Far sale by the Sulperintendent of Documents, Washington, D.O. - Price 5 cents
Approved Code No. 275--Supplement No. 3
Registry No. 802--02
NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR C OMPE TITION
(A Division of the Chemical Manufacturing Industry)
AS APPROVED ON AUGUST 21, 1934
WE DO OUR PART
GOVERNMENT PRINTING OFFICE
This publication is for sale by the Buperintendent of Documents, Government
Printing Office, Washington, D.O., and by district ofikes of the Bureau of
Boreign and Domestic Commerce.
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Approved Code No. 275--Supplement No. 3
SUPPLEMENTARY CODE OF FAIR COMPETITION
INDUSTRIAL ALCOHOL INDUSTRY
As Approved on August 21, 1934
APrr~Nova SUPPLEMCENTARY CODE OF FAIR COMPETITION FOR THE
A DIVIION OF THE CHEMICAL MAINUFACTURING INDUSTRY
An application having been duly made pursuant to and in full
compliance with the provisions of Title I of the National Recovery
Act, approved June 16, 1933, for approval of a Supplemental Code of
Fair Competition for the Industrial Alcohol Industr~y to the Code
of F~air Competition for the Chemical Mlanufacturing Industry, and
hearings having been duly held thereon and the annexed report on
saidl Supplemental Code, containing findings with respect thereto,
having 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 Presl-
dent, including Executive Order No. 6543--A, dated Decemiber 30,
1933, and otherwise; do hereby incorporate by reference said an-
nexed report and do find that said Supplemnental Code complies in all
respects with the pertinent provisions and will promote the policy
and purposes of said Title of said Act; and do hereby order that
said Supplemental Code of Fair Competition be and it is hereby ap-
proved; provided, however, that the last paragraph of Article VC,
Section 10 be And it is hereby stayed pending further consideration
of the advisability of having uniform agency contracts provided for
in codes of fair competition.
HUGH Sj. JOHNSON,
Administrator forl Iruclustrialcx Recovler)y.
Approval recommended :
GEO. L. BERRY,
Augusat 1, 19~34.
REPORT TO THE PRESIDENT
The Whi~2te How~e.
SmR: This is a report on the Supplemental Code of Fair Competi-
tion for the Industrial Alcohol Industry, a Division of the Chemical
Manufacturing Industry, the Public Hearing on which was held in
.Washington, D. C., June 12, 1934, in accordance with the provisions
p~f Title I of the National Industrial Recovery Act.
The Industrial Alcohol Industry as represented by the Industrial
~Aleohol Institute, being truly representative of this Division of the
Chemlical Manufacturing Industry, has elected to avail itself of the
option of submitting a Supplemental Code of Fair Competition as
Provided for in Articles XI and XII of the Basic Code for the
Chemical Mlanufacturing Industry approved by you on February
RESUMCE OF THIE CODE
LABOR AND GENERAL PROVIS10NB
'Article II states
"'All provisions of the Code of Fair Competition for t.he Chemical
Manufacturing Industry, as approved by the President on February
10, 1934, are hereby incorporated by reference as though completely
set forth herein."
As the Code of Fair Competition for the Chemical Manufacturing
Industry contains the labor provisions and general provisions which
apply to the Chemical Industry as defined, these are labor and gen-
eral provisions which apply to the Industrial Alcohol Industry
Article III gives the necessary definitions applicable to this
Division of the Chemical Mianufacturing Industry.
The term "L member of the Industry "' is defined to mean any per-
son holding a Federal Government permit to operate an industrial
alcohol plant, any person producing isopropyl alcohol or methyl
alcohol other than that produced from the destructive distillation
of wood and any subsidiary or affiliate thereof who sells any product
of the Industry as defined in Section 2.
The producers of methyl alcohol by the destructive distillation of
wood are excluded because they are covered byl the Code of Fair
Competition for the Hardwood Distillation Industry.
Article IV establishes a C~ode Authority of nine members, consist-
ing of eight members to be elected by the Board of Directors of t~he
Industrial Alcohol Institute and one representative of the members
of the Industry who are not members of the Institute. The repre-
sentative of the non-members of the Industrial Alcohol Institute may
be elected by such members by a fair method of selection subject to
the approval of the Administrator or appointed by the Administrator
if they fail to elect. In addition to the above, the Administrator
may appoint not more than three AIdministration Mlembers who are
to serve on the Code Authority without vote and without expense to
Article V provides the trade practice provisions which shall apply
to the Industrial Alcohol Industry. Some of these provisions aimed
at correcting the destructive price competition existing in this Indus-
try have received a great deal of consideration in order to harmonize
them with Administration policy.
The provisions concerning the open filing of prices are in accord
with the Administration's policy as announced on June 7, 19341.
Section 2 of Article V provides as follows:
"'Inasmuch as certain products of the Hardwood Distillation In-
dustry, namely, methyl alcohol for anti-freeze, are used for identical
anti-freeze purposes, as ethyl, isopropyl and various types of methyl
alcohol as covered by this Code, t~he filing of prices on the last named
products under this Ciode, and all other provisions of Article V.
hereof, are not to become effective until and unless a provision for thea
filing of prices of the above named products which are covered by
the Hardwood Dist~illation Industry Codee, and the emlbodying of the
other provisions of Article V hereof, are incorporated in that Code.
When this is accomplished prices filed under each code shall be ex-
changed under the same conditions as outlined above insofar as they
apply to both the above named classes of products."
The reason for this provision is explained therein. Obviously
the open filing of prices by the Indlustrial Alcohol Industry on
products which are directly competitive with almost identical prod-
ucts produced by the Hardwoood Distillation Industry would not
be of any aid to them in reducing or knowing about destructive
price competition unless the open filinga of prices were adopted also
by the Hlardwood Distillation Industry for the products referred
to. For the same reason the other fair trade practices are not to
become effective in respect to the products of thle Industrial Alcohol
Industry which are comlpetitive with methyl alcohol sold for anti-
freeze by the Hardwood Distillation Industry unless thle other trade
practice provisions specified in Article V are also adopted by the
Hardwood Distillation Industry.
The Code Authority of the Hardlwoodl Distillation Industry has
conferred with the Code Committee of the Industrial Alcohol '1In-
dustry and they were also represented at the public hearing on the
Code for the Industrial Alcohol Industry. It is understood that
as soon as the Code for the Industr~ial Alcohol Industry is approved
the Code Authority of the Hardwood Distillation Industry will
consider the fair trade practice provisions of th~e Code for thie
Industrial Alcohol Industry with a view to taking whatever action
thereon with respect to a modification of their Code which the Code
Authority votes on.
The last paragraph of Article V, Section 10, provides that
"L The Code Authority by a two-thirds vote may at any time estab-
lish a uniform agency contract subject to the approval of the
This provision is stayed pending further consideration by the
Administrator of the advisability of having uniform agency con-
tracts provided for in codes.
The Deputy Administrator in his final report to me on said
Supplementary Code having found as herein set forth and on the
basis of all the proceedings in this matter:
I find that:
(a) Said Supplemlentary Code is well designed to promote the
policies and purposes of Title I of the National Industrial Recovery
Act, including removal of obstructions 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 organiza-
tion of industry for the purposes of cooperative action among the
trade groups, by inducing and maintaining united action of labor
and management under adequate governmental sanctions and super-
vision, by eliminating unfair competitive practices, by promoting the
fullest possible utilization of the present productive capacity of in-
dustries, by avoiding undue restriction of production (except as may
be temporarily required), by increasing the consumption of indus-
trial and agricultural products through increasing purchasing power,
by reducing and relieving unemployment., by improving standards
of labor and by otherwise rehabilitating industry.
(b) Said Industry normally employs not more than 50,000 em-
playees; and is not classified by me as a major industry.
(c) The Supplementary Code as approved complies in all re-
spects with the pertinent provisions of said Title of said Act, in-
cluding without limitation Subsection (a) of Section 3, Subsection
(a) of Section 7, and Subsection (b) of Section 10 thereof; and that
the applicant Institute is an industrial association truly representa-
tive of t~he aforesaid Indust~ry; a~nd that said Institunte imposes no
inequitable restrictions on admission to membership therein.
(d) The Supplementary Code is not designed to and will not per-
mit monopolies or monopolistic practices.
(e) The Supplementary Code is not designed to and will not
eliminate or oppress small enterprises and will not operate to dis-
criminate 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, therefore, I have approved this Supplementary
Honc S. JoHNsoN,
AUGUrST 21, 1934.
SUPPLEM~ENTARY' CODE OF FAIR COMPETITION FOR
THE INDUSTRIAL ALCOHOL INDUSTRY
A DIVISION OF THE CHEMIICAL AANUTFACITIRING INDUSTRY
To further effectuate the policies of Title I of the National In-
dustrial Recovery Act, the following provisions are established as a
Supplementary Code of Fair Competition for the Industrial Al-
cohol Industry, a Division of the Chemical M~anufacturing Industry,
and upon approval by thle Administrator shall be, in conjunction
with the basic Code for the Chemical MSanufacturing Industry, the
standard of fair competition for this division of the Chemical
ARTICLE II--LABOR AN'D GENERAL Paovisions
All provisions of the Code of Fair Competition for the Chemical
Manufacturing Industry are hereby incorporated by reference as
though completely set forth herein.
SECTION 1. The term "' Industrial Alcohol Industry or the "L In-
dustry as used herein shall mean all manufacturers of ethyl alcohol
for industrial purposes and all manufacturers of ethyl alcohol,
isopropyl alcohol or methyl alcohol otherr than that produced fromn
the destructive distillation of wood) for Anti-freeze purposes.
SECTIZON 2. The term "L products of thle Industryl as used hler~ein
shall mean ethyl alcohol, denatured alcohol (includling the product
commercially known as "L proprietary solvent ") sold for industrial
purposes, andl ethyl alcohol, denatured alcohol, isopropyl alcohol
and methyl alcohol (other than that produced from the destructive
distillation of wood), or any product containing 70%~c or more of any
of these materials, or any produllct containingn a combination of 70%r
or more of any of these materials, sold for anti-freeze purposes by
any member of the Industry.
SECTION 3. The term "L person "' includes, but without limitation,
any individual, partnership, association, corporation or other form
SECTION 4. The term member of the Industry' s used herein
shall mean any person holding a Federal Government permit to oper-
ate an industrial alcohol plant, any person producing isopropyl alco-
hol or methyl alcohol other than that produced fromt the dlestructive
distillation of wood, and any subsidiary or affiliate thereof who sells
any of the products of the Industry as defined in Section 2 above.
SECTION 5. The term "L subsidiary as used herein shall mean any
person over whom a member of the Industry has either, directly or
indirectly, actual or legal control, whether by stock ownership or in
any other manner.
SECTION 6. The term affiliate as used herein shall meanan
person who has either, directly or indirectly, actual or legal conto
of or over a member of the Industry or a subsidiary thereof, whether
by stock ownership or any other manner.
SECTION 7. The term agent as used herein shall mean any
person (except officers or employees of members of the Industry),
firm, corporation or other form of enterprise who acts under the
supervision or control of a member of the Industry in selling the
products of such member.
SECTION 8. The term "L Institute as used herein shall mean The
Industrial Alcohol Institute, Inc., a domestic corporation incor-
porated pursuant to the Membership Corporations Law of the State
of New York, having an office in the City of New Y'ork.,
AnTICLE IV -A ADMINISTRATION
SECTION 1. Nine members, eight of whom shall be elected by the
Board of Directors of the Institute, anid one representative of the
members of the Industry who are not members of the Institute, who
may be elected by such members by a fair method of selection sub-
ject to the approval of the Administrator or appointed by the Ad-
ministrator if they fail to elect, are hereb$ constituted as the Code
Authority for administering and supervismng the performance and
observance of the provisions of this Code.
SECTION 2. In addition to membership as above provided, the Ad-
ministrator may appoint not more than three (3) Administration
Members without vote and without compensation by the Industry
to serve such terms as he may specify:.
SECTION 3. Each trade or industrial association directly or in-
directly participating in the selection or activities of the Code Au-
thorit~y shall (a) impose no inequitable restrictions on membership
and (b) submit to the Administrator true copies of its articles of
association, by-laws, regulations, and any amendments when made
thereto, together with such other information as to membership,
organization, and activities as the Administrator may deem necessary
to effectuate the purposes of the Act.
SECTION 4. In order that the Code Authority shall at all times be
truly representative of the Industry and in other respects comply
with the provisions of the Code and of the Act, the Administrator
ma~y prescribe such hearings as he. may deem proper, and, thereafter,
if he shall find that the Cobde Authority is not truly representative
or~ does not in other respects comply with t~he provisions of the Code
and of the Act, may require an appropriate modification of the
composition and method of selection of the Code Authority.
SECTION 5. Nothing contained in this Code shall constitute the
memrbers of the Codoe Authority partners for any purpose. Nor
shall any members of the Code Authority be liable in any manner
to anyone for any act of any other member, officer, agent, or em-
ployee of the Code Authority. Nor shall any member of the Code
Authority, exercising reasonable diligence in the conduct of his
duties hereunder, be liable to anyone for any action or omission to
act under this Code, except for his own wilful malfeasance or
SECTION 6. If the Administrator shall determine that any action
of the Code Authority or any agency thereof may be unfair or unjust
or contrary to the public interest, the Administrator mnay require
that such action be suspended to afford an opport~unity for investi-
gation of the merits of such action and further consideration by
such Code Authority or agency pending final action which shall not
be effective unless the Administrator approves or unless he shall
fail to disapprove after thirty days' notice to him of intention to
proceed with such action in its original or modified form.
SECTION 7. The Code Authority shall appoint, within thirty (30)
days after the approval of this Code, a Trade Practice Comm~ittee
which shall meet with the Trade Practice Committees appointed
under such other codes as may be related to thme Industr~y for the
purpose of formulating fair trade practices to govern the relation-
ships between employers under this code and under such other codes
to the end that such fair trade practices may be proposed to the
Administrator as amendments to this code and such other codes.
SECTION 8. All members of the Industry shall compile and submit
monthly reports in gallons of the production, total sales, and in-
ventory of ethyl and denatured alcohols, and sales of isopropyl
alcohol and methyl alcohol (other than that produced fromt the
destructive distillation of wood) for anti-freeze purposes, in such
form as the Code Authority may require. Such reports shall be
submitted by the members to an impartial and confidential statistical
agency outside the Industry, or to a certified, registered, char~tered
or any other lawful practitioner of public accountancy having no
connection with any member or members of the Industry, said
agency or firm to be designated by the Code Authority. Such agency
or fim shall keep in strict confidence the individual figures sub-
mitted, and shall submit to the Code Authority only compilations
thereof, without disclosing any individual figures submitted by spe-
cific members of the Industry. The Code Authority, upon receipt
of this information, shall prepare a consolidated report which shall
be! furnisihed to each member o-f the Indulstry who is complyingr with
the provisions of this Code; provided, however, that such members
who are not engaged in the sale of ethyl alcohol for industrial pur-
poses shall only receive reports relating( otoe shale othyl alcohol,
isopropyl alcohol and methyl alcohol(ohrtntatrdud
from the destructive distillation of wood) for anti-freeze purposes.
SECTION 9. All members of the Industry shall furnish to the Code
Authority such information and reports, except data and statistics
in relation to number of employees, hours of labor and rates of pay
( which are collected by the Chemical Alliance, Inc.) as are required
for the administration of this Code. In addition to information re-
quired to be submitted to the Code Authority, members of the Indus-
try subject to this Code shall furnish such statistical information as
the Administrator may deem necessary for the purposes recited in
Section 3(a) of the Act to such Federal and State agencies as he
may designate; provided that nothing in this Code shall relieve any
member of the Industry of any existing obligations to furnish reports
to any Government agency. No individual report shall be disclosed
to any other member of the Industry or any other party except to
such other Governmental agencies as may be directed by the Admin-
SECTION 10. A. It being found necessary to support the adminis-
tration of this Code, in order to effectuate the policy of the Act and
to maintain the standards of fair competition established hereunder,
the Code Authority is authorized:
(1) To incur such reasonable obligations as are necessary and
proper for the foregoing purposes and to meet such obligations out
of funds which shall be held in trust for the purposes of the Code
and raised as hereinafter provided:
(2) To submit to the Administrator for his approval, subject to
such notice and opportunity to be heard as he may deem necessary:
(a) An itemized budget of its estimated expenses for the fore-
going purposes, and
()An equitable basis upon which the funds necessary t~o support
suhbudget shall be contributed by all members of the Industry
entitled to the benefits accruing from the maintenance of such stand-
ards, and the administration thereof ;
(3) After such budget and basis of contribution have been ap-
proved by the Administrator, to determine and collect equitable con-
tributions as above set forth, and to that end, if necessary, to insti-
tute legal proceedings therefore in its own name.
B. Each member of t.he Industry shall pay his or its equitable
contribution to the expenses of the maintenance of the Code Author-
ity as hereinabove provided and subject to rules and regulations
pertaining thereto issued by the Administrator. Only members of
the Industry complying with the Code and making such contribu-
tion, unless duly exempted from making such contribution, shall be
entitled to participate in the selection of the members of the Code
Authority or to receive the benefits of its voluntary activities or to
make use of any N. R. A4. insignia.
C. The Code Authority shall neither incur nor pay any obligation
substantially in excess of t~he amount thereof as estimated in its
approved budget, and shall in no event exceed the, total amount con-
tained in the approved budget, except upon approval of the Adminis-
trator; and no subsequent budget shall contain any deficiency item
for expenditures in excess of prior budget estimates except those
which the Administrator shall have so approved.
ARTICLE V- FAIR TRADE PRACTICE Provisions
SECTION 1. Each member of the Industry shall file with a confi-
dential and disinterested agent of the Code Authority or, if none,
then with such agent designated by the Administrator, identified
lists of all of his prices, discounts, rebates, allowances, whether
guaranteed against decline in price, and all other terms or conditions
of sale, hereinafter in this article referred to as price terms; which
lists shall completely and accurately conform to and represent the
individual pricing practices of said member. Such lists shall con-
tain the price terms for all products of the Industry (as defined
herein) as arie sold or offered for sale by said member. Said price
terms shall in the first instance be filed within five (5) days after
the effective date of approval of this provision. Price terms and
revised price terms shall become effective immediately upon receipt
thereof by said agent. Immediately upon receipt thereof, said agent
shall by telegraph or other equally prompt means notify said member
of the time of such receipt. Such lists and revisions, together with the
effective time thereof, shall upon receipt be immediately and simulta-
neously distributed to all members of the Industry and to all of
their customers who have applied therefore and have offered to defray
the cost actually incurred by the Code Authority in t~he preparation
and distribution thereof and be available for inspection by any of
their customers at the office of such agent. Said lists or revisions or
any part thereof shall not be made available to any person until
released to a~ll members of the Industry and their customers, as afore-
said; provided, that prices filed in the first instance shall not be
released until the date this Code becomes effective. The Code Au-
thorityt shall maintain a permanent file of all price terms filed as
herein provided, and shall not destroy any part of such records
except upon written consent of the Administrator. Upon request
the Code Authority shall furnish to the Administrator or any duly
designated agent of the Administrator copies of any such lists or
revisions of price terms.
SECTION 2. IDRSmuch as certain products of t~he Hardwoodt Iis-
tillation Industry, namely, methyl alcohol for ant~i-freeze, are usedi
for identical anti-freeze purposes, as ethyl, isopropyl and various
types of methyl alcohol as covered by this Code, the filing of prices
on the last named products under this Code, and all other provisions
of Article V hereof, are not to become effective until and ulnless,
a provision for the filing~ of prices of the above named products
which are covered by the H~ardwood Distillation Industry Code, and
the embodyingr of the other provisions of Article V' hereof, are
incorporated in that Code. Wheni this is accomplished prices filed
under each code shall be exchanged under the samie conditions as
outlined above insofar as they apply to both the above named classes
SECTION 3. When any member of the Industry has filed any re-
visioni, such member shall not file a higher price within fortyF-eight
SECTION 4. No member of the Industry shall sell or offer to sell
any products of the Industry, for which price terms have been filedl
pursuant to the provisions of this Article, except in accordance with
such price terms. The provisions of this Article, shall not apply
to the transfer or sale of the products of the Industry to subsidiaries
or affiliates or subsidiaries thereof, as defined herein, who use the
products of the Industry in their own manufacturing operations,
nor shall1 the provisions of this Article apply to. sales for export
from the UCnited States or between members of the Industry.
SECTION 5. No member of the Industry shall enter into a.ny agree-
ment, understanding, combination or conspiracy to fix or maintain
price terms, nor cause or attempt to cause any member of the Indus-
try to change his price terms by the use of intimidation, coercion,
or any other influence inconsistent with the maintenance of the free-
and open market which it is the purpose of this Article to create..
SECTION 6. Wilfully destructive price cutting is an unfair.method
of competition and is forbidden. Any member of the Industry or
of any other industry or the customers of either may at any time
complain to the Code Authori~ty that any filed price constitutes
unfair competition as destructive price cutting, imperiling smaUl
enterprise or tending toward monopoly or the impairment of code
wages and working conditions. The Code Authority shall within
five (5) days afford an opportunity t~o the member filing the price
to answer such complaint and shall within fourteen (14) days make
a ruling or adjustment thereon. If such ruling is not concurred in
by either party to t~he complaint, all papers shall be referred to the
Research and Planning Division of N.R.A. which shall render a
report and recommendation thereon to the Administrator.
SECTION 7. It shall be a violation of this Code for any member
of the I~ndustry to give a commission or any other form of compen-
sation to any person on the sale of any of the products of the Indus-
try by such member to any buyer of such products in which such
person is financially interested or bywhom he is employed. It shall
also be a violation of this Code or any member of the Industry
to employ any person financially interested in or employed by any
Buyer of the products of the Industry if such employment is made
for the purpose of influencing the business of such buyer.
SECTION 8. NO member of the Industry shall secretly offer or make
any payment or allowance to any buyer of any of the products of
the Industry, of a rebate, refund, commission, credit, unearned dis-
count or excess allowance, whether in the form of money or other-
wise, nor shall a member of the Industry secretly offer or extend to
any buyer of any of the products of the Industry, any special serv-
ice or privilege not extended to all buyers of the same class, for the
purpose of influencing a sale.
SEcTION 9. No member of the Industryv shall give, permit to be
given, or offer to give, anything of value for the purpose of influene-
ing or rewarding the action of any employee, agent, or representa-
tive, of another in relation to the business of the employer of such
employee, the principal of such agent or the represented party wit~h-
out the knowledge of such employer, principal or party. This pro-
vision 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 commercial bribery as hereinabove
SECTION 10. No member of the Industry shall allow a purchaser
either dir~ct~ly or through an agent, any commission or other form
of compensation which will result in the purchaser paying less for
his products than the price filed by the said member pursuant to
Section 1 of this Article.
A list of the agents of each member of the Industry shall be
filed with the Code Authority within five (5) days after the effec-
tive date of this Code and any changes in the lists of such agents
or any new agents created, shall be promptly reported to the Code
Authority whenever made.
The Code Authority by a two-thirds vote may at any time estab-
lish a uniform agency contract, subject to the approval of the
SECEON 11. It shall be an unfair trade practice for any member
of the Industry t~o employ subterfuge directly or indirectly to avoid
or attempt to avoid the provisions of this Code or the purposes or
intent of the National Industrial Recovery Act, which are to in-
crease employment, provide better wages, promote fair competitive
methods, anid to promote the public welfare.
SECTION 12. No provision of this Code shall be so applied as to per-
mit monopohies or monopolistic practices, or to eliminate, oppress, or
discriminate against small enterprises.
Such of the provisions of this Code as are not required by the
National Industrial Recovery Act to be included herein may with
the approval of the Administrator be modcified or eliminated as
changed circumstances or experience may dictat~e.
This Code shall become effective on the fifth business day after it
shall have been approved by the Administrator.
Approved Code No. 275---Supplelemen No. 3.
Registry No. 602-02.
'See paragraph two of Order approving this Gode.
UNIVERSITY OF FLORIDA
3 1262 08584 2192