 


87,307 


2 71 


40 27 


2-12-2 


7 


29 


87,028 


39 


87,067 


2.70 


42.97 


5-7-5 


8 


9 


22,129 


60,203 


82,332 


2.54 


45.51 


2-9-3 


9 


10 


26,074 


50,901 


76,975 


2.38 


47.89 


4-10-4 


10 


16 


30,355 


44,026 


74,381 


2.29 


50.18 


6-6-5 


11 


13 


67,660 


48 


67,708 


2.10 


52.28 


2-8-5 


12 


16 


66,227 


25 


66,252 


2.05 


54 33 


5-8-7 


13 


20 


59,279 


20 


59,299 


1.84 


56 17 


4-12-4 


14 


36 


45,787 


9,390 


55,177 


1.71 


57.88 


2-^10 


15 


22 


52,914 


587 


53,501 


1.65 


59.53 


3-10-3 


16 


17 


46,945 


1,922 


48,867 


1 51 


61 04 


4-8-10 


17 


22 


46,892 


1.029 


47,921 


1.48 


62.52 


4-8-5 


18 


17 


41,168 


6,279 


47,447 


1.47 


63 99 


4-8-6 


19 


29 


28,514 


16,878 


45,392 


1.41 


65.40 


2- 12-4 


20 


27 


43,267 




43,267 


1.33 


66.73 


10-i 


21 


12 


37,418 




37,418 


1.16 


67 89 


2 9-5 


22 


17 


35,861 


2 


35,863 


1.11 


69.00 


2-10-2 


23 


21 


18,413 


15,049 


33,462 


1.04 


70 04 


5-8-5 


24 


20 


26,534 


4,052 


30,586 


.95 


70.99 


3-9-5 


25 


5 


21 


29,225 


29,246 


.91 


71.90 


4-8-8 


26 


28 


10,932 


15,818 


26,750 


.83 




3-8^6 


27 


19 


25,105 


471 


25,576 


.79 




0-12-5 


28 


10 


23,082 




23,082 


.72 




5-8-10 


29 


12 


22,326 




22,326 


.69 




5-10-5 


30 


32 


21,543 


178 


21,721 


.67 


75.60 


4-7-5 


31 


4 


17,561 


2,983 


20,544 


.64 




2-10-4 


32 


17 


19,379 


552 


19,931 


.62 




2-8-2 


33 


15 


14,875 


4,513 


19,388 


.60 





• In Georgia and South Carolina the grade i.s stated in the PjOj-NHj-KjO 
order, which could not be conveniently used in this table. An 8-3-3 grade 
for example in these states, as far as the fertilizer itself is concerned, is 
identical with a 3-8-3 in Florida and Puerto Rico, and the tonnages given 
here include both. 



-143- 
Exhibit 27 of Appendix II gives a general suimmry of fertilizer 
consumption in the j^ear ended June 30, 1934, in relation to grades of 
mixed goods re")orted by States. 

A single fertilizer manufacturer itiay maJce several hundred grades. 
For example, an executive of a large Baltimore firm stated that while 
the efforts made to reduce grades during the code period had had none 
of the desired effects, it is still necessary for them to mix 120 
different grades although they feel. that this number could well be re- 
duced to about 20. (*) 

Efforts to Reduce dumber of Grades 

Healizin,^ that this great raulti:olicit-,' of tirades was not based on 
sound manufacturing or mercliandising policy and feeling that it added 
to the cost of manufacture, the industry requested and received 
approval in its code of the following provision: 

"Article VII - Section 1. In order to eliminate waste 
and reduce the cost of manufacture, bearing in mind the 
economic interest of the farmer, a list of grades 
suitable to meet the agricultural needs of each State, 
or of each zone, as the case may be, may be established 
by the producers in such zone or State acting through 
a zone committee, in coo;'3eration \?ith agronomists and other 
Federal and State agricultural officials, subject to the 
approval of the l^ational Recovery Administration. After 
sach tirades have been established for such State or zone, 
the sale or offer for sale therein of mixed fertilizer 
not conforming to the grades so established shall be 
considered an unfair trade jpractice, provided that the 
sale of special formulas or special ingredients in 
standard formulas may be made to satisfy bona fide 
orders from consumers if adequate additional charge 
is made for mixing costs as determined for the par- 
ticular plant under the uniform accounting methods 
prescribed in Article VI plus the extra cost of 
special materials used; and, provided, that this 
shall not prevent any producer from selling or offering 
for sale two extra grades for laws and gardens in 
various sized packages not to exceed 100 pounds a 
package." 

The original plan was to make this matter of survey of the grade 
situation and reduction in number of grades mandatory but because of 
the opposition of certain interests which claimed that this would be 
discriminatory it was placed on a permissive basis. As is apt to be 
the case- when improvement of trade practices is left on a permissive 
basis instead of being made mandatory there was some delay by the 
industry in getting into action on this matter. 

(*) Interview of Fertilizer Industry Stud;^ personnel with Mr. HcQuade 
of Standard Wholesale Phosphate and Acid Works, Baltimore, 
Se-otember 10, 1935. 



Hov/everj even prior to the code -leriod some few states, notably 
Texas, in cooperation with the fertilizer manufacturers had succeeded 
in bringing about reduction in number of grades sold. That is, con- 
centration on the grades actually needed in the state. In 1934, 
according, to The ITational Fertilizer Association (*) there were 
offered for sale in Texas only 37 different grades. According to 
reports of the Texas Agricultural Er^eriment Station, in the season' 
of 1925-1926 there were considerably over 100 grades sold but after a 
series of conferences this was reduced to about two dozen by 1931. In 
commenting on this ma.tter of number of grades officials of -the Texas 
Agricultural Ex;-)eriment Station say: 

"The grades of fertiliser sold in Texas are limited in 
number. This standardization aids the farmer to become 
familiar with the different kinds of fertilizer, enables 
him to decide more readily on the proioer kind to be used, 
enables the agricultural worker to make definite recom- 
mendations, and i?educes the cost of manufacture and 
liandling, thereby also reducing'the cost to the con- ' '" 
sumer." (**) 

This same bulletin calls attention to a joint conference of 
fertilizer manufacturers doing business in the states of Texas, 
Louisiana, Mississippi, and Arkansas. This was the tenth such con- 
ference for Texas manufacturers and the second of- the joint con- ' 
f erences. At this conference in conformity with the code provisio:is 
above quoted, agreement was entered into as to the grades of mixed 
fertilizers to be sold in these four states during the 1934-1935 season. 
In the State of Louisiana the nujnber of grades was reduced from 32 to 
23, in Mississippi from 21 to 16 and in Arkansas from 33 to 17 (***). 

Official Grades Under the Code 

Official lists of grades under the code were also adopted for 
North Carolina, Maryland, District of Columbia, Delaware, West Virginia 
and Virginia (****). 

In the State of Maryland grades were reduced in number from 134 
to 22 (*****), Delaware 65 to 14, West Virginia 66 to 18, and in 

(*) "A Survey of Fertilizer and Plant Food' Consumption in the 

United States for the Year Ended Jxmc 30, 1934", -Proceedings 
of the Eleventh Annual Conventior. of The ITational Fertilizer 
Association , The National Fertilizer Association, 1935. 

(**) Texas Agricultural Ex;oeriment Station, Bulletin' 498, Nov. 1934. 

(***) Ibid. 

(****) The Fertilizer Review. ^November-December , 1934, p. 10. 

(*****) Exhi'Bit 28 of Appendix. II shows the s''-)ccific grades adopted 
by Maryland together with the tonnage of each grade sold in 
1934 and the percentage which each grade represented to total 
sales. 

9761 



-145- 
North Carolina from 167 to 29. It should be noted that prior to 
January 1934 there were 63 other _;rades on the ammonia basis sold in 
Forth Carolina and that if these be counted as separate grades there 
were at one time 250 tirades offered on the Forth Carolina market. In 
that state the sale of one grade, namely 3-8-3 used principally on 
cotton, accounted for 57.30 per cent of the total sales in 1934. It 
is interesting to note that this grade which v:as put into the adopted 
list because of its heay;'- prior sales was not one recommended by the 
llorth Carolina State Agricultural Experiment Station which instead 
recommends 4-8-4, the sales of which in 1934 reported only 7.21 per 
cent of total tonnage of mixed fertilizers 'sold in that state. This 
naturally raises a very interesting question as to why it has not been 
possible to get more of the North Carolina farmers to change over to 
the grade recorajnended. Part of this may be due to habit and part of 
it may rest on price differentials. 

Brands 

The branding of fertilizers developed in the very early stages of 
the fertilizer industry. The desireon the part of the manufacturer was 
apparently not only to identify his merchandise in the mind of the 
farmer but also to develop brand names with reference to certain crops, 
materials used in the mixture, etc. and hence lead the farmers to be- 
lieve that they would secure special benefits' therefrom, Data is not 
available on' the total niunber of brands on the market. The followins 
data, however, taken from various State Agricultural Experiment Station 
Fertilizer Control Reports are indicative of the situation. Thus it 
is stated that in Kentucky (*) in 1932 there were 719 brands registered, 
in Vermont (**) in 1934 there were 184 brands and in MaSHaCllusetfcs. C"-^** ) 
there were 439 different brands. Brands arc used not only on mixed 
fertilizers but also on fertilizer materials. 

Some companies offer the same grade for sale under a variety of 
brand names even in the same state. Thus in the Spring of 1934 
Virginia-Carolina Chemical Company had on the market in ITorth Carolina 
eight different brands of this grade. These brands of 3-8-3 were ex- 
clusive of the ST)ecial 3-8-3- for use on tobacco (****). 



(*) Analyses of Commercial Fertilizer - Kentucky Agricultural 
Experiment Station Bulletin 336, December 1932, p. 397. 

(**) Commercir.l Fertilizers, Vermont Agricultural Experiment Station, 
Bulletin 381, 'July 1934, p. 3. 

(***) Inspection of Commercial Fertilizers - Massachusetts Agri- 
cultural Experiment Station Bulletin Control Series 74, Nov. 1934. 

(****) Analyses of Corarnercial Fertilizers - Spring Season 1934 Bulletin 
of the Forth Carolina Department of Agriculture. 



9761 



Chan^i;e in Character of Bra.nd '''ames 

Within decent, years brand names at least in some states have taken 
on a somewhat different tone than formerly. This is quite interestingly 
pointed out by the State of Vermont Agricultural State Experiment 
Station Bulletin 223 entitled "A Half Century of- Fertilizer Control in 
Vermont". In this report by Dr. J. L. Mills, he states that in the 
80' s and 90' s use was made .of such brand names as Standard, Unexcelled, 
Sure Crop, Gold Brand, Prolific, Sure Catch, etc. and further that 
frequently the identical grade was sold as a "corn manure" and "potato 
fertilizer". The trend in brand names is apparently toward less flam- 
boyant descriptions - terms which come closer to being real descriptions 
of the fertilizers. However, the following are sanrples of a few which 
appear to be the other type of brand n£,me talcen from the 1934 report of 
the Board of Fertilizer Control of South Carolina - Good Luck, Old 
Hickory, Profit Malcer, Superlative, Bonanza, and Oversized. 

Geogra-phic Variation in Seasonality of Sales 

Fertilizers being for the most part appliedto the soil just prior 
to or, at planting. time,, the bulk of the total United States shipments 
are made in the Spring season. As already noted above about 40 per 
cent of the fertilizer consuired is used in the Southern States, chiefly 
on cotton, and on tobacco and truck crops. The planting season for 
cotton begins earliest in Texas, although as noted above Texas is not 
a heavy user of fertilizer for this crop. The planting season pro- 
gresses with the' advent of .Spring a.n^ for the cotton belt as a whole, 
the mos.t active, season comes from about the middle of March to the 
middle or latter part of April. 

The National Fertilizer Association has compiled from various 
State reports sales of tax bags by months. Data on this were presented 
at the hearing and have been frequently used in other connections by the 
Association to show the seasonal character of the fertilizer business. 

Table 2 presented the Association data on the percentage of 
fertilizer tax tags sold each month in the thirteen Southern States 
and cover the four seasons of 1926-27, 1937-28, 1928-29, and 1929-30. 
This compilation shows. that 84.47 per cent of all the tax tags were 
sold in the first four months with the sales of the other 15.43 per 
cent distributed throughout the remainder of the year. 

Table 63 shows the 1934 percentage 'which monthly tax tag sales 
for mixed fertilizer bore to the annual sales in 17 states. 



9761 



-147" 
T^LE 63 

3ALE3 OP MIXED rBBTIlIZEH TAX SAGS Txi SBVEHTEEN STATES IH 1934 (*) 



Month 



Tons 



Per Cent 



January- 
Pel) ruary 
March 
April 



Total, 4 months 



565,246 

535,146 

1,284,149 

806.735 

2^987.276 



9.5 
13.9 
33.5 
21.0 

77.9 



May 

June 

July 

August 

September 

October 

Hovember 

December 



180,379 

50,797 

20,382 

103,246 

172,457 

130,153 

87,974 

98,206 



4.7 
1.3 
0.7 
2.7 
4.5 
3.3 
2.3 
2.6 



Total, 



months 



851,594 



22.1 



Grand total 



3,838,870 



100.0 



(*) Table adapted from Testimony Relating to the Code of Fair Com- 
petition for the Fertilizer Industry, Senate Finance Committee, 
April 12, 1935, p. 25. 



The above data cover the sales of tax tags which necessarily much 
be bought in advance of the shipment rf fertilizers. Apparently there 
is for the cotton belt as a whole about one month lag between such 
purchases of tax tags by the producer and actual shipment of fertilizer, 
However, it should be noted that in practically all states which re- 
quire the purchase of tax tags, such tags cither are good until used 
or may be exclianged for new tags. Thus as previously pointed out, it 
might occur the.t in some years fertilizer manufacturers might purchase 
a larger nurobEr of tags for cotton fertilizers than they would ac- 
tually need due to a sharp break in the cotton market about planting 
time. 

Per Cent of Sales Each Month in Texas 



Table 64 presented data for the State of Texas showing the per- 
centage of tax tags sold and the percentage of fertilizer sold each 
month of the season for the years" 1917-1918 to 1925-1926 inclusive. 



-.6.33 


.74 


,2.63 


1.37 


-3.00 


.92 


■ 7.15 


1.81 


■ 20.18 


12.16 


23.65 


22.25 


28.29 


33.70 


-7.52 


21.51 


.45 


2.31 


• .11 


.42 


.18 


.28 


,. .20 


.53 



-148~ 



Table 64 
ahfjal exp3irizi:cs ?0r state of texas ( *) 

A-ugust 31, 1918 - August 31, 1925 

Monthly Percentage of Amiual Sales 

Tax' Tag:s Fertilizer Tonna£:e 

September 

October 

Novemlier 

December 

January 

February 

March 

April 

May 

June 

July 

August 

(*) "Fertilizer Statistics for Texas", Texas A,q;ricultui^ Experiment 
Station Bulletin 350, April 1927, Tables 5 and 5, pp. 8-9. 

From that table it nill be noted that whereas 20 per cent of the 
tax tags T7ere sold in the month of January' only 12 per cent of ferti- 
lizers T?ere sold in that month. Also T/hile tax: tag sales in April 
amounted to onlv 7.5 per cent for that month, the sale of fertilizers 
amounted to 21.5 per cent of the total. In other words the ta_x tag 
data v/ould seem to indiate that in that state there is about a month 
lag in sales as compared to tey. tag sales. 

Heaviest iviissouri Sales in Fall 

In some of the other states where fertilizers are chiefl" used on 
crops other than cotton and in states not iTroducing cotton, the season- 
ality of sales presents a somewhat different picture. Thus in' Missouri, 
the State report (*) indicates that in 1933 the Spring sales of fertili- 
zer amounted to 5,089 tons, while the Fall sales amotuited to 20,449 
tons. In the grain belt states a considerable pro-oortion of the fer- 
tilizer used is in connection with winter wheat which is planted in the 
Fall. The fertilizer there used consists of superphosphates arjTjlied as . 
such or in connection with barnyord ;nanure or special grain grades of 
mixed fertilizer. 

".'hile the above- in^ Af»0 thtew »ftino light dmrthe seasonality of 

fertilizer businers. tnere are not at hand such data as would apnarently 
(*) Registration, Labeling and Inspection of Comnercial Fertilizers, 

1933, - Missouri Agricultural Experiment Station, Bulletion 333, table 

5, p. 29. 
9751 



-149- 
give a complete and true picture for each state. The solicitation of 
business from farmers may take "olace severcal months "before actual ship- 
ments are made.. This is, of course, but natural due to the manufact-orers' 
desire to book ahead as mai\y orders as possible. As to the price angle 
of this situation, it is sufficient to point out here, that in the 
past it was at least during some seasons, the practice to book such 
orders at what were in effect tentative prices with the understanding 
that settlement could be made on the basis of the lowest price in 
effect durint:^ the season. 

Factors Influencinif^ the Amounts Sold 

In addition to varying needs for different and in fact the same 
crops on different soils and under different farm management systems, 
certain other factors are to be recognized as influencing the amount 
of fertilizer sold, both total and by kinds. To one of these attention 
was briefly called above, tliat is, the relation of prices of farm crops 
and general level of farm purchasing power to tonnage. Other factors 
are: increased knowledge on the part of farmers as to benefits to be 
derived from the use of fertilizer, the price of fertilizer, transporta- 
tion costs especially as affecting geographic differences in sales, and 
new discoveries as to plant foods and crops, and as to methods of 
handling soils and methods of applying fertilizers. 

Of these various factors, the two which probably have exerted the 
strongest influence are the first two mentioned, namely, farm purchasing 
power and the increased knowledge of benefits to be derived from the 
use ofusc of fertilizer. This, of course, does not minimize the im- 
portance of the other factors and naturally the second one mentioned is 
largely influenced by the new discoveries along the lines mentioned. 

Prices of Farm Products and General Purchasing _P ower 

Even a preliminary examination of the total sales of fertilizer 
by one familiar with the ups and downs of agriculture will reveal to 
him tha,t years of low farm" prices and/or general farm purchasing power 
are followed by years of decreased tonnage d£ fertilizer sales and 
vice versa. 

C-enera] p.^^l^t^^^-' ^-f T^'^^rn TnP.nmR and Rales of Fertilizer 

Table 4 is of interest in showing in a general way the relation 
between farm income and sales of fertilizer. It shows for each of the 
years 1909 to 1934 the gross income from farm products and in parallel 
columns, tons of fertilizer used the next year. 

The experience of the last few years is tyjoical of the whole 
•ocriod. The sharp dxov in gross income from farm crops in 1930 as 
compared with 1929 was'fbllowed in 1931 by a very sharp drop in tons 
of fertilizer used. Again in 1931, the drop in gross income was 
followed in 1932 by a drop in fertilizer consumption. For 1933, the 
income from farm crops began to pick up and so did the 1934 consumption 
of fertilizer. A further increase in the income in farm crops in the 
latter year was followed by a still further increase in fertilizer 
consumption in 1935. 

9761 



-150- . 
Income From Cotton and Fertilizer Sales 

Since more fertilizer is used on cotton than any other one crop 
we present Table 65 shovvin^ the gross income from cotton and cotton- 
seed and the tons of fertilizer used on cotton in ea,ch year. The 
story told by this table is quite similar to that showins changed in 
t,ross income from farm cro-os and the total tons of fertilizer used. 





r Income from 


Year 


Cotton and Cottonseed(l) 


1928 


$1,470, 000, #00 


1929 


1,389,000,000 


193^ 


751,000,000 


1931 


'528,000,000 


1932 


464,000,000 


1933 


688,000,000 


1934 


723,000,000 



-151- 

TABLE 65 

GrROSS INCOME FROM COTTON AND COTTONSEED AND TONS OF FERTILIZER USED THE 
NEXT YEAR ON COTTON ' ' 

Tonnage of Per Cent of Fertilizer 
Fertilizer Consumption used on 
Used on Cotton (2) Cotton (2) 



$2,426,698 30.4 

2,403,288 29.6 

1,457,383 23.1 

866,588 19.8 

1,214,284 25.2 

1.002.195 18.2 

6 year average 1929-34 <^1,561,756 25,3 

(1) Crops and l^arkets, U, S, De-oartment of Agriculture, Volume 12, No. 7, 
July 1935. 

(2) "Testimony Relating to the Code of Fair Competition for the Fertilizer 
Industry", Charles J. Brand, Executive Secretary and Treasurer, The 
National Fertilizer Association, Extract from Hearings "before the 
Committee on Finance United Sta.tes Senate, Seventy-Fourth Congress, 
First Session Pui suant to Senate Resolution 79, United States Govern- 
ment Printing Office, 1935, p. 6. 



It is not felt, however, that from the ahove data one can reason 
that given a certain known degree of increased or decreased farm prices or 
farm -purchasing power one will have a definitely known increase or decrease 
in fertilizer purcliases the following year. Farmers need to huy other 
things in addition to fertilizer, and further in some sections, as already 
pointed out, farmers feel the need of fertilizer much less than do farmers 
in other sections. 

Other Factors Heed to be Considered 

Examination of more detailed data indicates that there are a nuraher 
of other factors which must he ta^cen into consideration. For one thing 
it will be noted from Table 4 that in spite of a decrease in 1932 as com- 
pared to 1931, the 1933 consumption of fertilizer was materially higher than 
in 1932. As there seems to be no basis in the statistical data to explain 
this increase in fertilizer sales in 1933, it may have been due to the 
psychological effect of the change in administration and the consequent hope 
for agricultural relief.. 

Comparing; 1934 and 1929, the question night arise as to whether an 
advance in farm income from crops to $5,500,0t0,000 would mean sales the 
next year of 8,000,000 tons of fertilizer. Examination of more detailed 
data by years as given in Table 66 indicates that this would not neces- 
sarily occur since some years in which the income from crops was pract- 
ically the same were followed by years in which the tonnage of fertilizer 
differed quite notably. 



-152- 
■ - Index Numbers of Farm Prices 

Table 66 has been ore^ared so as +o show in the left hand column 
the total amoan+- of fertilizer and fertilizer r.aterials sold each year 
from 1,910 to date. In ^-he column to the right are given for the year 
next preceding - first, price index number of cotton and cotton seed in 
the entire ,Year^.Jast preceding; second, for December of that year; third, 
the indexy^fnr tlie orices of all farm products; fourth, tJ:ie index number 
of prices paid by farmers for rll. comnodit.ies bought including both 
^hos3 for production and household purooses and fifth, +he ration existing 
between trices paid and prices re.ceived. Examination of Ta.ble 66 shows 
some interesting things. Co^"ton .and cotton seed haye been included in 
the Table s^nce according -to Table 65 about 25 per ce^^t c5f all the 
fertilizer sold is used on cottoij_. ' Further, for many of the farmers 
who raise it, cotton constitutes- the -chief cash crop. 

Consideririg first the index number of prices of cotton for the 
entire preceding year it is noted that the drop of 12 points in the 
index of 1912 as compared with 1911 was accomDanied -by a. somewhat 
decreased use of fertilizer for 1912. A further illustration is seen 
in the drop in tonnage of fertilizer sold in 1915 of one million and 
several hundred thousand tons while the cotton price index for 1914 
was 12 -points lower than it was in 1913. The o-a.tstanding illustration 
is the decreased spies of fertilizer in 1931-1932 as compared to 1930 
and also the five year average. In 1930 ^he index number of the price 
of cotton was 42 ooints lower than in 1929, while by 1931 the index 
number had declined an additional 29 points. In like manner the increase 
in sales of fertilizer in 1928 and 1929 ibver ISCTl had .al-so- beeir -preceded by 
increases in the price of cotton. 

It will be noted that the tonnage sold in 1913 increased over that 
in 1912 even though the year price index had fallen. This apparent 
discrepancy may Derhaos be exolained when one notes the fact that while 
the year price 'ind*x did fall the December Price index made a material 
advance, going from 70 +o 97. Also the somewhat decreased tonnage of 
1916 did not represent as great a drop from 1915 as one might expect 
when he notices that the year price index dro-pped from 85 to 77. Again 
the explanation is probably foimd in the sharp rise in the December price 
index of cotton and cotton seed. 

Price Changes not Always Accom-:)anied by Same Change in Fertilizer 
Tonnage 

A further interesting ooint to notice from comDaring tonnage sales 
of fertilizers and the two iricG indices for cotton and cotton seed is 
tha^ a rise or fall in these price indices in ohe year may not be ac- 
comjanied b" the same degree of change in 'he fertiliser sales the 
following year as had occurred at some jrevious period which ha,d 
similar annual changes in the r^rice indices. From this and what has 
been said above concerning changes in the December price index, it may 
be reasoned that a given price of cotton does not call forth a certain 
tonnage of fertilizer sales but that the decrease or increase in such 
sales is rather influenced by what the farmer thinks the cotton market 
is s-oing to do the following vear as indicated in the months of December 
and January, and perhaps February, when he is urobably 'shaainfi; his 





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9761 



"154- 

his cotton production olans for the coraine; season. In other irords, it 
is not a matter of so manv cents increase in cotton but probatly the 
general feeling on the part of cotton farmers that better times in 
general are ahead for cotton farmers that leads to increased ourchases 
of fertilizer. 

■Prices Paid by Farmers Also Important 

As in the cases of index number for or ice of cotton and cotton 
seed so with the rise and fall in the ind5x number of the combined 
orices of all farm products, a decided increase or decrease in one year 
is generally accompanied bv a change in the amount of fertilizer our- 
chased the following year. In considering this whole problem attention 
must be given to the index number of prices paid by farmers for all 
commodities and the ratio of prices paid to prices received, feturally, 
if the price of cotton and cotton seed and other farm products show 
marked increases, and the prices of commodities which farmers customarily 
purchase rise still more rapidly, the farmers' total purchasing oower 
is depressed instead of enhanced. 

Distribution Channels and Methods 

As noted above, the annual movement of fertilizer amounts to 
aro ind 6,000,000 tons distributed to some 2,225,000 farmers. Each state 
contains some of these cus^"omers although the market is more highly 
concentrated in some areas. Further it was seen that there has been a 
gradual expansion of the market into Western States and that this move- 
ment is apt to continue and in fact accelerate. The great bulk of th© 
total United States tonnage is sold in the first few months of the year. 
The geographic seasonal variations are of course influenced by the 
variations in the crops raised. 

Factors in or Affecting the Methods of Distrit)ution 

Engaged in the distribution of these large quantities of fertilizer 
to these millions of customers are a great many individuals, firms and 
groups. These include the manufacturers and mixers themselves and 
various tyoes and kinds of distributors (brokej:-s, wholesalers, agents, 
dealers, retail stores); salesmen on salary and/or commission; snd a 
special type farmers cooperatives; as well as numerous contributory 
agencies or services such as transportation, communication, credit and 
the like. Distribution of fertilizer both as to kind, ouantity and chan- 
nels is also influenced by various government and state agencies (es- 
pecially the latter) through their educational, regulatory and advisory 
services. Of especial significance here is the work of the state agri- 
cultural experiment stations and agricultural extension forces and state 
fertilizer lep-islation anci control. 

Status of Data on Distribution Channels and 
Methods 

There have been no recent studies made either descriptive or 
analytical of the distribution of fertilizers either by government or 
private agencies. Thus it is imoossible to set forth in as much detail 
for fertilizers as it would be for numerous other kinds of commodities 

9761 



-155- 

the kinds and tvoes of distributors, the volume of spies moving through 
each tvioe, the number of employees, opers.ting expenses, methods of 
ooerption, ' etc. For ex-'mple, there pre no data vhich were secured by 
the Census of Distribution comparable to those for either the wholesale 
or retpil sales in such lines as groceries, boots and shoes, furnitjxe, 
clothing, dairy oroducts, grain, etc. 

The most recent government studies are those of the Federal Trade 
Commission issued in 1916(*) and 1923(**)- These two reports were no 
doobt of fcreat value when written and will repay careful reading by any- 
one interested in the fertilizer industry in its public relations orior 
to the boom and depression years. In fact they are drawn on to a certain 
extent as indicated in this and other chapters of this report. However, 
since a considerable nufliber of vears have elapsed which have been years 
of many new developments and changes, the .usefulness of these- reoorts 
for present purposes are decidedly limited. 

There are also some fragmentprv data in some other government 
reports and some of the state reports - but no comprehensive and 
detailed studies such as gov.ernment agencies have made in the cas'i of 
a number of other comnodities. Nor did the first Census of Distribution 
taken in 1933 (which did produce some exceedingly'' worthwhile data and 
resulted in some very good reoorts on di-stributi^n of some other com- 
modities) make any real contribution to the knowledge of distribution 
of fertilizer because of its well defined limitations which are dis- 
cussed latter. 

Channels of Distribution 

From the available data and general knowledge of the Industry, 
it can safely be stated that at least orior to the Code the fertilizer 
manuf pct'orers and mixers probably used everv known method of making 
spies and probably also used and/or developtd for 'their use every 
conceivable type of distribution channel. 

At the time of the codification of the industry its products were 
moving to its final customers through at least the following channels: 

direct from manufacturer (factory or mixer) to farmer; 

from manufacturer to dealer (retail) ;-to farmer; 

manufacturer to local frirraer cooperatives to farmer; 

from manufacturer to wholesale cooperative to local cooperative 

to farmer; 
to wholesale, to retail dealer to farmer. " •■ 



(*) 1916 ~ Reuort of Fertilizer Industry, Federal Trade Commission 
submitted in response to Senate Resolution No. 487, Sixty-Second 
Congress, Tnird Session, August 19, 1916. 

(**) 1923 - Fertilizer Industry,. Federal Trade Commission submitted in 
response to Senate Resolution No. 307, Sixty-Seventh Congress, Second 
Session, larch 3, 1923. . 



9761 



-♦156- 

In pddition to the atove channels, there wps also some volume . . 
nov.ne throus^h aerents of various types. In some sections of the United 
Sta.tes, it was customp.rv for a manufacturer to desi^ate as an agent 
a farmer who made some sales to his neiijhbors thus enahlins him to 
purchase fertiliser for his own ise at a discount. On the other hand, 
there ipere company agents on salary or commission. Durin;^ the life of 
the code, some extremely interesting ooints developed in connection with 
this matter of a^^ents which are' discussed in greater length in a later 
section. 

Percentage of Sales ThrOu.?h Different Channels. 

According to Chart I, at the time the code waS :submitted there :had 
ordina^ilv moved 20 per cent direct from manufacturers '.-to farmers; 10, 
per cent to or through coooeratives; 79 per cent to dealers .wj-th, wide 
variations in these percentages in different sections of the country. 

The data on percentage of sales through various channels secured hy 
the Census of ranuf acturers in 19b0 for the year of 1929 at the-reauest 
of the Census of Distribution show the following: ■■ 

15.7 per cent of total sales made to wholesalers with 179 plants, using 
this channel (32 of them exclusively); 104 plants distributed. through 
their own wnolesale branches, the total sales so moving, being- 10.1 
jer cent of total fertili-^er sales and 27 man'jf a,cturers. -were reDorted 
as using this ':ethod t-sclusively. The data on sales to retailers show 
219 plants selling -^o retailers and the total sales to retailers for the 
year was 52.1 oer cent of tne total dollar v^'lue distributed by all 
plants. Seventy plants reoorted selli'Tg through manufacturers* agents, 
brolers and commission houses and 27 of these reoorted that all of their 
sales were so made. (*) 

Unfortunately the data secured on sales direct tp farmers were not 
so reoorted that they could be tabulated and shown separately but such 
sales for purposes of publication were included under the caption 
"Sales to Industrial and Other Large Consumers" and hence throws no 
light on this ooint. 

In considering these Census data it should be keot in mind that the 
"Channels of Distribution Inouiry" was set up in uniform fashion for all 
the inoustries and may have not been the most significant from the 
standooint of the fertilizer industry. Farther these data cover sales 
ma.de bv manufacturers to other manufacturers and/or mix_rs "'ho in tiirn 
sell to farmers either direct of throiagh various channels. Thus all 
that can be done here is to discuss the channels and methods of distri- 
bution of fertilizer to the extent made -oossible by general knowledge of 
the industry from such martial data as a.re available from various 
sources. 

Mixers proba,bly sell more direct to consumers than do manufacturers. 
The Census da.ta make no differentiation as between "manufacturers" and 
"mixers". Especially in the Southern States thei"e are quite a number of 
these mixers wno whil^ members of the Fertiliuer Industry and covered by 

(*) Distribution of Sales of I':anufactur ing Plants, 15th Census of the 
United States (1932), Table 1, do. 32-33. 



"157- 

the Census of Manufacturers do not actually have nanuf actor ing plants. 
Their operations consist in Dorchasing- the various ingredients, nitrogen 
carriers, • superphosphate, potash salts pnd the like and mixing them into 
some crade of fertilizer such as 3-8-3 or 4-8-4. In some instances they 
sell these materials to the famers for direct application or home 
mixine:, Materials mav he bought either bagged or in bulk and bagged 
bv the mixer before sale to the farmers. 

In one sense these mixers are probablv to .be considered rather a 
special type of wholesaler or retailer than as manufacturers. It is 
probable that they sell a much larger percentage of their total output 
direct to farmers than do the complete manufacturing plants. However, 
tne mixer also makes some sales to or through retailers and agents. 

From tne above data, it will Le seen that the fertilizer business 
is an indistrv \n which the oroducing members perform the wholesale and 
retail f-unctions in the distribution of their product to a much greater 
extent than is true in the case of nuintrous other lines of production. 

Number of Wholesale and Retail Distributors 

Erae-ment arv data are available as to the number of wholesale and 
retail distributors of fertilisers. The Censas of Distribation (*) 
talcen in 1930 and coverinf^ the year of 1929 reoorts 279 "'holesalers 
of fertilizer and fertilizer n.-terials with total s^^les of $187,469,687. 
Of these sales aoiroximately $3,500,000 were made direct to consumers 
and ap proxiraatelv $56,500,000 to industrial consumers. The latter term 
would cover sales made throufi;h some tvue of wholesaler to man-ufacturers 
and mixers. The census reoort further states th^t these 2?9 wholesalers 
included 92 wholesale merchants, 85 man'uf acturers ' sales agents, 35 
manuf-^ctiorers agents and 19 brokers as well as a number of commercial 
merchants, sales agents, and other miscellaneous tvpes. 

Jn considering the above data, it must be kept in mind that the 
Censj.3 classification as to kind of baseness was on a, 50-50 basis, so that 
there woj.ld be classified as wholesale fertilizer dealers onlv those 
firms whose schedules show that at least 50 per cent of their total 
sales volame was in fertilizer. "Even for those definitely classified as 
fertilizer wiiolesalers, it is not probably that their total sales 
voltime is made 'jp exclusivelv of fertilizer. Fertilizer is also 
commonly handled on a wliolesale basis by firms which also handle feed 
and/or other farm sup-;lies, but there is no way of ascertaining from the 
Census data what part of their total sales consisted of fertilizers. 
The Census of Distribution wa.s necessarily taken on the "kinds of busi- 
ness" basis rather than on the commodity basis. This fact plus the fact 
that in connection with the retail trade, the Census of Distribution used 
schedules for all retailers in incorporated places of less than lO.OOC 
population, which made no provision for securing sales by commodities, 
made it impossible for the Census of Distribution to show aay satisfactory 
amount of data on the number of retail dealers selling fertilizers or 
on the volume of their business. In f^ct even in cities of over 10,000 
population the schedules used for stores doing less than $60,000 would 

(*) Fifteenth Census-Distribution, Vol. II, Wliolesale Distribution, 
Table 3, p. 76. 



-158- 



not. show com odi^y brepk down. As a result of the above limitations 
the Census of Distribution shows only 1,213 stores with sales of 
aoDroximstely "SSl.SOO.OOO which were classified as fertilizer dealers-(*) . 
In other words, that many stores which re:>orted that at least 50 oer 
cent of their sales consisted of fertilizer. 

It is a well known fact that tnere are numeroas other kinds of 
stores, esoecially in the smaller olaces, which sell fertilizers. 
Amon^ these are hardware stores, farm implement stores, feed a,nd seed 
stores, general merchandise s+ores and f:;eneral stores. Since there 
are several hundred thousand of these kinds of stores throughout the 
farming: regions there would seem to be no dearth of available retail 
outlets for the fertilizer oroducers who desire to sell through them. 

Other Infor-aation as to Tyoes of Distributors 

Under the rules and regulations for open price filing set up 
bv the Fertilizer Recovery Committee there was included one reouiring 
companies to list their dealers and agents according to the following 
categories: 

herchant agent 
Farmer agent 
Cooperative agent 
Merchant dealer 
Farme-^ dealer 
Cooperative dealer 

In a letter to menbers of the industry arp;ing comoliance with this 
ruleing(**), I'r. Brand states th.-t up to ^hat time he had received 
listings covering 40,000 agents and dealers. He further states that a 
previous listing totalled 56,000 agents and dealers but does not give 
this date of this orior listin*?. 

leaning of Dealers a.nd Agents 

Distinction between dealer and agent apparently is not a lite 
clear cut in this Industry. The usual distinction as between dealer 
and a.ff-ent apparently did not always aoply in the fertiliser industry. 

Th-is in discussing the status of dealer and agent in 1923 the 
Federal Trade Commission says: 

"In selling to dealers the custom is now to ise the consif'nment 



(*) Fifteenth Census, Distribution, Vol\ime I, "Retail Distribution, 
Part I, Table 14, p. 49. 

(**) Letter from the Code Aathority to oroducers, t-iarch 28, 1934. 
(Copy in IT.R.A. Fertilizer Industry Files) 



9761 



"159- 

form of contract which fipoears to be one of agency. "(*) 

Codpl Definitions 

The F. R. A. Code for the fertilizer industry defined "dealer" 
and^aeent", as follows: 

"Sec. 8'. The term 'dealer' means any person, other than a pro- 
ducer, enfi;ai£;ed in the tusiness of buyin.? mixed fertilizer, super- 
phosphate, and/or other fertiliser material for the puroose of 
selling at a profit. One buying; for his own'ase, or orincipally 
for his own as e and th.-t of his tenants, shall not be deemed to 
be a def^ler. a f^O'op of unincorporated consumer buyers acting 
collectively or through an individual for the ourpose of contract- 
ing for a joint order is not a dealer. 

"Sec. 9. "he term 'agent' means any oerson engap-ed in the business 
of distribatinp- mixed fertilizer, superphosphate, and/or other 
fertilizer materials for a fixed compensation as provided in the 
producer's irice list, and who guarantees the whole and complete 
Derforraance of i-.he terms of iiis contract with the producer. "(**) 

Shift from. Dealer , to Agent During the Code 

Since the dealer t-"kes title to the fertilizer, he usually sells 
•fro his customers on sach terms and conditions as to price as he may 
determi.ne. The dealer was exem ted from filing trices under the open 
price/4rovi§i'^ns of the code. Under these conditio-ns, when the industry, 
after ooerating for a few months onder the code, decided to qaote prices 
on a "delivered to the farm" instead of an "f.o.b. factory basis" there 
was a concerted effort to change from a dealer to an asency basis so as 
to keep title and control the consumer price. That the industry was 
successful in accomplishing this was indicated bv Mr. Brand, who stated 
that during: the .'criod of codal ooera+ion the industry had verv largely 
changed over to an agent rather t'hpn a dealer basis. (***) 

Cost of Dealer versus Agent Distribution 

In pXi. address before the Association Mr. Brand stated that in the 
days before F. R. A. 

"It was our most com':on custom to sell on a dealer basis and to 
make dealer contracts with those merchants or other buyers who 

(*) Fertilizer Industry, 1923, Federal Tr^de Commission Report to the 
Senate, p. 36. 

(='*) Article II, Sec. 8 and 9, Codes of Fair Competition, Volume II, 
p. 124. 

(***) Conference with Mr. Al F. O'Donnell, Unit. Chief, Fertilizer 
Industry Study, October 25, 1935. 



9761 



-160- 

oaT-chp.sed for resale, who '^ere possessed of sdeauete cash or 
Food credit. Then we c istomarilv made a^eencv arrangements with 
a fringe of distribarors who were lacking in cash or were of 
doubtfTii. credit, and to these we shipped o .u- g'oods under con- 
signment arrangements designed to impose upon them as many of 

■ the responsibilities of ownershio of the consigned goods as 
possible but still retaining: title for the oul-pose of protecting 
our acco'onts. ( "") 

The logical inference would be that it was cheaper to do business 
on a dealer basis and that the change to an agency basis would ulti- 
mately cost the industry mone:'- which v/ould in the lon^ riom be passed 
on to the consumer in the form of hi^-her prices. 

■ Practically speaking such evidence as is available would not 
support this contention. It seems that the change to an agency basis 
was not more than a nominal one. The nhysical channel of distribution 
remained the same, llr . Brand indicates that in Alabama, which stayed 
largely on the dealer basis, the Industry had the most tro'iible with price 
cutting. (*=^) 

It is interesting to note that it is this very State which remained 
on a dealer basis which is always selected by The Fa+ional Fertilizer 
Associa.tion to prove that the small and medium volume producers benefit- 
ted more than the large producers in increasing their tonnage .under the 
Code. No figures are available to indicate the relative profits on such 
increased tonnage. ( ***) 

FATiERS AS AGEKTS OR DEALERS 

The practice of giving agents' or dealers' discounts to farmers 
buying in large Quantities, some of which they may or may not have sold 
to their neighbors, apparently led to serious difficulties prior to the 
Code. On this point kr. Brand, soeaking of the pre-code days said: 

"We gave dealer prices and terms to consumers able to buy in car- 
lot Quantities, with the effect of s constant tendency to crumble 
all prices to the relatively low level extended to our best dealers, 
namely those possessed of ample cash and good credit. "(****) 

(*) "Our Industrv under the Code", by Charles J. Brand, Proceedings of 
the National Fertilizer Association Convention , 1935, p. 24. 

(**) Ibid, p. 31. 

(***) Charles J. Brand, Testimony before the Senate Corami'-tee on Finance, 
/Seventy-Fourth Congress, First Session, Pursuant to Senate Resolution 
79, Govern.-nent Printing Office, p. 24. 

(***''')"Our Industry under the Code", Proceeding's of the Eleventh Annual 
Convention of the National Fertilizer Association , The Nati'^nal 
Fertilizer Association, 1935, p. 24. 



-161" 

However, it must not oe reasoned from the slJove statements concerning 
chpnge from depler to agent tasis that the industry was altogether with- 
out oroblens on this point during the code. In fact, there is evidence 
that the matter of oroper interpretation of the codal definition of an 
agent was at times one of the most serious prohleras which confronted the 
industry in its codal operation. It would aooear that at times some 
oroducers classified as agents, farmers who themselves consumed 90 per 
cent or more of the fertilizer sent them in their alleged capacity as 
agents. 

On this difficult problem of consuraers qaalifyin;^ as agents, the 
code authority itself does not seem to have been a.t all consistent in 
its interpretations. Thus, in the N.F.A. letter of August 14, 1934, in 
the definition of Article II of the Code, Mr. Brand savs that "one who 
buys fertilizer solely for his own use cannot aualify as an ae;ent" and 
again on the third of April, Mr. Brand savs that "a producer cannot make 
an agency contract with a cooperative which is entirelv made ijp of mem- 
bers of an incorporated farm". 

However, on March 19, 1935, in resr)Onse to inauiry from Senator 
Smith and the FSA, Mr. Brand states "the Averafce consumer in South 
Carolina is usuall'' a large one. Provision has been made to care for 
sj.ch buyers by enabling them to become agents and enjoy the discounts 
provided for agents". From this corresoondence ooncertiamg the South 
Carolina situation, it would apoear that in March 1935 Mr. Brand did not 
feel that he coula be as strict with the members of the industry as in 
August, 1934. 

Administrative Order No. 67-36, October 24, 1934, was an approval 
of the reouest of the code authority to reauire producers to report, 
when officially reauested to do so, the names of all agents to whom they 
sold fertilizer materials or mixed fertilizers. This reouest was made 
by the code authority in order to assist in determining which producer 
was supplying an agent with fertilizer and who had been charged with 
price catting. 

Certain correspondence between Assistant Deputy Administrator 
Battlev and Administration Member Baxter also throws light on the situa- 
tion(*). For example. Major Baxtor on August 30, writing to Captain 
Battley approving the idea of the listing of dealers and agents says 
"The question of the functions of an agent in the Fertilizer Industry 
is one which is quite serious." and in an earlier letter, August 6, 
said that the chief difficulty in arriving at a satisfactory definition 
was the fact that the members of the industry themselves could not agree 
as to how af^ent should be defined. Captain Battley, in writing Major 
Baxter under date of September 15, 1934, is discussing this oroblem said 
"There seens but one way of solving the problems, namely, a,n amendment to 
the code." The industry was consistent in its policy not to reopen the 
code for amendment and this agency problem remained a serious one as 
long as the code existed. 



{'') Copies of th-se le-^ters are available in the NRA Fertilizer 
Industry ^iles. 



-162^ 

Company Salesnen on Commission- Prohibited 

Prior to tht code, it had teen castomarv for members of the 
industry to emoloy salesmen both on salary and on cori'^ission. Section 2, 
Article VTI, of tne code, "larketinfi; Provisions," prohibited the em- 
ploying; of salesman on a commission basis in" the following lane;uaee: 

"No traveling; salesman- shall be .eraoloved on- i^ commission basis 
for the sale of mixed fertilizer, superphosphate, and/or other ' 
fertilizer material. Such sales shall be made only throueh re^lar, 
I'e^itimate, salaried salesmen workin,^ under the control of the . 
producer. This section shall not aoply to the State of Florida.," 

The reason for orohibitins: the use- of salesmen oh commission basis 
apparently was th^t difficulty had been eraerienced in oreventin^ such 
salesmen from splitting; commissions v^ith their customers thereby threaten- 
ing the stability of the price structure. ' 

At the Public Kearin;?; the ar<.°:uments asrainst commission traveling 
salesmen were S'amraari?ed by kr. C. F. EurrOiOfhs,' President of the F. S. 
■Rovster G-uano Com.oany, as follows: 

" - - - that a commission salesman is difficult to control; he 
Sometimes represents several lines; he mav be in the employ, on 
a salary basis, of a concern, and handle fertilizer as a side line; 
he is prone to split his commission with substantial customers, 
with or without '"he knowlei.-ge of the producer paving his commission 
in the following; manner — -""hile goods are invoiced at the goine; 
market anT paid for as billed, and apparently everything is regular, 
later on the comnission traveling: salesmen nakes a private settle- 
ment with his customer, thus "avoiding --^s far as the seller is con- 
cerned, the charge of secrcit rebating and yet obtaining the business 
for his principle at a net *Qst orice."(*) 

On the other hand hr . Penniman of the Standard Wholesale Phosphate 
and Acid Works of Baltimore, spoke in opposition to this section of the 
code saying th^t his company considered "that the very essence of 
successful selling of goods is selling them through men who are on a 
commission basis — but nen, of coarse, who are under control. "(**) 

It IS interesting to note tha,t according to Section 2, the State 
of Florida was exempted from those provisions so that producers selling 
in that S^^ate might employ traveling salesmen.' on commission. 

Bv terms of Section 8, Article VII, subsec^-ions a and b, the 
following states were also exempted: Idaho, Utah, Iviontana, Colorado, 
Wyoming and Nebraska. The reason for the exemption in the case of these 
Western States is to bf f o i.nd in the fact that thev use such small 
aaantities of fertilisers and that a producer could not afford to 
emoloy salesmen for '■hat territory on any other than a commission 
basis. 

(*) Transcript of Pablic Hearing!: on Code of Fair Com-.Tetition for the 

F^^rtili-er Industry, September 6, 1933, oo. 212-213. 
(**) Ibid, pp. 166 



-163- 



Attemot to Liml t the N'-umb&r of Sslesmun 

7hilc it was not adopted in the final code, the attempt to limit 
the number of salesmen which a company could employ should be mentioned 
aa indicative of the extent to v/hich some members of the Industry 
wished to fi;o in rei^ul==tins; the industry's business practices. The 
draft of the code \inder date of July 18, 19'63, contained the following 
provision; 

"lultiplicity of Salesmen. Prohibited" . 

"In order to eliminate excessive s^les cost, the use b^y any oro- 
ducer of mixed fertiliser and/or fertilizer material of an unrea- 
sonable namber^ of salesmen for marketing his said products is 
hereby prohibited. "(*) 

The aopendix of tnis draft of the code contains prooosed basis for 
deciding this matter as follows: 

"The following indicates tne basis of annual tonn^^ge and territory 
to be covered by each salesman: 



o^.s and/or cover not less than 



a. 


New England- 


1 , 500 


5 


CO unties 


b. 


Middle Atlantic 


S.OOO 


10 


coionties 


c. 


Soutneasc 










Virginia 


3,000 


10 


counties 




Forth Carolina 


6,000 


10 


counties 




South Carolina 


5,000 


.10 


counties 




Georgia 


4,000 


10 


counties 


d. 


f^^ulf Section 










Alabama . 


5,000 


10 


counties 




Mississiopi 


4,00(- 


10 


counties 




Tenn^-ssoe 


3,000 


10 


counties 


e. 


Southwest 


2,500 


10 


counties 


f. 


kiddle 'JTest 


2 , 500 


15 


counties"(*'<') 



This provision 'bs also cont.^ .ned in several subsequent drafts 
but had dissappea.red bv August 19 and certain notes on a conference 
held on August 15 indicate that it was removed at the suggestion of the 
Deputy Admi'istrator who stated that it was out of line with recognized 
unfair trade practice -;rovisions and that he would not recommend it for 
aooroynl. (***) 

Prohibiting of Sales Through Trokers 

Prior to the code, it nad been customary for some sales to be made 
through brokers. According to the code there was out into effect a 
prohibition ae-ainst making sales, through brokers of mixed .fertilizers 
and/or bagges sup-,vrpnosohate to dealers or consumers. This is. contained 
in section 4, article VII, "marketing provisions, " which reads -as follows: 

("*) Volume a". Draft of Code d^ted Julv 18, 1935, p. 4, ' ' 
(**) ^rolm\e A, Draft of Code d--^ted Ja"iy 18, 1833, appendix. 
(***)(These notes are in the ^HA. Fertilizer Industry Files) 



9761 



-164- 

"The spli- by th. producer of miretl' fertlil-ser and/or bageed 
superohosohate to th'? denier or cons-onier through brokers is 
hereby prohibited." 

It was alleged at the Public Hepring that because the fertilizer 
manufacturers make contact with the consumfr very directlyi and that the 
industry wanted to prevent the possibility of brokers entering the 
distribution channel (*). It is probably that the industry wished to 
close the possibility of brokers being apoointed solely as a subterfuge 
for price cutting. 

Farmers' Cooperatives 

The data ores.nted on Chart I by The National Fertilizer Association 
at the hearing stated that 10 per cent of total fertilizer sales were 
handled by cooperatives, but this varies from State to State. Thus in 
tnose states where the large scale cooperatives are active they are auite 
imoortarit factors, for example, the Grange League Federation in New York, 
the Earn Bilreau Wiiolesale Services in Ohio, and likewise in Indiana, 
Illinois, Michigan, and Alabama. 

In fact, so important did the industry reg^-rd cooperatives as being 
that they -incorporated in their code a special provision entitled "Distrii» 
bation throui^h Coooorative Associations.'' 

This provision is found in section 3, article VII, marketing provi- 
sions, and reads as follows: 

"a. Any arrangement upon sale, consignment, or agency basis between 
producers and regularly incorporated farmers' organizations engaged 
in the various activities common to such organizations and orin- 
cipally 'engaged in a bona fide wholesale business or their divisions 
or departments granting special rates, commissions, or concessions, 
or the divisions of orofits, may be continued, entered into, and 
jierformed, orovided that such Sf^les are not below the producer's 
price as provided in Article VI, Section 1 of this Code, and that 
it shall be obligatory upon such cooperative organizations to 
maintain the producer's schedule of prices to their dealers and 
cojasuirier in areas covered. 

"b. No provisions of this. Code shall be interpreted as preventing 
farmers' cooperative corporations from paying patronage dividends 
as authorized by law." 

This section has thus twC'lmportant—Drovisions (l) that fertilizer 
producers could sell jko cooperatives on any terms they chose as long as 
such prices were not "below producers' cost, although even then they 
could meet existing competition, (2) that the cooperative while having 
to maintain price schedules to dealers and consuners could include 
fertilizer purchases in calculating patronage dividends ascruing ' 

(*) J. Ross Hanahan, ^resident , Planters Fertilizer and Phosphate Company, 
Charleston, S. C. Transcript of Public Hearing on the Fertilizer Code, 
September 6, 1933, p. 240. 



-165" 

to their' members. This sjecinl cooperative provision and the fact that 
the code aathoritjr had in its membership from the start one representative 
of the coooerativLS and later a second cooperative member, are in them- 
selves indicative of the importance of the cooperative in the distribution 
of fertilizers. ' 

■ Cooperatives Under the Code 

As the code i-'cnt to the hearine; the orovision oh cooperatives 
contained the words "stati- wide" but on the showinf'; of Mr. Chester Cray, 
Araerican Frrm Bureau. Federation, and of certain others these words were 
eliminated. The reason was that it wrs clearly demonstrated that 
numerous coooeratives were actively en°:ap:ed in the handling; of fertilizers 
which although oolite important were less than state wide in their scope, 
for espmole, tTashini^ton' County, Missouri and lierrimack County, New Hamp- 
shire. 

Execgtive Orders in re Cooperatives 

This whole auestion of the treatment of and preservation of the 
ri'^hts of coo-ierr-tives under the various codes including this one were 
subject to much dispute frequently accompanied by bitter feeling. Iii an 
attemot to clarify the situation there were issued two E-ecutive Orders, 
No. 63.55 (October 23, 1933) find No. 6606-A (February 17, 1934) and 
Administrative Order No. X-35 (Kay ' 18, 1934). (v*) The first of these. 
No. 6355 was issued-for the purpose of specifically providing that none 
of the provision^ of the codes of fair competition under the NIHA which 
were designed to limit or or'ohibit oavment of allowances, rebates, re- 
funds, etc.- should sa operate as 'to Drevent "the .oa:yment of patronage 
dividends in accordance with IrtW to any member of any bona, .fide or 
lig:itima,te cooperative orga.nization" . It should further provide th^t 
^hesi^ coooeratives must bi dulv organized under the laws of any state, 
territory, or the District of Columbia of the United States and such 
patronage dividends must be paid out of actual earnings and not paid at 
the time the member made his purchases. The^basis for this Order is, of 
coarse, to be fo ind in the nature of the cooperatives which are not set 
up as profit making enterprises but in order to effect savings for the 
members. Such savings, if any, over and -above 'the cost of merchandise, 
operation-, etc. aft^r making due allowances' for revisions, etc. are re- 
turned to the members in the form of patronage dividends in prooortion 
to the total amouht purchased by ^ach member. 

o Executive Order 6606-A, issued "February 17, 1934, supplemented and 
amplified Order 6355 and the Order stated that it was issued because 
"a j-dstions nave arisen concering the "scope and meaning" of Executive 
Order 5355." 

This Srder states that no provision of th?.- many codes of fair 
coinpetiti''n or any agreement or license Dursuant' to Title I of NIRA 
"Shall be' construed or a.pplicd so as to ma];e it a violation of any code 
of fair comoetition to sell to or through nny bona fide and legitimate 
cooperative organization- including any farmer cooperative." 

(*) These Executive Orders are included in Appendix II as Exhibits 29, 
30, and 31 respectively: 



- 166 - 

This Order also reciffirms t.ie forTner order to the effect that no 
code Y/ill be allo-.-ed to prev=;nt cooperotive organizations- from receiving 
or distribiiting to its rae:al)ers as patronage dividends or other-Tise the 
proceeds or benefits cUrectly or indirectly derived from any discount, 
coinraission, rebate or dividend". The order also authorized the Admin- 
istrator for Industrial Eecov ry to ceternine after such hearings and 
proceedings as deemed necessary ^7hethe^ an organization is or is not a 
bona fide and legitimate cooperative entitled to the benefits and pro- 
tection of this order. 

Difficulties of Q:aalifying as a Cooperative 

In spite of the special provisions in the code and the tuo Executive 
Orders and the Administrative Order above mentioned it would seem that 
some cooperatives er.perienced difficulty in securing, or qualifying for, 
the benefits vzhich they felt the said sections in the Executive and Ad- 
ministrative Orders vere intended to provide for them. 

Thus the Executive Director of the Code. Authority;- r^oled that 
cooperatives to qualify under the Special ;,:arlceting Provision must sell 
at least 50 oercent of their total volume to dealers or member coop=>ra- 
tives. That is, he ruled that a coopera.tive, no matter nhat the volume 
of their fertilizer business, coiild not recieve the benefits of this 
marketing provision if they dealt directly \7ith the individual farmer 
members. He firrther ruled, that' cooperatives to quality under this pro- : 
vision must handle other farm supplies and' states- in II.F.A. Kens for 
February. 2, 1934 "the various activities common to such organizations , 
referred to in this section are the sale of the general line of supplies 
to farmers through local cooperatives and/or dealers", ' However, the 
section in question, section 3 of article 7, does hot so state; the 
language being "incorporated farmers organizations engaged in the various 
activities common to such organizations and principally engaged in bona 
fide wholesale business".. 

Sales to Cooperatives by Producers and Importers Exempted from Open Price 

Filing' Provisions 

Under date of April 10, 1934, General Johnson issued Administrative 
Order 57-3 which was of considerable significance to cooperatives, Tlae 
Order asserted the right of any wholesale cooperative as described in the 
code to purchase such materials as ootash, phosphate rock, and/or nitrogen 
carriers from producers or importers even though these latter had not 
filed schedules of r^rices to dealers and consumers. At the same time it 
became incumbent upon the cooperatives to themselves file and maintain 
open price schedules. In other words, this Order gave producers and 
importers of fertilizer materials the right to sell to cooperatives mth- 
out having to file [.irices to dealers and consumers which act would have 
made them liable to the code. Prior to the issuance of this Administra- 
tive Order there had be^n received numerous complaints from farmer 
organizations that they could no longer buy these products directly from 
importers and producers but, had in all cases to purchase them through 
fertilizer producers at consequently higher prices. 



-167- 
'Reaction of Produc-Ts to Cooiooratiye Provision 

In some cases cooDcrativcs, vnich orobablv were clearly in the 
neanin.^ of th:- code and th-. various Executive and Administrative Orders, 
had difficulty in securing: for themselves and mamters of the benefits 
of these special provisions. 

As illustrative of tno first uoint, iajor Baxter, Administration 
Member, in a letter to Deputv Administrator Battlev, under date of 
Au£cust 27,, 1934, reporting on a .trip to Chicaf^o to attend an Executive 
Committee I'eeting, made a report on cooperatives, esoeciallv the State 
Farm Bureaus. Kajor Baxter had 'conferred with m;magers of the Kichi^an 
and Ohio State Farm Bureaus, also members of the Tennessee Corporation, 
one of their principal s:iopliers of fertilizer and materials, and also 
representatives of the Smith Pertili'^er Comoany of Columbus, Ohio. 
This latter cQmoany .und^r. date of September .5, 1933 submitted a letter 
to the TTiA. verv bitterly complaining of whait th^.y alleged to be unfair 
discrimination in favor of coooera.tives, clairiin;:' among other things 
that cooperatives were in eff^ ct brokers and hence prohibited by the 
code and stating thpt special concessions to the cooperatives were in 
violation of fair trade pr= ctice provisions and in addition stating 
that farmer organizations did not pav sta.te dealers taxes, or license 
fees. In this Mr. Smith overlooked entirely the fact that farm'ers 
after. all do pay a, good many taxes which are not paid by manufacturers 
and dealers. The special provision in the code and the coooeratives 
had resprest ntrtives on the code authority is. evidence that not all 
producers opposed cooperatives. 

C ooperative.s Improved Position under the Code 

In the Baxter letter above ref , rred to he says "producers 
are alarmed ove-r the inroads made in their business by the exempted 
cooperatives". He states the essentials of a contract with the Tennessee 
Corporation which gives Farm Bureau discount similar to dealers- 9 per 
cent discount on small shipments; 12 per cent on 100 tons or more; 
and also 5 oer cent allovrance for office erqjenses and general sales 
exoenses; further that if sales unJ- r the contr-ct showed the producer 
a gross of over 3 oer cent for expenses, a.dditional profits were to be 
divided beween producer and cooperative and that the cooperatives 
held and exercised a right of auditing oroducers' books. In Baxter's 
opinion, this provision would allow an additi^'nal 1 or 2 per cent to 
the Farm Bureau. 

With reference to Ohio, I-iaJor Baxter says that principal fertilizers 
the-e sold by the Farm Bureau for $39 per ton with 12 oer cent or $3.60 
off in the 100 tons lots minus an additional 5 per c^nt or $1.50 for 
overhead. Baxter says that it was estimated that all of this $1.50 did 
actually go for overhead and he figured th^t tnis would leave the $3.60 
(12 oer cent discount) minus a 60 cents commission paid by cooperatives 
to their ae:ent or a net of $3.00 to be covered into the cooperative 
patronage dividend fond. In ;iakinfi- this sta.tuKcnt i ajor Baxter 
apparently was not familiar with methods of operation of well-organized 
cooperatives as they do not actuall""- pair o it all net profits a,s patronage 
dividends but first make certain deductions fo^^ reserves arid the like. 



Major Baxter says _tja,at the manager, .of . the-iwo State- Farm Bureaus in- 
formed him that they had increased their business 50 percent over the 
previous season and anticiiDated a similar increase for the next year, 
that is 1935. 

If these two farm bureaus did increase their sales by anprox- 
imately 5? per cent, it is interesting to note that the total sales 
of fertilizer in Ohio increased 26.39 per cent in 1934 over 1933 
and in Indiana 52.8 iDer cent. Ho^rever, it should also be noted from 
Table 5 that the Smith Agricultural Chemical Cornoration, Colunbus, 
Ohio, the chief critic of the cooneratives showed a net nrofit before 
interest and dividends in 1934 of $114,414 as compared to $54,178 
in 1933, an increase of $60,236 or anproximately 111 -oer cent. 

Major Baxter also in the s^jne letter stated tha,t some producers 
were trying to organize coo-oeratives among farmers so that they 
could sell on the same basis as other loroducers were selling to 
Farm Bureaus. Major Baxter stated that in his ODinion this would 
lead to cora-oetition between cooperatives ajid would be accoiTOanied by 
a rise in distribution costs as a larger percentage of the total 
tonnage moved through these channels so thp.t the cost of distribution 
through cooperatives raight in the long run be no cheaper than other 
methods. 

Transportation as a Factor in the Distribution of Fertilizers 

The fact that much fertilizer and fertilizer materials moves 
in interstate coranerce and that about 25 per cent of the cost of the 
product when it reaches the consumer's hands Is represented by trans- 
portation costs has been discussed in Chapter I. 

Table 67 shows the results of a survey made by The National 
Fertilizer Association in 1933 covering outbound shipments by ferti- 
lizer manufacturers. This study shows a considerable decrease in the 
percentage of the total saipments which were made by rail, a very 
material increase in shipments made by trucks while the shipments by 
water remained practically constant. 



9761. 



- • • •■ TABL^ 67 ■• ■ -■■■■'■" ■ '- ' 

SlMiAHY OF OUTBOUND SHIPMENTS BY r^I?TILIZ^ MAlJUFACTin'^RS ACCOimiNG- TO 
G^OGHAFRIC S"^CTIONS AND PSHCiinTAG'^ MOVimJ'BY VARIOUS -TYp-^S OF 
TRANSPORTATIOT^' (*) 







All Rail 


Water and 


All Water 


Trucks 


Rail and/ or 






Per Cent 


Rail 
Per Gent 


Per Cent 


Per Cent 


Water and 
Trucks 




,1931 ■ 










Per Cent 




63.3 


6.2 • 


24; 


6.0- 


0.5 


New i:ngland 


1932 


56.3 


5.7 - 


20.9- 


15.9 


1.2 




1933* 


36.1 


1.3 


29.2 • 


32.8 


0.6 




1931 


70.0. 


2.5- 


9.9 


16.3 


1.3 


Middle At- 


1932 


53.4 


3.0 


9.3 


32.7 


1.6 


lantic 


1935*: 


31.8 . 


2.9 - 


^ 15.6 -: -■ 


■■■45.8-' 


3.9 


South At- 


1931 


85.3 


0.1 .■ 


■■• ,2.8 


11.8 


0.0 


lantic ■ 


1932 ■ 


85.1 


0..O ■• 


• 1.4 


13.5 


0.0 




1933* 


69 .-4 , 


.• 0.0 


-i;7 


"28.8 • 


0.1 


South Cen- 


■19i31. 


■ • -92.3 


3.1 


o.r • 


4.5' 


• 0.0 


tral 8- 


= 1932 ^^■ 


.80.2 . 


3.7 


5-.0- ■ 


11.1 ■ 


0.0 


Southwest . 


,,1933* 


71.6 


1.2 


^.-6 


25 .'6 


0.0 


Mid-i?fes.t . ; 


- -1931 


89.1 


• 0.0 ■ 


0.1-- 


10 .'8 


0.0' 




■ 1932 


75.0 - 


0.1 ■ 


0.1 


24.8 


0.0 




1933* 


65.3 


0.3 


.0.1 


34.3 


0.0 


All Sections 


1931 


83.2 


1.3 


4.5 


10.8 


0.2 


„,...,. r 


■ 1932 


75.3- 


1.5 


■ - 4.8' 


18.0 


0.4 




1933* 


63.2 


0.7 


4.6 


31.0 


0.5 



10 J.tonths Only ■ 



(*): A.dapted from Table -11, ^.zhibifj of Code ADrfl-icatioh, I'Sioecial 

Surv.ey -of -Inhoiond- and Oufboiind Fertilizer Shipments for the Three 
Seasons 1931, 1932, and 1933," The National Fertilizer Association, 
lilay 13,jl933,- -D.-.e.. (Cotdx availahla ih .NRA files)' 



Interstate MoTement 

AmiDle evidence of interstate shiDinents ' of , fertilizers sold to 
farmers will he found in the rarious state fertilizer re-onrts-and which 
give the location of the fertilizer slants selling within various states. 
.Typical illustrations " show that of ■the:, various TDlants selling -fertilizer 
in-HississiTD-oi-j 24 are located within-:the .State and 27 are'- outside of 
the Stste, while in the case of Missouri, of the total of 35 fertilizer 
-oroducers selling in that State only 11 are located in the State and 
24 outside, .Of the 70 fertiliser' 'o^-oducers' selliiig fertilizer in the 



9761 



-170- 

State of Maine 55 -nlants are located outside of the State of which 8 
are Canadian and one is a Dutch concern (*). 

G-overnment and State Agencies and their Influence on Distribution of 
Fertilizer 

Government Agencies 

The most imnortant ffovernment agency from the standpoint of its 
influence on the kind, quality and amounts of fertilizers distributed 
is the United States DeiDartment of Agriculture. Through its ex-oerimental 
and educational or advisory servicesi this Department has. exerted a real 
influence in bettering the position Of the farmer in his -ourchase and 
use of .fertilizers. 

State Agencies 

The TDrincirial stat= agencies of 'interest here are the State Agri- 
cultural Colleges and experiment stations, the State Denartraents of Agri- 
culture and state legislation. Pracfically every state in the Union has 
imiDortant legislation affecting the s'ales of fertilizers including loro- 
vision -for guarantee on th'er part of fhe manufacturer, as well as the 
frequent analyzing of sarar)les which may be done at the request of any 
farmer.. Chart XT' gives a summary of state fertilizer control laws, re- 
gulations and rulings as of September' 1, 1935, ' These state laws vary in 
some essential re'S-oects, but they have, by and large, had an extremely 
helpful effect in seeing to it that the farmer is nrotected in his tdut- 
chase of fertilizers. The" various stkte agricultural colleges and ex- 
neriment stations have also rendered feervice of incalculable value both 
to the farmer and- to the members of the Industry through their research 
and teaching work in connection with the -Drotier use of fertilizer materials. 

Credit as a Factor in the Distribution of Fertilizers 

Credit from various sources nlays an imoortant nart in the distri- ( 
bution of fertilizers not only in connection with credit -Durchases by 
farmers but also in connection with the financial needs of the members of 
the industry. However, since credit terms are quite intimately connected 
with the' matter -of -nrices ^the discussion of credit is written up later 
in this Chanter in connection with the discussion of nrioes. 

Conclusions on the System of Distri>utirig /tf'ert^.lizers 

As already noted there a.re not available sufficiently detailed data 

(*) ReiDort of Analysee of Commercial Fertilizers and Fertilizer Materials, 
Seasons 1932-1933, State Det)artment of Agriculture, Jackson, f.'^iss., 
mo. 24-27 

Registration, Labeling, and Insnection of Commercial Fertilizers; 
University of Missouri, Agricultural Experiment Station Bulletin 348, 
Aoril 1935, dd. 11 and 24 

Commercial Fertilizers, 1935, Maine Agrieultiiral 'Brrieriroent Station, 
Orono, Maine, October 1933, td, 96. 



-171- 

on the system of distributing fertilizsrs (methods and costs) to make 
Dossitle a scientific arpraieal as t o the degree of economic soundness 
or unsoundness now existing. However there is amt)lp evidence that many 
of the TDractices as regards sales methods, -orices, discounts and credits 
have "been economically unsound. 

Further evidence of what may he considered an uneconomical astject 
of the system of distrihution is seen in the following. There are 
distributed annually atJiDroximately 6,000,000 tons of fertilizer. Chart 
I indicates that 70 x>eT cent of the total, or about 4,200,000 tons are 
distributed by some 50,000 agents and dealers, which is eauivalent to 
annual sales loer agent or dealer of only 84 tons. Thus the gross income 
from fertilizer commissions of such a dealer or agent would be from *100 
to $200, 

That such a large number of small market outlets is disadvantageous 
to the industry is well recognized in the following statement: 

"Too many dealers are trying to sell fertilizer, "^very 
fertilizer manufacturer wants a dealer in every town. But the manu- 
facturer would be better off, in my oioinion, and the dealer would 
be better off, if the manufacturer had fewer but exclusive agents. 
For all of them could then do enough business to justify their 
putting into the business more time and more service to the farmer." (*) 

Jistributive Relations .just Prior, to National Recovery Administration 

At the time of code submission it is not too much to say the industry 
was in a distressed condition. As described in detail in Chatiter I it 
had suffered a severe slum-o of sales loartly at least due to the sharp de- 
cline in farm income. This had been accom-oanied as in -orpvious -oeriods of 
stress in the industry with cutting of -orices. The industry i:ay be said 
to have been on a strictly price comnetitive basis with wides-pread in- 
dulgence in various maneuvers such as STsecial inducements, SDecial agency 
contracts, free goods, etc, in an attempt to stay in the market and hold 
customers sending the return of more nearly normal conditions. 

The National Fertilizer Association, which has done much to straighten 
out the industry and to im-orove its trade -oractices, was finding that 
much of this work was being negatived. It, no d'-^ubt, welcomed the op- 
portunity to come under a code which it probably believed would accomplish 
at least some of the things aimed at in previous voluntary attempts. 



(*-) "Change and Cooperation", by L, W. Howell, Vice President, Swift 
& Company and President of the National Fertilizer Association, 
Proceedings of the_ Sixth Annual Convention of The National Fertilizer 
Association . The National Fertilizer Association, 1929-^0, p. 12-13, 



9761 



172 



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^ • -173" 

Ferha-DS the test way to set forth the shortcomings of the methods 
of distrilDution as the industry' itself saw them is to siiramarize the oro- 
visi^ns the industry accer)ted in its code. Attention is also directed 
to some proTDOsed provisions which were not incorporated in the approved 
code (*). 

Code Provisions Affectin.q: Distribution 

Price cutting was aimed at throU;<;:;h the open price filing systems, 
prohibition against the sales "below cost and several of the fair trade 
practice provisions, ani? gi^-nara.! marketing methods through Article VII - 
Marketing Provisions, and Article VIII - Unfair Tirade Practices. Some 
other articles contain provisions which also had an effect on distri- 
bution, especially Article II - Definitions - Section 1 - as ''ill be 
pointed out later. ■- 

Article VI - Price Provisions - contained two sections (l) pro- 
hibiting sales by any riroducer below nis cost except to meet competition 
(2) providing for the, filing of open .price schedules, .wh,ich were not. ef- 
fective until the lapse of 10 days time and requiring also that copies 
of schedules be mailed or otherwis'' delivered to all competitors 
simultaneously with transmission to the Association. .^,. 

Article VII - Marketing Provisions - Section 2 prohibited sales 
through commission traveling salesmen and provided that ^' sales shall be 
made only through regular legitimate salaried salesmen working under the 
control of producer". Section 4 prohibited sales through brokers. 

Six states, Idaho, Utah, Montana, Colorado, ■37yoming and Nebraska 
were exempted from all rules pertaining to sales. The reason for exempt- 
ing sales in these TTestern States, from code sales provisions was that •, 
there was not enough fertilizer business in those States to justify em- 
ploying salaried salesmen or restricting competitive methods, of increasing 
sales. The six States exempted from all , marketing provisions ordinarily., 
consumed less than 1 per cent of the total fertilizer sold in the United 
States. , ' ' 

There are two other sections in this Article which throw some light 
on the problems of the industry as seen by members of the industrj'-, name- 
ly. Section 1 making permissive a reduction in number of grades offered 
for sale in the various states and Section 3 covering distribution through 
cooperative associations. 

Article VIII, prohibiting certain allegedly unfair trade practices, 
gives a pretty good idea as to what the industry felt was wrong with their 
system of distribution especially in relation to prices. It is, of course, 
recognized that in addition to these things which the industry decided to 
prohibit there may have been other disadvant?iges in the system of distrir 
bution which were more apparent from ths customers' standpoint than from 
that of the industry. 



(*) Code of Pair Com-oetition for the Fertilizer Industry is in "Codes of 
Fair Competi.tion," '^'^ational ''.ecovery Administration., Volume. II, 1933, 
p. 117-136. 



■ ■-175- 

There a.re some other factor^, the development of which jnay cause a 
decrease "both in the tonnasie of fertilizers and in that of lolant food 
consumed in certain sections notatly the Old Cotton States. 

'Effect of th? A.A.A< Program 

One of -.thege factors, is the effect of the A. A. A. cotton acreage 
reduction nrogram. It is still too early to he ahl° to determine the 
long-run effect of 'this nrogram on the various asriects of southern agri- 
culture or on the -fertilizer business in that area. It may not however, 
he amiss to raise certa^in noints.at this tiipei 

On th-i one hand, Mr. Brand of The National Fertilize]* Association 
who was at one tinjorco-sdministrator of. the A. A. A. has re-oeatedly pointed 
out that in his ODihion the A.A.A. -Drogram has increased the nros-Derity 
of the cotton fe.riiejr .of the Old .South . and has made it -oossihle for him to 
TDurchase more fertilizers. . ^ 

There is, of |CQurse, the other side of the story, namely that in- 
creased nrice of, .American cotton due'to the A. A. A. rirograni is driving it 
out of foreign." mark.ets and is encouraging other cotton countries to in- 
crease their acreage. This increased foreign nroduction of cotton will 
mean increased futuj-e comx>etition for the United States cotton in foreign 
ms.rkets. Either the cotton acreage and -oroduction in this country will 
have to he still further reduced, hence reouiring less fertilizer or else 
we shall have a trend toward the very cheapest loossihl" cost of uro- 
duction.. It is not clear whether the answer to the latter -ooint would 
he cotton on few-=r acres with more -fertilizer or cotton on more acres 
with less fertilizer. 

•''"?:■ .■'";■■■■ -1. 

, • ... Mechanical Cotton: Pickers 



li" any of the., various attomistsat devolpriing mechanical cotton 
-Dickers . should work out -oractically, that, in i-tself_ would very materially 
reduce, the cost, of ,■ making the cro-p so that farmers in, say, Alaharaa, 
Mississi-DTDi and G-eo3;-gia might -oerhaDS use more" fertilizer. Thus it is 
stated' that in the Mississioni Delta region mechanical -Dickers and 
stri-opers would make -oossihle a 75 per cent reduction in o-oerating lahor. 
However, it has at least in the -oajSt he.en' -oreiipted that -oerfection of 
mechanical, cottop. -Dickers woUld cause, a, large increase in the -oroduction 
of rntton in certain sections of Texas' where, ks already noted, fertilizers 
are not commonly used to any a-o-oreciahle extent, and where the limiting 
factor has -orohahly heen the lack of a sufficient su-o-oly of chea-o lahor 
at nicking time. 

Shift in Cro-p, Acreage 

Another interesting slant on .this, crohl'.^m is contained in the re- 
cent releases- pf the Bureau of the Census .of Agric-ulture taken in 1935 
covering the year 1934. In g-neral thes.e sho^ in the Old South a very 
decided decrease in cotton acroa.ge which has, been largely, taken u-d in 
incrensed acreag"^ of food stuffs and food cro-DS.,., acco.miDanied by sub- 
stantial increases in livestock. Thus in North' Carolina there was an in- 
crease of 900,000 acres in corn and hay; 150,000 acres more wheat; 
217,000 m'ore cattl? and lOfj.OOO' more hogs, Por Alabama, the release 



-176- 

shows 1,000,000 acres more corn; 450,000 more acres (»f hay and 440,000 
more cattle (*), 

Since one of the reasons' for the use of less fertilizer in some Mid- 
lest States is to "be foiond in the mixed character of' the farming, in- 
cluding the carrying of more livestock and hence the availability of a 
much larger Quantity -of'farm 'raanure-j-^iC-may- be reasonable to expect a 
somewhat similar develoriment in these Southern States if the Toresent 
shift to general farming hecome's TDerraanent. ' It is, of course, recognized 
that if this increase in corn and livesto'cV- becomes -Dermaneht in thei 
South, it may cause som^ of the Mid'-'?est States to make such shifts in 
their farming -oractices as to add' croiDs' on which it will Day them to use 
fertilizers. ' ' ' . - ■ , . . 

' Summary of Future Distribution Volume 

In view of the present changing "trends in American agriculture, the 
future of the distribution of fertilizer is very difficult to nredict, but 
barring rather far reaching developments one way or the other, it would 
seem reasonable to expect a slow, but fairly constant increase in the 
trend in tonnage of Dlaht foods used on American farms. ■ This, of course, 
does not necessarily me'an that these "olant foods will 'be obtained from 
the same- sources as at present. Industrial chemists are still busy as 
they have been in the nast arid the immediate future may see some 'further 
changes, 

■ ■ ■ ■ PRICES ■ ■" 

■•'■'■" ■' THT?] SIGNIFICANCE OP PRICE - ■• : "'' 

The whole system of loroduction and distribution of fertilizer' is, 
set UTD to get a rorice and, if -oossible, a Tsrice which will show a net 
■orofit over and above cost. Thus to the manufacturer nrice is of extreme 
ira-Rortance. To the farmer, the nrice of fertilizer means the cost of one 
of his most essential and most expensive production items. To the 
laborer in the factory, the -Drice- which the fertilizer manufacturer can 
secure may- be the difference of having'a job or 'not having one, and the 
nrice differential over and above cost of materials may be the difference 
between DOor and good wages. To the consumer of agricultural -oroducts 
either in the original or convjrted form, as well as to all students of 
our economic situation, the nrice of fertilizer is significant as being 
one of the factors influencing the degree to which farmers can make the 
most efficient use of their cro-o' lands. 

FACTORS AFFECTING TK-i; FARMER'S PRICTi: OF F-tRTILIZER 

The farmer in buying fertilizer finds himself in the same nosition 
he does in the nurchase of most sup-olies - that is, he finds he must nay 
the nrice asked by tho manufacturer and/or distributor. This, of course, 
does not mean that' the nrice asked is necessarily too high nor that the 
manufacturer or distributor" can ask and secure any' nrice he desires. In 
fact, it may not always be nossible for a selle't of fertilizer to secure 
a nrice high enough to reimburse him for all of nis cost - to say nothing 

(*) Farm Census, •^'reliminery Renorts', ''Bureau of the Census-, Denartment 
■ of Commerce, 1935. • .■■■■' ■ 



of always seciirin,^ a profit. 

However, disre^ardinf; the necessity of "orice cuts to move 
raercharidisf^ under -Deculiar conditions, . it may, be said that the manu- 
facturer'' s ^ cost is one of the' most", important elements in .the iDrice of 
fertilizer to the farmer. Other factors influencine; -orices are: the 
cost of distribution, transportation, ?nd credit; the general -orice 
level; the level of farm nrices, and -ourchasin.": x>0"'^T of farmers, etc, 



Cost of Ma nufacture as a. Price Element 

Cost of manufacture does not necessarily set a minimum "base for price, 
tut it certainly has a tendency in that direction. In The "Fertilizer 
Industry according to published data of the national Fertilizer Associa- 
tion (*) prices have at times been cut to helow total plant cost. How- 
ever, plant cost must be taken into consideration in connection with 
prices. 

Cost of Raw f^aterials the Chief Element in Factory Cost. 

Pre Codal Period 

In the total cost of manufacture of mixed fertilizer by far the most 
important element is the cost of the materials. IJhus data on cost of 
making 4-8-4 in the Southern States issued in 1929 (**) shows that for 
12 plantw the total factory cost exclusive of interest on investment 
Was $21.29. Of this amo\int the average cost of material (basis port 
plants) represented 81 per cent while other cost factors were ps follows: 
Factory labor 5 per cent and all other factory cost including bags, twine, 
power, taxes, etc. represented 14 per cent. 

1929 data for other sections of the United States presents a similar 
picture, thus in New England material represented 65.7 per cent in cost 
of making 5-8-7 and in the Middle West materials represented 77 per cent 
of the cost of making 2-12-6. 

In the case of superphosphate a study made by The National Fertilizer 
Association (***) showed that here too the materials formed by far the 
largest share of factory costs. Thus in the Middle and South Atlantic 
States materials represented 83 per cent of the total cost; in three 
Southeastern States, 81 per cent; and in four South Central States, 
78 per cent. 

Materials Cost During the Code 

Cost studies made dxiring the code (****) showed that in the ^ring 
of 1933 materials represented 63.1 per cent of total cost at the plant 

(*) National Fertilizer Review, January-February-March 1934, p. 1. 

The National Fertilizer Association; and numerous publications and 
statements. See also Table 53 of this Report on Costs and Sales Prices 
in 1933. 
(**) Comparison of costs of mixed fertilizers. The National Fertilizer 

Association, 1929. 
(***) Comparison of cost of superphosphate, 1929 to 1930, The National 

Fertilizer Association, October, 1931. 
(****) "A General Report on Mixed Fertilizer Costs find Sales Prices, 

Spring Seasons of 1933 and 1934 in the Principal Fertilizer Con- 
sioming Area in the United States," The National Fertilizer Association, 
October 26, 1934. Appendix II, Exhibit 20. 



-179- 

and in 1D34, 62.3 per cent (*) 

The above examples are sufficient ' to show the great importance of 
the cost df materials to the manufacturer ,and the part it plays in de- 
termining the price at v;hich he can afford to sell. They are for the 
same reasons equally important to farmiers and the students of the econom- 
ic conditions of agriculture since developmentvs bringing about an increase 
or decrease in the prices of these materials are usually, other things 
being equal, accompanied by an increase' or decrease in the price of fer- 
tilizers to fariTiers. In the case of materials that the farmer buys for 
home mixing or direct application the relationship is still closer. 
The price history of these materials has been reviewed in Chapter II. 

Cost of Distributi on 

The available data are very m,eager oh the cost of distribution as 
an element in the retail price to the farmer. The items which probably 
should be included under this. general caption are manufacturers' selling 
expenses, cost of transportation, anr' the discounts or commission allowed 
to the various kinds anc: t^^pes of distributors. 

As a general rule manufacturers at interior points are nearer the 
markets and have lower costs of distribution but a compensating factor 
is the higher cost of raw materials as contrasted to port cities where 
the lower cost of raw materials is offset, by higher cost of distribution. 

The National Fertilizer Association Studies of Distribution Costs 

As to manufacturers' selling expenses, a study (**) made by The 
National Fertilizer Association showed that for the year ending July 31, 
1930 selling expenses in various sections of the country were as shown 
in the following summary: 

Middle Western States - S-12-6 - Total Cost ^26. 74 
Selling Serpen se $2.27 

South Central States -4-10-4 - Total Cost $27.56 
Selling Expense $1.31 

South Eastern States, - 4-8-4- Total Cost $22.79 
Selling Expense $1.53 

South Atlantic States - 4-8-4 -Total Cost $23.23 
Selling Expense $1.12 

New England States - 5-8-7 - Total Cost $35.62 ' 
Selling Expense $3.13 

(*) A Digest of the Coat Accoimting Manual prepar.ed for use -in Adminis- 
tering the Fertilizer Code is contained in th-s- F;.-irtilizer Industry NRA -• 
iLrchives as Exhibit D. 3ee also.Zxhibit 21, Ap^^endix II which explains 
the cost accounting system. 

(.**)■ Comparison of Co-cf^ of' Mixed F.ertilizers , 1929-1930, The National 
Fertilizer Association, September, 1931. 



-180- 

A later report (*) gives a genernl silmiaary of what is referred to as 
"Average Cost of Distribution". Here the total is given as $4j69 per ton 
including average freight -?2.39, average trucking from railroad station 
to farm -74 cents, average agent's compensation -$1.56. I"t should "be 
noted that this average cost of distribution does not include the manu- 
facturer's selling expenses. 

Such "selling expenses" are unfort-unately not separately set forth 
in the survey. If available there could be calculated the average cost 
of distribution. However, such "averages" are not very satisfactory for 
such an item as cost of distribution of fertilizer. That is the generic 
term "fertilizer" covers so many different kinds that to get a true pic- 
ture there should be available cost of distribution data for at least the 
principal grades and by geographic divisions. With reference to the 
latter point, the transportation costs vary considerably at the present 
time. The total cost of distribution varies for a given grade of fertili- 
zer from such States as North Carolina on one hand and Nebraska and Kansas 
on the other hand since in the latter States the farmers are a much f\xrther . 
distance from the fertilizer factories. It is felt that such data as are ^ 
needed to present a true picture of cost of distribution could be obtained 
only through a detailed study. 

Vial's Study of Cost of distribution 

A different approach to cost of . distribution is presented in a study(**) 
published at Cornell University. The author of the bulletin E. E. Vial 
publishes data which he refers to as cost of distribution for certain 
fertilizer over a period of years. Analysis of his discussion, however, 
(page 4) reveals that these are not really "cost of distribution" but 
cover the entire spread between the market quotations of the materials and 
such retail prices as he was able to secure, for various states. In other 
words his data include transportation of material to factory, plant costs 
(other than for materials) siich as labor, bagging, manufacturers' , selling 
expenses, transportatiori to dealer and farm, etc. Vial himself points 
out these limitations on page 4 but states "for the farmer, however, the ; 
difference between the .difference of prices in wholesale market and the ^ 
price which he pays in his local community represents the cost of distri- 
bution" . Later in his report, on page 153, he discusses these data as if 
they did cover the actual cost, of distribution. 

It should be noted that most quotations on materials do not necessar- 
ily represent what the fertilizer manufacturers actually had to pay for 
them. Further the retail prices as used in the Cornell report are taken 
from certain state reports which are chiefly concerned with chemical 

(*) Mixed Fertilizer Costs and Sales Prices, Spring season of 1933 and 
1934 in the principal fertilizer consuming areas in the United 
States, Fertilizer Recovery Committee, 1934. 

(**) Retail Prices of Fertilizer Materials and Mixed Fertilizers, Cornell 
University Agricultural Experiment Station, Bulletin 445, 1932. 



analysis and control of fertilisers aiid which include retail price data 
merely as indicating trenus'. - It is felt tnat s\icn prices do not neces- 
sarily indicate what farmers r.ctiisily paid for fercill7er. ?or exarrple, 
there is no way of determining' wheT;her the nrices for va^-ious years are 
on a comparaole "basis nor do the dasa as pu.'bJ.ishei sho-A whether the prices 
shown are ''tlLie "basis" or "cas.a baol.-?'" or Y.hether they do or do not in- 
clude various dibcounts such as quar.ii*:y, seasoral and the like, l^'uiile 
the Cornell data might possibly be rf some v:ilue as indicating in a 
general way the relation between mar Ice t quott..5icng or iral-erials axid 
retail prices, it is not felt that m such a report as tne present one 
their so-called "cost of distribution" data can b3 used as such. 

Conclusions on Cost of Distribution. 

Even in the absence of detailed cost of distribution data there 
would seem to be p^-ima facie evidence; 'of economic ursounaness in the 
system of distribution of a large shave cf the tc-^al tcinage. The annual 
average tonnage is approximateJ^v 6,000,000 tons- .i»-ccarJing to the 
Association data 70 per cent o"^. the tytal or 1,1300.000 tons is sold by 
dealers and agents of which the Association says there ai e approximately 
50,000. This means average annual sales per agent and/or dealer of some 
84 tons. 



9761 



-182- 

Credit as a Factor in the Distribution and Prices of Fertilizer 

0-eneral Ira-oortance of Credit 

Credit, including the need for, availability of, cost from 
various sources, has been of vital imnortance in the distribution and 
nrices of fertilizer. For the -Dur-poses of this chapter the -ooints of 
s-oecial interest are the farmers' purchases of fertilizer on a credit 
basis, kinds and sources of credit, credit availability for this 
purpose, and the cost, both absolute and relative, of credit from these 
various sources. Of interest also are the credit terms of sales as 
they existed prior to the Code, the Code provisions, and experiences in 
attempting to operate under it. 

Annual Survej> of Fertilizer 'Credit 

In the annual survey of credit in the Fertilizer Industry made by 
the Division of Farm Finance, the Bureau of Agricultural Economics, 
certain data are published which indicate at least in a general viray the 
-importance of credit in this Industry. This survey is conducted in 
cooperation with The National Fertilizer Association. The 1934 
survey (*) covered 97 manufacturers who had in 1934 sales amounting to 
^48,000,000. They estimated that taieir 1935 sales in 25 states would 
be 16 per cent on a credit basis which was identical with their 1934 
experience. Of these 97 firms, 24 reported that they did not expect 
to use credit from banks, 26 reported they expected to use bank credit 
to about the same extent as in 1934, while for the entire group it is 
expected that bank credit for 1935 will exceed bank credit for 1934 
by 6 per cent. 

At the sa.me time, these manufacturers estimated that farmers in 
1935 bought 29 per cent of their fertilizer on credit as compared with 
26 per cent in 1934. It should be noted these nercentages refer to 
tonnage and the ■nercentage of farmers using credit in the purchase of 
fertilizer may be something auite different and probably considerably 
higher since farmers purchasing larger tonnage may not have needed 
credit to the same extent as the smaller farmers. It is also interesting 
to note that both act-ual 1934 percentage and the forecast of percentage 
for 1935 are materially lower than the 1933 figures issued in Iove;rib;er 
of that year which showed that during the year 35 -oer cent of the 
farmers' purcliases of fertilizer were on credit basis. 

An interesting question here is whether this reflects a better 
cash position of the fa.rmers or an increased availability of credit 
through other soxirces such as banks or crop production loan associations, 
the securing of which make it possible for farmers to pay cash for 
their fertilizers and avail themselves of cash discounts offered by 
fertilizer manufacturers. 



(*) Bureau of Agricultural Economics, Department of Agriculture, 
Division of Farm Finance, Mimeographed Report November, 1934. 



9761 



-183- 

Sirnilar -Doints of interest ari^'.e in connection with the statement 
that, in 1933, 1,641 fertilizer dealers reqt'irca crer'it as against 939 
in 1934 but here the q-ac?tio.u is ivhstrer this was due to the 'b'^'tter 
cash position of rfrmera or wh-'tht^i nt may not have "been -principally 
due to elirairatiori of or rech-:..-t:i.on m t^e Piimher of dftpltrrs through the 
efforts of m^nufacliirers durin;^ the codr.l r.eriod to increase their 
sales thro-jfh a,:-,-e'"'ts. There Beemb' to be 'iome evidence that this was 
probably accomplished at least to a cer'osin degree in some states. 

Farm Credit Verj^ Important Problem 

The whole problem of the farmers' use of credit in obtaining 
farm sup-nlies as well a^ xiousehold sup-olies is an extremely important 
and interesting one with many ramifications. The purcii.?se of fertilizers 
on credit is, of course, but one phape of this larger "oroblem, Beca.use 
of the significance of this problem a ccnisiderabl e pmount of work has 
been done on it in the -oast by the Bi^renu of Agr"^- cultural Econonics, 
United States Department of A-rictil tv.re and by some of the state agri- 
cultural experiment stations and more recently by the Farm Credit 
Administration. 

Fertilizer Credit in Forth Carolina 

In 1930 there was published a study on "Farm Credit in North 
Carolina - its cost, risk and manag=^raent. " (*) This bulletin presents 
data covering several groiros of far:ns in the State of North Caroline for 
the year 1925. For the groun of farms studied the purchases of fertilizer 
account for 46 p-^^r cent of the' total short term credit obtained in 19^6. 
The bulletin states 

"The total expenditure for this item often exceeds the farmers* 
available funds and is most often the factor which causes the 
North Carolina farmer to seek credit," 

Since credit for the purchase of fertilizer originally runs for a 
relatively long term, generally 7 months, as in the case of cotton, 
banks liave not been so willing to carry the burden. Only one-third of 
the fertilizer credit in 1926 was on the basis of cash loans, the other 
two-thirds being extended by merchants and generally at a higher charge. 
According to the same bulletin cash credit costs these farmers on the 
average of 7.7 per cent while merchant credit on the a.verage costs them 
25 per cent. It is also interesting to note that credit from stores 
costs on the average of 28.5 per cent, wnile credit from fertilizer 
companies costs 22.7 per cent, llerchant credit was often obtained on a 
flat charge basis. Thfet is, merchandise having a cash price of $100 
would have added to it a, flat time charge of 10 per cent of the balance 
or a total of ?5ll0. Tims, if the account ran only 6 months the rate 
would really be 20 per cent per annum. On the other hand if the account 



(*) Bulletin No. 270, North Carolina State Agricultural Experiment 
Station. 



9761 



-184- 

ran for 18 months iser anniim the r-^-te would he 6 ?.lz -per cent. This 
fact may accoxmt for the general slowness of some farmers in settling 
UD such merchant credits since overdue accounts would he cheaper 
than those t)aid Drom^tl;;'- when due. 

Cost of Fertilizer Credit Relatively '-^igh 

There are some extremely interesting eomments on costs of 
fertilizer credit, contained in a suLmmary (*) on the cost and terra of 
short term credit according to purpose. It shows that fertilizer 
credit on the averpge costs these farmers 35.4 per cent as contrasted 
with 11.8 per cent for other farm expenses and 20.8 -oer cent for 
living expenses. It further shows that the cost of merchant credit 
for fertilizer was 35.2 per cent whereas the cash credit for fertilizer 
cost hut 8.8 per cent and the cost of merchant credit for fertilizer 
was much higher than that for other farm expenses - 23 -oer cent. It 
would a-oDear that at least at that time, 1926, mercha,nts customarily 
charged more for credit sales of fertilizer than they did for credit 
sales of other commodities. On this noint the authors of the bulletins 
make the following nertinent comments: 

"The cost of fertilizer credit further tends to be generally 
higher ths.n for other pur-noses because the flat rates carried 
are distinctly higher thin flat rates for most other gooJs 
sold on time. I'lerchants usually reported -^heir time charges 
for general sur)nlies at 10 to 15 t)er cent, a,nd occasionally 
at 20 per cent, increase of cash rates, whereas time charges 
for fertilizer were generally 20 -to 30 per cent above cash. 
This -Dolicy of differentiating rates on sales by the two methods 
is set by the fertilizer corr^panies in selling to dealers and 
carried out in retPil sales." 

"The significance cf this variation in credit cost for the farmer 
is that he should use what cash he has or can borrow to buy this 
fertilizer and, in so far as he finds it necessary to use credit 
bearing a flat charge, to use it for those purposes which have 
longest term and so result in lowest vier annvim cost." 



Note: A similar report for the State of South Carolina (**) gives data 
and conclusions quite similar to those for North Carolina.. 



(*) Bulletin No. 270, North Carolina, Agricultural Experiment Station, 
Table 13, t5. 26. 

(**) Agricultural Finance in South Carolina, South Carolina Agricultural 
Experiment Station, Bulletin 382, November 1931. 



9761 



Credit Conditions in the Ir c'-ts t^y j ust Prior to the Code 

The terms and methods of haiidlin-? crt^dit sales in the Industry 
just Tirior to the cooGj at Icr^st en the '^■Hrt of zon'?- comnpnies, left 
much to be desired as indicavod hy Mi o Ersr.d and oth.-ra, and "by code 
provisions there'jn in Article VHI - VvitiZT Pia.-ticer. Thus i^e find 
that in Section 8 it was felt nf3C33rary tj ■orchiuit waiving the 
ohlig-ation to be paid in ca^h before docui-ients or goods are delivered 
in connection with S.CB.L. sales and also the -Dract:i.ce of wpiving 
earned interest. Farther, sr.b-section (b) of Section 11 prohibits 
the carrying as delinquent balances cra'.i by solvent costoraer ^'-'ith no 
intention of requiring ultimate paiTr-ent. Section 12 -)rohibits certain 
devices which had been resorted to in coanectio:; with what ^''ere ap- 
parently cash sales and in fact inoking thsrn creCJt poLes.. T.'ie?e 
metncds aoparently were making salsy covared by c.ight draft rnd bill 
of lading and then the producer who made the sale endorsed negotiable 
instruments which enabled the purchsser to obtain the cash to meet 
the S.D.B.L. The other method wps similar in that the producer 
rendered himself responsible to the bank although not actually en- 
dorsing the obligation.. 

■Ruinous Credit Practices 

Mr. Brand in the 1932 convention of The National Fertilizer 
Association in t-^* Iking pbout. the pps and downs of agriculture and 
discussing the T-'obleM^ of the Industry mentioned ten -nroblems of 
essential imporxance ana two of ibese were as fallows: "ruinous credit 
policies" and "a vicJors pr?iotice of deferred settlements J' In this 
connection Mr. "Brand referred to his address to the convention in 
June of 1927 entitled '^For Bc-tter or for Worse - Our industry." Since 
it was in this address that he originally mentioned the two problems 
quoted above, it would seem that the situaLlon had not materially 
improved in the time which had lapsed from 1927 to just prior to the 
code. 

The Code of Fair Practices of the Fertilizer Indtistry, adopted 
January 10, 1927 prohibited -'extendod c:-e lit terras that do not take 
into accoun.t the actual cost" cf rjonoy or credit,-' and also required 
that in the case of delivery against prc\ricSoiy r.otcd the accounts 
should be made payable at the time the crop was marketed. 

The 'Txad-e Practice Conference P.uies of December 1929, approved 
by the Federal Trade Commission, contain provisions qpite similar to 
those in the adopted l^HA code. Tins, section (u) of Ilule 2 of the 1929 
trade rules was almost identical with Section 8 of Article VIII of the 
Code, and section (h) of Hule 2 of the 1939 Trade Practice Rules was 
practically identical with Section 12 of Article VIII, In the proposed 
plan for a volp^iitary code submitted to the Federal Trade Co-miission in 
October 1935 these same matters are covered in almost identical words. (*) 

At the 1935 convention, Mr. Brand, in speaking on pre-codal 
conditions of the Fertilizer Industry, said: 



(*) A copy of this Voluntary Agreement is contained in Appendix II as 

Exhibit 32. 
9761 



-166-. 

"Because of our genuine and proxier desire to sell as lar-^e a 
quantity as -oossible for cash, it was our custom to have an 
extraordinarily wide s-oread between cash and time Dricep 
that often resulted in criticism of the industry, much of it 
unwarranted and based ur^on misinformation. 

"We pursued credit -oolicics that commonly resulted, in years 
of diminished agricultural income, in a burden of bad debts 
and uncollected accounts that iraDOscd unfairly urion the frugal 
and prudent farmer -who paid his bills. We often pursued a 
loose fallacious credit policy intended to reduce unit over- 
head costs by obtaining larger tonnages ever which to dis- 
tribute such costs, with the result that frequently we 
garnered in bad debts far in excess of any saving made in 
overhead." (*) 

Typical Cash Discounts 

The experience with cash discounts in South Caroline is typical. 
During the first few months the usual schedule of disco-ants was as 
follows: 

10 per cent for cash 
9 per cent for payment within 30 da.ys of invoice 
8 per cent for payraent within 60 days of invoice 
Note required, bearing interest at 8 ner cent, if payment was not 
made within 60 days of invoice. 

After January 1, 1934, cash discounts were increased and put on 
a basis of named dates insteaci of a given number of days after invoice. 
The typical schedule effective during the first six months of 1934 was: 

8 per cent interest was paid on deposits in advance of purchase 
15 per cent discount for payment before March 15 
14 per cent discount for payment oefore April 15 
13 per cent aiscount for payment before Majr 15 
12 per cent discount for payment before June 30 
No discount after June 30 a-nd an 8 per cent note reaiiired 

1 per cent additional disccTint allowed on cash price for pajmients 
at or before delivery. 

Unscientific Credit Practice 

During the operation of the code, the industry continued to offer 
an abnormally high discount for cash often in order to shift the 
banking function from the shoulders of the Industry. Keen competition, 
however, seems to have presented a scientific application of the idea 
and large discounts of as much as 12 per cent were allowed for cash 
payments within four months after delivery. Typically these discoiints 
decreased from 15 per cent to only 1 per cent per month for four months 
whereas to accomplish the purpose of shifting the credit burden from 
the Industry these discounts .might have been decreased much more sharply 
as time elapsed from the delivery date. The policy used by the Industry 
tends to shift the desirable credit risks and keep the poorer ones. 

(*) "Our Industry under the Code," Charles J. Brand, Proceedings of the 
Elevent h Annual Convention of The National Fertilizer A ssociation , 
The National Fertilizer Association, 1935, p. 24-25. 



-187- 

After four months the d i s c oitn t ;-:. ceased and a legal rate of 
interest wns charged in addition. In sr)ite of tliese deterrents 
nearly 30 per cent of the sf les of the industry during the code were 
made on a c-^edit basis. This fact should he horue Jn nind in con- 
sidering cost stijdiep which shov! the amoiint received hy tho nancifac- 
turers as a cash pri^-e. Unlers the excessive competition forced the 
extension of credit urwissly the ind\istry must have made mnnyy on its 
hanking fuaction as I'c ver cant discount olus 6 to 8 opr ci-at interest 
is certainly moi'e than the money was worth to any well financed 
fertilizer cora-nanj^ 

That fertilizer coratianies had been accustoned to a hanking -profit 
is evidenced froti the following quotation: 

"The sale of fertilizer at cfish Drices means that from now on 
we must rely more on a ma.nufacturer 's profit and I'ealize that 
what might oe termed a ba.nkcr's profit resulting- from inteiest 
received on time sales, will 0^ largely missing." (*) 

In this connetctinn it is interesting to observe that the cost 
study referred to in Table 53 shows that the manirfactarer in 1933 
received at the plant ol.52 -oer ton less than the fertilizf;r cost him 
according to the standard cost accoiontirg formula. If we could a-oply 
such losse;i to the entiie 5,532,956 tons of fertilizer sold in 1933 
it would indicate losnes for the industry of ■•'G;410:093 in thst year. 
The income tax returns in Table 6 on S95.a05,631 gross sales (Census 
shows $82,811,000 sale.c for the industry) rhoT/ed a net deficit of only 
$2,474,256 thus illa^'trating the f allacionsnee? of comi^utin^: the 
profits or losses of the. industry from suoh a cost study of prices 
received by the manufacturer at the plant, 

Tholesele Prices 

Table 68 gives an indication of the way in which .the wholesale 
prices of typical grades of complete fertilizer have varied over a 
period of years. 



(*) Annual address of the president; by Spencer L. Carter, Proceedings 
of Third Annua l Convention of The ITa tinnal Fertilizer Association , 
The national Fertilizer Association, June 7, 1927, p. 10. 



9761 



■• TABLE 6^^ 
W^-^OLESALE PRICES OF TYPICAL '^-RADES OE C0:TLET^ EE-^.TILIZER (*) 



Year 


3-8-3 


5-B-7 


2-12-2 




ner 


Cent of 




South, 


(Forthefst) , 


(i'ladle Wes 


t). 


1919 


nrice 




price "oer ton 


or ice loer ton 


■Drice -oer ton 


(a- 


vera^e) 


1919 


■'.55. 6 P. 


'■'94.25 


'-49.93 






100 


1925 


22.80 


41.54 


28.10 






46 


19,?7 


19.00 


28.09 


25.41 






36 


1929 


22.40 


34.15 


26.19 






41 


1931 


19.13 


31.35 


21.90 






36 


1953 


14.77 


24. 29 


19.10 






29 


1934 


17.35 


26.26 


20.36 






32 



:,etail Prices 

The industry conditions of nrice cutting in the pre-codal period 
nave made it impossible to construct a,n accurate index of -orices paid 
by the farmers for fertilizer either before the Co(3e or since the 
Schechter decision. 

The extent of the devintions fro'.i list prices vras indicated by 
the study of the fertilizer industry ,aaoe by the Federal Trade Cora- 
mission which showed that discounts of 25 per cent from list prices 
was not unco.Tiraon. (**) 

During the code the industry aJopted open nrice filing so that 
prices and terms of s^-^le for thnt period are av- liable but we cnnnot 
accurately measure those nrices a.f^-ainst the cues which preceded or 
followed the Code. 

The Bureau of Agricultural Economics of the U. S. Department of 
Agriculture publishes an index of retail fertilizer prices but the 
data from which the index is comniled is obtained from a dealer 
ouestionnaire and is made up of nrices which the defilers say they 
charge farmers. This index is contained in Table 66. So far as has 
been ascertained no actual series of prices actiially paid by farmers 
is available. 



(*) Ta.ble submitted by Charles J. /irand, Executive Secretary and 

Tre='surer, The National Fertilizer Association at the Hearings 
befi^re the Senate Committee on Finance, April 12, 1935, 
Government Printing Office, p. 18. 

(**) "Fertilizer Industry," Federal Trade Commission Report, 
March 3, 1923, Government Printing Office, p. 74. 



9761 



Tile disadvantages of such indexes not "based on real settlement 
■orices is indicated by the follovring auotrtion: 

"During the past tv/elve months fertilizer -nrices have receded 
12.6't. In actual practice mixed fertilizers have receded more 
than our index number shows for the index is based unon quota- 
tions of fourteen of the most used fertilizer analyses and not 
unon the final settlements." (*) 

Chart XII shows how the index of fertilizer prices at the factory 
compared with farm t)rices at the farm from 1929 to 1934. 

Chart XIII gives a comparative graphic -nresentation of the 
Department of Agriculture fertilizer prices and the -orices paid by the 
farmer for commodities which he purchases and correlated with the 
prices which the farmer received for the things which he sold. 

Chart XIV is a graphic illustration shoi-rin,^ the same data for 
January 15, 1935 as contrasted to March 15, 193ri. 

Further detail on the relative cost of fertilizer and other com- 
modities purchased by the farmer is contained in Chart XV which shows 
that fertilizer had advanced less relatively than any of the other 
commodities shown. 

Chart XVI presents graphically the details of the relative 
increase in the nrice of fertilizer with the ririces which the farmer 
received for certain farm "oroducts. This chart illustrates that 
fertilizer increased less in -orice than the increase in -orice received 
by any of the farm -oroducts shown. 

Chart XVII -presents this data in a more striking fashion showing 
the quantities of certain farm ^oroducts necessary to -ourchase a ton 
of fertilizer for use on such -oroducts on January 1, 1935 as con- 
trasted to Jan-uary 1, 1933. 

As indicated in a previous chapter the prices -oaid for a ton of 
fertilizer do not give a true picture of the value received by the 
farmer since the percentage of plant food in a ton of fertilizer has 
been continuously increasing. Table 69 which -oresents price data 
for the State of Vermont illustrates this "ooint very nicely. 



(*) "The Industry and the Association: An A-opraisal," by 

Charles J. Brand, Executive Secretary and Treasurer, The National 
Fertilizer Association, Seventh Annual Convention, J-une, 1931, p. 23. 



190 

CHAitT XII 



INDEXES OF FARM PRICES AT THE FARM AND OF 

FERTILIZER PRICES AT THE FACTORY - 

1929 TO 1934 BY MONTHS 



F6rm Prices - /909 to /9/4 =/00. 
Ferf-i/,zer Prices- /9/0 to /9/4 -- /OO. 




^ftcmMifi ar rnf /^r/o*HL feitr/u^of - 



9761 



191 



CHABT nil 



COMPARISON OF THE FARM PRICES OF FERTILIZER 

AND OF FARM PRODUCTS AND OF THE 
PRICES PAID BY FARMERS FOR COMMODITIES 



250 



50 



BOUGHT, 1910 TO 1934 

('according to u. s. dept. of agriculture.) 



/ ""W-z^yP/V PfiO/?l/Cr P/f/CSS 




'■r^Pi/PC///iS//^6 PO/Tf/? Of 
FMM PP(?/?i/Cr5 W TfPMS 
OF f£Pr/l/Z£P PP/CES 



\ 



i\-\ 



— — — — — — — — — — fMCJOJCjCvlCV/CJCJCJCVJOOdfOO 



192 



CtL-j.T XTV 



HOW PRICES HAVE RISEN 

(based on indexes of the 
u.s.dept. of agriculture) 

P£RC£/^r ff^CREASE 



too 




MARJ5,/933 



JAN. 15, 1935 



Ffi£f)1/i£0 BY T/f£/Mr/0/WL ££Pm/ZfR ASS/V. 



9761 



193 

CHART XV 



RELATIVE COST OF COMMODITIES BOUGHT 
BY FARMERS AS OF SEPT. 15, 1934 

(according to u. s. dept. of agriculture) 


COMMODITY 
BOUGHT 


INDEX NUMBERS. 1910-1914=100 
25 50 75 100 125 ISO i75 






FERTILIZER 




EQUIPMENT 
AND SUPPLIES 

FOOD 

FEED 

ALL COMMODI- 
ViLS BOUGHT 

CLOTHING 
FURNITURE 

BUILDING 
MATERIAL 

MACHINERY 
SEED 




■:,.,,-.■:■::-:: , :l« 






:.-■:■ \.„ 






yyy : .|.. 1 






y-yyyyyy- :. ■: ::-:::..:::::-,:,. 1- 1 






:■■:•-.:.• ' : :>: - .■:.,....■...::. .1- 1 






x-;.; : .:::-x::x;:>:. ■■■■1- 1 






::•:■:.■.•:■■■--:.: ■ .x-: : :■: , ; .x-;.-. .■■:■:■: 1^^. | 






x:xx-x xxx;;x. ,x x; . 'x :xx|.r. I 






>:--:::x XX XX ::;,;;;::■■-: xx: x :'xx:::-:-x|- 


1 



9761 



194 



INCREASED PRICES OF FARM PRODUCTS i 
AND OF FERTILIZER, 
SEPT. 15. 1933 TO SEPT. 15, 1934 

(ACCORDING TO THE U. 5. DEPT. OF AGP. IC Ul't U RE) 1 


I 

PRODUCTS 


PERCENT INCREASE 
25 50 75 100 


TOBACCO 

CORN 

HOGS 

OATS 

COTTON 

CHICKENS 

EGGS 

WHEAT 

BUTTER FAT 

BEEF CATTLE 

MILK 

POTATOES 

ALL FARM 
PRODUCTS 

FERTILIZER 

ALL COMMODI- 
TIES BOUGHT 




1 


"9 


1- 




1- 




1 - 




1" 




1" 




1" 




1- 




1" 




1" 


~]' 


1 J« (p£CRfAS£) 




■ 1" 


THf5£ //^CA'£45£S ^O /VOT 
L /NCLl/D£ /?£AZ4/. /i/VD 
—J B£A/£F/r P/IYAf£/^TS 


,■,,,1' 



9761 



195 



Cn..i-.T XVII 



QUANTITIES OF FARM PRODUCTS REQUIRED 
TO BUY A TON OF FERTILIZER 



JAN. I, 1933 



JAN. I. 193? 

I^ijj If COTTON [nnrri 

368 pounds 191 pounds 




CORN 

138 bushels^^ 36 bushels 






WHEAT 

80 bushels 34 bushels 





POTATOES 

113 bushels 79 bushels 



HOGS 




985 pounds 



447 pounds 



T'/^e f/yurej represen/ ^-/^-d for Com, iy/?edf and fiogs, 
3-6-5 for Cotton, and J-6-7 for Potatoes. 

wepn/ieD BY mf /urio/iAL f£/>T/L/za ass/i. 

The above chart shows clearly that price increases of the past two years 

haye placed the fanner in a more favorable position so far as his fertilizer 

purchases are concerned. A similar situation holds with respect to other 

farm products not shown in the chart. 



9761 



-196- 
TABLE 69 

RETAIL PRICES OF FERTILIZER, POUNDS OF PLANT POOD PER TON, A!D PRICE OF 
PLANT FOOD PER POITl-ID - VERMONT - 1923 - 1935 (*) 



Ap-oroximate 

aver?ige 

retail 
prices* 



1922 


$46 


1923 


44 


1924 


46 


1925 


46 


1926 


47 


1927 


42 


1928 


42 


1929 


44 


1930 


44 


1931 


45 


1932 


36 


1933 


34 


1934 


39 


1935 


35 



Ap-nroxiraate 

average 
pounds plant 
focd in a 
ton** 



292 
305 
320 
327 
350 
353 
355 
371 
362 
410 
452 
453 
424 
444 



Ap-oroximate 

average 

retail 
price of a 

pound of 
plant food 

15.8aJ 

14. 3'^ 

14.4,^ 

14.1(2; 

13.4'^ 

11.9^ 

11 . 5<j: 

ll.Si 

12.2^ 

10. 9t* 

7.5rf 
9.2;? 
Q.li 



Percentage 
of pre-war 
prices 



156 

141 

142 

139 

132 

117 

113 

116 

120 

108 

86 

77 

94 

83 



Percentage 
of 1916 
prices 



113 

102 

103 

101 

96 

85 

82 

84 

87 

78 

60 

54 

66 

58 



* Approximate average price asked by "old line" companies 
** Nitrogen, available phosphoric acid, potash 



(*) Compiled from Vermont Agricultural Experiment Station Bulletins 
No. 334 (1931) tchle on p. 28, and Fo. 397 (1935) table on p. 19. 



-197- 

One thing the table sho-'S is that the average retail price per ton 
for the seasons of 1932 and 19b3, just "orior to the code, were consider- 
ahly lower than prices in 1915 ,and also as compared to pre-war prices. 
During the two seasons i^hile the code was in effect the average per ton 
retail price increased somewhat from the low of the depression years but 
still did not come un to the level of Dre-war of 1916 or ices. 

\}hile these retril prices are imr)ortant, the mont significant 
information is contained in the section and third columns. Thus by the 
second column it is seen thrt rrhereas in 1922 apioroximately average 
pounds in plant food in fertilizer sold in Vermont was only 292 this 
average had increased to 444 loounds per ton in 1935, This is clearly 
indicative of the trend noticeable throughout the coimtry towards the 
use of more highly concentrated fertilizers. Column 3 shows that during 
the same "oeriod, due to this higher concentration of plant food, the 
retail price T3er pound of "olant food dropned from 15.8 cents in 1922 to 
8.1 cents in 1935. Further it is interesting to note that not only was 
the -oer ton price higher in 1954 than in 1933 but cost per pound, of 
plant food was also higher. This w-^s not due solely to incrensed price 
per ton but also to decre-'^se in the number of pounds of plant food in 
each ton. 

Table 70 gives an example of pre-codal and codal prices for typical 
grades of mixed fertilizers. 

THE CODE Provisions A3 TO P1ICE klTD COST 

G eneral Features 

Previous to the code, price-cutting through one device or another 
had been prevalent in the industry, Atte-ipts to eliminate rebating, 
sales apparently below cost, and gr-.nting of gratuities, fictitious 
credit terras and guarantees against price decline had failed. 
Recognizing the inpossioility of stabilizing their industry without 
bringing these practices to a halt, it ■'^-^s but natural that numerous 
provisions thereon should be included in the proposed code and insofar 
PS then existing IIEA policy made it possible in the finally approved 
Code. 

In the code as approved October 31, 1933, specific price practice 
provisions '^ere incorporated in the following Articles; Article VI - 
Price Provisions, Section 1, prohibiting sales by sxrj producer below 
his cost except to meet existing competition and Section 2, compulsory 
open price filing; Article VII - Section 2, prohibiting sales through 
traveling salesmen on con'iission, since it was believed that such 
salesmen often split comnissions with the buyers; Section 5 providing 
for uniform contracts of sale; Section 7 enaoling producers in various 
zones to set up rules pna re'?,ul?'tions; Article VIII, prohibiting 
certain specified unfair trade practices, 18 in number of which 12 had 
to do "ith rebating or other forms of price-cutting. 



9761 









"198" ;. 














TABLE 70 








RETAIL 


PRICES OF 


GRADES 


AS SPECIFIED - 


- TERMOT^TT - 


- 1930 - 1935 


(*) 


G-rade 


1930 


1931 


1S52 


1933 


1934 


1935 


2/10/2 


•• 


$32 


$29 


$27 


$31 


$28 


2/8/10. 


$40 . 


37 


35 


33 


55 ■ ' ■ 


; 34 


2/12/4 


.. 


.. 


34 


■ - 32 


40 • '■ 


39 


5/1C/6 


41 


, 39 


32 


35 


35 


34 


3/10/4 


. .. 




32 


30 


37 


3C 


4/8/4 ■ 


41 


■ .38 


33 


50 


34 


31 


4/8/7' 


40 


36 


- 34 


32 


39' 


33 


4/8/lL 


.. 


.. 


38 


35 


39 


35 


4/12/4 


43 


44 


33 


32 


30 


31 


5/8/7 


45 


42 


37 


35 


41 


37 


5/8/10 






43 


34 


41 


39 


6/8/6 






34 


33 


32 


30 


7/5/6 






39 


37 


42 


37 


8/16/14 


.-. 




48 


48 


59 


51 


8/16/16 






48 


50 


52 


47 



(*) Vernont Asricultur-il Experinent Station Bixllatins, No. 334 (1931), 
table -o. 28; ITo. 361 (1933) table d, 17; and Fo. 397 (1935), 
table ;o, 19. 

These oulletins contpin -prices on otlie:" grades but the se^'ies are 
not con^olete^ This table includes all ^-rades for ^-hich px'ices 
are ^iven .continuousl/ fron 1932. 



9761 



"199- 

Sales Bel o 'JT Cost Prohibited 

Article VI, Price Provisions, Section 1, Sales Below Cost 
Prohibited, p,s finally adopted and aionroved, reads: 

"The sale or offer for sale by :my producer of mixed fertilizer, 
suTDer-Dhosphate, and/or other fertilizer mrterial at a price 
below his cost except to meet existing competition is herebj'^ 
prohibited. The term 'cost' as used herein means the cost 
determined in accordance '-'ith uniform methods of accounting 
which shall be prescribed hereunder by the Fertilizer Recovery 
Committee with the apioroval of the National Recovery Admini- 
stration. Such cost shall pronerly define the differences in 
factory, manufacturing, and mixing costs, and costs of dis- 
tributing the nroduct to producers, dealers, agents, pJid con- 
sumers, and such differences in cost shall be reflected in the 
sales Torice to erch of these classifications." 

This section contains two distinct provisions which are, however, 
intimately connected. (a) No prodixcer could lawfully sell at a price 
below his cost except to meet existing competition and (b) such cost 
was to be determined according to a uniform accounting system presented 
by the Fertilizer Recovery Comnittee with approval of the ilEA and also 
providing for recognition of differences in distribution costs as well 
as differences in manufacturing costs. 

Uniform Cost Accounting System 

The fertilizer industrj/- was one of the few industries which had 
its accounting system approved by KRA (*). 'Their success in getting 
approval was undoubtedly due to the fact that they were ready to and 
did submit and sectire approval of their Code at an early date, as policy 
of KRA, especially that of the Division of Research and Planning, later 
chpjiged materially on tnis point and in fact it became for a while 
practically impossible for an industry to secure approval of a uniform 
cost accounting system. 

The code as first submitted to the KRA, July 17, 1933, had a "no 
sales below cost" provision, but at that time was written in terms of 
"reasonable costs". "Reasonable cost" is defined as "the fair average 
cost determined by zones" as per uniform a.ccounting system. The July 
50 edition of the code read "reasonable cost plus a reasonable profit". 
Still another edition prohibited sales below "the cost" although some 
time prior to October 17 this was changed to read as at present "his 
cost". 

Compliance with Cost Provision 

Judging from the small number of complaints received by !IRA, the 
"no sales below cost" provision was fairly well lived up to. A few 



(*) A copy of the Cost Accoxmting System is contained in the 
Fertilizer Industry KRA Archives as' Exhibit D. 

9761 



complaints '--ere received by the Fertilizer Recovery Comnittee and 
satisfactorily adjusted "by the group, ^rith one exception which was 
referred to the Federal Trade Comnission (*). Mhrt the situation 
might have been or would be in cp.T.e o' declining crou -orices'and de- 
creased' fertilizer sales there is no way of definitely knowing. It may 
be assumed that such conditions vifould put an additional strain on this 
point as it would seem that the declining narkets led to abandonment 
of previous Federal Trade Comnission fair trade Dractices. 

Examination of l^TFLA. ^ilps, records and corresiDondence revea.ls very 
little difficulty over or comr)laints concerning the •uniform cost 
accounting system. As far as ascertainable, it would seem that no 
manufacturer felt that the system a.do-oted comT)elled him to figure into 
his costs items which rightfulljr did not belong and thus forcing him 
to sell at a higher iDrice than he wished to. 

A highly ii.TDorta.nt concomi:iittant of the "no sales below cost" 
provision was thpt of section 2 providing for the filing of open price 
schedules and the furnishing of co-pies thereof to each competitor. 
That is without such open price filing, but little if any check could 
be made as to whether sa.les were or were not below individual and 
compulsory, without cost data, hevt in uniform ma,nner and there could 
be no way of checking susioiciously lo^- orice p.gainst actual cost. 

Open Price Filing Provision 

The -orovisions for the filing of o-oen -orices are contained in 
Section b of Article VI. This section wiiich is given in full in the 
copy of the code in the apioendix provided that i^dthin five days after 
effective date of the code, each -Droducer should file with the 
Secretary of The National Fertilizer Association a statement showing 
the zones in which he intended to sell nnd also a schedule by zones 
setting forth the prices, dealers, agents or consumers, together with 
terns and conditions. This section also provided that copies of these 
schedules must be mailed or delivered to comnetitors. 

After the filing of this schedule no sales should be made at 
prices or terms other than those contained in this schedule unless a 
new schedule had been filed in conformity i-'ith the section. 

Provisions concerning these new schedules were that they could 
not be effective either for advancing or reducing -orices until 10 days 
after a new schedule was filed with The national Fertilizer Association 
and copies of these new schedules also had to oe ma,iled or delivered to 
co'ipetitors at the sa'.ie time that they were sent to the association. 

According to the code also, schedules were o-nen to ins-oection by 
any producer. The one exception as to the 10 da.y waiting period was in 
ca,se a x)roducer was filing to meet existing competition in which case 
schedules might become effective on the same date as his competitors* 
schedule providing he filed so th.-^t this nev schedule to meet con-oetition 



(*) AiDpendix II, Exhibit 21, contains a discussion of these cases. 
9751 



-201- 

reached the Association at least 48 hours 'befGre the schedule he 
desired to meet was to becone effective (*). 

Hegulptions Hegarding Q-oen Price Filing 

Shortlj^ after the of^fective date of the code, the Fertilizer 
Recovery Connittee through Mr. Brand, the Executive Secretary, issued a 
nujnber of "regulations covering the filing of o-oen -orice schedules", 
which later "ere revised nnd/or amended. TKe earliest edition '^hich is 
in the files is dieted Deceia'ber 23, 1953, and on July 11, 1934 there was 
issued a printed edition. •., 

Authority for making these rules and regulations has not been 
found in the code. The Introduction to the issue of July 11, 1934, 
contp-ins the following Daragranh: 

"The following revised Re gulrtions Coverin g the Filing of Q-oe n 
Price Schedules '-'ith the Secretary of The National Fertilizer 
Association are promulgated under Article VI, Section 2, of 
the Code of Fair Conroetition for the Fertilizer Industry. 
These regulations have been ap-saroved by the Code Authority, 
acting through the Administrative- Comriittee, and supersede all 
■orevious issties." 

It is to be noted that this paragraph contains no reference to 
ap-oroval by the wational Recoverj'' Adrainis tra.tion. This matter hp.s been 
checked with the Legal Advisor, Mr. O'Brien, and his tentative con- 
clusion on the matter is that this renresents one of several similar 
ca,ses in connection with codes where the code authority was permitted 
to exercise functions which while not specifically mentioned in the 
code '-^ere nevertheless felt to De in keeping with the snirit thereof. 

There has not been located the authority or the exact reasons for 
certain subsequent revisions in or additions to the regulations for 
open price filing. For exaviple, under date of April 11, 1935, the 
Industry wa,s informed 'oir the code authority that in filing open price 
schedules they "must definitely state the loc-^tion of all fa,ctories and 
all producer-leased or producer-owned warehouses from which deliveries 
will be made by the producer." It ^^ould be interesting to know with 
reference to this and other similar additions or revisions why they were 
not included in the first draft of the regulations; what experiences 
induced the code authority to add them; how they were received by the 
Industry; which ones, if any, were dropped because they proved either 
unenforceable or undesirable. 

In connection with this ma,tter of tho aiiiliority back of such rules 
and :-egulations considerable interest attaches to an inouiry directed 
by Mr, Brand to Hr. Edmund B. Quiggle, General Counsel, of The National 



(*) A discussion of the administrati^'-e procedure in handling 

schedules filed under the open price filing provision is contained 
in Appendix II as Exhibit 33. 

9761 



Fertilizer Association. The Administrative CoinTnittee uassed a resolu- 
tion ordering Mr. Brand to refuse to receive for filing open price 
schedules which ';7ere faulty in any detail. Mr; quii-:^gle' s advice to 
Mr* Brand was thr-t it was not within his jurisdiction to so refuse and 
that such refusal might render Mr. Brand liable to suit for and recovery 
of damages^ Mr. Qaiggle's interpretation apparently was that the code 
merely required producers to file open price schedules with the 
Fertilizer Recovery Committee and that Mr. Brand's function was the 
actual filing thereof plus notification of interested parties that 
such schedules had been filed. _ Mr. Quiegle did inform Mr. Brand that 
it was within the latter' s functions to act in an advisory capacity 
but that in giving advice to producers concerning the details of their 
open price schedules, he should make it clear' thnt these suggestions 
were purely advisory and in no sense mandatory. 

Section 7 of Article VII - Marke.ting Provisions - authorized the 
producers in each zone, subject to apWoval of the Fertilizer Recovery 
Committee and of the KRA to iDrepare uniform rules consistent with the 
code governing "methods of quoting iDrices, methods of distribution and 
methods of delivery"-. 

Exoerience Under the Open Price Filing Provision 

From an examination of materials developed, by an NRA group study- 
ing the open lorice schedules filed in accordance with these regulations 
certain generalizations can be made with reference to the open price 
filing system. 

Price leadershiTD seems to have existed just as it did in the pre- 
codal era and schedules filed by the price leaders in a particular 
territory were very quickly followed by schedules of other producers 
'to meet such competition. In testifying before the Senate Committee on 
Finance, Mr. Brand t)resented a tabulation showing that between 
January 1, 1934 and January 23, 1935, 7,889 schedules had been filed 
of which 3,192 had been filed to meet competition (*) and Chart 
XVill Jjresents this graphically. 



(*) Copy of this tabulation is included in Appendix II as Exhibit 34. 



9761 



CHART XVIII 



PRICE SCHEDULES FILED 
IN THE FERTILIZER INDUSTRY 

January I. /93f ' f'-'hruary /935 



')ch('c/u/e5 Fi/ed to Mee/ Compel/ t /on 
\A// Of her 5£hpdij/cs fifecf. 




/ff 'I'i^N 



9761 



-204- 

Prices nere relatively uniform at a given time in the various 
territories for particular grades of fertilizer and terns of sale also 
tended to oe uniform. 

Slowness Trith which sonie firms filed prices to meet competition 
raises the Question as to whether or not their own price schedules were 
rii^idly adhered to '.Then competitors lowered prices. It seems likely 
thp.t the expense and time necessary to file a complete new schedule 
when only a small change had heen ma.de in an old one tended to prevent 
the filing of a new schedule and must have acted to discourfige price 
changes. While there is no evidence thnt the 10-dpy wp.iting period was 
used for coercive measures against price changes, the evidence does 
not esta"blish that any waiting period as long as 10 days was necessary. 

The sharp drox) in -prices after the Schechter decision may he 
partially attributed to the ina,ctivity of that period of the year in 
fertilizer rales but is also aji indication that the open prico filing 
plan may have resulted in undue stahiliz-'^tion of prices. At oest there 
ca.n he but a tendency towards such stabilization since this industry is 
competitive enough to allow economic forces to operate in the long run. 

One thing ^-hich the open price filing system did do was to give 
publicity to the actual prices and terms of sale which facts could not 
previously be correctly ascertained. 

Price Changes Daring the Code 

In order to determine what happened to prices during the codal 
period we have a series of price indices compiled by different agencies. 
The Bureau of Labor Statistics h,as an index of ra" material prices and 
of the wholesale prices of mixed fertilizer (*), As already discussed 
the Bureau of Agricultural Economics have an index of what the farmer 
pays for fertilizers but which is really what dealers say they charge 
farmers. 

Table 71 includes this data for 1933-1935 inclusive (**) 

In these indices we have the explanation of the relatively low 
increase in the cost of fertilizer to farmers as compared to the 
increases in the prices of other commodities which the farmer purchased. 
During the life of the code, the index of the prices of raw materials 
actually decreased from 72.5 in September 1933 (the last month preceding 



(*) The National Fertilizer Association also published indices but 
the Btireau of La,bor Statistics uses the figures supplieu by The 
National Fertilizer Association and even though different weight- 
ing is used the figures are approximately the same when reduced 
to the same ba.se year, 

(**) Details of the fi:<pj.res for the Bureau of Labor Statistics from 

1926-1935 are contained in the Fertilizer Industry IffiA Archives, 
Exhibit A, Table VIII, p. 14. 

9761 



the adoption of the Code) to 71.6 in i'!a;/ 1935 (the last month of codal 
operation) . 

Raw material TDrices havin-^ gone do'7n in the aggregate in spite of 
the increases of 20-25 per cent in the "orice of superphosphate (the one 
fertilizer material 'oroduced by the fertilizer manufacturers and v;hich 
has "oeen discussed in Chapter II) allowed fertilizer manufacturers to 
make a fair "orofit '-^ithout advrincing prices to too great a degree since 
fertilizer materials reoresente'd about 63 per cent of their tota.l cost. 



The Bureau of Labor Statistics publishes a series of prices in 
South Atlantic Sta,tes for the cotton fertilizer known as 3-8-3 from 
which ?.n idea may oe obtained to the a.ctual changes^ in price. Ta.ble 72 
contains this price series. 



9761 



-206- 

TA3I£ 71 



PRICE IITDICES 0? FERTILIZER iai-^RIALS Al^D MIXED FERTILIZER 





\molesale (l) 


\/holesR.le (1) 


7 


ertilizer Materials 


Mixed Fertili2lers 


1933 Jan. 


67.6 


64.5 


Feb. 


66.8 


64.2 


Mar. 


67.2 


61.8 


Apr. 


68.3 


61.7 


May 


74.7 


64.9 


jTine 


73.8 


64.8 


jTily 


74.5 


65.1 


Aug. 


74.9 


66.2 


Sept. 


72.3 


69.7 


Oct. 


73.4 


70.3 


Nov. 


73.6 


70.5 


Dec. 


73.9 


71.9 


1934 Jan. 


74.3 


7S.2 


Feb. 


75.1 


74.6 


Mar. 


75.5 


74.7 


Apr. 


74.6 


74.8 


May 


72.1 


75.3 


June 


73.7 


75.5 


July 


73.4 


74.9 


Aug. 


70.4 


75.1 


Sept. 


72.1 


75.1 


Oct. 


71.3 


75.1 


Nov. 


70.1 


75.6 


Dec. 


70.9 


75.8 


1935 Jan. 


72.2 


75.4 


Feb. 


71.9 


74.9 


Mar. 


72.0 


74.9 


Apr. 


71.7 


75.0 


May 


71.6 


75.2 


June 


71.3 


76.6 


July 


71.3 


70.6 


Aug. 


72.5 


70.1 


Sex)t. 


73.0 


69.8 


Oct. 


73.0 


69.9 


Nov. 


73.3 


69.5 


Dec. 


70.0 


69.7 



Retail (2) Fertilizers 
. Fertilizer Materials 



69.7 



75.9 



78.2 



79.5 



81.2 



75.9 



(1) Bureau of Labor Statistics indexes of 'rholesale tirices of 
"Fertilizer Materials" shifted to a 1929 base. 

(2) Bureau of Agricultural Economics index 1910-1914-100. 



9761 



-207- 
T.Ari^ 72 



BIREATI 0? L.«OR STATISTICS PEICE OF 5-3-3 IIT SOUTH ATLAJ'TIC STATES 
(DOLLA^^S ■PT'I. TOU) 



1935 



January- 


^.14.25 


Fell rupTv 


14.25 


March 


14.25 


A^^ril 


14.25 


?.'ay 


14.25 


J-one 


14.25 


July 


14.25 


August 


14.25 


September 


IS. CO 


October 


15.25 


IJovemuer 


15.25 


December 


16.75 



ft 17. 33 



S18.15 



17.38 


18.15 


17.25 


18.15 


17.25 


18.15 


17.25 


18.15 


17.25 


18.15 


17.25 


15.73 


17.25 


15.73 


17.25 


15.73 


17.25 


15.73 


17.25 


15.73 


18.15 


15.73 



Thus from these fi-ures -'e see that the price of 3-8-3 increased 
27.4 T3er cent from March 1333 to March 1935, it increased only 13.4 
per cent during the Code from the $16.00 in September 1933 to the 
$18,15 in May, 1935, The reported decrease since the Schechter decision 
from $18.15 to $15.73 is enuivalent to a 13.3 per cent decline. 

The Bureau of A,;3ri cultural Economics index above referred to 
indicates thpt in March of 1934 and 1935 'orices ";ere only 14 and 15 
per cent, respectively above those of the corapar-'tive period of the 
pre-code year 1933, 



9761 



-208- 

chapt:;:r v 

CODi: ADiaillST-iATIOM 

CODE AUTKOPJTY OHGAiaZATIOlI 

The provision authorizing the selection of a code authority as it 
ap:ieared in the approved code vs.s as follows: 

"To effectuate further the policies of the Act, a "ertilizer 
ilecovery Connittee is hereby designated to cooperate nith 
the Adjninistrator as a Planning and ]?air Practice Agency 
for the Fertilizer Industry. Tliis Counittee, -constituting 
the Code Authority, shall consist of not less -than tnelve 
representatives of the Fertilizer Industrj"-, selected by a 
fair nethod of selection to be a.pproved by the Aifninistrator. 
Tliree members rrithout vote nay be appointed by the President 
of the United States." (*) 

HHA Approval of 'Code Authority Personnel 

On I'overnber 20, 1933, the Executive Secretarj^ of the Fertilizer 
Recovery Connittee requested ITPA approval of the selection of thirty- ^ 
two rnenbers of the code authority. ■ The naines subnitted were those of 
the pre-code Fertilizer iLecover;'- Connittee (**) \7ith 'the addition of ■ 
the following: 

L. \1. Britton, Consolidated Rendering Cbrapany, Boston, Ilass. 

E. H. Westlake, Tennessee Corjjoration, ITev; YorJ: City. 

J. A. Liller, Price Chenical Conpajiy, Louisville, Kentucl:^-/ 

G-. R. Clapp, Swift £; Conpany, Korth Portland, Oregon. 

Fomal approval of the code authority personnel wa,s extended by 
ERA under date of December 6, 1933, the order of approval also giving 
official sanction to the appointment of Charles R. Baxter as Adjninis- 
tration Lember (***). 

Representative Nature of Code Authority 

As constituted at the tine of Administrative approval, the code 
authority was entirely representative of all geographic areas of the 
coimtrj'-. Generous representation was given snail industrj^ interests 
on the code authority, its membership being composed of fifteen • 



(*) See Article III, Section 3 of the Code for the fertilizer 
Industry, Codes of Fair Competition, Volujiie II, page 125. 

(**) The personnel of the Fertilizer Recover-f Committee was re- 
ferred to in Chapter I, and the names of its members are in- 
cluded in the Appendix as Exhibit 12. 

(***) Administrative Order No. 5-8. (In IIRA Files) 



rejjrescntp.tivGs of smr.ller conroraiics, eight of firms of medium size 
pr.d eleven of the lar:;;er .companies.. (*) 

The record discloses no o"bjections from any source as to the 
personnel of the code authority ^s selected, nor to the methad of 
selection. In this regard, hov/evcr, it may he noted thrt the 
personnel vras appointed by the President of the ITational Fertilizer 
Association hefore ariroval of the code, p■^d. ohviously hefore any 
method of , selection had heen apiproved b" the Administrate:?, as pro- 
vided in the code ro-ticlc on Administration. Apparently no question 
was raised regar din;;, this by the Lc'^l Division of ITRA or other 
Advisory Board. 

Chanr^es in Code Authority Personnel 

On July 2, 1934, the Executive Secretary of the Code Authority 
advised the De:^uty Adrainistrator that L. ¥. Britton rjid C. A. Holderncss 
had tendered their resignations as code authority members. In his 
letter, the Executive Secretrry requested ajroroval -of the code author- 
ity's accept.-ncc of the resignations, and also requested administrative 
approval of the following newly selected members of the code p.uthority; 

C-. V. Savitz, International Agricultural Corp., Nov/ York City. 

J. S. Coale, I. P. Thomas & Son Co., Philadelohia, Pa. 

¥. T, Wright, P. S. Royster Guano Co., LTorfolk, Va. 

A. L, Ivey, Virginia-Carolina Chemical Co., Richmond, Va. 

Approval of the requests of the code authority was extended by 
HRA under date of August 7, 1934. (**) 

Ovid E. Roberts, Jr., was appointed Administration Ilernber of 
the Code Authority on March 1, 1935 (***) to succeed Charles H. Baxter 
whose resignation ha.d been tendered and accepted. 

Ho other changes v;ere made in the code authority org?nization, 
the code provision stipulating no length of tenure of office for 
code authority members. 

Code Authority Sub-Committees 

The code provided the following authority for the delegation 
of adininistrptivc -oowers and duties to individuals or sub-comuittees 



(*) Testimony of Charles J. Brand, Executive Secretary, The 
national Pcrtilizer Association, before Committee on 
Finance, United States Senate, 74th Congress, April 12, 
1935, p, 2. of Proceedings. 

(**) Administrative Order Ho. 67-31. (lii HRA Files) 

(***) Administrative Order IIo. 67-51. (in ICIA. Files) 



-210- 



of the code authority: 



"The Code Authority nay delega,te or appoint individuals 
and suhcormnittees in carrying out its administrative work, 
77ith such of its power or powers as noi'' from tine to tine 
"oe conferred by the Code Authority upon said individuals 
or subconmittees, responsihility, however, to renain \7ith 
the Code Authority." 

"The Code Authority shall appoint, fron its oxm. nemhership, 
an Administrative Cordmittee of eight nemhers. Said Con- 
nittee shall exercise such authority as may have been 
delegated to it by the Code Authority except that the Ad- 
ministrative Committee shall not ma]:e recoriimendations for 
the amendment of this code unless recommendations for such 
amendments have been approved in writing \iy t^'O-thirds of 
the mepibers of the Code Authority. The Administrative 
Committee shall serve' as the exectitive agency of the ferti- 
lizer "Secoverj^ Committee, which constitutes the Code 
Authority." 

An Administrative Committee of eight members and an Administra- 
tive Su.bcomnittee of three members were ap'oointed shortly following 
approval of the code, and were delegated authority to perf9rm certain 
code authority functions between code authority meetings (*). 
Llerabers of the code authority served on these committees on a basis 
of rotation. Lieetings of the acljninistrative committees were generally 
attended by the Administration Hember of the code authority. 

Functioning of Code Authority personnel 

j.lembers of the industry selected for membership on the code auth- 
ority apparently accepted the duties in a conscientious manner and 
devoted a great deal of their time to matters pertaining to the code 
and its operation. In addition to the time devoted to attendance at 
meetings of the code authority, its members also served as members 
of the adi'iinistrative and zone executive committees which placed 
further burdens on their time. 

^ile recent sales figures of the larger companies are not 
available, it has been estimated that a major portion of the total an- 
nual volume is done by a small group of these firms. These com.panies 
were members of The National fertilizer Association, and it is evident 
from the method of assessing for association dues that they contri- 
buted a most important percentage of the funds necessary for its 
support. 



(*) i-inutes of Code Authority and Adjiinistrative .Committee 
meetings are in ITRA Files; Fertilizer Code, Linutes of 
lieetings Folders. 



9751 



VTnile these firms rere adequately represerxted in the fomulntion 
of the code and in its adninistration, it has not "been apparent in 
the stuoy nade of the actions taiien "by the code authority that it 
was dominated hy the lai'ser nenbers rdio had "been the principal sup- 
nort of the association. In fact, the President of the American 
Agricultural Chenical Conp^ny, durin.-^' the earls'- nonths of code opera- 
tion, 'oresented his resi;'p:iation fron the code autliority rjid its ad- 
ministrative comnittee, indicatin.:; that lie at least xnxs not exerting 
a dominant influence or. the code ar.thority. 

Efficiency of Sxecutive Secretary and. Staff 

It is ohvious from the record, that a great d^eal of the benefit 

uhich the ind.ustry derived frosn the operation of the code was due to 

the intelligent and. aggressive efforts of Charles J. Brand as Sxecxi- 
tive Director and Secretarjr of the Code Authority. 

lir. Brand' s long exjoerience in work connected v.'ith the indtustry 
and thorough l:nov.fledge of its existing problems enabled him, with the 
aid of a competent staff of as3istajits(*) , to capably handle the 
enoiTious vol-ane of worl: necessarj'- in effectively administering the 
code. The record indicates that Ut. Brand was frequently the balance 
wheel in d.ifficult sitviations arising fi-om varj'-ing viewpoints of in- 
d.ustry nenbers on important ma.tters pertaining to code operation, and. 
it is apps.rent that his actions in all natters were motivated by a 
desire that the code be adjninistered in the interest of the indcustry 
as a whole, with favor to no group or class within it. (**) 

IJRA Cooperation with Code Authority 

Probcoblj- due to the aggressiveness of the Executive Secretary 
of the code authority in keeping IIBA officials (***) acquainted with 
industry problems arising und.er the code, the records of code adnin- 
istration ind.icate that these officials had a sjTnpathetic understand- 
ing of the problem.s and mad.e a consistent effort to cooperate in 
effecting a solution. 

It is apparent fron the fact that the ind;astry was perr.iitted to 
retain such features in their code as a ten day waiting iDoriod in 



(*) A description of the qualifications of members of the staff 
of the Code Authority is contained in Appendix II and is 
].abGlled Ejdiibit 35. 

(**) Opinion based on study of minutes of meetings of Code Authority 
and Ado-iinistrative Committee. 

(***) A description of the background of the USA officials who 
adr.7inistered. the Code for the Pertiliner Industry is 
included in Appendcix II, and is labelled. Erd^ibit 35. 



9761 



-212" 

connection "ith the Open Price Filing Provision and an approved 
method of cost accounting that code authority memhers had convinced 
1m3A officials that the industrj' required these devices to solve 
their problems. 

It appears equally obvious that officials of ItBA "believed that 
undue restraint should not be exerted u^ion the code authority even 
though it appears that at tines code provisions did not provide a 
basis for certain results achieved. {*) 



(*) This opinion is based principally on a stud;^r rii,ade of ' zone rules 
nhich rrere recommended by zone executive committees, but vhich 
rrere never approved by IIRA.. Woi-k Sheets supplied by the unit 
nhich studied the operation of the open price filing provision 
of the code sho^.T that rules which tended to provide a uniformity 
in tems and conditions of sale rrere generally adopted by pro- 
ducers in most zones. It is not s. natter of available record 
that KEA officials tool: action to discourage or prevent the 
attainment of this ■oniforr.iity, undoubtedl;^ held by industry 
members to be essential to successful operation of the code. 



3761 



-?13- 

TEADE ZGMS 

Zones as Criminally Appr oved 

The code authorized the code aathority to divide the 'Jnited 
States into appropriate tr"?de zones to facilitate localized adi^in- 
istration of the code (*). 

The zones as ..originally estaDlished by the code authoritv, and 
which were made n part of tne code when approved (**), follo^pd 
generally the outline of districts whidh had been established by the 
Nation^il' Fertilizer Association eieht or ten years previously. 

Shortl'^'' after the provisions of the code ^ere made operative 
it became apparent to members of the code authority that it would 
be desirable to divide several of the zones into smaller areas for 
the purpose of simplifying the filing of price schedules by producers. 

The principal' reason for creatine? sub-zones was that producers 
vrere required to mail price schedules to all competitors within a 
zone or sj.b-d'ivi si on thereof (***). Until sub-zones were established, 
small producers, wno opera,ted entirely within a very limited area 
immediately, adjacent to their plants, were required to mall all 
price lists to every other producer within the limits of a large 
zone. This obviously entailed a great deal of unnecessary labor 
and expense on the part of small producers which was eliminated 
by the establishment of the sub-zones, as it then became necessary 
to mail price lists to the other producers in the particular area 
in, which, an individual producer operated. 

Another reason which made the establishment of sub-zones 
desirable was that the practice of filing prices on a "delivered 
to the farm" basis had become uniform with the producers in most 
zones. As tnese prices ^ere Dased on average costs of trajisporta,- 
tion charges throughout a given area., reducing the size of the 
territory in which an established price was m-ade applicable, pro- 
vided a needed measure of f le-'-ibility in establishing "delivered" 
prices. 



(*) See Article III, Section 5 of the Code for the 'R'prtilizer In- 
dustry, Codes of Fair Competition, Volume II, pa^e 1?.5. 

(**) See Schedule. A of the Code for the Fertilizer Industry, Codes 
of Fair Competition, Volume- II, page 134. 

(***) See Article VI, Section 2-a-3, of the Code for the Fertilizer 
Industry, Codes of Fair Competition, Volume II, page 127. 



9761 



At the request of the code authority, approval was extended 
by NRA to the estahlishment of sub-zones in Zone 3, 4j 8, lO^ 11 
and 12 (*). 

Kap ¥o, 4 snows the alignment of all zones and sub-zones as 
established. 



ZONE EXECUTIVE OR ADMinSTRATIVE COWITTEES 

Committee Estaolished in Each Zone. 

In carrying out the naroose of localizing efforts to obtain 
compliance with the code (**) and to assist the Code Authority in 
its administration, -sn executive or administrative committee was 
formed in each of the twelve zones. 

] embership of Zone Committe es. 

At meetings held in each of the zones during the early months 
of 1934, industry members in attendance elected the members of 
these committees. The committees were composed of seven members, 
including a chairman who was usually a member of the Code authority. 
Membership of the Committees as established in each zone provided 
for two members representative of the larger industry interests, 
two of the medium size and two of the smaller companies. Eauitable 
methods of voting were arranged in each zone (***). 

Duties and Powers of Zone Comn i ttees . 

At a meeting of the code authority held on January 19, 1934, 
the following duties and powers were delegated by the code 
authority to the zone committees (****); 

(a) To obtain compliance with the fair trade 
prnctice provisions, and in the event of 
failure to secure compliance therewith, 
to forward all facts 'to the code authority. 



(*) Administrative Orders IIos. c?-5 and 67-28. (In IPA Piles.) 

(**) See Article III, Section 3 of the Code for the Fertilizer 
Industry, Codes of Fair Competition, Volume II» page 125. 

(***) Methods of voting were not the same in qll zones, but are de- 
scribed in detail in minutes of zone committee meetings, in 
NEA files, in folders marked, Minutes of Zone Committee Meetings. 

(****) Minutes of Code Authority I^eetings in NRA files, in folders 
marked Minutes of Code Authority meetings,' 

9761 




9761 



-216- 



(b) To initiate and formulate recommendations 
for some rules to the code authority. 

(c) To assist by education and direct contact 

in obtaining observance of price provisions. 

(d) To report all actions taken to code authority 
and provide minutes of all meetings. 

(e) To perform .any SDecial services reauested by 
code authority 

(f) In general, to act as local agency for the 
code authority in obtaining that cooperative 
corapli.ance with the entire code necessary to 
make it a success. 

Flans for Handling Trade Practice Complain ts 

At the earliest meetings of the zone committees, arrqjigements 
were made and procedure established for the handling of complaints 
of alleged violation of the trade practice provisions of the code. 

In each zone, a Secretary was selected by the Executive Director 
of the code authority and assigned to the zone committees. The 
principal duties of the Secretary were in connection with the investi- 
gation and, where possible adjustment of complaints of alleged code 
violation. Members of the zone committees also acted in the capacity 
of local compliance committees in code matters. 

Z one Rules 

As contemplated in the code (*), producers in each zone apparently 
considered it of major importance that rules relative to methods of 
quoting prices, methods of distribution and methods of delivery be 
recommended to the code authority for adoption. Consideration was 
given to such rules at the first meetings held. When approved by 
the code authority and MA, the rules were to become binding vioon all 
industry members selling within the zone. 

Inasmuch as KRA wa,s not requested to extend approval to the 
rules recommended by any of the zone committees, reco'T"^endations 
which were made are not discussed in fall detail. However, for the 
reason that, although the rules were not officially adopted, a 
majority of the producers filed their o-oen price schedules in siach 
manner as to incorporate certain of the rules which zone committees 
had recommended, mention will be made of the more imuortant items 
and those which were generally adopted by the producers. 



(*) See Article VII, Section 7, of the Code for the Fertilizer 
Industry, Codes of Fair Conpetition, Volume II, page 129, 



Adoption of "D el iver ed to the Farm" Prices 

Although opinion was to some extent divided on the matter, 
producers generally favored quoting prices on a "delivered to the 
fai-ra" basis, based on tiie aver-^ge cost of deliverer throughout the 
zone or any subcUvisicn thereof. In connection ^rdth this recommended 
rule, a further rule ^-hs usually proposed, providing for a uniform 
allowance for hauling by truck from the purchaser's nearest railroad 
station or boat landing, in cases mere it was desirable for the 
producer to make deliveries only to, sucn points. - 

,0 the r Hecommended Rules . 

Another proposed rule, generally recomnencied for adootion in 
the various zones, was to provide imiforn schedules of trucking 
allowanc*='B in cases 'cihere purchasers called at the r)roducers' or 
agents' w^'rehouses and hauled the materials in their own trucks. 

In certain zones, rules '.'rere recommended for adootion xvhich 
would have practically eliminated distribution of fertilizers 
tiirough dealers. 

Other rules which "ere recommended would have established 
uniform disco^unts for pa,yments within va.rious time limits to be 
allowed the cdfferent classes of purcnasers and agents. 

Rules Adopted Although not Approved by I'-mA . 

Minutes of code, authority meetings and copies of letters "-ritten 
the Executive Director of the code autnority indicate that there 
was a general feeling that tne rules recommended by the various •^ones 
would nott De f^'vorably ipassed upon by !©A, a,nd it was apprently 
decided by the code authority that for^iial request "fould not be made 
for such approval. However, as practicnlly all of the producers in 
the zones incorpora;ted the provisions of tiie recommended rriles re- 
garding uniform methods of quoting prices and delivery charges in 
their open price schedules (*"), and, as '"h'-n zo filed, they became 
entirely binding" on the producers fiii f: trie schedules, the result was 
-■ppirently the sane as though the rules had oeen saDmitted to ^nd 
approved by W.A, 

•''^rning of Executive Director of the Code Aat hori ty 

That the Executive Director of the code authority saw- sone 
legal danger in the situation if certain rules were adopted in 
the zones ^^ithout the recuired aoorox'al of F"'A having been obtained, 



(*) Conclusions confirmed by study of ' .or': Sneets, " Study of Open 
Price Filing in th^ Fertilizer Ind..Etry". 



9751 



is indicnte6 in the folloi''ine' letter (*) sent by the Secretary of 
the code aathority to qll producers in the industry: 

"Inuuiries and inforns.tion received by this office indicate 
that there is still some Tnisunderstanding as to the ri,s-ht 
of producers of fertilizer in the different ?o?ies to m^ke 
2one rules for the conduct of their business. It seen at)- 
propriate at this time to clarify the situation. 

"The only authority given by the fertili-^er code to producers 
in the various zones to -orepare rales for the conduct of their 
business is in section 7 of Article VII: 

'Section 7 - ivlethods of quoting prices, methods of 
distribution, and methods of delivery: 

'The producers in each zone, acting in accordance 
Tvith procedure established by the Fertilizer 'Re- 
covery Committee and subject to its approval, are 
authorized to orepare ^onifor^ rules, not inconsistent 
with 9ny provision in this Code, governing the 
methods of quoting prices, methods of distribution 
and methods of deli'-'-ery, including trucking allow- 
ances, to be used in the sale of mixed fertilizer, 
superphospaate, a'ld/or other fertiliser material , 
in such zone or subdivision thereof. S-uch rules, 
Vnen so prepared anc approved by the Fertilizer "Re- 
covery Committee, shall be submitted to the \Tqtional 
P-pcovery Administration, and -"nen approved bv it 
shall be binding upon •^ll producers selling said 
products in such zone or subdivision thereof.', 

"This section quoted does not authorize the oroducers in the. 
zones to prescribe or give binding effect to anj'- rules pre- 
pared by them. It authorizes then merely to frame proposed 
rules for their zone which are not to be incons.i stent '^ith 
any Code provision, covering three subjects, namely, (l) 
methods of quoting prices, (2) methods of distribution, and 
(3) methods of deliverv, including- truckinf: nlloi"ances and 
. ■ to submit 'them for the approval of the Fertilizer ""ecovery 
Committee and the National Recovery Administration. '^ntil 
approved by the Fertilizer Rpcovery Committpe and thf= r?!t ional 
Recovery Administration, the rules have no DindincT ef-fect 
whatever under the Code. 

"The foregoing understanding: is important in its relation to 
thp operation of the Federal anti-trust la'-'s which prohibit 



(*) Letter dated Iv'ay 22, 1934, from Charles J. Brand, E:^-ecutive 
Director of the Code Authority to all producers of mixed 
fertilizers. (In NRA Files, Fertilizer Industry Code, 
Zone Rule folder. ) 



- -219' 



restraints of trade in interstate or foreien commerce. 

"Section 5 of the National Industrinl 'Rpcovery Act r>rovides 
in part : 

'Sec. 5. (Antitrust laws, exceptions,) - ">/hile -this title 
is in effect (or in the case of a license, while Section 
4(a) is in fffect) and for sixty days thereafter, any 
code, a,>3reement, or license a-oproved, prescribed, or 
i; sued and in effect under this title, and any action 
comnlyinfi: vdth the provisions thereof taken diirinfi: such , 
loeriod , shall he exempt from the provisions of the anti- 
trust la"-s of the United States.' 

"Under the aiJOve section, any action t^Ven oursuant to the 
provisions of an aporoved Code of Fair Competition is exera-ot ■ 
from the federal antitrust laws notwithstaadin/^ that such 
action mi.orht in tiie absence of a Code provision aathorising 
it .oe m violation of the antitrust la^s'. On t]ae, other 
hand, the existence of a Code does no-^ orotect the me'^bers. 
of an Industrv saoject thereto from prosecution under 
the antitrust laws for any action taken hy them outside ' 
of the authority of the Code, notwithstanding that it may 
have a relationship to matters dealt 7d.th in the Code. 

"For instance, under Section 7 of Article VII of the 
Fertilizer Code, the producers in -a-ny ?one would he au- 
thorized to meet for the nurnose of preparing, marketing 
rules to be submitted to the Fertilizer 'Recovery Committee 
and the National Recovery Administration for tlieir aiD- 
proval, and enter into an ot)en discussion^ thereof with- 
out thereby incurring liability \inder the,, antitrust, la.'FS, 
as that is clearly permitted by the Section. However, 
in advance of such approval by both the Fertilizer Re- 
covery Coramittee and the National "Pecovery Administra- 
tion, the oroducers v?o ild not De autuori-^ed to agree either 
expressly or by im-olication to abide Dy such rules without 
incurring the risk of violating the . antitrust la'-'s provided 
any such rules were in restraint of trade. , ;.'ithout the an- 
proval of such ruleB by both th® Fertilizer Recovery Com- 
mittee and the ilational Recovery, Administration, tne tiro- 
ducers who agree to follow them are in the same situation 
insofar as the antitrust laws are concerned as if no Code 
wiiatsoever were in existence, or, as if the Recovery Act 
itself had not been eacted. 

"Agreements in restraint of trade may be inferred from 
all of the circumstances of -! ..o-iven situation even though 
there is no express; underctandin,^. Ercaress or inferable 
agreements or understandings out into :jr--ctir-e or designed 
to becom.e effective without arioroval uy ta^ Fertilizer '•^e- 
covery Administration, if in restr"int of tr^ide, do not 
receive any xDrotec'rion from th- Code -^nd hence are fraught 
with the gravest danger. It is therefore important that 



9761 



-220- . 



the nroducers in the different sones confine themselves 
solely to the nrep^ration ana reconiTnendnt ion of marketing 
rules Tinder Section 7 of Article YII of the Code if they 
desire to be protected against cora-Dlaints under the Federal 
antitrust laws. " 

Complaints of riecominended Rules 

The above letter w?!S very probably occasioned by corrolaints 
which were registered by a number of producers (*) who -oreferrecl 
to quote prices f.o.D. their plants rather than on a "delivered 
to the farm" basis ^nd by trucking como-nies and the American 
Trucking Association to the .effect that they had been -olaced at 
a disadvantage in the alloi'Vances made for tracking fertiliser 
materials in uniform schedules filed by producers in several 
states. It is possible also that it raav have been felt that 
the letter should be sent to correct -^ny false impression that 
might have been gained through the follo'-ing paragraphs contained 
in the U.F.A. Ne-rs (official Code Authority organ) on February 
5, 1934: 

"ZOHS I'ARKETING 'BULKS BIIWIIJG IF INCLTJDED IN PPCDHCERS' 
PRICE SCHED'TLE. — We have repeatedly stated in the News 
that the Zone marketing rules, regula,tions, interpreta- 
tions, and recommendations that were adopted by the 
various zones have not been approved either by -the Fer- 
tilizer Recovery Ccm.mittee or the National Recovery Ad- 
ministration. As soon as it is loossible to do so the 
Administrative Committee anc the Sab-Committee will con- 
sider each of the rules individually. Some of the rules 
will be approved, and the Industry will be notified 
promptly. Undoubtedly some of them "111 be disapproved. 

" In the meantime, however, all such marketing provision s 
as are incladed in the open or ice schedules of prodacers 
are binding uoon them and up on --^ll c ompetit or s who have 
incladed the same provisions in their scnedules. Pro- 
ducers who have not included zone rules in their schedules 
are, of course, not boond by them . " 

It is obvious from the a.bove that ■oroducers in the various zones 
who i-'ere desirous of attaining uniformity in terms and conditions of 
sale could do so by incorporating similar provisions in their respective 
nrice schedules. 



(*) Correspondence in NRA Files, Fertilizer Industry Code, 
Complaints folders. 

9761 



■S21- 



CODdl AITi'HOHITY BY-T^iI7S 

Although the coce autliority rud its x-ai-ious co" -.inittees be^r.n f-anc- 
tioning in an ap'oarently systfmatic manner imrnec'iiitel^' after the effective 
date of the code. B-"--La'^'s adopted for code ruthority operation Trere not 
■oresented for T . R. A. approval until December 15, 1934. After revisions 
suggested by 1^ H. A. ha.d been accepted by the code a.-Lthorit;'-, formal 
approval ■'.ts extended on February 26, 1935 (*). 



Code Authority lte-oresei:tatior. for ron-Association t.erabers 

As ap-^roved, Section 1 of Article III of the 'Jy-up.'-B provided for 
election to the code ai.ithority of t'""o me.iberp of the industr"-, rot mem- 
bers of the LTational Fertiliaer Association. This -orovision r/as ma,de 
in accordance vrith i-. 'l. A. policy as regrrds the personnel of Code 
authorities, nnd the record does not indicate that it r.'p.s inserted in 
the By-La"'s to ans'rer arr^ criticism made of the code authority as con- 
stituted. Two such members, elected in n.ccorc'ance v-ith this provision, 
would ha,ve been added to the code aut/iority rt on industry meeting held 
in June, 1935, had not the Schechter decision intervened. 

By-'Lav/s Effected I^Io . ChrJige in Code Authorit" Personnel 

Another provision of the 3y-La'"s provided that not more than tv/o 
members of the code authority should be connected r'ith the same producer, 
an exception being ma.de in the case of e;:-officio members of the code 
authority. This provision and others inserted in the B-'-La'^'s to insure 
a code authority tru.ly re'oresentative of all interests in the industry, 
did not make necessrry pn"- changes in the personnel of the code authority 
as originally selected. 

Section 6 of Article IV, providing that actions of the code author- 
ity were to be taJ:en on an o,ffi /-native vote of a mcjorit;'- of voting mem- 
bers present at a meeting, -Tas in accordance v.'ith procedure of the code 
authorit"- estrblisned previous to approval of the JyLcxis. Action to 
amend the code in anj^ nanner reaiilred a majority vote of code authority 
members. 

Section 7 of Article IV proliibited votes b-^ iDrorr/ rt code authority 
meetings as 'jell e,s tae appointment b-'- members of alternates to attend 
code authorit-/- meetingr,. 

By-Lav Frovisicn for Code Authority Officers 

Officers of the code aathorit-^ rt provid.ed in Section 1 of Article 
V, included a Chaitman, Vice Chairntm, Executive Director, Secretary, 
Treasurer, Assistant Secr?tF---, md an Administrative Assistrnt. These 
officers had been' selected previous to approval of the 3y-La'-s. Fo 
duties or poT7ers not usually,'- granted code authoritv officers in 3y-La'''s 
approved by 1'. R. A. were grrnted the officers in the 3y-La'''s of the code 

(*) Administrative Order To. 57-50. (in i'. R. A. Piles.) 

9751 



author! t;-' for this inclustry. 

Other 'J-r-Lrr P'^ovisions 

Other sections of the By-La s, a cop-- o:'^ rrhich is included in the 
7ertilizer Industry,'- i". ?.. A. Archives, labelled lixhibit "J, provided an 
orderl-y procedure for the handling of code matters b" the code authority 
and its Agencies, includin;^ '^one executive committees, rnd contained no 
provisions other than those generally a-o-oro-/ec v/ithout question h^^ the 
Legal Division of V. ^. A. 

BUDGET AJMD IfflTHOD 0? ASSESSl'IENT 

Authority to Levy Asrsssmerts 

The erode provision (*) authorizing the collection of assessments 
from indxxstry members for maintenance of the code oaithority did not pro- 
vide a definite basis for assessing the members, but reauirec! that T. R, A. 
approval be obtained before a budget .and method of assessment vrere adopted, 

Suomirsion of "-^ud-et 

On May 12, 1934, the Executive Secretar-'- of the code authority, in 
accordance with action of the j^.ojninistrrtive Committee taken on April 24, 
1934 (**), submitted a budget in the amount of ^130,041.55, covering the 
period from November 1, 1933 to June 30, IS 34, ajid a budget in the amount 
of $219,929.00, coverin.- the period from July 1, 1934 to June 30, 1935, 
the latter budget alc;o making provision for the possible expenditure of 
pxi additional $30,000.00 for the piirpoee of defraying the erqjense of an;/- 
additional zone ' ork that might be found necessa.r'/". 

The amount of the budget for the eight months ending June 30, 1934 
had been based on the actual eroendi tares of the code authority?" during 
the first six months of code ooe^-rtion rn'' an estimate of probable expen- 
dit-ares for the months of i.lay and J-ojie, 1334. The bud.'^et for the t^'elve 
months ending June 30, 1935, v.'a.s estimated in the ligiit of experience 
gained during the first six months of code authorit^' functioning. 

Ex-oenditures as Proposed In Budgets 

Proposed expenditures under these budgets -'ere distributed as follows: 

Period Ending Period Ending 
June 30, 1934 Jujie 30, 1935 

I. Code Authority- Expense s; 

A. Salaries $36,500.43 $68,630.00 

3. Office Expenses 25,669.93 31,144.00 

(*) See Article XI of the Code for the Eertili'-ser Industry, Codes of 

Pair Competition . Voliims II, page 133. 
(**) Kinutes of Administrrtive Committee meeting. (In K.R.A. Eiles, 

Fertilizer Industry Code, " .Itrates " Polder.) 

9761 



-223- 



Period Ending 
Jane ;>0, 1934 



Period Ending 
Ji.ine 30, 1935 



C. Traveling ■2::penF,es 

D. Le.":al tnd Audit in :;■ Fees 

E. I.iiscellaneous 



9,246.11 

8,27,2.20 

954.98 



17,000.00 

9,200.00 

17,000.00 



II. Committees and Eacilities Thereof: 



A. Traveling Expenses 

3. Printing and incidental exTjense: 

III. Zone Office Expenses : 

A. Salaries 

B. Office Expenses 

C. Travelin.?: Exvjenses 



431.88 
052.25 



27,413.65 

14,984.43 

5,655.76 



7,000.00 
2,000.00 



57,210.00 
15,295.00 
11,150.00 



Total $130,041.65 $219,929.00 

I.iethoc for As^-esgment of Industry :"embers 

Sold and/or consigned and ship'oed either direct or throufh Agents to 
d^ealerr. or consiuners: 



Ba,"-ged 
(In cont; 

A. Mixed fertilizer, inclucin'T processed 
manures ;:'Xjd comnercinl Tuanos; sujer- 
phosT^hate; basic gIp^' ~ inoorted; fer- 
tili'zier materials, e:-.ceMt those listed 4.0 
in Paragra-ohs 3 nnd C: 



per ton) 



3.2 



B. Kainite, "oeot, humus, serr-^e, slucre, 
ga-rbage tan'cage, and sinilar organic 
material of lov: value; h-rdratad burned. 
rock and shell lime, basic slag - 
domestic, and gy-osum: 2.0 

C. Phosphatic material, excluddng rock 
exports; ground limestone, (including 
dolomite), and ground shell lime, 

.marble dust, etc.: 1.0 

II. Sold and/or consigned and shipped to other 
producers or r^hole^ale coo-oerr tives: 



1.6 



A. L,;ixed. fertilizer, including -orocessec 
manures and comjiercial gupj^os, super- 
■ "ohosphrte, . and im"oortcd basic sla.i' 



2.4 



9761 



B. Hydratec burned rock cnz. shell lirie, 
domestic basic sla.^^, rnd gjrosum: 1.2 

C. Ground limestone (inclurin'- dolomite) & 
ground shell lime, marble dust, etc.: 0.6 



2.0 

■1,0 
0.5 



"224* 



Receipts Contem-olrted Under iiethod of Ar^-ersment 

Based on the tonnages of the vrTious mr.te rials cr- reported "by 
practically all producers for 19r'3 rnd the first hr.lf of 1934, the ahove 
rates of assessment v/ere e-'rpected to "brin::^ slightl-"- less than the amount 
set forth in each biiog'et. A minimim rate of >p20.00 oer year vp.g set 
for all producers other than pror.ucers of specialty'" fertilizers; the 
minimum rate for producers of spccialt-^ fertilisers, not otherwise en- 
gaged in the fertilizer bu^.ineps, '-cs 315.00 joer vear. 

3ud.^et G-enerall:"- Satisfactory to Industr'^ Members 

After considero.tion oy 'J.R.A., the budgets ''ere notices for "Op-- ■■' ■-■ 
■oortunity to be -ieard" ruider date of July 14, 1934. The record dis- •,.;.■ 10 
closes only five 'complaint s from inr'ustr'^ members ( *) re-^arding the • ■ .■,'!.Z 
budgets and method of assessment. .Three of these '."ere from firms vhich 
handled relrtivelV small Quantities of processed manures, and the com- 
plaints Tfere generally to the effect tha,t this ;oroduct should be assessed 
at a lo'"er rate tlian mi::ed fertilizers; one other firm protested on the 
basis of its poor finoncial condition; the other complaint appeared to 
be based on the fact thrt the firm did business in one county only, al- 
though statements made in the com-olaint incicpted that the firm did an 
'annual business of approximrtel-i' 2500 tons. After due consideration, it 
ve.s not Gonsid.ered that the coi.nlaints '"'ere of sufficient importance to 
■^.'t'rront r.dthholding approval of the budgets. 

After halving been aoproved by the Legal Division rnd the Research 
and !Planning Division, vjid. vcoon the recomnend.ation of the Deputv Adjninis- 
trator, the budget and method of assessment vere formall"'' approved by 
F, R. A. (**) 

Budgets Adequfte ?or Co6.e Authorit"^ Oper.ation 

In comparison nith budgets of other code authorit"'- of industries of 
similar size, the budtget for the fertilizer industry might be considered 
some7.'hat excessive. Consideration, ho^.'ever, should be ^iven to the fact 
that a great deal of the total expense '..'as for mrdntena,nce of the tr;elve 
offices, rrithout '.vhich it is not probable that the code authority'- ^?ould. 
have f-'onctioned as eff ectivel^r. 

It is not apparent from a ^;tud-;r of the minutes of code authority 
meetings or files of the cdeputy ac'jninistrator that an-'- of the budget 
items '7ere considered extravagant by members of the industrjr. On the 
other hand, it appears tha.t tlie funds provided ^'ere adeaua.te to permit 
the cod.e authorit"' to carr:- out an effective administraitive program. 

In con-ection ''ith the size of the budigets, it is of interest to 
note that in f. number of yea s the i^'ational Fertilizer Association ha,d 

(*) Correspondence in T. "".. A. .".^iles, Fertilizer In-'ustry Coce, " Budget " 

Folder. 
(**) Ad-mini strative Order i'o. S7-r2. (in V. '2. A. Files.) 

9761 



-325- 

o-oerating budgets in excess of S200, 000.00 (*). These funds had 'been 
raised by assessing Association Members on a basis which ranged from 
l-^(# per ton on superphosphate to 4(# per ton on mixed fertilizer. The 
amount of individual code authority assessment.s was included in the . 
dues of members of the association. As these members were responsible 
for a major nortion of the annual volime of sales, financing of the 
code authority did not nresent any serious laroblem in this industry. 

Pp.yments of Code Assessments not Mandatory 

The code provision authorizing a budget for code authority mainte- 
nance did not provide for mandatory payment of assessments by industry 
members. Although it would have been possible to have amended the 
code without the formalits'' of a public hearing so as to include the 
standard provision requiring mandatory riayment, the code authority in , 
this, as in other instances, was aianarently reluctant , to open the code ■ 
for any amendment regardless of its nature. 

Termination of Exenxption Granted in Order X-36 not Requested - 

Althovigh numerous isroducers of mixed fertilizers and fertilizer 
materials are engaged in these activities as an adjunct to other and 
larger business and were thus given exemption from paying code assess- 
ments to the code authority for the fertilizer industry in Adminis- 
trative Order No. X-35, the code, authority did not. request a. .termina- 
tion of the exemption granted in this Order, although such request 
was made by a majority of code authorities in similar circumstances. 
While it would seem that termination of the exemption would have been 
desirable action on the -oart of the code authority, the record does 
not indicate that the exemption -nresented any serious difficulties to 
the code authority in making collections from the firms affected, and 
no -oroblems in this connection -^ere -nresented to MA for solution. 
This was undoubtedly due to the fact that the major portion of assess- 
ments were collected in the for.11 of dues to the National Fertilizer 
Association, 

Report of Receipts and Extendi tures 

A report submitted by the code authority as of December 31, 1934 (**) 
indicated recei-ots of $39,875.85 and expenditures of ffe41,827.50. No 
later report is available, but on Hay 16, 1935, the Executive Secre- 
tary of the code authority stated in a letter to all fertilizer pro- 
ducers that 635 out of a total of approximately 700 producers load paid 
assessments and that these producers represented 98 per cent of the 
industry volume. 



(*) A description of the methods of financing the various activities 

of the National Fertilizer Association is contained in Appendix II 
and. is labelled E::hibit 36. 

(**) Detailed financial report . (in 1©A Files, Fertilizer Industry 
Code,. Bu(ifeet 'Folder.) ' ' ' 



TRADE PRACTICE COKIPLAINTS COMMITTEE 

Need for Adequate Organizg-tion for Compliance 

Members of the code authority, with Icnowledge gained through the 
ex'oerience of t>revious codes, recognized the fact that if the ind^istry 
were to derive substantial benefit froai the code, it 'rould be necessary 
to TDrovide adequate machinery for the promiDt and effective handling of 
comrilaints of violation of the trade practice -nrovisions. The matter 
of -oerfecting an efficient organization was, therefore, one of the 
first efforts of the code authority immediately following the a-Dtiroval 
of the code. 

Authorization to Handle Com-nlaints on Reference 

IIRA procedure for handling complaints of alleged violation of 
trade practice Tjrovisions was in the formulative stage during the 
early months of 1934, at which time the fertilizer industry was going 
into its first busy season under codal operation. The fertilizer 
industry was one of the ifirst to make apnlication to be authorized to 
handle these complaints "on reference," and this authorization was 
granted by MIA under date of February 15, 1934 (*). This authorization 
permitted the code authority to liandle complaints of alleged violation 
of trade -oractice -nrovisions after they had first been referred to an 
NRA State Compliance Director. 

EP'rmulation^f Trade Practice Qqmplaints Plan 

On Ifey 21, 1934, the Executive Director of the code authority, 
acting in accordance w ith a resolution passed by the administrative 
committee, requested mA ariproval of a Blan for handling trade practice 
complaints and authorization for the code authority to liandle such 
comr)laints "in the first instance," or without previous reference to 
NRA State Directors. It was proposed in this plan that the administra- 
tive committee act as a Central Trade Practice Complaints Committee, 
and that the executive committee of each zone act as a local committee 
for handling the complaints arising within the zone. 

Membership of the administrative committee rotated in s uch manner 
as to make it reoresentative at all times of the different groutDS and 
interests in the industry. Its members indicated a willingness to 
devote the time required to handle the work involved in adjusting the 
trade practice complaints referred to it by the local or zone committees 
The cominittee had a legal adviser, and the staff of the code authority 
employees was available for assistance in the handling of routine ■--' 
matters. It was proposed to make the Administration Member of the code 
authority an ex-officio member of the central trade practice complaints 
committee. 

Code AuthQjrity Staff Increased 

In order to insure trade practice complaints being handled in a 

(*) Letter , dated February 15, 1934, from Joseph F. Battley, Assistant 
Deputy Administrator, Division #3, to Code Authority, Fertilizer 
Industry, (in NRA Files, Fertilizer Industry Code, Trade Practice 
Complaints Committee Folder). 



-227- 



proper me.nner vithout dela^, the cooe ruthority's ■^to.f'' had bean aug- 
mented bv the einplovment of Jrmcs A. :^ hil Ir^ly to .-ct c?.'- Chief of the Code 
A:.ithoritv Compliance Division, and John ?. Donovpn as ?ield Investigator 
of such comrilaints. 3otn of these ;::entlemen rere attorneys vith ?ederal 
Trade Commission experience, and vere idealljr eouiTTed thro-ugh this er.- 
perience to competeritly handle the duties as'^igned.. 

In each of the zones, a, secretary/" w.3s co.refulV selected v/hose 
duties v/ere principally the handlin- of trade practice complaints. In a 
majority of the zones, the secretary' selected hp.d ha-d legal training, 
and in each instance had heen employed because of special qua-lifi cation 
for the work (*) . 

IT. n. A. Ap-oroval of Flan 

Due principally to the fact that ¥. H. A. requirements as regards 
rules for code a-athority procedure \7ere not entirel-"- definite at that time, 
the code authority's application of L.ay 21, 1934, was not approved,. Af- 
ter negotia.tions had been carried on throTigh a period of si;c months and 
adoption b"'- the code author! t" of a.ll suggestions made by K. R, A., a. 
revised plaji \7as submitter' o^r the code authority under date of November 
26, 1934, and was approved by 1^ 3. A. on December 7, 1934 (**). Through 
inadvertance, the v/ording of this Order did not specifically DViX>TOve the 
executive committee in each zone as a, trad.e T)rac'';ice comT)la,ints committee 
for that zone, and at the code authoritjr" s reouest, this oversight was 
corrected on February 8, 1935 (***), 

Procedure foi- "lanoliag Comolalnts 

Prior to formal approva^l b^r F. H. A. of the trade practice complaints 
plan, the code authorit3^ had "oroceeded v'ith the handling of complaints of 
alleged violation of trade pra.ctice precisions in essentially the manner 
outlined in the plan as approved.. This procedure, briefly described., was 
as follows: 

1. Complaints made in r^riting, and containing a. complete statement of 
facts, were filec ^"'ith the zone trcc?e -oractice complaints committee. 

2. Upon receipt of a. com-^->laint in vhich it '.'as found that the act 
complained of would constitute a coc'e violation if substantiated, 

a letter \7a,s sent the resr)ondent by registered miail, setting forth 
the nature of the comola.int. This letter reouested a statement of 
the respondent's position in the matter. 

3. In the event a respondent made no ajas'^er to a complaint, or where 
in an ans-'er the complaint ^as denied, the case was docketed for 
a hea.rin.-; to be held, by the zone committee. 

4. In cases where the resjordent aojnitted the facts, and gave as 

(*) Description of the bacl-rg-ouiid of the Code Authoritv is contained in 

A-opendix II, labelled E:diibit 35. 
(**) Administrative Order Fo. 57-41. (In V. '".. A. Files) 
(***) Administrative Order "Jo. 67-48. (In IT. .R. A. Files) 

9751 



• -228- 

explanation sr.tiE-fa.ctor-^ to the zone comnittee, the case nas 
adjusted ty notice of rcce;ota.nce of the e:rplan?tion by the zone 
committee, such notice bein.^ sent to ooth res^^ondent and com- 
plainant. 

5. In cases 'here no violrtion rrac fonnd by tae zone committee, 
respondent and comwlainpnt vere so notified in v;riting by the 
zone secretar;^. 

6. Proper notice of and procedxire for hearings by zone and cen- 
tral committees vere prescribed in the plan. 

7. Provision x:s.s made for reference by the ?:on? committee to the 
central trpde practice coiTolaints comnittee of cases in v/hich 
the zone com-iittef; t;p<-, uncble to secure f-atisfactor^'- p.djtistment. 

8. Privilege -a?, extenoed either com-olrinant or respondent to 
appeal a decision of a zone committee, such ap-oeal to be mad-e 
to the central tre.de prrctice complaints committee. 

9. Upon receipt of such appeal, rnd after reviev of all records 
in the case by the central traco prrctice complaints committee, 
a o.ecision vb.s rendered affirming or reversing the decision of 
the zone committee. 

10. Procedure i."'as outlined for reference to tiie ComiTliance Division 
of il. R. A. of cases in "hich the respondent refused to abide by 
the decision of the central trrde oroctice comolaints committee. 

Hi. Respondents v/ere informed in x/ritin.? of their -orivilere of ap- 
■oealing any decision of the central trade practice complaints 
committee to L'. II. A. 

Plan of Procedure Adeqimte for Effective Opergttion 

A reviev.' of all cases handled b"- the zone ai:id centi^al trade practice 
coraplclnts committees indicates that the procedure outlined in the plan 
Tfas generally followed, raid '-as a;op<:-rently adiequate for the systematic 
handling of the complaints (*). A notaOle exception, hovTever, was that 
in many cases in vrhich a respondent d.enied the charges ajid in which the 
complrinpnt was not able to full" substrjntiate them, the cases were 
marked "adjusted" vathout a hearing having been held h-r zone committee. 
However, the alleged offenses in maji^r of these instances were of a minor 
nature, and the volume of cases arising in tae more active zones made 
hearings in all such cases virtually p. ph'-sical imposribilit^'-. 

C-ge? Fairly nnd Efficiently Ilrndled 

The re^'ie-.' of cases handled \r-- the cpd-C authority agencies indicates 
that all the zone secretaries "ere aggressive in handling' complaints 
promptly and efficiently, and that secretaries and members of zone and 

(*) This O'oinion based on an investigation of corn'oliance files of Code 
Authority,'- by Fertilizer Stud" Unit. 

9761 



-229- 



central committees neve eminently fr'lr in consicieration of cases brought 
to their attention (*). 

LABOR COiI'LAIrTS COi:::iTTEE 

Fo Plan Anproved . 

Althou^^h nec<;otiations relative to the ev:,tablisiiment of a laoor 
complaints committee and "olan for htijidlin;:^' com-olaints of alleged vio- 
lation of the labor provisions of the code vera cstrried on for many 
months, a plan had not been a-roroved up to the time of the discontin- 
uance of the code. Conseouently, labor com-Dlaints v.-ere handled for the 
most part by the Compliance Division of rT. R. A. , although a number r/ere 
referred to the cooe authorit""- for handlinf-;. Tliese cases are discussed 
under the section on "Conroliance" in this reoort. 



(*) Operation of the code authorit^'^ organiza.tion for handling trade 
practice complaints is further discussed under the Section on "Com- 
plisnce" in this Report. 



9751 



-2S0~ 

HULE3 AIID SGULATICIIS 

First Difficulties of Administration Encountered 

Among the first difficulties encountered in administering the pro- 
visions of the code were those arising from prohlems in connection 
with the proper classification of individuals, firms and corporations 
desiring to qualify as "producers",- "agents", "dealers" and "wholesale 
cooperative associations", as defined in the code. In order to pro- 
vide as definite a basis as possible for decisions regarding such 
classificaticn s, the c ode author ity in January, 1933, submitted six 
"Hales and Regulations" for the approval of HEA. These rules and the 
problems they were designed to assist in solving were as follows: 

Rale 1. Any vifholesale cooperative association (a coopera.- 
tive a,ssociation of the ciiaracter described in sub-division 
a of Section 3 of Article VII) sliall have the right to 
purchase potash, phosp.iate rock, and/or nitrogen carriers 
from producers or importers of these materials, even thougli 
such producers or importers do not file any schedule of 
prices to dealers and/ or consumers in the areas covered by 
such cooperative association, provided that in all ca.ses 
where such producers or iirporters do not file any schedule 
of prices to dealers and/or consumers, that such coopera- 
tive association shall itself issue, file and ..laintain 
open price schedules of the ciiaracter and in the manner 
specified in Section 2 of Article VI of the Code, and 
provided further tha.t such cooperative association shall 
abide by all of the price provisions applicable to procuders 
under said Article VI. 

Hale 2. Any producer or importer of potash, phosphate 
rock or nitrogen carriers who does; not sell to dealers and/ or 
consumers may sell such products, or sny of them, to any 
wholesale cooperative associa.tion (a cooperative associa- 
tion of the character described in sub-division a of 
Section 3 of Article VII) without thereby being deemed to 
be subject to any of the provisions of the Code. 

Rule 6. The Secretary of the ivational Fertilizer Asso- 
ciation with the advice and assistajice of the Parm Credit 
Association, may from time to time prepare and issue a 
list of the names and addresses of (Iholesale Cooperative 
Associations (cooperative associations of the cnaracter 
described in sub-division a of Article VII of the Code) 
operating in such zone or subdivision thereof and mail 
copy of such list to each such '.Tnolesale Cooperative 
Association and to such producer operating in such zone 
or subdivision thereof. 

necessity for Hales 

The necessity for the above rules was occasioned by the difficulty 
ezperienced by numerous cooperative farmers' organizations in purchas- 
ing raw materials from producers and importers. The disinclination 



"231- 

of such producers to sell to tiie cooperatives was due to the uncertainty 
as to whether in doing so txie producers would place themselves in posi- 
tion where it would be necessary to file open price schedules in 
accordance with article VI , section 2 of the code. This \incertainty 
was due to the wording of Section l-b of Article H which provided 
that : 

"In the event that any producer or importer of potash, 
phosphate rock, or nitrogen carriers makes no sale of 
mixed fertilizer, superphosphate or other fertilizer 
iiiaterial' to dealers and/or consumers, none of the pro- 
visions of this Code shall apply to such producer or 
importer. " 

The above rules disposed of the problem as regards those Cooperatives 
which definitely answered all requirements of Section 3-a of Article VII 
as to being "principally engaged in a bona fide wholesale business", 
but left considerable doubt in the minds of importers and producers of 
raw materials in determining in individual ca.ses whether numerous co- 
operatives could so qualify. Hale 6 was designed to assist in removing 
this difficulty. Tlie matter was one of considerable importance to the 
cooperatives, as failing to be able to purchase the raw materials from 
the producers direct, meant increased prices when they were forced to 
buy the materials from producers of mixed fertilizers. 

No Qaesticn Raised Regarding Code Basis f o r Rule 

Althougli taere is some doubt as to the basis in the code for the 
provision in Rule 1, requirin;r cooperatives to file "orices Y/hen pur- 
chasing raT/ materials direct from a producer, the record does not dis- 
close that any cooper-^-.tive protested this .^ale or that any question 
was raised regarding it. 

Quantity Discounts ;;pde Mandatory 

Included in the rules v/as the following: 

Rale 3. All schedules hereafter filed in compliance 
with the provisions of Section 3 of .-.rticle YI of the 
Code must provide for the allowance of suitable quantity 
discounts from the prices listed in raid sc' edules to 
producers, dealers, agents and conswiiers in Section 1 
of Article VI. 

Tlie above rule was considered desirable in order to lessen criti- 
cism which na-d been directed at the spr'^ad between dealer prices and 
those extended large -consumers. ( *) It had also been called to atten- 
tion that it was the practice of producers to ap_:oint many farmers as 
their agents. Tliese farmers were fertilizer users, and in many cases 



(*) Corre spondenc e . (in IRA 7ile3, J^ertilizer Industry Code, 
Complaints Folder. ) 



9761 



evidtsnt]y disposed of only a few tons more than needed on their own farms 
to relatives and neigl'ibors, securing an agent's discovint on a relative- 
ly small aggregate purchase. There appeared, therefore, to "be consider- 
able justification in the pretests of a nu-nher of large consumers who 
did not make an effort to become the appointed agents of producers but 
whose purchases for their own use were in greater quantities than others 
who were receiving the agents' discount. By making quantity discounts 
mandatory in filed schedules, the code authority evidently felt that 
the Rule was equitable, and vrould, in some measure, prove a solution 
to the above problem, and at the same time lessen the criticism being 
made of prices which producers had filed under the code. 

Question of Code Basis for Quantity Discounts 

It may be seriously questioned whether any provision in the code 
provided a basis for compelling a producer to allow quantity dis- 
counts in his filed schedule. The record, however, discloses no pro- 
test being made or question raised regarding the rule. 

Authority to Issue Producer Lists 

The following rules were designed to clarify the situation as re- 
gards the status of applicants who desired to be classified as pro- 
ducers under the code definition: 

Rale 4. The Secretary of the National Fertilizer Asso- 
ciation, to assist producers in filing schedules with 
their competitors in compliance v;ith the requirements 
of Section 2 of Article VI of the Code, may prepare and 
and issue from time to time a list of the nrines and 
addresses of producers operating in each zone, or sub- 
division thereof, and mail copy of such list to each 
producer. " 

Role 5. The Secretary of the National Fertilizer 
Association may require from such persons who wish to 
be included in such list of producers an affidavit or 
sworn statement declaring that they are producers 
(within the meaning of Section 12 of Article II of the 
Code) together with the facts pertinent thereto, and 
that they agree to comply with the previsions of the. 
Code and all regulations issued tnereunder, including 
specifically, but without liuiiting the generality of 
the foregoing, the labor provisions of Article IV, 
the price provisions of Article VI, the marketing 
provisions of Article VII, and the xinfair practice . 
provisions of Article VIII and the provisions as Vo 
fees and expenses in Article XI. 

Problem to be Solved 

It would seem that the code authority would have been within its 
authority without such a rule in furnisliing lists of known producers 



-?33- 

in each zone to assist the producers , in mailing price schedules to com- 
petitors, as required in Sec. a-3 of Article '^''I of the code. Hov/ever, 
the prohlem to te solved was to eatatlish in a dsfinite manner the 
status of entrants into the field of production and distribution of 
mixed fertilizers, so that raw material producers might have a guide 
in recognizing or declining to recognize an individual or firm claiming 
to "be entitled to the prices extended producers of mixed fertilizers, 
especially claij^iants v/ho were just entering the field. iiThile all 
expressions made by the code authority regarding this matter were to 
the effect that the status of a producer and his recognition as such 
were dependent entirely on the facts surrovmding each case, it is 
obvious from tlie record that prospective producers were able to pur- 
chase raw materials at producerel prices only when their names had 
been placed on the producer lists issued by the code authority. 

Application Blaril-c Prepared by Code Aut hority 

Apparently using Rale 5 as authority, the code authority prepared 
an elaborate questionnaire (*) and application blanlc on which prospec- 
tive producers were required to ajiswer m?Jiy questions regarding their 
proposed operations in order to establish their qualifications and 
have their names placed on the producer list of the code authority. In 
signing the application blanlc, the applicant agreed to abide by code 
provisions and to pay assessments for the maintenance of the code auth- 
ority. The basis for the latter stipulation may be open to question 
inasmuch as Article XI of the code did not make payments of assessments 
mandatory on the part of indiistry members. 

Approv a l of RjLles by ITBA 

All of the above Rales were foDnally approved by NRA under date of 
February 6, 1934. (**) 

Autliority for Combined Parchaces to Apply on Q:aantity 
Discounts 

On June 3, 1934, the code authority requested approval of an addi- 
tion to the "Rales and Regulations" as follows: 

"A producer's schedule may provide that in computing the 
amount of quantity discount to which any producer, 
dealer, agent or consumer is entitM, tlie combined 
tonnage sold to such producer, dealer, agent, or 
consumer by all producers doing business in the zone 
in each fertilizer season will be taken into ccnsidera- 



(*) A ccy of tlae questionnaire is included in Appendix II 
and is labelled Ex::-iibit 37. 

(**) Administrative Order Ho. 67-3. (in .'RA Piles. ) 



9761 



tion, but no producer sliall pay a quantity discount 
on any tonnage in excess of tiiat actually sold by liim 
to the producer, dealer, agent or consumer involved." 

The need for this rule was that opers.tion of Rule 3, previously 
discussed, had tended to encourage purchasers to confine their purchases 
to one producer in order to obtain the highest discount possible on 
quantity purchases. The new lule permitted the purchases from more 
than one producer to apply on the quD.ntities to '.vhich discounts might 
be applied. Ilie record, however, does not malce clear the manner in 
which a producer determined the amount of purchases made by a customer 
from producers other than r.imself . 

The above rule was submitted as an amendment or addition to the 
"Sales and Hegulations" , approved on February 6, 1934, and on June 29, 
1934 NM approval was extended to the rules as amended. (*) 

Reporting of Distributors Made Mandatory 

On October 3, 1934, the Code Authority requested approval of the 
following regulation relative to the reporting of distributors: 

Section 1. Each producer shall, within five days after 
receipt of a written request authorized by the Adminis- 
trative Coimiiittee, submit to the executive officer of 
the national Fertilizer Association, lashington, D.C., 
a complete list of the ^^aines and addresses of all individ- 
uals, partnerships, a.sscci;^tion, and/or corporations 
appointed or utilized, in any zone, for the distribution 
of fertilizer and/or fertilizer :;iaterials, by such pro- 
ducer, as salaried salesmen, commission traveling sales- 
men (in Florida only), or distributors - whether dealers 
or agents - each class to be sxiown separately. 

Section 2. Each producer of whom such request has been 
made shall, without further request, within five days 
after such producer' s said salaried salesmen, commission 
travelling salesmen (in Florida only), or distributors - 
whether dealers or agents - notify the executive officer 
of the National Fertilizer Association, Washington, D. C. , 
of such change, elimination, or addition, in order that 
such list may be kept current. 

Section 3. The Administrative Committee shall not 
authorize tlie executive office of the National Fertilizer 
Association to request such a list for any zone except 
upon the specific request of such zone. 

Such a ruijilation as the above had been found desirable in several 
zones in order that responsibility for acts of an agent in cases of 
alleged violation of code provisions could be placed upon the producer 



(*) Administrative Order No. 67-29. (in aTRA Files.) 



9761 



-235- 

or producers whom the .leent represented, and in order to make a matter 
of record the names of individuals and firms v;ho were receivin,; dis- 
counts extended at^ents and dealers. 

Basis of Authorization and Object ion Rnise d 

In requesting approval of this regulatin, the code authority used 
as a basis of authorization, Article IX of the Code which provides that 
the code authority may reo^uire reports from producers containing infor- 
mation necessary for administration and enforcement of the code. 

Tlie Research and Plannin{j; Division objected to the regulation on 
the grounds that the code did not provide for calssif ication of custo- 
mers, and that a producer shouJ.d not be required to divulge the names 
of customers. Other Advisory Boards offered no objections, and NRA 
approval was extended under date of October 24, 1933. (*) 



(*) Administrative Order llo. 67-36. (in NRA Files. ) 
9761 



-256- 



CODE C0:.PLIA1TCZ 

Pl an of Procedui-G 

In accordance with a plan of procedure adopted "by the code 
authority for handling complaints of alleged violation of trade 
practice provisions of the code, the zone executive co.vimittee in 
each zone acted as a local compliance committee of the code aathor- 
ity. In addition to these conrnittees, a secretary was assigned to 
each zone whose principal duties were the investigation and handling 
of trade practice conrplaints. 

These secretaries v/ere careftdly selected in the light of 
their qualifications for the vvork assigned. All had practical 
knowled;ge of the industry and its problems, and a majority had a 
background of legal training. 

The procedure for routine handling cf trade practice complaints 
has "been previously dcscrihed in this report under the caption, 
"Trade Practice Comi^laints Committee". 

Cases r.andled During First Active Season 

The code hecamc effective on ITovember 10, 1933, and the industry 
entered into its hea^-y sellin^; season in January, 19S'l. During the 
four months from Jaiiuary to '/.ay, inclusive, 227 cases of alleged 
violation of trade practice provisions vere handled by the Code 
Authority and its agencies, a vast majority being adjusted by the 
zone coiiurdttces. 

During the remainder of 193'i, 341 additional cases of alleged 
violation were filed, or a total of 568 during 1934. 

Increase in Complaints during Second Season 

During the months from Januarv to liay, 1933, 766 cases of al- 
leged violation of trade practice provisions were filed, as compared 
with 227 during the sa;ie ^Deriod in 193^1. 

7ith the exception of approzimately one hundred cases in which 
action was pending at the time of the Schcchter decision, the total 
of 1,334 cases had been followed to some conclusion (*). 



(*) T.ie above (and following) compilations wore made from jpccords 
of individual cases contained in the files of the National 
Fertilizer Association. 



9761 



-237- 



Com-plaints of ViQlation of Filed Prices l.ost Prevalent 

Eleven hundred and forty-three, or 93;.o of the 1,254 cases dis- 
posed of "by zone conmittees and the code authority involved alleged 
violation of Sec. 2 of Article VI, selling at prices, terms or 
conditions of sale other than tliose listed in open price schedules 
filed "by the respondents. Several . cases alleging sales at prices 
other than those filed by the respondents also involved possible 
violation of Section 1 of Article VI, "Sales Below Cost", but as 
the filed price schcdvJ.es invariahly provided a more definite basis 
for proof of violation, action wa5 usually ta)':en under Section 2 
of Article VI. 

Distribution of Other Complaints 

The remaining 91 cases of alleged violation of code provi- 
sions were distributed as follows: 



Article 
Article 
Article 



VIII, 
VIII, 
VIII, 



Section 
Section 
Section 



Article VIII, Section 6 



VIII, 
VIII, 
VIII, 



Section 
Section 



Section 10 



Article 
Article 
Article 
Article 
Article 
Article 
Article 
Article 



Defamation of a Competitor 3 
debates and unearned discounts 8 
Paynent of Agents' and Deajlcrs' 
discounts to others than Agents 
and Dealers 3 
Furnishing warehouse space without 
adequate charge for same 6 
Failure to enforce contracts 2 
Sclliiig on time at cash prices 1 
- Gratuities 12 
VIII, Section 11 - "i.rnloyin- a buyer as an agent 17 
VIII, Section 12 - Subterfuge in invoicing 3 
VIII, Section 13 - Sefxinding or retroactive settle- 
ment 1 
G-uarrjiteeing prices against 
decline 10 
Inducing breach of contract 5 
False "larking and Branding 2 
False advertising 9 
Crop sharing 1 
VII, Section 1 - Selling unapproved grades 1 
VII, Section 2 - Employing coiumission salesmen 1 
VI, Section 1 - Sales below cost 3 

IV, Labor provisions 3 

91 



Article 
Article 
Article 
Article 
Article 
Article 



Article VIII, Section 14 



VIII, Section 15 

VIII, Section 16 

VIII, Section 17 

VIII, Section 18 



Distribution of Complaints 

Tlie cases disposed of were divided ejnong the various types 
of Industry members as follov/s: 



9761 



Lar^e ". .ediim ■•- Bnall Fpnaers CooiDeratives Raw late rial 
Producers 

397 374 ■• 483 57 34 

Percentaf^^e of Gases in -.Txiicl:. Violation v/as Sstaolished 

In 853 of the 1,334 cases ■f.lcposed of, no violation was found; 
258 cases in wliic violation was admitted by tlie respondent or esta'o- 
lisl.ed by a zone committee were aujusT'telby satisfactory promise of 
action on the part of the respondents to discontinue the practice 
coraplained of; 113 certificates of future compliance were signed 
"by respondents who had been found r^uilt^'' of violation. 

Six hundred and fifty-four, or slightly more than 50 per cent 
of Cases handled, were occasioned by alleged actions of 3,i:;cnts of 
producers, rather than by direct actions of the producers or 
their salaried salesmen. 

Difficult.- in Sstablishin.-:: Violations 

The hi;;h Toercenta^e of cases presented in which no violation 
v/as established was occasioned for the most part by the extreme 
difficulty complainants experienced in obtaining the evidence 
necessary to definitely establish a violation. To be sufficiently 
definite, such evioonce, in most cases, would require that the 
i^urchaser furnish the details of a transa.ctlon in which he had 
been favored by a producer. As mi,;ht be c:<pcctod, a purchaser who 
had received a favor was not likely to be so un,:;rateful as to divulge 
the facts with the knowledj;e tiat to do so would create trouble for 
the producer who had extended favorable prices or terms. 

Cases in 'Taiclj. Violation wa.s Denied . 

In many cases which were disposed of as having been "adjusted", 
the files contained complaints, apparently made in ^'pod faith, that 
transactions completed by producers or their agents had been made, 
in a manner not in accordance mth schedules filed l>y the producers; 
in answer to the complaints, the charges would be emphatically denied 
by the producers, with assurances that the transactions had been in 
entire accordance vd th filed schedules; the complainants were then 
advised of these statements, and a.lmost invariably vrere unable to 
furnisl". a.dditionil information of sufficiently definite nature to 
v/arrajit further -iressing t. .e charges. 

Ti-'.c review of individual cases indicated thg.t in nearly all 
instances where an agent >.ad apparently sold or offered to sell at 
va.riance with the prices oi' terms filed, the producer cooperated 
in correcting the situation, in souie instances cnaicelling agent's 
contracts. 



9761 



Cases not Based on Su'Dstantiatecl iJ'acts 

In a large ntLtfoer of tlie cases in which no violation was found, 
it seemed apparent tliat the charges had heen filed on hearsay evi- 
dence, the respondents frequently estaMishing that they were in 
no manner involved in the transaction which had "been questioned. 
Some ^ of this confusion unc'euttedly resulted from the fact that 
frequently the same agent represented as many as four or five 
producers. 

Criticism of Compliance Efforts 

Tj.ile the tone of letters from the industry members in the 
files of the Depiity Administrator indicates that it was generally 
felt tlia.t operation of the code and tlie use of a system of open 
price filing had exerted a strong stabilizing influence in competi- 
tive conditions, the following quotation from a letter of a zone 
officer to the Executive Director is tj^ical of expressions made 
by other producers v;ho felt strongly that more drastic measures than 
securing certificates of compliance would be necessary if the code 
were to continue of value: 

"All you do is tell us to take it up with the State Director. 
There is rapidly developing a feeling among producers in 
this Zone that nothing is going to be done about violations, 
ajad there is a feeling of 'don't you report me and I won't 
report you'. The feeling further seems to exist that there 
will be a certain amount of correspondence and the matter 
will be dropped and tha.t the shrewd man will be able to get 
array with these kind of things. 

"TJe are having a mectin-;; of the Executive Comirdttee the 
first of the week,, and v;e should like to get things into 
sliape to chfcdc the growing disregard for the Code. T 
am thorouglily convinced that unless some producers, both 
large and siTiall, are brought up with a jerk that the whole 
tiling- is going to be of little value." {*) 

Other letters from producers in the files of the Deputy Ad- 
ministrator express dissatisfaction with the hancUing of the com- 
paratively few cases which the code authority found necessary to 
refer to USA in that it was felt by these producers that removal 
of a Blue Eagle or signing a compliance certificate were not suf- 
ficiently severe penalties to stem the rising tide of alleged 
violations. 



(*) Letter in Compliajice Files of national Fertilizer Association, 



9761 



-240- 



Bxperiencu in Securing HRA. Cooperation 

In December, 1934, the code compliance structure in Southern 
California was seriously tlireatcned t?/ tlic apparently flagrant and 
defiant violation of the code "by a producer in that district. 
Charges filed were promptly and efficiently handled hy the Secre- 
tary and zone committee. After review hy the central trade practice 
coimnitteo of the code authority, the case was referred hack to the 
zone coi.i:::ittee on Fehruary 8, 1935, to he submitted to the State 
Director of HEA. 

As the activities of the respondent in th^; case had re-oltcd 
in reprisals on the part of other producers, t. e zone sccre "ary and 
memhers of the zone committee made the stronge;;t possible effort 
to induce the State Director and legal officers of the, State to 
institute court action to restrain the actions of the producer whicli 
appeared to he unquestionably in violation of the Code. In spite 
of these efforts, no such action iiad been taken up to the time of 
the discontinuance of the code. Details of this case are reported 
because of its importance to the industry and the feeling of pro- 
ducers in the zone that the chaotic conditions which existed there 
during the 1935 season could have been averted had effective action 
been promptly talccn. 

Reason for Large Number of Complaints 

ITiiile the number of complaints which Zone Secretaries and Com- 
mittees were called upon to handle is large in comparison with other 
industries with comparable volume of sales, this condition was un- 
doubtedly due to the extremely large force of salesmen and agents 
engaged in intensive competition during an active selling season of 
short cljuration. Also entering into the situation is the fact that 
consumers had undoubtedly becom.e accustomed in previous years to 
play one producer against another in securing the best possible 
prices ajid teims in a demoralized market, and it is natural that 
producers and their representatives found it difficult to abide by 
fixed price schedules in' concluding sales with buyers v/ho drove hard 
bargains and to whom the producers had made various inducements in 
the past to obtain their business. 

Increasing Lack of Respect for Code 

Especially during the first busy season unler codal operation, 
it seems apparent that the code exerted a strong influence in stabil- 
izing competitive conditions, and that prices filed by producers were 
generally well respected. In the 1935 season, it seems equally ap- 
parent that the code did not command the same respect as in 1934, a 
logical conclusion being that certain producers and their agents had 
gained the impression that even a proven violation would not bring 
dXiY severe penalty. 



9761 



-241- 
Results of Compliance Efforts 

As previously described in this report under the caption, 
"Trade Practice Complaints Committee", the cede authority made 
ever;- possible effort to provide adequate machinery for enforcement 
of the trade practice provisions of the code. The results, although 
severely criticized in so;ne instances "by industry members, may 
reasonahly he considered fairly commensurate with the effort in that 
the price structure of industry products was generally maintained 
throughout two seasons, and, prohahly of greatest importance, pro- 
ducers wore ahle to retain a margain of profit at the end of the 
season without "being forced to maJco retroactive settlements with 
customers due to having gaarajitecd prices against decline, as had 
"been the case in -Drevious years. 

Tnd'as trv "Zv nluation of tne Code 

A succinct statement of the high esteem in which the fertilizer 
industry held their WRA code and a suggestion that without it the 
United States Government might have to talce over the industry is 
contained in the follov;ing quotation: 

"Calling N.R.A. codes 'almost as important as the Code 
llapoleon, « Charles J. Brand, executive director of the 
Fertilizer Code Authority, said he could not 'conceive 
that American industry and government would scrap the 
vast amount of consti-nctivc effort they represent.' 

"He likewise attributed the rise in profits last year 
in tha-t industry to the code system. Although there 
was a trade practice code in the industry since 1927, 
'the I'T.Pl.A. gave us soiacthing wo didn't have "before: 
a degree of opportunity to see that the code was en- 
forced. ' If this is not continued, he said, the govern- 
ment T.dll have to step in and run the industry." (*) 



(*) Testimony of Charles J. Brand, Executive Secretary and 

Treasurer, The !Tational Fertilizer Association, and Execu- 
tive Director, Code Authority for the Fertilizer Industry, 
public hearing on price differentials, llarch 14, 1935, Press 
■.leraorandwn l-Io. 8, third day, Release 10466, p. 4 



-242- 



OPPIC^ OF NATIONiiL RECOVERY ADMINISTRATION 
DIVISION OP REVIEW 



THE F"iRTILIZER IKDUST-IY STIDY 

VOLUME II - APFEEDICES 

By 

Al P. O'Donnell 



Industry Studier, Section 
March, IS 3 6 



- 243 - 

OrnCE OF ITATIQdUL rscoi/ehy .almihistratiok 
DIVISION 0? KCYIEW 



THE EERTILIZER IHrUSTRY STUDY 
V0LTJ1,!E II - APFEIIDICES 
By 
Alf. O'Doniiell 



WORK Jl^TERIALS IJO. 63 



IlIDUSTRY STlIDirS SECTIO: 
March, 1936 



9761 



-244- 

AF^niroix I 

METHODOLOGY US^ IN ¥ilITIITG THIS H^POHT 

and 

OUTLINT OF PROPOSED FUTUEE RESEARCH 

Outline of the Industry Study 

The initial a-o-oroach to the Fertilizer Study was an analysis of 
the ■orohleras of the industry. Once ther-e lorohlems had hegn outlined, 
the industry was divided into its loeiical -oarts for the ^atherin^ of 
information. The main suhdivisions under which it was -oroTjosed to 
gather information were called: 

(1) Production 

(2) Later 

(3) "Distrihution -nd Prices 

(4) Finance 

(5) Industry Goopn-ation and 
Government Relation.; 

(6) Torei^n '^rade 

(7) S-pecial Prohlems 

A detailed outline was then written setting forth in detail the 
tyDe of material which it '^as honed could he gathered under each of 
these sections. (*) 

Personnel 

The -D-^rsonnel for the carrying out o-f the assemhling of this 
material was all reauisitioned from tne thf=n existing KRA iDPrsonnel. 
A cony of the organization chart and a description of the e^-nerience of 
the Unit Chief and of the Project Heads is included in An-oendix II as 
Exhihit 38. 

Sources of Information 

The various men selected for this study were canable and had had 
experience in the type of work to which they were assigned. In snite of 
this, several weeks had to be snent in becoming familiar with the narti- 
cular nrobleras of the fertilizer industry. A field trin was undertaken 
to Baltimore to the nlants of the Standard Wholesale and Phosnhate 
Comnany, the American Agricultural Chemical Comnany and that of JBaugh 
and Sons, Inc. so that a better annreciation might be secured of the 
■orocesses and nrobloms o-f the industry. 

(*) A cony of this outline was nublished b.v the Division of ! eview 

as Work Outline No. 54, dated December 16, 1935, and is icluded 
in the Fertilizf-r Industry !^RA Archives ?s E-'hibit F. 



9761 



-245-J 

The NEA files on th° fertilizer industry were -anusviallv coraDlete 
and TDrovided the main source of information for the material contained 
in this rex)ort. "^he National Fertilizer Association was most helnful in 
furnishing certain material which they had xsrevi'iusly nublished. They 
also made available their file of comoliance cas'-^s -^or our analysis. 
The chief executives of the National Fertilizer Association, including 
Mr, Charles J. Brand, Executive Secretary, Miss Josephine Feeley, 
Office Manager, Mr. F. S. Lodge, Chief of the Otjen Price Section of the 
Code Authority and Mr. John Moran, Cost Accountant, were good en-ugh to 
meet with the author and answer certain Questions concerning the in- 
dustry's activities. 

Dr. J. W. Turrentine, President, American Potash Institute, Inc. 
was very helpful in furnishing information concerning the notash industry. 

The main source of information outside of the NRA files was ob- 
tained from various other governmental denartraents which had investigated 
and Tjublished materials -oertaining to -osrticiLar -ohases of the fertilizer 
industry. Prominent among these sources of information was the Deriart- 
ment of Agriculture, the Federal Trade Commission, the Tariff Commission, 
the Department of Labor, the Deuartraent of Commerce and the Denartment 
of Justice. 

Ex-oeriment stations in the various States cooperated in furnishing 
the Fertilizer Industry Study with co-cies of their most recent publi- 
cations pertaining to fertilizer. 

Need for Future Research 

Future economic research in this industry should be directed along 
two lines, first, a thorough survey of the economic weaknesses of the 
industry as it is now constituted, and second, the improvement of the 
available statistics concerninp- the industry. 

Size and 'Efficiency of Com'ngnies 

A thorough survey should be undertaken of tiie efficiency of large 
versus small scale companies in this industry. One method of approach- 
ing this problem would be to have special tabulations made by the 
Treasury Department from the income tax records. The income records 
would be classified by companies according to the dollar value of their 
output, or in lieu of that, accordins to the total reported asset value 
of the corporation in a series of classifications which would indicate 
the relative profits of the various size companies. The Treasury De- 
partment could also prepare the financial statistics for a specified list 
of 10 or 15 each of small, medium and lars:e size companies geographi- 
cally diversified, '^hese figures when correlated with the known existing 
economic conditions in particular years should shed considerable' light on 
whether or not ths existins' industry str\icture of integration of control 
in the hands of a few companies is economically sound. 

A careful analysis should be made of the existing plant locations 
with ref=^rence to the markets which they serve, particularly correlating 
the demand in what should logically be the market area for a particular 
plant with the alleged production capacity of the particular plant. 



-245- 

Duplication of TDroduction facilities "by coranatinfi: comoanies in a iDPrti- 
cnlar area in an uneconomic way should "be studied. Merger xjossilDilities 
should te considered as a TDotential means of eliminating excess du-oli- 
cate or obsolete Broduction ca-oacity. 

DistriTjution System 

Industry leaders have stated in nutlic lorint that . the nresent 
system of distribution was both costly and inefficient. Ylo real survey 
of distribution channels in this industry has ever been undertaVen. 
The cooperation of certain of the lar^cer conrjanies should be obtained 
and a thorough study made of their rjarticular distribution ex-n5rience. 
In this connection the Tjlace of the farmers' cooijerative organizations 
'in fertilizer distribution and a critical analysis of any t)ot.' itial 
economies for the consumer in the ex-oansion of svch a, method cf distri- 
bution should be studied. 

In tercor-oora.t3 Relationships 

A careful survey should be undertaken of the intercorTDorate re- 
lationshi-DS in the fertilizer industry. A study should be undertaken to 
determine to what extent fertilizer coraiDanies are diversifying their 
activities into other lines of chemical manu-facturing and what the 
effect of such diversification will be on the consumer of fertilizer in 
the long run. 

It would be esTDecially significant to survey the degree to which so 
called fertilizer manufacturers control the TDhosTjhate rock -oroduction 
suTDToly of the United States. Some five or six comr)anies are alleged to 
dominate this situation. In this connection a determination should be 
made of why this industry continues to shio unground nhos-ohate rock to 
wjidely scattered suTjerTohos-ohate tilantSj each of which has its own in- 
vestment and grinding eauinment. Such equipment under the iDresent 
system is not utilized 25 to 50'^ of the time, whereas if the rock were 
ground at the -ohosTDhate rock mines, the eaui-oment could be used much 
more efficiently. 

A study should be mp~e as to why the tilant food content of 
TDhosphorous and -ootash nroducts ^re not measured in terms of the elements 
TDhosphorous and lootassium instead of a mythical -chosTDhoric acid (P2O5) 
and potassium oxide (KgO) . There is no way of comnaring th--^ rilative 
value of these different elements as olant -"opds since they Tjerform 
different functions for the growing -olant. However, comoaris~ns now 
made lead casual observers to assume that the niiroFen is the most ex- 
•oensive element contained in fertilizers, while i-*^ m.easured on the com- 
narative basis of the thr^e elements it is -orobable that r)hosT3horous 
would be the most expensive. 

A further study should be undertaken in connection with the attitude 
of the various interested narties toward tariffs in fertilizer raw 
materials. 



9761 



Conc^ntrat^'d Fertilizers 

A careful survey shoulci be undertaken to det-rniine the iDotential 
relocation of su-oer-ohos-ohate manufacture if some of the nrohleras con- 
nected with the -oroducticn and farmer acce-otance of the higher suiDer- 
TDhosTDhates. is successful. The e^roeriments of the Tennessee Vall°y 
.Authority with fertilizer deserve much more treatment that it has heen 
■Dossihle to give them in this "brief survey. 

Reduction of G-rndes 

If concentrated fertilizers achieve a more nrominent -oosition in 
fertilizer used, a marked reduction in the number of grades now sold 
would be automatically effected. Thether or not this comes to -oass, the 
siub'ject of reducing the number of gr-^des offered for sale is one of 
vital im-Dortance to all -oarties interested in the fertilizer industry, 
llo survey is available which makes any estimates of the savings which 
would be effected to the manufacturer and to the consumer by manufacturing 
and selling fewer grades of mixed fertilizer. The elimination of non- 
fertilizing comDOunds from fertilizer materials (Sodium chloride from 
TDOtash and gypsum from suDenDhostihate in excessive quantities for 
fertilizer iDunDOses, are subjects of economic interest. Similarly the 
study of reducing the use of fillers in fertilizer is of economic in- 
terest to the farmer. 

Seasonality 

Since seasonality has been becoming more acute in the fertilizer 
industry, a survey should be undertaken to determine what has been done 
to offset this trend and what the -oossibilities alon*: these lines are. 

Credit 



The source and cost of frrm credit for purchasing fertilizer should 
be carefully studied. Logically, such work would involve a, study of 
what is being done by such institutions as the Farm Credit Adminis- 
tration, CroTD Producers' Loan Association and various credit unions 
sponsored by State governments. 

Statistics 

A careful study of retail -orices actually ijaid by the farmer should 
be made. The only information available a.t the -oresent time is that ob- 
tained by the Deioartment of Agriculture in a questionnaire to dealers 
and the figure which they re-oorted as charging farmers. 

No accurate infor^iation is available as to the investment in this 
industry, l=t alone det ^-rminina: a basis for the evaluation of that in- 
vestment. "Jhen figures of investment are used as they often are in con- 
nection with the industry, more sxiecific details should be p:iven as to 
exactly what is meant by investment. 



-?48~ 

': Prod-gctioB Capacity 

There is a need for -Droduction statistics of -Dsrticular companies 
in this industry, "both as to their tdnnage Taroduced and as to its , 
dollar value. 

Ambiguity arises' in' discussing -oroduction capacity of the industry. 
Standards should he set utd and an accurate survey made of the true ijro- 
duction ca-oacity of the industry accordin.^ to tnose standards. 

Government Der)grtmental CooTje^ation 

Many j?pvernmentsl deT>attraents now assemble '"xcellent information 
on -oarticular segments of the fertilizer industry. The figur-s, how- 
ever, being collected for various uses are not always com-oaratle. There 
should be a central clearing hai se for this information and it could be 
TDublishad in a manner in which it could be more readily accessible and 
more serviceable to int -^rested -oarties. There is really a need for a 
continuing study of the fertilizer industry which could continue to do 
the' tyne of wprk which has been begun in this narticular study. In. the 
long run, such work would be invaluable to the industry,. to labor and 
to the consumer. 



9761 













APP 


l^NDIX 


II 
















-249. 


- 




:jxhibit 1 
















LOCATION OF 


FSF.TILIZZR 


PLAHTS 


, 1953 


, 1934 


and 


1935 










1935 






1934 








1935 






..A. 


A. 


._CL 


.Total 


.A. 


__ B 


_.-C^ 


Total 


^A„ 


, „B„ 


.^.. .' 


Total 


Alatama 


8 


9 


53 


70 


6 


8 


39 


53 


6 


8 


41 


55 


Arizona 














2 


2 






2 


2 


Arkansas 


1 


2 


13 


Ifi 


1 


2 


9 


12 


1 


2 


9 


12 


California 


4 


1 


28 


S3 


3 


1 


51 


55 


3 


1 


57 


61 


Colorado 






1 


1 






1 


1 






1 


1 


Connecticut 






9 


9 




1 


9 


10 




1 


8 


9 


Delaware 






8 


8 






8 


8 






8 


8 


Florida 


4 


3 


33 


40 


5 


3 


38 


46 


5 


3 


48 


56 


Georgia 


17 


20 


120 


157 . 


17 


IC 


124 


159 


17 


18 


148 


183 


Illinois 


2 


4 


5 


11 


2 


5 


8 . 


15 


2 


5 


9 


16 


Indiana 




7 


8 


15 




.7 


8 


15 




7 


11 


18 


lov/a 


1 




2 


3 


1 




4 


5 


1 




4 


5 


Kansas 






4 


4 






5 


5 






5 


5 


Kentucky 


1 


2 


fi 


9 


1 


2 


6 


9 


1 


2 


7 


10 


Louisiana 


4 


2 


9 


15 


5 


1 


8 


14 


5 


1 


8 


14 


Maine 






12 


12 






14 


14 






15 


15 


Maryland 


fi 


5 


35 


4fi 


P, 


5 


36 


47 


6 


5 


38 


49 


Massachusetts 


2 


1 


7 


10 


2 


1 


6 


9 


2 


1 


6 


9 


Michigan 


1 


1 


4 


fi 


1 


1 


3 


5 


1 


1 


5 


7 


Minnesota 






5 


5 






5 


5 






6 


6 


Mississippi 


4 


4 


7 


15 


4 


4 


9 


17 


3 


5 


10 


18 


Missouri 




1 


7 


8 




1 


4 


5 






3 


3 


Montana 


1 






1 


-1 






1 


1 






1 


Nebraska 






3 


3 






3 


3 






3 


3 


New Jersey 


2 


1 


IS 


21 


2 


1 


19 


22 


2 


1 


23 


26 


New Mexico 














1 


1 






1 


1 


New York 


1 


2 


11 


14 


1 


2 


15 


18 


1 


2 


16 


19 


N. Carolina 


12 


7 


fi5 


84 


10 


7 


72 


89 


10 


7 


73 


90 


Ohio 


7 


10 


10 


27 


P, 


11 


11 


28 


6 


11 


11 


28 


Oklahoma 






1 


1 






1 


1 






1 


1 


Oregon 






1 


1 






3 


3 






3 


3 


Pennsylvania 


2 


3 


38 


43 


2 


2 


33 


37 


2 


2 


32 


36 


Hhode Island 






1 


1 






1 


1 






1 


1 


S. Carolina 


10 


f> 


48 


64 


10 


5 


53 


68 


10 


5 


74 


89 


Tennessee 


5 


5 


4 


14 ■- 


5 


5 


5 


15 


5 


5 


3 


13 


Texas 


2 


1 


24 


27 


3 




19 


22 


3 




21 


24 


Vermont 






1 


1 






1 


1 






1 


1 


Virginia 


7 


3 


38 


48 


7 


3 


3P 


46 


7 


3 


40 


50 


Washington 






fi 


fi 






15 


15 






14 


14 


West Virginia 






p 


2 






1 


1 






1 


1 


Wisconsin 




1 


6 


7 




1 


6 


7 






5 


5 



Totals 



104 101 653 



637 Producers listed in 1933 
672 Producers listed in 1934 
743 Producers listed in 1935 

Source: American Fertilizer 
Handbooks 



97 692 



890 100 



96 772 



A - Complete Plants, make Sulphuric 
Acid and Superphosphate 

B - Make Superphosphate and purchase 
Sulphuric Acid 

C - Purchase Superphosphate a-nd mix 
Fertilizer Materials only 



-250- 

APPEMDIX II 

EXHIBIT 2 

■ ■ ■ PRODUCTION CAPACITY OF THE FERTILIZER INDUSTRY 

In discuGsions of the productive capacity of the Industry, its repre- 
sentatives stress the ability of existing plants to produce tonnage of both 
mixed fertilizer and superphosphate greatly in excess of the highest rate 
of consumption even in the peak years. 

In its application for a Code, the National Fertilizer Association 
claimed capacity to loroduce annually fully 12,000,000 tons of mixed fer- 
tilizer as against sales of 8,1^3,870 tons in the peak year of 1950, and 
capacity to annually produce fully 10,000, 0''0 tons of superphosphate, al- 
though consumption had never greatly exceeded 4,000,000 tons (*). 

The "basis for the computation of these figures Avas not supplied by 
the Code sponsors, and that such estimates arc not made on entirely defi- 
nite information is indicated by the fact that on November 5, l'";35, the 
Executive Secretary of the National Fertilizer Association at a Hearing on 
the Labor Provisions of a Proposed Voluntary Agreement stated that "the 
capacity in the industry to produce mixed fertilizers ha.s for many years 
been fully 13,000,000 tons" and "the su.-oer-'Dhosphate industry could produce 
8,000,000 tons annually" (**). 

, In a conference with Mr. Charles J. Brand, (***) Mr. Brand stated 
that the method of determining capacity was essentially that which was 
used in 1930 when statements were received from each producer as to the 
quantities of the materials which could have been produced under normal 
working cnditions in additi.m to the Quantities v;hich were actually pro- 
duced. It v/as pointed out that in 1930 this meant a ten-hour day of one 
shift, plus an average of ten percent as many workers on a night shift, 
although in some instances the nigjit shift miglit employ 20 percent as many 
v/orkers as on the day shift. 

The estimate productive capacity of most of the plants in the United 
States are listed in annual issues of The American Fertilizer Handbook, 
In aji effort to ascertain the method by which production capacity is fig- 
ured', th publisher of the Horidbook v/as interviewed and said that thu listed 
capacities are sometimes ba.sed on the tonnage a company normally sells, and 
at other times they indicate the maxirauin possible production of the plants 



(*) Fertilizer Industry Application for a NRA code, August 2, 1933, 
p. 12. (Copy in iffiA Files) 

(**) National Recovery Administration Hearing nn Title A (Labor Provi- 
sions) of Proposed Voluntary Agreement far the Fertilizer Industry, 
November 5, 1935, p. 27. (Coi:.y in IBA Files) 

(***) Conference of Al F. O'Donncll, Unit Chief, Fertilizer Industry 

Study, with Mr. Charles J. Brand, Mr. Jolin Moran, Mr. F.S. Lodge, 
•, -Miss Josephine Feeley of the National Fertilizer Association, 
October 25, 1935. 



-?51- 

if operated at capacity for a full twelve month period, (*) 

It appears quite certain that if even a majority of existing 
plants operated for any considerable period prior to the active sell- 
ing seasons, a substantial oversupply of mixed fertilizer could be 
produced. Ho?/ever, as with all seasonable merchandise, producers 
naturally limit their productive operations to as short a period as 
possible immediately prior to the time orders need to be shipped, and 
it has not been disclosed that the industry problem of over production 
has been caused by producers over-estima.ting demand and preparing large 
stocks of mixed goods in advance of the selling season. 

In the matter of capacity to produce superphosphate, the situa- 
tion is sli/;htly different, as it is, of course, necessary for pro- 
ducers to prepare and store this material in varying quantities in 
anticipation of demand. From available data, it is not possible to 
definitely check the estimates of capacity to produce superphosphate, 
as, to do so, would reouire knov/ledge of the length of time individual 
plants are operated in advance of the selling season, and the extent 
of facilities of the plants to store phosphate rock a.s well as the 
finished product, superphosphate. 

As over a period of years, superphosphate producers have known 
that the demand for fertilizers is approximately proportionate to 
farm income in the previous year, and as the National Fertilizer As- 
sociation releases monthly reports (**) which show stocks of super- 
phosphate on hand at the beginning and end of the month, and produc- 
tion and shipments during the month, producers have definite guides as 
to the extent to which they are warranted in producing the material in 
advance of a season, and undoubtedly operate their plants accordingly. 



(*) Interview of Mr, Dexter 'lutein with Mr. Albert Ware, Ware Brothers, 
Philadelphia, November 5, 1935. 

(**) Application for a NRA Code, August 2, 1933, Page 30, 



97fil 



252 







i^liiiiyiiliiifiliil^liiiiii 



1 1 



jwsie* CSC i.A»,id,i».'kAi.3gsi^s^ 



V. w 



9761 



i^:iBiT3. 



ArrUJLIX II 



1 1 i 



KXHIBIT3. 



APFiiNDIX II, 



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9761 



254 

LXHIBIT3. 



APPENDIX II 




IlllPii 



li 



9761 



-255- 

APPENDIX II 

ZXillBIT 4 

TTKiTTY POIl^TS CODE 

The Twenty Points Code of Trade Practices as described in the 
Statement of Industry conditions made to the Court by William J, 
Donovan, Assistant to the Attorney G-encral, filed December 21, 192'^, 
filed in the District Court of the State of Maryland in the case of 
United States versus American Agricultural Chemical Company'-, et al, 

"(l) Adopt a uniform, cost accounting.; system, 

"(3) Arra,nge for proper dissemination of costs to managers 
charged with distribution that they might market goods in- 
telligently, 

"(3) Discontinue hunting for car lot orders, 

"(4) Eliminate cca-^.ission travelers, 

"To explain -ooint 4 it may be said that com;-;iission salesmen 
had been accustomed to sacrifice part of their coi'anissions 
to olDtain sales oy giving purchasers lower prices than their 
companies authorized, 

"(5) Eliminate all direct sales agents, commission agents, 
salaried agents, etc., 

"{^) Reduce t?.e number of salesmen and reouire each salesm.an 
to sell a certain amount of fertilizer, 

"(7) Eliminate warehouses, 

"(8) Provide a spread oetween sight draft hill of lading 
prices and time prices consistent v/ith additional expenses 
and losses which accruer in connection v/ith transacting time 
■business, 

"(9) Invoice .oods at the price they viere to he sold, 

"(10) Discontinue selling chemica,ls and materials at low 
prices for the purpose of influencing the sale of other fer- 
tilizers, the purpose and effect of this point oeing to dis- 
courage dry and home mixing, 



97*^1 



(11) 

"(a) Discontinue deliveries in manufacturers' trucks 

"(B) Make no frei;:jht or other allowance for trucking 
or hauling in tuyers' trucks or wagons, 

"(C) Make price to agents or dealers or car lot buyers 

for f»ods loaded on buyers' trucks or wagons at factories 

the CAT price at factories plus an adeouate charge for 
loading; 

"(12) Enter into contracts with buyers in good faith and 
enforce contract terms on hu^/er, 

"(13) Terms and discounts to be allowed, 

"(14) Abolish custom of prepaying freight except to certain 
sections, 

"(15), (1ft), and (17) Restrict number of brands upon the 
marke t , 

"(18) Increase available phosphoric acid in various brands, 

"(19) and (20) Use legitimate traveling salesmen only." 



97fil 



-257- 
AiTElDIX II 

Er-:i3iT 5 

LIST OF THIRTY-iniE IIDICTSD COMPMIES 

The thirty-nine companies sued by the United States G-overnment 
for violating the anti-trust lav/s in 192^ were as follows: 

American Agricultural Chemical Co, 
Armour Fertilizer "ITor'cs 
Adair t. licCarthy Bros. Inc. 
Baugh c: Sons Co. of Baltimore City 
Caraleigh Phosphate & Fertilizer Works 
The Carolinas Chemical Company 
Central Chemical Co.. ■ -.\ , . . 
Cotton States Fertilizer Co. 
Darling co Company 
The Davison Chemical Co. 
Eastern Cotton Oil Coiiroan;^" 
Empire Sto,te Chemical Co. 
Etiwan Fertilizer Company 
The Farmer's Fertilizer Co. 
Federal Chemical Company 
Griffith c: "Boyd 
The Hand Trading Company ■ 
International Agricultural Corp. 
I. P. Thomjxs i- Sons, Compa.i]^' 
Meridian Fertilizer Company 
Mutual Fertilizer Company 
McCahe Fertilizer Company 

The lliller Fertilizer Co. of Baltimore City 
■ . 5, O'ber d- Sons Com-o,';,ny of Baltimore City 
: '■■ -planters Fertilizer d Phosphate Companj'- 
■ Charles II. Fridd^,' d Company, Inc. 
■■ ■ E. Eaugh d Sons Fertilizer Com;oany 
Head Phos-ohate Com-pany 
Reliance Fertilizer Co. 
F. S. Royster P-uano Co. ■ 
The SUiiTiers Fertilizer Co. 
The Smith Agricultural Chemical Co. 
Southern Fertilizer C Chemical Co. 
Svdft and Company 
F.,>7. Tunnel 1 .;'. Co., Inc., 
Virginia-Carolina, Chemical Co. 
TJelch Chemic-;.l Con-oan3^ 
TTilson d Toomer Fertilizer Co. , 
TTuichet Fertilizer Conroany' 



97fil 



-258- 

APFSI'IDIX II 

EXHIBIT 6 

CODS 0? ILRADE FHACTICES OF THE 
■ FERTILIZES INDUSTRY. 

Adopted January 10, 1927 

THE CODE 

The following Code has "been formulated, with a view to eliminating 
the waste and the unfair trade' practices that have "jeen prevalent in the 
fertilizer industry and that have led to demoralization, which is disas- 
trous to the manufact-urers and which in. the long run cannot hut also 
operate to the detriment of the. consumers: 

1. SOUND ACCOUNTING METHODS 

Manufacturers should recognize the sound principle that in manufac- 
turing and selling their product cost should be accurately determined and 
carefully considered. A scientific system of cost accounting should be 
established and applied in order that m.anuf acturers may know accurately 
the cost of their product and the relation of price thereto. In this 
connection the attention of manufacturers is called to the cost account- 
ing and cost estimating studies prepared by the Cost Accounting Committee 
of The National Fertilizer Association. 

2. ELIMINATION OF WASTE 

Wasteful selling methods should be elim.inated. A multiplicity of 
grades adds materially to the cost of mixed fertilizers and, as pointed 
out by the Federal Trade Commission in its investigation of the fertilizer 
industry, there is no econtsraic justification therefor. A reduction in the 
number of grades is therefore recommended as a measure of economiy. It is 
further recommended that manufacturers avoid the practice of making up 
fertilizer (actually of standard gra'des) for sale under private brands, 
and also the practice of compounding special formulae for individual 
buyers. 

Since freight rates constitute a material portion of the cost of 
fertilizer, it is recommended that manufacturers, who are primarily 
wholesalers, market their product "in carload lots only, so as to avoid 
the large differential betv^eeh carload and less-than-carload shipments. 

3. NO SECRET DISCRII'^INATIONS' A^ID RSBaTES 

Manufacturers should scrupulously avoid the granting of secret re- 
bates, irrespective of the form they may assume. Competition should ex- 
press itself openly rather than in special and discriminatory form. 
Among practices violative of this principle which have heretofore prevailed, 
and the elimination of which is recommended, are the following: 



9761 



(a) Providing truck, service -without adequate charge for it, or 
reimbursing the dealer or purchaser for tr\icking costs. 

(b) Providing local .warehouse facilities or reimbursing the dealer 
or purchaser for the actual or theoretical cost thereof. 

(c) The sale, simultaneously with the sale of mijced fertilizer, of 
chemicals and materials at special concessions designed to induce the 
buyer to purchase mixed fertilizer. 

(d) Failure to enforce, in good faith, the terms of contracts pre- 
viously made for the sale of fertilizer. 

f (e) Preparing special formulae or using special ingredients in 
standard formulae without making adequate charge for the cost of such 
formulae or special ingredients. 

(f) The making of special allowances to buyers for advertising. 

(g) Adopting selling methods which, as experience has amply demon- 
strated, nearly always promote secret rebates and concessions and put it 
out of the power of the manufacturers to control them. Reference is here 
particularly made to the practice of selling through commission agents 
and others who are irregularly employed and whose compensation, v/ithout 
being "loaded" into the price, is measured in terms of quantity sold. 
Where experience has shown that commission men and like agents custom- 
arily resort to split commissions, secret rebates, etc., manufacturers 
should sell only through regularly employed salaried salesmen and agents 
responsible to and directly controlled by the manufacturers. 

(h) Extending credit terms that do not take into account the actual 
cost of money or of credit. 

4. AVOIDANCE OE UNSOUND CHEDIT TERIviS 

In certain sections of the country, buyers have customarily taken 
advantage of "open shipments" by receiving and using goods and then re- 
fusing to settle on any terms other than those satisfactory to themselves 
and often quite different from the terms under which the contract of 
purchase and sale was m.ade. Where this abuse has prevailed, manufactu- 
rers should sell only on terms such that, to obtain the bill of lading, 
the purchasers must make pajinent in cash or negotiable promissory note 
for the contract price. 

Where delivery is made against promissory note, the note should be 
made payable at the earliest date consistent with the principle that 
the fertilizer should be paid for not later than the time when the crop 
to which the fertilizer was applied is marketed. 

5. NO GUARANTY AGAINST DECLINE OF PRICES 

Sales should be made at fixed prices, and terms should be accepted 
in good faith by buyer and seller with the mutual intention of complete 
performance. Manufacturers should avoid selling under conditions that 



"260" 

provide for' a reduction in- the,, jprice .of goo.rts previously sold in the 
event of subsequent sales of like goods at lower prices. 

The effect' of t.his" practice -i-s ,to apply .to all goods sold the low-> 
est price vfhich may he quoted by any competitor to any buyer, even though 
the .price may be much below the. cost of production. .This puts the weaker 
manufacturer-s at the mercy of the stronger. 

6. EXCHANGE OF STATISTICAL INFOREATIOK 

In order that the relations^ .of supply and demand and the statlsti'-- 
cal conditions existing from time to time in the fertilizer industry 
may be known, .it is proposed to establish .a. Bureau of Statistics, of 
The. National Fertilizer Association, to which periodical sta.tistical 
reports shall be made, giving information with resp'ect' to stocks on 
hand, production, shipments, average prices realized, and such other 
statistical .inforrnation as may lawfully be- assembled and exchanged, and 
which shali relate entirely to past and completed transactions. 

. Adopted by the Fertilizer Industry at a Special Convention held 
January ,10,- 1927, at Washington, D. C, under the Auspices of The 
National Fertiliz.er Association., 



9761 



-261- 
E^ailBIT 7 

REVISED AID AIEIIDED 
CODE OP TRADE PRACTICES 0? THE 
FERTILIZES IlfDUSTRY 

December, 197:9 

There follo^TS a complete co'iy of the Code, Part I incli-ides the 
Trade Practice Conference Rules n^^proved 'oy the Federal Trrdo Connission. 
part II includes the Voluntar;',- Trade Practice Rules adopted by the si.'^na- 
tory firms, 

THE CODE 

PAiLT I 

Certain rules covering the trade, practices of the fertilizer industry 
having been submitted to the Federal Trade Coi^mussion and, after full hear- 
ing having been a;i-jroved by the Commission and classified as Group I Rules 
under its Trade Practice Conference procedure, ai'e hereby made a, part of 
this Code, as follo\7s: 

TRiiDE PRACTICE CO: riEIElTCE RULES 
Ap Droved by the Federal Trade Commission 



GROUP I 



Rule 1. SALES SELOV COST: 



Resolved, that the sale or consignmeut of goods beloir cost for the 
purpose ajid with the intent of injuring a competitor and mth the effect 
of lessening con^etition is an unfair trade -pr^.cticQ* 

Rule 2. REBATES: 

Resolved, that the grajiting of secret rebates, irrespective of the 
form they may asstimo, constitutes u:afair trade practices; and that the 
follOTTing practices, among others, violate this -orinci-ole and therefore 
arc unfair trade -ora.ctices: 

a*. Silling of goods at nrices nhich do not reflect actusJ. ret\irns 
to the seller or consignor, 

be Providing truch service without adomxato charge for it, or re- 
imbursing the dealer, purchaser, consignee or agent for the cost of 
trucking if reimbursement is not provided for in the manufacturers' price 
list. 

c» Selling or consigniag chemicals and materials uith special con- 
cessions or at reduced prices,, given to induce the bu;:,^er or consignee to 
purchase mixed fertilizer and/or other lortilizor materials. 

d, Failui'e tc enforce in good faith the terms of contracts -ore- 
viously made for the sale of fertilizer, for exan-ole: 



-262- 



1. Selling on terms that require the payment on sight 
draft on presentation of bill of lading (S.D.JJ.L. ) and then 
waiving the ohligation to pay cash before documents or goods 
are delivered, thus deferring the payment of the cash to sone 
future date. 

2. Selling pjid delivering goods on time, consignment 
or open "bill of lading termS on S.D.3.L, price, or naiving 
earned interest, 

e, IHirnishing si-^ecial containerc, preparing special formulas for 
individual "buyers or consignees, or using special ingredients in stan- 
dard fornralas, 'jithout adequate charge for the cost of such containers, 
formula.s or special ingredients, as an inducement to the making of a 
contract and/or sale, 

f» liaking special sJ-louarices to "buyers or consignees under the guise 
of advertising expense, or giving ajiy other form of gratuity. 

g. Ado-oting selling methods that promote secret re"bates fjid con- 
cessions, such as: 

1» Employing a "buyer or consignee or his agent or ' 
anyone employed by or connected iiith a buyer or consignee 
with the purpose, design, or effect of influencing the 
business of such customer. 

2. Carrying on books by seller or consignor, as 
delinquent, baAcnces due by solvent customer, uith no 
intention of requiring ultimate payment. 

h. Enabling the purchaser or consignee to obtain fertilizer appa]>- 
ently on cash terms but in fact on credit extended to him by or through 
the manufacturer, as, for example: A transaction covered by a sight 
draft and bill of lading under vrhich the purchaser or consignee is made 
to appear as honoring dociunents upon presentation by payment with his 
OTm funds, T7hcn in fact the cash involved vas obtained in whole or in 
part upon a negotiable instrument (usually discounted at a bajik) bearing 
the endorsement of the manufacturer; or a transaction by which the manu- 
facturer, although he does not actually endorse the obligation, renders 
himself legally or morally res'oonsible for its payment if the purchaser 
or consignee should fail to meet his obligption to the bank at maturity. 

i. Refunding to the buyer or consignee, either directly or indir- 
ectly, any part of the purchase -orice on account of goods accepted and/or 
settled for by the buyer or consignee under the terms of the contract. 
This practice is commonly referred to as "retroactive settlement". 

(Note by the Commission. Subdivisions a, b, c, d, e, f, g, h, and 
i are hareby interpreted as being controlled by the preceding clause re- 
lating to secret reba-tes and as specification of methods of secret rebat- 
ing. Uith that interpretation these subdivisions are aiD'oroved. ) 



9761 



Rule 3. HEFAIUITIOTT OP COVrPETITO^l OE DISPj^PAGEIEHT 0? KIS GOODS: 

Resolved, that the defpnation of a conpetitor in any manner, either 
"by imouting to hin dishonorable conduct, inahility to ;perforH contracts 
or questiona'blo credit str-uiding, or false disparr.goneut of the r;rade or 
quality of his goods, is an unfair trade practice. 

PAIIT II 

By the mutual agreement and acce-iitance of the signatories hereto, 
the f ollo'!;7ing additional rules are 'f or.iulated r?nd adopted ijith a vie^ 
to eliminating certodn demonstrated mstes rud unsound and detrimental 
trade "oractices prevalent in the Tortilizer Industry' : 

VOLUlITiiRY TRADE PHilCTICZ RULES ' ' 

Accepted "by the Signatories 

Rule 1, REBATES: 

ao The oractiQC of granting i-otiates su-opreases constructive economic 
competition, rnd "by disturhing markets prevents orderly development of 
the industry. This "orlis to the ultimate injujry of manufacturer, dealer 
SJid consumer. When granted secretly rebates constitute unfair trade 
practices and as such arc unlawful, as ";)rovided in Croi-ip I, Rule 5, 
which enunciates the general princrole that the granting of secret re- 
bates constitutes unfair trrdo practices -iid lists specific practices 
as violations of the principle, 

h. .All forms of rebating, _ and v.articularly those described in para- 
graphs b, c, f, g (l) pjid i of Group I, are unsound, • even though they may 
be riracticed openly, and shoiild be avoided. 

Rule 2. SQUID ACCGUETIEC- ;ET:iODS: 

Manufacturers sliould nrintain reliable s3^stons of cost accounting 
in order tha,t they ■rnry IniOT? pccurately the cost of nrking rnd marketing 
each product and the relation of price to cost. In this connoctioji the 
attention of ■ inanuf acturors is called to the co£;t accounting f=nd cost 
estimating studies loreiorred by the Cost Accounting Cominittce of the 
national Fertiliser Association. 

Rule 3.^ ELII.IIlIATIOir CE UASTE: 

a. TJasteful methods of ricanuf actu.rG and marketing should be elimin- 
ated. 

b. A reduction in the number of grades of fertilizer to the )Oint 
of reasonably satisfying the needs of fertilizer consimcrs is recoimended 
as a measure of econony. A nultiplicitj^ of grades adds to the cost of 
mixed fertilizers vdthout economic . justif ic-^tion, as . pointed out by the 
Federal Trade Connission in its investigation of the fertilizer industry. 



9761 



c. It is rlso reconncnded that iirji-of rcturGrs avoid the practice 
of making up fertilizer for sole under priv^'te jraads "by nerchant deal- 
ers, and of ;oreparing special formulas or usin^; special ingredients in 
standard forimilas ^rithout nalting adequate charge for the cost of such 
formulas or specirl ingredients. 

d. Since freight rates constitute an au jreciahlc part of the cost 
of fertilizer, it is reconnended that rasnufacturers, in sofar as the 
requirements of their custoners ;ocrnit, market their 'tjroduct in carload 
lots onlYf so as to avoid the differential loetuoon carload ?nd less 
than carload shipments piid. the uneconomic use of carrier equipment. 

Rule 4. AVOIDAl.^CS Or OTiHYA UlISOIMD PR.;CTICE3: 

It is recommended that the folio-ring prnctices, rhich e:r:)erience has 
shorrn to "be unsound, Ido eliminated: 

a. Reimhursing hioj^ers or consignees, directly or indirectl^r, for 
actual or theoretical '-'arehousc service or facilities. 

h. Adopting selling methods rrhich, as exoerience has ewolj demon- 
strated, nearly alnays -iromote secret rebates and concessions and ■:)ut it 
out of the pOTor of the manufacturers to control then. Reference is here 
particularly made to thu -prrctice of selling through commission agents 
and others '.'ho pro irregularly?- employed and -'hose compensation, without 
being included in the price, is measured in terms of quantit;,^ sold. Where 
experience has shovm th,at commission men and like agents customarily re- 
sort to sv.ilit commissions, secret rebates, rnd similar practices, manu- 
facturers should sell only through regularly employed salaried salesmen 
and agents resjjonsible to and directly controlled by the mrnufactureK. 

c. TThen shipments are made pgainst documents, msnufncturers should 
sell only on such terns that, to obtain the bill of lading, the 'ourchasor 
must make payment upon delivery of goods in ca,sh or make settlement by 
negotiable promissory note for the contract price. If the delivery is 
made against a promissory note, the note should be made payable at the 
earliest date consistent rdth the requirement that the fertilizer should 
be paid for not later thrn the time rfhen the cro > to vrhich the fertilizer 
was applied is marketed. 

d. Every purchase and sale transaction denotes a thing sold, a de- 
livery, and c> price to be paid and received. In order to be effective and 
enforceable, the transaction should be specific and definite as to each 

of its elements. TTliile preserving and maintaining the orivilege and the 
right from time to time in good faith to meet bona fide competition, 
manufacturers should avoid guaranteeing -orices against declines. The 
effect of such a guaranty is that at the time the goods are shipped the 
msinuf acturer does not knoi; the price he v.dll eventually receive for them, 
and the account rendered is ooen to controversy and may bo subject to 
settlement ,at the loiiest price that may prevrdl during a, sea.son or that 
moy be quoted to a buyer by r. conT:jetitor who may be lacking in good 
faith, This -daces com-oetitive bu;^'-ers at a, disadvantage and often results 
in discrinina.tion bct-i-'cen consmnors. 



9751 



Hule 5. IlrTEEPEP:Zl-CE TTITH COI.'ELlCTS: 

Inducing or r.ttemptiii:: to induce the "breri-ch of a, contract oetv-een 
a competitor rnd his curtouer durin" the tern o" such contr^.ct is an unfcir 
method of coLTootition. 

Hule 6, EXCHAIIC-S OF STATISTICiiL IlD'OPuIiiTIOi:: 

In order that the relations of suo >1'/ rnd demand and. the statistical 
conditions existing: fron tine to tine in, the Pcrtilizer Industry nay ho 
knovm, The National Pertilizer Association has estrblished an Economics 
Division to rrhich periodic-O. statistical rvoorts rro hoinc nadc. Those 
reports give inforuation rrith respect to stocks on hand, production, ship- 
ments, average prices' realized, and such other statistical information as 
may lawfully "be assenhled and c::chan/7ed. This infornation relates entirely 
to past and completed trrjisp.ctions.. It is roco;n lendcd that nanixfacturers 
coo"oerate rrith the Association' in this T?ork, 



Competition should c.xoress itself openl?/ rnd not in secret or discrim- 
inatory form» The Pertilizer Industr;' shoiild serve Americrn r^^'riculture 
at the loxrest cost coraMonsuratu TTith good service rnd reason." ole -profit* 
The foregoing rules hrve been made to oresorve frir corroetition and to 
increase the efficiency rnd stability of the . Indus trjr in the public inter- 
est. It is hoped, therefore, that dealers and cons'oners "ill cooperate 
with the majiuf acturers t& achieve these pTirposes. 



9751 



-266- 

EiSIBIT 8 

HEVISSD Aim AIEinDED TRaDE PHACTICE 
COlIPEEr.HCE RULI3 OP TKJ PEHTILIZER IlIDUSTRY 
August 4, 1931. 

IlITRODUCTOHY STATE! iEiTT 

The rules aoproved V/ the Federal Trade Conmission as a result of 
the industry's trade practice conference held January 29, 1929, v;ere later 
revised ty the Commission on its own motion. The revised rules irore pub- 
lished "by the Commission on August 4, 1931, and they represent the last 
Commission action in roierence to the conference rules for the fertilizer 
industry. The revised rules are , set forth helorr. 



GROUP I. 



Rule 1. 



The Coimnission substituted and approved the follorring for Rule 1, 
Group I, as published June 12, 1929: 

The soiling of goods belor: cost with the intent and rrith 
the effect of injuring a competitor and rhcre the, effect may 
be to substantisJ.ly. lessen competition or tend to create a 
monopoly or to unreasonably rastraija trr.de, is an unfair trade 
practice. 

Rule 2. 

The Commission substituted njid aDproved the following for Rule 3, 
Group I, as published June 12, 1929: 

A. The defamation of competitors by falsely imputing to 
them dishonorp.ble conduct, inability to perform con- 
tracts, questionable credit standing, or by other 
fpj.se representations, or the false disnr.ragei.ient of 
the grade or quality of their goods, rrith the tendency 
and capacity to mislead or deceive purchasers or nrospoc- 
tive purchasers, is an unfair trade practice. 

B. Fithholding from or inserting in the invoice, statements 
which make the invoice p. false record, wholly or in part, 
of the transaction represented on the f.-^ce thereof, is 
condemned by the industry. 



The Commission substituted cjid aooroved the following for a part of 
Rule 2, Group I, as published Jujie 12, 1929: 

The secret payment or allowance of rebates, refunds, conmis- 
sions, or -Lineairned discounts; whether in the form of money or 
otherwise, or secretly extending to certain purchasers spec- 
ial services or privileges, not extended to all purchasers 



.. -267- 

under like terras and conditions, v.dth the intent and with 
the effect of inj\iri-ng a competitor and ^here the effect 
may be to substantially lessen competition or tend to create 
a monopoly or to unrepsonably restrain trade, is an unfair 
trade practice. 



9761 



-?68- 

AFIEWDIX II 

EXHIBIT 9 

Letter Suggesting Abandonment of the Code'. 

Extract from a letter sent to members of the Executive Committee "by 
the Secretary of the National Fertilizer Association, 

"As you know, during the past two years little effort 
has teen made to bring about observance of the Group 
(2) rules of the Code of Trade Practices of the Ferti- 
lizer Industry as promulgated in amended form by the 
Federal Trade Commission on May 29, 1931. These are 
published, together v/ith a careful history of the 
whole matter, beginning on page 54 and concluding on 
page 61 of the proceedings of the seventh annual con- 
vention of the Association. 

"You will recall that the Group ( 1) Rules are regarded a 
as enforceable by law. The industry' s loss of interest 
in obtaining observance of the Group (2) Rules was due 
in part to the fact that after months of delay, the 
Federal Trade Commission in May, 1931, changed the form 
and to some extent the substance of the Code from the 
manner in which the industry prepared and adopted it. 
Group (2) Rules are intended to express the best opinions 
of the industry as to sound trade practices, but there is 
some doubt as to many of them being enforceable at law. 
So far as the Association has been concerned, the matter 
has been left to the individual initiative of each signa- 
tory company. 

"At the Atlanta (1932) convention, because of chaotic 
conditions prevailing in the industry, a situation evident 
throughout the business structure of the country, certain 
companies notified the Board of Directors of the withdrawal 
of their acceptance of the Code. As a result of this action, 
Mr. V/atson has suggested that all signatories be ad^jised 
in a proper way that it has been deemed wise for the time 
being to suspend the operation of the Code, because in 
certain territories certain features of it are not being 
lived up to . 

"I am in some doubt hs to just what result would flow from 
advising signatories that operation of the Code is to be 
suspended. However, we are faced with the actual fact 
that for several years many, if not most, of the signa- 
tories have ceased to observe one or many of its require- 
ments. 

"A gesture to suspend the Code has a wide variety of legal 
implications. The Department of Justice, the Federal Trade 
Commission, and every competitor, whether he is a signatory 
or not, is concerned, I wish, therefore, that in every 



possible case "ou. v/o\ild suTDmit this matter to your 
coionsel in ci-Her that oiiv Mction ve mav take he v,'ell 
advised." 

AFFELTDIX II 

EXHIBIT 10 

• BY-LAISS 

of 

THE NATIONAL FERTILIZER ASSOCIATION 
■ INCOP-r ORATED, 

ARTICLE I - ■ MEIv.BERSHIF 

Se Section 1. The members of this Association shall consist of two 
classes, Active and Associate. , All members of The National Fertilizer 
Association as of the- date of the incorporation of this corporation shall 
be members of this corporation and shall retain the same status which 
they had as members of said unincorporated association; that is to say, 
an Active Member thereof snail be an Active J'ember of this corporation, 
and an Associate I.;ember thereof shall be an Associate Member of this 
corporation, for the purpose of allocating the right to vote for Dir- 
ectors of the Association, the Active J.iembers thereof shall be divided 
into twelve groups, which groups shall be designated District No. 1 to 
District No. 12, both inclusive. The twelve Districts shall incl\ide, 
respectively,, those Active llembers of the Association having their prin- 
cipal places of business located as follows, viz.: 

District 1 

Maine, Nev; Hampshire, Vermont, Iviassschusetts , Rhode Island 
and Connecticut. 

District 2 

New York, Pennsylvania, New Jersey and Puerto Rico. 

District 3 

Maryland, Delaware, District of Columbia, Virginia north of 
Jaifies ^ver and including Accomac and Northampton Counties, 
and the B. & ., Section of V.'est Virginia. 

District 4 

North Carolina, Virginia south of James Biver and including 
Richmond, and the C. & 0. Section of West Vir-sinia. 



-270" 

District 5 

South Carolina 

District 6 

Georgia, Florida starting with the eastern bo-undaries of 
Columbia, Suwanee, Lafayette ,. and Taylor Bounties and 
extending west to the Apalachicola Hiver. 

District 7 

Florida east and south of Suwanee, Columbia, Lafayette, 
and Taylor Counties. 

District 8 

Tennessee, Alabama, Mississippi, Florida west of the Apalachicola 
Hiver, and Louisiana east of the' Mississippi River. 

District 9 

Arkansas, Louisiana west of Mississippi River, Texas, Oklahoma 
and New Mexico . ' 

District 10 

Michigan, Ohio, Indiana, Kentucky, Illinois, Wisconsin, Minnesota, 
Iowa, Missouri, North Dakota, South Dakota, Nebraska, Kansas 
Montana, Wyoming and Colorado. 

District 11 

Washington, Oregon, and Idaho. 

District 12 

California, Nevada, Utah, Arizona, and Hawaii. 

The Board of Directors of the Association shall have the right 
from time to time to create new Districts out of territory included in 
existing Districts; and said Board of Directors shall have the right to 
change existing Districts by adding additional territory which may be 
taken from other Districts or by eliminating from any Districts terri- 
tory then included therein. 

Section 2. Active Mem bership. Any individual, firm, or corpor- 
ation engaged in the manufacture of fertilizer, or in the importation 
or production of fertilizer materials, shall be eligible to active 
membership in the Association. Each Active Member shall be entitled 
to one vote, subject to the exclusive right of Active Members from 
each District, except Districts 11 and 12, to elect two directors. 



9761 



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Section 3. Associate Membership.. Any individual, firm or corpor- 
■ ation engaged in the sale (not as a part of importation) of fertilizer 
materials, or in the manufacture or sale of fertilizer machinery, or 
fertilizer "bags, or in negotiating sales of any of such commodities as 
broker, or in the business of making chemical' analyses, or engaged in 
any business directly connected with the business of the fertilizer in- 
dustry, but not such as to come within the requirements for active mem- 
bership, shall be eligible to Associate Membership in this Association. 
Associate' Members shall not be entitled to any vote; such Associate Mem- 
bers shall not be- entitled to any vote; such Associate Members shall, 
hoY;ever, be entitled to attend the meetings of the Association. 

Section 4. Any member of the Association, whether Active or 
Associate, may be expelled from membership therein for non-pa;;mient of 
dues or for any conduct which in the opinion of the Board of Directors 
is prejudicial to the purposes, principles or interests of this Associa- 
tion, or for any other cause which said Board of Directors may, in its 
discretion, ' deem sufficient. Such expulsion shall be only by a two- 
thirds vote of the members of such Board present at a meetint thereof 
duly and regularly called and held for the purpose of taking such action, 
except that a m.ember may be expelled for non-pajinent of dues by a major- 
ity vote of such members so present, and notice of such proposed action 
need not have been given in the call for the meeting, A member ma^,'- not 
be expelled for any other cause unless such member shall have been given 
a reasonable opportunity to appear in person or by representative before 
the Board of Directors to answer the charges made against said member. 

ARTICLS II - MEETING OF MEMBERS 

Section 1. A stated or annual meeting of the members shall be held 
in each year on such day and at such place and time as the Board of 
Directors of the Corporation shall fix from time to time, at which meet- 
ing Directors consisting of Active Members of the Association or, repre- 
sentatives of such Active Members as may be co-partnerships, firms or 
corporations, shall be elected to succeed the members of the Board of 
Directors whose terns then' expire, and to. fill any vacancies then exist- 
ing. At such meeting there shall likewise be transacted any other busi- 
ness that may be then properly and legally presented. 

Section. 2. A fall meeting of the members of the Association shall 
likewise be held annually at Atlanta, Georgia, in October or November 
of each year, on such date and at such time and at such place in Atlanta 
as said Board of Directors shall determine. 

Section 3. Notice of the time and -place of the annual meeting of 
the members of the Association and of the fall m.eeting to be held at 
Atlanta, Georgia, in October or November of each year, shall be mailed 
to the Active Members of the Association at least twenty days prior to 
the date fixed for such meetings, respectively, such notices to be mailed 
to all Members at their addresses as furnished by them to the Secretary 
of the Association. 

Section 4. Special meetings of the members of the Association may 
be called by the President or by order of the Board of Directors at any 
time, and upon written request of twenty per cent of the Active Members 

9761 



-272- 

of the Association shall te called 'by the President, to "be held at such 

time and place anc" for such time and place and for such piorpose as the 

President or the Board of Directors or such written request, as the case 
may "be, shall designate. 

Section 5. Notice of the time, place and purpose of special meet- 
ings shall be mailed to the Active Members of the Association at least 
twenty days prior to the date fixed for such meetings, notices to be 
mailed as in Section 3 of this Article provided; but if a special meet- 
ing is called by the unanimous vote of the Directors present at a meet- 
ing, or by unanimous written consent of the Directors, then, if the 
Directors so order, only ten days' notice need be given. 

Section 6. Meetings may be held without notice if all Active 
Members are present or if notice is waived by those not present. 

Section 7. Those Active Members present in person or by proxy or 
other duly authorized representative shall constitute a quorum at all 
meetings of the Association. 

Section 8. Except as otherwise provided by law, or in these By-Laws, 
action by the Active Members of the Association, in meeting duly assembled, 
shall be by the afi'irmative vote of a majority of such members present in 
person or by proxy. 

Section 9. In voting for Directors or on any other proposed vote, 
the voting shall be by ballot upon the request of any five of the voting 
menb ers. 

Section 10. Any mem.ber entitled to vote at any meeting may-do so 
by proxy duly apxointed in writing, provided that such proxy shall not 
act a t any meeting of the members of the Association which shall be held 
on a date which is more than three- jnonths subsequent to the date of the 
instrument naming such- proxy, unless such instrument on its face provides 
that it shall be valid, for a longer period, such period being designated 
therein, provided, however, that attqndance at a meeting by a member shall 
revoke the proxy given by such member and that any proxy shall be revoked 
upon the presentation of a proxy bearing a later date, whether or not the 
proxy bearing the earlier date is or is not on its face irrevocable. 

A3TICLE III-DIRECTORS 

Section 1. The business and affairs of this Association shall be 
managed by and under the direction of its Board of Directors of not less 
than thirty-three exclusive of ex-officio members, to b^ selected as 
hereinafter provided, each of whom shall be an Active Member of the Asso- 
ciation or a representative of an Active Member. In case the President 
and/or Vice President and/or the retiring President are not members of 
the Board of Directors they shall be, ex-officio, added to the member- 
ship of such Board each year until the next annual meeting. The Direct- 
ors 'by majority vote of the entire Board may increase the number of 
Directors to not more than sixty. 



Q761 



-27S" ;., ^ 

Sectibn 2. Except as provided herein, . there shall te two Directors 
for each District, elected by the memhers thereo.f;, and, one. Director for 
each District, elected at large, as hereinafter in .this article provided'. 
The memhers of Districts 11 and 12 shall .elect o.ne Director each and the 
Members of the Association at thd annual 'meeting shall elect two addition- 
al J3 irectors-at-large to balance the representation of these Districts. 
When a new district is created, the Directors to be elected by the mem- 
bers of such newly created District shall forthwith be elected, and the 
other Director to be elected at large shall forthwith be elected, as 
hereinafter in this article provided, except that 'if such increase of 
Di stricts occurs prior to thirty days before an annual meeting, such 
Director-at-large' shall be elected by the. Board of Dir,e<j.tors , as provided, 
in Section 7, to hold office until such annual meeting, at which time his 
successor shall be elected at large. ' 

.Section 3. The Directors shall be ele;cted in the following manner: 
Directors from the Districts; 'Active Membe-rs of each District, by plural- 
ity vote of such members exclusively, shall have the right to elect .two 
Directors, except Districts ll'and 12 each of which shall have the right 
todect one Director. The remaining members of the fioard of Directors, 
except ex-officio members, shall be known as Members-at-large and shall 
be efected by the' Active Members , ■.in annual, meeting asserabled.i frpm those 
individuals nominated as follows: . i . 

The President o'f the Association shall appoint, a Nominating Committee 
consisting of one representative from each District and one who is in his 
judgment a representative of the- territory at la,Tge,, .which shall meet and' 
report to the annual meeting the names of individuals whom they nominate 
for Members-at-large of the Board af Directors, ^at the.ra,te, of one nominee 
foi; each place to 'be filled annually; or in its. discretion not;' to exceed 
two names more than the' number of places to. be filled. .The Committee 
shall also place in nomination one name for each vacancy that may 'have 
o.ccurred during the' preceding year by reason, of resignation,, death, or 
otherwise of any Director-at-large whose regular term of office shall not 
have expired. Nothing in this section shall be construed to prevent any- 
Active Member from voting for any other Active Miember or Members not in- 
cluded on the ballot of said Nominating Coir.cni tt.ee for Members-at-large of 
the Board of Directors. That number of individuals corresponding to the 
places to be filled at t'he particular meeting, receiving the largest number 
of votes of the Active Members in such annual meeting assembled, shall be 
elected members at large of the Board of Directors. .In case one or more 
candidates receive the same number of votes, then that one or those of 
such candidates requisite to complete the election shall, be selected by 
lot from among those receiving the same number of votes.. 

Section 4. Directors (other than ex-officia Directors as hereinbefore 
provided) shall 'be divided into three' classes ■ and shall be elected for a 
term of three years from and after an annual meeting, succeeding the 
Directors whose terras expire, provided that if the num,ber of Directors 
be increased, the new Directors shall be .divided by the Board of Directors 
then in office among the three- classes so that the number: in 'each class 
shall be as nearly equal as may be; the term of one. class expiring, at the 
next annual meeting; the term of the second class expiring at one year 
after the next annual meeting; and the term of the third class expiring 

3761 



..... . "2V4« . 

two years" after the next annual meeting. As and when Directors are elect- 
ed as successors to such Directors; their terms shall "be three years. 
The successor of a Director elected by each District shall be selected in 
the same manner as the retiring Director wns elected, and likewise a 
Director succeeding a Director elected by the Active Members of the Asso- 
ciation at large shall be chosen' by vote of such Active Members. 

Section 5. One-third of the total number of Directors shall con- 
stitute a quoriom at all meetings of said Board of Directors; but if there 
be no such quorum the members present may adjourn the meeting from tim^e 
to time. At all meetings of the Board of Directors duly convened, action 
of such Board shall be by affirmative vote of a majority of the members 
present, except as otherwise in these' By-Laws provided. 

Section 6. No member of the Association shall be permitted to have 
more than two individuals who are representatives of such member on the 
Board o'f ^Directors at any one time. ■ 2'his limitation shall not apply to 
ex-offic'ib members, for purposes of representation on the Bo-=rd of 
Directors" controlling, subsidiary and affiliated companies shall be con- 
sidered one member. 

Section 7. In the event of a vacancy in Directors-at-large on the 
Board of Directors, it shall be filled by the remaining Directors in 
office by a majority vote. In the event of an increase in the number of 
Districts prior to thirty days before an annual meeting, the Directors- 
at-large to be elected pu^suant to Section 2 of this Article shall be 
elected by the Directors in office by a majority vote. 

Any Director so elected shall hold office until the next annual 
meeting of the Association, when a successor chosen in accordance with 
pertinent provisions of this Article shall be elected for the remainder, 
of the unexpired term." In the event of a vacancy in Directors elected- 
by the members of Districts On the Board of Directors,' it. shall be filled 
by election by the members of the District in^ "question for the remainder 
of the unexpired term.- ' 

ARTICLE IV - COMITTEES ... 

District and Other Committees . 

Section 1. The President, subject to the approval of the Board of 
Directdrs'i shall from time to time designate a committee for each of the 
Districts; these •committees shall be known as "District Committees", and 
each member thereof shall be an Active Member of the Association or a 
representative of an Active Member. 

Section 2. The District Committees shall have no power to bind 
the Association unless expressly authorized .so to do by resolution of 
the Board of Directors, which resolution shall designate in. detail the 
manner in which the Association elects to be bound by the action of such 
District Conrr.ittee or District Committees. It shall be the duty and 
function of the District Committee — 



9761 



-275- 

a. To secure ne',- nemtcrs for the Association; 

■b. To keep informed as to Legislation affecting the ferti- 
lizer industry or &,n/ part of it, or in v/hich such in- 
dustry or anj'' part of it nn~j oe interested; 

c. To keep informed as to the \'ork of agriculturrl e:cperi- 
nent stations within the District; 

d. To coo-oer; te vith dealers, consumers rzid an"' others in- 
terested in the elinination of ujinecessary grades for 
use in the District. 

Such Go:raittee shall kee-^ minutes of Meetings held by it, of which copies 
shall "be mailed to the Secretary of the Association promptly after such 
meetings; each such Coniittee sha,ll likewise report to the .'.ssocia.tion 
annually the result of its activities, and from time to time to the Board 
of Directors. 

Section 3. All co'imittees, unless otherwise provided in the By- 
Laws, shall Tdo appointed "by the President as soon as practicable rfter 
the annual "business meeting of the Association. 

Section 4. All a-Dpointments to men"bership on committees shall 
"be for the -sriod "between the annual conventions of the Association., 
except when they involve the filling of a vacancy, in which case thejr 
shall "be for the remainder of the unexpired term of the previous in- 
cumbent or ixi^til a successor has been a'l'oointed. 

Section 5, The President, the Vice-President, aiid the Executive 
Secretar3'' and Treasurer shall be members ex-officio of all standing 
committees. The President shall be bj\ ex-dfficio member of all special 
committees. 

Section 6. All committees shall keep suitable records of their 
procep-dings, of which copies shall be filed promptly, by mail or other- 
wise, after each meeting, in the executive office of the Association. 

Section 7. Each Committee shall report to the Association annually 
the result uf its activities, and at such othor times as the Board of 
Directors or the nro'ooT officers of the Association may prescribe. 

Section 8. The Secretarj'- of the Association shall be secretary of 
each standing aJid special com:.uttee, except when the Board of Directors, 
in creating the co:tiittee, otherwise -provides. He is authorized to des- 
ignate an alternate to act for him when he is unable to a.ttend the meetings 
of any coimittee. 

Standing Commit tees s 

Section 9. Executive Committee. The President, subject to the 
approval of the Bor.rd of Directors, shall a^-ooint, from ai'nong the 
Directors, pn Executive Committee of not more than nine members, which 
shall in the intervrls between meetin^rs of the Board, have ajid exercise 
the oowers of the Board in the managmeut of the business aaid affairs of 
the Association. Five members of the Co-mittee shall constitute a .• 
quorum for the trrnsaction of businerss, IJlien unable to attend a meeting 
a member of the Executive Committee mn"" designate an aJ-ternaite. 



Section 10. Soil Inoi-ov.einent Goinittee , Subject' to' the p-p"o-roval 
of the 3oarc of Director^;, the Pre^icent v\cy c.p'ooirit p. Soil Im'orovement 
Committee of not more than sevent-en members. The Comnittee shall elect 
e. Chairman from amon^- those of its iiemberr- who a,re also members -of the 
Board of Directors. It shall "be the dut]'- of the Corimittee to form-alate 
policies and olans intended to increr.se tneuse of fertiliser, bv collect- 
ing end disseminatin,:' to formers, to federal, state and local agricultural 
T/orkers, and to the ;r.embers of the fertilizer industr-^ useful knor-lec'Te 
of all pi-oblem-s relatin^r; to soil fe-tilit--. The Executive Secreta^^y 
shall su'Dervise the execution of the plans and policies adopted by the 
Soil Improvement Coraiiittee. 

Section 11. Public "^.elations Committee . E::clusive of sx-officio 
members, this Commit ':ee shall consist of a Chair-nan and not more the.n 
ten members, appointed b-^ the President \"ith the approval of the Board 
of Directors. It shall be the cuty of the Comnittee to advise the 
Board of Directors anr" the officers of the Association on ouestiTns of 
national -'Olicy af.'^ectinr the fertilizer industi-r and to oerform such 
acditional duties as the Board of Directors m :^ from time to time assign 
to it. 

Section 12. Cast Acco"^' ting Co '.mittee. This committee shall con- 
sist of a Chairman andnot more than ten additional members, appointed 
by the President. It shall be the duty of the committee, "hen called 
upon, to ps'^ist in formulating R.nC. a-oplving scientific systems of cost 
accoui'itin.G, in the fertilizer inoustry, in orcer that its members may 
I:no" accuratel-'- the cost of their "oroducts aJid the relation of -orice 
thereto; it shall le-^iorm such other duties as ma"'- be imposed upon it 
from time to time. 

Section 13. Insurance Committee . This committee shall consist of 
a Chairman and not more than four rcditionaJ. membe-s ap-oointed b]'- the 
President. Its duties shall be the, considera,tion and safeguarding of 
the interests of members in their relations r/ith insurance com-oanies, 
aind- the giving of such information ax.d other services in connection 
therev,'ith as ma.-- be proper and ;oracticaoble. 

Section 14. Traffic Committee . This committee shall be composed 
of not more than tjilrteen members, one of ''nom shall be designated by 
the President of the Association to act as Chairman.- Under the direction 
of the Board of Directors, acting through the executive officers of the 
Association, it shall serve the As'^ocirtion in all exclusively mutual 
matters relating to freight rates, traffic regula;,tions and tr'ansportation 
generall"/. 

Section IS. Chemical Control Committee . This committee shall be 
composed of not to exceed eight members knor/n to be com.petent in the 
chemistry and teciinolo.^'- of the fertilizer industr---. It shall be appoin- 
ted b^r tiie President, T/ho shall designate one of its members as Chair- 
man. It shall be the dxitv of the committee to recommend for s-doption 
proper methods of anal-^sis enC. c lemical control; to cooperate '.7ith the 
properl" authorizec" officers of the several states in bringing about 
uniform and constructive enforcement of the fertilir:er la-Ts of the sev- 
eral states; to advise sjnd. assist in the preparation o-;- revision of those 
features of state la''s relating to com-oosition, analvsis and sampling, 
an;' to perform such other services in the field of fertilizer chemistr-'- 
and technology as may be required. 



-277- 

Section 16. Fertilizer Recover^^ Coniiittee, There^ shall "be a 
strmlint;,' connittee'to '^e Imoirn r.s tho Fertilizer Recovery' Con; littee;' conir- 
-posed of not less than t'-elve nenhers, selectei.1 a.s provided in this 
Section, rnd. such neraliers e::-officio -r: these Jy-Larrs may jrovide 

i.Ierahers, e.-ce-it neiihers ex-officio, shall he selected hy the active 
members of the Association at the anmi.al meeting of theTiemoers to serve 
until the next annual ueetinc of the nembers, ;:'rovidedJ 

That tJiere shall be at least one member '"r'^"- each district, and 
not more than five members from* any one district, but the Executive 
Secretary shall not be considered as from a district, and ^^rovided 
further: 

That members shall" be chosen rrith due regard for the interest of 

Small -iroducers, 
. ■ Medium producers, 

Large -oroducers, and - ■ 

Local producers. 
Regional producers, 
national producers, aiid 

Producers of mixed fertilizer, 

Produceis of superphosphate, ■ 

Producers of fertilizer naterials, 

and any other clr?.sses of producers vhich conditions in the industry may 
wa^rrant, and jjrovidod further: 

That, excluding members ex-officio, not more than tiro members 
shall be con.iected \7ith the sa.me producer, 

ilominations of lerson for membership shall be made by the Boa.rd 
of Directors. Additional nominations nay be made by motion, duly 
seconded, and carried. 

Slection' shall be ^oy a -oluralit ' of the votes ca.st. 

Should any vacancr occur subsequently to the Pa„ll meetin;.;', it shall 
be filled, for the unerroired portion of the term of the -jrevious incum- 
bent, by the Executive Co;imittee of the 3oard of Directors. Should a 
vacancy occur prior to the Pall meetiUi_';, such va.cancy shall be filled 
by the Executive Committee of the lioard of Directors, but the member so 
selected shall serve yjitil the Pall meeting. At the Pall meeting the 
active members shall elect persons to fill vacancies in the manner above 
provided for elections, to serve for the uiiex^ired portion of the tern of 
the original incumbents. 

Such committee shaJl have power to elect a chairmaji from among its 
own members and to designa.te the nuraber of riieiabers ^7hich shall constitute 
a quorum from the transaction of busi-iess. S\ich committee nay further 
delegate its powers, to such extent as it nay determine, to one or more 

9761 



-278- 

sulo-conmittees of its o\7n inem"bers which it may a;3-ooint» 

Such conrnittee shall have authority to represent the Association 
in all matters relating to the national Industrial Recovery Act, or to 
any law enacted or "oroposed for ehactnent in lieu thereof or "by way of 
amendment thereto, .njid shall have authority to employ such persons as 
they ma;;'" deem necessr.r'/ to effectuate such ounDOse, provided that no 
erroenditures, sho21 'oe made by such cOMmittee in excess of amounts 
provided for such purpose in the budget authorized hy the Association^ 
unless approved "by the Doard of Directors. 

Section 17, The Board of Directors may fron time to time, by 
resolution, create such a,dditional standing or special committees as 
it may deem requisite ajid prescribe their duties, 

AllTICLE V - lELTiriGS OP TIESOARD 03? DIRECTORS 

Section- i. The sjinual meeting of the Board of Directors shall be 
held immediately follovdng the adjournment of the annual meeting of the 
Association, and such meeting may be held without notice. At such meeting, 
the Board of Directors shall elect the officers of the Association for the 
ensuing year. 

Section 2, S-oecial meetihgs of the Board of Directors may be called 
by the President, and upon the written request of ten members of the 
Board, shall be called by the President, to be held at such time at 
such plE.ce and for such purpose as sh^l be determined by the President 
or stated in such written request. 

Section 3, . Hotice of he time, place and -ouruose of special meetings 
shall be given to the members of the Board by telegraphic or written 
notice sent or mailed not less 'thajti five days prior to the date fixed for 
such meetinj, 

ARTICLE VI - OPL^ICEHS 

Section 1, The officers of the Association shall consist of a 
President, a Vice-President, a Secretary, and a Treasurer, and such 
other officers as the Bop.rd of Directors may from time to time determine. 
Officers shall be elected by the Board of Directors at its annual meeting 
and shall hold office for one year or until their successors shall have 
been chosen and shall have accented office. The same person may hold the 
Office of Secretary and Treasurer, 

Section 2, The Board of Directors shall have poT-er to remove 
from office at any tine, with or without cause, any officer of the 
Association, and to fill any vaccncry which may occur through death 
resi'-^ation or other /ise. 

Section 3, President It shall be the duty of the President to 
-oreside at all meetin;:;3 of the Association and of the Board of Directors, 
and he shall be e:c-of..'icio member of each standing and special committee, 
Iraiaediatel^'- after his election by the Board of Directors, excei^t as 
otherwise provided in these By-Laws, he shall appoint, subject to the 

9761 



-279- 

arproval of the '?oard of Directors, tue members of the various standing 
committees which have been created as hereinbefore provided. He is em- 
powered to appoint, in addition, such special committees as he may deem 
necessary from time to time. 

Section 4. Vice-President . In the absence of the President, or in 
case of his inability to act, the Vice-President shall_have and exercise 
all the powers of the President, and he shall also be ex-officio a mem- 
ber of each standing committee. In the event of the absence or inabili- 
ty to act of the President and Vice-President, the Board of Directors 
shall select a Chairman, who shall act as President pro tempore. 

Section 5, Secretary , It shall be the duty of the Secretary to make 
and keep all records of the Association; to notify the members of the 
annual meeting and of all special meetings; to notify the Board of 
Directors of meetings, and to perform such other duties as may be 
delega.ted to him from time to time by the President or by the Board of 
Directors, 

In the discretion of the Board of Directors, the Secretary may be 
designated the Executive Secretary, In this event, he shall be an 
ex-officio member of standing committees, and, in order to insure economy 
and uniformity of purpose, recommendations of proposed measures, projects 
and expenditures arising from such committees shall be prepared by him 
for presentation to the Board of Directors, by committee chairman or 
otherwise, as the President may direct. The iixecutive Secretary shall 
devote his time and effort to promoting the objects of the Association, 
managing its affairs and extending its membership and influence. He 
shall keep in close touch with all the activities of the Association and 
shall inform the members regarding matters of interest to them. He shall 
have authority to employ and remove, subject to "the approval cf the 
president, the employees of the executive department, and the employment 
or removal of other employees shall be subject to his approval. He shall 
have charge of the offices and property of the Association and shall be 
subject to the direction of the president and the Board of Directors, 

Should the Association have an Assistant Secretary that officer 
shall perform such duties as may be delegated to him from time to time 
by the Board of Directors or the Secretary. 

The Secretary and the Assistant Secretary shall respectively be 
compensated for their services and be reimbursed for such expenses as 
may be approved by the Board of Directors. 

Section 6, Treasxirer . The Treasurer shall collect and have the 
custody and control of all the moneys of the Association and shall keep 
aji accurate account of all the moneys received and paid out on account 
of the Association, which account shall be at all times open to the 
inspection of the Board of Directors. He shall render a report in 
writing of his receipts and disbursements at each anndal meeting of the 
Association or at such other time as the President may direct. 



.9761 



Por the faithful discharge of his duties, the Trea,surer shall 
furnish an indemnity 'oond in such sum as the Bop.rd of Directors ns:^ 
prescribed,, the cost thereof to "be paid "by the Association. 

ASTICLE VII - DUES 

, Section 1. P-onds for financing the Association are to l3e provided 
from the dues to "be assessed upon and -oaid 'bj the Active and Associate 
Hem"bers and fr-o;i such contrihutions frqm menhers Snd non-nenfoers as may 
be received by the Association \7ith the approval of the Board, of Directors 
Such funds are to he used for payin^j the general- exoenses of the Association 
and of such activities as nay be deternined iipon fron tine to tine "by 
the Board of Directors. 

Section 2. The a:inual dues to he assessed upon and paid by the 
Active Members shall be assessed in each year b^r the Board of Directors, 
such assessment to be made by pjoportioning the a:jount of the budget of 
the Association for the coning fiscal year, ajpproved as hereinafter pro- 
vided, anong the Active lie'ibers of the Association in such manner- as 
the Board of Directors in its discretion may fron tine to tine determine 
having due regard to the tonnage of fertili:^er and/ or fertilizer materials 
sold, and/ or consigned and shipped by the res'oective Active iiembers in the 
last fiscal year for fertilizer \ises a>id a'lplying such rela.tiVe . rates 
per ton for bagged fertilizer, for bul]: supeyyjhosphate, and/ or fertilizer 
materials, as the Board -of Directors in its drscretion may consider 
proper. The budget upon '7hich the assessment of dues shall/be based shall 
be the budget vfhich is a'7:3roved«b:,'- the vote of the Active I.-Iembel's of the 
'Association iii annual' meeting' assembled. ThfeprqDOsed budget shal". ">e 
prepared by a special committee appointed for the purpose from time to 
'time by the Presic'ent, i7hich proposed budget as ai'^roved by the Board 
of Directors shall be' submitted to the Association at its annual meeting 
for action. 'i 

Section' 3. The anniia.1 duos to be assessed uoon and, paid by Associate 
Members shall be in such amo\mt as shall be assessed in each year by the 
Beard of Director's and aroproved by p. vote of the. Active !Iembers of the 
Association in aiinual meeting assembled. 

Section 4. All dues siiall be oayrble in eqtial qu.arterly instalments 
in each year, the first payment to be due on Aa,-;ust 1 of each fiscal 
year. Subsequent instalments shall be due and payable as of the first 
day of each quarter, beginning October 1. 

Section 5. Any member v.'ho shall fail to -os.y his dues -ithin sixtjr 
(so) days after notification \iy the Trea-Surer that he is in arrears shall 
be reported -oronptly by the Treasurer to the Board of Directors for 
a.ction. 

Section 6. The fiscal jcex of the Assbciation. shall commence' on 
July 1 and end on June 30 of the follo^ving /e'^r• 

ASTICIZ] VIII - AEPLIC-.TI T.Q ?C2 " l^-CU -iSIII P AI/D aESIG?TATIO:'S 

Section 1. Any individu:"!, firn or corporation eligible for active 
or associate membershro in the Association a.s provided in Section 2 and 3 

9761 



-281- 

of Article I of these Sja-Lpws, shall be admitted to membership in the 
Association upon filing with the Secretary an approriripte form of 
aprlication showing such eligibility, 

-section 2, Any member .may resi£;n from the Association vdthin 
thirty days after adjournment of the annual meeting by submitting a 
written notice of r e?i,gnation, provided that such member's dues have 
been paid to the end of tne expiring fiscal year. Any member may 
resign at any other time upon filint'-; i^ith the Secretary written 
notice of resignation, out such raemL^er shall be obligated to pay the 
dues assessed for the tni. n current fiscal year. 

Section 3, All reL-.ignation s must be filed with the Secretary 
and by him referred to the Board of Directors, 

Ar.TICLE IX - bK-ICES_ 

The principal corporate pfiice of the Association, as recuired 
by law, shall be at such place in the State oi ..ipr,'land as the Board 
of Directors shall from time to time designate, and the Association 
may have saca other offices as said Board may determine from time 
to time. The executive office of tiif- Association shall be located 
in the City of 1,'a.shington, District of Columbia, 

/ATI CLE X - DISSOLUTION 

This Association 'nay oe dissolved in any manner provided by 
the laws of the State of :,Iaryland, but only upon the affirmative 
vote of t'^o-thirds of all of the active members, at any meeting 
duly convened and held, and called for the purpose. 

The assets of the Association remaining after the payment 
and discharge of all debts and liabilities of the Association 
shall, in the event of dissolution, be. distributed to the members 
of the Association, both Active and Associate, and to non-members of 
the Association, and to non-member contributors, in proportion to the 
relative amounts of their lespective contributions, by way of dues 
or otherwise, to the funds of the Association during the three fiscal 
years next preceding the vear in which dissolution is effective. 

Whenever dissolution is authorized the proportion of the dues 
or contributions covering the period of the then current quarter which 
has already expired shall become immediately due and payable, and if 
not paid within 30 days after the date of the authorization of dissolu- 
tion shall, together with any dues or contributior s previously in arrears 
and remaining unpaid, be offset against the share of the distrrbution 
to which such member or contributor rould be entitled other'-ise. li, 
however, any unpaid dues or contributions shall be pa'id ivithin thirty 
days after the authorization of dissolution, the amount of such payment 
shall be added to the total amount used as a basis for calculation of the 
share of each member or contributor in the assets of the Association, 

The Board of Directors at the time dissolation is authorized as 
aforesaid shall determine, subject to the r^pprov'l oi the court in case 
dissolution is b-^ court proceedings, trie exact aiaourt distributable in 
dissolution to the members according to tue fore'roirs- provisions, and 
shall like'-ise determine all cu.-stions of lact vr-ich may arise in connec- 
tion with the computation of the lespective interests of tne several members 
of the Association. 
9761 



ARTICLE XI - OrDEr. 0? 3USIUESS 

At all corporate meetings of this Aasociation the order of busi- 
ness shall be as follows: 

1, Call to order, 

2, Roll call. 

3, Heading of minutes of previous meeting. 

4, Opening addresses, 

5, Reports of officers. 

6, Report of the Nominating Committee 

7, Report of the Budget Committee 

8, Report of other committees, 

9, Unfinished business. 

10. New business, 

11. Election of the Board of Directors. 

12. Adjournment. 

ARTICLE XII - Ai-ETOlviENTS 

The Board of Directors shall have the power to make, alter and 
repeal additional and supplementary By-La^s not inconsistent with any 
of the By-Lav's ado-oted by the Active Members, at a.ny meeting of the 
Board of Tirestors by a majority vote of the members present, provided 
notice of the TDroTjOsed change was given in the notice of meeting or 
'^'aived, and the Ey-Lav's of the Association, including those made by 
the Board of Directors, may be altered, amended or repealed at any 
meeting of the Active • Members of the Association by vote of a majority 
of such members present, provided notice of the proposed change was 
given in the notice of the meeting or waived, 

ARTICLE XIII - MISCi^LLAJ-EOUS 

K'hen Questions arise UDOn which, in the judgment of 'the Board 
of Directors or of pny of the Comiriittees, as the case may be, the 
sentiment of the members of the Association would be helpful to the 
Board or 'to the Coi.imittee, sxich Questions may, by direction of the 
President, be submitted by mail to the voting members of the Associ- 
ation, and the ans^'ers oi' such members may then be received and 
tabulated by the Executive Secretary and the results thereof furnished 
to the Board or to the Corxnittee, as the case may be; provided, that 
no approval, consent, or other response so obtained shall De deemed 
to be a vote of the members having any legal force or effect '"ith 
respect to action '-hich would or may by law be taken oy the members 
of the Association, 

ARTICLE XIV - COFiORviAI'CE MTH NaTI'-FAL INDUSTRY f^COVERY 
ACT 

The By-La.'-'S of the Association are hereby amended in every respect 
to such extent as may be necessary to conform to the National Industrial 
Recovery Act and to the provisions of the Code of Fair Competition for 
the Fertilizer Industry and' the rules provided thereunder, and all tjrovi- 
sions of the Bv-Laws not in conflict there-^ith shall remain in full effect, 

9761 



CODE or ?Ali. COLPLTITIOIT 70R ITHS 7L3n!lLlZ22 iriXJST2I 

(Adopoed in rccM'dnnce \ni,h tne resolution adopted "b;,- 
the Convention ond subject -':o revision "ov the 
j?ertili'r;er r.ecoveiv Co^-i; iitt>?e and the 
I:3.tio;;d,l ..ecovei';- Ac'T.iiniu'tration) 

Al'JIlGLZ I. PUliOGE 

Tliis Code is set v:p for the -airiose of increasing enploynent, 
estahlishin,-; fair and adequate vra.^'es, effectini']; necessaiy 3:eduction of 
hours, inproving standards of Irhor, and e I iininating unfair trade prac- 
tices, to the end' of rehahilitatiii..;;: the Tertilizer Industr;;- and en- 
abling it to do its pa±'t to-^'ard establishing; thc^t balance of industries 
uhich is Decesoar;"- to tii--' restoTcation and" ;aaint.en&Jice of the highest 
practical degree of -otiblic ■;elfarc. 

It is the declared purtjGse of the i;:'ertili%er Industry and adher- 
ents to this Code to bring, insofar as nay be practicable, the rates 
of '.Tages X'aid -Tithin the Tertilizer Industry to such levels as are 
necessar;"- for the crea.tion and naintenaaice ^of the hi.jhest practicable 
standard cf living; to restore the inco'ue of. 'enteiriTrises ijithin the 
incoistr;- to levels uhich T-^il]. ma.":e possible tlie pajnient of such 'rages 
and avoid tlie further 'derjletion and destiuctioh of capital assets; 
and fron tfie to ti'ie to revise the rates of -"Ta-ges in svich raanner as 
pill c'Lirrently reflect the equitable adjustment to variations in the 
cost of living. 

ARTICLE II. •pj\IiTiaiPATI01T 

Partici'Tation in this Cods, and any subsequent revision of or 
addition to the Code, shall be extended to any rierson, partnership or 
cor;30ra.tion in the Fertilizer Industrjr ^rho a.ccei;ts his share of the 
cost and responsibility, as "ell . as; the' benefit, of such participation 
by beconing a nenber of The ilationcal fertilizer Association. 

A2TIGLS III. DlVISiOiyOf TKZ IH^uSTZT 

A. PO'ners 

i?or the puig;'Ose of the a.dininistratioh of this code the Fertilizer 
Industr;^ shall be divided into divisions as set forth belov'. Sach 
division shall designate or establish itfj o'.'n a^diinistrative agency 
or agencies. Each such division shall be, inde-iendent and self-govern- 
ing in respect of all conditions tmd problsr-s relating exclusively to 
the said division, subject nouever to the g-';.io-'al i^ixiervisory powers 
of the Pertilizer llecover;^ Coriiittee as l.er^.rinr iter ret forth. Pro- 
posals in respect of matters aff ectin:: lore tj;aa one division nay be 
initiated bs" any division,' and '-.hall '^je ;,vh' .it i;,e;. for consideration 



-284- 

to the Tertilizer Hecoverjr Committee of The national Fertilizer Asso- 
ciation, hereinafter described, and its determination shall be binding 
upon said division and all other divisions affected thereby. 

B. Nanes of Divisions 

Divisions are hereby established as. follov.'s: 

i.ixed and Bagged Goods, 
Sulphuric Acid, 
Phosphate Rock 
nitrogen, 
Superphosphate, 
Potash, 
Sulphur , 

Iliscellaneous Plant Food Division (covering all other 
materials used as plant food); 

provided that if the manufacturers of Sulphuric Acid, Phosphate Hock, 
Nitrogen, Potash or Sulphur determine to organize either themselves or 
with others in forming codes of fair competition, then such divisions 
shall be e::cluded from the operation of this Code. 

C. Administrative Committee 

Each of the above divisions, and any others rrhich may subsequently 
be formed nithin the Fertilizer Industry, shall set up an Administra- 
tive Committee for the purpose of administering the provisions of the 
Code, to secure adherence thereto, to hear and adjust complaints, to 
consider proposals for araendments thereof and exceptions thereto, 
(and such other provisions as you may nish to include), and otherwise 
to carry out rithin the division the purposes of the National Industrial 
Recover;- Act as set forth in this Code, 

If a division, as named above, does not concur in the submittal 
of this Code; or if, at any tine thereafter, a division fails to per- 
form its obligations as provided here under, the Fertilizer Recovery 
Com:-.iittee of The National Fertilizer Association, hereinafter des- 
cribed, is hereby empov/ered to adopt a Code for the division and may 
provide for the administration of that Code as if said Fertilizer 
Recovery Committee were the Executive of the division concerned. 

ARTICLE IV. DIVISION REGULATIONS 

A. Labor Code 

Each of the above divisions, and any other which may subsequently 
be forried, shall promptly undertal:e the Toraulation of a labor code, 
which shall be submitted through the Fertilizer Recovery Committee, 
after approval by it, to the President of the United States for his 
approval. 

The labor code established "by the said division shall, upon 
approval of the Fertilizer Recover;.'- Committee, be binding upon all pro- 
ducers of products in such division. The labor code of each division 



-285" 

shell contain the follorint;; provisions: 

(a) Ei.iployees in the Fertilizer Industry'- shall have the right 
to organize and har.'iain collective!;'- through representf^tives of their 
ovm. choosing, an", shall te free ,fron the interference, restraint, or 
coercion of employers of lator, ' or their p^-ents in the desi,r^ation 
of such representatives or in self-or-^ani 'nations or in other concerted 
activities for the p-aroose of collective oar-iaiuin:,' or other inutuaJ. 
aid or protection. 

(h) ilo employee in the fertilizer lnc.:a^.tT2r, and no one seeking 

employment therein, shall he reqiiired .as a condition of emplo^nent 

to join any company union or to refrain from joining a lahor organiza- 
tion of his O'-Ti choosing. 

(c) Employers of lahor in the fertilizer Industry agree to 
comply '-'-ith the naxim\ii.i hours of lahor, minir-nm rates of va-j, and 
other "orlzing concitionr. approved or prescrihed by the President, 

And, in addition, 

(d) A classification of kinds, of lahor in the Fertilizer 
Industry. 

(e) Laximmi hours of each class of laoor, and e:xeptions. 

(f) ianinuTi rrages for each class of lahor, and e-ceptions, 
vrhich shall tal:e into consideration geographical location of plants 
and verying skill of employees. 

' , (i') Such other provisions as nay he foun.d necessary in regard 
to working conditions. 

B. Proc\iction Code 

A production code T'ill he rrorked otxt later in cooperation rrith 
the industry in ea,ch of the territories. There has not heen time to 
prepare one for suomittal no'^, 

C. Price; Cocle 

Each of the ahove divisions, and anjr 'others rrhich naj'- siihsequently 
ho formed, shall proceed at once to provide for standard methods of 
cc^tin.^ nhich shall he used oy all ma^rafacturers nithin that division 
for the pur^DOses of this section of the Code. 

Each division, rrith the approval of the Pertilizer Recovery 
Comittee, shall divide the United States into zones suita.hle for the 
enforcement of the code of fair conpetitic^n ■ n'" shall determine for 
each s"ach zone minimum prices fur t''-e rifxt :. : i/':. rades of fertilizer 
and/or fertilizer materi-alc loIC. tljercia, v\,ick .irices shall he fair ,. 
both to the pioduccr and t;-' tl;u conru.f]^ r^,. (Mv.olf the industry to 
pay rates of irages neces-iary t) i.^alntain t/^; hi. hG;;;t practicable 



9761 



- -see- 
standard of living for lalDor. Schedules of such prices shall te sub- 
mitted by the Tertilizer Recover^'- Conruttee to the President oi' the 
United States for approval "onder the ?Tational Industrial Secover;' Act. 
The sale or ofier for sale of any fertilizer or fertilizer naterial 
at a price helor? the miniiauii price so established therefor, shall he 
deemed to he an unfair method of conpetition in violation of this 
code. 

AFJICLE V. ?EHTILIZER ?J:C0i7I]?.Y COu'ITTSE 

A. Ilepresentation 

There shall "be a fertilizer Recovery Coni.iittee of The I'ational 
Fertilizer Association appointed ojr the President of The national 
Fertilizer Association uith the approval of the Board of Directors. 

This Fertilizer Recovery Goronittee shall he the general planning 
and coordinating agency for the industry in respect to all matters 
under the Industrial Recovery Act. Its members selected ty established 
divisions shall be empowered by the said divisions to act for them 
conclusively in respect to all natters befoi-e the connittee for con- 
sideration rjid within its jurisdiction. The conmittee shall have povers 
and duties as jjrovided herein, and in adt.ition thereto it shall 

(a) From time to tine req\iire such reports as in its judgm.ent 
may be neccssa.Ty to advise it adequately of the ac'ininistration and 
enforcement of the provisions of this Code; 

(b) Upon conpla.int of interested parties, or upon its 0'.7n 
initiative, nal:e such inq^uiry and investigation into the operation of 
the Code as nay be necessary; and 

(c) Lal:e rtiles and re.gulations necessary for the administration 
and enforce'ient of this Code. The Comr-.ittee may delegate any of its 
authority to sub-coromittees of its o-ti members and meof designate such 
agents as it shall detenune. 

ARTICLE VI. IIOUSTRY REGULATIOIIS 

A. I.iarlzeting Code 

The fertilizer Recovery Connittee :ia:'- establish a marketing code 
TTith provisions rith respect to: 

(a) Classification of outlets or p\irchases and recognition of 
standard and economically Justifiable price differentials among them; 

(b) In order to eliminate Tiaste, reduce the cost of npjiufac- 
ture, bearing in nind the economic interests of the fan'ier, the 
Fertilizer Recover^'- Committee nay establish a list of grades of mixed 
fertilizer for each state. The sale or offer for sale vr'ithin any 
State of nixed fertilizer not conforraing to one of the grades so 
established, shall be a violation of this Code, -nrovided that the 



9761 



■- -287" 

Pertilizer Recovery Connittee nay provide such exceptions from this 
rale as it cleerjs necessarj'; 

(c) Cooperative acvertisin^;; ioi- the incustry; 

(d) Collection ?Jirl interchange of credit information; 

(e) Cooperative adninic.tration of insolvent deotors; 

(f) Establisliment of iiiniinuii consui.ie:: prices to simplify 
oTDservrJice of the code; ■ 

(g) Limitation of S2.1esnen ty tonnage and/or territories vrith a 
viei7 to reducing cost of distribution. 

.(h) And/or other aspects of narlieting. 

3. . Trade Practice Pailes 

The folloijing shpll be deened to be "unfair competition nithin the 
meaning of the' Industrial Secover^^ Act: 

(a) The defamation of competitors by falsely imputing to them 
dishonorable conduct, inability to perform contracts, questionable 
credit standing, or by other false representations, or the false 
disparagement of the grade or quality of their goods, nith the tenden- 
cjr and capacity to mislead or deceive purchasers or prospective pur- 
chasers, is an rjifair trade practice. 

(b) The payment or allowance, e::cept as required "oj laxr or 
rebates, revisions, commissions, or unearned discounts, vfhether in the 
form of money or otherr/ise, or extending to certain purchasers, 
s-oecial services or privileges not extended to all purchasers under 
like tenis and conditions. 

(c) Withholding from or inserting in the invoices statements 
which mal:e the invoice false regarding the liaole or any part of the 
trojisaction represented on tlie face thereof. 

.,(d) Providing txuck service rrithout adequate charge for it, 
or reimbusing the dealer, purcha,ner, consignee or agent for the cost 
of tnacking if reimbursement is not provided for in the manufacturers' 
price list, 

(e) Selling or consigning chemicals and materials rith special 
concessions, or at reduced prices, given to induce the buj'-er or. con- 
signee to 25urchase mixed fertilizer and/or other fertilizer materials. 

(f) Fairo.re to enforce in good faith the terms of contracts 
previously made for the sale of fertilizer, for er.a.mple: 

(l) Selling on terms that reoiiire the pa/.^ient 
of sight dra-ft on presentation of bill of lading 
(S.D.3.L, ) and tlien ^-^aiving the obliga.tion to pay 



9761 



-see- 
cash "before documents or goods are delivered 
thus deferring the pajTnant of the cash to some 
future date. 

(2) Selling aiid delivering goods on tine, consign- 
nent or open hill of lading terns on S.D.B.L. price 
or waiving earned interest. 

(g) Furnishing special containers, rjreparing special formulas 
for individual buyers or consig-nees or using special ingredients in 
standa-rd formulas, without adequate charge fo:- the cost of such con- 
tainers, formulas, or special ingredients, as an inducement to the 
malring of a contract and/or sale. 

(h) i.:al:ing special allorrances to huyers or consignees under the 
g-aise of advertising expense, or ;^-:iving an;' other foni of gratuity. 

(i) Adopting selling methods tliat promote secret rebates and 
concessions, such as: 

(1) Em'iloying a h'u^jrer or consignee or his agent 
or any one employed oy or connected I'ith a hu^'^er 
or consignee rrith the purpose, design and effect 
of influencing the ousiness of such customer. 

(2) Carrying on hooks hy seller or consignee 

as delinquent, halai^ces due hy solvent customer 
i.7ith no intention of reo^uiring ultimate payment, 

(j) Enabling the purchaser or consignee to obtain fertilizer 
apparently on cash terms but iii fact on credit erctended to him by or 
througli the manufacturer, as, for example: A transaction covered by 
a sight draft and bill of lading under '-/hich the purcliaser or consi;:piee 
is made to appear as honoring documents upon iD-resentation by pa^'^ient 
with his oim funds, when in fact the cash involved was obtained in 
whole or in part upon a negotiable instrument (usually discounted at 
a banl:) bearing the endorsement of the manufacturer; or a transaction 
by which the najaufacturer, although he does not actually endorse the 
obligation, renders himself legally or morallj^ responsible for its 
payment if the purchaser or consignee should fail to meet his obli- 
gation to the banl: at maturity. 

(h) Ref-onding to the biiyer or consiipiee, either directly or 
indirectly, any part of the purchase price on account of goods accepted 
and/or settled for by the buyer or consignee under the terns of the 
contract. This practice is commonly referred to as "retroactive 
settlement," 



9761 



-289- ^ 

ARTICLE VII. STATISTICS 

In orc.er to provide datn aecessary for the adijinistration of 
the ITo.tional Incoistrial Hecoverj'- Act the iienhers of the Tertilizer 
IriduEitr;- shall furnish, aiio. the Tertilizer necove;.y Connittee shall 
gather, statistical inionaation from all .the raenoers oi the Industry. 

ARTICLE VIII GEilEPAL 

(a) ITo provision in this Code shall "be interpreted or applied 
in such a nanner as to: . ' , ■ 

1. Procote raonopolietic practices, 

2. Pemit or encourage unfair corraetition, 

■ 3. Elininate or opiixess suall enterprise, or . . . 

4. Discriminate ar'i'ainst sv^fetll enterprise. 

("b) This Code or -an;' of its provisions nay be cancelled or 
modified rjid any approved rule issued thercander shall he ineffective 
to the e-::tent necessary to confom. to. any action hy the. President- 
under Section 10 (h) of the hational Inci^strial Hecoverj'- Act. 

(c) The Fertilizer Recovery Co-ij-.ittee of the Fertilizer Industry 
shall fron tine to tine nahe .to each Division estpjsllshed or to "be. , 
esta"blished under tjie provision, of tnis Code, such reconxiendations, 
incliidintj; anendnents of the Code, as in their judfj:-ient__\-.-il3- aid the . 
efiective acljiinistra-tion of this Code or may be necessary to effe.c- 
tuate v'ithin the Fertilizer Industry or rithin any Division thereof 
the pun^ose of the National Industrial ilecoverj^ Act as administered. 

(d) AiMendjnent .to this Code may be proposed, by. any established , 
division to the, Fertilizer ilecoverj- Gomnittee or v'^oy be initiated by it, 
and uhen subnitted to and approved by the Fertilizer Recovery 
Gomnittee and by the Presi.dent of the United States or ]ais noninee 
shall be ef:'.ectiv.e.^ , . ■ , ■ • - . 

(e) Violation 'b^'- any ;-iroc"'aicer Cf' fertilizer or fertilizer 
material of exij provision of this Code, or of any ap-oroved rule 
issued thereunder, is an unfair method of compfetition. 

(f) This Code shall be in eflect beginning ten days after ■ 
its a-roroval by the President of the United States. 



9761 



"290- 

APP^MBIX II 

EXHIBIT 12 

F^RTILIZSa RUCO'I^RY COJ/IMITTl]^ 
; (ps constituted June 21, 1933) 

^z O^Ticio 

John J. Watson, President, The National Fertilizer Association 
Charles J. Brand, Frecutive Secretary and Treasurer, 
The National Fertilizer Association 

District No._l 

■5. H. Jones, Anothecaries Hall Comnany, Watertury, Connecticut 

District No « 2 

Horace Bowker, The American Agricultural Chemical Com-oany, 

New York City 
T. "5. Milliman, Coo-oerstive G. L. F. Mills, Buffalo, New York. 

, ■ . District No . 3 

B. H. Brewster, Jr., The Bau^h.-*- Sons Co., Baltimore, Maryland 

C. F. Fockley, The Davison Chemical Co., Baltimor=^, Maryland 
TiT. W. Price, Smyrna, Delaware 

W. F, Valliant, Valliant Fertilizer Co., Baltimore, Maryland 

District No . 4 

C. F. Burroughs, F. S. Royster Guano Co., Norfolk, Virginia 
George A, Holderness, Virginia-Carolina Chemical CoriD., 

Richmond, Virginia. 
Oscar F. Smith, Smith-Dous-lass Co., Norfolk, Virginia 
Thomas H. 'JTright, Acme Manufacturing Co., TTilmington, North Carolina. 

District No . 5 

J. Ross Hanahan, Planters Fertilizer ^r Phosrihate Co., Charleston, 

South Carolina 
A. F. Pringlc, Merchants ""ertilizer Co., Charleston, South Carolina. 
J. D. Prothro, Aiken Fertilizer Co., Aiken, South Carolina. 

District No . 6_ 

H. B, Baylor, International Agricultural Corp., Atlanta, G-eorgia, 

J. E. Sanford, Armour Fertilizer Works, Atlanta, Georgia. 

A. D. Strohhar, Southern Fertilizer <P- Chemical Co., Savannah, Georgia, 

District No. 7 

■5. A. Brandis, Standard Chemical Co., Troy, Alabama 

J. V^. Dean, Knoxville Fertilizer Co., Knozville, Tennessee. 



-291- 

District No . 8 

C. D. Jordan, Southern Cotton Oil Co., Few Orleans, La. 
P. H. Manire, Marshall Cotton Oil Co., Mr^rshall, Texas. 
C. D. Shallenb^r^er , Shrevex)ort Fertilizer Works, Shreve-oort, 
Louisiana. 

District Fo . 9 

R. P. Benedict, Darling & Co., Chicago, Illinois. 
L. W, Howell, Swift 8- Co., Chicago, Illinois. 

District No . 10 

leller Nohle, The Pacific Guano & "fertilizer Co., Berkeley, 
California. 

District No . 11 

C. T. Melvin, The Gulf Fertilizer Co., Tamria, Florida. 

R. B. Trueman, Trueman Fertilizer Co., Jacksonville, Florida. 

Nitrogen 

A. P. Axtell, Anglo-Chilean Sales Corp., New York City. 
W. N. Mcllravy, The Barrett CoTmoany, New York City. 



A. A. Holmes, United States Potash Co., New York City. 

Frederic Vieweg, American Potash & Chemical Corp., New York City. 

Sulphur 

H. R. lemiDle, Texas Gulf Sulphur Co., New York City. 

Sulphuric Acid 

■5. H. Westlake, Tennessee Corporation, New York City. 




tHJUVUHIC iCID 

(Data repartad by rertUiser Hanufaeturara only) 

Daeaafcar. 1988 

Contparaa with praceaing nontha 

Statistics on production, purehaees, stocks, etc., of sulphuric acid, based on data raported by 69 far- 
tillzar nanufacturers for 1935 and 71 for 1934 and 1933, wara ralaasad today by Director W. L. Austin, Boraan 
of the Census, Department of Conmeree, and are presantad In tha following tables. Two nanufacturers, repoort- 
Ing prior to 1935, have gone out of business. 



Table 1. 



AMD 



(Quantities expressed in short tons; Northern District, States north of Virginia-North Carolina 
line; Southern District, States south of Virginia-North Carolina line) 



— ^ — ' 

and 


MAMJFACTORERS 


PUHCBA3ED FHCM FIHTIUZB 
MAmFACTORESS 


PDBCHASED FROM NON-FERTI- 
UZER UANnFACTOREBS 


Month 


Total 


Northern 
District 


Southern 
Dlatri ct 


Total 


Northern 
District 


Southern 
District 


Total 


Norlliern 
District 


Southern 
District 


1935 

January. 

February 


169,301 
154,359 
141,358 
139,333 
1U,102 
99,176 
110,249 
123,209 
130,260 
149,729 
153,792 
172,823 


98,802 
86,546 
90,944 
98,748 
79,632 
73,343 
77,441 
77,710 
82,306 
87,491 
92,171 
110,445 


70,499 
67,813 
50,408 
43,585 
31,470 
25,833 
32,806 
45,499 
47,952 
62,236 
61,621 
62,378 


34,545 
26,269 
18,769 
11,760 
11,610 
16,830 
27,714 
35,573 
35,742 
33,396 
35,134 
30,185 


13,705 
12,165 
10,646 
7,508 
6,609 
12,852 
14,305 
10,768 
7,669 
10,093 
16,249 
14,630 


20,840 
14,104 
8,123 
4,852 
4,801 
3,978 
13,409 
24,805 
28,073 
23,303 
18,865 
15,555 


2l|647 
18,636 
13,397 
13,186 
20,662 
23,334 
10,638 
1£,111 
17,540 
►18.946 
22,402 


18.035 
8,778 
10,929 
7,874 
7,108 
14,378 
17,246 
7.960 
4,528 
9.344 
12.968 
14.061 


9.789 
12.875 




5 523 








6.484 
6,068 
2.678 
7.569 
6,196 
•5,968 
8.341 


July 

August 

September 

October 

November 

Decon'^er 


Total (Year) 

1934 

January 

February 


1,654,685 

143,811 
139,61! 
132,549 
119,619 
107,563 
92,894 
88,049 
97,478 
116,120 
149,968 
159,781 
172,052 


1,052,581 

82,800 
79,334 
83,046 
81,149 
80,068 
72,119 
65,887 
65,569 
74,960 
89,969 
91,339 
99,399 


602,104 

61,611 
60,281 
49,503 
36,470 
27,300 
20,778 
22,162 
31,889 
41,160 
59,999 
66,442 
72,653 


317,527 

32,312 
20,151 
16,945 
12,158 
5,739 
3,441 
7,411 
13,048 
21,136 
36,164 
39,330 
36,734 


137,399 

13,697 
3,833 
4,763 
8,084 
4,367 
8,858 
3.718 
4,983 
8,478 
10,851 
18,787 
18,330 


180,128 

16,618 
18,318 
18,188 
«,1S4 
1.388 
1.189 
3.699 
8.068 
18,661 
87,313 
26,603 
84,404 


820.517 

29,470 
27,300 
87,766 
82,781 
18.793 
26,577 
85,951 
17.060 
12.560 
27,249 
28.796 
88.813 


133.187 

16.798 
12.332 
14.269 

».»73 
15,002 
88,398 
81,239 
13,817 

7,113 
18.492 
16.146 
19.083 


87.330 

12.738 
14,968 
13.497 
18.748 
3.791 
4,188 
4.718 
3,843 
5.447 
8.787 
6.650 
9.730 




May 


June 




August 

September 

October 

NoTembor 

December 


Total (Year) 

1933 

January 

February 


1,519,504 

U4,618 
99,825 
79,328 
73,900 
90,605 
76,530 
98,587 
ia,016 
133,056 
"■'6.406 
-So, 407 
155,695 


965,059 

69,174 
57,870 
47,978 
51,007 
68,777 
66,312 
79,919 

1 82,472 
81,323 

j 96,917 
91,478 

' 95,059 


554,445 

45,444 

41,955 
31,380 
28,893 
21,826 
10,218 
18,668 
48,544 
51,733 
61,469 
63,929 
62,636 


246,568 

18,794 
10,628 
10,309 
18,122 
7,311 
10,323 
83.629 
89,108 
17,768 
27,126 
34,869 
36,181 


90,014 

7,848 
3,881 
8,768 
3,683 
4.831 
8.173 
18,407 
11,168 
4,036 
7.304 
U.079 
11.706 


188,861 

8,848 
6.804 
4,5U 

8.499 
8.780 
4.180 
U.4e8 
17,937 
13,787 
19,888 
83,810 
84.478 


887.086 

16.193 
10,384 

8.844 
14.487 

8.247 
13.880 
16.147 
81.804 
83,604 
31.693 
83,680 
83,763 


186,899 

12,054 
8,378 
4,933 
7,119 
4,831 
9,880 
8,156 
9,606 
6,493 
17.797 
88,139 
13,481 


100.487 

4,139 
8.008 
3.611 
7.368 
3,416 
3,470 
7,968 
12,198 
18, lU 
13.896 
11.541 
10,342 


April 




June .... . 


July 


August 

September 

October 

November 

December 


Total (Tear) 


l,36ei,97? 


^ '-96,286 480,687 


833,076 


80.180 


1«3,J16 


ai,866 


126.780 


98.086 



9761 



SUIPHUKIC ICIO 

Tabl* 8. - C0N9DIJFTI0N IS RRTIUZSR lUSUfkCTam JOB 
(^uastltlei (XiraBaaA la short ten4) 



T»ar 

•ad 


OONSDMED BY REPORTINO HAITO- 

FAOTORBBS IN PHODtJCTICW OT 

PDCnLIZSR 


SHUPH) TO OTHBS THUJ PBR- 
TILIZBR lUNUTACmRERS 


SHIWED TO FKHl'lLIZER lUUTO- 
rACTORBRS 




Total 


Northarn 
Blatrlot 


Sontban 
Dlatrtet 


Total 


Rorthara 
Dlatrtet 


Sootlwn 
Olatrtot 


total 


NOPthani 
Dlatriat 


Soatharn 
Dlatriat 


less 


162,698 
13S,319 
104,041 
93,873 
87,944 
78,690 
94,980 
99,673 
101,708 
131, Ul 
•180,496 
138,908 


81,640 
68,868 

80,806 
49,060 
84,484 

48,366 
66,216 
43,778 
41,204 
86,682 
88,215 
61,892 


81, lis 
70,781 
68,836 

44,818 
83,490 
87,334 
39,764 
58,898 
60,804 
74,789 
•67,881 
70,616 


38,166 
38,716 
4t,81» 

40,893 
89,714 
84,388 
40,739 
48,404 
46,717 
80,808 
48,478 
81,116 


87,381 
89,494 
88,886 

33,818 
83,014 
89,786 
84,601 
39,418 
89,813 
41,181 
8T,4Ti 
48,043 


7, •86 

7|068 
T.OTB 
6.70O 
4,686 
6,188 
8,998 
7,404 
9.661 
8,006 
9,073 


39,693 
30,618 
41,990 
88,868 
18,478 
88,381 
84,684 
28,816 
30,888 
88,031 
89,886 
38,363 


84,304 
17,470 
34,608 
89,683 
14,681 
88,308 
19,488 
19,647 
17,398 
80,128 
81,736 
30,468 


15,389 
13,148 

o,4de 

4,838 
3,798 
3,073 
8,199 
8,869 
13,493 
7,903 
7,790 
7,908 


rabruaiT 


ici^l 


Hay ,,,. 




July 


A«»»»t 

9»Pt«>ber 

Ootobar 

NOTsabar 

Daoeaber 


Total (Ta«p).. 
ISM 


1,343,331 

161,800 
149,236 
138,988 
107,842 
83,969 
80,214 
83,079 
77,404 
88,918 
137,367 
143,288 
168,268 


663,741 

77,182 
61,191 
68,676 
59,009 
86,398 
86,613 
67,172 
48,062 
40,139 
66,768 
68,931 
67,398 


679,890 

84,348 
88,048 
71,807 
48,833 
88,671 
24,601 
26,907 
38,368 
48,776 
70,898 
80,361 
84,873 


808,866 

87,163 
88,793 
34,167 
30,840' 
26,894 
86,783 
81,991 
89,887 
83,594 
34,938 
88,616 
88,637 


418,061 

86,793 
81.893 
31,183 
28,168 
24,143 
24,400 
80,808 
25,844 
20,848 
27,999 
21,860 
81,664 


91,808 

1,870 
1,800 
3,034 
8,078 
l,7Bl 
1,383 
1,786 
4,043 
3,049 
6,939 
7,366 
6,973 


370,014 

86,664 
81,842 
83,733 
81,926 
14,318 
10,848 
14,896 
88,111 
31,066 
39,797 
41,680 
47,367 


878,739 

17,738 

18,488 
19,347 
19,098 
13,199 
9,203 
U,936 
28,313 
82,943 
23,140 
30,366 
38,981 


96,878 

8,986 
8,790 


'•bruary 


April ,. 


8 831 




1,U3 
979 


j\iiig..,,, 




8,660 
8 798 


Auguat 


8»P*«1>W 


8,118 
16,687 
U,168 
U,786 


N07ambsr 

Daoambar 


Total (Tear).. 

1938 

JWuary 

mwarr 

ttoroh ■ ■ f • ■ • 


1,386,049 

101,336 
88,180 
76,673 
71,649 
67,162 
93,886 
71,981 
117,728 
98,962 
160,688 
184,206 
180,097 


707,493 

63,597 
41,337 
38,060 
36,634 
39,391 
40,630 
48,001 
91,696 
37,047 
73,848 
66,940 
66,416 


688,896 

47,739 
46,843 

38,613 
38, U 6 
27,771 
12,986 
86,980 
66,030 
66,918 
86,840 
87,868 
83,681 


353,302 

26,638 
£1,678 
19,761 
23,613 
37.873 
30,819 
38,888 
41,970 
38,327 
36,870 
83,788 
38,008 


898,047 

84,060 
19,074 
17,420 
88,368 
36,091 
88,662 
37,374 
37,377 
34,324 
38,683 
31,948 
38,890 


41,886 

8,478 
8,601 
8,331 
1,280 
8,187 
8,167 
1,8U 
4,693 
4,008 
8,687 
1,780 
8,718 


380,666 

14,641 
14,063 
14,439 
14,068 
13,194 
14,236 
13,881 
16,811 
31,818 
23,876 
83,994 
26,807 


840,868 

9,484 
9,604 
11,764 
9,746 
11,868 
13,889 
10,088 
11,778 
14,908 
16,989 
16,640 
17,440 


80,301 

5,817 
4,489 
8,676 

4,ai» 

1,686 
407 
3,169 
4.736 
16,307 
6.817 
8,364 
9,068 




Umj , 








Saptenbsr 

Ootobar 


Rovanbar 

Daeamber. ....... 


Total (laap).. 


1,806, U7 


690,499 


619.618 


386,861 


3e^».W5 


31,896 


819,398 


168,744 


66,648 



9761 



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SOLHIIJUC ACID 



Table 3. - STOCKS ON H&MD, END Oy MOST 
(Qct&ntltlM «Z9rMUd In skort toos) 



Southern Dlatrlet 



1055 

jatnuary. ......... 

Abntary 

March 

April 

VKT 

Jme 

TuXs i.... 

August 

SaptABbar 

Ootober 

NoTenber..^ 

1934 

January 

Fabruary 

March 

April 

toy 

Tuna ..., 

July 

AU0ist 

September 

Ootober... ........ 

ROTember. 

Dacenber 

1933 

January 

February 

March 

April 

May 

June 

July 

Au0iat. 

Septonbcr , 

Oatobar 

RoTember 

Daeembsr..... .... , 



ui.aw 

111,02* 
101,429 
97,898 
97,6«5 
97,901 
99,174 
91,996 
91,060 
81,457 
•88,850 
92, £53 



104,465 
98,26a 
83,637 
78,127 
86^048 
92,781 
94,466 
86,672 
95,923 
99,119 
107,609 
117,036 



106,367 
103.283 
90, vol 
81,884 
70,413 
71,946 
8&,4CS 
92, lU 
104,037 
101,028 
lis-, 933 
112, lias 



82.0U 
79,995 
69,947 
69,176 
70,576 
70,729 
70,419 
64,020 
60,607 
49,604 
55,560 
56,303 



74,534 
78,097 
61,119 
63,995 
60,690 
68,180 
69,705 
64,185 
71,106 
7a.S14 
78,177 
84.449 



80,815 
80,869 
72,301 
65,406 
57,407 
66,711 
64.721 
67,114 
74,689 
73,317 
83,485 
82,980 



29,353 
31,027 
31,482 
28,728 
27,089 
87,172 
88,765 
27.975 
30.459 
31,853 
*35,870 
33.950 



89,931 
86,163 
88,518 
24.134 
26,358 
84,541 
84,761 
82,467 
24,817 
26,60& 
29,452 
32,587 



25.553 
22.414 
18,400 
16,479 
12,916 
15.234 
81,688 
25,002 
29.348 
87,711 
29,463 
31,445 



9761 



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-298" 



AFF7EDIX II 



^rrllBIT 17 



SATIO OF 



lAG-^S TO COST or wLkT^lALS & COLIFaRI SOE 7ITH ALL MAlvUFAC TURING 
INDUSTRIES (*) 



Wages (Fill ions 
of Dollars) 



Cost of I'laterials, 
Containers, Fuel, 
and Pur chased 
'i:iectrical Energy 
(Millions of Dol- 
lar s ) 



Ratio of 
Wages to 
Cost of 
Materials, 
etc. 



Ratio of Wages 
to Cost of 
Materials in the 
Fertilizer In- 
dustry to that 
in All Manuf actur 
ing 



Fertilizer Industry: 



1919 


$25 


1921 


16 


1923 


16 


1925 


18 


1927 


18 


1929 


18 


1931 


.12 


1933 


7 



1919 
1921 
1923 
1925 
1927 
1929 
1931 
1973 



10,462 

8,202 

11,009 

10,730 

10,849 

.11 , 621- 

7,173 

5.262 



Si 85 
145 
128 
138 
138 
150 
107 



All Manufacturing Industries: 



37,253 
25,321 
34,706 
35,976 
36,173 
.38., 550. 
21 , 680 
16.748 



13.5 
11.0 
12.5 
13.0 
13.0 
11.2 
11.2 
10.1 



28.1 


48.0 


32.4 


33.9 


31.7 


39.4 


:29.9 


43.4 


30,9 


42.0 


30.1 


37,2 


33.7 


33.2 


30.5 


33.1 



(*) 1919-1929 Census of Manufactures, 1930, Vol. II, All ^Manufacturing 
Industries, Tatle 1, -d. 14, "'ertilizer Industry, Table 1, id. 686, 



1931-1973 All Manufacturing Industries, Census of Manufactures, 
1933, Summary hy Industries, January 23, 1935, Table 1, n. 1, 
Fertilizer Industry, Census of Manufactures, 1953, re-oort on Chemical 
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OT 



! 



,3w 



(D H 



i 



^i^ 



Ph 

■if-? 



..•I • 






CD OT 



APPEHDIX II 
EXHIBIT 19 



PRSSIDSIIT' 3 ?l3E;.:?L0Y1/iEIJT AGiSZl.ZENT 
irE.^TILIZS.1 inDUSTflY 
Substitutions for Para^^raphs 2 and 3, of President's Agreement 
Code Reference: Article III, Section 2 



Employees (ot.ier than factory or meclianical workers or artisans or 
outside salesmen or watchmen) shall tc employed not more than 40 hours 
per week, averaged over an eight-week period. 

Employees engaged in the production of mixed fertilizer and/or 
superpiiosphate shall "be employed not more than 40 a-urs per week, nor 
more than 8 hours per day; provided, however, thf.t employees, during 
temporary or seasonal emergencies, when there is not a sufficient supply 
of additional lahor available to meet the renuirements of production, 
may he employed net more than 43 hours per week, with the consent of 
such employees; provided further tho,t such maximum hours shall not ex- 
ceed a period of more than 4 calendar months in exij year. 

Employees, in the case of any process requiring continuous opera- 
tion shall he employed not more than 40 hours, c-xcept where competent 
employees are not readily available, they may he employed not more than 
48 hours per week, at the rate of at least time ajid one third overtime 
for hours over 8 daily; provided, however, that such employees shall 
not exceed 10^ of the total number of employees in the industry. ■ 

Continuous operation is defined as the manufacture of sulphuric 
acid, phosphoric acid, and superphosphate. 

Tnere shall be no limitation on the maxiraom number of hours for 
which superintendents, managers, or officials, who now receive more 
than $35 per week, foremen during rush periods, or emergency maintenance 
crews required for work in connection with fire, cyclGne, flood, or 
machinery breakdown, may be employed. 

Employees in the production of mixed fertilizer and/or superphoa- 
phate shall be entitled to one day of rest per week. 

Substitutions for Paragraph 6 of President's Agreement — Code 
ileference: Article III, Section 3. 

Employees shall receive not less than the following rates: 

(1) 35^ per hour in the ilcrthern Are.-^ ox the United States 

(2) 25.j^- per ho'or in the Southern Area of th^ United States 

(3) 35(^' per hour in the ;.adwestern Area of tlie United States 



30S^ 

(4) 40',> per hour in the Pacific Coast Area of tlic United States 

provided, however, that where State laws require a higher minirmim wage, 
employees shall not be paid a lower wage tlaan that specified "by such 
State laws. Cvertinie shall he ;5aid at the rate of one and one third 
times tl'ie normal wage, for all work in excess of 3 hours per day. 

Tne l-Torthem area of the United States is defined as follows: Maine, 
ITew Hampshire, Vermont, Massachusetts, Connecticut, Hhode Island, 
New York, Pennsylvania, New Jersey, Delaware, Ilaryland, and West Virginia. 

Tlie Southern area of the United States is defined as follows: 
Virginia, North Carolina, South Carolina, Georgia, Florida, Alabama, 
liississippi, Arkansas, Louisiana, Oklahoma, Texas, and Tennessee. 

Tlie Midwestern area of the United States is defined as follows: 
Ohio, Illinois, Indiana, Kentucky, Missouri, Kansas, Nebraska, South 
Dalcota, Colorado, New Liexico, Arizona, Wyoming, Montana, Michigan, 
lisconsin, Minnesota, and Iowa. 

Tlie Pacific Coast area of the United States is defined as follows: 
■Washington, Oregon, California, Idalic, Nevada, and Utala. 

The minimum rate of pay herein prescribed establishes a guaranteed 
minimum rate of pay, regardless of whether the employee is compensated 
on the basis of a time rate or on a piecework performance. 

Substitution for Paragraphs 2, 3 and 6 of the President's Reemploy- 
ment Agreement. 



-S34- 



APPEKDIX II 



EXHIBIT 20 • ■ 

A GSKE3AL ItEPORT ON ' ' 

MIXED FERTILIZER CDSTS AjMD SALES PRICES 

SPRING SEASONS 1933 and 1934 

IN T:IS, 

PRINCIPAL FERTILIZER CONSUMING 

AREA IN TIIE UIJITED STATES 



Prepared in Compliance with a Request from 

Capt. Joseph F. Battley, De mty Administrator, Division 3 

National ilecovery Administration 

by the 

Fertilizer Recovery Committee 

iVashington, D. C. 

and submitted 
October 26, 1934 



9761 



-305- 



COHTENTS 

Page 

SUiiimary 306 

Tlie P.eport , so? 

Companies furnishing data 307 

Sales price data 30? 

Cost data 308 

Prices 308 

Delivery costs 303 

Quotations 508 

Costs, Sales Prices and Profit cr Loss ^^q 

Conclusions 3]_a 



TABLES 

Table 1 - Agents' CJUoted Prices and x^ealized 

Prices ' 309 

Table 2 - Summary of Costs, Sales Prices, and 

Profit or Loss 510 

Table 3 - Cost of ?ertili::er Laterials 513 



9761 



536- 



SUIvn/iARY 

Tile figures given in tiis report are an average of all the grades 
of the nine "Cost and Sales Price Data" reports previously issued. 
These grades are: 

4-8-7 for Hliode' Islnjid, and parts of Massachusetts 

and Hew Eainp shire 
4-8-5 for I'low Jersey and Eastern part of Pennsylvania 

(principally) 
6-6-5 for Eastern Saore of Virginia 
2-8-5 for Central 1/laryland 
3-8-3 for north Carolina 
3-8-3 for South Carolina 
3-9-3 for Georgia 
4-8-4 for Mississippi and Louisiana East of the 

Mississippi Jiiver 
2-12-6 for Indiana 

The reports disclose that: 

Eifty-two firms representing more than 100 plants supplied data. 

The consumption of fertilizer in the nine territories surveyed was 
2,490,405 tons in 1933. 

T!ie consumption of fertiliser in the United States in 1933 was 
4,833,940 tons. 

Tlie sales of fertilizer of the 52 firms supplying data in the nine 
territories surveyed was 1,301,000 tons in 1933. 

The consumption in the nine territories surveyed, of the grades 
selected, was ap vroxiraately 750,000 to 1,000,000 tons in 1933. 

ifxien the term "agent's price" is used in this report it refers to 
the consumer price less the agent' s ccnpensation. 

A summary of production costs and sales prices in the spring of 
1933, as compared with the spring of 1934, is as follows: 

1933 1934 Increase Increase 

Dollars Percentage 
Average cash price to agents 

P.O.B. factory ol3,98 $18.68 )4.70 34 

Average cost of production 15.50 17.68 3.18 14 

The average loss, 1933, was $1.52 per ton, or 10 percent. 

The average anticipated profit, 1934, was .il.OO per ton, or 6 
percent. 



9761 



-307" 

Tiie avurage cost of mate-ials cJid iDags actually used in tliis ferti- 
lizer offered for sale on Marcli 1, 19;34 was ;12.35 a ton. To replace 
these materials on the March 1, 1934 raw material market would have cost 
an avero,ge of .U3.37 a ton - an increase of .i^l.OS a ton, or an increase 
of 8 percent. '.Tx-ile the loss of 10 percent this year, on the hasis of 
replacement -:■:': .': ..-i,. ■'. l, t . ■■y.o^." x,y. .■: /It •■.v.^J. ave been 
wiped out piXi'l a loss of 3 cents shown. 

In order to change the F.O.B. price, factory hasis, given above, 
into the open schedule delivered-to-the-iar.n price, it is necessary to 
add average freiglit of o2.39 a ton, average trucking from railroad sta- 
tion to the farm of 74 cents a ton, and average agent' s compensation 
of ol.JG a ton. This gives a. total of .^54. 69, which is the average cost 
cf distribution. Adding this amount tc the average price of 118. 68 
F.O.B. factory, gives the consumer delivered-to-the-farm cash price of 
$23.37 a ton vidiich prevailed on l-iarch 1, 1934, after discounts had been 
applied. 

The costs given above are based on actual costs for materials, 
bags, and labor, and include all oper'\ting expenses except interest on 
investment in plant and inventory. 



Ti:S SEPCI 



This report is a summary of the nine "Cost and Sales Price Data" 
reports, previously issued.. The attached map- shows the actxxal areas 
covered by the survey. 'I!.ie3/ are all heavy c'onsui-ning territories. Tlie 
consumption of ^.11 kinds of commercial fertilizers in them in 1933 
amounted to 2,490,405 tons compared v/it.i a consuirption for tlie whole 
country for 1933 of 4,823,940 tons or sligLatly more than 50 percent. 

Tliese territories are also representative cf the general areas in 
which they are located. Tliey form an excellent cress section of the 
country East of the Mississippi Hiver, an area which uses over 90 percent 
of the total consumed in the entire country. The nine territories cover 
all general farming a„nd most of the special crops. 

jTe estimate t'-i.at the tonnage of the grades selected for the pur- 
pose of t-e survey amounted in these territories tc a consumption be- 
tween 750,000 to 1,000,000 tons or approximately 35 percent. 

Coaipanies Purnishing Cost and Sales Price Data 

Tlie data on \'7liich t.iis report is bo.sed were requested from and 
furnished by the fifty-two companies which are representative of those 
operating in the nine territories. They sell sliglitly more than one- 
half of the total tonnage of all grades consumed in these territories. 

Sales Price Data 

Tlie fertilizer Code went into effect on llovember 10, 1933. Since 
it provides for the filing witii the S-cretary of the National Fertilizer 



Associaticn of opon price schedules, we have accurate information as to 
the prices charged "by every company for all grades and kinds of 
fertilizer sold or offered for sale since that date. 

Jill of this inf orm';ition is open to inspection. 

Cost Data 

Most of the 52 firiis which supplied data keep accurate cost records. 

Their reports to us c.re also open to inspection by authorized 
agencies. 

Since approxif-'iatel/ 35 percent of all ^ the fertilizer used in ' the 
nine territories nrnsistp of the grades selected for the different 
territories, thusc cost figures may be considered very representative. 

Delivery Costs 

Tlie a,verage cost of delivering, fertilizer from producer' s plant 
to consumer's farm in the nine territories is ipS.lS a ton. 

Quotations ■,■-.'. 

Average prices netted at the factory for the nine territories for ■ 
which data v;ere olDtained are as follows: 



9761 



PRICES,, 



Table 1 



Agents' Quoted Prices and P.ealized Prices 



(Average of Nine ?.et)fesentative Grade,s of Mixed Fertiiizer) 
Of- Tile Nine Teri-itories for Wliich "Cost and 
Sales Price Data" P.er)orts were issued. 
1933 and 1934 



The averages,; given are "weighted" according to the tnnnage 



consumiDtion of the . different territories. 



Territory 



Sul3- 

Zone zone 



Quoted 

Price 

P-.0.,3. 
■Pf'oducer 's 

•Plant 
Sririns,1933 



Average 

realized 

•nrice* 

F.0.3; 

Producer's 

Plant , 

Spring. 1933 



Quoted 
Price 
]?.0.3. . 
Producer' s 
Plant as of 
March 1, 
1934** 



Rhode Island and -oarts 
of Mass. -and New Fam-oshi 

New Jersey and Eastern 
Dortion of Pennsylvania 



"?4.65 



24.11 



35.69 



(principally) 


t3 


D 


IT. 75 


16.36 


19.36 


Eastern Shore of Virginia 


3 


A 
(part of 


•31.29 
■) • 


17.85 


23.89 


Central Maryland 


3 


3 


16.34 


13.34 


16.45 


North Carolina 


4 


C 


15.66 


12.81 


18.02 


South Carolina 


5 




14„50 


13.59 , 


17.44 


G-eorgia 


6 




16.68 


13.43 ■ 


18.55 


Mississippi and 












Louisiana (East of • 












Mississippi River) 


8 


C 


19.64 


16.71 


21.41 


Indiana 


10 


D 


23.27 


20.77 : 


24.21 


"Weighted" • 












Average 






16.5^. 


. ,13.98 . 


18.68 



Consumer's delivered-to-the-farm price for any given producer would 
be actual price F. 0.1. plant as given in Table 1 above, plus his 
average freight, • plus the commission he allows the agent. 



After rebates, special discounts, etc. 

Quoted consumer's delivered-to-the-f arm price less actual agents' 
compensation and a,ctu3,l average transportation. 



9761 



-310- 
COSTS, SALES PRICES AM) PHOFIT OP LOSS 

The cost, sales -nrice, and tirofit or loss ty territories, for 

the ST)ring season 1933, and as cf March 1, 1934, for the selected grade 

of mixed fertilizer sold in each territory are shown in Tahle 2. 

Tahle 2 

SIWAHY OF COSTS, SALES PRICES, Aim PROFIT OR LOSS 

Increase Increase 



Zone 1 - Suhzone C 


1935 


1934 


Dollars 


Percentace 


Cosfat Plant: ' :' 










Materials ' " 


' .^IS.34 


ni3.3S 


^, 1.02 


8.2 


Bags 


1.17 


1.75 


.59 


50.4 


Labor: mixing, 










shiiD-Dina:, etc. 


• 1.21 


1.53 


.32 


26.4 


''= Other Costs 


6.56 


6,75 


.19 


3.0 


Total Cost at Plant 


21.28 


23.40 


2il2 


10.0 



Actual Net Cash (Dealer) 
Price Received by 
Manufacturer h,t Plant 24.11 25.69 1.5S 6^ 



PROFIT or LOSS 


• 2.83 ** 


2.29 ** 


-.54 





Zone 2 - Sub zone D 










Cost at Plant: 










Materials 


10.86 


11.74 


.88 


8.1 


Bags 


.94 


1.43 


.49 


52.1 


Labor: mixing, shi-o- 


1.08 


1.41 


.33 


30.6 


ning, etc. 










# Other Costs 


4.82 


4.62 


-.20 


-4.2 


Total Cost at Plant 


17.70 


19.20 


1.50 


8.5 


Actual Net Cash (Dealer; 










Price Received by , 










Man-ufscturer at Plant 


16.36 


19.36 


3.00 


18.3 


PROFIT or LOSS ' 


1.54 * 


.16 ** 


1.50 





# See footnote at end of table 

* Indicates loss 
** Indicates profit 









Increase 


Increase 


Zone 3 - Subzone A 


1933 


1934 


Dollars 


Percentage 


iv^'Tt of ■ 










Cost at Plant: 










Materials 


• ^13.33 


^17.45 


$3.62 


26.2 


Bags • ■ 


.91 


1.39 


.48 


52.7 


Labor: mixing, 










shir)-oing, etc. 


1.23 


1.77 . 


.54 


43.9 


-i','- Other- costs 


. 3.73 


3.73 


— 





Total Cost at Plant 


19.70 


£4.34 


4.54 


23.6 


Actual Net Cash (Deal 


er) 








Price Received by 










Man-ufacturer at 










Plant- 


■ 17., 8.5 


23.89 . 


6.04 


33.8 


PROFIT or LOSS 


1.8-5 * 


.45 * 


1.40 


, 


Zone 4 - Sub zone C 










Cost at Plant: 










Materials 


3.72 


10.85 , 


:, 2.15 


24.4 , 


3ags 


.84 


1.35 


.41 


48.3 


Labor: mixing, 










shi-D-Ding, etc. 


.51 


.89 


.38 


74.5 


4 Other Costs 


.3.77 


4 . 09 


.32 


8.5 


Total Cost at Plant 


13.84 


• 17.08 . 


3 . 24 


23.4 



Actual Net Cash (Dealer) 
Prices Received by- 
Manufacturer at 
Plant- - . 12.'^1 . 13.02 . 5.21 40.7 

PROFIT or LOSS 1.03* .94,** 1.97 

Zone 5 

Cost at Plant: 

Materials ■ 9.29 10.12 .33 ' 8.9 

Bags . .85 1.27 . .42 49.4 

Labor: mixing, 

shipT)ing, etc. ■ .41 .70, .29 70.7 

;f .Other Costs 4.05 ■. ■ 4.16 .11 ' 2.7 

Total Cost at Plant . 14.60 . 16.25 1.65 ,11.3 

Actual '^Tet Cash (Dealer) ' - , 

Price Received by 

Manufacturer at 

Plant 12.59 . 17.44. 4.85 ' 38.5 

PROFIT or LOSS 2.01 * 1.19 ** 3.20 



- See footnote at end of table 
' Indicates loss 
'* Indicates -nrofit 



9761 









Increase 


Increase 


Zone 6 


1933 


1954 


Dollar 


Percentage 


Cost at Plant: 










Materials 


>1C.09 


no. 69 


$ .60 


6.0 


Bags 


.85 


1.30 


.45 


53.0 


Later: mixing, 










shipping, etc. 


.60 


.89 


.29 


49.0 


r Other Costs 


4.?6 


4.52 


.26 


6.0 


Total' Cost at Plant 


15.80 


17.40 


• 1.60 


10.0 


Actual Net Cash (Dealer) 










Price Received hy 










Manufacturer at 










Plant 


13.43 


18.55 


5.12 


38.0 


PROFIT or LOSS 


2.37* 


• 1.15** 


• 3.52 


-„ 


Zone 8-Subzone C 










Cost at Plant: 










Materials 


11.83 


12.18 


.35 


3.0 


Bags 


1.13 


• 1.58 


.45 


39.8 


Lahor: mijcing, 










shipping, etc. 


.62 


.86 


.24 


38.7 


# Other Costs 


5.07 


5.00 


.07 


-1.4 



Total Cost at Plant . 18.65 ■ 19.62 .97 5.2 

Actual Net Cash (Dealer) 
Price deceived by 
Manufacturer at 
Plant 16.71 21.41 4.70 28.1 



PROFIT or LOSS 


1.94* 


1.79** 


■ 3.75 





Zone 10 - Suhzone D 










Cost at Plant: 


13.67 








Materials 


13.67 


14.03 


.36 


2.6 


Bags 


• 1.13 


• 1.69 


.56 


49.6 


Labor: mixing. 










shipping, etc. 


.85 


1.01 


.16 


18.8 


IF Other Costs 


6.18 


■ 6.27 


.09 


1.5 


Total Cost at Plant 


21.83 


23.00 


■ 1.17 


5.4 


Actual Net Cash (Dealer) 










Price Received by 










Manufacturer at 










Plant 


20.77 


24.21 


3.44 


16.6 


PROFIT or LOSS 


1.06* 


- 1.21** 


2.27 





/f Includes tax tags; light, power, fuel; taxes; depreciation on physical 
property at income tax rates; office, sales, and administrative expenses 
bad debts; insurance; etc. 

* Indicates loss 
♦* Indicates profit 



9761 



-313- 









Increase 


Increrse 


Territories - Conoines 


19"^) 


193':- 


Dollars 


Ferce]ita:.:e 


Cost at Blant: 










Hatcrials 


s 3.77 


vll.Oc 


1.25 


13 


3acs 


.So 


1,35 


,^5 


51 


Lat'or: nixiiir^, 










shi'o-nn-', etc. 


-.61 


S'j 


.32 


Rp 


■„ Other Costs , 


) '. cL' 


i:..40 


.16 


U 


Total Cost at Pl-nt 











Actual Ket Cash (Dealer) 

Price Received hv 

h'pnufacturer at 

Plant 13.93 IS. bo U. 70 it 

PnoriT or LOSS l.^?* 1.00** 2.52 



V Includes tr:: ta.^'s; lijht, "O'/er, fuel; ta::es; r.e :reci- tion on phsyi- 
cal property bX i-xome tar: rates; office, sales, and acuinistrative e: 
penses; tad de"bts; insurance; etc. 

* Indicates loss 
** Indicates "orofit 



Tal)le 3 
COST or PL3.TILiZE.l LiATISIALS 

Price Price Increase Per 
Lla.rch 1 harch 1 in cent 
Hate rial 1S33 193^^ Dollars Increase 

A I ■oniun sulphate, donestic, c-t. oulh / $1.00 
Galciu.u Cyanauid, l)a..";s, unit of IT ** I.IG 
Sodium nitrr.te, ci'ude, hac-^s. crt.* 1.29 
Cottonseed meal, Ul percent !ie:.rjhis, ton 12,00 
Tanka;-;e, 10 & I5 percent Chicar-o, ton 11. 50 
Sup ei^phosp hate, hulk r^an— o:''-"pile, ' 

unbilled & unscreened - per ton hasis, 

16 percent Baltinore " 6,00 7*50 1.50 25tO 

C-round hone - It;; percent annonia, 

Chica-o, ton 
lianure salt - 20 percent 'vpO, hulh, ton" 
l.Iuriate of potash, G-c5 ^pSOlj, hul'-:, tor 

/ Hz- vessel at ports, lis.rch shipaent 
* 3:: vessel at ports 

** Freight allo'jed various destinations, in carload lots for liarch ship- 
ment 



$1.25 


% .25 


25,0 


1,30 


,12y 


10,6 


1,35 


.05^> 


Kz 


2)4.00 


12.00 


100,0 


2U. 50 


13.00 


113.0 



lU.OO 


16.00 


2.00 


IU.3 


12.00 


12.00 


h'one 


IJone 


37.15 


37.15 


None 


None 



3761 



-31^ 

COl'ICLUSIOI'JS 

The average cosh- r.eali zed price to agents P. 0,3, proc.ucers' plants 
for fertilizer sold in the nine territories surveyed increased fron 
$13, 9S a ton for the spring season of 1S33 'to $lo.5S a ton. as of llarch 1, 
193^* This increase aapunts to $U. 7O a ton, or 3^1- percent, . 

The principal reasons for this increase in price a.re: 

1, That materials for a ton of fertilizer had increa.sed $1,25, or 
11;^ 13 percent; 

2, That "bars for a ton of ^"ertjlizer had increased U5 cents, or liy 

51 percent; 

3, That, lahor for. a ton of fertiliser had increased 32 cents, or l)y 

52 percent; 

h. That last year fertilizer sold at $1.52 helo-' cost (not includ- 
ing any interest or investnent) ; ■ 

3» Thcit other nanufacturing and distrihuting costs had increased 
16 cents, or "by k percent; 

All. these items together P:;greg?te $3*70 ?- ^on. The average anti- 
cipated -orofit for 193*+ '''^s $1,00 a ton, thus ax;counting for the total 
of" $U. 70". 

Less than 7 percent of the incres-sed price is due to increased 
direct lator costs imder the National itecovery Administration. 

All our figures are. open to inspection ano verification of author- 
ized agencies, and anj- a6.ditional information desired v/ill "oe olotained 
e-nd furnished on request. 



Respectfully su'Dnitted, 

[ [ FEHTILIZZIi lECOVEHY COIIi.IITTEE 

By: Charles J. I^rand 

E::ecutive Director 

District of Col'im'bia, ss. 

Before me, a ITotary PuTD^ic in and. for the District of Golumhia, 
person?olly appeared, Chs.rles J. Brand, . E::e cut ive Director of the 
Pertillzer .recovery Com:.iittee, 'iho, oeing diily s-forn, deposes and sE.ys 
that the facts contained in the foregoing statement are true and correct, 
to the test of his !:no-7ledge and 1)01101. 

S-7orn and suloscrihed to in my -oresence this 25th day of October, 
I93U. 



i\iot?.ry Puolic 
9761 



315 



LOCATION OF AREAS 
FERTILIZER COST AND SELLING PRICE SURVEY 




9761 



-316- 

APPENDIX II 

EXHIBIT 21 

DEVELOPMENT AMI) AF'LICATIOI OF UNIFOitJvI COST 
ACCOUNTING SYSTEMS IN THE EEETILIZEfi INDUSTRY 

Presented by 
JOHN MORAJNT, C.P.A. , 
Cost Acco-untant 
THE NATIONAL iERTILIZEP. ASSOCIATION 

^pshinfi;ton, D. C. 
Pt the 
SIXTEENTH INTERNATIONAL COST CONi LRENCE 
Under the Aiispices 
of the 
NATIONAL ASSOCIATION OJ COST ACCOUNTANTS 
At Boston, iiassachusetts, June 25, 1935 

As long ago as 1906 the proceedings of the pnnual convention of 
the National Fertilizer Association contained this statement "The 
question of figuring costs was also discussed and a committee was 
appointed to investigate and formulate economical methods for figuring 
costs." Recommendations of this committee are not available but the pro- 
ceedings of the convention of 1906 repor t the publication and distri- 
bution of a booklet entitled "Cce t Accounting." 

Ten years later, in 1916, another cost accounting comiaittee 
reported details as to a uniform system of cost accounting. It was 
not until 1924, however, that a comprehensive cost accounting system 
was developed. A cost accounting committee, headed by B.A. McKinney 
of F. S. Royster Guano Company, Norfolk, Virginia, was authorized, 
in 1921, to investigate cost finding methods in the fertilizer 
industry and to make recommendations as to a uniform system of cost 
finding. As a result of the work of this committee, a manual en- 
titled "Cost Accounting and Cost Estimating for Dry Mixers of 
Fertilizers" was published in 1924. In 1926 another manual entitled 
"Cost Accounting and Cost Estimating for Plants Producing Sulphuric 
Acid and Super-phosphate" was published. In 1927 "A i-^anual of Account- 
ing for Dry tlixers of Fertilizers", bringing up to date the 1924 
edition, was comrileted. 

Producers in the fertilizer industry fall into t'"0 classes - dry 
mixers and wet mixers. Dry mixers who onerate rpproximately 1,000 
plants, are engaged in assembling raw materials and mixing them into 
complete fertilizers. A wet mixer manuf acture^ superjihosphate in 
addition to prepprj^ng mixed fertilizers. Some vyet mixers also produce 
sulphuric acid which is useti in making superphosphate. There are ap- 
proj^iinatelv 200 plants th^.l manufacture superphosphate and mixed 
fertiliser.- Of that numbed 105 also manufacture sulphuric acid. Super- 
phosphate is the most impoHeVit fertilizer material and amounts to 
slightly more than onc-hfelf of the total amount of all tertilizer 
materials used in mixed fertilizer and it is also applied to the soil 
sepaTstely. It is the -DrinciTDal source ol phosphoric acid and is mixed 



v.'ith piaterirls sur)Tjl"inT: nitro£jen and -ootash to form a conplete mixed 
f e-'tilir'er. 

The industn"- is coi.iposed of a-Dproxiriatel-r -800 companies "Ith 
capitalizrtion of p. r.in,;le co.nnEn-"- nin.-'iri:? as lo" • as ^5,000 and as hi-sh 
as $50,000,000. remr jt ;-;a -pe-- cent of.tho coraopjiies do an annual vol- 
ume of fertilizer uusiress of ".es- t ■,■ n 850,000. It is estinoted that 
the total investment in the fevtili^ .v industry'- vmo-'jints to Fp-'iro::imatel-'- 
0300,000,0^0. 

The aoontion of the Code of 7rir Trr/ e Prc.ctice? for t^ie Fertilizer 
Indtisti^' in 1927 f'^p.ve co.st pccovjitin?: T'ork addec^ irpoet-'as. Under the 
direction of T,'. 3. McClosl-e--, no- arsocir'ted ^rith The Davison Chemical 
Company anc c. meph;;r o.f the 3altinora chp.-ter of the . ationpl Association 
of Cost Accoiantrnts, the uor"". o-^" in;;/r,--llin,~ ^oniforn accoMntin^ svstems 
■nrojressed rapidly. A niu^rDe" o": fi'-^i^- ,-!,'-nnf acti;.rir,2 vjeriiPns 50 "osr cent 
of the total vol-uae of mi:;ed fer'tili'z r, rdo it-sd o.nc installed curing 
1923, 1920, anc' 1S30 t^ie -Lini/or:! s ^rt -ns moli^hed yr the Association. 

Frcm 1930 t" ths tivne '.7hen the National Inf'ustrial lecove:^.'- Act 
was enacted, th^-o vaf in oii" i ou'^tr"'' t to srne leth.pr ;■;•"'■ in cost account- 
ing v.'orl: thrt e-':l?.ted in most other incu^.trie;-. 

The code cf fair ■ com-;stJ ti ir. for .the fei^tiliz-^r -L;.ru;-tr- '-'as arD- 
'oroved bv the fresident or, October Gl, I'n"; aud l)eca"ie e-^j'octive Fovem- 
ber 10,' 1955. It coy.t:iii:eL - -roiri-io.i t,:r t -rohijito:: tie srle or offer 
for sale b-- any •;rodi\c3::- of ii:i3e fe^-ti": iz?'-, su:^erphorohrts, and/or 
other fertilizer materi-1 at a orico jelo'^ hif: cr^-t errceot to naet 
existin,^ competitioi-), the tern "cost" "leanii '-" the cost ceteraincd in 
accordance ' ith Mnifor^.i methods of .-iccop-nti ";' to be ^Trescrioed by the 
Code Authorit-" -rith tne awprovrl of t^ie . -'ationrl P.eco'/er-'- Adjninistrrtion. 

Esrl]'- in i'ovember, 19. X , tne copt acco-aIltin,f^ committee of The 
National Fertilizer Ai soclatior., consi-tin-; of eleven auditors and cost 
accountants in thn fertiliser ind^-str;^ taree of rhom -vere certified 
public accountrnts, held an extended sec-rion revle'-ln.- the cost account- 
ing methods of thi incustr-'. It vas earl- evi-. '5,.;t ir b.iese discussions 
that certain cost elements he.'i-etof ore included in tue cost manuals '70uld 
not be ao -roved by the National :iecover-- Adi"iniatration. ilotable in 
this connection uas tr.e iro^-i ?i.on for i-terest on investment in plants 
and inventories. 

It 'as a"! so -olpin to t !.e i:^muers o? t.ie cor.iittee that if an 
effective ■'jjiifo-'m rccorntin..: metioo rs to oe ixsec b:* all momoers of 
the industr-, such s method .rist be rpducec to tae simolest terms. Talc- 
ing as a T'or ir- brsir. the t' o co;-t T.'rurl^'. mort rec Tif-" -published, it 
'"as decided to r-vt up rhat "e uive crl"' ed di;'^ests of cost nccountin.^ 
manuals. 7ollo'-ir;; the proced'ire of lirvir,;,- one m; nur ]. for the dr'' mixer 
and one m; nual for the '"Jet lux'.ir, tv,'o separate cost ri'restG were ac- 
cordingly'- prepared. 



Tne SI 
series of 



5 digests cor.tained t.ic o;.=e? for coet e^em^nts and a complete 
tne necessar-^ cont sb; t? len'o?. Separate cost forms v/ere also 



Torovided and ■^old to ii-mbers of the i.idustr"-. 



9761 



-31b- 

The digests contained a complete description of each of the 
expense classifications. The cost ele.nents were so classified and 
descrited ps to make it easy for any prf.ducer to prepare the cost 
statements from his book ol accounts i^httner or not the book of 
accounts folloi"ed the uniform cost system. 

The fertiliser basinesc^ is a distinctly se; sonal one. In the 
twelve Southern States vhere normally 70 percent of the entire United 
States fertilizer tonnage is consumed, from 60 to 65 percent of the 
annual output moves in a four-month period running from about the 
middle of January to about the middle of May. Actual cost cm not 
be computed until the end of the season when it is knovTi just hem 
.many tons of fertilizer were produced and sold. ::<oth the factory 
overhead and the selling and administrative overhead are materially 
affected bv the volume. Briefly, the overhead cost per ton is 
arrived at bv the division of tne expenses bv the number of tons 
produced and sold. 

In order, therefore, to have a practical working basis for the 
current season it was decided that the tonnage lor the current year 
should be estimated to be the average of the tonnace for the three 
preceding fiscal years. This 'pas the basis for the application of 
The factory overhead. However, for selling and general and admini- 
strative expense overhead, the tonnage for the current year was 
estimated to be the same as the tonnage for the preceding year. 

The distincticn between the tonnage basis for factory overhead 
liased on a three-year averpf'-e and the selling and administrative 
overhead based on one year, rests upon the theory that selling and 
administrative expenses in times of reduced outp.jt can be more readily 
reduced than in the case of fpctor^^ overhead items such as insurance, 
taxes, and depreciation. 

The digest provides that cost of materials shall be computed at 
the combined average of the actual cost of the materials in the plant 
and of comiQitments or contracts made as at the time the cost compu- 
tations are made or the price schedule iiled. I/iaterials manufactured 
oy the producer shall be computed at the actual cost of manufacturing 
and not at the market price. 

As to direct labor the digest prescribed, based on experience 
of the previous year and taking into consideration the new code labor 
rates, that the estimated labor cost be included in the cost state- 
ment. 

Because of the varying percentages used hr individual firms and 
because of the recognition by the ^fational Recovery Administration 
of the repsonableness of the depreciation rates used by producers 
in filing xederal income tax returns, it was decided that each pro- 
ducer should use the same rates of depreciation in preparing his 
cost statements as "^ere used in preparing federal income tax returns, 
I-n our many discussions with representatives of the Consumers' Ad- 
visory Boaid, theDivision of planning and £esearch, and Legal Division 
of the National Recovery Administration, this feature of the cost 
digest required the least time and discussion before approval bv the 
National necovery Administration. 

q7fii 



One of the interRsti;v: dipcursions with representatives of the 
Cons^ar.crp' AJ-vi--" n.'" .A^ '■ '•' r in coj-//;ec .:io-i rith the, inclusion of sell- 
ing and ?,cu'ainistr;:.bive c.^earv -s ?, ^art of copt. The vicv's of in- 
dustry cost accountants and of business r.en in the industry were tliat 
selling;- ...nc' ; ener.;,i ^cmini:^tr :tive expenses v/ere ri'.htfully elements 
of cost. Tne Con-u. :e-'s ' Av'viiror;.' lo .re too.' the -osition th;-,t svich 
itens r,s sc.lesicn': ? In.', : v. rtisi;./- , an'- officers' s\lariee, 
snoulc not be c;nside.ed i,s coct ole:.ients, yc •■"ticul .rl:' vhere industry 
codes contained --•rohioitions of s^-.les belo\7 co--t. The:"- al^o held the 
viovf th-rt the consumer shoulc not 'be coni-elled to te't.r ",n " -lart of stich 
ex.^en-es ?,s salesmen's salaries And advertisinL , "because these vere 
ou'Glays made hy competitors in £,ettina business av/ay from one another. 
It \;ould he difficult to convince any husinoss man in the fertilizer 
industry that scllina and sdaunistr- tive ea/oenses are not a 'irart of his 

GOSt. 

In the case of io_le or su.hstanti -,lly idle plants it was ^^ro- 
vidod that relativel-f fined iactory exnenses saich as depreciation on 
machinev; and 'buildini.js , pi'o-erty ta::es, fire insurance, anc^ factory 
rent "iioa.ld or.ly be cnai.'^ed against the cost of production in each 
plant io" the ye-r IGo^-l^^C.! in the rati^ thr.t the annu;xl average 
iTroduction in tne indu-try for the three prccediay j'-ears bears to the 
production in the industr-- for the banner ye-n' 19J?-1?30. This ratio 
was 60 per cent and in so-c illed idle or s-U'.^pt-aitiall-- idle plants 
only 60 per cent of such factory items a? de- reciatio"', taxes, and 
fire insurance, was char^^e" to the cost of a-roductlon ior the year 
193C^-19Z4-. 

This -provision '-^s included at tae insistence nf the Division 
of nconomdc Hesearch and fl-naing of the "'ation.^1 Recover:;- Administra- 
tion. I might state tiiri.t f.xare ms been in tlie indu.stry for years 
a plant overca-.aci t-^ of s--- r.ir.iraately 50 per cent. The largest t onna/7;e 
of fertilizer ever -roducea in tne United Str^tes occuxred in 19"0 when 
api^roxima.tely 8,300,000 tons were sold. In 19G1 the consumation liad 
drop;oed to 6,300,000 tons --.nC. in 193;: it dro;y;ed to less than 
4,400,0 O tons. Tor 1933 there was a gain of a:-'- ronimately one-h^-lf 
million tons, and for IP: i tnerc was a lurther gain of ap-roximately 
700,000 tons bring tne 19'..d -■-■roduction up to 5,300,000 tons. For the 
current year, 1933, it is e::-ected ohat tne consumption will, run as 
high as 6,200,000 tons. The averrge for the five years 19.:-;5-1909 was 
7,500,000 tons. I quote t/iese fi.gures at this woint to show the basis 
for the idle plant ya-ovision just discussed. 

One of the wrovisions 7rhich appeared in the cost manu-a.ls and 
which was disapproved by the "Jational xle.covery Achninistr:\tion, was the 
provision for txie inclvLsion in cost of •■ reasonable am unt to tahe 
care of the salaries of r,erE0"\s oaerati.a or . anarhng their ovm plants. 
This provision was su^f.gesteu both from the stand-'Oiirts of soioiul r-.ccouiit- 
ing and of fair competition. If failed to be incluaed in the cost 
digests princi]:ially because it Y/as Irarj to defi.ie wimt li/as a reasonable 
amount. 

I shiill not burden you. with further detail of the technical 
questions surrounding the completion of the cost accounting methods. 



9761 



-320- 

Sufficient to say, hourr of - is cue- si on vrere s'lent on sxich items as 
depreciation, idle ^lant, s--'rea.din,'.; of factor:-- ...nd fellius^; overhead* It 
is ny firm conviction that if it '--,re not for tae fact that v;e liad the 
cost accounting !n,anuals to e--rve a-^ a vor^dn,'; oar is v/hen v;e raet in 
1-Toveinber , 193-3, the cost accjTintin;=; coruTdtte-^ v.'oul'' still he viorking 
on a uniform accoimbing Tnetnor that v/ou1l' meet v-ith the ap-'^roval of 
the industry and the former "."ational Recovery A'^raiiiistration, As it 
V7as , our trnifor;.! s.ccountini, rn.trthod a^^-. devised by the cost accounting 
conijviittee , v.'as sent in -'niraeoyr^.'-^^Ler form in O'c nuar:'"', 1934-, to every 
producer in t:ie industry and only minor chanyes T/ere made before it was 
submitted to the National Recovery Administration, lie had numerous 
conferences wit.i the v.arious bot^rds of tne .National Recovery Administra- 
tion and finally on rebriia.ry ;^'. , l?3d-, tne Cost L'iyests and Cost ''anus.ls 
v;ere a 'Viroved by General Johason to become effective two weehs later. 
The cost diyests v.'sre ^^.rinted and a free co"^;''- ^-/as sent to every pro- 
ducer in the ind\istry. He a.lso instituted a campaign of cost account- 
ing education. Almost every v-eeh an item urging producers to fig".n-c 
their costs, ?/as carried in the order to i .staJ.l a uniform accounting 
system. In a la.rge number of cases the system in use can be and is 
modified to follov- the set-up of 'che raiiform accounting method. Also 
the difficult;' oi •seliin5_, ova- unilorm. syr^tem of accounts to producers 
relates at least partially to tie fact that many 'roducers because of 
the seasonal nature of the fertilizer business end their desire to 
mahe their plant facilities ;ind personnel "^rod-active in the off-seaso-n, 
are devoting morr attention to other lines of endeavor tlia.n they are 
devoting to " rodii.cing fertilizer. Peculiarities^^ in the lay-out of 
pla/nts, division of resy'onsibilit-' o: personnel, and connections v/ith 
other li'nes of business force slight deviations froiri the -uniform 
acco-uuitin' methods. The idea '-e ilvo.ys i.:ee-;) i-n mir.d is so-'ond acco-unt- 
ing. It is realized tn->t thero rmist be sc.ne e''evia,tions from the 
sta.ndard set-u:o in ce:- tain ca.ses. Fner.- conditions ar^ -normal, hovrever, 
the uniform accou:iti-ng methot's a.rG completely follov/ed. 

To be effective it is aoi eno-agh raerel;'. to instctll a, uniform 
accounti-ng system r^nd see it started. One of the most important 
duties is to catise the man-afaxt-oxer to become cost conscious and to 
encourage nim and his office force iii the v.'orh- of ma'lng frequent cost 
analyses. VJe ha.ve attempted to promote this tjjpe of vrorl: b^- annual cost 
studies V'/herein the cost figia-er^ of individual firms ar.j tab\ilr-ted vmder 
a secret code -mimber. The corap: rative statement of costs by geograph- 
ical areas is released only tctnose members tha.t narticipated in the 
v/orl:. In audition to shov/ing in tabular form, the cost of individual 
firms, tne weigrited a.vera,ge cost for each geogra.phica.l area is also 
shown for compara.tive pni-poses. 

The firms that have i-nstailed tne nniform accotuiting' methods 
serve as a nucleus in these studies but v/e often ^^et the coo-oeration 
of mei.;bers v;ho have not installed the -uniform cost system. It has 
been my exrierie-nce and I am ouite sure t;i'.t it v;-as also the experience 
of my predecessor, tliat the matter of a wider pdoption of -uniform 
cost accounting methods is almost entirely a mttter of salesmanship. 
It can not be ca.rried on entirely by null. The acco-untant must visit 
the plants of jDrospective users and sell the idea,. One reason tiia.t in 
our i-iidustry so few acco-imting systems li.ave been installed in the last 
several years in the fact that v/e liave been unable to devote the 

9761 



necc^rc.ry tine to this fcati-re of the ',7or :. It is owr intention, how- 
ever, in the nerr futiire to envl^T.sij^e this -'or''-. 

As to the future of imiform cost accoimtinj: methods in the industry, 
it is my oTinion t\iB.t mem'Dsrs are inorF; interested tliaii ever before. 
I am confident tncit the oni way to 'r.ee-p this interest alive is "by 
constant educational worl: and freraient visits "by; the staff account- 
ant Ox the Association v/ith the raer-oers in their, i^lants. ?or more 
tlia.n tea yec^rs the Association lias had on its staff a, certified pub- 
lic accoimtant eir^erienced in t le accoujitini- problems of the fertilizer 
incustry. I believe tmt the present is a psychological moment to 
follo'i/ u- the i^TOi rid-worlr'of the last several years. I "believe that 
t..ie uniform a,ccoixiitin£; methods tn: t ve hc.ve in ov.t industry will "be 
useful in xay volixntary agreement tiat i..ei".i"bers of the industry will 
"be iiseful in any volimt-r./ agreement t'nat ;:;en"'oers of the industry 
raig'ht enter into, or any concerted action that the industry may tahe 
with the view of eliminating unfair trade practices. 



9761 



APPENDIX II 

■^Pi^istry No. 4 
EXHI IT ?2 

NATILl'AL P.ECOVEPY ADl I''ISTnATIGW 

Title A. (Labor Provisions) of Pro- 
Dosted Voluntary Agrepraent for the 

fep.tilize:^' indijsthy 

Set for Public P^arini?- iJovember 8, 1955 

The labor Drovisions of a voluntary afTreenient for the Fertiliser 
Industry in the present form merely reflect the orooosal of the above- 
mentioned Industry, and none of the provisions contained therein are 
to be regarded as i.avin.e; received the approval of th^ Nat ional Admini- 
stration as applying to this Industry. 

FERTILIZER I1mT)USTRY 

Voluntary A^Treemen t 
as to Labor 

Each of the undersigned members of the fertilizer industry, in 
consideration of the agreement of other members of the fertilizer 
industry and in further consideration of matual agreements herein 
contained, Dursuant to the provisions of Section 4(a) of the National 
Industrial Recovery Act as extended, and subject to the aOTroval of 
this agreement by the President of the Tjnited States, does hereby 
agree with the other undersigned members of tnr fertilizer industry 
and with each of them to abide by and to observe, in thi=ir cnxjpcity 
as employers in the fertilizer industry, the terms, conditions, and 
provisions hereinafter set forth. 

Section 1. Collective "bargaining 

Pursuant to Section 7 (a) of tae National Industrial Recovery 
Act as e-'tendea; 

A. Emoloyees shall have the right to organize and bargain col- 
lectively throaeh representatives of their o-^m choosing, and sh^ll 
be free from the interference, restraint, or coercion of emioloyers 
of labor, or their agents, in the designation of such representatives 
or in self-organizpt ion or in other concerted activities for the 
P'^rpose of collective bargaining or other mutual aid or protection. 

!B. No emolo^'ee and no one seeking emoloyrent shall be reouired as 
a condition of employment to join -'^ny company union or to refrain 
from joining, organizing'-, or Tssistin/- a labor organization of his 
own choosin^. 

Section 2. I a-:imum Hours of Lnbor 

A. No party to this agre'ment, in his cnccity a.s ^ member of the 

97d1 



-323- 



fertilizer industry, sL^ll reouire or pernit any o-^ his F^uloypes to 
•^ork more than 40 hours in anj' one t'ppk ov more th'^n pielit hours in ' 
any one day, ercept c-s follows: 

1. Officials, managers, superintendents, sales^.en, chen-ists, 
foremen, and "-'atchruen. 

■ 2. Daring t/T- rash of the planting season, the hoars of labor 

may exceed the raaxim^om above prescribed by eight hours a '"eek, 
and in the case of skilled key men the hours of labor may 
exceed the ma:rim-am above prescribed by 20 hotirs in any 
iTeek, but as to each such weekly e:-ccess above 4(1 hours "each 
employee's hours of laoor shall be averaged to not more than 
40 hours a 'veek, before four months have ela/osed, or, if he 
reraaans employed for less than four montns, then such excess 
sh'ill be so averaged during the period of his emnloymefit, 
No employee shall be classed as a skilled key mail unless 
sj.ch employee is paid during tne rush of the xjlanting season 
at a rate at least i;0 percent ^freater than the miniraam hourly 
rate specified in Section 2 of this Article, 

3, office employees, except ' those sijecified in sub-paragraph 1 
of this paragraoh, shall not be required or oermitted to 
T'ork more than an average of 40' nours ^ '-eelc, and as to each 
weekly excess above 40 hours eaci. employee's hours of labor 
shall be averaged to not more than 40 liours a ^^eek t ?f ore ■ 
four months have elapsed, or, if he rerains emr)loyeo for less 
than four months, then such excefes shnll be so averaged 
during the period of ni's eraolovment. 

4, Employees engaged in 'any continuous oneration, including the 
loading ano unloading of vessels, T^hen' other competent erro 
ployees are readily available for such "^ork shall not b" ' 
required or permitted to "ork more than 40 hours in any 'one 
'■^eek, and, except in the loading and unloading-- of vessels, 
in no case more than 48 hours in any one week. 

5, Repair and shoo cre™s, engineers, and elc^ctrici-^ns 
shall not be required or permitted to "ork more th^n 40 
hours in any one ir^eek, rith a tolerance of 10 nercent, 
except in case of emergency, and except as provided in 
subTjara^granh 2 of this laragra-oh, and in the 'latter event an 
employee'!; hours of laoor shall be averaged ns provided 

in such subparagraph to the maximum hours of labor 
permitted in this suboaragrap'n. 

B. Overtime shall be pa.id .each employee at the rate of one ajnd one- 
third times his normal rate for all '"'ork in excess of eirht hours a 

day, except in the case of office emplo''"ees and those employees speci- 
fied in Paragraph A, Subparagraoh 1 of this Section. 

C. Every employee in the fertilizer industry shall have one day 
of rest a week. 



Section 3. linimum ntes 0+" Pay. 

A. No pnrtj'' of this !i,gref^nent , in his c-ip'-city as «, T^prnter of the 
fertiliser industr , shill: 

Pay any em"Dloyee in the rJorthPrn area less than ?5 cents an hoar; 

Pay any employee in the Southern area les; thnn S5 cents an hour; 

Pay any employee in thp I idwestern area less than 35 cents an hour; 

Pay any employee in the Pacific Coast area less than 40 cents an hour; 

Pay any employee in Puerto 'Rico less than '0 cents an hour; excent 
that 

1. Cf^"ice boys less than 18 years of a.^^e and '"atchmen shall 
noi' De oaid less than 75 percent of the minimum rates 
specified in tnis Daragrapn. 

2. Those persons v?hose earnine capacity is limited "because of 
age, nhysical or mental handicap, or other infirmity may 
be emioloyed on light '-ork at '^ages belo'7 the minimum 
proviced in this oar-igraoh. 

3. The Forthern area, comorisps i aine , TMe'" 'f^moshire, Vermont, 
I assacnusetts, Connecticut, '^hoc'e Island, We'" York, Pennsylvania, 
Few Jersey, I aryland (except the Eastern SiK^re)', ^Te-^castle County 
of ■nela'"arp, District of Columoia, and test Virginia. 

C. The Southern -irc'a comprises I'ent and Sussex Counties of 
Dela"'are, the Eastern Shore of ! aryland, Virginia, tlorth Carolina, 
South Carolina, Geor-rin, Tlorioa, Alabama, l.lsLissirioi , Arkansas, 
Louisiana, Oklahoma, Texas, and Tennessee, 

D. The rid'-'estern area com-orises Chio, Illincis Indiana, Kentucky, 
lissouri, Kansas, ".'ehrask^, Soutti "[^-ikota, Forth D^^kota, Colorado, Few 
Mexico, Arizona, "Tyominr, I.iontana, Ficaigan, '/isconsin, Finnesota, 

and Iowa. 

£. The Pacific Coast area comprises I'ashingtcn, Oregon, 
California, Idauo, Nevada and Utah. 

Section 4. Child Labor Prohibited 

Fo person under the age of Id years shall be employed in the 
fertilizer industry. 

Section 5. declassification of l- unctions Prohibited. 

There shall be no evasion of this agreement oy reclassification of 
the functions of eraioloyees. An employee shall not be included in any 
of the exceDtions set forth above unless the identical functions i^rere 
identically classified 60 days prior to the effective date of this 
agreement. 

Section 6. 

V/ithin each State, members of the industry shall comrJlj'- '"ith any 



-325- 



la"/s of such State imposing TOorp stringent requirs^ments, rerulating' 
the age of employees, rp[r(-s, or hours of -"ork. 

Section 7. Pursua.nt to the urovisions of subsection (b) of ?ection 10 
of the national Industriil npcovery Act as exter.ded, this ^:greem.ent and 
.■511 the Drovisions thereof are m.ade subject to the right of the President 
of the United States at any time to cancel or modify his appj-oval of 
this agreement or any conditions imposed by him uoon his aoproval tnereof. 

Section 8. Purntion of Agreement 

A. This =Hgrepment shall become effective when executed by members 
of the fertilizer industry having 90 percent of the ca^.-jcity of the 
fertilizer industry as indicated by records of the ^J«tional "fertilizer 
Association and uoon its approval of the President of the United St=)tes. 

B. If ■'ny of the terms, conditions, or provisions of this af^re-ment 
are altered or modified pursuant to Section 7, any onrty to this agree- 
ment may cease to be a party by filiig vfith the Executive Secretary of 
The National Fertilizer Association a written notice of withdrawal and, 
if the members of the fertilizer industry remaining Darties to this 
agreement do not have 85 oercent of the capacity of the fertilizer 
industry at indicated bv records of The National "fertilizer Association, 
then this agreement shpll become void qnd of no effect. 

C. On and after April 1, 1936, an-' oarty to this agreement 

may cease tobe n party by filing with the Executive Secretary of The 
i^Tational Fertilizer Association a written notice of '.withdrawal and, 
if the members of the fertilizer industry remaining parties to this 
agreement do not have 75 oercent of the caoacity of the fertilizer 
industry as indicated by records of The National Tertilizer Association, 
then this agreement shall oecome void and of no effect. 

D. The Executive Secretary of the Na+ional Fertilizer Association 
shall notify each party of this agreement of the "uthdrawal of any 
other partyo 

£. The Executive Secretary of The National Fertilizer Association 
snail notify each party to this agreement when the members of the 
fertilizer industry rem-=ining parties to this agrepnent do not have, 
according to records of the National Fertilizer Association, the 
percentage of the capacity of the fertilizer industry specified in 
Paragraph 3 or in Paragr'^.oh C of this section. 

Section £. 

A. This agreement may be siened and delivered in as many duolicate 
oriffinals as may be desirable or convenient, and all such executed daoli- 
cate originals shall be deem.ed oarts of this agreement. 

B. Any member of the fertilizer indastry not a party to this -agree- 
ment at the time it becomes effective in accordance with the provisions 



of Section 8, Paragr-Tph A, mny therpiftpr "become a party to this 
agreement in the same m-inner and -'ith the same duties, -^nd obligations 
as if he had been an original onrty to this agrepment. 

C. This agreement shall be delivered to the Executive Secretarv 
of The National Fertilizer Association, vfho shnll be the custodian 
thereof. 



(Date) (Name of Tember) 
By 



(Authorized officer or 
representative) 



(Title) 



Address 



9761 



-327- 

APPElMDIX II 
EXHIBIT 23 



Essential Differences between the Provisions of the 
Proposed Voluntary Labor Agreement and those in the 
former Code of Fair Competition for the Fertilizer 
Industry 

The Sections relating, to Section 7-a of the national Industrial 
Recovery Act as extended were substantially the same as the lanjguage 
of Section 7-a of the Act with the exception tliat Provision c of 
Section 1, Article IV of the Code was omitted from the proposed 
Voluntary Agreement. It was exnlained by Mr. Murphy (*). All members 
of the Industrjr did not have to do so assent to' this agreement if in 
addition to the hours and wages they agreea to, tliey also had to agree 
to abide by other undefined hours and Virages. • Mr. Allen Moore, of the 
Legal Advisory Board, felt that the inclusion of sub-section c was not 
necessary from a legal point of view. 

The first notable change from the Code is in Section 3, sub- 
section a-1 where watclimen were added to the list of serai-official 
employees exempted from the maximiun hours of labor provisions of 
Section 2-a. Mr. Hockley, of the Davison Chemical Company, (**) 
explained that in many instances watchmen v/ere employees Virho had been 
incapacitated for other work or who preferred light work, and should 
be considered more like firemen in public work where they v/orked longer 
houjTs than the ordinary class of employee but did not have any difficult 
woi-k to perform. 

Section 2, Su'b-iection a (2) The Industry added to this Section a 
qualification for "skilled key-men" which is an improvement over the 
Code and stated: 

"ITo employee shall be classed as a skilled key-man, 
unless such employee is paid during the rush of the 
planting season at a rate at least 30^5 greater than 
the minimum hourly rate specified in Section 3 of 
this Article. " 

A further change was made in this Section and the language of 
the Code "over any consecutive four-months' period" was changed by the 
Industry to read: 

(*) Tr.^nscrlpt of Public Ee^iring on Title A (Labor Provisions) of ' 
Proposed Voluntij:.y Agreement for the Pertiliaer IncLusitry, i-Qvember 8, 
1935, Jesse L. Vurd, Publisher, Vfashington, D. C, -nage 94. 



(**) Ibid, pc^-e 96. 



9761 



"But ka to each such \7eei:ly excess above forty hours, 
each employee's hours of labor shall "be averaged to 
not more than forty hours a week before four months 
have elapsed, or, if he remains erarrDloyed for less 
then four months, then such excess sliall be so 
averaged during the period of his employment." 

This was an attempt on the part of the Industry to incor-ioorate into 
the Agreement Interpretation #67-34 which had been made during exist- 
ence of the Code covering, this point. It does clarify it in the case 
of part-time employees, but on the other hs.nd it opens up for the 
Industr5'- an opportunity to split peal-: seasons by the elimination of 
the phrase "over any consecutive four-months' period." 

Section 2, Sub-section a (3) differs from the Code in that it 
also contains what the Industry thought v/as a clarification of 
language similar to the clarification discussed in Section 2, Sub- 
section a-2, and in addition added a statement which made it clear 
that those classes of workers specified in sub-paragraph 1 of Section 
2-a, -.namely officials, managers, superintendents, salesmen, chemists, 
foremen, and watchmen were not meant when the provisions regarding 
present employees were discussed. 

Section 2-a 4 was substantially the same as the codal provision 
except that it permits workers engaged in the loading and unloading 
of vessels to work unlimited hours. The justification for this pro- 
vision as explained by Mr. Hockley (♦) is that bad weather often pre- 
vents the unloading of a vessel during part of the "free time" 
because of the possibility of damage to the materials, and that when 
unloading becomes possible it should proceed undisturbed as rapidly 
as possible. 

From Section 2-a 5 wa.tchmen have been removed a.nd added to 
Section 2-a 1 as above discussed and to this Section was also added 

"And except as jirovided in subparagraph 2 of this 
paragraph, and in the latter event an employee's 
hours of labor shall be averaged as provided in such 
subparagraph to the maximum hours of labor permitted 
in this subparagraph." 

Section 3-b added "and those employees specified in Paragraph A, 
Subparat,raph 1 of this Section." This makes it itilain that the In- 
dustry had never contemplated paying time and one-third to officials, 
managers, superintendents, salesmen, chemists, foremen, and watchmen 
for any over-time they might put it. 

Section 2, paragraph c, is a distinct im;provemcnt over the 
language of the Code and reads: 

"Every emiployce in the Fertilizer Industry shall have 
one day of rest a week. " 



(*) Ibid pp. 83. 
9761 



-329- 

TMs makes the day of rest mandatory whereas the Code said: 

"Every employee in the Fertilizer Industry shall he 
he entitled to one day of rest a week." 

To be entitled to a thin^^ is not to have it, and the Industry made a 
good point in improving this language. 

Section 3-a on minimum rates of r)ay in the proposed Voluntary 
Agroomont is the same as the Code except that two exceptions were 
added: 

"Sub-section 1.- Office boys less than 18 years '»f age 
and watchmen shall not be paid less tnan 7Ef!o of the 
minimum rates specified in this para,5raph. " 

"Sub-section 2.- Those persons whose earning capacity 
is limited because of age, physical or mental handicap, 
or other informity may be employed on light work at wages 
below the minimum provided in this paragraph." 

The last Sections of the proposed Voluntary Agreement dealing 
with the divisions of territory for the various areas for which the 
various rates of wages were to be paid v;as the same as the Code but 
invoked some discussi6a..at the Hearing because certain interests pro- 
tested the inclusion of Kentucky in the mid-western zone. 

Section 4 incorporated the language of the Code in prohibiting 
child labor. It should be noted here that the provisions of the Model 
Code had been agreed upon by the Industry providing they could have 
been inserted into the Code without reopening the Code for public 
hearing. 

Section 5, on Reclassification of Functions Prohibited, is sub- 
stantially the langua.ge of the Code except that the dates after which 
reclassification could not occur is set at 60 days prior to the 
effective date of the proposed Agreement. It was suggested 'liat this 
date be extended back to a time v;hen Code standards were known to be 
in effect. It was also developed by !;Ir. Hockley (*) that this re- 
classification pertains to a position rather tha.n to an employee, and 
that the language could be improved by so wording, in place of 
functions which is ambiguous. 



(*) Ibid, pp. 1^3 
9761 



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9761 







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9761 



MHIBIT 



APPENDIX II 



332 

iiiHIBIT 



APPENDIX II 



Tonnage of Plant-food Consumed in the Ysab Ended Jone ; 



In mixed fertilizers 



Nitrogen 



P.Oi 



In materials Sold to 



Potash 



12,224 

7,017 
517 
446 

2,147 
448 



21,632 
6,387 
4,760 
5,385 

559 
3,785 

756 



8,762 

12!903 
12,002 
14,483 
8,499 
4,137 
1,189 
452 
1,316 



21,942 

12,833 

961 

970 

3,733 



59,766 
16,204 
10,025 
19,266 
2,252 
9,207 
2,812 

235,497 
19,795 
57,244 



41,979 
25,294 
23,200 
9,007 
5,820 
2,623 
3,496 



22,204 
14,772 



10,355 
8,147 

11,779 

1,557 

7,828 

154 

116,109 
9,734 
25,823 
16,619 
18,066 
21,732 
11,220 
4,3^6 
2,546 
617 
1,689 



2,061 
1,107 
1,069 

120 
1,155 

518 

78,178 

2,193 

15,971 

13,781 

11,595 

7,622 

11,719 

7,714 

671 

271 

665 



24,146 
6,054 
1,285 
9,460 
609 
3,170 



11,300 
11,047 
6,856 
4,278 
2,995 
7,872 
3,529 
4,271 
3,972 



3,841 
2,177 
64 
20 
576 
39 
965 



1,018 

213 

1,160 

1,643 

23,406 

446 

4,977 

5,179 

2,980 

4,199 

3,797 

714 

261 



716 
574 

3,343 
585 

2,681 

27,662 
8,448 
5,867 
6,454 
679 
4,940 
1,274 

166,870 
10,955 
37,760 
26,684 
23,597 
22,105 
20,218 
11,851 

1,860 
723 

1,981 



27,360 
14,116 
1,306 
1,412 
5,331. 
1,046 
4,149 

83,912 
22,258 
11,310 
28,726 
2,861 
12,377 



295,946 
31,095 
68,291 
45,559 
46,257 
28,289 
31,072 
12,536 
10,091 
6,595 
4,049 



26,045 

16,949 

885 

766 

3,606 

723 

3,117 

44,927 
10,842 

8,733 
12,797 

1,770 

1^797 

139,515 
10,180 
30,800 
21,798 
21,046 
25,931 
15,017 

6,040 

2,! 
704 

2,014 



1,574 
127 

8,970 
3,218 
2,044 
298 
1,222 
1,625 



4,438 



19,012 
14,169 
1,421 
3,579 
9,098 
1,880 
721 



122 



1,807 
1,734 



27,140 

8,018 

8,201 

956 

1,759 

5,117 

1,498 

1,176 

383 

27 

2 



5,316 
648 
12 

2,718 
829 
170 
457 
173 



1,892 

1,800 

84 

26,459 
13,025 
3,377 
1,007 

2^478 



2,242 
572 
915 
158 

24 
282 
198 

71 



4,484 
146 
277 

8,618 
8,618 



5,548 
5,546 



3,179 
290 



9,805 
9,805 



13,118 
426 











7,806 
78 


1,371 


113 




145 
29 
94 


4 
2 
2 


99 




204 





6,776 
2,222 



4,047 

2,214 

755 

1,395 

2.254 

729 

176 

58 

44 

13 

2 

1 

19,547 
4 
10 
30 



8 

17,602 

572 

1,133 

14,303 
14,303 



6,330 

5.390 

392 



32,037 
17,546 
2,428 
8,407 
11.576 
2,408 
1,255 



78 

113 

14S 

77 

114 

54 

100 

204 

10,906 

1,026 

1,276 

5,803 
5,803 



2.045 
1,930 



29,382 
8,590 
9,116 
1,114 
1.783 

l!696 

1,247 

403 

29 

2 

1 



4,016 
565 
731 



219.073 



333 



Appen(U3( 11 



Bxblbit 27 



AL SuMHAET or Fbbtilubb CoNscHmoM m TB« Y»AB Ehdbd Joi™ so, UM in BnjiTioif TO Gbadm 
Goods Rskwtbd 



Ntw England 

Maine 

N. H 



R. I... 
Conn. . 



MiddU AlUmtie. 

N. Y 

N.J 

Pa 

Del 



W. Va. 



N. C. 

S. C. 
Ga... 
Fla... 



Wxaa.. 
Tciin. 






150,000 
14,210 
13,000 



210,000 
130,000 
260,000 

30,000 
140,000 

48 



872 

590, 63U 
562,651 



280,483 
133,070 
14,210 
12,773 
60,504 
11 
48,373 

756,559 
191,450 
117,855 
243,341 

27,096 
128,529 

48,288 

2,620,866 
229,945 
672,366 
358,277 
436,301 
231,436 



88 71 
100 00 

S6 2S 

99 68 
100 00 

96.75 

92 46 

91 17 
90.66 



90 32 

91 80 
100 00 

73 05 
70 97 
77 10 
60 66 

77,54 
57.91 



169,620 
89,269 
41,011 
41 ,775 
78,712 
47,536 
3,738 

564,447 
224,403 
131,S81j 
19,347! 
C1,S18| 
90,000| 
19,844 



294 ,477i 80 26 

1.57.807 93 04 

84,4.i2 94 60 

25,346 6180 

28,905 69.19 

60,862 77 32 

38,370 SO 72 

2,322 62 12 



,726 



77 32 
SI 30 
US 13 



,S2 72 
100 00 
100 00 

i(X) no 



220,286 
118,' 
10,249 
9 

42,276 
9,411 
30,414 

581,380 
147,615 
102,199 
182,216 

22,189 
102,226 

24,935 



163,61 
519,85( 
267,408 
354,310 
184,751 



207,189 
104,735 
56,060 
14,649 
23,414 
40,601 
29,853 



344,412 
126 ,( 
85,064 
9,964 
29,747 
72,537 
12,362 
5 
2,163 



1 


0,33 


111 


23 20 


400 


:a 00 


1 


020 


479 


95 80 


596 


HM 


793 


79 30 


93,922 


58.87 


7,. 543 


83.81 


14,181 


94.54 


109,404 


90.56 


109,404 


90.56 


4,349,989 


77.97 



83,296 

83,296 



I^KO Mm ^i^ uno 



6-8-7 
4-«-10 
6-»-7 
4-8-4 

6-8-7 
6-8-7 
6-8-7 



5-«-7 
4-8-7 
0-12^ 



9-3-3" 
5-7-5* 



3,224,431| 1,291< 



3-8-5 
4-8-4 
0-10-4 
2-12-2 
4-8-6 
4-8-4 
4-8-4 



2-12-6 
2-12-6 
2-12-6 
4-8-6 
3-8-6 
2-12-6 
2-12-6 
0-9-27 
2-12-6 
2-12-2 
4-10-6 
2-14-4 



17.4* 
26.63 
31.36 
13.63 
35.17 
27.94 
30 38 

13 85 
18.73 
16.76 

15 65 
19 03 
22 39 
1685 

16 10 
28 48 
57.30 
48 00 
24 15 

9 39 



14-10-2 
3-10-10 
3-10-7 

10-6-16* 
10-6-lG* 



39 41 
85 36 
31 34 
66 44 
38.26 
25 57 
21 39 



32 63 
32 00 
44 09 



26 85 
40 85 
24 17 



82.10 
100 00 
100 00 



61.13 
66 8ft 
57.OT 

73 60 
75.62 
64 68 

44.60 
66.37 
67.95 

61 76 
60.69 
58 87 

62 13 

46 49 
62 55 
82.71 
86 23 

74 05 
34 11 



27.31 
34.48 
25 CO 



8-3 



W.05 
96.03 
90.22 
93.76 
08.36 
7600 02.79 



61.49 
75 38 
91.91 
91 95 
93 13 
48 99 



88 27 
90.55 
97.39 

95 52 

96 26 
99.05 

67 89 
83 35 
80 22 

68 52 
85 35 

82 18 
85 59 
87.71 

83 66 



57.94 
89 68 
75.18 

54.67 
54 67 



68.74 
97 97 



78 35 
78.35 



9761 



raili s in which one fifurc represents ammonia are here treated as different grades from the 1 

■n basis. For the pcrcintages when both such similar grades are combined see Table 2. 

',Oi-MI,-KiO. 

;iI,-l':Oi-K.O. 

eluding Puerto Rico. 



-334- 

APPEITDIX II. 

EXHIBIT 28. 

IIARYIAVJ} 
OFFICIAL &RA.DES ADOPTED UNDER CODE a/ 
WITH 1934 TOR'IACE OF EACH 







1934 "b/ 


Consumption 






Official 


Short 


Per Cent 






Grade s 


Tons 


Actual 


Cumulative 


1. 


^8-5 


12,279 


12.29 


12.29 


2. 


6-6-5 


11,397 


11.95 


24.24 


3. 


0-12-5 


6,989 


6.99 


31.23 


4, 


4-8-7 


5,323 


5.33 


36.56 


5. 


2-8-10 


4,303 


4.31 


40.87 


6. 


2-12-4 


3,742 


3.75 


44.62 


7. 


2-9-5 


3,579 


3.59 


48.21 


8. 


3-8-10 


2,921 


2.92 


51.13 


9. 


4-8-10 


2,106 


2.10 


53.23 


10. 


2-12-6 


1,698 


1.70 


54.93 


11. 


3-12-6 


1,560 


1.56 


56.49 


12. 


4r-8-12 


1,354 


1.36 


57.85 


13. 


1-10-5 


1,242 


1.24 


59.09 


14. 


2-10-4 


779 


0.78 


59.87 


15. 


5-8-10 


639 


0.64 


60.51 


16. 


3-8-3 


613 


0.61 


61.12 


17. 


5-10-5 


612 


0.61 


61.73 


18, 


4-12-4 


364 


0.36 


62.09 


19. 


8-5-2 


260 


0.26 


62.35 


20. 


6-6-8 


175 


0.18 


62.53 


21. 


O-IO-IO 


127 


0.13 


62.66 


Total 21 grades 


68,062 


62.66 





a/ The Fertili^er Review, NoveEiher - Decemher 1934, page 10. 

h/ Fertilizer and Plant Food Consumption, Proceeding 11th Annual 

Convention, National Fertilizer Association, 1935, Tahle 3, 

page 161-162. 



Total 1934 tonnage mixed fertilizer 134 different grades - 99,935. 
The approved list containing 1 additional grade 5-8-12 for which 
1934 tonnage data are not availahle. The official grade list also 
provides as follows: 

1. The sale of mixed fertilizer containing a total of 24 or more 
units of plant food in multiple of the a''oove ratios is permitted. 

2. The ahove lists of grades do not include top-dressers, which 
if offered for sale, shall contain not less than 9 per cent of nitro- 
gen nor less than 16 per cent of total plant food. 



-335- 

APPEl-TDIX II 

t:xeibit 29 

Executive Order 

Defining Effect of Certain Px-ovisions in Codes of Fair Competition 
Upon Coo^^orative Orfanizations 

In a ntim'ber of codes of foir com-octition "-Mcli liave heretofore 
"been aMprovcd or submitted for .approval ■"•ursuant to- title 'I of the 
national Industrie! Recovery Act, .a--'-orovcd June IS, 1933, there have 
been included provisions designed to limit or ^jrohihit the payment or 
allowance of rebates, refunds, or unco.rned discounts, \7hcthcr in the 
form of monej'- or in any other form, and the estension to certain pur- 
chasers of services or iirivileges not extended to all piu'chasers under 
similar terms and conditions. Question hi^is arisen as to whether pro- . 
visions of such tenor do not preclude the -oayment of natronage divi- 
dends to members by bona fide and legitimate cooperative organizations, 
including farmers' cooperative associations, corporations, or soci^etie^ 
hereinafter designated farmers' coo-neratives» 

Pursua.nt to the authority vested in me by title I of the rTational 
Indxistrial Recovery Act, upon due consideration of the fr.cts, and ui^on 
the report D.nC rcconmendation of the Ac^ministrator , 

I, Franklin D. Roosevelt, president of the United States, do here- 
by order tlifi.t no --^revision in any code of fair com^riotition, agreement, 
or license which lijis heretofore been or r^ y hereafter bo a"iiTroved, pre- 
scribed, or issued purr-.iant to title I of the Rational Industrial 
Recovery Act, sha.ll I--; -o construed or applied as to -prohibit the pay- 
ment of patronage rnvl. .; d'^ in accordance with law to any member by any 
bona fide and logit:- jo co O'^cr 'tive organization, including any' 
farmers' coopera':;' ^.l , l.-:v organized uiidcr the laws of any State, Terri- 
tory, or -che Dis'c:'ict o, u' kmbia or of the United States, if such 
patronage dividends are ^iaid out of actrcil earnings of such cooperative 
organization ancl are not paid at the time vhen such member makes a 
purchase from such coopera,tive organization. 



Franl-lin D. Roosevelt 



The White House 

October 23, 1933 

App r o va.l r c c oirme nde d : 
Hugh 0- Johnson, 

/LdTT-ini s t rt'.t or . 



(lTo.6355) 



-336- 

A/PEMriX ^11 

EXHIBIT 30 • 

rxeciitiv;. Orr^cr 

Supplement to and Anplif ication of ^xecutivc Order "o . G355 of 
Octoter ";3, 193o. 

TTIiEHTAS questions have arisen concerning the scope and meaning of 
Executive Order Fo. 6355, of October 23, 1333, defining the effect of 
certain provisions in codes of fair com-oc tition u^on cooT^erative or;^an- 
izations: 

■TOW, T"-TEB7"P0EE , by virtue of and pursimnt to the authority vested 
in rae under Title I of the '.'eitional Industrial Recovery Act aiiproTed 
June 16, 1933 (48 Stat. 195), it is ordered th-,t said T^xecutive Order 
iMo. 6355 be, and it is horeb;-, suoplomented and amplified as follows: 

■ ' 1. Ho 2^rovision in any code of fair corn-petition, .af^rcenent or 
license which has heretofore been or rr.y horaftcr be a-'v->roved, -ore- 
scribed, or issued purs-ua-nt to Title I of the ^'atioiial Industrial 
Recovery Act, shall be co!Tsb::-ucd or 'rv.-lied so as to raa"'te it a violation 
of any coae of fair conipeti !;io-.- to sell to or through any bona fide and 
legitime.te cooperative orf;anization, inclLuf in.'-; any farmers' cooncra,tive , 
duly ori:,anized under the lo.-'s of any State, Territory, or the District 
of ColiJmbia, of of the United States, or to sell through any intervening 
agency to such cooperr.'.tive organization, 

2. }Io such code of fair com-octitiii- ;:hall be construed or inter- 
preted so as to prevent any snch coo-':icra,tivo or^a:iization from being 
entitled to receive, a-nd/or distribiite to its ricraoers as patronage 
dividends or otherwise- the -iroceedc or benefits directly or indirectly 
derived' from any disconiit, commission, rob>;.te, or dividend (a) ordinarily 
paid or allowed to other pxirch.-'.sers for --iLirchases in vAolesale or middle- 
man a'aa-ntitics or (b) paid or allo\/ed pixrsuant to the requirements or 
^'fovisions of a'ny code of fair competition to other purcliasers for pur- 
-.Ghases i-n vmolesale or middlemnu Quantities. 

3. The Administrator for Industrial Recover'^ is hereby authorized 

to determine; after such hcari'igs -n.: v,ncceci-'.gs as he may deem necessary, 

whether, in any doubtful case, r.n organization is or is not a bona fide 

and legitimate organi •nation entitled to the benefits ond -orotection of 
this order. 



'ranklin D. Roosevelt 



The \7hite l-ousc, 

I'ebmary 17, 1934 



(no. 6606-A) 
9761 



-S37- 

A?PE!Tt)ix n 

EXHIBIT ^1 

Af'ininistrativc Orc.cr :'o. X-35 

Definition of Farmers' and GonsTJirz-rs ' CooTiers.tives 

In any Code of Fair Connctitio;! oncrating iindcr the terms of the 
national Industrial P.e c ovg ry Ac t , cooocrativc organizrations , as deter- 
mined "by the Administrator of the Act, to he entitled to the benefits 
and protection of Executive Order numherocl 6355 of Octoher 33, 1933, 
as supiolemcnted and amplified "by F.xecmive Order n-uin"ber 6606-A. of Fe"br-a- 
ary 17, 1934, as a. "bona fide and legitir.iate cooperative organiza.tion 
must comply v/ith the follo;;dnc' conditions, limitations and restrictions: 

1. 3e dixLy ori'^anized under the lav/s of any staotc, territory, or 
the District of Columhia. 

2. Allov/ to each mem'ber ovminr one fuJly loaid slia.re or mera"ber- 
ship one vote and only one in the determination of matters affecting 
the management of the organization, except as otherwise provided "by 
the la?f under v/hich such org^anization is incor-porated; provided that 

a central or regional cooperative association, the piem'bernhip of which 
is composed of cooperative associrtions , may -nrovide in its "by-la?/s 
for voting "based {upon the volume of business done by the members with 
the central or regional cooperative, or on the number of members in 
the member association. 

So Operate on a coo--^'er?,tive b^isis for the mutual benefit of its 
members, "nd all income, a,fter nrovidin;;- for reasonable and adequate 
surplus rnd reserves, as d"termined by its Board of Directors, and 
pa^Tnent of dividends on stoclr or rienbcrshi'o capital of not to exceed 
eight '-1; per centnjn •'■.er a:nwr.i, curilativo, shall be distributed to 
membc rs or sliarc holders on the oasis of -latronagc at stated -leriods 
but nut more frequently than semi-annually, 

4, Transact business ¥/ith and for an on belia.lf of, non-members 
to an amount not greater in valiic , curing any fiscal year, tha,n the 
business transacted with a.nd for a.nd on bexialf of, members during the 
same period, 

5, Permit a.ll. members and stoclcholders to ha.ve access to the 
records for the purpose of determining the salp..ry and compensation Daid 
officers and cm;'-'loyecs', a,nd that ho sclaries or cor/missions are paid 
except for services actua.lly rendered, 

6, Distribute patronage dividends equally to all members, and/or 
stoclfholdcrs, Vno have com-olied with mcnbershi-n requirements, in pro- 
portion to tneir -ourciirses , and/or sales; ma,y i^ermif accumulation of 
patronpigc dividends on non-member busines.s iintil it equals the value of 
a share of stoch when same shall ''oc issued; does not distribute such 
dividend in the form of a reiuad at the time of ^^urcl^a,se; a,nd does not 
evid'ence a,ny such lividends by any 

9761 



P50P0SED TBASE PJACTIOZ HULES 
E3dii"bit 32 
Part 1 

For Release in ATTEPcIOOiT i-ET/SPAPEr.S of Priday, Hovemlier 8, 1935. 

FSDE3AL TPADE CO:;.;iSSlOi: 
/fesliin^^ton 

Trace practice lailes proposed for the fertilizer industry and 
subniitteo. to t?.ie Federal Trade Coiu.ission for its consideration and 
appro vrl under its trade practice confere:.icc procedure, were made 
availaljle by tlip.t coi.nvdssion toda,y. In ruaivinv available tlie suggested 
rules, the Cominissiou issued the following; statenient: 

IIOTICE 01^ OPPOHTUi>IITY TO PS ISAPD 

Opportunity is extended "oy the Coiii'.ission to any and all 
persons affected by or havin;^ an interest in the pi'oposed 
trade practice rules to nresent to the Coaiinission their views ■ 
upon tie sa:-ae, includia:; sug.-estioiis or objections, if any. 
For this purpose they may, upon application to the Commission, 
obte.in copies of the proposed rules. Gomjviunication of such 
v±e\-!s should be made to the CoirFiission not later than ITovem- 
ber 25, next. Opportunity for oral hcarin,':c will be afforded 
at 10 a. m., honday, Poveaber ^o, 1935, at Poem 2724, Federal 
Trade Commission Euildin.f;, 7asPi.in{;ton, D. C. , to such persons 
as may desire to appear, and v/ho have made prior written or 
tele^:;raphic request to be Pieard orally. All briefs or other 
comi..unications received concerninr: tne proi^oscd rules will 
becoiv;e part of the public record subject to inspection by 
interested parties. After olvin : due consideration to 
such suggestions or objections as ma,y be received concerning 
tPiC rules proposed by tP.c industry, the Ooiirnission will pro- 
ceed to their final consideration. 

Application to the Conuaission for considei-ation and approval 
of the trade practice conference rules for this iridustry was made b"y 
the national Fertiliser Association, Inc., reported as comprising 
about 95 per cent of the entire fertiliser tonnage in the United 
States. The industry comprises all of the follov.dng groups: 
Producers and importers of (l) suloiiur, pyrites and by-product 
sulpliur furies; (2) phosphate rock; (3) superphosphate; (4) other 
compounds in which phosphorus is availr.ble as plant food; (5) in- 
orgaaaic nitrogen; (6) sjoatictic orgo-iic nitrogen; (7) various animal 
and vegetable nitrogen by-products; (8) potash, and (9) mixed fer- 
tilizers. . 

According to information furnislied the Coiu lission, there are 
in this country approxii.iately 900 individual operators, ^vith a total 
of about 950 plants, engaged in r.ianufacturing fertilizer, including 
superphosphate, located in more tlian forty states, these plants are 



9761 



-329- 

said to represent an investment of $300,000,000. There are also 
investments in nitrogen plants and in the phosphate rock, sulphur, 
pyrites and potash industries, reported as amounting to at least 
$300,000,000 additional, m>"king a total investment in the industry 
of ahout $500,000,000. 

According to information furnished the ComiiUssion, the total 
consumption of fertilizer in the United States in 1934 was more 
than five and one-half million tons vrith an estimated retail sales 
value of $158,500,000. The industry is said to employ approximately 
30,000 \7agc-oarners. 

PBOPOSED TRADE PRACTICE EU"I -E S gOPM ITTED 
-J BY REPRSSEI^TATIVES OF TIS FERTILIZSpriinjUSTRY 

(These rules have not "been approved or passed upon "by the Federal 
Trade Commission. They are a draft of proposed rules presented to 
the Federal Trade Commission for its consideration.) 

, PROPOSED TPJUDE PPACTICE COMEEEIICE RULES 
FOR THE FERTILIZER INDUSTRY 



Sales Belov/ Cost 

It is an unfair method of competition- for any producer, cither 
directly or through an employee, ag?-nt, or representative, to sell, 
offer for sale, or solicit the purchase of, or to consign mixed 
fcrtili-orj superphosphate, or any other fertilizer material "below 
his cof.'. to "be determined "by a so'ond uniform cost accounting method 
to be a^.n roved 'by the B'oard of Directors of this Association, where 
the effec': may "be suhstantially to lessen competition or tend to 
create a ..lonopoly or unreasona^oly to restrain ti-ade. 

Lrss Le rder Ti- ansactions 

Tlie -r.Tlj.ng, offering to sell, or consigning of any product 
of the industry at a loso ":o induce the purchase of other products 
of the inii._ury, with th.-: t'-adency or capacity to mislead or de- 
ceive purc"x--?,sers or prospective purc'iiasers and which unfairly diverts 
trade or otherwise injures competitors, is an unfair method of com- 
petition, 

misleading Price Information 

The iv.alcing, pu"blishing,' or-circula,ting or permitting to "bp. 
made, pu"blished, or circulated, of false, fictitious, or misleading 
quotations, statements, or price lists as to prices, terms or condi- 
tions of sale, having a tendency or capacity to mislead or deceive 
purchasers or prospective purchasers, is an unfair method of 
competition. • 



9761 



-340- 



?.el3ates 

The granting of rebates, irrespective of the form they may 
acsTome or the method oy which they are paid or allowed, where the 
effect may he suhstantially to lessen competition or tend to create 
a monopoly or unreasonahly to restrain ti'adc or to resiilt in imL aw- 
ful price c'lscrimination, is an iinfair method of competition. The 
followin;^;, anon- others, are examples of practices which violate 
this principle and therefore are unfair methods of competition: 

a. ',7ithholdin,-; from or inserting in an^ invoice state- 
ments which make the invoice a false record, 
wholly or in part, of the transaction represented 
on the face thereof. 

h. Providing railroad, track, or any other mode of 

transporting or delivering mixed fertilizer, super- 
phosphate, or any other fertilizer material vdthout 
adequately charging for such transportation. 

' c. Rcimhursing a dealer, agent, purchaser, or con- 
signee for the cost of transportation at any 
araount other than that set forth in the producer's 
contract. 

d. Selling, offering to sell, or soliciting the pur- 
chase of, or consigning mixed fi^rtilizers, chemicals, 
superphosphate, or any other fertiliser material with 
special commissions or at reduced prices, as an in- 
ducement to a purchaser or prospective purchaser cr 
consignee to purchase other mixed fertilizer, super- 
phosphate, or any other fertilizer material. 

e. failure to enforce in :;ood faith the terms of any 
contract previously made for the sale of mixed fer- 
tilizer, superphosphate, or any other fertilizer 
material. 

f. Selling on terms that require the payment of sight 
draft on presentation of hill of lading. (S.D.3,L.) 
and then waiving the ohligation to pay cash before 
documents or goods are delivered, thus deferring 
the payment of the cash to some future date. . 

g. Selling and delivering goods on tlie, consignment, 
or open Mil of lading terms at S.D.B.L. price, or 
waiying earned, interest. ' 

h. Furnishing containers other than the producer's 
standard containers, preparing a special formula 
for an individual purchaser, consignee, or agont, 



9751 



-341. 



or usinf- special iiv;redients in a standard formula, 
\7ithout cliar;'iine for tlie additional cost of such 
containers, or of suc>. formulas or special ingre- 
dients and tlie mixing thereof. 

i. liaking a special allo\¥ance to a purchaser, consignee, 
or acient under the ,:i-uise of advertising; expense, or 
giving any other form of gratuity. 

j. Eraployinr,' a purchaser, or prospective purchas- 
er, or consignee, or prospective consignee, or 
his agent or anyone employed "by or connected 
with a purchaser, or px'ospective purchaser, or 
consignee, or prospective consignee, with the 
purpose and design, ajid effect of influencing 
the' "business of sucli purchaser, consignee, 
prospective purchaser, or prospective consignee. 

k. Treating as delinquent any "balance due by a sol- 
vent customer v,'ith no intention of requiring 
ultimate p8,ynaent. 

1. Enabling a purchaser to obtain miied fertilizer, 
superphosphate, or any other fertilizer material 
apparently on cas.i terras, but in fact on. credit 
extended to him by or through the producer, as, 
for example: 

1. A transaction covered by a sight draft and 
bill of lading under vmich a purchaser or 
consignee is made to appear as honoring 
documents upon presentation by pajmient with 
his own funds, v,'hen in fact the cash in- 
volved was obtained in v;liole or in part 
upon a negotiable instrument bearing the 
endorsement of tie producer; or 

2. A transaction by which a producer, although 
he does not actually endorse the obligation, 
renders himself legally or morally respon- 
sible for its payment if the purchaser or 
consignee shall fail to meet his obligation 
at maturity. 

3. Refunding to a purchaser or consignee, 
either directly or indirectly, any part of 
the purcliase price on accoiint of goods ac- 
cepted and/or settled for by the purchaser 
or consignee under the terf;is of the contract. 
This practice is commonly referred to as 
"retroactive settlement." 



9751 



-342- 



DcfaiTiation of Com-pctitor 

Tl.c defaiTiation of a competitor "by falsely imputing to such 
competitor cliGlionorablo conduct, inalDility to perform contracts, 
questionalile credit standing, or "by otlier false representation, 
or tlie false disparagement of the grade or quality of his goods, 
with t>e tendency or capacity to mislead or deceive purchasers 
or prospective purchasers, is an unfair method of competition. 

Unearned Allowances axid Special Services 

lUie pajmicnt or allowance of an unearned commission or dis- 
count, or of a claim knovm to he false or unjustified, whether in 
the forui of money or otherwise, or extending to any purchaser any 
special service or privilege not extended to all purchasers under 
like ternis and conditions, is an tmfair method of competition. 

Inducin- Sales hy Scllinr:, Buying, or gxchanglng Other Commodities 

The "buying or the taking in exchange of farm crops, produce, 
or any other comiuodity of conmerce at prices in excess of the current 
market price, or the selling, offering for sale, soliciting the pur- 
chase of, or the exchanging of farm crops, produce, or any other com- 
modity of commerce at prices below the current market price as an 
inducement to the purchase of mixed fertilizer, superphosphate, or 
any other fertilizer material where the effect may "be su"bstantially 
to lessen competition or tend to create a monopoly or unreasonably 
to rcsti-a.in trade, is an unfair method of competition. 

Warehouses 

The operation or use by a producer of any warehouse owned 
or controlled by such producer, or of any warehouse or ware"house 
space ormed, controlled, rented, or leased by him or his agent, 
or employee, in such way or under such circumstances as to resiilt 
in the -;ranting of any rebate or special allowance in connection 
with the sale or distribution of any mixed fertilizer, superphosphate, 
or any other fertilizer matci-ial is an unfair method of competition. 

Inducinr breach of Contract. 

Knowingly inducing or attempting to induce, by any means, 
the breach of any contract for the sale or consignment of mixed fer- 
tilizer, superphosphate, or amy other fertilizer material entered 
into by ajiothcr producer is an unfair method of coi-npctition. 

Liisbranding 

The false marking or branding of any product of the industry 
sold, consigned, or offered for sale, v;hich has the tendency or 
capacity to mislead or deceive customers or prospective customers 
as to t.ic grade, quality, qua^itity, sLibstance, character, nature. 



origin, size, finisla, or preparation is an -unfair method 
of competition. 

False and l.Iisleadinf; Advert! sin.q 

Tlie makin-'^ or causin^^ or jjerrrdttini;; to oe made or published 
of any false, -ontrue, deceptive, or misleacdng statement hy v/ay 
of advertisement or otherwise coDCErning the {^ade, quality, quantity, 
suhstance, character, nature, ori^dn, size, or preparation of any 
prodxict of the industry, having the tendency or capacity to mislead 
or deceive purclmsers or pi-ospcctive purchasers, is an ujifair method 
of competition, 

Cominercial Bribery 

The offerin^;^ or ^ivin.-; of money or anything; of substantial 
value to an emploj''ee, agent, or representative of a purchaser or 
prospective purcliaser, without the knowledf^e or consent of the 
purcliascr or prospective purchaser, for the purpose or with the 
intent or effect of influencing the business of the purchasers 
or prospective purchaser,, is an unfair method of competition. 

Price Discriminations 

Discriminating directly or indirectly in price, terms, or 
conditions of sale between different purchasers is an unfair 
trade practice: Provided, that a producer may (discriminate in 
price, _ terms, or conditions of srlo between' purchasers - 

1. On accoiint of differences' in the grade, quality, 
or quantity of the cor.rao di ty sold, or 

2. Because of, and only to the extent of aii actual 
difference in the cost of selling or transporta- 
tion, or 

3. Because suca discriminatory prices, terms, or 
conditions of sale arc made in good faith to 
meet existing competition. 

Heduction in IJumber of Grades 

A list of grades suitable to meet the agricultural needs of 
each State in the District, or of tlie District as the case may be, 
may froa ti.nc to time be established by the producers in the Dis- 
trict o:.' State, acting thi-ough a committee, in cooperation, whenever 
possible, with agronomists and other Federal and State agricultural 
officials. After such grades have been established for any such 
State or District, the sale therein of mixed fertilizer not con- 
fomdng to the grades so established is prohibited as an unfair trade 
practice: Provi,ded, that the sal e^ of special formulas or special 
ingredients in stantlard formulas may be made to fill bona fide orders 

9761 r 



received fi-cm conGwners _Wiio order, on their own specifics.tionG, 
Guc". special formulas or special ingredients in standard, formulas 
if adequate charge is made for such special formulas or special 
in:^;redientG and the miixin," thereof. 

Info lunation and Statistics 

Tor the protection of huyers and sellers, competition should 
express itself openly pnd fairly. ,g«id not in secret or disc 'im- 
inatory form. To that end, memhcrs of 'the fertilizer incioistry may 
puhlish information and statistics relating to sales r?2id shipments, 
as indicated in the follovdng: 

1. Price Eeporting 

Section 1 

A. ITithin seven days after a producer becomes a memlDer of 
the District Fertilizer Producers Fair Practice Associa- 
tion he sliall mail hy first-class mail, vdth postage fully paid, to 
the Secretary of the Association, for filin-, and, at the same 
time, to each other meraher of the Association from vmom he has 

not on file an unrevoked waiver of receipt thereof, a price list, 
for the District or for each suhdistrict thereof in, which he intends 
to do or solicit "business. 

B. Subsequently, tlie member, may fro.a time to time and at 
any time, mail in like manner to the Secretary of the Association, 
for filinjp', and, at the zame time, to each other member uf the Associa- 
tion from whom he has not on file an unrevoked waiver of receipt 
thereof, (l) a new price list superseding his cur:;ent price list, 
and/or (2) a dated supplement to his current price list, identified 
therewith, adding and/or removing one or more grades or materials, 

but in aiiy event not more than a total of three supplements . to any 
one price list sliall be mailed or filed. 

C. For the puiposcs of these Ey-Laws, the price lists 
and/or supplements received froui a member and filed ''oy the :,ecrc- 
tary of the Association shall be deemed to be such member's tme and 
correct price lists, and/or supplements, c::cept that where an identi- 
cal price list or sur^plemcnt mailed by a member to all the other 
mom.bers of the Association is different from that received and filed 
by the Secretai-^, such identical price list or supplement shall be 
such racraber|s true and correct price list or supplement. 

D. Each price list shall be dated, shall show the Dis- 
trict or the subdistrict to w?.iich it applies, and shall set forth 
in clear, concise, and definite language all the prices, terms, 
and conditions v/hich the member intends to use in connection with 
the sale or offer for sale, or in solicitin^^; purchases of, all 
grades or kinds of mixed fertilizer, superphosphate, and/or other 
fertilizer materials which he intends to sell, including the 
following: 

9751 



-345- 



1.. Name- of memlDcr and addx-'ess fox- the District ox- sut- 
di strict* . 

2. Specific i-eo/.raphical area or arear. to which' listed 
px-ices apply ^n event the;^ do not apply to the whole of the 
District or suhdistx-ict. ... 

3. Class or classes of purcliasers to v,'hich the price 
list applies: consumers, retail dealers, private "brand com- . 
panies, wholesale or other cooperative associations, ?/hole- 
sale" dealers. 

4, Point or' points fx-ora which deliveries are to he made. 

5, Period of delivery contempla.ted hy the price list. 
5. uethod of quoting prices, e. 5., 

a. Con s'uiner-deli ve red- to - the-f axn . 
. h. F. 0. B. factory 

c. iDclivered railraod station, or 

d. Any othel- method. 

7. Price of each ^-^x-ade or kind of mixed fertilizer, 
supex'phosphate, and/or other fertilizer material, according 
to class or classes of purchasers, incruding a complete 
method whcrehy the price of any special mixture to. he 

sold or offered for. sale may "be determined. 

8. Quantities to v.diich listed prices api)ly. 

9. Description of containers as to type, capacity, 
and uiateriai, and differentials, if any, for shipment in 
other specified containers, or in hxxlk. 

10. Cash and/or credit tcxTas, includin;-^ settlement date 
or dates, x-ate of interest and date of matux-ity of notes, 
if any. ' , -.; 

11. Terras of conditions, if pjiy, applicahle to repurchase 
of "bags or other containers, or alhowance for hags or other 
containers. 

12. Agent 6.^ compensation, if ajiy, in v/hatever form. 

13. As to any State where a sales tax is collectible 
whether such tax is included in or excluded from the listed 
prices. 

14. All truckin.-: compensations or allowaixces, if any, 
to agents or purchasers. 

15. Wharfage or other port charges, if any. 

16. Warehousing allowances or warehousing compensations, 
if any, applicahle in connection with sales.. 

17. The geographical areas, by tovm or county, or other 
appx'opriate description, in which 'the memhei- intendes to par- 
ticipate' in the advancing of cash or any farm supplies other 
thaix mixed fertilizer, superphosphate, 0:;- o'tiier fertilizer 
materials, cither direct to purchasers or through -any agency, 

•.•if such member engages 'in sdch practice. ■ ■ . ' 

E. A member shall, within three days- after receipt of request 
from the Fair Trade Practice Conxmittee of the Association, issue 
and mail to the Secretary and to each other member of the Association, 
as prescribed in this Section, a written clarification of siny para- 
graph, sentence, clause, or phrase v.?hich appears in his current price 

9761 



list or in any suTDDleraent thereof which such Committee deems to be am- 
"biguous or incomplete. ■.;..' 



E, At the time of mailing his first price list, each member 
of the Association shall also mail by first-class mail, with loostage 
fully paid, to the Secretary of the Association a statement of the un- 
delivered tonnage of each grade ox kind of mixed fertilizer,, sutjerphos- 
phate, and/or other fertilizer material which he lias contracted to sell ' 
at prices or on terms or conditions at variance with those of such price 
list, with the name of the xjurchaser and the prices, terms, and condi- 
tions at variance with those of such price list. 

Section 2 . ' " ' • 

Whenever a member shall have made an agreement or offer to 
change the agents' comiDensation or other terms or conditions of sale, 
and/or shall have made any sale, contract of sale, or solicitation of 
purchase, at a price or on terms or conditions different from those- 
contained in his current price list, he shall, within 24 hours after 
making such agreement or offer and/or such sale, contract of sale, or 
solicitation of purchase, mail by first-class mail, with postage fully 
paid, to the Secretary of the Association, for filing, a re-oort, on a 
form approved by the Directors of the Association, showing the terms of 
such agreement or offer, and/or whether such sale, contract of sale^, or 
solicitation of -ourchase was a cash or a: credit transaction, the class •. 
of purchaser, and the -ooint of destination as sxDecified by the agent 
or purchaser (not the purchaser's name), together with the tonnage- of 
each grade or kind of mixed fertilizer, superohos-Dhate, and/or other 
fertilizer material so sold and the tirices, terms, or conditions used 
which were diffe;rent from those set forth in his current price list. 
The Secretary shall vvevipTe a daily summary, on a form atj-oroved by the 
Directors of this Association, of all such renorts received by him up 
to noon of the current business day, and shall mail by first-class 
mail, with postage fully paid, a copy of such summary to each other 
member of the Association. 

Section 3 ' 

Each member, by 'joining the Associaiton, declares that he 
understands and has personal knowledge of the fact that he is not ..in 
any manner or to any extenfbound to adhere to the prices, terms, or 
conditions set forth in any price list, supplement or report mailed by 
him in accordance with any of the provisions of. this Article, and that 
he may sell, offer for sale, or solicit the purchase of his goods at any 
prices, or on any terms or conditions acceptable to him: Provided, that 
he shall not by the use of such prices, terms, or conditions violate 
the pertinent provisions of these By-Laws and particularly Article XV 
relating to fair practice rules. 

II. Reports of Shipments • 

Section I , • 

On each 

(time to be determined by the Board of Directors) 



Sxiiibit 32 
Part 2- ■ 

COLIPATJSO:: of THS proposed TRA.de practice COI'PEZEl-CE RULES 
T7ITII TIIE CODE OP PAIR COKPETITICR' POE TliE PSRTILIZER IlIDUSTRY 



(For purposes of 'brevitjr the proviEions con- 
tained in the Code of Pair Conpetition for 
the Fertilizer Industry, aiDproved October 31, 
1933, will be terned "old" or "old .provisions" 
and the provisions conta.ined in the Pro-nosed 
Trade Practice Conference Rules, .which are to be 
submitted by the ITational Fertilizer Association 
to the Federal Trade Coimission, on behalf of 
the Industry, will be terriied "new" or "new 
provisions".) 



PROPOSED TPJOjE PMCTIC5 

cox:fepi].xe rules 



Sales Belov; Cost 



K. R. 



CODE PROVISIOITS 



Article VI, Sec. 1 

Sales Below Cost Prohibited 



It is an unfair nethod 
of competition for any riroducer, 
either directly or through his en- 
ploj'-ees, agents, or re-oresentatives, 
to sell, offer to sell, or solicit 
the sale of, or to -consign nixed 
fertilizer, superphosphate or any 
other fertilizer material below 
cost to be detemined by a uniform 
cost accounting s?/sten to be approved 
b;r this Association unless such sales, 
offers for sale, solicitations, or 
consignments are ns^de in good faith 
to meet existing conpetition. 



The sale or offer for 
sale by an-,^ producer of nixed 
fertilizer, superphosr)hate, 
and/or other fertilizer material 
rt a --^rice below his cost except 
to meet existing competition is 
hereby prohibited. The term 
"cost" as used herein means the 
cost detemined in accordance 
with uniform methods of 8.ccount~ 
ing which shaJl be prescribed 
hereunder bj'- the Fertilizer 
Recover:/ Committee with the ajp- 
proval of the National Recoverjr 
Adm.inistration. Such cost shall 
properly define the differ-^nces 
in factory, manufacturi'^g, and 
mixing costs and costs of dis- 
tributing the product to loro- 
ducers, dealers, a.gents, and 
consu' ers a-x". such differences 
in cost r.hall be reflected in 
the sales Trice to each nf these 
cla,s s if i cr, t i ons , 



97 SI 



.349- 



COilililT 



The "ner iirovisions" 
■oracticp.lly the sane as the "o] 



■e, erxept those hereinafter noted, 
•orovisiTAs": 



1. The "ne" provision" eir-ress]."'' is ap'olica-ble 
to agents, eviploj^ees or representatives of the pro- 
ducer in addition to the ;nroc'iicer hinself. The "nevr 
iirovision" e:q^ressl;- precludes do±i\g ^jj indirection 
that vhich cannot he done directly. 

2. The "solicitation of a sale" is also in- 
cluded in the "ner provisions". Tiiis is a trifle 
more stringent than the "old provision". 

3. The elenents to he consic^ered in deternining 
"cost" \7ere enunerated in the "old iDrovision". 



2. Secret Rebates 

The gra--.ting of secret 
rebates irrespective of the forn 
they nay assume or the nsthod hy 
nhich they are paid or allo:7ed 
is an unfair nethod of conpeti- 
tion. The follo'Ting -oractices 
among others BXe exaToles of 
practices uhich violate this 
principle and therefore are un- 
fair methods of competition: 

a. Billing or invoicing 
of mirced fertilizer, superphosph- 
ate or any other fertilizer Mat- 
erial at prices or on terns or 
conditions rhich do not reflect 
actual retn.rns to the producer 
under the tens of his contract. 



Article VIII 
Unfair Pra.ctice; 



Prohibited 



The folloT7ing shall be deemed 
to be unfair competition mthin 
the iTieaning of the national Indus- 
trial Recovery Act and are hereby 
proliibited: 

Sec. 4. TJithholding from or 
inserting in any invoice a state- 
ment v/hich mal:es the invoice false 
rega.rding the vrhole or e.ny part 
of the transaction represented 
on the face thereof. 



COLCIEIiT 



These are substantially" the same. 



b. Providing railraod, 
truch, or other diodes of transporta- 
tion or deliverying nixed fertiliser, 
superphosphate, or a.nj'- other fer- 
tilizer naterial rrithout adequa.tely 
charging for 



3U.ch trans-Qortation 



Article VIII, Section 5 - 
Providing transportation rithout 
adeq-oa.te charge for it, or re- 
imbursing the dealer* agent pur- 
chaser, or consignee for the costs 
of transportation if reimburse- 
ment is not provided for in 
the producer's price list. 



9761 



-350-: 



c, ReinDursin^; a dealer, 
agent, puj-clisser, or consignee : 
for the costs of transportation 
at an3'" amount other than that 
set forth in the procuder's 
contract, 

COMIIEITT 

These are substantial!-- the srne, rei;al)urcenent for trans^jortption 
under "nev;" to he in accord^,^.ce -"ith contraxt; u.:ider the "old" in accord- 
a.nce ■'Jith filed sched\ile'. 



d. SelMng, off faring to 
sell, or soliciting the sale of, 
or consigning nixed fertilizer, 
chemicals, superphosphate or ■ 
any other fertilizer material 
T7ith specia.l conmissions or at . 
reduced -or ices, an an inducement 
to the "buyer or pros-oective "buy- 
er or consignee to purchase mix- 
ed fertilizer, super;Dhosphate or 
any otlier fertili-zer na.terials. 



Article VIII, Sec. 7 - 
Selling or consigning chemcials 
rnd materials ^■'ith sriecial con- 
cessions or at- reduced "orices, 
given to induce the -ourcha-se of 
mi-:ed fertilizer, s\\perphosphate, 
aiid/or other fertilizer materials. 



COin.IEITT 



T'hef?c p.re su"bs_tantially the sr:;e, e::ce-ot that "offerii 
soliciting the so.le of - - - -" is induced in tlie "-^.en". 



sell, or 



e, railur to eiiforce in 
good fa.ith the terns of contracts 
previoual;- -lade for the sale of 
mixed, fertilizer, superphosphate, 
or any other fertilizer natt^ria.l. 



Article VIII, Sec. 8 - 
Failure to enforce in good faith 
tlie terns of contracts previously 
nade for the sale of nixed fei^ 
tilizer, su-oerphosphate, r,nd/or 
other fertilizer material. 



COI.n.EM' 



The.s 



'6 identical 



f . Selling on terns that 
require the pa:"~:ent of signt 
draft on presentation of hill of 
lading (S, 2. B. L.) and then 
waiving the ooligation to pay cash 
"before' docunents or goods are de- 
livered, thus deferring the paj'-ient 
of the cash to some future date. 



Article VIII, Sec. 8a- 
Selling on terns that reouire 
the pajrient of sight draft on 
;oresentation of hill of ladir^g 
(S. D. 3. L.) and then rraiving 
the ohligation to vp-j cash be- 
fore docu-ients or goods o,re de- 
livered, thus deferring the rjay- 
ment of the cash to some future 
date. 



9761 



-351- 



coi: 



Tjiese are identical, 



g. Selling and delivering 
goods on tine, consignment, or 
open bill of lading on S. D. l'. L 
nrice or vraiving ea^rned interest. 



"b - Selling and delivering 
goods on tine, consignnent, or 
open bill of lading on terms on 
S. D. B. L. "orice, or xraiving 
earned interest. 



COmElIT 



These are identical, 



h, Purnishing containers 
other than the producer's standard 
containers, preparing special forra- 
ulas for individual buyers, con- 
signees, or agents, or using s^iecial 
ingredients in standard fomulas, or 
special ingredients, as an induce- 
ment to the naking of a contract of 
sale; or a sale. 



Article VIII, Sec. 9 - 
Furnishing specia,l containers, 
-oreparing special fomulas for 
indvidual buyers or consignees, 
or using special ingredients in 
standard formulas, without ad- 
epriate charge for the cost of 
such containers, fonulas, or 
s;oecial ingredients, as 8:a in- 
duce-ient to the nailing of a 
contra,ct and/or sale. 



COLilSU 



Substantial!-' the sane. 



i, !'8.];ing special al- 
lowance to buyers, consignees 
or agents under the guise of 
advertising expense, or giving 
any other form of gratuitA^, 



Article VIII, Sec. 10 - 
:;3':ing special allor-ance to buyers 
or consignees t-Jider the g-uise of 
axlvertising eX'Dense, or giving any 
other form of gratuitv. 



coi.s:eitt 

Substantially the sane. 
3. Pronotin,": Secret Rebates Article VIII, Section 11 (a) 



It is imfair nethod of con- 
pet ition to use nethods of sol- 
iciting sales and naking sales 
that pro-'ote secret reb,ates and 
concessions, such as: 

a. Emloviig a bu--ei; or 
prospective bu"'-er,.or co:isignee, 
or prospective consignee, or his 
agent or an"' one employed bj^ or 
connected uith a bu3'-er or pro- 
spective biayer or consignee,, or 



Enplo3'-i:ag a. buyer or consignee or 
his agent ar any one enplo^'^ed by 
or coimected rith a buyer or con- 
signee with the "ourpose, design, 
and effect of influencing the 
business of such custo'ier. 



9751 



-352- 



prospective consi;":nee, '"ith t_ie 
piirpose and design, or effect of 
inf luenciiii:, the Easiness of v/acli 
suyer, coTisirnee , prospective 
"buyer or prospective conr-.i^'^nee. 



COMIEITT 



Substantially the spme. 



h. Carryir.g on "boohs "by- 
producer or his agent, as delin- 
quent, "balances due "by solvent 
customer vdth no intention of re'- 
quiriUi;; ultimate pa,yment . 



Article VIII, Sec. 11 (b) - 
carrying on hooks by seller 
or- .consignee as delinquent 
balances due by solvent cus- 
tomer v.'itli no intention of re- 
quiring ultimate paj^iient. 



Substantially the same, 



c. Enabling the purchaser 
to ob.tain mixed fertilizer, super- 
phosphate, or any other fertilizer 
material apparently on cash terns. 

1. A tran^E.ction covered bj' 
a sight dr'-ft a..r' bill oi lading 
under v^hic'n t".ie '-lurch-'.^er or con- 
signee is i'liade to ap'^e.^r 0,=: hon- 
oring. docuMents ui-^on prrcentation 
•by pajTnent vdth his ovm fwi'^ s , ■■■"le: 
in fact t"ne cash involved v/as ob- 
tained in vmole or part u:oon a 
negotiable instr-oiiient (usually dis- 
counted at a bank) bearing tne 
endorsement of the producer. 



Article VIII, Sec. 12. En- 
abling t"ne -nurchaser or con- 
signee to obtain mixed fertil- 
izer, styerphosphate , anchor 
other fertilizer material 
ariparently on ca.sh terms, but 
in fact on ci'edit extended 
to hira by or t'nrough the pro- 
ducer, PS, for example: Sec- 
tion 21. 

A transaction covered 
by r sight draft and bill of 
Jading; londer v;hich the pur- 
cimser or consignee is made 
to ap-oear as honoring docu- 
ments ur.on presentation by 
payment with his own funds, 
when in fact the cash involved 
was obtained in v/hole or in 
part upon a negotiable instru- 
ment (usur.lly discounted at 
a ban;:) bearing the endorse- 
ment of the producer. 



flOi 



Phese are identical. 



2. A transaction by v/hich 
the producer althou^/n he does 
not actually endorse the obliga- 
tion, renders himself responsible 
for its payment if the purcliaser 



Article VIII, Sec. 12 - 
b. A transaction by -v/hich the 
iiroducer altho-Ui^h he does not 
act-ually endorse the obliga- 
tion, renders himself legally 



9761 



■553- 



or a.'^ent sliall fail to neet his 
obli;2/'^tioi; to tile "banh at 
mo.tuj.-ity. 



or morally re?"-'onsi'ble for its pay- 
i-r^iit if the purcha,per or cor-signee 
sn-.ll .fail to ;.-'.eet his o''olij;,ation to 
tiie "banl: at maturity. 



co: 



L'ne £ 



identical. 



b. 2ef"unCin/ to the 
huyer or agent, either directly 
or in'J.irectly , an:' --■art of the 
pui'Chase price on accoxint of 
goods accepted and/or settled 
for by the biiyer or consl£;nee 
"ULider the ter.ns of the contract. 
This ;;>ro.ctice is cora.'-ionlj' re- 
ferred to as "retroactive 
settlement" . 

cc- 



Article VIII, Sec. 13. Re- 
funding to the bu^ver or consignee, 
either directly or indirectly, any 
"-■art of the '^urciia.se price on ac- 
count of goods acce-'-ited and/or settled 
for by the buyer or consignee under 
t"ie teriis of the contract. This 
pra.ctice ic commonly referred to as 
"retroactive settlement." 



These arc 


if.entical 


is 


Ar 


following 


- - -or 



•1, Rebates . I 
recom. .ended thiit the 
practices, which e:^^oerience 
has shown to be unsouiid, be 
elimina.ted: 

a. Reimbursing, buj'ers or 
consignees, directly or in.'irect- 
1;^, for actu£.l or theoretic; 1 
varehouse service or facilities. 



tide VIII, Sec. 6. " 

the ^nrlring by onj producer 
in connection v/ith the sale of 
mixed fertilizer, superphosphate, 
and/or other fertilizer material 
of an v.llowance for warehousing 
not included in his price schedule. 

Article VIII, Sec. 10. " 

- - - or giving any other form of 
gratuity," 



The "new provisions*' •would prbMtoit: the reiffibursement to buyers or 
consignees for j:,ctual v/arehouse service facilities, vrhereas.the "old" 



■oermitted an alloi"ance 



it was 



ncluded in the price sched^ule. 



b. Ado;ating selling raethocs 
which, as exToerience lias ainly 
demons tra.ted, nearly alv/ays pro- 
mote secret rebates and concessior 
and put it out of the po'ver of the: 
producer to control them, lleferei: 
is here particuiarlj- made to the 
practice of sellin, thro\Y:h coi-.i.;.iE 
a.gents an others who are irreguL? 
emiiloyedL and T/hose compensation i? 
measured in terms of qua,ntity solo 
'(There e^rperience luis shovm th3,t 
cominission men and li::e agents 



;ion 
riy 



Article VII, Sec. 2. Sales 
Through Commission Traveling 
Salesmen Prohibited. - No 
traveling salesman shall be 
enrployec on a cor.i:iission basis 
for the sale of mixed fertil- 
izer, Pu-.Terdios-ihate, and/or 
other fertilizer material. Such 
sales Kivall be made only 
throivgh reg-ular, legitimate, 
sa.laried salesmen worhing under 
the control of the producer. 
ThJ-S section shall not apyjly 



9761 



custoinarilj'' resort to split 
cor'TKissions , secret reloates, 
and similar -iractices , pro- 
ducer should sell ov.ly throu£;h 
regularly enrployed salaried 
salesmen and ag-euts responsible 
to and directly controlled by 
the "producer. 



to the State of Florida, 

Article ?II , Sec. 4. Sales to 
Dealer and Consumer ThroUij-h Brokers 
Prohibited. - The sale by the -pro- 
ducer of mixed fertilizer and/or 
bagged suioerphospha^te to the '.dealer 
or consumer through brokers is here- 
by prohibited.. 

(The States of Idaho, Utah, Montana, 
Colorado, Wyonin- and Nebraska are 
exempt from all regulatory rules 
■nertaininc: to sales.) 



COi 



These are substantially the same, 



5. Ile faraation of Competitor 

The defamation of a conT;:ieti- 
tor by falsely ijiiputin,j to such com- 
petitor dishonorable conduct, ina,b- 
ility to ;;erform contracts. Question- 
able credit sta:.idin£:, or by other 
ia.lse representation, or the false 
disparagir.ent of tne grade or ouality 
of his goods, v;ith the tendency or 
cacgcicity to :.iisle?^d or deceive pair^- 
cliasers or prospective purchasers 
is an unfair method of competiti r/n. 



Article VIII, Sec. 1. The de- 
famation of a com-->etitor by 
falsely inrouting to such compet- 
itor dishonorable conduct, in- 
c.bility to perform contracts, 
cnj.es tionable credit standing, or 
by other fa.lse disparagement of 
the grade or quality of his goodc 
vrith the tendency and capacity 
to mislead or disceive purc'naser:; 
or i^rosnective "ourchasers. 



COIii^EITT 



These are identical. 



6 . Un e a r ne d C oram i s s i o n s 
or D iscounts. 

• The paiTnent or allov/ance 
of unearned com lissions or dis- 
couits, or of claims 'niown to be 
false or unjustified, y/hether 
in the form of i.ioney or other- 
v/ise, or e;':tenc.in£ to certain 
jiurchasers s""icci<:.l cervices 
or privileges not extended to 
all purchasers under li]:e terms 
and conditions is an imfair 
method of corn-petition. 



Article VIII, Sec. 2. Tlje pa.y- 
ment of an allovfance, except as 
required by law, of rebates, re- 
funds, or xmearned commissions 
or discoititG , or of claims laiown 
to be f'llse or unjustified, 
v^hether in the fonn of money or 
othervifise, or extendi-ng to cer- 
tain purcha,sers special services 
or privileges not extended to 
purcliasers under like terms and 
conditions. 



9751 



-355- 



Substantin.lly tl 



7 . YJarcJiojases 

The operation or use 'by 
a riroc-ucer of any vfarehouse 
o'.'iied or controlled by such 
producer, or of any warehouse 
or Vv'areiiouso space ovned, 
co;-trolico., re:iter , or used 
hy hiia or .'-lis <.\_e.,t, or em- 
ploj^ee, for 'the storage of 
mixed fertilizer, sivoer- 
phosph^te, or an/ other 
fertilizer naterial, in 
such v;ay or under such 'circum- 
stances as to result in the 
^^rantinr;- of rebates or special 
alloi;a,nces from, the contract, 
or Scales -orice of any aixed 
fertilizer, superphospho.te , 
or any other fertilizer material 
sold or offered for sale oy 
such producer is an unfair 
method of competition. 



Article VIII, Sec. 6. The 
operation or u^e hy a Tiroducer 
of any v/arehouse ovmed or con- 
trolled l.y such producer, or of 
any warehou'"-e or warehouse 
s"oace lear-ed by him for the 
storare of mixed fertilizer, 
sui^emhospliate , and/or other 
fertilizer nateria,l, in such 
v/ay or under such circumst.ances 
?..s to result in the j^; ran ting 
of rebates, or si^ecial allovf- 
ances from the contract price 
of a.ny mixed fertilizer, super- 
phosphate, and/ or other 
fertilizer material "sold or 
offered for sale by such 
producer, or the mahin^ by any 
prodtucer in connection with the 
sale of m.irced fertilizer, stiper- 
phos"ohate, rnd/or other 
fertilizer material of an al- 
lowance for warehousini5 not 
included in his "orice schedule. 



C0:-5:"T 

Substc^ntial'^y the ss.me , ho-rever, the last clause of the "old" 
shoulc be noted in ccnnectio ; with tne"new -provision" -;:^ertaining to 
Rebates i^h) . 



S. Inducing tJie Bro.ach of 
'Contracts. 



Article VIII, Sec. 15. 



Knowinjly attei.rpting to 
induce or '.:n.o\-ii-:iQly inducing 
the brea.ch of ^.ny co/.tract for the 
sr-le or consii^jmient of mixed 
fertilizer, superphosphate, or 
a..y oth'ir : ertilizer material 
enterec. into by another -o reducer, 
b: offerin; a lo'.er --rice to tn.e 
purcliaser or co-.s;i; :.ee under such 
contract, or by any otner means 
is :;.n --unfair method of corp-.eti tion. 



Indue ini^ the breach of 
any co;;tra,ct for the sale of 
mixed fertilizer, suoerphos- 
"jliate , and/or other fertilizer 
material by offeriAc a lower 
-price to the p-'orchaser under 
such contract, or by any other 
means. 



COr~rT 

Tlie "new provision" is more stringent because it incl-ades the 
"attempt" to ind-ace a brea.ch of contract, whereas the "old" only 
pe'nalized "i-nducinp" the breach of ;::, co-ntract. 



9761 



-356- 



Mislirandi. 



Article VIII, Sec. 16. 



The fc.lpe :nar:':ing or "brand- 
ing of any produ.ct of the industry 
which ha.s the tendency and capacity 
to mislead or deceive customers or 
prospective customers as to the f^ade , 
q.Uc\lity, qiiantity, suhstance, cnaracter, 
natiire , 0T±c,iii, size, finish, or prep- 
aration is an unfair method of 
c omo e 1 1 1 i on . 



The false markinf;- or 
iDraiidinf: of any product of 
the industry which has the 
tendency to mislead or de- 
ceive customers or pros- 
"oective customers as to the 
grade, quality, quantity, 
sub s tance , clia.r ac t e r , nature , 
origin, size, finish, or 
preparation. 



Substantially the sojne. 



1 . Fa lse_ a nd i.'is leading 
Advertising 



Article VIII, Sec. 17. 



The mal:in{;; or causiUi^, or 
permitting to Le ma.de or :ou'blished 
of any false, untrue, decep.tive or 
misleading statement "by T.'a;," of 
advertisment or otherv;ise concern- 
ing the grade, q-urlity, qu^antity, 
suhstancc, character, nature, 
origin, size, or prej.iaration of 
any product of the industry having 
the tendency and caps-city to mis- 
lead or c eceive purciia-sers or 
pros"oective purciicasers in an unfair 
method of comoetition. 



The mahing or causing 
or permitting to he made 
or inuhlished of any false, 
untrue, or deceptive 
sta.tement hy way of advert- 
iseiient or otherv/ise con- 
cern! n,;; the ;;rade, a^uality, 
quantity, substance, 
c"naracter, nat-ore, origin, 
size, or preparation of any 
prodiict of tlie Industry 
havin". the tendency and 
c?.-"i;.city to laislead or 
deceive i-i-urchr sers or 
"orospective -i-jurciiasers. 



These care substantially the saiiie, 
11. Commercial Bribery. 



The giving of money, or 
anything ox subsca.ntial value 
to an, employee , agent or rep- 
resentative of a. "buyer or 
prospective "b-u^y-er for the pur- 
pose or uitli the in.tent or 
effect of influencing the 
business of tne "bu'er, or pros- 
pective buyer, is an unfair 
method of competition vaien 
done vdthout the ''rnov/ledge or 
consent of the buyer or pros- 
pective buyer. 



Insofa.r as the H.E.A. Code is co-^cerned t'lere v;as no provision 
s":-.ecifically pertalnin/:; to comnercial ■bri'oery. 



Price Jisc r imi na.t i one 



It is an -unfair uethod of 
conyetition for any producer en- 
ga;-;ed in commerce, either dir- 
ectly or indirectly, to discri- 
minate in price "oetv/een different 
piXL"^hasers lieca-ase the effect of 
such discrimination may "be the 
substantial lessening, of conpe- 
tition or a tendency tov/ard a mon- 
opoly in any line of couierce ; 
Provided, that a producer may 
dis'^ri in te in -irice "betv/een 
pirir^.:\;,G- -'l on acco"UJit of 

1. jifforences in tne ■^Tz.v.e, 
quality, or q-u^intity of the 
com-noditp sold, or 

d. Because of, and only to 
the exuent of an actual differ- 
ence in the cost of sellin/ or 
transportation, or 

o. 3eco,use such discrinina- 
tory prices are nade in {:;ooc' 
faith to i.ieet existinc coiT-^eti- 
tion. 



Article ■"■! , Sec. 2 a "- - 
- - each producei" sliall file with 
the Secretary of The ''National 
Fertilizer Association:" 

Article VI, Sec. 2 a (2) 
A schedule hy zones of the prices 
then in effect or to "be char£:ed 
for all ,;;rades or hinds of mixed 
fertilizer, su--> e rpho spliat e and/ 
or other fertilizer material 
sol'J or offered for sale to 
dealers, ag;=nts, or consumers 
hy such -producer, toyeTner with 
the terms and conditions 
sry-1 icg.h l e the reto. 

Article VI, Sec, 3"b 

" no mixed fertilizer, 

su'Ter--jhosphate, and/or other 
fertilizer material shall he sold 
or offerer for sale "by such -:iro- 
ducer r.t a '^rice or on terns or 
condition? ot'ier tlia.n 8,s speci- 
fied in said schedule - - - -" 

Article VI, Sec. 2 c. 
" - - - -schedule filed to meet 
a new or chg.n^yed schedule filed 
hy a com."':etitor may 'become ef- 
fective on the sam.e date and hotir 
t ha t t he c om- j e t i t o r ' s s c he dul e 
"becor.ies effective if a copy 
thereof is filed with the 
Secretary of the V"ational Fertil- 
izer Association ------ 



CC^ 



These are suhsta-ntiall",- the s vi le , "ur>der the "old" the "irice 
schedules filec contained provisioi:'^ for ; ranti'.L disco"Dnts for diff- 
erences in {.rade, quality and quantity of the -^roduct -'purchased; there 
was e^lso alloi"'a,nces made for differences in or .ns'iortation costs. 



1-3. Guarantee in 
Decline. 



;ainst 



.rticle VIII, Sec. 14 



9761 



-358- 



Every purch3.se and sale transac- 
tion denotes a thing sold, a deliver^", and 
a price to ue ;o?,id and 'to dp received. In 
order to 'be effective and enforcible, t;ie 
transaction should "be snecilic and definite 
as to each of its eleraents. 'Tnile -preser- 
ving a.nd iraintaining the privilege and the 
right from time to time in food faith to 
meet existing- comjjetition, prociucers should 
avoid gioaranteein;-' prices a^gainst decline. 
The effect of sucn a guaranty is th.at at 
the time the goods are shi;-ped the ;;-iroducer 
does not ^ noY.' the "-irice he v/ill eve:it-ually 
receive thera, and the accovjit renc.ered is 
opened to controverr.yand vu.:' he suhject 
to settlement at the loijest price tii^^.t 
raa,y prevail durin; the season or that may 
"be quoted to a buyer "by a com-:-;etitor who 
may he lacj:i:.ir in good fs.itli. This -ilacos 
competitive h-ujrere at a disadvpnta-ce and 
often results in discrimination Deti./een 
consumers. 



The guaranteeing of 
prices against decline to 
dealers , agents or con- 
s"uinv^rs. 



coiii;e"t 



Substantiall:" t"he so.me , the "now" 
justifying such prohi"bition. 



merely going in the reasons 



14. Private 



It is ^Iso rocon:aended 
t"nat producers avoid tlie vrac- 
ticeof :.ia':ing up mixed ferti- 
lizers, su;Tf;rp"nosT'hate , a,nd/or 
any other fertiliser material 
for sale under private "brand hy 
dealers, and of preparing specia.1 
formula.s or using s""ecial ingred- 
ients in standard formulas with- 
out making adequate cliarge for 
the cost of such formulas or 
special ingredients or the mix- 
ing thereof. 



Article VI, Sec. Z a 2 (supra), 
and Sec. G (su-.ra). 

Article "'.'II, Sec. 1-"-- 

after such grades have "been 
eGta."blished for such St.ate or zone, 
the sale or offer for sale therein 
of m.ixed fertilizer not conforming 
to the ^ra.des so established shall 
"be cojisidered an unfair trade 
practice, provided that the sale 
of special formulas or special 
ingredients in standard formulas 
may "be mtvde to satisfy "bona fide 
orders from cuftomers if adequate 
aC;."'itional c"nt'.rge is ma,de for 
mixing costs as determined for 
the particular plant rnder the 
uniform accountin, methods -'^res- 
crihed i.'j Article VI plus the 
extra cost of Gpecia.l materials 
used -------." 



COMLTEgT 
These are su'bstantially the s.ame, 



-359- 



15. Reduction anc". Star-d - 
ardization of C-rades. 



Article VII - Sec. 1. Reduction in 
:Tujn'Der of Gr-.dec of r.ixed Fertiliz- 
er. 



In ordor to eliminate y^aste 
and red.uce the cost of rnan-ofacture , 
bcp.riv.r- in' inindt the economic int- 
erec-t of the farmer, a list of 
grad.es suitable to meet the 
ai^ricultciral needs of each State, 
or of each District, as the 
cp.ce may he, may fron time to 
ti;-;e he established by the ;oro- 
ducers in such District or State 
acting throurh 3, ])i strict com- 
mittee, in cooperatioii with 
agronomrsts and'othe-c- Fed.eral 
and State agricultural offici-ls. 
After such grades have been 
established for such St-i.te or 
District, the s'le or offer 
to sell therein of mixed, fertil- 
izer not conforming to the , r-ule 
so established is consic.erec ,?ui 
unsouiid, uneconomic and vjasteful 
trade :>ractice. rlo'vever, the sale 
of s;-iecial formulas or special 
ingredients in standard formulas 
ma.j- be ms.de to satisfy bona fide 
orders received, from consuiers 
who ord.er, on their ova s-oecifi- 
cations, such special formulas or 
s":ecial ingredients in stancL^.rd 
formulas, provided th,at .an rde- 
q.u^',te charge is macie for the 
mixin,', thereof. 



I21 order to eliminate T.-aste 
and reduce the cost of manufact- 
ure, bearing in mind the economic 
interest of the farmer, a list 
of grades suitable to meet the 
agricultural needs of each State 
or of each zone as the case nay 
be, may be established bv the pro- 
ducers in such zone or St"te, 
acting throu<fh a zone committee, 
in cooT^erption with agronomists 
an^. other ?ederrl and State 
agriculti-r-1 officials, subject 
to the :■■■-■■ roval of the 'National 
Recovery Administration. After 
such grades have been esta,blished 
for such St -.te or zone, the sale 
or offer for sale therein of 
mixed fertilizer not conforming 
to the grades so establishect 
shall be considered as ■'onfair 
trr.de practice, provided tha,t the 
sale of s-'^ecial formul-s or 
snecial irgredients in stanidard 
formulas may be made to satisfy 
bona, fide orders fro-n customers 
if adequate addition-'.l cliarge 
is made for m.ir.ing costs as 
determined lor the I'l.-^rticular 
plant under the uniform account- 
ing methods -nre scribed in 
Article ■"■! plus the extra cost 
of -special materials tised; a.nd 
provided that this slnsJl not 
prevent any producer from sell- 
i V' or offering for sa.le two 
extra gr.ades for lavms and 
gardens in various-sized 
pachages not to exceed 100 
pounds a pachage. 



COWffiW^ 



Thes 



16. Settlement o: 
L . Shiument s . 



are substantiall 

I s. r. B. 



the 



1. Tfnen shipments are made 



Article VIII, Sec. 8. 
]^^,ilure to enforce in good faith 
t'le terms of contracts rirevioxis- 
ly made for the sale of mixed 



against docujuents, producers should fertilizer, su-iemhosplaate , and./ 



-360- 



sell only on such ter.is tli-t, to 
obtain the hill of lac'.in ■, t\\e 
purchaser -mu=;t nirJie pa^aent TOon 
deliver:-- ol ;":corl.s in cash. oe. mahe 
settlenent h" nejC-otiable -iroiais- 
sor:' note lor the contract price. 

2. If the delivery is nade 
a£,ainst a promissory note, the not 
should he made payaole at the 
earliest date consistent v.'ith the 
requirement tlmt the fertilizer 
should he paid for not later than 
the time vmen the cro"o to ••'hich 
the fertilizer vas ap-ilied is 
mar' :e ted. 



or other fertilizer ihaterial, as 

a. Selling on terms tha_t 
recivire the pa:','ment of sight - 
draft on presentation of bill 
of lading (S.~,B.L.) and then 
waiving the obligation to -nay 
cash before doc-uments or goods 
are delivered, thus deferring 
the -oajTnent of the cash to some 
fut-ujre date. 

b. Selling and dLclivcring 
goods on time, consignment, or 
o-oen hill of lading, terms on 
S.":.3.L. price, or v;aiving 
earneC' interest. 



co:'"t:^^ 



These are substantially the same, altho\\gh a certain relaxation 



is -permitted in 



of the "■ 



^s contrasted vdth the "old.' 



17. Crop Sharing 



Furnishing of mixedt 
fertilizer, superi-ihos^ohate , or 
any other fertilizer material 
by a :oroducer, uir;?ctl-- or in- 
directly, to any cons''jmer with 
a '"irect or indirect understand- 
ing that -payment therefore sliall 
be made hj turning over to such 
producer a q-oantity, fixed in 
advance and without reference 
to the marhet ;>-irice, of the 
crop produced by tnc use of 
such fertilizer is an -anfair 
method of competition. 



Article VIII, Sec. IG. 
ITui-nishing of mixed fertilizer, 
sir^erohos-'hate , and/or other 
fertilizer material \)y a pro- 
ducer to auiy consumer with the 
underst?nding ths.t pajn^.ent 
therefore shall be made by 
ti;.rning over to such ■nrod^^cer 
a qri^antity, fixed in adva.nce 
and without reference to the 
mar"' let price, of the crop pro- 
ducec' by the use of such 
fertilizer. 



COH'-MT 



These are substantially tlie sam.e. 



1 8 . fjrj.c& Il e'oorting 
Section 1 

A. v'ithin five days 
a.fter a producer becom.es 
a member of the District 

Fertilizer Producers 

Fair Practice Association he 
shall mail by first class mail 
or deliver to the Secretary 



Article VI, Sec. 2. Open 
3 -Schedules. -a. YiTithin five 



da.yr after this Code becomes 
effective each :orod.ucer shall 
file with the Secretary- of The 
l\Iational Fertilizer Association: 

1. A statement showing in wh-^t 
zones said producer intends to' 
sell mixed fertilizer, super- 
phosphate, and/or other fertiliz- 



9761 



-561. 



of the Ac-sociation for filing; a 
■-■rice list for -OJ. rr-". e? rr "i^inds 
of i.iisec fertilizer, sir 'erolios"!!!- 
ate, and/or other fertilizer mat- 
erials for the District or any :oart 
thereof in i^hich he intent's to do 
or solicit 'oiisi'iess. 

B. After such price list 

lies been filed, the nienher may file 
with the Secretary of the As-ocia- 
tion at sny tine a new ■■-■rice list 
super sedi-.\^, any -or ice list -revionsly 
filed hy him. 

C. On t:ie s;u-;ic d--,? tnrt a 
raera'ber r.ails or delivers c. "^rice 
list to the S&cvct r:- jf tV^e Asso- 
ciation, sue: .?.:iJer -nrl], -..hl hj. 
first class ."'--il cr t'elivf-r a tr-c.e 
copy tnereof to each other --le. iher 
of the Association. 

D. Each .leraoer, by joining 
-the AssoeiaWon, declares that he 

■understands a"nd has ^:ersonal 
l-nowled;r;;e of the fact t'nat the 
filir.fj of s. price list . ocs not 
in a^ny i.ian^ner or to any extent hind 
hiiTi to adhere to the '-rices, terns, 
andi co'naitions set forth therein 
and that he ma;- sell, offer for 
sa-le , or solicit the ■'-•iirch-se of 
his c;oods at any -'trices, or on 
any ter is or conditions acce-'tahle 
to him: provided, t'vat he shall 
not hj' the use of such -irices, 
ter;:is , or conditions violate the 
pertinent "orovisions hv these 
By-Lai7s and i?articularlv Articles. 



E. Ail -.rice lists s'lall Do 
dated ani. sliall set forth in 
clear, concise, and definite lang- 
uage the prices, terms, and con- 
ditions which the menher intends to 
use in connection vlth the sale, 
offer for sale, or in soliciting 
purchases of all i;;,rades or >inds 
of mixed fertilizer, sLroernhosphate , 
and/or other fertilizer- materir.ls 
including;, ajaoni;,- others, the 
f olIoYdn.'^i 



er no.terial; 

■■\ A schedule hy zones of the 
•irices then in effect or to he 
char-^ed. for all p;rades or I'rinds 
o:" n^ixed fertilizer, su-oer-ihos- 
"ohpte, i\nd/or other fertilizer 
material sold or offered for 
sale to cealerp, apents, or 
consumers h;- siich riroducer, to- 
{^ether ^-/ith the terms anr" con- 
ditions ap-ilic3."ble thereto; and, 

r<. S1ts,11 mail or deliver 
tme coT'ies of such schedule tp 
his con-'Otitor'- in the zones 
v/iiere s-J-Ch viroducer c'oes 
"business . 

h. If the original sch- 
e'dule s'l filed 'by any -oroducer 
re-^-^rc cents any clvan-^e in his 
t'\en e-"-istin£.: i^rices , terns, or 
c-in:~.itions , ic shall not hecome 
effective until the exoiration 



nour 



after it it 



:iiea 



After the orii-^inal schednJe is 
filed, no mixed fertilizer, 
su:-^ei''^hosphate , and/ or other 
fertilizer material sh^J-l he 
sold or offerc'"- for sale b-r 
such V voduccr at a "irice or 
o'/: torms or con.ditions other 
thnn as s-oecified in s-^id 
schedule or in a new schedule 
that has "becO'-^^ effective 
p.ursur'nt to the -orovisions of 
tni? Section.. 

c. "To nev schedule advanc- 
in;- or ro'fucin.f: any price or 
s-ian.ying the tfirms or conditions 
shall he deemed to liave hecome 
e^'fective here"under until a 
date and hoiu- ten days after 
it has heen filed with the 
Secretary of Th.e FationaJ 
Tertilizer Association a.nd. 
"Linlcss simultaneously vith 
such filing; triie couies there- 
of have heen m.ailed or delivered 
h^- such -producer to dther 
-nrodn.cers in the sones where 
the -n reducer vdio files the 
schedule-is doing business ex- 
cept that any such schedule 



9761 



-362- 



1. I'ame of .n'^n'ber and addr®?? 
of filing office. 

2. S^Tecific /^leographical arez 
or areas covered "b^r tlie 
price list. 

3. Point or "loints fro:-, -diici 
deliveries are to 'oe n.'.fe, 

4. Method of listii^.ii: -orices , 



a. Gonsu^ier-delivered- 
to-t^.ie-faria. 

b. P. 0.3. factory, 

c. Delivered rp,ilro3,d 
station. 

5. price of each --rsde of 'cind 
of rixed fertilizer, su;->er- 
l-ihos-oiiate, and/or other fert- 
ilizer materiaJ. 

5. Q,-ua.ntities to which listed 

-orices a^■^-'l^% such as carload 
or less-than-carload. 

7. Definite s-^ncif ic^ti ms of 

CO itainers and c iffere itials , 
if any, for shi\)niont ir. ot'ier 
s'occified conta,i"iers , or i"i 
bulh. 

8. Cash and credit ter^is. 

9. Settlement date or dates. 

10. Ra'te of interest and date of 
matiiritj'- of notes.- 

11. ISliether repurchase of 'ba£,s 
may be a term or condition 
of sale, and the a,ilowance 
for such bait;s. 

12. Agents' co/ roensation. 

13. In States v/iiere a sales 
tax is collectible, vhetlier 
such tax v/as includerf in or 
excluded from the nrice. 



filed to i'eet a, nev; or ciirnged 
schedule filed, by a com-etitor 
riay becorv^ effective on the same 
d.?.te and '-our thot the conrpet- 
itor's sc^^.edule becomes effect- 
iver if a co-T>r thereof is filed 
t7it>i tl^e Secretar.y of the 
rational ■'fertilizer Association 
end co^-iies have been mailed or 
delivered to ither prod,ucers in 
the same zones bX ieast 4-8 hsurs 
before such effective d.ate and 
hour. A'ly ori;'^inal, nevf, sr 
cho,nf;ed schednle y/nen filed sliaJl 
be or.en to ins-r^ection by Finy 
i-ror'ucer. 

d. ■'■'-ion recei-i-it from any 
producer o:" ^n?" orif;i!ipl or new 
sc":edule re^resentiny a eha.nye 
in "'rices, terms, or conditions, 
the Secretary of The '"'ational 
?ertilizer Association shall 
immediately m.ail to such i^ro- 
diuccr pad to other --producers in 
the zones to i^hich such schedule 
relates a notice of the date 
and hovT of filin."- of such 
sched\T.le ^nd ^hen it becomes 
ef'^ective. 

^. There shall be attached 
to each schediile filed hercimder 
p statem.ent s^oecifyiny the chanyes 
m'-'e t'-'orein from the l-'st -^re- 
ccdi-'.y sc'-e'hj.le. The oriyinal 
sc'-odule -^f each -^reducer filed 
hei'eunder shp.ll be nnmberefl "one" 
and •all srb5ean.ent scheduler or 
chanii^es in sched.ules shall 
be numbered serially in 
a.ccordance i-'ith a uniform -olan 
of nurnberiny "nrescribec" by ^Tie 
Fational "'''ertilizer Association, 



14, All truc'ln;'^^ coKoensations 
or ailowpnces ' to ;-urciTa<^erE . 

15. Whar: af,-e or other port cliarge 
if any. 



16. Classes of ;^-iurclia,sers to which listed 
;nriceG are r^i^i-ilicahlc , such 'as con- 
G"umers, 'de'i.lers , private "brand com- 
panies, wholesale or other coo:oer- 
ative associations, wholesale dealers, 
or fertilizer rianmacturers, 

17, Vv'areho-.sing allov/ances or corapensa- 
tions applica'ble in connection with 
sales. 

Section 2. 'Tneuever a menher sliall 
liave made sales at prices or on terris or 
conditions different from those contained'in 
his latest price list, he shall, v.dthin -.;■ hour: 
after mahing such se,les, i.iail h;/ first cla,ss 
mail or deliver to eacn :i.eriber and to the 
Secretary/ of the Association a report showing 
v/nether they v/e-e cash or credit sale§, pur- 
chasers post office (not the purchasers naLie)', 
together with tne tonnage, grade or liind of 
mixed fertilizer, superphosphate, and/or other 
fertilizer material sold and the prices, 
terms, or conaitions used which were different 
from those set forth in his current price list. 

Section 3. Each price list filed v/it! 
the Secretary of the Association shall be 
availahle to the puhlic for inspection at the 
Secretary's office. 



In this particrilar "ne-" "orovision" there appears the greatest 
divergence froP- the "old". In the first instance price lists are to 
he filed with the Secretaries of the District Association, of v/liich 
there are to he t^'elve, whereas ^onder tnc "oh " , all nrice schedules 
were filed with the Secretary of the national Tertilizer Association. 

Second, the -nrice lists which are to he filed are not binding 
on the filers, hhile undf r the "old" any sale or offer to sell at a 
price or on terris or conditions other tnan as specified in the filed 
schedule, or in a ne"' schedule that becaj:ie effective pursua.nt to 
the provisions of Section 2 c, of Article VI, was prohibited. 

Third, Under the "new" the yro.iting period of the "old" is 
dispensed with. 

Fourth, Under the "new" reports of sales lade at prices or on 
terms or conditions different fro i those contained in the current 
price lists are to he, within ~'A hours, --mailed hy first class mail 
or delivered to each -lemher and to the Secretary of the Association, 
These re-^jorts will omit the purhliasers name hut will designate his/ 
its post office. It should he notec that this merely pertains to 



9761 



past sales reports. Under the "oltV, as -->ointe': out in the Second 
Cor.Tment , sales of li\:e na.tvxe were a.bsolutely iJroMbited. 

?ifth, Each iirice list to be filed with the Secretary of the 
Association, is to he made available^ to public inspection, v/hereas 
under the "old" the nrice schedules, v;ere only available to 
inspection by producers. 

Sixth, The various data to be set forth in the price list 
in accordance with Section 1 E are substantially the same as tliat 
contained in the price schedules ^onder the "old", and v^hich experience 
dictates as being, necessary for the reasonable attainment of the 
objectives of the price lists. 

19. Liquic.atec Le^mafjez 

The plan -ander consideration 
contemplates the setting uo of corporate, 
organizations tlia-t '.-'ill' bri.if about com- 
pliance with or observance of feir trade 
practice by-lavrs and other by-laws of the 
contei:ijTlated district associations through 
the operation of liquidated damage provi- 
sions. The proposal is for an agreement 
through the medium of a, membership corporation, 
between producers of fertilizer who are in 
competition v/ith each other in a certain 
territory wnereby each member agrees v/ith the 
otners to compensate them in an amou:"it stip- 
ulated in advance for the injury caused by his ■ 
unfair act. 

In order to eflectuate the liquidated 
dat'aa.ge \ilan it is contemplated that a member- 
shi^D deposit, be made on the basis of S.,']5 a ton 
on previous years business witn a minimum 
deposit of $500. and a maximui:! of 310,000. 
Thereafter in case of a violation by a member 
of any of the by-lav.'s said deposit shall be 
subject to be assessed in whole or in part 
as liquidated damages. The rules and pro- 
cedure for determining such violations and 
for mahing such assessm.ents sliall be pres- 
cribed bj/ the By-La\"c. Any amounts deducted 
from such deposit pursuant to such a,ssessments 
shall be used to pay the ex'ienses of the 
corrioration. It is further contcniplated tj.at 
at the end of each fiscal year any member de- 
siring to v/ithdrav/ from the zone association 
may recall his membership fee, ]provided it lias 
not been forfeited due to violations of the 
by-laws. 

It is further submitted tlis,t, the 
liquidated damages be on the basis of 2;3 of the 

9751 



gross value of the sale or sales v/liercwer tj.e violation is 

vmcrever the violation is in 

connection with a sale or sales 

that the eimovjit he $100 for each 

violation. 



■ coi.riaTT 

The cCoQve noted plan is the neans hy \7hich the Industry Yirill 

atteu-^t to obtain ohservance of the orade n^actice rules. Such 

E -;dan is de-'encent u^on the voluntary cooperation of at least a 

prepondereht :r.a,_iorit'-^ of the raer-.hers in the Industiiy. 

Altno^^^yh some II. R. A. Codes contai-.ed iDrovision for 
"Liquidated Dajaages" , such a provision v/as not contained in the 
Code for the Fertilizer Industry. 

It sho-ald 'be "borne in mind tliat the ahovenoted plan as well 
as tne other eighteen proposals are merely teiata.tive and anay he 
changed "before presentation to the Federal Trade Conunission. How- 
ever, it is the writer's thought tlic^.t any ciiaonges Liade mil "be 
minor in charg,cter and tliat the ahovenoted "lay he considered as 
representing;; suostantially tiiat whicJi rdll he presented and con- ' 
sidered ot the forthcoming" Trade Practice Conference. 



9761 



APPE^TDIX II 

EXHIBIT 33 

OPEN PRICE SCHEDTJLE FILING m;D£? THE FERTILIZE"" CODE 

Prepared for the Tenth Annual Procepdina:s ty ?. S. Lodge 

Chief, Price Schedule Section, '-"ertilir^er Recovery Comnittee 

The Code of Fair Competition for the Fertilizer Industry, which 
was signed uctoter 31, 193S, to "become effective iJovejr'ber If), 1933, 
required that eacn proc>ucer file ^-fith the Secret'^rj?- of The National 
Fertilizer Association, '-'ithin five days after the Code became effective, 
a statement of th<= zones in which he intended' to c'o business ^.nd a 
schedule ty zones of prices then in effect or to be charged for all 
grades or kinds of mixed fertilizer, saperphosphate, qnd/or other 
fertilizer materials solci or offered for sale, together '"-ith the terms 
and conditions -^policnble thereto. 

Well over a thousand price schedules were received as a restilt 
of this requirement. The staff anc facilities of the Secretary's 
of;"ice were sorely taxed to care for this flood of schedules. As 
certain requirements in schedules were imperative, reg^ulat ions as 
to the filing of price schedules were prepared, a:Dproved, ind dis- 
tributed. Routine methods of handling schedules in the office were 
worked out, a staff was developed, anr! by the first of tne year most 
of tne difficulties interfering '^dth a smooth working operation had 
been overcome. 

It must be remembered that the entire procedure of operation under 
the Code and of filing price schedules was new to the industry as a 
whole; there were no precedents. Therefore, many schedules did not 
meet the requirements of the Code. As the -work oro.^rpssed it was 
possible to work out suitable regulations for a "oroducer to follow 
in making up his schedule, so that order w^s gr-'if'uqlly develoned, and 
the schedules subsequently received ^^er^ in the main suitable for 
filing without criticism. 

ADMIIISTRATIVS ORDER 67-3 

On February 6, 1934, the National Recovery Administration issued 
Aoministrptive Order 67-3, the first three sections of '"hich refer to 
the filing of open price schedules and read as follows: 

"1. Any -holesale cooperative association (a cooperative associa- 
tion of the character described in suo-division a of Section 
3 of Article VII) shall have the rirht to purchase potash, 
pnosDhste rock, and/or nitrogen c'^r.:-i'=-rs from nroducers or 
importers of these materials ev-^n thoic'li ruch "oroducers or 
importers do not file any schedule of orices to d ealers 
r<nd/or consumers in thi= areas covered oy such cooperative 
association, provided that in all cases ^"nere such producers 

9761 



or iinpcrters do not file any schedule of oriceB to dealers and/or 
consumers such cooperative association shall itself issue, file, 
and maintain open price schedules of the character and in the 
, the manner specified in Section 2 of Article VI of the ^ode, and 
provided further that such cooperative associa.tion shall abide 
by all of the price provisions applicable to producers ;.ader 
said Article VI. 

"2. Any producer or importer of potas i, phosphate rock, or 
nitrogen carriers who does not sell to dealers and/or consumers may 
sell such products or any of them, to any '"holes.-i.le cooperat ive 
association (a cooperative association of the character described 
in sub-division a of Section 3 of Article VIl) -irithout thereby 
being deemed to be subjpct to any of the provisions of the Code. 

"3. All schedules hereafter filed in compliance T'lth the pro- 
visions of Section 2 of Article VI of the Code r-iist provide for 
the allowEince of suitable quantity discounts from the prices listed 
in said schedules to producers, dealers, agents, and consumers as 
contemolated in Section 1 of Ar-ticle VI." 

It will be noted that Sections 1 .and 2 of this Order permit wholesale 
cooperative associations to buy materials from producers who do not 
themselves file open price schedules quoting prices to dealers or 
consumers, but in such event the wholesale coo'oerative must itself file 
an open price schedule as required in Section 2 of Article VI of the 
Code. 

Section 3 of this Order reouires that suitable quantity discounts 
must be provided in every schedule • from all prices listed to producers, 
dealers, agents, and contramers in such schedule. 

This Administrative Order is r.-^noator-'', and has authoritv equal 
to the Code itself. 'Many schedules filed subseauently to this Order 
failed to include quantity discounts and refiling was necessary. 

TRAt:SACTIONS .aTH AGhliJCISS OF THE FEDEFAL GGVEP.WEWT 

■,.a November 10, 1933, notification was issued by the Comptroller 
General to the effect t'lat s-jles to agencies of the Federal Government 
were exempt from, the provisions of codes, and in consequence for a 
time provisions for such sales mere left out of subsPQU^nt price 
scnedules. A later Presidential Order of i'/iarch 14, 1S3-'!., required 
that all transactions with Governnental agencies be handled strictly 
under Code provisions, and it becam.e necessary for schedules to comply 
?ath this Order. These various changes and other minor requirements 
caused much additional work on the part of producers in the filing 
of their price schedules, witn its natural • reflection in additional work 
in the Secretary's office. 

SEIPIIMG COPIES OF SCHEDITLES TO COI PETITO^S 

The requirement of the Code m.aking it necessary for a producer to 

9761 



send true cooies of his price schedule to all competitors was at 
first constraed as covering all prodacers in the zone. In the case 
of producers of specialty fertilizers, oroc<=ssed nanures, and similar 
materials, this -^as later deemed ph unnecessary requirement, as in 
most such instances the re^lar nrod_.cers v-ere net truly competitors. 
In the first issue of the Fertilizer Indastry Zone List, no distinction 
was made hetween these different classes of producers, but in issuing 
the second edition of the Zone List, a number of separate divisions were 
made so that unnecessary exchange of schedules could be avoided. A 
producer of specialty fertilizers or of fertilizers of certain oth^r 
classes need send his schedule only to those producers listing fertilizers 
of the same class(=-s, either in a separate schedule or in ^ general 
sched.ule, 'Taivers to the right to receive conpetitiire schedules may 
always be asked for, .■^no if they are received no farther mailing to 
such waiving producers is necessary, 

HOW PHICii SCHEDULES ARE "TAILED" 

The roj.tine of the filini^ of rarice schedules in the 'Vashington 
office may be of interest, 

Uioon receipt of a schedule for filing in the V/ashington office 
it is stamped by an automatic time stamp to register the d.q.te and hour 
of arrival. The schedule nu-ber is then verified from the producer's 
last filed schedule. If it is filed to meet competition, the filing 
date is checked as-'^inst the effective dnte of the schedule intended to 
be met, to d.etermine '"hether it w^ s received at leas^- the necessary 
48 hours before such effective date. If received within such necessary 
period, the schedule is then carefully compared item by item as to 
prices, terms, and conditions, with the schedule to be m.et. Any 
variations or additions are noted and a telegr'^m is sent to the 'oro- 
ducer stating the day qnd ho ...r his schedule ira.ll become effective, 
stating whether the competition has been m-^t, ajid stating any variations 
or exceptions from the com.petitive sched.ule. 

If a schedule is submitted for filing -ithout reference to raee+ing 
another schedule or if a schedule is received too late to meet the 
competitive d^te of the schedule it is designated to meet, it is care- 
fully read, as to the territory to which it applies aid the terms 
and conditions provided, to see that an entire subzone or zone has 
been covered, that all necessary requirements have been met, that 
nothing considered violat ive of the Code is included, and that all 
terms and conditions are definitely stated, A telegram is then sent 
to, the producer giving him the effective date and calling attention 
to any points questioned. 

A letter is also sent to any producer '"ho files a schedule with 
questionable features, or containing indefinite or viol'^tive provisions, 
pointing out these matters that are believed improper and requesting 
a new filing, 

9761 



A list of all schedules filed, including their effective dates and 
'including reference to any questionable features, is mailed three times 
a week to every producer in each zone. This List of Filed Price Schedules 
(frequently referred to as the Green Sheet) also indicates by an asterisk 
and footnote any price schedule filed hy a firm or individual that has 
not been listed in the Zone List as a producer. 

After bein-^-; listed, each schedule is bound into a folder marked 
with the name of the producer and the zone or subzone to which it 
applies. All schedules previously filed by this producer for this 
particular zone or subzone are in this same folder, so the entire record 
of the filing is in one place. For ready reference these folders are 
kept in alphabetical order of pr©ducers, and by sub-zones in metal 
cabinets, 

VARIATIONS IN UaKE-UP OF SCHEDULES 

It is interesting to note the wide variation in the make-up of 
price schedules, all designed to achieve the same result, Some schedules 
cover as many as 75 sheets of 8^- x 11 paper, others accomplish their 
purpose in t wo or three pages, some even on one page. It is entirely 
within the right of a producer to file his schedule as he elects, pro- 
vided it is not violative of the Code and contains the necessary 
information required by the Code and by the Regulations Covering the 
Filing of Open Price Scaedules, r..an5'- go far beyond the necessities. 
Certain schedules include a copy of entire sections of the Code 'itself^; 
others state the firm will carry on some definite ODeration, according 
to the Drovisions of the Code. It should be remembered that the" Code 
is the la'"'; its reptition in a price schedule is entirely suoerfluous. 
In some schedules the same provision is stated as many as three times; 
to state it once and then carry it out is sufficient. 

Schedules have been submitted for- filing in many forms - on nost 
cards, on tags, on cotton cloth, on cardboard; printed, typed, and 
Icng-hand; delivered by messenger, by mail, by air mail, by special 
delivery, by registered mail, and by telegraph. 

Not all of these schedules could be filed, as not' all met the re- 
quirements. At present, we. have over 2,200 individual price schedules 
in effect. Each filing in eaclj zone or subzone is an individual 
schedule. Some firms have as m^ny as 15 successive filings in one 
subzone, i'ully 10,000 schedules have been filed since the signing 
of the Code. Even since the November filings as many as 225 schedules 
have been received in a single day, approximately half of "tiich were to 
meet specific competition, requiring word-by-word comparison to see 
that competition was actually met. in one case a sched.ule listing 
F.O.B. factory cash prices to dealers was filed to meet the competitioit 
©f a schedule listing delivered-to-the-f arm time prices to consumers. De- 
tailed calculation was necessary on every grade to establish whether or 
not the competition had been met. In one case a single schedule was 
filed to meet the competition of fourteen other producers on separate 
items or groups of items. Under the present regulations approved by NRA, 

9761 



a£che:ln.le filed to rneot the coinpctition of anoth.er scliedule ca-\y not "oe 
different from the scliedalc bein.:; rset., Tliis ineans that prices, ter.ns, 
and coi.dibdor.r, .nist te tiic r.;'i-.c iii "both. Under these regulations, 
schedules of the kind just referred, to yajuIu not "be proper to meet 
the competitors schedules. 

hECzssAia ?:novisiohs !!■ ■ sc;:2Idules ■ 

It seems dfesirablc to direct attention to tny items that are 
essentiaJ in a T)rice scncdu].e' in order tlat it- may meet the provisions 
of the Code and the ?.e',ulaticnr, Coverin/;; the- Filing- rf Open price. 
Schedules. • ■ ,.^ 

1. It must contain the n-,me and'addl-ess of the company, vdth 
the correct sc'^ednle nun;8r and zone. 

n. It lUst contain -■ list of --11 grades aiid Vine's of fertilizer 
and of all mpteripls to ': o of ^''c-.^ec for sf^lc, tcpt'ior \7it.i ti\e prices 
fiereof; must show to v.'liom these prices ripply, and must set forth the 
terms r^ad conditions under v;hia: sales a.re to te made. ^ 

Z. It ;ust contain a method for pricing ruc'i hona fide orders 
fro;n consu-icrs as may he received for grades or kinds of fertilizers 
not listed, if such ordel'-s are to 130 filled. ^ 

4. It /nust state clearly the delivery -point of all sales. 

5. It must state definitely the terms of payment. 
' 6. It r.Tast state t^e type ahd size of Dackafo. 

7. It must set forth quantity discouixts for all items listed anid 
to all t-n)es of "ouycrs or agents. 

8. A statement of all c'd.an ;es from the last procedinij,' 'schedule ' 
must accompajiy oa.ch schedule. 

1:\ a''dition, a loroducer should set forth in his schedule pny 
otiier matters iiici',.cnt to the prices, ter.iis, and conditions tinder 
which he intends to o-oeratc his "business, he .mist provide for his 
metliod of distri"bution and of compensa.tin;- mis dlstri'outors, if 'any. 
If f'.eliver^r charges or t3.-ansportation allowances are to "be made, ' 
defini.tc ;-irovisions for such must "be included. If the producer 
T;is.,es to repurchase "uis used "oags, he must state the iDrice at which 
such purd:.ases will he made. He must provide for all. the terms and 
conditions under which he will operate. (One producer contended that 
since his schelule did iiot prohi'bit'a certain tyic of qxiotation he 
was e:.ititled to maJrc such quotation.) A schc.ule furnishet^ the infor-' 
matioh as to 'hov- the. producer vdll o:ocra,te nis business, and he can 
operate it in no other way. 



9761 



, -?71- 

^ SPECIAL FORMULAS 

One schedule submitted for filin^^ provided no list of grades to 
"be offered for sale, but included ' the statement that any grade of 
mixed goods would he. sold on the basis of t]ie cost of the required 
quantity of the raw materials listed nlus a stated mixing charge. 
Such a schedule is considered in violc'ition of . the Code, which requires 
that all grades and kinds of 'mixed fertilizers to be offered for sale 
must be listed, together with their -orices, terras, and conditions. 
Furthermore, definite prices could not be determined from such a 
schedule unless a master, formula were included in the' schedule, since 
the unit costs of the various materials differ. In accordance with 
the Code provisions, the Fertilizer Recovery Committee has declared 
that each schedule filed must list each grade or kind of mixed fer- 
tilizer, superphosphate, and/or other fertilizer material to be sold 
or offered for sale, to dealers, agents, or consumers. This is not to 
be construed to prevent the sale of sr.ecial formulas or special in- 
gredients in standard formulas to satisfy bona fide orders actually 
received from consumers. Prices for such special formulas must in- 
clude an adequate additional charge for mixing, as well as the extra 
cost of special materials used. 

ADDITIONAL GRADES M:^3E LISTED _ D 

The Fertilizer Recovery Committee has also adoiDted a resolution 
to the effect that additional grades or tcinds may be added to a 
schedule by filing a new tjage or new nages covering such additional 
grades or kinds and the -nrices thereof, -nroperly identifying such 
pages .with, the scliedule to which they relate; but no change in prices, 
terms, or conditions may be made without filing a new schedule. 

.ANALYSES OF ivJlTERIALS 

Many fertilizer materials are boufzht on the basis of analysis. 
Any such material listed in a schedule must have its particular 
analysis stated along with the price for that analysis. Since in 
many instances the analysis of different lots of a material varies 
more or less, a. provision should be made for adjixsting the price in 
accordance with the variation in analysis. Unless such a provision 
is made in a schedule, no variation from the listed price may be 
made, neither may the material be sold under the schedule if it varies 
from the listed analysis. There may be many satisfactory ways of 
wording such a statement. One method considered as meeting the require- 
ments could read as follows: 

Ground Tobacco Stems 2H Ammonia ^, , 

.^ _ , , n per ton 

6% Potash 

For other Grades of Tobacco Stems add or deduct $ per unit of 

Ammonia and $ per unit of Potash. 

GEOGRAPHICAL AREA 

Each schedule filed must cover an entire zone or subzone as the 
case may be. Reference to sched^iles is aade almost entirely by 
schedule number and zone or subzone. If more than one schedule 

9761 



-o72- 

niimber v;ere in effect in a sulizone at' bno time, endless confusion 
i70U.ld i-csult. As iiany different priccc niay be made for different 
pa.rts of a zone or su'ozone, on any item or items, as a producer 
may ijisb., so long as iae clearly descrilDos the area to which each 
individr.al price is a.nplica'ble and covers the entire zone or sub- 
zone at each filin.-r. If a producer does not intend to -operate over 
an entire .zone or suhzone, he may file prices for that part in which 
he intends to operate and include "no sale" provisions for that 
part of the suhzone in which he docs no huGinecs. 

coihscTioii or TYPOG;^AF"iCiL sisoas 

In the haste of preparing; schedules for filing, many typographi- 
cal errors ha,ve heen made. If an eri-or is discovered promptly 
and a correcting telegram is sent L^imediatcly to the Secretary of 
Tlao National Fertilizer Association so that such notice is received 
before the schedule is listed in the Lict of Filed Price Schedules 
the error may, he corrected hy notifying "by letter all coiVipctitorG 
aiid sending a copy of the letter to the zone secretary and to the 
Secretary of Tie !Tational rertilizcr Association, such letter to 
state clearly the error and the correction, and to ' carry the state- 
ment that t'.io correction was reported to the Secretary of The 
Ha'iional"^. Fertilizer Association oefore the schedule was listed. 
A schedule once listed riay not he corrected, as it is then an 
official", docuTicnt as filed. 

t;itijd?ji-jal of scisdulfs. 

Because of- serious error or for other important reason, a pro- 
ducer may wish to withdra.w a sched\i.le after it. has "been filed. This 
may be accoiupli shed if written notice- of the intent is delivered to 
the Secretary of The national Fertilizer Association at least 48 
hours before the effective date of such scl.'.edule, and if notices of 
withdr?,r;al are delivered or .nailed to all competitors and to the 
zone secretary simrd tancously -./ith the mailing or delivery of the 
notice to the Secretary of The ITational : Fertilizer Association. 
After t:.:e orpiration of t.i..c period ending 48 hours before the effec- 
tive C3.tc of a schedule it may not be withdrawn, although it may be 
superseded by a "rice schedule or a no-sale schedule. 

IHFHOFEH PFOVISIOhS 

Maiiy improper Tohrascs appear in schedules submitted. The 
Code requires that sdicdules shall list the prices, terms, and con- 
ditions covering sales and offers for sale. This can mcriii only that 
all sue.:, features in a schedule must be definitely determinable. 
Sucn erircssions as "not more than," "minimum prices," ajid "to 
facilitate collections we may v/aive interest" are not definite and 
do not oolong in i.rricc schedules, r.o iteia viay /.ave two prices in 
effect under the same ter.is and conditionr, at -uiy -loint. A competitor 
has t:.-:e right to be able to detoraine fro:'. ,- s.-. (jv^vlc exactly what 
price BXi-j particul.ar item will carr?' at n.. .ivu. i.^^ivit. 



9761 



BITECTIVS DATS 

A sclicdulc ordinarily "bccoROG effective 10 days after its receipt 
for filin.'j. It may not become effective "before tliat time unless filed 
to:';-ieet competition. A ]Xoduccr ma^^ :;.ave Ms schedule iDccomo effective 
on p. dr.te; s-oecificd tlierein, pr ovidcd' such sciiedule is' received for 
filing at-lcast 10-da;5i-s 'before such specified date. Unless some 
specific c>te.is particularly important to the producer, it is re- 
quested that no effective date "be 'mentioned in a schedule, as un- 
certainty, in the mails may cause such 'date to "be inoperative and cause 
confusion on ^xcount of the 10-day specification. ' _ | 

SELF-Li;;;iTED SCI-iEBUlES ■ ' 

Unless limited "by its own provisions, a schedule remains 'in 
effect until superseded. If self-linited, the provisions as outlined 
in the schedule must "be adhered to rigidly. 



SCI^DULES SI'OV; IHPEOVELEIIT 



■ On the whole, schedules now "bein^: su'bmitted for filing are 'com- 
plying very satisfactorily with the Code and. the Regulations,' 's'ihc'e 
producers arc "becoraini;: more and more familiar with the requirements. 
As tine passes and exiDorience under Code operation is had, v/c' "believe 
every producer will he a'ble to file comi^lote and definite schedules - 
complyinj Yvith the Code in every particular , and em"bodying the prices, 
teiTOSj and conditions under which his sales and offers for sal-e will 
"be made, * * ' ' 



97S1 



APPS'DiX II 
■E]\HIi;IT 34 
Price schedixles filed l/u\ tho Fertilizer Industry 
January 1, 1934— Jamiary 23, 1935 



(a, total schedules filed; TB, schedules filed to meet competition) 





•■ 








193!^ 
































'* ^ 


f? 














r 


r^ 




■ u 


03 
















a 


,Q ■ 




.. e 


,!i 










C-) 


CD 




S • 


» ^ 












P', 






0) • 




U 


U 




^ 


rH 




-p 














;J 




(D 


o 


o • 


• f-3 


Pq 




-^ 




h 


h) 


'< 


Ul 


o 


^ : 



Zone 1: 

A 135 150 38 33 

3 nz 93 5 7 

Zone 2: 

A 155 183 103 26 

3 33 110 41 . S 

Zone 3: 

A 190 S54 158 45 

3...... 97 162 72 9 

Zone 4: 

A ,. ■ 106 175 73 61 

' 3 24 87 12 24 

Zone 5: 

A 73 89 26 8 

S....... 5 27 2 2 

Zone 6; 

A 114 162 65 11 

3 6 46 11 3 

Zone 7: 

A 28 34 15 19 

3 1 7 1 1 

Zone 8; 

A 86 133 104 21 

B 25 43 46 5 

Zone 9: 

A 50 47 8 1 

3 22 28 

Zone 10: 

A 6 61 163 59 

B 37 110 3 

Zone 11: 

A 33 19 12 8 

3 2 3 10 

Zone 12: 

A 54 64 65 18 

3 1 31 8 

Zone 2PR: 

A 8 2 U 

B 10 

Total for all Zones: 

A 1,018 1,385 830 510 

1/B 299 675 309 63 

Schedules coverin-:?: sr)Gcia,l 

phosr)hates omitted. 



r-; 


4 


1 


s 


35 


14 


11 


95 


35 


572 














29 


7 


5 


70 


9 


309 


6 


95 


44 


51 


22 


■";, R 


9 


65 


109 


905 





61 


12' 


14 


7 


24 





47 


43 


398 


3 


176 


76 


■79 


38 


39 


10 


78 


114 1,340 





116 


15 


15 


30 


67 





49 


46 


678 


15 


127 


124 


53 


156 


28- 


101 


95 


30 


1,144 


2 


73 


65 





91 


3 


45 


28 


2 


457 


17 


57 


40 


-26 


53 


34 


35 


50 


35 


543 


1 


12 


26 


11 


27 


11 


11 


21 


4 


141 


11 


71 


39 


8 


30 


39 


43 


51 


55 


599 


2 


23 


5 


1 


13 


4 


14 


5 


14 


147 


11 


34 


26 


26 


31 


18 


21 


15 


11 


237 








10 





7 


4 


4 


5 


1 


40 


8 


60 


65 


35 


87 


42 


58 


60 


53 


812 


1 


23 


33 


11 


55 


11 


43 


31 


22 


347 


1 


6 


14 


IS 


17 


15 


4 


26 


35 


237 








12 


c 


5 


8 





11 


12 


101 


5 


22 


216 


42 


23 


9 


5 


18 


171 


800 








161 


10 


1 








1 


110 


438 


5 





4 


7 


11 


12 


p 


3 


3 


119 








2 


1 


3 


2 





3 





17 


6 


7 


10 


41 


76 


61 


36 


52 


10 


480 





1 





19 


26 


7 


? 


6 


2 


104 


p 


3 





5 


9 


10 


10 


1 


1 


51 











2 




4 


7 








16 



93 662 659 394 ;nS 406 

6 309 342 G6 297 152 

nirtures, naiiures, pent 



345 6U7 662 1/7,889 
133 258 265 1/3,192 
, htimus, lime & 



A?Ps:iDi:: ii 

E]ffIBIT 35 

A JHIWI STRATI VS STA?? 0? THE FLRTILIZ5R REGOFiZRY COinilTTES: 

CF ARLES J» 3?Airo, Executive Direc t o r and 'Seer etary : 

l\rative of I.iiruiesOta (1379) and grr„duated fron the University of 
Minnesota (1902). Sntered U. S.Denr.rt'ient of Agriculture December 
190S, serving in various scientific capacities until May, 1913, -.vhen 
he was appointed Chief of the Bureau of Markets. Mr. Brand assisted 
in and supervised Ihe drafting of, and later, administered (l) United 
States Cotton Futures Act, (2) Grain Standards Act, (3) United States 
Warehouse Act, (4) Standard Container Act, and (5) Pood Products In- 
spection Law. He prepared the foundation draft of the Food Control 
Act, and directed various war-time activities, including the food 
and fertilizer surveys of the United States, licensing of stockyards 
and other narket agencies, market insnection of nerishacles, xmrchase 
and distribution of nitrate of soda.. Under the \Jp..t Industries Board, 
he was Chairman, Committee on Cotton Distribution; member. Wool Ad- 
visory Board, liauidating officer of Wool Section, by a^sTJointment of 
President Wilson. 

From 1919 to 1922 , Mr. Brand v.'as Vice-President and General 
Manager, Araericpja Fruit Gro-vers, Inc., Pittsburgh, Pennsylvania, 
an organization that -oroduces and/or nrrkets over 30,000 carloads of 
perishables annually. 

From 1922 to 1925 , he -'as Consulting Snecialist in Marketing to 
the Secretnry of Agriculture; Chief of the Economic Section of the 
Packers and Stock-TTds Administration; assisted in the pdministration 
of United States Grain Futures Act; and prenared the first agricul- 
tural relief mepsure - the JicxTary-Haugen Bill - with the assistance 
of, George 'T, peek pnd General Hugh S. Johnson. 

Since 1925 , Mr. Brand has been S:-:ecutive Secretary and Treasurer 
of the Np.tional Fertilizer Association, ajid now-, in addition. Execu- 
tive Director, Fertilizer Recovery Committee, the Code Authority for 
the Fertilizer Industry. 

From May 15, 19--jc to Sentemoer 3^, 1955 , by request of President 
Roosevelt, Secretary Wallace, and George N. Peek, and with the unan- 
imous approval of the Executive Commrttee of the IT.F.A. , served p.s 
Co-administrator of the Agricultural Adjustment Administration. Under 
Mr. Brand's direct supervision, the staff of the Administration 
was built wn from less than 10 when he took the oath of office to 
3,228 on. the day his resignp.tion tool: effect, 

D.S. iIUP:PH. Administrative Assistant. 

Native of South Carolina and has been closely identified with 
agricultural interests and activities all his life. He holds the 
degree of A.B. from Wofford College, Snartanburg , South Carolina, the 

97G1 



-376- 



degree of A.Ii. from Trinity College (novj Diilce University), Durham, 
IJorth Carolina, nnd the degree of LL.3. from G-eorgeto\Tn University, 
Washington, D,C. 

1913 - 1917 Secretary, Committee on Ae'jri culture, U. S. House 
of Representatives, during tlie \7hole iDcriod' leading u^d to, our -OFr- 
ticipation in the World Ifer. 

1917 - 1921. Chief, Cotton llarketing Division, Bureau of 
Markets, U. S. Department of A^^riculture, in direct charge of the 
administration of the United States Cotton Futures Act, the prep- 
aration and distrihution of the United. States Cotton Standards, and 
cotton grp.ding, marketing, and spinning investigations. 

1920 - 193b . Engages in the general -orsctice of the Ifw in 
South Carolina, serving from time to time, 'uy ap-oointnent of the 
Governor, as Special Judge' of tne Circuit Courts of that State. 

June 1953 - Janu ar y 1954 . Came to ^./ashington at the urgent re- 
quest of the Administrators of the Agricultural Adjustment Adminis- 
tration. Organized the handling of the 1935 Cotton Production Con- 
trol prograin under which benefit -oayments totaling ap-oroxiraetely 
$130,000,000 V7ere disbursed. Later was a.TD-oointed Chief of the Cotton 
Processing and Marketing Section, and in this, cap-^city was largely 
responsible for working out the Torpcessing and com-oensating tpjxes 
relating to cotton. 

Jg nuary 3, 1934» Resigned to accept position ■-'ith the National 
Fertilizer Code Authority. He was -oriraarily res"^onsible for hand- 
ling interpretations, ex-olana,tions and o-oinions relating to the 
Code and open price schedules. 



JOSEPHII'E i;. ?EELSY, Executive Assistant and Assistant Secretary . 

Native of Ne'- Haven, Connecticut, and commercial college graduate. 

1917 - 1920 . Engaged in vnrious clerical "oositions in U. S. 
Department of Agricult\ire. 

1920 - 1925 . Emoloyed in secretarial nnd re"oorting work with 
various law firms in Washington, D.C.; also secretary of Alaska Coal 
and Coke Company. 

1925 - 1934. Office Manager, The national Fertilizer Association, 

January. 1954 . Elected Assistant Secreti.ry of Code Authority, 
and designated Executive Assistant. 



■377- 



R. Sl.IALLEY, Chief Agronomist . 



STative of Indiana and a grn.duate of Purdfie University (l91l) 
rith Master's dsf ree in Agricultural C]aemistry (1913), 

1911 - 1915 . Assistant Chemist at the Indiana Acricultural 



ExTDeriment Station. 

1913 - 1914 . Office of "Farm lianagenent" , U. S. De-oartment of 
Agriculture. 

1914 - 1919 . Served as County Agricultural Agent in the Indiana 
Extension Service, 

January 1, 1920 - 1954 . H-.s served with the National Fertilizer 
Association as field agronomist in the I.lia.dle T/est; as Agronomist 
pjai Director, Northern Division, Soil Imorovement \/ork; as Director 
of "both Northern and Southern Divisions of that T7ork; as Chief 
Agronomist of the Association; and Managing Editor of the FERTILIZER 
REVIEW. In the course of' his service with the Association, Mr, 
Smalley has initiated and directed much sales oromotion and market- 
ing re'^earch work. In connection v/ita the Code, he handles, primarily, 
questions of agriculture relationsiii-os and -oroblems arising under 
Article Vll, Section 1 - Reduction in the N-iJinber of Grades of Mixed 
Fertilizer. 



F. S. LODGE, Chief, Q-pe n Price Fil ing Section . 

Native of Illinois, (1884). Gr;-duate, University of Illinois 
with degree of Bechelor of Science in Chemical Engineering (1908), 

1908 - 1915. Chemist, Assistant Chief Chemist, Armour & Co., 
and Chief of Chemical Control, Armour Fertilizer Works, Chicago, 
Illinois, 

1915 - 1951 . Assistant Director of Manufacturing, Armour 
Fertilizer Works. In charge of all manufacturing and maintenance 
o-oerations in the twenty-five factories of the company; Res"DonsiDle 
for the comiDany's compliance with requirenen'ts of the Federal and 
State statutes covering manufacturing' in general, includin,g Employees 
Liability Insurance, Labor, and Special Fertilizer Laws. 

1916 - 1931. Either acting or aijioointed' Chairman of the 
Chemical Control Committee of the National Fertilizer Association, 
As such, re-oresented industrj;- i i many conferences with Federal and 
State Officials and legislative committees on new legislation pro- 
Toosed and on internretations and coraT^liance of the industry with laws 
alread-'- in effect. 

1951 - 1932. SiDecial investigation work with the Chicago Better 
Business Bureau, 



9761. 



-378- 



19S5 - 1924. Vice President and General Manager, C'^nisteo Sign 
and l-'Ianufacturing Comxiany, Canisteo, Nev; York. 

January, 191^.4 -' 1955 . Chief, Orien Price Schedule Section, 
Fertilizer Recovery Conmittee, 'Jashin::;ton, D.C. 



JAMES A. MULLALLY, Chief. Com-oliance Sectio n. 

native of North DrJcota (1899), Graduate of Georgetown Univer- 
sity School of Law (LL.B.) in 1928. Admitted to oar of Sunrerae 
Court of !!orth Dakota in 1927, 

1917 - 1923. V/ith Great Northern Rail'vay, Grand Forks, 11. D. 

1925 - 1925 . Vith Fruit Gro^^ers Express, ',/ashington, D.C. 

1925 - 1928 . Clerk, United States Senate. 

1923 - 1934. Attorney, Federal Trade Comraission, investigat- 
ing and assisting in trials of numerous coroorat ions for using 
trade practices in violation of Federal Trade Commission and Clayton 
Acts. Also investigated violations of Sherman Act and Securities 
Act of 1933, STDeciaJ-ly assigned to decision as to admissibility 
and sufficiency of evidence and preparation of recommendations to 
Commission as to loroner iDrocedure. 

March, 1934o Placed in cha.rge of Com.-'Dliance '.-ork. Fertilizer 
Recovery Conmittee. 



JOHN M. F. DO:"OVMT, Field Investigator. 

Native of tiassachusetts, a gra.duate of the University of Maine, 
(1924) and has tpken'his H. A., Ph. D. , and, two law degrees at 
Georgetown University, Washington, D.C. Served as ;^orofessor of 
political science a,t Georgetown and at Fordliam University, New York 
(1925 -1927), and after other teaching experience, was legal and 
economic analyst of the U. S. Department of Labor; then attorney 
for the Federal Trade Commission in Washington. Now for nearly 
five years he has conducted anti-trust law investigations from the 
New York office of the Federal Trade Comnission. 



JOHN MOBAN, Cpst Accountant . 

Native of Virginia, 1894, and educated in the -oublic schools 
9761 



of Norfolk and William and Mary Extension College. Mr. lioran is 

a memoer of the American Society of Certified Patlic Accotintants and 

the National Society of Cost Acco-ontants. 

1917 - 1925 . Cost Accountant and Traveling Auditor, F. S. 
Royster Guano Co., actively engaged in cost and accounting work 
rela.tive to operation of sulphuric ?cid, superphos-ohate, and dry 
mixing fertilizer olants. 

1925 - 1928 . Pul)lic Accountnnt on staff of A. Lee Rawlings 
& Co., Norfolk, Va. , and Raleigh, N.C. 

1928 - 1930 . Practiced puhlic accounting in Virginia and 
North Carolina under partnership name of Bundy and Moran, Elizabeth 
City, N.C. 

1950 - 1954. In charge of cost accounting work, the National 
Fertilizer Association, and co-author of its cost accounting digests. 



PIELID STA?F. 



STI:PHEN J. GILIIAN (Office, Boston, Hass.) 



Mr. Gilman has, since 1928 "been engaged in ousiness for him- 
self as a merchandising counsel. He is a grad^iate of the Harvard 
Law School, practiced for a nuiiber of years, and has "been engaged 
in the following business enterprises; credit man for Firestone 
Tire and Ruhher Cora-oany, Akron, Ohio; sr-les manager, Thomas G-. Plant 
Co. (shoes), Jamaica Plains, Hass; s-^.les and advertising manager, 
Ground Gri-oper Shoe Co., Boston, Mass.; assistant to President of 
Lewis A. Crossett Shoe Go. , Boston, j.'^-.ss. 

ZOtIB #2 . W. L. GAY (Office, New York) 

Hr. Gay has been connected with the fertilizer industry since 
1915. He studied agriculture and general science at Rutgers Univer- 
sity, He was em-oloyed Qj Swift & Coiapany as salesman and sales 
manager from 1915 to 1920, and by George F. Taylor & Co., in the 
fertilizer brokerage business from 1920 to 1922. From 1922 to 1926 
he was mrnager of the Fertilizer DeiDartment of the Cooperative G.L.F 
Mills, Inc., and since 1926 until his resign,ation which became ef- 
fective on January 31, 1934, he has been with the Summers Fertilizer 
Com-oany as Vice President and Director. 

ZONE #3 . J. P. F. RITZ (Office, Baltimore, Md. ) 

Mr. Ritz has had a long and successful experience in the fer- 
tilizer industry. He began work for the Miller Fertilizer Co. , of 
Baltimore in 1895, and remained with that company until 1953. He 

9761. 



was Vice President for 21 years and for a time President of the 
Company. In 1932 and 1933 lit, Ritz was also Vice President of the 
Davison Chemical Company. He attended iirivate schools and the 
Baltimore Polytechnic Institute, 

Z0NE_i4. .G-. 1. CROCKER (Office, Uilson, h.C.) 

Mr. Crocker is v/ell kno'Yn in the fertilizer industry in the 
Zone, For a nunb-erof years he ^ras connected '^ith tiie American 
Agricultural Chemical CorDoratidn as ra'anager of its' Norfolk office. 
Later he was connected with the Eastern Cotton Oil Co., and still 
later with the Davison Chemical Co, For some time he was engaged 
in the practice of law at Seatoard, r.C, 

ZOilE #5. JEinCIl'S M. ROBERTSOIT (Office, Columhia, S.C.) 

Mr, Robertson has had a wide husiness ercoerience, connected 
for the most -part with the cotton and fertilizer industries. He is 
a graduate of Citadel Military College at Charleston, and was 
for several years engaged in the fertilizer brokerpge "business in 
Charleston and Richmond. 

ZOIIE #6. 3. -J. WOODRUFF ' (Office, Atlanta, Ga, ) 

Mr. Woodruff is a native of Georgia and a graduate of Wash- 
ington and Lee "University where he received his A. B. degree in 
1916 and his LL.3. in 1921. He has practiced law for the past 12 
years, first with the firm of Denny & VJright of Rome, Georgia, then 
from 1922 to 1930 with Randolioh, Tuckei' & Porntner of Atlanta, and 
since 1930 as a partner in'Randoloh and Woodruff, 

Z OIIE it7 . HARRY C. HAR^iIS (Office, ■Orlahdd,;Florida) 

Mr. Harris is a native of Pennsylvania, a, 'graduate of the 
University of Pennsj^lvpnia, and studied law 'at Columbia and New 
York Universities. He si^ecialized in husinesB administration and 
commerce and practiced law in New Yorl^ for a number of' years. Prom 
1929 to 1932 he was a member of the staff of the International 
Telephone and Telegra-oh ComDan2'-, He has had experience in coriDOra- 
tion organization, business, tax, finance and insurance law, 

ZOIJSS # 8- and #9 . S. L'. ROBIITS (Office, Montgomery, Alabama) 

■Mr. Robins served as Zone Secretary in these two Zones. _, He is 
well kno\7n and highly regarded in the industry. He has been 'Pres- 
ident of Meridian Fertilizer Factory for mafiy years and has been 
active in Association work, having served as P-^esident of the Southern 
Fertilizer Association and as Vice President of the national Fertiliz- 
er Association, H6 haS also been 'a raembi^r of the Board of Directors, 
and Chairman of his District Committee. He is a graduate of the 
Mississinpi Agricultural and Mechanical College, ;yid was formerly 
State Chemist of Mississi-prii. 



ZOKS #10 . JOHII M. SAI.TLE (Office, Indiann,r.olis , Indinjia) 

Mr. Sanple is a native of Korth Carolina (1381) and cid 
his uiider-grpdua.te and cost-graduate, \7ork at Virginia Pol^rtechnic 
Institute. Ee snent fifteen years as State Chemist of Tennessee, 
administering its fertilizer, feed and seed la'^ra; , also served 
as Executive Secretary for three and one-half years, Southeastern 
Millers Association, and later returned to State service for three 
years a.s Chenist and Dairy Coinmissioner, 

ZOm\ fll . ?LOYD OLES (Office, Seattle, Washington) 

I'ir, Oles is manager of the Northwest Fertilizer Associa- 
tion and has had much exnerience in association work. Mr. Oles 
is also manager of the Pacific Northv/est Feed Association and of 
the Northwest .Produce Administration, Inc. He is Executive vice- 
President of the'National' Federation of Feed Associations, a raem- 
her of the Executive Committee of the National Pee^ Recovery Com- 
mittee, -and a member of the National Code Authority of the fruit 
and oroduce distributive industry. Mr. Oles has for a nurah'er of 
years cooperated heartily with this association ajid has heen help- 
ful in many ways. 

ZONEj^. GEORGE P. GRAY (Office, Los Angeles, California) 

Mr-, Gray was formerly director of the Soil Imorovement Com- 
mittee, California Fertilizer Association, With the exceiDtion of 
the past year he has heen connected with the fertilizer industry 
since 1926, having done research and educational work for the 
American Cyanimid Corn-cany from 1926 to 1931. He was Chief of the 
Division of Chemistry, California Deioartment of Agriculture, 1920 
to 1925, He received his Master's Degree from the University of 
California in 1911, and from 1911 to 1920 he was with t he Califor- 
nia Experiment Station and University as chemist and instructor in 
insecticide work, 

ZONE EXECUTIVE COl'HITTSES 



ZONE_ia. 

George V. Savitz, International Agricultural Cor-ooration, 

}3oston, Mass. 
C, G. Ward, American Agricultural Chemical Cornoration, 

North Weymouth, Mass, 
E. S. Davis, Rogers &. Hubbard Coixjany, Portland, Conn, 
A. F. Detweiler, Armour Fertilizer Works, Presque Isle, Maane. 
Evan K. Jones, Apothecaries Hall Com-oany, Waterbury, Conn, 
Frank P. Morrison, Morrison Brothers, Bangor, Maine, 
P. J, Sullivan, Aroostook Federation of Farmers, Caribou, Maine, 



9761. 



ZO-IS ----2 . 

Horace Booker, Anerican A^^ri cultural Chemical fcornoration, 

lle'T York Cit;,-, "J.Y,. 
J. S. Coale, I. P. Thomas & Son Com"irny, PhiladelDhia, Pa. 
?. H. Tunneli; F. ¥, Tunnell g; ConTOiany, Philadelohia, Pa. 
■J. J. Gray, Amour Fertilizer Morks, We^" York City, I'.Y. 
W. T. Hart, American Agricultural Chem,ical Corroany, Hew York, N."! 
Raymond Hutchinson, Trenton Bone Fertilizer CoiriDany, Trenton, Ij. J. 
Rotert A. Reicnard, Ro^bert A,. Reichard,. Inc., Allentown, Pa. 



SIB - ZOITE TrS. (Puerto Rico) 

C. C. Ar ledge,. Armour Fertilizer Uorks, San Juan, P.R. 
Amos J. King;, Ilitrate Agencies ComDany, San Juan, P. R, 
Luis R. G-onzales, Ochoa: Fertilizer Corxjoration, San Juan, P.R. 
Jenaro San Miguel, Sucrs. San Miguel Hnos. , Bayamon, P.R. 
G-eorge W, TiTniting, Standard irnolesale Phosnhate & Acid u'orks, 
Baltimore, Md. 

ZOIJE rr3. ' 

Wm. E. Valliant, Valliant Fertilizer Cora-oany, Baltimore, Hd. 
3, H. Brewster,. Ill, The Bajigh & . Sons Corapsxiy, Baltimore, l.id. 
W, Newton Long, The Central Chemicpl Company, Hagerstbwli, Ud, 
John L. Morris,, W. B> Tilghr.:an Cormany, Salisbury, Md. 
H.' B. Ramsburg, The Ra^nsliurg Fertilizer Comr-any, Frederick,- Md. 
George A. Whiting, Standard Wlioles.ale Phos-ohate &. Acid Works', 

Baltimore , lid, 
M, 0. Wilson, American Agricultural Chemical Company, Baltimore, 



ZOIffl "^4 . 

Or. A. Holderness, Virginia - Cprolina - Chemical Company, 

Rici-imond, Va. 
0. F. Smith, Smith -'Douglass Cora-:)any, Ilorfolk, Virginia. 
G. T. Cunningham, Armuur Fertilizer Works, Greensboro, N.C. 
R. C. Adams, Robeson Lianufacturing Com^oany, Lumberton, :\C. 
A. C. Diehl, Nitrate Agencies ,Comr)rny, '..'ilmington, I'.C. 
Charles A. Flynn, './ashington Fertilizer Comnany, Washington,!!. C. 
v.. Tk Wright, F. S. Royster Guano Company, ilorfolk, Virginia. 



, ZOIlE ir5 . ' ' 

■J. Rose HanpJ.ian, Planters Fertilizer & Phosphate Compajiy, 

Charleston, S.C. 
P.C.ToiTnsend, Virginia -, Carolina - Chemical Corporation, 

, .Columbia, S.C. ^ 

W. F. Farmer, Anderson Fertilizer Company, Anderson, S.C. 
R. L. Payne, Araerican Agricultural Chemical Corporation, 
ColuraDia, South Carolina. 



9761. 



-383- 

A. F. Prirvgle, Merchants' Fertilizer Com-Da,ny, Charleston, S.C, 

P. T. Snith, Smith-Wilkinson Coraoany, Charleston, S.C. 

A. E. Tisdnle, Siimter Fertilizer Manufacturing Co., Sumter, S.C. 



ZONEj^. 

A. D. Strohhar, Southern Fertilizer & Chemical Company, 

Savannah , Ga. 
H. B. BrylQT, International Agricultural Corporation, 

Atlanta, G-a. 
S. W, Porler, Covington, Georgia. 

3. Pl. Hodgson, Empire State Chemical Company, Athens, Ga. 
R. L. Xing, Georgia Fertilizer Co'-i-n.-'jiy, Yaldosta, Georgia. 
J. B. SheiDard, Shepard Fertilizer Comnany, Doerun, Georgia. 
J. A. Woods, Armour Fertilizer Works, Atlanta, Georgia. 



ZOM -#7. 

C. T. Helvin, The Gulf Fertilizer Co., Tampa, Florida. 

Bayless W. Haynes, Wilson & TooTner Fertilizer Co. , Jacksonville, Fla, 

W. H. Klee, Nitrate Agencies, Jacksonville, Florida. 

P. F. Coffee, Armour Fertilizer Works, Jacksonville, Florida. 

Sara Laird, Waverly Fertiliser Works, Waverly, Florida. 

Franlr 3. Rue, Florida East Coast Fertilizer Co., Homestead.Pla. 

W, L. Waring, Jr. , Lyons Fertilizer Company, Tampa, Florida. 



ZOITE #8 . 

E. A. Brar.dis, Standard Chemic 1 Com-oany, Troy, Alaharaa. 

J. M, Ra'.7lings, P. S. Royster G^iano Co., l.iontgoraery, Alaoama. 

H. A, Parker, Syla.cauga Fertili:;er Co., Sylacauga, Alabama, 

James W, Dean, Knoxville Fertilizer Comrjany, Knoxville, Tenn. 

A. A. Green, Jr. , Jackson Fertilizer Comr>any, Jackson, Miss. 

J, A, HoT/ell, Virginia-Carolina Che::ical Cor-oora.tion, Jackson, Miss, 

E. F. Jackson, Piedmont Fertilizer Company, Opelika, Alabama. 



ZQHE --9. 

P. H. Manire, Marshall Cotton Oil Comioany, Marshall, Texas. 

C. D. Shallenberger, Shreveport Fertilizer Works, Shreveport ,La. 

C. R. Croft, Arkansas Fertilizer Company, Little Rock, Ark. 
J, W. Anthony, S'vift & Connany, IJew Orleans, La. 

D. B. Brown, Tem-ole Cotton Oil Ccai^any, Little Rock, Ark, 
Douglas Kelly, Armour Fertilizer Vi'orks, New Orlea,ns, La,. 

R. E. Montgomery, Palestino Oil I'ill & Fertilizer Co., Palestine, 
Texas, 



9761. 



ZONE #10. 

Jno. A. Miller, Price Chonical Comi,-^-!-/, Louisvillfe, Kentucky. 

J" . "'. 3ti,.ii-i., G'-.i^'o I.C Ooi.i.jaiiy, nai-wiond , Indiana. 

George Kinfrstiiry, Kingsburv & Co., Indi'^n'-nolis . l^d. 

J. J. O'Leary, Aiie.-'ican .A^Ticultur-l C-.e-dc-l ComjfJty, Detroit, 

Michigan, 
H. A, Smith, Smith Agricultural Chemical Coranany, Colunou&, Ohio. 
C. 0. St)i":er, Stadler products Comopny, Cleveland, Oiiio. 
Otto Voyles, The Tennessee Corporation, New Albany, Ind. 



ZONE #11. 

I!. C. Taylor, Magnolia Fertilizer Com-oany, Seattle, Washington, 
V, G. HcKilloTo, Balfour,' Guthrie & Co., Seattle, Washington. 
G. H. Cl.aT)-o, Swift e-. Conoany, North Portland, Oregon. 
\1. H. Lebo, rl^.rine Py-Products, Seattle, Ifesaington, 
P, E. Peterson, Portland, Oregon, 



ZONE #12. 

'./eller Noole, Pacific Guano « Fertilizer Comijany, Berkeley, Calif, 

Jos, G. Lewis, Growers' Fertilizer Comioany, San Francisco, 'Calif . 

'.'. F. Price, Swift 6; Comoany, Ontario, California," 

A. L, Chandler, Mutual Orange Distributors, Los Angeles, Calif, 

George \i. Fuhr, Azusa, California. 

"iiTilson lieyer, Wilson & George layer & Co., San Francisco, Calif, 



9761, 



-385- 

APPENDIX i: 

EXl-'IBIT 36 



Budgets of the ifetional Fortiliser Association 

i9a5 - 1^:35 



Eie income of tlio Kationa.l Fertilizer As'^-ociation has "been priiTiarily 
obtained from assessments on a tonnage basis cf materials sold by meiJoers. 
Non-member? ■■lave contributed substantial amounts and there ha.ve been 
miscellaneous sources of revenue. Daring the depression the activities 
of the Association v/ere curtailed, the budget? and assessments being 
reduced in keeping with tie activities. 

In the earlier years of tne reviev/ed budgets typical assessments 
were 4 cents per ton on mixed goods sold (3 cents in 1927-38), l\ cents 
per ton on bulk superphosphate, and 3 cents per ton for active members 
producing and importing raw materials. 

July 1, 1925 July 1, 1936 July 1,1927 July 1, 1928 
June 30,1936 J-jne 50.19 37 J-'one 30.1938 J une 50.1929 

Active Members ,i208,633.08 Ol97,0'A8.91 ;i^0,e67.11 :^309,461.50 

Associate Members 6,700.00 6,750.00 5,350.00 5,825.00 

Kon-Members 34,350.00 13,730.00 16,300.00 16,100.00 

Interest 1,705.28 5,682.20 2,658.01 2,086.25 
Sa.le of publications' 

Northern 6,060.75 11,139.31 9,737.55 7,997.55 
Sale of publications 

Southern 2,392.12 4,504.05 3,128.19 1,872.C5 
Probable additional 

receipts 5,000.00 8,00 0.00 

Total receipts :;;250 , 541 . 33 :1381,074.47 ■^179,940.87 .:;251 ,542.15 
Disbursements .;;183,834.68 $308,947.51 $324,981.15 $351,169.19 
Budget was $225,000.00 $334,000.00 $213,000.00 $253,580.00 

In the fiscal year 1929-1930, the budget v/as $245,680.00 and the 
estimated receipts were $245,000.00. 

For 1930-1931, the budget was reduced to ..;209,240 and the assess- 
ment on mixed goods cut to 3v cents a ton at wliich rate it was estimated 
that receipts would be $206,200.00. 

The effects of tie depression are reflected in the 1931-1952 
budget of $69,000. The rates of assessment were cut to: 



9761 



3/4 ol" l;i per ton en bagged fertilizsr 

?/4 of l(i on fertilizer materii^ls sold by active 

ineiTiDGrs to fertilizer man^afe.cturers and 

consiimers 
1/4 of Itp on superpliospliate in bulk 
1/4- of 1''' on p-iosphate rock 

Th3 work of the A.ssociaticn ras substpxitially confined to work 
tliat is nationa,l in scope, excluding the educL.tional work, hitherto 
conducted by the Soil Improvement Committee and involved closing the 
branch offices hitherto operated by that Oom.iiittee. 

In 1932-1933, the assessment was rrlsed to 1 cent per ton on bagged 
fertilizer and the budget was still further reduced to .'''62, 010. 00. 

The advent of the II. I.. a. A. v?as tal:en cognizance of in setting Lip 
the 1933-34 budget which amounted to >i5l 60, 370.00. Of this amount 
$100,000.00 was budgeted for vrork in connection Y.dth the II.I..R.A. and 
the balance for regialsr Assccie.ticn Activities. In order to raise this 
money on the decreased fertilizer tonnat,e it was felt necessary 1 .r&i a© 
the assessments to the following rates: 

5(/ per ton for bagged jfertili zer; shipped Jbj active 

members of the msnufacturer andmijEr 

class 
5^ per ton for producers and i npo rters of f ortHi zer 

materials 
2-j(^ per ton on superpiiosphate in bulk shipped to 

ether fertilizer manufacturers, dry 

mixers and consumers 
1^/^ per ton on domestic sale of phosphate rock for 

miners only of phosphate rock 
Minimum rates for any active member $50.00 per year. 
Associate I/iembership -._--- /;50.00 " " 

Ihe 1934-35 budget reflected the active v?ork of Code administra- 
tion and was as follows: 

For regular work $64,825.00 

For Recovery work 219,929.00 

For additional Zone woric 30,000.00 

(Frr visional) 



$314,754.00 

Total expected income for years 1933-34: 

From active members: $139,332.24 

From associate members 2,130.32 

From ncn-meriber c-ntributors 15,960.00 

:;207,'^13.06 



9761 



-387- 

. ■ APPEIIDIX II 

ADMIKISTRATIVE FORMS USED IH DETERMIFIl^TG PRODUCER STATUS 

EXHIBIT 37 

Sumnary of Material to be Sent Has price schedule '^een filed? 

to Pirms Desirin;; to be Listed 

as Fertilizer Producers and to If so ^ive date 

lone Cliairmeu and Zone Secretrries and Eone ; 



Administrative Order 67-3 

Letter I (l) transmittinti to firm: 

1. Code of- Fair Competition for the Fertilizer Industry. 

2. Letter dated November 7, 1933, regarding the labor pro- 
visions of the Code. 

3. Mimeographed sheet I (l) 3 entitled »ImT)ortant Provisions 
of the Code," copy herewith. 

4. Questionnaires 40-A, 40-3, and 40-C. Copies are sent 
herewith with the understanding that they are not to be 
duplicated in or distributed tlirough zone offices. 

5. List of zones to be checked showing where the firm does 
business. 

Letter I (2) to Zone Chairman and Zone Secretary asking for pertinent 
information to be sent out at seme time as Letter I (l) to 
firm. 

Abstract of Questionnaires II (3)a - Il(4)a to be sent to Zone Chairmen 
and Zone Secretaries. 

Letter II (3)b to firm transmitting: 

1. .-".kl^lMVrS OF PRODUCER," Il(3)bl, one form for individuals 

and one form for corporations or partnerships, to be used as 
the case may require. Coxjy is enclosed for your information. 

2. Copy of. the digest of uniform cost accounting system. 

3. Application for membership in The National Fertilizer 
Association. Joining is wholly voluntary. 

Letter II (4)a to Zone Chairm.en and Zone Secretaries asking for recom- 
mendation. 

Letter II (4)b to firm saying questionnaires are being a.cted upon. 

Letter III (5)l notifying firm that name will be entered on list and 
transmitting: 

1. A letter IIl(5)l, of which copy is enclosed, notifying 
it that its name will be entered on the Fertilizer 
Industry Zone List. 

2. "Regulations Covering the Filing of Open Price Schedules," 
with amendments. 

3. Fertilizer -Industry Zone List. 

4. Form letter. IIl(5)4 (copy enclosed) to National Recovery 
Administration for signature of firm, expressing 
assent to operating under the Code. 



-388- 

February 9, 1934. 

To Zone Chairmen and Secretaries 

Procedure for Handling; Corresr^o n dence of Firms 
Desiring to Be Listed as Fertilizer producers 

Dear Sirs: 

In order to expedite the handling of correspondence with firms that 
desire to he listed as fertilizer producers (see regulations 4, 5 and 
6 of Administrative Order 67-3, cory of which is enclosed), we have 
adopted the following procedure: 

I. TifHEK THE FIPJa FIRST SEEKS LISTIMG AS A PRODUCER : 

Upon receipt of information that a firm desires to he listed as a 
producer, this office wi3 1: 

(1) Send to the firm : 

Letter l(l) (copy of which is sent you herewith 'i transmitting: 

1. Code of Fair Competition for the Fertilizer Industry. 

2. Letter dated November 7, 1933, regarding the lahor 
provisions of the Code, 

3. Mimeographed sheet 1(1)3 entitled "Important Provi- 
sions of the Code," copy herewith. 

4. Questionnaires 40-A, 40-3, and 40-C. Copies are 
sent herewith with the understanding that they are 
not to "be duplicated in or distributed through zone 
offices. 

5. List of zones to be checked showing where the firm 
does business. 

(2) Send to the Zone Cha.irman and to the Zone Secretary a form 
letter l(2l (copy of which is sent you herewith), asking for pertinent 
information concerning the firm. 

II. liTHEN THE PIRi/1 HAS SENT IN QUESTION.,aIRES 40-A, 40-B and 40-C: 

Upon receipt of the questionnaires this office will proceed as 
follows: 

(3) If is clear that the firm should be listed as a producer in 
the Fertilizer Industry Zone List: 

a. Prepare an abstract Il(3)a - Il(4')a of essential material 
contained in the questionnaires, and send a copy to the 
Zone Chairman and to the Zone Secretary for their infor- 
mation. 

b. Send to the firm a letter Il(3)b, copy of which is sent 
you herewith, transmitting; 



-389-. 

1. "AFFIDAVIT OP FRODUGER, " Il(3^bl, one form for in- 
dividuals and dne form for corporations or partner- 
ships, to be used as the case may require. Copy is 
enclosed for your information. 

2. Copy of the digest of uniform cost accounting sys- 
tem. 

3. Application for membership in The National Fertili- 
zer Association. Joining is wholly voluntary. 

(4) If it is not clear that the firm should he listed as a pro- 
ducer in the Fertilizer Industry Zone List; 

a. Prepare a,n abstract Il(3'*ia - Il(4)a of essential material 
contained in the questionnaires, and send a copy to the 
Zone Chairman and to the Zone Secretary with a request 
Il(4)a for recommendations as to the listing of the firm. 

h. Notify the firm by letter Il(4)b that its questionnaires 
have been received and are in process of being acted 
upon. 

c. Hold the loapers- in abeyance pending report of the Zone 
Chairman and/or the Zone Secretary. 

d. When such re"oort has been received the procedure will be: 

1. In cases in which it appears that the firm should 
be listed, follow the -orocedure shewn in Paragraph 
11(3). 

2. In cases v/here listing is NOT to be made, send: a 
letter,- -appronriate to the particular case, to the 
firm informing it of the decision. A copy of such 
letter will be sent to the Zone Chairman and to the 
Zone Secretary. 

-III. PROCEDUKE WHEN AFFIDAVIT HAS BEEN RETUffi\i:il ; 

Upon receipt of the executed affidavit, the procedure will 
be: 

(5) Send to the firm : 

1. A letter IIl(5)l, of which copy is enclosed, notifying 
it that its name will be entered on the Fertilizer In- 
dustry Zone List. 

2. "Regulations Covering the Filing of Open Price Schedules,' 
with ajue.ndments. 

3. Fertilizer Industry Zone List, 

4. Form letter IIl(5)4 (copy enclosed) to National Recovery 
Administration for signature of firm, expressing assent 
to operating under the Code...., 



(6) Send a copy of letter IIl(5)l to the Zone Secretary and the 
Zone Chairman. 

C?"! Take the -oiro-Der- steps to, have the name of the firm listed in 
the next revision of the Fertilizer Industry Zone List. ■ 

(8) List the name of the firm in The II. F. A. News, together with 
the zones ' or stih-zones in-which it does hiisiness. 

':;.._ Very truly_ yoiors, 

'"CIIaRLES J. BHAi^ (signed') : ^^ . 
■ Executive Secretary and Treasiirer. 

Enclosures: 

Administrative Order 67-3 . ^ -■ 

Letter l(l) 

Imoortant Provisions of the Code l(l)3 

Questionnaires 40-A, 40-B, and 40-C 

List of Zones 

Letter 1(2) 

Abstract of Questionnaires Il(3)a - Il(4)a 

Letter Il(3)b 

Affidavit Il(3)bl 

Letter Il(4"^a 

Letter 11(4)1) 

Letter IIl(5)l 

Letter IIl(5)4 

NATIONAL REGOVSHY ADi/ilNISTHATIOK 
WASHINGTON, D. C. 

Administrative Order ^67-3 February 6, 1934 

(3P.M.) 

1. Any wholesale cooperative association (a cooToerativG; a-socia- 
tion of the character, described in suh-divisicn a of Section 3 of Arti- 
cle VII ") shall have the right to purchase potash, phosphate rock, and/ 
or nitrogen carriers from producers or importers of these materials .even 
though such producers or importers do not file any schedule 6f prices to 
dealers and/or consumers in the areas covered' by. such cooperative asso- 
ciation, provided: that; in all cases, where such producers or importers do 
not -file any schedule of prices to. dealers and/or consumers such coope- 
rative association shall itself issue, file, and maintain open price 
schedules of the character- and in the fnanner specified in Section 2 of 
Article VI of the Code, and provided further that such co.operative asso- 
ciation shall abide by all of- the price provisions applicable to pro- 
ducers under said 'Ar'ticle VI. 

2. Any producer or importer of potash, phosphate rock or nitro- 
gen carriers who does not sell to dealers and/or consumers may sell.-euch 
products or any of them, to any wholesale cooperative association (a 
cooperative association of the character described in sub-division a 



of Section 3 of Article VI I ) without therety "being deemed to be subject 
to any of the provisions- of the Code. 

3. All schedules hereafter filed in comoliance with the urovisions 
of Section 2 of Article VI of- the Oode must provide for the allowance 

of suitable quantity discounts from the prices listed in, said schedules 
to producers, dealers, agents, and consumers as contemplated in Section 
1 of Article VI. ■.,.; 

4. The Secretary of Tlie National Fertilizer Association, to assist 
producers in filing schedules with their competitors in compliance with 
the requirements of Section 2 of Article VI of the Code, may prepare 
and issue from time to tine a list of the. names and addresses of produ- 
cers operating in each zone, or subdivision thereof, and mail a copy of 
such list to each producer. 

5. The Secretary of The ITational Fertilizer Assdciation may re- 
quire from such r.ersohs who wish to Ise included in such list of produ- 
cers an affidavit or sworn sta.tement declaring that they are producers 
(within the mea.i^ng of- Section 12 of Article II of the 'Code') together 
with the facts jertinent thereto, and that they agree to comply with 
the provisions of the Code and all regulations issued thereunder, in- 
cluding specifically, but withotit limiting the generality of the fore- 
going, the Labor provisions of- Article IV, the Price Provisions of 
Article VI, the luarJcetin.^ Fruvisions of Article VII, the Unfair Prac- 
tice Prohibitions of Ar'^icle VIII, and the provisions as to Fees and 
Expenses of Article XI. 

6. The Secretary of The National Fertilizer Association with the 
advice and assistance of the Farm Credit Adrainistration may from time 
to time -oreTDare and issue a list of the names and addresses of whole- 
sale cooperative associations (cooperative associations of the charac- 
ter described in sub-division a of Sectio:"! 3 of Article VII of the Code) 
operating in such zone or sub-division thereof and mail a copy of such 
list to each such wholesale i-,ooperative association and to such produ- 
cer Operating in such zone or sub-division thereof. 



V^ASKIIIGTON, D. C. 

Dear Sir: , ■ ■ ' ■ ... 

Reference is made to your letter of ■ - , 1934 regard- 

ing your desire to be listed as a fertilizer orodacer in the JIC.~:TILIZIIE 
INDUSTRY ZONE LIST. 

Your attention is ca.lled to the. fact that inclusion in, or. exclU'^ 
sion from, thi-s List does not fix a person' s status - whether as pro- 
ducer or otherwise - in the fertilizer industry and is not so intended. 
The List is prepared merelj^ for the assistance of producers in co.mply- 
ing with the Code, and contains names of oersons who are believed, from 
the information obtained, to be "producers" under the Code meaning of 
the term. 

¥e are sending j^ou under seoarate cover the following: 



-392- 

1. Code of Fair Comoetition for the Fertilizer Industry. 

2. Letter dated Hcvember 7, 1933, regarding the lator provi-- 
sions of the Code. 

3. Ivlimeographed sheet entitled "Ira-oortant provisions of the 
Code. " 

It is urged that you read all of these documents very carefully. 
One who is a "producer" under the Code incurs certain obligations and 
these doc-uments are sent to you so that you ma-ir acquaint yourself with 
such otligations at this time. 

4. Questionnaires 40-A, 40-B, a,nd 40-C. Questionnaire 40-A 
contains a number of general questions; 40-3 relates to 
plants and facilities; 40-C has reference to sales during 
the year ending June 30, 1933. Instructions are attached 
to each questionnaire. 

Please answer every question and fill in every blank ap- 
plicable to your business, with the greatest care, and re- 
turn the questionnaires to us at your earliest convenience. 

5. List of zones. Check each State or part of State in which 
you intend to do business. 

Enclosures; Very truly yours, 

Copy of Code 

Letter of Nov. 7 

Important Provi- Executive Director, Fertilizer 

sions of the Recovery Ooranittee. 

Code 1(1^3 
Questionnaires 40-A, B, andC 
List of Zones. 
CJB:D.1 



iiviPoaTAiJT p::^:ovisioms of the code 

All producers as defined in Article II, Section 12 of the Code who 
sell to dealers and/or consumers come under the Code and, among other 
things, must observe the labor provisions (Article IV); must not sell 
below cost (Article IV); must file open price schedules and send copies 
thereof to their competitors (Article Vl); must refrain from the unfair 
practices prohibited (Article VIIl); must furnish reports and statis- 
tics as reauired (Article IX) ; and must pay to the Code Authority their 
apTii-ODriate share of the amount necessary for the administration of the 
Code (Articli XI) . 

Anyone violating the Code in any respect is subject to the penal- 
ties provided in the National Industrial Recovery Act. 

ARTICLE II - DEFINITIONS 

Section 12 defines "producer " as follows: 

"The term 'producer' means any member of the industry engaged in 
the business of preparing, mixing ma.nufacturing, or importing mixed 
ferti;|Lizer, super-phosphate, and/or other fertilizer material for sale." 



It is clear from a reacLing of this definition that "producer" status 
is a Qdestion of fact. The Code does not give to' The National Fertilizer 
Association or to th»2 Fertiilzer Eecovery Committee the authority to make 
a conclusive determination of the question as to whether any particular 
comoany is a producer. That depends on the facts in each case. The Code 
Authority crmnot, uj any mrxndate or finding or ruling, convert into a 
producer one who is not such -by virtue of the facts as to the nature of 
his 'ousiness, nor, on the other hand, can they exclude from the "produ- 
cer" class any person the nature of whose, "business shows him to telong 
to such class. 

ARTICLE IV - LABOR PaOVISIOKS . ■ 

Section l--Collective Barg;aining . 

Employees have a right to organize and bargain collectively through 
representatives of their own choosiag. No employee shall "be required to 
join a comnany union. Employers must comply with the hours and wages 
provided in the Cede. ' , 

Section 2 — Max iijuia Hours o f L a" bor . 

With minor exception no emriloyee shall "be reouired or permitted to 
Tr;<rk more than 40 hears in any one week cr 8 hours in any one day. .. • 

Ovortime. Overtime shall "be paid at the rate of one and one-third 
times the normal rate for all wor': in excess of 8 hours a day except ih 
the case of office employees. 

Section 3 — Mi ni mum Rates of Fay . 

No employee shall "be paid' less,., than 35 cents an hour in the North- 
ern area, 25 cents an hour in the Southern area, 35 cents an hour in the 
Midwestern area, 40 cents an hotir in the Pacific Ooaat area, and 20 cents 
an hour in Puerto Rico. (Soe Article 1.7, Section 3, for description of 
these ares.) In case he works more than the prescribed hours he must 
"be paid therefor at one and one-third tiiaes his rate of pay. 

ARTICLE VI - PRICE PROVISIOi\^S 

Section 1 — Sales Belo'.7 Cost Proh ibited. 

It is a violation of the Code for, ,a -oroducsr to sell goods at less 
than his cost exceot to meet existing comoetition. Costs must be compu- 
ted in accordance with the uniform methods of accounting prescribed by 
the, Fertilizer Recovery Committee and aoproved by the National Recovery 
Administration. ' . ' 

Section 2— -Q-pen Price Schedules . ' . . 

Before a prodacer may sell his goods to dealers and/or consumers he 
must file an open price schedule with the Secretary of The National Fer- 
tilizer Association and simultaneously mail or deliver copies to his com- 
petitors. Schedules - except those to meet competition - do not takes 
effect until ten days af ter ' filing. ' ' 



ARTICLE VIII - raiTAIR- PRACTICES PROHIBiTED 

There are 18 sipecific trade loractices v;hich are prohibited. En- 
gaging in any cf these practices constitutes a violation of the Code. ■ 
,It is urged that this Article "be read very carefully. 

ARTICLE IX -r. REPORTS AilD STATISTICS 

Prom time to time the Code Authority will require certain reports 
and statistics, which^inust "be furnished. 

ARTICLE XI - EEES Ax® EXPENSES 

Each producer subject to the jurisdiction of the Code and accepting 
the benefits of the activities of thr Code Authority will "be required to 
pay his share of the cost of administration cf the Code. 



TIIE KATIONAL FERTILIZER. ASSOCIATION 
616 Investment Building, Washington, D. C. 



Company Name 



QUESTIONNAIRE NO. 40-A 
^Address 



2, Is your business 

( ) A .corporation 

( ) A copartnership 

( ) An individual enteriDrise 

3, Parent Company 



( ) A Govern: lental Agency, Fede- 
ral, State, Municipal 
( ) Other, if any - specify: 

Address 



If more than 50 per cent of the capital stock is owned by another 
company, insert the name and address of the parent company above. 

4. parent companies will list the names and addresses of their subsidia- 
ry companies here: 



Check in the following list thos,e from whom you Tiurchase: 



^Tholesalers Import- 
and Jobbers ers 



Brok- 
ers 



Sulphu.r j c Ac id 
Phc.s-,.-;i'it.e R.^ck 
Superrj : i o Kphate 
Ammoni\ui Phos- 
phate 
Nitrate of Soda 
'Sulphate of Ammonia 
Cyanaraide 
Tankage 

Cotton Seed Meal 
Other Organic Mat. 
Potash Materials 
Mixed Fertilizer 



Dry Foreign 
Mixers Co's 

( 
( 

( 



Miners 
or 



( 


) 


Dry i.ixers 


( 


) Retail Coopera- 


( 


) 


Brokei-s 




tives 


( 


■ ) 


V/hclesale 
Coooera- 


(■ 


) private Brand 
ComiDanies 






tives 


( 


) Others, as fol- 
lows: 



6. Check in the following list those to whoa you sell your fertilizer 
products: 

( ) Cons-omers, direct 
. ( ") C.onsumers, thru 

a.gents 
( ) Retail Dealers 
( ). Wholesalers, and 

Jobbers . 

7. Are you engaged in "business as: 

( ) Icir^orter ( ) Manipulator of Manures 

( ) Broker ( ) ^"Jholssaler or Jobber 

( ) Manufacturer of Suoerphospate ( ) Private Brand ComiDany 

( ) Manufacturer of Mixed Pertili- ( ) Tftiolesale Cooperative 

_ zer ( ) Retail Dealer 

( ) (Manufacturer of llitrogen ( ) Retail Cco-oerative 

, Materials ( ) Other, if any - s-oecify: 
( ) producer cf Potash 

8. Huw long have you conducted the business above described without 
change either in legal organisation or in the nature of the business? 
years. 

On a separate sheet to be attached hereto, descri"be changes that have- 
been made during the past three years, if any, in the legal organization 
of your business and/or in the nature of the products sold. 

9. Uhat was the sales value of the raixed fertilizers, superohosphate, 
and/or other fertilizer iaaterials sold during the fiscal year ended: 

June 3 \ 1933 $ 

June 30, 1932 

June 3'\ 1931 

iJhat was the amount of sach sales for Decemlrer 1935 



10. Attached is a list cf zones. Check each State or oart of a State, 
as shown "by the list, in which :/ou do or intend to do business. If you 
do "business only in a limited area, sioecify on the list the particular 
area. 

11. Por what zones, if anjr, have you, filed ODsn price schedules as des- 
cri"bed in tht Code? (C-ive the zone numbers and opnosite each zone num- 
ber give the filing date of the latest schedule only.) 



12. Of the raixed fertilizer, suoerphosphate, and/or other feri-i:}.izer ma- 
terials "oroduced in nlants owned or leased "by you, how many ^q:is did you • 
and your tenants consume during the fiscal year ended June 30, 1933? 
tons. 

13. Of the mixed fertilizer, superphosphate, and/or other fertilizer ma- 
terials PURGEASED by you and SOLD as such , how many tons did you and your 

tenants consume diiring the fiscal year ended J-^one 30, 1933? • 

tons. 

14. a. Do you now O'^n or have under lease a -plant? 

b. Have you reopened a plant formerly operated by you?___ ■ 



-396" 
If so, exolain' fully on a separate sheet. 

15. Have you, since July 1, 1933, actually mixed, manufactiored, or pre^- 
pared mixed fertilizer, supemhosphate, and/or other fertilizer materials 
for sale, in a plant owned or leased by you? How much? tons. 

16. Have j/ou, since July 1, 1933, made sales of,, or offered for sale, 
mixed fertilizer, superphos-ohate, and/or other fertilizer materials, 
produced in a plant owned or leased liy you? . 

17. a. How many tons of mixed fertilizer do you expect to produce 

during the year 193- in plants now owned or leased by you? 
tons . 

: b. How many tons of such mixed fertilizer do you expect to 'be used 

by you and your tenants during the year 1934? ^tons. 

c. Of the mixed fertilizer, superphosphate and/or other fertili- 
zer materials to be PURCHASED by you during the year 1934, how 
many tons do you exiDect to be used "iy you and your tenants? 
tons . 

Affixing of the signature hereto is a representation by the party 
so doing that the answers hereto given are trae to the best of his 
knowledge. 



Date 



Signature of Executive Officer, Owner, Manager, 
.or other person actively in charge of the busi- 
ness and in position to answer the above 
questions. 



I INSTRUCT I oi;s 

FOa MSWERIMa Q.UESTIOmiAIiffi W. 40-A 
These Instx'uctions refer by number to the questions . 

1. Give full company name and address. 

2. Give the legal form of organization of your business. 

3. Give the name and address of the comioany, if any, owning more than 
50 per cent of the ca-oital stock of your comoany. 

4. Each parent company will name its subsidiaries and give the proper 
addresses thereof. 

5. Check in this list the types of companies fron which purchases are 
made. 

6. Check in this list the channels through which your sales of mixed 
fertilizers, superphosphate, and/or other fertilizer materials are 
made. 

7. Check in this list all of the terms which characterize or describe 
your business or any part of it. 



8. Give the number, of years your company has conducted its tusiness 
without change i:i tlie tyne of legal organiza.tion (corDoration, co- 
partnership, indiviaaal enterprise, etc.\ or in the products sold 
(mixed fertilizer, suoer-ohosphate, and/or other fertilizer materials). 
Describe changes, if any, as indicfited by the question. 

9. Self explanatory. 

10. In checking the list of zones it is especially iraoortant that you 
check each State, or part of a State, as shown in the list, in which ' 
you do or intend to do business. . 

11 to 17, inclusive. Self exislanatory. 

THE MTIONaL FERTILIZ^ii ASSOCIATION 
616' Invest-aent Building, Washington, D.C. 

QUESTIOMAIHE NO. 40-B EEUiTING TO TLAllTS AlID FACILITIES 

Mote; A se parate ques t ionnaire is to be filled in each plant 

1. Name of - Number and Street 

Company ; City and State _j 



2. Name of person in charge of plant_ 



Date of acquisition of plant, if owned 

Date of lease, if ].eased_ . __..a''i<i oeriod of lease_ 

Date of building or construction of -olant 



4. On a separate sheet to be attached, describe the facilities of this 
plant . 

5. Daily capacity when in full operation at eight hours a day 

tons. 

6. Tons ;oroduced during the past two years; 

a. July 1, 1938, to June 30, 1933 ^tons. 

b. July 1, 1931, to June 30, 1932__ tons. 

7. What is the fair value of the plant: 

a. Land $ c. . Machinery $ 

b. Building $ d. Total $ 



Is the plant described in this questionnaire: 

a. Dry mixing ^b. Acid-ulating c,^ Complete 

b. Fertilizer Materials plant . 

(Before ansv\fering this question read the Instructions very care- 
fully) . 

Give the location of ea.ch sales office. (See Instructions for des- 
cription of sales office) 



-398- 

10. a. What were the principal products (materials and mixed goods') 
produced in the ahove plant during the past two years? 



"b. If the plant was not in operation during the past season, then 
state the products which it is proposed to produce: 



11. Is any department of your plant not to he operated, according to 
present intentions, during the 1934 season? . If- so explain 



Affixing of the signature hereto is a representation by the party 
so doing that the answers hereto given are true to the test of his 
knowledge.. 

Date L.5. 



THE MTIOKAL FERTILIZER aSSOCIATIOH 
616 Investment Building, Tifashington, D.C. ~ 

Il^TnTSUCTIOKS 
FOR ANSWERING (.^UESTIONHAIRE NO. 40-B 

These Ingtruetions refer by numher to the questions. 

A separate questionnare' (Form No. 40-b) is to be filled in for 
each separate ulant. See definition of types of plants in 8 below. 

1. Self explanatory. 

2. Self explanatory. , . , 

3. Self explanatory. 

4. Pacilitnes include: (a) the plot of land; (b) size and construction 
of the 1-uilding; (c) type and s tjrle of: dry mixing machinerj?-; aci- 
dulating machinery; sulphuric acid equipment; (d) railway sidings; 
(e) capacity of warehouse; and (f) other pertinent information. 

5. Self exT/lanatory. 

6. Self explanatory. 

7. Self explanatory. 

8. a. A "Dry mixing plant" is a plant having equipment suitalsle for 

mixing fertilizer. 

b. An "ac'-du'-ating plant" is a plant in which superphosphate is pro- 
duced by mixing sulphuric acid and phosohatc rock. 

c, A "cora'-jlete plant" is a Plant having acid chambers for producing 
sulphuric acid, acidulating equipment for producing superphos- 
phate, and mixing equipment for producing Qoaplete fertilizer. 



d. If you produce any fertilizer material either as a principal 
product or as a liy--Droduct of sone other industry, so indicate 
by naming the product or products. Examples: Cottonseed 
meal, fish scrap, animal tan':;age, iDoneneal, nitrogenous tank- 
S'gs, gartage tankage, sewage sludge. 

9. Give the address of each sales office which meets the following re- 
quirements: 

a. Is designated "by the company as a sales office. 

b. Is the office of a sales manager, district sales manager, or 
other person filling the same general functions. 

c. Is an office where sales are made. 

d. Is not merely an office where a local or traveling salesman is 
located, even though he spends all or part of his time in 
making sales. 

e. Is not a retail store owned by the herein named company or firm. 

10. Name the principal products as "Mixed G-oods"; "Superphosphate"; other 
types of materials, if any, 

11. Give as the name of the "department" (a) Mixed Goods; (b) Super- 
Dhosphate; (c) Sulphuric Acid; (d) Phosphate Rock Grinding; or other, as 
the case may be. 



TfflESTIOMAIRE NO. 40- C Code Number 



THE NATIONAL FERTILIZER ASSOCLA.TION 
616 Investment Building 
Washington, D. C 

Note: Please read the instructions carefully before gathering the data 
or attempting to fill in this form. 

Section 1. I SOLD SIiRIl'IG THE PISCAL YE^jR ENDED JUNE 30, 1953: 
(Not including Exchanges and Transfers) 

Tons Sold 



Bagged Bulk TOTAL 

Mixed Goods ; 

Supcrphosnhate 

Sulphate of Ammonia 

Nitrate of Soda 
Potash Materials 
Natural Organic Materials 
Other Fertilizer Materials 



TOTAL TONS SOLD 



Section 2. OF THE QTJANTITY SO SOLD, I PURCHASED FROM OTHERS THE FOL^ 
LOWING: 

Mixed Goods ^_ ^^_ 

Superphosphate 

Sulphate of Ammonia 



Hitr^te of Socio. ' / ^ 

Potash Materials 

iJatural Organic liaterials 

Other fertilizer I.aterials_ 

■TOTii 



Section 3. OF TMS QIJ AMTITY SO SO LD, I .' '^TUFACTT-PIED IN PLAI^'TS OTxIED OR 
LEASES BY L£'( 0": IrR;.£D) TH£ rOLLOJIHG ; ,■. 

Liixed Goods 

Superphos)h;ite ' • ^ ' 

Surohate of Ammonia . ' 

lit rate of Soda ■ __^ ] 'J_ - ■ 

Pot-;,sh liaterials , 

Hat \xr al • . r ga-' i i c ! la t e r i pi s 



Other Fertilizer iViaterials 
TOTAL 



Section 4* IF Ai\TY GOODS SO SOLD w'llillE, IIvIPO:-lTED 3Y YOITR COLIPAjTY IIT ITS 

07/11 : A}[£ ( AilD NOT THjIOUGH AilOTIlEX) STATi: THE ITITSET^ OF TOiTS OF: 

Potash Laterials • 

iJitrrte of Sor.'. a '• ■" '■' ' " . . ^ 

Salpnate of Anmohia . ■_ _ ' __' ^ 

Others f ^ \ ; 

nanung( 

theiri( 



TOTAL 



INSTRUCTIONS 
FOR AlISWERING ^UESTIO""mAIRE FO. 40-C 

The In^t ru-tions refer "by n-omher to the sections. 

This questionnaire covers sales made during the yi=ar ended June 30, 1933. 

It is necessary to know -Aet&r the sales were made from g-oods -ovcc- 
cho,sed from others or from floods produced in plants owned or leased by 
the company, •' , . : 

1, The total sales of fertilizer and/or fertilizer materials should 
be shoirm here,., _ The tonnage shoiMi in this section for any item should equal 
the combined tonnage sho\7n in Sections 2 and 3 for the same item. 

2, In this section, uiider the proper headiujp-s, should be entered all 
sales of goods which were net produced in plants owned or leased by your 
company, but which were purchased from others. 

For example, if your company bought -bulk rained goods and bagged and 
sold the same, the tonnage should be entered as "Mixed Goods," "Bagged." 
Lixed Goods to be entered in this section include all mixed goods purchased 
from others and resold, except those to which additional materials were 
added and mdxed. 

If your conppny purchased' -sup&rpho.sphate, any amount of such material 
sold, except in mixed goods, should, be entered as "Superphosph.nte , " "ilagged" 
or "Bulk," as the case nay be. The same procedur-e should be followed with 
regard to sulphate of ammonia and other materinl.s, 

Z. Goods manufactured qj: ^^'oduced. in factories owned or leased by 
your company or mined by your.^.coiipahy'tind sold should be sho'-'n here, 
I/iaterials ourchased by yo--'ar cpr^pany, used in the -ipnuf 'irture Of mixed 
goods, and sold by your conpany in i.iixec -oods Lhoi.ild apipear as "Mixed 
Goods" and not as materials. Unless nitrogen -ncl ootajii naterials are 

9761 



-401- 

act;ially produced by your .corToany, sales of such materials should not 
be entered in this section, but in Section 2. 

DESCRIF TIOi^^ OF GOODS 

In order that there may be unif or:iiity as to the classification of 
fertilizers and fertilizer materials, the following descriptions are 
given: 

Mixed Goods Include : 

Mixtures, .containing at least two pla.nt foods, such as phos-ohoric ■ 
acid and nitrogen, or ohosohoric acid and potash. It would, of 
■ course, include mixtures of three plant foods (nitrogen, phos-oho-:- 
■■■'■•'■'- ric acid, and potash). '■ 

- SuTperpho sphate :. Self-ex'olanatory 
Sulph-c:.te of Am-nonia : " n ' 
Mitrate of Soda : m n 

Fotgsh Mai^erials Include : 

Muriate of Potash .,■■■. 

Sulphate of Potash 

Sulphate of potash Magnesia 

Kainit • , , ; ■ 

Manure Salts -■■■.■:... . ■ 

Nitrate of Potash - , . -. 

Natural Organic Materials Include : 

Cottonseed Meal G'Uiano 

Sewage Sludge Cestor pomace 

Tanlcage '• Manipulated Manures 
Dried Blood Other materials of plant 

Fish Scrap or animal origin 

Other fertilizer Materials Include : 

Bone Meal 

phbsohate Rock 
. -'Basic Slag 

Amuoniujn ■ Ph'o STDha.t e 
'■■ Calclujn CyansTfiide 

Urea ard Calurea 

Any others not already listed 

FERTILIZER RECOVERY CUMlTTES (CODE AUTHORITY^ 

616 Investment Building ■ 

Washington, D. C. •' ' FORM 50 . 

SALES TERRITORY SHEET 
(please check those States in which you. 
are doing or expect to do business) 
Name of Reporting Company Address 



-4C2- 



Zone No. 1 * 

Maine 

New Hampshire 

Vermont 

Massachusetts 

Hhode Island 

Connecticut 

Zone No. 2 * 

New York 

Pennsylvania 

New Jersey 

Puerto Hi CO 

ITest Virginia (Frnhiindle Sectio! 

cormorising Hajicock, Brooke, Chi'. 

Marshall Counties'* 

Zone Nc. 3* 



Zone Ilo. 7* 

Florida east and south of Suwa- 
aee, Colioaabia, Lafayette, and 
Taylor Counties 

Zone Ho. 8* 



Tennessee Alabama Mississippi 

Florida west of the Aoalach'icola 

River 

Louisiana east of the Mississinopi 

River . 



;one No. 9* 
Arkansas 
Oklohoqa 



Texas 
and uK.j-aiiui4a, New Mexico 

Louisicina west of the Mississippi 



Maryland 

Delaware 

District of Columbia 

Virginia north of James River, inclu- 
ding Accornac and Northamr^ton Countie 

■J7est Virginia (B.&O. Section - compri- 
sing the following counties and, 
with the exception . of the ParJiandle 
Section, counties north thereof; Ma- 
son, Jackson, Braxton, '..'ebster, pendle- ■ 
ton, Roane, Calhoun, RandoToh, Ni- 
cholas (that part served by the B. & 0. 
RR. ) Zone No 



Zone No. l'> 
~ Michigan 
Ohio 
Indiana 
Kentucky 
Illinois 
Yv is cons in 
Minnesota 
Iowa 



Missouri 
North Dakota 
South Dakota 
Neljraska 
Kansas 
Montana 
Wyoming 
Colorado 



11* 



Zone No. 4* 



Washington 
I druio 



Oregon 



Virginia south of daraet; River, inclu- 
ding Richmond 
Vfest Virginia (C. 
North Carolina 



& 0. Section^ 



Zone Ho 12* 
California 
Utah 
Hawaii 



Nevada 
Arizona 



Zone No. 5* 

South Carolina 



Zone No. 6^ 



Georgia 

Florida, starting with the eastern bound- 
aries of Coliorabia, Suv7anee, Lafayette, 
and Taylor Counties and extending west , 
to the Apalachicola River 



Indicate on the tlank 
line provided for each 
zone the address to 

which you wish open 
price schedules for 
that zone to be sent. 



Return to: 

Fertilizer Recovery Committee 

The National Fertilizer Association 

616 Investment Building 

Washington, D. C. 



-403- 



W.SHIT GTOK, D-C. 

Letter l(2) 



To the Chairmpn snc the Secretrrv of Zone 



Peer Sirs: 

j-ishes to "be listed 

?.s r producer in tne i^iJ-.TILIZE- P^DUSTLY ZOrK LIST. \^e have sent 
hi;a our form letter I'O. l(l), co y of vhich hps been furnished you, 

'.ill you pler-se sun-oly us with ?ny information you may 
have regarding this firm, rith particular reference t^ its producer 
status. 

V'erv truly yours, 



Eiiecuti'-j Director, I'ertilizer Secovery 
Committee 



404- 



Il(3)j 

11(4)! 



FEIiTILIZE^ rJi,CCfJE-:f CO llTThii. (C^DE AUTHOivITY) 
616 Invertment Building, .pshire'ton, D. C. 

A^STnACTS OP CUESTIO'""? AlfJIS 40-A^ B, A>tD C 



1. Co.werv 1-larae 
Address 



2. FroTDOse to do business in Zones 

3. Location (ii not ps pbove) 

Person in Chaffee 

4. Business: 



5. Plant 



5. Sales: 



Price Schedule Filed 



8. S-oecial Inf orjaption: 



Cony to Chairraan and Secrfetarv of Zone 



9761 



-405- 



MSHirGTOF, D. C. 



i^etter Il(3)b 



re?r Sirs; 



Re§?rding your Questionnaires 40-A, 40-B, and 40-G, it aiDpears 
from p preliminarv examinption of ?11 of the information T^hich Y^e have 
obtFined that vou should be listed in the i-^ERTILIZER IFDUSTRY ZONE 
LIST. In order to determine this finrlly, re are sending you: 

1. "Affidavit of producer," One form for individuals and one 
form for corporati'onr or, r^prtnership are enclosed. If you are a 
producer under the Code meaning of that term, and i"ill execute the 
appropriate form and return 'it to me, it I'dll become a part of your 
aiDplicption to be listed as a nrocucer in the i'EftTILIZER INDUSTRY 
ZONE LIST. , ■ 

We are also sending you: ' . .. . 

2. Digest of Uniform System ot Cost Accounting ao-oroved by 
the Code Authority and the National Recovery Administration. Your 
attention is again directed to the fact that costs under Article VI, 
Section 1, must be compcited in accordance vith the uniform methods 
of accounting prescribed by the Fertilizer Recovery Committee and 
the National Recovery Administration, 

3. Arplication for membership in The National Fertilizer Asso- 
ciation, '*ve are glad to have all producers as members of our Associa- 
tion, in case you fill out and re1;,urn the Affidavit, ^e shall be 
very glad also to have ^ou fill out and return to us the application 
for membership. Such action on your part is wholly voluntary, 

4. If membershin is de; ired and an appl cation is sent in, you 
should also fill in and return the tonnage report blank. This report 
will be used for co'roiiting dues to the Association if you become a 
member. A rate of dues memormdum is also enclosed for your information. 

Very truly yours. 



Sep. Cover ; 

Affidavit of Producer ' ' ' ■•' ' 
Dif'est of Uniform Sys- 
tem of Cost Accounting 
Membership Application 

Tonnage Report Blank Executive Director 

Rate of Dues v^emo, Fertilizer Recovery Committee 

CJB:LM 

9761 



-406- 



AJ? I DAVIT 0.F FhODUC.EIt 
(Individual) 



Il(3)b 1 



State of ) 

• ' . ■ , ) SS 
CouAtv of • ■ ' ) , 



bon? fide- iri' the business of 



.being, dulv, sworn^ s?ys that he 
(Preparing, mixing, manufacturing, 



(or importing mixed fertilizer, superphos ohate, and/or other fertilizer 

for sale, within the meaning of 

(mp-terial by name) : .; . 

Section 12, Article II, Code oi Fair Competition for the Fertilizer In- 
dustry, approved October 31, 1933, under the National Industrial Recovery 

Act; that his __: : ■, [ , 

'"■ ' (plant, or principal place of business if an importer) 

is located at ' ' ■ ■ . . . . ' . , 



(town or city and State) ,,.. . 
that further facts regarding his business are as set forth in Question- 
naires 4J-Ai'40-'3, 40-C no'»r or heretofore filed; with the Secretary of 
The National' 'Fertilizer Association; and-that he does hereby agree to. 
accept andcom-ply vith ell of the p-rovisions of said Code applicable to 
such producers, ■ including 'Article lY, Labor Provisions;., Article VI', 
Price Provisions; Article VIII, Unfair. Practices Provisions;. Article 
IX, Reports and Statistics Provisions; and Article XI, Fees and Expenses 
Provisions, together i^ith an.y regulations issued or to. .be is.sued there- 
undfer. . • ■ . ' '.^ ^ ^ 



(Name of person signing) 



(Street) 



(City or town). 



(State) 



Subscribed and sworn to before me 
this day of , 1934 



Notary Public 
9761 



Il(3)b 1 



■^ J I DAVIT OJ' PKODUCEii 
(Corporation or Fartnershin) 

The undersigned hereby certifies that it is a 



(corporation 
bona fide en|r:pged in the business of 



(partner shit)) (preparing, 

(mixing, manufacturing, or i!nx)Orting mixed fertilizer, superphosphate , 

for sale vithin the 

(and/or other fertilizer material by name) 

meaning of Section IT, /article II, Code of Pair Co.ipetition for the Fer- 
tilizer Industry, p-o-oroved. October -jI, 1&33, under the liational Industrial 

Recovery Act; that its 

(plant, or principal lolace of business if an importer) 

is located at ; that further facts regarding 

(to-"n or city and State) 
its business are as set forth in Q,ueGtionnaires 40-A, 40-B, and 40-C no^ 
or heretofore filed "dth the Secretary of The National iertilizer Associa- 
tion; and that it does hereby agi'ee to accept and comply vrith all of the 
provisions of saic Coce apr)licable to such producers, including Article 
IV, Labor Frovisiors; Article VI, Price Frovisionp; Article VIII, Unfair 
Practices Provisions; Article IX, Iieports and Statistics Provisions; and 
Article XI, Pees and Expenses Provisions, tOr^ether "^ith any regulations 
issued or to be issued thereunder. 



3y_ 



(Tame of corporation, or partnership) 



(i'arae of person signing) 



(Title of person signing) 
(Note. If corporation, add signature of Secretary and corporate seal.) 
State of County oi ^ 



, being duly svorn says that he is 



(Title of 
of 



(person signing:) d'ame of co-por^tion or partnership) 

above named; that as such he is autbo^ : ;; ; d to execute the foregoing docu- 
ment,' and that the statements made tnei-in as facts are true to the best 
of his knc^ledge, information, and belief. 

Subscribed and s^-'orn to before me 



this dav of , 1934. 



F_tary Puolic 



-.408,- 

ril ■S.kHlLVAJ. :vrTILIZL- ASoCCIATK-t 
1-t^s of Dues 
: icc-:l Yp-t 19:G-1934 

Active '/-e:.\\DPTii 

a. liiniraum r.^ts, $25. on a yenr for other tii;?n Specialty'- Producers; 
$15.00 a year for S;oecialt,' Proc.ucFrs. 

■fa. 5 cents a ton for Ja?;g-'6 fertili-zer sold rad/or c^nsi^'aed -vad. 
shipoed oj active nernoer;; of the annuf o.cturer -^nd mixer class. 

c. '5 cents a ton for prodvicers and importers of fertili:;er miterials, 

except: 

d. 2-,^.- cents a ton on ]:ainit; -o-.ai, li.umc, se'^'a.;'^- sl-ior-^, ^-^^^rbage 
tankp'^e, ^nif" sinilar organic m'-.t-rial of lo'^ i-^nlue. 

e. 2-'':- cents .--^ ton "n suDerphosohate, in "bur-: snipoed to other fer- 
tilizer nanufacturers (eacliidii'-), erchcjiges) , dr;r nixers, and 
consumers. 

f . I7- cents a ton on domestic sale of phosphate rock for miners 
only of phosphate rock, • 

Associate members 

fC, $50.00 a -rear. 



"Bagged fertili'-er" le-inr- all "'a': '"-d "oocs, 'ihether ccntain- , 
ing nitrogen, ohosphoric ■^.cid, and pota'-h; or nitrogen ano ^hos- 
•ohoric '^cid; or ohosphoric axid and potash; or sivoerphosshate only 
if sold in b-iys. 

Active members en."~g"c' in the mr.imif actare and mi:-.ing of fer- 
tilizer pay nothing en kainit or other forms of DOtash, nitrate of 
soda, cottonseed meal, t?nkage, "blooo , hone, fish, castor pomace, 
sulph 'te of ojnmonia, cyanniaide, et ctera, mien sold as such in an 
unmixed sto-te. 

Active m e mh e r s "/fho are ••jrod'acer s_ nr ',noort''"rs cf fertili?pr 
materials -o?y dues on t:i^ '-■" vi'\l;: -.o-'ci-'iv-" in the -irececiMg -o^ra- 
5ra;,ph i-rhen sold and/or coni.i :u^ ; ni'. shio ^ed ,'r them to fertilizer 
manufacturers, dry mixers, ind c(yo.sx[i?.^::s. 

Active memp - rshio dues for th" cTirr.-^nt fisc.-l xear are com- 
puted on the ton'a''^:e of the oreced in^; j.^^ ^ y ear end^d June 30. 
These dues are oayable in eoupl cjuvt--rlv installments, the first 
payment beiig due on Au,;ust 1, Suh-eqaent installments are due and 
payo.hle on the first da;- of egich cuart^r oeginninjg October 1. 



9761 



-409- 



iviembers '-'ho join durin; p fiscpl year pay dues lor the rempining 
ouarters including the quarter in '"hich their na-ae is prded to the 
meintership list. Dues are comijuted for the entire fiscal year, and 
1/4, S/4, 3/4, or 4/4 of thpt pmourt is payable according to the quarters 
remaining in the fiscal vear at the time of inclusion on our memhershin 
list. 



9761 



Letter Il(4)a 



«ASHIKaTO:'", p. C. 

To the Cnpirmgn and Secretary of Zone , 

Depr Sirs: 

Attached hereto is an Abstrpct of v^i.estiornaires 40-A, 40-B, pnd 
40-C, regprding , 

..e do not ieel from the inf ormn-tion in our possession thpi this 
firm should be lasted as a producer in the fertilizer Industry Zone 
List. «ie would appreciate it if you vould send us your recommendation 
at once, together vith the statement of the facts upon 'i^hich it is based. 

Very truly yours, 



CJT!:LL.i 



Executive Director 
lertilizer iiecovery Committee 



•ASKIFGTON, D. C. 

Letter Il(4)b 



Dear Sir: 

Heceipt is ackncwledged of your (questionnaires 40-A, 40-B, and 
40-C. They are no- being exprair.ed and in due time we u^ill report to you 
the result ol our examination. 

Very truly yours. 



Jixecutive Director 
Fertilizer Hecovery Committee 



CJB:Li.. 



-411- . 

'..ASKIFC-TOlv\ Ei C. 



Letter IIl(5)l 



Depr Sir: 



Receipt is hereby pcknov/ledj'^ed of vo\ii' executed "Affid?^vit of Producer. 
It is m/ present indention to have your nr-me entered in the next revision 
of the i'£ETILIZEJn. INFJSTRY 20!^&; LIST as a producer selling; to dealers, 
agents, and/or consumers, Ho' ever, as alreadj'' indicated, inclusion in, 
or exclusion fro-a, this List ooes not fix a person's status — '"hetlier as 
producer or otherwise — in the fertilizer industry, and is not so intended. 
The List is -orepared merely for the assistance of producers in complying 
•'ith the Code, and contains names of persons vho are believed, from the 
information obtained, to be "producers" under the Code meaning of the 
term. 



t»e are sending you the following: 

1. "regulations Covering the riling of Open Price Schedules, 
i.''ebru!^ry 21, 1934, superseoing the issue of December 28, 1933. 



dated 



2. Copy of the FEl^TILIZER IFrUSTRY Z01>Tij LIST. In mailing copies 
of your schedules to vour co irietitors you should send copies not only 
to those firms listed in this book but also to any other firms vhich 
you may kno"- to be producers in the zone or zones in '-hich you are 
doing business. 

3. A form letter to ajor George L, Perry, Deputy Adrai-istrator, 
National Recovery Administration, T'hich is enclosed for your convenience 
as an opeh expression of your -scent to operate under the Code. I shall 
be glad if you "'ill sign thic letter and return it to me. This is not 
compulsory, but failure of any producer to sign the lette-r does not 
operate to relieve him of recponsibility lor observing the provisions 

of the Code. 

It is fitting that I should no'', on behalf of tne fertilizer 
Recovery Committee, solicit voar full cooperation in the administration 
of the Code, 



CJB:LM 
Sep. Cov. : 

Regulations Covering 

filing of Open Price 

Schedules, 

Fertilizer industry 

Zone List, 

Letter to x/iajor Berry 



Very truly yours, 



jixecutive Director 
jj'ertilizer Recovery Committee 



9761 



-41^ 



111(5) 4 



NO 'ICE Oi ACCLTTMCE : 

of the 
CODE OF i'AIR COi'iPETITIOr j'Oit THt; i'ERTILIZEIt IKDUSTEY 



(r^te) 



Major George L, Berry 

Deputy Administrator 

Nationpl Recovery AdmiriEtretion , _ . 

'(.Bshmgton, D. C. ■ 

You pre hereby advised that this coiapany wishes to be enrolled 
as accepting th^ Code of Fair Cora-oetition for the Fertilizer Industry 
Fs ap"croved on October 31, 1933, by President Franklin Delano Roosevelt 
under authority of the National Industrial Recovery Act. 

.e are taking this action in order 'to do our part in plpcirg, 
as nearly as may be possible, all in the industry on an equally fair 
competitive basis. 



(Name of Company) 



(Signed by) 



(Address) 



9761 



-4x3- 



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9761 






The ■'. ■ '.1- u;'an c ■ vt ^'.-r-r t': : --trr-innol -'''lich \"frs ^.ctively 
engagec -^ i' ~ . z y. -tv."-^ o:' t"'.e •^'crtilizcv' i^-i':'-artr", T'ost 

of the --':•;. ^ \_ " .^ '. ' ■'■ ^:'t.;:'^ '^- Lut; A""'-"Gt '""' , 19"". 3y "ToveL-fber 
15, 1935 the puuor- : . * ' nonr.el n-i th tao oxccTtion of three stcno- 
r-raphers iui.d ueen - , _ ': , i:.'om the study. The various '''ey -personnel 
wei-e sepxr-'tcd fron t -i^ =tud;" -.s follows: 

Hr- '"• ^-« 'A^^tein ^Tovcnher 1';^, 1935 

"-■'r. "•. J. P-tchell ~ecc;nter Zl , 1935 

Hr, ". L. luc:'- :^ecen"ber ri, 1?3'5 

I'-T, C. 7. Sohannrai Fohr-'or.ry '^, 19?5 

"r, C. ^.. 'TilliE '^c'hr-jsirr 7, .1936 

I'r, Al r. O'Eonnell, 'hit. Chief of the ?tud;,- ■'■'cs left with one 
stenofiTa-iher to --re-^r.re the Ji-'-l ro-^ort for -molic-tion. 



9761 



-415" 

AFPr'L IX II 

EXKIIIT Z8 

T'PETILIZHI; STUDY 

FERSOi"^:L LATA 

UinT CHIEP . • " , . ^ 

A. F. O'Bonnell 

Chemical Ln^'ineeririiP- cdnca.tion at iiass: chusetts Institute of 
Tcclmology var, followed oy several years of industrial eiv:ineering ex- 
perience a.id tlie-i "by three years of {.rachiate vorl: in "'comonics and 
Business Administration tahen at tao :-!a,rvra-d Graduate School of Business 
Administrai:ion, Univcrsit;- of California and the University of Chicago,, 
respectively. 

Tvro rycars of teaching economics, one at the University of Chicago 
and the second as Professor of Enginecrin Economics at Iowa State^ 
College (1923-1924-) Yfcre followed hy te-. ;-ears continiiously engaged in 
directing econoMc . research as to the current and iDrospective status 
of industries and companies for iy'vestrient purposes, hut principally 
for the purpose ox puhlic financii^g. Prom "Jovcinher, 1934 to the Schech- 
ter hecision lir, O'Donnoll vas an Economist with the Research and 
Planning Division of the 1T.P..A. and advised on all of the Chemical Indus- 
try Codes including that of the "ertilizer Industry. 

EOREIGl^ TRADE 

p:^.oject head 

E. J. PATCHELL was Assistant " eputy AdorAnistrator in the Chemical 
Section when the -fertilizer Code war; fir=-t presented in July 1953, and 
sat in the ]-;rc-hearing conferences ;".nd some of tae nost-hearing con- 
ferences until the Code was arnrovcd. After this his time was devoted 
to other chemical codes raitil Octoher, 1234, -when he v/as Administration 
Memher in ITew York on the 'Ton-; :etallic Section Codes of the Basic 
liateriaJs Division. lie hi.s had an ei.gineering training at Columbia 
University; his business eirocrience since 1916 has heen in the market 
research and sales end of technical products, about half of which was 
in foreign trade. From 1925 to 1928 he introduced concentrated fertil- 
izer in Latin American mrrhets for t-ie A-raerican Cyanamid Comnany. 



9761 



-416- 

DISTRIEUTIOIT iL" PRICES 
FSOJECT HEAD 

CHARIilS D. BOrlAJ^rjAl-I Ims lijid sor.; t-vcnty years of responsilDle college 
teaching, research and adninistrabivo vjork in A/ricultiaral Colleges and 
Experiment Stations, and in ,iovcrn::ient o:\=.a.iiz-.itions. ?rcm OctolDer 1929 
to July, 1933, he v/as the econoi,iist ia Cji2,rge of the section of the 
first Census of Distribution ccvoted to the Distribution of Agricultxiral 
Commodities, v/hich included farm supplies such as fertilizer. Ilr,- 
Bohannan caavic vith '^'.H.A. in December, 1933, and just prior to working 
on the fertilizer study was Assistant Dcnuity Arjainistrator in the Food 
Division, 

PEOLUCTIOl" A;-L -^L-AilCE 

PROJECT :-3;ad 

DEXTEP- A. Tl'TEIl', a graduate of Hassachusetts Institute of Tech- 
nology School of Chemical En^,ineering Practice, after ten years as 
vice-president of a concern interested in management merclmndizing and 
importing of pig iron, coal, coke and by-products (including fertilizer 
products) spent five, years in the b-uviag dc^iartment of a large invest- 
ment banking house, , Pie had been Ydta ii,H,A. about o year and a half, 
at first on the Industrial Advisory Board and later as Deputy Adminis- 
trator with the Equipment Division prior to joining the .Staff of the 
fertilizer Study, . ' • • 

LABOR 
PROJECT I-iEAD 

liYROH L. BUCK was full time A" ini: b' . tion aember in ciiarge of 
the H.R.A. Cleveland Office ad ] - -^ ■.-.: c:r'ierience in the adminis- 
tration of codes under II.R.A. bot: : i "■ r-'iington and in the field. His 
industrio.l experience as an executive -as mainly obtained in the auto- 
motive field with sach concerns as Lodge Brothers and Oakland I'.iotor 
Car Company. 

IITDUSTRY COOPERATIOrl AiTP GOTPRiJliEKT FxELATIOlIS 
?ROJT]CT HEAD 

C, E, WILLIS aaiiie vath 1T,E.A. shortly after its .organization, after 
being employed for twenty years by the RCA-Victo"':- Company and its ^^re- 
decessors in va.rious C3,pacities having to do vrith tlie sales of products 
of t'arX corq-any. Hi?^ work in I-;.R.A. as Assistant DopuLy Adjninistrator 
and as Acting De-Quty Adininistrator con^-isted in the preparation for 
approval of a/^y'roximately forty codes and in the active adm.inistration 
of an even ./reater number. Just prior to joining the fertilizer study 
he was en,; aged in writing Code Histories, 



?761# 



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 +.he 
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 v/hich 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 ffith 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, 
out 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 W ork 
Material s No 18, Content s of Code Hi^tries, 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 NPA 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 
9T68— 1 



-ii- 

set forth the origination of the code, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industry, the 
recommendations of the various Advisory Boards, certain types of official correspondence. 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to amendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the work of the Division 
of Review. ) 

THE WORK MATERIALS SERIES 

In the work of the Division of Review a considerable number of studies and compilations 
of data {other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Work M aterials No - 17 . Tentative O utlines and Sumgaries a£ 
Studies in Process , these materials are fully described). 

Industry Studies 

Automobile Industry, An Economic Survey of 

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

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

1934. 
Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part D - Exports and Exporting under NRA Codes. 
Forest Products Industries, Foreign Trade Study of the 
Iron and Steel Industry, The 
Knitting Industries, The 
Leather and Shoe Industries, The 

Lumber and Timber Products Industry, Economic Problems of the 
Men's Clothing Industry, The 
Millinery Industry, The 
Motion Picture Industry, The 
Migration of Industry, The: The Shift of Twenty-Five Needle Trades From New York State, 

1926 to 1934 
National Labor Income by Months, 1929-35 
Paper Industry, The 

Production, Prices, Employment and Payrolls in Industry, Agriculture and Railway Trans- 
portation, January 1923, to date 
Retail Trades Study, The 
Rubber Industry Study, The 

Textile Industry in the United Kingdom, France, Germany, Italy, and Japan 
Textile Yarns and Fabrics 
Tobacco Industry, The 
Wholesale Trades Study, The 

Women's Neckwear and Scarf Industry, Financial and Labor Data on 
9768—2 



- iii - 

Women's Apparel Industry, Some Aspects of the 

T rade Practic e St udies 

Coiaaodities, Inforaation 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. 
Trade Practice Rules of The Federal Trade Commission (1914-1936): A classification for 
comparison with Trade Practice Provisions of NRA Codes. 

Labor Studies 

Cap and Cloth Hat Industry, Commission Report on Wage Differentials in 
Earnings in Selected Manufacturing Industries, by States, 1933-35 
Employment, Payrolls, Hours, and Wages in 115 Selected Code Industries 1933-35 

Fur Manufacturing, Commission Report on Wages and Hours in 
Hours and Wages in American Industry 

Labor Program Under the National Industrial Recovery Act, The 
Part A. Introduction 

Part B. Control of Hours and Reemployment 
Part C. Control of Wages 

Part D. Control of Other Conditions of Employment 
Part E. Section 7(a) of the Recovery Act 
Materials in the Field of Industrial Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 



Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 
Administrative Interpretations of NRA Codes 
Administrative Law and Procedure under the NIRA 
Agreements Under Sections 4(a) and 7(b) of the NIRA 
Approve Codes in Industry Groups, Classification of 
Basic Code, the — (Administrative Order X-61) 

Code Autiiorities and Their Fart in the Administration of the NIRA 
Part A. Introduction 

Part B. Nature, Composition and Organization of Code Authorities 
9768—2. 



Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 
Code Compliance Activities of the NRA 
Code Making Program of the NRA in the Territories, The 
Code Provisions and Related Subjects, Policy Statements Concerning 
Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Provisions in the Codes 

Part E. Agreements under Sections 4(a) and 7(b) 

Part F. A Type Case: The Cotton Textile Code 
'Labels Under NRA, A Study of 

Model Code and Model Provisions Tor 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, 

Maltiple 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 Stud ies 

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-Judioial Methods of 

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

Government Contract Provisions as a Means ;f Establishing Proper Economic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

lutrasUtv Avtivitiss Which sq Affect Interstate Commsroe as to Bring them Under the Cora- 
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 cf Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the United States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 
9768—4. 



THE E VIDE NCE STUDIES SERIES 



The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Schechter decision the project was continued in order to assemble data for 
use in connection with the studies of the Division of Review. The data are particularly 
concerned with the nature, size and operations of the industry; and with the relation of the 
industry to interstate commerce. The industries covered by the Evidence Studies account for 
more than one-half of the total number of workers under codes. The list of those studies 
follows: 



Automobile Manufacturing Industry 

Automotive Parts and Equipment Industry 

Baking Industry 

Boot and Shoe Manufacturing Industry 

Bottled Soft Drink Industry 

Builders' Supplies Industry 

Canning Industry 

Chemical Manufacturing Industry 

Cigar Manufacturing Industry 

Coat d.nd Suit Industry 

Construction Industry 

Cotton Garment Industry 

Drses Manufacturing Industry 

Electrical Contracting Industry 

Electrical Manufacturing Industry 

Fabricated Metal Products Mfg. and Metal 

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 Inc:ustry 
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 Contraotins Industry 
Retail Lumber Industry 
Retail Trade Industry 
Retail Tire and Battery Trade Industry 
Rubber Manufacturir,g Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding IndDstry 
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. 



- vl - 

Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint, Varnish, and Lacquer, Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

THE COVERAGE 

The original, and approved, plan of the Division of Review contemplated resources suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govern- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies; and the abandonment of the consolidation and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be cared for under other 
auspices. 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the largest and richest single body of information 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review. 
9768—6.