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3 9999 06542 027 3 

OFFICE OF NATIONAL RECOVERY ADMINISTRATION 



DIVISION OF REVIEW 



THE CONTENT OF NIRA ADMINISTRATION LEGISLATION 

PART C: TRADE PRACTICE PROVISIONS IN 
THE CODES 



By 



Daniel S. Gerig, Jr. 

and 
Beatrice Strasburger 



WORK MATERIALS NO. 35 



Work Materials No. 35 falls into the following parts: 



Part A 
Part B 
Part C 
Part D 
Part E 
Part F 



Executive and Administrative Orders 
Labor Provisions in the Codes 
Trade Practice Provisions in the Codes 
Administrative Provisions in the Codes 
Agreements under Section 4(a) and 7(p) 
A Type Case: The Cotton Textile Code 



^9 



t\ 



Special Studies Section 
February, 1936 



OniCE OF MTIOiTAL RECOVZ.RY ADMIiflSTRATIOH 
Division 0¥ ITAflEW 



T:-iE COHTEUT of lIIrLA ADMINISTRATIVE MGISLATIOH 
PART C: TRADE PRA.CTICS FHOVISIOKS III THE CODES 

By 

Daniel S. C-erir, Jr. 

r,iid 
Seatrice Strasliurger 



Speci:-.! Studies Section 
Fe'bru'^.ry, 1936 



967^ 



yOHSY/OED 

The object of this study is to set forth in convenient form the 
substantive content of a,drainistrative le,^'islation "unclsr the authority 
of Title I of the I'ational Industrial Hecovery Act as found in the or- 
ders, codes and a^^reements. Part A, prepared by Ruth Aull, is con- 
cerned with Executive a,nd Aci-ministration Orders, and in some case^, 
Office Orders and Memoranda, legislative in ne,ture; Part B, prepared by 
Ruth Reticlrer', with the labor pi'ovisions in the codes: Part C. pre- 
pared by Daniel S. Gerig, Jr. and Beatrice Strasburger, with the trade 
practice provisions in the codes; Part D. prepared by C. W. Putman, 
with the Administrative provisions in the codes; Part S. prepared by 
Ruth Aull, with the provisions of a(2;reements under Sections 4 (a) and 
7(b); and Part P, prepared by Ruth Aull, with a type case: the Cotton 
Textile Code. Tlie work was under the general charge of G-. C Gamble, 
Coordinator of the Special Studies Section. 

Title I of the i%tional Industrial Recovery Act delegated to the 
president unprecedented powers with respect to regulation of industry 
and trade. The theory of the Act was tliat through the sponsorship of 
codes by trade or industrial associe,tions or gTouj^s, and through vol- 
untary agreements, such regixLation would be cooperative with industry 
and tra.de. 

By Section 2(b) of the Act the president was authorized to dele- 
gate any of his functions a.nd powers to such officers, agents, and 
employees as he might designate or appoint. This power of delegation 
T/as widely exercised and through the a.dministrative activities of the 
national Recovery Administration., established by the President under 
Section 2(a) of the Act. 557 so-called industry or trade codes and 
188 codes supplementary to the basic codes came into being. These 
codes were approved under the authority of Section 3(a) of the Act. 
In addition a smaller but none-the— less considerable number of agree- 
ments was entered into under Sections 4(a) and 7(b) exclusive of the 
President's Reenioloyment Agreement, based on Section 4(a), v/hich was 
"accepted" bj- more than 2,000,000 employers. The codes vifere to be as 
binding as any Act of the Congress, and the code-making administrative 
processes uiider the Act may aptly be described as sub-legislative. 

The Supreme Court iia its decision on the Schechter case, which 
terminated the existence of the codes, referred to the legislative 
aspects of the code-mal:ing process in saying: 

"It (the statutory plan) involves the coercive exercise of the 
law-making povj-er. The codes of fair competition which the sta- 
tute attempts to authorize are codes of laws. If valid, they 
place all persons within their reach under the obligation cf pos- 
itive law, binding equally those who assent and those who do not 
assent ." 

The agreements entered into under the Act, at least with res- 
pect to the administrative steps leading to approvel, were less 
clearly legislative, but the a.greements under both Sections 4(a) and 
7(b) constituted, to the extent they were used, the detailed and sub- 

9679 - /-_i_ 



stantive e:roression of the legislative intent. F-urthermore , the pos- 
ition tahen hy the National Recovery Administration that the piirase 
"same effect as a code of fair competition" used in Section 7(li) re- 
ferred t o the fact that the agreement when approved shoxild carry the 
penalty provisions of the act, wo-'old, if sustained, give such agree- 
ments legislative aspects identical v;ith those of the codes. 

In the administration of the National Industrial Recovery Act 
man?," orders vrere issued which affected the actions or interests of 
persons not connected with the National Recoverj'^ Administration or 
affected the provisions of codes. The Executive Orders issued 'by the 
President and the Administrative Orders issued hy the Administrator 
for Industrir.l Recovery or in the name of the ITational Industrial Re- 
covery Board hearing on the administration of Title I of the Act vere, 
with e, f ex; e xceptions, issued -"jjider the authority of the Act itself 
or under the delega.tion of power permitted by Section 2(h). A sub- 
stantial percentage of such orders, through the natui-e of their pro- 
visions, were legislative. ¥ithin the National Recovery Administra.- 
tion Office Orders or Office iviemoranda were issued primarilj'^ as in- 
structions to or for the guidance of the personnel of the organization 
or for the TDnrpose of esta.hlishing parts of the organization. Some 
of these orders nevertheless contained provisions or requirements 
which directly affected code provisions or indicated reqiiir-^ments up- 
on members of industry and in their scope seemingly may he c si led 
legislative in nature. 

It '.Till he observed that the provisions of the i\Ia,tional Indus- 
trial Recovery Act constituted a ybtj small portion indeed of the 
great volume of administrative legislation under the Act. TIe sub- 
stance of the adjninistrative legislation is to be found in documents 
formxilated from various types of administrative action. 

The studs" is not concerned with evaluation of this administrative 
legislation; it is not concerned with evalua,tion of its consequences. 
Such issues a,re treated in other studies. This study is confined to 
a sta,tenent of the content of the NIEA administrative legislation. 

At the back of this report a brief s tatement of the studies under- 
talren by the Division of Review will be f oimd. 



L. C. Marshall 
Director, Division of Review 



Febrvr.r- 17, 15: 



3679 



-ai- 



Digitized by tine Internet Archive 

in 2011 witii funding from 

Boston Public Library 



a 



http://www.archive.org/details/workmaterialsc35unit 



TRADE PRACTICE PRuVISIOi'S I:T CODES 0? FAIR COilPETITIOF 

TABLE OF COKTEITTS 

Page 

PART I _ IITTRODUCTIOW .1 

PART II _ SUiniARY STATE -WT OF TRADE PPACTICE PROVI SIGHTS .-5 

I. TABULATION OF CODES BY TYPES OF TPADE PRACTICE RESTRIC- 

TIOKS 35 

Chart - Numlier of Ccd^is a,nd SiiDnl ^^n^^nt s 'b^'' Industry G-roiiDS 

Containing Sn^cifi'^d Trade Practice Restrictions 7 

II. Notes on It^ns A-oTjearing in Tabulation 26 

Production, Ca:oacity and Inventory Control 26 

Cost Accounting Systens 29 

MinirauTT! price Provisions 30 

Terns of Pajnnent 35 

Forms of Pai'/nient 41 

Freight and Transporta.tion Terms 41 

Shipment s 43 

Open Price System 44 

Sales in Other Zones Below Lo-^est Filed Price in 

Those Zones 49 

"Dumping" 49 

Price Guarantees and Other Offers of Price Protection-. »• 50 

Deferred Deliveries. 52 

Unilateral Agreements 52 

Rebates 53 

Allowance s 53 

Pajnnent or Diversion of Commissions or Fees to Buyers 

or Agents 57 

Rendering Financial Assistance to Buj;-ers 57 

Assumption of Liabilities Not "Reasonably" Seller's 60 

Conditional Sales. 60 

Shipments Without Order 62 

Product and Maintenance Guarantees 62 

Returns end Adjustments 64 

Rendering Additional or Special Services 66 

Supplying Additional or Special Goods 69 

Forms of Offers, Orders, Agreements, Etc 73 

Departures From Contract 74 

Standards 75 

Labeling Requirements 76 

Sales of Sub-Standard, Obsolete or Used Goods 77 

Piracy and Imitations 78 

Coercion, Trespass, a,nd Interference 79 

Purchase from Customers or Exchange of Own For Competi- 
tor' s Products 83 

Misrepresentation and Deception 83 

Shipping or Performing a,t Variance from Contract or 

Representation * 88 

9679 -iii- 



( 



I 



3Page 

Discrimination in Prices, Terns, Service and/or 

Privileges 90 

Custom'=r Classification . 90 

Sales to Del inquent Acconnts . 92 

Trade Differentials and Quantity Discounts 93 

Selling Directly in Competition with Retailer 

or Other Trade Factor 94 

Adherence to Seller' s Code "by Customer 94 

Dealings with agents, Brokers or Other Controlled 

Sales Representatives. 95 

Restrictions on Code Merahers as Purchasers 96 

Renting or Leasing Industry Products 97 

Contracting Out of Work 98 

Working on Materials Furnished hy Others 98 

Bidding and Awarding 99 

PART III _ AHALISIS OF TRADE PRACTICE PROVISIONS III A SELECTED OROUP 

OF CODES 105 

Chart - Distriljution and Service Trade 109 

Footnotes - Wholesaling or Distrihuting Trade 113 

Chart - Textiles and A-c-oarel Manufacturing Industries 133 

Footnotes - Cotton Textile Industry 140 

Chart - Graphic Arts Industries 149 

Footnotes, 155 

Chart - Construction Industries 161 

Footnotes 169 

Chart - Mi scellaneous Group 179 

Footnotes 

Iron and Steel & Wire Reinforcement Industries.. 192 

Structural Cla,y Products Industry 195 

Bituminous Coal Industry 197 

Luraher and Timher Products Industries 200 

Chemical Manufacturing Industry 204 

Paper and Pulp Industry. 206 

Ruhher Tire Manufacturing Industry 207 

Cigar Manufacturing Industry 209 

Electrical Manufacturing Industry 211 

Furniture Manufacturing Industry 213 

Trucking Industry 215 

Bankers 217 

Motion Picture Industry 213 

APPEKDIX I. - Trade Practice Restrictions Excluded From Tabulations. 221 

I. Specific Restrictions Omitted From S-ujnmary Tabulation of 

Part II 221 

iPPElTDIX II» - General provisions Affecting Trade Practice Restrictions 

Excluded From Tabulation of Both Parts II and III. 223 

9679 -iv- 



-1- 

T?J©E PEACTICE PEOVISIOHS IN CODES OE EAIR COMPETITION 

PART I 

INTSODITCTION 

The tc.D-L-lation and description of trade practice provisions pre- 
sented in p,?,rts II and III "belo\7 have teen londertaken in an effort to 
reduce to Sfjnaary statement the mimerous and diverse restrictions 
?iiich fonaed the "body of KRA law relating to fair trade practices. Be- 
cause the various trade practice restrictions did not apply ■uniformly 
to all of the codes, a necessary part of the sunmarj'- has heen a measure 
of the freq^uency with '.rhich each of them was incorporated in the codes, 

Fo attempt has "been made to trace the amendments or modifications 
of trade practice provisions during the life of the codes. The present 
anal/zsis hr.s rather heen confined to the provisions as last effective, 
that is e.s of Iiay 27, 1935. Provisions stayed (temporarily or indefin- 
itely suspended though not deleted, from the code) have however "been 
included in the totals, the numoer of provisions stayed in each ca,se 
"being indicated. 

The basic summary statement is set forth in Pa^rt II, Section I "be- 
low. It presents the princi'oaJ t^\"pes of trade practice restrictions 
which appeared in the codes, together with the nura'ber of codes in each 
of the " twent3^-two industry groups which incorporcted the specified 
restrictions. Thus, the trade practice provisions have "been s ummaTi ssd 
in two important respects. In the first place, only the principal 
types of restrictions have "been iiid- ividual ly specified. Secondly, in- 
stead of a listing of the individual codes which included the restric- 
tions, the ta'^culation 'cresents the total num"ber of codes which contained 
the specified restrictions, the tota.ls "being "broken down, however, "b;'- 
the tTrenty~t-.70 industry groups referred t o a"bove . The v alue of this 
summary is precisely tiiat of setting forth "by codes, the maintjrpes of 
tra^de practices which were restricted, together with an indication of 
the frequency with which and the manner in which these practices vrere 
o"bjects of control "by the va.rious groups of related codes. 

In 8,ddition to the ta"bialation v.hich appears in Part II - Section 
I, Part II - Section II ims "been included as a running series of foot- 
notes erplaining and e rroanding the materia,l contained in the tabulation. 
Specifically, these footnotes have "been designed to explain the nat'cre 
of the practice regula,ted and t"lie principle upon which provisions vere 
grouped together, to summarize the vs,ria.tions in t he word'ing of the 
provisions classified under each item, and to indicate the types of 
practices w'nich exe included in the various summary or "catch-all" 
items appearing in the t a"bula,tion. 

Part III has "been prepared to illustrate mora concretely than was 
possi"ale in Part II the complexity and variety of cod^l t rade 'o ractice 
provisions, "by summarizing in detail all of the restrictions of twenty- 
two codes - one representative code for each of the tt'enty-two indus- 
tr;- groi\ps. 



)673 



— 2— 

?lie first step in the S'-amma.riz-'.tion of trade "o:.T,ctice provisions 
was tlie c.evslopment of e. f raaev/orlc of classification. The classifica~ 
tion used in the present ajial^-'sis hcis ".vhere possihle heen hased uoon 
siLiilcrities in the objectives or f- gnctionq which the trade practice 
restrictions vrere designed to achieve; otherwise the hssis has been 
sir.iilr.rit" in th3 kind of practices restricted. The first is a func- 
tional ?-nd the second a descr:ptiv3 basis of clo,ssif ica.tion. 

The use of a descriptive as well as afunctional basis has re- 
sulted in the relatively large number of major groupings which were 
adapted for p-arposes of this svrauc.rj. They are as follows;* 



pp.ODUCTicr, Capacity AiTD iittej-^tohy 

COl'TP-OL 
COST ACCrJl'TIlTG SYSTL:.'S 

;;ii:iii7i: frige provisioits 

TSSilS 0? PAYiZ;iMT 

FOPJ.IS OP PAYivUHT 

P?i:iC-ET A"TD TS:ivTSP03TAriOII TEEIviS 

SHIPIviElITS 

0P31T PPJ GiD SYSTEMS 

SAiES I:T OTIiEP. ZOFES BELOiT LO\IEST 

PILED PHICE m THOSE ZOKES 
"DUITJC-." . 
PRICE G-UAPwAMTEES AlID OTEER OFPEIlS • 

OP PRICE PROTECTION 
DEPSPRED DSLIVE-IIES 
UlTILjlTSPjiL AG?J;E]2;NTS (buj^er not 

boriid) 
RC3ATES . . ' 

ALLOTTAilCES 

PAYiSlTT OR DIVERSION OF COi:;:iSSlONS 
OR PEES TO BUYERS OR THEIR AGENTS 

PlE:tperi:""g Piiiiu^ciAL assistaiice to 

EuTERS 
ASSTJiPTIOi" OP LIABILITIES rOT 

"PLASOR.YELY" SELLER'S 
COlDITIO:.riJ. .SALES 

SKI?; i]::ts without opder 

PROEUCT A.LD liAIiTTEilAITGE GIIARAiTTEES 
.PETURRS AJT) ADJUST! HURTS 

?i:in)ERn:G additioral or special 

SERVICES 
SUPPLYIRC- ADDITIOITAL OR SPECIAL 
GOODS 

POPJ.is OP opr:.?^, orders, ageee- 

•LEJTTS, ETG. 



DEPARTURES FROl ; COITRiC T 

STAIRDARDS 

SALES OP SL^STAIOARD, OPSOIETE 

OP USED goods 
PiPJ.CY AID IMITATIONS 
LAEELIRG REQUIPEMEKTS 
COERCIOR, TRESPASS AICD IITTER- 

FEREIICE 
PURCPiASE PROM CUSTOMER OR EX- 
CHAJi'TGE OP OM POR COITETITOR'S 

PRODUCTS 
MISREPRESERTATION AKD DECEPTION 
SHIPPIRG OR PERPORMIKG AT VAR- 
lAlTGE WITH CONTRACT OR EEPPJIl- 
SENTATION ■ 

DISCRIi.IIlTATION IN PRICES, TERIIS? 

SERVICES AIID/OR PRIVILEGES 
CUSTOI'SR CLASS IPIGATION 
SALES TO DELINQUENT AGCOURTS 
TRADE D IPSEREITTIALS AlE) QUAITTI- - 
TY DISCOUNTS 

SELLIRG Dlr^ECTLY IN C OIPPETITION 
VHTK RETAILER OR OTHER TRADE 
PACTOR 
ADHEEEIICE TO SELLER'S CODE 5Y 

CUSTO;PER 
DEALING '.TITE AGENTS, BROICRS, 
OR OTHER CONTROLLED SALES 
REPRESENTATIVES 
RESTRICTIONS ON CODE LSiviBERS AS 

PURCHASERS 
RENTING OR LEASING livTDUSTRY 

PRODUCTS 
CONTRACTING OUT OF WORK 
WOPJriNG ON TATERIALS PURJISIED 

BY OTHERS 
BIDDING Al'lD AWARDING 



* The difficiij-t;/ in clsissifying trade practice provisions on a func- 
tional basis ?,rises f rora the lack of precise information about the pur- 
pose for vfhich many of such provisions were incorporated in codes. 

9679 



-3- 
(Footiiote ccntimied) 

Such i:iforms,tion mxist av/ait a detailed a.nalysis of the operation of 
thses provisions. However, there hff^s been one notable attempt made 
t-j the Trade Practice Studies Section to group trade practice prr.— 
visions r..ccording to their similarity of function. It is set f oi 'tli 
hel0T7 to illustrate the type of c lassification which may with some 
certainty- "be -oossitle after the results of the investigation of c(.-'-l-e 
e:cperience a re availahle . 

I. Production and Capacity Control provisions 
II. liinLaum Price Provisions 
III. Open Price provisions 
IV. Provisions Primarily Designed to Restrict the Granting of 
Indirect Concessions to Influence a Sale 
V. Provisions Primarily Designed to preserve or ??odify Channels 
of Distrihution 
YI . Provisions Primarily Designed to Preserve or Modify Geograph- 
ical Relationships 
VII. Provisions Primaa'ily Designed to Restrict the Use of Competi- 
tor's Designs or Styles and the Imitation of Competitor's 
Identifications 
VIII. Provisions for Standardization, Simplification and Labeling 
IX. Provisions Primarily Designed to Limit the Use of Coercive 
rzLd Predacious Devices 
X. Provisions Primarily Designed to Limit Deception and Misrep- 
resentation 
XI. Provisions of a Special ITature Primarily Designed to Regulate 
Pidding and Awarding Practices 
XII. Other- Trade Practice Provisions 

In liost cases the major classes of t ra^de provisions have 
been suodivided into minor groiipings of rela,ted provisions. Frequently 
the minor groupings are obviously related to the major heading as in 
the case of "Production, Capacity and Inventory Control" under which 
appear: 

1. I.ia-chine and plant hour limitations 

2. Restrictions on productive capacity 

3. Limitations on Size of Inventory 

4. Allocation of Production 

In some causes, however, the relation is not at once obvious. This 
is especiall:" true where the basis of the classif icr.tion is a fionctional 
one and where, therefore, the inclusion of groups of provisions under 
a given heading is based ixoon an inter-pretati.on of the objectives of 
these provisions. One purpose of the running footnotes appearing in 
Pa,rt II, Section II is to explain s uch interpretations. 

A f ina.l step in t he clasiif ics-tion of trade practice provi- 
sions wa,s the development of a method for showing the manner in which 
the specified practices were restricted. Althoijgh there wa,s a wide 
variety of these r estrictlons , the great majority were classifiable as 

3579 



-4- 

foiiov.-s: 

Prohibited under an"' c irci-'mstances 

Prohibited except under c ircjiBS 'nances defined "by Code Auth- 
ority 

Prohibited only if secret 

prohibited only if d iscriminatory in effect 

Prohibited only if inisleac'. ing, deceptive, or mis representa- 
tive 

Prohibited only if free 

Prohibited only if unreasonable or excessive 

Prohibited unless adequate charge is made 

i.Iaximui.i limit prescribed 

IlinimUi:! limit prescribed ';' '' . 

Tine limit pre^-cribed 

ilu3t secure authori2a,tion of Code Authority 

VxLst report practice to Code Authority 

In the tabulation set forth in Part 11 of the report, onl;'' 
those restrictions of the specified trade practices which occurred 
with relatively gree.t frequ.ency vere individually indicated. Other- 
wise the-- T'ere gro'.voed under the item "Other Restrictions." Thus 
under the trade practice, "Sales on Consigriinent or " 'eiiorj ndum" these 
restrictions appear: 

Prohibited 1 51 codes 

prohibited except under c irciimstances defined by 

Code Authority 89 codes 

Prohibited except under circumstances defined by 

Code Authority .with administrative approval 57 codes 

Other restrictions 22 codes 

As explained by the footnote for this item, the "other re- 
strictions" included the follo'.ring: prohibited only if secret; pro- 
hibited if discriminator-y; maxinura prescribed f or the length of tine 
for TThich a consignment might be made; terms thereto must be set forth 
in written agreement; prohibited if 'orices for possible futvire sales 
were indeterninate ; and prohibited onl^^with res'psct to new customers. 

In Part III where twenty-two representative codes are treated 
in detail, all restrictions, however infreqiient their occurence, have 
been i'^dividually set forth. This was done by a method of reference 
symbols v:hich is explained in detaal below. 

Limitations of space have prevented the inclusion in t he ta,- 
bule,tion set forth in Part II of the numerous exceptions granted by 
code provision in connection with the various restrictions. These 
exceptions most commonly applied to the sale of certain kinds of pro- 
ducts, the sale to certain classes of customers or the sales by cer- 
tain t "pes of-merabers. Exceptions of manifest importance, however, 
have been mentioned in the footnotes which accompany the tabulation. 

All exceptions granted in the twenty-tvo codes summarized in 
Part III have been indicated by reference syrabols. 

9679 



-5~ 

PAET II 

SUI<Q,-:AHY STJSEfiEET OJ TRADE P5ACTICE PROVISIONS 

Tlie g'eneral siaminary of trade practice provisions in the codes of 
fair coLipetition is presented in the two sections wliich f ollow. Sec- 
tion I contains a tabulation of the numhei- of codes ''o'j types of trade 
practice restrictions. Section II, by a series of notes, explains and 
expazids the material in the tahulation. 

I. SieULATIOl: OF CODES EY TYPES OP TRADE P;jLCTICE RESTRICTIONS 

The tre.de practice provisions of 571 codes and 189 supplements, 
or a t ot£,l of 760 codes and supplements, are included in this te^bulation. 
The [^revisions of four codes. Investment Bankers, Auction and Loose 
Leaf Tooacco TJarehouse, Grain Exchange and Llemhers Thereof, and Live 
Poultr;- Industrj'- in the Ivietropolitaii Area of Y^e^:^ Yor]-, however, have 
"been e ::cluded entirelj'^. The provisions of these f oi-'jt codes for the 
most part are vjiique. Their inclusion in the tabulation would have 
necessit^.ted an expansion in the nuEiher of individus,l items entirely 
out of proportion to their relative significance. 

The Trade practice provisions of the Investment Bankers Code ma,y 
"be found in CODES OP FAIR COLIPETITION , Goverrjnent printing Office, 1935, 
Vol-oce III, Page 509. The provisions of the other three codes may be 
found in the ujibound copies of those codes issued by the Agricultural 
Adjustment Aoxiinistration. 

Omitted., also, from the tac'alaLtion are a number of relatively "un-^ 
importrJit tra.de practice provisions ^'cAcli appealed too infrequently 
to justify the considerable expp.nsion of the tabulation which w oijild 
have been necessary to incorporate them. They are set forth in Appen- 
dix I, together with the t otal number of codes and supplements in 
which the;" were included. 

The cat,pitalized and italicized stubs on the left side of the tab- 
ulation show the trade practices upon which some type of restriction 
was inposed. The s \ibheads indicate the manner in which the practices 
were rsstricted. Opposite each of these subheads are given the numbers 
of codes in which the restriction appeared - the first col-omn c ontain- 
ing the total for all codes and supplements a^nd the others the totals 
for the tr.'snty-two industry groups. The figures in oa^renthesis are 
the n'omber of such provisions which, as of I'ay 7, 1935, were stained. 

In arriving at the totals, provisions in supplemental ( *) codes 

* Suppler.enta,! codes were codes which incorpora.ted some of the pro- 
visions of a b8,sic code but which were s.p proved independent!;'' of 
the ba,sic code, whereas so-called divisional codes were integral 
par.'ts of abasic code but containing special provisions applying 
only to certain members or products of the industry". 

9579 ' 



-6- 

were distin.£,"aished from those in the "basic codes andcoimted sep^j^?,tel7. 
On the other hand, a given provision was counted 'b-at once virhether it 
appeared in one or each of a numher of divisions of a code. 

It v.'il?, 06 noted tlia.t a page reference to the appropriate notes 
in Section II is set forth opposite each trade practice heading appear- 
ing in the tahula.tion. 

The taO'a-l':'.tion follows. 



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II. NOTES or ITEM'S AFPEAHIHCt I:T TISUIATIO!^ 

The serier :)f notec wliicli folI:Mv rre designed to explain .and 
e3Cpr,nd the inaterinJ contained in the t:Vbul'\ti rn of Section I atove. 
A note is incorporated for each class of tr de practices listed in 
the tahulation and the notes are arr",n,'_,ed in the order in v/hich the 
practices p.re presented in the tabulation. No distinction is raade in 
the discussion betFeen codes and supplements. That is, the word 
"codes" is used irrespective of whether it refers to basic codes 
a.nd/ r sup'o 1 eme nt s . 

PEODUCTIOl'T, CAPACITY AITD IItvEIITORY CONTROL 

Included in this section are provisions desiftsned to curtail 
or control the output of the codified industrj'". The methods provided 
in codes to accomplish this objective fell into four main groups. 

M achine a nd Plant Hour Li mitation 

One type of control established ':as the prohibition upon 
the operation of productive equipment longer tKan .a specified length of 
time per day or week. This ty-^e ".f control appeared chiefly in the 
textile codes. The time limit was expres'-ed in various virays : hours 
per dp,y, hours per vreelc, shifts per day, shifts per v/eel", days per 
week, or by a combination of two or more of these. The hours of 
opero.tion permitted vo,ried widely — fror: 27 hours per v/eek in the Cast 
Iron Soil Pipe Code to 144 in the Newsprint and Waxed Paper Codes; 
however, there w.as heo.vy bi-modal concentration at 40 and 80 hours. 
The shift-limitations were confined to either ^ne or t\'o, with but 
two exceptions. Where the shift was used as the unit jf limitation, 
it v/as defined as to length, either in connection with the provision 
itself or in the labor section of the code. The days per week were 
either five or six, and have been noted in the tabulation only rrhen 
no other restrictions on operation periods were included in the code. 

The restrictions were chiefly ap^^lied to the o;oeration of 
either "machines" or "plants". Other objects of limitation in certain 
codes were "operations", "productive oioero,tions" and "productive 
equiioment". In some codes the restriction applied only to certain 
specified tyjoes ""f equipment. Provisions made in other irxstances 
for seo.sonal enlargement rf the operating period; this wp,s accomplished 
in some codes by lim.iting tli^'.overage vreekly operation over a period 
of time rather tl\an by specific limitation on each week's operation. 

Rest rict ions ojn Produc tiv e Capo.city. 

Another type of lorovision was directed toward limiting 
output by controlling the capacity of tae industry to produce. Generally, 
in these cases , no restricti.on was placed uoon the length of time 
during which the equipment could be operated, although in a fev/ 
textile codes tliis wp.s done. Goncretsly, these restrictions related 
to the erection of factories, the installation of ma.chin'ery, o^nd the 



9678 



^27- 

construction of other e-'uipment ■.-■liicji ^-'Oiild alter existing ca"Os,city 
to ■produce. 

Tv.'O codes, Iron and Steel, -nl Linseed Oil, contrined a. 
"blanket prohibition of increasin'; caj-'city. The Iron and Steel Code, 
in Article V, Section 2, read as follows: 

"....none of the laerfoers of the code shall initiate the 
constraction of any ae" blast furnace or open hearth or Bessemer 
steel ca\:iacity. '' 

Two other codes perinitted the Cade Aut'iority to put such a :)rohi'bi- 
tion into effect after ohtainin^ s,dj-iinistrative approval. 

A second t'^^e of restriction reouired authorization before 
new capacity could he constructed. This authorization was to be 
obtained either from the ITV-., frorj soiae other .;';ovemr.ent arency (in 
certain transportation codes), or from the Code Authority subject 
to a.dministrative review. Tlie authori'^ation took the foxTn of a 
certificate of convenience and necessity; generally some fTuiding 
sta-idard was set up, such as that the new erection or installation 
would tend to effectuate the ralicies of II. I.T.A. ''fhere the granting of 
the authorization was -Dlaced in the hcinds of the Cgde Authority, an 
appeal to IPA was pi-ovided when autliorisation v/as denied. 

A third main type of restriction was the re'aiirement that all 
additions to present c'^acity as well as "oresent capacity itself be 
registered with the Cgde Authority. This 'orovision was fre^-uently 
accompaaiied by a provision for r'Uthorization by the Gijde An.thority, 
but included in the totals for this item in the table are only those 
codes where registration was the sole restriction. It should be noted 
that this re uirenent in itself 'olaced no actiial restraint upon the 
increasing of capacity. 

There -ss considerable vr^riance as to what ectivity was 
pctually restricted. Tiie ma,tter i; y be trea^ted "•ondev (l) objects of 
restriction, and (3) exceptions per.iitted. Anong the activites pither 
prohibited or requiring avithorization or registration, the chief ones 
were "installation of rdditional machinery", "constraction of new 
capacity", "instelle.tion of additional ":)roductive enui'xient" , 
"Establishing additional production, storage, or tonnage", "construc- 
tion of_a new '?lant", " ^urdiase manufacture, or lease of productive 
machinery", "additions to or eiroaiision of present manufacturing olant 
or eouipment", "shifting of plants from one locality to sjiother", 
"oTening of closed plsnts", "oy^ening of new routes", etc. In. some 
codes the restriction read in snch a i"ay as to a'Toly to present 
members only, while in others to apply to a.ll present a:id ■jotential 
members of the industry. Fjnally, some of the codes restricted the 
installation only of a, limited and s'^ecified tj/pe of machinery. 

Still greater variance existed in activites exce'Dted from 
the basic restriction. Tlie most imoortant of these exceptions were 
as follows: "rerjlacement of similar nuraber of units", "re-olacements 
not increasing ca':)acity" , "v-hich improve efficiency", "which lov/er 



967 



'Q 



-28- 

costs", "modernization", "treaisl'ers of en-ai'jment £..xnonj corroetitors 
v.'hich do not increcse total industry capacity", "re"olacementG of 
existing ca^oacity" , "resuiriing operation of "'lant'3 ovmed or operated 
"before a specified date", "replacing exir,ting ca'pacity '.^ith ..lodern 
enurpr.ient which does not increase mernlDer's capacity", etc. Itost of 
these exce'otions '..-pre so v/orded as to regulate effectively any 
increase in actual ca'^acity. The two extremes were those codes making no 
exceptions on the one hand, and those which exempted activity designed 
for modernization, im jroveraent of efficiency or lowerin'; of costs, on 
the other. 

Limitations on Size of Inventory 

T'le four codes i.vhich contained a .landatory -orovision for 
control 01 inventory v;ere Petroleum, the Sales Yarn Division of VJool 
Textile, Carbon Black I.Ianufacturin^, and Carpet ajid /^g. Carhon }21ack 
manufacturers v/sre forbidden to increase the quantity of carbon black 
in storage during any six calendar months' ;}priod; or, if an increase 
■■ere ■unavoidable, they were re-iuired to reduce their storage "oy a 
similar aiuount during the next six calendar months. T>,e Ca^rpet and Rug 
Code 'orovided that the "finished ^:bods inventory of snuare yards of 

merchandise. ... shall not exceed onp-tliird of sales in snuare 

yards for the ■preceding tv.-'elve no'nths. " A ■leriod of 120 days v/as 
allowed in v/hich to resto'i^e the balance in the case of an inventory 
exceeding the ;o"rBscribed size. Hie Wool Sales Yarn plan was quite 
similar to this. 

The Cem.ent Code contaaned the only enabling provision re- 
lating to invento-ry control. 

« 

Allocation of Production 

The three codes v;hich co^ntained a mandatory plaji for allo- 
cating ouotas were Liajnber and. Timber Products, "e'ti'ole'um and Co"0"oer. 
T-he first two ■provid.ed -production ruotas an!l the last one sales nuotas. 

In the Liuaber and Timber Code, the Code Authority was era- 
powered to establish production ouotas. Pirst, a totrl indri.stry nuota 
v/as to be set up, ba.sed on' estiraa.tes of total consu'ntion. Individual 
quotas '-er? then to be allotted, with various bases to be used in the 
allotment. The bases s^oecified included -jast ■production, shipments, 
number of em-oloyees, taxes -paid, and standing timber; the quota 
assigned was to be a f'unction of each of these variables. Provision 
was made for revision of ra\ota,s rt least every three months. In the 
nuota assigned Avas exceeded, it v.-as to be correspondingly reduced 
in the next period. The Cqde Authority- could alter the method of 
determining rraotas, subject to ITIiA review. Various su-p" elementary 
rules were added in the divisional codes. 

T-he Petrole'-oia Code ■provided that a total industry ruota be 
determined by ?, Federal agency designated by the President on the 
basis of estimated consumption. This r.uota in tti.rn was to be enuitably 
allocated rinong the States by the federal Agency, "ithin each State 
individual pool, lease, or well ruotas \,ere to be allocated by the 

9679 



-39r- 

Stpte Regulatory Body. These 'uotas aTjlied to the production of 
crude oil. 

Tlie Cop-oer Code "plaxed no limitations upon the production of 
primary copper producers hut did regulate sales of such cojjper. Kj.e 
quotas in this case v/ere e?rpressly set forth in the code. They were 
suhject to alteration dov.'n-"ards only by unanimous vote of the Code 
Authority and l>y consent of the parties v/hose qaotas '.vere decreased; 
and to alteration upwards "by s. two-thirds vote of the Code Aiithority 
and consent of the ICIA. These sales ouotas were set forth for ten 
companies, were expressed in terras of. tons per aamum, ajid ranged from 
366, dOO tons for the Kennecott Copper Corporation down to 17,500 tons 
for the Copper Range Company. ' Ix^ey were determined on the basis of rel- 
ative annual ■orodf-ction capacities. ~rovision was also made for 
allocation of 9,500 tons a month as individual sales nuotas among the. 
producers of secondary coroer "by an "eciuitable" method. Unused sales 
ouotas in one period v/ere cuTiulative and might be used in the following 
period, subject to some exceptions. Sales by producers to their 
own subsidiary fabricating -Dlents were not to be included in computing 
sales made against T.otas. T^e IGA was empowered to alter the nuotas 
at any time. Various sup'oleraentary r^ales were provided for secondary 
producers, custom smelters, and refiners. 

Ihe four enabling provisions noted on the tabixlation v/ere in 
the codes for Iron aiia Steel, Cement, C-la^ss Container, and Atlajitic 
Ivlai.ckerel. 

COST ACCOUlITIilG SYSTEM 

One of the most common of code provisions was that providing 
for the establish^iisnt of cost accon-iitrag systems. It wa.s contemplated 
that uniformity in cost acccjjiting procedure would thus be obta.ined. 
Two main types. ma.y first oi .--.11 be distin^i;aished; (l) those whose use 
as a basis for minimum prices was not mrndatory, and (2) those to be 
used in deterT.ii-.iing costs in connection with prohibitions of selling 
below cost. Tlie first type of provision inas not included on this 
tabulation for the reason that they vifere generally only sugj^estive 
and purely of a recommendatory nature. A'i^out hrlf of the codes in 
this group followed the identical wording of Office Memorandum IJo. 238, 
Exhibit "C". Ti-^is provided that the Code Authority should, draw up a 
suggested uniform plan to be approved by 1J?A; after such an approval, 
the plan was to.be made available to members but wa.s not to be used as 
a basis for minii.TUJii -prices. 

The provisions actually tabulated here applied to systems 
which were related to -orohibitions of sales beloi.'^ cost, liieir "ourpose 
W8,s to insure that costs of competitors would be compa,rable through 
the use of common accounting methods, and a,lso to facilitate cost 
investigations. Tlie first sub-grou-i included those which -orovided that 
the Code Authority might either establish a system or approve systems 
submitted to it by members, without having to submit the t)roposed 
plans to IJPA.. Tlie second su.b-group includes those which instructed 
the Code Au-thority to establish a uniform system but re-'Uired sub- 
mission of the pro'iosed plan to IIRA for approval before making effective. 



J79 



-30- 

The third groiip includes a lev/ codes 'Tiiich contained detailed cost 
accoiantin^ methods themselves, together v.-ith those for nhich systems- 
v:ere actually aroroved "by iRA. ■'feriations v/ere fr.enuently permitted 
so long as the -jriiiciples a^d degree of detail" ejid completeness \"ere 
observed. 

!..IlIIl.rUli F?JC3 P20VISI01JS 

Included in this main section are the four main types of orovi- 
sions which regulated in sor.ie fashion the actus.l nominal price at vrhich 
industry products might be sold. Tliese vrere in contrast to the great 
variety of regulations which dealt with majx; aspects of the t^rms of 
sale which are discussed belo?;. Osly a very fev; of the codes required 
price uniformity between industry members, Eje manner in wliich most of 
them so-oght to establish a floor -Jas by prohib-'ting sales below 
individual cost. In a number of codes the -:)rohibition of sr.les below 
minimum prices was extended to cover offers to sell belo- minimum -prices 
as well. 

Selling g^lc^ Cost 

N-u.:aerically this grout) was "oy far the most inr^ortant of the 
minimum price provisions. Some provision relating to sales below 
cost appeared in some '",?0 codes. The first two subheads in the table 
under this subject apply chiefly to non-distribution codes while the 
third one applies to distrib'Lition codes only. 

Within the group of prohibitions of sales below cost, those 
relating to sales below individual cost were "ay far the most recuent. 
These provisions typically rsad that "it is an "onfair practice to 
sell below cost" or that "sales below cost are ;:rohibited. " 

Several Vt:riations nay be distiiig-aished, depending uoon the 
methods prescribed for finding individual cost. (l) Most irecuently ■ 
appearing were those codes which provided for the computing of costs 
through the use of a uiiiform cost o.cco-anting system to be established 
by the Code Authority, after administrative approvp.l. Ts\e effectua- 
tion of the prohibition was thus made dependent upon the submission 
and approval of the accounting system. Since only <!1 cost accounting . 
systems were a,pproved, it is clear that most of these provisions, 
the largest, grou;n, n^ver officially became effective. Some codes 
provided -orelininar;' r.iles effective until a s^'^stem WrS approved. 
(2) A few codes made the effect-ua.tion of the provision dependent 
upon the establishment of a uniform cost accounting system by the 
Code Authority without recxiiring administrative approval of that 
system, (-z) Several codes provided for the use of a specified and 
already existing acco^onting system in finding cost. (4) A few codes 
proposed the use of acco^onting methods "recognized in the industry" 
when approved by the Code Authoi-ity. (5) Other codes went no further 
than to specify a few of the elements to be included in commuting 
costs. (5) la the distribution codes which prohibited sales below 
the individual member's own cost, cost was found by taJking either the 
invoice price of the merchandise or th'= invoice price plus tra^isporta- 
tion costs to the member. (7) And finally a sraall number of codes 

9679 



contained a "blanlcet -orohiliition of s.-?>,les "below cost vjithout defining 
cost or -irescribiniT, methods of determining it. 

Ssventy-tliree of the codes "orohioiting sales "below individual 
cost also contained provisions for est abolishing miniraura prices in 
emergency. 

Tlie other main tyie of provision, foujid chiefly in non-dis- 
tri"bution codes, prohi"bited sales "below a s;iecific cost for the 
entire ind"astry. In this case the Cede Authority, with or without 
administrative approval, was required to find costs for the entire 
industry. A single cost figure wa,s eventually to "be arrived at 
and this figure then "becsjne the floor for all the mem"bers of the 
industry, irrespective of their ov.oi individual costs (a fe-=' of the 
codes included here a.iso contained prohi'bitions of sales "belor in- 
dividual cost). IChis restriction, it should "be understood, was 
operative regardless of whether or not an " emergency" ^^'as declared. 

There wqre four t;-oes of industry cost specified in the 
codes, and they app'eared with a'bout the sajae frequency.' One gro^ip 
of codes specified "lowest reasonable cost" as the "basis for minimtim 
prices; another simply "reasonable cost"; a third, "lowest represent- 
ative cost"; and the fourth, "average cost." [Siese represented the 
type of cost to "be foujid "by the Code Authority after its collection 
of cost data. 

The third main type of prohibition of -sales below cost, 
peculiar to the distribiition codes, was a combination of individual 
and industry cost. The minima:im 2')rice here T/as the suiii of the in- 
dividual member's invoice cost of merchandise and a uniform mark-up 
or overhead for the industry. This uniform mark-u;o in most codes 
was to cov^r "store labor" but in some cases was to cover "delivery 
costs", "collection costs", or "d.istribution cogts." 

Minirjuia Prices 

The types of minimijin price provisions included here fall 
into two main groups. The essential feature of the provisions 
classified under the first sub-head was that, where an emergency was 
found to exist, a temporary floor was established until the emergency 
was deemed to have "oa.ssed. Tlie -orovisions containing such emei'gency 
provisions are of two types; these were ~oa,tterned after two lOA 
office memoranda, that of February 3, 1E34, and Office i.emorEJid-ujn 
IIo. 228. The earlier codes -Tere patterned after the former and. 
the later codes after the latter. The total nu'iber of codes con- 
taining each tj-ie were rovi-ghlp eoual. The most im;:)ortant difference 
between the two tj^pes was that the earlier ti'oe -tirovided that the 
Cgde Authority, subject to II~A a;T'iroval, should determine '-hen an 
emergency existed, and establish minim-um prices based on the lowest 
reasonable cost in the industry; v^iiile the later one, Ho. 22G, provided 
that the iEL-'L declare the -mefgency ajid establish the minimum trices. 
Tv^e complete text of each follows: 



;67S 



-32- 

rrice Provision r.s in Office i..eniorcaidiu-n of Te^ru- 
ary , 3 , 15?4 . 

"Vihen the Co<ie Authority deter.:iine3 the.t en emergency 
exists in this industry and that the cause thereof is destructive 
■^rice- cut ting such as to render ineffective or seriously endanger 
the maintenance of the ;irovisionf;; of this Code, the Code Authority 
ma^' cause to De doterrnii.ed the lowest x-easonahle cost of the 
prodticts of this, industry, such determination to be subject to 
such notice and heo.ring as the Adr;:inistrator nay reauire. The 
Administrator may approve, disapprove, or modify the determination, 
thereof ter, during the period of the emergency, it shall. he an 
unfair trade practice for any menher of the industry to sell or 
offer to sell any products of the industry for which the lowest ' 
rea-sonahle cost has "been determined at such -orices or u^on such 
terras or conditions of sale that the buyer will pay less therefor 
than the lov.'cst reasonable cost of such jroducts." 

Price Provision as in Office liemorandum No. 228. 
(Exiiibit 3, Section 2) 

"(a) '\fnen no declared eniergency exists as to any given -jroduct, 
there is to be no fixed minimum basis for prices. It is in- 
tended that sound cost estimating methods should be used and 
that consideration should be given to costs in the determina- 
tion of pricing nolicies. 

"(b) 'it\en an emar/^ency er:ists as to any f.;'iven -iroduct , sales 
below the stated minirrrom price of such product, in violation 
of Section 2 hereof, is forbidden. - , ■ 

"(a.) If the Administra.tor after investigation shall at any 
time find both (l) that, an emergency has arisen v/ithin the 
industry adversely affecting small enterprises or wages or 
labor conditions, or tending toward monopoly or other acute 
conditions which tend to defeat the purposes of the Act; 
and (2) that the determination of the sta.ted minimiun price 
for a specified product ?;ithin the industry for a limited 
period is necessary to mitigate the conditions constituting 
such emergency and to effectu.ate the pur;)0ses of the Act, 
the Cede Authority ..lay cause an impartial a^v:ency to investi- 
gate costs and to recommend to the Adj'ainistrator a determina- 
tion of the stated minimum price of the product affected by 
the emergency and thereupon the Administrator may proceed to 
deterraine such stated m.inimum price. 

"(b) 'Ihen the Acljninistrator shall have determined such 
stated minimum price for a specified "oroduct for a stated 
period, which ^rice shall be reasona,bly calculated to miti- 
gate the conditions of such emergency and to effectuate the 
pur-:)0ses of the ITational Industrial .■\ecov'=-ry Act, he shall 
;oublish such price. T^ierea.f ter, .during such stated "Deriod, 
no member of the industry shall sell such specified products 
at a net realized nrice belov; sai-l stated, j'.inimura price and 

9679 



anj" sucli sale shall "be deemed destructive price cutting. From 
tine to tine, tlie Code Axithorit;;- maj' recommend, review; or re- 
consi6,er or the Administrator maj^ ca^use ails'- determinations here- 
under to "be reviewed or reconsidered and appropriate action tal:en. " 

Seventy-five of the codes containing such emergenc37" provisions 
also contained prohihitions of sales helov; individual cost. 

The codes classified tinder the second sut-head provided at 
some tine or other during their existence, for the establishment 
of nininun prices "b;^ the Code Authoritj'' or a comparahle agencj'", 
irrespective of emergency and in most cases without reference to cost. 
The follouing codes contained such a provision: 

Petroletun 

Bitui:iinoixs Coal 

Domestic Freight Forwarding 

Inland T7ater Carrier Trade 

Graphic Arts 

Wood Cased Lead Pencil 

TiFholesale Coal 

Si:: of these codes privided for some tjnpe of HEA. review of 
the minimum prices established. The 'iTholesale Coal Code provided for 
minimTin prices as established -onder an approved coal p)roducers' code. 

Destructive Price Cutting 

The third group of ■orovisions directed toward the estab- 
lishment of minimum price were tliose which prohibited destructive 
price CLitting, Three t'Tjes are incliided under this one heading. 
The first of those was a blan]ret injunction against or prohibition 
of destructive price cutti:ng without defining or qualifying the terms 
used. The tj'pical provision of this sort stated simpl3^ that "Destructive 
price cutting is prohibited" or "is an unfair practice. " 

The second group, confined to a total of 13 codes, contained 
a simila,r prohibition but added some further explanation or qualification. 

The third and largest group was more or less closely patterned 
after Office Hemorandtim Ho. 228, Exhibit "B", Section 1, the te:ct of which 
is given below. The additional feature in this tjrpe of provision was 
that, besides prohibiting wilfiilly destructive price cutting, a pro- 
cedure was established for hearing and appeal to MRA upon complaint 
of violation. 

Te-rt of Office Uenorand-jjii ITo. 228 
(Exhibit 3, Section l) 

"Section 1. The standards of fair competition for 



9679 



-3'1- 

the industry with reference to .'ricin^v -oractices are 
declared to be as follows: 

(a) 7ilfull:,- desti-U-ctive Trice catting is -n iinfpir 
method of co::netition end is foroidden. Any raember 
of the indx^st^v cr of rx.y other industry or the custo- 
mers of cither ma^' at any time ccrnplain to ^he Code Au- 
thority that aiiy filed, -price constitutes uniear com- 
petition as destractive .price cutting; iape.'iling small 
entenrise or .tend.in/5. toward nono-poly or the impairment 
of code '-.'ages and v.-orkinj;. .conditions. The Code Authority 
shall v/ithin 5 days afford an opportunity tc the member 
filing the rrice to ansv.-er such complaint ax^d shall 
within 14 days malce a ralin^.- or adjustment thereon. 
If such inilir." is not cor.curred in by either party 
to the conrolaint, all .papers shall be referred to 
the ?.esea.rch and Planning Divipion of ZIRA vvhich shall 
render a report and recominendation thereon to the 
Adxiinistrator. " 

These provisions a^^ainst c.estru.ctive price cutting were 
rarely found unaccompsnied 'hy some other tyDe of minimum price 
provision. Only seven of the codes included in the total "londer 
this he$iding contained no other miniraujn price provision. 



It shoi-.ld be noted that a considerable majority of the 
provisions falling into the three grovxps of minimum price pro- 
visions above contained a V3,riety of exceptions — penaission 
under certain circurastances' to sell belOT; the minirum price 
esta.blishedi Tlje first and lar^'jest ca.tegory of exceptions 
were those, anplying' particularly to the selliu^:-belov;-cost 
proliibitions , v^iiich -permitted, coiirpetitors to meet th^ competi- 
tion of other members of the industry. The major variations 
of this exce'otion related to the types of co.netition -diich might 
be met. Ugst fre^^uently, members were "jemitted to meet the Trices 
of competitors who, themselves', v,'ere not sellii:^ below cost. L 
second variation was permission to meet- the prices of lower-cost 
producers. iTinally, a number of codes permitted members to meet any 
prices established by coi.ipet iters. 

A second class of exceptions related to sales of various 
types of siJibstiJidar.d goods, such as' secoiids, obsolete, or used goods; 
to distressed goods, and to goods sold during s"oecial sales. Tljese 
varied from an outright exemption from the m.inim-jm jrice provision to 
stipulation of the percentage reduction that might' be made. 

IT-j-merically mach less important ^-ere a number of miscellaneous 
types of S'les: excepted, the chief of which were: introduction of new 
product, s--.ips to other industry members, meeting of com-oetition of 
e'^uiv.-^lent but non-industry -products, fulfilling contracts made prior 
to code, and sales to affiliates. 



9679 



■ -.35- 

Ibout a fourth of the ■:)rovision3 r° uired ppproval of, and 
alraost half req^uired notice to, the Code Aut'iority before the 
exce'^tiou co\xld oe trken advanta;.:e of. These conditions ^^ere 
most freouent in connection with excerptions relatinin- to sales of 
substandard goods. . 

Price Diff erenti als "^et ?;e en Cl asses of Prod ucts 

The "orovisions classified under this item prescribed the 
differentials to be maintained between products of different size, 
auE.lity, or grade. The "base" price on certain specified 
basic products was to be established hy the individual members of the 
industry withotit restriction. An absolute dollar amo"ant or a certain 
percentage amoimt then had to be added to or deducted from this base 
price for other -oroducts varyin^; as to size, rfuality, or grade; these 
additions to or dedxictions from the base prices were reqaired to be 
xijiiform for the industry and were either to be determined 1)^ the Code 
Authority or were set forth in the Code itself. 

ilie five Codes which ei'.r^owered the Code Authority to fire 
these differentials were Iron and St,eel, Toy pnd Plaything;:, the Steel 
Locker and Steel Shelving Division of Business parniture, Valve and 
Jittings ilanufacturing, and ?:efractories. Three of these were 
pa.tterned after the Iron and Steel Code, the te::t of which follows: 

" ,..,... an,'/ e::t ras added to , and any 

deductions made from, the bas? orice for any product 
sold by any member of the Code in determining it's 
■quoted or billed price for such product shall be uniform 
for all members of the Code. Tlie rates of such extras 
and deductions shall be those a.-Toroved fron time to 
time by the Board of Directors as being in accordance 
with the trade practice customary in the industry ' 
at the effective date of the Code and as meeting 
the requirements of the Code." 

The two codes in which the differentials were s'^ecified in 
the code were the Lead Pigments Division of Lead, and Blectrotj-ipang 
and Stereot^nping, in -..hich the differentials of an industry association 
were incorporated by reference. 

A few codes required that the "differentials reflect 
differences in cost". 

TE2i:S OP PAIriEITT 

All of the items included in this section relate to re- 
stiructions placed upon the credit terms granted by industry members. 

Cash D-i s counts 

The -orovisions included here regulated the discounts which 
might be' allowed for rmmediate pajTnent or -oecfc^f-iit within a s'oecified 
period. The .riost comx-ion type of restriction was that '"hich imposed, 

9579 



-36- 

in some way, a limit Tjon the ai.io'ant of discount that could he given. 
These restrictions of necessity had b-o dimensions - the •percentage 
rate of disco^jjit a:id the length of the "period after the sale during 
which it might he granted. 7?3' far the greater nui.iber -orovided for a 
two per cent discotmt ra.te; "but some "ierr.iitted as hit;h as eight -Derc'=nt 
v/hile on the other hand others limited the rate to one-half percent. 
iTi'th respect to the time eleraent, the mode was ten Av.ys. Hoi.vever, 
cuite a fev codes required irmnediate pa^onent if discount '^ere to be 
allowed while others allowed several months. A freoiient version was 
that whidi extended the discouiit ;oeriod imtil the 10th day of the 
month following that in which the ^pods were hilled, i.ijst of the 
provisions definitely worded the restriction to read, as a ma.xira'am or 
upper limit. About ten percent, however, read as though the rate set 
forth were the exact rate which must be follov.-ed. 

The second sub-head inclv.des those codes \';liich ^5x"ohibited dis- 
counts of any jcind for immediate or early isj'^cnent . The "other re- 
strictions" on cash discounts includes codes not prescribing definite 
limits but prohibiting them if excessive or if discriminatory. 

Antidi-oation of Bill s 

Tlie provisions classified here regu.lated the discoiuit that 
might be allowed for early payr.ient in case bills were paid after 
the e;q3ira,tion of the cash discount period but before the ex^oiration 
of the free credit period. The first t'j-oe of restriction limited the 
size of the rate of discount that might be granted. About one-third 
of these -prescribed, the exact rate to be granted while the other two- 
thirds established only an woper liiait. M^st of them set the ra-te at 
one-half percent a month or six -oercent per ajinum, or else the "legal 
rate." 

A few codes prohibited outright the granting of such an 
anticipatory discount. 



The period of free cred.it is the length of time after the 
date of shipment during wnich no interest accrues on the unpa,id 
balance. The farailiar expression "net sO mny days" is the usiial 
raynner in '-hich the length of the period is e:roressed. Any pajonent ..-lade 
before the expiration of this ;7eriod will be accepted without re.-uiring 
interest; but thereafter interest on the bill will be added. 

The .'lodal period in the codes placing a limit on this period, 
was 30 days. Second in frequency was 60 days, and beyond that there 
was no notev/orthy u^iiformity. 

Inte rest Hate Beyond Free Cr edit Period 

The charge that was to be ..'.ade for furtiier extension of 
credit on "omaid bills after the expiration of the "net" or free credit 
•oeriod was also subjected to reg"ulation in some codes. Sp far as 
regulation of the s-"jecific r.-'te v--s concerned, i^- took the form in 

9679 



ov8r two thirds of the codes cited of prescribing the exact rate to 
he chrirgod; sli^^htly less than one-third estahlished a ininiirrarn rate. 
In hoth ca.ses the rate applied w-as almost loniversally six per cent 
per annrun or the "legal i-ate". 

The suh-head "other restrictions" includes four different types 
of provisions scattered through a few codes. Some codes sinply stated 
that some interest must he cliarged. One code required that the rate 
cover the cost of financing to the seller, another prohibited an un- 
reasonable or excessive charge, and one code established the maximum 
rate tl-oat might be clia,rged. 

Installment Sales 

The provisions classified here regrJated sales in which settlement 
was made by a. series of periodic pajT:.ients. They ias.y be distinguished 
from those classified under "Deferred Payments (other than installment 
sales)" by the fact that the latter related to sales in which there 
was neither a series of payments nor were they necessarily periodic ; 
rather the entire payment \7a.s dels.yed for an extended length of time 
or at least no kind of a definite scheme of payment \ms prescribed. 

As indicated "bj the first sub-head, some of the codes established 
detailed rules covering installment sales. These were most common in 
the industries supplying heav^," equipm.ent. The complexity of the rules 
waa too great to resize a. brealcdo^jTn feasible on the chart. The ru-les re- 
lated, for exa-n^jle, to amouiit and time of doTOi payment; frequency, time 
and size of installments; carrying ch^arges to be added; documents to be 
drawn up; procedure upon non-payment of any installments; and sujidry 
other matters. To illustrate the nature of these provisions, a tj'pical 
one, taken from the Construction fechinery Distributing Code is repro- 
duced here. 

"Failiiig to require on installment sales at least twenty- 
five (25) per cent cash payment before shipment cr on delivery 
of the goods sold and the payment of the balance of the pur- 
chase price in monthly installments, the first installment 
to be payable in not more than sixty (60) days from date of 
shipment, the last installment to be payable in not more than 
twelve (12) months from date of shipment. All installments 
sh-all be evidenced "oj notes bearing date of shipment and bear- 
ing interest at the rate of not less than six (6) per cent 
per annum from date of shipment ujitil paid, IIo installment 
note shall be extended or renewed in whole or in part ex- 
cept for actual ina.bility of the pvircliaser to make payments. 
ITo understanding for renewal or extension of any install- 
ment note shall be ms.de "orior to the sale of the goods to 
the purcliaser." 

The other codes containing rules with equivs,lent detail were: 
Oil Burner, C-asoline ruiag La.nufacturing, Hock Crasher Manufacturing, 
Power and C-ange lawn Llower, Shovel, Dragline and Crane, Replacement 
Axel Shaft, China, e.nd Porcelain ianufactuiring, Commercial Hefrigera- 
tor. Beauty and Barber Equipment and Supplies; YJholes-ale Jewelry, Pipe 
Organ, Printing Equipment, Concrete I.ixer, Counter-type Ice Cream 

9579 



-33- 

Freezer, Bottled Soft Drini:, Ti'ailer Iruiufacturiiij-', Dental Goods and 
Eauipment, Surgical Distributors, anu. Borlii'.j ojid Billirrd Eouipnent. 

Tile su-b-head "Qtlier Restrictions" i:iclurles codes \iith. 
provisions as follows: a- prohilDition of inst- llr.ient s:les", 
re^uiienient that linancinj costs "be covered in the ")rice, re'^xiirement 
that the sale be set forth in a written contract, a fixing of minimmn 
installmencs; r?jid one provision that, if th^: purchaser has the 
privilege of retf.rning the goods, it be rega-'ded as a rental only. 

Deferred Pfiymqnt (other than InstallEeat Sales) 

This item includes provisions relating to sales in rhich 
pajTuant is rue onj.y after a considerable "period of tiae. It does 
not include provisions "hich "orescribed a series of periodic pajinents, 
which are classified under " Listallnent Sales". 

Tile corr^lexity of mnny of the provisions cialces a brealcdov.-n 
of the various r.'.les in the t.-bulaticn irnpracticEble, ajid hence such 
provisions a,re included under "Det-dled ter-.is aaid conditions specified". 
The two chief and nost frequently iiientioned rules ■•ere tiiose regulating 
size of down paiiaent and tlie uaxinruia credit period a.llo-.-;able. Tlie 
text of the provision in the code for Textile liachinery iianuf acturing 
is cuoted as a tj-pical exaiaple: 

"The initial casli pajT.ient siia,ll not be less than 

25'^j of said price ajici siiall be paid not less tiian 30' days 

from date of siiipi.ient; the balance of the purchase ';rice shall be 

payable over a period not in excess of tvo y=ars following 

tile average date of shipment "ujider sucii contract. Tiie rate of : 

interest pa^^able on sucli deferred payments siiall not be less tiian 

o^.'i per annum. Ilo machinery siiall be sold on terms other than 

cash unless the title to or lien on sucli machinery is retained 

by the seller until the purciiase price tlierefor shall iiave been 

•oaid in full. " 

Another type vhich appeared in some codes simply li.iited 
the period of deferred pajonent. ?or exa-uple, the American iiatcii Code 
stated tliat, 

"IJo member of tlie industry shall extend terras of -oayment beyond 
thirty (30) days from date of siiipmpnt." 

This says nothing of a f ree credit period and thus ijaist. be- classified 
under deferred ^oaj'/ment. 

The sub-head "Otiier ?-e strict ions" includes a few unique "iro- 
visions rhich did not contain lull detailed rij.les. The Code for 
Cement Gun Contractors prohibited sales in vhich -oayment became .- 
due only when mon^■'y was received by the seller from other soiirces. 
The Code for Gasoline Pump Lanufacturing oroiiibited sales in which 
payment was governed by sales of the gar.oline dispensed from tiie 
TDum-os. 



9679 



-39- 

Delayed Billing 

Delayed "billing is the "oractice of deferring the invoicing of 
a customer imtil some time after the shi-oment has been made. -JBie 
effect thereof is to e;^tend additional credit to the customer "beyond 
that contern-ilated in the ordinary credit ter:as. In some cases this 
practice ma;' represent merely the customary method of granting the 
customary free credit period. In others, particularly vhere a code 
placed definite limits upon credit terms, it re;ore3ented a pos3i"ble 
loo"ohole "by means of -rhich, in the p'usence of regala,tion, the code 
might have "been evaded. 

Provisions classified under the first suo-head on the taJo- 
ulation out-lawed this practice. Som.e used the very ^^ords, "delayed 
"billing", in naming it as an unfair practice. .Another common tyve of 
provision included here \Tere those which "orohibited "datings." Ihis 
term is somewhat e^oiguous hut generally relr.tes to some type of 
deferred invoicing" or jost-dating of invoices. Also, t-.70 codes pro- 
hi"bited "seasonal dating", a specialized tyoe of deferred invoicing 
\7hich is utilized diaring certain months of the year only, depending 
upon the seasonaJ. peculiarities of the industry, rinaily, some of 
the codes prohibited failure to invoice at time of shipment in diverse 
terminology. 

The second sub-head includes codes which prescribed definite 
ru.les reg'alating the length of time for which s^^ch invoicing might be 
delayed or post-dated and the times of the month or yea,r during v/hich 
such concessions might be gr-nted. A ty-Dica,l exaiiril e of detailed ro.les 
relative to dating is -uoted from the code for Undergarment and Negligee, 

"All merchandise shipped from the first (1st) of the month to 
the twenty-fovLrth ( :;4th) of the month inclvisive shall be due 
and -oayable on the tenth (lOth) of the follo',7ing month. Bills 
for merchandise shi'o .-ed on or after the t^7enty-fifth (25th) of 
the month may be dated as of the first (1st) of the following 
month. There shall be no additional datin:^." 

Codes limiting seasonal datings specified the months of the 
year during ijvhich and th^ length of time for -.hich dating might be 
allowed. For e::ample, the Plo'asehold Ice Sefrige'ra.tor Code read as 
f o11ot7s: 

"In sJ-1 s'hipments betY;een December I, and Ajril I, invoices may 
be dated April 1 and such invoices may be subject to cash 



discount if -^air by A'oril 10 



The Code for Insecticide emd Disinfectajit Lanufrcturing -oro- 
vided tha,t "Jrme 1st dating iriay be a,llo-?ed on all shipments from 
January 1st to J^jiie Ist." 

The third sub-hea,d, dealing rith retained percenta^^'es, 
includes 'orovisions ~hich re.5"'.ila.ted a praictice com..ionly fouiid in the 
Construction Industry. In contracts bet'^reen coiitra^ctor and customer 
it V73.S fre->uently provided that a certain portion of the tota,l 



367C 



-40- 

"payment v:'Ould not De 1:1116(1 for ?. certp.in 5e;'iod pxter completion 
01 the work, until the customer \7as satisfied that the v?ork per- 
fonned v/as in no -rsy defective. This so-called "retained percentage" 
thus served as sort of a oond. ■!>-.? codes classified h^re plr.ced 
limits on the percentage that oighl he rithheld gjid the length of 
tine durinj "^hich it might te ^rithheld. Pqr ez'^ainle, the Code 
for P.ollinj Steel Door reads r-s follows: 

"ila^cim^-'Lin temis for jroducts sold -erected shall re-^iiire 85 j 
of proportionate vrlue of 'Tork done to he due monthly; final 
pa;\Tnent to he due and payahle 50 df^s after completion of 
contract . " ■ ■ 

The 35-j minimum ejnd the 30 day iina.1 limit \7ere practically uniform 
for all 'orovisionc 



L^ • 



Tlae fourth s-.ih-head includes a- group of miscellaneous 
restrictions on deferred invoicing. Anonf; tiiese the chief ^ere 
a prohibition of dating? only if discriminator;/-, and a few sim'ole 
time limitations v/ithout inclusion of detailed ru.les. 



9679 



yOHliS 0? PAYIIEHT 

This section inclades limitations placed xipon the means of payment 
which might he accepted h},'- industry members from customers as a suhsti- 
tute for cash or checks in pa:;Tnent of hills. 

Acce-otinjS: Securities 

The principal restriction on the acceptance of securities was 
sim.ply that they he taken in at a figure not exceeding their current 
market ve.lue. A typical provision i^'as that in the Code for the He- 
fractcries Industiy, which read: 

"In soliciting business, no manufacturer sha,ll agree to 
accept as pa;;'Tnent securities such e,s mortgages, honds, 
stocks, tax hills, certificated, or any other security 
except at current marketable ce,sh value." 

The sub-head "Other Restrictions" includes tvro Codes (Cork and 
Beverage Dispensing Equipment) ""^hich prohibited the acceritance of 
securities in pajinent at any time; codes '.'hich lim.ited such acceptance 
only to the settlement of insolvent accounts; end cocas which prohi- 
bited" acceptance if such constituted a m.eans of affecting or concealing 
price discrimination. 

Accepting Certain Other IForms of Fa'nnent 

Classified here are provisions ^'.hich restricted the acceptance of 
forms of payment other than cash or check and also other than securi- 
ties as treated above. The acceptance of the follov/ing means of pay- 
ment T'as prohibited in certain codes; customer's ca"oital stock; cus- 
tomer's goods; "other tlian la^Tful money"; crecit transferred from one 
buyer to another; proceeds of sale m.ade by industr"'' member for his 
customer's account-; de'oosit made to another manufacturer, and forms of 
payment other than those specifically enuinerated in the code. 

The sub-head "Other restrictions" includes z, limitation on the 
amount of rental paj^^ments that could be ap-jlied fhere the product was 
finall;'" purchased; a requirement that "real or persona.l property" be 
accepted at not more than its market value; and a. tim»e limit upon the 
duration of negotiable instruments. 

PEEIG-HT. Al^ TRAI-TSPORTATIOi" TEPJ-.IS 

The common feature of the provisions in this section was the 
regulation of the manner in which the cost of transportation was 
applied in quoting a price or in billing for the shipment. 

Basing Point System 

!Ehe three codes which set up detailed rule;^ establishing a basing 
point system were Iron and Steel, Reinf orcixig Fabricating Laterials, 
and Steel Joist. In addition, the Lime Code contained an enabling 
provision specif icall^j- empowering the Coc^e Authority to establish such 
a system, subject to i'HA. revie--; pursuant to that, a system was set up 

9 379 



in the Lime Industry. In some others also basing ooint systems rere 
establishe'-''. parp-'aar.t to brord enablinf provisions; this '.t.-.s typified 
in six divisions of the Luinter rnc TimDcr Procucts Code. 

The syrtens '"ere too ■cor.iple-c to ma;:e practicpl here the presenta- 
tion of more than the b,v.rest details. As en errmple the Iron and 
Steel Code npTieo specific, cities as Dpsing -joint^. The mernhnrs y.-ere 
required to J:ile oriceSs f.o.o. thesa ooints. It v/p.s not required, 
hovrever, that the-^ be \iniform for a.L? -ooints. The price quoted to any 
customer, re.-;ardless of his location, had to be the filed price at the 
basing point closest to tne customer plus the published freight rate 
betv;een the ba-sir.-- ooint and the custoiner's receiving "ooint. ilerabers 
v/ere prohibited from filing prices or an"','' other basis than f.o.b. the 
specifiec "joints and from frilin.3- to induce transoortation costs in 
quoting the c slivered price. 

P.O. 3. Jcsi-^ 0^ Selling • 

The codes clcssifiec here recuire.", in a variety of '.7pys, that 
incustr;"' products be' solo onl-.- on a brsis of f reight-on-boaro factor;.'' 
or TTarehouse, or central selling point. This meaxit tnrt, in arriving 
at the final price to the customer, the cost of shipping had to be 
added to the published base price. Putting it in another Txay, it pro- 
hibited the ouctirjg of a uniform deliverer" price -to all customers dis- 
similarly located. 



Deliverec Basis of Selling 

The coces clrssified here requirec the ouoted price to be a 
delivered "orice ano, b"'" imiDlication, prohibitec -the quotation of prices 
f.o.b. the f rctori^. 

Omitting ?rei ^ht Char."js in Com-outing Delivered' Fric6 ' 

These codes presuirir.bl"' hpod rs their object the prevention of the 
absorption hy Indastr}'- nembers of the freignt costs of their shipments. 
That is, if memb-^rs chose to sell on a delivered price ba.sis or were 
required by their code to do so, their cuoted price must include trans- 
portation costs in j.dcition to the b? se selling price of the product. 

Prepayment of Preight Ch3rf:es 

Classified here are regulations of the- practice of prepaying ship- 
ping charges on merchandise sold. These m?"'' or nay not iipve appeared 
in conj-onction v^ith other "oroT-isions listed in this section. In a 
number of cases this practice vras prohibited. ?or example, in the 
Heclaimed P-r.bber Mrnufacturing Code it T'-f- provided that, 

"All '".hipments shall be mad.e f.o.u. member's factor;'' or 
warehouse. Freight ma^.'' be allowed to customer's receiving 
point but such freight shall not be nre;oaic." 

Another t^-'-oe of restriction, as indicated in the second subhead, 
■■.^as that ivhich permitted oreoiyment of freight costs onlv upon the con- 
dition that the original selling price be high enough to cover this 
cost. One of the codes included here, Bleacaed Shellac l-.lan'ufacturing, 
»679 



-43- 
read as follovs: 

"It is an "Luifair xiroctice to deliver -oroducts, transpor- 
tation charges prepaid, at anv place, unless such charges 
are given due consideration in ceterraining the cost and 
sel].ing price thereof and are adided to the seller's pub- 
lished price for its shipping point nearest to such des- 
tination. " 

A third type of provision permitteui prepajnnent, "but in conjunction 
with some other restriction. 

The fourth sub-head, "Other Restrictions", includes provisions 
which prohibited r^uch preoryment if secret, or if discriminatory; or 
which permitted it proviced the shipments rere over s-oecified weight or 
value . 

Equalization of ?rei,~ht Rates 

Thir "oractice involves the absorption b^r s seller of transporta- 
tion costs to the e.'^jtent that the freight cost remaining to the customer 
eauals the cost of shipjjing from a closer seller. In other words, the 
codes included here permitted sellers to meet, insofar as transporta- 
tion costs are concemec, the competition of more closely located com- 
petitors. However, this did not constitute a permission to cut below 
a competing seller, for the provision was frecuently designed to lim.it 
dumping in the sales territorv of a competitor. The provision in the 
'^all Paper i.;r-n"af3,cturing Cooe may be quoted as an e::ample: 

"All man'ofacturers, shrll sell their products on the brsis 
f.o.b. own mill or mills, with no greater freight allowance 
than railroad freight eou^alization, carload rates of L.C.L. 
rates, as the case raa.y be, to nearest competing operating 
mill to the' Ccistomer being sold. " 

A few of the codes here i^rescribed specific points which were the 
only ones from which rates could be equalized; e.g., the Furniture 
Manufacturing Code read with respect to ceca.r chests, a.s follows: 

"Freight from any factor^^ shipping point to any destina- 
tion may be so eaua,lized that the ca,rload freight rate 
which would be applicable to that shipment will be no 
greater than the ctrload rate on the same shipment if it ^vere 
made from the nearest point as follows; Atlanta, G-eorgia, or 
from Chicago, Illinois, or. from IT ew Torlc, ue-- York." 

SHIPlvS'TS 

S-Qlit Shipments 

Split shipments occur when a single order is shipped, not in one 
complete shipment, but in two or more shi^om.'ents, "'hether or not at 
different times. The codes inclixded here placed certa/in restrictions 
on this tToe of shi'oment, the caief of waica were that the goods be 
9679 



-4'1- 

■billed as ohioped instead of pfter the fin.-l shirmient onl"'-, or that the 
relative size and timinfy of shipments be equitable distributed. 

Shipments Smaller T.irn Specified M irdmum 

i 

The codes cltssifiec here named some -init of- shi-oment and re- 
stricted shipments of cait^ntities ^."'iich uere less then that lor.it. 
Ainon^ the codes irhich prohibited outrir^^ht shipments belo:7 such a mini- 
mum, theWin^ov- G-lcss Co-^.e es^ab''ished a, carloa^'' of .glass as the mini-, 
mum; the Dr;^ Tran'-fer Division of G-rap-iic Arts s"oecified 1000 tre:;is- 
fers; and the sTliolesFle Confectioners Code prohibited the breaking up 
of mariufcctuf ers' ooxes for resale. 

Some codes permitted shi'oments belo",7 the specified uiiit but re- 
quirec rn afcitional hanolin^j chrrge to be ma.de for t'lis service to 
custom.erF . In the Silvix'.^are I.ianuf r.c t^iri ng Codo, the minim'ara v/as a 
shipment vrlaed at ten dollars or more and tae service charge •^a.s 
tT/ent'.r-five cents. The otlier restrictions, fo-OJic in ore or more codes 
'".'ere: must be re:.:)orted to Code Author! t'^, and ap"oroval of Code Author- 
ity ra^uirec. 

cpzr ppjc:^ SYST3i,i 

An o'oen price system as it a,ppearer in codes, in brief, involved 
the reiDorting to some central agenc' bv mem.bers of an industry of their 
current or future ririces. This central agency in turn generally dis- 
seminated these reoortt in sum.mar:,'- or identical form to the members of 
the industry, and in soi:;e cases to customers also. This type of s^rs- 
tem is to be distin:guished from the t^'^pe com;ion before the i'PA, wnich 
only involved the roporting of ps.st prices as manifested in completed 
transactions. It ''.'as conterap].ated that the "orices filec under the 
systems set up by the codes ^/ould be follonec until nev; prices v/ere 
filed. The plans as they appcare.d in codes, however, varied widelv in 
detail. 

The first t'''o .sub-heads on the charb indicate the chief 'vays in 
':7hich the codes provided that the s3'"stem '7ould go into effect. Codes 
containing the first provision mace the. establisliraent of the syst.3m 
comp^ol'-ory . Under the second, provision, the Code Authority'-, with or 
\7ithout iJPA approval, was em'oovfered to establish, a system at its dis- 
cretion; some codes laid do'7n certain rules \.hich had to be followed 
in formulating a s^y-.tem, if rncT vhen the Code Authority chose to do so. 
About sixty of the non-man da toi':'- codes required approval of a majority 
or tvfo-thircs of the inc'ustr' before a system could be put into effect. 

Some codes reauired in addition to reporting prices to the cen- 
tral agency, that members eithier post their prices conspicuously in 
their niece of busiress or else ""oublish" them to the trade. Gener- 
ally no fui't.ior elaborrtion vrs included as to wiiat actually consti- 
tuted such oublication. i-ot shoW'n on the cha.rt are the reouirements 
found in tifo codes tnrt r.iem.bers mast send price lists directly,'- to their 
competitor'^ and in eleven codes that tlie:''' must mail Tjrice lists to 
customers. 
9679 



^45" 

A fer; codes not containin,^ a genuine open price system provided 
soaetliinj: of a substitute therefor !)-'■ recuirin.^' members to post their 
prices in conspicuous places; the usual rules relrtive to adherence to 
these prices cno 'Titing periods before changes, hc^ever, v;ere in- 
cluded.. One code not having an open lorice system required members to 
exchange prices directly a.nd one other code reouired its membership to 
publish their prices in a specified trade periodical. 

The nezt four sub-heads, numbers five to eight, deal rdth waiting 
periods. A waiting period is a period of time r;hich must elapse 
betvjeen the filing of^ reporting to the central agency of price changes, 
e.nd the effective da'Se of such a, change. The member filing the -price 
change is not at liberty to sell at the ne^/ly reported prices until 
this effective date. In the meajitime it '''as usuallj'' "orovided that the 
central agency ^^o'ul.d disseminate the ne^'-'ly filed prices to all other 
members of the ind.ustrj'-. Somewhat over one-fourth of the total number 
of codes i.^ith open price systems contained no provision relative to a 
Waiting period. In most cases in this group price changes became ef- 
fective upon receipt of the nev; price lists b^y the central agenc^"-. In 
about thirty codes a price chajige r'as effective even before filing rith 
the agency. Six codes r/ithoiit v/aiting periods provided, that price 
changes would become effective only upon receipt \f the member of the 
agency's ackno'"'ledgeraent . Attention should be called, in this section 
dealing with "no waiting perioc", to the fact that in only slightlj'' 
less than fiftj^ per cent of all codes with open price sj^'stems, a pro- 
vision for some Icinc. of a waiting period was stayed by adjninistrative 
order. This means that in roughly seventy-five per cent of the codes, 
no waiting period ^as actually in effect. 

The most common t;;oe of waiting period, was that where a specified 
lapse of time '-as required bet"een the filing of a price change and 
its effective date, whether the caange was upward or dc'^nward. This 
period of time varied from one to twelve days, the mode being five 
d^ays. As ind.ica.ted on the tahulo,tion and as discussed in the preced- 
ing paragraphs, a considerable portion of these provisions were stayed 
by administrative order - generally concurrently with the approval of 
the code. 

Another important variation with respect to vraiting period re- 
quirements were those codes recrairing a lapse of time between the fil- 
ing of a price change and its effective date, only if the change were 
downward. Upward, changes thus becsjne effective as soon a,s reported. 
Some codes mentioned downward changes s"oecif icall''- as the onl"!- ones 
which required the observing of a waiting period. Other codes read a-s 
if the waiting period applied before any changes; but talcen in con- 
Junction --^ith the ahility to sell ahove the prices filed (see the 13th 
and 14th sub-heads), the effect was to reauire a waiting period before 
decreases onl*^ - since a m.ember could sell above his filed prices 
without having to report the fe,ct. A considera.ble number of these 
waiting period provisions were stayed also, as indicated in the tabu- 
lation. 

There were no cod.es which required waiting TDoriods before in- 
creases onl)'". 
9679 



-46- 

About tv/enty-f ive codes erroovered the Coce Auvhorit*'- to es- 
tablish awaitin.j period at its discij'etio'n . 

The eighth <^-ub-head deels '•'ith tht -problem of the '-aiting period 
requirements applicable to a. menber ■'ho cuose to carn^e his price fol- 
lordng a change "o^'- a fallow competitor. The codes classifiec here con- 
tained provisions allo'jxng price chrnj;es filed to meet e previous 
change on the part of another member to become effective on the same 
date as the first c.ian~es filed. Tiire-J different tj'-pes of these pro- 
visions ma^"" be cistinguished. The first allowed the subsequent changes 
to become effective on the S3jne date, regardless of the nature of the 
change and vrhether or not it vent belo'7 the nrices first filed. The 
second, ajid m.ost numerous type allowed them to become effective on the 
same date, only if they viei-e not belo'^' the prices filed by the first 
member. The third p^llovred them to become effective on the same date, 
only if filed before a specified part of the waiting oeriod for the 
first member had elapsed; generally this \7r,s one-half. Over seventy 
codes contained no provision for shortening of the TJaiting period; 
this figure, houever, irclude-^ those codes in Trhich the r/aiting period 
itself v'B.s stayed. 

The ninth anc tenth sub-heaf s relate to the reouirements of 
publicity of ."^ileo prices to custoners. Under the ninth sub-head are 
classified all codes which in some \''ej reouired tha,t the filed informa- 
tion be released to customers. The nature of this reouirement varied 
wicely, and the mrin t^noes snould be summarized. T'-'o codes reouired 
that the centrrl agencv send copies of filed data to all customers. 
About one h-'ondred reciuired that data be sent to customers upon request, 
generally ritli the additional reauiremen.t that the customer bear the 
cost involved. About tro huaiclred codes required that the prices filed 
be open to tha inspection of customers, o/nC about thirty more reouired 
that inspection be "oermitted by customers of the orices for the parti- 
cular class into uhich they fell. About a dozen coces left the ques- 
tion of the release of filed data to customers open to the discretion 
of the Code Authorit3r, Some orovisio.-, s trere in terms of "interested 
parties" rather tha^i of "customers". 

The tenth sub-head includes aJl codes v.'ith o"oen price s'^'stems 
\7hich contained no ■'irovision for ma'iing the prices filed available to 
customers. 

The eleventh sub-head includes all codes v.'hich required that in 
some vay the filed prices be releasee, to members. About 170 codes re- 
quired the central agency to senc them to a,ll members. About 110 codes 
required it to send them onl""' to directl"'- competing producers of simi- 
lar products. A feT code-^ reouired that i^rices be sent only to members 
in the same region, that the-- be sent onl-r iiTDon request, or that they 
be sent only upon pa^'^ment of costs. Some seventh codes reouired only 
that the central p-encv Icee-o its price files ooen to inspection by 
members, l-ine codes left the question of rvailability to members to 
the discretion of the Code Authoritj-. Two coder; specif icallj'' provided 
that tne central agenc"- send to menders onlv the lowest price on file 
for eo.ch product. 
9679 



• ■ ■ -47- 

The twelth i Eub-heac includes s.l"!. code? vrith 0"oen price systems 
uhicii did not reoaire tlie centrrl ar-enc"- to release the filed prices to 
mera"bers in any ^'ay. 

The la'^;'t four sub-hea.ds deal nith the problem of aciierence hy 
members to their filed prices. The first of these, "Must sell, at filed 
prices", includes those codes which reauired members to sell at the 
prices the-;- had filed, thus prohibiting sales ct prices above or below 
them. The next sub-xiead, 'iMa]'" sell above filed prices" includes all 
codes which prohibiteo sales belov.- filed prices and which, thus, in- 
ferential!' permitted members actuall^A to sell at 'orices above those 
which they had filed. 

The next to last sub-head includes the codes which permitted 
sales at prices as Iot' as the lowest price filed b"^ any member, even 
though these sale prices were below the filed price of the particular 
seller. Under the last sub-heeid are classified codes which permitted 
sales below the filed price in case of sales of certain special goods, 
such as second'', dropped lines, etc. 

Space prevents the presentation of all of the numerous details of 
the open price systems on the tabulation, but a few of the adc'itional 
points of difference between various types may be described here. 

One point was the degree of compulsion on members to file. Most 
of the codes made filin,^ compulsorj'-. A few made it entirely optional. 
Some t^'o dozen codes, mostly in the paper froup, made -the a.ctua.l filing 
optional but provided taat if a member chose not to file his own 
prices, he r'as deemed to :iave filed the lowest price of other members 
on file and "as recuired to observe it. 

Another point of variance wr s the na,ture of the central agencj?- 
with whom, prices were filed. About t«To-thirds of the codes named the 
Code Authority as tne central a-^enc;^, including the industries where 
the trade association functioned as the Coc'e Authority. The other 
one-third reouired that the central agency be a "confidential ajid im- 
partial agenc^'-", to be named eitaer o-f the Code Authorit-;'- or KRA. 

Prices generally had to be filed for all classes of bwers but a 
few codes exempted ■orices to governments or to certain specified 
classes of large buvers. 

Ilegarding the t^rpe of products for which prices were required to 
be filed, about one-third of the codes reauirec price to be filed for 
all products. Aboxit one hundred codes left to the Code Authority,?- the 
determination of this Question, while about fift3'" left the matter to 
majority vote of industry,'' members. Also, about fifty codes reouired 
filing on "standard." products onl-r, while another fift''- required filing 
on all standard products and on such non-standard products as the Code 
Authority selected. Finally about a fifth of the codes contained no 
provision relative to this matter. 
9579 



.-43- 

Anotlier vrrirtion cor.eisstsi." in the cifferert tyoes of ii'formation 
r,'hich different codes revi-u.ir':c' to be f ilec . Lees than ten per cent of 
the codes confi/.ed the filin~ to -prices. About three-f owrths of 
them stipulated that pll c.ipcoantp p.nc terms ?.nc" conditions of sale be 
filed, as veil as prices. Pertinent to this point i3 the fact that 
some sixty codes instinicteo the Co-Jo iuithority to prescribe the reporting 
form irithout incl-udin^- any soecific restrictions r"^. to "hat mi-^ht be 
asked for on the form. 

On the matter of ide--'tif7i-.''.g the disseminated ;orices b"/ the nejne 
of member filing them, most of the codes v^ere silent. Horrever, some 
sixty codes mfde such identification raandator^'" and one prohibited such 
identification. 

Some sixt",^ codes reauired that, after filing a given price, s. 
specified minimuiTi period must elapse before an increased price could 
be filet. This -period ras almost -universally fort";^-eight hours. This 
was not B T^.'eiting period reouirBmeht, for it related to a period between 
t':'o filings aind not to the effective date of one filing onl-''-. Two 
codes required, such a ninim-um period between filings, v/hether the 
second one v.-as an uprarc or do'.-:'n'-ard revision. L'o- provision similar 
to this existed for decreases only. 

Mne codes prohibited the rddition of comments bv the central 
agenc":'' when ;orices were diisseminated. . . - 

Finally, it should' be noted thr t about sixty of the codes with 
open price systems incorporated without, change the "'ording of i\IRA 
Office l.iemorsJid-ara Number 223, 'Exhibit "A". The text of this is given 
below, both to indicate the \mTC±nc of these sixty codes and to show 
the culmination of ITPA policy with respect to the details of an open 
price s''-stem, at the enC. of the code writing period. A n-umber of 
other coders were partially patterned, after this but varied in some im- 
portcnt particular. The complete text ':-as as follc's: 

"Section 1. Each member of tne trade/iiicustr^'- shall file 
with a conf icentia]. and disinterested agent of the Code 
Authority, or, if none, then with, such an rgent designated by 
the Administrstor, id.entified lists of all of his prices, 
discounts, rebates, o.llowcnces, and all other terms or con- 
ditions of sale, hereinafter in this article referred to as 
'price terms', which lists shall com;oletelj^ and accurately'- 
conform to ajid re-oresent the individual pricing prrctices 
of said member. Such lists shall contain the -nrice terms 
for all such strjidard products of the inrustry as are sold 
or offered for sale by said member and for such non-standard 
prod.ucts of said member as shall be designated bv the Code 
Author! t:'?". Said price terms shall in the first instance be 

filed within days after the da,te of approval of this 

provision. Price terms and revised price terms shall become 
effective immediatl;'- upon receipt thereof bj'- said agent. 
Immediately upon receipt thereof, G,-:'id arent shrll liy telegraph 
or other eq-uallv prom-ot means notif-;'- said .member of the time 
of such receipt. Such lists and. revisions, together with 
9579 



-49- 



the effective time thereof, shall upon receipt he immediately 
and simultfjieousl}'" cistrihuted to all merahers of the industry 
and to all of their cuEtonerE v;ho ha.ve applied tharefor and 
have offered to defray the cost ectually incurred hy the 
Code Authority in the T)reparation a,nd dlstrihution thereof 
and be availphle for inspection hy any of their customers 
at the office of such agent. Said lists or revisions or any 
part thereof shall not be mace available to any person until 
releasee to all mem.bers of the ind.ustry and their 
customers, as aforesaid; provided, that prices filed., 
in the first insta:ice shall not be released until the 

e:>rpiration of the aforesaid day period after 

the approval of this code.' The Code Authority shall main- 
tain a permanent file of all price terms filed as herein 
provided, and shall not destroy ani" part of such records 
except upon written consent of the Administrator. Upon reouest 
the Code Authority sha.ll furnish to the Administrator or 
any duly designated argent. of the Administrator copies of 
any such lists or revisions of .price terms. 

Section 2. 'fhen any member of the trade/industr^/ has 
filed any revision, such member shall not file a higher 
price \vi thin forty-eight (48) hours. ■, ■ 

Section 5. rlo member of the tra.de/industn'- shall sell 
.or offer to sell ajiy. products/services of the trade/in- 
dustry, for TThich ^^rice terms have been filed pursuant 
to the provisions of this .articliS, except in accordance 
.with s\ich price terms. . . , 

Section 4. iro member of the industry shall enter into 
an.y agreement, under-c^tanding, combination or conspira.cy 
to fis or maintain price terms, nor cause or attem.pt to : 
cause any member of the industry todiange his price 
terms l^y the use of intim.idation, coercion, or any other 
influence inconsistent vdth the maintenajice of the free 
and open market v^hich it is the purpose of this Article 
to create. " 

SALES IIT OTHER Z01T3S 3SL0W L07SST FILED PRICE III THOSE- ZOI-IES 

The cod.es classified here, established certain regions T'ith pro- 
visions for orice filing ^r^ith regional agencies. The tj'-pe of provision 
involved here prohibited a. producer from selling in a region other tha^n 
his ovrn and- one in t.'hich he did not file prices, at a price lower thsji 
the lov:est one on file in that region. 

Two codes in addition prohibited such sales onl^^ if at a price 
more thaji tv^enty loer cent, belov: the lowest filed price in the outlying 
region. 

"bui.Tiiic" 

Included here are codes, with onlj;- tiro exceptions, which prohibited 
9579 



-50- 

" dtunping" , generrJLl/ r/ithout defining or elaborating that term. It is 
presinned that they referred to the practice of quoting prices for distant 
markets which '.Tere loTver than those quoted in the home Pi,".rket. As such, 
they had some similarity to prohihitions of sales in other zones "below lov/est 
filed price in those zones and also to i^rohibitions of geogra,phical 
price discrimination. But ,'s stated, they did not as a rule contain ex- 
planations of the term. 

PEIC3 GUiJlAilTLLS AID OTHLH Or^ERS OP PaiCS PROTECTIOII 

The iDrovirions included under this section related to 
guarantees given b-'- sellers to customers against a decline in price, an 
advajice in price, or both. A guarantee ai]:ainst a decline was generally 
carried out through a rebate to the customer's a,cco-ant, reflecting the 
difference between the price originally charged and the subsequent 
price; this might be made even though the goods were no longer ipart of 
the customer's stoc]:. A fi^aarantee against an advance generally was 
applicable to the undelivered or unbilled portion of a shij^raent ajid took 
the form of charging the seller the old i^rice, even though prices had 
risen after the original order v;as given. 

Price G-uarantees 

Classified here are provisions which used the terms "guarantee" 
and "price" in setting up the restriction, or some words with obviously 
equivalent meaning. In some codes elaboration of the terms was given 
and in others not. 'rnere was considerable uniformity in the provisions. 

Included under the sub-head " jrohibited" are all forms of 
prohibitions, whether aroplied only to declines, to advances, or to both. 
About half of the total prohibited only gTiarantees agaanst s. decline, a 
very few prohibited only, giiarantees ei,gainst an advance, and somewhat less 
than half applied to rll ty^^es of price gu.arantees. A ty,Dical guarantee 
against a decline ma;'' be cited from the Cast Iron Pressure Pipe Code: 

"It is an unfair practice to make or give to an,];- 
purchaser of any product fuiy guaranty or protection 
in any form against decline in the market price of 
such product." 

The Code for Uatch Co.se iianuf acturing contained a t5'"pical 
prohibition of any price guarantee: 

"It is pji unfair practice to ma.ke or give any guaranty 
of protection in any form against advance or decline 
in the market price of any product." 

The second sub-herd i.ncludes those codes in which price 
guarpjitees were permitted but in which a definite limit was placed on the 
period of time during which the ..guarantee might run. In most cases 90 
days was set as the maxim^ora per.iissible li!iit; there were a few vari- 
ations, however, above md below this figure. 

The sub-head "Otiier restrictions" includes codes which pro- 
hibited discriminatory i^rice /^arazitees; those which orohibited 

9679 



-51- 

guarantees against increases ■unless the seller nas correspondingly loro- 
tected against decreases; those TThich prohihited guarantees unless set 
forth in a written agreement; those irhich linited the guarantee to the 
seller's own decline; and those rrhich specifically confined the 
guarantee to genuine orders for definite quantities. 

Agreements Indefinite as to Tine ond/or Quantity 

The type of contract involved here virs the so-called "require- 
ment" or "term" contract. Such a contract contained a fixed price 
"binding upon the seller, hut specified no definite amount to he taken 
hy the h"i:i;>-er. Or there vas provision for a series of shipments without 
an;'" time limit upon the length of the agreement. Under these, the 
customer could ouy as little or as much as he chose at the contract 
price — so that the arrangement was ooviously a form of price protection. 

Under the first suh-head are incliided codes which prohihited 
such contracts. Some prohihited onlj'" those indefinite as to quantity, 
others those indefinite as to time, and a few prohihited hoth tyoes. 
There was little ui:iiformit5'' in the wording of the provision. Generally, 
a distinction was drarm between various types of indefinite contracts, 
and the permissihle tyiDes were set forth. In a nimher of the co6.es 
supplying construction materials, a contract indefinite as to quantity 
was allowed if it applied to a single, clearly identified i^roject. 
Some codes permitted such contracts for all "requirements" hut required 
that a definite period he established hy the contract. Still others 
permitted some variation in quantity hut required the contract to specify 
the maximum and minimum limits thereto. All of these types are in- 
cluded under the first siih-head, since they all prohibit some type of 
indef initeness as to time or quaaitity. 

The sub-head "Other restrictions" contains a few codes with 
one of the following restrictions: a r.iinimum quantity, at least was re- 
quired to be specified, provision had to be made for reimbursing the 
seller for increases in cost, or the contract h'^d to be for a fixed 
percentage of the total consumption requirements. 

Other Offers of Price Protection 

Under this catch-all item ha,ve been classified provisions 
which restricted the granting of -orice protection to customers in a 
variety of ways. The common element in all of the practices involved 
was that a fixed price was guaranteed to the customer over a period of 
time. In most cases this took the form of an offer at a given price 
which sta3'ed open for some time; meanwhile, the customer might accept 
or reject as he chose and w9.s not bound at any time. 

Under the first sub-head are included codes which prohibited 
one of the following practices; making a:a' offer with a fixed price with- 
out fixing a definite exi^irrtion dr.te thereto; making any price offer 
which was not subject to change uiiless accepted inmedip.tely; giving 
"options" (no definition or elaboration of term); entering into con- 
trs-cts not for immediate shipment which contain no jjrovision for re- 
vising prices in case of price change; and the giving of advance 
notification of price changes to customers. 

9679 



-52- 

The second s~j.lD-heacl ijicluc.es codes rhich specified a naximuin 
period of duration for one o± tlie follo'rin.^: fixed offer not subject to 
change -until its exoiration ("firn" offer); "ootions"; offers of pjiy 
liind; ojid contr:\ct3 not for ir-.iediats ahipnent ivhich did not contain 
provision for revising price in case of -iricc chan;::e. 

The third sub-head includes codes i-fhich nlaced one or nore of 
the follo'-'in" t'^-pes of restrictions on the pro.ctices set forth in the 
tv70 preceding; paragraphs; the agresKent or offer must he in rrriting; it 
r.iust not be discri;ainator:/-; it rmist he reported to the Code Authority; 
it iiust include p "i-^ithdrcawal" orovisicn; or it must pernit price ad- 
justments , if necessar;-, at stated intervals. 

DE]?i:SE3D DELIVSSISS 

The torn deferred delivery applies to shijjmonts (or other hinds 
of performance) -^hich are made, not i-riedirtel"'" u^on the formation of the 
agreement, hut some suhst-^ntial length of time thereafter. The terra is 
used -jhether the entire 3hip;ient is tlius delayed or only r part of it. 
Under the fir-ot suh-head are the codes ^^hich prohibited this pra^ctice; 
the ;5rohibition in each case '-as a jplicd to the very ^-ords "deferred 
deliver^''" rithout definition or clarification.. 

The second sub-head i'lcludes the codes 'vhich plrce some kind 
of a raaximuin time limit ujon thg period during ^-^hich contracts had to be 
completed. They fall into tro main groups, accordingly'" as they pro- 
hibited entering i nt o contracts v'l^ich contemplated shipments delayed 
beyond the specified time, or prohibited delaying delivery on contracts 
of any sort beyond the soecified time. ITo uiiiformity existed rrith re- 
grrd to the maximum time permitted, some codes rllovring no more thoJi 
thirty dp^^s after date of agreement and others mermitting up to trro 
years. 

The sub-head "Other restrictions" includes codes which applied 
one of the folloring restrictions upon shipments deferred till some 
time after the formation of the contract; must be reported to the Code 
Authority; must be set forth in rrritton r.rreement; must include an 
arrangeraent for irice adjustment if pricer. change; permitted only if 
destined for specific md. clearl?'' identified job :>roject; and must be at 
a fixed price, 

U::iL.iTZaAL AuIillElErTS 

The codes classified here contained prohibitions of entering 
into contrrcts binding upon the ind\istry member but nhich did not bind 
the b\iyer. The effect of such -oractices J.iay, in some cases, have been 
similar to price protection. But the provisions included here may be 
distinguished from those classified on the chart under "Price 
Guarantees" , by the fp,ct that they rre broader and do not mention prices 
specifically. They simply allude to agreements ^.7hich rre binding only 
on the sel].er, or 'viiich have cancellation druses applicable to the 
buyer only. 



9679 



-53- 

The tern "reup.te" lias 1360:1 tviven a lairl'/ broad, meaning here- 
in and has hsen interpreted to cover a, variety of refunds, retroactive 
settlements, pjid ad.iustnents nade for the heMefit of the custoner's 
accoioiit a.fter the seller has carried ovit his perf ornaaice, HoiTever, a 
grea^t -3ro-oortion of the codes included here actually used the term 
"rebate", either alone or more coLiJionlj'- in conjiuiction ivith some other 
terms. The first tv/o sub-hea.ds, that irohioitin^-;;; all rebates and that 
prohibiting secret reba.tes, relate to provisions which rrere uniform in 
practicaJly all the codes cited. The standaa-d form prohibiting all re- 
bates \7r.s as follons: 

"I'o meuber shall -oa'f or allo'^ rebates, refunds, cor.rnissions, 
credits, or unearned discouiits, whether in the form of money 
or other\'ise. " 

The items enumerated here after rebates have not been noted 
else-rhere in the tabulation, so thrt the term "rebrtes" ha^s been used to 
include these also. 

The staxidard form for the prohibition of secret rebates is a,s 
above q\ioted with the addition of the rrord "secretly" follov;ing the 
word " shall" . 

The third s\ib-head covers provisions which prohibited rebates 
only if they were not given to all b-uj/ers on the same ba.sis. 

The "Other Hestrictions" includes codes prohibiting rebates 
only if they were excessive or unreasonable; requiring that they must be 
set forth in a written agreement; requiring that they be reported to the 
Code Authority; and prohibiting them if they were mislea.ding. 

ALLO'-AiTGES 

The term "aillowances" in itself is indefinite a.nd broad. In- 
cluded in this section are all provisions which used the term itself in 
some connection and, in addition, those specific tj^pes of 23i"actices 
which seemed to be similar to certain types of allowances. A working 
definition of an a.llowaiiCe is tha.t it is a pa,yment of credit by the 
seller for some value rendered to him 'hj the buyer. It serves to 
distinguish an allowance from a reba.te, for which generally the customer 
renders no specific valuable service or otherv/ise. 

"Allowances" 

The first item in this section contains provisions which re- 
stricted "aJ.lowances" , without indicating the nature, of the allowance 
referred to. The codes under the first sub-head simply prohibited 
aJ-lowcnces withbut an^'' elaborr tion. 

The subr-heai-d "Other restrictions" includes the following types 
of restrictions on "allowances"; prohibited if eiicessive; prohibited if 
secret; prohibited if discriminatory; prohibited if misleading; must be 
set forth in written agreement; must be reported to the Code Authority; 

9579 



-54- 

ajid prohibited if inr.de in collusion v/ith "buyer to evade code. The re- 
strictions on discriminatory o.ilOT;c.ncos i.isde up aliout half of the total 
under this siih-heo.d. Tho standard reliate clauses, \7hich frequently in- 
cluded "allo^rcncec" or "excessive allouances" in addition to the other 
terms, have not heon included in the counting here, on the principle 
that they were inclxtded nxider the rebo,te sectiono 

Advertising Allor/ ances 

This t;''oe of allo\7pnce gensrally took the form of a credit 
applied to the accovnt of the cti.stomer to reinhur'se him for part or all 
of tho cost bornr h'f him in advertising the seller '.s product. The actual 
form of the advertising might have "been nenspaper ads, theatre ads, 
T7indov7 displays, eidiihits, ca,talogues, "billtoards, handoills, etc. The 
customer generally malces the original outlay and then is repaid in part 
or whole by the allowance given him ''oj the seller. 

The first suL-nead includes the codes which prohibited industry 
members from making any allowp-ices for advCi'tising, ojid thus from sharing 
or bearing the cost of adver'oiGing done 'h}/ customers. 

The second restriction covers a nuraber of codes which per- 
mitted such allowances b"at laid down elaborate rules governing the 
practice. The co5-es here fell into two groups, within each of which the 
wording of the provision was quite ste.ndardized. The most common form 
was as follows: 

"llo member of the industrj'- shall 'osy a bu3''er for a 
special advertising or otner distribution service by such buyer; 
(a) except in pursuance of a written contract made in good faith 
and explicitly defining the service to be rendered pjid the payment 
for 'it; and (b) unless such service is rendered rnd such payment 
is rea,sonable and not excessive in ax:o^^nt; and (c) tmless such 
contract is separate and. distinct from vxi-j sales contract, and such 
payment is seprrate and distinct fror. the snles price paid is not 
designed or used to reduce a. sales price; raid (d) -jiiless such pay- 
ment is equally a.vailsble to all buyer^ of the same qua,ntity ajid/or 
distribution class in the sane competitive market; and (e) u:iless 
a copy' of ea.ch such contract is reta.i.ied on file for a period of 
one year. The Code Authority shall be empowered to request a 
member of the industry to re;Dnrt such contracts made b^;- him and/ or 
to request a member of th.e industry to -oroduce a copjr thereof for 
inspection." ■ 

The other detailes form followed in some codes was that set 
forth in liPJi. Office lienorandum "Jo. 525, ^-'hich reflected the policy re- 
commends,tions of IiRA, c s of Januar;;^ 5, 1935. It read as follows: 

"ho member of the industry shall designate as an 
'advertisi,ig allowance', -^ '.oronotion allov-a.ice ' , olr by similar 
term, any ;.)rice redaction, discount, bonus, i^ebate, concession, 
or other form of allowcrice, or any consideration for advertising 
or promotion services, offered or .--iven by him to any customer. 
"Jo member shall offer or give any cons idera.t ion merely for 'pushing'', 
'advertising', or otherv.dse than for definite and specific ad- 

9579 



-55- 

vertising or promotion services. Such consideration shall "be 
given only pursuant to a separate vrritten contract therefor, rrhich 
contract shaJl specifically a-nd completely set forth the ad- 
vertising or ^Droraotion services (in such manner that their specific 
character may he understood hy other members of the industry and 
their customers) to he performed "by the recipient of said con- 
sideration, the precise consideration to he padd or given therefor 
"by said memher, the method of determining performances, a.nd all 
other terras a.nd conditions relating thereto," 

The suh-head "Majciraum limit specified" includes codes which 
limited the memher 's permissihle sha^re of the cost of customers' ad- 
vertising to a certain percentage, generally fifty; and a few codes 
which expressed the limit in teims of a percentage of sales. 

The suh-head "Other restrictions" includes codes which placed 
one or more of the following restrictions upon advertising allowances; 
prohibited if secret; prohibited if discriminatory; prohibited if ex- 
cessive or unreasonable; prohibited if misleading; must be set forth in 
written agreement; must be reported to the Code Authority; approval of 
Code Authority required before granting; prohibited unless seller's 
name or trade-nark appears in the advertising; prohibited if the effect 
is a concession in price; and documentary proof of outlay of customer 
required. 

Distribution Service Allow ances 

Allowances for "distribution services" are those payraents and 
credits granted to customers for various types of promotional work, 
other than advertising itself. In a good many of the codes included 
here, the words "distribution services" were used, while others were 
classified here because their wording brought them into this general 
category. 

Those codes under the first sub-head contained the two types 
of detailed restrictions discussed under the second sub-head for 
"Advertising Allowances", The codes under the sub-head, "Other re- 
strictions" contained one of the following restrictions: prohibited if 
excessive; prohibited if secret; prohibited if discriminatory; prohi- 
bited if misleading; must be set forth in written, agreement; must be 
re^jorted to Code Authority; and prohibited if in form of concession 
made by sales representative. 

Freight Ali o 'ances 

An allowance for freight is an adjustment rendered on the 
accoimt of the elastomer to reimburse him in pa.rt or in whole for the 
cost borne by hira for shipment of the goods from seller to him. The 
freight is sent collect b]^ the seller and paid in the first instance 
by the customer. Then, if the seller wishes to assume part or all of 
the shipping cost, he credits the customer's account upon presentation 
of the receipted freight bill. Included here, also, are provisions 
regulating ca,rtage allowances made the customer when he takes delivery 
of the goods himself at the seller's factory. 



9679 



-56- 

Suc?i allorances v/ere prohibited in the codes claEsified under 
the first suTD-head" The effect. .of these .prohibitions yhen coupled uith 
prohioitions "of prepayment of freight cho-rges, as' th!e.y. frequently were, 
T7as to '"orevent the seller fron rssiuni'ng any. part of the shipping costs. 

The .other. restrictions on freight charges, found in one or 
more codes,. '^'Cre e.s follc-s:' 'prohibited only if crxessive; prohibited 
if . discriitiin'atory; rjaxinuii .linit specified ( in ter^ns of percentage of 
totai; freight cost) ; .nini.uu'^ we'ight shipment specified 6n jjhich allovr- 
ance 'laight be made (e.g. , only oh .shipment over 100 'lbs., or 'a carload); 
prohibited unless cost 'involved was included in conputing original 
selling ^rice; pi;oh.ibite,d exqept in co.sh sales; and p.rohibited except 
for local delilreries. ' ' ' " . 

Attention should be called here to the section in the tabu- 
lation der.li'ng TTith 'Treight e;ad Transportation Terms". The re- 
strictions on freight eous.lization, preppy.aent of freight cha.rges, and 
bases of selling 9xe clcaely related to the sxibject of freight allow- 
ances, lor exaiiple, pernission to equalize freight is a form of re- 
striction on freight 'allowances - in the sense that nenfoers mazr not. ex- 
ceed the amouiat necessa.ry to reduce the freight cost to the customer .to 
that Qbtained froji the competitor nearest this customer. 

Trade-in Allowoaices 

An allowrnce for a trade-in is a. paj.nnent or credit granted by 
a seller to a cr.sfcoraer, generrll^'' for a used product similar in nature 
to tie one being purchased. Unlike the other allowances, the rendering 
of value by the customer usually occurs before the a.ctual sale o.f the 
industry product is made; so that the allowance will be reflected in the 
original billing and not as a subsequent credit on account. 

The first .sub-head pertains to codes which permitted no allow- 
ances of aji]'' sort upon trpde-ins. These restrictions occurred chiefly 
in the machinery f^jid equiprient codes, A comon version here y.ras that 
which prohijited th,e accepting or offering to accept of old, used, or 
second-hand products of the industry as pa^'^ment, in whole or in part, 
for products of the indust3rj-. A nujnoer of the I.iachinery and Allied 
Products sn.nplerients, which 'accounted for n,bout half of the total here, 
went on expressr3'' ' t.o permit mei.ibers to o^ssist customers to find pur- 
chasers for the used products of the latter. 

The other restrictiojis contained in. one or more codes, were 
as follows; prohibited if excessive or unreasonable; prohibited if 
discriminatory; specific raaximiun limit on amoiuit of allowance specified 
(in terms of percentages of price of new product sold); must be' set 
forth in written agroemont; m-ust be reported to Cede Authority; must not 
permit customer to .retain goods for which a.llowance v.'as grrnted; number 
of units to be trcd.ed-iu limited; and prohibited if products to be 
traded-in are of d'fasoiete design. 

Other Special Allowances 

Tl:is item tovcrs' provisions which regulated a group of mis- 
cellaneous types of allowances. The different tj'pes of value rendered 
by customers, for which these ellowances would be given, were as 

9679 



-57- 

follows: ' returning empty containers miich originally'" contained industry 
products; installing industr"/ products; -oerforming some further pro- 
cessing Ttork on ind'istry products; maihitaining or repairing industry 
products; furnishing some supplies ur.ed in production of industry pro- 
duct; printing labels; and "any special servicer-" 

The first suh-head conta,ins codes \rhich contained a prohi- 
bition of one or rno-^e of these types of allor/ances. The second contains 
codes which prohibited one or more of them only if excessive in a^mount. 
The third sub-head contains codes v/ith one or more of the following re- 
strictions on one ox the tjnpes of allovjances; specific limit prescribed 
for amount of allo-rrance; prohibited if deceptive; must be set forth in 
written agreement; seller must be relieved of liability; and allcjances 
confined only to certain specified ty-:)es of products, 

PAYI\IE1IT OR DIVZRSIOII OP COI.iinSSIOh"S OR PESS TO BUYERS OR AGENTS 

The provisions classified here vere aimed against the practice 
by sellers or their salesmen of passing on to the buyer or the agent of 
the buyer a part or all of the comMission or fee, which ordinarily T.70\ild 
go to the salesmen themselves. The objection to this practice, pre- 
sumably, wa.s that it represented six indirect and secret price concession. 

Under the first sub-hea^d are those codes which forbade the 
practices under all- circumstances. The exact wording of the activity 
prohibited vaa-ied some^^hat with different codes. The following are the 
main versions used in the prohibitions: payment of commissions or fees 
to buyers, pa.yment of commissions or fees to other than bona fide or 
controlled sales rei.iresentatives, paiyi'ient of commissions or fees to 
purchasing agents compensated by bij^-er, payment of commissions or fees 
'bj agents of members to buyers, splitting of commissions or fees oj 
members or their agents with b'ayers or their agents, a,nd payment of 
brokerage to other than bona fide brokers. 

The other restrictions placed on such payments in one or more 
codes were as follows: prohibited if excessive, prohibited if secret, 
prohibited if discriminat-ory, and a ma.xiraar.i limit prescribed upon the 
amount of such paj'-irBnts. 

RE-IOERIHG FlilAh-CIAL ASSISTALICE TO BUYERS 

This section covers jjrovisions v/hich regulated certain deal- 
ings with customers which were generally separate and distinct from the 
sale itself and which in some way \Tere of financial benefit to the 
buyer. Usually some money flowed from the seller to the customer as a 
result of these transactions. 

Purchasing from Buyer 

The provisions cla,ssified here nlaced restrictions upon buying 
from a customer products other than industry products. The first group 
were those which forbade Purchases of 3,ny sort. For example, the Metal 
Tank Code read as follows: 

"It is an unfair practice, for the jpurpose of inducing 
9679 . 



-58- 

a sale, to buy or to offer to 'bu-j, directly or indirectly, 
from purchasers or prospective purchasers of the product of the 
industrv, ct.pital stock, ^oodSj r/rres, rnd/or nerch.-uadisc." 

The second sul-head iiicludC'S tvio types of "orovisions: those 
limiting the purc'uases to a "reasO'U.biLe" amomit rnd those requiring that 
the price paid by the indvistry neraber be iic& excessivee 

The other restrictions Yjere r prohibition of such purchases 
if misleading, axid a prohibition of all purchases except for the member's 
ovm use. 

Renting From Duyr'- ,- 

This item covers restrictions plR.ccd on the renting of space 
from the customer '^oy the selltr^ The space night be used for storage 
purposes, offices, dis'ilays, eico The customer as loaidlord rrould pre- 
sumably be benefited therebyo In sorae codes such action xjd.s entirely 
forbidden. The other restrictions laid down in one or :iore codes in- 
cluded a prohibition if discriminatory or if excessive in amount. 

Assumption of Bu'''er's Costs 

Classified ui-^der this item are codes Trhich restricted the pay- 
ment by the seller of certain costs of the customer, rhich normally be- 
longed to the cu&bc.'ier rnu rrhioh had no direct connection uith the sale 
of indii-stry product Sc 'I'he customer's costs T;hose payment bj'- the seller 
xie.s restricted in one or more of the codes included here, were as 
follows: insxirance preniiuas; inspection fees; ^^er'iit charges; long 
distance telephone calls to seller; telegrams to seller; personal ex- 
penses; traveling expenses; and freight charges on reshipments by 
customer to his own custoiaerso 

The first sub-head includes codes -rhich prohibited allowances 
for one or more of these costs. The second inclades codes which pro- 
hibited them only if discriminatory or required that such payments be 
previously set forth in the v;ritteu agreement. 

Subsidizing or financing Buye r 

Classified under this item, in addition to restrictions on 
"subsidies" or "financing" themselves, are restrictions upon activities 
whose effect represented e. subsidy of some sort. The following sort of 
activity by sellers wo.s restricted in one oi" more codes: malcing loans 
to customers; financing sale of securities by cu.stoner, ipurchasing 
customer's capital stock, coj-'pensating customer for "business losses", 
guaranteeing a.ccounts due customer; fins:ici;ig payments due customer 
from his own custcners; and eLnlo3'"ing employees, relatives, or associates 
of the customer or employing the customer himself. 

Aside from the prohibitions of these practices, the following 
restrictions were placed upon one or riore of these pra,ctices in one or 
more codes: prohibited only if secret; must be set forth in written 
agreement; -orohibited if effect was discriminatory; a.nd prohibited un- 
less the cost involved to the seller \;a.s allowed for in the selling price 

9679 



-59- 

of the industry product. 

Fa.tronizine Fublic:-tion in Wliich 3uver is Interested 

This iten includes codes ■'.7hich restricted payments or allow- 
ances to customers for advertising^ or other reasons, in connection with 
customers' cp.ta,lof;i.ies, house orgens; programs, trade journals, or various 
other puhlications 3"'3or.sorGd in some way "by the cnstoraero The first 
sub-head contains cedes \rhicb. prohioited pa.tvonage of one or more of the 
things enumsrs.tedo Classified ijnder the second su"b-head are codes which 
contained one or more of the following restrictions on one or more of 
the a^hove; prohiliited if ■'xareasono.'ble in amount; m3,ximuja limit specified; 
or subject to approval of Code~ Authority. 



9679 



-60- 



ASSUI.CTION OF LIABILITIES N'^T " ?3AS7iIA3LY" 33LLEil' S 

Classified ^i^re are cedes vvhis'x proliioi ted t^ie assumption "by the 
seller of certain contingent liabili ci'^s wliicli norriially, allegedly, were 
the rcGpou?ibility of t.-e customor. The ^rarlov.3 type? of liability, the 
assumption of which "by s^■:ller3 V7as prchihi ted i.i Oiie or more codes, were 
as follows.: liahM^ty fov non-perf oripance cf seller's ncntractual duties 
when caused hy njn-controllaole facocrs, liability for consenuential 
damages, liabxliiy for patent infringement b, liability for errors in 
plans or specifications furnished ov approved by o^xyers, and liability 
for damage to buyer' s drcv:^inf;s or equipment caused by non-controllable 
factors. Also included here are codes w"'iich prohibited members from 
entering into contracts rhich were not subject to adjustments necessi- 
tated by non-controllable factors. 

CCiiDITiaiMAL SALES 

Tlie coiiiiT->n feature of ell the items in this section v/as that th^ 
related to transactions in wh:ch the transfer of goods to the biiyer was 
.not final, Hie buyer, if he was unable to sell the goods or for other 
reasons, might retij..rn them to the seller with no further obligation. 
The sale \7as conditionsd and not absolute. 

Sales on Con signrient or Llemorandumi 

The provisii.r. s cla^^sified onde'^ tiis item generally mentioned the 
words "consignment" or ''meaorv-indujii'' in setting forth the restriction; 
only a few codes ha.ve been classified here by interpretetion. Sales 
on consignment or memorand'om are those in wiich the seller sends goods 
to the buyer withoiib the latter entering into a contract to buy or 
without being billed; the legal title remains with the seller; and the 
buyer can return the goods at any time or the seller can recall them 
at any time without either party being boiond. Ii , however, a customer 
for the resale of the goods appears, the jriginal buyer or consignee 
may sell the goods and arrange for the trar.sfer of title from the 
original seller or consignor. 

The first si:hhead includes codes in v/hich all consignments of any 
nature were forbidden. Tlie second inclades codes which gave to the 
code authority power to regul;.te such transactions without repairing 
N3A approval of its rulings. Some cedes contemplated that the code 
authority set up general coniitions, applicable to all members, \ander 
which consignments migli''". be mads. Others assigned to it only an ex- 
empting function to be rsed wh^ere special circumstances so required. 
The third s'c.hhead includes codes with provisions similar to the second 
but which required NBA approval before promulgation of rules by the 
code authority. 

Tlie other rertrictions, found in one or more codes, were as 
follows: prohibili-d only if secret; prohioited if tl:.e effect was dis- 
criminatory; maximum prescribed for the length of time for which a con- 
sigrjnent miglit be made; terms tiiereto must be set forth in written 
agreement; prohibited if prices for possible future sale were indeter- 
minate; and prohibited only with respect to new customers. 



9679 



-61- 

A n-ambs> of codes specifically exempted consign:;ients to controlled 
subsidiaries, "direct reT)resentatives" or "agents", from the restriction 
established. Also, there were numerous exemptions of shipments for 
bona fide sample p"drpose5 or approval and demonstrating imrposes, which 
miglit otherwise have been rest±'icted by tlie sweeping i-ules relative to 
consiijnments. 

Storing; Goods with fastomer 

The provisions classified under this item a.lmcst ■'universally used 
the words "stcrin.^ goods rith customer". As jipj be seen from the tabu- 
lation, the common restriction was an oatrigLit prohibition of the 
practice. This pi-ovision is classified imder "Conditimal Sales" be- 
cause the effect of t-ie practice is similar to that of consignments — 
goods are pla^ced in the hands of customers without their being obligated 
to buy, althougLa being in a position to sell if customers appear. 

The other restriction required that adequate remuneration should 
be paid to the customer by the member if he stored goods v?ith customers. 

Hesale Guarantees and Hepurchase Agreements 

A resale guarantee involves a contract in wliich the seller, in 
effect, guarantees the buyer a certain specified voliune or resale busi- 
ness or turnover on goods purchased outright. If this vol'ome is not 
realized by the customer within a specified period, the seller agrees 
to taice back all goods unsold and to credit the customer' s account 
accordingly. The effect of a repurchase agreement is simila.r, inasmuch 
as, in this case, the seller agrees, as one of tue terms of the contract 
to buy back all unsold goods. 3oth may be distin(:i:aished from a consign- 
ment in that both contemplate the transfer of title and the customary 
invoicing in the first instance. But, as may be seen from the defini- 
tion, they nevertheless are conditional and not absoKite sales. Classi- 
fied under this item also are prohibitions of "bill-back" or "charge- 
back" arrangements, which are similar in nature to the other two items 
here. 

Sales on Trial or Approval 

In sales on trial, the entering into a binding contract of sale and 
the billing are delayed until the goods are received by the buyer and he 
has had an opport-unity to ''try them out." If he finds the goods unsat- 
isfactory after such trial, he may return them and is under no further 
obligation. On the other hand, if he finds them satisfactory, a con- 
tract of sale is signed and he is then billed for the goods in his 
possession. Sales on approval are similar, excepting tliat it is not 
contemplated that the goods will actually be used, as when on trial, but 
merely inspected and examined. T-ie codes wiiich reg^alated trials covered 
chiefly heavy machinery and equipment codes where inspection alone would 
furnish only an inadequate test, wliereas the codes which regulated 
approvals were chiefly consiimers' goods. Both types are included under 
this one item. 

The first subhead includes codes wnich prohibited sales on trial, 



9679 



-52- 

sales on approval, or "both. Tao second includes codes whicli "oermitted 
but placed a limit upon tae number of da/s lurins, miich goods might "be 
left with customers without oillini^ tliem tliereior. The other restric- 
tions apply only to sales en trial and consisted of tie following, which 
appeared in one or more codes: limiL placed en quantity of ^oods that 
migiit "be Icf i; with custoir-er on tvipl at a gi^/en ti-ae; pro'nroited if 
ultimate price irdc. ■.,onr:lnate; pcrm.i-^tod only for new customers; terms 
thereof mufil, "be s';!, for'...h in written oi^Teeuie.it; m.ist have written re- 
quest for trial from customer; inusu "be reported to code authority; or 
authorization of code authority reouired. 

Tlie installation, for testing puT^oses. of newly developed mach- 
inery v/as cccasicna.lly exemptrrd from the restriction. 

SiiiPi/iTiJTS ,;iTi:cuT o^sa 

A number of codes contained jproxiibitions of shipping goods to 
customers wiclioat orders therefrom. Soaie added ''without customer's 
consent." Tic e7ii.ct practico at which these were ai.ned cannot be defi- 
nitelj' ascertained. In some cases it vms apparently directly against 
consignments as disc\issed above. In other cases, partictilarly where 
"without b-jyer' s consent'- was aided, it seemed directed against the 
possit-ly coerrivc prac-.j.cn of sending goods to customers without order, 
following up with a. demand for payment, and thus trying to force goods 
upon unv/illing buyors. A cla^.:sification of the provisions into these 
two types cannot, however, be accu.rately made, so they liMve all been 
lumped together here. 'Iv.e cones f:r Toy and Plaything and for the Seed 
Trade contained what seemod to be provisions of the second tyipe. 

Tile second restriction noted in the chart occurred in the Lumber 
ajid Timber Products code. 

P20DUCT AND i;L4II'TErA!>JC3 GU A3AITTE3 3 

This section contn,ins provision 3 wnich re.joilated adjustments made 
by sellers for inadequate performance by or defects in the product. 

Uniform Product G ua rantee 

The cede? included nere set forth th.e exact terminology to be used 
by all members in the guarantees of performance given with their prod-ucts. 
Tl-e actual subject matter of the guiiiantec is classified under one of the 
other provisions in this section. 

Guarantees in Excess of Majiufacturer' s "iTarranty 

Included here are codes v.'uich pr-hibitod the extending of a war- 
ranty which exceeded that provided by the manufacturer of the product. 
These codes covered either tie distribution trades or else assembling 
industries, which used products fabricated by another industry. 

"P r oduct Guarojitce " 

Tlie codes classified hereunder include those which placed restric- 



9379 



-63- 

tions on "product gTiarantees" , wifiout explaining whetlier the restric- 
tions related to all gaarantees or only to these applying to other than 
defective merchandise. (Cf. two following sections. ) One common type 
was a "blanket g-uarantee whicii covered all possihle diff icul.ties occur- 
ring, irreppictive of, whether or not the product was defective and the 
■fault the Siller's. The other chief type of provision was that using 
. the words "product guarantee" without further explanation. 

die first suohead contains codes which prohibited such guarantees. 
The second contains those which established a maximum period of time 
for which such biarlcet .guarar.tees could he given. Those ran all the 
way from ninety days to several years. The. other restrictions include 
tlie fbllowingj as found in ono or morG codes: prohibited if excessive; 
prohibited if misleadiiig; maximum limit placed on amount of allowance; 
■■guarantee must be set forth in writing; must be reported to code 
■ authority; seller may repair or replace at his option; service actually 
received by customer to be deducted from adjustment on a pro rata 
basis; customer must bear all shipping costs; and seller not responsi- 
ble for improper use of product. 

Product Guarantees Against Defective lierchandise 

Codes classified here regulated guarantees against defective mer- 
chandise, where the failure of the product was the fault of the seller 
only. The first subhead includes those codes which placed a limit 
upon the length of time for wiiich a guarantee could be made or during 
v;hich it was permissable to malce an adjustment for defects. Again, 
there was no uniformity in the limit specified a.s between codes.' The 
second subhead includes codes which require that the allowances made 
for defective merchandise be reasonable and not excessive. 

Tlie other restrictions, found in one or more codes, were as fol- 
lows: discriminatory allowances for defective goods prohibited; maxi- 
mum limit specified for amount of allowance for defective goods; guar- 
antee' must be set forth in writing; allowance granted must be reported 
to code authority; acceptance of returned dsfective merchandise must 
be reported to the code authority; allowance not to be made if product 
improperly used; repair or replacement only permitted; no. liability 
for consequential damages may be assujned; customer must bear all re- 
turn shipping costs; and return of goods must be previously authoriz ed 
by seller. 

P.roduct Guarantees Against Other Tlian Defective Merchandise 

Tiiis item represents provisions which specifically confined the 
scope of guarantees to actually defective merchandise. This was accom- 
plished by prohibiting, in diverse terminology, the iTiaking of any pro- 
duct guarantee against other than defects in workmanship and material. 

Maintenance Guarantee 

A maintenance guarantee is tne promise of free servicing and re- 
pairing of the product sold, whenever- it ceases performing satisfactor- 
ily. In the first group of restrictions, such free servicing was en- 

9679 



r-64" 

tirely forbidden. In the second, a .Ta:d.:num lengtii of time after the 
sale was specified during waich free servicing might "be given. 

"Guarantees " 

Tais ii:?m covers codes which restricted sap.rpjitec.s- in some way 
witho-ab specif yi;ng irhai- i^arti- alar typn of g'iar,- jifceo, if any, was meant. 
The first suohead inclvjlcs cedes which forh-d the malcing of misleading 
or deceptive ^laran '-.ee^;. The other restriction u in general v/ere: pro- 
hibitfad if excessive; ai^d prohihited if discriminatory. 

PjlTUHilS MB ADJUSTl/IENTS 

These five types of restrictions related to the matter of accept- 
ing the retiirn o:^ mrrchandise fjia ma':lng adjustment therefor — v/hen the 
merchandise itself v/as, insofar as the cocio provisicai indicates, physi- 
cally catisfactory and ±ree of defsctj. In a sense, the ahility to re- 
turn goods mi^css the sale a ccr.diticnal one and tlxi s section, accord- 
ingly, ■■shovJ.d he considered in relation to the section entitled "Condi- 
tional Sales'' ahcve. 

"Accepting P.etuiT. of Merchandise " 

The codes incl-jded here c^ntaired restrictions upon the acceptance 
of returned gooJs v-,i'oh:-:;.i qualifying the terms in a,ny way. Thus, it 
cannct be determined w^.'^'cher v.e protfisicns were aimed chiefly at the 
return of satisfacr^ory, r.c-n-d'-;f active goods or simply at all goods, 
whether or not defecti.e. Tc the 3J tent that the latter is true, the 
provisions are parl-iall.y related to taose which rsf^olated product guar- 
antees. Because cf this imporjoerahle , quotation morlcs have been used; 
and there have he-'n classified here only thoce codes Tiiich used these 
words without qua.iification. 

The first subhead includes codes vhich contained a blanket prohi- 
bition of accepting the return of goods which were actually sold and 
delivered. It is within this group that the greatest doubt arises as 
to whether the provisions may not have been intended to apply only to 
non-defectiv'e . goods. 

Tlie second group includes codes v/hich provided that goods could 
not be returned af'r.er a specified number rf days following the sale. 
The third group provided that goods might le returned but required that 
the allowances granted tuerefor be reason able. 

The other restrictions, found in one or more codes, were as fol- 
lows: a handling cr service charge must be ma.de when goods returned; 
an unreascnahle amount of goods must not be accepted for return; no 
discrimination to be practiced in accepting returned goods; maximum 
limit specified on amount of allowance mat-e foi returned goods (in 
terms of percentage of selling; price); ai^'thcrization of code authority 
required; must be reported to code authori.ty; allovyances prohibited if 
only partial T)rocLUct returned; and prohibited unle ss accompanied by 
another order of equal value.. 



9679 



Accepting; 2etMrn of C f.i er Tr.aii So fac ti ve i . lcrchandise 

This item includes codes wviicii re£;alated the retiirn of first-class 
non-defective, goods. The first t;;nre of rostriction prohilDited, practic- 
ally in so majiy words, accepting tho return of ji'Dods other than those 
defective in T70xicnj',nship and nnteriil. Tlie second typt; perirdtted 
accepting the return of non-def ecti^^e goods but required that the 
seller char.'-^e a hvulling or servica fee in ea.ch cs,ge. The third type 
prohibited accepting the retuj-n of ror -defective goods after a. speci- 
fied number of d.aj's follov^ing the original sale. 

The other ro'itrictian s, fov-nd in one or more codes, were as fol- 
lows; alloiTances for gooas raturned not to be excessive; maxirr-um limit 
placed on a'ncujit of good? to be acce]y'.ed for return, maximum limit 
placed upon allowance for ret'arned goods (in terms of percentage of 
original sel'iing price'i; accep-;.snce of returns must be repofte-d to the 
code authority; permitt>=d only if goo is retxirned are still on current 
.list; and goods must be in saleable condition. 

Accepting Return of Obsolete, Discontinued, or "Un'^aleable" Ijjerchandise 

The provisions classified under this item reg"alated the return of 
goods which were physically in good condition and non-defective, but 
which were of a typo nc longer en the current lifted 'hy the seller. 
Such goods m.ight be either ac cuall^" obsolete in design, of a line that 
had been entirely discontinued, or for S'orae reason totally unsaleable. 
The first subhead, covers cedes which prohibited industry members from 
accepting the return of one or more of these three types of goods. The 
other restrictions, foujid in one or more codes, on the return of one of 
the types, were as follows: handling or service charge must be made; 
upper limit placed on amount of allowance to be given; and acceptance 
of such returns must be reported to the code authority. 

Adjusting Incorrect Sliipments 

This item includes provisions which rejialated the practice of re- 
placing or making allowance for errors in shipment, such as wrong quan- 
tity, size, grade, type, etc. Those codes "onder the first subhead 
specified a maxim^a.ii period of time after the receipt of shipment by the 
customer during ?;jrj ch it was permissible to malce such adjustments. 
Those under the second prohibited the m^alcing of an excessive number of 
adjustments or the granting of unreasonable allowances for adjustments. 
The other restrictions were tv/o in nuaber: return of goods must be pre- 
ceded by an explanatory letter; and no claim for consequential damages 
may be allowed. 

Exchanging Merchandise 

Tills item includes codes which prohibited the practice of taking^ 
back one tjrpe of goods T-fhich was in good condition and giving others in 
exchange therefor. It had nc relation to the problem of defective mer- 
chandise applying only to piiysically good merchandise. 



9679 



-55- 

R-5KD3HIJIG ADDI'i'I "i^'AL C3 SPECIAL 3EHVICZS 

The practices restricted in txiis section have as their common char- 
acteristic the fact the.7 are ail types of ir tangible services which the 
seller may render the tuyer. These services dc not Cinstitiite the 
basic industry vj-^oducts themselves. bi;.t are i.-endf;red in connection with 
the sale of indU3-:ry p:-oducts. The most coiT^mon restriction v/as that 
which prohiLi ied vh jm if free, or roqaj red an adequate char;<i-o to he 
made. This indicates the intent to plug up a possible loophole for 
evasion of miiii;:ioin price provisiais. 

Lavish or E:: c es!i'"Te Ent-?rtaJr.ment 

The codes included here prohihited certr.in types of entertainment 
of purchasers, cf prcspeccive purcuasers, or of their eniployees. These 
types were vai'ioij&ly descrihed as lavish, excessirc, •undignified, or 
ur.'/?arranted. Tne only elahoratiQi of these terns was contained in tlie 
Cement Code whic.i prohibited tne providing of banquets for purchasers. 

Providing Sales Kelp 

The prac'i-ice involved here was that of the supplying by the seller 
of one cr more salesmen to th-^ buyer. Tlie seller would pay the sales- 
man's salary; and the latter wcxild sell to the buyer's own customers, 
with the sales beirg made for the account of tliis buyer. 

Aside from the codes which entirely prohibited the supplying of 
such service to custou;3vs, the following re-jtrictions were imposed in 
one or more codes; prohibited only if done to an excessive degree; pro- 
hibited only if d~o e se.:re1;iy; prohibited Ojily if buy/er is not ade** . 
quately char^:-=d for the cost thereof; pr-ihioitec" if discriminatory; 
prohibited ujiiess salesnian represented to be employee of manufacturer; 
prohibited if it gi'^'es member an undue aa\antage over coiapeting members; 
and maximum l:"mit placed upon length of time for which one CListomer 
may be so aided. 

Demonstrating 

Tne forms which this service may take are the supplying by the 
seller of his own paid employses to demonstrate pr-oducts in the buyer's 
place of business to the bu.yor' s customers; the supplying of employees 
to demonstrate at some lengtlj. machinery an.d equipment sold to the buyer 
where this o\\yer is the ultimate user, and so.pplying employees to in- 
struct buyer' s employees how to operate the product. 

Aside from the blanket prohibitions of these tjrpes of demon- 
strating, the following rostrJctions v^ere placed upon them in one or 
more codes: allowed on]y for specified length of time for each buyer; 
employee itiust be clearly identified as a demonstrator; seller must 
make adeqopte charge for such services; pronibited until after buyer 
has given order; and prohibited if a comrpetitive demonstration in con- 
nection v/ith a call for bids. 



9679 



-67- 



Erection and/or Installation 

Tlie service restrictad here v;s.s taat cf settin^- up or installing 
industry prodacts, generally lieavy nic.chinery cr eruipnent. Some codes 
restricted all such ser".Lces, "jViiile oth.ers specified certain permssive 
t-"pes and liniited only oti^^er types. The first subhead contains codes 
which required that the seller niast charge the tuyer for the additional 
cost involved. The second c-:ntains codes wliich pi'ohioited such ser- 
vices entirely or only if they were discriminatory. 

"Jarencusinj; or Storage 

The service restricted here wad that of permittin,^ customers to 
use T73.rehouse3 or stora^^s space ovTied "oy tl-e seller, whether for the 
hori.G:"n.g of goods vvhose delivery was not accepted hy tie contract date 
or othervrise. The most comrnoA restriction, shovin in the first subhead, , 
permitted the prextice only if a isasonaole cnarse was made to the 
buyer. The other restrictions, foiijid in one or mere codes were as 
follows: prohibited entirely (two codes); prohibited if carried to an 
unreasonable extent; permitted only for a specified length of time per 
customer; or prohibited if discriminatory and not made available to all 
customers. 

Heconditioning, Hepair or Maintenance 

The services restricted here were the restoring of a used product 
belonging to tiie customer to first class conditi:n, repairing of parts 
out of condition for reasons other than the seller's fault, or provid- 
ing of periodic servicings necessary to keep a product in good condi- 
tion. In es,ch case the service was performed by the seller's employees 
upon products which continued to belong to the buyer. Most commonly, 
as under the first subhead, the codes prohibited such service only if 
rendered free or if a charge covering the cost involved was not made. 
Tlie other restrictions, classified rmder the second subhead, were as 
fallows: prohibited only if not provided equally to all buyers; or 
permitted for only a specif iea rnanber cf lays after the sale. 



9679 



-63- 



Sup"? lying Draw in,; s . Plans, Soecifi oa tions, Surveys, or Formulae 

The service perfonr-cil here by the 3s?.l3r ^vas; that of provid- 
ing, generally in adv&nco of a ■oo£'',.'ble sale, ceris/dii. :inalyses which 
wereof valviy to oVit. buyer in lor^mi'Ucting hie purchasiug reqr.i-^ements. 
The five itsias listed iri the title ave suggcs^tivo and cne or more of 
them was covered :v eacn coO.e ].istf-:d h-^re,. Drav.ings might he archi- 
tect's drawings. C'rawio~s of KachinPR, or other hltie prints. Tonnulae 
pertained to the xr.i-epafation of special lorrrulae necessitated hy the 
customer's pecul-.r.r nsoviii. 

Again, the mort coiimon rei^.triction, as covered "by the first 
suh-head, requ.ireH r,kac '^ rea-onahlo c'laj-^c ho made for sucn services 
or prohibited them if free, A groap of the Ii'kchinerj'' and Allied Pro- 
ducts supplements ?.equirf;d the authcrlEation of the code authority he- 
foredrawinrs of .li-achinss could he prepared and furnished to prospective 
h-uycrs. T.'ia other restrictions, appearing in one or mere codes includ- 
ed the following, lurni-hirg cf drawings absolutely "orohibi ued; furn- 
ishing of free drawings prohii.-.ted if done exessively; and furnishing 
of plans or specifications permitted only v/hen already contained in 
catalogues. 

Other Special or Additi o nal Services 

Classified u:ider th: s iten is a group of miscellaneous ser- 
vices, the rendering of \7hich to cuntomers was restricted in some way. 
The granting of the folle^vin:.; types of services was prohibited entirely 
in one or more cod'is; assisting customer to find purcliaser for used 
product owned by customer; assisting ctistomers to obtain used products 
for trade-in purposes; repacking goods upon cuistcmer's request in a 
form other than originally packed; rendering ''favors" to customers; 
performing certain "Oixasviil processing rjef.'ices ST.ecified in the code; 
special staiLping or marking of good;: for ci^'-storaer 's purposes: partici- 
pating in "grouj.' 3howin:'i-!=," , converitic'it., exc, sprnsored by customers; 
and rendering ''any -onusual service'' (withcti.T: further definition.) 

The following types of services were permitted by one or more 
codes only if an adequate ch&rge for them were made to the custom.er; 
deliveries by seller's tracks; engineering services (specified or unde- 
fined); "handling" (v/ithout further dofini i;ion) ; crati.ig or packing of 
goods sold; inspections; furnishing certain 'ipecirl processing services 
specified in cooo; siippl-iring cs timjs.tes; special stampings and. markings; 
and rendering "any -onusLml sea-vice." 

Classified under other restrictions are the following which ap- 
peared in one or more codes; ''favors" and "anj'' iinusual service" prohi- 
bited only if secrot; deliveries by seller's tracks and "any unusual 
service" prohibited if excessive in amount; engineering services a,nd 
participation in "group showings" permitted only upon authorization by 
the code authority; furnishing certain srjecial processing services speci- 
fied in code prohibi.;^ed only if discriLiinatoiy as among customers; rend- 
ering "any unusual services" unless set forth in V7ritten agreement; and 
participating in group showings unless the declared policy of the cxhi- 

9679 



-69- 

titing organization was to promote sale of products of the member's in- 
dustry. 

SUTPLYISC ATDIC^IOITAL OP. SPECIAL CxOODS 

This section contains restrictions upon the furnishing to the 
customer of additional physical and valuahle goods heyond those provided 
for in the tvCtual or normal contract of salo. The additional goods 
might .take the cane form as tnose actually sold or otherwise. \There 
the supplying of these goods was prohihited; it is not clear v/hether 
the prohio:" tion a.pplied only when they were supplied gratis or under 
any circumstances.. Without douht, in many cases the word "free" v;as 
implied in such e.cpressions as premiums, prizes, samples, etc., even 
thoiigh it was not expressed; and so a. seemxi^g prohihition under all cir- 
cximstances may have "been intended only as a limitation upon supplying 
them gratis = However, it hs.s heen impossible to ascertain the intent 
clearly in all cases; a rigid cla:,? Ification according to the precise 
terminology ; regardless of context or probahle intent has, therefore, 
"been followod. 

Free Deals 

A "free deal" lia.s been construed here to mean a gratuitous sup- 
plying to a customer, in connection with a specific sale, of goods in ex- 
cess of those actually billed to the customer and identical in nature 
with those 3,ctu3.11y sold^ The pro"verbia.l "baker's dozen" represents a 
free deal of one unit. Pro'^'isrlons included hereunder, in addition to 
those which conformed to this definition, were those which vsed. the 
words "free deals'' or "free goods or mierchandir s" without qualification, 
which enumerated industry products in the restriction, or which restric- 
ted "free services" v/hen the basic industry product was actually a ser- 
vice. 

The subhead "prohibited", i;v this case, relates only to the 
gratuitous aspect of srpplying these things. 

Under "other restrictions" are included the following, as 
found in one or more codes; prohibited only if excessive in amount 
(Radio Broadcasting); and certain multiple restrictions which were 
patterned exactly after H. H. A. Office Memorandum Ho. 232, Yfhich re- 
flected il. H. A. policy as of June 12, 19-34. This I;iemorandum read as 
follows: 

"Although there shall be no general prohibition against the 

use of premiums, the use of free deals, premiums, or prices, 

in the following ways is prohibited: 



"5 



The use of free deals, premiums, or prizes in ways 
which involve commercial bribery in any form. 



"b. The use of free deals, premi-'oms, or prizes in ways ■ 

which involve lottery in any form. The term 'lottery' 
should be constraed to include, but without limitation, 
any plan or arrangement whereby the free deals, premiums 



9679 



-70- 

or prizes offered differ s-abstantially in value from 
custoiaer 'co ccytomer of the sarne r.lass, except as a 
result of differonc-iS in q-urr titles purchased. 

"c. Tlv? use of fre^ deals, premiiims, or pri::'3s in ways 

whicli ir-(^;lvG inAsre^ircsentation, or fraud, or dccep- 
tioii in r7iy form, inoludir.", but vrithout liaitation, 
the ase cf the vrard 'frae', 'gift', 'gratuity', or language 
of sinular ir.Toort in connection -.vith the giving of free 
do;.l3, preTiiiriis, or prizes for the purpose or rith the 
effect of misleaiing or deceiving customers. 

I'd. The giving of free deals, premiums, or prizes to any 
cue toners vrhen such free deals, premiums, or prizes 
are not offered to all cu-stomers of the same cls-ss 
in the ti-ade area." 

Lump Si Lm an d/ or C omoir^ tj on Offers of Sales or Supplying: Other or 
Addiii o-. i=^l C-ooc..' ?t ?.8c'u , .ed ?-'i. ces 

The restrictions placed upon lurip sum offers, comhination 
offers, and coml'inaticn ^lulec are included in this section "because 
these practices represL.T xcd methodic through which additional goods 
could he sup'oli.'jd to CL!.d'lcmei-3 eithei gratis or at something less 
than full price^ o l"jp tum offer 'Tris one in which a single price was 
quoted for t-o or voi-r. --/voduc-^r-. Combination offers were offers of 
two or more prodvc';s at a price less in amou-it than if the constituent 
products were sold sepai'ately. Comoination sales were simply the con- 
summation cf combination offers. 

The first subhead includes codes v;hich prohihited one or 
more of these three prav.:ice!?, In^'-ludei are those code; which used 
one of the three termf? themgelves ox explajned the practice in a 
manner which confoiraed to the ahove definitions, A n".^mDcr of pro- 
visions were in tevjis of unitcnizcd offers, hut the effect of these 
is the same as tho-ie dlscussec . 

Under the second sijhhead are those codes which specifically 
prohihited such, offers or sales unlers thu total price quoted or charged 
eq-Lialed the s'-im^. of the prevr.j.ling prices of the constituent products. 
Included under this subhead also are codes which prohibited, in connec- 
tion with a given sale, sales of other or additional goods at reduced 
prices. 

Among the other restrictions, appearing in one or more codes, 
wag the one which required that industry products must he itemized where 
industry and non-industry products were combined and unit prices shown 
(regardless of total). 

Gifts 

In classifying provisions under this item, "gifts" were con- 
strued to mean valuable and physical things of a more or less personal 



9679 



V 



-71- 

nature igiven to the ■b-a;s'er hinself. excluded were merchandise of various 
sorts T7hich could he resold and gifts to employees of the huyer. Dona- 
tions of money, hov/ever, were included. This term definitely implies 
tiiat the supplying thereof is :;ratis. Si-jecifically, there rere includ- 
ed here provisions which restricted "i?-:;ifts", "donations", etc; provi- 
sions which restricted practices defined as aoove; provisions v;hich 
enxime rated sundry objects other tlian industrj^ products, which camo 
under the ahove definition; and provisions which regulated gifts to 
organizations in which the buj'-er was interested. 

Aside from the codes which prohibited gifts in one of the 
forms mentioned a-bove, there are included vinder the second subhead 
limitations on deceptive or m.isleadiag gifts. A considerable number 
of these were uniform and read as follows: 

"Ho member shall offer or give prizes, premiums, or gifts 
in connection with the sale of products, or as an induce- 
ment thereto, 'oy any scheme, which involves lottery, mis- 
representation, or fraud." 

Included here also are a fev/. codes which applied to gifts 
Policy Memorandum ITo. 232, as quoted under Free Dgals above. The 
other restrictions on gifts, which appeared in one or more codes in- 
clude the following: prohibited only if of an excessive value; pro- 
hibited only if done secretly, prohibited only if discriminatory, 
maximum limit placed on amount of gifts; a.nd approval of code author- 
ity required. 

C-ratuities 



Under this item have been classified codes which restricted 
the giving of "any gratuities" and those which contained certain broad, 
sweeping restrictions on supplying "anything of value" and similar 
vague restrictions. This item by its very nature represents, of course, 
a gratuitous s\ipplylng. The other restrictions, classified under the 
second subhead, are found in two codes which prohibited gra.tuities only 
if discriminatory a.nd four codes, only if of excessive or unreasonable 
value. 

Premiums 

A premium has been construed here to be goods other than those 
produced by the industry, supplied to the buyer.,- with or without charge, 
which are of value to the business for resale purposes or otherwise. 
Classified here are codes, the greatest number of which used the word 
"premium"; and those codes restriction the sipplying of certain things 
defined as above. As discussed under the title of this section, there 
is no doubt that part of the codes regarded premiums as something free 
by definition. Consequently, some of the codes listed under the first 
subhead as prohibiting premiums may h^ve intended to prohibit only free 
premiums. 

The second subhead contains chiefly codes which read the same 
9679 



-72- 

as the quotation tjiven under the seconL. subhead under "Gifts" or as Of- 
fice I.ierao randtim llo. J33 as quoted under "Tree Deals" atove. 

The third suchead contains codes v/hich presur.iably did not re- 
gard premiums as rome thing inherently free. Thoy required in some form 
that the cost of the premium he included in the totel selling price 
charged. 

The other restrictions, fou:id in one or more codes, uere as 
follov^s: pr:;hi"bited only if e-xcessive: prohioi;.ed only if secret; 
prchriiiited only if discriminatory; m&,.-;inuri limit placed upon permissible 
amount; prohioited only if they effct price reduction or discounts; 
and prohihited e".cept to conriujiier purcliaser;;. 

Prizes 

Included here ?,rc codes which used the term "prizes" and codes 
which resti"icted "af/ard'c'' or c.:-:'ril^,r mr.tters in connection with some 
Icind of a contest, other tl-ja.n T.hqse in will ch only enroloyees of the 
seller coiirpc^.e. Aside from the codes v/hich prohibited ;Drizes, under 
the second subhead are included codes which restricted the giving of 
prizes only when deceptive or mislea.ding. These generally read the 
same as the quotation given under the second subhead vinder "G-ifts", 
or as in Office Liemorandum ITo. 2G2 as ouoted under "Free Deals" above. 
The other restrictions; fo'und in one or more codes, were as follows: 
prohibited unless the cost thereof is covered in selling prices; and 
prohibited only if discrimina-tory. 

Samples 

A sample lias been construed here a,s the supplying, with or 
without charge, of a limited number of indtistry products prior to an 
actual sale of. goods, to per:.:it inspection ^oy the customer. Unlike 
sales on approval, the sample itself does not constitute the entire 
amount o±. products contemplated in the sale but only a fractional part 
thereof; also it is generally assumed tha.t the customer will permanently 
retain the sample goods. Most of tho codes included used the word 
"sarqole" in setting forth the restriction. The others were classified 
here because of the confoimity of thuhr wording with the above defini- 
tion. 

The codes classified under the first stibhead prohibited, with- 
out qualification, the supplying of samoler, to customers. These may or 
may not have intended to. prohibit only free saini:)les. 

Under the second subhead are classified codes containing de- 
tailed and heterogeneous rules governing the furnishing of samples. Fol- 
lowing are some exam-pies of the tj^pes of restrictions involved: prohibit- 
ed except with bona fide order; limitations on allor/ances for samples 
returned; maxirau^;! credit terms en sarqiles specified; prohibited if an 
integral part of sale; and permitted only if hand or display samples. 

Under the third subhead are included codes which prohibited 
9679 



-73- 

the furnir-hing of free samples, wliich reqn.ired that an adequate charge 
should he made for them, or which required that their cost he covered 
in selling prices. 

The fourth suhhead includes codes Vifhich placed a specific 
maximum limit upon the amount of sa.mples that might he furnished to any 
single customer. The other restrictions classified under the fifth 
suhhead, ac appearing in one or moi'e codes, included prohibition of 
samples and the requirement thiD.t samples must he returned hy customer 
within specified number of days. 

Other Special Goods 

This item is a catch-all for codes containing miscellaneous 
restrictions of goods other than industry products. The supplying of 
the following types of goods was restricted in one or more codes classi- 
fied here: containers of any kind; sppcia.l containers only; supplemen- 
tary equipmiont; special equipment; certain advertising materials; dis- 
plaj'" materials; printed matter (other tlieai advertising material); cer- 
tain accessories; coupons; lahels of any kind; special lahols only; 
script hooks; and permitting retention of trade-ins upon which seller 
has made an allowance. 

Under the first suhhead e.re codes which prohihited without 
qualification the furnishing of "one or more of the types of goods 
enumerated ahove. Under the second a-re codes v/hich required that 
the furnishing of one or more of them should he done only if an adequate 
charge was made therefor. The other restrictions, found in one or more 
codes, on the furnishing of one or more of these types were: Custom^or 
must return after a. specified number of days; ma.ximom limit established 
to amount that might he furnished; prohibited only if excessive in am- 
ount; prohibited only if not furnished to all customers; prohibited if 
not branded with seller's n3.me; prohibited without signed request from 
customer; and prohibited unless deposit collected to insure return of 
goods. 



rOmiS OP OFFERS, OSDEHS, AGIGmailTS , 3TC. 

This section contains regulations established for the form 
smd. subject matter of documents which record the varioiis steps in a 
transaction. The types of documents so regulated- incl\ided offers, 
orders, contracts, invoices, receipts and appraisals. The obvious de- 
sign of these provisions was to secure completo records, whether for 
the purpose of preventing evasion of other code provisions or other- 
wise. 

Oral Offers, Orders, Agreements and/or Appraisals. 

The codes classified here prohibited one or more of the 
following: shipping goods without a written order from the customer; 
oral offers; entering into contracts \7hich were not written, or giving 
oral appra.isals of merchandise. The prohibitions of oral agreements 
make up ab^ut three-fourths of the total codes included; ora-l orders 

9679 



are prohibited in only two codes and oral appraisals in only one. The . 
other restrictio:;s were in cedes permj.ttj.ng oi-al offers or agreements 
if the aracxit involved or period of duration viferc less than a specified 
figure. 

Sales Pocu r.e nts Or n ittin ;; significr.nt s-pocified De tail. 

The re'^t .•icticns hcrtdn inoliidsd related to the following 
types of (loc-i-caent!:; ofi-.r'^, o.."d;vrE; K.ivoices, ai.d conti'-acts. The types 
of detail required to he inril-'ricd :'.n these \70i'e; date of shipment of 
goods; ternis u:pon which sale was rriixds; soociin cations of the size and 
types of chipiaen'':; and a gro-up of mitcollr.Msous detailo The codes laid 
down i.-nles for one or more of the t^'pes of doc".ini'?nt3 and required one 
or more of th; tjpes of detail to hy jncorpors tnd in f^^a.id documents. 
Ho code lias ocen counted move xhan once i^-O-der this subhead. 

; The other rofitriclion under the second suohoad related to 

entering into co/ivracts \/hich did rio'c contozn full specifications of 
the shipmenl, t/Ldc was pi'oh^.oi ted only if the contract contained no 
provision for the c^j.stor.ier to supply specifications v/ithin a specified 
number of days. 



Unitemized 



'.i'la 



The codos classified here either required that invoices 
list all items rold tcj'^ouhsr xrAh the individu-P.l prices thereof, or 
prohioited sending invoices which were not so itemized indicating 
only a total sum. 



DSPAETUIHS FHOM COiJTHiCT 

This section includes provisions which required members to 
enforce upon customers the performances required of the latter by the 
contract of sale. 

De-oarture from Credit Terms of Contract 

Iri_.cludod under tte first subhead 8,re codes v/hich contained a 
blanket prohibition of permitting t>>'.s practice in so many words; and 
also those cedes; wxiich ^prohibited leniency to the customer with res- 
pect to specific contract-ual credit terms, such as cash discoamts, periods 
of free credit, installment sales rales, et''-c Classified ujider the 
second subhead are the codes which permitted such leniency only if extend- 
ed to all customers eau;illy. 



9679 



-75- 
Per.iittin;- Z.-gye r 's Cancellation or r.e T ac-i3,tion of Contract 

The provisions here related to the practice of permitting the lauyer 
to nithdraTT iTon the contract entirely, whether oefors or after the 
seller has r.ade shipnent. The codes tuider the first subhead forhade 
all0'7in3 su-ch action Idj the cu scone..- i;^ider any circ■ur•^stances^ Those 
■ander the second pemitted nithdra\7al only -a ion condition that the 
customer paid an adequate consideration to cover the e:rpenses incurred 
by the seller in prejDaring to carry cut his contractual duties. Tlie 
other restrictions, found in one or nore codes, vjere as follo\7s: must 
be reported to code authority; custDnier naj'" cancel undelivered portion 
only after notif icrtion; nay be peruitted if done rrithin specified 
n'ojnber of days after shipment received; pemitted only if done before 
goods ship2D8d b;- seller; nust be in rriting; and reinstatement of can- 
celled order iaust be raade at current prices '">nly. 

Settlement at Less Than Contn-.ct Va3-'ae 

Classified here are codes "hich prohibited the settlement of old 
acco".:aits at less than full value, those raich prohibited the pernitting 
of improper deductions rhen buyer remits, end. other prohibitions of al- 
lowing the custo:ner to jiay an arnoujit less thoai that prescribed in the 
contract. The other restriction, found in the Iron and Steel Code, re- 
quired the authorization of the code authority, subject to IT.E.A. revievr, 
before old accounts could be settled at less than their fall value. 

Other Deviations from Temns or Cf'nditions of CorAract 

Classified here is a group of niscellaneous restrictions on permit- 
ting buyer's departure from his contractual duties. The following prac- 
tices TTere prohibited in one or more of the codes inclr.ded here: sr.bsti- 
tuting ne-w contract for £ji old one nith aaj^er &t a lower price; extend- 
ing contract lor buyer's jenefit; erxeeding contract; making a collat- 
eral a.greenent with b-aj''er not to enforce r. part of contract on him; 
granting customer's request for a later deliver?^ date tlian provided in 
contract; rnd laalcing retroactive settlements or adjustments. The other 
restrictions, found in one or more codes, T.'ere as follows: retroactive 
settlements or adjustments prohibited only if discri:.iinator;;r in effect, 
and the extension of contract permitted only when bu3''er is onable to paj'", 

STllEAPJDS 

Product Stgnds.rds 

Included under this item, are all provisions relating to the estab- 
lislrient of standards for the produ.ct itself, whether the product be 
phj'-sical goods or services. Owing to the great diversitj"- of the provi-_ 
sions snd their overlaroing tendencies, a detailed breakdown into the 
different characteristics to which the standards relate is not feasible. 
The following general product characteristics were the subject of stand- 
ards provisions in one or m.ore codes: contents, ingredients, materials, 
q'oality, artificial ingredients, use of second hand materials, use of 
sub-standard goods, adiilteration, TJ^'eparation, joerfomance, o^uantity, 
size, weight, measure, thiclmess, covnt, color, tjrpe, grade, sub-stand- 

9679 



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ard ~oods, ar.d secrndr. 

The snoliead "Specirried" iT.cVudes, in the firrt -ol.-ce, those codes 
TThich theraGclves set forbh de'j-- iled stain^ards for one of the character- 
istics eniojierated atovc In addition it iTicliides codes vrhich incorpor- 
ated "o;"- reference exiptine; st<?jida,rd3 dravrn \ip "b^ sons specip,! agency, 
Aiaons the agencies so noccificd -nere'. existing trade association, pri- 
vate stands-rds agency 5 'sovern.iicnt a'gcncy [s.", !!>areau of Standards or De- 
partment of Agrioiilture) or e. con'binatiorj of tro of these, A few codes 
incorporated hy r-^ference the ''-customcM-y standaras" of the industry, A 
feu codes sinilarly incorporated the standards of another industry or 
codeo 

The second sub-head includes enaoling provisions emponerinj sone 
agency to di^ay? "op and pj:-oin-o_l-'-:ate st^-ji-oard-^o This a^'ency wps •'generally 
the code authority or one of :t-s sv.'b--co!r;r3 cteer ; a fcxj codes provided 
that the "aen'bers of the indv, ,; r ry''' shcal3. constitute the agency, Usu- 
allj'' their acticn Pas •'ip.de suDJect to HPA approval. Provision Tras oc- 
casionallj" r.ade for either gc.vorn:.2er.';al or consvjier representation in 
the agency, Alco, there vras poneti'ios prevision for cooperation vrith 
sone specified govemrpent agercy, private standa-rds agency, or other 
industries or trade asoociations, 

Pacl:a"<ing or Contrtiner Standards 

These standa:vds veve intended to regulate and to secure unifonnity 
in methods of paching and tjrpes of containers used. Again, in some 
cases the code contained detailed rales, and in others the code authoi^ 
ity or sone other agency v/as instructed to fomulate standards and pro- 
mulgate them, 

A fei7 codes contained standards provisions covering other matters, 
which do not fc,ll into either of the iteins on the tabulation. These re- 
lated to price, s^d-vertising, operation, processing methods, sanitary con- 
ditions of production, srfety of product, and ;.anner of labeling, 

LABEL iijG iC':;ui:^:;EETS 

Tliis section covers provisions ccntrining positive labeling re- 
quireaents, other than those relating to the use of USA. labels. It 
does not 'nclude the neijatii^e and blanket prohibitions of false label- 
ing, which are covered O'/ the r.ection entitled. "i.Jisrepresentation and 
Deception" below= Generally the rules were set forth in detail in the 
codec In a few cases the cod.e authority ox- raenbers were empowered to 
establish labeling rales; p;a-t of these reqxiired ilEA approval, or gov— 
eminent and consuner cooperation. In several cases labeling require- 
ments esta.blished elsewhere veve incorporated by reference. 

All Products as to Q,uality or Other Physical Properties or Character- 
istics 

The various subjects for ^hich labeling rules were prescribed in 
one or more codes, were as. follows: cxuality, materials, ingredients, 
quality' guarantee, size, weight, cubic content, capacity, process used, 

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type, perforr.an.ce, deEcription, serial m-unber, nnrne, contents of loack- 
■age, date produced, and grade. 

All Products as to Orir?:in or Tradenark 

The codes included here required thf.t the nane of the producer of 
the prod\ict or bis trc.der.ark he stsjiped on each product. 

All Products as to Price 

These provisions reo^uired that in some ytb:^^ the price of each pro- 
duct be attached thereto or he prominently displayed, 

Cert3.in S'pecified Clas se s of Produc ts 

The provisions incl"'ided here pertained to nandatorj'- or accurate 
labeling of one or mere of the follcring types of substandard products: 
second, " Eub-stEnde.rd" . defective, used, rebuilt, discontinued, obso- 
lete, unstan6.ardized, ncn-confonaity irith standards, initation, or 
substitute. Also included here are provisions rdiich required the label- 
ing of samples a,s suche 

SAl.ES QJ' SlU"S'^ICJI)A3Ii, OI'SOLE'TL 07: USES GOODS 

Under this iten are classified ^orovisions nhich restricted the 
sales of non-stanaa,rd p-ood.s, other then those provisions which specif- 
ically s'ap'plemented a I'linimun price provision for stands^rd products. 
Por example, a provision requirin.'j a"o-'.roval of the code authority for 
the selling of beloT? cost of iroc'ucticn txas not been included here, 
■ Tiiose rhich are included ap dy irrespective of the price at which the 
goods are sold. The sub-standard goods, the ss.le of xrhich rras regu- 
lated in one or more of the codes, included here, were as follows: 
seconds, used goods, damaged goods, rebuilt or over-hauled goods, dem- 
onstrators, obsolete goods, surj^lus stock, discontinued lines, returned 
goods, scrap and ''culled" goods. 

The tjrpes of goods viiose sale was prohibited in one or more codes 
were: seconds, dmaged goods, rebuilt goods, denonstrators, obsolete 
goods and discontinued lines, 

So:-'.e codes perraitted the sale of certain of these goods during 
specified months of the year, or not until after a certain period of 
time had ela^jsed. The goods whose sale wa-s so restricted in one or 
more codes were used goods, demonstrators, surplus stock, and discon- 
tinued lines. The third subhead inclixdes codes which placed an upper 
limit on the amount of sales of cert-ain tjnoes of sub-standard goods 
during a given period (ex-nressed in terms of percentage of total sales 
during the period). This tj'-ie of restriction was imposed in one or 
more codes upon sales of seconds, _^-a:ia,ged goods, surplus stock, and 
discontinued lines. The fourth subhead includes codes which required 
authorization of the code authority before certain tj^pes of sub-stand- 
ard goods might be sold. The fifth includes those which required mere- 
ly that such sales be reported to the code authority, 

Tlie other restrictions found in one or more codes aiid applying to 
sales of one or more of the types of sub-standard goods were: prohi— 

9679 



-78- • 

bited rnilecs sevsregated (in billings, etc.) fron sales of standard pro- 
ducts; ;.mst be incorporated in written agree'ient; nust not compete -un- 
fairly with sale of standard -roructs; proiiibited if siicli sales tend 
to lessen emplojnvient of labor; prohibited ur-lesc; brands or serial nun— 
bers ronoved: prol.ibited if stybilitj' of inc^'rastiy is aprnfully effected; 
and prohibited if goods diverted to other than certain specified uses. 

PIPJiCY AiJD Il.IITA^'IOrS 

P iracy of Styles- Desi>'^ns^ Iceas, Shetches, etc . 

The codes cla:;cifiGd under this iten restricted in some traj' the 
imitation, a.ir jrcpriatior , or copyinf^ cf one or more of the fcllomng 
things, as originrt^d by a corroetitor; st3'-Ies; designs, idea.s, sket- 
ches, patterns, patentsj copyri.'^htss machines, effects, tjTDes,' drawings, 
dummies, faoricsj advertisings prints, or lineso These items may be dis- 
tinguished from those in the item bslow by the fact tart the latter are 
marks of identifi.-.ation r/hile these constitute nn integral part of the 
product itself. The moso coiu-.on T?o"d used in the codes to cover the 
imitation involved ijas '"pirac2"''o There was scarcely any definition 
or clarification of rhat these terms embraced. 

The first subhead includes codes which contained a blaiol^et prohi- 
bition of such i*piracy" ujider all ci r 3-umsta,nceso The second includes 
codes which rjrohibited it until the lapse of a specified period of tine 
after the origination o}' a co:-."oetitoro This period of time was generally 
not less tha:i six months and ':-ent as high as five years in the Harking 
Device^ Code, 

The third subhead contains codes which jirovided a scheme for reg- 
istering styles with some central agenc;'' and prohibited the use of com- 
petitors! styles when so registered. In about lialf of the codes, the 
code authority or some committee ttiereof were nai-ied as the central agenc;''f 
while the other h-alf specified either some existing ^^^'ivate registration 
bureau or the U, So Patent Office, In some instances registration was 
nandatorj'- and members were required to register their own designs and 
styles before they themselves could xise them. Generally the prohibition 
of the use of styles registered by competitors \7as limited only to a 
specified period after registration. 

The fourth tyoe of restriction reouirel that the permission of the 
competitor who originated a style be L^ecured before it might be imitated. 

The othor restrictions placed in cne or more codes upon the a,ctivity 
under consideration here "ere: prohibited only when misleading; prohi- 
bited onljr if product r^old below creator's published prices; prohibited 
only if used in product whose ^rade was inferior to that of competitor; 
producer's name must be clearl;'- stamped on the product; and prohibited 
only if sold under reasonable cost. 

Imitation of Trade Karks or Other Identification of Conwetitor 

The codes classified under this item restricted in some way the 
imitation of one or more of the follov/ing means of competitors' identi- 

9679 



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fication: trade-nar!:s, trade nanes, "bi'ands, slogans, labels, package 
designs, store fronts, catalj^iie forms, signs, illustrations,: descrip- 
tive texts, lot nv.'nbers, "oroduct nimbers, or "other identifying marks". 
The first tr.-o means cited rrere b;- far the most frequently mentioned. 
There wa.s little definition or clarification as to rhat r/as included 
under each of these items. 

The first suhhsa-d includes codes nhich prohibited all such imita- 
tion, generally in virt'cally so many \70rds. The second contains those 
"fhich provided for the registration of identifs^ing mai'ks with some cen- 
tral agency and -orohibited imitation of any marks so' .registered. The 
third contains codes which reqaired the consent of the competitor be- 
fore an identifying mark originated by hin might be copied, 

COEHCIOSs TEESPASS, MD lilTEHIilEREKCE 

This section is composed of restrictions placed upon coercive prac- 
tices involving violence or the use of a superior bargaining position 
to bring pressure to bear upon competitors or customers to force them 
to do certain things aga-iast their Fill; trespass or the invasion of 
legal rights of competitors or customers; and interference rrith a com- 
petitor's busi,ness or property in a. Tiaj not contemplated in or necessi- 
tated by normal competitive relationships,, 

"Coercion" . 

Tlie codes included here prohibited "coercion", using that ver;'- term 
and not elaborating its meaning to enj- extent. The Faolesale Automo- 
tive 0ode declared that "the practice of coercion ,is ^onfair com- 
petition". The Ivietal Ta;al;: Code prohibited "obtaining or endeavoring to 
obtain business ''oj threats or coercion". 

Contingent Sales 

The codes included here contained restrictions U'oon the tjractice ■ 
of selling customers upon the condition that they refra,in from dealing 
in TThole or in part with competitors of the seller, Iiost,of the provi- 
sions related to the tj'-ing contract, either mentioning it by that name 
or restricting the compelling of b'uyars to purchase or lease one prod- 
uct in order to purchase or lease a»nother, A few codes restricted con- 
cessions contingent uoon, the buj'^er's agreement not to deal with com.peti— 
tors; or refuging to sell to custo;:ers who also purchased from competi- 
tors, A few others were still more broad and restricted sales "contin- 
gent upon the same or jjurchase of any other thing, the perfomajice of 
any other service, or any other contingency," 

Aside from the codes \7hich prohibited such arrangements, a few per" 
mitted the practice onl;;- if the agreement were in writing. The other 
restrictions were in codes which uermitted the practice to a, partial de- 
gree, but which placed definite limits upon the amo-^ont of products whose 
purchase might be made a prerequisite for purchasing other products, 
(Cf, iiotion Picture Code, V,Ii, part 5) 

Unwarranted Threa.ts of Liti!°;r.tion 

Tlie ^^rovisions classified here were quite uniform and generally 

9679 



-30- 
follor^ed this wording: 

"J'To nen'ber shall iintlish or circilarize threats of suits for in- 
fringement of patenbs or traderiixrks or any other legal proceed- 
ings not in good faith uith tho ttndencj^ or effect of harassing 
competitors or intinidating thei:.- custoners." 

In many of the codes there rras adc'ed to this ^^rovision that "fail- 
ure- to prosecute in due course shall be evidence that any such threat 
is un^rarranted or unjustified.," 

He'oudiatior- or .Threats o f Re-judiat ion of Contract 

The prohihioiojis o::' repudiating ccntracts Tere almost all uniform 
and read as follov.-s: 

"ilo memoer shall rerjcidiate a contract entered, into in good faith 
Tfhen the pui~^ose of buch repudiation is to create for su.ch neraher 
an unfair price advantage, ■' 

In some of the codes threats of repudiation rrere forbidden also. 

The other restrictions ircltide codes Trhich prohibited, cancellation 
of a contrr.ct unless a leasoiiable renv_ner?.t ion vras paid to the customer, 
and some very detailed. r'Tles in the Distributors and Exhibitors section 
of the iiotion Picture Code, 

Urg ing Sub stitute.pyp dv/-. b 

The 2''3rovisions classified here occurred chiefly in the retail codes 
and most of them T7ere vforded as folloTsS 

"i'To retailer shall place obstacles in the i-^arj of the purchase of 
a prod.uct T7hich a consumer orders by brand name by urging upon 
the ccnsv-mer a substitute product in a mamier which disparages 
the prod.uct ordered, " 

Violence or Tlireats of Violenc e 

Included here are only thor.e cod's '-'hich prohibited violence or 
threats thereof in those exact -.vordso iTo -irovision has been classified 
here solely through inter- iretation of its nepning. The code for the 
Motor Vehicle Storage and Paiking Trade, for example, prohibited violence 
to person or propertj!-, threats of violence,^ consijiracies among several 
members to use or threa.ten viclenco, or combining or cooperating vith 
non-members ."ho use or threaten violence. 

Intimidation or Threats of Intimidation 

The textual discussion under "Violence or Threats of Violence" 
applies here. The codes containing the two p.rov,i'"-ions are practically 
identical, llo definitions ^ere given as to r'hat constituted- intimida- 
tion. 



9679 



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^.S2ipnage of _Coj;ipeti tq_r 

Tiie provisions cla,ssifieG. here were generally uniform as to 
terminoloiiy and read as follcv/s: 

"iTo ne.n'ber shall secure confidential information concerning the 
"business of a coi.ipetitor hj a false or misleading statement or 
representati CM, "by a false impersonation of one in authority, 
hy bribery, or "by other unfair method." 

In some cases "espionage" alone v/as prohi'bited, and three codes 
specifically prohi'bited espionaj^'e of the unopened "bids su'bmitted "by 
competitors. 

Z^ticement o_f Cormetitor '_s 3.^plpje_e__s_ 

The v/crdin:'-.- of the -nrovisions included here sho-jed little uni- 
formity^ but were all similar in meaning;. -Tlie following provision is 
a tjTjical one and illustrates the substance of these provisions: 

""/o member shall entice away the emplo^^ees of competitors v/ith 
the piirpose and effect of undiily haiaperin,;,, injurin. , or embar- 
rassing com-etitors in their business. This shall not prevent 
any employee from offering his services to a competitor or pre- 
vent any erroloyer from employing an employee of 8,nother mem.ber 
when the initiative of su.ch change of employment is talcen by the 
employee." 

Blacklistiiig 

Incluaed here are codes which prohibited parti cipcccion in black- 
lists, generally without clarification of v/hat was embraced by the 
term. In a fev; cases it was indicated as applying to an organized re- 
fusal tc sell certain customers whose nane was on a blach list. This 
is the coraiuon conception, aside from its use in the field of labor. 
Perhaps, som.e of the codes not defining the term int':-nded it to apply 
to the blacklisting of emnloyees, but there is no evidence on this 
point, excepcing tiiat the provisions v/ere in the trade practice section 
of the code. 

Interference T.'ith Contracts or Con-oractual "".elations 

The wording of the -orovisions classified here showed no great uni- 
formit.y, thourh the meanings were substantially the same. The follow- 
ing is a. t^gpical provision: 

"I'i'o member shall induce or attempt to induce the breach of an ex- 
isting oral or written contract "between a competitor and his cus- 
toD.er :r source of supply, or interfere with cr obstruct the per- 
formance of an;^ such contraccual diities or services." 

Some codes specifica-lly prohibited the offering ::f a lov/er price to a 
customer to induce him to break his contract with a competitor. Others 
prohibited interference only if vdlful. Unli";e the example quoted 



9-7= 



-82- 

above, many codes referred onl ■ to contracts vvitli customers and did 
not mention thoo'"" v/itli soiircos of '•uppl/. On the other hand, sorae 
added contracts rloh erployers to the list. 

Coercion to 7orcfc Revision i:i Tileu. PriceF 

A'Jow''. z±y.t,' oZ the pro-.-itlons i:i-"ludeu here y/ere ]part of the 
open -orico provl;;" jn ;or.-. cerned aftn-_ '■ffice i [enorandiii:! No. 233 (Cf. 
textual discussion ujidor Cpe:: price c'^'stoi.is abDve). This provision 
read as follov.s: 

""o nemher shall... .c-Aise or at.^em;ot to cause any member to 
chan, .a his price t;rm.s "by the use of intimidation, coercion, 
or aiiy othor influ^=nce inconsistent with the maintenance of 
the free and open rjarlcet which n the pumoso of this article 
to create." 

The rtner codes "■ "■''cludf-^CL here cIpc leferref lo the "brin.^in cf 
pressure to ^jear ni me'i' ors i ' cho.i'^^p their published prices or terms. 

laj'aperin;-,; j/ith Gcm"oetitpr' s Propertj^.'; 

The usual -provision cla^sifieu here prohiOT ted the rnaladjusting 
of or tcU'^T-erin^ Y/i 'hi a c-im'oelitor ' '_ ^ir^ducts or nachii^es in arder to 
discredit him ■with cus'io-.^eri- or for an^" other rurnose. In several of 
the codes mutilation or deso'acticr of ad^ erti-^in/; weie fo'^^'bidden. 
The other restrictions Ir.cluc'ea a limitation on destroying competi- 
tor's posters till they had been up a specified length of tine, and 
a prohibition of ai.taching tags to competitor's empt^y" and returnahle 
containers Tvith nt his consent. 

Cp_inmercial Bribery 

The co.-ij lercial bribery n'rovisions in all cedes v/ere standardized 
by Executive Order ilo. (^'J^^., and all provisions not corresponding 
thereto v/ere amended by the Order to read as follows: 

"17c ..lemner of the incustry shrli -y-l-' e, permit to be given, or 
directly off ~r to give, anyt/ilny of va?ue for the purpose of 
influencing -r rev.arding the action of any eiiplo^^ee, agexit, or 
representative of an.other in relation to the business of the 
eitiplcyer or sv.ch enplo^"ee, the principal of such agent or the 
represented party, v/ithout the linowledge of such employer, 
principal or partj?. Cormercial bri''"'ery provisions shall not be 
constrned tc "orohibit free and oneral distribution of articles 
cor.ii.ionl"^" used f Dr advertising except so far as such articles are 
actua.ll' - u-^ed for comj^oi cial bribery as hereinabove defined." 



9f^79 



-83-:_. 
> 

TJse of Com-peti tor's Si:iecif ics-tioiis. Services. EaiiiTjrient . Advertising 
Materials, etc . 

The codiBs cls.ssified here prohihited the use, generally add- 
ing "without consent" , of one or more of tne f ollor/ing types of competi- 
tor' s property: lontainers if star-ped or otheririse identified as com- 
petitor 's^ sample^, various tyoes of advertising material, design, 
specifications, dimjings, equipment or services. 

Removal of Manufactuj-er ' s Label 

These prohibitions of removing, defacing, altering, mutila.ting, 
or destroying the label of a competitor on a product generally aiDplied 
when the member was repairing; a competitor's product. 'They also cov- 
ered in some cases serial nim-bers, trade marks or other meajis of iden- 
tification. 

PURCHASS PHOI.I CUSTCivEE OR EXCH/JiaE Or OITII POR 
COLIPETITOR''S PRODUCES 
The practices aga.inst which these restrictions were directed 
were those of buying from a customer the products of a competitor which 
customer had in stock; or exchanging such products for member's own 
products. Aside from the codes prohibiting such acts, the Alloy Cast- 
ing Code required that the price paid or allowance made by the member 
be not in excess of the actua.l value of the goods a.cq_uired. 

MISEEPRESEilTATIOH Airo DECEPTIOII 

This main section includes various types of provisions, the 
comiaon feature of which was the prohibition of deceptive or misleading 
statements or performance. The party who was regarded as being de- 
ceived by the forbidden practices was chiefly the customer. Certain of 
the provisions, however, seem directed against misleading practices the 
impact of which msy have been entirely on fellow cor/i[3etitors. Finally, 
some of the provisions are aimed against practices "which may have been 
used to evade or nullify certain other codal restrictions, the party 
deceived by such practices being the code authroity in its capacity of 
enforcement agency. 

Misrepresentation of Anv Kind 

There are included under this single item two main types of 
provisions. The first of these was a blajiket prohibition of "misrepre- 
sentation" without the addition of any explanatory or qualifying state- 
ments. Such a provision appeared in nineteen of. the codes. 

The other type, which appea-red most frequently, -prohibited 
misrepresentation of a wide number' of specified things with the obvious 
intention of maMng the list all inclusive. The form of this provision 
was highly standardized and read ci,s follows: 

"It shall be unfair competition for aiay member of the Indus- 
try to in any way misrepresent any coramoditj'- (including 

its use, trademark, grade , qual i ty , quantity, origin, size, 

9679 



-84^ 

sutsts-nce, character, nature, fiuish, lapterial content or 
preparation); credit term-3„ value?, policies, services, or 
the nature or form of the l^r.3iness coniucted," 

ActuaJLly incliidcd i-.nder this headin'3; r;ere all provisions '■'hich pro- 
hibited miyreprot-entation of tliC rl.". items onuzncrated in the quoted 
te::t and pro\, isions which enu.nera.ted only five cf them, omitting "the 
nature and form of the "jusin-sss co-iductedo'' Ahov.t tvTO- thirds of the 
codes containinf^ this enumeration included this last item fjid ahout 
one-third omitted it. 

Misre-nrese nt atici'j of Fr c ducta 

E7 far the most common ty;re of provision incliided h ere were 
those which contaoined a prohihiticn of nisreprscenting products, with- 
out, hbrever adding the conplet'3 list of items contained in the text 
quoted in the su.lr.- section aho^'Oa There ^ere in many cases, though, one 
or more items in addition, such as services, prices, or credit terms; 
these are noted S'jparatcly on uhe chart, ^ain, no elahoration of the.*erm 
"misrepresentation'' itself A7a3 madeo 

Also included are those corses which prohihited the represen- 
tation of ODcoletSs S"j.h--stanc'ard, us^d, etc., goods as new, or the 
representation of new prcduchs a.s C'b^Dlete. suh- standard, used, etc. 
Although they did not, in ncirj cases, directly relate the latter re- 
striction to the minim'J-n' price provisions cf the code, it is highly 
prohahle that this restriction was j.9signed to iDrsvent circumvention 
of the minirnum price and price discrimination provisions. Such re- 
strictions were placed in various codes on sales of the following: 
seconds, used goods, damaged goods, rebuilt or overhauled goods, demon- 
strators, obsolete goods and discontinued lines. Eight codes prohibited 
sales of usedgjods if deceptive or nisleading. 

Misrepresenta-tion of Prices 

Included here are all codes which prohibited the misrepre- 
sentation of prices, other than those which included such along with 
the four or five other items, as discussed under the first item in this 
section. Agrin, the word "misrepresenta<,tion" was not elaborated. 

The few codes ^/hich contained prohibitions of "false price 
statements" are included here. 

MisreTpresentation of or Deceiptive Credit Terms 

Classified here are all codes containing a prohibition of 
misrepresentation of credit terms, other than those which included 
that along with the four or five other iteiis, as discussed under the 
first item in this section. "Jost of the codes included here, however, 
prohibited "deceptive" or "misleading" credit terms, 

Misreiiresentation of Services, Form of business . Affiliations. Market- 
ing Conditions, or Origin 

Included here is a miscellaneous group, of prohibitions of 
misrepresentation. The code generally applied only to one of the five 

9679 



-85" 

items under this heading-. This again excludes those codes rrhich in- 
cluded one of these items alon.'?: mth four or five others, as discussed 
under the first suh-hcading in this section. Ahout half the codes in- 
cluded here related to misre-Tresenta.tion of services. 

Misdated or Otlierr ri se Fa l se or Dece-otive Offers, Orders ^ AjTreements. etc» 

Glf'ssified fjider this headin^; are provisions v/hich prohihited 
a Tride variety of deceptive practice?;. The feature conrnon to all was 
that they related to inaccui'acy in the variotis documents rrhich recorded 
the different ste-os of a transactiono IJo definite statement can he made 
of intent, hut it is prohahle that a suhstsntial share of these provi- 
siors was inserted for the purpose of preventing- evasion of other code 
provisions through inaccurate recordss The i^arties thus protected T7ere 
more "orohahiy ccrroetitors and the code authority, than the custoraer. 

The prohibition of false invoices or hilling was numerically 
the most important item included here ap";B aring as it did in 380 codes. 
The o,ctual wording took various for^^s hut the xiord. "false" generally 
was used. A typicaJ. forn was as follows: 

"It is an unfadr trade pra,ctice to withhold from or insert 
in ajiy invoice facts which ma.he such invoice a. false or 
misleading record, whcll}' or in prrt, of the transaction 
represented on the fa.ce thereof," 

¥hile this was the most standard form, other versions also were used; 
these were e:cpressed in terms of deceptive billing, misleading hilling, 
and other e.-qsressions with similar meaningo One comrron form which did 
not include the word "false" was as follows: 

"It is ail ur.fair trade practice to withiiold from or insert 
in any statement that mrires it ina.ccurate in any material 
particular." 

The word "knowingl;'-" was sonetines inserted before "to witlihold." Still 
another t;rpe prohihited "the malcing of any false invoice with the intent 
or effect of mislea^ding any interested party." 

The second nost frequent provision a27i3eaj"ing in 139 codes in- 
cluded here was the prohibition of false offers or quotations. Often 
the restriction on invoices and quota:tions aj)peored in the same provi- 
sion. Seven codes prohibited "deceptive" offers. 

False or misleading contracts or ag;ree:nents were lorohibited 
in 32 codes. Palse or deceptive receipts were prohibited in 11 codes. 
False orders were forbidden by 15 and deceptive appraisals by two codes. 

One -particu-lar type of falsif ica.tion was singled out by many 
codes and specif icaJl:" prohibited. This wa.s the practice of misdating 
documents. Presumably the objection to this practice resulted from the 
fact that it made possible evs-sion of some other code ^jrovision. For 
example, .the pre-dating of a document might enable a seller to give a 
customer the advanta^ge of an earlier price which had subsequently been 

9679 



-85-- 

raised, or of errlier terns Trhicii had subsequently "been made less favor- 
able. The post-dating of a doc-amant ai^-"it have the effect of allovring 
more liberal credit terms tlirn the code pei-nitted. Ehatever the purpose 
may have been, ho^reverp 112 codes prohibited misdated, pre-dated or 
post-dated invoices. This is jiot to be confused Tzith prohibitions of 
"delcyed bilT.ing'' rhich related to th-? piactice of not dravring up and 
sending ths invoice ur.til a period ci" bine hpd elapsedo 

In addition- 55 coces prohibited nis- dated contracts, 17 pro- 
hibited mis-dated offers or y.otatious, 10 v:rchibited mis-dated receipts, 
and 3 prohibited mis-d^ited orderso 

Inaccurate or Se c e-ptive Advortisin.? 

Prpctically all of the provisions included here followed a 
well standardized form, T7hich read as follors: 

"ITo Eember of the incLustry shpil use or publish advertising 
(\?hetLer printed, raliOc d:'. splay or of ajoj- other nature) 
which is misleadin;':' or iracruivte in any mr.terial p^xticular." 

Another version found in sone codes vras: 

"ITo meiiibcr sh^ll naice, cause, or pernit to be nade or pub- 
lished joiy fciise, un'-.rue, or deceptive statement by way of 
advertising or othei^wise concerning any grade, quality, sub- 
stance, character, origin or preparation of any product of 
the industry o '' 

Still ejiother t-jpe was : 

"ITo member shall use advertising nethods which have the 
catDacity or tendency to deceive or mislea.d the customer 



or -oros^ective cuTDoner. 



II 



Included in the totals, eJ-SD, are a few codes which prohibited decoT)- 
tive display of goodse 

Deceptive Labeling. Brgjidin?. LiarlcLn.? or Packing 

A great najority of the provisions included here followed the 
highly standardized form, which follows: 

"llo meaber of the indusT;ry sha-11 brsnd or nar^c or pack any 
goods in any manner which is intended to or does deceive or 
mislead purcha-sers with respect to the brand, grade, quality, 
qv-cntity, origin, c-ise, sxibstance, character, nature, fin- 
ish, naterial content, or preparation of such goods," 

In q^jlte a n\mber of codes, the word "falsely" was added following the 
word, "shall." There were some other variations in form aiid terninolc^ 
but the meaning was the sfjne e^id numericcHy they were uninrportant. 



9679 



-87- 



Deceiptive Selling liethods 



The provisions incliided here -oroiaibited deceptive selling 
methods virtually in so nany words. That is, there have not been in- 
cluded here prohinitions of vorior.s specific practices \7hich might 
have "been regarded as' ''deceptive selling mcthodso" The raost common 
wording vras as follo'is: 

"ilo rnenfoer of the industry shall use selling methods 
which tend to deceive or mislead a customer or prospective 
customer." 

Another version was 

"IIo nemher shall offer for sale aiiy product of the industry 
"by any false means or device irhich tends to mislead or de- 
ceive purchasers, competitors, or others." 

Lotteries 

The provisions relating to lotteries generally followed the 
standard form which follows: 

"Ho mem"Qer of the industry shall offer or give prizes, 
premiums 5 or gifts, .in connection with the sale of pro- 
ducts, or as oji inducement thereto, Ijy any scheme which 
involves lottery, misrepresentation, or fraud." 

The code for the Retail Trade contained 3, special version (amendment 
#3), as follows: 

"IIo retailer shall sell or offer for sale any merchandise 
upon s. condition which involves a lottery, gamhlc, or 
element of chance, simila.r to what is 'mown as a "Suit Cluh 
Plan, ' "o:.;ovided, however that this section shall not apply 
to no?i-profit crggjiizations not definitely constituted to 
carry on retail tre^de," 

The Radio Broadcasting Code prohihited the granting by members of per- 
mission to clients to broadcast letter;/ plans. 

Inaccurate or Persistent UndersellinA" Claims 

Three types of provisions are included here. The first tjnpe, 
which includes the greater number of codes listed, may be illustrated 
by the code for the Retail Trade, which read as follows: 

"IIo retailer shall use advertising which inaccurately lays 
claim to a policy or continuing practice of generally under- 
selling competitors." 

The second type differed from the first, only in the fact that "inaccur- 
ately" was omitted; some of these ^^rovisions otherwise read identically 
with the one quoted,, while others had the same meaning. For example. 



9679 



-bS- 

the code for the Paper Distributing Trade contp.ined the provision tha.t 
"Ho Menher of the Irrde shall ^-nare.ntee to sell oelo'-' the price of a 
conpetitoro'' 

^he third tyje, the -prohT'oition of "uniforn price offers", 
was found cnl^ in the codes for the P.etail Drug and Retail Jenelry 
Trades (in UoS« and Ha\"aii) and apoLied to fixed price offers not con- 
tingent upon vrlue rendered, such a,s a continuin;^' offer to supply pre- 
scrrotions or certain jerrelry service at a fixed price, irres-oective 
of the cost involved in perf orinaaice or tJie qupjitity requested. 

Defaaation of or I. nj.ccurate R e ference to C?:rQot itor 

The provisions cle,s3ified here f ollo^'ed -alnosf exactly one 
of the tuo folloTTing provisionso The one most frequently used vas as 
follows: 

'"iTo meaher shall defarne a conpetitor hy falsely inp\iting to 
him ditihonoi'e.hle hu .iness conducts inahility to perforin con- 
tracts, questionahle credit standing, or hy other false re- 
presentations regnding h±s business conduct, or "by the false 
disparageraent of the grede or quality of his goods." 

The other T7ell standardized form nrs: 

"ITo Lienber shall u-Sg advertising or other rejaresentation 
which refers inaccurately in any material particular to 
any conroetitor or his conraodities, prices, values, credit 
terns, policies, or service." 

Two other versions found in some of the codes pere: 

"Ho member shall r-illf-olly or maliciously defajne a compe- 
titor or disparage a. coni:)etitor • s products, policies, equip- 
ment, or personnels" 

"llo member shall mahe false or deceptive statements regard- 
ing the business or bu.siness co2iduct of a conpetitor." 

SHIPPIiTG OH PEHPOHIJIIIG- A^ YAF.1m1G2 V2QU C01:T?^GT OR REPEESEIITATI Oil 

This item relates to a group of varied provisions, the common 
feature of which ^.re.s that, in some r7ay, they restricted deviations by 
the industry member in actual performance from what he agreed to do in 
the contract or in a preceding offer. There was n o standard terminology. 
Also, two contrasting purposes v;ere involved vjhich cannot be separated 
out in many of the provisions. One chief purpose was to protect the cus- 
tomer against performa,nce which failed to cone up to the contract. The 
other was to protect competitors against performance which exceeded the 
contract and thereby beco.me similar' to the furnishing of free goods. 
Some provisions can be readily classified under one of these two pra.c- 
tices; others cannot beca.use they prohibit only deviation from the con- 
tract without specifying whether more or less. 



9679 



-89- 

Accordingly,, the first sal^-head laiider this item includes those 
provisions vrhich prohioited deviations of any sort. A feu examples may 
"be given: 

"ITo memuer shall use or stihstitute any material differing 
in quality frcn that specified "oj the purchaser" (Silver- 
'vrare Kf go ); 

"ITo meirfoer shall ship or deliver gloves \7hich do not materially 
conform to the samples suom.ittedj or -,7hich do not conform to 
the repi'esentations ma,de prior to securing the order" (Cotton 
Cloth Qlove lifg.); 

"llo memlDer shall allorr a shipment or sale of goods which are 
in any way of better or poorer qualitj'^, weight, gauge or 
appearance than is represented" (Suhher flooring Division 
of HuFoer Mfgojo" 

Some of the provisions stress the consent of the naurchaser and thus 
appear to he aimed at misrepresentation! only: 

"llo menher sheil use or substitute any material differing 
in quality, design, weight, or construction from that 
specified hy the purchaser or representations made hy the 
manuf acttu'er prior to securing the order without the con- 
sent of the pxu-chaser to such substitutions" (Medium and 
Lew Priced Jewelry Mfg. )•" 

Finally, another version runs in terms of deception, 

"Ho member of the industry shall ship or deliver merchandise 
or sirpplies -rith the intent to deceive the ;Durchaser, which 
do not conform to the samples submitted or representations 
made prior to securing the order thore;"or." (Puneral Service). 

Another group of codes prohibited substitution of inferior 
goods or performance which did not come up to the contractual agreement 
or previous representations. The p"arpose in these cases was obviously 
to protect the customer against inadequate performance. 

The third sub-head under this item includes provisions which 
prohibited only the exce e ding 'oy the indies tr'/ member of his contractual 
duty. Thus, they were quite similar to restriction on free goods and 
combina,tion offers. Generally, the ;orovisions read in terms of substi- 
tuting a sunericr quality of goods or shir)ping a greater quentity of 
goods than called for in the agreement. It was either ex7oressl3'- stated 
or implied in most of the -orovisions that the prohibition applied only 
when an adequate charge was not made for the increased value rendered; 
it was not the mere act of substitution that was objected to but the 
failure to obtain cora'oensation for it. 



^679 



-90- 

The prohi"bition of false meas-ares ap-olied to the giving of short 
weights, short cor.nts, or ths uoe of deceptive containers where the 
effect v/a-s to deceive the c-astomer as to the qvantity he received. 
Eleven of the coO.cs cited on the c/^art are the Fisheiy codes, whose 
provision read as follow?.: ''xlo mom.ber shall use slack weights or slack 
measures, or overweights or over-moaova-es. " 

The final svJb-head, ''Other Restrictions" includes a miscellaneous 
group of rcstricti.^ns on suhstitution '.'h'.ch -arc not classified else- 
where. One type permitted sli.'^ht v-ariances from the contract-ual re- 
quirement and sel "i\p the raai^ciinLiin toleran^je therefor. Another type pro- 
hihited svl'Stitution cnly when discriminatory. Another prohioited it 
unless the -".atuie of the suhstitutiJon was clearJ.y indicated. 

DlSGHIffl^^lTIOlT IH PaiGES, TZliaiS, S3S:VICE3 Ml/OR PRIVILEGES 

Classified here are all discrimination clauses which related to 
one or more of the four.' iteniG en'omerated. in the title. Prohibiticn of 
discrimination ir. other Lja.tters, at^ for e-yiXuTole discri:n?natory adverti- 
sing r.llo7»an'jes (see aTjcve), are cliHsif: °d Uiider the irdi^idiial prac- f 
ticc- specified. These four items an^ the ones for which discrimination 
was most frequently prohihiti.-d. No code ha.s heen ccunted more than 
once under any given suo-heac: thoi^-gh it may have related to two or 
moreof the four items. 'Ihe suh-headc correspond quite closely to the 
exact wording of the provisions and little further explanation was given. 
Many provisions contained tvro or more clauses such as "h-uyers of the same ^' z. 
q"uantity and of the same class"; these have heen co'Oiited separately tinder 
the relevant subheads. Included here are codes which prohibited both 
discrimination r-nnx''a.lifiedly and secret discrimination only. 

The terminolo£,y of these discrimination provisions was fairly uni- 
form aside from the two variables of the subject matter of discrimina- 
tion and the kind of b'u;)''ers among whom discrimination was restricted. 
This terminology Y/as as follov;s: 

"ilo m.ember of the industry shall offer or extend to any 
btiyer any special (price, terms, service, privilege)not 
extended to all bnyers (all bvij'ers, of same class, of ; 



same quantity, etc.)'.' 



List of Customer Classes 



CUSTOi'IER CIASSIIICATIOI 



The codes classified here enumerated at some point a list of 
classes of cr.stom.ers in the industry, but did not define them or pro- 
vide for a classification of specific ci'-storaers into these classes. 
Such a list rr.i.i;ht b3 as follows: jobbers, distributors, wholesalers, 
retailers, and large cons-'omers. In some cases it is doubtful if the 
list had anything to do with the differentials to be granted to differ- 
ent classes. At the other extreme are the codes which made it manda- 
tory for members to observe the listed classes in classifying their 
own customers and in drawing up price differentials for the different 
classes. Somev/here betv/een these two extremes are most of the codes 
whose exact purpose in listing classes of customers cannot be ascer- 
tained from the code itself. 

9679 



-91- 

Definition of Customer Classes 

The codes incltided here contained in some form only lists of cus- 
tomers, iDUt also provided for definitions or explanations of the clia.rac- 
teristics of the niemhers of each class. 

Under the first suohead. are codes which set forth some kind of a 
definition. As under the item above, these definitions varied all the 
way from those which ohviously v/ere not originally intended to make man- 
datory the classif ic3.tion, to those whose use was expressly mandatory 
in determining into what class any given customer fell. All are includ- 
ed together here for the reasons that the increa-sing degree of compul- 
sion was hy too fine gradations and at the same time too indefinite to 
make a further treakdo^frn feasible ; and "because, even those ohviously 
designed for another purpose originally, may in practice ha-ve influenced 
classifications for pricing purposes. Some typical definitions were as 
follows: A johher is one who buys directly from the manufactiirer, main- 
tains a sales organiza^tion, and has an exclusive selling arrangement for 
a "brand of product for which "ne assumes sole responsibility for sales 
in a given territory. A wholesaler is one who buys from a jobber, main- 
tains a warehou.se and stock of goods, and does not sell to the ultimate 
consumer. A retailer is one who sells solely to the consuner and not 
for purposes of resale in any form. As pointed, o^it above, these nay 
have been expressly stated to be for som-e pjuroose other than determin- 
ing recipients of trade differentials, may have been expressly sugges- 
tive only, riB.y have been ra3,nda.tory, or rra,y have contained no mention of 
their intended use. 

The second subhead applies to codes which "em^^owered the code author- 
ity subsequently to draw up definitions of the characteristics of the 
different classes of customers. Some of these provided tliat the use of 
these definitions would be ma.ndatory, while the others do not discuss 
that point. 

The third subhead includes codes which were patterned after Office 
Memorandum lIo.257, which was issued on July 20, 1934. The text of this 
follows: 

"The Code Authority shall cause to be formulated and keep 
current a classification of all types of customers of the in- 
dustry. Such classification sioall be subject to the disap- 
proval of the Administrator and shall contain; (a) A complete 
list of all of the classes of customers of the industry, in- 
cluding a class to cover every laio".7n tj'pe of customer; and 
(b) definitions or descriptions of the severa.l classes in 
terms of Sanctions performed, or in other 3.ppropriate terms 
such as purcha.sers of defined quantities." 

"After submission to the Administrator, if there is no dis- 
approval or request for suspension of action within twenty 
(20) days, full information concerning the classif ica,tion 
shall be made available to all members of the industry. iMo 
one sh3.11 be intimidation, coercion, or other undue influ- 
ence cause or attempt to cause the inclusion of a.ny custo- 
mer from any class of customers, or the exclusion of any 

9679 



-92- 

class of customers from tlie classification, or the use of 
uniform or stit)ulated prices, discount, or differentials 
and each ineT.hcr of the industry nay at all times classify 
his c'.Tn custoi.'.ers in accor'iarce v/ith his ov/n judgment." 

Classification of Speci f ic Cix storaers 

The first suhhead includes thooe codes ^vhich empovjered the code 
authority to classify the customers of the industry into their proper 
classes. Thereafter this cla.:-3ificci.ticn w-^s mandatory, aside from the 
right of appeal; ard in quoting prices or trade discounts to particular 
customers, the msmher was "bciixd "bj/ the claos into which the code auth- 
ority had pv.t thetn.. In raost of the codes the povi"er of approval or dis- 
approval of the classifi cations est'illished was specifically given to 
HEiL. In a few of the codes this claf'sification applied only to certain 
classes, such as to johhers c:r distyihatjrs. In three codes, as a pre- 
liminary to clasr.ificaticn "by the code authority, the raemljerG were re- 
quired to s\ioiiiit a list of their cus''. omers with their existing classi- 
fication. The Cede authority was then to ...orripile the lists ao suhinitted, 
to revise certain class-ifications , and th°:i to promulgate a uiiiform 
classification which the raemhers were required to follow thereafter. 

Under the second suh-head are those codes which required the suh- 
mission to the code authority "by each member of a classified list of 
his customers. 

Sales to Specified Classes of Custom ers 

These codes prohihitsd industry members from selling to certain 
classes of customers — orohers in one case, contractors in another, re- 
tailers in another, etc. 

Sales to Other Than Specified Classes of Custom.ers 

These codes en^om^eratod the selling ch3.nnels a member might use and 
forbade selling through other channels — as for exaiiiple sales were to be 
made only through brokers or Yjholesalerf . 

SAL3S TO DSLIl-TQUEKT ACCOUl'ITS 

The first sub-head includes codes which prohibit sales customers 
whose accoui-its were past due more than a specified number of days, such 
as 45 or 90. 

The other restrictions on sales to delinquent accounts, found in 
one or more codes, were as follows: must be reported to the code auth- 
ority; allowing of cash discounts on cash, sales prohibited as long as ' -.;:- 
there is a past due balance; or delinquent accounts themselves must be 
reported to code authority. 



9679 



-93- 

" TRADE DlFF}iKENTI.4LS AI-JD QUANTITY DISCOUNTS ' ' 

Trade Differentials 

"Trade differentials", as used here, includes the spreads "between 
the -orices given to different classes of customers; the discounts off 
the "list" -price to the consumsr giv3n other cla.sses; or simply the ac- 
tual Tjrices at ^'hich sales to the 6.i"ferent classes of customers are 
made. The term I'trade disco-iats" is often used to anply to the same 
thing. Trade discounts, unlil:ij quantity discounts, are not direct 
functions of the size of the purcha,se Init rr.ther are based u-oon the 
type of purchaser — whether he is a joooer. hroker. wholesaler, distri- 
tutor, retailer, consumer, government, nationa,l corporation, etc. 

The f ir s t , subhead includes codes which prohihited "trade dis- 
counts" in so many words^ Tiie second includes those which contained 
a "blanket mandate against the giving cf a lower pric3 or a large dis- 
count to a custOKsr, than those to which his classification entitled 
him. The i;}'iird f;-a"bhea6. includes codes which specified the masimum or 
esiact percentags discornts thg,t might he gii«en off of list price to 
the va.rious classes of customers in the industryo 

The other restrictions, found in one or more codes, were as fol- 
lows: code r.uthoritjy, with air.inis trative approval to prescrihe maxi- 
TTtnTn trade differentials; co(?e r-uthority may review and modify trade 
differentials estahlished and filed "by monhers; must not "be di scrim- 
atory; must "be a.decuate as "between specified classes; mu.st be reported 
to code authority; and extension prohi"bited to huying pools composed of 
customers who, a.s individual "buyers, A^ould not be entitled to such dis- 
counts. 

pTj-antity Discounts 

Quantity discounts as u.sed here are discounts granted "buyers 
"based upon the volume -ourchased. 

Under the first suhhead are codes in -.'hich "volume" or quantity 
discounts were prohi"bited entirely. The second subhead contains codes 
which reouired th'it the disco"ants "bs computed on the hasis of sales to 
one firm only; and which prohi":Dited their granting on the "basis of the 
total order of a pool of "buj/ers, whereby ea.ch buyer would receive the 
advantage of the larger disco-unt extended to the pool. Some of the 
codes under this suhhead worded the restriction to read as a prohibi- 
tion of a pool" car sales below L. C.L, TDrices, The third subhead con- 
tains codes which iDrohibited the granting of discounts based on a 
large order when only a xiart of the order was actually shipped and 
taken by the buyer, T"ne fourth contains codes which prohibited basing 
the discount on the cumulated total of a series of shipments, 
requiring tliat each discount given be based on the quantity of each 
single shipment only. 

Under the fift'h subhead are codes which required that the dis- 
counts be not excessive or unreasonable in amount, 'The sixth includes 
those codes which prescribed either the mazcimum or exact percentage 
rate of discount which might be given. These took the form of 

9679 



-94- 

schedules of rates to 'be .aoTlied to different sDecified quantities. 
For e:::anple, the schedule of the Wood Cased Lead Pencil Manufacturing 
Code T7as as follov/s; 

2,500 pencils - 5fo 



5,000 


li 


- 3fo 


10,000 


tl 


-2:\o 


25,0^10 


II 


-k5;i 


50, COO 


II 


~oG-' 


100,000 


II 





The otlier restrictions j fcxuid in one or more codes, were as fol- 
lows: ■ prohi>)ited if discrir':in.atory'. -oroiiitlted if retroactive; must 
be based on purcharas of one -nrodiict only cxA not tots.! for several 
types of prcduc+f". ; "nust be bsstd on purchases during not more than a 
SDCcified -ccriod of ti:')e; must oe set forth in T^ritten agreement ; ap- 
proval of codo authority recuirod; cod3 authority to prescribe maximum 
ra,tes of disco"U"'i'i: , coc?e Futhonty nay review: and modify rates estab- 
lished oy members J must be reoortod to code atxtnority; prohibited if 
misleading; must be based upon and reasonably measure a substantial 
difference in the Quantities purchased; nultiple carload discount not 
to be greater than single carload disco-ant; must be based \ipon actual 
differences in cost; f.nd minimum Quantities specified upon which it is 
permissible to grant discounts^ ' • 

SELLIIIG DIPJCTLY IN COlirETITIOH './ITH 'ETAILER 

OR Gl'HLE TVAjjE rACTOS : ■ • 

Twenty-four of the codes -prohibiting this practice were the 
basic code for the Vi/liolesaling and Distributing Trade and its sup- 
plementary codes. The -orovision effective in all of these codes 
was as follows: 

"It shall be an iinfair trade practice for wholesalers who 
secure ? substantial portion of their business from members 
of the retail trrde to enter into competition '■dth retailers 
by selling merchandise at v/hole:.;ale -orices to ultimate con- 
sumers for personal use oi' to sell to civic, institutional, 
and/or similar tynes of wholesale cr sterner 3 5 merchandise for 
the personal use of emploj-ees of such customers. " 

The Cigar Manufacturing code laid doirm detailed rules as govern- 
ing direct selling, "hile in the Automatic Sorin'.ler code the 
authorization of the code authority \;as required for such sales. 

ADIIEHEMCE TO SELLEK'S COIE BY CUSTOMER 

Sales to C us tomers Mot Adhering to All Or Specified provisions of 
Seller's Co de 

The provisions included here may be broken down into four main 
types, accordingly as they -orohioited selling to customers v/ho failed 
to adhere to (l) seller's loublished resale prices, (2) certain price 
provisions of code, (Z) certain other specific provisions of code, or 
(4) all provisions of code. The 'first tyne constituted the typical 

9679 



-95- ... 

"resale price maintenance" arr.angeraent. The second tjrpe prohibited '. 
sales to customers who violated certain sioecif ied provisions of the 
code, which were actually miniiniun price provisions. The third type 
prohibited selling to customers who were not adhering to specified 
provisions of the code other thpji price provisions; such provisions 
included restrictions on product guarantees, accepting return of 
merchandise, giving of samples, etc. The fourth type prohibited sell- 
ing to customers who were not adhering to all provisions of the 
sellers' code and frequently ao-olied to contractors. 

Contracts v/ith Customers Requiring Adherence to All or Specified 
Provisions of Sellers' Code 

This kind of provision differed from the one above in that, 
in order to obtain the customer's adherence the seller was required 
to secure the customer's written and binding promise of adherence 
before selling to him. The provisions included here may be broken 
down into three types., accordingly as contracts with customers were 
required for the following: (l) adherence to seller's published resale 
prices, (2) adherence to specific provisions of the code other than 
price provisions, or (S) all provisions of the code. 

Sales at Other Than Manufacturer's Published Price or Not in 
Adherence with Other Specified Provisions of Seller's Code 

Pive codes for distributing trades prohibited their members 
from selling below the, resale prices published by the manufacturer 
from whom they purchased the product. The other codes required 
that members adhere to certain specific provisions of the code of 
the industry from 'T^hich they -purchased, such as terms of sale or 
guarantee policy. 

DEALIHGS WITH AGENTS, ER0K3HS 0!^ OTHSH' CONTROLLED SALES REPRESENTATIVES 

The provisions classified in this section regulated the relation- 
ships between members and their controlled sales representatives. The 
latter are to be distin.guished from "customers" \vho are independent 
and buy outright. Regulations of agents, brokers, affiliates, and 
salesmen have been included here; and other reguls,tions when the con- 
text of the provision 'indicated that the party involved was 
"controlled" by the seller and v.'as not an independent buyer. 

Definition of Agents, Brokers, or Other Controlled Sales Representatives 

The codes included here defined one or mor-e of the types of 
parties under consideration, either alon,^ with definitions of certain 
classes of customers or separately. In most cases, it was "agent" or 
"broker'* which was defined. 

List of Agents, Brokers, or Other Controlled SaJes Represe.ntatives 

These codes required the filing by members with the code 
authority of the names of certain t3rT3es or all of their controlled 
sales representatives. In a few cases there was specific provision 

9679 



-96- 

for the code o.uth.ority to distri'bute these names to all other raemhers. 

Sales -Thiro -ugh Assnts, Brol:ei*s; or Other Controlled -Sales Repre sentative s 

The first group- of -codes here QO-iitained detailed riijiles covering 
the principal-agent relationship. . ' ' -. 

The codes ujidor -the 'S'econd subhead maj'' "be broken dovm into four 
tj'pes, accordingly as' they prohibited sales to controlled sales represent- 
atives not a:dhering to- (l) principal's published prices; (2) specific 
minimum price i>rovisioii of- principal's code; (3) specific 'provision other 
than relating to price in principal's code; .or (*i) all provisions of 
principal's bode. <_ .'..,, 

Cont r acts with Agents, Brokers, or Other Controlled Sales Representatives 
f ' . ■ - ■ - * *i 

■'■-'■ The codes Uiider'the first subhead required that members, before 
deaiing with controlled sales representatives,, -secure binding agreements 
■frotii them requiring them-to (l) observe principal's published prices; (2) 
file'-' their own 'Selling prices with principal.' s code authority; (5) observe 
a specified non-price provision, of 'the principal's code; cr (4) observe 
all provisions of principal's code. ' . ' , 

The other provisions relating to contracts with controlled sales 
representatives, in one or more cbdes, were: mandatory to have s.uch a 
contract; mast be a'?proved-by code authority; or nrast be reported, to code 
authority. 

" Cpmr.n.ssions or Fees to Agents, Brokers, or Other Controlled Sales 
Representatives 

The provisions l:iere regu.lated the corapensation paid to con- 
trolled sales representatives. Those under the first subhead prohibited 
the payment of certain types of coixtpensation, such as brokerage; or pay- 
ing salesmen upon a commission basis. Those under the second subhea.d 
prescribed a maximum or specific percentage rate that might be allowed 
for fees, commissions, or brokerage. The other restrictions in one or 
more codes. Were as follows: prohibited if excessive; must be set forth 
in vi?ritten agreeaerit; and must be reported to code authority. 

Dealing with Other Than Bona ?idc A;::ents, Brokers, or Other Controlled 
Sales Representatives 

The first subhead includes codes which required members to 
deal only with controlled sales representatives with whom :a f orma.l agree- 
ment had been made; and codes which sought to ban dealings with 
"roving'' commission salesman who had no,- direct connection with the 
seller, and tiarning in orders only spoi;adically. The--bther restrictions 
prohibited such dealings, if "secret, or reauired that such arrangement 
be reported to the code authority. 

RESTRICTIONS OK CODE iiElJBLRS AS' PURCHASERS - 

The provisions In -this ^section regulated the relations between 
the code members and the parties -from whom they purchased raw materials 

9679 



-97- 

or mercliandise . 

aepudiation of Buying Agreemen t 

The provisions classified here appeared in the Fishery Codes 
and YJere "aniform in terrninolo;5y . They read as follows: 

"Ho meriiber shall refuse without lav/fcil reason to accept and 
pay for, at the price agreed Lipon, fresh fish and/or fresh 
shellfish purchased from fishing vessels, officers of fish- 
ing vessels, crev;s of fishing vessels, or owners and/or 
operators of fishing eqmpinent." 

Deferring Payment for Products Purchased 

She provisions included here also a,ppeared in the fishery codes, 
'She California Sardine Canning code prohibited delaying settlement 
with fishermen. The codes under the second subhead required that pay- 
ment be mao.e on delviery or "in no event shall the agreement of sale 
provide for payment later than 10 days after the delivery" . 

Failure to Furnish Written Aclaiowledgment of Purchase 

These provisions found in the Pisherj"" codes required members to 
furnish to fishermen " a written aclmov,'ledgment of purchase containing 
all information necessary to a complete ^onci.erstanding of the trs,nsaction, 
including price, q^.^antity, and terms of payment". 

Other Restrictions on Code Members as Purclr^asers 

Classified under this item are miscellaneous types of re- 
strictions, appearing in one or more codes, which regulated members' 
relations with pa.rties from whom they bought. They Mere as follows: 
" incDm/:)lete" purcliase contracts prohibited; certain details speci£ied 
(as prices, q"a8,ntity, etc.) which miist be incorporated in p^oxchase 
contracts; offers to buy at a given price m.ust include an ejcpiration 
date; no buying contracts shall be entered into in ?/hich the price is 
not definitely fixed; delivery of purciiases shall not be accepted 
before the opening of a, specified season; members not to buy goods 
under an arrangement whereby price is fixed more than certain period 
of time thereafter; payment for goods purchased must be in money or 
its equivalent; pajAinent in other tiis,n money or equivalent shall not 
be excessive in amount; members shall hot subsidize sellers or agents 
of sellers from whom they purchase; general contractors forbidden to 
-give rebates to sub-contractors; members shall not bear transportation 
costs on goods purcla-ses; members shall not accept concessions from 
sellers; concessions' accepted from sellers must be provided for in 
written agreement; no inaccurate represente,tions as to competing 
sellers' prices or other matters shall be made to sellers; purchase 
of goods produced in viols,tion of game laws prohibted; and buying 
from code viola.tors probabited. 

HMTIlia OR LEASIlTCi lUSUSTHY PRODUCTS 

Tlie practice regulated by the provisions herein classified vifas 

9673 



-98- 

that of renting or leasinif-; industry products instead of selling them 
outrigiit. Tlie codes containin;^ such provisions are largely . equip- 
ment and machinery codes. The restrictions applied to this specific 
and act'ual products of the industry and not sinroly to supplementary 
equipment necessary for use of industry i^roducts. Under the first 
subhead are codes v/hich prohihited all loans or leases of industry 
products. Under the second are codes which permitted sub-leasing 
but reouired that the charge nade cover the cost involved to the 
member/ The ether restrictions, appearing in one or more codes, 
were: prohibited only if discriminatory; may be rented for only 
a specified period of time; must be set forth in written contract; 
and must be reported to code authority. 

COi"TRf.CTIi-!G OTJT Oi' WORK 

The provisions classified here are those which regulated the 
contracting out of work when the contractor was an independent firm 
and an employer, and when the relationship bet\Yeen the member and con- 
tractor was that of two independent parties. Excluded are provisions 
y/hich regulated contracting out of work to individ'oals - homework - 
v/here the relationshJ.p was more an emrployer-einployee one; these are 
regarded as more essentially labor than trade practice provisions. 

Aside from the codes forbidding entirely the contracting out 
of nvork, a number of codes, mostly inthe garment trades, provided 
detailed rules to be followed in such contrs-cting. .Some of the more 
important required that work should be equitably distributed among 
the various cohtractors; contractor must adhere to labor provisions 
of member's code; contracting for manufacturing in penal institutions 
prohibited; contractors must be registered with code authority; and 
payment for contracting to be large enough to allow contractor to 
pay code wages plus reasonable overhead. 

' . , • '.TOREIiTCr OIT liiATERIALS EURHISHED BY OTHERS 

These provisions regulated the processing by members of mater- 
ials furnished to them by customers, the title to which never passed to 
the member; Those codes which prohibited such practices presumably in- 
tended to maintain the independent-manufacturer position of industry 
members and to prevent them from becoming simply contractors with no con- 
trol over the marketing of the finished product. The other restrictions, 
classified under the second sub-head and .appearing in one or more codes, 
included: ciia.rge made: therefccs muB^ cover all costs;- cliarge made must 
be established price of finished product less marJiet cost of materials 
furnished; member prohibited from assuming liabilities dependent vcpon 
quality of material furnished; and customer must bill member for material 
the latter then including this cost in his.ovm bill to the customer. 



9679 



-99- ■ . • 

The prnvisiDns classified i" this sectian re£ulr?.ted in some 
Y/a,y practices involved when sales Yrero made throxigh the medi-um of 
sealed "bids filed with or.d o^jened simultaneoiisl^,^ oj an awardin^;^ authority. 
While appearing most fev/quentlj- in the Construction Codes, they occurred 
in codes for other industries vmere the sealed-hid method of awarding 
contracts v/as used. The first ei^'ht items regulate the pro.ctices of . 
hidders; the last eleven re{^ulate the practices of awarding authorities. 

Bid Peddling 



The practice of hid pedaling was defined in the "basic Con- 
struction Code, a.s follor/s: 

"Bid pedcLling in effect means the offering hy the bidder 
, prior, to the. making " of an award of a substitute hid or price 
lower than the one originally -hid without a comiiensurate 
decrease in the requirenents .if the joh." 

Classified hereunder are codes vmich prohibited "hid peddling" 
in so many words, those v.fliich -oroMoited the "nalrihg of alternative 
offers", and all codes which in wording of .ne sort or .another required 
the original offer to he the final offer so long as specifications were 
unchanged or when all hids were nDt rejected oy the awarding authority. 

Making Alternative Offers Unless All Eidders Have Snjae Privilege . 

The codes clo,ssiiied here requiiPid tiiat the first hid he the 
fin.al hid uiiless the privilege of suhstituting a.. new hid were allowed 
to a,ll competing hidders, A fe',T of the codes included j-^rohihited 
the submitting of two or more hids at- the some tiie (hased on the use 
of different grades ~f materials) hetvreen which the awarding authori'fe'' 
could take its choice, unless all conrpeting hidders were allowed the 
STAe privilege, 

Suhmi s sion of Contractor's Bid Before Closing I'-^/be and o'f Sub-Contract or's 
Bids to Contr xtor ?ithin ,?4 Ho-un-s Before C losin g Trcte . 

The first tyve of restrict! xi included nere was th-.t which 
specifically prohibited bidders from submitting their initi-^l bid 
a.fter the closing date established ibj- the avi^ardiiog authority, or 
required them to have their bids in before said closing date. 

The second type of provision classified.; here applied ujiifosiy 
to the basic Construction Code .and r.ll of its supplements. This required 
subcontractors to deliver their bids to the general, contractor -at le-s t 
24 hours prior to the time set for the.recerot of the bid of the general 
contractor 'by the avfo.r ding out h rarity. It provided that hids received 
after such time should n^t be opened. 

Bidding on Other Than Hequirements of S'l-iecificat ions. 

The i^ev.eral "uoroo'^e of the provisions cl-^ssified hare was to 
com^joel bidders to adliere to .-jinounced specif ico,ti;ns in coniputing and 



-100- 

suornittini-; their oids. Included are provisions '"iiich -oroliiMted: 
(l) su.Driitting bids on specifications other than those "orescriljed by 
the arrarding authority; (2) changing specifications in computing the 
bid; (o) underesti'natiuf quantities of material required in formulat- 
ing bid;' (4) na'^ing inac.eovmte specif icatio is i^hen bids are called 
for projects as a nhole, vithout specifications bein;; set forth; and 
(5) bidding at a price other than that announced hj awarding a-uthority, 
T7hen the price is fixed and competition is intended to be ba.sed on 
qualitj- and' quantity rendered. 

The other restriction prohibited secret changes in specifications 
and the submittin^s of bids before the detailed plans or specifications 
had been an-nounced by the awarding authority. 

Collusion TJith Com-oetitors 

All but three of the codes included here cane under the Con- 
struction co6.e, rhich prohibited "collusion betreen the different 
bidders in the prepara,tion of any bid," The other three codes also 
rela,ted to collusion rrith competitors in preparing sealed bids. 

Collusion rith A'.'^ardin^' Authority 

The first sub-head includes (with but one exception Construction 
Code) '^^hich prohibited collusion "by bidders with the awarding authority. 
The second sub-head prohibits activity by 'lembers directed to the end 
of -ha-ving all bir.s rejected by the awarding authority, whether by 
collusion with awarding authority, with competing bidders, or by in- 
dividual activity. 

riling of Sealed- Bids 

The codes classified hereunder provio-ed for the esta,blishment 
of a bid depository with "hich duplicate and sealed copies of all bids 
would be filed concurrently with the -lailing of the bid to the awarding 
authority. The first sub-head includes codes which prescribed detailed 
rules for the establish'aent ajid operation of such depositaries. 
Respecting the nature of the depositary, six of the codes named the code 
authority; ten, an "impartial agency" to be named by the code authority; 
two, the "estimating bureau"; and three, some other agencj?-. T7ith re- 
gard to the kind of information, required to. be filed, four co6.es in- 
cluded a notification of irtent to bid on any given project; all but 
one required the filing of an exact duplicate bid ^ith all its details; 
one permitted 'filing of the Iuito sum only; p,nd two sr>ecified that 
itemized quantities of materials involved must also be filed. Eleven 
cod.es required that the bid.s be filed before the closing date fixed bj'- 
the awarding authority, only one requiring such filing after the closing 
date; the remainder were silent upon this point. Fifteen prohibited 
the opening of bids by the depositary until a specified number of hours 
after closing date (generally 24); three perraitted such opening upon 
receipt of filed bids; and the remainder contained no provision dealing 
with the subject. 



9679 



-101^ 

The second sut-head contains the codes rrhich required that coTDies 
01 8.11 bids filed he sent to a,ll hidders participating: - after the 
closinfT dp.te of the av^arding authority. The third contains codes ^-^hich 
reauired that the filed "bids oe 'Open only to the inspection of other 
hidders after the closin:^ date. Onl:" one of the codes ^^rovided for 
disse-'.ina-tion of the filed information hefore the awarding authority's 
closing date. 

The fourth suh-head contains codes which enporrered the code 
pjuthority to investigate bids filed, upon the complaint of a memher. 
This provision ras genera,lly read as follov's: 

"Upon the request of a. oidder, the Code Authority or a re.fional 
or loca.1 adjiinistrative comnitteS a/opointed h-^r it shall appoint 
e. coEinittee of revieir composed of not more than three qualified 
"bidders, '.Tho are not bidders on the job, rhich committee sha,ll 
be empor/ered and directed to investigate any bid to determine 
whether anj?- provisions of this code have been violated in such 
bid. In the event such committee sha.ll find an;' such violation* 
their findings therein, together vrith a summ.ai-"' of the facts 
upon TThich they are based shall be reported to the local admin- 
istra,tive committee or the code authority for such action as 
may be appropriate." 

Under the last sub-head a.re codes Trhich did not specify detailed 
rules therefor but empotrered the code authority to establisht a procedure 
for checking bids, whether through bid filing or through other acceptable 
methods. 

Pailure to Disclose Subcontractors on Request of Awardin,R: Authority 

The ba.sic Construction Codfe, provided that: 

"Before 'laJ-ing an a^a.rd the avarding authority may require 
an bidder to na-:e the subcontra.ctors whom such bidder intends 
to em-oloy for the va^rious divisions of the ttork bid upon," 

The remaining items of this section cover provisions restricting 
the activity of the a.warding authority rather than of the bidders. 

3 id Shp-pi-iing 

The codes cla,ssified here prohibited ^^±&. shopping", using the 
identical tern. Bid shopping wa.s defined ^oj the basic Construction Code 
as efforts on the part of the award.ing authority,'- to induce a bidder, 
prior to the ::ahing of the awa-rd, to lower his original bid price with- 
out a, com.mensurate decrease in the requirements of the job. 

Considering Alternate Proposals ■ 

The ba.sic Construction Code, of which all codes included here 
were a part, provided that:- ■ 



3679 



-10 2-. 

"On?vy a United nu ^~ier of alternate proposals shall te required 
in connection ^ith p.rrj 'bic' , r.nd no alternate proposal of a "bid- 
der rhp.ll te considered b;^ the awarding authority, u-^less the 
privile-.e of alternate proposals is erttenced to al"! "bidders. " 

Avrarding: at Other than rjidder^s Original Price 

The "basic Constr.i.ction Code, A-'hich ap-olies to all "but one of the 
codes classified here, lorovided tliat; 

"An arard if lade shall "be -nade at the bidder's original "bid 
price. It is recognized that competition "based solely on -orice 
is soneti les unfair and accordinc^lv the avarding authority lay 
nahe an arrp.rd to a corietitive "bidder other than tiie louest "bid- 
der provided the avrard is ~;ade a.t such conpetitor's original 
"bid price. " 

Acce-otin-r ?.e"bates Tot Included in Cri':inal Bid 

The "'oasic Construction Code, of.v'hich all codes classified here 
■T7ere a part, prohibited the a.r,'ardir..g aaithority's accepting of rebates, 
refunds, c.iscoia^its, or other special a.llorances or services from a 
bidder unless inclnded b'"' the bidder in liie. original bid. 

Furnislli^^~ Inad-eaur.te S'oecif ications or Other Deceintive Conditions 
of !^iddin;j 

Tiie basic Construction Code, '"hich apjilies to 22 of th^ codes 
classified here, read as follows: 

"The ar?a,rding authorlt^r shall na'''e available vmiformly to all 
bidc'ers, plans and/or snecifiTcati'^ns or ot'..er requisite infor~ 
nation \7hich shall be sufficiently co-TOlete to enable each bid- 
der to preoare a definite bid in accordance '7ith the regulations 
herein -nrovided for." 

Three of the codes included here required the a'jarding authoritj;- 
to establish conditions of bidding vhich rere n'~t -lislear'ing or 

deceptive. 

Inviting Bids from Unreliable Bidders, Inviting "Unnecessary Hunber of 
Bids and Acce-ptin? Uninvited lids 

The basic Con3tracti'^;n Codes, of vhich all the codes classified 
here '.Terc a. part, contained the following three TDrovisions: 

"Tlie a/^arding authorit^r shall not invite bids fron a bidder un- 
less such bidder shall have deraonstrated to the Satisfaction of 
t"ae avarding authority that he is conpetent technically and fi- 
na.r.cially to perfon t"ne rorh, and tlie ability of the bidder to 
obtain a performance bond shall not be regarded as the sole test 
of such bidder's conpetenc^';, " ; 

"Since it is recognised that the preparation of a bid. is a ser- 

9679 



-103- 

vice involving an ex;oense to the "bidder and that the inviting 
of an -onreas enable nuiiber of bids is an economic rraste, the 
ana.rding authority shall not invite an unnecessary number of 
bids." 

"Bids received rfter (closing date) or from uninvited bidders 
shall be returned unopened. " 

Acceptance of Possibly Erroneous Bid TJithout Proof 'by "Eidder 

The basic Construction Code, of irhich all the codes cla.ssified 
here r;ere a. ioart, provided that: 

"The arrarding authority shall not use any bid vhich is so un- 
duly lo\"' as to indicate an error or ;iista^':e in estimating trith- 
out first giving the bidder the opportunity of demonstrating 
by cost sheets or other 'i.ethods the correctness of the bid tha^t 
he has submitted.." 

Time of Acce-pting Bids 

Classified here are several types of provisions re.Tilating the 
time element in the acceptajice or rejection by the anarding authority of 
bids submitted to it. The following two provisions ap~3eared in the ba.sic 
Construction Code and applied to all codes sup^olementary thereto: 

"Tile arrarding authorit3'- shall designate a specific hour and 
•olace for receiving competitive bids. Bids received s.fter such 
time shall be returned unopened." 

"The awarding authoritj'- shall make an award or reject all 
bids for the principal contract with the o^ner within twenty 
da'-s after the stipiilated tim.e for the receiving of bids ex- 
cept where an extension of the time has oeen requested from 
the bidders a.nd lips been consented to by two or more bidders. 
In the case of bids conditioned upom the award of a iDrevious 
contract, each succeeding awarding authority shall maize an 
award or reject all bids within thirty days after the award 
of such previous contract except as to such bidder as shall 
agree to an extension of time." 

One code outside of the construction group prohibited the ex- 
tension of time for acceptr/.ce of bids. 

Rejecting Bids a.na Calling for ITew Bids 

The basic Construction Code, of which all codes classified here 
were a part, read as follows: 

"The right to reject any or all bids may be reserved by the 
awarding authority and such rejection shall be ma.de in writing. 
Wliere all bids are rejected, bids shell not be again invited 
or submitted for the mere purpose of obtaining a lower or re- 
vised price or prices for substantially the same work previous 



S679 



-10<lr- 

to the ela-pse of nir.etj' drys fron tlie date of such rejection, 
excert there "be a sulsstantial clian-'^e in the plans and/ or 
s^oecif ications, or excent there he evidence of eol^usion, 
or except there be sach a ".ar^'-ed difference hetr.'een the "bids 
subrittsd and the avardin^ anthority's estimate as to the 
valua.tion of the '■'or^- e.s voul.d indicate to the avrarding authoi^ 
it3'- and his code authoritj- the necessity of ner bids in order 
to secure fair conpetition. " 

Reveali:-.e Any -Bid to CoToetitor 

The basic Consti'uction Code, of r'hich all but trro of the codes 
classified here were a part, prohioited the avrarding authority, at any 
..tine ■orior to the specified ti -e for receipt of bids, fron conve^/iii^ to 
any bidder information relating to the price or terms of eny other bid 
in order to inflv.snce the price or terns of such bidder. The provisions 
in the other tv70 codes nere si'iilar in -leaning. 

Collusion '"ith Bidders 

The basic Construction Code, of ™ich all codes cl8.ssified here 
v,'ere a, part, prohibited "collusion betreen the aua.rding authority and any 
bidder, " 



9679 



-105- 
PAH'T III 

MALYSIS OP TRADE PRACTICE PROVISIOITS IP A SELECTED GROUP OP CODES 

This third imrt of the study of Trade Practice Provisions 

in Codes of Pair Competition consists of a series of five tahnlations 

which present in detail the trade practice restrictions found in a 

selected number of basic codes, and their supplements and divisions 

v/hich contained trade practice rjrovisions additional to or superseding 

those of the basic code: 

1. Trade Practice Restrictions - Distribution and Service 
Trade s 

No, 201. Wiolesale or Distributing Trade and its 22 
supplements of which supplements r'os.l5 
aad 22 each h^d two divisions 
ITo . 60. ' Retail Trade and its 1 division and 3 sup- 
plements 
Ko. 101. Cleaning and Dyeing Trad^e 

II. Trade Practice Restrictions - Textile and Apparel I'Tanu- 
facturing Industries 

Ho, 1, Cotton Textile Industry and its 2 divisions 

and 1 supplement which had 9 divisions 
No. 474. needlework Industry in puferto Rico.. ' ^us 
llo. 118. Cotton Garment Industry and its 11 divisions 
¥.0, 44, Boot and Shoe Industry 

III. Trade Practice Restrictions - Graphic Arts Industries 

¥.0. 287, Graphic Arts Industries and its 17 divisions 
of- which 287A4 has 2 divisions and 287E13 
has 7 divisions 

IV. Trade Practice Restrictions - Construction Industries 

ITo. 244, Constructionlndustry and its 21 supplements 

of which supplement lIo._ 1. has 2 divisions 

V, Trade Practice Restrictions - Miscellaneous Group 

Ho. 11, Iron and Steel Industry and its 1 consolid- 

at i on 
Ho, 123. Structural Clay Products 
Ho. 24, Bituminous Coal Industry 
Ho. 9, Ltmber and Timber Products Industries 
. Ho, 275, Chemical Manufacturing Industry and its 3 sup- 
plements 
Ho. 120, Paper and Pulp Industry 
Ho, 174, Rubber Tire Manufact'oring Industry 
Ho, 467, Cigar Manufact-ioring Industry 



9679 



-106- 
V. Trade Practice Restricticnc (Continued) 

No. 4, Electrical li^niifact-oring Industry and its 

3 supplenients 
Ho, 145. Fui-niture Manufacturing Industry 
lie. 278, Truclring 
ITo. 47. Banlviers 
iTo. 124. Motion Pict-ores and 5 divisions 

Twenty-tvro oasic codes v/ere selected, one from each of the 
twenty-4;v7o industry groups, from the list of seventy-one coded indus- 
tries employing 50,000 or more persons each. Together with their sup- 
plements and divisions, these twenty-two basic codes cover 137 sets of 
trade practice provisions. The bases used in the selection of these 
codes for detailed analysis were as follov/s: (1) As mentioned above, 
one code v;as selected from each of the twenty-two industry groupings. 
(2) A Y/ide variation in the size of the industries included was ob- 
tained. Thus, althoiigh the basic codes Fere talcen from the list of 
codes covering 50,000 or more employees each, raa,ny of the supplements 
and divisions of these ba.sic codes cover a far fewer n^imber ranging as 
low as 800 in the Kalamein Industry, one of the Construction Group. 
(S) The group selected was made representative from the standiooint of 
date of code approval. Thus the code for the Cotton Textile Industry 
was approved July 9, 1933, whereas the Code for the Cork Insulation 
Contractors Industr;^ was approved on April 1, 1935, 

At the top of each of the tabulations which follow are the 
names of the basic codes and their supplements and divisions which con- 
tained one or more trade practice provisions supplementary to or super- 
seding those of the basic codes. Along the left margin of each tabulation 
are listed the trade practice vvhich were regulated by one or more of the 
codes, supplements or divisions indicated on the tabulation. These 
trade practices are for the most part classified and arranged according 
to the system used in connection v/ith the summary tabulation presented in 
Part II above. 

As contrasted with the summary tabulation of Part II where only 
principal trade practice restrictions v/ere individually set forth, the 
tabulations which follow specifically include all trade practice re- 
strictions. ^ ^ 



* Except those provisions which, although supplementary to or other- 
wise affecting trade practice restrictions, did not themselves re- 
present restrictions. See A^-^pendix I - II. 



The kinds of restriction placed by codes on trade practices 
are indicated on the tabulations through the use of the symbols which 
follow: 

P - prohibited 

C - Prohibited if free; ader[\;ate cliarge must be made; or cost 

must be recovered 
D - Prohibited if discriminatory 



J679 



-107- 
Trade Practice Restrictions (Continued) 

S - Prohi'bited if excessive; or proMl)ited if at more than 

Market value 
J - Prohibited unless consent of competitor or customer is 

. obtained 
M - Prohibited if misleading or deceptive 
S ~ Prohibited if secret 

L - "rlaxim-ura limits on amour.t, rate or value Sjiecified 
G- - i.Iinimum limit on amount, rate or value specified 
Z - Exact amouiit, rate or value specified 
T - Time limitation; duration specified 
W - Must be set forth ii: writing; or contract required 
H - Mandatory; or required 
B - Permitted 

Y - Ee commended 

X - Code Specified; or code contains 
K - Dode defined term 

V " Incorporated by reference 

R - Must be reported to Code Authority or other Administrative 
Agency 

P — Must be filed in accordance with a manner of open price 
provision 

I - Code Authority may establish (rules governing) 

- Code Atithority to establish (rules governing) 

llote: The encircling of a symbol means tha.t the restriction 

referred to ?;as established by the Code Authority pur- 
suant to an enabling provision 

IvT - Code Authority may grant exception; subject to approval of 
Code Authority; on iDermission of Code Authority 

A " Administrative a-pproval required; subject to Administrative 
approval; Administrator to take action 

Q, - Subject to Administrative review and/or disapproval 

b - Excej^tion permitted 

c - Excei3tion permitted to meet competition 

d - Certain products only; or certain product excepted 

m - Certain customers only; or certain customers excepted 

n - Certain territories only 

r - Certain member only; or certain members excepted 

The ac com.panying footnotes (references by figures in paren- 
thesis appearing in the tabulation present detail which cannot be in- 
dicated by symbols, and elaborate where sjTnbolization does not 
adequately describe the restrictions. It should be noted in this connec- 
tion tliat precise and certain use of the symbols was not possible in many 
cases because it was not always iDOssible to determine the intent of the 
code provisioms. Por example, the decision as to the use of an "I" or an 
"0" was frequently made in an arbitrary n'ianner because the code was not 
clear a,s to whether the Code Authority was by d^^ty required to take 
certain actions or was merely empo?rered to do so. 

The footnotes are classified according to the basic codes. 
Tha,t is, all footnotes pertaaning to supplements and divisions of a 
basic code -jill be found u_-der the title of the basic code of v/hich the 
supplements and divisions are a part. In order to facilitate reference, 



-lOd 



Trade Practice Restrictions (Oontinuod) 



each group of footnotes is captioned "by the name of the trade practice 
to which they refer. The footnore arrangement is the same as the 
arrangement of the trade practices used in the tabulations. 



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DEALINGS WITH AGENTS, BHOKEHS AND OR OTHER 

CONTROLLEO SALES REPRESENTATIVES 

DEALINQ WITH OTHER THAN BONA FIDE CONTROLLED 
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-113- • 
THADE PRA.GTIC3 33STHICTIGa^3 - DI3TPJ31TTI0N MP 3aHVi:B THADSS 
201 Code of Fair Competition 
for the 
fiiolesaling or Distributing Trade 
and its supplements 



Hours Per Jeek of Store Operation 

(1) die Code Authority with administrative approval 'tnaj es- 
tablish uniform hours of store operation by regions, but not less than 
fifty nor more thsji seventy hours per week nor more than six days per 
week are permitted. 

Days Per leek of Deliveries 

(2) Deliveries on Suadays or holidays are prohibited, except 
in cases of emergency which must be reported to the Code Authority. 

Cost Accounting System 

(3a) i/iembers to estim3,te costs in accordance with the 
principles of the method established pursuant to enabling provision. 

(3b) Items of cost specified to be determined in accordance 
with accounting foriTiala when established pursuant to enabling provision. 

(3c) Cost accounting system established pursuant to enabling 
provision is to be used to extent found practicable by members. 

Sales Below Individual llember' s Cost 

(4a) Cost is to include actual net invoice purchase price 
plus transportation charges to seller' s -ffarehouses-, allowance for actual 
wages involved in effecting the sale and delivei-y of goods, and other 
items when fixed by Code Authority ^vith administrative approval. Com- 
petition in any tra.de area on identical or essentially similar goods nay 
be met wlien such competition is not in violation of the selling below 
cost provision; provided the Code Authority is notified of all facts. 
Jobs, seconds, damaged goods and closeouts excepted. 

(4-'b:) Competition may be met only if not in violation of the 
selling below cost provision. 

(--^.c) Cost is to include net invoice cost plus transportation 
costs to seller's warehouse plus allowance for actual wages involved in 
the sale and delivery of the merchandise, such allowance to be deter- 
mined by the Code Authority subject to administrative approval. 

(4d) Cost is to include net invoice price plus incoming trans- 
portation costs to warehouse, except to meet competition not in viola- 

9679 



-114- 

tion of the selling below cost provision; such sales must be reported to 
the Code Authority within three da/s. Discontinued, obsolete and dis- 
tress merchandise are excepted. 

(4fc) Cost is to include net invoice purchase price plus 
transportation cJiar^es to whclesp-lers' warehouse and whsn ascertained 
by the Administrator on recom-nendation of -blie Cede Authority is to in- 
clude a reasonable amount for direct labor cost entailed in the sale 
and delivery of merchandise and coll3Ction of accounts. 

(4f) Cost to inclxide net invoice purcnase price plas incom- 
ing transportation costs. 

(4^;) Discontinued, obsolete or distress merchandise excepted. 
See also footnote (5a). 

(4:i) Cost is to include actual net invoice cost of woolens 
and/or trimnin^s plus transportation costs to wholesalers' warehouse 
plus actupl '.vages for st-^re. labor and/or labor involved in direct handl- 
ing when determined in accordance with the acGou:iting system established 
pursuarit to enabling provision. 

(4i) The prohibition against sales below cost is pujrely in- 
ferential. The code states: "It is intended that sound cost estimating 
methods should be used ana that consideration sho'old be given to costs 
in the determinatirn of pricing policies." 

(-^rj) Cost is to include net invoice purchase price plus in- 
coming transportation cost?;. CoiXtpetition net in vialation of the sell- 
ing below cost provision may be met. obsolete goods, bona fide close- 
outs, damaged goods, stocks being liquidated and other goods designated 
by Code Authority may be sold at less than cost as above defined. 

Cash Discounts and Period of ?ree Credit 

(5a) 2/10 days; net 30 days. 

(d'c) On dealer's purchases for stock: 5/30 days or 2/60 days 
or 1/90 days v;ith additional disco'ont within disco-unting period for 
shipment in September, 4 percent, October, 3 percent, Hovember, 2 per- 
cent, December, 1 percent; net 91 days. On dealer's purchases in rool 
lots: 3/lOth of :..onth folloT/ing purc.iase. 

(5c) On supplies and sundries: 2/iOth of month following 
purchase, c.o.d., receipt of payment by cash or check with order or in 
advance of order. On furniture and eqxiipraent: 5/l0 days from date of 
delivery. 

(5d) 7/10 e.o.ra. 

(5e) 2/10 e.o.m. ;; net 60 days. 



9679 



(5f) 3 jper cent within pei^iod to '"De fixed "by district' .^e cy 
subject to revision "by the Code Authority with administ rat ive approval, 
net 30 days. 

(55) S/lOth proximo or 30 c ".ys from dp.te of invoice; dtie 
net the foli^mng day. 

(5h) To inrn'uf-.cturing vdioles-le furriers: 5/l0 e.o.m. or 2/IO 
e.o.m., 60 6- ays extra or net e.o.m., 90 days extra. 

To manufacturing retail furriers: On sales from March 1 to 
August 31, 3/10 e.o.m. or net October 1; on sales from September 1 to; 
Jebrur.rj' .28, 3/IO e.o.m. or 2/ 10 e.o.m. 60 days extra. 



p.fter . 



(5i)^ 3/10 e.o.m. or 6/IO' e.o.m. 60 da,ys extra, net there- 

(5j) 2/10 days or 2/lOth proximo ; net 30 days. 

(ok) 5/10 days or 3/4-0 days; net 50 days. 

/ 
(51) To cutting up trade ma/nufacturing ladies; misses' and 
cMldren's apparel and ch-ln stores, 2/l0 e.o.m. 

To retail department, dry goods and trimming stores; on reg- 
ular go^ds 3/10 e.o.m.; on pe-.rl goods; 3/l0 e.o.m. 

To jobbers 2/l0, 50 days extra. 

(5in) 2 per cent in anticipatine'S due deXe of invoice but not 
to apply to those lines Y/here manufacturers' terms provide for gre3,ter 
cash discount. Discount may not be allov/ed on note settlements, 

(5n) 2/10 days; net 60 days except n,rtists' colors net 3 
d?-ys ?jid to trade sale oxcounts 10th of month follomng purchase to 
customers 77ho regularlj?" disccoiit in month follomn; purchase. 

(5o) Limited to percer-tage of discount received by member 
on samemsrcha.ndise and limited to payment by 10th of month following 
date of shipment and in no ce.se oil |oaym.ent ma,de by wr.rrant , note or tro,de 
acceptance. 

(5p) 2/l5th day of month follomng date of- 'invoice, not payable on 
on notes, etc.; maximum credit period 60 days from 15th of month following date 
of shipm^ent vdth interest starting 10 days p.fter net due da,fe. 

(5q) 3/10 e.o.m. or 2/IO e.o.m,, 60 d-ys extra. 

- '(5r) On trimmings and neckwear; . 3/10, e.o.m., or 6/10, 60 days 
extra. 

On embroideries: 3/l0 or 2/10 e.o.m., 50 days extra. 



9679 



-116- 

(5u) ret 10 days e.o.m. 

Antici'Qg'.tior. of Tills and Interest Rate Be^'-ond Yree Grec'it Period 

(o) 6 por cent per anmim oi- le^al rs.te, "iiiciiever is lower. 

(7a) 5 3er cent ;jer annum or le ;al rate, vjiiichever is lorrer. 

(71)) Acceptance of non-interest liearin-j note in -oa^rment of 
matured oblisre.tion, exce-oting pa'iTient from insolvent de'otors. 

Installment Sales 

(8a) ?5 '^er cent of contract price must oe paid on execution of 
contract for furniture and/or equipment. Deductions for trade-ins must be 
made 'oefore 25 Ber cent is com-outed. 

(B'd) 3-| months bsyond due net date ir maximum period allor/ed on 
installment "notes, \7ith 90 day estensicn permitted at 5 per cent or legal 
rate of interest. 

Datings 

(9a) 60 oar-S' datings to drapery and upholstery departments of 
retail stores and :rurniture manufacturers and e.o.m. terns permitted. 

(9b) Shipments after' the 28th day of the month may be dated as 
the 1st of the m.onth f ollov/ing. 

(9c) Orders for v/oolens of less than 30 ya.rds, or trimriings, 
total purchase price of which is less than S75.00, ship^ied prior to 25th 
daj;- of any month, may be dated first day of follc.aiig month;, if shipped on 
or after 25th of month may be do.ted as first day of seco,nd month follorr- 
ing. . 

(9d) G-nods shipped after the 24th day of the month rna-r be dated 
1st of month f ollov/ing. In case of v/omen' s near, the provision does not 
apply to jobbers. 

(9e) Trade sales are initial stock orders of an''" one manufac- 
turer' s line to nei- dealer accounts limited to 4 month dating from date 
of shipment rith standard terms. Datings on initial stock orders of ar- 
tists' colors to new dealer and jobber accounts are limited to 2 months 
from date of shipment with standard terms. 

(9f) ilerchfndise shipped after the 25th of the month ma'"'' be 
dated as the 1st of month i ollov/ing. 

(9g) Goods sliip-oed after the 24th day of the month ma'^ be dated 
as the 1st of month following. 

Seasonal Datin,-;s 

(lOa) On seasonal goods: Febiiianr 1st for Valentines; April 
1st for Easter goods; September 1st for school supplies; Decem- 

9679 



-117- 

ber 1st for holiday goods, and Octo'oer 1st for Halloween j^oods and 
desk calendars, witn terins of 2/l0 days, net 30. Code Authority em- 
powered to modify these datings or esta.'blish imiform datings for ad- 
ditional items. 

(10b) On advance spring orders shipped llovera'ber 1st and 
spring samples whenever shipped, March 31st datings, 2 per cent if 
paid April 10 are permitted. 

(10c) On orders fcr woolens of net less than 30 ^"ards, or 
for trimmings, the total ;mrchase price of which is $75.00 or more, 
shipped after March 1st for Spring season and after September Ist for 
fall season, 30 days extra, dating- permitted. A.dv,ance orders for woo- 
lens of not less than 30 yards or for trim.ning3, the total "mrchase 
price of wiaich is n:t less than .:p75.00, vna^/- "be dated April 1st for 
spring season on goods shipped on or after January 1st and "ctober 
1st for goods shipped on or after July 1st. 

(lOd) Except artists' col:)rs to established dealer 
accounts, datings are limited to spring stock orders shipped at dis- 
tributor' s convenience after jctober 15th with April 1st darting and 
regular terms, with only one order on any one manufacturer' s line to 
any one account. 

On initial stock orders for -iXi'S one manuf acuterf ' line to 
new dealer acc&-ant, orders shivoped between October 15th and December 
1st may be dated April 1st with regular teriTiS. 

Datings on orders to established dealer and jobber ac- 
counts are limited to datings on fall stock orders shipped at whole- 
saler' s convenience after A'oril 1st with September 1st dating, sold 
en regular terms and only one order to one acco-ont. 

I.n case of show-card colors and inks, which are subject 
to freezing, datings are liLiited on spring stock orders shipped at 
wholesaler's convenience after Usvember 1st, or in th.e event of water 
shipment, date may be advanced not to exceed 10 days prior to official 
closing of na.vi^ation over such route with Aprj.1 1st dating, sold on 
regular terms and only one order to one account. 

(lOe) October, November, and December shipments may be 
dated not later than January 15th of the year following, subject to 
2 per cent discount. 

(lOf) Shipments made from September 1st to Kovember Isf 
terms: 3/l0 e.o.m.. 30 days extra or 3/l0, 90 days extra. 

7.0.3. Basis of Selling 

(11a) Itcvision is nat applicable to purchases in room 
lots when sold at advance prices above wholesaler's or distributor's 
price fG&r stock orders. 

(lib) Goods on which it is the trade practice of the ma- 



9679 



-118- 



nufacturer to or?? :)ay tr-uis_Jortati 'n Cuav^es t~ retai"'. stores on goods 
sold by wholesaler are exce^ted. 
Preoayraent of r:'-e ii ''.it Jn-orge'^ 

(13) ■^ennitted o.i c-eli^'sries by me? senders or local ;pack- 
age delivery s9Tv'.L"e wit'iin ;?3 mile radius of olace of "business. 

Lower Price on D \ x-e ct rJ-:a ?':--.ctor,y SO^ipinents 

(13a) Pro'-iibited except for differences in cost. 

(13b) Prcnibited if lower t.-i:m prices or ot.ier terns of 
credit or cr,Sii di^C'untv t^ian tn;se received ''oy distributor. 

Open Prica oystem ■ ' 

(14a) Contr%.ct ss.les to retr-il stores cf manufacturers 
if purcxia-ses are for stock, CDntro.ct sales for wholesalers, hotels, 
clubs, stea.ashios, ti^eatars, railroads , and public works are excepted. 

(14b) Adopted f:r 3:aie regi:ns. Prcvisi n is inside for 
filing past prices v/ith disinterested agency if renuested by Code 
Authority in support of t_.e selling below nost provision. 

(I4c) Available on payment of cost. 

(I4d) 3/3 of members must assent. 

Guarantee Against Price Dgcline 

(15) Tnere datings are given, M'ice may be guraranteed 
for a period not exceeding period -^f sucIj. dating. 

(Unearned) Discounts 

(16) Iccluding but not restricted to courtesy discounts, 
except as expressly provided ih tie Code. 

Advertising Allowajices 

(17a) In iaa,nuf ac ture r - distributor - dealer cooperative 
advertising, aia:unt contributed may not exceed that contributed by 
the dealer or manufacturer, nor in any case be in excess of one-fourth 
of tie total cost of such cooperative advertising. 

In distributor - dealer cooperative advertising, amr^unt 
contributed may not be greater tian one half of 'lealer' s cost of such 
advertising. 

Hot more than a total of 2j per cent of total net sales of 
radio app.onraJtxEB to dealers for current fiscal year may be expended for 
both types of cooperative advertising. Such payments may be made only 
on proper written statement certifying correctness of dealer's adver- 
tising rates as fair current contract rate. .Allowances are to be 



C1A'7Q 



based on cost of broadcastiii;^, space used in newspapers, pabli cations, 
billbcards, placards, tlieater screens or .-tier cust?;iiar.y pxiblic media. 
Tlie cost :f any mec'-ianical set-up and art work as well as cuts, 
make ready or otlier si.iiilar items, otlisr than st'mdard advertising ' 
mats or cuts supplied tie manufacturer, saall net be paid for by the 
member. 

District agency may require niembers to file current coo- 
perative advertising agree-ients and aianjes prior to effecting such 
m:dif ication, copies to be availaole to all members on reiuest. 

Liembers must reserve tne riglit t: supervise media, layout 
and copy in cooperative advertising. 

In cases of anticipated advertising accruals, member may 
not accept liability beyond actual accruals against genuine purchases 
shipped and invoiced within a period previously agreed upon, not to 
exceed the following six consecutive months. Cver- expenditure by deal- 
er bey;nd actual amount available in specific plan member is following 
may not be paid by member. 

(17b) Members may funaish advertising cuts and matrices, 
""-frovision is not applicable to joboers. 

(17c) Fi'ohibition is against allowance and donations to 
customers for their advertising. Cooperative advertising is permitted 
if items are trade marked or "t^r-anded by member, provided paymaent be 
made in cash to an advertising mediijm owned and operated independent- 
ly of the parties interested. <■ 

Freight Allowances 

(18) If member has not filed f.o.b. factory price in open 
price schedule, on f.o.b. factory shipments which do not include any 
handling ser^/ice by member, allowance may be o.iven customer in lieu 
of such service, but in no case may tie price quoted be lower than 
invoice or replacement cost, whichever is less. 

Sales Promotion Allowoinces 

(19) Am:unt expended is li^nited to 1 per cent of totrd net 
sales within any current fiscal yea.r. 

Patronizing Riblication in -Viicli Buyer is Interested 

'20) Advertising in scxiool publications score TSoards, 
season sc-iedules and otiier media of similar character prohibited, ex- 
cepting mediums holding secr-nd-class mail permits .:,r with approval of 
the Code Authority, subject to Administrative appeal. 

Consignments 

("31a) Goods wnich are damaged or deteriorated and cannot 
be sold in accordance with Code regulations with regard to such articles 



.9679 



-120- 

may te sold on coasijiiinent subject to rej^alation 'by tlie Code iutJicrity. 
Tne Code Authority may per.nit lo.an oi' articles for sucu time as tlie 
articles owned b,y custc.ner f,re bein^ repaired. 

(21b) Products of iTianufactarers whose general plan of dis- 
tribution is by consi.in.iient, and n:t 'oy sale for resale are exce 'ted. 

(21c) Code Aut.':ority nay per.nit exce ititn when meinber 
sends certification of necessity of consignraent sale to move damaged 
goods. Code Autliority disapproval is subject to appeal to A'iininistra- 
t^r. 

SJiijjaents or Sales on Trial or Approval 

(22a) I.Iercaandise mu.?t be returned witliin three days from 
date of receipt by consignee. 

(22b) Goods nrast be invoiced tc orospective customer sub- 
ject to return for credit 'vithin tl irty days. 

(22c) Ten-day time limit. Person t: whom ,soods are shipped 
niust pay shipping ciarges bctli ways, excepting watchmalcer' s and je- 
welers' materials, etc., and men's novelty jewelry. 

"Accenting H?turn of l.iercnandise" 



(23a) 10 oer cent service and depreciation c'lar^e mast 
be ira.de. No pieces less than t'.iree yards .nay be excepted for return 
mien distributor is not at fault. 

(23b) Provision pr:'-iibits accenting jnercfendise for credit 
after trie season. Provision is n''t applicable to j-jbbers. 

(23c) Tairty da:;s fr:..i d-.te of receipt ti..ie limit is placed 
on accepting goods for credit. 

Accepting; Return of Qt.'or T-ian Defective Jlerchandise 

(24a) Five do.ys from date of receipt is t e time limitation. 

(24b) Prohibited for merchandise selected by ,ond sCld to 
customer or his ajent from stock; five days from date of receiiit is 
the time limit on goods shipped on order. 

(24c) Prior consent to return is re--uired. On goods ac- 
ceoted Oiiarge of net less t:..an five yer cent of selling price must be 
made and freig'it charges mast be charged to sliipper ret-arning goods. 
This provision is effective only so loni^ as provisions of Article XX 
of Paint, V,;.misn and Lacquer Manuf acturin": Code as approved'. October 
31, 1933 are effective. 

(24d) Sixty da.ys from date of sliipment time limitation is 
placed and charge equfil to seller's cost of handling mercaandise re- 
turned must be iria,de, except in cases where seller is at fault or in 



9679 



C. 



-121- 

cases of customer' s inBolvency. 

(21e) Sxceptijns jeruiitted if in acccr ance v?itli terms of 
guarantee or in cases .f custOir.er' s insolvency, in which latter case 
acceDtance of returns must be reported to t::e Code Auth-rity. 

(24f) Ten per cent of merciiajidise sold to any custodier 
during the fc-'or months -'receding return may he credited to customer to 
extent of not more than eighty per cent of the current wholesale price 
for such merciiandise. In cases of customer's insolvency, returns may 
"be accepted hut must be reported to fcie Code Authority. 

Accenting Heturn of Damaged an d/ or Defecti ve G-o ods, and Adjusting 
Incorrect Sliip:iient5 

(25a.) Damaged or defective go::ds or goods n^t in conform- 
ance witi specif icati "n must he returned for credit within three days 
of receipt. If defects are not readily ascertrinable and return is 
accepted at later date, t..ie facts, with certification that such accept- 
ance is not in violation of Code must be reported to the Code Autho- 
rity. 

(25b) If goods are obvijusly defective they must be re- 
turned for credit within ten days of receipt; if latently defective 
they must be returned within the.' time tuat a reasonably prudent re- 
tailer in the exercise of ordinary care w:uld discover defect. 

(25c) Prohibition applies to g.ods which have been cut. 

(25d) Ten days from receipt is the time limitation. 

Exchanging Merchandise 

(26) Pro!.iibition applies to goods wliich have been used, 
excepting defective goods. 

Delivery by Sel ler' s Track 

(.27) Chairge must equal common carrier ra-te when delivery 
made is outside metropolitan area. 

Any Additional cr Special Service a nd Free Deals 

(23a) Items :r services used for advertising and for edu- 
cational purposes and given to the trade at large are permitted. 

(28b) Xien servicing consui'ner for dea.ler, dealer must be 
charged reasonable price. 

Gifts arid G-ratuities 

(29) Applies to ^ivin^ of ^ifts to athletic organizati:ns, 
leagues, associations, at..letes, winners of athletic competitions or 
persons prominent in any line if sport to induce same to use, recominend, 



9679 



-122- 



^r adopt a? "official" s^ich grods or couip-aent witlirat disclosing 
tl.at such person.; wore recipients of .tionoy or jifts. 

Prizes 



(30) Frchi'oiti.n applies to giving trophies or other things 
of value for adoptin or use by any team, club, association, league 
or educatirnal institution, excepting Professional baseball lea|i,ues 
operating in organized baseball. Donations of balls "r raoney to pro- 
fessional baseball leagues luay n^^t be in excess of t.e schedule of do- 
nations ests.blisxied by the Code Authority subject to administrative 
approval . 

SaiTipl e s 

(31a) SazTole lengths of fabrics ot.ier than snatches and 
samples bound in book form not exceeding fifty-four souare inches, 
except Ciiintzes and cretonnes TC:Lich may be 216 square inches, iinist 
be billed at regular prices per yard without allowance or trode dis- r 
count. Borrowers must pay for lost samples, except taat 25 per cent 
allowance may be made if special circumstances warrant it in opi- 
nion of seller. Thirty day time limit is placed on samples on me- 
morandum. 

(31b) Book of selections for free distribution is limited to 
one for each customer. Issuance of current year's sa^nple bocks prior 
to January 1 of year is prf^hibited. T-ie number of sample books which 
may be distributed is limited to coverage annual number of sets dis- 
tributed by members during the five years preceding January 1, 1934, 
or during the year 1933, whichever is more. Same method of com- 
puting number is to be used each successive yttar of Code operation, 
liembers distributing less than 100 books are exempted from limitation 
on number. Samples must be charged at sane rate as goods purchased 
for stock plus otlier expenses incurred in maZcing sample book. 

(31c) Samples are liuiited in size to 65 square inc^ies. / 

(31d) One specimen button, buckle, slide or ornamunt of any 
one color to any one custo-isr may be furnislied fre^. Sample cards 
and labor on seme may be furnished free to jobbers. 

(316,) One pattern of one color .nay be furnis_ied for period 
n't in excess of ten days. If not returned wittiin said period the 
sainple must be invoiced as of do.te ;f shipment. 

Display LCaterials 

(32) Li.oited to 10 per cent of OLayant of sa,le with which given. 
Coupons and/ or Coupon Books 

(33) ?r ".'Vision prohibits allowing more: f avarabls' terms of 
credit, discounts or datings on sales of coupon books than specified 
in Code for s?,lc of merch.'andise represented '^o-^ coupons. 

9679 



-123- 

Invoices Omitting 3i>?iif ica.nt Specified Detail 

(34) Invoices must emb -■?.:/ all prcvi!3i;ns ^f the Code re- 
garding terras snd conditions of sale including orices, payment dates, 
provisions governing delinquency, descriptions, discounts and dis- 
coTont "periffds, packing and delivery charges, delivery date, cancella- 
tions, returns or exc'.ianges of trade products. 

Product Standards 

(35a) 'Tiie Code Autli:rity is to appoint a committee to 
study classifications and standards of dimension and Quality, for sucli 
products of the Industry as it may select, in cooperation wit-i tlie 
Bureau of Standards and/or other organizations which will guarantee 
both government and consumer representation in the drafting of stand- 
ard 3 . 

(55b) A conmittee is to be app-.-inted by the Code Autho- 
rity so constituted as to afford producer, consumer and government- 
al representation, to study classifications and standards of quality, 
etc. , of staple- products. 

Standards of Measure 

(36) All woolen lengths based on a 56 inch width or over 
en double widtn 6/4 goods and on 38 inch width or over on single 
width 3/4 go:ds mast be measured not to exceed 36 inches to the yard 
before being shrunlc, and no allowance for short measure is permitted 
on any delivered length, measuring 36 inches to the yard before being 
shrunlc. 

Pricing Standards 

(37) On sidewalls and ceilings, prices marked or printed 
in sample bocks or floor stand books must be based on unit roll as 
approved by the Lepart.nent of Com:i:ierce in Cominercial Standards C3 
16-29. On borders, ;p3ices must be quoted on the basis of single 
width lineal yards. 

labeling of Products as to Quality and Origin or Trade Mark 

(384) Surface printed wall papers in which the rav/ stock 
has not been fully grounded before the design is printed, shovm in 
sainple books, stands or otaer forms of collective sample showings, 
must be plainly printed wito^ word "ungrounded" on back of sample. 
llo wall paper made on -angrounded stock .iiay be marked in any way to 
indicate t-iat is non-fading. 

(38b) As to cuality and origin, labeling renuirements 
apply to watch case sold as separate entity or fitted with a movement 
as a complete watch. Stamping must be legible and indelible. 

Labeling of Products as to Price 

(39) Sample books, stands and other forms of collective 

9679 



srraple showings must be marked in pi- in dcllrjrs and cents per single 
roll or vcrd, but sxich price is not ^o be considered resale price. 

Labeling; of Sg mples 

(4''^ Sanple books for free distribution must 'be narVied a.s 
being the propert]/' of the wholesaler issTii.ig sp.id books and that they 
are loaned to the concern to whom issued, for the neriod designated. 

Lab e liig of Second-Hand and Re^juilt G-oods 

(41'* As to second-hand and reouilt goods, laoeling is to 
apply to movements. Labeling is to be on tag attached to wr.tch. 

Sr.les of Substandard, Obsolete and/or Used G-oods 

(42tO Sales of current year's goods as jobs, seconds, da- 
maged goods or close-outs prior to the 31st day of December of any yeex 
prohibited. S3-1/3 per cent discount from price ouoted on nevr goods 
is' ur.x;iinum, except that there is no restriction on selling price of 
job (sLjscontinued lines'* after they are out of current line for one 
year . 

(42b) May be sold irrespective of cost provided that iivnu- 
facturer has refused or neglected to repurchase same v/ithin ten days 
after they are tendered to hin by member at his purchase price less 
a reaso:aable charge alloT^ed maiaufacturer for reconditioning and -oro- 
videc. that such articles have been advertised as uns..:,laDle through the 
medium of the asbociation trade jotirnal of the Befuty and Barber Suo- 
plv Institute; except that floor or Si?,lesi:is,n' s samples that have been 
on display or used for demonstrating purposes for six months or longer 
may he sold at 2'"' per cent discount from filed priced of member, 

(42c) Detail must be reported prior to sales including 
amount of merchandise on hrnd and date of its purchase. 

(42d*^ Details must be reported at leest two weeks prior to 
sale including descriptions, Quantities, and minmmum a,cceptable price 
for such stocks and reason for sale. Sale may proceed unlessother- 
wise ordered by Administrator on recom^-endation of the Code Authority. 

(42e'^ Types of goods not specifically nr-jned in Code; Code 
states "to maintain clean and well-balanced stock of merchandise" since 
goods are not restricted by selling below cost provision. 

(42f ) Details must be reported prior to date of sale. U0t 
restricted by selling below cost provision but burden of proving good 
faith rests with member. 

(42g) The details must be reported at least five days prior 
to sale. 

(42h) Details must be reported fifteen days or more prior to 
ss,le including amount of merchandise on hand and date of purchase. 



9679 



-125- 

(421) In the case of discontinued lines and siir-olus nerchrn- 
dise ".'oods must be from previous selling season. Such goods may be 
sold r.i: prices necessar3;- for dispossl, if .uiember certifies he is acting 
in good fa.ith. 

I.nitation of Trade Marks and/or Other Identification of Com-oetitor 

(45') Provision refers specifically to use of name or initial 
of an;- athlete or other person when comoetitor has -oreviously acquired 
fron sale exclusive right and good V7ill to such neaae, etc. 

Transfer of Goods From Original Cent iner 

(44"^ Provision specifically prohibits re"oacking or transfer- 
ring c,ny article from a -orof essional package (defined in Code)' or other 
original container into another container in violation of any contr..\ct 
with the owner of the formula or tr: de marks or with the original manu- 
fact-'jTer, and offering such rep^acked product in comoetition with the 
■oroduct as originally oacked by such owner or manufacturer. 

Misrepresentation of any Kind 

(45') Code refers soecificallv to misre"oresentation of goods, 
credit terms, values, policies, services and nature or form of business. 

Misre-jresentf tion of Product 

(46) Provision prohibits representing as seconds, defective 
cr as of inferior ouality, goods which are not defective or inferior. 

Inaccitrate and/or Misleading Advertising 

(47'' In addition to the general prohibition against inaccu- 
rate and/or misleading advertising, nrovision is made that no advertising 
allcwsjice may. be made unless the "orice quoted on radio sets includes a 
coiTrlete set of tubes; unless, if the word "comolete" is used in connec- 
tion T7ith receiving set advertised, tubes and other accessories neces- 
sary for the operation of the set are included, excepting outside a,erial 
and instcllation; unless- illustrations in the advertising correctly 
portray the model advertised and orice, and descriotion accompenying 
illustration is distinctly. set forth as a-o-olying to the appropriate 
illustration; if there are inaccurate, misleading or ambi,guous state- 
ments regarding radio oerform.ance claijis, amount of trade-in allowances, 
down pa3rraents, terms or false reference to "no interest charges" on 
ingt&llrient sales. These reg^-ilations ap'oly to all tj^oes of advertising, 

Inacc'.jjate or Deceptive Laoeling, Er-ynding, Larking or Packing 

(48') In addition to the general prohibition against inaccu- 
rate or deceptive labeling, branding, marking or packing, there is a 
prohibition against indicating, :narking or -orinting fair vrlue, vclues 
or prices of an?'' kind by s"/mbol, Code or any other method than plain 
dollar and cents figures. 



9679 



Discri-iination getreen Ctistomers of Sam,-^ Class as to price and/or Terms 

(49) Provision prchibits f^ranting more favoraole orices to 
ai'-iliated retailers thf.n to other retail ciistomers. 

Sales to Other ?"nan Soecifi?d Clssses of Oistomers 

(50) Provision -orohibits the sale of orofession^l oa.c'^^.E.-ges 
to other th:\n be-" aty and barber shoos and schools ?nd. other ccm:iercial 
users. ■" 

Extension of Credit to Delinquent Accounts 

(Sl'^ Accounts not ^aid within three months from date of de- 
livery are considered "oast due and no member m;?.v extend credit until 
oast-due accouiit is settled •unless member notifies Code Authority in 
writing that further credit is being extended,- giving reasons, and 
such further extension of credit is aoorcved by the Code Authority. 
Qp-de Authority ma,y reouire filing of all delinouent accounts and ma'^r 
disseminate list of stone -orovided t.here is no agreement aiioni; members ' 
not to sell such acco'onts. 

Pug.ntit''- Discounts 

(SS"^ Ten oer cent on full oieces ejid. over but not unless 
full piece consists of fifty yards or more and on materials at net 
less than $1.00 per yard wholesale on ha,lf pieces of twenty-five 
^rards and over -orovided such purchases are for stock. Contract srles 
for T/holesalers, hotels, clubs, steerashi-js, thea.ters, railroads and 
public worlcs are not c^overned by this provision. 

Selli-TS Directly in Competition with Retailers . .. ■ ' 

(53^ Provision rirohibits sales at wholesale orices in con- 
petition with retailers, but places no aosolute restriction on selling 
in coi-.ipetition with retailers at ssjne -orices as retailers. 

Selling Directly in Compietition with tianufacturer 

(54) ViTiere a t holesaler has been granted a fair differen- 
tial 'b;'- a manufact-orer, he ma-''' not n^ote a lower -or ice on a com.iodit:'- 
than quoted b;"- the manufacturer to the sar.:e class of ourchaser. If 
siich differeriti.-fl. is greater than the c lerating cost of the member, he 
nay on furnishi-ag -oroof of his lower operating costs to the Code Au- 
thorit"- sell at less than the differential so established but 'not afe 
a louer -orice than invoice cost r>lus o'oerating cost. For other ex- 
ceotions and further -'etail, see Article V. 

Sciles to Parties Violating A^'reenent s 

(j5^ Provision orohibits serving, selling, or suo-olving a 
shhool with the -oroduct of a man-'ofacturer if the school accepted the 
product from, the m^ni-ifacturer as- free merchsjidise to be used for edu- 
cation,^l -p-or-poses and subsequent to the acce-otarice of such product 



9679 



-127- 

viclated the sales oolicy or agreement under which the freel-^r f-Jjrr.ished 
jroduct wat^ intended to be used, Drovided that when the school has paid, 
as of date of acce-ottuice, the v;hclesale -orice of such misused orod-uct 
to the i.ienufacturer there is no restriction of serving, selling or suo- 
Tl-'-in^s' such school. 



9679 



-128- 

60. Code of Fair CoEiT?etition 

fo r the 

Hetan. ?i -ade 

a rd its .'Up'olements 

Hours Per V.'eok of S~or6 O^jeration 

(la) Fifty-two hours per ^jeek is ninimum which any retail es- 
tahlislunent may elect to operc.te, luiless it i"'£s operating less than fift^''- 
tno hours per T/eek just prior to June 1, 1935, in v;hich case its store 
hours may not he rsduced from such nuiher. Three schedules of operating 
hours per v/eek are set forth in the Code and each retail estahlishment 
must elect to operate under one of these: less than fifty-six hours hut 
not less than fifty-t\7o; fifty-six or more hours hut less than sixty- 
three; sixty- three or more hours. 

Different maximum hours of lahor and minimum wage rates are established 
according to which schedule of operating hours per v/eek is elected. Es- 
tablishments are permitted to revise original decision as to which schedule 
of operating hours they elect, hut such changes are contingent upon cer- 
ta.in restrictions '.rith rega,rd to lahor hours and ^ay. 

(ih) Retail drug estahlishjnent may elect to remain open seven 
days per week for a total of eightj'^-f our hours or more per week hut on no 
day less than eight hours. 

Sales Below Individual i.ienher' s Co!;:t and Sales 3elow Manufacturer's List 
Price 

(2a) If it is necessary to sell oelow cost to meet competition 
on the sale of identical or essentially'' similar articles, this competition 
may he met -orovided tha,t the competitor's price is not a loss leader (e.g., 
slae helow cost) and member meeting such price notifies the nearest re- 
presentative retail trade organization of such fact. Merchandise sold as 
bone fide clearance, if advertised, marked and sold as such, highly per- 
ishable merchandise which must be proraptlj'' sold to forestall loss, imper- 
fect or actually damaged merchandise or bona fide discontinued lines of 
merchandise if advertised, marked and sold as such; merchandise sold in 
ouantity on contract to public ca,rriers, departments of governments, hos- 
pitals, schools and colleges, clubs, hotels, and other institutions not 
for resale and not for rsc.i stribution to individuals, drugs, or drug sun- 
dries sold to phj'-sicians, nurses, dentists, veterinarians, or hospitals 
are exempted from prohibition against use of loss leaders. 

(2b) During the first six months after publication and on books 
published before July 1st of amr year until January 1st of the following 
year, booksellers may not sell an^^ book for less than the publisher's 
published price thereof. At any other time loss leader provision (see 
footnote 2a) applies, excepting books as bona fide clearance or bona fide 
discontinued books if advertised, ma.rked aJi6. sold as such, provided that 
books subject to the loss leader provision must first be offered to 

9679 



-129- 

soiarce of supply at not more thcin bookseller's i.ivcice cost, and dt..- 
raaged, "second-hand" or shelf worn books if advertised, marked and '-'vot: 
sold as such and books sold on complete finnl liquidation; provided, 
that no took is sold in violation of rules and regulations that raajr 
te established by the Code Authority v/ith adniiiistrntive a-o-oroval 
with regard to this "distress raerchr^ndise. " For further exce'otioiis 
to loss leader provision and sales below publisher's price see Section 
3 of the Code for Sooksellers. 

(Sc"* Sales helow manufp^cturer' s wholesale price list per 
dozen for any drugs, medicines, cosmetics, toilet preparations or drug 
su;iCLries a.re prohibited, exceot that in the case of biologicals or 
other products specified in Code which are not custonarily sold in 
dozen, or greater lots, the Code Authority may fix a comparable unit 
quantity. This is in substitution for the loss leader provision. 

Price Increases 

(S') Price of merchandise sold after the effective date of 
the Code ;-iav not be increased over price existing June 1, 1933 by 
mere then necessary due to amo-'ont of increase in production, operating, 
replacement and invoice cost of merchandise and taxes or other costs 
resp-lting from action taken pursuant to the National Industrial Reco- 
very Act or Agriculture Adjustment Administration. In setting new 
prices, due account must be given to probably increases in sales volume. 
Distress prices of June 1, 1933 may be equitably adjusted. 

Acceptaaice of Certain Form of Payment 

(4'^ Non-negotiable scrip, company checks or other evidence 
of wage pa-naent issued Dy any individual or private profit crgrjnization' 
in pajnaent of wages, and negotiable instruments not payable within one 
month of issuance, may not be accepted as payment for purchases. Com- 
mission appointed by the Administrator to investige.te implications 
of this restriction and upon approval by the President such other re- 
gulations established by it supersede those in Code. For further det-ail, 
See Article IX, Section 4 of the Code for the Retail Trade. 

prizes and Aiiy Additional or Soe ci e.1 Service and Lotteries 

(5) This provision prohibits the giving of articles of value 
or service free of charge contingent on any scheme of chance or contest 
in violation of lottery or gambling laws. Contests must fulfill the 
following conditions: Rules of contest must be clearly defined and 
strictly a^ohered to in making award; award iiiust be influenced by merit 
and net ov cha.nce; eoual consideration must be given suggestions of 
all entrants by a sufficient strff of competent and disinterested per- 
sons; and all employees and their families must he ineligible. 

Pree Seals 

{S) liembers of the subscription and mail order book industry 
nay give books if they are special editions regularly distinguishable 
in form from regular trade editions or if they are trade editions 



'9679 



.■ . • —130- ■ ' 

cri inrlly jr.blished in the United Sts.tes net less than two years be- 
fore such offer. 

(V^i A statement consoicuously ■•irinted which indicates the 
me-niier (solid or sawdust raethcd"! in which article was clerned must 
be att0,ched to a button loop, or buttonhole or other consDicuous place. 
Size cf tag and langurge are to be determined bv the Code Authority. 

Es'oiona.^'e of Comoetitcr 

(S'' Provision prohibits using mailing list acquired by the 
emplo3"ee of a cornoetitor until his relationshiio with such com-oetitor 
has be-n terminated for a period of six months. 

'lisreoresentation of Product 



(9) "The Trade name of any skin when it is not descrrotive 
and net Qualified hy the true n?jne of the skin shall be deemed in- 
accurate in a material particular." This definition is given in con- 
jujiction with the orovision lorohibiting false or inaccurate offers 
or invoicing, 

Hisrepresentation of Employees 

(l'")) Any demonstrator or sales emoloyee whose salary is 
partially or wholly paid by manufacturer or distributor may not be 
represented as other than the agent of such manufacturer or distri- 
butor. 

Unifcrm Price Offers 



(ll") Provision orohibits offers to fill •■rescri ?tions ir- 
res -ective cf cost of ingredients or quantitj''. 



101 - Code o f Pajj- Co mpetition 

fo r the 

Cleaning and Dyeing Trade 

Honors and Da-"-s Per Week of Store Operation 

(la"^ Sixty- three hours oer week is minimum which any retail 
cutlet may elect to ooerr.te, uailess it v/as operating less than sixty- 
three hoiors oer week on J\Hie 16, 1935, in which ce.se its store hours 
may not be reduced from such number. Hours rier day are limited to 
twelve, exce Siting sixteen hours is the maximum on any Saturday. Re- 
tail outlets are required to be closed on Sundcys or other Sabbath 
day and on national, state, or local holidays. The Code Authority is 
empowered to prescribe uniform hours for opening and closing of retail 
outlets by regions. 



-131- 

Iliniintu-.! Prices Irrosr)Rctive of llmeris;ency 

(2'! Price schsd^ales for sone regions received adjninistrative 
ao-prcvr.l for tei.roorarv -oeriods orior to the stay of the entire Code. 

Cash pi so omits 

(3) 2/l'Hh of -nonth follovi^ing -ourchase. Such discounts may 
be in the form of cash, book credits, or •Dromises to pay. 

Heb: tes 

(4^ Reb.-ites may not be given under the guise of allowance 
for lost, ■lis-olaced, or damaged articles. 

"G-uarantees" 



(5"^ Guarcjitees which are not soecific as to nature or extent 
or which are unenforceable against the gup^rs^ntor are "orohibited. 

preraiu-is 

{&) Tlie use of oremraxas or of certificates in connection with 
the sale of cleaning or dyeing services which orovide to the buyer mo- 
ney, goods or service, having a resale vr-lue not in excess of 5 oer cent 
of the minimum prices of such services, if the amount of such resale 
valtte is added to the minimum price established pursusjit to enabling 
"orovision are -Deruitted. 

Coujcns and/or Couoon Books 

(7) CouDO 1 books or discount cou-oons mav be used onl3?- if 
r,:3re3d upon b;;- all nerabers doing business in the sarae area. 

Stanc".3.rds of Quality 

(8) The Code Authority is to coo-oerate with a cooaittee con- 
oosed of or^e meraber eppointed by the Board of Birectors of the national 
Association of Dyers and G'leaners, one member a-oiDointed by the American 
Home Economics .(\.s so elation and a technician, r)referablv from the Bureau 
of Standards, to be agreed upon by the other two oer sons or if they 
fail to agree, by the Administrator, to adopt and orescribe minira-um 
sta;icl.ards of quality for each service performed by the Cleaning and 
Byel'-iz Tr de . 

Lusre-rresentation of prices and/ o r Credit Terms 

(9) Provision prohibits reoresenting any 'orice as "special" 
when it is in fact "regular"; im-olying that quoted price aoplies to com- 
pleted work when in fact it applies only to partially -orocessed work; 
or tr-ing to collect more than stated price for eradication of S"oots or 
stains. 



Der.lin~ rith Other Than Bona ^ide C^'nti-olled Sale s R epresentatives 

(I'O This provision excludes derlm-gs with any oerson not 
a He' iter of the tr: de or regi.ilrrly enoloyed by a me'iiber. Persons iijider 
contract to solicit, ter!'.iinable on not less than six months' notice, 
are dee:ied regularlj'' emploved. 



9679 









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-].40- 
1 Code of Fair Qompetition 

for the 

Cotton T o xtilQ Industry 

and its 

Supplements and Divisions 



Machine and/or Plant Hour Limitations 

(la) Operation of macMnory is restricted to two shifts of 
forty hours per xjcelc each, except the operation of finishing machinery 
and printing machinery o\'med "by mill finishers, which may he operated 
a sufficient numher of hours to finish fahrics woven on their own 
looms only, or cotton thread made on their own machinery. 

(ih) Reports to the Cotton Textile Institute, Inc., are to in- 
clude information respecting numher of looms and/or spindles in place, 
numher operated each vreek, nuraher of shifts and total numher of spindle 
and loom hours each week, required every four weeks. G-eneral pro- 
visions in other Codes requiring or enabling Code Authority to re- 
quire production data a.re not indica,ted r^n the charts, "but this pro- 
vision is directly allied to tae limitation on machine hours and re- 
striction on productive capacity. 

(ic) Sales offices arc required to remain closed on Saturdays 
and Siuidays. 

Restrictions on Productive Capacity 

(2) The Code empowers the Code Authority to make recommendations 
for tile requirement "by the Aciministrator ^f registration of pro- 
ductive machinerj- and for the requirement of certification "by the 
Administrator prior to the installation of additional productive 
machinery, ezcept for replacement of a simil8,r numher of existing 
looms or spindles or printing, dyeing, starching and/or drying machines 
operating on fa'brics 8,s the same are used for the major operation in the 
production and finishing of plain hleached and un"bleached fa'brics, or 
machinery used for spooling, winding, reeling or skeining as a final 
process to produce cotton throad ready for sale as a finished article 

or cone winding me,chine3, reels, through tuhe cup machines and parallel 
tuhe winding machines used in the production of mercerized yarn only, 
or to "bring the operation of existing productive machines into "balance. 
Such recommendations Eu"b3equently were made and approved "by the 
Administrator. ( See Administrative Order, effective 10/l/33, approved 
4/9/34, 10/12/34, etc.) 

Sales Below Individual Hem"bcr's Cost 

(3) Provision is not effective until the definition of cost and 
method of accounting have "been esta'blished pursuant to enabling pro- 
vision and for throe months or more thereafter as may "be fixed "by the 
Code Autl'iority with Administrative approval. 

9679 



-141- 

Casli Discounts aiicl Period of "Free Credit 

(■-l-a) 2/30 days or 2/10 e.o.m. as purcliaser elects. Five day tolerance 
r)er.iitted in disco'ont period. 

(■'-"b) 2/10 days, e.o.m., except tha.t terms on thread for use of 
Scliiffli and Svdss nand embroidery .■■lachines may "be 2/30 days or 3/l0 days, 
net SO days. 

(■.■•c) ITet 60 days e.o.r;;. 

(4d) 2/10 days, 60 d^.ys extra or 3 per cent c.o.d. 

('ire) 2/50 days e.o.m. or S/lO days e.o.m. 

(4f) 2/10 days, 50 days extra or 3/l0 days, no extra 

(''--o) 2/10 days, 60 days extra or 2-i/lO days, 30 days extra or 3 per 
cent c.o.d., or S/lO da-ys from date of invoice or sliipment ifliichever is 
earlier, no extra. 

(4-li) 2/10 da,ys, SO days extra or 3/l0 days or 3 per cent c.o.d., 
effective from date of invoice or shipping memorandum v/hichever is earlier, 

Anticir)ation of Bills smd Eate of Interest 

(5a) 6 per cent per annuiii, 

(51)) Legal rate. 

Datin£:s 

(Sa) Shipment on or after the 25th of the month may "be dated as of 
the 1st of the following: month. 

(Sh) Tliirty days extra datin,;^ on shipments from points cast of the 
Mississippi River to points -Test of the longitude of Denver, Colorado. 
See r2so footnote (Sa) 

Seasonal Datin-ns 

(7) To jobbers, June deliveries may be billed 2/l0 da,ys. October 1st 
and December deliveries may be billed 2/l0 days, April 1st. 

Inequitable Distribution of STilit Shipments and Contracts for Deferred 
Deliveries 

(8a) On make and hold orders, contract must provide that buyer v/ill 
accept delivery of full q-j.antity specified within contract period, and 
tiiat s-iipments 'vill be fairly and equita,bly distributed throughout the 
term of the contract. Contracts not for inrnediate delivery must be in 
writing for definite quaiititics and foms filed ydth Code Authority to 
be ava.ilable to all members as soon as effective. Contract period is to 
exceed three months on contracts for manufacturers' threads not for im- 
media.te delivery. 

9679 



-14-3- 

(8^) Five v^ontlis' maxiraum period, v-ith thirty cu?.ys extra vdth approval 
of Code Authority. 

Reporting of Post Sales 

(9a) Recuirod of hoth spirmiiie- mills and selling a^-ents. Reports are 
to inclixde *d-,te of order, ouaivtities ojid descriptions of yarn, delivery 
specifications, prices and ter:ns of sale. Disse.'uination is permitted 
only in swa^Barized form. Reports pxicL s-ommaries are required weekly. 

(9"o) Reouired every four weeks on unbrajided ;-oods only on reporting 
form prescribed ty Code A^^thority. 

(9c) Fnen memljers detemined by majority vote, all members are re- 
quired' to file weeicly reports coverius sale of standard nraibers sold in 
previous v/eeh, specifying "orj cas on different items classified by 
quai-.tity. Individual operations mry not be disclosed in dissemination _ 
of such information, Fo^-^er to suspend reporting requirements rests nitn 
the Code Autjiority. 

Advertising^ Al lo"7an ces and Sis-olays 

(10) The Prohihition applies to advertising allowances offered or 
given to im^uco or consuirmate a sale. bLit in no way restricts proper 
expenditures or allowances for advertising or displays actually fur- 
nished. 

Samioles 

(11a) Giving free samples to customers for the puroose of obtaining 
business is not in itself a trade abuse but it is an unfair trade prac- 
tice if any quantity of thread other than trial saJTiple is given as in- 
tegral part of sale or as means of mahing a specific sale. 

(lib) i.iajciraum length of free sample' is l/2 yard; beyond this, goods 
must be cliarged at regalar sales price. 

(lie) To wholesalers? 2 per cent of original order is maximum; to 
eacli district office of chain store organizations or main office in lieu 
of ■".istrict offices: One set of reference saiTiples is maximum; To 
■ customers: One swatch less than 1^ yards long of any one style. All 
other ' sample requirements must be diarged at regular prices. 

(lid) Three reference sets and swatches not iviore than 2" x 4" and 
not m9unted on customer's cards, may be furnishecT free. All other sample 
requirements must be charged at full cost, fabric to be figured at sale 
price. 

(lie) Reference sets not er.ceedin- three in number to any one customer 
may be furnished free. Sample requirements furnished jobbers, catalog 
houses, diain stores raid manufacturers must bo charged at full cost, cal- 
culating fabrics furnished at sa,les prices. 



9679 



-143-, 

Standard Contract Form 

(1?.) Use is mandatory on- sales for future delivery. 

Standards of TTeigLt 

(is) Yarn must be soldiiet weigi^-t. Ball warps, V7arps on beaiiis and 
similar put-ups: sucli yarn must "be sold on the ba^sis of calculated nel^jT-t 
witli 2 per cent tolerance* 

La'^^eling of All Products- as to UeipiLit and/or Size 

(l-i) Five per cent tolerance in weight or measure alloY^ed in label- 
in',-. 

Sales of Sub- standard. Obsolete aaid/or Used Goods 

(15a) i.iay be sold below cost only if clearly invoiced as substandard 
and/or obsolete and if record of sale is kept and mad.e available to the 
Code .tothority. 

(I5b) kay be sold below cost only if clearly invoiced as sub-standard, 
obsolete and/or used. 

Her'.'istration of Trade Liarks and Brggids with Code Authority 

(16) Upon approval of the Administrative Committee of a plan of regis- 
trg,tion, members may register vrith the Textile Fabrics Association ja.c- 
quard designs, twenty-harness dobby designs, prints and such other de- 
sign or styles as may be considered, as novel. Upon registration, such 
designs or styles sh3,ll be confined to registrant for a six months period 
and for an additional six months if he proves to the satisfaction of the 
CoEimittee that he has cs,usod the ma^nufacture in further quantity of said 
design, etc. At the end of the second six months ownership period, 
rer-istrant may obtain renewaJs of all rights by semi-annual re-registration. 

Quantity Discount on Fooled Orders 

(17) If person or firm in whose na.iie sale or contract is ma^de actually 
establishes a soimd financial basis for the credit involved ajid assumes 
sole financial responsibility, quantity discount may be granted on the 
pooled order. 

Sell ill;- in Corn-petition ^dth Selling Agent 

(is) hills may not grs.nt .any allovfa/nce in the guise of coramissions, 
brOiCera,ge, dealer's discoiont or fee or secret rebate, advantage, induce- 
ment, compensation, gift, or otherwise effect a lower price than mill 
would quote if dealing through an agent. 

Hestrictions on Activities of Arcents . 

(19) Agents may not tuy stocks of carded yam for their oi/7n account or 
tliat of a subsidiary, affiliate, or parent organization; engage in short 

^ 9679 



-144- 

sclling; or goarantee price afcainst deadline, except that any agent may 
sell for Ills om accoiint yarn taicen over lay reason of {guarantee of 
purclie.ser' G account or contract. 

474. Code of Fair ComT)etitioH for the I-TeedloT\rork Industry in Puerto 5ico 
Cost Accounting Systems. 

(1) ilemberS' cost accounting systems must utilize the prin- 
ciples of method prescri'bed pursuant to enabling provision. 

Destructive Price Cutting 

(2) Vfhen no emergency exists, destructive price cutting has 
meaning promulgated hy the Administrator on his own motion er on 
recomi-iiend^t ion of the Code Authority. In a)i emergency, any price in 
violation of the minimum cstahlished pursuant to enabling provision is 
deemed destructive price cutting. Exceptions are permitted in order to 
meet competition which ha.s "been reported to the Code Authority and/or if 
memher has endeavored in good faith to malce proper use of announced cost 
estimating methods. ( 

Period of Pree Credit 

(3) Maximum terms arc ten days fro-:i date of shipment. 
Paving Insurance Costs 

(4) I'Tot in strictest sense regulating dealings Ydth customers. 
Provision requires that contractors and sub-contractors must charge maziu- 
facturers and continental manufacturers when premiums paid by former are 
above his individual interest. 

Accessories 

(5) Hot in strictest sense regulating dealings with custom.ers. 
Provision requires that cost mast be recovered on ribbons, findings or 

other trimmings furnished manufacturers aiid continental manufacturers. ( 

113. Code of Pair Comxietition for the Cotton Garment Industry and its 
Divisions 

"-.achine gjid/or Plant Hour Limitations 

(1) Operation of machinery is restricted to one shift of 
forty hours, except cutting machinery, with Code Authority subject to 
administrative approval empov/ered to grant relief to members who 
customarily operate on a tv/o shift basis. 

Cost Accounting System 

(2) Cost accounting system csta.blished pursuant to enabling 
provision is to be used by members to extent found practicable. 



9679 



-145- 
Saleg Below Individual MemTjer' s Cost 

(3) Tile prolii"bition 'against sales "below cost is purely inferential. 
Tlie Code states: "It is intended tliat sound cost estimating methods 
should be used and that consideration should bo given to costs in the 
determination of pricing policies." 

Price Differentials Between Classes of Products 

(4) On sizes larger than standard sizes, additional cost for such 
larger sizes must "be added to price. , , ,. 

Cash Discounts and Period of Free Credit 

(52) 3/10 days e.o.m. , or 2/lC days, 60 days extra 

(5^) 2/10 days, e.o.m. 

(5c) 2/iO days, net 30 days. 

(^5d) -2/1)0 days, e.o.m,, net 60 days or 2/30 days, net 60 days. 

(5e) On ladies' leather garments: 8/IO days, e.o.m. On men's and 
"boj^* s garments to johbers, mail order houses and chain stores: ITet 30 
days. See also footnote (Sb) 

(5f) 3/10 days, e.o.m. 

(5g) To jobbers, mail order houses and chain stores operating ten or 
more stores: l/lO days, net 60 .days. 

(5h) "No member . . . shall grant cash discounts in excess of net 
thirty days." - - 

Anticipation of Bills 

(6) Six per cent per annum. 
Datings 

(7) Shipments on or after the 25th of the month may be dated as of the 
1st of the following month. . 

Seasonal Datings 



(Sa) Light garments for Spring and heavy garments for Fall ma,y be 
shipped prior to but not in excess of thirty days in advance of sliipping 
date specified in order, ajid invoice may be dated as of shipping date 
specified in order. 

(8b) Jobbers, mail order houses and chain store terms: All sales of 
mercliandise in Jawiary, February'-, and up to March 10th may have datings as 
of Harch 10th net thirty days; from March 11th to l.iay 31st net 30 days? 
June 1st to August 10th may liave dating as of August 10th, net 30 days. 
After August 11th, net 30 days, no datings. 

9679 



-145- 

Retailers terras: 111 sales of mcrclia.ndise from Octolier 1st of current 
year to :iay 51st of tLe follovrins year not to exceed 2/l0 days e.o.m. 
After J-umc 1st tlie terms granted may "be 3/l0 days, e.o.m. as of 
Scp-tember 1st. See also footnote (5e). 

(8e) On flanelcttc wear for FrJl delivery terms may lae granted as of 
Augaat 1st, 8/10 days e.o.m. payatle September 10th. 

Slii'pments Smaller Tnan Specified iiinim-um 

(9) On drop shipment to jothers of fifty garments or les: 
of five cents per garment must he made. 

Advertising Allowances 



(10) I.iembers may pay fifty per cent of the cost of advertising hut 
advertising allowance is not permitted if goods- advertised is for resale 
at less than cost to customer and if advertising is to promote resale of 
products of any person other than member ;;Trantang -the allowance. 

Accepting,; Return of Other Thaii Defective ilerchandise 

(lla) "dust be returned within 10 days after -receipt of goods. 

(lib) Accepting return of garments destroyed, mutilated or damaged 
by acids, chemicals, etc., or through carelessness, improper ?/ashing, etc., 
or if worn, prohibited. 

(lie) i.Ierchandise returned for credit niust be accompanied by a 
written statement stating contents of returned package, reason for return 
and date of original delivery; must be returned within five days after 
receipt, for errors in shipment delay in delivery, defective material or 
worki-aanship or breach of contract. If returned later, package must be 
held unopened subject to impartial examination by an impartial representa- 
tive of the Code Authority. 

Permitting Buyer's Cancellation or Repudiation of Contract 

(12) On orders cancelled after agreed shipping date, cancellation 
must bein writing and three dr.ys from date of receipt of cancellation 
must be allowed manufacturer to ship merchandise in vrork at time of 
receipt. If no cancellation is received, all merchandise remaining on 
order must be cancelled by manufacturer two weeks after expiration of 
date of order. IJo cancellations prior to shipping date are permitted. 

"Stand3.rds" 

(13) A special agency is to be set up to work in conjunction with the 
Bui-eau of Standards to "promulgate regulations to prevent misrepresentation 
and submit to the Code Authority for submission to the Administrator for 
his approval a set of standards." 

Standards of Size 

(l4a) Men's and Boy's garments: 

9679 



-14f7- 

llJuvenile, size 3 - 8 

2 Eoys, sizes 6-18 

Lien's suede garments, sizes 34-46 

Hen's liorseliide and sheeplined garments, sizes 34-43 

Ladies .garments ; 

1 Juvenile, sizes 2-6 

2 girls, sizes 8-14 

3 llissGs, sizes 14-20 

4 Ladies, sizes 34-42 

(.1413) Youths' sizes may not exceed age 16. (or size 34) on all garments 
except shirts. Shirt sizes shall not exceed 14-|-; lien's extra size shall 
"begin with: Waist 44 for overalls, paiits and hreeches; Size 48 for coats, 
comlDination suits, "blazers, windhrealcers, vests aJid other similar garments; 
Size 17^ for shirts. 

La'belin,'^ of All Products as to Contents, or Ingredients 

(15) Material labeling is prohi"bi ted unless such material represents 
the major portion of the fa"bric of sucli shirt.. 

Seconds . ■ _ , 

(l6a) liarkings such as may tie designated "by the Code Authority must 
"be legi"ble in indeli"ble inlc on the- center of the neck"baJid of each shirt. 

(151)) The word "second" must "be legi"bl5r and indeli"bly on ticket and 
white pocket, or if no white pocket on som.e other conspicuous place. 

Sales of Unfinished Product 

(17) Proni"bition applies to sales of merely cut "but unsewn and 
unfinished garments. 

?.!isrex)resentation of any Kind 

(18) Code refers specifically to goods, credit terms, values, 
policies, services or nature or form of business. 

Misre-oresent3,tion of Product 

(19) ITo merchandise may "be designated as "jo"b lots" which does not 
consist of discontinued styles or seconds. 

ComDensation to Contractors 

(20) A special conimission is to "be appointed "by the Administrator, 
expenses to "be pa,id hy Code Authority, to investigate what shall "be fair 
compensation to be paid "by manufacturers to contractors and to report 
for administrative action. 



9879 



-148- 
Contracting Out of Cuttin/i; Operations 

(21) Cutting operations must "be performed ty memlDer in liis oi.7n 
factory or plant aiicl contractors are prohibited from accepting uncut 
material for purpose of producing a garment tlierefrora. 

TTorkin^ on Supplies Furnished "by Retailers 

(22) Shirts made to measure for retailers' custom shirt departments 
excepted. 

44. Code of Fair Competition' for the Boot and Shoe Industr?;' 
Cost Accounting System and Sfles Below Individual kembers Cost 

(1) Tlie prohibition against sales bolov; cost is purely inferential. 
The Code states only that selling below cost is detrimental to the 
Industry, the inference being drawn from the further requirement that the 
manufaxturer submit upon request a statement from a certified public 
accountant recognized by the Planning and Fair Practice Committee for 
the Industry that the manufacturer has a proper cost accounting system, 
provided further that such statement may not be accepted as final by the 
Committee either as to cost accounting or selling below cost. 

Cash Discc-gnts and Period of Free Credit 

(2) 5/30 days from date of order or shipment, fifteen days extra 
for west of Rocky fountains. 

Rebates, Allowai:ices, Trade Differentials 

(3) Prohibited if purpose is subterfuge to evade terms of sale 
specified in Code. 

Advertising Allowances 

(4) Contributions to customer's advertising are permitted only if 
manufacturer's name or trade mark appears. in such advertising. 



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112 



'-155- 

387 Co d e of Fair Com-oeti-bion 

for the 

G-rapliic Arts Industries 



Registration of P.eplacement and/ or p-grcliases of Product ive Equipment 

(1) Code Authority is to make a survej'' of equipment and produc- 
tive cr.pccity and it is its duty to s,dvise mernhers contemplating pur- 
chase of additional equipment if in its opinion such purchase v; ould 
have r, harmful effect upon e xisting conditions, emploj'inent , or over- 
equipuent of the Industry; and it is empovared to a.rrange for scrapping 
or other disposal of eauipraent displaced "by neiiv equipment in coopera- 
tion with the manufactiu'-er . 

Filiurs; of Circu]-ation Data 

(2) Each pxn.blisher is required to puhlish in the first copies 
issued oi"ter April 30th and Octoher 30th of each year, circulation 
data covering six months periods ending Decemher 31st and June 30th 
respectivelj'-. CircLilation figures, divided between copies a.ctually 
sold and copies distributed free, filed with Code Authority to be in 
sworn statement. Full circulation records are not required where less 
than five .per cent of total space is not advertising. 

Cost Accounting System 

(3) Lembers ' cost accoionting systems m\ist confrom to the prin- 
ciples Slid, be e t leg,st as detailed and complete as the method pre- 
scribed purs-j^.nt to enabling provision, with such ya^riation of applica- 
tion ojiC. exceptions a.s may u:oon proper showing be approved by the Code 
Authority. Member may determine costs of products in conformity v/ith 
the principles and methods of accounting and cost rates and production 
standa;rds, including the cost of all ma.terials used, or upon cost de- 
terninr.tion schedules established pursuant to enabling provisions, 
whichever m.ethod results in the lowest costs of its products. Cost 
deteminT'.tion schedules were aoprpved pursuant to en<abling provision 
for certain relief printing products, .etc. 

Sales Selow Individual Members' Cost 

(4) Tor a period of twelve months after the effective da,te of the 
Code, a competitive bid ms.y be met if reported to the Code Authority. 
Any newspaper or periodical may be sold or delivered by the publishers 
a.t less th^ji cost thereof ajid any bona fide issue of any advertising 
newspaper ma^y be d elivered without cost to the reader. 

(4b) Until costs can be determined in accordance with the methods 
described in footnote (3), establishments prohibited from selling ajiy 
product listed in an approved a^nd available catalogue already in gen- 
eral use a/c a price lower t han listed in such c atalogue after a,pprovo.l 
of said catalogue by the Administrator, except that this restriction 



9679 



-156- 

does not apply to individ-ual orders exceeding $500 in amo-ujit uor to 
com'oined or contract orders exceeding d5,000 in amount per year. Such 
orders are also excepted fron the selling "below cost provision after 
costs can oe computed hy the method descrihed in footnote (3). 

(4c) Sup;oleraenting the provision of the "basic code it is 
provided tliat "box v/raps, lahels, bands, riders, seals, stic':ers, etc., 
must bear the proper- proportion of cost to be itemized in the per- 
thousand lorices. Discontinued and obsolete packings are excepted. 

Price Differentials Between Classes of Products 

(5) Proper additional charge must be made for grade of 
paper or materials higher than tliat prescribed as standard for lav/ 
work. 

Cash Discount and Period of [Free Credit ■ ' ' 

(6a) 2/l5 of month following billing, net e. o. m. month 
following billing. 

(Gb) Supplies may be subject to 2/ 10 days e. o. m. 
at the option of seller; sales and service and/or library binding 
are payable net 10 days, e. o. ra. 

(^c) 2/10 days from, date of invoice, 30 daj^'s net. 

(6d) I'let 20 days e. o. m. 

(be) I'et cash 10 days e.o.m. or 30 days net. 

(6f) Het 30 days, no cash discouiit. 

(6g) O^pen accounts: 2.10 days; 30 days net 
C. 0. D. accoimts , net, no discount 

Koney-with-order accounts: 5fi discount 

(6h) To customers direct: 2/ 10 days from ds.te of shipment, 
30 days net. 

(6i) ITet cash or net 30 days 

(6j) To points east of Denver; 2/IO days from date of 
shipment, net 30 days. 

To Denver and points west: 2/20 days from date of 
shipment, net 15 days. 

Interest Rate Beyond Free Credit Per i o d 

(7a) Legal rate bearing Trade acceptances must be given 
not later than e.o.m. following c'iate of billing. 

(7b) Legal rate murt be charged 30 days from date of 
invoice. 



o 



679 



-157- 
Minim-jin Down Pa^Tiients _ 

(8) Ou C. 0. D. orders 50^'i must "be c-e-iOsited vdth order, 
"Da,lance paid on c^e livery. 

Delayed Billing 

(9) Composition, pla.te makin^^, paper and printing nust be 
"billed when completed; binding on completion of specific order or 

at option of binder as books are shi-oped; imsMpped tra.de books must 
be billed T/ithin 6 months after completion; and all ■'onshipped sub- 
scription and text books ■ivithin one year after completion. Folding, 
plating, gathering and/or sewing of all unordered sheets when such 
work is performed by the binder m.ust be billed within 1 year after 
completion. Q.'ua.ntity orders on a cefer.red billing basis are per- 
mitted if terms and conditions are approved by the Code- Authority. 

Seasonal Datings 

(10) 5' > special discoimt on order received on or prior to Feb- 
ruary 15th for manufacture prior to July 1st which are accompanied 
by a dummy, approved sketch s.nd complete manufacturing instructions, 
provided such order is ship;oed and billed upon completion- and invoice 
is paid on the ca,sh disco-ont date. 

Production and Shipments .Smaller than Specified Minim-urn 



(11) 5,000 transfers of design is the minimijm order which may 
be accepted f or. mamjaacture ; 1,000 transfers from manufactured stock 
is minim-om which may be shipped. 

Oijen price System 

(12) Open price system adopted by c^ny code group must "sub- 
stantially conform." to provisions specified in code, provides for 
filing of "prices and/ or houj.-ly rates and prodiiction standards used 
and/ or determin-ation schedule and/ or catalogue as such plan may re- 
quire, together with terms and conditions of sale of all products inclu- 

^.c-sd in such open price pl-.n*'" Group plan may except certain estab- 
lishments from filing; 7 days is minimun ?;aiting period and 10 days 
ma::imum waiting period. May meet lowest filed price for a period 
not exceeding 10 da.ys after the effective date of a,ny revised list. 

Contracts for Deferred Delivery 



(l3a) L'aximnjm period one year from date of order or contract. 

(13b) Blanket contracts placed to protect customers on a min- 
Imam price oa-sis are prohibited unless written and subject to order 
form prescribed by the group, and subject- to all other fair trade 
practices set. forth in code. I.Iinimum qua-ntity for which such con- 
tract may be accepted is 1,000,000; transfer to be constimmated with- 
in 12 months from date of contract and only if customer agrees to 
accept invoice at end of year for an additional ciiarge representing 
difference, if any, in price on the q-uantity cons-umed at such price 



-158- 

schedule and price contained ±:i the contract. 

Rebates, Refunds , Allowauces, Services, Free Deals, PreraiajTiS , etc. 

(14a) Prohibited if discriminatory hetv/e'en customers of the 
same class and if resvilting in sales in violation of selling belov/ 
cost provision. 

(I4b) Where a brand ovmer has' paid for pac.'.:ings or Icibels 
remaining in the stock of the manufacturer, he is' entitled to re- 
imbursement for amouiit due when pajTnents are made by otiier than 
him against vithdrawals. See also footnote 14-a. 

Advertising in School Annuals 

(15) Limited to 2 H^ of the total cover contract price as billed 
lay manufacturer. 

Sales on Consignment or Ilemorandum 

(16) Prohi'Dited exce'it uiioer signed contract or regulations 
prescribed by the Code Authority. 

T/arehousing or Storage 

(l7a) Transfers carried on order or contract 'beyond 1 year must 
be cliarged Y.o ver month on balance for storage, 

(l7b) "ilo establisliraer.t rlxill hold sta.nding matter beyond 30 
days following end of month during v/hich job is corarpleted v/ithout 
making a monthly charge to customer in accordance with methods in- 
corporated in the cost system apioroved for the industry." 

Supplying Engraving, Proofs or Designs, etc . 

(18) iiaking of engravings or originals must 'be covered by a 
definite order from prospect or customer and charge liOt less tlian cost 
must be made. Cha,rge may be remitted if order for qpantity of po.cking 
is placed within 120 daj's from date of order for proofs. 

Special Packi ng 

(19) Special charge must "oe made for variations from uniform 
methods - e, g. , for sheeting of transfers a;id for rolls co.itaining less 
than 2500 transfers. 

Printing Customer's Advertising on Product 

(20) Advertisement of a jobber, dealer or distributor of res- 
taurant checks simll only appear on such checks provided the name of 
the manufacturer also appears; and all restaurant checks so printed 
shall be classified as specially printed restaurant cnec^vS. 

Lump Sum Offers 
9679 



-159- 

(21) Prices mxist te quoted per page of standaM rneasxirement plus 
rate per liour for author's alterations, for a particular number of 
copies, plus specific charges per unit for "blank pages, extra proofs, 
reprint, inserts and other extra charges ahove standards to which page 
rates applj^. 

Overruns 

(22) Limited to 10 ;i on order for "branded packing and la"bels for 
deferred deliveries, neutral labels or packings excepted. 

Standard Contract Form 

(23) Contracts must "substa/ntially conform" to contra.ct approved 
pursuant to ena"bling provision. 

Extending Contract Period. 

(24) Permitted only when SO""? of quantity ordered has been i^ith- 
dra.wn and then only with minimum ch^irge of l''i per month on "balance. 

Product Standards 

(25) Standards to govern Class "A" li'brary "book "binding shall "be 
specification of the Eook !.{anufacturers ' Institute when a;iiproved "by the 
American Li"brary Association. 

Standards of Size 

(25) G-roup 77-1 - maximum size 13'i sqilare inches. 
Group ir2 - ma,ximum size 18^- square inches. 
Group 7r-3 - maximum size 24 square inches. 

processing Standards 

(27) Code prohi"bits use of die stamping or em"bossing, photo-pro- 
cessing work or macMne engraving for script or other lettering in the 
preparation of any steel engraved security and requires that steel en- 
graved vignettes be hand line engraved T^/ithout use of photo-process. 

Labeling of All Products as to Orig i n or Trade Mark 

(2S) In lower right hand corner of "bade lid on all classes of 
school annual covers. 

Sale of Used Equipment 

(29) Provision prohi"bits sa.le or other disposal of steel engrav- 
ing, roll or die Y/hich hii.s been used in preparation of any 'bank note 
or security or blank steel engraved borders usable for securities, ex- 
cept that the assets of any establis'nment may be sold to another es- 
tablishment in the division through merger or in furtlierance of liquida- 
tion. 



967^ 



Irait-:.tion of Tr- ,de M.-r ' '-: or D: sign • _ i (-■ q- 

. (30) Provisicn includes prohioition of appropriation, or imita- 
tion of exclusive plans> products,, ideas, service, forms, designs or 
systems ori/"inated or developed "by any competitor. 

Misrepresentatio n of any Kind 

(31) Cede refers specifically to products, production facilities, 
mercliandisc 5 service or terms ^ 

Misrepresentation of Product 

(32) Provirion prol^ibits representing printing treated with sub- 
stances tiiat fuse and raise ijnder heat treatment, simulating engrav- 
ing, as engraving; and/or representing as liand engraved any plate or 
die produced by an engraving machine. 

S ales to Other Than Specified Classes of Customers 

(33) Sales to other than consumers and/or manufacturers of such 
products are prohiuited. 

Partie s to whom Trade Differential s May be G-ranted 

(34) Tnolesalc prices may be granted to groups of theaters under 
one general management with total seating capacity/ of' not less than 
10,000. 



9679 



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-169- 

244 Code of Fair Com^oetition 

for the 

Const rue tion Industry 

And, its s u-'Q-olem ents 



Cost Accounting System 

(la) Members are to use cost accoujiting system, v.'hen 
established pursuant to ena"bling provision, to the extent found 
practicable. 

(lb) Members are to utilize the principles of the cost 
accounting system established pursuant to enabling provision. 

(Ic) Members are to use princi'oles and methods as detailed 
and complete as the system set forth in simplified course of accoujiting 
for Master Plumbers or Heating Contractors formralated by the Plumbing 
and Heating Ind\i.stry Rireau, v/ith such variations as may be approved by 
the Code Authority and Administrator, and made sup"3lem'=ntal to the 
simplified course of acco'onting for M-aster Plumbers or Hgating 
Contractors. 

Sales Bpl o \-: Individual Hember's Cnst 

(2a) Px-ovision prohibits ss,les below, the reasonable estimate 
of the sum of the following items of costr ma.terials, labor, job 
expense, general overhead. 1!hese items of cost are further defined 
in the code. Overhead is to be ass-omed at lO'o of other items of cost 
until the Code Authority with administrative approval determines the 
lowest reasonable 'oercentage of overhead costs during the period from 1927 
to 1932, mich percentage shall then be used instead of the lO/o. 

(2b) Until the cost acco'UJiting system is established 
pursuant to enabling provision, estimated cost is to be the sum of 
following items: la,bor and supervision at job site, ail "materials to 
be used in the contract, tr3Jisporta,tion of eouipment and r.iaterin.ls, 
railroad fare or eoual ajid/or hotel expenses if chargeable 't* the job, 
munici"jal permits if any, cost of Toilic liability and vorkraen's compen- 
sation insurance and raaintenajice and surety bonds, maintenance, deprecia- 
tion, repairs and rentals of tools gjid eoui'^ment used on the individual 
contract in accorda.nce with income tax schedules, power and any other direct 
expense properly applicable to the individual contract, allowance of not 
less than 12'^j of other items of cost for overhead. 

(2c) C«(f-st is to be determined pursuant to the cost finding 
and estimating methods when estfirolished i.rsuant to enabling provision, 
provided that items of depreciation on unused facilities, interest on 
indebtedness, interest on investment o± selling expenses are not to be 
included in estimated costs. 

9679 



(2d) Cost is to t«^ u.eter:uned •yarsuant to cost finding and/or 
estimatin^r methods established jursn.int to enaoling- provision; defined 
as Slim of the loljovjing it ens of co&t: materials, Istor, joli expense 
and overhead excluJ.ing itenis of devreciation on unused facilitie:^, 
interest on iniel^tedness, intex'est on investment or selling e::penses. 
Items of co3t are further defined in the code. 

(2e) ur.til a uiiiforr.i systea of accountin,^ and cost finding 
is estrhlished pursuant to ena.tling _:)rovision, estii-iated cost to "be 
computed as sum of the items ."^iveu in footnote (3d). 

(if) Cost is to be the sur^ of materials plus labor, plxis 
overhead, a3 doter.alned in accordance •. with" the princi'iles of cost 
accQiJuitinf established pursuant to enabling provision. 

(Zg) Until the cost accoLjiting system is established 
pursuajit to the er.-hlin;-; provision, the estim£.,ted cost is to be the 
sun of the follo\7lng items: All material to be used in the contract, 
labor and sv.-^ervision at the site, corr.pensation and liability insurance, 
V70 rkinen ' s traveling, expenses, board for i.7or?anen, freight and cartage, 
cost of material sxiA. labor for scaffcidini; less salvage value of 
material so used, eauipment re-air and rentals aroplicable to the in- 
dividual contr;?ct., any other dii'ect ex;;)ense applicable to or caused by 
the execution of the individual contract, a,ll0T:ance of not less than 
15^ of sum of other iter.!? of cost for overhead. \ 

(2h) Prohibition i? inferential from statement: "'Then no 
declared emergency exists . . . there is to be no fixed minimum basis 
for prices but it is intended that sound cost estimating methods should 
be used. " : 

(2i) Estimated cost is defined as sum of estimated cost of 
labor including liability and com-oens-tion insurance, and cost of 
material including freight and ca^rtage, filing fees and other direct 
expenses apTolicable to the job, and not less than 12-^-^j of the sum of the 
cost of labor and materials for overhead, 

(ii) Until items and methods and/or formula are determined 
pursuant to enabling -orovisions, allocable cost is defined as the sum of 
a bona, fide estims.te of the follov;ing items: materials, labor and super- 
vision at th'9 site, job ex't'enses, including items specified in code, and 
allowance of not less than 10,^ of the sum of other items for overhead, 
selling and ac'jiiinistrative e?qDense, out excluding costs of depreciation 
on unused facilities, interest on indebtedness, interest on investments, 
or for selling errpenses other than included in the lOS. 

(^k) Prohibition is inferential from statement - "It is 
intended tha^t sound cost estimating .aethods should be used and consider- 
ation should be given to costs in the determination of--iricing policies". 
Also contracts not including labor and materia.1 costs are prohibited. 

Destruc ti ve Price Cuttin g 

(?) ^Then no emergency exists destr.ictive 'tirice cutting has 

9679 



-171- 

aeaning cleclarec. in rules and re§^^lations prormlgatec". j;-" Af-ninistrator 
on his 0'7n -aotion or on recon-iendation of the Code Atithority; in an 
emergency, destructive price cutting- is anjr sale in violation of rain- 
intun price estr."jlished p\irsu8-nt to ene-hlint^ proviEions, Conpetition 
'bein.'j net "lust he reported to the Code Authority. Desti"^ictive price 
cutting nay he defended also as a nethod of disposin;^: of dropped lines 
or seconds, or if :,;enher has endeavored in good faith to r.irlze proper use 
of cost estinating iiethods. 

Period of Free Credit . 

(U) Iiet 30 days after conpletion of i7ork erxept on general 
contract; ter.is of pa;-ient to oe incorpora,ted intlie general contract. 

Interest Hate T^eyond Tree Credit Period 

(5) Legr-1 rate of interest. 
Deferred Paynents 

(6) 10 days after the general contrp.ctor has heen paid, pay- 
ment nust he ::ade in full. 

Retained Percentages 

(7) hone;' retainec. for purposes other than .laintenance must 
he paid \7ithin 30 days after acceptance of '7orh contracted for, 

Acce-pting (or dvingystocks siidjor Seal on Personal Pro'oerty, etc . 

(0) Prohiljited if accepted or given e.t ::ore thr/n fair narh- 
et value, to he deter;iine6. in douotfu]- cases oy indeper.dent and compe- 
tent apprahse-l. 

Guarantees against Price Increases 

(9) ?er::itted if contractor is protected aga,inst decline. 
"Product Crur.rantees " 

(10) 2 years froa conpletion of ^'^ork. 
Oral Offers 

(11) ."ids having va,lue of less then $75 excepted. 
Offers Onittin..^- Other Sirgiifica-nt S'oecified Detail 

(12) Each hid nust m::ie stock and quarry on -.;hich hid is 
hased g.nd pla.ce and conditions of deliverer. 

Orders Onittin.-'v Other Si:'-:nificant S'oecified Detail 

(13) All orders -mst identify joh for 'Thich order is placed. 

S679 



Stanc'.arc" Contrr.c': 7oi-n 

(lU) Str-ncarc" i'oru o:r Cor.-''.rrct Locvanent of tlic Aiierican 
Institute o:" Arcliitects is reconnenCec. as the 'oasis for contracts. 

Departure f r on Prices r-nd/or Terins o f Contr^^.ct 

(15^-) 1-1 car^e of 'oona fice c'.ispute as to ario'OJit due, the 
contractor nay {;ran': a reiisona^ble ccncossion if a.p;provec. ay the Code 
Autliority. 

(130) lids and price'^ r.a.y pe altered only in case of, and 
only to the e::tent of, a chai^fe in "a;:;es or naterir.l prices, or in case 
of change in plans and specif ications„ 

Product and Perforria-nce Standards 

(iba) The follouin;;; standards are recon:iended -.-hen nethods 
of doing sheet ;:ctal -'ork are not clen,rl;' sho^-n on drav:ings or in speci- 
fications prepared oy architects. Standard Practice in Sheet lietal 
ITorh puljlished oy the ifetional Associa-tior. of Sheet lietal Contractors of 
the United States, Inc.; Slate ?.ooxe piiolished ~oy the iTationa.1 Slate 
Association; for cor.position or htiilt— up roofs, specif ics-tions approved 
hy the United hoofing Contractors Association of Horth ^\:'^.erica^; in in- 
stallin-': var-r. air furance and hearting syste:is or :icl:ing repairs or 
?-lterations '.-het'e feasiole to a,oi6.e "oj S'.andard Code of C-ra.vity '.Ta.rn 
Air Heating and Air Conditioning Association; and other sta,ndards approv- 
ed hy the Code Av-thorit;"-. 

(iGh) Classifications, dinensional standards and qualitj- 
specifications arc to lie studied in cooperation ^.vith a federal govern- 
nental agency, prefera.Dly the Tlureaa of Standards. 

(ibc) Code specifies classifications, stp-ndr.rd grades and 
auality, and spcci: ications for materials and services. 

Standards of Puhlic Safet"'^ a.nd Eer.lth 

(17) Installations :mst "oe in accordance -.'ith a^pplicahle 
municipal state la;.7s and Engi;j.eering Sta,nda,rds of the Association unless 
other dse reqr.ired "by plans and specifications of or.'ners; for nelding 
process, "^el'fi;ig Stanterf.s and Specifications of the Association to "be 
aoherec to. 

Sales of Suh-Standard. Cosolete and/or Used Goods 

(iSa.) liay he sold 'jelo'7 cost if clea.rly de s ignr.t er. as discon- 
tinued and/or ohsolete. 

(lEh) iiust oe desi',-na.ted at tine of saJ.e and on invoice as 
suh-standard etc. lianufa.cturers' laoels to this effect ria," not he re- 



(icc) Code sta,tes only thr.t 'roposals shall oc hasec" on ne'.7 
S679 



-173- 

naterials imless otherr/ise clearly statec. in the proposa-l or imless 
offered and installed as other than nev; aaterial, 

(iSd) llust oe offered and installed as second-hand, o"bsolete 
or out^'ioded. 

Su'p'olr.'in;^ 5!:etches. Desi-^'ns^ Plans. Etc.. and Bstino/bin.'': 

(19) Heasons-ble fee nust Idb charged nhen shetchcs, designs, 
plans, Etc. , and/or ec-tinates are requested "by c^istoner for information 
only. 

Erection gnd/or I:istallation 

(20) Code specifically nanes the follovring services miich 
Bay not oe performed vfithout charge unless errpressl^'' statec. in contra.ct 
or specifications: Services rendered in connection rith the placing of 
the sub— Taase or foundation flooring in proper condition to receive the 
finished flooring or in obtaining' free ant', clear ■;orl:ing space; ser- 
vices required ?.s a result of fail-are of p;ir chaser to so arrange pro- 
gress of operation as to pemit one continuous uninterr.-u.ptec install?.- 
tion or as a result of failure of pu.rchaser to provide electrics-1 
poT.'er a,nd light '.vhen necessary; services required c,g a resiilt of f3-il- 
ure of purchaser to provide free "ase of elevator, hoist and operator 
■^hen necessarj; costs incurred for insurance of rvaterials delivered 

to or installed in the prenises. 

ilaintenance 

(21) i:aintena,nce and cost of current naj- be assrxied only on 
a percentage ba.sis, 

Coiabina.tion Offers a.nd/or Sales 

(22) Price for ijork of this division uust be stated sep- 
arately". 

Sales of Unfinished Products 

(23) Prohibition ap)plies to sale of unset tile. 

Interference "Tith Contrg.cts or Constractual P.elations 

(2U) Uith approval of the Code Authority, r.enber uarj point 
out that "7orh a^re^rded does not confonn in quantity or axiality to plans or 
specifications on 'Thich sa.id uark 'vas quoted, 

iiisre-Qresentation of Any Kind 

(25a) Code refers specif icall],-' to proo.ucts, r/o rlnnanship , 
credit terns, valu.es, policies, conduct a.nd services, 

(25b) Code refers specifically to goods, credit terms, values, 
policies, service, and nature or forn of business. 



-174- 
False Invoicin", Ing.ccurate Ac'.vertisin:^' and Pece'otive La"beling 

(26) Provision proliiliits relei-ence in invoicin-, advertising 
and/or labelin^^.' 'to quantity or quality of materials, iTizitures, apparatus 
or installations so as to nislead or deceive purchasers, 

SIiit)-oin.g or Perfoi-r-iinf: at Variance "Titli Contract or r.e'oresentation 

(27) Proper adjustiaent in quoted price and clea.r identifi- 
cation of nature of suljstitution required. 

Discrimina-tion 

(2S) Provision prohibits granting services, privileg'es, or 
price or tenns not specifically mentioned in oricinrl plans and specif- 
ications. 

Delinquent Acco'cnts 

(23) Code Authority is to disseuinate the infomation for 
protection of aerfoers, Pai^nnent delayed 'be3'ond si:cty days is considered 
delinquent. 

Adherence to Seller'?: Code "by Custoners 

(30) Castoners nho resell gra;nite nust a£,-ree not to split 
comnission or sell e:ccept in conpilia^nce uith nenl^er's Code. 

Subnission of Sub-Contractor's Bid Contractor 

(31) Su'o-contractor' s bid to contractor nust "be delivered at 
least t'7enty-fo\ir hours prior to tine set for receipt of contractor's 
bid by anarding author it]-. 

Submittin.-? Pid After D'oenin^' of Bids 

(32a) Hot pernitted Tithin ninet;^ days a,fter opening, \inless 
plans and specifications are changed. 

(32b) Prohibited unless closing date is errtcnded or nerr bids 
are ca.lled for, 

Biddinr: on Other Tha/n P^eqiiirenents of Plans and S'oecifications 

(33) If ^"'- project ha.3 been serviced by an approved survey 
lureaii., quantities uhich nhen sir.ilarl]' priced nust not be nore than t;70 
per cent lover tha.n price based on use of correct q_ualities and/or 
quantities furnished by the Survey rDiiresu, '-.-hichever is loner, 

Subnittin.:: lii-". if Closin': Pate is Hot Set and Fro.iect "ot Identified 

(3'+) I^ver;^ bidder is reqr.ired to notify the Code Authority of 
the closing da/te naned in reque-^t for bid and if different closing dates 
are named, Code Au.thority is to set closing da-te. 

9679 



Sutjmitting Bic"'- if Quajitities ai^e Indefinite . . 

(35) ?err.iitted only on a cost plus "basis, 
Subnittina Alternates Unless Conpetitors Have Ssxie Pi-ivilef,'e 

(36) Alternate proposals .for constraction operations are 
exenpt fron this provision \7hen such alternate proposals are not pro- 
hibited "by axTD.x6±iiQ authority, and s.re made '^oy memhers s.s e. result of 
initi^itive, ingenuity and/or engineering, proposing methods, design 
and/or conduction procedure differing fronv that > called for in plans and 
specifications. 

Bidding Uhen Pla,ns and/or Specificg^tions 1-Tot Chg.nged 

" (37^") ilenbers nay not hid on sane plains and specif ic8.tions 
of < 
closing date. 



after set of coupetitive hids have heen suhnitted, for ten nonths after 



(37''o) If lowest origins-l hid -Tas $25,000 or ;:iore, no neraher 
may change hid for ISO days; if less, 120 days. 

Bidding on Revised Plans and./or Specifications 

(3Sa) ■ Sxxpplemental hids hased on changes in plans and specif- 
ications riust ■ reflect only the true, value of such cha,nges, 

(3Sh) If revisipn in specification as to aualitjA and/or 
quantity of aarhle does not amount to twenty— five .percent of that 
origina-lly called for, or if more than t'7enty-f ive percent of the marhle 
of kind called for in original specifications is included, no member v;ho 
did not submit a bid on the original specifications is permitted to bid 
on revised plsji, 

(3Sc) If revision in specifications requires changes of less . 
than tnentyr-five per cent of cubic quantit3^ of gra.nite, onl;'- bidders 
who originally submitted bids naj bid a.nd only on sane basis as original 
bid. If lorrest bid filed originaJ.13- amounted to less than $25jOOO above 
statement effective for one hxindred and twenty days, other^^ise one 
hundred and eighty days from time of filing origina-1 bids. If change is 
twenty-five per cent or mare, any member may bid,,. 

Submission of Bid to More Than One Contractor 

(35) I'or ten months after closing da.te members i.7ho originally 
submitted bids are the only ones permitted to submit bids on the job to 
any additional contractors, a/nd such bids may not be lower than the ones 
originally sxibraitted. 

Submission of Joint Bids 

(Uo) Such bids lirast be .designated as joint bids and must 
designate names of concerns interested. 

Bidding on Competitor's Goods 
9679 



-175- 

(Ul) Specip-l /granites, o.ny one of •.7hich p:io\uao to less than 
five per cent of the total {ji-anite cuoe, excepted, 

TTithdravral of 3d.d '. 

(U2) ITithdrarral in per;nitted after date specifiec". vjithin which 
"bid naist.be acted upon or if no such statement has "been uade, thirty 
days after closin.;;; date, 'Ji thdranal because of error is pemitted at 
any time. 

Failure to Furnish Evidence of Pinancial Standin-'": on Request of Anardinig 

Authority 

(U3) Su.ch evidence must be furnished on standard questionnaire 
forms developed and approved and available through Joint Conference on 
Construction Practices, Washington, or other forns recoivin;'; adninistra-r 
tive approval. 

Acceipting Financin,^.: From General Contractor and/or Sub-Contractor 

(UU) Su.ch fact- mast be set forth in ori/;^inal contract, 

Filin," of Sealed Sids 

(U5a) P.ecru.ired to file proposals anoLintin;:; to $250 or more 
rrith depositor;- designated by Code Authority, which -.Till be kept sealed 
and conf identis-l vjitil after lettin;"j of contract, after which success- 
ful bidders' proposal raay be disclosed to all bidders, 

('4-5b) P.equired to' file all competitive bids, including al- 
ternates and revisions, with Code Authority or other av,'ency designated 
by it, which may not be opened until twenty-four hours after time spe- 
cified by awarding authority for receipt and opening of such bids. 
Agency required to send to each i.ienber filing bid, vdthin 'forty-eight 
hours after stich opening, a list of names and addresses of bidders 
indicating amoi^jits of bids, alternates, modifications and exceptions. 
Code Authority e;.rpovrered to investigate bids upon complaint of any 
bidder, 

(U5c) Required to file bids sjnoiinting to more than $250, or 
less sum deteri-iined by Local Administrative Comraittee, with depositor;'- 
designated by Code Authority, Copies of all bids and details of con- 
tract award, sent to each bidder who pa;''s committee his share of cost of 
handling, tabulating, and distributing, after award of contract or open- 
ing of bids. Code Authority empowered to investigate bids upon com- 
plaint of any bidder. 

(U5d) Regional or local administrative co:.r..-iittee desiring to 
install a method of checking corrpetive bids, to use depository designat- 
ed by the Code Authority. After contract awards or o^^ening of bids, 
Comj-nittee to send copies of bids and details of contract award to each 
bidder vrho pa;'-s his share of cost of handling, tabulating and distribut- 
ing Code Authority, empov/ered to investigate bids on conpla,int of any 
bidder. 

9679 



f 



-177- 

(U5e) Hequired to file tic.s at least tvo hov.rs prior to 
s-atmission of oi". aiQ-untinf;; to $75 o^' nore, rrith tlie Code Authority 
or agency. desi£;nated by it, to be kept sealed and confidential until 
letting of contract or e^t least tr/enty-four hours after bid is due, 
after vrhich all bids nmy be discloser] to all bidders. 

(^i-5f) HeqvLired to file bids in e::cess of $100, including 
alternates and revisions, or such lesser sun as deternined by the 
Code Authoritj'-, with agency designated by the Code Authority, rrhich 
shall be kept sealed, and conf identieJ until twenty-fou.r hours after 
tine specified bj'- avrarding authority for receipt of bids. TJithin 
three days after anard of contract es.ch bidder to be sent amounts of 
bids only. The Code Authoritj;" enponered to investiga-te bids upon com- 
plaint of any bidder. 



'» 



C-^!?.':,') required to file all bids ainounting to 3100 or more, 
TTith conplete tabulation of quantities of niateria,ls iter.iized a^nd re- 
visions, ATith d.epositorj'- designated by the Code Atxthoritj^, iThich shall 
be kept sealed and confidential UJitil after bids are received and opened, 
following which the bid and list of qiia,ntities of lowest bidder may be 
disclosed to a.11 bidders, 

(U5h) Eequired to file all conpetitive bids in e::cess of 
$300 and alternates and revisions with agencj'' designated ^oj the Code 
Authority, which shall be kept sealed and confidential -cu7.til twenty- 
four hours after tine s-oecified bj'- awarding authority for receipt and 
opening of bids, -.iithin five da.ys after opening, on requ.est of any 
bidder, names,- and addresses, amounts of all base bids, alternates, 
modifications and e;;cept,ions to be sent to all members vrho filed bids. 

(U^i) Secaiired to file' 9,11 bids in excess of $200 or such 
lesser sum as deter}:.iined b;^ the Code Authority, and all alternates and 
revisions, with agency designated '"dj the Code Authorit;', which shall 
be kept sealed and confidential until twenty-four hours after tine 
specified by awarding axithority for receipt of bids, "Jithin three days 
after award of contract, amounts of bids only to be sent to all bidders. 
The Code Authority empowered to investigage bids upon complaint of any 
bidder, 

(U5j) Required to file all bids amounting to $250 or nore, 
and revisions, simultaneously with submission of bid, with agency 
designa^ted by the Code Authority, which shall be kept sealed and con- 
fidential until twentjr-four hours after bids are due, or until letting 
of contract, after which low or successful bids may be disclosed to all 
bidders. The Code Authority empowered to investiga.te bids upon complaint 
of any bidder, 

('45k) ?Lequ.ired to file all bids aiiounting to $1,000 or more 
simultaneously with submission of bid with co:xnissioner, to be kept 
sealed and confidential until after closing date, O'a day after closing 
date or as nea-r therea.fter as possible, axiount of competitive bids, 
names of bidders, and names of those to whom bids were submitted shall 
be mailed to all bidders, Prelimina-rv estimates must alco be filed but 
are held confidential. 

5670 



-178- 

(U5I) Required to file bids anounting to $5»000 or more nith- 
in thirty liours "oefore tiue set for opening of "bids, nith agency des- 
ignated "by the Code Authority. I'Tot sooner than thirty hours nor later 
than seventy-eight hours after time established for filiM", bids shall 
be opened, and nailed to all nenbers ^/ho have filed bids, 

('45m) Required to file bids anounting to $500 or nore nith 
agency designated by the Code Authorits;- nhich sha-11 be kept sealed and 
confidential until bids are received and opened, follo:7ing vhich success- 
ful bid and three lo\7est proposals shall be disclosed to all bidders. 
The Code Authority enponered to investigate bids upon conplaint of any 
bidder, 

AcceTstin^ Uninvited Bids or Acce-oting Bids After Closing Date . 

(U6) I.fast be returned to bidder unopened, 

Invitin-" Bids Prop. Unreliable Bidders 

(U7) Ability of bidder to obtain perfornance bond is deemed #" 
inadequate test of bidder's competency. 

Delaying Arrard or Rejection of All Bids 

(Us) "ithin trrenty days after time stipulated for receiving ._ 
bids, anard or rejection of all bids must be made, unless an e::tension 
of tirie has ''aee:-\ requested by bidders and consented to by trro or more 
bidders. If bid is conditional on award of previous contract, each 
succeeding a\7arding authority must avrard or reject all bids rrithin 
thirty days after auard of previous contract unless bidders agree to 
extension of tine, 

Callin;'; for He\7 Bids After Rejection of All Bids 

(^9) Awarding Authoritj^ may not call for new bids merely for 
the purpose of obtaining lower or revised price for substajitially same _- 
work until ninety c^^ys have elapsed, unless there is evidence of \^ 

collusion or such narked difference between bids su-bmitted and awarding 
authority's estimate as would indicate to this Authority, and the Code 
Authority, the necessity of new bids to secure fair competition. 



9679 



179 





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-19?- 

11 and 11 c/l Cod&s of j' air Gonpetitiori 

f or the 

Iron and. Steel Industry 

and for the 

Vire Heinforcement Industry 

Construction of New Froductive Capacit y 

(1) Prohibition applies to ne'- blast furnpces and open hearth or 
Sessemer steel cppacity. President empo'Tered to suspend operation of 
this provision. 

Cash Discounts and period of Free Credit 

(2) "^ of 1-j of invoice price if invoice is paid "dthin thirty days 
from date of invoice in case of v'ater shipment from or through Atlantic 
Coast or Gulf Fort to any pacific Coast Port or throu:^'h Pacific Coast 
port for delivery in Oalifornia, Oregon or i-.ashington, the Canal Zone 

or an Alaskan port. In all other cases ^ of l,o of invoice value for pay- 
ment "7ithin ten days of date of invoice or on the basis of settlements 
t^ice each month on invoices aated first to fifteenth on payment "before 
the twentv-'f if th and on invoices dated ftom sixteenth to end of month on 
payment before tenth proximo except on products competitive with those 
produced at Pacific Coast plant and delivered to California, Oregon and 
"lashington. ^ of I'i may be alloT?'ed for payment within ten days from 
date of invoiceo 

In case of pipe, 2^^/10 days or settlements tv,'ice monthly as 
above permitted, e.-^cept to joboers; to jobbers 2}o for payment on the 
15 day of the month follo'.^ing; or on nori-interest-bearing trade acceptances 
due in not more than 120 days from date of shipments. 

In case of merchant '-'ire products, fence and sign posts 2/10 
days or t^ice monthly as above permitted, or on ivater snipraents 2/30 days 
or 40 days on products similar to those produced at Pacific Coast plants 
and shipped to California, Oregon and '.ashington. 

On products shipped by "later from or through Atlantic Coast 
or Gulf ports to Oregon or "/ashington. Canal Zone or Alaskan port, net 
50 days from date of invoice; otherrdse, thirty days from date of invoice 
excepting series of shiiDments to any purchaser during any calendar month, 
net 20th of month follo'^ing. Products similar to those produced in 
Pacific Coast plajits for delivery to California, Oregon and Washington 
payable net 60 days from date of invoice; pipe to jobbers and merchants 
vire products snd. fence and sign post, 60 days from date of invoice. 

Seasonal Eatings 

(3) On woven wire fencing and fence and sign posts in lots of 500 
rods or posts or more sold to purchasers for resale: Spring terms for 
shipments on and after December 1st ajid on or before the following 

9679 



1 



-193- 

A -T let 4-1 for cash on or before the following Januar^^ loth, <^o 
April \^*'/';/°^^^^3\°3 follo^in^ February 10th, 3> for cash on or 
for casn on or oef ore t.ie l oiiot^ . oefore the folloring 

^f^iB£rz %^ - s^^t5;/Ln:t^anS T - 

^° frcn^for or b;fore the folloring Septeniber 10th, 2^ for ca.sh on or 

30th, 2/10 days from date of invoice. 

All di.coxmts s^T^lv only to invoiced value after excluding any 

thereof. 

Except as otherwise provided, in the care of woven wire fencing 
in lots of 500 rods or more and of fence and sign posts in lots of 500 
posts or more sold to purchasers for resale on shipments made on and 
after December 1st and on or before the follov/ing April 1st the maximum 
period of free credit shall be end of tlie follov^ing May 31st; on shipments 
made after April 1st and. on or before the following Maj^ 31st, 60 days 
from date of invoice; on shipments made on and after Jione 1st and on or 
before the following October 1st, the following I'ovember 30th, and on 
shipments made after October 1st and on or before the following November 
30th, SO da^^s from date of invoice. J^ate of mailing check or other order 
for payment may be deemed date of such payment. 

Ba.sin^ Point System 

(4) For details see Schedule F of Code of Pair Competition as amended 
May 30, 1934, and amendment IIo. 1 for Wire Reinforcement Industry as 
approved Se-otemher 12, 1934. 

Open Price System 

(5) I.lembers required to file "base prices", that is prices f.o.h. 
basing point before any extras are added on any discount or other deduction 
allowed; only one base price to be filed for anj- product at an:/ brsing 
point except carload price and L. C. L. price may be filed for pipe. 
Prices for standard tee rails of more than 60 pounds per yards and angle 
bars and rail joint prices shall be f. o. b. m.ill of producer or point 

of destination. Price ma-;^ not be filed for longer period than quarter 
year. 

Contract Period 

(6) Shipments under contract reauired to be completed before end of 
calendar Quarter year ending not more than four months after date of making 
contract, excepting purchases for constriAction of an identified structure, 
of new railroad cars or locomotives under specified definite contract of 
purchaser with a third part" e.t a fixed price or for construction of such 
structures, cars or locomotive owned b"'' such purchrser provided that con- 
tract reauires tha^t products sold be used only for such construction. 

9579 



Hebates 

(7) P.estriction "orohi'bits rebates, etc. other ths.n set fortli in con- 
tract of sr.le. 

Sales of Scra'o 

(o) Provision proliibits selling es ccrap an- product ^/liich may have 
value for other tuan remelting pur^ooses. 

Agreements Heouirin.g Ac^lierence to .I'ember' s Prices b"'' Customers 



(9) Agreenents must be in form sr.bstjntiall''' as approved by the 
Board of Directors and filed ■'.;ith the Seci-etrr"'-. Provision is mpde for 
penalty in case of violation of agreement. 



C 



9573 



-195- 
123 Code of Fair Competition 
for the 
Structural Cla^ products Industry 



Starting Operation of Wew Plants 

(1) Certificate must be procured from Branch Committee 'before 
starting operation of plants not heretofore in oueration or shut down 
for three years prior to approval of code. If Branch Committee denies 
application for such opening or refuses to make a decision Trithin sixty 
days, orjner may appeal to Code Authority or Administrator for final 
decision. Improving efficiency, adopting methods or machinery to lorrer 
production costs or improve products, or resuming operation of plants 
owned prior to Octoher 1, 1931, permitted. 

Cost Accounting System 

(2) System to he adaptable to the "business of all members of the 
industry'- and to he designed to make possible accurate determination by 
each member of his individual cost, lierabers to keep records in accordance 
with such system or in other manner which will make readily available 

the information required thereby. 

Sales Below Individual Member's Cost 

(3) Allowable cost to be individual direct factory cost of member 
plus weighted average indirect allowable cost for such branch of the 
industry as determined in accordance with the formula for company and 
the items to be included as designated by the Code Authority. 

Credit Practices and Discrimination Between Customers of the Same Glass 
as to Prices and/or Terms 

(^T Manufacturers may refuse credit, require special terms of pay- 
ment when this is necessary for protection of account. Exchange of credit 
information is permitted. 

Open Price System 

(-5) To be published at the site of consumption except that in any 
region where filing of prices, including individual transportation charges 
to the site of consumption, is impracticable for any member in the region, 
such member may file prices at any point or points of delivers^ other than 
site of consumption, subject to approval of the regional committee. 
If permission is granted, any other member may publish his prices at 
such point or points in addition to the publication of prices delivered 
at site of consumption. 



9679 



-196- 



Offers and Contracts Omitting Other Sifinificant S pecified Detail 

(6) Offers and contracts nust contain definite statements as to 
price, terms of payment, place of deliveiy, in addition to all other 
items necessary to a complete iinderstanding. 

Sales of Su'bstandard. O"bsolete and/or Used G-oods 

(7) These goods may te sold at less than cost of new standard 
grade products after they have "been reported to the Regional Committee 
who sha.1] detenine within 10 days the prices and terms of sale of such 
products subject to review "by the Branch Committee Code Authority or 
Administrator; or if they fail to do so, the Branch Committee or Code 
Authority'' may make such determinations. Members required to publish 
these prices and terms in accordance with the rules for publishing 
prices of new products. 

Interference With Contracts and/or Contractiial Relations 

(8) Includes prohibition of solicitation of orders from anyone 
with the knowledge that he has already signed an order with a competitor, 
excepting that an architect's specifications are not deemed a signed 
order; and renewal of sales effort by a competitor after the seller 
receiving the order has commenced delivery even vihen a difference has 
arisen resulting in cessation of delivery, unless seller has had a 
reasonable opportunitj'- to adjust the difference. 



C 



9679 



■-137- 
24 Code of JTa.ir Corapetition 

for the 
Situninous Coal Industry 



Sales Below Fair Market Price 

(1) In contracts for deferred deliveries, "fair market price" 

is to De at the date of such contraxt, regardless of the dates specified 
for raalcing deliveries. The "fair market prices" for various kinds, 
grades and sizes in the various consuming markets are to he established 
"by marketing agencies, or hy the Code Authorities for those areas where 
no marketing agencies exist, suhject to administrative review. The Code 
specifies certain factors to he tal:en into consideration in determining 
"fair market prices", such as furnishing of employment, competition v/ith 
other fuels, needs of the consuraing public, etc., and it is provided 
that coals shall he classified by applying all factors usually considered 
in connection with physical structure and chemical analysis and their 
effect upon salability and use value of such coals. ■ It is provided 
further that while making competitive market prices, dumping prices in 
any area of consumption are to be j'^arded against. "Fair ma,rket prices" 
must be published by the Code Authorities, and any coal producer may 
apply for information at the office of the district Code Authority witk 
regard to classification and prices. 

Where coal is refused by consignee in transit or at destination, 
shipper 'may sell at less than code price provided name of consignee and 
reason for refusal, copy of notice of refusal and notice of re-consign- 
ment, price received for coal so sold, and statement that sale is not in 
violation of any other code provision, are filed with Code Authority. 

If any size is made for which a price is not named or if the over- 
size exceeds the permissable tolerance specified in code, price for next 
larger size must be used. In case of conflict, the tolerance on sized 
coals controls. 

Right of appeal is established. For further details see Article VI, 
Sections 1-4 as set forth in Amendment No. 6 approved 1/25/35. 

Anticipation of Bills 

(2) Legal rate. 

Period of Free Credit ■ ■ ' 

(3) Rail shipment:. 20th day of month following shipment. 
Tidewater shipments: 30 days from date of vessel bill-of-lading or where 
shipments are made regularly, 20th day of month following shipment. 

Lal^e cargo shipments: 60 days from djSute of vessel bill-of-lading. 

Bunl3 r coa,l at tidewater for foreign vessels: 30 days sight-draft 

New York exch^ange for American vessels or 20th day of month following 

delivery. 

Railway fuel: 25th day of month following shipment, 

9679 



-198- 
PreTja'-nnent of Freight Charfes 

(4) When bids require delivered price and freight is thus iDre- 
paid, amount of freight prepaid rmst be invoiced to bu;^/er within 24 
hours of receipt of freight hill. Prepayment of frei<n;ht to point publish- 
ed in railway tariffs permitted. 

Q-otions 

(5) Options voided if price is increa.sed. Acceptance must be in 
writing and be filed with Code Authority. Retail dealer may be given 
options at not less than current code "orices, to be converted into con- 
tract to protect retail dealer on a bona fide signed contract between 
such dealer and industrial plant or public institution as defined in 
code. 

Spot Sales 

(6) Defined to be orders for shipment within 60 da,ys from date of 
sale. Written acknowledt'^jient required, containing sane clauses as re- 
quired of contracts. Failure of buyer to accept order within specified 
time voids contract. 

Agreement Indefinite as to Time and/ or Quantity 

(7) Number of cars or tonnage to be specified, excepting that 
contract na.:/ call for supplying entire or stated percentage of buyer's 
requirements if maximu^a tonnage is specified and excepting that a 
tolero.nce of lOfo over or under specified tonnage maj^ be allowed. 

Contract Period 

(8) 12 months. 

Sales on Consignment or Memorandum 

(9) Bunker coal, coal applicable against existing contracts and 
coal for storage other than in railroad cars by the producer or his 
agent, in rail or truch yards or on docJcs, wharves or other yards for 
resale 107/ the producer or his agent - consignments limited to cover 
above at rail or truck yards, tider/ater ports, river ports or lake 
ports and/or docks ber/ond such ports. 

Ad.iustin:'^ Incorrect Shipments 

(10) YJhere claim is that shipment is of sub-standard preparation 
or quality, shipper ma:/ settle at less tlrnn code -orice but must file 
with Code Authority, name of consignee and reason for request, amount of 
allowance or adjustment and statement that in making allowance no other 
code provision has been violated. 



9679 



,. -199- 
Standard Clauses for Contrac ts 

(11) These deal with altering contract prices in case of increases 
or decreases in freight rates or later costs; one provides that in 
diverr.ion of shipment from original destination, the price, if necessary- 
shall "be altered so that it is not less than the current published price 
in the zone to v^hich it has been re-consigned. These are raanda,tory. 

It is pernitted to insert a clause that in case of a reduction in code 
price, such price may be substituted for contract price. 

Contracts a.nd Cornjriit'nents 

(12) Must be reported v/ithin 5 days and must specify name of 
purclia.ser,' tonnage, price ar;.d duration. 

Sta.ndards of Testing Siz e 

(13) Tests to be made on a hand-shalcen round-hole screen in 
accordance r/ith principles established in proposed tentative method of 

% test for screen analysis for bit'ominous coal as released by sub-committee 
VII of A. S. T. M. on 11/21/34, 

Trade Differentials 

(14) Por am^ounts see uniform nar^:eting rules and regulations for sub- 
division of division I e.pproved by ildministrative Order 24-117A on 5/11/35. 

Extension of Trade Differentials to Parties Fot Entitled Thereto 

(15) Sales to or through any brolzer, jobber, cora'iission account or 
sales agency 'ivhich is in fact sn agent for an organization of retailers 
or industrial consumers, thereby granting unentitled discounts, are pro- 
hibited. Trade differentials may not be granted in cases where coal is 
purciiased for distribution at retail over or through a vehicle, dock, 
trestle or other facility owned, operated or a.ffiliated with suchperson^ 
nor in cases where partial or complete orrnership, rel<?tionship or affili- 

^ ation exists between a person and the consumer; nor to persons engaged 
jF primarily in the retail coal business where coal sold is to be used for 
domestic purposes or is to be delivered, to another person in the retail 
business or is to be delivered from retailer's yards by trucks or is to 
be delivered from a dock trestle, private siding or team track by truck; 
nor on coal transported b3'' truck from mine to consumer. 

Contracts t7ith Afents 

(16) Contract with sales agents must be written and filed with the 
Code Authority and be subject to their approval. Such contracts must set 
forth the authority of the agent, his compensation and all other terms 
and conditions of his appointm.ent. The Code Authority is required to 
regularly publish lists of producers and their sales agents. 

Commissions or Fees to Agents 

(17) Compensation to agents is lim.ited in maximum amount to amounts 
to be 3,llowed as trade discoxints by producers to wholesalers and must be 
paid out of the commission of the general or regional sales agent. 

9673 



-200- 

9 Code of Tair Conpetition f.r the 
Lumber and Tiniber Products Industries 



ProductiDn Quotas 

(1) Code Authority to determine and revise not less frequently 
than each 3 months estimate of e:cpected consumtion, and based thereon 
to esoahlish and revise production quotas for divisions and sub- 
divisions of the industry. To be elij^lble for allotment, ne;.ibers 
inust be rej^istered Avith aL-;encies desi/nated by Code Authorit -. Basic 
Code specifies all'traent for periods not in excess of o months but 
sone divisions (inahoganj-, philropine nah0;;;a,r^7, northern hard',70oa, 
northeastern hard\7ood, northern hemloclr et al) perait allotnents for 
longer periods specified in code or at the discretion of the Code 
Authority. Basis for individual quotas designated are alterna,tive. 
For full details see Article YIII of Cod^ Alterations of allotinents 
are permitted und^r special circuustances on amplication to agencies 
designated by Code Authority. Certain exceptions, such as f or • 
production during pealc periods, are sioecified, but generally allot- 
ments are not cunralative and increases are permitted to execute 
export orders. 

C^sh pis_counts_ and Period of Pre_e Credit 

(2) Except for y;ater shipment, viliere credit risl: is satisfactory 
to seller; To retailers: '^0 days net from date of invoice; cash 
discount of 2,j of net sjao-.int after dediicting actual freiglat paid if 
paid wiTihin 5 da/s after arrival of car. 

To W/iOlesalers; SO., of net amount after, deducting estimated freight 
ATithin 15 days from date of invoice, balance less 2''i of total, net 
after deducting actual freight v/izhin '^0 days from date of invoice. 
To industrials and bu"''ers n:,t otherwise classified: ^0 days net 
from date of invoice or 2j cash discount of net ajiount after deducting 
freight if paid ^Tithin 10 days after a: rival of car. 

P^re^ayinent of Frei/jit Char.'_.es_ 

(3) Uet, sub.ject to si;_,ht draft or pa.y...ent .voon receipt of 
invoice. In figuring delivered prices for rail shipments, seller 
must use established schedule of weights for species sold. 

Offers ITq_t Sxpirin,^ in Specified Time 

(4) Offers must expire v/ithin 13 days from date of quotation, 
except that they nay be extended over a perriod of i^O days o:-i .special 
constniction projects. 

Cjont rac t s_ _f or Deferred Deli very_ >Io_t Sub jec t to Pri ce Chan ~e_ 

(j) To retailers and wholesalers tine limit is 30 days from 
date of :rd?r; to industrial:, and wholesa.lers for ship.uents to 



9^79 



-201- 

industrials, tine limit is 3 months from date of order e::cept a 
2oeriod may be extended on aaT.liorization from the Code Authority. 
Water shipments, anc. products sold for specific construction .jo'b 
under contract not subject to cancellation, exce-oted. 

S_hij)men_t J7ithqut ""rd-e^r 

(fi) Placing: stock in transit via rail is prohibited. Placing 
unsold stock in transit via r/ater by either manufacturer or wholesaler 
unless vmolesaler has acquired full and unconditional title to stoci.c 
prior to shipment is prohibited. 

"JProduct C-uarant ees_" 

(?) Red cedar shini-,les may be ^juaranteed as to grade only as 
provided for in simplified practice recommendations R IP— 29 and Com- 
mierciaJ Standards C S 31-33 of the Bureau of Standards. 

\ 
Orders and Invoices ;3raittinj. Specifications And/or Other Signijfi_cant 
Sjoecif ied pe_tail 

(o) 'Offers and invoices nrast show terms of sale, a.ssociation 
grade, species, quantities, sizes and price of each item for a^.reed 
delivery. If not of American Lumber Standard size and/or association 
grade, order and invoice must shov/ nominal and finished sizes and 
;^rade sold by reference to some non-association sioecification on file 
v;ith the Division, or completely state specifications. Must state 
whether stock is ;reen, air dried or kiln dried. If order does not 
include specifications they must be supplied seller within 15 days 
from date of order. 

Product ^Standards 

(9) In absence of e:coress sales agreement, products are to be 
manufactured and graded in accordance with official published manu- 
facturers association grading and inspection rules a'oplicable thereto. 
Also trade terns, definitions and all other terms, words or phrases 
and regulations relating to the manufacture, sale, invoicing and ship- 
ment of lumber are understood to be interpreted and applied in accord- 
ance with apiilicable provisions of the official ma'.rjjfa,cturers associa- 
tion grading rules in effect at time of sale. 

P.ed cedar shingles are required to conform to simplified 
practice recoiaraendations P. 1''^ - 29 and Commercial Standards C S 31 - 33 
of the Bureau of Sttindards. Some details specified in code, such as 
minimum size 5/S" thickness measured at butt end and 1*^" length. 

Ivlanuf actuxe And/or Sale of ITon- Standard Products, 

(10) Liur.ber special non-standard sizes and grades may be sold 
under special contract but grade, size both rough and dressed and 
price must be detailed in both order and invoice. ITon-standard red 
cedar shingles are prohibited. 



9fi79 



-202- 

Labeliiii, Standards 

(ll) If liuiiber is i;re,de mai-.:ed or species mar":ed, only standard 
i.ianufacturers association j.,rade and riar'-s v/iiorever establishod are 
allov/ed. 

LalDeling of All Prodn.cts As To : i-ade anc Q;aantity 

(!;'!'*■ Ezce;ot for water shipment, as certification of quantity 
and rl'jade of rir;:d-act sliip'ied official .lan ifactiarers association car 
cards (shi-rjer's certifica,te) must oe placed in ea,ch car ship-oed. For 
sliip;.ients reojairin,;;, inspection at poi:.it of origin, official certifica- 
tion of the manufacturers association i'lS'oectiO'i a^-jencies vdll be 
furnished. Ship'-iers certificate not to disclose name of ori^.inatinf 
manufacturer but must be identified suff icientl;- to pei'mit actrainistra- 
tive agency to trace shipment. 

?.ed cedar shin;;:les must 'be branded or labeled as to species and 
grade numher in letters of sane size as .'.rade naiie estahlished \)y 
simplified pra.ctice recouaendations P. 1'^ - 29 of the Bureau of 
Standards. 

Labelin.'T of Suo-Standard Pro6-ucts_ 

(13) Applies to all products rou^^h or di'essed manufactured to 
sizes iDelov; Am^-rican Luxiber Standards and/or manufacturers Association 
Standards sold on ste,ndard nominal Rize. Stamp not to he obliterated 
or removed. 

uisrepresentation o/ A-ny ICi:;d 

(14'> Code refers specifically to {.joods, credit terms, values, 
policies, services and ..latnre or form, of business. 

Trade Dif f erentials_ 

(15) j:a;;inium discounts to wholesalevs to be established by 
divisiono2 and subdivisional ^encies anc' filed v/ith the Coc.e Authorit-^ 
to remain in effect tintil cha^iges are approved by the Cof e Authorit-. 

"xtensipn of Trade Differentials to Parties Hot "^intitled Theret:> 

(1^.) 3u./ers' agents actin/; for purchaser are not entitled to 
discounts nor lay discounts be Qiven to other than wholesalers. 

Pool Car Sales_ 

(17) Carload sales requiri.'g invoicing and delivery to mc^re than 
3 retailers or more than one stop-over at ori^-^in and one s'cop-over at 
destination prohibiteu. Pool car sales of less than 10,0i")0 feet to one 
customer are subject to service char(,'e to be established bj each 
division. Stop-over nha.rQes m'lst be i:aid ''oy buyer or bu3^ers in addition 
to invoice price. 



9*^79 



-203- 

Co.i."unission or Fees to A, ents, 3ro':ei-s or Other Controlled Sales, 
?.e;oresentatives 

(IC) ;iaxi:.iuin co;rnissions to 'be j^P-ici to co;.nission men to be 
esta,lilisiied "by v.ivisional and sub-divisional a;;encies and filed v/ith 
the C'de Authority"; to reua.in in effect until chan^^es are o/.roroved loy 
the Code Authorit"''. 

Fimoer of Sales Cutlets 

(13) '■'^ne coLirassion representative for each species callin.'-; on 
t.ie sfjiie tra... e in the sav.ie territory/ is naximurn allowed. 

C_o_ns ervati o n lieasur e s^ 

(30) Code A-ithority to request a conference with the Secretary 
of Agriculture E,nd other state and p^iblic agencies as he may designate 
with the purpose of esta'olishinj; measures necessar^,^ for the conservation 
and sustained production of resources, in c-operation with Ste,te and 
I'ederal authorities. Schedule C of th" C^de provides for promulgation 
oy divisional and suo-divisional a, encies especially desifaiated to 
foniiulate and revise rules of forest practice for approval of the Code 
Authority' a,nd suhject to disapproval or suspension "by the AcYiinistrator, 
to secure enforcement of such riales, and to cooperate v/ith governmental 
and other . a^-;encies. Principles of "Fores't Conservation are set forth 
in Schedule C. 



9^72 



275 Codes of Fair Competition 
for Sup'olernents of tlie 
Chemical llamifacturing Indxistry 



Cash Discounts and jPerio_d of rree Credit 

(l) l/lO days or on notice to Code Authority, 10th day of fol- 
lowin; month on rarming accounts; net 30 days. 

Seasonal ^Dat\n/^s_ 

(3) Spring stoch orders for shipoent at rnanufacturer 's con- 
venience to a-;ricultural sulphur distributors, jobbers, dealers and/or 
consumers may be dated not to exceed :."ay 1st with regular terms, 
provided that the Code Authority surveys trad' conditions by zones and > 
authorizes and approves datings for such zones, subject to ac^ministra- *> 
tive ap'iTrova.l. 

Qjpep. price System 

(S) Basic Codes provide that any subdivision iway elect, subject 
to approval of the President, to operate under an open price system for 
any of its productions provided that changes in prices and/or terms and 
conditions ajje announced by member immediately to all other members 
througla such agency as subdivision determines, and provided that 
variations from s'^.ch open and publicly announced prices and/or terms 
and conditions are not allov/ed. 

Allov/ances f ;r Returned Containers 

('•1-) I'o allowances on containers returned vdiicn are non-returnable 
po,ckages as defined in the Poisonous Articles Sections of the I.G.C. t 
reg-alations. 

Sales on Gonsirnme^nt or Memorand.um 

(5) Patented phytonomic oils nay be consigned to spray oil 
eLMlsion manufacturers. 

Storing Poods I7ith Customer 

i^-') Prohibited if sxic'ii storage is a subterfuge for consifii'.ient, 
or constitv.tes rebate. If not in violation of above, pa'.Tnent of ware- 
housing fee in excess of public A7arehouse rate is prohibited. 

Free_ Deals and Samplers 

(7a) Limited to free samples to Agriciiltural ;^,:'.perimental 
Stations and other governraent agencies; samples n^t exceeding 35.00 in 
value at any one time; materials used for experij.iental purposes directly 
under the supervision of the seller; and nev/ products which have been 
on the marcet for less than one //■ear. 
9f=i7S 



-205- 

(71d) a reasonable qnantit:/ of solid car'bou dioxide nay "be 
fva-nisiied to a prospective c"astoner or s^ld belov; published prices 
provided -shat such custo-.ier has not previnusly piu'chased solid carbon 
dioxide coiiiiMercially for any purpose, in cases of encouraging; the 
developnent of nev; uses cornercially. ITar.ie and address of such - 
prospective purchaser, intended use of product, prices, discouiits, 
oerms of pajz-^ient and conditions of sale applyin,-, to such sale nmst be 
filed confidentially with the Code Authority. 

Priees, ?rer.:iuns, "ifts and Lotteries 

(n) ■^vohibition applies v;hen prizes, 7Dremiur.'is or gifts are given 
by any neans ■vhich involves lottery, fraud or nisvepresentation. 

Containers 

(9) "e.-foers of the Liqiiid Carlion Dioxide Section of the Industry 
recuii'ed to file once in each 90 da.y period, naxies and addresses of 
cusTioiaers failing-; to conform to tenvis under v/nich its c^rlinder property 

• has b een f iirni shea to such cus t oiier s , 

?a.c.z8.{^_ln( or Container Standards^ 

(lOa) TJ^iere pacica^es are covered by the specifications of the 
I. J. C. regulations, only svich packages permitted, otherr/ise restricted 
to those sizes shoirn on published price lists. 

(lOb) billing any apparatus not having official ap;oroval re- 
quired ''o;: any j_overnLient a;^ ency v/ith solid carbon dioxide is prohibited. 

Labelin;^ Standards 

(11) randatory labelin.,:; of ba^gs, barrels ^r other conta,iners of 
agricultural sul;ohur aceording to the Pederal Insecticide Act of 1910 
as amended. 

La.beling of All Products as to Content or In'-redients 

(l,-3) Label to sho';r fineness of elemental sulphtirs in gro-und 
agricultural sulphurs or prepared sulphurs excepA vrlien sold as in- 
secticide in Florida. 

Cus oner Glas sif i_catipn. 

(10) Agricultural sulph^^J" distributors and jobbers to be classi- 
fied under the supervision of t-.e Coo;.e Aitthority in accordance v/ith 
definitions set forth in the Code. Final detenaination of classifica- 
tion rests T/ith the Code Authority sifbject to Adj-anistrative disapproval. 

Coznissions to 3rohers, 

•(1--) Co:.r:issions to brohers linited to 1 '. 



->v^ 



-2j6- 
120 Code of Fair Competition 
for the 
Paper and Pulp Industry 



Cost Accounting- Sy.steu 

(1) Systems used by members to be in accordance v/ith principles 
of system established pursuant to enabling;; provision and must be as 
detailed and complete as such system. 

Sales Below Individ-'oal Iviember's Cost 

(2) Member's cost is that during last period of 3 consecutive 
months or 3 accounting periods of 4 weeks each, ending not less tlian 
30 days prior to the first date of such quarter in accordance with the 
accoTonting system as provided in code. Cost of delivery is item of 
cost unless this principle is modified by the divisional Code -^thority 
e;:ce"ot that if belov/ individual cost, scheduled price nay be justified 
on basis of lov;est price filed for same product by a conraetitor provided 
that such other schedule can be identified. Su_ch justification is voided 
if such competitor's price is cancelled or increased. 

Open Price System 

(3) 5 day meiximum prescribed b,y Code. 
Conservation Measu-res 

(4) Conservation of forest resources is declared purpose of the 
Industry. Code Authorities are therefore to cooperate with the 
Secretary of Agric-olture and other national and state officials and 
agencies and the Code Authorities of other industries in planning 
measures to this end. 



( 



9679 



-207- 
174. Code of Fair Competition 

for the 
Ra"b"ber Tire luanufactiiring Industry 



Cost Accotanting System 

(1) ^Tj^ch system to be established "for guidance of each member". 
Provision provides for a, stud3/ of a laarfcet stabilization plan based on 
cost control. 

Price Differentials Between Classes of Products 

(2) After standards have been established pursuant to enabling 
provision, any products in excess of maximum specifications aiust be 
sold at prices which truly reflect their higher cost. 

period of Tree Credit 

(3) 10th Proximo 

Open Price S:v stem . 

(4) Provision requires filing of consumers preferred wholesale 
and state lists, former defined to be the lists frora which dealer and 
jobber discounts shall be a"plicable, and to apply to sables of tires and 
tubes to owners of less than five vehicles; preferred wholesale list to 
apply to commercial operator^ of five or more vehicles,; and state lists 
to ayply to state, country and raonicipal accounts. If new prices are 
files to meet competition, to be effective on the same date as those 
being met, such revisions must be filed jpi'ior to (no specific time 
specified) the effective date of the list first filed. Uo member is 
permitted to solicit the reinstatement of any order previously cancelled 
at other than his own current price. There is further, a provision that 
orders received or postmarked after 12:01 A.M. of the effective date of 
a new price list nrast be accepted at new price. 

Contracts for Deferred Delivery Not subject to Price Change 

(5) Price guarantee on future deliveries prohibited. Deliveries 
beyond thirty day period (definition of deferred delivery) mu.st be made 
at prices in effect on delivery date. 

Product Standards 

(6) Tire Committee of the Tire and Him Association is to provide the 
Code Authority with standard specifications to standardize manufacturing 
tolerances v/ithin the Industry. Copy to be sent to every member of the 
Industry after approv8.1 of 51 per cent in volxijae of members of Code and 
administrative approval, and sha,ll becoLie effective 90 days thereafter. 
See Price Differentials Between Class of Products which provide for 
products above standard tolerance. 



)679 



-208- 
Labeling of All Products as ^: Zzr.zzrr. zr Ir-gres-ier-ts 

(7) Side wall of casing and label to indicate n-Jimter cf ccrd plies 
from bead to bead, built into tne casing of automobile, truck and b-os 
pneuEsatic tires. 3rea>er strips are not constr^jed to be plies for the 
p-jjrpose ti this provision, but plies extending; from the heel of one bead 
to the heel cf the other bead, if substantially of the sasie construction 
as other plies in the tire, are not constr"aed as brealrer strips. 
The Code Authority is eiapo".7ered to desi^-nate sarMr.rs for the p"JxpoEe cf 
this provision. 

(5) Iha Code Authority to desivr^te nar>i-gs for this purpose. 

Sales of Sub- standard, Obsolete and/or "sed Sc'cds 

(3) Seconds csjc be sold to ei-jplojees for their ovrn use but not for 
resale. In no cass c^:.* firsts be sold as seconds. 17otice to the Code 
Authority zrcst be sent two weelrs in advance of sale of other sub-standard 
obsolete or used -cr><^ds indicating numbir of tires or tubes to be so dis- 
posed of, reasons-thsref or, discount below re£,'alar established prices at 
which they are to-bc'^old. Approval of the Code Authority req-oired, and 
if they are to render-a decisisn within ten days member may appeal to 
the Adriinistratar f or -approval . The Code Authority is reauired to notify 
all nen b ers siimliane^usly if any such authorizati-on. 

i:isre-resentati::n rf .-c-." Ztr.L 

(10) The Code-refers specifically to consodity, credit terris, val":^, 
policies, services .and nat'ore or form of business conducted. 



9579 



-209- 

467. Code of Fa i r Com p etitio n 

for the 
Cigar Lla^ufac tuning Ijadustr^ 



Mininium Prices Irrespective of Emergency 

(1) Two for five cents maximum orice for cigars or stogies produced 
"oy em-ployees paid the minimiun wage rate prescribed in Code; containers, 
mxist be labeled two for five cents. 

Cash Disco-unts 

(2) 'Two per cent within established credit terms of member. 
Open Price System 

(3) Retail prices to be filed and these to constitute basis for 
computing discounts and terms for all dealers, v/hich discounts and terms 
must also be filed. 

premiums 

(4) Permitted unless constituting additional discount or reduction 
in price belov/ minima established in accordance with Code provision. 

Unitemized Billing 

(5) Sequired to show retail prices and discoijnts therefrom. 

(Numbers G-8 not used in this tabulation) 
Labeling of All Products as to Price 

(6) Retail price mast be marked on containers. 
Trade Differentials 

(7) See Article VI, section 2, for detail; members selling directly 
and exclusively to consumers are exenrot from merchandising plan as set 
forth in Article Vl, Section 2. 

Selling in Com;3etition ¥ith Retailer 

(3) Sales by members of this Ind.ustry in competition with re- 
tailers must be in conformance with the merchandising plan. 

Adherence to Liember's Code by Customers 

(9) See Schedule I annexed to Code. This sets forth in part the 
merchandising plan for the Miolesale and Retail Tobacco Trades. Such 
merchandising plan is accepted, adopted and a proved by this Industry 
(Article VI) It is not ana-lyzed in detail here, other than those pro- 
visions which specifically relate to cigar manufacturing, because such 
other provisions relate to the customers of cigar iVianTifact-iorers who are 

9679 



-2l0- 

covered by the Wholesale Tobacco Trade Code and the Retail Tobacco 
Trade Code. 'The provisions, as explained above, become part of this 
Code because of the statement in ^oaragraph 1 of Article VI "accepting, 
adopting and approving" the plan. .H-nalysis, however, belongs properly 
to these two other Codes. Briefly, the plan provides principally for 
filing of prices by jobbers and sub-jobbers and sets forth discounts 
for sale by retailers. 



9679 



aHMHBB 



-211- 

'" 4. Code of Pair CoiTroetition 
for the 



Electrical I'lanufactaring Industry 



and its 

Sup'o laments 

Cost Acccunting SvEtem 

(l) Systems used "by members must conform to the principles 
of and be as detailed and complete as the system set forth in Sixth 
Edition of the ivlan^jal of Acco"Li:iting, prepared and published by IISI.IA., 
(national Electrical Iknuf acturers ' Association) for method of account- 
ing, and a system fonnulated or appi-oved by KSIIA for method of costing 
variations must be approved by ITEM Committee. 

Sales Below Individual Member's Cost 

(2a) Such cost to be determined in 9.ccordance with uniform 
and standard method of costing formuls-ted or approved by NSI/A, excep- 
tion allowed to meet competition only if supplemental code makes 
specific provision therefor. AdiBinistrative Orders 4-3 and 4-7 per- 
mit this exception for wire and cable sub-d.ivision in lie"'^ of any 
si^jplemental code therefor, special goods excepted.. See 'Sales of 
Sub -standard Obsolete and/ or Used Goods. 

(2b) In filing a mii price schedule to meet coirrpetition, Code 
Authority must be advised that revised schedule involves sales below 
cost to meet conroetition. If no price is filed for any product, mem- 
ber may meet proven quoted price if previous notice of such intention 
is given Code Authority. During period of developing and introduc- 
ing some noTJ product ■ontil market demand and volume of production 
produce a cost below the price tiiat can be reasonably charged, member 
may sell below cost if prior notice of such intention has been sent 
Code Authority. See also footnote (2a). 

Cash Disco'onts, Period of Eree Credit and Interest Hate Beyond Eree 
Credit Period 

(2a) Sight draft bill of lading wherever feasible and in no 
case may open acco"ant extend beyond 20th proximo unless evidenced ''oy 
negotiable note, trade acceptance or other negotiable instrument 
bearing interest at' an anrroal rate of 6/o or maximum legal rate, which- 
ever is lower. 

(3b) Two to ten days from date of invoice; 30 days net. 

Open Price System 

(4) Incorporated 'oy reference from basic cod.e. 



3679 



-212- 

Advertising Allorances 

(3) Office Memorandiim Vio.^26 ap;Troved Jan. 5th, 1935, incorpor- 
ated by Amendment . 

Demonstration Allov.'ances 

(6) Exce"i3tion permitted if product on v;Mch a.llowance is made 
is one having: such uiius-'aa.l mechanical or other special features as 
require m.ore ex?pert demonstration and eicplaimtion tlian that which 
should reasonably be exoected of the averagie sg.les person. 

"Product Guarantees " 

(7) Limited to replacem.ent or repair of equipment which is de- 
fective in material or. woriaranship . Members permitted to develop in- 
dividual plans for replacing units in case of failure after the expira- 
tion of the warranty, provided that no representation of any nature is " 
made to mislead any purchaser to "assume extension of vfg-rranty beyond 
the period of one year from date of installment, or to confuse such 
replacements v;ith the W3.rranty; and provided further tliat in all repre- 
sentations the amoxint added to the complete unit price to cover average 
cost of unit replacement is indicated. 

Acce-Qtin^" Het'orn of Other than Defective Merchandise 

(8) Returns rnay be accepted because of purcljaser' s failure to 
meet obligations, but such retu-rns must be reported to the Code Author- 
ity. 

Premiums and Rewards 



(S) Prize contests openly conducted among purciia.sers are per- 



mitted. 



Orders Omitting Other Significant Specified Detail 

(lO) Orders must set forth terms of sale as to state, -oayraent, 
quantity, price, delivery, arrangements and corirolete description of 
product. 

Product Standards 



(ll) Code Authority to establish standards committee represen- 
tative of the industry and two members appointed by the 1T.I.R.3. to 
study and recommend to Code Authority and N.I.R.E. such standards as 
are deemed feasible. 

Labeling of Hon-Standard Prodv-Cts 

(13) Provision not effective "mtil <^;tandards l;ia.ve been estab- 
lished purs^uant to enabling provision. 

Misre-orescntation of Any I'.ind 

(13) Refers specifically to misrepresentation of goods, credit 
terms, values, ^^olicies, services and nattu'o or fonn of business 

9679 



-213- 

145. Code of Fair Conroetition 

for the 

Farnit'ore Ivianufacturing Industi7/ 

Sales Below Individxial Member's Cost 

(l) Cost on future deliveries is that at time of acce-otaace of 
order. 

Cadh DiscQ-giits and Period, of ?ree Credit 

(S) 2/30 days from date of shipment or ten days after arrival 
at destination or on monthly settlements- the 15th of the month follov?- 
in^ date of shipment . 

Anticipation of Bills 

(3) one half of one per cent per month. 
Interest 5ate Beyond Free Credit Period 

(4) Six per cent per annimi on notes. 
Zqxialization of ?rei.'::ht Pates 

(5) On cedar chests and other storage pieces equalization per- 
mitted so tliat carload, freight rate applicahle to shipment from fac- 
tory to destination ?/ill he no greater than carload rate on same ship- 
ments from nearest of following points: Atlanta, Georgia; Chicago, 
Illinois; or Hew York, l;Tew York. 

Freight Allowances 

(6) Carload freight rate must fee used, in computing allowances 
whether made on carloads or less on cedar chests and other cedar stor- 
age pieces. 

Crating Allowances 

(7) 'iThere cedar chests or cedar storage pieces are shipped iiith- 
out crB.ting, dealer m3.y he allowed fifty cents per cr3,te mazim-om. 

Sales of Discontinued Merchand.ise 

(8) Permitted at any price provided that manufacturer never 
again man"afactures such discontinued jjattern. She Code Authority may 
require reports of such S3.1es and., suoject to aaninistrative approval, 
may adopt rules to prevent the use of close-outs as an -unfair trade 
practice. 



9679 



-214- 
Firacy of Dosi^jis and/ or Styles 

(.":) Copying or re;frod-acing exclusive desi^^n or pattern original 
in design or treatracnt within two years of its introduction is prohi- 
bited. 

Lisre'oresentation of Any Kind 

(10) F.afers specifically to misrepresentation of products, 
credit terms, values, policies, services or otherwise. 

i.Iisre'oresentation of Product 



(11) Provision prohibits the failure to furnish to the buyer 
on request a description of products, including the principal mater- 
ials of which it is made and other important attributes. 



9673 



-215- 
278. Code of Fair Cormjetitlon 
for the 
Truckinf; Industry- 
Sales Belc"^ IndJTJc'xiaj. Mom "b ei-' s Cost 

(1) Cost to 06 determined in accorfance r'ltli cost forrmla es- 
tablished pursuant to enabling provision. Sales at 'juch lesser rate 
as may "be approved iDy the appropriate Code Authority, permitting for 
hire memher to meet rates smd tariffs of a competition outside of 
Indri.strj, permitted. 

Open Price System 

(2) "To esta'olish a.dr^iinistrative rules governing; the filing of 
r-inima for rates and tariffs ..." . State and Divisional Code Author- 
ities to receive PJid keep record of schedules of m.inima for rates and 
tariffs filed hy men"bers. Price filing rules and rer;;ulations set forth 
in the Code applicalile to for hire memhers. Additional provision for 
rates end tariffs may be submitted oy the Ifetional Code Authority, sxi"b- 
ject to administrative approval. 

Oral Invoices 

(3) Written memorandum must "be issued rrithin forty-eight hours of 
the "beginning of transportation unless exception is granted "by proper 
Code Authority, 

Pieceiots Omitting Other Si:°-nif icant S'oecified Detail 

(U)l.iust shou point of origin, neiie of consignee, date, general 
description of shipment, destination and name of consignee unless 
exception is gra^nted "by proper Code Authority. 

Standards of Puolic Safety and Health 

(5) The Code Authority is enpo^Tcred to make studies of the a.d- 
visability of requiring evidence of responsi'Dilit;- or insurance i.7ith 
reference to pu"blic lia"bility for injury to persons or property, and 
Tfith reference to securitjr of property transported "oi'' ■mem"bers of 'the 
Industr^r, and report to the Administr?.tor thereon. 

IIisre"oresentation of Product 

(6) "iTo mem'ber of the Industry shall allo'7 s.-aj shipper to "bill 
freiglfit at less than its actual ireight or to fplsely descri"be an]'' 
product, " 

Trade Agreements 

(7) Proposed trade agree.ients ■lust "be su"b:'iitted to proper Code 
Authority if approved "by the majority of meinoers ":y nuji"^.)er of vehicles 
or T7ho carr;'' m.ajor portion of tonnpge, and. approved "by Adiinistrator; 

9679 



-216- 

such agreeuents "binc.ing on all nenters of the incaisti-y -ithin the 
jurisdiction o" the Code Authority suonitting same. Each such a^ree- 
nent must set forth its scope "by area and operation. Tor further de- 
tail see Article VIII of the Code. 



C 



0679 



-217- 
Mo . 47 Code of Fair Comietition 

?or the 

Bankers 



(1) diis Code contains no trade practice provisions, 



9679 



1 24. Code of ?air Competition 

jor the 

Motion Pictiire Ind'astrv 

aiid its suppleiaents 

Options 

(la) Exiiititors entering into contract for exhibition of pictures 
permitting exhibitor to select from total number of pictures licensed 
less than 35 per cent and reject the remainder, must send written re- 
jection within twenty-one days of availability. 

(lb) If e^diibitor has contra-cted to exhibit all pictures offered at 
one time by distributor to exhibitor and license fees of all average not 
more than >ij250, exhibitor is privileged to exclude from such license 
agreement not to exceed ten per cent of total number of picture so 
licensed, provided exhibitor is not in default under such license agree- 
ment and has complied v/ith all provisions for exhibition of such picture 
at specified intervals, and provided tliat notice of rejection be written 
within fourteen days after general release date in excliange territory; 
exhibitor inay exclude without pajnnent one pict^ure out of each group of 
ten of the number of featiore picture specified in the license agreement 
provided nine are, paid for, or may exercrise privilege by paying license 
fee of each motion pict-are excliided with notice of its exclusion. If 
last group licensed is less tlian ten but not more than five, exliibitor i 
may exclude if all but one are paid for. ?or further details of 
exclusion in cases where license fee is to be percentage of exhibitors 
receipts, see Article V, Section F, Part 5, especially subsections, c PP. 

Pree Seals, Prizes, Script Books, Coupons, and L etteries 

(2) These, or other methods or devices for lowering amaounced ad- 
mission prices which are unfair to comoeting exhibitors or deceive the 
public, are prohibited. Llininum admission price specified in any con- 
tract licensing exhibition of a picture must be iiiaintained. Exhibitors 
may alter admission ijrices only if notii' violation of contract or .^ 
published price. 

§^ifts and Premiums 

(Z) If exhibitors operating not less than seventy five per cent 
of the number of actively and continuously operated theaters not 
affiliated with distributors or producers, and exhibitors operating not 
less tx:ian seventy-five "oercent of the number of actively and continuously 
operated theaters affiliated with distributors or producers declare in 
writing that giving rebates such as premiuiBS in the form of gifts or 
other things of value shall not be permitted within area as defined by 
Local Clearing and Zoning Board, it is prohibited to give such things 
of value after ninety days sifter such determination. 

Standard License Agreement 



9679 



-219- 

(4) Optional Standard License Agreement (1933) negotiated "by 
exhibitors and nov; "being used ty distributors to "be used hy distri"butors 
for licensing exhibition of motion pictures unless parties mutually 
agree that different form be used, and except where any provision is 
inconsistent with the Code provision. 

Piracy of Designs and/or Styles 

(5) Prohibition applies to appropriation by any cartoon producer 
of the good will of another by adaptation of a cartoon character. 

Tying Contracts 

(6) Requiring lease of short subjects, excepting nev/s reels, 
limited to proportion of feature pictures for which contract is negotiated 
bears to total number of fea.ture pictures required by exhibitor. 

Contingent Sales (other Than Tying Contracts) 

(7) Requirement of exhibition of specified pictures on any 

in specific day or days of vifeek must be provided for in exhibitor's contract 
therefor, and in no event may such requirement be made if license fee is 
a fixed sum only. : .• 

aepudiation or Threats of Eepudiation of Contract 

(8) .Adjustment of license fees for exhibition rights of a nuiiiber of 
pictures licensed in a group for a stated average sum per picture, and so 
stated in the license agreement is maddatory if the total number of 
pictures so licensed are not delivered by the distributor and the ex- 
hibitor has fulfilled the 'terms and conditions of s\ich license. 

Interference v/ith Contracts and/or Contract-gal Relations and Enticement of 
ComiQetitor ' s Em'oloyees . 

(9a) Producers are prohibited from aiding or abetting in the 

•voluntary release or dismissal of any author, dramatist or actor employed 
in rendering exclusive service in connection v/ith any legitimate drama 
or musical comedy for the purpose of securing the services of any such 
person. Producers may not negotiate with any employee under written 
contract to any other producer prior to the last thirty days of the term 
of his contract of employment. Article Y, Section B, sub-sections 2,3, 
4, 5, and 6, establish regulations relative to requirement of notice to 
producer in making of offer by another producer to his eniployce, 
priority rights to the services of eniplojfees, etc. All these resralations 
were indefinitely stayed. " " - - —^ 

(9"k) Provision prohibits public exhibition, prior to date agreed in 
contract for motion— picture rights to aaiy draraa,tic or musical work and pro- 
hibits negotiations prior to sixty days before de.te when outside producer 
or associated producer has f^xlfilled coRz-iitnent to produce, or distributor 
with whom he has contractual obligations, or sixty days prior to termination 
of agreement, whichever is earlier. 

failure to Offer ITew Porduct to Exclusive Customer 

9579 



-22C- 

(lOa) If any exhi'oitor has contracted to exhibit laore th^n fifty 
per cent of the total n"^amber of pictxires announced for release diiring 
any given season by a 'iistributor and such distributor during such season 
releases any picture 'in addition to the number so anncanced, he must 
offer such picture to such exhibitor prior to his offer of it to others. 

P.evealin,-; Confidential Inforr.iation 

(11) 2efers specif icaily to revealin.;; exhibitor's box office 
receipts. 

Shippin;.'; or Ferforming at Variance \(%^c^ Contract or Representative 

(12) If substitution is niade, a paid advertisei.ient of not less than 
one fourth of a pa^e in at least one issue of a national trade 
publication before the release date of the picture in v/hich substitution 
was mp.de mast be published. 

Sales to Specified Classes of Customers 

(13) Licensing of pictures to non-theatrical accounts for exhibition 
contrary to any determination, restriction or limitation by a Local 
C-rievancel3rer'd '■•hat such licensing would be "unfair to an established 
motion pictiare theater is prohibited, excepting to army posts or camps, 

U. S. ITavy ships, ships carrying passengers to foreign or domestic ports, 
educational cr religious institutions, prisons, hospitals, orphanages, etc. 

Registration of Agents for "^Thon Member Buys 

(14) Code Authority to establish an agency couimittee, composition 
of which is specified in the code, to maize rules and regalations for 
registration af and dealings with agents, and to arbitrate in case of 
dispute. 

Bijying from Code Violators 

(15) -Provision prohibits dealing with a-:;ents who practice 
commercial bribery with regard to producer's er.K)loyee, alienate or entice 
any employee under written contract of employment, or advise or induce 
violation in any manner of such contract, falsely malce representation to 
producer affecting in any way eiiipioyment of the person represented by 
the agent, refuse to register, or have had registration revoked, and 
other provisions. 



9679 



-221- 
APFEIIDIX I 

TZA3I; ??vAC'xICE FliDVISIOlTS OlilTTSD PSOli TlZrulATIOHS 

I. SPECI?IC PJISTPJCTIOKS OIII'TTED FZOIi SUl,aiAEY IKBUIASIOI' 0~ PART I 

■ I'Tuxi'ber of Codes In 
. Provision liJhicli Included 

"Discounts" prohioited 7 

"Discounts" proliioitec. if e:;ces£ive 3 

"Discounts" prohioited if secret U 

"Discoxints" prohroited if discrininatory S 

"Credit terns" :-3ust not "'oe excessive 1 

"Credit terns" uust lie reported to code authority 1 

Delaying acceptance of order prohil)ited 1 
Accepting order for specific joo hefore customer secares arrard 

prohil)ited 2 

Contracts containing penalty clau.ses prohihited 1 
Contracts containing penalty clauses prohioited yjiless provision 

for Donus also 3 

Contracts containing liquids.ted damages clairse prohioited 2 
Pailure to give custoners advance notice of discontinued lines 

prohibited 1 

Ua:s:iauH tolerance provided for date of shipnent 2 

TJilf-ol rna-nujfacture of substandard products prohibited 3' 

Heceipting bills before paynent prohibited 2 

Split billing prohibited 3 

Regulations of auction sales 1 

Ma.ndatory uniforu contrext fora set forth in code 5 

Llandatory uniforu order fom set forth in code 1 

Liandator;' unifom leasing forn set forth. in code 1 

Form of contract used must be approved by code authority 1 
Sales for export to buyers not under contract not to resell 

TTithin U, S, prohibited h 
Permitting diversion of product ^o'j customer to specified uses 

prohibited 1 
Direct from factory to customer shipments - distribution codes 

require compensating charge to be made h 

Activities of members' agents restricted 2 

Sales by outsiders in enfranchised territories prohibited 3 

T7arehon.se sales (rather than from factor^O prohibited 1 
TTarehouse sales (rather than from factory) prohibited -ujiless 

additional charge made h 

Freight or tra.nsportation charges prohibited if secret 1 

Diversion of shipment from original destination prohibited 3 

Disclaimers of legal responsibility prohibited 1 
Failure to offer nerz adequate inspection of product by customer 

prohibited 1 
Failure to permit ad.equate inspection of product ^oj customer 

prohibited 1 
Acceptance of orders or good.s designated for competitor pro- 
hibited 2 
Collusion to -ithhold instruments of prod-o.ction from certain 

producers prohibited 1 
Purchases in excess of requireiients to hinder competitors pro- 
hibited 3 

9679 



-222- 

laui'ber of Codes In 
Provision TJliich Included 

Representing conpetitor's sales or instr.llations as o'.7n pi-o- 

hitited 2 

Iviisleadinr,- pronise of delivery date prohiliited 5 

Deceptive resale price tp.gs prohilDited 3 
Resale price tcQS to shovf price not exceeding 125/j of price to 

custoner 1 
Concealed relationship vrith selling agency prohioited U 
Transfer of assets to avoid perforraance of constract prohi"bited 1 
Acting "both as agent and undisclosed principal prohi'jited 1 
Bidding -Tithoxit adequate capital to perform prohiljited 1 
Fal:e, fictitious, or ""blind" hids prohibited 9 
Failure to post insurance information, prohi'oited 2 
Inaccurate representations to prospective sales representa- 
tives prohihited ^ 2 
Accepting rebate or comnission vjidis closed to principal pro- 
hibited 1 
Offer of sale unauthorized hy owner prohibited 1 
Eales prescribed for use of estimating bureau uhich code aoith- 

ority is to establish 5 
Detailed conservation rules 3 
Renting or leasing space or equipment to shop employees pro- 
hibited 3 
CoLiparative de:.:onstrations of onn and competitors' prodv.cts 

prohibited 2 
Leasing productive equipment to non-members of industry pro- 
hibited 2 
Peraitting performance of industry function by non-member pro- 
hibited ' 2 
Supplying trade secrets to non-industry producers prohibited 3 
Sharing ^ith processor compensa,tion received for indxistry 

function prohibited. 1 

Selling unifinished products prohibited U 

Processing prison-made goods prohibited 2 



9679 



-223-* 

IPPELIDIX II 

II. C-Ei^iERAL ??.OVISIOi:S ATEECTIITG- T2ADS F2ACTICE EESCPJC^IOIIS EXCLUDED 

EEOi: tadulatiok or :doth patits ii aiid hi. 

1. General provisions nhich c.id not restrict the activities of 
code memlDers or specif ics.lly enponer or require the Code Ai^.thority to 
act on any specific natter, as for exanple: the provision fo'u.nd in a 
majority of codes which prohibited the use of suhterfuge or the aiding 
or a'cetting of any other nenher of the industry in violation of any 
code provision; the provision that the Code Authority,' might require 
perio6.ic reports on employment, production and other na.tters vhen such 
poner nas not specifically related to production control or other res- 
trictions; or the provision that the Code Authority night recommend 
further "trade practices", etc. ATithout specific reference to any pe.rt- 
icular trade practice or cla.sses of trade practices, 

2. Provisions, vrhich r/hile affecting trade practices, seem to have 
had as their pri'mary purpose siipport of administra.tive or lahor pro- 
visions, as for eriample: provisions requiring the maintenance of re- 
cords of transactions, etc.; regulatio:is dealing ivith the use of JI.S,A, 
lahels; or penalities for violations of code provisions and provisions 
relating to the aoministrative machinery for complaints, appeals, etc. 

3. Provisions lyhich reg^alated the adjustment of _ contracts in exis- 
tence on the effective date of the code or other regralations dealing 
\7ith effective date of the code or any code provision, 

U, Provisions rrhich reg'j.latec; l)U3/ing, selling, or processing of 
prison-made goods or enplojment of prison lahor. These provisions vere 
excluded hecause hy the terms of Executive Order Ko, S6S^A of April 
19j 193^j the Compact of Pair Competition for the Prison Industries of 
the United Statestook precedence over such provisions as -ere already 
in codes and future code provisions Trere required to he in accorda,nce 
with such compact. 



9679 # 



9679 



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 
infoTination and records of experience of the operations cf the \rarious t rades and 
industries heretofore subject to codes of fair competition, shall study the ef- 
fects of such codes upon trade, industrial and labor conditicns in general, and 
other related matters, shall make available for the protection and promotion of 
the public interest an adequate revie.v 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 Revie*. 

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 cede his- 
tories. The materials which were produced by these sections are indicated below. 

Except for the Code Histories, ail items jientioned beloff 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 7,ere held, and 
the activities in connection ,',ith 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 
c'-i; provisions dealing with wages, hours, trade practices, and other provisions. These 
ajid other matters are canvassed not only in terms of the materials to be fcund 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 Cojiiaerce in typewritten forji. 
All told, approximately eight hundred and fifty (850) histories will be completed. This 
number includes all of the approved cod33 zr.i some of the unapproved codes. (In Work M ate- 
rials No. 18, Contents of Code Histories , will be found the outline which governed the 
preparation of Code Histories. ) 

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



- li - 

set forth the origination of the code, the sponsoring group, the evidence advanced to sup- 
port the proposal, the report of the Division of Research and Planning on the industry, the 
recommendations of the various Advisory Boards, certain types of official correspondence, 
the transcript of the formal hearing, and other pertinent matter. There is also much offi- 
cial information relating to aunendments, 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 ffork of the Division of Review a considerable number of studies and compilations 
of data (other than those noted below in the Evidence Studies Series and the Statistical 
Material Series) have been made. These are listed below, grcuped according to the char- 
acter of the material. (In Work M aterials No. 17, T entative O utlines and Summaries of 
S tudies in P rocess , these materials are fully described). 

Industry Studies 

Automobile Industry, An Economic Survey of 

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

Electrical Manufacturing Industry, The 

Fertilizer Industry, The 

Fishery Industry and the Fishery Codes 

Fishermen and Fishing Craft, Earnings of 

Foreign Trade under the National Industrial Recovery Act 

Part A - Competitive Position of the United States in International Trade 1927-29 through 

1934. 
Part B - Section 3 (e) of NIRA and its administration. 
Part C - Imports and Importing under NRA Codes. 
Part D - Exports and Exporting under NRA Codes. 

Forest Products Industries. Foreign Trade Study of the 

Iron and Steel Industry, The 

Knitting Industries, The 

Leather and Shoe Industries. The 

Lumber and Timber Products Industry. Economic Problems of the 

Men's Clothing Industry. The 

Millinery Industry. The 

Motion Picture Industry, The 

Migration of Industry, The: The Shift of Twenty-Five Needle Trades Froji 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 Yams and Fabrics 

Tobacco Industry, The 

Wholesale Trades Study, The 

Women's Neckwear and Scarf Industry, Financial and Labor Data on 

9768—2 



< $0 



- iii - 

Women's Apparel Industry, Some Aspects of the 

Trade Prac tice Studies 

Commodities, Informaticn Concerning; A Study of NRA and Related Experiences in Control 
Distribution, Manufacturers' Control of: Trade Practice Provisions in Selected NRA Codes 
Distributive Relations in the Asbestos Industry 
Design Piracy: The Problem and Its Treatment Under NRA Codes 
Electrical Mfg. Industry: Price Filing Study 
Fertilizer Industry: Price Filing Study 

Geographical Price Relations Under Codes of Fair Competition, Control of 
Minimum Price Regulation Under Codes of Fair Competition 
Multiple Basing Point System in the Lime Industry: Operation of the 
Price Control in the Coffee Industry 
Price Filing Under NRA Codes 
Production Control in the Ice Industry 
Production Control, Case Studies in 

Resale Price Maintenance Legislation in the United States 

Retail Price Cutting, Restriction of, with special Emphasis on The Drug Industry. 
Trade Practice Rules of The Federal Trade Commission (1914-1936): A classification for 
comparison with Trade Practice Provisions of NRA Codes. 

Lg bor 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 1933-1935 

Fur Manufacturing, Commission Report on Wa-es and Hours in 

Hours and Wages in Americaij Industry 

Labor Program Under the National Industrial Recovery Act, The 

Part A. Introduction 

Part B. Control of Hours and Reemployment 

Part C. Control of Wages 

Part D. Control of Other Conditions of Employment 

Part E. Section 7(a) of the Recovery Act 
Materials in the Field of Industrial Relations 
PRA Census of Employment, June, October, 1933 
Puerto Rico Needlework, Homeworkers Survey 

Adm inistrative Stu d ies 

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

Administrative Interpretations of NRA Codec 

Administrative Law and Procedure under the NIRA 

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

Approve Codes in Industry Groups, Classification of 

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

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

9768 — 2. 



Part C. Activities of the Code Authorities 

Part D. Code Authority Finances 

Part E. Summary and Evaluation 

Code Compliance Activities of the NRA 

Code Making Program of the NRA in the Territories, The 

Code Provisions and Related Subjects, Policy Statements Concerning 

Content of NIRA Administrative Legislation 

Part A. Executive and Administrative Orders 

Part B. Labor Provisions in the Codes 

Part C. Trade Practice Provisions in the Codes 

Part D. Administrative Provisions in the Codes 

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

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

Model Code and Model Provisions for Codes, Development of 

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

President's Reemployment Agreement, The 

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

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

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

Legal Studies 

Anti-Trust Laws and Unfair Competition 

Collective Bargaining Agreements, the Right of Individual Employees 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. 



lUE EVIDENCE STUDIES SERIES 

The Evidence Studies were originally undertaken to gather material for pending court 
cases. After the Scheohter decision the project tias continued in order to assemble data for 
use in connection with the studies of the Division of Review. The data are particularly 
concerned «ith the nature, size and operations of the industry; and ffith 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 ol workers under codes. The list ol those studies 
follows. 



Automobile Manufacturing Industry 
Automotive Parts and Equipment Industry 
Baking Industry 

Boot and Shoe Manufacturing Industry 
Bottled Soft Drink Industry 
Builders' Supplies Industry 
Canning Industry 
Chemical Manufacturing Industry 
Cigar Manufacturing Industry 
Coat and Suit Industry 
Construction Industry 
Cotton Garment Industry 
Dress Manufacturing Industry 
Electrical Contracting Industry 
Electrical Manufacturing Industry 
Fabricated Metal Products Mfg. and Metal Fin- 
ishing and Metal Coating Industry 
Fishery Industry 

Furniture Manufacturing Industry 
General Contractors Industry 
Graphic Arts Industry 
Gray Iron Foundry Industry 
Hosiery Industry 

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



Leather Industry 

Lumber and Timber Products Industry 
Mason Contractors Industry 
Men's Clothing Industry 
Motion Picture Industry 
Motor Vehicle Retailing Trade 
Needlework Industry of Puerto Rico 
Painting and Paperhanging Industry 
Photo Engraving Industry 
Plumbing Contracting Industry 
Retail Lumber Industry 
Retail Trade Industry 

Retail Tire and Battery Trade Industry 
Rubber Manufacturing Industry 
Rubber Tire Manufacturing Industry 
Shipbuilding Industry 
Silk Textile Industry 
Structural Clay Products Industry 
Throwing Industry 
Trucking Industry 
Waste Materials Industry 
Wholesale and Retail Food Industry 
Wholesale Fresh Fruit and Vegetable Indus- 
try 
Wool Textile Industry 



THE STATISTICAL MATERIALS SERIES 



This series is supplementary to the Evidence Studies Series. The reports include data 
on establishments, firms, employment, payrolls, wages, hours, production capacities, ship- 
ments, sales, consumption, stocks, prices, material costs, failures, exports and imports. 
They also include notes on the principal qualifications that should be observed in using the 
aata, the technical methods emplcyed, and the applicability of the material to the study of 
the industries concerned. The following numbers appear in the series: 
976B— 5. 



- vi - 

Asphalt Shingle and Roofing Industry Fertilizer Industry- 
Business Furniture Funeral Supply Industry 
Candy Manufacturing Industry Glass Container Industry 
Carpet and Rug Industry Ice Manufacturing Industry 
Cement Industry Knitted Outerwear Industry 
Cleaning and Dyeing Trade Paint, Varnish, and Lacquer, Mfg. Industry 
Coffee Industry Plumbing Fixtures Industry 

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

Cotton Textile Industry Salt Producing Industry 
Electrical Manufacturing Industry 

THE COVERAGE 

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

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

Notwithstanding these limitations, if the files are ultimately consolidated and in- 
dexed the exploration of the NRA materials will have been sufficient to make them accessiblo 
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 .