(navigation image)
Home American Libraries | Canadian Libraries | Universal Library | Community Texts | Project Gutenberg | Children's Library | Biodiversity Heritage Library | Additional Collections
Search: Advanced Search
Anonymous User (login or join us)
Upload
See other formats

Full text of "Work materials ..."

Li BOSTON PUBLIC LIBRARY / Q 

I 3 9999 06542 006 7 



NATIONAL RECOVERY ADMINISTRATION 
DIVISION OF REVIEW 



WORK MATERIALS NO. 17 



TENTATIVE OUTLINES AND SUMMARIES OF STUDIES IN PROCESS 



PART D: ADMINISTRATIVE STUDIES 



Work Materials No. 17 falls into the following parts: 




Part A 


Industry Studies 


Part B 


Labor Studies 


Part C 


Trade Practice Studies 


Part D- 


Administrative Studies 


Part E 


Legal Studies 


Part F: 


Contributory Materials 







> >\ > J' 



> i ^ i 1 t J, t * * ' 

' ' 1 ; ' > > > > > ,' ' , 



J i 



J t J t J 



* , > 



' ' ' ; ' 1 t > > I 1 > 



N 



December, 1935 



: .• : ; .• • * 



CONFIDEITTIAL 

1/iEMORMDUM TO: ' SECTION HEADS DecemlDer 30 

19 3 5 
SUBJECT: WOSK MATERIALS NO. 17 

TENTATIVE OUTLINES AND SUiAlAHlES OF STUDIES IN PilOCESS 



In order th^it those working on' one ^tudy may secare access to 
allied materials in other studies, these TENTATIVE OUTLINES AND SUM- 
MARIES are made availalole for confidential use within the Division 
of Review. ' • 

Since these docuiaents were prepared from work that is now in 
process, they are highly tentative. The outlines are the present 
operative ta"bles of contents of the studies, but' they are of course 
subject to change as the work progresses. The •sui.imaries are, in 
some cases, forecasts rather than actual summaries of developed manu- 
scripts. Notwithstanding their tentative character, tne documents 
will serve to indicate in some 'detail the subject matter of the studies 
now in process in the division. No one ?/ill think of these materials 
as "findings" or "reports" in the usual sense of those terms. 

It is expected that these TENTATIVE OUTLINES AND SUMMARIES 
will result in many conferences, both formal and informal, ajnong 
those working on the studies — to the ends that effective coordina- 
tion of the studies may occur and duplication of effort will be 
reduced to a minimum. 

L. C. Marshall 
Director, Division of Review 



1 3 Wl;; 35 g 

9347 -i- 



STUDY SECTICIIS OF THS DIVISION OF REVIEW 



Administrative Studies 

II.Pl. A. organization William Tf. Bardsley, Coordinator 

Code Administration Harry Weiss, Coordinator 



Foreign Trade Studies Section H. D. G-reshain, Coordinator 

Industry Studies Section M. D. Vincent , Coordinator 

La"bor Studies Section A. Ho v/ard Myers, Coordinator 



Legal Studies Section Angus Roy Shannon, Coordinator 

Enforcement Studies R. S. Denvir, Coordinator 

Research Studies G. "W. Kretzinger, Jr., Coordinator 



Special Studies Section C-. C. G-amble, Coordinator 

Statistics Study Section W. J. Maguire, Coordinator 

Trade practice Studies Section Corvrin Edwards, Coordinator 



Decemter, 1935. 



9347 -ii- 



JT. -B. A. DRGAinZATION STUDIES 

.... . . . ■ . . - ■ ■ Page 

AGHEEMEIITS UlIDER SECTIONS 4(a) and 7(b) OE THE 
MTIOIJAL MD^SIRIAL EEC.OVERY. ACT. .-• (-C. A. Bdblin) 

. TaT^^eo.f Coatents. •....*•.■.■...•.. 408 

Sxunmaiy 410 

AMEmnHMTS - (p.. L..Boland) . ■ ■ 

Table of Contents 412 

Summary , »..:.%..,. 417 

BASIC CODE,' THE. " (ADMINISTRiVTIVE. ORDER- X-ei) •■ •• •■ 

(W. H.'Edmondp & U. \I, Smft) . • ■ 

_ Table of. Contents ;« i .-. i 418 

Summary, , , , 419 

CLASSiEiCATioiI OF IITDUSTRY IvIElvIBERS - (C. Carl Eink) 

Table 9f , Contents ,.. 420 

Summary ,....;..•.;.•;. 424 

COiro I T i 6ml ' ORDERS " OF APPROVAL - ( V/ . hU Chubb ) 

Table of Contents 426 

Summary 430 

DEVELOPMEiTT AlTD APPLICATION OF H.RcA. POLICIES - (¥. W. Swift) 

Table of Contents 432 

Summary 433 

DEVELOPMNT OF THE MODEL CODE AI\rD MODEL PROVISIONS - (Harry Mulkey) 

.... Table of Contents ■ 434 

Summary. ■........• 436 

DUE PROCESS OF- LAW AND DELEGATION OF POTOR IN THE N.R.A. - 
(Paul. Aiken) 

Table of Contents 437 

. . Summary 439 

EXS.IPTION.S. AITD EXCEPTIONS - (D. L, Bo land) 

Table of Contents * 442 

.Sujijmary 447 

GOVERMvIENT .CONTRiiCTS -.(J. D. Hill) ■ • • 

Table of , Contents .■.•..-....• 449 

Summary 450 

INTERPRETATIONS AKD EXPLANATIONS - (D. L. Boland) 

Table of Contents 452 

Summary., 456 

MULTIPLE CODE .COVERAGE .-. .(-E. -C- Hutchinson) 

Table of Contents 458 

Summary 460 

N.R.A. COMPLIAN.CE ACTIVITIES -■ (F-ra.nlc Hursey) 

Table of Contents 462 

Sujnmary 465 

N.R.A. INSIGNIA .- (T/.. M.. Duvall.) 

Table ojT .Contents.. ....... ^ ,-. ^ 467 

Summary. . 469 

N.R.A., THE:.. AN fIJSTORICAL RE VIETT AND. APPRAISAL - (P. J. Taft) 

Table of Contents 470 

OVERLAPPING CprE PEJTINITIONS.- (E. C. -Hutchinson) 

Table, of. Contents ;....;;;;;...; 475 

Summary 460 

PRESIDENT'S REEllPLpYMSNT AGREEMENT, THE -.(H*C. Hoover) 

'Table of. Contents ; 477 

Summary . . • 482 



9453 



^111-- 



PEISON CCMPETITIOH AND THE PRISON COMPACT - (V. J. Clarke) "^^ 

Table of Contents * 14 483 

Summary* i . » » * . . » * . * i » 486 

SHELTERED WORKSHOPS - (Leo a. Cyr) 

Table of Contents 488 

S'ummary ......'.....,".. 490 

STATE AIID IvIUNICIPAL RELATIONS WITH "N.R.A. - (Hobart Nevvman) 

Table of Contents 491 

STAYS - (D. L. 'Boland) • ' ' ' 

Table of Conterits. .-. . .".'. '....." ' 493 

Sinnmary 497 

TERRITORIAL COLES AND AGREEMENTS - (F. J. Dafficy) 

Table of Contents.'. . .■.'.. 498 

•Summary. . . .-, .-. .■.■.•. . . . .... . .'. . . .' "..... 502 

UNCODIFIED INDUSTRIES - (K. B. Fit zge rail) 

■ Table of Contents .....'.' "...'.'..... 504 

■ Summary 508 

•■**#)|<H( 



CODE Ara.lINI STRATI ON 'STUDIES 



ADMINISTRATION -OF LABOR PROVISIONS BY "CODE 'AUTHORl'TIES ~ ' ' 
(R. M. Wilmotte) 

■Table of Contents.'. ..•.■.■.■.■...■..■.'.'.■.■..'.'.'.'.'. .' _.. 510 

■Summary. .'..•.■..."."..■..".'.'.■.'.'.'.'.'..'.'.'..'.' 512 

ADMINISTRATION OF TRADE PRACTICE PROVISIONS BY CODE AUTHORI- 
TIES - (J. W. Mackenzie) 

■Table -ef •CDnt'ents'.-.'.'.*.. .'..■.■.'. .. .'.■.■.■.*.■.■.■.'.'. 513 

CODE AUTHORI^TY F-INMT<:B -■ (H.' P. Vose) ' • ' . ■■' ' 

Table of Contents '...'. 519 

Summa-ry-.'. .•.'.•.•.•.•...■.'.'.■. .'. .'.■.■.'.■.■.'.'.'.■.'.'.*." 521 

COMPOSITION- OF CO^l AUTHORITIES" -• (K^'U'.' Filmb'fte)' 

Tab: c ■-.! 'Contents . . . '. • 524 

Summary .■..■.•.-.. '....■..■....,......■.'.'.. 526 

LABOR COMPLIAITCS ACIIVITIES OP CODE AUTHORITIES -' (A. R. Cleary) 

Table of ■Content s ■...'. 530 

LEGAL ASPECTS- OF THE CODE AUTHORITY - (R. li. " Wilmotte) 

Table- of Contents .;.....!............ 533 

Summary ', 534 

OPERATING RELATIONSHIPS -OF CODE AUTHORITIES AND TRADE 
ASSOCIATIONS-- (R. M. Wilmotte) ' ' ' 

Table of Contents 536 

ORGANIZABILITY -OF INDUSTRY FOR CODE ADMINISTRATION - (Alfred ^ 

Caiien) • • . 

Table of Contents 537 

Summary ...-.•.•.•.•..• ■..■.....' 540 

ORGAITIZATION OF GODS -AUTHORITIES - (R. M.' Wilmotte) 

Table of Contents 529 

ORIGIN OF TEE CODE AUTHORITY - (Travis Brdvm) 

Table of Contents '. . .' 542 

Summary. .■.■.■.•.■.-.•.... '. .'. 544 

STATISTICAL AND RESEARCH ACTIVITIES OF CODE' AUTHORITIES - (H. P. Vose) 

Table of Contents 546 

Summary ■ '. . ' 551 

TRADE PRACTICE COLIPLIANCE ACTIVITIES OF' CODE AUTHORITIES - 
(J. W. MacKenzie) 

Table of Contents 553 

9453 -iv- 



-403- 



AG BEEI.1ENTS UIirER SECTIONS 4(a) and 7(1d) 
OF THE NATIONAL INDUSTRIAL RECOVEPIY ACT 

Table of Contents 

■ . CHAPTER I. INT?RODUCTION 

I. ScQ-je of Study 

II. Codes and Agreements Distinguished 

CHAPTER II. SECTION 4(a) 

I. Provisions 

II. purposes 

CHAPTER III. PRESIDENT'S REELPLOYI'^NT AGREEMENT 

I. C-eneral Discussion 

II. Origin and purpose 

III. Appl i cat i on 

IV. Duration 

V. provisions 

VI. Subsequent Departures From Basic Provisions 

VII. Recapitulation 

CHAPTER IV. OTHER AGREMENTS UNDER SECTION 4(a) 

I. Service Trade Agreements 

II. Territorial Agreements 

III. prisoii Compact 

IV. Agreement Between Tire Manufacturers and Distrilnitors 

V. Captive Mines Agreement 

CHAPTER V. ENTORCEMENT OF 4(a) AGREEliElWS 

I, Leans Provided "by the Act 

II. Methods Adopted by N.R.A. 

A« Use of Blue Eagle Emblem 

B. H.R.A. Label 

C. C-overnment Contracts 



9453 



t,-' 



-409- 

III. Judicial Enforcement in Behalf of Individuals 

A. Collective Bargaining Provisions of Section 7(a) 
3. Suits for Back Wages 

IV. Legal Helati on ship of Signatories to the T.R.A. to: 
A. The president 
16. "Hach Other 
C. Third parties 

CHAPTER VI. SECTION 7(1d) 

I. Scope of Agreements Approved Under Section 7("b) 
A. Arahiguity of Section 
3. Legislative Intent 
C. N.H.A* Interpretations 

II. Distinguishing Characteristics of 4(a) and 7(1:) Agreements 

CHAPTER VII. EXTENT OIT UTILIZATIOiT OF SECTION 7(b) 

I. Ai'ea Agreements Under the Construction Code 

II. The jippalachian Agreement in the Bituminous Coal Industry 

CHAPTER VIII. EFFECT OF SCHECHTSR DECISION 
UPON SECTIONS 4(a) AJID 7(b) 

CHAPTER IX. PROPOSED VOLUNTARY AGREKuENTS UNDER 4( a) OF AI.'IENDED ACT 

CHAPTER X. FINDINGS AND CONCLUSIONS 

CHAPTER XI. SUGGESTIONS AND REC0M.2NDATI0NS 



9453 



-41U- 

ACrREEMEirrS miDER SECTIONS 4(a) AI T D 7Cb ) 
OF THE ITATIONAL IKDUST.RIAL RECOVERY ACT 

p r el ill! i nary S^jimmary of Ein dings 

The fornralation and administration of "volunt?ry" and "mutual" 
agreements, pursuant to Sections 4(a) and 7(13) of Title I of the National 
Industrial Recovery Act, constituted a phase of N.R.A. activity which was 
incidentc,l or supplementary to the major phases of code-making and code 
admini st rat i on,. 

Section 4(a) of the Act afforded "broad possitilities for various 
types of voluntary agreements, and such possibilities were freely 
utilized. 

The voluntary agreements promulgated under the authority granted in 
Section 4(a) aided to some extent in the attainment of N.R.A, olDJectives, 
the president's Reemployment Agreement having played a most conspicuous 
role. 

The effectiveness of voluntary agreements under Section 4(a) would 
have "been considerably enhanced "but for errors of administrative procedure 
and policy and lack of a statutory means for enforcing compliance. 

Voluntary agreements such as were provided for under the Act cannot 
be relied upon exclusively as a solution to the problems that gave birth 
to N.R.A. 

The agreement provision of Section 7(b) afforded limited possibili- 
ties in comparison with Section 4(a), since it only authorized the estab- 
lisbnenfof labor standards by means of collective bargaining agreements 
in those industries where collective bargaining was already recognized 
and established. 

Section 7(b) was put to considerable use under the codes for the 
Bituininous Coal Industry and the Construction Industry; and as a conse- 
quence tiiC number of wage earners working under collective bargaining 
agreeiients negotiated in their behalf by labor unions increased consid- 
erably under N.R.A. 

Section 7(b), by prescribing the same penalties for violation of 
collective bargaining agreements as were applicable to code violations, 
had tne effect of vesting such agreements with a legal status that did 
not exist prior to N.R.A, 

Area, agreements under the Basic Code for the Construction Industry 
were confined to the building trades crafts, where labor was well organized, 
and also were limited in application mainly to metropolitan areas, where 
labor unions were most powerful. 



9453 



-ill- 
outstanding inpediments to a more coMulete success of the area 
agreement program tmder the Construction Code were: 

(a) Lack of a clearly-defined adiainistrative policy regarding 
numerous questions which arose in connection vrith them. 

("b) Failure on the part of N.R.A. to give wider encouragement 
to the handling of later problems "by means of collective 
agreements. 

Section 7("b) was more extensively resorted to and achieved its 
greatest prominence in the Eituaainous Coal Jndustry, The Appalachian 
Agreement in the latter undeniably proved a potent factor in inducing 
and maintaining united action on the part of labor and management, and 
enabled nine workers throughout the industry to secure higher wages and 
better working conditions than had previously been their lot. 



9453 



Table of Contents 

I, Introduction 

A. Objective and Scope of Study 

II. Pertinent Provisions of the Act 

A, Section 3 (a) 

B, Sections 10 (a) and 10 (b) 

C, Ao-plication of Sections 5(a), 10(a) and 10(b) to Sections 
4," 7(b) and 7(c) 

D» Le^al Aspects of Power Conferred 

E» Limitations, if any, upon the President 

III. Definitions of "Amendment" 

A. Popular Definition 

B. Administrative Definition : 
C« Relation to Term "Modification" 

IV» Delegation of Authority to Approve Amendments 

A. Delegation to the Administrator 

B. Delegation to the National Industrial Recovery Board 

C. Retention "qj President 
D» Joint Authority 

1, Agricultural Adjustment Administra.tion 

2. Federal Alcohol Control Administration 
E» Re-delegation by Administrator or IT, I.R.B. 

1, Delegation to Division Administrators 

2, Delegation to Territorial Administrators 

3, Limitations and Rec[uireraents with Respect to Delegation 

Y» Methods of Amendment 

A« 3y General Executive or Administrative Order 

1« Affecting all Codes 

2. Affecting more than one Code 
B» Specific Amendment of a Code 

1. On Industry/ Application 

2. On Labor Application 

3. By Government Action 

C. Legal Aspects of Amendment 

D, Code Limitations on Method of Amendment 
1» Necessity of Assent of Industry?' 

2, Non-waivT?r of Constitutional Rights 

VI, TjTpes of Codes Subject to Amendment 

A* president's Reemployment Agreement 

1» General - Necessity of Assent 

2. Substituted Provisions 
B, Codes under Sections 3(a) and 3(d) of the Act 
C« Labor Agreements under Section 7(b) 
D« Rules and Regulations Having Effect of a Code 



453 



-413- 

VII, General Amendi.ient of all Coaes ^j Executive or Aoministrative' 
Order 
A» Purooses 

1« To Obtain Adjustment to Policy 

2, In the Interest of Legality 

3, In the Interest of Clarity 

4, To Eliminate Conflict with other Laws or Governmental 
Agencies 

5, Other Purposes 

B. Effects: 

1» On Q-eneral Code Structure 

2, On Industry 
3» On Labor 

4, On Consumers 

VIII* Initiation by National Recovery Adi-iinistration of Specific Amendment 
of a Code 

A. Purposes 

!• To Obtain Adjustment to Policy 

2« In the Interest of Legality 

3, To Elim.inate Code Administration difficulties 

4, To Facilitate Compliance 

5, To Eacilitate Enforcement 

6, To Brin;^ About Recognition of Protesting Groups 

7, To Eliminate Overlapping Definitions 

8, In the Interest of Clarity and Draftsmanship 

9, To Increase the Uee of Exemptions 

10, To Eliminate Provisions ITot Susceptible to Interpretation 
11» To Maintain the Industrial Balance Geographically 

12, To Simplify Code Structure 

13, To Modify Code Authority Set-up 

14, To Limit or Enlarge Code Authority Powers 

15, Other Purposes 

B, Discussion of Viewpoint th-^t an Application for Amendment 
Opens Entire Code for Administrative Study and Revision . 

1, Pur-Qoses 

2, Effects 

IX. Analysis of Applications and Amendments v/ith respect to: 

A, Code Definitions of: 

1, Industry or its Subdivisions 

2, Members of Industry and Classifications 

3, Distribution Agencies 

4, Commodities 

B, Labor Provisions 
1» I.iaximum Hours 

2, Minimum Images 

3, Child Labor 

4, Apprentice Limitations 

5, Handicapped Workers 

6, Standards of Safety and Health 

7, Home^vork 

. 8, Stretch-out 



9453 



:xs^ 



9, Scrip Pa3Tii3nts 

10, Equitable Ad.just;nent of Wages above Liniimim 

11. Posting 

1?. Collective Bargaining 
13» Miscellaneous 

14, Development of Labor Policy 

15, Legal Aspects 

16, Evaluation of Experiences 
C« Trade Practice Provisions 

1, General 

2, Price Policies, Including Bid Depositorj'-Sj'-s terns 
D, Code Authority Provisions 

1, Necessity for Amendment 

2, Eights of Code Authority 

3, Obligations and Duties of Code Authority 

4, Inclusion of Suggestions and Regulations of N.R.A. 
5» Legality of Procedure 

6, Policy Involved in Amendment 
7^ Finances 

8« Incorporation of Code Authorities 
9, Trade Association Participation 
E« Label Provisions 

1, necessity for Use of La,bels 

2, Tj^es of Amendment Submitted 

3, Types of Industries Submitting Amendments 
F« Statistical Reports 

1, Executive Order of December 7, 1933, Requiring the 
Submission of Statistical Data by Industries 

2, Types of Amendments Submitted 

G-» Conditions in Aj-nrova-l Orders of Codes a.nd Amendments 

1« AjnendjTient s Incorporating Conditions 

2, Amendments Changing Conditions 
H. iiiscelle.neous Amendments to Codes 

X, Effective Periods of Amendments 

A, Duration of Act 

B, Duration of Code 

C, Temporary 

D, Emergency 

XI. Governmental Orders Affecting Amendments 

A. Executive and Administrative Orders of General Application 

B, Orders of Approval 

1. Of Codes' 

2, Of Amendments 

XII, Procedure in Effecting Amendments 
A, Application by; 

1, Industry Member 

2, Industry Groups 

3, Code Authority 

4, K.R.A. 

5, Government Agencies other than N.R.A. 

6, Labor 



9453 



-415- 

3. Consideration of AiTolicaticn 

1, Consideration "by: 

(a) Deputy Adiainistr-^tors 

i'b) Advisory Boards 

(c) Reseerch and PlanriiHe? Livision 

(d) Legal Division 

(e) AdT.iiniGtr-': tion IIem"bers and Code Authority 

(f) ?.evien Division 

(g) Division Administrators 

(h) president and ImiLediate Suboi dinates 
(i) II.H.A. Field Offices 

2, Extent of Consideration 
C. Dp.e Process Puequireinents 

1« Applications Given Public Hearing 

2, Applications Published in a notice of "Opportunity 
to be Heard" 

3, Application Eeceiving No Riblic Consideration 

4, General Legal Aspects 
D» Pinal Action 

1, Form 

2, Notice 

E, Analysis of Procedure and Tine ConsuTied in Handling 
Amendment Applications 
1» Interoffice 

2, Intraoffice 

3, Field Offices 

4, Due Process 

5, Extra - N.RrA. Reference 

6, Effect of Policy Palings 

7, Protests 

8, Comparison \vith Procedure of Other Government Agencies 

9, Causes of Delay 
10, Effects of Delay 

XIII, Analysis of Amendments 

A. Submitted by Private Groiips: Effects upon: 

1, Codes 

2, Industries 

3, Labor 

4, Ccns'Limers 

3. Initiated by N.R.A. : Effects upon: 

1, Industries 

2, Lab^r 

3, H.H.A, 

4, Consumers 

XIV» Substantive Problems Involved in Amendments 

A, Hhat rights of sponsorship of amendments should be grsjited? 
B« Uhat Consideration of Amendments Should be Afforded In~ 

d\T.stry and Labor by IJ.R.A.? 
C. Should the Po'ver of General Amendment of all Qodes be 

Utilized? 
D# Faat Participation should Industry mid. Labor Have in the 

Issuance of Orders of General Amendment? 



H53 



^-41 6- 

E« What Requirements of Due process should "be Adhered 

to "b^^ NoR.A. ? 
F. Should N.R.A, Institute Ajnendments on its 0\7n Motion? 
On, Effect of Amendments on Priorly Granted Exemptions 
H» Should Field Offices "be Granted Power to Amend Codes? 
!• Should N.E.A. open a Code for General Revision Upon the 

Submission of an Applico,tion for a Specific Amendment? 

XV# Effect of Amendments upon: 

A. Code Structure 

B» Declared 'Purposes of Act 

C. Large Business Units 

D« Small Enterprises 

E, Monopolies 

F, II.R.A. Policy 

G, Legality of Codes 
H» Industry 

I, Lator 

J. Consui.iers 

XVI, Evaluation 

XVII, Conclusions 

XVIII, Bibliography 



453 



-417- 

Al;Ein)i3ITTS 
Pr eliminar:/- S-ur.i5rU-y of Fi ndings 

The power to r-jnend codes was not comoletely set forth in the Act. 

Uniformity of the use of the terms "ajnendment" and "amend" is 
important to proper administration and application of policy* 

An analysis of amendments of wage and hour provisions dhows that a 
majority increased maximum hours, "but also increased miniLnim wages. 

Practically all amendments of Code Authority provisions involved 
N,R,A» policy and regulations. A n-omter of amendment's dealt with the 
following subjects: 

(a) Election of representatives of nev; groups and geographical 

sub-divisions to Code Authorities© 

("b) Changes in methods of election to promote representative 
character of the Code Authority. 

(c) Prevention of trade association domination. 

Sixty-seven codes rere amended as to the definition of the industry 
or trade or of its products, or of a meml^er of the industry or trade. 

Any new legislation should contain adequr,te reference to the power 
of amendment of codes or voluntary agreements, and its exercise "by proper 
authority'- at any time. 

The exercise of the power of amendment should "be subject to legis- 
lative limitations of discretion, which should "be declared in the form 
of standards. 

'^Aroendment" should he defined in nev; legislation. 

Delegation of the power of amendment to sjiy lesser official than 
the Administrator of the Act should "be legislatively prohibited. 

The power of amendment by general Executive or Administrative Order 
should be adequately provided for. 

Conditional orders of approval, as a m.ethoa of amendment, should 
be limited to cases where the condition bears a relation to the policy 
of the Act. 



9453 



-418- 

THE BASIC CO DE (ADL IIII3TRATIVE OKOaR X-6l) 
T alple of C ont ents 

CHAPTER I. N.R.A. AS A CODE-MAKIITG ORa.^ivIZATION 

!• Authority for Code-lvlaking in the National Industrial Recovery Act 

II. Beginning of Codo-iviaking and the President's Reemployment Agreement 

CHAPTER II. Factors LE.a)ING TO CriANGE OF POLICY 

I. Problems of Code-Making 

II • Early ProlDlems of Administration 

CHAPTER III, PLAN FOR COFiPLETION OP CODE-IvlAKING 

!• Early Developments in Formulation 

II • Final Stages in Formulation 

CHAPTER IV. PARTICULAR FEATURES OP PLAN FOR 

COt.'EPLETION OF CODE^-MAKING 

I. Labor Provisions 

II. Trade Practice Provisions 

III. Acjnini strati on through G-eneral Code Authority 

CHAPTER V. OPEHATIOH OF PLAN FOR COlwPLETIOlT 

OF CCDE-^kAICING- 

I. Procedure 

II. Industries Excepted 

III. Discussion of Results Obtained 

CHAPTER VI. FIltDING AND CONCLUSIONS 



9453 



-419-" 



THE BASIC COEE (ADkINISTR.:.TIVE ORDER X-6l) 



Preliminary Siammary of FindiriiSis 



The finding reached as a result of this study are: 

(1) The Basic Code was unsuccessful in acconrplishing its purpose - 
the completion of code making. 

(2) Its timing vr^s ill-advised, and it should have heen initiated 
much earlier in the process of code-writing. 

(3) A thorough, accurate and comprehensive classification of 
industry in advance of the endeavor would have aided the 
campaign materially. 

The study also suggests the recommendation, in the event of new legisla- 
tion contemplating the formulation of codes or similar instruments for the 
control of industry, that a plan for the grouping of the smaller industries 
under codes with identical "o revisions, such as was contemplated "by Adminis- 
trative Order No. X-61, should he formulated in the early stages. It- 
seems reasonahle to supcose that such a plan, timed in this manner, would 
serve as an effective complement to the condif ication of the major indus- 
tries, and would reduce the numher of individual codes to a minimum. 



9453 



-420- 

CLA3SIFICATI0N OF INDUSTR Y IAEM3ERS 

T able of Contents ' ' ' 

I. Introduction 

II. pertinent Provisions of the Act 
A. Sections 3, 4, and 7 
3. Other Provisions 

III. Definition of "Classification of Industry Members" 
A. T^npical Cases 

IV. Causes of Requests for Classification 

A. Lack of Knowledge of N.R.A. by Persons Affected 

B. Wording of Code Definitions 

1, Definitions of lypes and Forms of Industry 

2, Definitions of Forms of Production 

3, Definitions of Forms of Products and By-Products 

4, Definitions of Forras of Trade 

5, Definitions of Member of Industry 

6, Definitions of Methods of Distribution 

7, Definitions of Types of Distributors; 

(a) Who Took Title to Goods? 

(b) Who Did Not Take Title to Goods? 

8, General Definitions 
S, Other Definitions 

C. Multiple Code Coverage 

1. Defined , . . 

2, Reflected 'by Inability and/or Failure of Industry Members to 
Adjust Activities to Conform to Providions of T^70 or More Codes 

D. Executive and Administrative Orders, as a-oT)lied to; 

1, Contracts 

2, Towns of 2500 or Less 

3, Joint Codes 

4, Service Trades 

5, Cooperatives 

6, N.R.A. Basic Code 

7, Sheltered Workshops 

8, Administrative Order X-36, Relating to Assessments 

V. Motives for Requests for Classification, as Found in; 

A. Labor Provisions 

1. Hours 

2. Wages 

3. Posting of Labor Provisions 

4. Labor Agreements 

5. Others 

B, Provisions for Use of Insignia 
1, Labels 

C# Code Authority Provisions • * 

1. Assessments 

2. Statistics 

D, TracTe Practice Provisions '• ' 

E, Price Filing Provisions 

F, Government Contracts 
9453 



-421- 

C-. Compliance and Enforcement 

H. Ar.iendments, Stays, and Exemptions 

VI. Action Taken by N.R.A. : Early Classification Activities 

A. 'j^j Deputy Administrators 

B. B3' Field Offices 

1, District Compliance Directors 

2, District and State Recovery Boards 

3, Com"oliance Boards 

C. General Discussion 

VII. Development of Orderly Procedure and Administration Activities TTith 
Respect to Classification 

A. Necessity Therefor, Arising from: 

1. Growth in Number of AT)\-)roved P.R.A. Substitutions 

2. Increasing Number of Approved Codes 

3, Lack of Coordination of the Various N.R.A. Units 

4, Lac): of Precedent 

B. Origin of Requests for Classification 

1, Industry or Trade Member or Representative 

2, Industry or Trade Group or Representative 

3, Code Authority 

4, N.R.A. 

5, Labor Groups 

S. Other Government Agencies 

C. Request Directed to: 

1, ' N.R.A. 

2, Field Offices 

3, Code Authorities 

D. Consideration of Requests by N.R.A. 

1. Disposition by Explanation 

2, Requests Requiring Formal Action 
E, : Due Process and Procedure Thereunder 

1. Notice to Ap'jlicant 

2. Notice to Code Authorities 
5, Notice to Industry Members 

4, Notice to Labor 

5, Notice to All Other Interested Parties 

F, Right of Appea.1 by 

1. Industry ' • 

2. Labor 

3. Code Authority 
■4. Other 

G. Final Actions 

1. Form 

2. Notices and to 7hori Sent 
H. General Discussion 

VIII, Substantive Problems Involved in Classification 

A. Classification by Code Authority 

1. Authorized by Codes 

2. Authorized by N.R.A. Policy 

B. Classification by Industry 

1. Authorized by Code 

2. Authorized by N.R.A. Policy 

9453 



-422- 

C. Should Authority to Malce Classifications "be Granted to N.R.A. 
Field Offices, and Under Tnat Conditions? 

D. G-roirps or Individuals Sioonsoring Requests 

1. Labor 

2. Industry 

3. N. n. A. 

4. Others 

E. Should Determination of Classifications be l^^-de Without Hearing, 
Public or Informal? 

F. Should Affected Parties be G-iven Ri=-ht to Aooeal? 

1. Industry 

2. Labor 

3. Code Authorities 

G. IM.E.A. Rulings 

1, precedents Established and Binding on All Parties Similarly 
Affected 

2, Retroactive 

3, Temporary 

4, Modifications 

5, Terminations 

5, General Legal Aspects 

H« Rights and Obligations of Pnrtios Involved 

1, Prior to Application 

2, Pending Determination 

3, IThere Violation is Involved 

4, Ignorance of Question 

5, Honest Doubt 

6, Where Delay is Sought 

IX. Effects of Classification w'ith Respect to 

A. Indus try 

B. Labor 

C» Consumer 

D, Government and State Agencies 

E, T;j^es of Actions Under Codes 

1, Amendments and Modifications 

2, Stays « 

3, Exemptions 

4, Interpretations 

5, Code Suspensions 
S, Compliance 

7, Litigation 
P. Legality 

X. Causes and Effects of Failure to Classify 

A. Causes In: 

1. Industry 

2. Code Authority 

3. N. R. A. 

4. Labor 

B. Effects On: 

1. Industry 

2, Labor 

3, Code Authority 

4. Consumer 
9453 



-423- 

5, Com'oliance and Enforce:aent 

■ 6. N.R.A. 

XI. Lval-a?.tion and Conclusion 

A. Difficulties EncoimterecL 

B. ?.e cults Obtained 

1. Favorable 

2. Unfavorable 

C. Constructive Su^'gestions 

XII. Bibliocraphy 



9453 



-424- 



CLASSIFICATIOIT 


or 


IITDi; 


rsTHY 


FJ2/IBERS 


Preliminary 


S'ojrw. 


-Avy 


of F: 


Lndine;s 



Prooler.s of classification aroc-e frova conflicts bet;?een definitions 
of industries and trades in codes. A :::ood man7/ cases occurred in Tvhich, 
because of confusion in such definitions, it v;as impossible to determine 
V7here sore concerns belonged, £.nd the code imder vrhich they should uork. 

Allied v/ith these problems v/ere those arising between industries 
and some of their individual enterprises, because of overlapninf^ defini- 
tions of industries. Still others, closely connected with the foregoing, 
are treated under Multiple Code Coverage, All these coraT^lications have 
as their oasis the lack of a comprehensive and well developed classifi- 
cation of industries. 

There was no coordinated scheme for the v/riting of codes for all 
industries, 1\To consistent plan was ever established to guide industries 
in the drafting of their definitions, and no authority was ever delegat- 
ed to any officer of the N.R.A. to formulate such a plan and to put it 
into operation, 

During the first year of its existence N.H.A, did not fully reco{^'- 
nize the seriousness of the classification problem, and made little ef- 
fort to cope with its ^causes. The policy adopted 'ay the Assistant Ad- 
minis trrtive Officer for Classification Problems failed to operate 
successfully. 

The drive to secure approved codes v/as effective, but only as a re- 
sult of sacrificing other important considerations, essential to a con- 
sistent grouping of industries rmd of trades. The net effect was a 
series of complications of such magnitude as to threaten the breakdown 
of the entire program for the rehabilitation of industry. 

The problem of classifying members of industries and trades will 
exist as long as any industrial regulation is based upon a national 
classification of industries. The establishment of proper policies o.nd 
procedure for the handling of overlap-oing code provisions and saultiple 
code coverage, however, vrauld greatly reduce the number and complexity 
of these problems. Any future legislation -nernitting codes should: 

(a) Permit the development of an industrial classification, 

(b) Provide an equitable basis for establishing and assessing code 
administration expenses, 

(c) Provide sufficient time between the approval and the effective 
dates of codes to permit the development of sound administra- 
tive plans, 

(d) Permit all interested parties to have a voice in matters of 
classification prior to code or agreement aporoval, 

(e) Require all divisions and representatives of industry to 
cooperate in the establishment of definitions and the coordina- 
tion thereof. 



9453 



-425- 

Procedure in administration should be simplified to secure executive 
action v-itli the least possible delay, and personnel should be selected v.dth 
proper qualifications for the work at hand. 



9453 



.-; -426- 

CO NDITI QIIAL ORpjKS OT APPRO VAL 
Tablv) of Contents 



PAJLT OlIE 

EXECUTIVE Aim ADMIIIISTRATIVE APPROVAL OF CODES, 
AGREEI.IE:;TS Al'lD AI.IEIO.IEIITS 

I. Introduction 

A. 3rief Orientation and E:rplanation of Scope of Study 

II. Basic Sources of SulDJect 

A. Provisions in the Act 

1. Poners conferred irDon the President 

B. Delegations of Authority of Approval to the Administrator and to 
National Industria.1 Recovery Board 

1. Authority for Dele.=5ation 

2. Reasons Leading to Delegation 

3. Executive Orders i.iaj:in,7; Delegation 

4. Reservations in Delegation 

III. Use of Conditional Approval Orders 

A. By the President 

1. First Code for which Used 

2. Other Codes for v/hich Used that Presented Unusual Circumstances 

B. B"" the Adninistrator and the national Industrial Recovery Board 

1. Tirst Code for which Used 

2. Other Codes for Ymich Used that Presented Unusual Circumstances 

IV. Development of Policy on Conditional Orders of Approval ' 

A. By L::ecutive Order 

B. By Adninistrative Order 

1. Use of provisions of Office Orders ITos. 65, 63A and. 63B, 
January 27, 1934 

C. Adninistrative Circrxi stances Attending First Use of Conditional 
Order 

1. Facts Presented and RecomnendEitions 

2. Considered "by yhom and Aiial^rsis 

3. Statement of Policy 

D. Policies, if any, Announced "by: 

1. Policy Board created hy Office Order ^'ro5, September 16, 1933 

2. Policy Boa,rd reorganized by Office Order 7r55, Janus-ry 6, 1934 

3. Policy Co:.imittee created by Office Order #58, Januarj^ 12, 1934 

4. Policy Boards created by Office Order =,^4, March 26, 1934 

5. Assistant Administrator for Policy created by Office Order #83, 
April 9, 1934 

6. Advisor^-^ Council created by Office Order #89, May 21, 1934 

V. Legal Requirements necessitating Certain Conditions 

VI. Substantive Aiialysis of Conditional Orders of Approval 
A. Codes and Aiaendrnents 

9453 



-427- 

1. Frequency of Use 

2. Code Groups vrherein Conditional Orders Lost Frequently Used 

3. Most Usual Types of Conditions in Successive Stages of 
Code taking 

4. Specific Conditional Orders P.egarded Vj Industry or Lator 
as Vitally Altering Code 

5. Evidence of Degree of Industry Assent 

(a) Specific Assent 

(b) Tacit Assent 

(c) Opposition 

5, T^'T)es of Conditions Affecting: 

(a) Hour, T7age and Other Labor Conditions 

(b) Administration 

(c) Classification 

(d) Trade Practices 

(e) Industry Reports 

(f ) Control of Production and Allocation of J5asiness 

(g) Price or Cost Accounting 
(h) Other 

B, Agreements under Section 7 (b) 

VII. Evaluation of Conditions.! Orders of Approval 

A. Justification for Use: 

1. To Avoid Approval Dela^^s 

2. To Meet Established Policy 

3. To Protect Labor Interests 

4. To Protect Consumer Interests 

5. To Protect Industrj-- Interests 

6. To Avoid Illegality 

7. Other Reasons 

B. Reaction of Industry'- and Labor V/ith Respect to: 

1. Compliance 

2. lTon~coi.TOlia-nce 

3. Enforcement - Wliere Required 

C. Compliance or Eon-Conpliance with Conditions 

1. Sta;''s, Modifications or Terminations of Conditions 

2. Extension of Specified Time Limits 

3. Efforts of N.R.A. to Enforce Compliance 

4. Effects of lTon>'Compliance 

5. Effects of Compliance 

VIII, General Conclusions and Constructive Suggestions 
IX. Bibliography 

PART TJTO 

AmilTISTRATIVE APPROVAL OP OTHER DOCUMENTS 

I. Introductory 

k. Orientation and liqplane.tion of Scope of Study 

II. Basic Source 

A. Adrainistrative Actions Setting Up Code Authority Concept 

9453 



-428- 

B. Provisions for Approvals and Dcle^'ations of Authority, with 
Liiiitations as to: 

1, "liethod of Election of Code Authorities 

2, Election of Code Authorities 

3, I^'"-Laus of Code A^.ithorities 

4, Tr&.de Practice Conplaints Plans and Cor.mittees 

5, Lahor Complaints and Disp.utes Plans aiid Committees 

6, Stays and Ibzenptions 

7, Budgets 

8, Price Systems 

9, Cost Systems 

10, Tine E::tensions for Required Actions 

11, Other Code Author it"- A^'sencies 

12, Standards of Safety and IlGclth 
13» Lists of Ha-zardous Occupations 

14. Applications for Increased Capacity 

15. Plans for Allocation of Production 

16. Classifications of C"'istomers 

17. Lov/est P.easona¥le Costs 

18. Uodel I.Iarlaips • ' ■ 

19. Miscellaneous Suojects 

III, Use of Conditional Approval Orders 
A, 3:^ the Administrator 

1, 7irst Important Ad:iinistrative Order for which Used 

2, Other IJ^'-pical Cases of Use hy the Administrator or 
Division Administrators 

: (a) Uethod of Election of Code Authorities 

(l)) Election of Code Authorities 

(c) By-Laws of Code i^^uthorities 

(d) Trade Practice Complaints Plans a-nd Committees 

(e) La"bor Complaints and Disputes Plans and Committees 

(f ) Sta^-s and Exemptions 

(g) Budgets 

(h) Price Systems 

(i) Cost S;^rstems 

(j) Time Extensions for Recfuired Actions 

(k) Other Code Authority i^gencies 

(l) Standards of Safetj^- and Health 

(m) Lists of Hazardous Occupations 

(n) Applications for Increased Capacity'- 

(o) Plans for Allocation of Production 

(p) Classifications of Customers 

(q) Lowest Reasonahle Costs 

(r) Model Marlrups 

(s) Miscellaneous Su"bjects 

IV. Development of Policy 

A. ]^r Administrative Order 

B. Policies, if any, Announced "by: 

1. Policy Board created hy Office Order #35, Septemher 18, 1933 

2. Policy Board reorganized "by Office Order 7f55, Januar;:.^ 6, 1934 

3. Policy Committee created "by Office Order ■#■58, Januar;^ 12, 1934 

4. Policy Boards created "by Office Order #74, I larch 26, 1934 

9453 



-429- 

5. Assistant Administrator for policy created "by Office Order 
#83, April 9, 1934 

6. Advisor:^ Council created "by Office Order #89, May 21, 1934 

Y, Legal lleojo-irements necessitating Certain Conditions 

VI. Substantive Analysis of All Orders of Approval of 25 Selected Codes 

A. Frequency/ of Use 

B. Classification of Adjiinistrative Actions wherein Conditional 
Orders Were Most Frequently Used 

C. Most Usual Tij'pes of Conditions in Successive Stages of 
I'IRA Development of Co6-e Administration 

1. Requiring Deletions 

2. Requiring Material Amendment 

3. Requiring Fature Actions, Other than Documentary Alterations 

D. Compliance Trith Conditions 

E. 0-oposition oy Industry to Conditions 



■'tj 



VII. Evaluation 

A. Justification for Use 

1. To Avoid Delays 

2. To Meet EstalDlished Policy 

3. To Protect La^bor Interests 

4. To Protect Consumer Interests 

5. To Protect Industr;^'- Interests 

6. To Avoid Illegality 

7. Other Reasons 

B. Reaction of Industry*- ajid Lahor with Respect to: 

1. General 

2. Compliance 

3. ilon- Compliance 

4. Enforcement, tThere Required 

C. Compliance or ITon-Compliance v/ith Conditions 

1. Sta3/-s, Modification or Termination of Conditions 

2. Extension of Specified Time Limits 

3. Efforts of II. R, A. to Enforce Compliance 

4. Effects of llon-Compliance 

5. Effects of Compliance 

VIII. General Conclusions and Constructive Suggestions 
IX. BihliograrDhsr 



9453 



rttum'rr.t 



COIIDI TIOIIAL ORDERS OF APPROVAL 
Pre liminary Symmar;^ ojf Pindin,£-s 



As a part of the process of codification it was frequently necessary 
to reconcile differences and to find means for adjusting the views of 
industrial groups to the requirenents of the l^.R.A; for the desiraliility 
of speed in getting industry'" under codes, so that people could "be put "back 
to work, was at all times in the minds of those responsilDle. Tliere v^ere 
cases where it seemed wise to provide means for approving codes, even 
though there were still differences "between IT.R.A. and the industries in- 
volved. Similar situs-tions developed v;ith respect to the adi.iinistration 
of codes previously approved. 

Among the devices used in these cases were amendments, exemptions, 
stays, interpretations and conditional orders of approval. This study 
deals exclusively with the last named tjoe, since the others have "been made 
the su"bject of separate reports. 

Conditional orders of approval were applied iDy the President in his 
approval of codes, and of agreements and amendments. They were also used 
at times oy the Administrator and ''oy the National Industrial RecoverjT" Board, 

In addition, minor administrative actions "by the Administrator and 
the Division Administrators, in such cases as Code Authorit3'' elections and 
the approval of Code Authority/" "by-laws and of Trade Practice Complaints 
Committees, \7ere also handled "by conditional orders of approval. 

In many cases these conditional orders departed far from the 
provisions of the Act in their intent and effect... 

In only one instance were the conditions imposed in an order of 
approval assented to, and a clear order of final approval issued. This was 
the case of Code Ho, 1 for the Cotton Textile "Inclu-str^^. Su'bsequently con- 
ditions, many of which were vital and others which were important, were 
imposed in orders of approval; and the codes were treated as effective vol- 
untary/ instruiiients, without specific industi^' assent and subsequent orders 
of final approval. This treatment, hovrever, was pro"ba"bly legalized "by the 
industries* tacit assent to the conditions. 

Under Section 4(a) of the National Industrial Recovery Act, with 
respect to voluntar;!,'- agreements entered into and approved hy . the President, 
no power was given to impose conditions, since the reference to Clause 2 
of Section 3(a), as contained in Section 4(a), was only to the requirem ents 
thereof. 

Agreements or codes under Sections 7("b) and 7(c) had the same effect 
as codes approved under Section 3(a). Any conditions in the approval order 
would therefore serve, in the writer's opinion, to render such an agreement 
non-effective until it was assented to, unless otherwise specifically 
prescri'bed "by the President himself. 

9453 



-431- 

There is evidence that come conditions were inserted in orders of 
approva? at the instance of the sponsoring committees, in order to relieve 
the latter of the onus of failure to satisfv the- desires of some memoers of 
their industries in the code nei;^otiations. 

Peginning with Code llo. 235, for the Cooking and Heating Appliance 
Industrjr, nany approvals were sutject to a stay of the clause providing for 
a waiting period on price filing. 

Man-r codes were approved subject to conditions that certain actions 
"be taker within a specified time limit. TJhere such a tine limit was not 
met, the cede thereafter was automatically in a state of suspended approval, 
and was legally ineffective. . ; 

Code No, 354, for the Snail Arms and Ar.inunition Industry, provided, 
among other conditions in its order of approval, for the elimination of the 
"hedge" clause, dealineg with the non-v/aiver of constitutional rights and 
non-consent to modifications, and therefore could not "become effective until 
these conditions were assented to "by the industry. To have considered the 
code effective under the conditions set hy the order of approval would have 
"been equivalent to the imposition upon the indust"^ of a prescribed code, 
The approval of prescrihed codes had not "been delegated to the Administrator, 
"but had heen specifically reserved to the President hy Executive Order. 

Code ITo. 541, for the 71at Glass I.Ian-uf acturing Industry, was approved 
ty the National Indus: trial Recovery Board, suhject to the condition that 
Article 117, Section SCt), providing for tolerance in hours during a pealt 
period, "be stayed. Tliis was a vital provision of the code to certain manu- 
facturers; and when the stay v/as made a condition of adiiiinistrative approval, 
the resu]-t was apparently a prescribed code, which the Board was without 
delegated 8.uthority to approve. Two members of the Industry protested. 
The Code CoLimittee refused to organize the Code Authority, claiming that the 
Code was non-effective under the law, Tliis sitiiiition continued until the 
conditions were removed. 

It is doubtful if any advantage in expediting the approval of . 
voluntur*,'- codes, by the prescription of eliminations or of new or altered 
provisions in the. orders of approval, justified the resulting confr.sion in 
administration.. 

The principle set forth in Section 3(a) of the Act is believed to 
have baer. sound, but ios effectiveness in administration would be clarified 
by re-\/ording approximately as follows: 

"The President as a requisite precedent to his approval 
of a voluntary code may require the elimination, addition, 
or alteration of such provisions therein as in his discre- 
tion are deemed necessar;^'" for the protection etc. " 

I'v is essentiril to the administration and to the considerati6n of the 
legal -tatus of a code tliat when any departure from clear-cut approval be 
made, the condition descriptive thereof be so worded as to avoid any possi- 
bility of an interpretation which would leave the code in a state of su.spend- 
ed approva.!, or which would act to place it in a state of legal suspension 
through the fa.ilure of the Industry to comply with the condition. 

9453 



-432- 

._ : D3VEL0PONT AIID AP FLICATIOII OF IIM POLICIES 

TcJole of Content s 

I* Heed for Development of Policy 

II. Treatment of the Policy Proolem 

III, Application of Policy and Third Phase of Pol icy-Making 

IV. Influence on Policy-Malting of Divisions a-nd Advisory Boards within 



V. General Reorganization of Administrative Structure of N.R.A. 

VI, Sui.inar;'- of Policy Development and Application 

VII. rindings and Conclusions 

VIII, Suggestions and Recojranendations 



9453 



-433- 

DE VELOPI'.SIIT AND AP?LICATI01? OF N.R.A. POLICIES 
Preliminary SiJr:ii:);n,ry of iinuin^s 



The development of H.H.A, policy nas liesitaiit and spasmodic, "but 

continuous. The first guide to policjr officially distrilDuted \7a.s issued 

on Octooer 25, 1933, practically four months after, the passage of the 

Act and the estevtlishmc-nt of the Administration; and this v;as not made 
availalDle for genera.l distrihation. 

The Administration's personnel, as -/ell as that of industry, nas 
handicapped in the early days of code-malring "by the lac): of declared 
policies t'o guide them in considering the codes suhmitted. 

The shifting and uncertain character of N,?.,A. policy created con~ 
fusion, and v.'as one important influence in retarding the codification of 
industry; for an industry's desire to have a code \7as affected oy the 
willingness or un'villingness of IT.R.A. to approve specific proposals. 

Policy-making efforts, until the creation of the policy groups, 
uere in the hands of persons ^vho ^yerc also performing administrative 
duties; and such persons are too absorbed in details to pass adequately 
and effectively upon policy problems. As a result, policy-mailing efforts 
were inadequate, especially in the early period, of the N.R.A. 

As a consequence of these findings the following recommendjitions are 
made, in case new legislation is initiated: 

1, The bill should declare the legislative policy in explicit and 
specific terms, instead of stating the objectives broadly and voguely, 
as in the National Industrial Recovery Act, 

2, A policy-making imit of broad pov/ers, with well-eouipped. pciv- 
sonnel, should be immediately established, to study the legislation and 
to ad.opt promptly a strong, comprehensive and. definite administrative 
policy for the guidance of all concerned, 

3, The staff of such a policy-making unit should be composed, of 
persons halving no ad.ministrative duties. 

4, A simple and direct procedure should be adopted for bringing 
policy problems quickly before this unit, for consid.eration and. decision, 

5, Policy, v;hen established, should be adhered to and rigidly ap- 
plied, until it has been formally'- changed. 



9453 



-434- 

DEVSLOFI^NT OF THE MODEL CODE MB MODEL PROVISIONS 

Table of Contents 

CHAPTER I. INTRODUCTION AND REASONS POR PROMULGATION 

I. Proposed Codes Varied Widely in Approach, Treatment and Expression 
A« Uniformity Desirable 

II, Need for Expedition 

III. Absence of Developed N.R.A, Policy 

IV. Guide for Consideration of Proposed Codes Needed by N.R.A, 
Personnel 

V. Need of Aid to Industry in Formulation of Proposed Codes 

CHAPTER II. FORMULATION 

I. Commission for Study and Recommendation of Model Provisions 

II, Data Used in Preparation 

III. Provisions Approved for Model Code 

CHAPTER III. ISSUES AND REVISIONS 

I. Issue of August 8, 1933 

II, Issue of October 1, 1933 

III. Issue of October 25, 1933 

IV. Issue of November 6, 1933 

V. Issue of April 3, 1934 

VI. Issue of Office Manual, November 21, 1934 

CHAPTER IV. AlffiNDMENTS TO MODEL CODE 

I. Commercial Bribery 

II. Statistical Information 

III. Review of Acts of Code Authorities 

IV. Selling Below Cost, Open Price Filing, and Accounting Methods 

V. Trade Practice Committees 

VI. Handicapped Workers 

9453 



-435- 

VII, Standards of Safety and Health 

VIII, Premiioms 

IX, Mandatory Assessments • 

X. Blue Eagle Insignia 

XI, Classification of Customers 

XII. Advertising Allowances 

XIII, Liquidated Damages 

XIV, Prohibition of Dismissal of Employees for Reporting Alleged 
Code Viclations 

XV# Homeuork 

XVI, Non-TiTpAver of Constitutional Rights 

C.dtJ>TER V. APPROVED CODE PROVISIOITS WHICH 
DEPARTED FROIvi THOSE OP MODEL CODE 

CHAPTER VI, RECEPTION BY INDUSTRY 

CHAPTER VII. CCIXLUSIOITS AIID PIKDINGS 



9453 



-436- 

DEVELOFMENT OF TIIE MODSL CODE ANT MOSSL PROVISIONS 
Preliminary Siunmary of Eindinf?:s 



Much time would have "been saved and many mistakes avoided had 
N,R»A, adopted an official model code much earlier than it did. In the 
early days of code- drafting, those responsihle had only Title I of the 
Act and H.R.A. Bulletin No. 2 for use as guides. A large number of ap- 
proved codes appear to have "been too hastily drafted. Ninety-nine 
codes were formulated and approved prior to the issuance of the Model 
Code of November 6, 1933. 

"The Model Code for Self-G-overning Industries," a document issued 
"by the National Association of Manufacturers under date of May 31, 1933, 
the President's Reemployment Agreement, and the earlier approved codes 
were used "by many industries as a "basis for drafts to "be submitted for 
approval, nith insistence that similar provisions be included in their 
own codes. 

In the earliest approved codes, provisions were permitted which 
were not embraced in the Model Code of November 6, 1933, and in subse- 
quent issues, and which were likewise denied to industries for which 
codes were subsequently approved. 

The delay in the establishment of a policy board, and in the formu- 
lation of policy handicapped the development of an official model code, . 
and caused much uncertainty in the minds, not only of N.R.A. personnel 
but of members of industry, as to Just what provisions would be approvedi 

The following recommendation is made. In case any new legislation 
is initiated to permit the formulation and adoption of codes to govern 
industry, a policy board should be created at the very outset, with a 
personnel consisting of representatives of the government, of industry, 
of labor, and of the consumer, to study the legislation thoroughly, and 
to formulate policy for its administration, including the adoption of a 
model code which could be used as a guide in the drafting of proposed 
codes. 



9453 



-437- 



DUE PHCCESS OF LAW ilTB DELEGATION OF FOSTER IN TEE N.R.A. 



Table of C cnt ent_3 . 

PART ONE 
AN ADivilNI STRATI VE LAW BACKGROUND 



CHAPTER I. irrRODUCTICN 

!• Historical Situption of Industry in Relation to Restrictive 
Legisle,tion 

CHAPTER II. DE^TELOPlvIENTS 

!• Separation of Governmental Pov/ers 

II. Growth of Administration and Administrative Law 

III, Delegation of Power and Finality in its Exercise 

.CHAPTER III. JUDICIAL REVIEW AITD SAFEGUARD 

I. Review "by Courts and Safeguards Against AlDUse of Administrative 
Power 

CHAPTER IV. ADMINISTRATI'/E FINALITY AlID APPLICABLE 

CASES 

I. Narrow Review of Some Other Administrptive Activities of 
Governmental Agencies 

II. Broad Review 

III. Jurisdictional Q;aestion 

IV. General Procedure Requirements 

PART TWO 
ON THE PROBLEMS OF ADMINISTRATION AND ADl.:iNISTRATIVE 

LAW 

CHAPTER V. THE ORIGINAL PLAN 

CHAPTER VI. ADMINISTRATIVE APPROACH 

CHAPTER VII. JURISDICTION AND JURISDICTIONAL FACTS 

CHAPTER VIII. PROCEDUPtAL SCTTElvffi AND THE HEARINGS 

CHAPTER IX. FILDINGS AND RECORD 

9453 



-438- 



CHiPTER X. PROBLEMS IIT FIBLICATION, NOTICE mD OTHER 

ADMINI STRATH'S ACTIONS OF N.R.A. 

I, Pu-blication of Administrative Regulations and Draftsmanship 

II. Notice and Participation in the Industries' Activities 

III. Other Formal Action.s ty N.R.A. 

IT. Speedy Determinations 

V. Departure From its Established Procedure by N.R.A. 

CHAPTER XI. . SUBSTANTIVE PROBLEIvIS IN DUE PROCESS OF 

LAW AJ^ID ADMINISTRATION 

I. Reasonableness 

II. Problems in Administration 

III. Malfeasance 

PART THREE 
PO^RS OF THE N.I.RoA. AND TiIEIR DELEGATION 

CHAPTER XII. POTfERS IN THE NATIONAL INDUSTRIAL RECOVERY 

ACT 

CHAPTER XIII. DELEGATION BY CONGRESS 

CHAPTER XIV. DELEGATION BY THE PRESIDENT AlH) N.R.A. 
•■ . ■ 

PART FOUR 
CONCLUSIONS Al^ SUGGESTIONS 

CHAPTER XV, FORESTALLING "BROAD REVIEW" 

CHAPTER XVI. ADMINISTRATIVE SAFEGUARDS AND THE CHALLENGE 

IN TI^EIR ADMINISTRATION 



9453 



-459- 



DlIE PROCESS OF LAW AI^^ CSLEOATION CP FCW2R IIT TEE N.R,A. 



Preliminan'- Siuninary of Findings 

The purpose of this study is to indicate the original legal 
difficultieis in the National Industrial Recovery Act, and those in 
N»R.A» grovzing out of its administration. Such a subject is not sus- 
ceptible of precisely ste.ted findings. There are, for instance, maiiy 
problems vrith respect to vzhich it is impracticable to make a finding, 
or even to suggest more than a possibly preferable course of action* 

The intent of " the study is to set forth briefly the state of 
administrative law in the United States, and then to attempt a critique 
of H.R.A.^s general scheme in this light. Next, an effort is made to 
discuss technical legal problems that N.R.A. would have had to face in 
the courts, had not its existence been so abruptly terminated. These - 
include jurisdiction, -crocedural -orocess, and substantive due process 
of law, A further nroblem is present in the constitutional basis of 
the Act or "powers." Coupled with that is the -croblem of delegation. 

The following findings are the only ones that can be made in the 
form of positive statements. 

The subject matter of the National Industrial Recovery Act involv- 
ed controversial economic and social questions. Such problems, when 
treated administratively, have been subject to the most careful scrutiny 
by the courts. N.R.A. , therefore, sho^jld have foreseen the possibility 
of broad review, and should have attempted to meet it. 

The administrative scheme of the Act had little precedent, and 
there was none for the extended use to which it was put, N.R.A. might 
reasonably have expected, on the part of the courts, the procedural 
requirements of Interstate Cominerce cases rather than those of the 
Tariff Commission, •■onder the flexible tariff Drovisions, UDon which it 
partly relied. 

Legal difficulties, with resort to administrative remedies such as 
mandamrus and injunction, might have resulted from putting final authority 
and responsibility on the President. 

The administrative apDroach was handicapped by haste, by inexperienc- 
ed personnel, and by a failure to give early and thorough consideration 
to problems of administrative law, 

A n-umber of questions of jurisdiction and jurisdictional fact arose. 
Some were unavoidable. Others might have been more caref-'olly handled 
had. there been anticipation of judicial review, 

IT.R.A. public hearings were in the main inadequate. They often 
placed a premium unon speed, rather than upon the exhaustive develop- 
ment of a factual basis. Rules against argument and opinions were 
abused, even if there was any ground for prohibiting argument and opinion, 

9453 



-440- 

Q?he loov/ers of subpoena and p-miishnient for perjury woiild have "been 
usef-ul aic.s to fact finding. Little attention was paid to the problem of 
the adiTiissibilitj'- of evidence. 

The requirement that all evidence relied upon must "be in the record 
-as not adhered to. The factual basis for findings was often inadequr.te, 
substantial evidence not having been taken. The problem of burden of 
proof was frequently ill-considered. The statement of the basis for action 
was not alv.ays as complete as could be desired. 

Publication of administrative action was net complete or fulljr ac- 
cessible. Setter legal draftsmanship would I'lave been of material assis- 
tance. 

Notice was usually given quite fully. There \7as insufficient con- 
sideration, however, as to what persons were entitled to notice, and as 
to hon much time ought reasonably to elapse betv/een receipt of a notice 
and the date of a hearing. 

Other formal actions by N.ii.A, such as interpretations, amendments, 
exemptions and exceptions and stays, were not given as full procedural 
safegrr.rds as would have been desirable, 

1\[,R.A, did not always follow its own rules of procedure. _ .^ 

A possible test of substantive action oy KRA on judicial review lay 
in the doctrine of "due process of law." That is, pricefixing and other 
substantive policies might have been attacked by the courts as arbitrary, 
capricious, and unreasonable, 

U,Pl,A, was responsible for the actions of its own officers and for 
those of members of code authorities. There are a number of instances 
where N.R.A, failed properly to control actions of such persons. 

Some of FEA's activities were undertaken without a full considera- 
tion of the implications to be c'jrav/n from decisions of the Supreme Court 
in related fields. 

The enforcement procedure used was not in harmony with the courts » 
stated views, which limited enforcement methods to those expressly es- 
tablished in the statute. 

At the time of the passage of the Act the delegation by Congress, 
though broad, did not seem likely to be questioned. The extreme ad- 
ministrative redelegations appear to have been more questionable. Rede- 
legation of power to interested persons and to private persons not acting 
as public officers is open to serious legal objection. 

Standards for the exercise of redelegated power were not always es- 
tablished; nor were they, when established, made clear, although such 
standards as the Act set up should have applied. 

Careful consideration of all these points might have gone far to have 
made N,R,A, acceptable to the courts, 

9453 



-441- 

In addition, the following matters are \TOrthy of serious considera^- 
tion if a sinilar plan is ever put into effect in the future: 

(a) The value of cross-examination as a testing device for evidence 

should not "be lost sight of, 

(o) Definite rules as to turden of proof would be helpful, 

(c) Unnecessary delay in determining issues does not ha.rraonize v'ith 
our notions of justice. 



9453 



• -442- 

SXEI.IPTIONS AITD EXCEPTIOITS 
Table cf Contents 



I. Introduction 

A» 0"bjectives and Scope of Study 

II» Pertinent Provisions of the Act 

A. Section 3(a) 

B. Application of Section 3(a) to Section 4, 7(1)) and 7(c) 

C. Application of Section lC(a) and Section 10(1d) 

D. Limitations, if any, upon the President 

III. Definitions of .Exceptions and Exemptions 

A, Reference in Act to Terms 

B, Popular Definition 

C, Legal Definition 

D, Administration Definition. 

1, Administrative Reference to and Use of Term "Exception" 

E, Synonomous Use of Terms and Application for Purpose of Study 

IV. Delegation of Authority to CJrant Exceptions and Exemptions 

A. Necessity and Extent 

1, Delegation to the Administrator 

B. Retention hy Presic'ent 

1, Concurrence or Conference with Other U, S, Agencie's 

C. Delegation to National Industrial Recovery Board 

D» Additional Delegations of, Limitations or Conditians on, 
Authoritjr of NoI.R,.B. 

E, Necessity for Re-delegation to Suhordind'tes 

1, Types under P«R,A, 

2, Types Under Codes 

F, Provisions for Appeal 

1, To Industrial Appeals Board 

2, To Advisory Council 

3, To Administrator and National Industrial Recovery Board 

V. Classes of Exceptions and Exemptions 

A, From Provisions of All Codes 

B, From All Provisions of a Code 

C, From Particular Provisions of a Code 

VI. Exceptions and Exemptions from Lahor Provisions 

A. Types 

1. Unlimited 

2, Conditional 
3» Typical Cases 

B. Maximum Hour Limitations 

1, Basic 

2, Peak 

3, Overtime 

C. Minimum Wage Rates 
1. Basic 

9453 



-443- 

2, Overtime . . 

3, Apprentice 

4, Skilled 

5, Union contract 

D. Reasons for Hour and Wage Exemptions 

1. C-eo graphical Differentials 

2. Ina'bilitj'- to Operate Under Code provisions 

E. Other LalDor provisions 

1, Child Lator 

2, Apprentices "■■ 
5. Handicapped Workers 

4. Standards of Safety and Health 

5, Homework 

C. Stretch-out 

7. Scrip Payments 

8. Equitaole Adjustments of Wages Atove the llinimum 

9. posting 

10. Collective Bargaining 

11, iiiscellaneous 

?. T'fpical Cases and Discussion Thereof as to: 

1, Eases Therefor 

2, Development of policy 

3, Evaluation of Experiences 

VII. Exceptions and Exemptions from Trade practice Provisions 
A. Of President's Reemployment Agreement 
3. Of Codes 

C. Character of Provisions 

1, General 

2, Code Authority'' Rules Having Force and Effect of Code 
Provisions 

D. price policies, including Sid Depository Systems 

VIII. Exceptions and Exenptions from Code Authority Rules 

A. Duties Required "by Code Provisions 

1. Organization of Code Authority 

2, Reports "by Code Authorities 

3, Compliance Activities 

4. C-eneral Code Administration 

B. IT.R.A. Enactments 

C. Executive and Administrative Orders 

1, Orgfinization 

2, Mandatory Requirements 

3, Code Administration 

4, Compliance 

IX, Exceptions and Exemptions Connected with Code Authority Finance 

A. irecessity for Exeraption from contributing 

1. Adiiiini strati ve Orders Rela,ting - X-19 et al. 

B. The Development of Terminations of Exemption 

1, Necessity 

2, Bases of j^cpli cations 

3, Consideration by N.R.A. 

4, Decisions 

(a) Complete Termination 
(h) Partial Termination 

5, Effects 

9453 



-4-44- 

X. Exceptions and Exemptions from LalDel Provisions 

A. Bases of Exemptions • 

B. If feet of Exemptions IJpon: 

1, Industry Members 

2. Compliance 

XI. Exceptions and Exemptions from Industry Reporting Require^'ients 

A, Prom Code Authority 

B. From Individual Members of Industry 
Ct For Usual Govermriental Use 

D. Executive or Administrative Orders as ■ exemptions from report 
mailing 

XII. Exceptions and Exemptions from Executive Orders Relating to Govern- 
ment Contracts 

A. Bases of Application for Exemption from Executive Orders 6337 
and 6645 

B. Nature and Extent of Exemptions 

C. Effect of Exemption upon Pui'pose of Orders 

XIII. Exceptions and Exemptions as Conditions in Approval Orders of Codes 
and Amendments 

A. Nature of Exemptions Requested 

B. Consideration "by N.R.A. ' 

C. Determinations 

D. Effect upon Conditions and General Code Structure 

XIV. Miscellaneous "xenptions 

A. From Code Provisions 

B. Fron Executive and Administrative Orders 

C. Policy Involved in Miscellaneous Exemptions 

XV. Effective Periods of Exceptions and Exemptions- • 

A, Duration of Act 

B, Temporary 

C, Retroactive 

D, Conditional 

E, Emergency 

XYI. Procedure for Handling Exceptions and Exemptions 

A. Application "by: • '• 

1. Industry Members • ■ 

2. Industry Graiip 

3, Code Authority 
(a) National 

( "b ) Lo cal 

4. N.R.A. 

5, Government Agencies Other than N.R.A. 

6, Labor 

B. Application Directed to: 

1. Washington 

2. Field Offices 

3, Code Authorities 

4, Governmental Agencies other than N.R.A. 

9453 



-445- 



C. Consideration of Application 

1, Consideration by: 

(a) Deputy Administrators 
("b) Advisory Boards 

(c) Research and Plannin;^ Division 

(d) Legal Division 

(e) Administration Members and Code Authority 

(f ) Reviev/ Division 

{g) Division Administrators 

(h) President and Im;iediate Subordinates 

(i) N.R.A. Field Offices 

2. Extent of Consideration: 

D. Due process Requirements 

1. Ap'olications Given Public Hearings 

Ap"olications Published in a Notice of "Opportunity to be 

Heard" 

(a) Form and Extent of Notice 

Applications Receiving No Public Consideration 

Treatment of Applications With Regard to Requirements 

E. Final Action 

1. Form 

2. Notice 

F. Time of Submission of Application 

1, Before Effective Date of Code 

2, During Code Administration 

3, Compliance ComiDlaint Pending 

4, During Litigation 

G-, Time Cons^amed in Handling Ap")li cat ions 

1, Received in Field 

2, Received by or Referred to Washington 



2. 






XVII. Subsequent Modification or Termination 

A. On N.R.A, Initiative 

B. On Application ^oy Industry 

C. On Application by Labor 

D. On Application by Code Authorities 

E. On Application by Others 

F. Bases of Application 

G. Effects 



XVIII. Substantive Problems 

A. Should N.R.A. permit Code Authorities to Grant Exemptions and 
Exceptions? 

B, Should Such Permission be Given N.R.A. Field Offices? 

1. Temporary 

2, Emergency 

3. Permanent 

4, Should Review be had by Washington? 

C, Y/hct Requirements of Due Process Should be Considered by N.R.A.? 

1. Notice 

2. TTith or Without Hearing 

D. Should Applications be Referred to: 

1, Code Authorities? 

2, Governmental Agencies? 

3, Administration Members? 
9453 



-446- 

E. General Legal Effect of Amendments, Stays and Interpretations 

upon Exemptions and Exceptions 
p* Should an Exemption or Exception Ruling "be a Precedent for All 

Parties Similarly Sitiiated? 
G-. General Legal Aspects of Exemptions 

1, Retroactive 

2, Temporary 

3, Conditional 

XIX. Effect of Exemptions Upon: 

A. Industry 

S. Labor 

G, General Code Structure 

D, Initiation of Amendments and Stays 

E. Oppression of Small Sntei-prises 
E. i.ionopoly 

G, Development of Policy 

XX. Sug:^estions Relating to Procedure 

XXI. Evaluation 

XXII. Conclusions 

XXIII. EiMiography 



9453 



EXEMPT IO"S AND EXCEPTIONS 

Freliniinary SurnHary of Findinp^s 

The poT7er to grant exemptions from N.R.A. requirements v?as easily 
suscepti'ble of a'Duse, and if improperly exercised it might result in 
complete defeat of the purposes of the legislation from ^-^hich the exemp- 
tion v;as granted. 

The reasons for the exercise of the po^er of exemption by N.2..A. 
may be stated as follows: 

(aO The avoidance of lav/suits pending the definite ascertainnent 
of the meaning of the law. 

(b) The recognition of special cases which could not fit under a gen- 
eral rule. 

(c) Relaxation in cases of an emergency nature where humanitarian 
considerations were concerned, 

(d) The relaxation of questionable policies, especially of an 
economic nature. 

The power to exempt or exceDt is thought by some to relate to the 
time of the order of approval; but this, in the author's opinion, is an 
incorrect conclusion. Rather, this power should be based upon the con- 
struction of the Act, The grant of power to exempt was conferred by 
Section 10 (b). There may be some doubt, however, as to whether exemp- 
tions and exceptions are included v;ithin the phrase "Tcancel or modify"; 
and this point should be cleared up by any future legislation. 

It should be made clear that the power to granf e::emiotions might 
be made at the time of the order of approval of a code or afterward, tliat 
the exemption itself might be modified or terminated, a.nd that the povrer 
to exenpt might apply to an individual, a grouD of individuals, an in- 
dustrir-1 sub-division or an entire industry, or to American industry in 
general. 

The terras "exemption" and "exception" should be legisla^tively de- 
fined. It is suggested that "exemption" should refer to administrative 
action b37- v-hich a particular member, or several members, of an industry 
or tra.de night be relieved from full or ;oartial operation of a code; and 
that an exemption per se should not operate -unless there was a prior ob- 
ligation to abide 'oy the code. 

The terra "exception" should refer to administrative action "-hereby 
an individual or group of individuals, or an entire industry or trade, 
might be relieved from the operation of a code, or of a portion thereof, 
by the terms of the code itself . 

Great latitude and discretion should be reposed in the administra- 
tive agency with respect to the period of an exemption. 

Retroactive exemptions should be eliminated. Should situations 
arise in connection with v/hich the power of condonation ought apparently 
to be exercised, they should be handled in that manner rather than by 
9453 



i means of retroactive exemptions. 

In the author's opinion a mimber of N.R.A, administrative orders of 
exemption contained conditions v/hich were invalid* 



9453 



-449- 

G0VERNM3KT . C01ITRA.CTS 

Table of Contents 

I « Intro due t i on 

II. :]::ecutive Order 6246 

A, Proriulgation of Order 
3. Analysis of Provisions^ of Order 
1. Authority 

2» Agencies and Supplies Affected 
5. Conpliance 
4. Penalties 

III, Adr.inistration of Executive Order 6246 

IV. E:-ecutive Order 6646 
A. Legal Issues 

j3» Analysis of Provisions of Order 
1« Bid Hequirenents 
2« Contract Provisions 
3» Subcontract Requirenonts 
4. Loan and Grant Requirenents 
■ 5» Penalties 
6« Provisions for Adnini strati on of Order 

7, All Code Provisions Applicable 

8, Exceptions 

V« Adi'.inistration of Executive Order 6646 
A. ilgency of Adninistration 
3. Organization and Procedure 

1» Personnel Statistics 

2» Case Statistics 

0. Procedure 
C« Exceptions 

D, Difficulties in Adninistration 

E, Execution of Order by Governnental Agencies 

1. Public '.Torks Adninistration 

2. Federal Sriergency Relief Adninistration 
o. Reconstruction Finance Corporation 

4» Home Ovmers Loan Corporation 
5» War Department 

F, Paramount Cases Arising! 

Im Northv/est Motor Comioany 

2» Andrev/s Paper Company 

o. Comptroller General (A-57744) 

4« llorthvfe stern Heuspaper Union 

VI. Executive Order 6767 

VII. Eval-oation ojid Conclusions 



S453 



-450- 

GOVEHl-g.'IEI TT S COII^I^ LIC TS 

Pr(;l ir.iin ar v S ii!-:Jr'?a 'y of .r inc.i n^:;s 

Shortl;^ r.fter the passa,{^e of the Fationo-l Industrial Recovery 
Act the Adxiinistration foresav; the necessity of requirinr';; the govorn:.ient , 
as a consmier, to cooperate with Title I of the Act aim its adi.iinist ra- 
tion, "by restricting its purchases to memDers of iiiclustr-,- complying 
v;ith codes cud the President's Heenplo^rment Program. Executive Orders 
6246 of August 10, 1933, rjid 6646 of March 14, 1934, v/ere oromulgated 
to effectuate this policy, and required Code caid P,I.,A, cornpllance on 
the part of government contractors Pnd suppliers* 

In s'ammarizing the preliminary findings of this stud^/- no atter.rot 
has been made to deterraine whether Executive Orders 5246 and 6646 v.'ere 
successful or -unsuccessful as secondary means of enforcing Codes pjid 
the P.R.A,, since neither conclusion could De proved "by the facts avail- 
able, imanerous individual examples cajji be given to siipport either vievj; 
but en attempt to evalu£'.te the compliance involved in the several bil- 
lions of dollars of contracts and sub-contracts which were subject to 
these Orders v/ould entail investigation far beyond the limitations of the 
present study. 

If it could be concluded that everyone xfho signed a compliance cer** 
tificate v^as complying raid continued to com-oly with all provisions of 
each Code to which he v-as subject, and that the only violators of the 
provisions of the Executive Orders referred, to were those whose con- 
tracts \."ero cancelled or were recommended for cancellation, the problem 
would be red-uced, more or less, to a matter of simple a-rithmetic, sjid it 
would appear that the Orders were unqualifiedly successful. No inform- 
ed person, hovrever, v/ould. accept such a sim-^ole formula for determining 
the success of these Orders. 

Hie most that this study can have accora-'ilished. is to shov; how the 
purposes of these Orders were obstructed by conflicting statutory regu- 
lations governing federal purchasing, ''oy un.coordinated inter-department- 
al administration, and by the rulings of the C-eneral Accounting Office; 
and as a result of these findings to suggest means for circuraventing 
similar difficulties in connection vjith future re^nilations, either 
through Executive Order or by statute. 

To avoid, conflict with existing Governmental purchasing statutes, 
any fxiture regulation of Governiient contracts that attemots to restrict 
bidding and. contracting to a s'oecified class or classes of enterprises 
should, have the force of a statute rather than, of a.n Executive Order, 
and shouldL provide specifically for the modification or repeal of exist- 
ing sto.tutes in conflict with its reqmrements* 

To avoid the uncoordinated interdepartmental administrative efforts, 
which were shovm to exist throughout the agencies of the Government by 
the va.rying and conflicting compliance certif ica.tes and provisons relat- 
ing to contracts, some one agency should be designated, with authority 
to draft the clauses necessary to enforce any future regula.tions, in all 
the contract ib rmc, and compliajice certificates used. This agency shoLild 
likewise be given authority to maJce findings as to violations and 
9453 



interpretations of the provisions of the st: tute; rnd these shoiiLd "be 
binding an ell C-overnrnent r.gencies, including the C-eneral Acco-onting Of- 
fice* With this authority ?jid t^ith smiicient personnel to investigate 
cases promptly and to make findings on alleged violo,tions, it is believed 
that such a statute v/ould. be far more effective in accomplishing its piu-- 
pose than were Executive Orders 6246 and 6646, 



9453 



-452- 

INTSRPHE TATIONS AND ESPIAIIA.TIOIIS 
TaDle of Contents 



I. Objective and Scope of Study 

II. Applica"ble Principles 

A. General Rales of Interpretation 

B. Rales ApplicalDle to Adninistrative Agencies 

III. Authority?- For Issuance of Interpretations and Explanations 

A. TJie Act 

B. Executive Orders 

C. Implied Powers 

IV. Definitions of Interpretations and Eliqplanations 

A. Po-oular Definition 

B. Legal Definition 

C. Administrative Definition 

D. Di^^tinction Between Interc^retation and Explanation 

1. Adninistrative Considerations 

2. Precedents for Distinction in Procedure 

3. Adr.iinistrative Effects 

V. Delegation of Authority: 

A. To UoJ.ze Interpretations: 

1. Delegation To the Ad'ninistrator 

(a) Transfer of Powers to National Industrial Recovery Board 
(h) Additional Delegation of, and Limitations or Conditions on, 
the Authorit^.^ G-ranted to N.I.R.B, 

2. Delegation to Division Administrators 

3. Delegation to Territorial Administrators 

B. To Make Explanations 

1. Delegation to Administrator £uid IT.I.R.B, 

2. Delegation to Division Adrainistrators 

3. Delegation to Deput^r Administrators 

4. Delegation to Boards Estalilished oy Administrator 

5. Delegation to Sta,te and. Regional Directors 

6. Delegation to Compliance Councils 

7. Delegation to Other Employees of !T.R:A. 

C. General Limitations Upon Delegated Power 

VI. Methods of Issuance of Interpretations and Explanations 

A. Executive Order 

B. Administrative Order hy: 

1. The Administrator or llationa.1 Industrial Recover^'- Board 

2. The Division or Deputy Adrainistrator 

3. Other Officials 

C. Decision of Compliance Councils 

D. Informal Written Communication 

E. Oral Communication 

VII. Extent and Scope of Interpretations and Explanations 
9453 



-453- 

A. General 
3. Specific 

1. Affecting Particular Groups \7ithin an Industry or Trade 

2. Affecting Entire Industry or Trade 

VIII, Originating Causes of Interpretations and Explanations 

A. An"biguity 

1. DoulDle Meaning • . 

2. Intent as Criterion 

3. Application of Provision to Facts 

4. Punctuation and Typographical .Errors 

B. Conflict with Other Laws or Government Agencies 

C. Faulty Legislative Draftmanship 

D. Multiple Code and Classification Protlens 

E. Necessity of Applying Administrative Policies 

IX. Discussion of Method of Treatment of Interpretations and Ezcplanations 

A. Necessity for Interpretation of Codes and Orders 

B. Inability to Control Issuance of E:q)lanations 

C. necessity for Control and Formality of Interpretations 

D. Adr.iinistrative Declaration of Distinction Between Interpretation 
and Explanation 

1, Purooses 

2, Application 

3, Possible Defects . 

E. Deterr^iination of Scope of Question 
P. Errors of Determination 

1. Explanations Uhich Should Have Been Interpretations 

2. Interpretations "Which Should Have Been Ezqplanations 

3. Causes 

4. Possibilities- of Correction 

5. Act-oal Corrections 

6. Tj'^ical Cases 

X. Classes of Enactments Subjected to Interpretation and Explanation 

A. national Industrial Hecovery Act 

B. E:;ecutive and Adiainistrative Orders 

C. Office Orders and Memoranda 

D. President's Reemployment Agreement 

E. Codes and j\mencjnents 

P. Labor Agreements and Amondi.ients 

G. Bules and Regulations Having Effect of Codes 

H. Policy Rulings 

XI, Classes of Code Provisions Subjected to Interpretation and Explanatioi 

A. Definition of: 

1. Indus tr;'/- or Subdivisions 

2. Members of Industry and Classes of Members 

3. Distribution Agencies 

4. Commodities 

B. Labor Provisions 

1, Maximum Hours 

2, I'inimim Wages 

3, Child Labor 

9453 



-454- 



4, Apprentices 

5, Handicap 13 ed Workers 
5. Standards of Safety and Health 

7. Homework 

8. Stretch-outs 

9. Script Pa;',Tiients 

10. EquitaMe Adjustnent of Wages 

11. Posting 

12. Collective Bargaining 

13. Iliac ellaneous 

14. Development of La-tor Policy 

15. Legal Aspects of Lahor Interpretations 
IS, Evaluation of Ezqoerience 

Trade Practice Provisions 

1. Tjrpcs 

2. Price Policy 
Administration Provisions 

1. necessity for Interpretation 

2. Affecting Rights of Code Authority 

3. Affecting OMigations of Code Authority 

4. Legality 

5. Policy 

6. Finances 

7. Trade Association Participation 
E. Latel Provisions 

P. Conditional Orders of Approval 



C. 



D, 



XII. Inter^Dretation and Explanation of Executive Orders P.elating to 
Government Contracts 

A, Bases of Application for Interpretation of Executive Orders 

B. Effect of Interpretations and Explanations 

XIII. Procedure in Issuing Interpretations and Expla-nations 

A. Applicant 

1. Industry'- I.Iei.ilier 

2. Indus trj^ Group 

3. Code Authority 

4. i:. p. A. 

5. Other Government Agencies 

6. LcLhor 

B. To TThom Application Directed 

1, Washington Office 

2. Pield Offices 

3, Code Auithorities 

4. Other Governmental Agencies 

C. Consideration of Application hy! 

1. Depxity Administrator 

2. Advisory Boards 

3. Research and Planning Division 

4. Legal Division 

5. AdLiinistration l.Ienhers and Code Authority 
5. Revien Division 

7. Extent and Limits of Consideration hy Boards 

8. Division Administrators 

9. Higher Officials and the President 



9453 



-455- 

10. Briefs 

11, Pield Offices snid N.R.A. 

D. Due Process Hequirenents 

E. Final Action 

1. rorra 

2. notice ; ■ 

F. Tine of Application 

1. Before Effective .Date of Code 

2. During Period of Code Ad:.iinistration 

3. Complian.ce Complaint Pending 

4. Litigation Pending 

G-. Tine Required for Handling 

1. Applications Received in Field 

2. Applications Received "by or .Referred to Washington Office 

XIV, Subsequent llodification of Interpretations and Explanations 

A. Initiation "hy IT.R.A. 

3. Axolication 'by Industry'' 

C. Application oy Labor 

D. A;TDlication b^'' Code Authority 

E. Application by Others 

F. G-roiinds of Application 

G. Bffects 

XV. Substantive Problems Connected v/ith Interpretations and Explanations 
A. Should Code Authorities be Permitted to I.Iakc Interpretations 

and Eirolanations? 
3. Siiould Field Offices be Permitted to Ma]:e Interpretations 
and EzDolanations? 

C. yhat are the Requirements of Due Process? 

D. Sliould Applications be Referred to: 

1, Code Authorities? 

2. Other G-overnrnenta]. Agencies? 

E. Ifiiat is the Legal Effect of Junendnents and Stays? 

F. "What Rights of Sponsorship Should be Permitted? 

G. Uhat Right of Cons idere-t ion Should be Afforded Industry and Labor' 
H. To TTnat Extent Should Ercecutive Orders Constituting 

General Interpretations and Affecting All Codes be Issued? 
I. Should II. R, A. Initiate Interpretations and Explana.tions? 

XVI, Effects of Interpretations a:id Explanations on: 

A. Code Structiu-e 

3. Declared Purposes of the Act 

C. Large Enteir-Drises 

D. Small Diterprises 

E. Monopolies 

F. II. R. A, Policy 

G. Legality 
H. Indus trj'" 
I. Labor 

J. Consumers 

XVII, Evaluation 

XVIII, Conclusions 

XIX, Bibliography 
9453. 



.. -456- 

IHTSRPRETATIO HS AlID KO'LMIATI OlIS 
Fre limin ar7 Sim marv of Findinjg:s 



The povjer of interpretation nas not specifically set forth in the 
present Act, Its existence de-Dends upon construction of the Act and upon 
implicatio"! from other pollers conferred "by the latter. Adequate provision 
for the ad.iinistrative exercise of this pouer should "be incliided in new 
legislation, if there is any, 

ITo le{?:islative use of the teria "interpretation" is found in the 
recent Act, In presidential and adninistrative use it is coupled with other 
sjmonyraous terns. Complete definition of the ten.i "interpretation" should 
"be legislatively declared. 

Interpretations, when issued, have the effect of code provisions. 
The power is of too great import to "be delegated to many lesser officials. 
Centralization of the delegated authority in the adninistrative hody is 
suggested, v/ith a possihle exception of delegation to an "interpretation 
officer", if necessary,''. Upon receipt of a "bona fide application an auto- 
matic grant of exemption is sn^gested, pending official interpretation, 
to prevent hardship and unreasonal)leness. 

The power of general executive or administrative interpretation 
should he specifically provided for in new legislation, if there is any. 

InterDrotation Vj the issuance of rules and regulations was permitted 
"by Section 10 (a) of the Act, and violation of the rules and regulations 
was made a criminal offense. It is sii^gestod that future rules and regula- 
tions should contain a clause specifically referring to the criminal effect 
of violation, if anj- new legislation should incorporate the suhsto-nce of 
Section 10 (a). 

Some interpreta.tions in effect amended code -orovisions. This use of 
the power of interpretation was he^'^ond the scope of authority of lesser 
officials of 1T,II,A,, and was exercised without recourse to the usual due 
process requirements. 

Delegation of the power of interpretation to code authorities shou].d 
he legislatively prohihited. Likewise, code authority rules and regula- 
tions, relating to suostantive code matters and in the natLire of 
interpretations, sho-ald he harred. 

The administrative distinction hetween "interjpretation" and "e:qDlana- 
tion" is difficult of determination. ITo control of all ezD^lanations is 
possihle. The iss-aance of explanations which were in fact interpretations 
was a recurring prohlem. It is suggested that the use of and reference to 
the term "e:colanation" he aholished; that only interpretations he consider- 
ed; and that a control hoard he enoovrered to deteriiiine whether or not a 
prohlem is one of interoretation. 



9453 



-457- 

The reasons for the interpretations examined are, in part: 

(a) faulty drafting of codes, 

("b) Ignorance of prolDlems and extent of code adninistra^ 
tion, 

(c) necessity of elal)oration of general statements. 

(d) Classification of industries. 

(e) Overlapping code definitions. 

(f ) Inconsistencies of code provisions with executive 
and administrative declarations of policy. 

Most interpretations uere iss'ied without consideration "by or notice 
to the industry, trade or other interested group. It is suggested that in 
any future legislation, power he conferred to interpret v/ithout hearing or 
notice to such groups, 

A rule of precedent v;ith resoect to interoretations should "be 
estahlished, and a readily accessible and properly indexed reference there^ 
to should he maintained. 



9453 



-453- 
MULTIPLE CODS CQVaRA.GE 
Table of Contents 



I. Introduction 

A, Brief Orientation and Explanation of Scope of Study 

II, Provisions of the Act Sustaining Multiple Code Coverage 

III, Definition of Multiple Code Coverage 

A. Necessity of Defining It "by Exam-ole 

B. Types of Coverage Developed in Multiple Code Operation 

1, For Basic Industries 

2, Eor Sut-tasic Industries 

C. Practices of Industries Producing Under More Than One Code 

1, Reasons for Industries Taking on Supplement Lines 

2, Cost Acco"anting Methods of Treating Side Lines 

3» Production of Component Parts Required for Completion of 

Whole Units 
4, Competitive Relations Resulting therefrom 
• D, primary Examples of Multiple Code Coverage 

1, Industries which, Prior to W.R.A., Did Most of Their Busi- 
ness in One Product and Secondary Business in Side Lines 
which were the Main Products of Other Industries. 

2, Large Basic Industry Memhers Having Shops Suhject to 
Different Codes G-rouped as One Plant 

3, Industry Hemhers who Operated Principally under One Code 
hut llirere Ohliged to do Certain TJork under Codes of Other 
Industries. 

(a) As an Original Provision of the Code 

(h) As a Result of Later Inter-industry Adjustments 

4, Industries which Manufacture Many Products Covered hy 
Separate Industry Codes, as Commonent Parts, Not Sold 
Separately, of Finished Articles 

IV* Chronology of Industry Codification 

A, President's Reemployment Agreement 

1. Its Pui*pose 

2. Its Operation 

B, National Recovery Administration 

1. Its Policy and Ohjective in the First Industry Codes 

2« Genesis of Indiscriminate Application for Industry Codes 

3. Effect of an Inadequate Classification of Industries on 
Code Framing 

C, Effects u-pon Administrative Functions 
1. Within NcR.A. 

(a^ Advisory Boards 

("b; Review Division 

(c) Research and Planning Division 

(d) Legal Division 

(e) Other Functions 



9453 



-459- 

3. In Industry 

(a) Trade Associations 

(t) Independent "Enterprises 

(c) Representation 

(d) Other Functions 
- 3. Within Lator 

(a) Labor Union Position 
("b) Union Contracts 

(c) Wage Contracts 

(d) Union Controlled Industries 

4. Effect upon Grov;th of Policy to Keep Pace wi%h Changes 
of Administrative Requirements 

V, Administration of Industries under Multiple Code Operation 
A. Within N.R.A. 

1* Evolution of Policy traced through: 

(a) Executive Orders 

(b) Administrative Orders 

(c) Office Orders 

(d) Office Manual 

(e) Other Pertinent Documents 

2. Effect of Switching Jurisdiction and Personnel 

3« Amendments, SxemiDtions, Interpretations Respecting: 

(a) Wage Provisions 

(b) Hour Provisions 
■ (c) Classification 

(d) Conflicts 
4« Effect on N.R.A. of Jurisdictional Conflict with Other 
Government Agencies 

5. Eield Problems 

(a) Compliance 

(b) Enforcement 

(c) Others 
!B» Within Industry 

1. Code Authorities 

2« Cooperation between Codified Industries 

3, Friction between Codified Industries 
C. Reca-oitulation 

1. Successes and Failures of Multiple Code Coverage 

2. Reconciliation of Its Problems 

3. Important Typical Sxamples of the Operation of Multiple 
Code Coverage 

VI. Evaluation 

A« Provisions of the Act 

B» Forms of Industry under Multiple Code Coverage 

C. Eyrperience in G-ror;th of Codes, their Coverage and Policy 
Building 

D. Administration Experience 

E. Other Points Developed 

VII. Conclusions 

A* Administration and Its 

1. Deficiencies 

2# Good and Bad Provisions 
B« Constructive Suggestions 

VIII. BibliograDhy 
9453 



. -460- 
IvHILTIFLE CODE COVERAGS Am) OViIRLAP?IN& CODE DEFIHITIONS 
Preliminary S-ommary of Findings 



Multiple code cov^'i'age existed when the operations of an enterprise 
were subject to the provisions of more than one code. Such codes might 
"be those of one industry or trade, or of several. In the sense gener- 
ally understood, however, a case of multiple coverage involved the codes 
of two or more industries* 

The "orohlems resulting from such a situation "became apparent most 
frequently: 

!• In the efforts of the code authority of one industry 
to collect assessments from- the raemhers of another, 
on the ground that they wore producing and/or dis- 
tributing Toroducts within the definition of the 
r ' former industry. ' 

2« As a result of differences in the wage and hour pro- 
visions of the codes of industries manufacturing or 
distributing similar or competing products, 

3, In cases where the ma-nuf acture, sale, distribution, 
erection and installation of products required opera- 
tion under two or more codes. 

At the root of the problems of multiple code coverage lay the im- 
possihility of requiring an enterorise to keep itself within the con- 
fines of one industry or trade as defined "by a code, and of refusing it 
the right to produce or sell what it chose, and to determine to its own 
satisfaction how far it should go into side lines. Erom the industry 
standpoint it was a continuing loroblem, and to a certain extent an un- 
solvahle one, 

iiultiple code coverage almost always increased production costs. 
The worst of the problem would have disappeared had some way been found 
to equalize the cost of production in competing industries. 

The establishment of minimiiim wages and of maximum hours and other 
labor provisions, differing greatly in detail, were sought without an 
adequate and fundamental industry classification, especially in the 
early codes. 

The administrative procedure for handling multiple code coverage 
problems did not exhibit the coordination necessary to successful re- 
sults. 

The problem of overla-pping code definitions of industries and trades 
is so closely related to those of multiple code coverage and of the 
classification of members of industries and trades that they should 
really iDe considered together. Much of the difficulty encountered in 
connection with the first two of these complications was due to the 
third, 

9453 



■■ -4B1- 

!Jhe absence of a classification pattern for coordinating the code 
structTire as a whole was a fundamental defect, as was also the lack at 
the start of an adequate plan for fitting together codes of different 
industries and trades into economically related groups. 

Unregulated freedom in writing code definitions was another primary 
cause of trouble, ■ "because of the overla-oping jurisdiction to which it 
led. • ■ ■ ^ 

Lack of experience and administrative precedent, rilus the failure 
of N»R.A. to anticipate important problems, made it necessary to attack 
many administrative troubles after they had gained headway. By that 
time the problems had often become so obvious as to have been widely 
recognized outside N.R.A. , and the public reaction was detrimental. 

Varied as the erperience of K'.R.A. has been it is still insuffi- 
cient to make possible a complete solution of the difficulties arising 
from the classification of members of industries and trades, from 
multiple code coverage, and from overlapping code definitions. But, 
though some problems of the sort may be looked for in any regulation 
of industrial practices based upon the individual industry, their 
magnitude and seriousness might be much reduced by -proper consideration 
of the facts developed through the experience of the past. 



^ '• , . 



9453 



-462- 

N.R.A. COMFLIAIJCE ACTIVITIES 
Ta"ble of Contents 
CHAPTER I, INTRODUCTION 

I. Purpose of Study 

A* To Shov: Major Problems Encountered "by Governmental 
Compliance Administration as Distinguished from the 
Compliance Administration of Industrial Adjustment 
Agencies 

B» To Indicate Methods Used "by Governmental Compliance 
Administration in Obtaining its Ends and in Over- 
coming Problems 

C» To Evaluate and Appraise Results 

II. Definition and Analysis of Word "Compliance" 

III, Method of Examination 

CHAPTER II. PERTINENT PROVISIONS OF THE NATIONAL INDUSTRIAL RECOVERY ACT 

I. Legislative Policies Sustaining Compliance Contained in the Act 

lie Potential Administrative Policies Sustaining Compliance 
Authorized by the Act 

III. Compliance and Legality of Problems Expressed 

CHAPTER III. COIvPLIANCE PROBLEMS 

I. Scope and Nature of Compliance Task 
A. Field of Compliance 

P. General Compliance Difficulties Inherent in Regulations 
1. Difficulties Caused by Variety and Complexity of 

Reg^alations 
2» Difficulties Caused by Degree of Departure from 

prior Standard 
3. Evidential Difficulties 

II. Special Scope and Nature of Compliance Task 

A. Special Compliance Difficulties Inherent in Regulations 

1. Interpretations and Explanations 

2. Multiple Code Coverage and Overlap 

B. Special Applicatory Difficulties of Regulations 

III. Power Limitations 

A. Effect of Power Limitations on Compliance 

1. Voluntary Compliance 

2, Involuntary Compliance 

IV. Effect of Compliance on Policy 
A* Legislative 

B. Administrative 

53 



-465- 

C, Su'bstantive 

D, Procedural 

V« Administration 

Am Division of Responsibility and Authority 
B» Training and Personnel 
C» Methods of Administration 

VI. Industrial Self- Government 

A# Effect on G-overnraent Adi-iinistr&tion of Compliance 

B. Industrial Adj"^str.ient A^jencies' Compliance Activities 

VII, State Recovery Acts 

A. Effect on Compliance of State Acts 
1. Benefits vs. Detriments 

VIII, Effect of Litigation and Lack of Litigation on Compliance 
A, Adverse and Favorable Court Decisions 

E, Threat of Litigation 

IX. .Public Opinion 

A» Problem and Necessity of Maintaining Favorable 

Public Opinion 
B» Problems of Public Opinion as an Enforcement T^eapon 

X, Miscellaneous 

A, ITon-Corapliance and Compliance 
B» E:-ctraneous Influences 

1, Political 

2, Economic 

3, Legal 

4, Administrr.tive 

CHAPTER IV. COLiPLIAlJCS iSTHODS 

I. Passive Complaint System 
A. Procedure 

II. Lass Compliance Activities 
A. Procedure 

III. Adjustments and Restitution Policy 
A. Procedure 

IV. Code Authority Compliance Functions 
A. Procodure 

V. Insignia and Labels as Instrurients in Obtaining Compliance 
A, Procedure 

VI, Government Contracts as Instruments in Obtaining Compliance 
A. Procedure for Restricting Government Contracts to Those 
Complying rdth il.R.A. 



9453 



mmi^mt 



>,464« 



VII. Legal Enforcement ..'.•■■..'.••■ 

A. Procedure for Legal Enforcement 

CHAPTER V. APPPAISAi 

I, Effect of Prolilems Considered on Iiesults of Compliance Activities 
A. Anal^'-sis of the Sffect. of the 10 ProlDleras Considered in Chapter 
III on Each' of the Eactors Enwnerated in Eval-uating the Results 
of Compliance Activities 

II. Effect of Methods Considered on Results of Compliance Activities 

III. Evaluation of Results of Compliance Activities Considered in 

Relation to the Attainment of Desiratle and Effective Compliance 

A. Definition of Desiratle and Effective Compliance 

B. Measurahle Efficiency and Results of Compliance Adriiinistration 
in Terms of DesiralDle and Effective Compliance 

1. ITith Consideration of Area, Time, and Other Factors 

C. Analysis of the Results o'f Compliance Activities ty State, 
"by Region, aind "by Nation, with Respect to: 

1. S^peed of Adjustment 

2. Restitution 

3. Personnel 

. 4. Ratio of Large to Snail Compliance Area 

5. Ratio of Adjusted to Closed Cases 

6. R2,tio of Pending Cases to Cases on Hand 

D. Evaluation of Relationship of Results of Compliance Activities 
to the Attainment of Desira"ble and Effective Comr)liance' ■ • 



9453 



-465- 

N.R«A. COMPLIANCE ACTIVITIES 

Preliminary S"ujnmary of ?indin|g:s 

In the author ',s opinion an analysis of N.R.A.'s comnliance exoer- 
ience warrsints the statement of the follo^ving "basic principles. 

It is necessary that le^^islation of the N.R.A, type be of such 
nature as to receive the support of public opinion and the courts. 

In vie\7 of the decision of the Supreme Court, such legislation 
should confine itself to regulating interstate coranerce. It was notice- 
able that public opinion more readily supported N.R.A. in its efforts to 
regulate piu-ely interstate matters than in its attempts to deal with 
activities that v/ere local in nature, 

P.egulatory -orovisions which are simple and easily understandable 
rather than complex, and which are few in nu.iiber rather than numerous, 
are, of course, most easily enforced. Standardization of such regular* 
tory provisions for all the industries affected will reduce the number 
of provisions required and simplify their context. 

Compliance is more easily obtained with provisions ^vhich are limit- 
ed in their departure from established usage, tlian with those -vhich set 
up stajidards not having a basis in customs and past usages of industries, 

A higher degree of compliance than that which was achieved with the 
N.R.A, codes could be obtained •■dth legislation which restricted its re- 
gulations to simple labor provisions, such as child labor, minimum wages 
and maximum hours, and which recognized only trade practices such as 
those covered by the Federal Trade Commission codes. The latter regu- 
late trade practices so obviously unfair that they are already condemn- 
ed by public opinion. 

Legislation which required the keeping of sworn wage amd hour re- 
cords by the employers affected would simplify compliance efforts, 

A higher degree of compliance can be obtained with provisions the 
viola.tion of which is easily established, than with those the violation 
of ^;hich can be proved only by evidence difficult to obtain. For ex- 
ample, it is extremely hard to prove that a secret rebate has been given, 
oecause the facts are exclusively within the knowledge of persons who are 
financially interested and reluctant to disclose them. 

Compliance would be aided by legislation requiring the payment of 
restitution to aggrieved employees in labor violation cases, 

Le^'islation of the N.R,A. type should provide for semi-judicia.l 
agencies of the Regional Compliance Council type, which would have the 
power to subpoena and swear witnesses; to make findings of facts binding 
on the courts; to assess amounts of restitution; to levy fines for both 
trade practice and labor violations; and to obtain injunctions from the 
courts through their own. employees and own findings of fact, rather than 
through the Department of Justice. 



9453 



-466- ■• 

Tlie str.tes shotild "be induced -to regulate intrastr.te comnerce along 
the lines of the Federal re^^la.tion of interstate commerce. 

The agency char^^ed vrith the responsihility of administering legis- 
lation -..'hich rergalates industr^;^ should have complete authority over labor 
violations, and assistance of intra- industry committees in the handling 
of trade practice violations. 

Such on agency, by usin.,: trained, educated personnel, should adopt 
an active policing system, rather than the ;oassive complaint systei.i 
which vas used by N.R.A. It should permit the adjustment of cases by 
its field policing personnel onl3'- in cases in which the facts are -uji- 
diSTDuted, and should provide for an ap-oeal from the fact finding agencies 
above nentioned to a similar central bod?,'', and thence to the Circuit 
Court of Appeals, 



9453 



-467- 

^A INSIGNI A 
TaMe of Contents' 



I, Inception and Original Theory of the Plan 

II. Development Under the President's ReemDloyment Agreement 
A. General Availahility and Display Features 

3, Eijplanations, Interpretations and Exemp'tions, and Their Effect 
on Insignia 

III. Origin and Development of Code Insi,gnia ., 

A. Relationship of Retail Trade Regulations and Code Authority 
Assessments 

B. Desires and Aims of Code Authorities 

G« AciP.inistration Desire for Immediate and Widespread Display 

1, Limited Revival of Local N.R.A. Committees 

2, Initial Insignia Distribution "by N.R.A, 
5. iT,R,A« Publicity 

D« Cciiformance Pressure by Code Authorities 

E, Code Authority Distribution 

P. Blue Eagle Manual for Code Authorities 

G-, Use by Code Authorities as Such 

IV. Rights in the Insignia 

A. Delegation of Authority 

B, The Design Patent 

C, Right to Remove 

D. Reproduction Rights 

y. Restrictions on and Regulations Regarding Insignia 

A. Its Use and Display 

B. Concerning Reproduction 

VI. N.R.A, Labels Bearing Insignia 

A, The Label Idea in the Garment Codes 

B, Blue Eagle Labeling Under P.R.A. 

C. Conflicts of Jurisdiction Over Insignia on Labels 

D. No Model Label Provisions 

E, Types of Code Provisions Dealing with N.R.A. Labels 

F. Code Authority Administration of Label Provisions 
G-, Restrictions Upon Code Authorities 

H» Administrative Orders 

I, Value of Label Provisions 

VII. Use of the Blue Eagle 

A, As a Symbol of Cooperation 

B, As an Educative Force 

C, As an Enforcement Weapon 

D, Social and Industrial Reactions 

E, Advertising Value 

P. Government Contracts and the Blue Eagle 
&• Use in the Territories 
H, foreign Use 

1. In Connection rath Imports 

2, Lxports and American Firms abroad 
9453 



-468- 

VIII. aMI.A. Ac'jnini strati on of Insignia 

A. Insl{\-nia Section 

B. Policy Development and Decisions 
C* PuMic Relations Division 

D. Compliance end Enforcement 

IX. Service Trades and Insignia . 

X. Effects of Insignia Upon Employers in Tovms of Less than 2,500 
Population . • 

XI. Insignia provisions in Executive and Administrative Orders 

A. P.H.A. Extensions' 

3. Collection of Ex^-)ense of Code Administration , 

C« Sheltered Workshop Insignia 

D» He.::oval of Right to use Insignia a Cause for Removal of Code 

Authority Memhers 
S. Prison Lahor Compact 
F, Registration Insignia for Trucking and Household Goods Codes 

XII. Attitude of the Courts Prior to the Sui'jrerae Court Decision of I.Iay 27, 
1935 

XIII. Effect of Supreme Court Decision 

XIV. Conclusions .. -. . 

x\. Broad Ohjectives in Adiainistration Use of Insignia 

B. Code Authority Control of Distribution vs. Exclusive Control "by 
Administration 

C. Desirability of a Single Emblem 

D. Recomnendations 

1. New Legislation 

2. Administration Under New Legislation 



9453 



-469- 

N,H.A. INSIGNIA 

Preliminary Siimmary of Findings 

The primary objective of N.R.A. insignia was to further cooperation 
"by industry and by the public, A secondary objective involved the use of 
the Blue Eagle as a direct means of enforcement. 

On the whole the code authorities were not well enough organized and 
not free enough from criticism on the score of partiality, to be entrusted 
with controlling power over insignia ajid labels, 

A sin:;;le emblem, as distinguished from the emblems designating indus- 
try or trade connections, would have avoided confusion and would have si:n- 
plified a.drainistration. 

As a result of the above findings, the following recommendations are 
made; 

(a) That specific insignia provisions be incorporated in any new 
legislation, to remove doubt as to the legal basis 

(b) Tliat adequate insignia regulations be prepared in advance of 
issuance. This was not done by N.R.A, 

(c) That if any insignia is to be used in connection with new leg~ 
islation, a single simple emblem different from the previous 
Blue Eagle -be adopted and patented, 

(d) That regulations vest all control, including distribution, in the 
enforcement branch of the Government alone, 

(e) That any regulations adopted prohibit the use of the insignia 

in connection with the raising of revenue by industry agencies, in 
order to preserve its broader symbolism. 



9453 



^-470- 

THE IT.R.A: All HISTORICAL HSVI3T7 'AITD APPRAISAL 

Table of Contents 

CHAPTER I, HISTORICAL Am LEGlSlATIVE BACKGROUND 

!• Impc-^ct of the World War Upon Commerce and Trade and Society and 
Government, 1914 to 1929 

!!• Puolic and Government Planning Consciousness, 1929 to 1933 

IJitii Economic and Social Forces Leading to the national Recover^'' 
Act 

III» The national Industrial Recovery Act; its Legislative History 

A« Congressional Introduction, May 17, 1933 

I!# President's S-Decio2 Messages of Hay 17 and May 20, 1933 

'• Congressional Debate and Committee Hearings 



n 



IV, Emergency Interim Set-up 

CHAPTER II. POVJERS 

I» .Analysis of the Po-./ers Contained in the Act > - 

A, E"oressed Pov'ers 

3« Irrplied and Incidental Powers 

II. E::ercise by the President and Types of Powers Delegated 

III, Purpose of Powers • • - 

A» Internal liRk Administration 

B. Agreement Method 
C« Code Method 

D. Adjudication and Enforcement 

IV« Leg^l Aspects of Delegation and Re-Delegation 

V. Powers liOt Delegated bj.tAss"amed ' 
A. By the President 
3« By iT.R,A# and its Agencies 
C# B3' Other Government Agencies 

VI, iTon--use of Powers in the Act 

CHAPTK-l III. AnilillSTRATIOH 

I» Orgaiiization 

A. Original Framework Set Up "b:/ N.R.A* 

B. Successive Chajiges and Developments 

1« P.R.A, Organization and Activities 

2, Code-Hairing Organization and Activities 

3» Code Administration Organization 

C. Powers, Duties aiid Res-5onsibilities of: 

1. P,R.A, OrgrJiization 

2. Code-i.iaking Organization 

3« Code Administration Organization 
9453 



-471- 

D, Efiectivenoss of: 

!• P.R.A. Orgpnization 

2. Code— I.Ialcing Organization 

3. Code Administration Organization 
S. Costs Incidental to: 

1. P.R.A, Program 

2« Code-iJ£\lving Program 

5. Code Administration Program ' , 

!!• Tlie President' s, HeemDloyment Agreemnnt 

A, necessity for P.H.A. 
1» ¥.e\i Emergency 

2. Pre-Codification Procedure 

3. ITeed to Equalize Wai^:;es and Prices 

4. Pressure for .Equality Among Cora-ietitors 

B. Authority and Nature 

1« President's Heemploj'ment Agreement 

2. Substitutions 

3. Exceptions 

4. Inter-oretations 

5. Insignia 

C« Voluntary Aspect of the Reemplo.Tnuent C,.:npaign 
D. P.r^.A. Policy 

!• As Stated by President Hoosevelt and General Hugh S« Johnson 

2» Exemplification of Policj' by the IT.H.A- 

o« '.Tith Respect to Substitutions, Exceptions, Interpretations 
rjnd Insignia 

4. Influence on Policy Croverning Government Contracts an'f. Loans 
Et II»R.A# Administrative Set-Up for P#R,A« 

A. Headouarters 

3. Field 

F. Conpliance \jitli and Enforcement of the P.R.A, 
1« Public Influence 

2« Consumer Influence 
3» Ulue Eagle Removal 

4, P.R.A, and the Cohorts 

G. Problems of the P.R.A. 

1, Voluntary vs. Compulsory Nature 
2» Equitable Adjustment of Wages Above the Ivlinimum 
3, ITon-Consideration of Geographical, Pop-uLa'tion and Sex 
Differentials 
H« Results and Accomplishments of the P.R.A. 

1. 2,300,000 Acceptances, as of Record 

2. Acceptance Pending Codification 

3. 50,000,000 Consumers Org^jiized 

4. ChaJiges in Em-olojnnent and Payrolls 
5« Sta.tistical Analyses: 

(a) Acceptances by Sta^tes 

(b) .Changes in Emplo;jn:nent , Payrolls and Weekly Income for 
June and October, 1933, by Stale's and Regions, 

(c) Changes in Employinent , Payrolls and Weekly Income for 
June and October, 1933, by Industries " 



9453 



-472- 

II, Code-I.Iaking 

A. Code-Making Program 

1. From Submission of Proposed Code to Approval 

2. Use of Powers in the Code-Making Program 

3. Legal Aspects of Delegation and Re-delegation of po'.iers 
in the Code-Making Program 

4. Powers not Delegated "but Assumed in the Code-Making Pro- 
gram 

3, Development of Policy in the Code-Making Program 
!• Representative Character of Code Proponents 

2. Labor; Hour^ Wage and G-eneral Labor Provisions 

3. Trade Practices: Production and Distribution 
4# Provisions for Self-Reg-olation of Industries 

5. Exemption of Individuals, Groups and Industries 

C* Influences and Theories Responsible for Approved Code Pro- 
visions 

1« Uniform Required Provisions 
2« Variable Permitted Provi-sions 

IV. Code Administration 

A, Reaction of Affected Interests Follo^.Ting Approval of Codes 

1. Of Industry 

2. Of Labor 

3. Of Consumers 

B, Industry/- Adaptability to Codes 

1. Labor Provisions 

2. Trade Practice Provisions 

> 

3« Provisions for Self-Regulation of Industry 

C, Code Administration by Industry 

1. Powers 

(a) Expressed in Code Provisions 

(b) Implied in and Incidental to Code Provisions 

(c) Powers not Delegated but Ass^umed in Code Provisions 

2. Duties: 

(a) Imposed by Code Provisions 

(b) Imposed by IT.R.A, 
3« Activities: 

(a) General: Education, Statistical and Functional 

(b) SpeciaJ: Adjudication, Compliance and Stabilizs-tion 
D« Code Administration by IT.R.A, 

1. Primary Functions: 

(a) Educational 

(b) Advisory 

(c) SiT'^ervisory 

2. Compliance and Enforcement: 

(a) Labor Complaints 

(b) Trade Practice Complaints 

3. Special Functions: 

(a) Policy-Making 

(b) Fact Finding 

(c) Fiat Promulgations 



!453 



-473- 

4, Qua si- Judicial Functions: 

(a) Notice of Opport-unity to "be Heard 

(b) "Show Cause" Orders 
\c^ Interpretations 

( d) Stays 

(e) Amendments 

(f) Exemptions and Exceptions 

(gO Budgets and Assessments, La'iDels, Insignia, etc, 

CKAPTER IV. POLICY 

I. I]::ercise "by the President of the Pov/ers in the Act, 
At Delegation of Powers "b" the President' 

II • ITon-'Exercise "by the President, of the Pov;ers in the Act 

III, ITon-Sxercise of the Powers Delegated by the President 

IV, He-delegation of Powers by 1J,R#A, 

A, '..'ithin the National Recovery Administration 
■.3*. J To Code Authorities 

V. I^ne President's Reemplojnnent Agreement 

A, Enlistment of Public Support 

B, Recruiting of Consumer Support 

C, Voluntary Acceptances 

D, Labor: T7age, Hour and G-eneral Labor Provisions 

E, Substitutions, Exceptions, Interpretations and Insignia 

F, Compliance ., 

■ ' ■» • 

VI • Code— I.Ialcing Program 

A, Eligibility of Industries .' , ■ 

B.* Representative Character of Code Proponents 

C, Labor: Hour, Tfage and C-eneral Labor Provisions 

D, Trade Practices: Production and Distribution 
E* Provisions for Self- Regulation of Industry 

F, I.Iodel Code Provisions 

G-, Consumer Interests 

H» Labor Interests . 

I, Industry Interests- 

J, Fact- Finding .. .. , 

VII, Code Administration Program 

A, Code Administration by Industry: 

1, Pov/ers Delegated to Industry by N«R«A,. 

2, Duties Imposed' on Industry by 1T,R#A, 

3, Powers Assumed by Industry 

4« Duties Self-imposed by Industry 

5, General Activities 

(a) Educational 

(b) Statistical 

(c) Functional 

6, Special Activities 
(a.) Adjudication 

(b) Compliance 

(c) Stabilization 
9453 



-474- 

Jj, Code Administration ^y IT.R.A. 

1. Code Insignia 

2» N.H.A. Hepresenta.tion on Code Authorities 

3« Conditional Approval of Codes 

4. Stays 

5. Interpretations 

6. Ar.iendments, Exceptions and Exemptions 
?• Compliance ond Enforcement 

8« Budgets, Assessments, La'bels, etc. 
9« Interests of Small Enterprises 
10» HonojpoliGs and Monopolistic Tendencies 

CHAPTER V. FTrilBAIvIElITAL DIFFICULTIES 

CHAPTER VI . EFFBICTS 

I. Effects On; 

A, Natural Resources Industries 

B# DuralDle Goods Industries 

C* Consumer Goods Industries 

!)• Service and Distributing Trades 

E, Foreign Trade 

II. Effects on LalDor 

A. Reduction in Daily and Weekly Eours 

E. Increase in Emplo^/ment 
C# Wage Rate Changes 

D» Collective Bargaining 
E« Legal Status of Labor 

F, Standards and Conditions of Labor 

III. Effects on Industry: . ' 

A. Sales 

B. Prices 

C. Earnings: 
1. Profits 
2» Losses 

3« Dividends 
4« Bankruptcies 

D. Production 

E. Costs; 

1. Rav; Materials 
2» Labor 

F. Trend to Mechanization 

G« Migration '. , 

K. Price and Production Control 

I. Monopolistic Practices 

J» Status of Small Enterprises 



9453 



-475- 
OVEELAJFING CODE. DEFINITIONS 

■ ^ I II I 11 H ■■ I - .1. - -■ ^ I- . - ■■ ■ . - — I I M 

- TSi"ble of Contents , .' » 

I. Introduction 

A. Orientation and Explanation of Scope of Study 

II. Provisions of the Act Sustaining Overlapping Definitions' 

III. Definition of "Overlapping" 
A. Concept and Growth 

S, Classification as Related to Overlapping 
C. Multiple Code Coverage as Related to Overlapping 

IV. ChronolO;iy of Industry Codification 

A, President's Reemployment Agreement 
1. Operation 

B. Nr.tional Recovery Administration 

1, Policy and Ohjectives in Eirst Codes 

2. Genesis of Indiscriminate ApT)lica.tion for Codes 

C, Effects Upon Ac^jninistrative Functions 

1. Within N.R.A. 

(a) Advisory Boards 

(h) Review Division 

(c) Research and Planning Division 

(d) Legal Division 

(e) Advisory Council 

(f ) Prom Claims of Untrue Representation 

(g) Of Appeals from Industries 
(h) Other Effects 

2, Within Industry 

(a) Trade Associations 

(Id) Independent Enterprises 

(c) Group Representation 

(d) Other Effects :, 

D. Grovrth of Policy 

1. History of Growth 

2. Pertinent Orders Establishing Policies 

(a) Executive Orders '• ■; 

(b) Administrative Orders 

(c) Office Orders . . 

(d) Other Orders 

V. AcT-iinistration of N.R.A, with Respect to Overlapping Definitions 

A. Substantive Analysis and Citation of the Problem 

1, History of Classifications of Industry rdth Respect to 
Overlapping Definitions 

(a) Before N.R.A. 

(b) During P.R.A. and N.R.A, 

2, Tirpica.1 Cases in Illustration 

B. Origin of Administrative problems 

1, Within N.R.A. 

2. Within Industry 

C. Adjustment of Problem 

1. Procedure in Earlier Code Period 

2, Procedure in Later Code Period 
9453 



-47o- " 

3. Effect of Code'.;A!:ieridments " 

4. Determination of Industrial Classifications 
(a) Methods Employed 

(1) Participation "bv Industry in Adjustments 

5. T^noes of Remedial Action Adopted "by N.R.A* 



(a. 

(c 

(d 
(e 

(f 



Interpi'e tations 

Amendraents 

Staysv- 

Executive Orders 

Administrative Orders 

Cancellation, of Codes 

Other Typfes; 

D. Causes and Effect of Delayed Settlements 

E. Enforcement 

1, Compliance 

2, Field Experience 

3, Litigation 

4, General Effects of Enforcement 
(a) On Policy Eormation 

On N.R.A. 

(1) Industry Relations 

(2) Labor Relations 
Legal Effects 
Economic Effects 



w 



(c) 
(d) 



Y» T^/pical Cases 

YI. Evaluation of; 

A, Provisions of the Act ..,,.. 

B, Procedure Used in Establishment of Definitions 

C» E:qperience in G-rowth of Codes and theij: Cove ra -p and in Policy 

Building 
D. E:Toerience in Administration 



VII. 



Conclusions 

A. Administration and Its Deficiencies 

B. Good and Bad Provisions 

C. Constructive Suggestions 



VIII. 



Bibliography 



9453 



-477- 

THE PBESIEENT'S REElg'LOYMENT 
A&JRIilEMENT 

T able of Contents 

CHAPTER I. THE PEESI3DE1IT' S HEEMPLOYMENT PROGRMI 

I. Aspects of Administration for Industrial Recovery 

II. Description and Development of Plan 

A. District Offices, Department of Commerce 

B. President's Reemployment Educational Campaign 

1. Bureau of Public Relations, N.R.A. 

2. Local N.R.A. Committees 

C. District Recovery Boards 

D. State Recovery Boards 

E. State Recovery Councils 

F. President's Reemployment Drive 

1. The Employers' Part 

(a) Method of Obtaining Blue Eagle- 

(b) Exceptional Cases 

(1) Cases ¥here a Code Covering Employers' Business Had 
Been Proposed 

(2) Cases Where an Applicable Approved Code Existed 

(3) Cases of Individual Hardship 

2. The Employees' Part 

3. The Public's Part 
G-. P.R.A. Policy Board 

CHAPTER II. THE PRESIDENT'S REEMPLOYMENT AGREEMENT 

I. Purposes 

A. To Effect Immediate Increase in Employment Pending Codification 
of Industries 

B. To Eliminate Child Labor 

C. To Spread Purchasing Power 

D. To Influence Public Opinion 

E. To Relieve Unfair Competition Between Interstate and Intrastate 
Enterprises 

P. To Determine Industrial Problems Affected by P.R.A. 

G. To Develop Rules or Standards for Labor Conditions in Trades 
and Industries in Various Localities 

H, To Prepare Employers for Code Operation 
I. To Encourage Submission of Codes by Industries 

J. To Reduce Competitive Inequalities Between Codified and Uncodi- 
fied Industries 

II. Discussion of Provisions 

A. Paragraph #1 ; Child Labor 
1. Official Explanation 

B. Paragraph #2 ; Hours Applicable to Non-Industrial Workers and 
Store or Service Operations 

1. Official Explanation 

2. Classes of Employment Included in Paragraph #2: Non- 
Industrial Workers 

9453 



1.478- 

3. Classes of Employment Not Intended to be Covered 
4.. Exemptions from Maximum Hour Provisions 

(a) Employee Exemptions (Paragraph #4) 

(b) Calendar Year-End Inventories 

(c) Fiscal Year-End Inventories 

5. Minimum Wages Applicable to Employees Covered by Paragraph 
#2 

6, Store or Service Operations 

C. Paragraph #3 ; Maximum Hours Applicable to Industrial Workers 

1, Official Explanation 

2. Modification of Paragraph #3 and Effect on Signers 

3. Classes of Employment Not Intended to be Covered 

4. Exemptions From Maximum Hour Provisions' 

5, Extensions 

6, Minimum Wages Applicable to Paragraph #3 Employees 

D. Paragraph # 4: Employees Exempted From Maximum Hour Provisions 

1, Official Explanations 

2, Classes of Employment Not Intended to be Covered 

3, Exemption of Emergency Maintenance and Repair Work 

4, Exemption of Executives and Managers 

5, Exemption of Professional Persons 

6, Exemption of Tov/ns of Less than 2,500 Population 

7, Exemption of Owner-Operated Stores 

E. Pa.ragraph #5 : Minimum Wages Applicable to Non-Industrial 
Workers 

1. Official Explanations 

2. Emj)loyment to Which- Paragraph #5 Applied 

3. Classes of Employment Not Intended to be Covered 

4. Exceptions and Exemptions 

5. Hourly Rates 

F. Paragraph #6 : Minimum Wages Applicable to Industrial Workers 

1. Official Explanations 

2. Employment to Which Minimum Wages (Paragraph #6) Were 
Applicable 

3. Employment Not Intended to be Covered 

4. Exceptions and Exemptions From Minimum Wages " 

5. Hourly Rates 

Gr. Paragraph #7 : Maintenance or Equitable Adjustment of Wages 
Above the Minimum .... 

1. Official Explanation and Basic Interpretations 

2. Preservation of Wage Differentials 

3. Problems of Compensation 

H. Paragra-ph #8 ; Pledge Against Use of Subterfuges to Defeat 

Agreement 

1. Official Explanation ■ -.' ■ 

I. Paragraph #9 : Pledge Against Profiteering 

1. Official Explanation 

2, Prices 

J. Paragraph #10 : Pledge to Support Establishments Adhering to 

the Agreement 

1. Official Explanation 
K. Paragraph #11 ; Pledge to Work for the Submission of Codes 

1. Official Explanation 
L. Paragraph #12 ; Pledge to Make Appropriate Adjustments in 

Prices of purchased Goods 



9453 



-479- 

1. Official Explanation 

2. Relief to Government Contractors 

IvI. P arajgcraph #13 : Termination of. and Substitutions to P.R.A. 
1. Official Explanation . 



2. 



Effect of Approval- of Code Ux)on Continuation 



N. FarajSiraph #14 ; Exceptions to .Avoid .Hardship in Special Cases 

1. Official Explanation 

0. Duration of P.R.A. :,.•. 
1* Original Agreement 

2. Pirst Extension 

3. Second and Pinal Extension 

4. Present Status . 

CHAPTER III. POLICIES SOUGHT TO BE EPFECTUATED ] ■ 
I. Initial Policies. ■ . 

II. Policy-Forming Bodies ■ 

A, P. R^A. Policy Board. . ^,- 

1, Origin and Purpose 

2. Organization axid Termination 

B, Blue Eagle Division 

C, CoiTxjliance Division • 
!)• National Compliance Board 

E, Advisory Council ..•".•.■■ 

P. Com]pliance Council ;;j; ■■ • ■■.•.w,. , • 

■ ' '. ; _ ^ - , . r, ,.■:■' 

■ ■ ^ ' ' . ". ' t • . 

III. Policy in Granting Substitutions to. P.R»A. 

A. Authority . , . 

3, Liodifications -.■■' 

C. Instructions for Submitting Pe-titions 

1. When Code was Proposed 

2. Uhen no Code Was .Pending 

D. Policies Pollo-ved by P.R.A. Policy Board in Considering Peti- 
tions for Substitutions 

1. Where Proposed Code Provisions Covered the Same Ground as 

the P.R.A. 
2,r In the Absence of Proposed Code Provisions Covering the 

Same Ground as the P.R.A. 

E. Functions of P.R.A. Policy Board 

F. Procedure of P.R.A. Policy Board 

G. Deadline for Applying for Substitutions 

H, Nature of Substitutions and Industries Affected 

1. Application of Approved Substitutions 

IV. Interpretations of the P.R.A. by: 

A. Special Interpretations Committee 

B. National Labor Board 

C. P.R.A. Policy Board 

D. Interpretations Section, Blue Eagle Division 

V. Exceptions in Cases of Individual Hardship 

A. Authority for Granting Exceptions 

B. Essential Information Required from Petitioners 

C. Exceptions Section, Blue Eagle Division 

9453 



-480- ■ 

1. Policies Followed in Considering Petitions 

2. Procedure Followed in Considering Petitions 

D. Local N.R.A. Compliance Boards 

1, Petitions for Exceptions Presented Under Paragraph 14 of 
the P.R.A. 

(a) Local IT.R.A. Compliance Board Regulations for Handling 
Petitions for Exception 

2. Petitions for Permission to Operate Under Union Contracts 
(a) Local N.R.A. Compliance Board Regulations for Handling 

Petitions for Exception 

E. State N.R.A. Compliance Directors 

F. Voliune and Disposition of Exceptions 

VI. Awarding of Government Contracts and Loans Contingent Upon Com- 
pliance with P.R.A. 
A. Executive Orders 6246" and 6646 
3. Puljlic Works Administration Regulations 
C, Relief to Government Contractors "by Public Act No, 369 

VII. Enforcement 

A. Public Opinion as Contributing Factor 

B. Surrender of the Blue Eagle Called for by N.R.A. 

CHAPTER IV. ADMINISTRATION OF PROVISIONS OF P.R.A. 

I. Headquarters of Administration in Washington 

A. Blue Eagle Division of N.R.A. 

1. Executive Section 

2. Recovery Boards Section 

3. Compl.ciints Section 

4. Reori;pjiizations 

5. Procedure 

6. Termination of Division 

B. Compliance Division of N.R.A. 

C. National Compliance Board of N.R.A. 

D. Adjustment of Complaints and Restoration of Blue Eagle 

II, Field Administralion 

A. Local Mediation Boards 

B. Local N.R.A. Compliance Boards 

1, Origin 

2, PurjDOp.e 

3, Orgrriization 

4, Representation 

5. Perru-uient Chairmen 

6. Voluntary Character 

7. Procedure for Handling Complaints of Non-Compliance 

8. Duration 

C. State i. .R.A. Compliance Directors 

D. Regional Administration 

1. Origin 

2, Regions 

3. Fonctions and Powers of Regional Directors 

4, Regional Compliance Councils 

9453 



-481- 
CHAPTER V. ACCCMPLISI-IGITTS 
I. Number of Agreements Signed 
II. Employment and Payrolls' Represented 
III. Degree of Compliance Obtained 

CHAPTER VI. PROBLEMS ' 

I, Unfavorable Conditions 

A. Delay in Development and Promulgation on Part of Signers 

B. Pear of Unfavorable Effect on Signers' Business 

C. Fear of Presidential Action under Section 10(b) of the Recovery- 
Act 

D« Failure of Substitutions to P.R.A. to Define Industry Member- 
ship and Employee States 

E« Defects of Field Agencies 

1. ' Difficulty of Establishing Alleged Violations and Failure 
to Do So 

F, Centralization vs. Decentralization of Enforcement 

G-. Public Opinion as Sole Basis of Enforcement 

CHAPTER VII. CONCLUSIONS AND RECOMvIENDATIONS 



9453 



-482- 

THE PKESI D MT'S KEEI.iPLOYMENT 
AGKEMENT 

Preliminary Summary of Findings 

It is douttful whether any preliminary plan would have been more ef- 
fective than the P.R.A. in effectuating the National Industrial Recovery 
Act, especially as to reemployment. The Agreement "bridged the gap in 
time necessary to bring members of trades and industries under codes. It 
was instrumental in eliminating child labor. It helped to expand pur- 
chasing power by increasing wages, reducing work hours and spreading em- 
ployment. It created public opinion in favor of the President's reem- 
ployment drive. It tended to diminish unfair competition between intei^ 
state and intrastate commerce. It revealed the special problems of indi- 
vidual trades and industries. It set standards for labor in all trades 
and industries in all localities at the same time, subject to approved 
modifications. It prepared members of trades and industries for codes. 
Indirectly, it persuaded them to submit codes for approval. Finally it 
tended to ease coriipetitive inequalities between condified and uncodified 
industries. Altogether, it more than fulfilled the Administration's ex- 
pectations. 

Setting aside the existence of an emergency and the need for immedi- 
ate action, experience has shown that haste should be avoided in launch- 
ing a program like that of the President's reemployment drive and the Re- 
employment Agree-.n8nt. Wherever possible the wording of such an agreement 
should be simplified, aid the statements should be specific rather than 
general, thus reduoi.ng to a minimum the need for interpretations and ex- 
plaJiations. 

Before launching the program the policies involved should be clearly 
defined; and adequate machinery should be set up to educate those af- 
fected as to Yjhat is expected of them, and to administer and enforce the 
agreements. 

If widespread cooperation is sought, a symbol or insignia for use by 
assenting employers has a good effect, and enables the public to deter- 
mine readily who is and who is not cooperating. Whether the boycotting 
of those who fail or refuse to assent or comply should be encouraged is 
a question of policy. 

The advisability of using voluntary organizations for administration 
and enforcement is questionable, because such agencies are apt to be un- 
derstaffed, and full time cannot be devoted to the work. Great care 
should be used in selecting personnel for administration and enforcement, 
and it should be thoroughly trained. 



9453 



-483-- • 

Prison C01IP5TITI0II AlID TE E PRISOIT COlgACT 
Table of Contents 

I« The Problem 

A. Free Industry Vievrpoint 

E. Prison Executives* vievnoint 

C, Consideration of Sonofits to Prisoners 

Dt Public Vieux)oint 

E. Helationship to IJ.R.A, 

II. The Prison ComiDact 

A, Origin 

B, Objectives 

C, Formulation 

D« Presidential Approval 

III* The Prison' Labor Authority 

A. Conferoncos nith- Cotton Garment Code Authority 
B« Conferences iiith Tv;ine and Cordage Code Authority 

C, Election for Formal Prison Labor Authority 

D, Efforts of Prison Labor Authority tov;ard Allocation and Diver- 
sification 

E. Prison Labor Authority Ileoirement of Labels on all prison G-oods 
Suitable for Labelling in Competition uith Free Industry Goods 

F. Action of Prison Labor Authority Estr.blishing Price Polic2'' 
Under Article V, Sections (a) and (b) and Article VII, Section 
2 (d) of the Comoact 

G« Action of Prison Labor Authorit^T- on Assessments 

H« Prison Labor Authority Votes to Bring under Its Jurisdiction 

Jails and Houses of Correction of I.Iinor Political Subdivisions 

TTlio Become Signatory to the Compact 
I. Tlie Association of States Signatorj'- to the Compact Votes to 

Continue the Prison Labor Authority After Supreme Court Decision 

in Schechter Case 

IV. Labels and Insignia 

A. Applications for Use of IJ.H.A, Labels by the Prison Labor Author- 
ity 

B. Legal Division Memorandum Stating the Administrator Might Author- 
ize the Use of F.H.A. Labels on Prison Made Goods 

C» Memorand-um of Acting Division Administrator to Adriinistrative 
Officer, Reco-'imending IT.E.A, Labels Be Authorized for Use on 
Prison Made Goods 

D, Memorandum of Policy Advisers on Question of Whether Goods Manu- 
factured Under the Compact Should Bear i-ioR.-^* Labels 
•-■ E, Policy Ruling that Prison Man-ofactured Products Under the Con- 
pact Might Bear an II .R. A. Label 

F, Adr;iinistrative Order Ko« V-2, Setting Forth Regulations to 
Govern the Use of lI.RoA. Identification Sjnnbbls 

G« Administrative Order V-o, amending Administrative Order V*-2, 
and Denying Application of Cotton Garment Code Authority for 
Permanent Stay of the latter 

H, Bud-get and Audit of Prison Labor Authority 

9453 j 



-484- 

V. Compliance 

A* Form Containing Instru.ctions to Coniplainants 

B. Authorization of Prison Lator Authoritj' to Hear and Adjust 
Conplaints under Article VII, Section 2 (li) of the Compact 

C. Certificate of Conpliance and Application for ISIA. Lal)els 

D. N..II.A. Code Authority' Field Letter !To, 5, Instructing 
Code Authorities as to Proced'ore for Handling Prison Laoor 
Compa-ct CoiTplaints 

E. Complaints 

F. Compliance Division Coriiplaints 
G-. Nature of Complaints 

H. Industries Host Active in Entering Complaints 

Against Prison Llade Goods 
I. Other Industries Affected "bv Prison Competition 

VI. Ulman Committee Report 

A. 36~Hour Ueeli for Cotton Garment Indastry 

B. Executive Order No. 118-135, October 12, 1934, Directing- 
Ulman Committee to Investigate Effects of Competition 

Between Products of Prison Lahor and the Cotton C-arment Industrj*" 

C. Points Concerning Prison Later Covered 'by 
Investigating Committee 

D. List of PersoiiS Appearing Before Ulman Committee, in 
Representation of Industrj^, Organized Lator, 
Prison Administrators and IT.R.A. Officials 

E. Committee Report and Recommendations - Release No. 9029-A - "•- 

F. Transcript of Hearing 

G. Findings of UT-man Committee 

H. Recommendations of Ulman Committee 

I. Comments of Prison Later Authority on Ulman Committee Report 

J. N.R.A. Public Release No. 9078 of Decemher 3, 1934, 

Designa.ting Committee to Conduct Negotiations with FEEA 

to Ascertain if the Latter Could Utilize Prison Lator Garment 

Production in the Relief Program. 
K. Official Action of N. I.R.B. on Ulman Committee Report TZithheld, 

Pending Procurement of Legal Opinions and More Data on Proclem 
L. Prison Later Authority;- Proposal to Effectuate Recomr.iendations 

of Ulman Committee 
M. Action of N. I.R.B. , May 27, 1935, Accepting In Principle 

Prograjn to Replan and Reorganize Prison Industries 

VII. Proposed Prison Industries Re-Organization Administration 

A. I.!emora.ndum of May 18, 1935, from Division Acbninistrator 
Collins to L, C. Marshall, Urging that 

Definite Action oe Taken b^- N. I.R.B. to p-'orther a 
Prison Program Recommended "by Ulman Committee 

B. Report of Organization Meeting Conference of Free Industries 
on Economic Plan for Prison Made Goods, May 23, 1935 

1. Platform of Principles Adopted "by Conference 

2. Telegram to President Roosevelt from Conference 

C. Memorandum of Division Administrator Collins to 

L. C. Marshall, April 29, 1935 Oatlining Steps to "be Taken 
in Connection with N. I.R.B. Action in Prison Lahor Field 



9453 



-Cj« 



i.' • 



D, Proposed Executive Order Estr.olisiiing Prison Industries 
He organization Administration 

I.ienorand-um of Division Adninistrator Collins to Hr, O'Neill, 
Ur..2ing that He Present Prison Labor Progrcjn to the President 
I.ieLiorandum from Division Administrrtor Collins to i^^r, Coonley 
Giving History of Compact and Its Operation 

G. Executive Order Ho. 7194, Establishing Prison Industries 
Heorgajiization Administration 

VIII. Adr.iinistration of Prison Labor Compact 
A» U,Ii#A, Personnel 
3, Prison Labor Authority Personnel 

C, Efforts of HoR.A, Officials to Coordinate Objectives of the 
Conpact '7ith Prison Labor Authority and Affected Code Author- 
ities 

Dm Legal Aspects of the Compact 

E, Interpretations 
P. Stays 

G« Prison Industries Statistics ns Compiled by II, P., A. 

E. Protests Received by K.R.A* Against Use of Prison Labor on 

Products to be sold in the Oioen Marliet 
I. Cooperation by Other Governmental Departments and National 

Associations v/ith N.H.A. in Administering the Compact 

IX» Effects and Conclusions 

A. Stabilization of Price Structure 

3, Encouragment of Uniform Prison Operations in Mrnufacturing 

a.nd Selling 
C» Diversification S;oreads Work Amon:: Prisoners and Exroedites 

Later Hehsbilitation 

D, Future Legislations 

E, State Use System 

F» Legal Requirements in Disposing of Prison Made Goods 



9453 



PRISON COldFETITION AND THfl PRISON COMPACT. 

Preliminary Summary of Findings 

The "Compact of Pair Competition for the Prison Industries of the 
United States of America, " commonly called the "Compact, " was a voluntary 
agreement entered into between state authorities and orison executives on 
the one side, and the National Recovery Administration on the other. 

The Compact 'ras for the parpose of 98 18^131 ishing a workable relation- 
ship, in so far as existing laws permitted, bet^-^een free industries and 
the prison industries, in an effort to- carry out the policies of Title 
I 01 the National Industrial Recovery Act, and especially to bring it 
aliout that prison-made goods, ^-rhen disposed of in the open market, i/ould 
be sold under competitive conditions, fair to free industries. 

The prison industry problem ^-^as essentially a state affair. The 
Federal Government can Ire of assistance by advising and aiding the 
state's in the formulation of a diversified program; but on no account, 
in the a.thor's opinion, should it attenpt to force into effect a 
progr^.m ^vhich the states do not voluntarily accept* 

The competition of prison goods ^'ith free industry goods became 
an F.R.A. problem -^hen an attempt ^^as made by the sponsors of the -Codes 
for the Cotton Garment, the Farm Equipment and the T^-^ine and Corda.ge 
Industries, and others, to insert in their codes clauses to prohibit 
their members from handling or selling prison-made products.. 

The state prison executives and the Bureau of Federal Prisons 
proposed to the President a code v;hich embodied the principles contain- 
ed later in the Prison Compact; but in the opinion of the N.R.A, Legal 
Division these groups vrere not entitled to a code because they could 
not meet the requirements of Section 7(a) of the National Industrial 
Recovery Act» 

Provisions were inserted in the Cotton Garment and the Retail 
Codes, which in effect prohibited members of those industries from deal- 
ing in prison-made goods, unless they were manufactered under the terms 
of a prison compact. These provisions were stayed until a compact could 
be formulated. 

In the opinion of the N.R.A. legal advisers the Compact, when for- 
mulated, lacked legal validity for the following reasons; 

(a) State compacts require the consent of Congress 

(b) It is doubtful whether Congress may delegate its power to give 
consent to such a compact to the executive branch of the 
Government 

(c) The National Industrial Recover3r Act did not contain any 
delegation to the President of the Congressional power to 
consent to conipacts; and the Compact was not an agreement 
within the meaning of the Act 

9453 



-4-87- 

(cl) The Prison LaDor Compact nay no.thave "been properly executed, 
as it did not comply '"dth the desirable rule that a State 
legislature pass a "bill providing for the adoption of the a.ct 
of its agent "before a c-ompact'Tssi;'^;nod, and providing further 
that the comppxt shall then "be the lav of the State, In one 
instance only -.that of the State, of Xenti;LCky - was there 
state legislation in support of, the Compact. • , 

'the Prison Compact did reduce to a great degree the loading of the 
markets r.'ith prison-made goods. The efforts of the prisons to conrply 
vfith the Compact diminished the dumping of such goods at less than fair 
current prices, . ,. ^ 

The Prison La"bor Authority was unable to accomplish rarach with re-_^ 
spect to the diversification of Prison Industries, as provided for under 
Article VII,* Section 2(f) (l) of the 'Compact, Ho'/ever, in some instances, 
they were aole to reduce the production of orison-made products. 

In the author's opinion, Federal legislation shoiild be enacted to 

encourage the States to enter into a prison compact through .approval by 

their legisl.atures, Tho objectives and purposes o*f such a compact should 
be: 

(a) To maintain fair competition between products of private 
domestic industry and those of prison industrj'', . * ' * 

(b) To assure a diversification of the output' of prison industries, 
in fair proportion to the production of the affected free in- 
dustries, . . , 

(c) To relieve unemployment wi'thih the, pena2 institutions of the 
'states by providing work for the inmates of a reha,bilita,tive 
and chardct.er-building nature, and to lessen the dangers in-- 
herent to idleness. 



9453 



— "-^ >— -^-- 



^488- 

SHELIERED WOEKSHOFS 

Table of Contents 

I. Introduction 

A. Origin 

1. Definition 

2. Kinds 

3. T^'pes of Workers 

(a) Mentally Handicapped 

(b) Socially HandicarD-oed 

(c) Physically Handicapped 

B, Objectives 

1, Rehabilitation of Workers 

2, Provision of Remunerative Employment 

3, Operation for Training Workers, and Not for profit 

II. Scope of Study 

A. Hand i carped Workers 

1, Defi.'iition 

2, In Private Industry 

(a) Executive Order 6606-P, February 17, 1934, Prescribing 
pLules for the Interpretation and Application of Labor 
Provisions of Codes as They Affected Handicapped Workers 
in Private Industry 
(b'l Special Cf'raiiittee Report, July 23, 1934, recom-iending: 

• 1) lu'.: re Flexibility in Minimum Wages Payable to Handi- 
capped Workers 
:?■) That Benefits of Sub-Standard Certificates be not 
Limited to the Handicapped Who Were at Least 75 
per cent efficient 

(3) That Industry be Allowed to Hire Those Less than 
50 per cent efficient 

(4) That Homework for the Handicapped be Allowed 

3, In Sheltered Workshops 

III. S-ieltero " ^Vr.kshops under the National Recovery Administration 

A, Probieiii Confronting N.R.A. 

1, Inclusion of Sheltered Workshops under Code Provisions 

2, Richberg's Interpretation of August 30, 1933, that Charitable 
Institutions, Whether or Not Operated for Profit, Which En- 
gaged in Industry, Should Sign the P.R.A. and Might Co:-.ie With- 
in the Terms of Permanent Codes 

3, Proposals by Sheltered Workshop Officials 

4, Appointment of Special Committee 

5, Report of Special Committee on February 1, 1934, recommending 
that Sheltered Workshops be Enabled to Comply with Spirit and 
Intent of N.R.A. and have Benefit of Blue Eagle, without Being 
Required to Conform with Codes 

B. Solution of the Problem 

1, Section 3(a) of the Recovery Act 

2. Issuance of Administrative Order X-9: 

(a) Defining Sheltered Workshops and Granting Conditions.! Ex«» 
emption from Codes 

(b) Establishing a National Committee and Providing for In- 
signia 

9453 



-489- 

3, Appointment of National Sheltered V/orkshop Committee 

4, Administrative Order X-59, Authorizing Committee to Issue 
La"bels 

5, Administrative Order X-81, Revising Regulations for the 
Issuance of Labels 

6, Administration and Use of Identification La'oels 

7, Agreement Restricting Production During Strikes to. Normal 
Quantity 

8, Resolution Providing that Relief Paid in Excess of Wages 
Should not he Included in Computing Cost of Production and 
I'air Selling Price 

9, Report of Ulman Committee on Sheltered Workshops: 

(a) That the Sheltered Workshop Committee was making Sin- 
cere Effort to Secure D^pir Competition 

(h) That the Board take no Action on Cotton Garment lianu- 
facturers' Controversy vith Sheltered Workshops, as 
it was about to be Settled, 
10. Adininistrative Order X-111-1: 

(a) Defining Com.iittee's Tenure of Office 

(b) Authorizing Regif^nal Committees 

(c) Providing Procedure for Handling Complaints Against 
Sheltered Workshops 



IV. Conclusions 



9453 



-49 > 

SHSLTEgED WCRKSHOPS 

Prelinir^ary S^unr.ary of Findings 

A "sheltered workshop?' raay "be defined as a charitable institution 
whose activities are conducted not for profit, crat to provide rem^onerar- 
tive ezroloynent for physically, mentally or socially handicapped --orVers. 

The problem confronting the H.H.A. in this connection Tiras to do 
justice both to the labor standards for reg-olarly euolo3'ed T?orkers, rhich 
were being built up in the codes, and to the handica-oped persons in such 
sheltered shops. 

Tlie Acjninistration^s policy ras that charitable institutions should 
not be covered by codes, as they did not engage in industry or trad.6; 
but th-.t "l.en such institutions, including sheltered T7orkshops, die. en- 
gage in industry or trade, even though not for profit, they should sign 
the ?,r..A. , and night then come "ithin the terns of permanent codes. 

On Uarch 3, 1934, there nas issued Administrative Order X-9, ■■hich 
nijiiit 'Tell be called the charter of sheltered -orkshops under N.H.A. 
This iTantec. exemption to such sho-os provided they signed a TJledge that 
they T70uld not: 

Iiir^lo3'' minors under 16 years of age, except for instructional pur- 
poses, r;l.en approved by a Regional Committee, 
En^-i^age in dert.-^^c'ci've price cutting or other unfair method of 
conpetition 
T7illifu?_ly hamper or retard the purposes of the Act, 

iT»?i*A« proved a most important milestone in the development of 
sheltered "rorkshops. For the first time the cause and problems of these 
institutions irere given adeq^oate representation in the industrial forui:. 
For the first time links were established between private industry and 
the government and the sheltered "porkshops, and among the latter them- 
selves. 

If a ner Act is proposed, it should provide specifically for the 
administrr^tion of sheltered ^;rorkshoTjs in the sane manner as ■'jjider the 
N.R.A. 

If the use of labels is approved for industries, it should be 
authorized for sheltered workshops also, 'subject to coirpliance with the 
proper conditions. 

If no ne— legislation for industrial recovery is proposed, mec,sures 
shoulc. be taken to continue the l^ational Sheltered Workshop Committee, or 
its ecuivalent, -zander the si:c)ervision of the Federal C-cverriment , either 
as a separate agency or as a unit of an established department. 



^453 



-49.1- 
STATE AI:D MWICIFAL HELATIOi'SKIPS -jith nha 
Table of Contents 

I* Local Ofxices in States EstaMished under P.R.A. 

A. State Recovery Boards 

B. State Recovery Councils 

II. Local Offices in States Established imder Codes 
A, Local N.R.A. Compliance Boards 

III. State Legislation Resiilting From the National Industrial Recovery Act 

A. Reasons for State Legislation 

1, Meed for Exemption from State Anti-Trust La-^s During Period of: 
Emergency 

2, Desirability that Codes and Agreements Cover Wliole Field of 
Commerce, Intrastate as Well as Interstate 

3, Desirability of Providing More Adeouate Enforcement thru State; 
Administration ajid La^ Enforcement Machinery . . 

B. Legal Basis of State Legislation 
... 1, Police Por:er 

C» Nature of State Legislation 

1, Passage of State Recovery Acts, Providing For 
(r) State Codes and Administration 
■ ^ "',:•• (b) .Su.spension of State Anti- Trust Lar^s 

(c) Suspension of Blacklisting and Boycotting Statutes 
■ (d) Cooperation ^7ith A.ArA. 

(e) Requirement of Certificates of Compliance '7ith N.R.A, 
Codes 

(f) Other Legislation in Support of N.R.A. , but Without En- 
forcement Provisions 

* - . * 

IV. State Enforcement 

A. N.R.A. Cooperation 

V. Court Decisions 
A. State Courts 
3. Federal Courts 

C. Schechter Decision 

VI. present Status of State Legislation ... . 

VII. Coordination of State La-'s "by N.R.A. 

A. Passage by Six States of Recovery Acts Inharmonious with Aims of 
N.R.A. 

B. .Need for Guidance in Drafting of Individual State La^vs to Effect 
Uniformity 

C. Submission of Uniform State Recovery Acts to State Legislatures 
in Session in. February, 1934 
1, First "Iclodel" Act" 

(a) Important Features 

(1) Adoption of National Codes as State Codes \.'ith 
State Jurisdiction Over Violations 

(2) Requirement of all Stste and I.amicipal Agencies to 
Purchase Only from Firms Com-Tlyin-', nith Aunlicable 
N.R.A. Codes 

9453 



-492- 

(b) Results 

(1) Model Enacted "by 14 States 

(2) Cooperative Le.gislation in Four States 

VIII. Government Contracts 

A. Problems of Public Purchasing Agents Result in Administrative 
Order X-48 

1. Legal Difficulties 

2. Purchasing Procedure Difficulties 

B. Executive Orders 6246, 6646 and 6767 

1, Effect on States and Minor political Subdivisions 

2. Effect on Industry Sales 

IX. Organization of K.R^A. State Relations Division, June, 1934 

A, Purpose: To further Coordination of State Legislation 

B, Result: Revision of Model Act ("Illustrative Draft of a State 
Recovery Act"), February 15, 1935 

1, Need of Overcoming Adverse Court Decisions Leads to Addi- 
tions and Revisions 

(a) The adoption of State Codes Conforming to National 
Codes, but Subject to the Approval of the State Gov- 
ernor or a Board Appointed by Him 

(b) Legalization of Wage Recovery Suits With Damage 
Clause 

(c) Other Provisions Added, Where Necessary, to Conform to 
State Constitutions 

C. Revised "Model" Act Submitted to the State Legislatures in 
Session, January, 1935 

1. Passed in 11 States 

2. Failed of Passage in Other States Because of; 

(a) Crowing Unpopularity of N.R.A. 

(b) Delay in Enactment of New National Industrial Recovery 
Act by Congress 

D. Recommendation for Executive Orders by State Governors in Lieu 
of Legislation, Providing that All State and Municipal Agencies 
Purchase Only from Suppliers Complying With N.R.A, Codes 

X. Adoption in Larger Municipalities of Ordinances Embodying Some 
Major Provisions of "Model" State Act 
A. Result was Control of Specific Industries Under Policy or 

Licensing Power in Chicago, New York, Philadelphia, San Francis** 

CO, and numerous smaller cities 

XI, Evaluation 

XII. Conclusions 

XI ir. Bibliography 



9453 



^•^ -^-^ ^' 



-4'93- 

S T A Y_ S 
Tatle of Contents 



I, Introduction 

A. 0"bjective and Scope of Stud;,'" 

II. Pertinent Provisions of the National Industrial Recovery- Act 

A. Section 3(a) 

B. Application of Section 3(a) to Sections 4, 7('b) and 7(c) 

C. Sections 6(a) and 6("b) 

D. Sections 10(a) a-^.d 10(15) 

E. Limitations, if an^, upon the President 

F. Ilea,sona"ble Implications 

III. Definitions of Sta7s 

A. Popu].ar definition 

B. Legal Definition 

C. Administrative Definition 

D. Relation to Terms "3xemption" and "Sjcception" 

IV, Delegation of Authority to Grant Stays 

A. necessity and Extent 

1. Delegation to the Administrator 

B. Retention "by President 

C. Delegation to National Industrial Recover^'- Board 
1, Rn2es and Regulations of N, I.R.B. Regarding 

^Executive Grants or Refusals of Stays 

D. Additional Delegations of, Limitations or Conditions 
on Authority 6fll. I.R.B. 

E. Re-delegation to Su"bordinates 

1. necessity 

2. Early Phases of I'.R.A. 

3. Re-delegation to Division AdLiinistrators 
'4. Limitations 

5. Re-delegation to Territorial Administrators 

6. Legal Aspects 

P. Provisions for Appeal 

1. To Industrial Appeals Doard 

V. Classes of Stays 

A. General - from All Provisions of a Code 

B. Partial - from Some Provisions of a Code 

C. Group - from All or Some Provisions of a Code 
Affecting a Group 

D. 'T^-pical Cases 

VI. Time of Iss-aance of Sta^^" Order 

A. On Approval of Code 

B. After Approval of Code 

C. On Aoproval of Amendment 

D. After Approval of Amendment 

E. Or. Approval of Code Administration Matters 

P. After Approval of Code Administration Matters 

9453 



VII. Reasons for Stays 

, A. At Time of Code Approval or Code Amendment 

1. Legality 

. . 2. Clarity and Draftsmanship 

3. Tor Purposes of Study 

4. Conflict with Other Codes 

5. liiforcement of Policy 

6. Hecognition of Protests 

7. Coordination or Conflict with Other Governmental Agencies 

8. Sections 5 and 6(a) of Act 

9. True Representation 

. 10. Difficulties of Administration, Compliance and Enforcement 

11. Refusal of Industry'- to AcceiDt Administrative Changes 

12. Other Reasons 

B, After Time of Code Approval or Amendment 

1, Legality 

2, Changes in Policy 

3, Difficulties of Administration, Compliance and Enforcement 

4, lTon~cooperation of Industr;'- 

5, G-eographical Problems 
5, Multiple Code Coverage 

7, Increase of Z::emptions • 

8, Foreign Competition 

9, Pending Amendment 
10. Other Reasons 

VIII. Types of Code Provisions Satjected to StajT's 

A. Code Definitions 

1. Industry.'- or Sulidivisions Thereof 

2. Memhers of Industry;- and Classifications Tliereof 

3. Distri^bution Agencies 

4. Commodities 

5. Bases of Applications and Industries Affected 

B. Lahor Provisions 

1. Maximum Hours 

2. Minimum Wages 

3. Child Lahor 

4. Apprentice Limitations 

5. Handicapped Workers 

6. Standards of Safety'- and Health 

7. Homework 

8. Stretch-out 
...... - 9. Scrip Payments 

10. Equitahle Adjustment of Wages ahove the l.Iinimura 

11. Posting 

12. Collective Bargaining 

13. l.Iiscellaneous 

14. Bases of Applications 

15. Industries Affected 

16. Development of Lahor Policy 

17. Legal Aspects 

18. Svalu8,tion of Experiences 

C. Tl*ade Practice Provisions 
1, General 

9453 



-495- 



2. Code Authority Regulations having ?orce and Effect of 

Code Provisions 
3» Price Policies (including Bid Depository Systems) 

D, Code Authority Provisions 

1. Rights of Code Authority 

2. Obligations and Duties of Code Authority 

(a) Optional 

(b) Mandatory 

3. Use of Stay 

(a) To Insure Representative Elections 

(b) Prevention of Undue Association Participation 
(c). Legality 

(d) Policy 

E, Code Administration Expenses 

F, Label Provisions 

1. Bases of Applications 

2. Use of Stay 

(a) Control 

(b) Withdravzal 

(c) Policy 

3. Effect of Stays 
G-, Statistical Reports 

1. Executive Orders of General Application 

2. Eases of Applications 
H« Conditions in Ap"oroval Orders of Codes and Ajnendments 

1. Nature of Stay 

2. Effect upon Conditional Orders ■•-'.'•••; 
3» Effect upon Policy and General Code Structure 

I. Miscellaneous Code Provisions 



IX. Governr.ient Contracts 

A. Executive Orders 6337 and 6646 

B. Stays of Code Provisions CF.used oi' Government Contracts 

C. Na,ture and Effoct of Stays for Government Contract Purposes 



X. Effective Periods "•■ 

A. Duration of Act 

B. Duration of Code 

C. Temporary 
D# Emergency 

XI. Enactments Other than Code Provisions Subject to Stays 
A« Executive Orders 

B. Aojninistrative Orders 

C. General Rules and Regula,tions 

XII. Procedure 

A. A^Tolication by: 
1» Industry 

2. Labor 

3. Governmental Agencies other than H.R.A. 

4. Consumers 

5. Others 



9453 



~49S- 



Bt Applications Directed to: 
1» Washington 

2. Field Offices 

3. Code Authority 

4. Other Governmental Agencies 

C« Consideration of Application "by N.R.A» 

1* Inter-office 

2» Extra-office 

3. Due Process 
D. Final Action 

1. 'Form 

2. Notice 

SIII. Stays Initiated "by N.R.A. 

Ai Bases of Action • ' 

1, • Policy . 

2. Legality 

3. Protests 

4, Recognition of Recommendations of N.R.A. Advisory Boards 
B« Analysis of Industries Affected and Provisions Stayed 

C, Effect Upon: 

1. Industry 

2. Labor 

3. Consumers 

XIV. Subsequent Modification or Termination of Stays 

A, N.R.A. Initiation 

B, Application by Industry 

C, Application by Labor 

D, Applicption by Consumers 

E, Ap;olication by Code Authorities 
P. Bases of Application 

G. Effects 

XV . Evaluation 

XVI, Conclusions 

ICVII. Bibliography 



-497- 

STAY5 
Preliminary Summary of. Findings 



The present report deals v/ith the exercise of N.R.A. administrative 
power in the staying of codes and code provisions. Many administrative 
problems and difficulties were dis-oosed of with varying degrees of final- 
ity t»y the use of stays, and others were postponed. 

No mention of the term "stay", or of any such power, is found in 
the National Industrial Recovery Act. The exercise of the power was 
"based purely on an implied grant, which in the author's opinion was 
insufficient. This "basis. .is found in Section lD("b). 

"V'axious. attempts were made to define a stay, as there had "been no 
legislative definition. These definitions, however, failed to descri"be 
the actual use. The line of demarcation was ar"bitrary. 

The term "stay" was used more or less inter changea"bly with 
"exemption" and "exception", and the result was confusion. Legisla- 
tive definitions of these terms should "be made. There were no limita- 
tions as to when a stay or an "elimination" (that is, a deletion by 
permanent stay) might "be invoked. Code provisions were often amended 
by the use of conditional stays. 



9453 



-493- 

IS?JlIrG?JAL GCLZ5 i^-^Z A:^?ZZ!2::"5 

Table of Contents 

I, Introduction 
A, Tlie Problem 

1, I'ot a Study of Individual Codes 
3. ?.evie:7 ajid Anal./sis of Special Policy and Methods Adopted for 

Territorial Codification 

1. Reasons for a Special Program 

2. ?.e suits Accomplished 

3. Appraisal of Merit 

II. Bases in Law 

A. Constitution 

1, Plenary Po-^er of Congress over Territories 

B. national Industrial Recovery Act 

1, ito Aicable to Alas>a, Hawaii and Puerto Rico, but to 
no Other Territories 

2. President Authorized to Codify 15iose Territories Zitr--::r cy 
Inclusion in: 

(a) i^ational Codes 

(b) Separate Codes 

;il. Early Territorial Policy 

A. No Special Policy at Beginning 

1. Territories Regarded as the Same as Other Geographical 
Sections 

2. ITeed for Concentration on Major Problems liade Impossible 
Consideration of Territorial Problems 

3. About 30,000,000 Employable Workers on Ifainlcjid to be Ccveref. 
by Codes as Compared -rith 250,000 in Territories 

C. General Policy of Single Fational Codes 7or all Oeo^arr.icc;.! 
Sections 

3, Recognition cy Adriinistravor Late in A:u.g--i£t, 1533, of Tif- .r .-" 

Zcononic Conditions in Territories. 
Z, Decision not to Extend P.?.. A. to Territories 

1. Assertion that Territories Cculd not be 7.e^:l^.'~'i -r. ".--■-, 
Basis as Mainland 

2. Confusion Resulting Jrc- Air-ir-istrator ' s Prono'an:; j.i.-it 

IV. Zcononic :,..■._- i^r. ir. Territories 
A, Alasl:a 

1, Sparsely Inhabited 

2, :7c Large ToTTns 

3, Pishing and Mining lia.jor Industries 

4, ITo Other Industries of Importance 

5, Trade Almost Exclusively with Iftiited Strt^s 

6, Fisheries and Gold make iq) 90 per cent of exports 

7, "-'Z- :- "_.^ of Manufactured Goods Imported 
c, Vr.e— . ' ~=;r.t Situation 

9. Prev^ . li.'. "^ -- : 



9453 



-'Jo'd-J- 



B. Hawaii 

1, Medium Density of PppixLation 

2, Population Urbaji r-md Rural 

3, Majority of Popul^,tion Oriental 

4, Territory PrinciiDally Agricultural 

5, Trade Chiefly With United States - . 

6, Sugar and Pineap-ole Make Up 90 Per Cent of Exports 

7, Most of Manufactured Goods Imported 

8, U. S. Department of Lator Study of Hours and Wages in 
Principal Industries, 1930 

9, Prevailing Wages and Hours not Unlike Those on Mainland 

C, Puerto Rico 
1, Very Densely Populated 
2» Population Both Urban and Rural 

3, 40 Per cent Illiterate and 80 Per Cent unable to Speak English 

4, Predominantly Agricultural 

5, Trade mainly with United States 

6, Sugar the Chief Product; Toba^cco, Fruits and Wearing j^pajrel 
the Other Main Products 

7, Most Manufactured Goods Imported 

8, Prevailing Wages and Standard of Living Low 

V, Period of Confusion with Respect to Territorial Codification 

A, In the Territories 

1, Puerto Rico • ■ 

(a) Very Little Interest in Codes 

(b) P.R.A. Never Introduced 

(c) Small Group Wrnted N.R.A. ; Larger Group Op-oosed 

(d) Administrator' s Statement Further Confused 'Situation 
• 2, Hawaii and Alaska 

(a) P.R.A. Introduced 

(b) Good Res-Qonse Elicited and Progress Made 

(c) Administrator's Statement Puzzling; Hawaii Protests and 
Alaska Awaits Further Advice 

B, At Washington 

1, Territories Technically Covered by 90 Per Cent of Codes 

2, No Ef :"ort at Enforcement * 

3, Adninistrator' s Statement Indicated that Territories were 
not Covered 

VI, Special Territorial Policy Formulated 
A. The Plan Aprirovcd 

1. National Codes to Cover Territories Unless Specifically 
exempted by Terms of Code 

2. Industries in Teri'itories to Apnly for Amendments where 
Necessitated by Economic Conditions 

3, No Attempt at Enforcement Meanwhile 

4, Separate Codes Permitted Only Where National Codes Exempted 
Territories . . " 

5, Procedure Established Similar to Mainland Procedure 

6. Truly Representative Groups to Pro-oose Amendments and Codes 

7, Public Hearings to be Held 

8. Industry Assent to be Procured 

9453 



-500- 






B. 



VII. Application of Territorial Codification Policy 
A. Alaska 

1. Plan Above Outlined Followed 

2. National Codes Applied 
Follow-up to Obtain Compliance 

• IJo Amendments Pro"oosed 
Hawai i 

1« Departure From Plan Outlined 
2« Proposal of Separate Codes oy Industries 

3. Hearings Held 

Puerto Rico 

1* Partial Departure from Plan Outlined 

2, Proposed Separate Code for lleedlev/ork Industry, the Larg- 
est Non-Agricultural Industry 
(a) Attempts at Negotiation of Amendments unfruitful 

?• Industries not Interested 



C. 



Revision of Policy ^vithHospect to Territorial Codification 
A. Recognition of Danger of Collapse of Codification Efforts in 
liav/aii and Puerto Rico Unless Separate Codes V/ere Permitted 
Danger of Validity of National Codes Being Challenged in the 
Territories, on the Basis of True Representation and Due 
Notice 

Decision to lisXze Best of Bad Situation 
Separate Codes Permitted for Both Territories 






C. 

D. 



IX» Re stilts of Territorial Codification Plan 
A, Virtual Fail^jxe of Separate Code Plan 

1» Only 5 out of 25 Proposed Separate Codes for Hav/aii Approv- 
ed 
2. Only 2 out of 12 Approved for Puerto Rico 

X. Adr.iini strati on of Codes in Territories 
A. Alaska 

1» Administration from Washington generally satisfactory 
2» Exemptions 

(a) Need for quick Action 
("b) Power to Grant Delegated to Deputy 
B# Hawaii 

1« Administration from Washington Proves Im-oracticahlc, Re^ 

suiting in Long Delays 
2, Need for Prompt Action on the Ground 
c» Power Delegated to Deputy 
C, Puerto Rico 

1» Active Competition Between Mainland aJid Puerto Rico In- 
dustry 
2, Washington Administration Found Necessary and Continued 

XI » Evaluation and Conclusions 
A, Evaluation 

1, Plan of Separate Codification as Demonstrated in Hawaii 
and Puerto Rico '.7as Inherently Faulty 

2, Needless Repetition of Old Conflicts on Administration's 
V/ell Deliberated Basic Policies 



9453 



-501- 

3« Long Delays in Ne£;otiation and Approval 

4. Unreasona"ble Increase in Adrainistration' s Work 

5. Hesiilting Confusion sji'l Conflicts xilth Mainland Interests 
6« Successful Operation of Plan of National Codes Including 

Territories Denonstrated in Alaska 
B» Conclusion 

1, Territories should "be Considered the Same as Other Geo- 
graphical Sections 

2m Should "be Treated as Part of National Territory 

3» Should he so Codified and Administered 

4, National Codes Should Contain Special Provisions Where 
Economic Conditions Necessitate 



9453 



IBB 

I 

-502- • 

TEHEITORIAL CODES AND AGRESIvfflNTS 

preliminary Summary of Findings 

The Constitution of the United States gives Congress plenary po-rer 
over the territories. The genera.l laws of the United States hitherto 
not locally'- applicable have been extended by statute to Alaska, Hawaii 
and Puerto Rico, but not to other territories. The National Industri.-^I 
Recovery Act, consequently, applied to those three, but to no others. 
It was within the President's discretion to bring territorial trades and 
industries within the N,R,A, , either by inclusion in national codes or 
by means of separate instruments. 

In the beginning the territories were regarded as the same as other 
parts of the country, and were treated in the same manner. Late in 
August, 1933, however, the Administrator announced that the divergent 
economic conditions in the territories made it impossible to apply basic 
national standards, and that provision, therefore, would have to be made 
for territorial trades and industries, 

Alaska imports almost all its manufactured goods from the United 
States proper, and sells its products almost entirely to the latter. 
The cost of living and the prevailing wages in Alaska are somewhat higher. 

The products of the Territory of Hawaii are sold almost entirely 
on the mainland, and Hawaii purchases nearly all its manufactur©d goods 
from ths latter. The cost of living and the prevailing wages are about' 
the same as in the States, 

Outside of agriculture Puerto Rico's only industry of any importance 
is needlework. The products are sold on the mainland, and the Territory's 
trade is almost entirely with the United States, Wages are in general 
lower than on the mainland, and the standard of living for the bulk of 
the dense population is also lower. 

After the admission that mainland code standards could not be 
applied to the territories, no effort to enforce national codes in the 
latter was made, and their status with respect to codification was left 
undetermined. This confusion made it inadvisable to take the position 
that employers in the territories should comply. Later a plan was worked 
out which reaffirmed the principle that enterprises in the territories 
were subject to approved national codes, but x'rhich recognized that full 
compliance with the latter was often impossible, and that the territories, 
consequently, should apply for amendments, pending which no effort at 
enforcement would be made. The procedure laid down was similar to that 
prescribed for the negotiation of the natirnal 3odes, 

Alaskan industries did not seek amendments, as they were already 
paying more than the national codes required as minimum wages, 

Hawaii departed from the policy laid down, due to a misunderstand- 
ing and to the insistence of the local trades and industries on 
separate codes. 



9453 



-503- 

pLierto Rico foimd conformance with the standard -olan inrjractica'ble 

in case of the lleedlev/ork Industr;;'-, and received permission to write a 

se-oarate code for the latter. Attempts to' negotiate amendments xiere not 
very successiojl. 

For practical reas,ons it was deemed ezoedient to permit, the ne/jotia- 
tion of separate codes in Hav/aii to continue; and the same privile-^-e, for 
similar reasons, was extended to Puerto ?dco« This policy was necessar;' 
to prevent the complete collapse of the efforts to "bring these territories 
under, the active operation of the Recovery Act* 

Onlj^ five of the 25 separate Hawaiian codes suhmitted had "been ap^ 
proved at the time of the Schechter decision, sjid those only very recent- 
ly. Onl3^ two of twelve proposed separate codes for Puerto Rico were ap- 
proved. 

The • adriinistration of codes in Alaska from T/ashington, with a Dex^utj^ 
stationed at Juneau, proved satisfactory except in the matter of exemp- 
tions. . • , . ■ 

In Hawaii the separate codes in effect rea_uired action by the Recov- 
ery Board on manj- points, and adrainistra.tion from, u'ashington proved in-* 
practicalDle. Authority was delegated, therefore, to the local Deputy, 
■ subject to review and disapproval in Washington. 

Puerto Rico, unlike Hawaii and Alaska, has good air mail service 
to IJa,shington« It was therefore considered unnecessary to delegate spec- 
ial adrainistrative authority to the Deputy there. ,- 

TLiese plans failed to accomplish the "ourposes desired, and demon- 
strated the difficulties involved* in separate codification. If the 
t)rol)len should otgain oresent itself, the difficu].ties might be eliminated 
in the beginning by having the territories properly represented in the. . 
negotiation of national codes. They would then bo jiut under the latter, 
subject to such special provisions as their economic conditions might 
require. 



9453 



I 



-504- 

UNCODIFIED . INDUSTRIES 
Table of Contents 



I. Introduction 

A» Orientation and Explanation of Scope of Study 

II, Provisions of the Act 

III. Trade, Industry and La."bor Not Codified on May 27, 1935 

A» Uncodified Whose Representatives Made Application for Codes 
to N.R.A. 

B. Uncodified G-roups, or Special Classes Thereof, Known to 
il.R.A. Which Made no Application for Codes 

C. Resume of Volume of Business and of Lahor and Unemployment 
Statistics of Uncodified G-roups 

IV» Preliminary Efforts to Induce Codification 

A. By the President 

1. N.R.A. Bulletins 1, 2 and 3 

2» State and Local N.R.A. Committees 

3, District and State Recovery Boards 

4, Request for Consumer Cooperation 

B. By the Administrator 

1, The Blue Eagle Drive 

V. Presentation of Codes 

A. Status of Industry Under P.R.A. 
1» Conditions of Acceptance 

2. Conditions Attending No n~ Acceptance 

B, Presentation and Scope of the Codes Filed 
1» Activities Embraced 

2, Sponsoring G-roups and Representation 
3# Dates of Presentation 

4. Objectives to be Achieved by Codification 
C» Delays in Presenting Codes or Failure to Make Application 

1, Uncertainty, as to Eligihility Under the Act 

2, Possibilities of Conflict with Existing Legislation, 
Federal, State or Municipal 

3, Lack of Adequate Trade Organization 

4, Doubts as to Legality of Code System 

5, Adverse Attitude of Industry Members 
]). Tj'-pes of Actions Talcen by N.R.A. 

1, Applications Rejected and Reasons Therefor 

2» Applications Accepted, but Proposed Codes Held in 

Abeyance with Rea.sons therefor 
3» Applications Accepted and Codes J^proved 

VI, Procress of Code Formulation and Difficulties Encountered 
A. .Administrative Problems in Code Formulation 

1, Proposed Provisions Involving Classification Difficulties 

2, Proposed Provisions Involving Conflict with Pending or 
improved Codes 

9453 



•505- 



3. Pro-DOsed Provisions Involving Monopolistic Practices 

4. ProToosed Provisions Involving Oppression of Small 
Enterprises 

5. Proposed Provisions Involving Conflict with N.R.A. Dolicy 

6. Ambiguities or Limitations of the Act 

7. Misrepresentations by Code Sponsors and Others 

8. Sponsors' Lack of Knowledge of N.R.A. ' i 

9. Conflict With Existing or Pending Laws, Federal, State I 
or Municipal 

B, Legal Problems of Code Formulation 
1« True Representation 

2, Equitable Assessments . 

3, Trade Association By-Lav^s 

4, Rights of Individuals 

5, Illegality of Code Provisions 

6, Other Problems 

C# Labor Problems of Code Formulation 

1. Merit Cla.use 

2. Collective Bargaining 

3. Unwillingness of Industry to Recognize Labor Organizations 
in Code Negotiations 

4. Disputes Over Labor Provisions 

D. Organization Problems of Code Formulation 

1. Lack of Coordination Between N.R.A. Units 

2. Ambiguities of Policy or Lpck of Policy 

3. Positions Taken by Advisory Boards 

4. Positions Taken by Research and Planning and Legal 
Divisions 

5. Personnel Problems, . ' 

E, Effect of Protests on Code Formulation 

1. Protests i^ainst Inclusion in Proposed Codes 

2. Protests Against ProDOsed Assessments 

3. Protests Approved of Proposed Codes From Interested 
Groups 

F, Miscellaneous Difficulties in Code Formulation 

1. Prison-Made -Goods 

2. Sheltered Workshops * 

3. Conflict Between National and Territorial Codes * 

4. Government Competition 

5. Model Code Provisions 

G. Summary of Difficulties in Code Formulation 

VII, Efforts to Expedite Codification 
A» By the President 

1, Executive Orders Pertaining to the Codification of 
Industry 

2. Executive Orders Pertaining to Compliance With Codes 
3# Executive Orders Providing Blanket Exem-otions 

4, Executive Orders Explaining Provisions of the Act 
B. By the Administrator or National Industrial Recovery Board 

1. Termination of Substitutions to the P.R.A. 

2. Administrative Orders 

3. Office Orders 

9453 



-506- 

4. Office Memoranda 

5. Instructions to IT.R.A. Staff 

6. Order Adopting Basic Code 

7. Other j;ethodS' Attempted 

8. Zlecover;;- Legislative Program. 

C. B:^ Industry 

1. 'i.Iodiiications of Origina,! Code Provisions 

2. Acceptance of Provisions in Model Code 

3. Other Concessions 

D. By LalDor 

1. Punitive Action: Its 7orms and Influence on Codification 

2. Concessions "by LalDor 

E. Efforts Td^'' Other Groups or Individuals 

1. 3;^ Trade Associations 

2. B:^ Others 

VIII. Circimstances Attending Pailure of, or Failure to Effect, Codification 

A, Disposition of Uncompleted Codes 

1. Held l)y Deputy Awaiting Policy Determinations 

2. Held l)y Deputy Awaiting Industr:^'- Assent 

3. Held ^y Deputy Awaiting Other Deterrainations 

4. Withdrawn l)y Industry Because of InalDility to Accept 

5. Withdrawn l)y Industry "because of Loss of Interest, Due 
to Changing II.H.A. Policies, Inability to Incur Further 
Expense, Enactment of Legislation, Change of Policy of 
Other Government Agencies, etc. 

B. Disposition of Proposed Codes Submitted for Approval 

1. Forwarded to Administrator for Approval 

2. Action Talien "by Administrator 

3. Forwarded to President 

4. Heaction of Lator and Industry to Administrative Action 

C. Suspension of Approved Codes 

1. Suspension hy the President, and Procedure Used 

2. Suspension "by the Administrator 

D, Su2:imar;;r of Delays or Lack of Results 

1, Unwillingness or Inability of li.H.A, to Accept Proposed 
Provisions 

2. Unvrillingness of Industrj^ to Accept Unconditionally 
Provisions Urged by N.R.A. 

3, Opposing Factions within Industry 

4. Opposing Factions within Labor Groups 

IX. Effects of Lack of Codification 

A. On the Effectuation of the Declared Policies of the Act 

B. On Compliance with and Enforcement of Approved Codes 

C. On Labor and Unemployment 

X. Evaluation rvid Conclusions 

A. Diff ic^^ities Encountered and Their Causes 

B. Effect of Policies Rirsued by N.R.A. 

C. Possibilities of Alternative Policies 

D. Possibilities of Effecting Future Codification and Results 
TTnich Light be Accomplished 



9453 



-507- 



1, Value of Codes for Trying out Proposed Legislation 
E. Limitations of the Act 



XI, Bibliography 



9453 



UNCODIFIED IlTDUSTHlilS 

Preliminary Siimmary of Findings 

During the period of F.H.A, activity, from June 16, 1933, to 
May 27, 1935, 55? 'basic codes were approved. In addition to these there 
v/ere submitted approximately 5,000 other codes. Records of the latter 
were not kept in such a manner as to make analysis possible, but it is 
known that many were dropped because of merger with other proposed codes, 
or with codes already approved, 

t 

Large industries for which no codes were approved were electric 
light and power, telegraphic communication, telephone, shipping and 
meat packing. There were approximately 3,000,000 employees in eligible 
industries not codified. No effort was made to codify certain large 
industries, of which the railroads were one. 

Of the many reasons ^-'hy important industries remained uncodified 
the outstanding ones were: 

1, Doubt as to the true representation of an industry by the code 
sponsors, 

2, Objections by represento.tives of some industries to operating 
and trade restrictions in their codes, introduced by N.R»A, 

3, Strong claims by some enterprises within an industry that the 
proposed code conditions would be oppressive and an aid to monopolization 
by ontbrprisos claimed to b3 favored, 

4, Discouragement of code sponsors because of excessive debate, 

5, Lack of continuity in code nego tat ions through frequent changes 
in N,R,A, personnel and the shifting of industries from, one N,R,A, 
Division to another, 

6, Various forms of maneuvering by code committees to secure 
comaercial and industrial advantage over competing industries: e,g, 

(a) Questions why certain industry groups should be codified, while 
.J others reaching into the same markets remained without codes, 

(b) protests of one industry'- against the granting to another of a 
code permitting more favorable operating conditions. The real 
motive for a protest was frequently obscure, and N.R.A. had no 
alternative to delaying procedure until the purpose was clear, 

7, Deliberate xDrocrastination by H,R,A, , at times, because of the 
knov/ledge that some codes would involve extraordinary, if not impossible, 
problems of administration and enforcement. 

The nature of this study, in the author's opinion, precludes the 
offering of constructive suggestions for new legislation. 



9453 



-50S- 

Any solution of the administrative problem will require a thorough 
analysis of all the factors; influencing industry groups away from 
codification, and the extraction therefrom of permanent principles of 
policy designed to eliminate the. former difficulties. 



■lO 



Hi '■ ':.ri2'l r-. .:x - ; .-. r. 



9453 



-510- 

AJMINI STMT ION OF LABOR PROVISIONS BY CODE AUTHORITIES 

Ta"ble of Content s 

CHAPTER I. NATURE OF STUDY 

I, purpose and Use of Study 

II* Difference Between Administration for Developing a Law and 
Adi.iinistration for Enforcing It 

III. Sources of Material 

« 

IV. Coverage of Study, "by Number of Codes and Number of Employees 

V. Classification of Codes by Groups 

CHAPTER II. DSVELOPIVIENT AND ADMINISTRATION 
OF LABOR LEGISLATION 

I. Co:.Tparative Evaluation of Methods Used to Develop Standards 
in Labor Laws prior to the N.R.A. 

II. Relative Importance of Collective Bargaining and Judicial 
liiTpaxtial Approach for the- Formulation of Labor Standards 

III. Evolution of Labor policies under the N.R.A. 

IV. Evolution of Administrative poTierfi of Code Authority Under 
the N.R.A. ' , • 

V. Standards for Evaluating the performance of Code Authorities 

CHAPTER III. ANALYSIS OF PERFORMANCE OF CODE AUTHORITIES 
HAVING LABOR REPRESENTATION . 

I. Introduction 

A. Summary of Outstanding Characteristics Common to the performance 
of the Code Authorities Covered by the Study 

B. Summary of Outstanding Variations Between the Performance of 
These Code Authorities, and Where Possible, the Reasons, Economic, 
Political and personal, For This Difference 

II. Expleiiations and Interpretations 

III. Exemptions and Stays 

IV. Amendments 

V. Sipecial Landatory and permissive Functions 



CHAPTER IV. AITALYSIS OF PERJOKIANCE OF CODE AUTHORITIES 
HAVING NO LABOR REPRESENTATION 

CHAPTER V. AITALYSIS OF PERFOmiAtlCE OF IL:paRTIAL 
CODE AUTHORITIES 

I. Introduction 

A. Codes With Impartial Code Aiithorities 

B. Nature of the Impartial Bodies 

C. O'Litline of Important Characteristics 

II. The petroleum Code 

A. Nature of the Administrative Bodies 

B. Explanations and Interpretations 

C. Exemptions and Stays 

D. Amendment s 

E. liazidatory and permissive Functions 

F. Other Functions 

CHAPTER VI. ACTIVITIES OF CODE AUTHORITIES'' ON SPECIFIC 
LABOR PROBLEMS 

I. Introduction and Sumniary 

II. Analysis of Administration of Certain Lator Prohlems. "by 
Code Authorities 

A. Wages Atove the Minimrora 

B. VJage Rates for Sl<:illed Labor 

C. Homework 

D. Learners and j^prentices .^ .. • . :-\-:r • 

E. Contracting 

F. O^vner-Operators 

G. Safety, and Health 

H. Hazardous Occupations 
. I, liethod of. Wage Payment ■ 



9453 



-512- 

ADMIIIISTRA.TIOII OF LilBOR PBO VISIONS BY CODE AUTHORITIES 

Preliminary Summary of Findings 

In evaluating the performance of Code Authorities in administering 
the labor provisions of their codes two criteria suggest themselves: 

First, the impartiality, efficiency, accuracy and expeditiousness 
with which it performed its duties under the code and the various admin- 
istrative orders; and second, its activities in studying and improving 
the code itself. 

It has "been found tentatively that one of the major causes of 
variation in the administration of labor problems by Code Authorities 
was the presence or absence of labor representatives. For the purposes 
of this study industries have been divided into groups with and without 
labor representatives on the Code Authority. 

Using the criterion of interest in labor problems. Code Authorities 
with labor representation show much greater activity than those without, 
though there are some exceptions. Less attention was paid to labor matters 
when the union in the industry was very weak and also when the labor repre- 
sentative on the Code Authority was not chosen by the union or the Labor 
Advisory Board. The Photo-Engraving Industry, though it had a strong labor 
organization and representation on the Code Authority (not officially 
approved), paid but minor attention to labor problems. This industry had 
worked for years under collective bargaining agreements, and had a function- 
ing machinery to take care of its labor problems. The Recovery Act did 
not affect this machinery, and there was apparently no reason for the Code 
Authority to undertake the administration of labor problems v\iiich h&d. been 
handled for years by another agency. 

It may also be concluded tentatively that the mere presence of a 
strong labor organization in aji industry did not cause the Code Authority 
to consider labor problems more attentively. Only when such labor organi- 
zations were represented on the Code Authority, apparently, did they appear 
to exercise a marked influence on the attention paid to labor problems. 

Many code authorities which had no labor representation apparently 
desired to be free from the surveillance of the Administration, and to act 
not as acivisory bodies, but as final administrative bodies. 



9453 



-513-" 

ADHIiTISTRATION OF TRADE HRAGTICE PHOVISIONS BY C O DE ATJTHORITiaS 

Talple of Contents 

CHAPTER I. IITTRODUCTIOW 

I. General Statement Regarding the Situation of Industry at the 
Tine of Signing the Act: The Emergency 
A. Attitude of Industry 

1, Hopes for Stabilization 

2, Elimincttion of Price Cutting 

3, Imposing of Uniform Conditions for Conduct of Business, etc, 
3. Attitude of the President 

1, Expression' 'of 'Confidence in Industry 
2m Waiving bf Anti-Trust Laws 

II. Purposes of the Study ■ •. ■ ' 

A. To Show How Code Authorities Exercised Powers Entrusted to Them 

B. To Evaluate Controls 

C. To Determine ?rnat Has Been Demonstrated as to Desirability of 
Acjainistratioh of Trace practice Provisions by Code Authorities, 
in Order to- Arrive at Conclusions as to Necessary Changes of 
liethod or l)esirability of Alternative Methods ■ 

D. Siir.riary of Conclusions ^ • 

CHAPTER II. THE NATIP_ffi OP TKE' TASK 

I, Sui'.r.iary of Trade Practice Provisions 

A. Of Major Interest " ■ 
1, Production Control 

(a) Restriction of Productive Capacity 

(b) Allocation of Production or Sales 

(c) Machine or Plant Hour-Limitation 

(d) Limitation of Inventories 

2# price Piling •■ ■ ■..' 

3, Minimum Prices 
• 4, 'Distributive Relations 

B. Of Minor Interest 
1, Terras of Sale 

2# Design and Trademark Piracy 

3, Standards and Labeling ' 

4, Geographic Relationships 

5, Misrepresentation or Fraud 

6, Secret Rebates or Other Discriminatory Practices 

II. Criteria of Workability of Code Provisions 

A, Degree of Industry Experience With the Provision 

B, Degree of Industry Support for the Provision 

C, E:roense of Administration 

D, Other Criteria 

III. Classification of Previsions as to Worka.bility 

A. Uorkable Provisions 

1, For Industries Generally 

2, For Certain Industries 

B. Doubtful Areas 
9453 



-514- 
C. Provisions Clearly Un^7orka"ble 

CHAPTER III. ADMINISTRATION OP TRADE p:^ACTICE PROVISIONS 

Production Control ; 

A. Poners and Duties 'of tlie Code Authority 

1, Specifically Authorized "by the Code 

2, Authorized hy Executive or Administrative Order 

0. Conferred "by Official N.R.A. Interpretation 

4, Conferred "by Unofficial Interpretation by N.R.A. Representa- 
tives or "by the Code Authority 

5. Assumed "by the Code Authority or "by N.R.A., Without Refer- 
ence to the Code 

B. Organization for Discharge of Responsi"bility 
1,. Agencies to Which Powers Were Delegated; 

(a) Trade Associations 

(h) Comraittees 

(c) Employees of the Code Authority 

(d) Regional Offices 

(e) Pield Agents 

2. Extent of Poners Delegated 
*- 3, Extent of Reviev/ "by the Code Authority over Acts of Those 
to Fnora Powers v/ere Delegated 
4, Nature of Agency EstaMished to Receive Information e.nd Re- 
ports; Its Impartial Character 

C. Administrative Procedure 

1. In Making Interpretations and Explanations; 

(a) Extent to Which Explanations Involved Interpretations 
(t) Extent to Which N.R.A, Approval Was Required Before 
Transmission to the Industry 

(c) Extent to Which Interpretations and Explanations Were 
Made Otherwise Than "by Formal Code Authority Action 

(d) Pu"blicity Given Interpretations and Eirplanations 

2. Procedure in Eixing Quotas in Allocation of Production or 
Sale 

(a) As Provided 'oy Code 
(Id) Variations in Practice 

(c) Method of Handling ADplications and OpT)ortunity Given 
Applicants for Hearing 

(d) Extent to Which Applications and Method of Handling 
Were Reported to N.R.A. 

(e) Extent of Requirement of N.R.A. Approval 

(f) Extent of Investigation of Applications 

(g) Protests; How Handled 

3. Procedure in Handling Applications for Installation of New 
Capacity 

(a) As Provided by Code 

(b) Variations in Practice 

(c) Method of Handling Applications and Opportunity Given 
Applicajits for Hearing 

(d) Extent to ?^ich Applications and Method of Handling 
Were Reported to N.R.A, 

(e) Extent of Requirement of N.R.A. Approval 

(f) Extent of Investigation of Applications 

(g) Protests; How Handled 



945; 



-515- 

4. Procediire in Handling Limitation of Machine or Plant Hours 

(a) Method of Determining Extent of Limitation 

(b) Extent of Requirerient of N.R.A. Approval 

(c) Data: How Collected 

(d) Apolications for Exemption: How Handled 

5, Procedure in Handling Limitation of Inventories 
(a) Method of Determining Extent of Limitation 
(Id) Extent of Requirement of N.R.A. Approval 

(c) Date: Ho\7 Collected 

(d) Applications for Exemption: Hon Handled 

D. Sumiiary and Evaluation: Is The Code Authority the Proper Agency 
to Acijninister this Tinoe of Industry?- Regulation? 

1, Functions Adequa.tely Performed "by the Code Authority 

2, Functions Ina.de o^uately Performed "by the Code Authority- 

3, Extent t<D Which Code Authorities Failed to Carry Out 
Responsibilities Assigned to Them 

4, Extent to Uhich Code Authorities Exceeded the Powers G-r<:Jited 
Them 

5, Degree of Ira"oa.rtialit2'' Realized by Code Authority Adminis- 
tration: Favor or Prejudice Displa^-ed Toward Groups or 
Individuals 

6, Extent to Which N.R.A. was Kept Continuously Informed of 
Code Authority Action 

7, Adequacy of N.R.A. Supervision 

8, Effect of N.R.A. Policy on Code Authority Administration 

9, Attitude of Code Authority 

(a) Toward PuriDOses of the Code 

(b) Toward Industry 

10, Attitude of Code Authority Toward Proper Division of Func- 
tions Between Itself and N.R.A, 

II, Price Filing 

A, Powers and Duties of the Code Authority 
3. Or:^:anization for Discharge of Responsibility 
1, Nature of Price Filing Agency 

(a) The Code Authority Itself 

(b) Tbi Trade Association 

(c) Agent or Employee of Code Authority 

(d) A Truly Impartial Agency 

C. Adrfiinistrative Procedure 

1. In Malting Interpretations and Explanations 

2. Price Filing Requirements 

(a) Prescribed Reporting Forms 

(b) Detail of Piling Required of Sale, Customer Classifi- 
cations and Specifications 

(c) Elements of Cost 

3. Dissenination of Prices and Terms 

(a) To Whom Distributed and Available for Consultation 

(b) Ex^")ense of Distribution: How Allocated 

4. Methods Parsued in Securing Adherence to Price-Filing Pro- 
visions. 

(a) Persuasive 

(b) Coercive 

D. Sui.riary and Eva-luation 



945; 



2! 



-516- 

III. Minininn Prices 

A. Pov;ers and Duties of Code Authority 

B. Or;r^anization for Discharge of Responsibility 

C. Administrative Procediire 

1. Cost Accoiinting System 

(a) Data: How Collected 

(b) Procedure for Adoption 

(c) Extent of Requirement of Industry Approval 

(d) Extent of Requirement of IJ.R.A. Approval 

2. Provisions Prohibiting Sales 3elow Cost 

(a) Data: Ho-,7 Collected ^ -■ 

(b) Procedure for Adoption of Cost Formula 

(c) Extent of Requirement of Industry Approval 

(d) Extent of Requirement of N.R.A. A;i3r)roval 

(e) Requests for Exemptions: How Handled 

3, Emergency Price Declarations 

(a) Requests For; How Initiated 

(b) Extent of Submission to Industry Before Recomraenda^ 
tion to N.R.A, 

(c) Nature and Extent of Investigation Before Recomnenda^ 
tion to N.R.A, 

(d) Disposition of the Code Authority to Request Declara- 
tions of Emergency 

4, Price Differentials Between Classes of Products and Classes 
of Customers; Other Prices Fixed by Code Authority 

(a) Method of Arriving at Prices 

(b) Extent of Requirement of Industry Approval 

(c) Extent of Requirement of N.R.A, Approval 

D. Summary and Evaluation 

IV. Distributive Relations 

A. Powers and Duties tf the Code Authority 

B. Organization for Discharge of Responsibility 
G, Adr.iinistrative Procedure 

1, In Making Interpretations and Exr^lanations 

2, In Establishing Classifications of Customers and/or 
Products 

(a) As Provided in the Code 

(b) Variations in Practice 

(c) Extent of Requirement of Industry Approval 

(d) Extent of Requirement of N.R.A. Aoproval 

(e) Extent of Conformity to or Variation From Established 
Industry Practice 

(f ) Applications for Exemption; How Handled 

3, In Promulgating" Other Regulations Dealing With Distributive 
Relations 

D. Su'anary and Evaluation 

V. Trade Practices of Minor Interest 

A. Terns of Sale 

1, Administrative Procedure ' 
2» Summary and Evaluation 

B. Design and Trademark Piracy 

C. Standards and Labeling 

D. CTOographic Relationships 

9453 



-517- 

Z, I.'isrepresentf.t Ivjii o'. J':.'^/ao. 

?, Secret Rebates o: Otl'-rr riscri-:ninf tory Practices . .' ' ' 

CHAPEH IV. COHPriRATIT^-^SLiLISIS CF OOBE .luTHCI^ITY -AIIinHIST::UTIOH 

0- 'P-LaiL: ^^nkGTiCE p:;K)"Vj;sio::s 

I, Cor.:parison "by T?/pes of Coce Aiithorit,;- Composition 
II. CoMi^.rison by 2ypes of Industries 
III. Couparison 'by l^eti af Code Authority Organization 

IV. Conpo.rison Before :;:nd Af bar A'Toointraent of Full-Time Administration 

ileiiber ^ ■ , 

V. Co::;-)arison Between Code At'i'horities 'Jhich "jxd. Cons\imer r.,nd/or Labor 
r.ep^-'eGentatives and Those 'r.-ich Did -Hot • ' . 

CIIAPEIl V, OlUC^wAL SUi.i.JLll-A]vD COlTCLUSIOiJS 

f ■ « 

I.. Ee?.ation of .Inclusion o.^ .Un\7orka^ble Code provisioi.s to Effectiveness 
of Code ^administration ,h.:.... 

II. P.elation of 1I.2..A. Polic;; and Surjervisien bo Effectiveness of Code 
Administration ■ 

illc l"iG?.ation of Attitv.oe of t la Industry to Effectiveness of Code Ad- 
ministration 

IV, The Code Author it^r as an jij-.enc^' to Acjninister Trade Practices 

ii... Li-£:ht Tliro-'-n f,n Q;aostion of a Propor Administrative A^^ncy "by 
t^ie Attitude cf the Code Authority Toward the Pi irDOses of 
:^rc.6.e practice provisions: E.rtent to "Jhich Code Aut-ioritj-' s 
Conception of These Purposes Differed fro~ that of the Adi'iinis- 
t rat ion 

li, ^.ttitude of. Code Authorities as to Proper Division of "r.nctions 
cuid Powers Betv^een Thense3.ves and N.H.A. On the 'Question as to 
"'".^.t Kind of As-ncy Should Administer Trade Practices 

C. Significance of failure to Perfonn inunctions Required b>^ the 
Code, taid Extent to 'iTnich N.R.A, vj-.h pLesponsible Rather than 
the Code Authorities 

D.. ]:::tent to which Code Authorities SLxeeded the Authority Granted 
Them 

E, Discrijiiination bj Code Authorities Bet-^een I.iembers of Industry 
01 Between Groups; Extent to 'Thich This Discri.riination .tp.s a 
Hatter of Individual Ab^ise of Power, and ro V.liich it .-^'as Inher- 
ent in tho Natur.-e of the Go^.^ec and the Po-vers Conveyed Under 
Tlien • ■ .. ■ ' . . 

V. Plani'iin^: for the Future 

A. Reasons ITliy Administration of Trt'de Practices by Code Authori- 
ties, a.s Operative Under N.R.A, , is. not Compatible 7ith the 
Rublic Interest 

B. I'viictions Which May Properly- be Performed b'- Such an Agencj^, 
and iunctions 7hich Should i\Iot be Entrusted to it 

• - 

945 o 



-518- 

C. Controls "by Governmental Agency T^ich are iMecessary to Protect 
the Public Interest 

D. Possible A.lternatives to Code Administration of Trade Practices 
!)■"■ Code Authorities 



9453 



-519- 

COSB AUTHORITY FINANCE 
Table of Contents 

CHAPTER I. INTRODUCTION 

I, Basic Ideas Regarding the Financing of the Cost of Code Adminis- 
tration and N.R.A. Supervision and Control 

II. Tevelopment of Policy, Methods, Standards and Requirements 

III. Development of Procedure 

A. In N.R.A. 

B, In Code Authorities 

CHAPTER II. BACKGROUND CF CODE FINANCING 
I. Development From Trade Association Methods 
II. Discussion of Mandatory Assessment Provisions in Codes 
III. Discussion of Voluntary Payments 

IV. Use of Labels as a Means of 

A. Insuring Compliance 

B. Guaranteeing (Quality of Goods 

C. Financing 

D. Other Uses 

CHAPTER III. BASES OF CONTRIBUTION AND 
BUDGETS OF EXPENDITURES 

I. Sales Basis of Assessment 

A. Unit Volume of Sales 

B. Percentage of Dollar Volume of Sales 

II. Production Basis of Assessment 

A, Volume of Raw Material Consumed 
B» Productive Machinery 

C. Productive Payroll 

1. Dollar Volume of Payroll 

2. Number of Productive Employees 

3. Number of Man Hours 

III, General Plant Basis of Assessment 

A. Flat Charge per Member 

B. Flat Charge per Employee per Annum 

C. Physical Capacity: i. e. , Floor Space in ITarehouse 

D. Invested Capital 

IV. Itemized Expenditures 



9453 



-520- 
CEAPTER IV. CONSOLIDATION OF CODES 
I. Basic Code and Supplements 

II. Consolidation of Administrative Agencies With Use of Multiple 
Secretaries 

CHAPTER V. MULTIPLE SECRETARIES 

I, Extent of Employment ....... 

II. Advantages and Disadvantages 

III. Types of Codes Employing Multiple Secretaries 

IV. N.R.A. Control Over Multiple Secretaries 

CHAPTER VI. DUTIES AND COMPENSATION OP 
CODE AUTHORITY EXECUTIVES 

I, Duties of Executives and Other Personnel 

II. N.R.A, Policy for Executive Salaries 

III. Discussion of Financial Records 

IV. Administration, the Joint ResT)onsibility of F.R.A. and the 
Code Authorities 

CHAPTER VII. GOVERNlffiNT CONTROL 

I. Amount of Government Control Dependent Upon Nature of Adminis- 
trative Organizations and Procedure 

II. Possihility of Change in; New Legislation 

III. Methods of Enforcing Payment of Contribution 

IV. Safeguarding the Rights of Industry Members 

CHAPTER VIII. CONCLUSIONS 



9453 



-521- 
COPg AUTHORITY FINMCE ' 
Freliminary Summary of Findings 

BACKGROUND' 0?' CODE ASS]i]SSMEr^TS 

The financing methods of trade associations were adopted "by Code 
Authorities, except that they did not involve the element of compulsion 
that ultimately characterized assessments for code purposes. In the 
first quarter of N.R.A. ' s existence the proportion of codes containing 
mandatory assessment provisions was approximately seven per cent, where- 
as during the last quarter it was at out eighty per cent. 

The commonest "basis of contrihution was that "by which the payments 
to "be made were figured as a. small percentage of the member's volume of 
"business. 

An examination of 60 codes for which records are availa"ble, and 
which provided for assessments, "both on the mandatory and on the volun- 
tary "basis, showed that expenditures for an adjusted 12 months period 
on a voluntary "basis amounted to a"bout $1,450,000 as compared with ' 
ah out $2,250,000 expended on a mandatory "basis. 

Prom an examination of these 60 codes, it appears that more .mem- 
"bers participated and contrilDuted under mandatory assessment systems 
than had formerly "been .the case under the system of voluntary contri"bu- 
tions, 

A study of the various N.R.A, industry divisions indicates that 
the percentage of mandatory codes varies inversely with the total numher 
of codes in each division. Code financing is affected much more "by the 
size and nature of the industrial group than "by its location in any one 
of the 12 industry divisions. 

If a future code system similar to N,R,A, is esta"blished "binding 
on all mem"bers of industry, it -seens exceedingly doubtful whether it 
can function vrithout G-ovornment assistance in obtaining funds under 
some degree of compulsion. 

BASES OF CONTRIBUTION ~ USB OF LABELS 

As compared to other means of o"btaining funds, the sale of labels 
was an effective tool; and it was not unduly expensive. If labels are 
to be used in the future, the power of issuance and suspension should 
be either retained entirely or closely supervised by the Government 
supervisory agency. Labels in some form could be used in connection 
with all articles sold as such through retail channels. 

Labels should be sold on a sliding scale, and the prices should be 
related to those of the articles, to which they are to be attached. 
Periodic adjustments should be made by assessing each industry member on 
the basis of a percentage of his sales and allowing for the difference 
between this axid the amount collected from the sale of labels. 

9453 



-523- 
OTHER BASES OF CONTRIEUTION 

In order that "bases of contribution may "be eaui table and the "burden 
not unreasonable, payments should he related to the size of the con- 
tributing enterprises. Only an approximation to equity is possible; 
and this can best be obtained by assessing on a small percentage of 
sales volume, 

Tlie volume of business upon which assessments are to b e based 
should preferably be averaged over a long enough period to overcome 
the effect of temporary variations. The period, moreover, should be 
the most recent practicable prior to the budget period, 

CODE CONSOLIDATION S 

If code consolidations are to consist in bringing industries to- 
gether under a basic code, with supplementary codes for the divisions 
of the larger group, administration will be about as costly as it would 
be with entirely separate organizations. If a consolidation, however, 
consists merely of an agreement by a group of small industries to use a 
common administrative or secretarial agency, a considerable degree of 
economy is possible, 

MULTIPLE SBGRETARIES 

Of a total of 871 divisional and supplementary codes, 219, or 25 
per cent, were administered by multiple secretaries. 

The smaller codes utilized multiple secretaries more extensively 
than larger ones. 

An examination of the operations of multiple secretaries under ap- 
proved budgets and bases of contribution discloses, under the control 
exercised by N.R.A,, no definite cases of fraud or maladministration. 

Special precautions and the submission of adequate and pertinent 
information regarding the operations of multiple secretaries should be 
required before permitting them to administer codes. 

DUTIES Mm COMPENSATION OF COLE AUTHORITY EXECUTIVES 

The executive personnel employed by Code Authorities should be ex- 
perienced and familiar with the industries involved, and should command 
the respect and confidence of the membership. 

The arbitrary limitation of executive salaries to a maximum of 
$10,000 or less might be false economy. It would be better to assure 
competent administration with adequate or liberal compensation. 

GOVERlllIENT CONTROL 

If it should be decided that the plan of self-government in indus- 
try, as developed under N.R.A. , put too extensive powers into the hands 



9453 



-523- 

of Code Authorities, or that the darif^er of abuse is so great that other 
methods of administration should "be used in any future case of a simi- 
lar nature, the methods of financing should he changed accordingly, 

The more closely G-overnment officials su-oervise, control, or ad- 
minister the provisions of any Act, the more necessary would it he that 
funds "be raised hy a method comparable to taxation, and that they "be 
allocated on an equitahlo "basis among the various parts of the organiza- 
tion. The usual methods for enforcing the payment of taxes would "be 
in order. 



9455 




-524- 

•QOI/IPOSITION OF CODE AUTHORITIES 
Table of Contents 

I, Standards of True Representation 

A. Employers and Other Interests 

1. Many Groups Were Helped or Hurt "by Each Code 

2, Representation for Extra- Industry Groups Was Rare: 
Lahor Was Represented on 42 Code Authorities, Con- 
sumers on 10 and Other Code Industry Groups on 4 

3, Minority Representation of Employers Was Accepted 
in Principle 

4, Representation of Geographical and Functional Groups 
was Nftrmally Demanded and Arranged "by the Code Spon- 
sors. 

5. li.R.A. Insisted on Non-Association Merahers in 17 per- 
cent of Large Codes and in 37 percent of All Codes 

6. Language, Religious and Racial Groups Occasionally 
Received Separate Recognition 

B. Votes Weighted hy Volume of Production 
1. Frequently Established ty 

(a) Codes, 

(h) Trade Association By-Laws 
'' ' ' (c) n.R.j^, Administrative Orders, 
(d) Code Authority Regulations 
, ■ 2. Defensible as True Representation "but Aroused Opposi- 
tion on the Part of Small Enterprises, and Hampered 
Compliance 

C. National Code Authorities Appointed by Divisional Code 

Authorities 

1, Where Many Divisions Existed, it was Natural to 

Have Each Select One Member of the Central Code Authority 

2, The Result of this Method was to Eliminate Minority 
Representation, Especially of Non-Association Members 

3, Similar Problems Aldose Within Federated Trade Associa- 
tions, or Wherever One Representative was Selected from 
Each Group 

4, Several Alternative Methods of Selection Were Employed in 
Federated Codes to Preserve Minority Opinion 

II. Statistics of Code Authority Selection 

A. Efficiency of Trade Association Control 

1. Trade Associations Selected All Code Authority Members 

in 50 percent of the Largest 35 Code Industries (covering half 
of All Inldiistry) and in 25 percent of all Code Industries. 
They Also Selected a Majority of Code Authority Members in 
Another 17 percent of Large Code Industries and in 37 percent 
of All Code Industries. 

2. Details of Such Selections Varied Among Different Codes, But 
the Result in All Cases Placed Control in the Hands of the 
Large Concerns, Which Usually Controlled the Trade As- 
sociations 

3. Such Control by Trade Associations Promoted Efficiency in 
Code Administration, Because the Code Authorities Got the 
Benefit of Trade Association Funds, Staff, and Experience. 



i53 



"OiiVJ" 



4. Such Control Lid Not Make For Democracy, "because Trade 
Associations Contained Only a Moderate Percentage "by 
ITxun'ber of Industry Members . 

B, G-eneral Industry Elections 
1, In 14 percent of the 35 Largest Code Industries, and in 34 

percent of All Code Industries, Code Authorities Were • 
Elected "by a G-eneral Vote of Employing Industry Members, 
Without Regard to Trade Association Affiliation. 
• 2, The Democratic Effect of Such Elections Was Limited: 
(a) By the Prevalence of Weighted Voting 
•'(b) By the Limitation "of Suffrage to Assenting Concerns, 
(c) By Seating Trade Association Officers Ex-officio on 
Code Authorities ■ . - ■ 

3. With All These Advantages in Their Favor, Trade Associa- 
tions Ran Their Slates With Marked Success: No Ex- 
ample Has Been Found of the Defeat of a Trade Associa- 
tion Slate "by lion-Association I'emlDers. 

C. Minority Representation Guaranteed 

1. Besides Stipulations for the Rex)resentation of Geo- 
graphical and Functional Minorities, Non-Association 
Minorities Were Guaranteed Representation in 17 percent 
of the Largest Code Industries 

2. Most of tliese Minorities Were Informally Selected: Ot-iers Were 
Elected by the Whole Industry or Ai^pointed by N.R.A. 

3. Even vihen the Selection of Such Minorities Was Provided 
For the Plan was Often not Carried Out, or the Selection was 
Made by a Small Percentage of Eligible Concerns 

4. Minority Representation on Code Authorities Was More 
Important Tlian in Political Legislatures and Was The 
Most Democratic Device in N.R.A. It Might Have Been 
Wise to Provide for the Presence of Even More Minority 
Representatives -on Code Authorities, but Without Vote. 

• D. Minor Methods of Selection 

1. Appointments loy Divisional Code Authorities was Frequent 
in the Large Federations 

2. A Few Small Codes Provided Tliat All Industry Members 
Should Sit on the Code Authority 

3. Where Industries Could Not Agree on Code Authority Mem- 
bers, N.R.A. Appointed Them 

4. Determination of t'le Method of Selection was Often Post- 
poned, to be Determined Later by Administrative Order 

5. Complicated Combinations of Major and Minor Methods " • 
Were Common. 

III. Correlation of the Composition With the Behavior of Code Authori- 
ties 

A. Certain Code Authorities Were so Inactive That They May Be 
Dismissed from Consideration 

B. Others Were Active, but had Trouble With N.R.A. or with 
Their Own Members: Grossly Unrepresentative Methods of 
Selection Were Practiced in Some Cases 

C. Still Other Active Codes Were Smoothly Administered, Accord- 
ing to Their Code Historians: Defects in Their Formal Repre- 
sentation Must Have Been Cured by the Selection of Temperate 
Representatives. 



9453 



-526- 



COMPOSITIOIT OF CODE AUTHORITIES 



Prel ininai^A Sir-inai"/ of ?indinp:s 



Entra-Industr"- 3e-oresentation "iTas ITeg-lif^i'ble. 

N.H.A. accepted the principle of minority representation, in the 
sense tha,t the Code Authority should represent all interests involved. 
Except in the C3,se of a feu codes, however, the enplo-'-ing memters of in- 
dustries alone Trere regarded as constituting an "interest," Lator, that 
is to say, r/as represented only on 42 Code Authorities, consigners only 
on 10, and other industries only on four. 

T rade Association Ment ers Controlled Practically All Code Authorities . 

A najorit;'- of the code authority T/as nomally selected from trade 
association nenoers, or from the large firns trhich controlled the trade 
association. Llost codes, expressly gave a code authority najority tp 
associations, e.s. shbim "by the ta"ble helo-v/. General industry;" elections 
were usiaally iron Vj trade association candidates, or hy representatives 
of large firns, 

leJDlc I 
Hethods of Selecting Code Authorities 



Size GrouD 
of 

Industries 



Per Cent of Code Authorities: 



Designated "by 
Txade Association: 



Elected iDy Selected 
Lienhers of B}/' Other 







All . 
LI enters 


Llajority 
of llemhers 


Ind!j.stry 


Methods 


Total 


3o Largest 
Code Industrie 


.7 

E 50 • 


17 


14 


19 


100 


All Code 
Incu.3tries, 
Including 
Divisions 




25 


37 


34 ' 


4 


100 



The proole:: in code authority selection, then, Tras to provide some 
check on ths -inevitaole control "by large trade-association concerns, rne 
codes thenselves and the IT.E.A. adninistration nenhers constituted one 
set of checks. Another ras the representation of minorities. 



9453 



Election s Were Tornglly !7on I^'- T r ade Associations . 

General industry.'- elections, except in one instance (that of "brush 
manufactiiring), rrere not planned to secure ninority representation. 
They were not as denocratic as political elections, iDecause (l) trade 
association officers rrere frequently seated ex-officio on the Code 
Authorities, (2) the suffrage \7as limited to paid-up assenting menters, 
and (3) votes nere frequently weighted. It seems protatle, moreover, 
that sponsoring trade associations did not consent to general elections 
unless they were confident of putting in their slates, llo example has 
"been discovered of an association slate "being defeated "by non-associa- 
tion members. 

Weighted Voting Accer)ted But of Dou'btful Value . 

This state of affairs was largely iDrou^t ahout "by the device of 
weighting votes according to volume of production. The system was pre- 
scrihed not only in 15'^ per cent of all codes, "but also in II. R. A. 
administrative orders, code authority regulations and trade association 
"by-laws. It coiild "be defended, though not conclusively, if the 
criterion of an election device were "tr\ie re-oresentation. " If the 
criterion were efficiency in securing compliance, weighted voting "be- 
came less defensible. It might keep all minority'- representatives off 
the Code Authority, or it might turn code administration into a police 
jo'b, which could "be done "better "by impartial government representatives. 
Unless a Code Authority could pledge the consent of at least a numerical 
majority of the industry, it could not "be much help in enforcement. 

Minority P.e-presentation Important 

Since general elections proved to "he another form of trade 
association control, gixaranteed representation for minorities was the 
chief democratic function of U.E.A. A mihoritjr mem"ber on a Code Author- 
ity was in a stronger position than minority'' mem"bers in a legislature, 
"because he could appeal to N.R.A. if he was outvoted. On advisory 
matters his arguments had as good a chance as those of the majority. 

Several kinds of minorities existed in industries. The most 
important kinds were small non-association concerns, and geographical 
or functional groups. Representation for the last two was normally 
demanded and arranged "by the sponsors of codes. H.R.A. insisted on 
guaranteed non-association representation on 331 out of 886 pa.rent and 
divisional code authorities. It might h8-ve "been wise to encourage the 
presence of non-association minority'" representatives without vote. 

A-pDOintment "by Divisions ?fei-vored Trade Associations , 

Mention should "be made of the system of having each division 
of an industr-^ appoint one representative to the Code Authority, 
Usually, such divisions were "based either on districts or on functional 
groups. Whichever the "basis, if only one TTem"ber was appointed, he 
would normally represent the majority group in that division and exclude 
all minorities from representation. Thus, in the wholesaling trade, 
where most divisions had trade association majorities and non-associa- 
tion minorities, the majority'' on the "basic Code Authority was purely 

9453 



-528- . 

trade association. This system of selecting national code authorities 
did not provide any checlr on trade-association control. 

Code Authority O rf'^anization - Geoplra-phical Divisions . 

Code Authority organization followed no one pattern. The "boundaries 
of geographical districts varied widely. II. R. A. had little contact with 
the local groups, and has little information ahotit them on file. Many of 
these geographical divisions were as important as supplementarjr codes, 
and should have had administration memhers attending their meetings. 

Code Author it'^ Meetings . 

Attendance was good at the sample of Code Authority meetings 
whose minutes o.re at hand. A surprising proportion of the time was spent 
in discussing conflicts "of jurisdiction. I^ridently, the complications . of 
the system hampered its operation. 



9453 



-529- 

0RGAITIZA.TI01I OF C QD3 AUTHORITIES 
Tatle of Contents 



I, Parent or Unitary/ Code Authorities 

A. General Situation 

1. Statistics 

2. FiJinctioning 

3. Examples 

B. Meetings 

1. Average IT-uinlDer was Thirteen 

2. Attendance at Meetings was Good 

3. Discussion Dealt Largely 7ith Terns of . , 
Sale, Conflicts, and Criticisms of H.R.A. 

C. Staff 

1. Typical Organizations 

2. Sxajnples of Leadership Ly Code Directors 

3. "I.Iultiple Secretaries" HaJidled Several Codes 

D. Committees and Special Agencies 

1. Executive Committee Set up iDy Large Code Authorities 

2. Compliance Hight "be by lTatione.1 Code Authority, "by 
Branch Offices, or by Divisional Code Authorities 

3. Other Committees for Other Duties 

4. Inter-Code Committees Frequent and Active 

5. Confidential and Impartial Agents Set Up to 
Receive Reports and Investigate Records 

6. Special Agencies for SpeciaJ Purposes 

II. Subsidiary Code Authorities 

A. Functional 

1. Supplementary 

(a) Set U'p in Separate Documents 

(b) Treated by I'T.R.A, as Separate Code Authorities 

(c) Examples of Operation 

2. Product Divisions 

(a) Set Up in Same Document as Parent Code Authority 

(b) Supervision and Status Varied 

(c) Examples of Operation 

B. Geographical 

1. Regional 

(a) Total of 1,400, Including State Code Authorities 

(b) Little Supervision by IT.R.A. 

(c) Supervision by National Code Authority Varied TFidely 

(d) Full-time Field Siipervisors Employed in Certain 
Industries 

2. Local 

(a) Over 4,000 Set Up in 24 Industries 

(b) Reports from Field Say Efficiency Varied ITidely 

(c) Examples of Operation 

III. Conclusions 



9453 



-530- 

LABOR COMPLIANCE ACTIVITIES OF COIiE AUTHORITIES 

Ta"ble of Contents 

CliAPTER I. LABOR COMPLIANCE ACTIVITIES PRIOR TO THE APPROVAL 
BY N.R.A. OF A PLAN OF PROCEDURE 

I. Educational Efforts 

II. Compliance Requirements 

A. Fall Wage Restitution for Payment of Less Than Code Minimum 

B. Overtime Requirement for Excess Hours 

C. Restoration of Employment in Cases of Discharge for 
Discrimination or for Making Complaint 

III. Recognized Sources of Information for Uncovering Labor Violations 
A. Any Complaint 
E. Only Complaints Signed "by Employee 

C. Inspection and payroll Reports 

D. Adequacy of Compliance Staff 

IV, Agency Used to Effectuate Compliance 

A. Code Authority Staff 

B. Bi-Partisan or Other Committee 

C. Correspondence 

V. Sanctions Employed 

A. Suspension of Label 

B. Certification to N.R.A. 

C. Use of State Recovery Agencies 

D. Use of Unions 

VI. Relation of Compliance Action and Requirements to Pre-Code 
Efforts at Self-Regulation 

CHAPTER II. OFFICIAL AUTHORIZATION OF COMPLIANCE AGENCY TO 
HANDLE LABOR COMPLAINTS IN THE FIRST INSTANCE 

I. Relation of proposed plans to Former Activities 

II. Changes in plan Suggested "by N.R.A. 

III. Relation of Final Plans to proposed plans 

IV. C-rovrth of N.R.A. Policy as Shown "by Suggested Changes 

V. Time Required for N.R.A. Approval 

CHAPTER III. ORGANIZATION OF COMPLIANCE MACHINERY 

I. Tj^pes of Agencies Used 

A» Bi-partisan Committees 

B. Impartial Chairman With or Without Assistance of a Committee 

C. Code Authority Staff Members 

9453 



-531- 

II. Geographical Organization of/Coinpliance Agency 

A. Centralized 

B. Decentralized ■. . 

1. Uith Supervision 

2, TJithout Supervision- • • 

III. Development of Functional Orgariization 

IV. Personnel 

A. previous Connections of Executive Personnel 

B. SOLirce and Training of Staff 

C. Adequacy of Staff to do Effective Jot 

CHAPTER IV. LABOR COi-iPLIA'TCE PROCEDURE Al'ID TSCHITIQUE 

I. Recognized Sources of Infojrmation for Uncovering Labor Violations 

A. Any Corirplaint 

B. Only Complaint Signed "by Employee 
C» Inspection and Payroll Reports 

II. Principles of Adjustment 

A. Full Wage Restitution 

B. Over-time Requirement for Excess Hours 

C. Mutual Satisfaction of Disput^mts 

D. Other Violations, Such as Discrimination, Discharge for 
Malcing Complaint, Stretch-out, etc, 

CHAPTER V. LABOR PROVISIONS RECEIVING LITTLE OR NO COMPLIANCE 

ATTSl^TION 

I. Sei'etj'- and Health provision 

II. Comppny Stores and Houses 

III. I.Iaintenance of TiTage Differentials 

IV. Miscellaneous 

CHAPTER VI. IMPARTIALITY OF LABOR COMPLIANCE AGENCY 

I. Charges of Partiality 
A. By Small Employers 
3. By Unions 

C. By Sectional Groups 

D. By Open-Shop and Non-Union Groups 

II. Lack of Interest in Non-Union Employees 
III. Indications from Exceptions, Exeriptions and Stays 
IV. Indications from Interpretations, Explanations and Ajnendments 



9453 



-532- 

CHAPTER VII. FINMCIjOj EEPENDEIICE OF LABOR COKiPLIMCE AGENCY 

I. On Code Authority 

II. On N.R.A 

III. On Trade Association 

CHAPTER VIII. STATISTICAL COliPARI SON OF LABOR COl'iPLIMCE " 

RESULTS 

CHAPTER IX. ADEQUACY OF N.R.A. COOPERATION AlTD SUPERVISION 
OF LABOR COIviPLIANCE 

I. promptness in Acting on plan of procedure 

II. Supervision of Complaint Hearings 

A. Central Agency 

B. Regional and Local Agencies 

III. ProBiptness in Acting on Interpretations 

IV. Pronrptness in Nominating Administration Memters and La"bor 
Representatives 

V. Pron^tness in Other Actions, Such as: 

A. Answering Correspondence • 

B. J^proval of Code Authority Members 

C. Approval of Budgets 

CHAPTER X. EVALUATION 

I. Tjhat Part, if Any, Should Such an Agency as a Code Authority Play 
in the Enforcement of Industrial Regulations? 

A. ITere the Lator Compliance Activities of the Code Authority 
Carried on in an Effective and impartial Manner, (Considering 
Obstacles and Difficulties for Which They Could Hot he 

Held Responsible? 

B. Tfas the Labor Interest in Enforcement Completely and Effectively 
Protected by the Representatives of Organized Labor on Compliance 
Agencies? Y7a.s it Protected Where There was No Labor Representa.tion 
on Con5)liance Agencies? 

C. Where an Effort was Made to Separate Compliance Agencies From the 
Code Authority Itself, "^Tas Such Separation Actually Effectuated? 
If Not, Why Not? Was It Because the Compliance Machinery was 
Financed by the Code Authority? 

D. Did the Establishment of Fall-time Administration Members Result 
in an Adequate Supervision of Labor Compliance Activities of Code 
Authorities, with a View to Safeguarding the public Interest? 

E. TJere Code Labor Provisions Drawn Up in Such a Manner that it was 
Impossible to G-et Enforcement Even With the Best practicable 
Compliance Machinery? 

CHAPTER XI. ALTERNATIVE PROPOSALS 
9453 



-533- 

LEGAL, ASBEGTS OF TIIE CODS AUTHORITY 

Table of Contents 

I, Ho Agencies, Public or Private, Have Been Fo-und Analgous to Code 
Authorities 
A, Differences Betv/een Certain Private Agencies 

1, Bar Associations 

2, Medical Societies 

3, Political Bodies 

4, Cemetery Associations 

5, Underv/ritors Ass-ociations 

6, Oil Proration Umpires 

3. Distinction Betv;een Code Authorities and Certain 
Government Agencies 
1# Interstate Commerce Commission 

2, Public Service Commissions 

3, Federal Trade Commission 

II, Legal Arguments Advanced as to: 

A. Status of Code Authorities as Government Agencies 

1, Argument That Code Authorities fere Not Government Agencies 
3« PoT/er nf Code Authorities . 

1, To Levy and Collect Assessments 

2, To issue N.H.A, Labels 

3, To Require Reports and to Mal^e Inspections 

III. Incorporation of Code Authorities 

A, Advantages 

B# Disadvantages 

C. Liability of Code Authority Members for Code Authority 
Activities 

IV. A. Powers of Code Authorities With Reference- to Their Legality 

1, To Grant Exemptions 

2, To Malce Rules Binding on Industry Members 

3, To Make Interpretations 

4, To Inspect Premises and Accounts 

B, Problems of Due Process 

1, Notice and Hearing 

2, Provision for Judicial Review 

3, Administration of Oaths and Subpoena of Witnesses 



9453 



- -534- 

LE G.AL AS?3C^ S OF THE COPE AUTHORITY 
Preliminarv Smnmar^T' of Findinp's 



¥.0 agencies analagous to Code Authorities have "been foiind. Several 
types of agency with more or less similar characteristics are discussed 
in the report. 

Two opinions are exipressed as to the legal status of code authori- 
ties. Both start v;ith the view that Section 2 (a) of the Recovery Act was 
the statutory basis for code authorities. From that point one theory con- 
tends that code authority members v/ere not appointed by the President and 
were therefore not "public officers," and that the code authority was not 
a "government agency"; the other contends that the members were in effect 
appointed by the President, and that therefore the code authority was a 
"government agency" and its members "public officials," 

Three theories are advanced to sustain code authority power to levy 
and collect assessments, namely: 

(a) The failure to pay an assessment was a violation of a code, 

(b) The power was incidental to the power of the President to carry 
out the purposes of the statute. 

(c) The contract theory. 

These arguments are advanced to refute the three legal objections 
raied to assessments. The objections were: 

(1) That assessments were taxes and that the power to levy them 
could not be delegated, 

(2) That by means of assessments money could be collected and dis- 
bursed by non-official groups, 

(3) That assessments deprived industry members of their property with- 
out due process of law 

ITo conclusion has been reached with regard to the arguments advanced 
to sustain the power of the code authority to require reports and to in- 
spect the premises and accounts of members, 

¥ith respect to the benefits of the incorporation of code authori- 
ties, the conclusion has been reached that incorporation would only limit 
the personal resposibility of members with regard to contracts, and would 
permit code authorities to sue and to be sued as units. 

Code authorities had no legal right to grant exemptions, to make 
absolute or conditional rules binding on industry members, or to malce 
interpretations. 



945C 



, . -535- 

The conclusion has iDeen reached that the tendency on the part of 
N«E»A» i7as to talce qua si- judicial pov;er arrav from code authorities; "but 
that in cases where code authorities did eMsrci.se sur-h quasi- judicial 
por/ers notice and opportunity for heariiig iuust have teen given or pro- 
vision nade for judicial revieu before a determination was made. 



9453 



-536- 



OPERATING RELATIONSHIPS ? CODE AUTI I OIITIES AIS 

TR ADE ASS OCIA TIONS 

Table of Conten ts 

I. Division of Fimctions iDetween Code Authorities and Associations 

A. Trade Association Functions Cover a Wider Field Than Do Code 
Authority Functions 

1. Typical Trade Association Functions 

2. Typical Code Authority Powers 

3. Twilight Zone 

B. Cooperation "bet^veen Code Authorities and Associations 

1, Code Authority Functions Delegated 

2, Funds and Help Supplied by Trade Association . 

3, Comnon Use of Office and Personnel 

4, Comparative Budgets 

5, Confusion Between Code Authorities and Trade Associations 

II. Relation of Division of Functions to: 

A. T2i3e£ of Orga,nization ■ • 

B. Trade Association Leadership 

C. Age £md Representative- Character of Trade Association 

III» Development of N.R.A. Policy for Trade Associations 

A, Influence Dominant on Code Authority Organization Until llarch, 
193-4 ■ : ' . 

B, Later Policy Changed 

C, Reasons for Change 



9453 



-537- T 

OHQANIZABILITY OF IITJUSTRY FOH CODE AHvIIHISTBATION 

Table of Contents 
CHAPTER I. PREPARATION FOR SELF-G0VERM.3:UT 

I. Wealcness of Organization in 1933 

II. Advantages of Utilizing IT.Pl.A. Developments 

III. Early Illegal Self-Govemment in Industry 

IV. War Industries Board 

V. Government Regulation in Specific Industries Prior to II. R. A. 

VI. Self-Government "by Trade Associations 

VII. Trade Association Cooperation with the Government Prior to N.R.A. 

VIII. The Gap Betv/een Trade Associations and Codification 

IX. Hou is Organizability Proved? 

X. Is Organization Desired? 

CHAPTER II. CRITERIA OF EFFECTIVE CODE ADMINISTRATION 

I. Labor Compliance 

II. Trade Practice Compliance 

III. Financial Administration 

IV. Representative Character of Code Authority Organization 

V. Industry Attitude Touard Code 

VI. Statistical Reporting Systems 

CHAPTER III. ECONOMIC FACTORS OF ORGAN I Z ABILITY 

I. Geographic 

A. Regional Centralization 

1. Single Regions 

2. Dual Central Areas 

3. Decentralization 

B. Urhajiization 

1. Location Principally in Cities Above 100,000 Population 
and Their Suburbs 

2. Location in Touns Chiefly Below 10,000 Population 

3. Location in Communities of All Sizes 

II. Industry 
A. Size 

1. Codes Covering More than 130,000 Employees 

2. Codes Covering From 50,000 to 130,000 Employees 

3. Codes Covering Less Than 50,000 Employees 
9453 



-538- 

B. Financial Control 

1. Potential Domination "by a Few Large Units 

2. Lack of Concentrated Control iDut Presence of Leadership 

3. Absence of Unified Leadership 

C. Economic Process 

1, Basic Production 
. 2, Patrication 
5* Distribution- and Service 

D. Contract or Commission System - Industries Allocating More 
Than IG per cent of Their Output to Contractors 

E# Significant Economic Factors in Individual Industries 

1, Foreign Trade 

2, Horae^-'ork 

3, Industries Experiencing Long Term Declines 

4, Industries with Inelastic Demand 

III. Lahor "'■■ ^ "- ■ 

A. Wage Level During First Six Months of 1933 

1. Average Above 50 cents per Hour 

2. Average 40 to 49 cents per Hour 

3. Average Under 40 cents per Hour 

B. Unionization 

1. Majority of Employees Unionized 

2. Effective Minority Unionized 

3. Negligible Member shii-j in Unions 

C*- Mechanization: Percentage of Labor Cost to Value Added by 
Manufacture (in the Case of Manufacturing Industries) or to 
Operating Expense , in the Ca,se of Distributing Trades 

IV. Sales Outlet 

A, To Industrial Users 

B, To Retailers and Ultimate Consumers 

C, Sales to Either Industrial Users or to Retailers, Through 
Wliolesale Channels, to the Extent of 33 to 66 per cent of 
Volume 

V. Government 

A, Prior Regulation 

1, Self- Government in Industry oy Trade Associations 

(a) Uniform Cost Accounting 

(b) Statistical Reporting 

(c) Trade Promotion 

(d) Industrial Research 

(e) Commercial Arbitration 

(f ) Evidence of Combination from Department of Justice or 
Federal Trade Commission Cases 

2. Cooperation of Trade Associations with Government Prior to 
N.R.A. 

(a) Trade Practice Conferences 

(b) Simplified practice Agreements 

(c) Commercial Standards 

(d) Webb-Pomerene Export Organizations 

(e) Import Organizations 



9453 



-539- 

3. Industries Affected by. Government Legislation Prior to IT.R.Ai 
(a) Tariffs . . . . • 

Cb) E:n:cii3e Taxes 

(c) Government Competition 

(d) Government Contracts 

(e) Government Supervision ■■ . ■ 

CHAPTER IV. SUMivIARY OF ECONOMIC FACTORS OF ORGAi^ZABILITY, 
EASED ON EXPERIENCE OF INDUSTRIES 
UNDER CODES 

I, S^mthesis of Econom.ic Factors Conducive to Indu'strial Self-Govern- 
nent, 

II, Coriljination of Economic Factors IncaiDacitating Industries for Or- 
ganization for Self-Government 

III. Economic Standards Flexibly Applied for Determining Capacity of In- 
dustry for Self-Government Under Codes, 



9453 



-540- 

OHGINIZABILITY OF INDUSTRY FOR CODE ADMINISTRATION 

Preliminary Siimmary of Finding:s 

The. ejqperie.nce of 100 coded industries, comprising 17,000,000 work- 
ers or three-quarters of the total under N.R.A. , indicates that possession 
of the following economic characteristics is conducive to effective self- 
government under codes: geographic centralization, financial control "by 
a fe\7 units, hasic economic processes, unionization, mechanization, sales 
outlets to manufacturing establishments, and previous experiences in 
public or private regulation. 

Preparation for Self- Governmen t, Organization in. American Industry 
was immature prior to N.R.A., as a result, largely, of the ever-present 
threat of prosecution under the anti-trust laws. The "brief experience of 
the ¥?T Industries Board occurred during a period of prosperity and ex- • - 
pansion, not comparable to the depression problems .which faced N.R.A. 
Self-government in industry by trade associations was with few exceptions 
poorly developed, due to the constant suspicion that such organizations 
were engaged in combination in restraint of trade. 

Co-operation between trade associations and the government since the 
War, as in export combinations and in connection with commercial standards, 
simplified practice agreements and trade practice conferences, was a step 
in the direction of self-government. However, association activities were 
entirely?- dependent on the voluntary cooperation of industry members. 
When the N.R.A. delegated important quasi-public responsibilities to some 
associations under the name of code authorities, most of ■ them were poorly 
equiriped, both financially and by past experience, to assume the heavy 
responsibilities of administration. 

This study has not gone into the controversial question whether the 
organization of industry is conducive to economic welfare, but aims mere- 
ly to ascertain what economic factors .contribute to organizability. The 
geographical, the financial, the labor and the other characteristics that 
tend to orgajfiizability is an old field o,f inquiry; but now for the first 
time the ezrperience of two years under N.R.A, make it possible to assess 
the accompli sliments of various types of industry in the effective ad- 
ministration of codes. 

On the basis of data tabulated by the N.R.A. Compliance Division and 
the Division of Review, 100 coded industries were rated by their adher- 
ence to: (1) labor compliance, (2) trade practice compliance, (3) code 
financial adiainistration , (4) the representative character of the code 
authority, (5) the industry attitude toward the code, and (6) statistical 
reporting systems. 

A combination of these six criteria yields an index of effective ad- 
ministration for each of the 100 codes, which is of interest not for any 
one industry but for the comparison of geographic areas, or with respect 
to the unionization of industry. 

Economic Factors of Organizability . One hundred industries were 
examined on the basis of twelve standard economic factors and compared by 
cross analysis with the index of effective code administration. No one 
characteristic is the key to the type of industry adapted to a code, since 
9453 



-541- , 

the factors that operate in "business life- are complex-. 

Industries possessing the following characteristics appear to tend 
to effective self-government under codes; ' geographic centralization; 
unified financial control; "basic economic processes; absence of contract 
systems; declining profits over long periods; unionization; mechanization; 
sales outlets to manufacturing esta"blishments; previous experiences in 
pu'blic or private regulation. 

Conversely, industries that have the opposite characteristics, such 
as decentralization, widely diffused ownership, sales outlets to retail- 
ers or consrjners, etc., tend to "be less organiza'ble. 

The size of the coded industry, the wage level prevailing prior to 
N.R.A. and the fact of location in large cities aioparently had no influ- 
ence, positive or negative, on organization. Several of the distri"butive 
and service industries, which are among the least organizable, qualify as 
large ur"bcji groups and have paid relatively high wages. 

The chief surprise resulting from the analysis of these t-'jelve 
factors is the failure of large industries to record any greater degree 
of organizahility than the smaller ones. 

HoT/ever, expectations of the kind had no factual foundation prior 
to H.R.A,, since no experience in self-government on a large scale was 
availa"ble for detailed examination. This comparison of the economic 
factors in industry with effective code administration, therefore, pro- 
vides the first material for testing organizability. 

The lessons of t\70 years ex-oerience, under N.R.A. point to the in^ 
capacity of some classes of industries to develop unity of interest among 
their mem'bers. Delegation of powers of self-government under Code 
Authorities to such industries is futile. A cora'bination of "basic economic 
factors, flexi"bly applied, will assist in worka'ble standards for deter- 
mining industrial eligibility to Codes, 



9453 



-542- 

ORIGIN OF THE CODE AUTHORITY 

Table of Contents 

CHAPTER I. TEADE ASSOCIATION BACKGROUO 

I. Beginnings of Trade Association Movement in Latter Half of Nine- 
teenth Century 

II. Passage of Anti-Trust Laws and Restrictive Effect on Trade Associa- 
tion Activities 

III. Change of Government Attitude during World War with Regard to In- 
dustrial Cooperation 

IV. Stimulus to Self-Government in Industry Afforded after War "by Fed- 
eral Trade Commission, and Liberal Attitude of Courts. 

V. Growth of Trade Associations under the National Industrial Recovery 
Act 

VI. Functions Performed by Trade Associations 

A. Classification of Trade Association Activities with Regard to 
Legp^lity Under Anti-Trust Laws, and Change of Emphasis, with 
Passage of Time to Activities More Clearly of a Legal Nature 

VII. Part Played by Trade Associations in Code Formulation 

A. Predominant Part Played by Associations in Drafting and Spon- 
soring Codes 

B. Appreciable Extent of Association Activity in Code Administra- 
tion, Especially during Earlier Period of N.R.A, 

CHAPTER II. THE CONCEPT OF "INDUSTRIAL SELF GOVERNMENT" 

I. Putative Failure of Anti-Trust Laws to Effectuate Free Competition 

II. Dissatisfaction of Industry with Anti-Trust Laws 

III. The Theory of Self Government of Industry Under Government Super- 
vision Embodied in the National Industrial Recovery Act 

CHAPTER III. DEVELOPMENT OF THE CODE AUTHORITY 

I. Failure of the Act to Provide Specif icallj'- for Industrial Adminis- 
trative Agencies 

II. Composition of Early Code Administration Agencies 

A. Change from Planning and Fair Practice Agencies to Code Auth- 
orities 
3. Increasing Emphasis on Representative Character of Code Auth- 
orities 

III. Functions of Early Code Adninistrative Agencies 

A. Limited Powers Granted to Planning and Fair Practice Agencies 

9453 



-543- 

B. Increase of Discretionary Pov/ers Permitted Code Authorities 

C, Development of Belief that Code Authorities Should Properly Be 
Limited to Ministerial Functions 



9453 



-544- 

O RIGIN OF THE CODE AUTHORITY 

preliminary Summary of Findings 

The great changes in industry in recent years have made the adoption 
of a iiiore effective system of industrial regulation essential. Since 
"business leaders were confident that industry could "best regulate itself 
in the public interest, and since a relaxation of the anti-trust laws 
had "been successful in stimulating industry during the World War, it was 
a logical method of attack upon the industrial crisis of 1933 to adopt 
the theory of the self-government of industry under Government regulation. 

TRJ dm ASSOCIATION EACEGRQUND 

The trade association movement, since its inception in the latter 
part of the nineteenth century, has epitomized industry' s attempts to 
achieve self-government. 

Activities of trade associations in the nineteenth century, in re- 
stricting competition and raising prices, contributed largely to the 
passaf:ie of the anti-trust laws. The ,anti-trust laws have in the mean- 
time "been unsuccessful in effectuating free competition and in stopping 
the tendency to centralization in industry. The Government's failure 
to enforce such laws uniformly and to clarify their meaning has kept 
industry in a continual state of luicertainty as to legitimate methods of 
self-control, and has often resulted in the continuation of destructive 
trade practices. 

Passage of the Recovery Act gave trade associations a long awaited 
opportunity to organize industries and to prove that their memlters, if 
permitted to work in concert under Government sanction, could rectify 
unfair industrial practices and improve the condition of la"bor. 

FUIICTIQHS PSRFOmiED EY TRADE ASSOCIATIONS 

Trade associations in the nineteenth century were principally 
concerned with restricting competition and controlling prices, hut such 
activities were eventually discouraged hy the anti-trust laws. In the 
twentieth century trade associations, turning their attention to more 
legeJ. practices, have contrihuted much to the improvement of "business 
conditions through cooperative action among industry memhers. 

Trade associations played the predominant part in organizing in- 
dustries to present codes to the Administration. 

CONCEPT OF INDUSTRIAL SELF GOVERNMENT 

The traditional American policy of laissez-faire, even with the 
support of the anti-trust laws, has not resulted in actually free com- 
petition. 



9453 



-545- 



I 



The conception of industrial self-government under Government super- 
vision en'oodied in the Kationnl Recovery Act was not a revolutionary i 



principle, but followed sub st^iiiti ally the ^}olic7 pursued "by the Government 
for 93::e years through the Pederal Tra,de Gojanission 

SEVELOPIIUMT OF THE COBE AUTHOIIITY 

Any definite concept of Code administration was slow in developing, 
the ea,rly er.rphasis of N.R.A "being entirely uoon Code formulation. 

Trade associations were chiefly relied upon to serve as C«de ad'ain- 
istrative agencies during tne first st:iges of IT.'l.A. In the later stages 
independent Code Authorities v;on favor for tj..ie purpose. 

The iTational Recovery Adiiini strati on had no preconceived notions as 
to the functions to be performed "by industrial o^^encies. They first 
served as planning agencies with very lii.iited powers. Later wide dis- 
cretiona,ry cowers, unfettered by Governinent supervision, were gronted 
them. However, as the il.R.A* entered its later stages, the discretionary 
powers of Code agencies \7ere subject to strict sTipervision. 



f 



9453 



-546- 
STATISTICAX AW KESEARCH ACTIVITIES OF CODE AUTHORITIES 

Table of Contents 

CHAPTER I. INDUSTRIAL STATISTICS OF THE UNITED STATES 

I. Responsibility for Industrial Statistics of the United States 
Divided Between the Federal G-overnment and Private Organiza^- 
tions, 

A, Division of Responsibility Before, During, and After the 
N.R.A, Codes 

1. Responsibility of Code Authorities as Qp.asi-Governmental 
Bodies 

II. Purposes for Which Statistical Findings are Desired, as Basis 
for Division of Responsibility for Collection of Data 

A, Purposes for Which Data Are Collected by the Federal G-ov- 
ernment 

!• As Basis for. Governmental Action 

2« For Use of Private Organizations and Private Citizens 

B, purposes for '.Thich Data are Collected by Private OrganizEu- 
tions 

1. For Use of Private Organizations and Private Citizens 

C, Purposes for Which Data Were Collected by Code Authorities 

1. As Basis for Action by Code Authority 

2. As Basis for Other Governmental Action 

3. For Use of Private Organizations and Private Citizens 

III. Difficulties in Collection of Industrial Statistics 

A. Arising from Characteristics of a Given Industry 
!• Lack of Adequate Booldceeping 

(a) Due to Number, Size, Relationship, or Duration of 
Establishments 

(1) Numerous Small Independent Establishments 

(2) Numerous Subsidiary Groups, Such as Con- 
tractors and Homeworkers 

(3) Numerous Recently-formed or Rap idly- growing 
Establishments 

(b) Due to Defects of Intelligence and Education on 
the part of Members of Industry 

(c) Due to Large Number of Items Produced 'or Handled 
2« Diversity of Processes and Methods Among Members of 

Industry 
3, I7ide leo'graphi'zo.l Distribution of Establishments 

B, Difficulties in Collection by Federal Government 

1. Problem of Maintaining Direct Contact With All Members 
of a Given Industry 

2. Problem of Adapting Statistical Procedure to Needs of 
a Given Industry 

3# Problem of Maintaining Public Opinion in Favor of Re- 
- porting of Industrial Statistics 



9453 



-547- 

(a) This ProlDlein is Present if Statistical Reporting is 
Voluntary and Also if it is Compulsory 

(Id) Im-Dortance of Adherence to Policy that Individual 
Re-Dorts he Not Disclosed hy Government Bureaus 
Collecting Statistics 

4. Large Expenditure Reauired for Administering Compulsory 
Reporting of Industrial Statistics 

5, Lack of Reports Prom all Industry Memhers Under Voluntary 
Reporting System 

(a) Fossihle Lack of All Statistical Reporting by in 
the Case of Some Industries 

(h) Possible Lack of Statistical Reporting by Given In- 
dustries of Some Items of Basic Importance 

(c) Lack of Statistical Reports Prom Some Members of Some 
Industries 

(d) Incomplete or Inaccurate Re-oorts Prom Certain Members 
of Some Industries 

C. Difficulties in Collection by Private Organizations 

1. Problem of Maintaining Opinion of Members of Industry in 
Pavor of Reporting Industrial Statistics 

(a) Importance of Adherence to Policy that Statistics be 
not Disclosed to Competitors of Person Reporting 

(b) Importance of Adherence to Policy that Statistical 
Findings be not Used by Private Organizations, to 
Detriment of Some C-roups liTithin an Industry 

2. Practical Impossibility of Compulsory Reporting for a 
Private Organization 

3. Lack of Comprehensive and Comparable Reporting by Industry 
Throughout the United States of Statistics Which are Most 
Desirable and Practicable 

(a) Lack of All Statistical Reporting by Some Industries 

(b) Lack of Statistical Reporting by Some Industries of 
Some Items of Basic Importance 

(c) Lack of Statistical Reports From Some Members of 
Some Industry 

(d) Incomplete or Inaccurate Reports From Some Members 
of Some Industries 

4. Lack of Sta,tistical Tra-ining and Experience of Persons 
Collecting, Summarizing, and Presenting Statistical Data 

5. Financial Lini tat ions. 

D, Difficulties in Collection by Code Authorities 

1. !To Difficulty Wliich is Not Found in Collection by Federal 
Government or by Private Organizations 

2, Fewer Difficulties than are Found in Collection by Federal 
Government or by Private Organizations 

(a) Problem of Maintaining Opinion of Members of Industry 
in Favor of Reporting of Industrial Statistics 

(1) Importance of /adherence to Policy that Individu- 
al Reports be not Disclosed by Code Authority 

(2) Importance of Adherence to Policy that Statis- 
tical Findings be not Used by Code Authority 

to Det-riment of Some Groups T7ithin the Industry 



9453 



-543- ~~ 

(Id) Lack of Statisticn.l Trainin,?; ond E-xperience of 
Persons Collecting;, Sioiomarizing and Presenting 
Statistical Data 

(c) Large E^coenditure Reqiiired for Administering Com- 
TDulsory Reporting of Industrial Statistics 

CIlAPTEtl II. STATIbTICS GOE?ILEI) EY CODE AUTHORITIES 
I. Provisions in Codes Authorizing Collection of Statistics 

II. Group of Pifty Code Authorities Selected for Study 

A. List of Code Authorities 

B. Code Authoritiey Grouped According to Type of Industry 

C. Code Authorities Grouped i^ccording to: 

1. NumlDer 

2. Size 

3, Relationship 

4, Duration of Establishments 

D. Code Authorities Grouped According to: 

1, Extent 

2. Q;aality of Statistical Work of Trade Associations Prior 
to Code 

III. Analysis of Statistical and Research Activities of Each ,.of the 
ITifty Industries 
A. Activities Prior to the Code 

1. Periodic Statistica.l Reporting Conducted at the Time the 
Code ^-lecame Effective 

(a) Items Reported 

("b) Proportion of Industry Covered 

(c) Prequency and Duration of Reporting 

(d) Sumiuaries 

(1) Distribution 

(2) Use by Industry 

2. Special Studies Made During the Six-Months' Period Prior 
to the Date the Code Became Effective 

(a) Items Reported 

(b) Proportion of Industry Covered 

(c) Period Covered 

(d) Summaries 

(1) Distribution 

(2) Use by Industry 

B« Activities During the Period for Which the Code was Effective 

1. Periodic Statistical Reporting Conducted at Any Time 
During the Period 

(a) Items Reported 

(b) Proportion of Industry Covered 

(c) Frequency and Duration of Reporting 

(d) Summaries 

(1) Distribution 

(2) Use by Code Authority 

2, Special Studies Made During the Period 

(a) Items Reported 

(b) Proportion of Industry Covered 

(c) Period Covered 

(d) Summaries 
9453 



-549- 

(1) ristrilDution 

(2) Use "by Code Authority 

C. Activities After the Code Ceased To 3e Effective 
1. Periodic Statistical He-oorting 
(a) Items Reported 
("b) Proportion of Industry Covered 

(c) Frequency and Duration of Reporting 

(d) Sunrmaries 

(1) Pistritution 

(2) Use "by Industry 
2« Special Studies 

(a) Items Reported 

("b) Proportion of Industry Covered 

(c) Period Covered 

(d) Summaries 

(1) Pistritution 

(2) Use "by Industry 

IV» Appraisal of Statistical and Research Activities of Each of 
the Fifty Code Authorities 

A, Evaluation of Q;aality of Statistics Collected 
B# Reasons Why Some Pata of Sasic Importa.nce Were Not Collected 

C. Reasons Wny Some Memlters of the Industries Failed to Make 
Statistical Reports 

D. Reasons Why Some Members of the Industries Made Incomplete 
or Inaccurate Reioorts 

S, Evaluation of Use by the Code Authority of Periodic Reports 

and S-oecial Studies 
P. Extent to Which Statistical and Research Activities Were 

Adeouate for Use of Code Authority and N.R.A, in Administeririg 

the Code 

CHAPTER III. I3XT STEPS III DEVELOPING THE IIDUSTRIAL STATISTICS 

OF THE UNITED STATES 

I, Need for Im-orovenent of Industrial Statistics 

A. Collection of All Data Wliich are Desirable and Practicable 

B. Assurance That Statistics Collected Reach a Reasonable 
Standard of Quality 

II. Supervision oy Federal Government of Industrial Statistics as 

Distinguished from Enlargement of Res-oonsibility of Federal Gov- 
ernment for Direct Collection of Industrial Statistics 

III. Plan for Supervision by the Federal Government of Collection of 

Industrial Statistics by Organizations for the Several Industries 
A, Work of the Federal Government in Regard to Industrial 

Statistics Should be Centralized in One Government Agency 
B« Statistician for Each Industry Should be Appointed or Ap- 
proved by Government Agency 

C. Legal Compulsion Upon Lembers of a Given Industry, Under 
Penalty, to Pay Assessment For Statistical Program and to 
Supply Statistical Re^oorts 



9453 



1. Assessments and Statistical Items to "be Collected Frora a 

Given Industry, Diiring An-' Six-i.iontlis* Period, to "be Announ- 
ced "by Governraent Af:;ency After Public Hearing Throe i.Ionths 
Prior to Period 
£). Statistical Reports to be Eeld Strictly Confidential by Statis- 
tician and Government Agency 
E, S"'Jirnnaries of All Data, Hot Revealing Individual Eeiiorts, to be 
Distributed to Members of the Given Industry 

IV. Advantages of Collection of Industrial Statistics by Organizations 

for the Several Industries, Under Supervision of the Federal Govern- 
ment 

A* ■ Increased Facility in Maintaining Direct Contact With All ilen- 
' bers of £? Given Industry 

B» Increased Facilit3- in Adapting Statistical Procedure to Needs of 

a Given Industry 
C. Possible Attainment of Comprehensive and Comparable Reporting of 
Those Industrial Statistics of the United States Which are Desir- 
able and Practicable 
D# Statical Program Maintained by Funds Obtained Frora the Given In- 
dustry Ra.thcr Tlian by Public Funds 



9453 



~b5I- 

. STATISTICAL A'r^D P^SEAUCH ACTIVITIES OF 

CODZ AU^IiOHrTIS S 

Preliminary S'uu:imary of Findings 

The present findings with regard to the statistical £md research 
activities of code authorities are based upon the experience of fifty 
industries. This sample includes code authorities, the quality of whose 
•statistical and research work ra.nged from, non-existent or poor to excel- 
lent. It is also representative of the whole range of industry, with 
respect to the number and size of the members, the number of employees, 
the geo.^^raphical distribution, and the types of product* 

In industry taken as a whole the statistical and research activi- 
ties of code authorities were superior as rega.rds both quality and quan- 
tity to those of trade associations prior to the HHA, There were of 
course individual exceotionse In some cases in \/hich excellent work 
had been done by associations the equality was not improved under the 
codes, though the qtiantity was generally increased. In some industries, 
moreover, in vrhich statistical v;ork on the part of associations had 
been entirely/- lacking prior to the N.R.A. , such work was not undertaken 
by the code authorities. 

The activities of code a^ithorities in the way of statistics and 
research showed wide variations both in quality and in quantity. 

Tlie statistical and resea-rch v;ork of trade associa.tions since the 
termination of the codes has been on the whole inferior both in quality 
and in cimntity to those of the code authorities. In some cases, of 
courses, there has been reduction of quantity without impairment of 
quality, except as regards the "oroportion of the industry covered; ajid 
in others, where statistical and research a.ctivity on the part of the 
code authorities was non-existent, no reduction has been possible. 

The experience of code authorities. Judged from the fifty industries 
covered by the present study, indicates many reasons for the gaps and 
defects tha.t existed in their statistical and research activities. 

The problem of collecting and compiling industrial statistics did 
not cea.se to exist v/ith the termination of the codes; cjid its solution 
is not necessarily de^^endent on the enrxtnent of legislation establish- 
ing any kind of "second il.Ii.A." Statistical and research work in the 
industrial field is now being carried on, subject to various shortcomings 
both by trade associations and by government bureaus. Because adequa.te 
statistics are essential to the vielfare of industries, because they are 
needed by the government for administrative purposes, and because they 
are widely desired by the general j.iublic, there should be improvement in 
the facilities for collecting, com;oiling and presenting them. 

Some think that the work of the FederaJ government vdth respect to 
industrial statistics should be expanded -ujitil all such information that 
is needed for adminis tractive purposes becomes available from government 
sources. Others propose that the statistics collected by the FederaJ. 
Government should include also those dem.anded by the general public, and 
9453 • 



-552- 

possilDlj'' olso those needed for the guidance, of i.iei.rDers of industry in 
conducting their business. 

Sone thinlc ibhat these ends co.uld he a.chieved by the voluntary re- 
porting of statistics, which would ordinarily result in data for a scxrole 
of an industry rather than for the ?.ndustry as a whole. Others feel th:.t 
compulsory collection by the Federal governjnent would be necessary, if 
satisfactory results are to be obtained. Some think that the work 
should be distributed pjnong the government bureaus now engaged .in tiie ■ 
collection of industrial data; others believe that it v/ould be nec&ssary 
to have concentration in one central. Federal agency of all governncnt 
activities relating to industrial statistics* 

Sone persons familiar \7ith the problems. of industrial statistics 
feel that it would be advisable, in the case of trade associations which 
are so.tisfactorily conducting statistical and research activities, to ■ 
arronge volutitary cooperation with the Federal government, by vrhich asso- 
ciation data would be a,ccepted..as a substitute for government collection. 

Hie writer believes that' statistical and research activities in the 
industrial field could be brought to the highest level both of qualitj^ 
and of quantity under a plan of compulsory reporting to trade associations, 
supervised by the Federal government. 



9453 



-553- 

TZ ADE PBACTICE CGMPLIA1TC5 ACTIVITIES OF CODS AUTHORITIES 

Ta"ble of Contents 

CHAPTER I. BACKC-ROUKD 

I. Historical S-ommary of N.R.A. Policy 

A. Factors Determining Evolution of Policy 

II. 1\F.P..A. Supervision of Code Authority Compliance 

A. Supervisory Machinery 

1, Effectiveness of Types of Supervision Attempted 

B. Effect of N.ReA, Qrgs.nization on Code Authority Compliance 
1, Separate Functional Organizations Within N.R.A. vs. Code 

Authority Compliance 

III. History and Summary of Plans Presented to H.R.A. 

A, Industries Concerned 

B. Evolution and Approval of Code Authority Compliance Pla.ns 

1, Conflicting Opinions of Opposing Factions 
(a) Association and Non-Association Meml)ers 

2, Major Issues Raised 
(a) Size 

("b) Geographical Location 
(c) Association Membership 

3, Attempts to Provide Adequate Industry Enforcement Machinery 

(a) T^'pes of Plans Submitted 

(b) Significance of Various Types of Plans Submitted 

4, Importance to Industry 

5, Importance to N.R.A, 

6, Summarj'- of Plans Approved 

CHAPTER II. ORGAinZATION MD PRESCRIBED PROCEDURES 

I. Organization of Compliance Machinery 

A, Geographical and Functional Organization 

1, Centralized or Decentralized 

(a) Suitability for Needs of Industry 

2, Problems Relative to the Relationship of 

(a) Code Authority 

(b) Com.pl iance Division 

(c) Deputy Administrator 

(d) Other Agencies (Trade Association, State Recovery 
Agencies, etc.) 

3, Employment of Commercial Investigating Agencies and Chambers 
of Commerce 

4, Basis for Code Authorities' Choice of Compliance Organiza^ 
tion 

5, Extent to Which Code Authorities Attempted to Modify Pro- 
visions of Codes 

II, personnel 

A, Affiliations and Background of Industry Personnel Conre cted uith 
Compliance 

1, Fitness of Individuals for Duties 

2. Disinterestedness of Individuals 
9453 



"554- 

E, Salaries or Fees 

C. Question of Dominance of Special Croups 

III. Procec.ure as a Compliance Authority 

A. Origin of Complaints 

1, Limitations on Ccnplaints Recognized 

2. Sources 

B. Lletliods of Investigation 

1. Relative Value of Various Tyijes of Investigation 
(a) Correspondence 

(Id) Field Investigation 

(c) Office Intervie^.73 

(d) Others 

2. Eights of Respondents to l^itiihold or Disclose Information 

C. Hearings 

D. Findings 

1. Relationship Bet\7een Findings and Adjustment Procedure 

2. Principles of Adjustment 

IV. Litigation 

A. 'T^^^es of Cases Referred to Litiga.tion 

B. Assistance Given the Litigation Division 

1. 3y Industry 

2. By Federal and Municipal Authorities 

V. Effoi'ts to Eliminate Violations 

A. E:rolanations 

1, Meetings, Bulletins, Releases, Etc, 

B. Edii-cational Activities 

1. Reports, Cost Accoimting, Hearings, Etc. 

CHAPTER III. C0MPLIA1\TCE ACTIVITIES 

I, Complaints 

A. Aiialysis of Origin 

B» Analysis of Type of Complaint 

1, Activity of Code Authorities in Handling Violations 

2. Ability of Code Authorities to Handle Complaints . 

C. Rejection and Acceptance of Complaints . > 

1, Impartiality or Partiality of Code Authorities 

(a) Effect of Special Interests, Size or Location on Code 
Authority Compliance Activities 

(b) Effect of Competitive Situations on Code Authority 
Compliance Activites 

D. Investigation Procedure 

la Methods Used by and Competence of Investigators 

2. Adjustment of Complaints 

(a) Methods of Reporting and Final Determination of Ad- 
justments 

(b) Evaluation of Their Fairness and Equity 

(c) Effect of Methods Used an Respondents and Others in , 
Industry 

II. Interpretations of Code Provisions 

A. Attempts of Code Authorities to Assume Inter-ore tive Powers Yiot. 

Permitted Them 
945--^ 



-555- 

1. Extent and Type of Ilhofficial Interpretations Issued "by 
National and Pce.gional Code Aiithoritie.s 

(a) Effect on Compliance With Code Provisions 

2. Cooperation Bet'Teen N.R.A. and Code Authorities in Issuiince 
of Interpretations 

3. Effect on Industry 

III. Hearings 

A, Nature of Hearings and Those Present 

B, Actions Taken 

C, Ric^hts of Appeal 

IV. Adjustment Principles 

A. Adiierence to Procedure Set Forth in Approved Rules and Regula- 
tions 

B. Acceptance of Findings ty Industry 

C. Effect on Industry Resulting from Hearings and Determinations 
Hade 

D. Reference to Higher Authorities 

V. Aids to Compliance • . ■. ' 

A. Code Eas^-le 

1, Relation to General Compliance Activities 
(a) By N.R.A. 

("b) By Industry 

2, Use of i/ithdrawal Pouers 'by Code Authorities 

(a) Effect on Respondents and Other Industry MemlDers 

3, Restorations of Code Eagles 

B. LalDels 

1. Use in Connection vrith Assessment Payiaents and General Con- 
pliance Activities 

2. Effectiveness as Aid to Compliance 

C. Liquidated Damages Agreements 

1, Development of This Procedure Compared vith Use of Code 
Eagle Removals and. Label Refusals 

D. Effectiveness of This T^^e of Enforcement 

1, From the standpoint of Industry 

2. From the standpoint of N.R.A. 

E. Labor's Part in Aiding Compliance 

F. Activities of Trade Associations in Support of Compliance 

CHAPTER IV. COMPARATI^/E Al^ALYSIS OF CODS AUTHORITY COMPLIAiNTOE 

ACTIVITIES 

I. Comparison by Types of Industries 

A. Extent to TThich Well Organized Industries Influenced Volijntarj'- 
Compliance With Code Provisions, as Compared With Less Organize- 
ed Industries 

B, Influence on Code Authorities in Those Industries in Which 
Strong Tendencies Toward Monopoly Existed 

G» Comparison in Respect to Size, Geographical Location, Labor Or- 
ganization in Industry, Integration, etc, , 

II. Critical Treatment of Types of Code Authority Organization 
A, Operation of Code Authorities in the Face of 
1, Monopolistic Tendencies in Industry 
9453 



-556- 

2, Strong Trade Association 

3, Weak Trade AGSOciation 

B. Varying Types and Degree of Trade Association Interference or 
Control 

C, Extr-.nt of Administration and Other I'on- Indus try Influence on 
Code Authorities and Cor.plaints Committees 

D. Influence of Code Authority Secretaries 

E, Powers of Code Authorities to Demand Information 

III. Basic Issues 

A, Were the Compliance Activities of Code Authorities Carried on 
in an Effective and ImT)artial Manner? 

B. Were Activities of Code Authorities Affected "by: 

1. Size of Enterprise 

2. Competitive Situations of Respondents 

3. Trade Association Membership 
4-, Location (North or South) 

5, Attitude of Code Authority MemlDers Tovrard Code and Re- 
sponsibilities of Code Authority 

6, Desire of Code Authority to Obtain Incriminating Evidence 
of Violations and to Push Compliance 

Ct E::tent and Type of Unofficial Interjjretations Issued by Code 
Authorities 

D. Were Trade Practice Provisions Dra-7n in Such a Manner that it 
T.'as Possible to Obtain Enforcement even \7ith the Best Practicable 
compl iance Machine ry '' 

E, Wli?-t Part, if any, Should Such an Agency as a Code Authority 
Play in the Enforcement of Industrial Regulations? 

?, Possible Put'jire Legislation 



94-53 #