Approved Code No. 235-Amendment No. 3 Registry No. 299-1-13
NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
AS APPROVED ON AUGUST 6, 1931
I' F' I T )-I R ''
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Approved Code No. 235-Amendment No. 3
Registry No. 299-1-13
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Approved Code No. 235-Amendment No. 3
AMENDMENT TO CODE OF FAIR COMPETITION
TEXTILE PROCESSING INDUSTRY
As Approved on August 6, 1934
MODIFICATION OF CODE or FAIR COMPETITION FOR THE TEXTILE
An application having been duly made pursuant to and in full
compliance with the provisions of Title I of the National Industrial
Recovery Act, approved June 16, 1933, for approval of a modification
of a Code of Fair Competition for the Textile Processing Industry,
and hearings having been duly held thereon and the annexed report
on said modification, containing findings with respect thereto; hav-
ing been made and directed to the President:
NOW, THEREFORE, on behalf of the President of the United
States, I, Hugh S. Johnson, Administrator for Industrial Recovery,
pursuant to authority vested in me by Executive Orders of the Presi-
dent, including Executive Order No. 6543-A, dated December 30,
1933, and otherwise; do hereby incorporate, by reference, said an-
nexed report and do find that said modification and the Code as
constituted after being modified comply in all respects with the perti-
nent provisions and will promote the policy and purposes of said
title of said Act, and do hereby order that said modification be and
it is hereby approved, and that the previous approval of said Code
is hereby modified to include an approval of said code in its entirety
HUGH S. JOHNSON,
Administrator for Industrial Recovery.
ROBERT L. HOUSTON,
August 6, 1934.
REPORT TO THE PRESIDENT
The White House.
SIR: This is a report on the Hearing covering the Amendments
to the Code of Fair Competition for the Textile Processing Industry,
held in Room A at the ashington Hotel, Washington, D. C., April
20. The Amendments, which are attached, were presented by duly
qualified and authorized representatives of the Industry, complying
with statutory requirements and being the same Agency that origi-
nally submitted the Code.
In accordance with customary procedure every person who had
filed a request for appearance was freely heard in public, and all
statutory and regulatory requirements were complied with.
PROVISIONS OF THE AMENDMENTS
There are four groups of Amendments as follows:
1. The addition to Article I of new Sections as follows:
Section 9 which defines the term "Division."
Section 10 which defines the term "Member of the Industry."
Section 11 which defines the term Member of the Division."
Section 12 which defines the term Service Charge."
Section 13 which defines the term Selling Price."
2. Additions to Article III of new Sections as follows:
Section 4 regarding the liability of members of the Code
Section 5 which provides for certain further powers and duties
for the Code Authority.
Section 6 which provides for the establishment of the various
divisions of the Industry, and also sets up the machinery whereby
the divisions may make recommendations to the Code Authority
and the method of voting on these recommendations by the divisions.
3. The addition of a new Article, number VII, as follows:
Section 1 which provides for the registration of productive
Section 2 which provides that any division in the Industry may
recommend to the Code Authority a plan for restricting or pro-
hibiting the installation of productive machinery and equipment and
also that the Code Authority shall submit such a plan to the
4. The addition of a new Article, number VIII.
This Article provides certain trade practice rules for the Industry.
The Deputy Administrator in his final report to me on said amend-
ments to said Code having found as herein set forth and on the
basis of all the proceedings in this matter:
I find that:
(a) The amendments to said Code and the Code as amended are
well designed to promote the policies and purposes of Title I of the
National Industrial Recovery Act including the removal of obstruc-
tions to the free flow of interstate and foreign commerce which tend
to diminish the amount thereof, and will provide for the general
welfare by promoting the organization of industry for the purpose
of cooperative action among trade groups, by inducing and main-
taining united action of labor and management under adequate
governmental sanction and supervision, by eliminating unfair com-
petitive practices, by promoting the fullest possible utilization of
the present productive capacity of industries, by avoiding undue re-
striction of production (except as may be temporarily required), by
increasing the consumption of industrial and agricultural products
through increasing purchasing power, by reducing and relieving
unemployment, by improving the standards of libor, and by other-
wise rehabilitating industry.
(b) The Code as amended complies in all respects with the perti-
nent provisions of said Title of said Act, including without limita-
tion Subsection (a) of Section 3, Subsection (a) of Section 7, and
Subsection (b) of Section 10 thereof.
(c) The Code empowers the Code Authority to present the afore-
said amendments on behalf of the Industry as a whole.
(d) The amendments and the Code as amended are not designed
to and will not permit monopolies or monopolistic practices.
(e) The amendments and the Code as amended are not designed
to and will not eliminate or oppress small enterprises and will not
operate to discriminate against them.
(f) Those engaged in other steps of the economic process have not
been deprived of the right to be heard prior to approval of said
For these reasons these amendments have been approved.
HUGH S. JOHNSON,
AUGUST 6, 1934.
MODIFICATION OF CODE OF FAIR COMPETITION FOR
THE TEXTILE PROCESSING INDUSTRY
Article I is hereby amended by the addition of new sections, to
read as follows:
9. The term division as used herein means a group of mem-
bers of the Industry engaged in the same part or parts of the Indus-
try, which groups are set up in Article III, Section 6 of this Code, or
which may hereafter be set up pursuant to the provisions of such
10. The term member of the Industry" includes, but with-
out limitation, any individual, partnership, association, corporation
or other form of enterprise engaged in the Industry, either as an
employer or on his or its behalf, including enterprises operating
"11. The term "member of the division" means any member of
the Industry engaged in operations included within the scope of a
particular division herein named or hereafter organized.
"12. The term service charge "as used herein means the amount
paid or to be paid to any member of the Industry for any of the
services performed by members of the Industry as defined in Article
I, Section 1, including the actual cost of incidental supplies and
materials furnished by members of the Industry in connection with
13. The term "selling price" as used herein means the amount
paid or to be paid to any member of the Industry for the sale of any
products made and/or distributed by the Industry, as defined in
Article I, Section 1."
Article III is hereby amended by the addition of new sections, to
read as follows:
4. Nothing contained in this Code shall constitute the members
of the Code Authority partners for any purpose; nor shall any
member of the Code Authority be liable in any manner to anyone
for any act of any other member, officer, agent or employee of the
Code Authority; nor shall any member of the Code Authority exer-
cising reasonable diligence in the conduct of the duties hereunder, be
liable to anyone for any act or omission to act under this Code, ex-
cept for his own wilful malfeasance or nonfeasance.
5. The Code Authority shall have the following further powers
(a) To insure the execution of the provisions of this Code and to
provide, subject to.rules and regulations established by the Admin-
istrator, for the compliance of the Industry with the provisions of
the Act; provided, however, that this shall not be construed to de-
prive duly authorized governmental agencies of their power to
enforce the provisions of this Code or of the Act.
(b) To adopt by-laws, rules and regulations for its procedure and
for the administration and enforcement of the Code.
(c) To use such agencies and to establish such committees as it
deems proper for the carrying out of any of its activities provided
for herein, provided that nothing herein shall relieve the Code
Authority of its duties or responsibilities under this Code and that
such agencies and committees shall at all times be subject to and com-
ply with the provisions hereof, and provided that representatives
designated by the Administrator shall be given full opportunity to
attend all hearings of such agencies and committees.
(d) To co-operate with the Administrator in regulating the use
of any National Recovery Administration Code Insignia solely by
those members of the Industry who are complying with this Code.
(e) To appoint, within six weeks after the effective date, a com-
mittee so constituted as to give consumer and governmental repre-
sentation satisfactory to the Administrator, to make a study with a
view to the establishment of classifications, nomenclature and stand-
ards of quality (grades) of staple products and services of the Indus-
try wherever such standards are deemed feasible. The findings and
recommendations of this committee shall be submitted to the Admin-
istrator, within six months after such hearings and investigations as
he may designate, and upon approval by him shall be made a part
of this Code and be binding upon every member of the Industry.
6. (a) The following divisions of the industry are hereby estab-
lished and set up:
Cotton Yarn Dyers and Bleachers
Cotton Yarn Glazers
Cotton Yarn Mercerizers
Cotton and Wool Yar Winders, Warpers and Slashers
Rayon Yarn Dyers
Rayon Yarn General Converters
Rayon Yarn Straight Twisters
Novelty Yarn Twisters
Rayon Yarn Winders, Warpers, Slashers and Beamers
Woolen and Worsted Yarn Dyers
Woolen and Worsted Woven Piece Goods Dyers and Finishers
Woolen and Worsted Knitted Piece Goods Dyers and Finishers
Cotton and Rayon Tubular Knit Goods Dyers and Finishers
Raw Stock and Top Dyers
(b) Every member of the Industry who manufactures or sells any
product of the Industry or performs any of the services included in
the Industry, shall, as to each product or service, operate under the
rules formulated for the division and/or divisions set up in subdivi-
sion (a) of this section into which such product or service falls, and
shall be a member of that division and/or divisions.
The Code Authority may, from time to time, with the approval
of the members of the divisions concerned, create new divisions, or
subdivide, combine and/or discontinue divisions, or add new prod-
ucts or services to any division.
"(c) Members of each division of the Industry may, subject to the
approval of the Code Authority and of the Administrator after such
notice and/or hearing as he may specify, adopt for such division,
and binding upon all members of such division, rules of fair practice
and methods of procedure not inconsistent with the provisions of
this Code or of the Act, including, but without limitation, measures
for industrial planning, stabilization of employment, standard sales
contracts, open price provisions, rules for determining costs, and pro-
hibiting the furnishing of services or the selling of products below
prices filed and/or costs.
"(d) Mlembers of each division of the Industry may cause to be
formulated, for such division, an accounting system and/or methods
of cost finding and 'or estimating capable of use by all members of
the division. After such system and/or methods have been formu-
lated, and when approved by the members of the division pursuant
to subdivision (f) of this section and approved by the Code Au-
thority and the Administrator, full details concerning them shall be
made available to all members of the division and thereafter all
members of the division shall determine and/or estimate costs in
accordance with the principles of such system and/or methods.
"(e) Members of each division of the Industry or part thereof
may determine closing hours for plant operations for such division
or part thereof between the hours of midnight Friday and 6 A.M.
Monday, and after such determination has been approved by the
members of the division pursuant to subdivision (f) of this section
and approved by the Code Authority, such determination, upon the
approval of the Administrator, shall have the same force and effect
as any other provision of this Code.
"(f) For the purposes of this section each division shall take
action by either:
(1) The affirmative vote of a majority of those attending a meet-
ing of members of such division duly held after adequate prior
notice mailed to all members in such division, provided that no
action shall be taken at such meeting unless at least one-third of
the members of such division are present either in person or by
(2) The affirmative vote of a majority of those voting on ballots
mailed to all members of the division at least ten days prior to the
day on which such ballots are to be counted. No action by mailed
ballot shall be binding unless affirmative ballots are received from
at least one-third of those to whom ballots are mailed."
This Code of Fair Competition is hereby amended by the addi-
tion of a new Article, number VII, to read as follows:
"1. Within 90 days from the effective date, each member of the
Industry shall file with such agency as the Code Authority may
designate complete inventory of its productive machinery and equip-
ment in place or otherwise; owned or on order as of April 1, 1934,
or thereafter installed, in such form as the Code Authority may de-
termine and only certified to as to its completeness and correctness.
Productive machinery and equipment for this purpose shall be de-
fined by each division and when approved by the Code Authority,
said definitions of productive machinery or equipment for the re-
spective divisions shall be transmitted to each member of the re-
spective divisions to facilitate proper compliance with this provision.
"Any changes in inventory filed shall be duly reported and certi-
fied within thirty days of such change.
"2. Any division in the Industry may recommend to the Code
Authority a plan for restricting or prohibiting the installation of
productive machinery or equipment. After approval of said plan
by a majority of such division, in accordance with the requirements
of the Administrator the Code Authority shall submit said plan to
the Administrator. If the Administrator, after investigation and
such notice and hearing as he may require, shall find both (1) that
an emergency has arisen within the division adversely affecting small
enterprises or wages or labor conditions, or tending toward monopoly
or other acute conditions which tend to defeat the purposes of the
Act; and (2) that the proposed plan for restricting or prohibiting
the installation of productive machinery and equipment is neces-
sary to mitigate the conditions constituting such emergency and to
effectuate the purposes of the Act, he may approve said plan. Such
a plan may include limitations on the replacement of productive ma-
chinery where the new machinery will have greater productive ca-
pacity than the machinery replaced, and may include recommenda-
tions regarding the disposal of old machinery. After such a plan
has been approved, no member of such division shall install produc-
tive machinery or equipment, except in accordance with the require-
This Code of Fair Competition is hereby amended by the addi-
tion of an Article, number VIII, to read as follows:
ARTicLE VIII-TRADE PRACTICE RULES
The following rules shall govern all members of the Industry,
notwithstanding that divisions of the Industry may hereafter adopt
fair trade practice rules to govern said divisions:
"1. False Billing.-No member of the Industry shall knowingly
withhold from or insert in any quotation, contract, or invoice any
statement which makes it inaccurate in any material particular.
2. Dating.-No invoice shall be dated later than the actual date
"3. Guarantee of Service Charge or Selling Price.--No member
of the Industry shall guarantee any service charge or selling price
against either advance or decline or give a customer an option for
services to be performed or goods to be sold which would have the
"4. Commercial Bribery.-No member of the Industry shall give,
permit to be given, or directly offer to give anything of value for
the purpose of influencing or rewarding the action of any employee,
agent or representative of another in relation to the business of the
employer of such employee, the principal of such agent or the repre-
sented party, without the express consent of such employer, principal,
or party. Commercial bribery provisions shall not be construed to
prohibit free and general distribution of articles commonly used for
advertising except so far as such articles are actually used for com-
mercial bribery as hereinabove defined.
5. Rebates and Allowances.-No member of the Industry shall
secretly offer or make any payment or allowance of a rebate, refund,
commission, credit, unearned discount or excess allowance, whether
in the form of money or otherwise, nor secretly offer or extend to
any customer any special service or privilege not extended to all
customers of the same class.
6. Inaccurate reference to competitors.-No member of the
Industry shall make any statements, whether published or otherwise,
which refer inaccurately in any material particular to any competi-
tors or their goods, prices, values, credit, terms, policies, or service.
"7. Inducing breach of contract.-No member of the Industry
shall attempt to induce the breach of a contract between a competitor
and his customer, or source of supply; nor shall any member inter-
fere with or obstruct the performance of such contractual duties or
8. Misrepresentation.-No member of the Industry shall publish
advertising (whether printed, radio, display, or of any other nature)
which is misleading or inaccurate in any material particular, nor
shall any member in any way misrepresent any service or product
(including but without limitation its use, trade mark, grade, quality,
origin, size, substance, character, nature, finish, material, content, or
preparation) or credit terms values, policies, services, or the nature
or form of the business conducted.
9. Inducing violation of the code.-No member of the Industry
shall induce or participate in inducing any member of the Industry
to violate any provisions of this Code."
Approved Code No. 235-Amendment No. 3.
Registry No. 299-1-13.
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