Por sale by the Superintendent of Documents. Washington, D.C. - Price 5 cente
Approved Code No. 201i--uppletnent No. 22
Registry No. 1631--1--07
NATIONAL RECOVERY ADMINISTRATION
S UPPLE MENT ARY
C ODE OF FAIR COM~3PE TITIOSN
(A Division of the Wholesaling or Distributinrg Trade)
AS APPROVED ON AUGUST 21, 1934
GOVERNMENT PRINTING OFFICE
WASHIINGTON s 1934
Thlis publication is for sale by the Superintendent of D~ocuments, Government
Printing Office, Washington, D.C., and by district offces of the 1Bureau of Foreign
and Domestic Commerce.
DISTRICT OFFICES OF THE: DEPARTMyENT OF COMMERCES
Atlanta, Ga.: 504 Post Office Building.
Birminghamn, Ala.: 257 Federal Building.
Boston, M~ass.: 1801 Custombouse.
Buffalo, N.Y.: Chamber of Commerce Building.
Charleston, S.C.: Chamber of Commerce Building.
Chicago, Ill.: Suite 1706, 201 North Wells Street.
Cleveland, Ohio: Chamber of Commerce.
Dallas, Tex.: Chamber of Commerce ]Building.
Detroit, Mich.: 801 First National Bank Building.
H8ouston, Tex.: Chamber of Commerce Building.
Indiatnapolis, Ind.: Chamaber of Commerce Building.
Jackisonville, F'la.: Chamber of Commerce Building.
K~ansas City, M~o.: 1028 Baltimore A9venue.
Los Angeles, Calif.: 1163 Bouth Broadway.
Louisville, Ky.: 408 F'ederal Building.
MCemphis, Tenn.: 229 Federn1 Building.
Minneapolis, Mlinn.: 213 Federal Building.
New Orleans, La.: Roomz 225-A8, Customhouse.
New York, N.Y.: 734 Customhouse.
Norfolk, Va.: 406 Eiast Plume street.
Philadelphia, Pa.: 422 Comsmercial Tlrust Building.
Pittsburgh, Pa.: Chamber of Commerce Building.
Portland, Oreg.: 215 New Post Office Building.
St. Louis, M/o.: 506 Olive Street.
San Francisco, Calif.: 310 Customhouse.
Seattle, Wash.: 809 Federal Oftee Building.
Approved Code No. 201--Supplement No. 22
SUPPLEMIENTAIRY CODE O1F FAIR COMPETITION
WHEOL~ESALE JEW]EL]RY TRADIIE
As Approved on August 21, 1934
APPROVING SITPPLEMENTARY. CODE OF IFAIR COMPETITION FOR THEP
WH-OLESAIX JEWELRY~ rjRADE
A DIVISION OF THEF WHOL;ESALING1 OR DISTRIBIRING TRADE
An application having been duly made pursuant to and in full
compliance with the provisions of Title I of the National Industrial
Recovery ALct, approved June 16, 1933, for approval of a Supple-
mental Code of F'air Competition for the Wholesale Jewelry Trade
to the Code of Fair Comnpetition for the Wholesaling or Dist~ributing(
Trade, and hearings having been duly held thereon and the annexed
report on said Supplemental Code, containing findings wiith respect
thereto, having been made and directed to the President:
NOW, TH`EREFORE, on. behalf of the President of the U~nited.
States, I, H~ugh S. Johnson, Administrator for I~ndustrial Recov~ery,
pursuant to authority vested in me by xe~cu1Itiv OrderIs of thet PresYi-
dent, including Executive Order N.6543-A, dated December 30,
1933, and otherwise; do hereby incorporate by reference said annexed
report anld do ~find that said Supplemnental Code complies in all
respects with the pertinent provisions and will promote the policy
and p~urposes of said Title of said Act; and do hereby order that
said Supplemental Co~de of Fair Comnpetition be and it is hereby1
a pproved ; subject, however, to the condition. that the provisions of
Article V, Section 11 (a), (b), (c) and Section 2 be deleted fromy
said Code and the following provisions substituted therefore:
"L SEenowN 1 (a). Destructive price cutting is an. unfair method of
competition and is forbidden. ALny sale shall be deemed prima facie
destructive price cutting if the net sales price shall be less than the
sellers net invoice~ cost plus transportation charges to seller's w~are-
"' Notwithstanding the provisions of this Section any wholesaler
may sell anyr article of merchandise at a price as low as the price set
by ny omptitor on merchandise which is identical or essentially
b n othe samne wPhere such competitor's price does not violate this Sec-
tion or where such competitor is not subject to the provisions of this
Notwithstanding the provisions of this Section it shall not be
deemed destructive price cutting for a wholesaler to sell the follow-
ing merchandise at less than net invoice cost plus transportation
charges, as provided above: obsolete g~oods, bona fide closeout mer-
chandise, damaged merchandise, stocks being liquidated, merchan-
dise sold for charitable purposes or to unemployment relief agencies,
and such other merchandise as mnay be designated by the Divisional
(b) If the ~Admin~istrator shall at any time find (1) that anr
emergency has arisen within the trade, adversely affecting small-
enterprises or wages or labor conditions, or tending toward mno-
nopoly or other acute conditions which tend to defeat the purposes
of the Act, and. (2) that the finding of a basis for determining
minimum price for all or any specified products sold by the trade
is necessary for a limited period to correct the conditions constitut-
ing such emergency and to effectuate the purposes of the ~Act,
the Code Authority may cause an impartial agency to investigate
costs and to recommend to the Administrator a basis for determining
minimum prices of said products. Thereupon the Administrator may
fix a basis for determining the minimum price of any of said
products for a stated period. During such period no member of
the trade shall sell such products at a net realized price below the
minimum price determined in accordance with the base so fixed.
F'rom time to time the Code Authority may recommend review or
reconsideration or the Administrator may cause anly determination
hereunder to be reviewed or reconsidered, and appropriate action
Hona S. JoRNSON
Administrator for Industrial Recover~y.
IROBERT L. HOUSTON.,
August 1, 1934.
REPORT TO TH~E PRESIDENT
. The PRESIDENT,
The White H~ous~e.
SIR: This is a report of the Hlearinlg on the Supplem~ental Code of
]Fair Competition of th Wh~olesale JewoPelry Trade, conducted in the
Cabinet, Room of the Willard Hotel, on ALpril 26, 1934. The Supple-
mental Code, which is attached, was presented by duly qualified and
authorized representatives of the Trade.
Due to the considerable overlapping in. th is rade with others,
accurate statistics are not available. According to data submitted byg
the Trade, in 1929 there were approximately 1,666 concerns w;Iith
aggregate annual sales of $355,085,847. The Trade employed about
PRIOVISIONSL OF THIE CODE
This Code contains no Supplemental Labor Provisions, the em-
ployees being subject to the wage and hour provisions of the Code
of Fiair Competition for the Wholesaling or D~istributinzg Trade.
The provisions containing supplemental definitions are consid-
ered inclusive and accurate.
The administrativPe provisions establish a D~ivisionarl Code Au-
thority which fairly represents all the different elements in the
The Trade practices proposed are not considered to be
T'he Deputy A8dministrator in his final report to mae on said Sup-
plemental Code havin: found as herein set forth and on the basis
olf all the proceedlings in this matter:
I: find that
(aZ Said Supplemental Code is well designed to promote the
policies and purposes of Title I of the National Industrial Recovery
Act, including remov-al of obstructions to the fr1ee flow of interstate
and foreign commerce which tend to diminish the amzoun thereof,
and will provide. for the general welfare by promoting the orgaan-
izaionof rae fr te purpose of cooperative action among trade
groups, by inducringr andmnainguieaconolboad
management under adequate governmental sanction and supervision,
by eliminating unfair competitive practices, by promoti ng re~the. fullest
possible use of the~ present prodluctive capcyofnusrsb
avoiding undue restriction of production (except as ma b tm
porarily required), by increasing the consumption of industrial and
agricultural products through increasing purchasing power, byv re-
ducing and relieving unemployment, by improving standards of
labor, and by othnerwise rehabilitating industry.
(b) Said Trade normally employs not more than 50,000 employees
and is not; classified by me as a major industry.
(c) The Supplemrental Code as approved complies in. all respects
wyith the pertinent provisions of said Title of said A~ct, including
without limitaltion. Subsection (a) of Section 3, Subsection (a) of
Section 7 and Subsection (b) of Section 10 thereof ; and that the
applicant associations are trade associations truly representative of
the aforesaid Trade; and that said associations impose no inequitable
restrictions on admission to membership therein.
(d) The Supplemnental Code is not designed to and w\ill not permit
monopolies or monopolistic practices.
(e) The Supplem~ental Code is not designed to and will not elimn-
inate or oppress small enterprises and will not operate to discrim-
inate against them.
(f) Th~lose engaged in other steps of the economic process have
not been deprived of the right to be heard prior to the~ approval of
thcis Supplemental Code.
F'or these reasons the Supplemental Code has been approved.
HUGHI S. JofNason,
AUGUST 21, 1934.
SU7PPLEMfENTARY CODE: OF` FAIR COMPETITION FORE
T'HE WVHOL;ESALE JEWELRY TRADE
A DIVISION OF TH WHOIJBSA;ING OR DIISTRIBUTING TRADEJ
To effectuate the policies of Title I: of the National Industrial
Recovery Act, this Supplemental Code is established as a Code of
Fair Competition for the Wholesale Jewelry Trade pursuant to
Article VI, Section 1 (c) of the General Code of Fair Competition
for the Wholesaling or Distributinlg Trade, approved by the Presi-
dent of the United States on January 12, 1934. All provisions of the
said General Code which are not in conflict with t~he provisions of
this Supplemental Code are hereby incorporated by reference in this
Supplemental Code and made a part hereof. Such provisions of the
General Code together with the supplementing provisions of this
Supplemental Code are thle standards of fair competition for and
are binding upon every member of said Wholesale Jewelry Trade.
ARTCLE II- -EFINEPINS
Supplementing _Article II of the General Code.
SECTION 1. Thne term wholesaler or "'distributor ", as used
herein, are defined to mean1 anly individual, partnership, association,
corporation or other form of enterprise or a definitely organized
division thereof, definitely organized to render and rendering a gen-
eral distribution service, which buys and maintains at his or its
place of business a stockr of jewelry, m~en'~s novelty jewelry, or watch-
makers' and jewelers' supplies which it distributes and which through
salesmen, ad vertisi ng and/or sales. promotion devices sells to retailers,
and for to institult~ional, commercial and/or industrial users for use
in, the conduct of their enterprises. Any person who sells to in-
stitutional, commercial and/or industrial users for resale to the ulti-
mrate. consumer, or in significant amounts to ultimate consumers, shall
be considered a wholesaler only to the extent of that part of his
business which fulfills thre qualifications stat~edl in the preceding sen-
tence. It is the character of a concern's selling rather than the
character of its buying which dist~ingulishes it as a wholesaler.
SECTION 9. The term the Trade ", as used herein, is defined to
mean the business in which the wholesaler or distributor as defined
in this Supplemlental Code is engaged.
SECTION 3. The term "' member of the Trade "', as used herein, is
defined to mean? any whsfolesaler or distributor engaged in th~e Trade.
SECTION 4. The term '" jewelry "", as used herein, is defined to mean
diamonds and other precious and semi-precious stones, pearls, cul-
tured pearls, synthetic stones and any limitations of any of these
articles, articles for personal wear and adornment of any character
whatsoever commonly and commercially known as 'jewelry ",
watihes, clocks, silverware, goldwsare, precious metal ware of the
platinum group, and wares plated with ~any of the precious metals.
SECTI[ON 5. The term men's novelty jewelry as used herein, is
defined to mean articles for the personal wear or adornment of men,
made from base metals, roll-plated precious metals and/or gold off
a fine~ness less than ten karat, such as: Collar pins, tie pins, cuff
links, collar buttons, studs, and belt buckles.
SECTION f>. The term wvatchmakers' and jewelers' supplies and
materials ", as used herein, is defined to mean any or all articles
(except those articles which are com~monly and commercially known
as jewelry as enrumerated and defined in Section 4 of this Article II)
used, consumaed, assembled, or resold by wrcatchmanke rs, jewelers, op-
tomzetrists or repairers and manufacturers for the purpose of repair-
ing, replacing, assembling, manufacturing; or reselling.
SECTICON 7. The term "L memrorandumn ", as used hnerein, is defined
to. mean subl-mitti;ng merchandise to th~e customer for a specified time
for approval or selection, the title to remain in the whlolesaler or
distributor until such. selection has been reported to th~e wholesaler
or distributor and the sale completed in accordance with the terms
specified in the contract under which the goods were delivered.
SECTION 8. The term consignment ", as used herein, is defined to
mean leaving merchandise with a customer for an indefinite period,
the title to remain in the wholesaler or distributor until such time
as the customer shall report to the wholesaler or distributor that
he has sold the merchandise and that the sale has been completed
in accordance with the terms specified in th~e contract under which.
the merchandise was delivered.
SECTION 9. The term guaranteed sale ", as used herein, is defined
to mean a sale made with, a guarantee by thre wholesaler or distributor
that if the mrerchandcise sold to the customer is not resold by said
customer, the latter shall have the right to return said mlerchand-ise,
or any part thereof, to the wholesaler or distributor for cash, credit
SECTI[ON. 10. T1he term General Code ", as used herein, is defined
to mean the Code of Fair Clompetition for the Wholesaling or
SECTION. 11. The term Supplemental Code ", as used herein, is
defined to mean this Supplemental Code of Fair Competition for
the Wholesale Jewelry Trade.
SECTION 12. The termI "' General Code Authority ", as used herein,
is defined to mean the General Code Auth~orty author~izedl by
Section 2 of Article VCI of the Genieral Code.
SECTION 13. The term. Divisional Code Authiority "?, as used
herein, is defined to mean. the Divisional Code Authority for the
Wholesale Jewelry Trade, a diviision of the Wholesaling or Dis-
Supplementing Article VI of the General Code.
SECTIN 1. A Divisional Code Atuthority is hereby established
which, in addition to the members appointed by the A1~dministrator,
shall be composed of twenty-on~e (21) members, three (3) of whom
shall be representative of the M~en's Novelty Jewelry Trade, andc
eighteen (18) of whom shall collectively be representative of the
following branches of the WIholesale Jewelry Trade: clockls, watchtes,
watchmakecrs' and jewelers' supplies, diamond jewelry, silver war~e,
precious metals, jewelry and novelt ies, and gift ware. Such repre-
sentatives shall be elected as hereinafter provided.
SECTION 2. (a) The three (3) representatives on the Divisional
Code Authority- to be elected by the M/en's NoveltyT Jewelry Trade
shall be lnominatedl by an E~lectoratl Committee composed of offi~ers
of the N~ationnal Wh~olesale Me~n's Novelty Jewelry A~ssociat~ion. In
selecting these nominees an~d inl conlducting the election the Elec-
toral Commrrittee shall provide for adequate representationl of all
menber~s of the Men's Novelty Jewelryr Trade including those who
are not members of the Natio~nal W~holesale Mn~tr's Novelty Jewelry
(b) WIithin ten (10) days after thne eftc~ti~ve date of this Supple-
menltal Code, thne Electoral Committee shall prepare ballots, on
which shall be listed the three (3) nominees selected als providled in
paragraph (a) of this Section 2.
(c) The ballots prepared by the Electoral Comrmittee shall con-
tain, in addition to the names of the nominees selected by such
Committee, three (3) blankr spaces in which any member of the
Men's Novelty Jewelry Trade mnay write his personal choices. Such
ballots shall be mailed to every member of the Men's Novelty Jew-
elry Trade asicerltainable after diligent search by the Electoral Com-
mittee. Each ballot shall have attached to it a statement of assent
to and compliance with this Supplemental Code and the General
(d) Tw~enty (20) dys after the mailing of these ballots the Elec-
toral Commnittee shl publicly open and count the votes which it
has received. Onl1y those ballots shall be counted which have at-
tachled to them signed~ statements of assent to and compliance with
this Supplemental Code and the Generaul Code. The three candi-
dates receiving thne largest n~umnber of votes shall be declared elected.
(e) TIhe :Elec~tor~al Commllittee shall certify to the Adiministrator
the method of election of these three members and the results of
SECTION 3. (a) The election of the eighteen (18) members of the
Divisional Code Authority representing the several branches of thle
Wholesale Jewelry Trade shall be conducted by an Electoral 1Board
composed of the President of the N~ational Wholesale Jewelers Asso-
ciation, the President of the Silverwrare WCholesalers Aissociation, and
one other person selected byr thie above two.
(b) T'his Electoral Board shall sed out nominnatingr ballots to
every memlber of the Trade (except those primarilyr engaged in the,
ditribution of men's novelty Jewelry) discoverable by diligent
sea rchl. Each such ballot shall have attached to it a letter of assent
to and compliance wiith this Supplemlental Code and the General
Code. ~Each voter shall be entitled to eighteen (18) votes which
he may distribute among several candidates or cast all for one candi-
date, its he. sees fit.
(c) Twenty days after these ballots have been mailed the Electoral
Board shall publiclycount those votes which it has receivedl. Only
those ballots shall becounted which have attached to them signedl
statements of assent to and compliance with this Supplem'ental C~ode
and the General Code. Thethryix()peonrcivgte
largest number of votes shall be dclre to6 bersn candidates.h
(d) The Electoral Board s~hall then prepare ba~llot~s contanining th
names of these thirty-six candidates together with at least nine (9)
blank spaces in which voters mnay write their personal choices. Such
ballots shall be sent to all those members of th~e Trade to whom
nominating ballots were originally sent. TIo each ballot shall be
attached a statement of assent to and compliance with this Supple-
mental Code and t~he G~eneral Code.
(e) Each voter shall have eighteen (18) votes which he may
dtistribute among several candidates or cast all for one candidate ats
he sees fit.
(f) Twenty (20) days after these ballots havPe been mailRed the
]Electoral Board shall publicly count those votes which it has
received. No ballot shall be counted which is not accomnpanied by a
signed statement of assent to and compliance with this Supplemlent~al
Code and the Gene~ral Code, or by a, statement, that such statement
of assenlt and compliance has previously been filed, w'hic~h statement
upon examination proves to be correct. The eighteen (18) canmdi-
dates receiving the largest number of votes shall be declared to be
(g) The Electoral Board shall certify to tee Admninistrator thte
method of election and the results thereof.
SECTION 4. (a) Two (2) of the three (3) members r~epresenting
the Mlen's N~ovelty Jewelry Trade on thne Divisional Code Authority
shall hold office for one (1) year and one (1) for two (2) years, the
tenure of offce of each to be decided b$ ensting lots.
(b) Nine (9) of the remaining eighteen (18) mnemberls of the
Divisional Code Allthority shall hold office for one (1) year and nine
(9) for two (2;) years, the tenure of: office to be decided by casting
SECnos 5. T'he suc-ce sor to anly member of the Divisional Code
Authlor~ity, whether to fill an unexpired term or a full new term,
shall be nominated and elected in the same amaner as provided in
Sections 2 and 3 of this ~Article.
SECTION 6. (a) Thne Divisional Code Authorit~y shall elect from
among its members an .Elxecutive Commnittee of five (5. he Adl-
:ministrationl member or membe~rsi of the Divisional Code AuthorityQ
shall function as members of the Executive Committee to the same
extent as'on the Divisional Code Authority-.
(b) The ExPcultive Commit~tee shall have such powers and duties
as mzay be fixed by the Divisional Code Authority in its by-laws,
provided- that all the acts of this Committee shall be subject, to the
review and disapproval of the D~ivisional Code Authority.
SECTION 7. The Div~isional Code Auth~ority shall have t~he fol-
lowing duties and powers, in addition to those prescribed in the
General Code, subject to such rules and regulations as mary be prge
scribed by the Admainistrator:
(a) Tlo appoint a Trade Practice Committee, which shall meet
with the T~rade Practice C~ommittees applointed under such other
Codes as may be related to thne Tralde, except other Supplemental
Codes to the. General Code, for the purposes of for~mulating= Fatir
T1raide 1Practices to govern the relationships between production and
distribution employers under this Supplemnental Code and under
such others, to the end that such~ F~air Trade 1Practices mn yu be pro-
posed to the Administrator as amlendmnents to this Sup~plemlental
Code and such other Codes.
(b) To appoint a Regional Committee in each~ of such reg~ions as
the Divrisional Code Authority mayT establish to assist the Dirvisional
Code Authority in admninisteringa this Supplemlental Code and the
General Code; provided, however, thatt nothing~ herein shall relieve
thle Divisional Code Aut~hority of its responsib~iities as such.
(c) To organize, elect officers, hire employees, appoint agents, and
perform such. other acts as may be necessary for thme proper adminis-
tration of this Supplemental Code.
(d) To adopt by-laws, rules and regullat~ions for its procedre.
(e) To use such trade associations and other agencies as it deems
proper for t1he carryingr out of any of its activities provided for
here~in; provided, however, that nothing herein shall relieve the Di-
visional Code Authorityr of its duties or responsibilities under this
Supplemental Code and that such trade associations and agencies
shall at times be subject to and comply withL thte provisions hereof.
(f) To obtazin from members of the Trade such information antd
reports as are required for the administration of this Supplemental
Codle. In addition to information required to be submitted to the
General Code Authorit and to the Divisional Code Authority, mem-
bers of the Tradle subject to this Supplemnental Code shall furnish
such statistical inrformation. as the Administrator m~ay deem neces-
sary for the purposes recited in. Section 3 (a) of thre Act to such
federal and state ageplcies as he maty designate; provided that nothing
in this Supplemental Code shall relieve any member of the Trade
of any existing obligation to furnish reports to any governmental
agency. No individual. report shall be disclosed to atny~ other mem-
ber of the Trade or any other party except. to such other govern-
mental agencies as may be directed by the Administrator.
(g) To appoint, within one month after the effective date of the
Supplemental Code, a committee so constituted as to give producer,
consumer, and governmental representation satisfactory to the Ad-
ministrator, to mak~e a study with~ a view to th~e establishment of
clra~ss~ific~ations andl standards of quality osfstaple products o~f the
Trade, wherever such standards are deemed feasible. The findings
and recommendations of this Comm~ittee shall be submitted to the
Administrator within six (6) months of da~te of appointment and
after such hearings and investigations ais he may designate, and upon
approval by him, shall be mades a part of this Supplemental Code
and be bindling upon every member of the Trade.
(h) To recommend to the Administrator any actions or measures
deemed advisable, including further fair trade practice provisions to
govern members of' the Trade in their relations with each other or
with other trades, measures for industrial planning and stabilization
of employment, and including modifications of this Supplemental
Code which shall become effective as part hereof upon approval by
the Administrator after such notice anld hearing as he! may specify.
SECTION 8. Nothing contained in this Supplemental Code shall
constitute the members of the Divisional Code Authority partners
for any purpose nor shall any member or members of the Divisional
Code Authority be liable in any manner to anyone for any act of
anly other member, officer, agent, or employee of the Divisional Code
Authority. Nor shall any member of the D~ivisional Code Authority,
exercising reasonable diligence in the conduct of his duties here-
under, be liable to anyone for any act or omission to act, under this
Supplemnental Code, except for his own wilful malfeasance or non-
SECTICON 9. If the Administrator shall determine that any action
of the Divisional Code Authority or any agency thereof may be
unfair or unjust or contrary to the public interest, the Administrator
may require that such action be suspended to afford an opportunity
for investigation of the merits of such action and for further con-
sideration byr such D~ivisional Code Authority or agency, spending
~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 10. (a) It being found necessary in order to support the
administration of this Suxpplemnental Code and to maintain the stand-
ards of fair competition established hereunder and to effectuate thte
policy of the Act, the Divisional 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 may be raised as hereinafter provided and which shall
be held in trust for the purposes of this Supplemenital Code;
2. To submit to the Administrator for his approval, subject to
such notice and opportunity to be heard as he may deem necessary
(1) an itemized budget of Its estimated expenses for the foregoing
purposes and (2) an equitable basis upon which the funds necessary
to support such budget shall be contributed by members of the Trade;
3. After such budget and basis of contribution. have been approved
by the Administrator, to determine and obtain equitable contribution
as above set forth by all members of the Trade, and to that end,
if necessary, to institute legal proceedings therefore in its own name.
(b) Each member of the Trade shall pay his or its equitable con-
tribution to the expenses of the maintenance of the Divisional Codie
Authority, determmed as hereinabove provided, and subject to rules
and regulations pertaining thereto issued by the Administrator.
Only such members of the Trade complying wilth the Suppleme~tntal
Code and contributing to the expenses of its administration as here-
inabove provided, unless du~ly exe~mpted. from malkingr such contri-
butions, shall be entitled to participate in the selection of members
of the Divisional Code Atluthority or to receive the benefits of any of
its voluntary activities or to make use of any emblem or insignia of
the National Recovery _A~dministration.
(c) The Divisional Code Authority shall neither incur nor pay
anly obligation in excess of thre am~ount thereof as estimated ini its
approved budget, exetpt upon approval of th~e Administrator; and
nro sulbsequlent budget shall contain any deficiency item for expendi-
tures in excess of prior budget. estimates exceept those wvhichl the
Administrator shall have so approedl.
ARTICLE IV-T~n ~PRAuenrs
Supplementing A1rticle VII of the Gxeneral Code.
The following practices arec here-by dleclared to be unfair mlethods
of competition and are prohibited:
(The following unfair trade practices are to apply to all w9hole-
salers or distributors unless otherwise, indicated in, the Schedules B
SCECTON 1. To use any sulbterfug~e to frustrate. the spirit and intent
of this SEupplemental Code or the General Code.
SECTIO)N 2. T0 sell on terms of payment except the following:
(a) Maximum~ eash discount shall be two per cent (2%0) for pay-
ment on or before the 15th day of the month following dlate of
invroice. Accounts not paid within the discount period shall be
(b) The maximum credit period shall not. exceed sixtyI (60) days
from the 15th day of the month following date of shipment. TIen
days after the net. due date, interest shall ije charged at the rate of
at least six per cent (6%) per annum or at the legal rate governing
(c) Inroices for merchandise sold or shipped in the months of
October, NTovember anld December shall become due a~nd payable not
later than January 115th of the following year, subject to a tw-o per
cent (297) cash discount.
(d) No discount shall be allowed other than the regular cash
discount from the? wholesaler's selling price, provided that this shall
not prohibit the allowance of quantity or volume discounts or dis-
counts allow-ed on the basis of services actually rendered wit-hout
discrimination amlonga customers of the samle class. This subsection
shall be construed to prohlibit the practice of arriving at a whole-
saler-'s net selling price by maeanrs of a series of discounts from a
fitt~itious list price and shiall not be construed as requiringr or author-
izing in any way the establishment of maintenance of any whole-
saler's selling price.
(e) T'he Divisional Code Authority, subject to review by the Ad-
ministrator, may change terms of credit onr specific, commodities in
order to enable, wholesalers to meet the competition of primary sellers
operating under manufacturers' Codes of Fair Competition.
(f) The period of time allowed after net due date shall not exceed
three and one-half (3)months or three and one-half (%
months average when installment notes are accepted. If the original
notes ar~e extended, interest shall be charged at not less than the
rate of six per cent (6%o) per annum or at the legal rate of such
extension. Such extension shall not exceed ninety (90g) days.
(g) No cash1 discount shall be allowed on any note settlement, nor
shall a non-interest-bearing note be accepted mn payment of a ma-
tured obligation. NSotes accepted after the net due date with a toler-
ance of ten (10) days must bear interest from the net due date at
a rate not less than six per cent (6%0) per annum or at the legal
rate governing the contract; provided thaat unsecured and non-
interest-bearing no0tes may be accepted from. insolvent debtors. Notes
so accepted shall be immediately reported to the Divisional Code
SIECTION 3. To make allowances and/or donations to customers for
advertising purposes. Nothing in this Section. shatll be construed to
prohibit the payment by any member of the Trade of the expense of
bona fide cooperative advertising actually incurred in the advertising
of items trade-marked or branded by such member of the Trade,
provided such payment be made in cash to an advertising medium
or enterprise owned and operated inldepenldently of the parties in
whose interest such expense is incurred.
SECTION. 4. To ship or deliver merchandise onl a guaranteed sale
basis, provided that the Divisional Code Authority may permit such
shipments or deliveries under unusual circumstances 3ustifyinlg the
SECTION 5. To ship or deliver merchandise on memorandumr and
authorize its retention by the retailer for longer than ten. (10) days;
provided, however, that the Divisional Code Authority may permit
such shipments or deliveries under unusual circumstances justifying
SECTION 6. To ship or deliver any merchandise on consignment,
provided that the Divisional Code A~uthority may permit such ship-
ments or deliveries under unusual circumstances Justifying the same.
SECTION 7. To make memorandum, shipments unless transportation
charges both ways shall be paid by the firm. requesting such shipment.
SECTION 8. TO allow any cash discounts to a retailer and/or insti-
tutional, commercial and/or industrial user on mnerchatndise sold for
his or its account to the consumer by the wholesaler.
SECTION 9. To prepayS transportation charges except where de-
liv~ery is by messenger or local package delivery service w~ithin. a
t~wenty-five~ mile radius of the wholesalr~'s or distributor's place of
SECTION 10. To make allowance for transportation charges on
shipments of merchandise, except that an allowance for transporta-
tion charges may be made on items which are ordinarily stocked and
available but which were temporarily out of stock at the time of the
shipment of the order.
SECTION 11. TO use the power of appointment of Watch Inaspectors
by any member of the Trade who is a GenIeral Watch lInspector for
railroads in order to force retailers to buy goods from hima, and to
furnish railroad passes by such a General WSatch. Inspector in order
to influence retailers to buy merchandise from him.
SECTION 12. To accept f-or credit or exchange merchandise whenz
shipped in accordance with customer's orders unless--
(a) Such merchandise be obviously defective in material or manu-
facture and be returned for credit within ten. (10) dayTs after receipt
of the same, or
()Such merchandise be latently defective and be returned within
suhtime as a reasonably prudent retailer in the exercise of ordinary
care would discover the defect, or
(c) Such merchandise be guaranteed by the manufacturer, in
which cas the wholesaler may accept such merchandise in accord-
ance with the terms of the guarantee and during the lifetime of thl-e
(d) Such merchandise? be shipped as a result of an error in order-
ing or shipping and bet returned for credit ~within ten (10) days after
recei ~t of the same, or
(e) Such credit be made on account of insolvency of the customer
and be reportedly to the Divisional Code ALuthority.
SECTION 13. To sell. second-hand or rebuilt watches, or watches
containing second-hand or rebuilt movem~enlts, unless at the time
of sale and delivery there shall be! afftixed to eachn such watchl a tag
which states that the watch is second-hand rebuilt.
SECTION 14. TO glv6 Or Offer tO gie directly or indlirec~tly any free
wFatch material, except that such watch mnat~erial may be supplied
without charge for purposes of replacing demonstrably defective
material previously sold to the recipient.
SECTION 15. To makze and send any inzvoice which does not, include
a, clear alnd complete, statement, of the terms and conditions upon,
which thre transaction was based.
SECTION li. TO 8611 Or Offer f07 sale any watch case either as a
separate entity or fitted with a movement as a complete watch unless
the said watch case shall have stamped indelibly and legibly in. some
visible place on its outside surface the manufacturer's name or duly
registered trade mark accompanied by a quality mark equally in-
delibly and legible, in a~cc~ordance within the standards and conditions
established with the standards alnd conldition~s established in Article
VIIII of the Code of Fair Competition for the Wlratch Case Mhanu-
facturing Industry as approved by t~h rsdn nDcme 3d
193; poviedhowver tht tisprovision shall not apply to
watch cases completely manufactured prior to the effective date of
this Supplemental Code, and for the possession and ownership of
which the distributor shall submit to the Divisional Code Authiority,
before offering the same for sale, an, executedl bill of sale dlatedl prior
to July 1, 1934, or such reasonable extension beyond said date as may
be granted by the Divisional Code Authority~ upon application
SECTION ~1. For a member of th-e Trade to make or permit his
agents or employees to ma~ke or publish aniy statement, oral or writ-
ten, which falsely disparages in any material particular any com-
petitors or their goods, prices, values, credit terms, policies or
(The following unfair trade practices are to apply exclusively to
the sale by members of the T'rade of watchmakers' and jewelers'
materials, tools, supplies and equipment.)
SECTION 18. To allow trade-ins for more than a fair market value
of the mlerchandlise taken in trade.
SECTIrON 1,9. TO & IOW IBre favorable terms of credit; discounts or
dating on sales of coupon books thanr are specified in this Article
for the sale of the merchandise represented by the coupons.
SECTION 20. To ship or deliver merchandise to retailers ond memo-
randum when its retention for longer than ten (10) days by the
retailer is authorized. Merchandise of this character kept beyond
the specified time shall be considered as sold. The Divisional Code
Authority may permit such shipments or deliveries under unusual
circumstances Justifying the same.
SECTIION 21. To guarantee the sale by any retailer of anly merchan-
dise, provided that the D~ivisional Code Authority may permit such
guarantee under unusual circumstances justifyTing the samne.
(None of the trade practice rules in Schedule A of this Article
except Sections 1, 4, and 6 shall apply to the sale by members of
the T'rade of men's novelty jewelry. The following unfair trade
practices shall apply exclusively to the sale by members of the Trade
of men's novelty Jewelry.)
SECTION 22. To accept for credit or exchange merchandise when
shipped in accordance with customers' orders unless:
(a) Such merchandise be obviously defective in maaterial or manu-
facture and be returned for credit within ten (10) days after receipt
of the same, or
(b) Such merchandise be latently defective and be returned wRithin
such ~ ~ ~ Y tiea esnbypuetrtailer in the exercise of ordinary
care would discover the defect, or
(c) Such merchandise! be guaranteed by the manufacturer, in. which
case the wholesaler may accept such merchandise in accordance wF\ith
the terms of the guarantee and during the lifetime of the guarantee,
(d) Such. merchandise be shipped as a result of an error in order-
ing or shipping and be returned for credit ten (10) days after receipt
of the same.
(e) ~A wholesaler may, however, accept the return of nlot more than
ten per cent (10%o) of the merchandise sold by him to a customer
durin$ the four (4) m-onths previous to the time the returned mer-
chandise is received by the wholesaler. Said retturne merchandise
so accepted by the wholesaler shall be credited to the customer to the
extent of not more than eighty per cent (80%0) of the wholesaler's
t~eecurrent teselling price for said merchandise. The wholesaler shall
therafte mae a triplicate record of the transaction; one copy of
which shall be sent to the customer, one copy shall be sent to the
Divisional Code Authority, and one copy shall be kept by the
wholesaler for his own record. T~he Divilslonal Code Atuthority may
permit return privileges more liberal to the customer than those
established in Subsection (e) where special circumstances justify the
(f) A member of the Trade may accept in lieu of payment the
return for credit of merchandise sold by said member to a customer
in thre case of insolvency or financial embarrassment of said cus-
tomer, provided that the acceptance of this returned merchandise
is reported immediately to the Divisional Code Authority.
SECTION 28. To gives discounts to purchasers m~ore- favorable than
thre per) cent, (3), ~ten (1 days -E.O.1M. or two per cent (2%),
ten(10 das, lussixy 60 days extra dating, except that ship-
ments made during the perto fro-m September 1Lst to November 1st,
inclusive, may be made on the following terms:
Three per cen (3%S~), ten (10) dlays E.O.M., plus -thlirty (30)
days extra dating, or two per cent (2%),~ ten (10) days, plus ninetyv
(90) days extra dating. Merchandise shipe frte25hoan
month may be dated~ as of the firstpe oft thze montho inndatel
SwcrroN 24L. To deliver to a purchaser any merchandise ini excess
of the merchandise charged.
SECTION 25. To give dlisp~lay materials of a value in excess of ten
per cent (10%S~) of the amount of the sale with which it is given.
SLECTION 26. T0 mRh6 any RHlOWRHOOc tO a purchaser :for adlvertis-
ing purposes. Nothing in this Section shall be construed to pro-
hibit the payment by any member of the Trade of the exp~ense of
bona fide cooperative advertising actually incurred in the advertis-
ing of items trad~emnarked or branded by the member of the Trade,
provided such payment be ma~de in cash to an. advertising medium
or enterprise owned and operated independently of th~e parlt~ies in
whose interest such expense is incurred.
SECrTION 27. rIO Ship or delivTer mnerchandise to retailers on m~emor-
andurm when its retention for longer than ten. (10) days byr the re-
tailer is authorized. MI\erc~handise of this character kept beyond
the specified ~time shall be considered as sold. The Divisional Code
Authority may permit such shipmnents or deliveries under unusual
circumstances justifyinlg the sa mne.
rSECTION 28. The Divisional Code Authority wit-h the consent of the
Administrrator ma~y change or eliminate, any of the provisions of this
Supplemental Code for the purposes of placing the members of this
Trade on a fair competitive basis with primaryV sellers or members
of other wholesale or distributive: trades.
ARTICLE V--PERMIISSTIVE TRADE PRACTICES
Supplementingr A1rticle VII of thne General Code.
SECTION 1. (a) ~No goods shall be sold or offered for sale at less
than the cost to the seller. Such cost shall be defined to mcean thre
actual net invoiced purchase price or market price, wh-lichever is
lower, plus transportation charges to seller's warehouse plus actual
wages involved in the delivery of goods by thec seller wvhen deter-
mined in accordance with an accounting formula developed by an
impartial agaency chosen with the advice of the Adml~inist~rator and
published from timne to time by the Divisional Code A~uthority after
approval by thle Administrator.
(~b) Notwrithstanding the provisions of this Section, any w1hole-
saler may sell any article of merchandise at a price as low as the
price set by any competitor on merchandise which is identical or
essentially: th~e same, and where such competitor's price does not
violate this Se~ction or where such competitor is not .subject to the
provisions of this Supplemental Code.
(c) N~otwithstandling the foregoing provisions of this Section a
wholesaler may sell the following merchandise at less than the prices
established under the said provisions: obsolete goods, bona fidle close-
out merchandise, damaged merchandise, stocks being liquidated,
merchandise sold for charitable purposes or to unemployment relief
agencies, and such other merchandise as the Divisional Code Au~-
thority may designate.l
SECTION 2. With the advice and consent of the Adminristrator, the
Divisional Code AuthorityT may at any time determine that an open
price plan of selling such commodity or commnodities of the Trade
as it shall specify shall be put into effect. Notice of such determnina-
tion and the details of such plan shall be announced to all known
members of the Trade who distribute such commodities.
ARPTICLEI VTI--FOWER OF PRESIDENT TO AMODIFY
SThis Supplemental Code and all thne provisions thereof are ex-
pressly made subject to the right of the President in accordance
with the provisions of Suab-section (b) of Section 10 of the Act,
from time to time to cancel or modify any order, approval, license,
rule or regulations issued under Title I of said Act.
ARTICLE VII--EFECTIVE DATE
This Supplemnental Code shall become effective on the tenth day
after its approval by the! Administrator.
Approved Code No. 201L-Supplemnent No. 22.
Registry No. 1631-1--7.
1 Amended--See paragraph 3 of order approving this Code.
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