NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
AS APPROVED ON MARCH 21, 1934
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Approved Code No. 110-Amendment No. I
Registry No. 899--03
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ABproved Code No. 110-Amendmnent No. 1
CODE OF FAIR COMPETITION
H~ARDWTOOD DI[ST~llTION INDUSTRY
As Approved on M~arch 21, 1934
AP~EPROVINGa AMENDMrENT OF CODE OF FAIR COMPETITION FOR THE
HARDWOOD DISTILLATION INDUSTRY
An. application having been duly maade pursuant to and in full
compliance with the provisions of Title I, of the National Industrial
REecovery Act, approved June 16, 1933, for approval of amendment
to a Code of Fair Comnpetition for the H~ardwood Distillation Indus-
try, and hearing having been duly held thereon and the annexed
report on satid amendment, containing findings with respect thereto,
having been made anzd directed to the President:
NOWC, THIEREFORE, on behalf of the President of the Unied
States, I, Hugh S. Johnson, Administrator for Industrial Recovery,
pursua~nt to authority vested in mle by Executive Orders of the
President, including ExecutivTe Order No. 6543-A, dated December
30, 1933, and otherwise; do hereby incorporate, by reference, said
annexed report and do find that said amendment and the Code as
constituted after being amended complyialrepcswtth
pertinent provisions and will promote th polc and purposes oft
said Tit~le of said Act, and do herebyr order that said amendments be
and it is hereby approved, and that the previous approval of said
Code is hereby modified to include an approval of said Code in its
entirety as amended.
HUGH S. JoHNSON,
Administrator for Inidustrial Recovery.
G-EO. L. BERRY,
March 1, 1984.,
]REtPORT TO THIE PRESIDENT
The Wh~Vite House.
SIR: This is a report on the Amendment to Article IX, Section 1,
of the Code of ]Fair Comlpetition for the HE-ardwood D~ist~illation In-
dustry, anld on the hearing conducted thereon in. WPashington, D.C.
on Fi~ebruatry 9, 1934, in accordance with the provisions of Title I oj!
the National Industrial Recovery .Act.
T'he Hardwfood Distillation Industry, through its Code Authority,
has availed itself of the provision in Arsticle VI, Section C, Operative
Provisions, of the Code of F'air Comzpetition for the H-lardwood Dis-
tillation Industry, approved by you on Novemnber 10, 1933, which
reads as follows:
"The Code Au~thorit~y shall study the functionin and operation of
the industry under this Code, with a view, to martking recomlmenda-
tions to the Administrator which it deems desirable for mlodificat~ion
or addition to the trade practice: regullat~ions and rules and regulations
contained in this Code."
OBJECT AND ECONOMIIC EFFECT OF THE AMENDMENT
Section 1 of Ar~ticle I~X and the preceding paragraph in the approved
Code provide as follows:
The Code Authority shall study trade practice rules and the oper-
ation thereof, and shaall mak any recommendations from, time to tune
to the Administrator which it deems desirable for modification or
addition thereto, which, upon the approval of the President, shall.
become a part of this Code and. have -full force and effect Eas provisions
hereof. The following~ trade practices are herebyprhbed
"1. F~or any member of the Industry to sell the produces h
Industry below his individual cost. of production of such products as
determined in accordance with the uniorm system of accounting re-
ferred to i~n Article VIII, after it has been approved by the AQdminis-
The aLmendment to this Section consists principally of adding the
following to Section 1 in the approved Code:
"Except, to meet~ prices competition either within. or outside of the
Hardwvood Distillation Industry and in such case, each member of th
Industry shall notify the Code Authority of the fact and his reasons
TIhis additional p revision is necessary in thiis Industrybeca use two
of the three principal products of the Industry, name, acetic acid
(or acetate of lime) and methanol foodd alcohol), are produced
syntheticallyr by chemical manufacturers who are not covered by the
definition of the H~ardwood Distillation Industry Code. It is gener-
ally believed that the synthetic producers of these two products have
lower cost of production than members of the Hardwvood Dist~illation
Industry and to some extent at least, the price whc~h members of the
Hardwood Dist'illation Industry can realize on these products is de-
termn d cc by tha epricbe se by: syn thet ic producers. It is, therefore,
coneivbletha meber ofthe H~ardwood D~istillation Indust~ry
would have to violate the provision in Section 1 of Article IXI in order
to sell these two products of the Industryg in competition with prices
which may be set by synthetic producers.
This amendment Is in accord wcith the policy of the A~dminist~r t~ion
as stated subsequent to thze time when the H~ardwood Dist~illation
Industry Code was sent forward for approvPal. In general, without
such a provision anid ignorig for the moment, competition of syn-
thetic producers in the two abov-e mentioned products, if a member
of the Industry could not sell below his cost to meet the competition
of a more favorably situated or equipped plant, it would have the
effect of allowig thze more favorably situated or equipped plant to
get more and more business and further reduce their costs. The
t~endencyr would be to concentrate all business in the hands of the m~ost
favporaly situated or equipped plants. This consideration applies
to the third product of the I[ndustry, namely, charcoal, as w~ell as to
the above mentioned products which are in direct competition with
s~yn thetic prod ucers.
I ~find that:
(a) The amendment to said Code and the Code as amended are
well designed to promote thie policies and purposes of TCitle I, of the
National Industrial Recovery Act including: the removal of obstrue-
tions to th free flow of interstate and foreign commerce whih tend
to clminish the amount thereof, and will provide for the general wel-
fare by promoting the organization of industry for the purpose of
cooperative action among trade groups, by inducing arnd maintaining
united action of labor and management under adequate govern-
mental sanction and supervision, by eliminating unfair competitive
practices, by promoting the fullest possible utilization of the present
productive capacity of the industries, by avoiding undue restrictions
of production (etixcept as may be temporarily required), by inc~reasingr
the consumption of industrial and agricultural products through;
increasingr pulrhchingr power, by reducing and relieving unemployv-
ment, by unlprorimg standards of labor, and by otherwise rehabirh-
(b) The Code as amended complies in all respects with the perti-
nent provisions of said Title of said Act, including without limnitat~ion
Subsection (a) o~f Section 3, Subsection (a) of Section 7 and Subsection
(b) of Section 10 thereof.
(c) The Code empowers the Code Authority to present the afore-
said amendment on behalf of the Industry~ as a whole.
(d) The amrendmuent anzd the Code as amended are not designed to
and will not permit monopolies or m~onopolistic practices.
(e) T'he amendment and the Code as amnended are not designed to
and will not eliminate or oppress small enterprises and will not opera~t.e
to discriminate against them.
(f) TIhose enaged in other steps of the economic process have not
been deprived of the right to be heard prior to approval of said
HoonG S. JoBNSON,
MARon 21, 1934.
AMENDMENT TO CODE OF` FAIR COMPETITION ]FOR THE
HARDWOOD DISTILLATION INDUSTRY
ARTICLE IX-ECTION 1
It is proposed to make this section read as follows:
"F~or any member of the Industry to sell the products of the
Industry at prices below the cost to the individual producer as deter-
minzed by the methods prescribed by the Code Authority, with the
approval of the Adm~inistrator, except to m~eet price competition
either within or outside of the H-ardwood D~istillation Industry and
in such case each member of the Industry shall notify the Code
Authority of the fact and his reasons therefor.
Approved Code No. 110. Amendment No. 1.
Registry No. 699-03.
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