Supplementary code of fair competition for the wholesale paint, varnish, lacquer, allied and kindred products trade (a d...

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Material Information

Title:
Supplementary code of fair competition for the wholesale paint, varnish, lacquer, allied and kindred products trade (a division of the wholesaling and distributing trade) as approved on August 4, 1934
Portion of title:
Wholesale paint, varnish, lacquer, allied and kindred products trade
Physical Description:
11 p. : ; 24 cm.
Language:
English
Creator:
United States -- National Recovery Administration
Publisher:
United States Government Printing Office
Place of Publication:
Washington, D.C
Publication Date:

Subjects

Subjects / Keywords:
Paint industry and trade -- Law and legislation -- United States   ( lcsh )
Protective coatings industry -- Law and legislation -- United States   ( lcsh )
Genre:
federal government publication   ( marcgt )
non-fiction   ( marcgt )

Notes

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. 619-06."
General Note:
"Approved Code No. 201--Supplement No. 18."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004939910
oclc - 63654791
System ID:
AA00006803:00001

Full Text





NATIONAL RECOVERY ADMINISTRATION




SUPPLEMNEN~VTARY
CODE OF FAIR COMPETITION



WHOLESALE PAINT, VARNISH,

LACQUER, ALLIED AND KINDRED
PRODUCTS TRADE


Ior sle by the Superlatendent of Documents, Washington, D.C. - Priie 5 center


Approved Code No. 201--Supplement No. 18


Registry No. 619--06


(A Division of the Wholesaling or .Distributing Trade)

AS APPROVED ON AUGUST 4, 1934


WE DO OUR PARI


UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1934
























This publication is for sale by the Superintendent of Documents, Government
Printing Offlece, Washington, D.C., and by district offces of the Bureau of
Foreign and Domestic Commerce.
DISTRICT OFFICES OF THE DEPARTMENT OF COMM~ERCE

A~tlanta, Ga.: 504 Post Office Building.
Birminghaml, Ala.: 257 Federal Building.
Boston, Mass. : 1801 Custombouse.
Buffalo, N.Y.: Chamber of Commerce Building.
Charleston, 53.C.: Chamber of Commerce Building.
Chicago, Ill.: Buite 17i06, 201 North Wells Street.
Cleveland, Ohio: Chamber of Commerce.
Dallas, Tex.: Chamber of Commerce Building.
Detroit, Mieb.: 801 First National Bank Building.
Houston, Tex.: Chamber of Commerce Building.
Indianapolis, Ind.: Chamber of Commerce Building.
Jacksonville, Fla.: Chamber of Commerce Building.
K~ansas City, Mo.: 102~8 Baltimore Avenue.
Los Angeles, Calif.: 1163 South Broadway.
Louisville, K~y.: 408 Federal Building.
Memphis, Tenn.: 229 Federal Building.
Miinneapolis, Mlinn.: 213 Federal Building.
New Orleans, La.: Room 225-A, Customhouse.
NewT York, N.Y'.: 734 Custombouse.
Norfolk, Va.: 406 East Plume Street.
Philadelphia, Pa.: 422 Commercial Trust 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 Custombouse.
seattle, Wash.: 800 Federal Offce Building.











Approved Code No. 201--Supplement No. 18
SUPPLEMENTARY .CODE: OF FAIR COLM[PETITIION
FOR THIE

WHOLESALE PAINT, VARNE~ISH~, LAC QU ER,
ALLIED AND KIINDRED~I PRODUCTS TRADEI~

As Approved on August 4, 1934

ORDER
APPROVING SUPIPLEM~ENTARY CODE OF FAI~R COMPETITION FOR THE
W7HOLESALE PAINT VARNISH, LACQ~UER, ALLIED AND) KINDRED PROD-
UCTS TRADE
A DIVISION OF THE WHIOLESALNG OR DISTRIUTIN TRADE

An application having been duly rnade pursuarnt to and in full
compliance with the provisions of T'it~le I of the National Industrial
Recovery Act, approved June 16, 1933, for approval of a Supp~le-
mnental Code of Fair Competition for the 'Wholesale Paint, Varnish,
Lacquer, Allied and K~indred Products TIrade to the Code of F'air
Competition for the W'holesaling or Distributing Trade, and hear-
ings having been duly held thereon and the annexed report on said
Supplemental Code, containing findings with. respect thereto, having
been made and directed to the President:
NOWT, THfEREF'ORE, 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
President, including Executiv-e Order No. 6543-A, dated December
30, 1933, and otherwise; do hereby incorporate by reference said
;annexed report and do find that said Supplemnenntal Code complies
in altl respects wrJith the pertinent provisions and will prom~ote~ the
policy and purposes of said T'itle of said Act; and do hereby order
that said Su~pplemnental Code of Fair Compevitions be andt ishere
by approved; provided, however, thatthprvsosoAril
IV S-ection 5 are approved only so long as the provisions of Article
X$ of the Code of 1Fair Competition for the Paint, Varnish, and
Lacquer M3anufacturing Industry as approved on October 31, 1933
are effective.
Huana S. JoHNSON,
Adminilstrato~r for Industrial Recovery.
Approval recommended:
ROBERT L. HousTow,
Division Adm~inistrator.
WAVSHINGTON, D.C.,
Aulgust 4, 1934.
78184*---1 044-33--341----1 (1)













REPORT TO THE PRESIDENT


The PRESIDENT,
The Wihite Hous~e.
SIR: This is a report of the Hearing on the Supplemental Code of
Fair Competition of the Wholesale Paintl Varnish, Lacquer, Allied
and Ktiindred Products Trade, conducted in the Green Room of the
Raleigh Hotel, on Miay 4, 1934. The Supplemental Code, which is
attached, was presented by a duly qualified and authorized repre-
sentative of t.he Trade, complying with the statutory requirements,
said to represent 15 per cent in number and about 50 per cent in
volume of sales of th~e Trade which could be included in this Code.
THE TRADE

No adequate current statistics are available with respect to this
Trade. According to the Census of Distribution, however, there were
about 1,027 establishments handling paint with aggregate annual
sales of $3041,999,000; the total employees numbered 12,571.
PROVISIONS OF THE CODE

Since this Code is supplemental to the Code of Fair Competition
for the WCholesaling or Distributing Trade, it contains no labor
provisions.
The provisions containing supplemental definitions are considered
inclusive anld accurate.
The supplement to the Administrative provisions of the General
Code establishes a Divisionlal Code Authority which is fairly and
adequately representative of all the different elements in the Trade.
The Trade Practices proposed are not considered in any way
objectionable.
FINDINGS
The Deputy Administrator in his final report to me on said
Supplemental Code having found as herein set forth and on the
basis of all the proceedings in this matter;
I: find that
(a) Said Supplemental Code is well designed to promote the
policies andi 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 t~he general welfare by promoting the organ-
ization of industry for the purpose of cooperative action among
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 use of the present productive capacity of in-
(2)








dustries, by avoiding undue restriction of productionl (except as
may be temporarily requiredd, byT increasing the consumption. of
industrial and agr~icultural products through increasing purchasing
power, by reducing and relieving unemployment, by Improving
standards of labor, and by otherwise rehabilitating industry.
(b) Said Trade normally employs not more that1 50,00(l employees
and it is not classified by me atsismajor industry.
(c) Thle Supplemental Code as approe~d complies in all respects
w~ith the pertinent provisions of said Title of said Act, including
without limitation Subsection (a), of Section 3, Subsection (a) of
Section 7 a~nd Subsection (b) of Section 10 thereof ; and that the
applicant association .is a trade association truly representative of
the aforesaid Trade; and that said association imposes no inequitable
restrictions on admiission to membet-ship therein.
(d) The Supplemental Code is not designed to and will not permit
monopolies or monopolistic practices.
(e) .The Supplemental Code is not designed to and will not elim-
inate or oppress small enterprises and will not operate to dliscriminate
against them.
(f) Those engangedl in other steps of the economic process have
hot been deprived of the right to be heard prior to the approval of
this Supplemental Code.
For these reasons, the Supplemlental Code has been ap~provPed.
Respectfully,
HUGcH S. JOHNrsoN,
Administrator.
AUGUST 4, 1934.













ISUPPLEMENTAIRY CODE OFE FAIR COMPETITION FOR
THIE WHOLESALE PAINT, .VARNISH, LACQUER, AL-
LIED AND KINDRED PRODUCTS TRADE
A DIVISION OF THE WHOLESAllNG OR DISTRIBUTTING TRADE
ATcICE I --URPOSES

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 Paint, Varnish, Lacquer, Allied
and K~indred Products Trade pursuant to Article VI, Section I (c)
of the General Code of Fair Competition for the W~holesaling or
Distributing Trade, approved by the President of the United States
on January 12, 1934. All provisions of the said General Code which
are not in conflict with the provisions of this Su~pplemental Code are
herby ncoportedbyreference in this Supplemental Code and
made a part hereof. Sc rvsoso h eea oetgte
waith thesuplemetnti ng provisions of this Code are the standards of
fai copeitin or ndare binding upon every member of said
Wholesale Paint, Varnish, Lacquer, Alhied and Kiindred~ Products
Trade.
ARTICLE II DEFINITIONSF
SUPPLEMIENTING ARTICLE II OF THE GENERAL CODE
SECTION f. WnO &daer orr Distribu~tor.--The term wholesaler or
" distributor as used herein shall mean any individual, partnership,
association, corporation, or other form of enterprise, or a definitely
organized division thereof, definitely organized to render and render-
ing a general distribution service which buys and maintains at his
or its place of business at stock o~ paints, varnishes, lacquers, allied
and/or kindred products, and which through salesmen, advertising,
and/or sales promotion devices sells not less than seventy (70) per
cen~rt of his or its total volume of sales to retailers and/or to institu-
tional, commercial, and/or industrial users. It is not the character
of a concern's buying but the character of its selling which marks it
as a wholesaler.
SECTION 2. The Tradce.--The term "L the Trade as used herein shall
mean the business in which wholesalers or distributors as above
defined are engaged.
SECTION 8. a88oelation.-The term "Association as used herein
shall mean the National Wholesale Paint Association.
SECTION 4. Divisional Codle Aulthority.--The term Divisional
Code Authority as used herein shall mean the Divisional Code Au-
thorityJ for the W'holesale Paint, Varnish, Lacquer, Allied and Ktin-
dred Products Trade, a division of the HCirolesaling or Distributing
Trade.








SECTION 5. General 'Code.-The rterma General Code as used
herein shall mean the. Codec of Fain.r Com~petitonn for thep W~Tholesaling~
or Distributing Trade.
SECTION 6. TraIZde Sale8. -The term "trade sales as used herein
shall mean all sales to job~bers, dealers, painters~, automotive refinish-
ing shops, institutions? hospitals, office buildlingis, apartment houses,
and ~or other commler~cial enterpr~ises not exc~ludedl under industrial
sales and sales made directly to th ultimate consumer.
SECTION 7. 17tdtw~fin'a. Salres.-T he term' industrial sales as ulsed
herein shall mean all scales to the followringr classes of buyers cover-
ing prroductts of tjhe Tradle used by such b~uyers on. their products or
for the finishinga of their equipment and for the upkeep and mamn-
tenance of their plants, equipment, tenements, and for any other
purposes:
Industrial plants of; all kinds (such as; automobile mannufacturers,
furniture manufacturers, etc.):
Transportation companies (melud~ing street railways, bus and air
transportation companies).
Car and locom~otive builders.
SPulblic-service companies.
Oil refiner~s and pipe-line companies.
Packing houses.
:Steel manufacturers anld those, who fabricate their own products.
Bridge builders and bridge operating companies.
Coal or other mninngr operations.
Steamship lines, shipyards, wharves, and docks.
All departments of any St ate, County:t Runicip~al, or other politi-
cal subdivision, but only for the followinrr products: Tra~ffic paint,
road paint, products used on bridges, truel-s, and machinery; auto-
mobile license tag coatings; or materials for finishing furmture, or
any other products manu~factu red in prisons or reformatories. All
other business from State, County, Miunicipal and other political sub-
divisions, such as produocts used on buildings, institutions, etc., to be
classified as trade sales.'"
All departments of the United States Government regardless of
usage.
ARTICLE III -A ADMINISTRATION

scrPLEMrENTING ARTICLE VI, OF THE GENERAL. CODE

SECTION 1 (a) The Divisional Code Authority for the Wholesale
Paint, Varnish, Lacquer, Allied and K~indred Products Trade (which
may be incorporated, not for profit) shall be composed of eleven (11)
members of the Trade, six (6) of whom shall be elected by the
Association, and five (5) of whom shall be selected from the mnemberss
of the Trade not members of the Association, in the following pro-
portion :
One (1) member representing wholesale hardw9are concerns dis-
tributina paint.
One 1) member representing-~----- wholesale building materials (in-
cluding lumber) concerns distributing paint.
O~ne (1)r member repree~nt~ingr wholesale wall paper concerns dis-
tributing paint.








One (1) member representing wholesale drug concerns distribu-
ting pamt.
One (1) member representing wholesale glass concerns distribu-
tm'ng pam t.
No more than two (2) of the five (5) members of the Divisional
Code Authority selected from among non-members of the Associa-
tion shall be chosen from any one State.
(b) The five (5) members to be selected from among non-members
of the Association shall be nominated by the Adminilst~rator. The
names of the five (5) persons so nominated shall be placed upon a
ballot which contains, in addition, fve (5) blank spaces for the
inclusion of other names. These ball ots shall be sent to all members
of the Trade not members of the Association who can be discovered
after diligent sea rch. Each ballot shall be accompanied~ by a letter
stating that no ballot will be counted unless it is accompanied by a
certificate of assent to and compliance with this Supplemental Code
and the General Code, and each vote in order to be counted shall be
postmarked not later than ten (10) days after the ballots are mailed
by the A1Sssociation.
~Each member of the Trade votinga for the Divisional Code Author-
ity may vote for the five (5) nominees selected by the Administ~rator,
or may write in on th~e ballot such additional names as he desires.
All duly elected members of the Div~isionatl Code Authority shall
serve for a period of twelve (12) months.
(c) The successor or any member of the Divisional Clode Authority
w~heth~er to fill an unexpired term or a full new term shall be elected
in the same maner as provided in this Section.
SECTION 2. The Divisional Code Authority shall have the follow-
ing duties and powers inr addition to those prescribed in the General
Code subject to such rules and regulations as may be issued by the
Admin istrator:
(a) To appoint a Trade Practice Committee, which shall meet
with the Trade Practice Committees appointed under such other
Codes as ma~ty bei related to the Trade, except other Supplemental
Codes to the Gener~ral -Code, for the purpose of formulating fair
trade practices to govern thre relationship between production and
dlistribution employers under this Supplemental Code and under
such other Codes, to the end that such fa.ir trade practices may be
proposed to the Administ~rator, as an amendment to this Supple-
maental Code and such other Codes.
(b) To organize, elect officers, hire employees, appoint agents and
perform such other acts as may be necessary for the proper adminis-
tration of this Supplemental Code and of the General Code.
(c) To appoint such Regrional Committees as it desires to aid in
the administration of this Supplemental Code and the General Code
provided, however, that nothing herein contained shall be construed
to relieve the Divisional Code Authority from its duties and liabilities
as such.
(d) To adopt by-laws and rules and regulations for its procedure.
(e) To use such trade associations and other agencies as it deems
proper for the carrying out of any of its activities provided for
herein, provided that nothing herein shall relieve the Divisional
Code Authority of its duties or responsibilities under this LSupple-








inental Code, and that such trade associations and agencies shall at
all times be subject to and comply with the provisions hereof.
(f) To obtain from members of the Trade such information and
reports as are required for the administration of this Supplemental
Code. In addition to information required to be submitted to the
General Code Authority and to the Divisional Code Authority mem-
bers of the Trade subject to this Supplemental Code shall furnish
such statistical information as the Administrator may deem neces-
sayfor the purposes recited in Section 8l (a) of the Act, to such'
edral and state agencies as he may designate; provided that noth-
ing in this Supplemlent~al Code shall relieve any member of the Trade
of any existinga obligations to furnish reports to any government
agency. No individual report shall be disclosed to any other memz-
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 this
Supplemental Code a committee so constituted as to give; producer,
consumer, and governmental representation satisfactory to tre Ad-
ministrattor. This committee shall marke a study with a view to the
establishment of classifications and standards of definitions of each
class of staple products of the Trade wherever such standards are
deemed feasible. The findings and recommendations of this ecom-
mlittee shall within six months be submitted to the Administrator
and, after such hearings and investigations as he may designate,
and upon approval by him shall be made a, part of this Supple-
mental Code and be binding upon every mrembe of thne Trade.
(h) To recommend to the Administrator a~y, action or measures
deemed advisable, including further fair T'rade practice provilsions
to govern members of the trade in their relations with each other
or with other trades, measures for industrial plaLnniing, and: stabili-
zation of employment; and including modifications of this Supple-
mental Ctode which shall beomne effective as part hereof upon
apronnval byv the~ Administra.t~or after uc~h notice. and hearings as he
ma~ specify.
iECTION 3. NOthing contained in this Supplemental Code shall
constitute the members of the Divisional Ciode Authority partnersa
for any purpose nor shall any members of the Divisional Code
Authority be liable in any vbmaner to anyone for any act of any~d
other mzemnber, offcer, agent, or employee of theDisonlCd
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 action or omission to act, under
this Supplemental Code, except for his own willful misfeasance or
nonfeasance.
SECTION 4. 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 thle 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 by such Divisional 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 5 (a). It being found necessary in order to support the
administration of this Supplemental Code and to maintain the
standards of fair competition established hereunder and to effectuate
the 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 t.he purposes of this Supplemental 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;
8. After such budget and ba~sis 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
necessa ry, to institute legal proceedings therefore in its own name.
(b) liach member of the Trade shall pay hlis or its equitable con-
tribution to the expenses of the maintenance of the Divisional Code
Authority, determined as hereinabove provided, and subject to rules
and regulations pertaining thereto issued by the Administrator.
Only members of the Trade complying with this Supplemental Code
and contributing to the expenses of its administration as hereinabove
provided, unless duly exempted from making such contribution, shall
be entitled to participate in the selection of members of the Divisional
Code Authority or to receive the benefits of any of its voluntary
activities or to makte use of any emblem or insignia of the National
Recovery Aidministration.
(c) The Divisional Code Authority shall neither incur nor pay
any obligation in excess of the amount thereof as estimated in its
approved budget, except upon approval of the Administrator; and
no subsequent budget shall contaJin any deficiency item for expendi-
tures in excess of prior budget estimates except those which the Ad-
ministrator shall have so approved.
Arrl~CLE I17-TRADE PRACTICES
SUPPLEMENTING ARTICLES VII AND VII OF THE GENERAL CODE
SEaTION i. E&#C~angye Of C0088 --It shall be a violation of this
Supplemental Code for any member of the Trade to take or allow to
be taken in exchange for the product or products of one manufac-
.turer, any product or products of any other manufacturer of the
Paint, VTarrush, Lacquer, Allied and Kindred Products Industry, nor
shall he give or permlit the giving of any advice or assistance, in
fac~ilitating sucrh exchange or replacement, nor shall he make or re-
ceive, or permit to be made or received, any concessions, allowances,
or gifts of any kidnd to promote or facilitate such exchange, pro-
vide~d that the restrictions imposed by this Section shall not apply to
any transaction and,/or sale made directly by a wholesaler or indi-
rectlJ: by him through a dealer wherein the ultimate nonindustrial
user Is dissatisfied with the quality of the merchandise. In such








eases the product of one manufacturer may be replaced either di-
rectly by th~e wholesaler or by him through the dealer with the prod-
ucts of another manufacturer, provided that both manufacturers'
products are stocked and distributed in the same territory at the same
time by the same wholesaler.
SECTION 2 (a). rStandcrcd Temws and Disoownt.--On and after the
effective date, the terms g-anted by wholesalers and/or distributors
for products of the Pamnt, Varnish and Latcque~r Manufacturing
Industry as defined in their Code shall not exceed: 2%l for cash ini
10 days, net 60 days, except artists' colors, on which the terms shall
be 2%0 for cash in 10 days, net 30 days. Except that discount to
Trade Sales Accounts may be extended to the tenth day of the month
following purchase and the discount to Industrial Sales Accountbs
may be extended to the twentieth day of the month following pur-
chase to customers who regularly discount in the month following
purschaste, and provided that not dae.iscount shall be allowed after the
(b) Datinge.--Except as specifically provided by this Article,
members of the Trade shall not grant any advance dating on the
sales of any products of the Trade.
(c) Sprmyg Stock; Orderes.--Datings on orders excluding those for
artists' colors to established dealer accounts shall1 be limited to dat-
ings on Spring Stock Orders for products of the Paint, Varnish and
Lacquer Mlanufacturing Industry as defined in the Code of that
Industry shipped at the distributor's convenience after October 15,
with an April 1st dating andi regular terms; only one order on any
one manufacturer's line to any one account.
(d) Newo Acowsnts.--Th maximum dating on trade sales initial
stock orders for products of the Paint Varnish and Lacquer Manu-
facturing Industry as defined in the Code of tha~tf Industry of any
one manufacturer's line to new dealer accounts shall be limited to,
four months from the date of shipment and with standard terms, pro-
vided that orders shipped between October 15 anJd December 1st in
any year may be with an April 1st dating and regular terms. Dat-
ings on initial stock orders of artists' colors from new dealer and/or
jobber accounts shall be limited to two months firomn date~ of ship-
ment and shall be sold on standard terms.
(e) Fall Stock Ordlers on Artists' C'olors.--Datings on orders to
establish dealer and/or jobber accounts shall be Ilimted to dating
on fall stocks orders and shipped at the wholesaler's convenience
after April 1, with a September 1 dating, sold on regular terms and
only one order to any one account. In t~he case of showp-card colors
and inks, which are subject to freezing, dating shall be limited on
spring stock orders shipped at t~he wholesaler's convenience after'
November 1st (or, in the event shipment is made by a water routee:
which is affected by the closing of navigation, this date may be ad-
vanced not to exceed ten days prior to the official closingl of navi-
gation over such route), with an April 1st. dating n odo
regular terms and only one order to any one account.
(f) AnticipatedE Discownis.--If any advance dating shall be per-
mitted under this Article, an anticipation discount may be allowed to
the extent of one half of one percent per month.








SECTION 8. (B) PricO Gutt~artfbid&-Guarantees against price decline
are prohibited except in the case of an order on which a dating has
been allowed, as herein provided, when such price guarantee may be
given for a time not to exceed the dating period granted.
(b) Timze Guara&ntees.-Definite time guarantees on the life and/or
service of the products of the Trade a~re hereby prohibited.
SECTION 4. COnsignm~ent.-No member of the Trade shall ship
goods on consignment except under circumstances to be defined by the
Divisional Code Authorityv, where peculiar circumstances of the
Trade require the practice.
SECTION 5. Retermed Go~ods. No member of the Trade shall
accept the return of merchandise from any customer without having
given prior consent to the return thereof, except in the case of defee-
tive products or where in some other way the member of the Trade
may be responsible. On such goods as are accepted for return in
accordance wFith prior consent given by a mcembe of the Teln rade,
reasonable charge 'not less than five (5)pretothsligpic
shall be made and the freight charges shall be charged to the ship-
per returning goods except in the case of defective products or where
m some other Iway the member of t~he Trade may be responsible.l
SwroIwO 6. (a) SeZlling Beolow Cost.--Destructive price cutting
is ain unfair method of competition and is forbidden. Any sale
shall be deemed prima face destructive price cutting if the net sales
price shall be less than the seller's net invroice cost plus cost of trans-
portation; provided, however, that no sale'shall be deemed destrue-
tive price cutting if made in good faith to meet existing competition.
()C'learanee Sales.--Bona fide sales for the purpose of closing
out discontinued, obsolete, or damaged merchandise may be made
at such prices and upon such terms and conditions as may be neces-
sary to effect their sale. Full details concerning such sales, includ-
ing the amount of such merchandise on hand and the date of its
purchase, must be reported to the Divisional Code Authorit a
least one week before the date of such sale. If the Divisionalod
,Authority shall so demand, any wholesaler making such sales shall
furnish to it proof that such sales were made in good faith. If at
any time the Administrator finds that the Divisional Code Authority
is abusing the authority granted to it by this Section, he shall
declare it inoperative either temporarily or permanently.
(c) Free Goods.--No goods shall be given free by any member
of the Trade either alone or in connection with the sale of other
merchandise, except where such free goods are given by a manu-
facturer and merely passed on 'by the wholesaler to his customer.
SECTION 7. Eme~rge~ncy Parvision.-W~hen the Divisional Code
Authority determines that an emergency exists in this Trade and
that the cause thereof is destructive price cutting such as to render
inefeciv orseioulyendanger the maintenance of the provisions
of this SupplementalCdteDvsoalCd uhrt a
request the Administrator, subject to such notice and hearing as he
may require, to declare such emergency and determine a rnunmum
markup to be added to the cost as established in paragraph (a),
Section 6 of this Article. During the period of the emergency it
shall be an unfair trade practice for any member of the Trade to
a See paragraph 2 of order approving this Code.






-11


sell or offer to sell any products of the Trade at such prices or upon
such terms or conditions of sale that the buyer will pay less therefore
than net invoice cost plus the minimum markup and cost of trans-
portation, except as provided elsewhere in this ALrticle.
When it appears that conditions have changed, the Divisional
Code Authority, upon its owfn initiative or upon the request of any
interested party, shall cause such deetermination to be reviewed. The
Administrator may at any time review such deteIrmnination and
modify or discontinue the operation of this Section.
SECTION 8. Subterfugre.--It shall be an unfair trade practice for
any member of the Trade to employ subterfuge directly or indirectly
to avoid or attempt to avoid the provisions of this Sjupplemental
Code, or of the Greneral Code, or the pqu rpoes nd intrent of the-
National Industrial Recovery Act, whicartoireeeml-
ment, provide better wages, promote fair competitive methods,
better business conditions, and promote thze public wPelfare.
ARTICLE V- POWER OF PRESIDENT TO MElOD)IFY

This Supplemental Code, and all the provisions thereof are exr-
pressly made subject to the right of the ]President in accordance
with the provisions of Sub-section (b) of Section 10 of the Act, from
time to time to cancel or modify any order, approval, license, rule
or regulation issued under Title I of said Act.
ARTICLE VTI FFECTrOT DIr

This Supplemental Code shall become effective ten (10) days after
its approval by the Administrator.
Approved G~ode No. 201--Supplement No. 18.
Registry No. 611M)6.




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