Proposed code of fair competition for the motor vehicle retailing trade as revised for public hearing


Material Information

Proposed code of fair competition for the motor vehicle retailing trade as revised for public hearing
Portion of title:
Motor vehicle retailing trade
Physical Description:
9 p. : ; 24 cm.
United States -- National Recovery Administration
United States Government Printing Office
Place of Publication:
Washington, D.C
Publication Date:


Subjects / Keywords:
Motor vehicle industry -- Law and legislation -- United States   ( lcsh )
federal government publication   ( marcgt )
non-fiction   ( marcgt )


Additional Physical Form:
Also available in electronic format.
General Note:
Cover title.
General Note:
At head of title: National Recovery Administration.
General Note:
"Registry No. 1403-42."
General Note:

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004937984
oclc - 649060014
System ID:

Full Text





The Code for the Motor Vehicle Retailing Trade
in its present form merely reflects the proposal of the above-mentioned
industry, and none of the provisions contained therein are
to be regarded as having received the approval of
the National Recovery Administration
as applying to this industry


For esle by the Superintendent of Documents. Washington, D.C. Price 5 ucents


Registry No. 1403--42



r rl


SuBurrrED BT




This Code is set up by the National Automobile Dealers Asso-
ciation, for the purpose of increasing employment, estab~lishlingr fair
and adeqluat.e wages, effecting necessary reduction of hours, im-
pr~oving standards of Labor and elimrinating unfair trade practices
to the end of rehabilitating the automobile retailing and/or servic-
ing and/or repairing industry and enabling it to do its part toward
establishing that balance of industries which is necessary to the
restoration and maintenance of the highest practical degree of
public welfare.
It is declared purpose of the automobile retailing and/or servic-
ing andi/or repairing industry to bring, insofar as may be practicable
the rates of wages paid within the automobile retailing and/or
servicing andi/or rIepair~ing industry to such levels as are ncessar~y
for the creation and maintenance of the highest practicable standard
of living; to r~estor~e the income of enterprises within the industry
to levels which will make possible the payment of such wages and
avoid further dep~letion and destruction of capital assets; and from
time to time to revise the rates of wages in such manner as will cur-
Irently reflect the equitable adjustment to variations in the cost of

Whlerrever in this Code, or in anly proceeding under or in con-
nect~ion withl this Code, the follow~ing w~or~ds or terms are used, they'
shall be deemed andl taken to have thle meanings ascribed to them
as follows:
TPhe w~ord dealer includes, but without limitation, any indi-
vidlual, partnership,, association, trust or corporation engaged in
whole or in part in an~y phase of the business of motor vehicle
retailing, and~/or servicing and/or repairing new and/or used motor
Ten lelS.
The term "' motor vehicle retailing shall mean any phase of the
business of retailing and/or serv-icing and/or repairing new motor
vehicles and the retailing and/or servicing and/or repairing of used
motor vehicles byr dealers who deal in new cars as aforesaid.
The term motor vehicles as used herein means automobiles,
including passenger cars, trucks, truck: t~rctor~s, buses, taxicabs,
hearses, aImbulances, and other commercial vehicles, for use on the
highway, excludling motorcycles, fire apparatus, and tractors other
than truck tractors.
Describe association: Incorporated uind'er laws of Illinois, princi-
pal office in St. Louis. The term "( association "? as used herein means
9061"--33 (ll

National Automobile Dealers Association, a trade association, having
its p~rinlcipal office at No. 1010 Pine Street, St. Louis, Miissouri.


(1) EmlployeeS of t~he automobile retailing and/'or repairing in-
dustry shall have the right to organize and bargain collectively
through representatives of their own choosing, and shall be free from
the interference, restraint, or coercion of employers of labor, or their
agents, in thle designaltion of such r-epresentatives or in self-organiza-
Ition or in other concerted activities for the purpose of collective
bargaining or other mutual aid or protection;
('2) No employee of the automobile retailing and/or servicing
and/or repairing industry and no one seekinga employment shall be
requiredc- as a condition of employment to join any company umion
or to refrain from joinung, organizing, or assisting a labor orgamiza-
tion of h~is ownr choosing; and
(3) Employees shall comply with the maximum hours of labor,
minia~mumn rates of pay, and other conditions of emlploym-ent, approvedl
or prescribedl by the Presidlent.
(4) WVithout in any way attempting to qualify or miodify, by inter-
pretation, the foregoing req~uiremients of the National Indtustrial Re-
covery Act, emnployers in thiis industry mray exercise their right to
select, retain, or advance employees on thle basis of individual merit,
without regard to their miembership or nonmembership in any organ-

(1) No person under 16 years of agie shall be emnployed in mnotor-
veicle retailing provided~, hioweve, thlat where a State law provides
a hiigher miinimuum rate, no person below the age specified by such
State law shall be emnployedl within that State, except that persons
under 16 may be emiployed (but not, inl manurfacturingi or mechani-
. cal ind~ustr~ies); for not to exceed 3 ~our~s per dlay and those hours
between 7i A.1\I. and 'i P.1\L in sulch work as will not interfere with
hours of dlay school.
(2) No emiployvee (except outside salesmen and watchmnen) shall
be emlployedl for more than 48S hours in any~ one week. All places
of business shall be kept open not less than 52 hours a week, unless
such~i hours were less thann 52 hours per week before July 1, 19333, and
Sin which case sulch houlrs shall not be reduced at all.
(3-) Thie maximum hours fixed2 in thle foregoing paragraph (2)
shall not apply to emlployees in a managerial or executive capacity
who now~ receive $25.00 per week or more; to employees in super-
visoryV enpacity or engaged in technical work; to employees engaaged
mn emergenicy repair and maintenance work on automobiles for which,
due to seasonal climantic conditions, there are in certain localities
insufficient trained workers available to take care- of consumer de-
mands; in such localities sixty hours shall not be exceeded in any~
onie week. It. is undlerstoodl however? that the average mn any six
mionth~s' period w~ill niot be over 48 h~ours.

(4) Not to pay any employees, except as hereinbelow p~rovided,
less thlan at the rate of $15.00 per week in any city of over 500I(,000(
polpulation, or in thle immediate tradre area of such city; nor lerss
than at the rate of $14.50 per week in any~ city of between 250.000
and 500!,000 population, or inl the immIedi a te trade area of such city;
nor le;ss than1 at the rate of $14.00 per weeke in any~ city- of between
2,500 and .250,000 p~opulation, or in the immediate tradte area of sulch
city;I and in towns of less than 2,500 population to increase all wages
by not less than 20%, provided t~hat this shall not require wages at
the rate of in excess of $f12.00 per w~eekr.
Provided, however, that in places where unskilledt Inbor, such, as
washers, greasers, porters, or helpers, were paid $12.00 or less per
wFeekl on July 1, 1933, that this class of workers shall be paid not
less than they were being paid on July 1, 19:33, but that their hours
be reduced to 48 per we~ek.
(5) Full-time outside salesmnen. who are unrrestricted as to hours
and receive, remuneration on a commission basis, shall be guaran-
teed a dlrawing account of not less th~an. $17.50 a week in any city
of over 500,000 population, or in the immediate trade area of such
city; nor less than at the rate of $15.00 per week in any city between
250,000 and 500,000 population, or in the immediate trade area of
such city; nor less than at the rate? of $12.50 per week in any city
between 2,500 and 250,000 population, or in the immllediate trade
area of suchf city; andl in towns of less than 2,500 population, all sales-
mlen shall be guaranteed not, less than $10.00~ per w~eek.
~An apprentice salesman is exceptedl fromr this guaranty until he
has served at least six monthis--th~ree months of which must be
served within employer last employing; him.l Such. apprentices shall
be limlitedl to one for each ten regular salesmnen, or mulltiple thereof.
Population for the purpose of this ar~1eemnent shaHl be determined
by reference to the 1930 Fe'deral census.
(6) No mechanic emnployed in, this industry shall be paid less than
50 cents per hour unless t'he hourly rate for the same class of work
on Julry 15, 1929, was less than 50 cents per hour, in which latter case
such mechanic shall be panid not less t~hanl the hourly rate of July 15,
1929, and in no event less than 30 cents per hour. This p~aragraph
establishes a guaranteed minimum hourly rate of pay regardless of
whether the employee is comlpensated on the basis of a time-rate
or a flat-rat~e performance, or otherwise.
(7) No dealer shall reduce the comp~ensation for employment nowr
mn excess. of th minimum wages hereby provided (nojt ithstanding
that thne hours worked in such emlploy~ment mlay be hereby redlucedl)
andl each. dealer shall increase the pay for such emuploymlent by an
equitable readjustment of all payT schedules.
(8) No dealer shall use anly subterfugetr to frustrate! the spirit and
intent of this Code which is, among other things, to increase em-
ployment, to remove obstructions; to commerce, anld to shorten hours
and to raise wages for the shorter weekr to a living basis.
(9) No dealer shall increase the: price of any mner~chandisee sold
after the date hereof over the price on July 1, 1933, byr mor~e than is
made necessary by actual increases in wages, or invoice costs of
merchanndise, or by taxes, since July 1, 1933, and in setting such price
increases, each dealer shall give full weight to probable increases in

sales volume and to refrain fromt taking profiteering advantage of
the consumiing pubbe.,
(10) Thle mnaximumn hours h~erein above provided markl the total
number of hours which mayr be worked by any employees; whether
hie work~bs for one or more employers; p3rovided, hiow8eer, that if any
employee works more than such maximum without the knowieidge
or connivance of anyr one of his emnployers suchi employer shall not be
deemed to hlave vliolated this paragraph.
(11) No employee shall be classified in any of the excepted classes
hlereinabove~, pr1ovided unless such emplloyee performls duties iden-
tical with those p~erform~ed~ by employees thus classified on June
16, 1933:.


To~ prevent sales belowf cost., heretofore~ due to unfair competition
thlat h~as resultedd in the, dissipation of the large part of the capital
originally in this industry anid has accumulated large losses sinee
1926, this industry agrrees to regulat~e itself so as to return profit
possbilities and support increased wages and shortened hours.
Givingg consideration to the pubie interest and to prevent sales
below~ cost, it is hlereby p~rovi~ded~:
(1) That the value of any used m~otor vehicle, either Ipssenger or
commelrlrcial, shall be the ave rage price that thle pub~lie in any given
market, area is then paying fo such vehicle, as ascertained by Na-
tionial Automobile Dealers' iAssociation from~ certified reports of
actual sales, subject to thle approval of the Admiinistrator. The
Assoc~iation shall pubish the, average prices thus ascerttained approx-
imatflely every3 60 days.
(2) That no dlealer shall, directly or indirectly, or by subterfuge,
necept in trade any used vehicle at an allowance price of more than
its v-alue as determined in paragraph (1) above, less a minimum
selling, handlingl, anid reconditioning charge of 20%.
(37) To prov~idei a rc-ord~ for the establishment of us~ed-ealr allow-
anIces~ in par~agraph,~ (1) ab~ove. there shall be provided in each logiest
trading area of the U~nited States an official guide which shall be
provided by the N.A.D.A. and such other organlizations as shall be
found dlesir~able andc shall be known as the N.A.D.A. O~icial Guide
and shall be .recognized as the authority for such allowances and
wh~ich~ shall be based up~on actulal sales in each trading areas for the
preceding 60-dlay period.
(4)' ThereP shall be~ used~ asf a bas~is of esit~ablihing allowance values,
as p-rovide~d in paragrarphs 1 and 3, the principle of averaging actual
sales for thle preceding period. Since this will, in isolated instances,
by~g reason of ver~ 'few or no sales ori particular models, leave a need
to esitablish~ a guide figure on suchi models, the following method of
d'eterminingr the allowFanic e values will be pur'sued for the public
If any model car describe in the Official Guide shows five or
mlore sales w~it~hin the district in any period, then the average figure
p~ublish~ed becomes the basis for determining allowances for the en-
suing~ period.

If any model car` ha~s less than five salles with~in the list rict for th~e
period then the new-car delers handling this particular make car
within thiis district shall establish its allowance value; samie to be so
published in the repor~t. Thlese figures to be subject to approval of
the National Conltrol Commuittee andl the Admlinistrator.
Ilf any makze car is not represented in the dlistr~ict or is no longer
m~anufactur~ed and less than five sales are reportedlyl on each or ainy
model of such earr, then the National Conltrlol Colnunittee, subject to
the approval of ther A~dministratorl will set the figure based on. what
like models of other makes bring in the District.


The following 14farketing Rtules shall taket effect 30 days after the
app~roval by the President:
(1) No dealer shall sell a newv car for less than factory list prices,
plus extra for eqluipmnent at listed prices, an amnount equivalent to
rail tr~ansp~ortation andi handling chlargqe to point of delivery, plus
all taxes paid by said delerll.
The only exceptions to these prices shall be sales to proprietorsY'
immediate families, or mnemrber~s of his organization when for the
personal use of suchl buyer. Motor vehicles sold to empyloyees for
use in their employers business as demonstrators or executives' cars,
andi cars us~edl as demonstrators by dealers, mrust b~e so reg~ist~eredl with
their trade ;Issoctiation, or w~ithl the State Adlvisory Comm~ittee; dent-
onstrator~s and- executive cars shall not be sold to a consumereI at re-
tail for es than the full re-tail price except when they hlave been
in use for a period of at least 60 days, from the date of registration
as afor~esaidl, and have had at least 3,500j miles actual r~oadl u~Agre,
or when the masnufacturer1 has maide public unnouncemient of a,
change in muodel.
('2) N'o dealer or representativee shall o-ffer or giv-e any grantuit~y,
commission, servicee or accessory for the? pulrpose of inducirng a
customers to pur11chase a car. Noth~fing~ heremn shafllprevent conrduct
pursuant to any wPtarranty or declared policy of th~e ma~nufa~cturer.
(3) Charges for financing retail sales shall be upon an equiitable
basis to consumrutr, dlealer anld financing company. A dlealer 'hand-
ling, his own paper on monthly payment basis shall not charge a
lower or higher ra~te3 th~an thatt charged by regularly establishedl
finance companies doing a national business.
(4) With the approval of the State Advisory Ctommnittee and thre
marnufactur~er concerned, and for a given reasonable time a dealer
will be permitted to sell and offers for sale, new cars that have been
discontinued or about to be dliscont~inuled at less than derlivr~led prices
as described in thle first paragraph in this section. The intent of this
provision is to enable dlealersY to clean up their own or their fac-
tories' stock before or after new model announcement. In thre event
that approval is refused by the said Comumittee or thle manufacturer,
said dealer shall have right of appeal, to the Admiinis-tra~tor, w~ho
may permit such sale.
(5) It shall be unfair trade practice for any new car dealer or
representative to sell or permit to be sold any new motor vehicle
for resale in a territory already enfranchised for that make of motor

vehicle except through the regularly enfranchised dealer in that
territory andl it shall also be an unfair trade: practice for any dealer
to purchase a vehicle as above prohibited.
(6) The retail list price for parts, necessories, and supplies shall
be the manufacturers' publishedl list price adjusted to include all
taxes. It shall be on unfair trade practice for any dealer to sell
such parts, accessories and supplies at other than retail list price
except to dlulyr authorized dealers, associate or sub-dealers, or au-
thlorized service stations operating under any N.R.A. Code.


Emnergency N'ational Committee shall hold a trade practice con-
fe~rnce as often as mnay be necessary for t~he purpose of making
recommnnendations to the Admninistrator in regard to the establish-
mnent andl amendling of rules of fair trade practice for the Industry.


(A) For the purpose of the adm-inistration of this code, there
shall be in each state an advisory~ commnitbtee consisting of not less
than five elected by the dealers of such state, in convention or by
mail vote. The chairman of each S~tate Advisory Comnmittee shall
be a member of the Emergency National Committee. The Vice
Chairman of each Stnate Advisor~y Commnittee shall be an alternate
member of the Emnergency National Commit~tee.
Each such State ALdvisory Commllittee shall constitute the fair,
practical, andl planning agency to cooperate with the Administrator
in respect, to problems relating exclusively to the said state. Pro-
posals in respect _to matters affect~ing more than one state may be
initiatedl by any S~tate Advisory Committee andi shall be submitted
for consideration to the Emiergency National Committee of the
motor vehicle retailing and/lor serv\icing and, 'or repairing industry,
hereinafter dlescribed andl its determination, subject. to t~he approval
of the Administrator. shall be bindlingr upon saiid state and all other
states o affected thereby. It shall be subject. to the final appeal to the
Adininistrator. For the purpose of th~e admlinistr'ation of this Code
the District. of Columbia, M~etropolitan New Y'ork, and the rest of
New York! andl Metr~opolitan Chicago, and the rest of Illinois, shall
each he considered one state.
States may be divided or rearr1anged upon application of any asso-
ciation or group of associations subject. to the approval of the Emer-
gency National Committee her~einafter described.

-Each of the present component. associattions mankinlg up each State
Group, and any others which may subsequently be formed within
the, Motor Y'ehicle Retailing and/obr Servicing or Repairing Indus-
tryshal st u Excutve committees for the purpose of assisting
in admlinistration of the prov-isions of the Code, to secure adherence
thereto, to hear and adjust complaints, to consider proposals for
amendments thereof and exceptions thereto, and otherwise to carry

out within the component; associations by cooperation throughal the
State Advisory Committee the purposes of the National Industrial
Recovery Act; as: set forth in this Code, subject to fin appeal to the
Administrator, provided that no inequitable restrictions upon mem-
bership in any such association shall at any time be imposed.


There shall be3 an Emergenc~y NaTtional Committee of the motor
vehicle retailing and/or ,serv~icingi and,/or repairing industry to con-
sist of one representative by eaich State Advisory Commnittee.

Th~e Emergency N~ational Committee shall be the general planning
and coordinating agency for the. industry. Its m~emrelrs selected
as aforesaidt shall be emnpowered to act for their respective State
Advisory Committe~es conclusively in respect to all matters before
the National Comimittee for consideration and within its jurisdiction.
The Clhairmlanl of thle Emergency National. Committee shall appoint
elevien members, to be: called the Adlministr~ative Commnittee.
Such appointments are to be approved by a; majority of the m~emi-
Ijer~s of the Emlergency Nlrationlal Commnittee anld to insure balancedi
representation of all classes of dealers mulst included dealers from
smaller towrns, a mlajor'ity of whoml shall be retail dealers anrd dealers
gaeographicallyr representative of the naton as well as the various
lines of cars and w~ith considelration of the appointee's availability
and willingness to serv-e.
The Emergency National Collnimittee shall delegate its power to
the maller body to be exercised~ as necessary to problems r~equirilng
attention between meetings of. the National body.
The Emer~gency Nationlal Committee shall have powers and duties
as provided hlereinl, and in addition thereto it shall--
(1) from time to time require such reports fromn state associations
and component associations, or from local associations, or from indi-
vid-ual dealers, as in its. judgment, subject to the app~rovralof the
Adlministrator, may be necessrlary to advise it adeqtcuatelyr of the
administration and enforrcemnent of the provisions of this code;
(2) upon comiplaint, of interested parties or upon its own initia-
ti\e make such~ inquiry and .invtst~igation into the operation of the
cod'e as may be netcessalry, andi report its findcin~gs to the Aidminis-
trator; andl
(3) make rules and regulations necessary for financing the admlin-
istra~tion an~d enforcement of this code, subject to the approval of
the Admuinist~rator. The Committee may dtelegate any of its author-
ity to the National Control Comimittee hereinafter provided and
may designate such agents as it shall determine.
7I. S~TBTnsJT e
The National Auntomobile D~ealers Association will serve as .a
medium through which all requliredd statistics wF~ill be obtained, and

each dealer agrees, upon request, to furnish it with such informa-
"tion and make his books available to the Nation~al Automobile Deal-
ers Associatio>n, t~o the end that the terms of this codle regarding
increase of wages, shortening of hours, and the establishment of
fair usedl-car allowance, based upon actual sales and the maintenance
of established prices, may constantly be available to the government.

The Emlergncy National Committee of the mnotor-vehicle retailing
anl/'or servicing andl/or repairing industry shall appoint from its
ow~n mlember~ship a N-ational Control Committee of three members.
In addition, there may be two nonvoting members appointed by thle
Administrator. The Niational Control Comnmittee shall exercise such
authority as may have been delegated to it by the said Emergency
Na tional Committee.
All commnunications and conferences of the Automobile Ret'ailing
andi/or servicing and/or repairing Industry with the President or
with his agents concerning the app roval or amendment. of this Code
or of any of its p~rov.isions or any matters relating thereto, shall
be through the said National Control Committee. The National
Control Committee shall serve as an executive agency for the Emner-
gency~ National Committee of the motor-vehiclle retailing and/or
servlcing and/or r~epaliring :industry, and shall be charged with th~e
execution of the duties, through agents; or otherwise, of hearing and
adjusting complaints, considering proposals for amendments and
making recommendations thereon, approving recommendations for
exceptions to the provisions of this code, and otherwise admninistering
its provisions. Anly member of this Indust~ry shall have the right of
appeal to the Emnergency, NEational Coiinuittee from decisions of the
National Control Commnittee and the decisions of the said Emergency
National Committee may be appealed from, to t.hle Administ~rator.
Thre function of this Comritt-ee. shall be the general planning and
coordinating for the motor-vehicle retail and or servicing and/lor
repairing industry and the cooperation with sim-ilar boards of the
Automobile an nu fact ure rs Chamber of Commerce and other
branches of the industry to the end of effecting a balanced national

(1) No prov'isioni in this Code shall be interpreted or applied in
such a manner as to:
Promlot~e monopolies,
Permit or encourage. unfair competition,
Elimniante or oppress enterplriSes, or
D~iscrimninate against, small enterprises.
(2) This CodeP is Ilyhereb epreslypCC maderl subject to the bright of the
PresidentC, pursuant~ to Section 10 (b) of the National Industrial
R~ecovryr Act, from timne to time, to cancel or modify any order, ap-
proval, Jicense, rule, or r~egulation issuedl under Title I of said Act,
and particularly, but without limitation, to cancel or modify his
approval of this Cod~e or any condition imposed by him upon such

(3) T'he Emuergency ~naional Committee of the mnotor-vehicle re-
tailing andi.'or servicing andc/or repairing industry and t~he National
Control Commlittee shall fr~om time to time make to the Adcministra-
tor such recommendations, including amendments of the code, as in
their judgment w~ill aid the effectivet admninistration of this code, or
may be necessary to effectuate wvithin the automobile retailing
and/'or servicing and/lor repairing industry or withinl any state
thereof the purpose of thfe National Industrial PRctovery ~Act as
(4) Such of t~he provisions of this Code as are not required to be
included therein by the National Industrial Recovery Act, may, with
the approval of the Presidlent, be maodifiedl or eliminated as changes
in circumstances or experience may indicate. It is contemplatednte thnat
from timle to time supplementary provisions to this Code or codes,
including in particular, but without lim~itationls, supplementary pro-
visions relating to dealers engaged exc'lusively in the rsale and repair-
mng used cars and persons enlgagedl exclusively~ m servicing or repair-
ing, will be submitted for the approval of th~e Presidlent to prevent
unfair competition in price and other unfair and destructive comn-
petitive practices andl to effecetuatee the other p~urposes and policies of
Title I of the Nrational Industrial 1Recovery Act consistent with the
provisions thereof.
(5) Violation by any dealer of automobile retailing and/or ser~vic-
ing and/or repairing industry or any ~provisions of this code, or of
anyS approved rule issuedl thereunder, is an unfair mnethlod~ of
(6) If any employer in this industry is also an em~ployer in any
other industry, th~e provisions of this code shall apply to and affect
only that part of the business of such employer which~ is a part of
the iridust~ry covered by this code.
"'(7) This code shall become: effective upon its approval byV the
President, except as herein specifically provided.


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