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OFFICE OF NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



HISTORY OF GENERAL EXEMPTIONS 

B y 

Lucius Q. C. Lamar 



WORK MATERIALS NO. 75 



CODE HISTORIES UNIT 
MARCH, 1936 



...... iX> "*i * *■ * s •- 



OFFICE OF NATIONAL RECOVERY ADMINISTRATION 

DIVISION OF REVIEW 



HISTORY OF GENERAL EXEMPTIONS 
By 
Lucius Q,. C. Lamar 



CODE HISTORIES UNIT 
MARCH, 1936 



9845 



7^, J, Sh/LJU. <^M^^*^^^ 



FOREWORD 

This history of General Exemptions was prepared by Mr. 
Lucius Q,. C. Lamar, Exemption Grouo Supervisor of the Code 
Histories Unit, Mr. Robert C. Ayers in charge. 

The history, the operation, and the effects of the Executive 
and Administrative Orders which created general exemptions have 
been treated in this work. The term "General Exemptions" as 
here used means those exemptions which were not limited in their 
application to a particular code. Work Materials No. 74 on 
"Administrative and Legal Aspects of Stays, Exemptions and 
Exceptions, Code Amendments, Conditional Orders of Approval" 
contains allied material. 

The exhibits referred to in the text are not here reproduced. 
They may be found in the NBA files under the title NRA Studies 
Special Exhibits, Work Materials No. 75. 

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



L. C. Marshall, 
Director, Division of Review 



March 25, 1936 



9845 -i- 



TA3LE_0E C ONTEN TS 

Page 
Summary 1 

General Exemptions; 

A. Exemption to members not participating in 

establishing code. 

Executive Order of July 15, 1933, No. 6205-B 3. 

B. Co-oueratives. 

Executive Order of October 23, 1933, Wo. 6355 9 

C. Terns under 2500 nonulation. 

Executive Order of October 23, 1933, No . 6354 13 

D. Service Trades. 

Executive Order of lasy 27, 1934, No. 6723 16 

E. Exemptions as to Sales to Hospitals. 

administrative Order of January 23, 1934, 

Order No. X-4 pnd others 20 

E. Handicaorjed Workers. 

Executive Order of February 17, 1934, 

No. 6606-P 25 

G. Horaevror : -ers. 

Executive Order of May 15, 1934, No. 6711-A 29 

H. Aup rent ices. 

Executive Order of June 27, 1934, No. 6750-C 33 

I. Sheltered Workshops, 

Administrative Order of March 3, 1934, 

Order No. X~9 and others 42 

J. Government Contracts 

Executive Order of March 14, 1934, No. 6646 44 



9845 ~ii_ 



Page 



K. Exemption from Assessments, 

Administrative Order of April 14, 1934, 

No. X-20 and others 47 

L. Territorial Possessions. 

Administrative Order of July 2, 1934, No. X-60 

and others 5-2 

EXHIBITS 

(These exhibits are not reproduced in mimeographed form. They 
are on file in bound form in NRA Studies Special Exhibits, 
Wo rk ivia te ria 1 s No . 75 ) 

1-A Memo from Malcolm Sharp re origin of Executive 

Order 6 2" 5- 3 
1-B Memo from 3. Lotwin re origin of Executive 

Order 6205-3 

2 Executive Order 6205-B - Granting exemptions 

to non-participating members 

3 Memo from L. J. Bernard re Interpretation of 

Executive Order 6205-B 

4 Memo from L. J. 3ernard re Interpretation of 

Executive Order 6205-B 
4-a Reports cf Exemptions under Executive Order 

6205-B from Construction Unit, Industry 

Section No. I 
4-B Reports of Exemptions under Executive Order 

6205-B in industries other than Construction 

Unit from Industry Section I 
4-C Reports cf Exemptions under Executive Order 

6205-B from Industry Section II 
4-D Report of Exemptions under Executive Order 

6205-B from Industry Section IV 
4-E Reports of Exemptions under Executive Order 

6205-3 from Industry Section V 

5 Executive Order 6355 - Exemptions to Cooperative 

Organizations 

6 Executive Order 6606-A - Supplement to and 

Amplification of Executive Order 6355 

7 Administrative Order X-35 - Definition of 

Farmers' and Consumers' Cooperatives 

8 Administrative Order 182-11 and 106-11 - 

Interpretation of Administrative Order X-35 



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■ in- 



Exhibits (Continued) 

9 Administrative Order X-98 - Interpreting Executive 

Order 66Q6-A Insofar as it aoplies to allowance 
of brokerage commissions to cooperatives 

10 Bulletin No. 3 - The President's Heemployraent 

Program 

11 Executive Order 6354 - Exempting towns of less than 

2500 population 

12 Executive Order 6710 - Amendment of Executive Order 

6754 

13 Administrative Order X-72 - Supplementing Executive 

Order 6710 and designating trades and industries 
subject to exemptions 

14 Executive Order 6723 - Exemptions to Service 

Trades 

15 Executive Order 6756-A - Authorizing local codes 

from unqialified service trades 

16 Administrative Order X-53 - Relating to service 

trades, the subject of Executive Order 6723 

17 Letter from Executive Committee of Cleaning and 

Dyeing Trade to the President attempting to 
withdraw assent tc code 

18 Reply of Eugh S. Johnson, Administrator, tc letter 

from Executive Committee (Exhibit 17) 

19 Administrative Order X-4 - Granting exemptions to 

Hospitals 

20 Administrative Order X-5 - Extending effective 

date of Administrative Order X-4 

21 Administrative Order X-8 - Granting permanent stay 

of Administrative Order X-4 in connection with 
certain industries 

22 Executive Order X-24 - Staying provisions of Admin- 

istrative Order X-4 with respect to the 
Signalling Apparatus Subdivision of the Electrical 
Manufacturing Industry 

23 Administrative Order X-39 - Modifying the Adminis- 

trative Order X-4 and excepting therefrom certain 
industries 

24 Executive Order 6606-P - Granting exemptions to 

Handicapped lor-ers 

25 Instructions from U. S. Labor Department dated 

November 8, 1934, relative to Handicapped 
workers 

26 Report from U. S. Labor Department dated December 

9, 1935, covering Handicapped workers 



9845 



•IV- 



Exhibits (Continued) 

27 Post Code analysis, Serial No, 78, by Research 

and Planning Division, of Cede Provisions re- 
garding Handicapped Employees 

28 Executive Order 6711-a - Exemption to Home- 

workers 

29 Report from U. S. Department of Labor dated 

June 1, 1934, regarding Home Jerk 

30 Report from U. S. Department of Labor dated 

December 9, 1935, upon exemption to Home 
Workers 

31 Form of Apprentice Contract prepared by the Federal 

Committee on Apprentice Training 

32 Bulletin Ho. 1 of Federal Committee en Apprentice 

Training 

33 Excerpt from Report of July 25, 1935 of the Federal 

Committee on Apprentice Training 
33-A Report Entitled the Apprentice Training Program 

Under the N.R.A. by the Federal Committee on 

Apprentice Training 
33-3 Post Code Analysis, Serial Ho. 74, of Provisions 

regarding Learners and Apprentices 
33-C Post Code Analysis, Serial Ho. 74-A, Supplementing 

Analysis of Provisions regarding Learners 

and Apprentices 
33-D Executive Order Ho. 6750-C - Exemption to 

Apprentices 
33-E General Regulation Ho. 1 re Apprentice Training 

by Secretary of Labor 
33-F Bulletin No. 2 of the Federal Committee en 

Apprentice Training 

34 Administrative Order X-9 - Exemption to Sheltered 

Workshops 

35 Administrative Order X-28 - Appointing national 

Sheltered Workshops Committee, etc. 

36 Administrative Order X-">9 - Authorizing the 

National Sheltered Workshop Committee to 
Issue the H.R.A. Insignia 

37 Administrative Order X-81 - Amending and Supple- 

menting Administrative Order X-59 

38 Executive Order 6646 - Requiring Certificate of 

Compliance on Government Contracts 

39 Administrative Order X-48 - Exemption in con- 

nection with quotations made to Governmental 
Agencies 

40 Executive Order He. 6767 - Modification of 

Executive Order 6646 



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-v- 



Exhibits (Continued) 

41 Memorandum from Laurence A, Knapp, dated June 6, 

1934, regarding assessments 

42 Executive Order 3673 - Relating to Collection of 

Expenses of Code Administration 

43 Administrative Order X-30 - Regulations Governing 

Collection of Expenses of Code administration 

44 Administrative Order X-36 - Regulations Governing 

Collection of Expenses of Code Administration 
Administrative Order X-36-1 - Interpretation of 
Paragraph III of Administrative Order 
X-36 
Administrative Order X-36-2 - Interpretation 
of Execration in Paragraph III, of Adminis- 
trative Order X-36 

45 Administrative Order X-60 - Exemptions of Trades 

and Industries in Ha-vaii and Puerto Rico, 
etc. 

46 Administrative Order X-80 - Approving Eorra of 

Administrator's Territorial Cooperation 
Agreement 

47 Office Memorandum No. 356 - Authorizing the 

Deputy Administrator for Alaska to decide 
Applications for Exemptions 

48 Office Memorandum Mo. 357 - prescribing pro- 

cedure for Deputy Administrator in the Exercise 
of the Authority given under 0. I'. Ho. 356. 



9845 



-VI- 



_ 1 - 



S'JMmA; 



This is a brief history of leral exemptions from code 
provisions. The terra ;l ;e:i fci a" as here used means 
those exemptions net Unite in th ii application to a particu- 
lar code but extend either to ail codified industries or a group 
or class of industries. 3? r example, Zbcecutive Order 6205-3, 
applies to any and all codes thereafter approved. Executive Or- 
dor 6711-A, which grants an exemption tc permit home work, applies 
only to those codes whic i prohibit home work. 

Mainly, the purpose of this work lias been to plane in a 
single volume the essential features of all the general exemptions 
tc serve as a handbook or starting point for a more comprehensive 
study of any yZ the particular exemptions. Therefore, an endeavor 
has been made to develop briefly a clear idea of each of the gener- 
al exemptions. This involved, first, the background or conditions 
which made necessary the issuance of the particular order; second, 
a summary of the order itself; and 1 thir<? a general treatment of the 
operations an. effect of the order. 

The; sources of information '-ere obtained primarily from the 
ariginai Executive and Administrative Orders and the supporting docu- 
ments pertaining thereto. However, in manycases there was no supporting 
documents or any documents en file showing the circumstances surround- 
ing the issuance of the particular order. In such cases wherever 
possible the writers of this history conferred with the 1JRA offi- 
cials who bad person-ally handled the particular order or had some 
personal experience relating to it and obtaining verbally such in- 
formation as the official had or obtained leads to other documentary . 
evidence. 

In the same manner considerable material was obtained in- devel- 
oping the various sub-topics, such as "Operation and Effect" and 
"Administration of Order", these sub-topics being common. to many of 
the main topics. 

Specific instances of information acquired from sources other 
than the official records are the following: 

Executive-Order 6-305-3;- The background of this Order from 
Malcolm Sharp (See Exhibit ITo. 1A) and 3. Lotwin (see Exhibit No. 
13). Report including the number and disposition of exemptions 
were operative under Executive Order from Robert IT. Campbell, 
Deputy Director, Section I of the Division of Business Cooperation 
covering codes in the Construction Industries (Exhibits :To. 4-A) . 

Like report from ',':. P. Tilis, Director, Section I, of exemp- 
tions under the Order in codes constituting the Easic Materials and 
Forest Products Industries. (Exhibit 4-3) 

Like report of sxtch exemptions from Industry, Section II, from 
3345 



- 2 - 

codes classified as "Manufacturing" Industries. (Exhibits 4-C). 

Like report from Industry' Section IV, from codes under the 
classification "Food 11 Trades and Industries. (Exhibit 4-D) . 

Similar report from Industry Section V, of such exemptions 
from codes in Graphic Arts Industries, Inland 'Jeter Carrier Trade, 
Codes under the Service Trades Section, Puerto "lean and Hawaiian 
Codes, Finance Cooes, Public Transpo'rtion, and Amusement Industries. 

There are no reports from Industry- Section III vrMch includes 
Textiles and Chemicals. 

Co-operatives:- Personal contact r/ith. Vernon J; Clarice, former- 



ly Senior Assistant Deputy, Public Agencies Division and also a 
tenative history of Co-operatives by Mr. Clarice, 

Terns under 2J00 "■"ovulation ;- Personal contact with Al.-ison 
James formerly Executive Assistant of the Distributive Trades Divi- 
sion. 

Service Trades ;- Personal contact with Ko 1 arc Z. Col an, Acting 
Assistant Deputy for the Distributing Trades Division. 

Sales to Hospitals and also Exempt j-.ns to Sheltered Workshop s ;~ 
Dffie Lee Lloore, formerly Executive Assistant of the Public Agencies 
Division, and Executive Secretary of the national Sheltered Workshop 
Committee. 

Handicapped '.Yorkers and Homoworkers :- Mrs. Clara a. Dyers, 
Assistant Director, Division of Labor Standards, United States Depart- 
ment of Labor and Chairman of Federal Committee on Apprentice Train- 
ing. (See also report of Labor Department on Handicapped '.Yorkers, 
Exhibit Ho. 06 and report on Eomeworkers, Exhibit lio. 30). 

Apprentice Trs j nting:- H. 3. G-underson, Technical Secretary of 
Federal Committee on Apprentice Training, and employees of the com- 
mittee. 

Government Contracts :- Tench T. Marye, Former Unit Chief, Inter- 
pretation Unit, Review Division, who formerly handled the review of 
exceptions from Executive Order SG46. 

There were many exemptions that do not come within the scope of 
this work and for useful information regarding exemptions in general 
the reader is invited to "Administrative and Legal Aspects of Stays, 
Exemptions and Exceptions, Code Amendments, Conditional Orders of 
Approval", " ; ork Materials 74. 



5845 



A. 3X31.1? HOLTS TO rZ\GC.'C _.XUX- J =I.C,^Aj:; I "i- I 'd 3STA3LISH HIG 
C033 

I. Origin of Or< r 
II. The Order 
III. Construction of the Order 

(1) Amendments to codes may be stayed under 
the Executive Order 

(2) Participation 

(3) Representation 

(4) V/hether action is tha t of an exemption 
or stay 

IV. Operation and Effect 
V. .Conclusion. 



I . Ori,.,in of Orde r 

The national Industrial Recovery Act was approved June 16, 1933. 
The first code, that of the Cotton Textile Industry, was approved 
by the President on July r , 1""" •'..;. (1) ^i3 Order of Approval contain- 
ed the conditions that administrative consideration should be given 
the application cf any person directly affected by the code who had 
not in '-arson or by representative consented thereto and that any 
such person should be given an opportunity for a hearing before 
the Administrator or his representative,' prior to incurring any 
liability under the code by an;/ of the means provided in the nation- 
al Industrial Recovery Act (Sea condition (ll) of the Order of 
Approval) . 

The possibility of litigation involving the legality and con- 
stitutionality of the code with respect to enforcement of its pro- 
visions upon non-assonti:.. members was considered by the legal staff 
and the question was raised whether such non-assenting members had 
been given duo notice and opportunity for making objections to the 
proposed code, es?eci E lly as the penalty provisions of the national 
Industrial Recovery Act wore considered to have been severe. This 
condition of the Order providing for the opportunity for hearing 
was accordingly inserted to meat such possible objections. There 
was however criticism from some of the members of this industry 
upon the ground that this condition was too broad as allowing more 
immunity from liability to non-assenting members than was necess- 
ary. 

After the approval of this cade it was doomed necessary to have 
a general order providing for notice and opportunity for hearing, 
applicable to all codes. An order was accordingly drafted by the legal 



(l) Printed Coda Volume I, ">a..;e 1. 



9845 



-.4 



staff of 1134 with the view of obviating the principal objection 
to the condition of the order approving the Cotton Textile Code. (.2) 
On July 15, 1933, the President signed the order, which nvas desig- 
nated as Executive Order ITo. 6205-3. 

II. The Order 

This Executive Order provided for hearings after the approval 
of a code tc persons who had not either in person or by representative 
participated in establishing or had not consented to such code, who 
claimed that in particular instances the code was unjust to them and 
applied for an exemption therefrom. Persons sc applying within ten 
days after the effective date of the code were given an. opportunity 
f:r a hearing and determination of the issued raised prior to incur- 
ring any liability under the code. The Administrator might also, 
if justice required, stay the application of the cods to all similar- 
ly affected pending the determination of the issues raised. 

The Order with formal parts omitted is as follows: 

"Any code of fair competition- approved by me 
shall be deemed in full force and effect mi the 
effective date as stated in the code; but after the 
approval of a code and as an incident to the immediate 
enforcement thereof, hearings may be given by the 
Administrator or his designated representative to per- 
sons (hereby defined to include natural persons, partner- 
ships, associations or corporations) who have not in per- 
son or o- a representative participate;, in establishing 
or consenting to a code, but who are directly affected 
thereby, and who claim that applications of the code 
in particular instances are unjust to them an;." who 
apply for an exception to, or exemptirn from, or modifi- 
cation of the code. Such persons s: epplying, within ten 
days after the effective date of the code, shall be e iven 
an opportunity for a hearing and determination of the 
issues raised prior to incurring' any liability to en- 
forcement of the code, and the Administrator shall, if 
justice requires, stay the application of the code to 
all similarly affected pending a determination by me 
of the issues raised. "(3) 

As will be observed from the Executive Ord^r, the mere filing 
of the application within the ten day period had the effect of re- 
lieving the applicant from the operation of the code until an 
opportunity had be^-n given for a hoarin^. No preliminary showing 



(?) See i/iemorandums from Lalcolm Sharo, formerly of the Legal hivisi.n, 
and Eemice Lotvin of the Legal Division, Exhibits 1-a and 1-33 
respectively. 

(3) Copy of Executive Order 6205-3 Exhibit 2. 
9845 



upon the merits vas required. ThiS relief was limited, however, 
only to those -.mo did not participate in establishing the code 
or had not consented thereto. 

III. Conrtrv.cti . n of the 0.*' • .-v 

(l) Amend ments to codes could be stayed 
under the Executive Or i _r 

It was held that since- an amended code "became pro tanto a new 
code that the Executive Order was applicable to amendments; (4) 
hence members of the ^articular industry who had not consented to 
such amendment or participated in its adoption could file their 
objections within the ten day period, in which event a stay of 
the amendment became operative as to them. 

VJho were the -persons "who lave net in person or by 
representative -ia r t i cio ated in establishing 
or consenting to a code?" 

(2) Fart i cipat ion 

Under this Order a person who merely appeared at the public 
hearing on the code but objected tc the code could not be said to 
have "participated in the establishing of or consenting to a code", 
unless his objection was sustained and the code amended according- 
ly; (5) hence persons so appearing and objecting to a code were 
eligible to file application within the ten day period. 

(3) Re ,rosontatj-n 

In order to have been eligible as a nonparticipant the appli- 
cant must not have participated either in person or by a. representa- 
tive at the hearing. Whether or hot a person was represented at 
the hearing was ordinarily 5 quest! n of express authorization. 
However, questions did arise as- to whether such representation ex- 
isted even though no express authority was conferred; for example, 
whether the persons appearing on- behalf of the trade association or 
other sponsoring organization represented the individual members of 
such organization to the extent that a member would be deemed to 
have participated in t he establishment of the code. The Retail Jewel- 
ry Code provided that the Code Authority might make recommendations 



(4) Memorandum from L. J. Bernard, Legal Council for the Review 
Division, to E. r.i. Jeffrey, dated September 27, 1934, in re 
application for exemption of Glick V.'atch Company, Retail 
Jewelry Trade (Order No. 142-24), marked Exhibit No. 3. 

(3) Sec memorandum from L. J. Bernard to E. M. Jeffrey, Review 
Division, dated July 27, 1934, Exhibit 4. 



9845 



based on conditions in that trade, whi ch upon approval of the Admin- 
istrator shall become operative as a part of that. code. Where the 
Code Authority had made its recommendations pursuant to such pro- 
vision which had been approved and therefore become a part of the 
code, it was held that the Code Authority as to such action represent- 
ed the entire industry and all members thereof had therefore partici- 
pated by representation in the e stab lis'hme lit 'of su.ch amendment, hence 
the stay was inoperative as to a member even though he files his 
objections within the 10 day oeriod. (6) 

(4) Whether action is that of an exemption or stay - 

It will be noted that the Order grants relief to persons "who 
apply for an exception to, or exemption from , or a modification of 
the code." There seems no doubt that the relief pending such 
hearing wastihat of an exemption as distinguished from a stay not 
only from the express language of the Order but from the express 
definition of the term-. "exemption" which applies tc rulings which 
release an individual, 'group or class within an industry from the 
full operation of a. code prevision as distinguished from that of the 
term "stay" which applies t: not less than an entire industry. (6a) 
nevertheless the relief provided by the Order was almost univer- 
sally referred to as a " stay under executive Order 5205-1". The 
terra "stay" no doubt was adopted becav.se of the phraseology :f the 
last sentence of the Order, i.e. "and the Administrator shall if 
justice requires, stay ..the application of the code tc all similarly 
affected." While generally known as a "stay" the relief was however 
handled as an exemption and orders terminating the "stay" were signed 
by the Division Administrators. 

IV. Operation and affect 

The relief provided by the Order was availed of quite generally 
by non-assenting members of the industry. Hearings in many cases 
were delayed with the resu.lt that many members of industry enjoyed 
exemptions for considerable periods of time and in many instances 
during the entire life of the code. Under the Order the exemptions 
became :' operative, upon, the mere filing of the application without 
tiie necessity of racking a snowing. 

VThile reports from all industries have not been received, reports 
have been received from 410 industries. They comprise Dxnibits 4 A, 



(6) Memorandum from L. J. Bernard, Exhibit ITo. 3 

(6A) Definition of «3xemption" - Office Manual III, Sec. 3210iard "Stay" 
Section 3211 - See also Review Division Precedent ITo. 07, - Office 
Manual III, Section 3200. 



J.»_ U ^. J, i ,/ , 



9845 



- 7 - 

4 B, 4 C, 4 D, ?.nd 4 Z. Ua • ". cutive Order, 517 applications 

_warfi.-iEa.do. Final disposition v? s made in 230 cases. In ."287 casos 

no final actio:: hac" been taken b t.. stays reuiainod in affect 
during the life if th= code. (7) 

The report from IidftSaertsry 5t ;ti n 1 is quite complete and is 
therefore susceotible' _>f fuxt.it r analysis. It includes the basic 
Construction Code and 23 supplementary codes of the Construction 
Industry. The report also includes 3 other industries in that Sec- 
tion. An analysis of this report shows the following: 

IT . o: codes involved 33 

. plications 455 

[No. of cases in which final 

dispositi m has been made 135 

lie. of casos in which no dis- 
position has o. .;. made 270 

Periods of stays in 18E casos: 

I. Less than one montn from the effective date of code 2 

From 1 to 2 months 3 

From 7 to 8 months 26 

From 3 to 9 months 3 

From 9 to 10 months 86 

From 10 to 11 months 64 

From 11 to 12 months 1 

V. Conclusi.n 

From the above it will bo noted that a large number of concerns 
obtained complete immunity from liability under codes by the more 
filing of an application without the necessity of making even a prima 
facie showing, many for p lone period of time and in the majority 
of cas=s during the entire life of the code, 'here hearings were held 
the. stays were in most instances terminated, indicating that most of 
such applicants were not entitled to relief. It would therefore 
appear that some provision should have been made for a prompt deter- 
mination of such applications. Possibly a general order requiring 
supplementary or post-code hearin, s upon such applications within a 



(7) The disposition of 10 applications not shown 
9845 



~ 8 



stated period from the effective dates of codes would have met 
the legal and constitutional requirements and 'at the same time 
insured prompt disposition. A single hearing might have been 
allowed for all members objecting to a code. For members who 
could net attend such hearing, provision' could have been made 
for submission of factual data and briefs, to ITZiA on or before the 
date of such hearing or within such -orescribed -oeriedt. 



9845 



b. ex&ipticws to poor: ::... 

Io Origin of Order 

II, Executive and Administrative Orders 

III. 'Administration 

IV« Operation and Effect 

V. Conclusion 

I. Origin of Order 

There lias teen in existence for a number of years cooperative or- 
ganizations, The genuine cooperative is ordinarily the Parmer's Coopera- 
tive or the Consumers' Cooperative. They are usually incorporated. The 
Farmers' Cooperative performs the function of a marketing agency for the 
farm products of its members and in many cases also acts as a purchasing 
agency, usually for supplies used in the production of the products 
marketed "by the organization^ 

As a purchasing agency the organizations secure the quantity dis- 
count which is passed on to the members, usually in the form of natron- 
age dividends. These dividends are paid at fixed periods and represent 
the net income after the deduction of administrative and fixed expenses 
and are payable to the member in amounts proportionate to their respec- 
tive purchases. Consumers cooperatives operate on the same -principle 
exce-ot that it pets merely as a purchasing agency and does not include 
the marketing feature,, There are other so-called cooperatives which 
contain some but not all of the features of the above described organiza- 
tions, as, for example.! establishments which allow discounts to pur- 
chasers but which do not act solely as agents of the members. 

A number of codes contain provisions designed to limit the payment 
of rebates, refunds ana unearned discounts to purchasers. It can, there- 
fore, be readily seen that such provisions prohibit or might be construed 
to prohibit the operations of cooperatives. In order to permit coopera- 
tives to continue to function the Department of Agriculture recommended 
an Executive Order excepting cooperatives from such code provisions. As 
a result of such recommendations, the President on October 23, 1933 
signed Executive Order Wo. 6355. 1/ 

I I . Executive and A dmini strative; Orders 

This Executive Order provided that i • code or agreement theretofore 
or thereafter approved should be construea to prohibit the payment of 
patronage dividends in accordance with law by any bona fide and legi- 
timate cooperative organization, including farmers' cooperatives, pro- 
vided such patronage dividends were paid out of actual earnings and were 
not paid at the time the member makes the purchase from the cooperative 
organizations* 

It will be noted that the above Crder is not in the form of an 
exemption. As to codes thereafter formulated it constituted a general 
policy that no code should contain provisions prohibiting the payment 
of patronage dividends by cooperatives under the conditions prescribed. 

1_/ Copy of Executive Order Wo. 6355, see Exhibit Wo. 5. 
9845 



..- 10 - 

However, as to those codes previously approved containign provisions 
prohibiting the payment of patronage dividends or susceptible of that 
construction, the order operated to relieve cooperatives from such pro- 
visions and to that ex tent. amounted to a general exemption. 

The immunity of cooperatives from code provisions was further en- 
larged "by Executive Order 6606-A, dated February 17, 1934. l/ This 
Order declared (l) Than no provision in any code or agreement thereto- 
fore or thereafter approved should "be construed to make it a code vio- 
lation to sell to or through any "bona fide and legitimate cooperative 
or any intervening .agency of such cooperatives; (2) That no code should 
be construed to prevent such cooperatives from being entitled to receive 
or distribute to its members as patronage dividends or otherwise the 
proceeds derived from any discounts, commission, rebate or dividends 
ordinarily or by code provision, allowed to purchasers of wholesale or 
middle— man quantities; (3) The Administrator was authorized to determine, 
after such hearings and proceedings as he may. deem necessary, whether in 
any doubtful oase, an organization is or is not a bona fide and legi- 
timate' cooperative organization entitled to. the benefits of this Order, 

Pursuant to the above Executive Order the Administrator by an Order 
dated May 18, 1934, 3/ entitled "Definition of Farmers, and Consumers 
Cooperative" No. X-35, prescribed the following conditions to "be ful- 
filled in order that such .organizations "be entitled to the protection 
of the Executive Order: (l) Be organized under laws of a state, terri- 
tory of the District of Columbia; (2) Permit each member owning one 
paid share of membership one vote only in matters affecting management 
of the organization, unless otherwise provided "by the law under which it 
is incorporated; provided a central or regional association made up of 
cooperative associations may permit voting based upon volume of busi- 
ness done "by members with regional- association, or on the number of mem- 
bers in the member ■ association; (3) Operate on a cooperative basis for 
the mutual "benefit of members, and all income, after pro.viding for re- 
serves and dividends on stock not to exceed 8^o, must be distributed to 
members or shareholders on patronage "basis at stated periods not more 
frequently than semi-annually; (4) lion-member business not to exceed in 
value the member business during any fiscal year; (5) Permit members" 
access to records to determine compensation of officers and employees, 
and no salaries or commissions are to be paid except for actual ser- 
vices; (6) Distribute patronage dividends to members according to amount 
of "business with the association; may permit such dividends of a non- 
member to accumulate until they equal the value of a share of stock when 
the same may be issued; patronage dividends must not be made in form of 
refund at time of purchase; no evidence of any such dividends by agree- 
ment or representation to distribute a definite amount may be made; (7) 
Not more than 3$ of the Capital raised may be allowed for service or 
organizers; (8) Conduct its affairs in the interest of the members. The 
control or management may not b^ by no n-co operative organizations or 
persons to whom surplus savings or unreasonable compensation are paid; 
and may not be required to buy commodities from a specified non-coopera- 
tive concern; (9) Comply with codes for industries in which they operate. 

l/ Copy of Executive Order No. 6606-A, See Exhibit No. 6 

2/ Copy of Administrative Order, Exhibit No. 7. 

9845 



- 11 ~ 

On June IS, 1934., a ruling in interpretation '"as'risfiued (Administra- 
tion Order I'os. 182-11 p 5 1 r-ll\ (*< tr. '"foot that Administrative 
Order X-35 applied to any bona fide ad legitimate cooperative and was not 
limited to farriers' and consumers 1 organizations. This ruling was made 
necessary because o^ tho doubt created by the caption of X-35, i.e., "De- 
finition of .Farmers' a->d consumers' Cooperatives." 

On October 12, 1934 Administrative Order No. X-98 was issued for the 
purpose of clarifying the provisions of Executive Order No. 6606--A. 
Order X-98 deals with brokerage commissions, providing that no code shall 
be construed or applied to make it a violation thereof for a member to 
pay a brokerage commission to a bona fide end legitimate cooperative per- 
forming the function for which other persors may properly be paid compensa- 
tion, and that no cognizance shall be taken of the fact that such coopera- 
tive will distribute its earnings, including such brokerage commissions, 
to its members in the form of patronage dividends, or the fact that such 
members may be the purchasers of the products in connection with which such 
commissions were realized. (**) 

III . Administration 

In accordance with Office .morandum 205, natters relating to coopera- 
tive organization were referred to Division 8, of which Mr. Linton LI. 
Collins was the Division Administrator. This division was later named 
the Public Agencies Division. The furhter personnel was as follows.: 

Assistant Deputy Administrator, V. J. Clarke 

Legal: Howard 3. Wahrenbrock, Sydney 3. Prince, 
Peter Seitz, William Wise 

Research and Planning: James Porter Davis 

Labor: Rose Schheidsrmann, Sydney Sufrin 

Consumers: The late Mrs. Mary Rumsey, Mercer G-. Johnston 

Industrial: Walter Whi'te 

IV. Operation and Effect 

There has te^n considerable objection on the part of some industries 
to the protection afforded cooperatives. The controversy was particularly 
acute in the Salt Manufacturers' Industry, the Code Authority for that 
industry being opposed to the recognition of certain cooperative organiza- 
tions as bona fide distributors of their product. It was principally due 
to this controversy that Administrative Order X-98 (dealing with brokerage 
commissions) was issued. There was also objection from the Food Industry, 
the code for this industry having definitely prohibited the -oayinent of 
brokerage to buyers ">r to agents of buyers. 



(*) Administration Order Nos, 182-11 and 196-11, Exhibit No. 

(**) Order X-98, See Exhibit l"o. 9 

9845 



' - - 1» - 

particular 'objection ^as directed against Administrative Order X-98, 
the Public Agencies' Division having' received in the month of May, 1935, 
over 100 letters requesting a reconsideration of this Order*- To meet 
these protests the matter of possible 'revision of Orders X-35 and X-98 
was referred to a committee consisting of Messrs. Walton Hamilton, member 
of the National Industrial Recovery Iloard, Willard 1, Thome, member of 
the Advisory Council and Mr. Linton M. Collins, Division Administrator. 

'A tentative draft of a proposed ruling was prepared excluding the 
so-called commercial coo-oeratives from the definition of bona fide, and 
legitimate cooperatives as that term was used in the Executive Orders. 
No formal order was actually issued, however, due to the fact that the 
decision of the Schechter Case was rendered before final action by the 
Committee. 

V. Conclusion 

Cooperative organizations seem to have become firmly established in 
this country. In the aggregate they carry on a large volume of business. 
This is especially true in the West. A more comprehensive xmderstanding 
of the subject would reauire a special study of cooperatives. While much 
of the controversy involved the matter of determining teat was to be con- 
sidered the -genuine and legitimate cooperative, actually it is. believed 
there was a more basic conflict .between the two methods of business. 
Many of the code -orovisions were designed. to -oromote the welfare of the 
particular industry with the resultant advantage to all the members of 
the particular industry* This is -particularly true with regard to the 
various orovisions relating to -orices and terms of sale. On the other 
hand the cooperative- cuts squarely through organization by industries to 
the detriment of the industry but to the. corresponding advantage of the 
producer or the consumer or both. The immediate benefit therefore to the 
consumer and nroducer is arroarent and aioeears to have been demonstrated by 
the growth of large coo-oerative organizations. Whether the coo-cerative 
method is of benefit to business or society generally or- "whether its ulti- 
mate effects might be detrimental even to the -croducer or consumer is a 
more debatable question. It is'nrobable that coo-oeratives have not de- 
veloped to a -ooint where their effects on general business can be measured 
and at this stage of development , one's oninion is governed largely by 
his basic philosophy of social economy. 

A -oreliminary draft of a History of Coo-oeratives has been proposed by 
the Jublic Agencies Division. Considerable information contained herein 
was obtained from this preliminary draft. 



9845 



-13- 

c. e;gip':'IO"'S to z.hl o: ' U t... ;.: :j&^ population 

I. ; ' bir to I ' e t's Reemployment 

A ''''"' '': it 

II. He ti . . to Co i 
III. Ope: ■tic: ct 

I . Relating to preside it's Reemployment Agreement 

The Rational Recovery Act, approved Jane 15, 1933, authorized the 
President to enter into and approve voluntary agreements with persons 
engaged in a trade or industry and with lat>or, trade or industrial 
associations, relating to any trade or industry. 

The president's Reemployment Agreement was issued pursuant thereto, 
to remain in effect until the approval of a code by the President to 
which the signatory became subject or until substitutions of any of 
the provisions of the Agreement (Paragraph l). In paragraph (4) of the 
Agreement it was provided that the maximum hours fixed in paragraph (2) 
and (3) thereof, were not to apply to establishments employing not more 
than two persons in towns of less than 2500 population which towns "ere 
not part of a larger trade area. 1 

1 1 . Relating- to C o des 

In Executive Order " T o. 6354, dated October 23, 1933, it "as stated 
that the purpose. of the exemption thereby conferred was intended to re- 
lieve small business enterprises in small towns from fixed obligations 
which might impose exceptional hardship but that it was expected that 
all such enterprises would conform to the fullest ■ extent possible with 
the requirements which would have '"oeen otherwise obligr tory upon them. 
The Order provided that the president's Reemployment Agreement should 
not be held to apply to employers engaged only locally in retail trade 
or in local service industries (not in interstate commerce) "ho do not 
employ more than five persons and are located in towns of less than 
2500 population (according to the 1930 Federal Census) which are not 
in the immediate trade area of a city of a larger population except 
that employers who have signed the Agreement and desire to continue 
to comply therewith may do so. It was further provided that the exemp- 
tion should also apply to the same extent to those employers signing 
the PHA but at that time subject to a substituted code from those ob- 
ligations not voluntarily assumed under such code. 

It will be noted that Executive Order 6354 -differs principally 
from the provision in PHA in that: (1) PHA. relates to all establish- 
ments, the Order effects only retail trade and local service indus- 
tries; (2) PHA. limits the exemption to establishments employing not 
more than t"o persons, the Order limits the exemption to those employ- 
ing not more than five persons; (3) the former releases employers solely 
from the provisions of PHA whereas the latter releases signatory parties 

Bulletin " T o. 3 containing PHA, Exhibit l T o. 10 
2 

Executive Order Wo. S354, Exhibit :T o, 11 

9845 



- 14 - 

to PRA not only from the provisions of PRA out to the sane extent from ,-- 
code provisions as to obligations not voluntarily assumed by them under 
codes. 

The above order was amended by Executive Order No. 6710, approved 
May 15, 1933, providing that employers engaged only locally in retail 
trade or local service trades who operate not more than three establish- 
ments in towns of less than 2500 ; ovulation and not in the immediate 
trade area of a larger town would be exempt from the President's Re- 
eimloyment Agreement and those provisions of approved codes relating 
to hours, wages, minimum prices of merchandise or services and collec- 
tion of assessments, except insofar as employers might signify their 
intention to be bound. 

The effect of the amendment was to extend the e: emotion to employ- 
ers who operate not more, than three establishments rather than five, 
as provided by the previous Order and also to exempt employers not only 
from the provisions of PEA but from hour, wage, minimum price and assess- 
ment collection provisions of codes as well. 

4 
Administrative Order X~72 dated August 6, 1934, prescribed rules 

and regulations relating to the application of Executive Order 6710 
and designates the "retail or local service trades" to be: Bailing 
(retail), Motor Vehicle Sto-Eage and Parking, Retail JPood and Grocery, 
Retail Jewelry, Retail Tobacco, Retail Trade (including Drug and Boole- 
sellers), Barber Shop, Eowling ana Billiard Operating Trade, Cleaning 
and Dyeing Laundry, Real Estate Brokerage, Shoe Rebuildar, Hotel, and 
Restaurant Industry and the following industries or trades not then 
codified, Confectioners, Milk at Retail, Beauty Parlors and such other 
trades or industries as the Administrator would from time to time design- 
ate. The term "town" was also defined and the conditions under which 
"towns of less than 2500 population" -were deemed to be "in the immediate 
trade area" of a larger city. Vanufacturir.g andwholesaling were ec- 
cluded from the Order. The method of relief was provided for employers 
not included in the exemption but who claimed to be injured from com- 
petition of those exempted. Those engaged both in one of the above C 
designated trades or industries and a business not so included, where 
such operations were not readily segregable were exempt only where the 
business covered by that order constituted the employer's principal line 
and such product constituted more than 50 per cent of the gross sales. 
Where the business was segregable only the department whose principal 
business (as above defined) covered by the trades ">r industries enumer- 
ated above were exempted.* When part of a business was exempted the em- 
ployer was not liable for assessments based upon that part. Employers 
complying with eddns to the extent not exempted were entitled to dis- 
play NRA insignia. 

By Administrative Order ho. 46-10, dated May 29, 1934, it was ruled 
that employers engaged in 'the Motor Vehicle Retailing Trade were bound 
by the code for that industry regardless of the size of the town in 
which their place of business was located. 

III. deration and Effect 

Other th an the ab ove orders there was little f~orther administrat ive 

3 Executive Order 6710, Exhibit ho*. 12 

Administrative Order X-72 , Exhibit No. 13 
9845 



action. The Code Authorities investigated and followed up the matter 
of what towns were entitled to the exemptions. The United States Census 
records were ordinarily conclusive upon the question of whether or not 
the population of a particular town was less than 250C. However Adminis- 
trative Order X-72-1, dated August 23, 1934, recited that the census 
of 1930 listed the town of Glasgow, Llontana as a town of less than 2500 
hut that it appearing that the population of that town was then in excess 
of 2500 it was ordered that for the purposes of the administration of 
Executive Order 6710 such town should he deemed to have a population in 
excess of 2500. 

Question also arose as to., whether a particular community was within 
the immediate trade area of,' a' larger town. This arose in a number of 
instances concerning factory communities located outside the "boundaries 
of towns. However these controversies were usually settled without the 
necessity of official rulings. On the whole the exemption to establish- 
ments in towns of less than 2500 population seemed to have become oper- 
ative with very little complications. 



9845 



- IS - 

D. EXEIiTTIC'dS TO S'RVICB TR ADES 

I. Origin of Order 
II. Executive and Adminis'tr-cive Orders 
III. Operation and Effect 

I. Origin of Prefer , 

SeiVa.ce crades, as that tern was used in HRA, consists of those 
trades or industries which perform personal services' such as barter 
shops, cleaning and dyeing, hotels, etc. At the time of the ap- roval 
of these codes, considerable doubt was expressed by representatives 
of these industries whether or not, in view of their purely local or 
intra-state character, the National Industrial Recovery Act was applicable. 
The Executive Order approving the Co.e for the Barber Shop Trade (Ho. 598) 
provided that, this code should not become ef i'eff ective until certain 
conditions therein set forth were fulfilled, including the requirement 
that the Code Authority designate the boundari- s f trade areas, establish 
local administrative Boards for such tree areas and that the Code Authority 
enter into a price stabilization agreement in such trade area with the 
President, the Local Administrative Board anc not less than 70;.' of the 
number of members of the trade in such area. {l) Similar conditions were 
embodied in the Code for the Laundry Trade. (2) 

The Codes for service trades were generally ineffectual, even 
as to industries in which codes had become e: fective. These industries 
consist of numerous small enterprises. There exists in this branch 
of industry probably a higher percentage of one-man companies or 
working proprietors and those employing only one man, than in any otner 
branch of industry. As a result, organization in these industries was 
difficult. The net result was an almost comnlete breakdown in code 
compliance. A more detailed e'eseri" tion of the conditions prevailing 
at that time wil" be i ound in the Coc'e Histories for industries. 

I I . Execut ive and Administrative Orders 

In order to meet this situation, Executive Order No. 6723 was 
issued by the President on May 26, 193d. It provided that all pro- 
visions in codes of such service trades or industries as should 
thereafter he designated by the Administrator were suspended, except 
those of Child Labor, iiinimum Hour, l.'iniraum Fay cmd the mandatory 
provisions of Section 7(a) and 10 (b) of the National Industrial 
Recovery Act, provided that in any locality in which 85 > of the mem- 
bers of a design'.te, trade or industry should ofier to abide by a 
local code for that locali :y, the Administrator, aft^r approval of 



(1) Vol. IX, page 331 - Bound Volume of Code 

(2) Vol. VI, page 281 - Bound Volume of Code 



3345 



- 17 - 

such code, vets authorized bo enter into such agreement s . (3) 

In t :•-■ let .er >f reco endation, . arit rn t the Administrator 
to the President, it ■ ■ ■ . dies of thi eration and 
effect oi codes for a ■* rvi: br and Industrie's indicated 

the necer~ity for relieviiv b e ".'■_, ti exce dve =ic ministrative 
burden in securin, L . ■■ ft 02 these ci s uid to permit of more 

effective administration >i oth r cbi aving* greater concern with 
the industrial structure 4 which liad been unduly hampered thereby. 

By Executive Order No. 675S-A, (4) dated June 26, 1934, the 
President offered to enter into an agreement with members of such 
service trades not theretofore codified, on condition that in any 
locality eighty-five per cent of the members thereof should agree 
to abide oy a local code of trade practices sug ested by them for 
that locality. 

Executive Order 6723, having provided that the Administrator 
should designate the trade;: and industries included under the Order 
the following Administrative Drdi rs were issued: 

Order Ho. X-27, cat ; 1934, design ting Motor Vehicles; 
Storage & Packing; Bowling ft 3illiards; Earber Shop; Cleaning 
& Dyeing; Advertising Display Installation & Advertising Distri- 
buting Trade. 

Order Ho. X-50, dated Jun 15 j la 4, Laundry. 

Order Ho. X-54, date-.' June 38 J 1 34, Hotel. 

On June 25, 1934/ Administrative Order H-53, was issued pre- 
scribing rules and regulations with respect to bhe 'operation of Execu- 
tive Order 6733, including the conditions un er which members subject 
to the Order were entitle', to fiisp'l 2 the Blue Ea^'le-. It was also 
providea that all parts of the' d- . ■'. :' codes » to the extent nec- 
essary, were in effect for the vmrposes of the operation of Execu- 
tive Order 6723, exceat tr; s practice and code administration pro- 
visions"^ (5) 

As previously stated the Barber Shop and the Laundry Trade Codes 
were not to become operative until the fulfillment of the conditions 
prescribed in the Order of Approval. . At the time of the above 
Executive Order, those conditions had not been fulfilled, and 

CiT ExecutiVe Order Ho. 6723, ExlTibTt Ho/ T3T " 

(4) Executive Order Ho.. 6756-A, Exhibit Ho-. 15 

(5) Administrative. Order X-53, 'Exhibit Ho--. 16 



9845 



hence such Orders were not effective. The Administrative Order, 
therefore, made such provisions effective .for the purpose of op- 
eration under Executive Ordsr 6723. 

III. Operation and Effect 

The Executive Order was not favorably received "by the trades 
and industries affected. Considerable effort had previously been 
made tc organize these industries more effectively. Many were en- 
deavoring to establish minimum price provisions. A series of con- 
ferences were being held in various parts of the United States with 
a view of remedying the breakdown in code compliance in the Hotel 
Industry, and a movement was on foot to establish minimum rates. 
The Order in question, of course, nullified all such efforts. 

Code Authorities in the industries affected were, in effect, 
abolished by the Order. There was, therefore, considerable resent- 
ment from these industries. 

On June 20, 1934, the Executive Committee of the Code Author- 
ity for the Cleaning and Dyeing Trade wrote the President "that this 
Code Authority considers that the code for the Industry was no 
longer in force and effect with respect to any of its provisions and 
that, so far as it was within their power, the assent to this code 
is the reby wi thdrawn . " ( 6 ) 

On June 36, 1934, the Administrator replied that inasmuch as 
the administrative .provisions of the Cleaning and Dyeing Code were 
suspended by Executive Order 6723, the Code Authority authorized 
under such provisi.ns was, accordingly, suspended and could not, 
therefore, at that time, be deemed tc be representative of that 
Trade or have authority to act on its behalf, hence the assent 
to this code could not be wi thdrawn by that body. (7) 

Pursuant to the Executive Order, local codes wore submitted by 
the following industries and trades - 

Cleaning and Dyeing submitted approximately 54 local codes, 
nearly all of which contained provisions for minimum prices. 

§hoe Eebuildin^ Industry submitted 277 local codes, nearly 
all of which contained provisions for minimum prices. 

Barber Shop Industry submitted 277 local codes, all of 
which contained requests for rninimum-'orices. 



(6) Copy of letter from Code Committee - Exhibit ITo. 17 

(7) Copy of the above letter - Exhibit ITo. 18 



9845 



' »r Vehicle ano Storage i i ait ted 3. 

Laun< ry It di su m: I i 1. 

tic tries n - - ntionec' submitted no coder. 

The policy ri I ' > rove provisions for establish- 

minimum prices. Therefore, of lo..al coc.es submitted, there were 
approved on r in the Shoe Re uildiiig md two inCleaning andDye- 
ing Ir de. The codes a' ■ v ii not oaontai.j minimum price orovisions. 

(3) 

Since the Code Authority v-as the enforcement as well as the 
administrative agency of industry, the elimination of such bodies 
resulted in still greater disregard for these code provisions re- 
maining in of foot, i.e., labor provisions. Coc n e enforcement in 
those trades or industries were virtual.. y ■ med rnd non-com- 
pliance became gener; 1. This situation continuec 1 until the date 
of the Executive Order suspending al? codes. 



(8) See also Chater IV of "Agreements under Sections 4 (a) and 7 (b) 
of '_:. I. R. A.", b; Creston A. Giblin, Administration Studies. 



9G45 



- 20 - 

S . hlhlTSD EXEilPTIOh Fh O' L PEL VIS IOhS Oh C'DES III 
COIHTECTIGi: ;, r ITI" SALES TC HOSPITALS 



I. Origin of Order 

II. The Order 

III. Operation and Effect 

IV. Conclusion 



Origin of Order 



An application, on behalf of the hospitals of the 

United States supported by public subscription or endowment and not 

operated for profit, was made for an exemption from any Code to all 

industrv or trade members vv..:en dealing with sue'., hospitals. As a 

1 ■ 
result of such application, Administrative Order X-4 was signed 

by Hugh 3. Johnson, Administrate r, upon t'-e recommendation of 

A. D. V/hit&si&e," Division Administrator. 

II. The Order 

The essence of tie order is quoted as follows: 

"It is hereby ordered that those members of 
industries subject to cedes of Fair Competi- 
tion who sell or may sell supplies or materials 
to hospitals cf the United States which are 
supported by public subscription or endowment, 
and not operated for profit, within the limita- 
tions hereinafter provided, be and the;' are 
hereby exempted from compliance with provisions 
of such codes governing sales, provided, how- 
ever, that the exemption hereby granted shall 
be limited to an operative only in connection 
with sue': sales made by such members tc such 
institutions. " 

Further provision was made for it to take effect in ten 
(10) days, unless otherwise ordered by the Administrator and was dated 
January 23, 1934. 

III. Operation and Effect 

lie dcubt the purpose of this order v/as to relieve chari- 
table hospitals from sharing in the burden of national recovery and 
thereby increase the usefulness of the funds at their disposal, how- 
ever, the order had scarcely been signed when objections to it came 
pouring into the PRA. Those industries relying largely upon hospital 
trade and which were operating under codes or the PEA made objection 



See Exhibit ho. 19, 



934-5 



- 21 - 

on the grounds t i t tie;/ could not sell below established prices and 
comply with the requirements of t.:e coO.es or PRA as to hours and wages 
As a result of these >r tests, Administrative Order X-5^ was issued 
February 2, 1931. 3j the terms of that order, the provisions of 
Administrative jrder X-4 were stayed for a period of thirty "(30.) days 
from date of X-5 to give considerate n to the objections made. 
The order reserved the right to t.ie Administrator tc suspend the 
effective date thereof by further r.rder. 

In the petition or brief 3/, dated February 26, 1934, and 
presented en behalf of the X-Ray and Slectro-Medical Products Groups 
of the Electrical Manufacturing Industry, a protest was made to the 
Staying Order of X-4 and the continuation of X-4. The following ex- 
cerpts from that document seem to give a picture of conditions during 
the period of X-5: 

"As soon as it became generally known that 
Order X-4, dated January 33, 193d, had been 
issued, a very marked decrease in business 
occurred in the X-Ray aid Hlectro-Kedical 
Groups, due to the fact that the hospitals 
of this country demanded exemptions from 
the codes for their purchases; since the 
issuance of tie Staying Order, all orders 
of customers have been held in abeyance 
pending the final decision on this matter. 
This stagnation in business will continue, in 
our opinion, as long as there is any delay in 
deciding whether the original Order X-d will 
be allowed to stand or will be permanently 
withdrawn; Based on the anticipation that 
Order X-4 will be allowed to remain in effect 
after March 5th, one hospital in Baltimore has 
already demanded of us a 1'5/j discount on our 
products which it anticipates purchasing. 

"We are no longer interested in a further stay 
of the original order and herewith submit 
factual data, which we know will furnish suffi- 
cient information to warrant the NRA to with- 
draw Order X-d permanently, at least insofar 
as it relates tc the X-Ray and Electromedi- 
cal products. 



2/ See Exhibit Ho. 20. 

3/ This document is filed in folder marked "Division VII! 
Charitable Institutions - X-4 - S. R. Prince, Jr. " 
and at the time of this writing is in the custody of 
Effie Lee Lioore, formerly Acting Executive Assistant, 
Division VIII. 



98 45 



22 - 



,r .7e acknowledge that the intention back of 
the issuance of Order X— '1 is' commendable. 
It will have little effect on most' indus- 
tries, such as t os,e sup plying food, coal," 
furniture, linens, and the large majority 
of other items purchased by hospitals each 
year. These latter, named industries may 
find it possible to offer the hospitals 
special discounts on purchases, .because 
their total sale's to hospitals are net more 
than 5j or 1QV of the total sales of such 
industries. It is more important to note 
that in the case of the X-Bay and Electro- 
medical Groups of the Electrical Manufactur- 
ing Industry, our sales to hospitals is 60, > 
of our business and closely allied are our 
sales to doctors of 36p additional, thus 
accounting for all but 4j of our sales. There- 
fore, we present this brief, asking that the 
manufacturers of X-Ray and Electro- iiedical 
Products be exempted under X-4. 

********.***** 

"Under t.e terms of the original Order X-4 we 
fail to see how cur manufacturers can differ- 
entiate between sales made to any class of 
hospitals, due to the fact that it is almost 
impossible tc define the so-called "private 
hospital' or those hospitals w . .ich are sup- 
ported b ' public subscriptions and endowments 
end not operated for profit. (As an example, 
in the City of Baltimore, all hospitals re- 
ceive a set sum every year from the State of 
Maryland or from the City; Johns Hopkins 
hospital receives a very substantial sura each 
year from the State. Another instance is the 
Swedish Hospital in 3rooklyn, New York, which 
is ran for profit and, on the other hand, re- 
ceives free ambulance service from the City 
of l"ei.7 York, paid for by taxes.) 

************* 

"Order X-4 makes no statements as to whether 
exempted hospitals include those hospitals 
supported by taxes. ",7e believe that they are, 
and if net, the Order will soon have to be ex- 
tended to include them.****** 

"The question then arises as tc whether "this 

order would not soon be further extended to 
educational institutions, tax-supported and 



9845 



otherwise, wh \.c. . use X-Ray and Electro-Medical 
... t. 

"7e res lectfully call 3'our attention to the fact 

• X- cites not prevent purchasing by 
hos : t n s rn.'. t sir re ] ! Ln ; to others. ",7e 
icn w that cur groups con not maintain sales tc 
'* ctcrs on published prices within tile Code 

ulations and at the same time sell to hos- 
litals wit:: - t tal disregard as t: sales of 
all existing cedes. '.7e believe t>-e doctors 
will naturally lirchase through hospitals or 
demand equal rices and tat would br'.ng 

r :tic ; ' all cf our business under exemp- 
tion from codes on sales." 

Tl^e document goes on to point out that to permit the application 
of X-4 tc their industry would leave tc individual manufacturers and 
vendors the right to determine wh t er any hospital wa.s cr was not 
v/ithin the sco;to of the order, tut -t would foster price-cutting and 
discrimination and other unfair trade u-acticer. 

In response to the v r ls ■ t t lade, Adminlstra.tive 
Order X-o 4/ was issued, March 3, 1934. Tils order ..ir.de permanent 
the stay created by X-5 insofar as it affected the X-Hay and Electro- 
Medical Apparatus as covered by the Code for tee Electric-... Manu- 
facturing Industry, the Scientific Apparatus Industry and oil other 
industries that established to the satisfaction of the Administrator 
that e. substantial pert of t sir supplies or materials were sold to 
hospitals covered by X-4 and also s itisfied the Administrator that 
justice required the relief granted be Order X-8, This Order was 
signed by hugh S. Jo;mson, Administrator for Industrial Recovery, 
upon the recommendation of A. D. jhiteside, Division Administrator. 

Later it was establis'. ed to the s; tisfaction of the Adminis- 
trator that a substantial part of the supplies and materials of the 
signalling Apparatus Subdivision .f the Electrical Manufacturing In- 
fo-try were sold to hospitals of tie United States supported by 
public subscripti.n or endowment and not operated for profit, and 
upon this finding Administrative Order X- 34 5/, issued April 21, 
1034, stayed permanently the terms of X—'.- in so far as it affected 
this industry. 

Administrative Order X-39 6/ was issued May 28, 1934. This 
order modified X-4 so as to require members of the Bituminous Coal 
Industry, tie Vholesale Coal Industry and the Retail Solid Fuel In=- 
rlustry t. fully comply with the requirements of Coal Cedes in sell- 



4/ See Exhibit he. 21.. 

5/ Se Ex ibit No. 22. 

&/ See Exhibit ho. .03. 
0045 



- 24 - 

ing coal to hospitals. Eie order stated the reason for tlie issuance 
was t" .at objections Iiad been filed to the prcvisicn-s of X-4 by members 
of the Coal Industry, and that it had been established tc the satis- 
faction of the Administrator that justice require! the modification. 
It is noticeable that the recitation clause doer, not say "that a 
substantial part of their supplies or materials are sold to such 
hospitals" as set out in the Staying Clause of X-8 . 

The records show that industry members who had considerable 
dealings with hospitals and were subject to a cede or a P?A made 
considerable objection to X-4 in so far as .it affected their indus- 
try, because the order, in effect, prohibited them from dealing 
with hospitals. Such an effect resulted from hospitals refusing 
tc deal with such members without a substantial reduction in prices. 
In cases where members of a code refused to reduce prices to 
hospitals, sales were almost entirely curtailed, pending a deter- 
mination of the Administrator as t. whether or net such industry 
membexrs should comply with the provisions of their code. This 
condition brought about considerable confusion concerning the 
Order X-4 during the early months after its issuance, which was to 
a great extent corrected by Administrative Orders X-8, X-24 and 
X-39. 

IV. Conclusions 

The records indicate that the depression had brought 
about a condition w„ere the number of people requiring charitable 
hospitalization in whole or in part had greatly increased over 
pre-'-.epressicn times and that likewise the subscriptions and dona- 
tions to hospitals had reached a much lower level, thus placing 
upon t.e shoulders of the institutions a burden which they v/ere 
financially unable to carry. To make t. e hospitals rarchase 
supplies at the increased prices caused oy the codes and T'Rk would 
but reduce their ability to carry the steadily increasing burden. 
The Administrative Order X-4 had the effect of distributing this 
burden among industry and because of this result those industries 
whose major production was utilized by hospitals v/ere given re- 
lief from the order. '.7ith these last-mentioned industries being 
excluded from the provisions of X-4, that portion of the extra 
burden of the hospitals which was shifted to industry was spread 
among industry members whose great majority of sales v/ere made in 
conformity to code regulations. 



9845 



- 35 
HAEDI CAPPED WOMERS 



I. Origin of Order 
II. Executive Order i T o. 5606-3? 
III. Procedure 
IV. Summary of Administration by Labor 
D jpartment 



Origin of Order 



The codification of industry presented the problem of the effect 
upon the continued smployment n f persons handicapped by physical or mental 
defect or by reason of age or other infirmities. It can readily be seen 
that a minimum wage requirement might result in the discharge of those era- 
ployees who by reasfu of such disabilities did not meet the standard of 
efficiency reauired. This was soon recog Lzed. 

Bulletin ~.o. 5, contains interpretation ~if the President's Eeenroloy- 
ment Agreement, Interpretation l T o. 21, Paragraph 3, being as follows: 

"Persons who are limited in their jarning power through 
physical or mental defects, ago or other infirmities may be 
employed on light duty below the minimum rage set by the 
President's Agreement, and for longer hours than are therein 
authorized, if the employer obtains from the State Labor 

commission a certificate authorizing the employment of such 
de f e c t i v e s in such manner . " 

As codes superseded the PEA the auestion was presented as to what 
disposition should be iade of authorizations "bo employ handicapped work- 
ers issued- to concerns -hen they wer« onde'r PEA and numerous request for 
advice were received from state authorities designated to issue these cer- 
tificates. This gave rise to the issuance ~f Executive Order No. S606-P. 

II. Executive Prior ':'o. GSOC-.? 

This Order was signed February 17, 1934, and recited that a question 
had arisen or might thereafter arise as to whether the minimum- ^?ge and 
maximum hour provisions precluded those handicapped by physical or mental 
defect, age or other infirmity from their former opportunities of obtain- 
ing employment. The Order provided in part as follows: (*) 

"A person whose earning capacity is limited because 
of age, physical or. mental handicap, or other deformity, 
may be employed on light work at a wage below the mini- 
mum established by a Code, if the emo3.oyer obtains from 
the state authority designated by the United States De- 
partment of Labor a certificate authorizing such person's 



'*) Executive Order ' o. 6506-F - Exhibit h r o. 24 



c ,345 



employment at such wages and for such hours as shall be 
stated in the certificate. Such authority shall .be 
quided by the instructions of the United States Depart- • 
ment of Labor in issuing certificates to such perons. 
Each employer shall file monthly with the Code Authority 
a list of all such persons employed by him, showing the 
wages paid to, and the maximum hours of work for, such 
employees. " 

III. procedure 

The Administration of the exemption relating to handicapped persons 
were in the hands of the United States Department of Labor. On ITovember 
8, 1954, that Department issued Instructions to guide State Authorities 
in the issuance of Certificates to Handicapped Workers? (*) etc., which 
prescribed the method of procedure in such cases substantially as follows: 

(1) An application was required to be filed by the employer with 

the authorized state agency, to contain information concerning the employee, 
such as his occupation, earnings and the wages and schedule proposed for 
him as well as the minimum wage and maximum hours applicable to the same 
occupation under the code. Where the handicap was other than age, a. doc- 
tor's certifica.te, stating the exact nature and degree of the disability 
was to be obtained and where the handicap was mental deficiency, a certi- 
ficate was required from a psychiatrist or a. neurologist. The certificate 
was required to be from a physician holding public office. Wherever pos- 
sible, the state authority was to make an investigation at the -olace of 
employment. 

(2) In determining whether an employee was. to be" classified as a 
handicapped worker, it was necessary to distinguish between workers with 
infirmities and those whom the employer considered slow but who had no 
specific handicap. It was also necessary to distinguish workers who had 
physical or mental defects but whose earning power was not impared by 
such defects. 

The reduction in wages defended uoon the extent of the handicap. 
When a code contained no provision relating to handicapped workers the 
wage allowed was prescribed at not less .than 75 per cent of the code mini- 
mum for that industry unless specifically approved ty the Department of 
Labor. However, a differential of as low as 10 per cent was allowed where 
the handicap warranted such differential. Longer hours than those pre- 
scribed by the code for normal workers was not permitted, both because of 
the tendency .to reduce the hour standards for all workers and because 
the handicapped person, in general, was not physically able to work longer 
hours than a. normal person. 

(3) Unless specifically approved by the Labor Department, a certi- 
ficate to work for less than the minimum wage was not permitted to be 
granted for more than 5 per cent of the working force in a given estab- 
lishment, except where a code specifically permitted the employment of a 

(*) Instructions issued by Labor Department - Exhibit No. 25 



9345 



_ 27 .„ 

larger percentage. However, one handicapped worker was allowed in each 
establishment, no natter how small, when, in the judgment of the State 
Authority issuing certificates, the application was justified by the facts 
of the case. 

(4) Executions to the rules of the United States Department if La- 
tor that a handicapped person may not be oaid less than 75 per cent of 
the minimum, or that not more than 5 per cent of the workers in am' - one 
plant should he so classified, was provided for in unusual cases of hard- 
ship to the workers upon the recommendation of the State Authority. 

(5) ITight -watchmen were"not" permitted to work longer hours than 
prescribed by the code * If hours were not limited by a code, a certi- 
ficate was issued permitting employment for such Lours as seemed to the 
issuing officer to be justified, 

(6) A person receiving workmen's compensation on account of injury 
could be employed at less than the minimum on light work until he was 
able to resume his job provided the employer reported the particulars 

of such light work to the State official designated to issue certificates 
and to the State Supervisor of Vocational Rehabilitation, 

IV. Summary of Administration ~oy Labor Departme nt 

The Division of Labor Standards, United States Department of Labor, 
issued a report covering Handicapped Workers. (*) Dor more detailed 
study this report will prove illuminating. In general it may be stated 
that the Labor Department was confronted with the necessity of promulgat- 
ing a uniform policy with respect to the issuance of certificates to em- 
ploy hanC.ica.pped workers. With the view of accomplishing uniformity of 
local administration, the state issuing officers met in Boston in 
September, 1934, which meeting was attended by officers from the leading 
industrial states. Among the problems considered was that of fixing an 
age of employees which should be considered old. for the purpose of the 
Executive Order. It was determined that disability from this cause varied 
to such an extent in individual ca.ses and. depended so much on the parti- 
cular work that no arbitrary age limit could be fixed. Another question 
was what percentage of the number of such workers should be allowed, a 
concern as compared to the total number of employees. This percentage 
as has been seen was limited to five per cent. 

A summary of applications for certificates while not complete show 
a total of 21,136. Formal applications were granted and. certificates 
issued in 17,203 cases. Applications were refused in 3,033 cases. Cer- 
tificates were issued in at ?east T J 61 different codes and in 44 states 
and. the District of Columbia. The greatest number of exemptions for 
handicapped workers was from the Cotton Garment Code, there being 6,735 
certificates issued, from the minimum wage provision of this code or more 
than one third the total number of certificates issued. The next high- 
est number was in the Canning Industry with 1,053 certificates. 23 codes 
accounted for not less than 14,245 certificates or approximately 84 per 

(*) Report of Labor Department on Handicapped Workers - Exhibit Ho. 26 



5845 



■~ 28 - 



cent of the total issued, 276 certificates were revoked for violations 
of the terms under which they were issued and 590 cancelled for various 
other reasons. 

I.Iany of the codes contained provisions relating to handicapped 
workers. A summarization of 475 codes prepared hy the Research and plan- 
ning Division of NRA (*) shows 277 codes, 2 amendments and 9 supplementary 
codes containing provisions for exemptions of handicapped workers. 

Information on" this subject is also to he found in "Policy on Ta'-es 
"below the Minimum", Vork Materials Ho. 45. 

(*) Report of Research and planning - Exhibit Mo. 27 



9845 



- 29 - 
G. HGMEWOEKE.' S. 



I . Origin of Order 

II. Executive Order No. 6711-A 

III. Procedure under Order 

IV. Summary of Administration under Order 



I . Origin of Orde r 

A practice has prevailed among industrial concerns of offering 
employment to persons who for various reasons are confined to their homes. 
The type of work is of such nature that it is not necessary to be performed 
in the factory but could be done in the hemes. While this offers an op- 
portunity for employment to many who would otherwise have no means of earn- 
ing a livelihood the practice on the whole has tended to create unfair com- 
petitive conditions bee-. use it is difficult for the competitor of the con- 
cern employing homeworkers to maintain fair standards of nours , wages and 
working conditions for their employees who work in- the factories.. Previous 
to NRA some efforts had been made to control this practice and reduce its 
evils to a minimum. A considerable number of codes prohibited homework. 
These code provisions, however, brought forth p. number of complaints from 
individual workers who were confined to their homes because of age, infirm- 
ity or because their services were needed to care for an invalid. 

In March 1924, a consultation was held between the Secretary of 
Labor and the Administrator of the NRA. wnich resulted in the setting up of 
a joint committee of NBA and the Department of Labor to study the problem,. 
As a result of the committee's activities an executive order was recommended 
to the President wnich resulted in the issuance of Executive Order No. 
6711-A. 

I I . Executive Ord er No. 671 WA 

This Order was signed May 15, 1§34". It recited that the question 
had arisen or might thereafter arise as to whether the abolition of home- 
work had Tir£cluded certain persons v/ho were incapacitated for factory work 
from their former opportunity of obtaining employment and then provided 
that no code in which homework is prohibited theretofore or thereafter 
approved snould be construed or applied as to violate the regulations there- 
inafter set forth. (*) These regulations provided in part as follows: 

"1. A person could be permitted to engage in home- 
vork at the same rate of wages paid for the 
same type of work performed in the factory or 
other regular place of business if a certificate 
was obtained from the St'- -te authority 
or other officer designated by the United 
States Department of Labor, such certificate 

'was to be granted in accordance -with. iast-ruo-» 

tions.. issued -by -the' 'United States Department 

of Labor'; Provided • 



(*) Executive Order No. 6711-A - Exhibit No. 28, 

9845 



~ 30 - 

(a) Such person was physically incapacitated 
for work in a factory or ether regular 
place of business and was free from any 
contagious disease; or 

(b) Such person was unable to leave home 
because his or ner services were ab- 
solutely essential for attendance on 
a person who Was bedridden or an in- 
valid and botn such persons were free 
from any contagious dise se. 

"2. Any employer engaging such a person should keen 
such certificate on file and file with the Code 
Authority for the trade or industry or subdivi- 
sion thereof concerned the name and address of 
each worker so certificated. 

Tnis order should not apply to or affect Codes 
of Fair Competition theretofore or thereafter 
approved for food or allies products trades, 
industries or subdivisions tnereof, wnich con- 
tained provisions prohibiting the manufacture 
and/or processing of food products in homes." 

Ill . Procedure under Order 

Pursuant to the order, the U. 3. Deoartment of Labor on June 1, 
1934, issued instructions relating to the certificates , (*) in which it 
was recited that the order applied to codes approved or to be thereafter 
approved, which contained a provision prohibiting nome work in the industry 
or part thereof, excepting the food or allied products industries , and had 
no effect upon codes which did not contain such a prohibition, and furtner 
provided substantially as follows: .. 

(a) A joint application for the certificate was to be made by 
the home worker and the employer on a form furnished by the Deoartment of 
Labor, through the State agency, stating the reasons for the worker's con- 
finement to nomc , the rate of pay per unit of work, the time required to 
complete a unit, the number of units given out at one time, and the time 
allowed for completion of the work. The worker was required to certify 
that he would personally perform the work, and the employer was required 
to certify that he would Pay the same piece-work rate laid in the factory; 
that all material, etc., would be furnished, delivered, and returned by 
the employer and at his expense, and that no deductions would be made for 
spoilage or for imperfect work. 

(b) In -ddition to the reasons given in 1 (a) and (b) of the 
order, the instructions- authorized issuance of a certificate if the home 
worker was accustomed to this method of work before the code prohibition, 
and was too old to make an adjustment to factory routine. 

(*) "Instructions for Issuance of Certificates Permitting Home Work in 
Special Cases," etc., Exhibit No. 29. 



9845 



- SI - 

(c) To maint-in the code o or.ioi tions , the State Autnority was 
to investigate the application to determine if the exemption was justified, 
and the standards set forth were to be strictly applied. The issuing 
officer could require a medical certificate signed by a puolic health 
onysician as to Physical incapacity, and no able-bodied person under fifty 
was to be considered too old to make the necessary adjustment to factory 
work. 

(d) The certificate coul^ be issued if justified, specifying 
trie amount of work given to the employee during a specified period, not 
to exceed that which could be completed during code hours. 

(e) The certificate was to "be issued in quadruplicate, one copy 
far the worker, one for the employer, one for the code autnority, and one 
for che file in the issuing office. 

(f) More stringent State laws or regulations affecting home- 
work were not to be superseded by the provisions- under which certificates 
were issued. - . 

(g) T 'o limitation of the number, of. incapacitated workers to 
each employee was provided, but caution was to be exercised to prevent 
fraud if numerous applicants were received from any one firm. 

(h) A certificate could be revoked if (l) the reason for granting 
same ceased to exist; (ei) the work was performed by a person other than 
the employee named; (3) the employer give out work in violation of author- 
ized conditions. t 

I V . S ummary of Administration under Order 

The Division of Labor Standards, United States Department of 
Labor, issued a report ' covering exemptions to nome-workers, reference to 
which is made for more detailed study of this subject. (*) 



A meeting of the state issuing officers was neld in Boston, 
Massachusetts, in September 1334, to discuss . the problems wnich arjse in 
connection with the administration of. exemptions to home-work prohibitions. 
Among the problems considered were cases of mothers confined to tneir home 
by the care of ymng children, aomeworkers who while not incapitated for 
factory work, lived at prohibitive distances from factories. It was de- 
cided that the Executive Order should not r- -ply in such cases and that 
certificates should not therefore be issued. 

Reports were received from the State issuing officers on the ac- 
tion taken on applications for certificates. While not absolutely complete, 
figures have been assembled based on thase reports. They show the follow- 
ing: 

Formal action was taken on 5,065 applications. Of this number 
2,608 certificates were issued and certificates were refused in 2,457 cases. 



(*) Report of Department of Labor on Homewurkers, Exhibit No. 30. 



9845 



- 32 - 

The number of certificates issued is insignificant as compared tc the 
total number of homeworkers formerly aotacned to these industries. Ap- 
plications were' granted, in 23 States; hov,ever the number issued did not 
reach substantial proportions ^xce-ot in a few states. 

•Che following table shows tne mb<=r of a:o Li cations 
granted and refused for the ten industries in whicn 100 or more certif- 
icates were issued. 

Industry Number of certifi- Number of ao'olica- 

cates issued tions refused 

Men's Neckwear 807 523 

Merchant and custom tailoring.... 220 73 

Infants' and cnildren's wear 132 131 

Artificial flower and feather 160 151 

Undergarment and Negligee 153 219 

Men's garters, suspenders, etc... lfil 141 
Pleating, stitching, and bannaz 

and nand embroidery 126 447 

Toy and plaything 121 150 

Tag 118 43 

Cotton garment 116 100 

4. See lage 7 of F.eport , Exnibit No. 30. 

The greatest number of applications were from concerns located in th«= 
State of New York, being 5,065 applications , of which 2,608 were granted 
and 2,457 rejected. Next in rrder wns that of Pennsylvania, vdth 391 
aTyolic^tions, 247 of which were granted and 14^ rejected. Tnen followed 
California with 270 applications , of Which 220 were granted and 50 re- 
jected. (*) 

B. Information on this subject is also to be found in "Policy 
on Wages below the Minimum", Work Materials No. 45. 



(*) For further information on Luis subject see "1I.R.A. and Industrial 
Homework", by 0. W. Rosenzweig - N.F..A. Labor Studies. 



9845 



- 33 - 

h. a ppzciitich trapii;g- 

I* Nature of Apprentice Training 

II. Origin of Order 

III. Executive Order 5750-C 

IV. Organization 

V. Admi listra ti on 

VI. Conclusion 

I. N ature of Apprentice Training 

The tern "apprentice" is defined as "one who is bound by indenture 
or by legal agreement to serve another person for a certain time with a 
viei; to learn an art or trade in consideration of instruction therein 
and formerly usually of maintenance by the master." 1/ 

While the above is no doubt an ancient definition, it is still 
generally speaking an adequate term for present day wage. 

Thus, the distinction between "apprentice" and "learner" or 
"beginner" becomes manifest, the former usually ap-olied to the youth 
and the training is fundamentally an education jrocess, which the em- 
ployer is obliga.ted to perform by the terns of the apprentice agree- 
ment. 2/ 

"Under apprentice training young men and women are 
given broad and comprehensive training in all branches 
of skilled occupations. 

"It is of primary imortance that everyone under- 
stand that p rprentice training is fundamentally an edu- 
cational process. It is first and foremost training for 
a voc tion. This jrograra cannot and should not be re- 
garded merely as a means for furnishing employment to 
young persons. 

"Apprentice training stands Gut in sharp contrast 
to the employment of helpers, to the trade school course 
in '-hich the student receives no experience in work under 
normal real conditions, and to the minute specialization 
of oper- tors." 3/ 

II. Origin of Order 

The need for s-oecial training in trades and industries has long 
been recognized. In 1917, a Federal Board for Vocational Education was 
established by an act of Congress. Subsequently this work wa.s placed 



1/ Webster's New International Dictionary 

2/ Form of apprentice agreement issued by Federal Committee on Appren- 
tice Training, Exhibit No. 31. 

3/ Bulletin Ho. 1, page 2 of Federal Committee on Apprentice Training - 

Exhibit Ho. 32. 
9845 



- 34 



under the Office of Education, Interior Department and a. new division 
of that office created named the Division of Vocational Training. How- 
ever, during the depression the training of new workers fell to a :oint 
where it "as practically negligible* "Skilled help was abundant and 
employers found reduction of costs imperative; training programs inauger- 
ated during prosperous times were largely abandoned," 4/ 

Although the National Industrial Recovery Act was approved June 16, 
1933, no general provision was made for apprentice training and no action 
was taken until February 1, 1934, when Ur. Leon Henderson, Director, 
Research and Planning Division, appointed a committee to investigate 
this problem and ma.de recommendations. 

Meanwhile, many codes had been approved, most of which, failed to 
include any provision for apprentice training and the few codes that 
had such provisions '■•ere generally inadequate for systematic training. 
On the other hand the codes "ere blocking apprentice agreements since 
wages under codes --ere higher than that usually paid apprentices at the 
beginning of their training -ieriod. 5/ 

The membership, of the Committee appointed "by Mr. Henderson, con- 
sisted of sixteen authorities on the problem, representing the I iTcA, De- 
partment of Labor, the Office of Education, employers, organized labor 
and State Departments of Education. The Committee was composed of the 
following personnel: 6/ 



Dr. A. J. ALtemeyer, 
Chief, Labor Branch, 
Compliance Division 



Dr. Carl Ruasbenbush, 
Technical Adviser, 
Labor Advisory Board I ERA 



Mrs. Clara Li. Leyer, 
Director, Industrial Division 
Children's Bureau 
Department of Labor 



Mr. Stanley I. Posner 
'Economic Adviser, 
Research and Planning 
Division ERA 



Mr. W, A. Calvin, Ass't. to 
Sec'y.-Treas. , John P. Fre--. 
Metal Trades Department, 
American Federation of Labor. 



Mr, Walter 3?. Simon, 
Supervisor of Apprenticeship 
Industrial Commission of 
Wisconsin 



Mr. Frank Cushman, 

Chief, Industrial Education Service 

Office of Education 



Dr. William H. Stead, 

Associate Director 

IT. S. Employment Service 



Mr. J. W, Dietz, 

Supt. of Public Relations, 

Western Electric Company, 



Mr. F. J. Trinder, 
Saco-Lowell Textile Ma.chine 
Company, 



4/ Page 1 of Exhibit ITo, 32 

5/ Page 1 - Excerpt from Report of July 5-, 1955 by Federal Committee 
on Apprentice Training - Exhibit L'o, 33 

6_/ Personnel of the Committee - page 2 of report en Apprentice Training 

Program under 1IRA, Exhibit ITo, 33-A, 
984-5 



OO - 



Mr. C. R. Dooley, manager, Dr. J. C. 7/right, 

Industrial Relations, Assist. U. S. Commissioner for 

Sec on/- Vacuum Oil Compc ny Vocational Education 

Mrs. Betty Harrley, Exo , Sect., Mr. Guy G. Via, 

Advisory Eoard on Industrial Education, HcToort Nevs Shipbuilding 

3oavd of Education, Her: York City Company. 

Mr. John J. Seidol, Director, 
Vocational Education for Lrryland, 
lir. Seidel uas Executive Secretary of- 
the Oomnittee. 

The study of the Committee shor/sd: 

"1. That the terms 'beginner', l lea3cner' and 
'apprentice 1 had Leon used interchangeably in the codes. 

"2. That most so-called 'apprentice provisions' 
rrere for short 'breaking in' )eriods of from one to 
nine months. 



n 



o. 



Thrt only 4.3 per cent oi" the codes contained 



orovisions for genuine aa arentice training." 7/ 



III. Executive Order 6750- C 

As a result of this investigation and the recommendation of the 
Committee the President on Juno 27, 1934, issued Executive Order IIo. 
6750- C. . - 

This Order provided that no jrovision in any Code or agreement mhich 
had theretofore been or moulo. thereof tor be r oroved should be so construed 
or applied as to violate the rales and regulations therein after promul- 
gated. These rales in substance -/ore: 

1. A ierson vas permitted to be employed a.s an 
apprentice at less than the minimum r:age or in excess 
of maximum hours of labor if p. member of an industry 
should obtain from an Agency established by the Secre- 
tary of Labor a certificate oermitting such employment 
in conformity rath a training program offered by such 
Agency, such em loyment to continue until the certifi- ■ 
cate should be revoked. 



7j Page 2 - Excerpt of Report oi July b, 1925 - Exhibit No. 33. 
See also summarization of aa jrentices and learners -orovisions 
in codes by Research and Planning, Exhibit Ho. 33-E and 33-C. 



9345 



- 36 - 

2. The term "apprentice" should mean a person of 
at least 15 years of age -.'ho had entered into a. written 
contract with the employer or ?n association of enroloyers 
which provided for at least 2000 hours of reasonably con- 
tinuous employment and his oarticipation in an aonroved 
program of training as therein provided. 

3. A Committee should he established oy the Secre- 
tary of Labor to advise the Secretary in the exercise of 
the powers therein conferred and to perform such other 
functions as the Secretary night direct.' This Committee 
should oe composed of one or more representatives of the 
Office of Education, the national Recovery Administra- 
tion and the United States Department of Labor. 

The Order further authorised the Secretary of Labor to prescribe 
further rules and regulations and take such other steps, as he might 
deem necessary to effectuate the Order. Orders approving codes or agree- 
ments inconsistent with this Order were modified accordingly, -orovided 
the employer elected to become subject to the Order. The Order became 
effective July 15, 1934. 8/ 



IV. Organization 

Pursuant to the authority conferred by the Executive Order, the 

Secretary of Labor appointed the following members to consitute the 
Federal Commit'tec on Apprentice Training: 

Mrs. Clara, LI. Beyer, Chairman, Assistant Director, Division 
of Labor Standards, U. S. Department of Labor, representing 
the Department of Lahior. 

Alternate - Dr. William I". Stead, Associate Director, U. S. 
Enrol o-wiient Service. 

Hr. Frank Cushman, Chief of Industrial Educ: tion Service, 
Division of Vocational Education, Office of Education, repre- 
senting the Office of Education. 

Alternate - Ilr. R. V. Billington, Agent, Industrial Educa- 
tion Service, Division Vocational Education, Office of 
Education. 

Mr. Stanley I. posner, Research and Planning Division, 
National Recovery Administration, representing the National 
Recover".'- Administr tion. 

Alternate - Dr. Harry TJeiss, Assistant to the Executive 
Secretary, National Recovery Administration. 9/ 

On August 14, 1934, pursuant to the authorization contained in the 
Executive Order, the Secretary of labor issued "General Regulation No. 1" 



8/ Executive Order No. o750-C - Exhibit No. 33-D 

9/ Page 3 of the Apprentice Training Program under the IIRA Exhibit 

No. 33-A. 
9845 



- 37 - 

prescribing further rules and regulations for the ca,rr- r in~ out of the 
irentice training )rograra. 10/ This Administrative Order directed 
Oi imittee tc >reprje and recommend to the Secretary basic standards 
for use in the training progjjram. Such standards night he varied accord- 
in.; to the occupation but the training neriod should not be less than 
2000 hours nor more than. 10,000 hours of reasonable continuity. Not 
1 • than 144 hours rjer yeex should be devote", to grouo instructions 
in general and technical subjects under the direction of rublic author- 
ities "but the cenbinea hours of <-'ork and instruction should not exceed 
44 hours per week. The beginning va :< rust not he less than 25$ of the 
basic rate for journeymen ure /.^ilinj in the occin.- tion and locality .and 
the wage must be increased -periodically during the life of. the contract, 
the river? e wage for the entire a. y-, rent ice training -.eriod being not 
ler:s than 50 per cent of the b; sic wage rate. The Committee was also 
directed to review the activities of all state agencies and re jort to 
the Secretary whether p.ivj such agency should be designated. The Committee 
should also recommend to the Secretary such "other regional, local, general 
or special agencies as might be necessary to supervise the training of 
ap rentices. The Conhtoee should transmit to the Secretary nominations 
for membership in any sue ■mcf.. m ie by (l) N.R.A. ; (2) U. S. Employ- 
ment Service or emnloyraent service in the State i-;here such agency.' - was 
created; (s) State Board of Vocational Training; (4) State Labor Depart- 
ment; (5) Organization of En loyees in the articular state; and (6) 
Organization of ■ Emnloyers in the particular state. Every such agency 
should (l) a.dont as the lermount guidin ; irinciple the education and 
training of apprentices; (2) adopt basic standards at lea.st equal to 
those prescribed by the territory; (o) be authorised to issue certifi- 
cates emitting en doymer.t of a mrentice; (4) prepare and execute a 
general plan for- supervision of arorentice training which should include 
the aniraisina: and a onrovin : 0" specific programs, approving contracts 
of agnrenticeshi o, registering a -.--.rentlces, supervising the training, 
cancelling contracts "nd issuin • diplomas. 

Pursuant to the above Administrative Order the work of organizing 
the st; te committee was be -.in, A series of regional meetings conducted 
by Mr. William E. Patterson, Executive Secretary of the Committee on 
Aporentice Training, was begun August 23, 1934, and continued until 
October 9, 1954. As a result o ' th se meeting State Committees were 
organized and their an ointments officially made by the Secretary of Labor. 

The Federal Committee on Apprentice Training sent out to the State 
Committees written ins tract ins released under date of October 20, 1934, 
relating to the organization of the State Committees and of Trade Advis- 
ory Committees and specifying the functions cf both and also standards 
in the administration of the apprentice training program by the State 
Committee. 11/ Generally these instruct ion. 3 follow Instructions No. I, 
issued by the Secretary of Labor previously referred to. The instruc- 
tions issued by the Committee were, however, more elaborate and specific. 
The State Committees, being agencies set up pursuant to the authorization 
contained in Instructions No. I, the Instructions from the Federal 

10/ General Regulation Ho. 1 - Exhibit No. 33-E 

11/ Instructions issued b Federal Committee - see page 4 to 8, inclu- 
sive, of lie >ort of Committee - Exhibit No, 35-A. 
9845 



— 38.- 

Committee relating to represent; tion of groups and agencies 0:1 the Sta.te 
Committees followed the requirements of the .Insist arc tion 3 fron the Secre- 
tary of L.-bor, e;:coT)t that the Committee's Indstructions more specifi- 
cally designated NBA State Compliance Division, instead of UFA. and the 
State Federation of Labor instead of an organization of employees in 
the particular State. The other bodies represented --ere the same as 
in the Instructions' fro:: the Secretary, i.e., Strte Department of Labor, 
Strte Board for Vocational Education, EoplOyuent Service and Organiza- 
tion of Employers. The functions of the St te Committee were to super- 
vise the training 0:" apprentices in accordance with the standards a p n-oved 
by the Secretary of Labor which included approval of apprentice contracts, 
'issuing certificates, registering ^purentices, supervising the trailing 
of apprentices, cooperating vita educational authorities in the school 
program, cancelling contracts mii issuing diplomas. The instructions also 
urged but did not require the establishment of Tr- de Advisory Committee 
for each trade to be composed of epresenativos of employees and employers J 
Such Committees • ould ret in an advisory capacity on such matters as the 
determination of a uniform contract form, the prevailing average fate for 
journeymen, cooperation with school authorities, the selection of appren- 
tices,- matters of grievonce either of the apprentice or the employer and 
other matters. 

Bu Hay IS, 1935, forth- three state committees and forty-one plans 
had 'oeea a proved by the Secretary of Labor. The ground work of the 
organizations, plans and policies was completed. 

The Federal Committee on Ap irentlce Trainin : did net cease to function 
upon the invaJ.ida.tion of the National Industrial Recovery Act. Executive 
Order 6750-0, as well a.s the agencies created thereunder, were extended 
by Exeuctive Order 7Q7S, issued June 15, 1935. Sanction was further given ] 
this Committee by Executive .Order No. 7086, creating the national Youth 
Administration one of the objectives of which va.s the employment 'nd ap- 
prentice training of the youths of the nation. 12/ The national Youth 
Administration has designated the Committee as the agency for carrying 
on the apprentice phase of its program and a representation of the "national 
Youth Organization ha.s been appointed to tlie Federal Committee. In Decem- 
ber, 1935, this Committee consisted of the following personnel: 13/ 



Mrs. Clara i'. Beyer, (Chairman) 

Assistant Director, Division of Labor Standards, 

U. S. Department of Labor, 

Alternate - Dr. Uilliam H. Stead, Associate Director, 

U. S. Employment Service. 

Dr. Frank Cushman, Chief of Industrial Education 
Service, Division Vocation Education, Office of Education, 
Alternate - Mr. R. V. Gill in 'ton, Agent, Industrial 
Bducati n Service, Division Vocational Education, 
Office of Education. . 

12/ Page 1, Bulletin lTo. 2 of Federal Committee on Apprentice 
Training - Exhibit 33-F 

13/ Page 4, Bulletin No. 2 of Federal Committee on Apprentice Training - 

Exhibit 35-F-. 
9845 



- 39 - 

Mr. C. R. Dooley, Manager of Industrial Rel; tions, 
Se cony- Vacuum Oil Company, Inc. 

Mr. John P. Troy, President o:7 the Metal Trades 
Department, American Federation of Labor. 

Dr. Mary H. S. Mayes, Director of Guidance and 
Placement, national Y oil th Administration* 

Dr. L. C. Marshall, Director, Division of Review, 
ILIA, Alternate - Dr. Harry Weiss, Chief, 
Code Authority Administration Unit, jRA. 

Mr. Willi.' n. r. Patterson, Executive Secretar; r . 

VI. Administration 

TTnile the organization had '.eon largely completed the actual number 
of apprenticeship contracts effected at the time of invalidation of codes 
vt s not great. A report of contracts classified by trades and industries 
anc by states is contained in the Committees' Renort. (Exhibit Ho. 33-A.) 
This re'oort shoes' that on June 16, 1935, the number of apprentices under 
contract ■■■■■ s 355; number of employees 140; number of occupations 52. 
The occupations aont'aini'ng the largest number of apprentices <7ere that of 
Plumber, in nhi'ch there --ere 6.2 a-nrentiees; Machinist, containing 52; 
Fibre Weaver 42 , and T .>ol Maker 50. ■ The states containing the largest 
number of apprentices in the order n; led ^ere Wisconsin, 220; Texas, 50 
and Michigan, 44. 



VI • Conclusion 

The method of supervision by the Federal Government of an r entice 
trainings differs in severrl res^ecty from that enloyod in the regula- 
tion of industry through the LIRA, The following -nil be noted: 

1. iiRA functioned ->urely as r federal ^ ;eucy. The ap )ren- 
tice training "orogram, ho-rever, nroceeded norc nearly up on state lines. 
The active administration of r:o ^rentico training is b" the State Com- 
mittee subject to the General Supervision of the Federal Committee. An 
officer of th" State Government (r representative of the State Labor 
Department) is a member of the State Committee. The State of Wisconsin 
has its omn c i irentice traini lg Ian, -jhich is administered by a State 
Commission. In dealing 'dth this situation, the Federal Committee simply 
designated this strte r :ency rs the State Committee. In fret, the ad~ 
rainistr tion of Federal Training has proceeded uoon the idea of a cool- 
er? tive movement "ith the states rather than uoon the assumption of 
exclusive jurisdiction in the Federal Government. 

2. The Administration of national Industrial Recovery Act 
Trrs centralized Largely in Washington, D. C. ; the Administration of 
apprentice training ,T --'S localized in the are^s of operation. This is 
closely "related to the previous observation. Hovrever, the first refers 

9845 



- 40 - 

to questions of conflict of Federal pud State Sovereignties whereas this 
suggests the relative differences' in centralized a:u'...decentralized 
authority* Of course, even the apprentice training program ^ps not en- 
tirely decentralized as general supervision was reserved, in the Com- 
mittee. 

3. In the a.dministr ■■tion of apprentice training there has 
"been considerably less --.over and influence by industry than under uBAm 

One of the priae principles of BRA, was self-government of indus- 
try; hence, organization by the individual industries regardless of local- 
ity and the election of code authorities. TThile final r-ction in ::ost 
matters was reserved in 1IRA, actually the recomnenda tion of the code 
authorities prevailed unless such recommendations contravened some basic 
policy. For example, in orders ;ranting or denying exemptions the 
recommendations of the code authorities -ore followed in :robably not 
less than ninety (90) oer cent of such orders. 14/ Industry is also re- 
presentee, in the administration of aoorentice training, but no to the 
same extent. On the Federal Comuittee there is one represent,' tive of 
industry, four renrssentatives of agencies of the Federal Government 
and one of organized labor. Proportionate representation on the State 
Committee is about the same, therrj being throe representatives of the 
national Government, one of the St- te Labor Department, one of organized 
labor and one of industry. It will further be noted that the renresen- 
t tion of industry and labor is equal. As a resnlt of the above set-uo, 
there -is less -^o^er in any particular interest or. class and stronger 
governmental control. 

Hovever, it should be recognized that the organization and admin- 
istrati n of the Federal Ao^rentice Training program is not in all res- 
pects comparable to the vork -oerformed by irj.. The former deals with 
a. single problem, the latter with a vast and com ilex variety of nroblens. 
Nevertheless, it is believed a study of some of the features above re- 
ferred to as veil as a study of the administration of exemptions to 
home^orker and handicapped '-orke"':? nay develop valuable suggestions in 
the ^reparation of any future federal legislation to regulate industry, 
should such future legislation be considered. 14a/ 

There is still an almost limitless field for the training of emolo^ec 
in industrial occupations. A large percentage of exemptions vere based 
unon the ground that skilled workers were not available, especially ex- 
emptions to meruit' employees to vork in excess of the maximum hours. Pre- 
emptions fror maximum hour provisions constitute^ more than 50 per cent 
of the total exemptions. 15/ The fact that employers generally vere 

14/ All exemptions vere reviewed by the Revie • Division - Several of 
the -riters of this History vere in the Lxejiption Unit. 

14a/ See also "State Recovery Legislation in Aid of .Federal Recovery 
. Le jisla.tion" Legal Studies. 

15/ For authority for the above statements, see note 14. This Unit 
has also compiled a. digest of Orders granting aid denying exemp- 
tions classified by grounds. 

9845 



~ 41 



■ ill in • to ory more then the normal rate of pay for overtime ^ould 
indicate sine rity of their statements in this respect rnd thr.t 
it '■'-■ not Ln co.ct >rofi table to hire the unea loyed labor that was 
available. The situation existed in innumerrble instances "here in 
a community in which then as lrrge unemployment there w n s also acute 
shortage of available skilled labor* This could be largely alleviated 
the extensive program of aoprentice training. 

Information on this subject ia also to be found in "Policy on 
7- ;es below the Minimum", TTork Materials No. 45. 



9845 



- 42 - 

I. SSCLTEKED WORKSHOPS 

I. Origin of Exemption 
II. Administrative Orders 
III. C-nclusion 



I. Origin of Exemption 

Sheltered workshops are chari table institutions which, provide em- 
ployment to handicapped persons* Handicappec persons am those unable 
to secure employment in. business occause "f physical, mental or other 
disabilities. There are some three hundred of these institutions in 
the United States. It was s"oon realised that these institutions could 
not comply with many of the code provisions. On the other hand there 
was considerable objection from industry because ;f the competition 
from such institutions. 

On February 12, 1934, a commission was appointed by Hugh S. John- 
son, the .Hxministrator of SUA, for the purpose of investigating the 
problem of sheltered workshops an t aalce rec~mr.endar.i ons for neces- 
sary acti-n. The commission was ;aade up of the following: 

Dr. Fredericr Y«'o odward, University of Chicago 
Mr. Oscar II. Sullivan, national Rehabilitation 
association, St. Paul, Minnesota 

Ir. Stanley P. Davis, Charity Organize/:! n : - cioty, 

Tew Y.rlr City. 






II. Ad ministrative Orders _ 

As a result of the efforts of the Commissi :n, Administrative Order 
No. X-8, dated March 3, 1534, was issoied which created a general exemp- 
tion to? all sheltered v/orkshops up a certain conditions. This Order 
defined shelterec. w rkshops t: be charitable institutions or activities 
thereof c oacaucted not for profit, but for tap. purp se >f providing re- 
munerative employment for physically, mentally and - cially handica; 
workers and -orovided that any shelterec w rkshop t be cut it led to the 
exemption should sign a pledge o the following effect: 

1. hot t: empl y dnors u " :r r-ixteen /'ears of age 
except such as arc the.- f r instructional pur- 
poses as approved by i nal Committee sub- 
sequently pr vided for; 

.?. Hot to engage in destructive price-cutting or 
any ^ther unfair method of competition; 

3. ! T ~t t wilfully hamper r retard the purposes 

f Title I f the LTpti-nal Industrial P.ecovcry 
Act ; 

4. To cooperate so far as possible with the N§.ti nal 
Recovery Ataninistrat i .n; and 



1 See Exhibit No. 34 



„ 43 - 

5. To carry out so far as possible the intent and 
spirit of the National Industrial Recovery Act. 

A ministrative )rder ".To. X-28 2 which was signed H y 11, 1934, ^ 
appointed the National Sheltered Workshop Committee and provided for 
the design and use of i ropriate insignia and specified the form 
of pledge to be signed i '■ tional Sheltered Workshops and further 
required the said Committee to designate the several geographical 
;■ Ions of the United States which were referred to in Administrative 
Order ho. X-9. The personnel of the Committee appointed under this 
Order was: 

Mr. Oscar N. Sullivan, President, National Rehabilitation 

Association, St. Paul, Minnesota. 

LIr. Oliver A. Friedman, Milwaukee Good Will Industries, 

Milwaukee, Wisconsin 

Mr. Peter J. Salmon, Secretary, Brooklyn Industrial Home 

for the Blind, Brooklyn.-, New York 

Mr. Edward Kochhauser, President, Altro Workshops, 

The Bronx, New York City 

Mr. J hn N. Smith, Jr., Director, Institute for the Crippled 

and Disabled, hew York City 

Rev. Join: 0' Grady, / tional Conference of Catholic Charities, 

Washington, D. C. 

Administrative Order ho. X-59 was issued July 2, 1934, and pre- 
scribed rules and regulations for the issuance of labels to sheltered 
workshops anc the use tnereof. This Order was amended by Administrative 
Order ho. X-81 which supplemented a . of the provisions of Crder No. X-59. 

Administrative Order No. X-81 4 . provided that the committee should 
issue labels bearing the NBA insignia to sheltered workshops and collect 
the actual and reasonable cost thereof, to pass on the qualifications 
of applicants, find to determine whether or not they came within the scope 
of the sheltered workshop exemption, subject to the disapproval of the 
Administrator, and in general provided for the supervision of sheltered 
workshop exemptions as provided for in the Act. 

III. Con clu sion 

A complete history of Sheltered Workshops has been written by hiss 
Effie Lee Moore, Executive Assistant of the Public Agencies Division, 
and also Executive Secretary of the National Sheltered Workshop Committee, 
It is therefore unnecessary to treat here the administration of the com- 
mittee. Generally it may be stated, however, that the conflict between 
industry and sheltered workshops was largely eliminated and general work- 
ing conditions within the sheltered workshops were greatly improved. 



3 

4 



See Exhibit ho. 35 
See Exhibit ho. 36 

See Exhibit lb. 37 

See also, "Sheltered Workshops under N.R.A.," by y. J. Clarke, and 
Leo. G . Cyr , Admi n i s t rs t i an S t ud i e s 



~- 44 -■• 
J. EXdi.PTIQtf TO ElfJTP.S PIT GOVEEEIdd'T CCETd^CE S 

I. Certificate of Compliance Eequired 
of Bidders 
II. Origin of Exemption to bidders on 
Government Contracts 
III. Administrative Order X-48 
IV. Executive Order No. 6767 
V. Interpre cation of Executive 
Order ! T o. 6767 
VI. Conclusion 

I. Certificate of Compliance dequi,??d of Bidders 

By Executive Order ; T o. 6646 1 datedParch 14, 1934, it was pro- 
vided that all invitations made on behalf of the United States Govern- 
ment to Didders should provide that no "bid should be considered unless 
the bidders certified that he -as complying with' the code to which he 
was subject or if the bidder was not subject to a code that he would 
comply with the President's Ecepployment ^reenent. It was further 
provided that all government contracts should contain a provision re- 
quiring such compliance but that the Administrator v:a.s authorized to 
make exceptions in specific cases. 

I I • . Origin, of Ex emption to Bidders on Government Contract s 

One of the effepts. of code operation was that in numerous 
cases competing bids were identical in -"rice though in most instances 
the Government was by law required to contract with the lowest bidder. 

This was claiired to' have resulted from -the price filing pro- 
visions of 'the codes and the further requirement of a certificate of 
compliance under Executive Ordci- No. 6646. 

Assuming that variations existed between prices filed by the 
members of a particular industry, it is not entirely clear how such 
price filing provisions resulted in identical bids although necessarily 
tiie bidders freedom of action was restricted to the extent that he could 
not bid below his own price list. A further study of the effect of 
price filing provisions', ^specially with respect to identical bids 
should produce valuable information. It has often been asserted that 
such price filing provisions tended to create a uniform price structure. 
The submission of identical bids would seem to substantiate this view. 

This opinion is further supported by a Government publication 
entitled, "P.egulations Governing Bids idled to Offer Government Agen- 
cies Prices 15$ 3elow Published Quotations", being the subject matter 
of the Executive and Administrative Orders hereinafter referred to. 
The portion of the publication applicable is the following: 

"To take care of cases in which the full 
15 per cent variation may cause damage to an 

Executive Order ho. 6646, Exhibit 'do. 38 
9845 • 



- 45 - 

industry's jrice strixcture, the order rovides 
that if complaint is filed, the Administrator 
for In ustrial Recov -y ma; after due investiga- 
tion an ig of the facts reduce the allow- 
able percentage, "but in no crse to less than 5 
per cent below the posted prices." 

III. Administrative Drder X- 48 

On June 12, 1954, Administrative Order X-48 was issued, which 
exempted industry members who should ther ifter bid on government con- 
tracts, from compliance with code ] r -visions which prohibited any of 
the following practices, anr 1 . such members , notwithstanding such pro- 
hibitions, could: (a) Quote prices anc terms to such agencies as favor- 
able as bhose permitted to commercial buyers for like quantities; (b) 
Quote definite "rices or terms, bot subject to adjustment relating to 
increased costs, for definite quantities and for definite periods not 
to exceed three months (unless code provided longer period); (c) Same 
as (b) except for in Lte quantities for definite periods not to 
exceed sip: months; (c ) Quote prices and terms to apply to contracts to 
become effective not more th days ' the opening bid- date, (e) 
Quote prices f.o.b. point of origin and/or destination. The order 
contained a proviso that it sho Id not permit deviation from or abandon- 
ment of code, open price mi • cost protecti >'. jrovisions. 

IV. Executive Order H . 6767 

Executive Order ho. 6646 was modified by Executive Order ho. 
6757, approved June 29, 1934, which authorized any person submitting 
a bid to the government, at prices which, under an approved code, 
should have been filed with the c rity prior to their quotation, 
to quote a price n ot m ore than 15 pe;r cent be Low his filed price, which 
action would be deemei equate compliance with the Code require- 
ments, if, after the bids were opened, each bicder who quoted below his 
filed price, immediately filed a copy of his bid with the code author- 
ity or designated a ; _ency. If complaint was made to the Administrator, 
and he found, after investigation, that the tolerance of 15 noer cent 
resulted in destructive price cutting, he "/as authorized to issue an 
administrative order reducing the tolerance to an extent necessary to 
prevent price cutting, but in no event to a tolerance of less than 5 
per cent. The Achnini street or '.".'as directed to cause a study to be made 
of the effects of the Order upon standards of fair competition in^sales 
to public and private customers, anc to report within six months. 

V . Interpretat ion of Executive Order h o. 6767 

On July 14, 195-"-, Legal Memorandum ho. 49 was sent by Mr. 
Black-. 'ell Smith to the Legal Staff, interpreting Executive Order ho. 
6767, so far as the '-rice tolerance exemption is concerned, substanti- 
ally as follows: 



2 
Administrative Order X-48, Exhibit do. 39 



"^Executive Order ho. 3757, Exhibit ho. 40. 
9845 



- 46 - 

(a) The general terms of the Order permit of no 
exceptions and bids 15 per cent below filed nrices 
could be Made to government agencies without code 
violation even though resulting in prices below cost 
or below stated minimum prices, provided, that the 
Trice filed, from which tolerance was allowed, was a 
valid price under the code provisions. (b) Any legal 
interpretation of the clause which required that a covy 
of each tolerance bid to be filed with the Code Author- 
ity or agency, should be based upon its wording, which 
was believed not to justify an interpretation that 
filing such a copy constituted filing a revised price 
which then became available as such, to all purchasers, 
(c) If the Administrator found that the 15 per cent 
tolerance was resulting in destructive price cutting, 
he co\ild reduce sa ie to prevent such result, but the 
tolerance reduction could not exceed 10 per cent. 

VI. Conclusion 

MRA Office i'anual, Part III, Section 4600, stated that Executive 
Order l!o. 6767 "lias not been very extensively applied, consequently the 
problems now involved in Government Contracts relate almost exclusively 
to ITo. 664-6, on which the following sections are based." 

Since Executive Order Ho. 6757 operated without the necessity of 
further specific orders the 1 T RA would in all probability have no offi- 
cial record of the extent to which the privilege conferred by this 
order was availed of. However-, as members bidding nelow their filed 
prices were required to submit such price quotations to code author- 
ities or other confidential agencies the code authorities should have 
this information. Further study from this source might be of value. 



3_ 
Lxecutive Order No. 6767, Exhibit Ho. 40 



uSee also "Relationship of 17. R. A. to Government Contracts and Contracts 
Involving the Use of G overnment Funds," by Jordan D. Hill, A-h/iinis- 
tration Studies; Chapter V of '"Agreements Under Section 4(a) and 7(b) 
of H.I.R.A.", by C. A. C-iblin, Administration Studies. 



9845 





E. ASSESS] 


I. 


Origin of Order 


II. 


The Order 


III. 


Ope rati oil gind Effect 


IV. 


Conclusion 



- 47 - 

::; pjioi 



I. Origin of Order 

Pri^r to Executive Order ITo. 6678, contributions to code adminis— 
tration'.;s expenses had "been on - voluntary basis, under a standard pro- 
vision which was c > .tained in • ved code? and provided that members 
were to he entitled to participate in and share the benefits of the 
activities of the Cx.e Authority, and p; rticipate in the selection of 
the members thereof by assenting to and complying with Code require- 
ments an sustaining their re . u ble share of administration expense, 
same to be determined by the Code Authority, subject to review by the 
Administrator, on the basis of volume of business, or other equitable 
factors. Under such a provision contribution to the expenses could not 
be legally enforced. 

Tn memorandum from Laurence A. Kn i > , Review "Division Counsel, to 
E. II, Jeffrey, dated June S, 1934 x > as to the purposes and effect of 
Executive Order ho. 6673, a i ministrative Order X-36, it was stated 
that the President issued the executive order to meet the vociferously 
expressed desires of many industries to make failure to pay .assessments 
for expenses of code administration a violation of the code. 

_ p 

?ne Executive Order war. approved on April 14, 1934. 

I I . T he Or der 

The essential part of the order was as follows: 

It was ordered "that the following clause cr any 

appropriate modification thereof shall "cecome 
effective as a wart of any code of fair competi- 
tion approved -under said Title (Title I of. 
rational Industrial Recovery Act of Juie 16, 
1933), upon application therefor (1) pursuant 
to the provisions of the Code relating to amend- 
ments thereto or (2) by one or more trade or 
industrial associations or groups truly repre- 
sentative of the trade or industry or subdivision 
thereof covered by the Code, if the Administrator 
for Industrial Recovery shall find that approval by 
him. of sucn clauses is necessary in order. to ef- 
fectuate the policy of Title I of said Act: 

"1, It being found necessary, in order to 

Exhibit ho. 41. 
Executive Order ITo. 6678, Office Manual, Part V, V-C-29, Exhibit 42. 

9845 



- 46 - 

support the administration of this code and to 
maintain the standards of fair competition 
established by this Code and to effectuate the. 
policy of the Act, the Code Authority is au-i 
thorized, subject to the approval of the Ad- 
ministrator: 

" (a) To incur reasonable obligations 
as are necessary and proper for the foregoing - 
purposes and to meet such obligations out of 
funds which may be raised as hereinafter pro- 
vided and which shall be held in trust for the 
purposes of the Code; 

"(b) To submit to the Administrator for 
his approval, subject to such notice and opportunity 
to be heard as he may deem necessary, (l) an itemized 
budget of its estimated expenses for the foregoing 
purposes, and (2) an equitable basis upon which the 
funds necessary to support such budget shall be com-. 
tributed by the members of the Industry; 

"(c) After such budget and "oasis of contri- 
bution have been approved by the Administrator, 
to determine and seciu-e equitable contribution 
as above set forth by all such members of the in- 
dustry, a '.d to that end, if necessary, to institute 
legal proceedings therefor in its own name, 

"2 'Only members of the Industry complying with the Code 
and contributing to the expenses of its administration 
as provided in Section 1 hereof shall be entitled to 
participate in the selection of the members of the Code 
Authority or to receive the benefit of its voluntary 
activities or to make use of any emblem or indignia of 
the national Recovery Administration." 

III. Operation a nd Sffec t 

On April 14, 1934, Administrative Order X-20 3 was issued, which 
provided for the collection of expenses of code administration, non- 
payment of which constituted a violation of the code only if an item- 
ized budget had been approved, and the code authority certified that 
the member had' been given notice of the approved basis of contribution, 
that non-payment within 30 days after such notice was a code violation, 
that the member had a right to protest, but had failed to pay or file a 
protest. It was further provided that no members should, be in violation 
of the code for failure to contribute to any industry other than th 
which embraced his principal line of business, but any code authority 
could, show caiise to NBA why a member subject to its code, should con- 
tribute to the expenses of same, in addition to a contribution by him 
to another code or codes. 



3* ' ■•••.. 

""Administrative Order X-20, Office Manual, Part V, V-D-ll Hxhibit 43. 

9C45 



r- 49 - 
A 

On May 26, Administrative- order X-36~, was issued, supplementing the 
Executive Order and rescinding' Administrative Order X-20. it prescribed 
rules, regulations and procedure governing tne collection of contribu- 
tions, and provided as follows: - 

"Fending determinations by IT.H.A. with respect to specific Codes 
upon cause shown by a Code Authority or otherwise, every member 
of a trade or industry is hereby exempted from any obligation 
to contribute to the expenses of administration of any Code or 
Codes other than the Code for the trade or industry which em- 
traces his principal lino of business, provided that he shall 
submit such information and comply with such regulations with 
respect to such exemption as N.R.A. nay require or prescribe." 

It was not a policy requirement that a code contain the mandatory 
assessment provisions contemplated by administrative Order X-36, but 
unless the requirements of tne Order wore met, contributions of a 
compulsory nature could not be collected (office Manual II - 1570). 

Subsequent administrative orders of interpretations, and granting 
exemptions pursuant to the order were as follows: 

r 

Administrative order Ho. X-56-1, dated October 11, 1934, 
held that an establishment which operated under more than one 
divisional or sub-ui visional code, each having en approved 
budget, was exempted ~by paragraph III of Administrative Order 
X-36 from contributing to other than the division or sub-division 
which constituted its principal line of business. (See Review 
Division precedent Ho. 63, paragraph III). 

Administrative Order K-35-2, dated liarch 30, 1935 held that the 
exemption conferred by X-36, did not extend to the purchase of labels, 
and all members of the industry were obligated to pay for labels at 
the approved rates. .(See Review Division precedent No. .63, Para- 
graph III). 

Administrative Order X-78. was issued August 21, 1934, providing 
that, pending further order clarifying the problem- of multiple assess- 
ments in the Distributing Trades, no order of termination of exemption 
under. X-36 should -be construed to: 

(1) Require any member to contribute to any code covering 
wholesale distribution by him, except the code covering his 
principal line of wholesale distribution, provided, however, 
the termination should apply to any of his business other 
than wholesaling. 

(2) (Consists of a similar provision as applied to Retail 
Trade members). 

In construing (l) above, the Legal Division, on February 21, 1935, 
held that a wholesaler was required to pay the code Authority for his > 
principal line of business only on the basis of business done under that 
one code, and was not required to pay such principal line wholesaling 
code authority on the basis of his entire wholesaling business (See 
Review Division precedent Ho. 63, Paragraph IV). 

(4) Administrative Order X-36, Office Manual, Part V, V-D-21, Exhibit 44, 

9S45 



- 50 - 

Administrative Order X-122, approved December 14, 1934, provided 
that because of conflict of the Graphic Arts Industries Code with certain 
other codes, any establishment operating under one or more codes other 
than the Graphic Arts Industries Code, which did not sell printed matter 
in competition with producers under that Code, and which employed on 
graphic arts processes not more than nine mechanical employees was ex- 
empt from the provisions of said code governing the collection of assess- 
ments for code administration expenses. This order was rescinded by 
Administrative Order X-133, approved January 22, 1935, but the exemption 
was substantially re-adopted. 

Administrative Order X-131, approved January 7, 1935, established 
a Si-gle Assessment principle for members engaged in retail distribution. 
It terminated exemptions granted by X-36 or X-73, effective January 1, 
1935, which applied to the retail business of retail establishments, 
after which, a retail establishment, to the extent it engaged in retail 
distribution, was required to pay a single assessment upon its total 
retail business to the expense of its principal line code (l) at the 
rate of assessment approved for that code, or (2) upon its principal 
line at the rate approved for that code, and upon each minor line at 
the rate approved for each minor line code. If contribution was made to 
the expense of another code, based upon the business covered by that 
code, credit and deduction therefor was to be taken in computing payment 
to the principal line code. (See Review Division precedent No. 63, 
Paragraph V). 

Administrative Order X-139, approved April 10, 1335, provided that 
applications for approval of budgets and bases of contribution should 
contain recommendations to eliminate (l) nuisance contributions and 
(2) for exemptions designed to avoid inequitable contributions or 
articles which were not marketed per se .' (See Review Division 
precedent No. 63, paragraph VII ). 

Administrative Order X-140, approved April 11, 1935, granted a 
qualified exemption of members engaged in a Principal Line Retail by 
providing that separate establishments whose principal line measured 
by dollar volume, was retail distribution, were exempted from contri- 
bution to any minor line non-retail code governing a portion of the 
business, provided (l) non-retail business did not require full time 
services of 2 or more employees, and (2) the obligations of such es- 
tablishments to affix labels, and pay the approved label rates, was 
not affected. (See Review Division precedent No. 64, Paragraph Vl). 

IV. Conclusion 

This problem is one of the results of multiple coverage. A concern 
even though with respect to its own organization an intergrated unit 
might be subject to several codes. Each code may be totally different 
with respect to contributions to the code authorities. One code may 
contain a mandatory provision for assessment; another code may contain 
a provision for voluntary contributions. The bases of assessment or 
contribution differed. For example, one code would be based upon dollar 
volume of business, another upon production volume, by dollar volume of 
payroll, or by the number of employees and many other different bases of 
assessment. Finally, the rate of assessment varied with the individual 

9845 



~ 51 - 

industry. TJhen the basis of assessment differed, it was difficult to 
ascertain whether or not a particular member ?as paying double assess- 
ment or less thai his proportionate share. 

The difficulties were in all probability not anticipated in the 
early days of code formulations and these complications were met in 
individual cases as they arose during the course of administration. 
The fact that policy changed from time to time as embodied in the nu- 
merous orders on the subject indicates that the difficulties were not 
entirely solved. For example, under Administrative Order X-36 a concern 
with 51 per cent of its business in one code and 49 per cent in another 
might be exempted from assessment on the 49 per cent of its business. 
The result was the flood of orders from a great number of industries 
terminating this exemption. 

7ith the experience of the past no doubt some broad policy in- 
itiated at the beginning of the code making could be evolved. This 
would involve as far as possible uniformity in the assessment pro- 
visions of each code. If mandatory provisions are legal then all codes 
might contain a similar mandatory provision. 

The same uniform policy could be continued in the organization and 
administration of the code authorities in respect to assessments. Thus, 
a uniform ba.ses of assessments could be adopted, For example, assess- 
ments might be based upon the dollar volume of business. This would 
eliminate many of the complications and uncertainties. There will still, 
however, be the question of differences in rates of ' assessments. Con- 
sidered as a tax, there is considerable merit in the position that the 
rate be uniform in all industries. Cn the other hand this is opposed to 
tiie idea of organization by individual industries and the belief that 
each industry should be responsible for financing its own administration. 
Whether the latter was adopted or not, it would seem well that a member 
receive a single questionnaire and a single notice of assessment, and 
that the apportionment of that assessment be worked out through a clear- 
ing house or a system of credits of the code authorities involved. As 
a natter of fact this principle was adopted in Administrative Order 
X-131 with respect to establishments engc.ged in Retail Ilstribution. 



5 See also Part D, entitled "Code Authority Finances", by 
H. P. Vose, of "Code Authorities and Their part in the 
Administration of the N.I. 3. A.", F.R.A. Administration 
Studies. 



9845 



~ 52 ~ 



L. 



I. Administr .tive Order Ho. X-SO 

II. Tcrritori 1 Cooperation Agreement 

III. Exemption from M-.inl nd Code 

IV. Conclusion 

I. Administr tive Order II o . X-60 

Administrative Order ilo. X-60, d tec. Febru ry 8, 1934, exempted _t?. : d;.s 
-nd industries in the territories of Puerto Rico ".ntV H:v;-ii from codes: ' 
theretofore Approved until September 1, 1934, nnd fron codes there. -.fter 
approved for -„ period of six we ks following the d .tcs of such pprovlsi 
It wis further provided, however, th t the order should not ffect ' ny 
exemption or exception of ray industry or person in such territories nd 
thr.t the Order sho Id not .ffect -.ny code for .tr.de or industry in 
Puerto Rico or H-.r.ii (presum hi me ni':g 1'oc 1 cod s >r tr des nd in-' 
dustrics peculi r to such territories.). At ,ny ti , "before the cxpir-.tian 
of the exemption thereby gr ntot! qualified ■ ssoci ti n.s in cith.-r'-of the 
territories could -p^ly for ~. modific tion of -. code or the p rovl of 
sep-.r-.te code. Provision w-.-s --.1st .:: -!:c for'' l-'hols. ('*) 

II. Tcrritori .1 Coopeu' tion Agr: mont 

By Administr tive Order ho. X-80, d-vtod August ??, 1934, the Ad- 
ministr tor pproved'th| form of the Torritori-.l Cooper tion Agreement 
for Puerto Rico, R-.w.ii -nd Ah .sk which w-.s rttrchod thereto. (**) 

The Agreement provided th t it would r;.m..n in effect until ( ) 
sep r to code ir.d "been p; roved; ("b ) the deputy for the territory 
ordered its termination'; (c) not l-.ter th n June 15, 1935. Hie Agreement 
further included provisions rcl- ting to m~ximum r i , d it ion .1 compens - 
tion for overtime, exemption from maximum hours in codes of emergency n-,in- 
t a nee- nd r:;}- ir work, minimum w cs, oquit bio \djustra :i.t , child 1 .dor, 
lo rncrs m pprenticcs, h ndic rued workers, collective b rg-.ining nd 
provisions which prohibited monopolies nd oy >rcssion of sm.ll entcrr>ris..s . 

III. Exempt i n from V. ir.l~.nd C ode _s 

A Ki'-.inl-.nd code w~s one th t included not only Continent 1 Unite". 
St tes "but H'.T'ii, Puerto Rico -.nd Al~,s2r .s rel! . A coco w-.s construed s 
- rrr.inl.nd code if its terms, ( ) included no st tement s to the extent of 
its ■pplic-tion, or, (b) did not define the re of its ipplicvtion to c xclude 
•ny or -.11 of the territories nd pos: Lo: s. (***) 



■(*) Administrr.tivc Order Ilo. X-60, Exhibit Ho. 45. 

(**) Administr tive Order No. X-SO ".nd Tcrritori l : Cobpcr tion 
Agreement, Exhibit ho. 46, 

(***) See N.R.A. Office M~nu~l 11-40 0-4009. 



9845 



Office I 'emorandu'i Ho. 356, i May 3, 1934, authorized the De- 
puty Administrator for "C.-io lerritfr.y of Alaska, subject to the suoer- 
vision of and review by the rational Industrial Recover-/ - Board, to grant 
or den-- exemptions from code vu-ovisions to the extent that a code ap- 
plied to transaction within that territory, except that such authorisa- 
tion was not to apply to the follcming codes: 

Canning Industry- 
Canned Salnon Industry 
Lumber and Timber Products Industry 
Fishery Industry (including supplementary C^des (*) 

Office jiemorandum Eo = 357, (*^) issued iiay 3, 1935, provided that 
certain provisions, i.e., Part III, Section 3231 and 3234.2 should not 
apply to the Deputy for Alaska in the exercise of the authority given 
him under Office Memorandum Ho. 356. 

IV. Conclusion 

This topic includes only the administrative Order granting an ex- 
emption from mainland codes in the territories and the related Office 
Memoranda on the subject,, Ho attempt is made to treat the administration 
of codes in these territories. Special studies and histories have been 
prepared and written covering this subject, both generally and with re- 
ference to particular trades and industries. (***) 

(*) Office hemoranduE Ho. 356, Exhibit Ho. 47. 

(**J Office Memorandum 357, Exhibit Ho. 38. 

(***) Generally . "The Coda Making Program of H.H.A. in Territories" 

by Fu J. Duff icy, Administration Studies. "Chapter 
IV of ''Agreements under Section 4(a) and 7(b) of 
I". I. R. A.", by C. A. Giblin, Administration Studies. 

Alaska : - History of HRA Administration in the Territory of 
Alaska, by M. W. Stead. 

Puerto Rico : Report entitled "High Spots of IRA in Puerto Rico" 

by Boaz Long. See also the following code histories 
applicable solely to Puerto Rico: Baking, Motion 
Picture, and Banking _y Frederick Sartorious; Men's 
Clothing by Ualter M. Barrow; Cigar and Tobacco, 
and Survey of Heedle-work Homeworkers by J. P. S. 
Minnet; and the Study of Heedle-work in Puerto Rico 
by J. P. S. Minnet and Boaz Long. 

Hawai i : - The following histories and studies by Frederick 
Simpick: "A Surve3f of Labor Conditions in the 
Principal Industries of the Territory of Hawaii"; 
"High Spot Memorandum 11 of ' HRA in Hawaii; "History 
of Graphic Arts in Hawaii and Retail Trade in 
Hawaii. " 



J845# 



OFFICE OF THE NATIONAL RECOVERY ADMINISTRATION 

THE DIVISION OF REVIEW 

THE WORK OF THE DIVISION OF REVIEW 

Executive Order No. 7075, dated June 15, 1935, established the Division of Review of the 
National Recovery Administration. The pertinent part of the Executive Order reads thus: 

The Division of Review shall assemble, analyze, and report upon the statistical 
information and records of experience of the operations of the various trades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditions in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate review of the effects of the Administration of 
Title I of the National Industrial Recovery Act, and the principles and policies 
put into effect thereunder, and shall otherwise aid the President in carrying out 
his functions under the said Title. I hereby appoint Leon C. Marshall, Director of 
the Division of Review. 

The study sections set up in the Division of Review covered these areas: industry 
studies, foreign trade studies, labor studies, trade practice studies, statistical studies, 
legal studies, administration studies, miscellaneous studies, and the writing of code his- 
tories. The materials which were produced by these sections are indicated below, 

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

THE CODE HISTORIES 

The Code Histories are documented accounts of the formation and administration of the 
codes. They contain the definition of the industry and the principal products thereof; the 
classes of members in the industry; the history of code formation including an account of the 
sponsoring organizations, the conferences, negotiations and hearings which were held, and 
the activities in connection with obtaining approval of the code; the history of the ad- 
ministration of the code, covering the organization and operation of the code authority, 
the difficulties encountered in administration, the extent of compliance or non-compliance, 
and the general success or lack of success of the code; and an analysis of the operation of 
code provisions dealing with wages, hours, trade practices, and other provisions. These 
and other matters are canvassed not only in terms of the materials to be found in the files, 
but also in terms of the experiences of the deputies and others concerned with code formation 
and administration. 

The Code Histories, (including histories of certain NRA units or agencies) are not 
mimeographed. They are to be turned over to the Department of Commerce in typewritten form. 
All told, approximately eight hundred and fifty (850) histories will be completed. This 
number includes all of the approved codes and some of the unapproved codes. (In Work Mate- 
rials No^ !§, Contents of Code His to ries , will be found the outline which governed the 
preparation of Code Histories.) 



(In the case of all approved codes and also in the case of some codes not carried to 
final approval, there are in NRA files further materials on industries. Particularly worthy 
of mention are the Volumes I, II and III which constitute the material officially submitted 
to the President in support of the recommendation for approval of each code. These volumes 
9768—1 . 



set forth the origination of the codes, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industry, the 
recommendations of the various Advisory Boards, certain types of official correspondence, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to amendments, interpretations, exemptions, and other rulings. The 
materials mentioned in this paragraph were of course not a part of the work of the Division 
of Review. ) 

THE WORK MATERIALS SERIES 

In the work of the Division of Review a considerable number of studies and compilations 
of >.dta (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grouped according to the char- 
acter of the material. (In Work Materials No. 17, Te ntative O utlines and Summaries of 
Studies in Process, the materials are fully described) . 

In dustry Studies 

Automobile Industry, An Economic Survey of 

Bituminous Coal Industry under Free Competition and Code Regulation, Ecnomic Survey cf 

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 P ractic e S tudies 

Commodities, Information Concerning: A Study of NRA and Related Experiences in Control 

Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes 

Distributive Relations in the Asbestos Industry 

Design Piracy: The Problem and Its Treatment Under NRA Codes 

Electrical Mfg. Industry: Price Filing Study 

Fertilizer Industry: Price Filing Study 

Geographical Price Relations Under Codes of Fair Competition, Control of 

Minimum Price Regulation Under Codes of Fair Competition 

Multiple Basing Point System in the Lime Industry: Operation of the 

Price Control in the Coffee Industry 

Price Filing Under NRA Codes 

Production Control in the Ice Industry 

Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 

Trade Practice Rules of The Federal Trade Commission (1914-1936): A classification for 

comparision 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 

A dminis t rativ e Studi es 

Administrative and Legal Aspects of Stays, Exemptions and Exceptions, Code Amendments, Con- 
ditional Orders of Approval 

Administrative Interpretations of NRA Codes 

Administrative Law and Procedure under the NIRA 

Agreements Under Sections 4(a) and 7(b) of the NIRA 

Approved Codes in Industry Groups, Classification of 

Basic Code, the — (Administrative Order X-61) 

Code Authorities and Their part in the Administration of the NIRA 
Part A. Introduction 
Part B. Nature, Composition and Organization of Code Authorities 

9768—3 . 



- iv - 

Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 
Cjde Compliance Activities of the NRA 
Code Making Program of the NRA in the Territories, The 
Code Provisions and Related Subjects, Policy Statements Concerning 
Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Provisions in the Codes 

Part E. Agreements under Sections 4(a) and 7(b) 

Part F. A Type Case: The Cotton Textile Code 
Labels Under NRA, A Study of 

Model Code and Model Provisions for Codes, Development of 

National Recovery Administration, The: A Review of its Organization and Activities 
NRA Insignia 

President's Reemployment Agreement, The 

President's Reemployment Agreement, Substitutions in Connection with the 
Prison Labor Problem under NRA and the Prison Compact, The 
Problems of Administration in the Overlapping of Code Definitions of Industries and Trades, 

Multiple Code Coverage, Classifying Individual Members of Industries and Trades 
Relationship of NRA to Government Contracts and Contracts Involving the Use of Government 

Funds 
Relationship of NRA with States and Municipalities 
Sheltared Workshops Under NRA 
Uncodified Industries: A Study of Factors Limiting the Code Making Program 

i2£Sl Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees to Enforce 

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

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

Enforcement, Extra-Judicial Methods of 

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

Government Contract Provisions as a Means of Establishing Proper Economic Standards, Legal 
Memorandum on Possibility of 

Industrial Relations in Australia, Regulation of 

Intrastate Activities Which so Affect Interstate Commerce as to Bring them Under the Com- 
merce Clause, Cases on 

Legislative Possibilities of the State Constitutions 

Post Office and Post Road Power — Can it be Used as a Means of Federal Industrial Regula- 
tion? 

State Recovery Legislation in Aid of Federal Recovery Legislation History and Analysis 

Tariff Rates to Secure Proper Standards of Wages and Hours, the Possibility of Variation in 

Trade Practices and the Anti-Trust Laws 

Treaty Making Power of the United States 

War Power, Can it be Used as a Means of Federal Regulation of Child Labor? 

9768—4. 



- V - 

THE EVIDENCE STUDIES SERIES 

The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the 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 and Suit Industry 
Construction Industry 
Cotton Garment Industry 
Dress Manufacturing Industry 
Electrical Contracting Industry 
Electrical Manufacturing Industry 
Fabricated Metal Products Mfg. and Metal Fin- 
ishing and Metal Coating Industry 
Fishery Industry 
Furniture Manufacturing Industry 
General Contractors Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

Infant's and Children's Wear Industry 
Iron and Steel Industry 



Leather Industry 

Lumber and Timber Products Industry 
Mason Contractors Industry 
Men's Clothing Industry 
Motion Picture Industry 
Motor Vehicle Retailing Trade 
Needlework Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 
Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
try 
Wool Textile Industry 



THE STATISTICAL MATERIALS SERIES 



This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment, payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qaalifications that should be observed in using the 
data, the technical methods employed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series: 
9768—5. 



- vi - 

Asphalt Shingle and Roofing Industry Fertilizer Industry 

Business Furniture Funeral Supply Industry 

Candy Manufacturing Industry Glass Container Industry 

Carpet and Rug Industry Ice Manufacturing Industry 

Cement Industry Knitted Outerwear Industry 

Cleaning and Dyeing Trade Paint, Varnish, ana Lacquer, Mfg. Industry 

Coffee Industry Plumbing Fixtures Industry 

Copper and Brass Mill Products Industry Rayon and Synthetic Yarn Producing Industry 

Cotton Textile Industry Salt Producing Industry 

Electrical Manufacturing Industry 

THE COVERAGE 

The original, and approved, plan of the Division of Review contemplated resources suf- 
ficient (a) to prepare some 1200 histories of codes and NRA units or agencies, (b) to con- 
solidate and index the NRA files containing some 40,000,000 pieces, (c) to engage in ex- 
tensive field work, (d) to secure much aid from established statistical agencies of govern- 
ment, (e) to assemble a considerable number of experts in various fields, (f) to conduct 
approximately 25% more studies than are listed above, and (g) to prepare a comprehensive 
summary report. 

Because of reductions made in personnel and in use of outside experts, limitation of 
access to field work and research agencies, and lack of jurisdiction over files, the pro- 
jected plan was necessarily curtailed. The most serious curtailments were the omission of 
the comprehensive summary report; the dropping of certain studies and the reduction in the 
coverage of other studies, and the abandonment of the consolidation and indexing of the 
files. Fortunately, there is reason to hope that the files may yet be carec for under other 
auspices. 

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessible 
and highly useful. They constitute the largest and richest single body of information 
concerning the problems and operations of industry ever assembled in any nation. 

L. C. Marshall, 
Director, Division of Review. 
9768—6 .