Supplementary code of fair competition for the replacement axle shaft manufacturing industry (a product group of the rep...


Material Information

Supplementary code of fair competition for the replacement axle shaft manufacturing industry (a product group of the replacement parts division of the automotive parts and equipment manufacturing industry) as approved on July 3, 1934
Portion of title:
Replacement axle shaft manufacturing industry
Physical Description:
11 p. : ; 24 cm.
United States -- National Recovery Administration
United States Government Printing Office
Place of Publication:
Washington, D.C
Publication Date:


Subjects / Keywords:
Automobiles -- Axles   ( lcsh )
Automobile supplies 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. 1404-33."
General Note:
"Approved Code No. 105--Supplement No. 2."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004939835
oclc - 652494306
System ID:

Full Text





For sale by the Superintendent of Documents, Washington, D.C. Price 5 cents

Approved Code No. 105 Supplement--No. 2

Registry No. 14041-33

(A Product Group of the Replacement Parts Division of the
Automotive Parts and Equipment M1anufacturing Industry)


DOCUggy .r-T.


This publication is for sale by the Superintendent of Documents, Government
Printing Office, Wasshington, D.C., and by district offies of the Bureau of
Foreign and Domestic Commerce.
At~lanta, Ga.: 504 Post Office Building.
Birminghamu, Ala.: 257 Federal Building.
Boston, Mlass.: 1801 Customhouse.
Buffalo, N.Y'.: Chamber of Commerce Building.
Charleston, S.C.: Chamber of Comimerce Building.
Chicago, Ill.: Suite 1706, 201 North Wells Street.
Cleveland, Ohio: Chamber of Commeree.
Dallas, Tex.: Chamber of Commerce Building.
Detroit, M~ich.: 801 First National Bank Building.
Houlst~n,, Tex.: Chalberr of Commerce Building.
Indlianapolis, Ind.: Chamber of Commnerce Bulildinlg.
Jacksonv\ille, Fla.: Chamnber of Comnmerce B~uildinlg.
liansas City, Rlo.: 1028 Baltimore Avenue.
Los AngFeles, Calif.: 1163 Solt~h B~roadway.
Louisville, Ky-.: 40S Federal Building.
M~emphis, Teirn.: 229 Federal Building.
M~inneiapolis, Mlinn.: 213 Federal Building.
New Orleanis, Lan.: Room 225-A, Customlhouse.
N~ew York, N.Y'.: 7341 Customhouse.
No~rfolk, Van.: 406 East Plume Street.
Philadelphia, Pa.: 422 Commercial Trust. Building.
Pittrsburgh, Pa.: Chamber of Commerce Building.
Portland, O~reg.: 215 N~ew Post Office Building.
St. Louis, Mlo.: 506 Olive Street.
San Francisco, Calif.: 310 Customhouse.
Seattle, W'ash.: 80)9 Federal Office Building.

Approved Code No. 105--Supplement No. 2



As Approved on July 3, 19f3



An application hlaving been duly madte pursuant to and in full
compliance w-ith the provisions of Tiitle I of the National Industrial
Recovery Act, approved June 16. 1933, for approval of a Code of
Fair Compet~ition for t~he Replacement Axle ~Shaft Mannufacturing
Product Group of the Replacement Parts D~ivision of t~he Automotive
Parts and Equipment Ma~nufacturmng Industry, a supplemental Code
to the Basic Code of the Aultomotie Par~ts and Equipment MLIanu-
facturing Industry, and hearings having been duly held thereon and
the annexed report, on saidl Code, containing findings with respect
thereto, having been made andi directed to the President:
NOW, THEREFORE, on behalf of the Presidenlt of thie United
States, I, Hugh S. Johnson, Administrator for Industriall Recovery,
pursuant to authority vestedl in me by Exnecutive Orders of the
President, including 'Executiv-e Order h'0. 65413-A, dated December
30? 1933, and otherwiise; do her~eby incorporate by reference said
annexedl report and do find that said Code complies in all respects
with the pertinent provisions and wFill promote the policy and pur-
poses of said Title of said Act; and dlo her~eby order that said Code
of Fair Competition be and it is her~eby approved; provided, ho~w-
ever, that the provisions of Article IV', par~agraph (10), insofar as
they prescribe a, waitinga period between the filing with the Code
Authority (iRe. actual receipt. by the Code Authority) and the ef-
fective date of revisedl price lists or revised terms and conditions
of sale be and they are herebyr stayedic spending my further order.
Adndinistrato~r fol~r Idustlri~d R;cover~ly.
Approval recommended :
Division Aldmlji istrator.
July 3i, 1939.
71726 *- 829- 14-----34 (1)


The Whitse H2ousae.
SIR I Th6 supplement. to thle Codle of Fair Competition for the
Automotive Parts and Equipmenlt Manul~facturing~ Industry covering
Fair Tr~ade Pr~actices forl thle Replacemeltnt Axsle Shaft M~anufactuzring:
Product Group, a sub-division of the said Industry, wcas submiitted
to the Aldministrator on Augaust 26, 19,3;3 by1 the Chairman of t.he
Replalcemient Axile Shanft MIanufacturerss representing approximastely
80%c of the total volume of sales and members of the trade.
The Hearing was conducted in WJashington on December 7, 1933
and the supp~!lemlent wa~s r~evisedl during the recess of this Hearing and
is submittedl in its present form for approval. Every person who
requested anm appearance, wsas properly heard in accordance with thle
statutory and regulatory requirements.
The Product Group is nat~ion-wide in charter and has expe-
riencedl but little expansion during the past five years.
AIRTIICLE I: states the purpose of the Supplementary Code.
AIRTI[CLE I[I accur!ately defines specific terms emnployed2 in the
Supple-mentary Code. This Prodtuct. Grroup is a division of the Auto-
molctive Parts and Equipmient nlanufacturing Industry and the labor
pro'vibions of its Basic C'ode as appIroved Nov-emberr 8, 193,3, are the
labors leavn\isions of this Sup>plemientary Code.
ARTICL~E III estab~lish~es an Administratiive Committee, con-
sisting of the Executive Committtee of the Institute anid one: addi-
tionlal membell~tr, to be selectedl at the discretion of the Administratorr
and one non-vocting memliberl, to be ayppointedr~ by the Admlinistrator.
It also providesa machineryS for obtainling statistics and t~he adminis-
tration. of this Code.
ALRTICLE IV sets forth the fair t~rad~e practices of this ~Supple-
merntaryy Code, which hlas been especially designed to effect fair
compel'titio-n in this Prod~tuct Group of the Industr~y.
~ARTICLE V provides against monopolies and monopolistic prac-
tices andl provides for the submission of sup~plemientary provisions
to this Supp-lemecntary Code or modifications thereof, and contains
the mandatory provisions contained in Section 10 (b) of Title I of
the Act, and states the effective date of the: Supplementary Code
shall mean the tenth d~ay after it has been app~roved.

The Dep~uty Admriinistrlator in his final report to mie on said Sup-
p~leaniental Code having found as herein set forth and on the basis
of all the prnicceeedings in this matter -
I find that:
(a) Said Supplemlental Code is wFell deltsigned t~o promote the
policies and~ purposes of Title I of the National Industrial Recovery

Act, including removal of obstructions to the free flow of interstate
and foreign commerce which tend to dliminish the amount thereof
an" &d will provide for t~he general welfare by promoting the or~gani-
za~tion of indlustry~ for thle purpose o~f coocpeirative nation amlongr the
trade grouDS. byr ind~ucingr andr maintaining unnited action of labor
and management, under adequate gov\erinmentall sanctions and sup~er-
vision, by eliminating unfair compiletitive pra~ctices, by p)romolting
the fullest possible utilization of thle p~resnt pr-oductive capacity
b of industries, by avoiding undcue resitrictionl of prodne"1tion (ex~cpt as:
r- may be templlorar~ily req~uir~ed~), by increasningr th~e consumption of in-
dustrial and ag riculturanl products through incrensing prchlin
power, by reducing andl relieving unem~ployment, by impr~oving
standards of labor, and by1 otherwise rehabilitatmng indlustryS.
(b) Said P1cirodct Group normally employs~ not more than 50,C000
employees; andl is not classifie by me as a major industry.
(c ) The Supp,~lementary) C'ode. as appl~roved~, complies in all r~slpctfs
with the pertinent provisionls of said Title of said~ ALct, including
.without limlitation Subsection (n) of Se~ction 3, Subs~ection (a) of
SSection 7 andi SCubsection (b>) of Sectioni 10 thereof ; and that the
applicant. Inst itute is a n indlustrial A~ssocia tion, truly r~epriese~nt at~ive
of the alfor~essid Indlustry; and that saidl Institute, imposes Ino
inequiitaible restrictions on ndlmissiion to membetrshi p therein.
(d) The Supple llmentary Co~de is not designed to and will not
permit monopolies or mnonopolistic practices.
(e) The Supp~lemienitary C'ode is not designed to and will not
eliminate or oppress small enlterprises and will not operate to
discriminate agAinst themi.
(f) Those engaged in other steps of thle economic process have
not been deprived of the right to be heard prior to approval of~
said Supplementary Code.
For these reasons, therefore, I have approved this Supp~lementury
A dE.mi listr~ator.
JULY 3, 1934.




Pursuant to the provisions of Article II of the Code of Fair Com-
petition for the Automotive Parts and Equipment Mianufacturing
Industry, dtuly approved by the President on November 8, 1933, the
following provisions covering fair trade practices and the adminis-
tration thereof for the Replacement Axle Shaft Mainufacturing
Product G~roup of the Replacement Parts Division of the Automotive
Parts and Equipmnent Mannufacturing Industry, which has been
organized as anl admlinistrative unit of the Automotive Parts and
Eq-uipm'ent Mannufacturin~g Indlustry, are hereby established as the
standards of fair competition for said Product Group, and shall be
bindling upon every member thereof.


The term Product Grroup as used herein is defined to mean
tihe p~roduc~tion and rl mi lanufacture of automotive replacement solid
pr'op:eller shafts, re~placement. axle shafts and or flanges for same.
The termn "' Member" or 1\lember of the Pr~oduct Group as used
heretin inc~luders, b~ut without limiitation, any individual, partnership,
association, corporation, or other forml of enterprise engaged in thle
prlodullctio~n andC or malnulfacturle of the products of the Product
Glcroup eiflthr as an emplloy~er or on his or its own behalf.
Thle termll Institute as used herein is definied to mean the Auto-
mo~tiv~e Rep~lacemient Alxle Shaft Institute., a trade association at
present having its hleadlquarters office in Detroit, Mlichigran, in which
as~sociationi no inequitable restrictions are placed upon membership.
Thle termn '' Basic Code "' as used herein is defined to mean the Code
of Fair competitionn for the Automotive Parts and Equipment
Maonufactulring~ Industry, as approved by the President on November
8, 1933.
The term Codle Aut~horityt as used herein is defined to mean the
Codle Auth~ority. designated in the Code of Fair Competition for the
Automnotive Par~ts and Equipmnent M~anufacturing Industry.


(1) (a) The Executive Committee of the Institute shall constitute
the Adml~rinistrat~ive C'onunittee to assist the Code Authority and
the Admiinistrator in the administration of the fair trade practice

provisions hereinafter set. forth and thle provisions of the Basic Code,
to which these fair tradle practices are! a supplement.. One adlditional
member may~~ in the dliscretion of the Adlministr~ator be add~ed to
represent non-mnembers of the TInstitute w~ho assent to and comply~
with this supplement, such additional member to bje selected by such
non-m~ember s of the Institute by a fair mnet~hod ap~prov,\ed by the
Admni nist ra tor.
(b) In addition to memllbership, as above providedl there may be
one additional mlember, without v.ote, to~ be appointed by th~e Adminl-
istrator, to serv.e without expernse to the IndrustryS for, suich termn as he
miay specify.
(2) 1\Ienllbers of this Pr~oduc~t G~roup shall be entitledl to participate
in and share the benectis of th~e netiv.ities o~f the Aidministr ativet
Committee and to participate in the selections of the me~mbers thereof
as hereinabove set forth, by assenting to andc compnl-lying wvith th re-
quirements of the Basic Cod~ce andl this suipplemnent, and sustaining
their reasonable share of the exp~enses of th~e admlinistratio n of thiis
supplement. Such reasonable share~ of such expenses shall be deter-
mined by the Adlministrative C'omimittee, subjlc~t to rev~iew by thle
Code Aut.hor~ity and byI the A~dminist~ftrator on thle basis of volume of
business and 'or such other factors as may be dlelleme equitable.
(3) (a) The Administratbive Commnittee: shall, subject to the dis-
approvaul of the Cod~e Author~it.y and the Administrator, have thre
power to adopt by-law~s and rules andl regulations for its procedure
and to obtain from members, directly or through an imparltial agency,
such information and reports as are required for the administration
and enforcement of this supplement; to cooperante with the Adminis-
tra~tor in regulating the use of any N.R.A. insig~ni, to hear and adjust
complaints, to initiate, consider and recommend to the Code Author-
ity\ for trans~imittal to the Aldministr~ator further fair trade pDract~ice
provisions to goverrn the members of this 1Product Group; and to dlis-
charge the other powers andl duties provided in this supplement.
(b) If the Administr~ator shall determine that any action. of the
Administrative Commiittee or the Code Author~ityS or any agency
thereof may' be unfair or unjust. or contrary to the public interest.,
the Admninistrator may require that such action be suspended to
afford an opportunity for investigation of the merits of such action
and further consideration by such Adlminist~rat~ive Committee or the
Code Authority or any agency thereof pending final action which
shall not. be effective unless the Adtministrator approves or unless he
shall fail to disapprove after th~irty days' notice to himn of intention
to proceed with such action in its original or modified form.
(c) Each trade or industrial association directly or indirectly
participating in t~he selection or activities of the Admninistrative
Committee shall (1) impose no inequitable restrictions on memiber-
ship, and (2) submit to the Administatorar true copies of its articles
of association, by-laws, regulations, and any amendments when
made thereto, together wvith such other information as to mnember-
ship, organization, andi activities as the Administrator may deem
necessary to effectuate the purposes of the Act..
(d) I~n order that the Administrative Committee shall at all times
be truly representative of the Prodluct Group and in other respects

comply with the provisions of the Act, the Administrator may pre-
scribe such hearings as he mnay deemn proper; and thereafter if he
shall find that the Admninistrative Coiinuittee is not truly repre-
sentative or does not in other respects comply with the provisions of
the Alct, miay require an appropriate modlificat~ion in the method of
selection of the Admninistlratiive Commnittee.
(4) All members o~f thiis Proluc~t G1croup shall be bound by the
provisions of the Bas~ic Codie. For th~is purpose, all provisions of the
Basic Code are hereby dleclalred to be a part of this supplement.
In case of any conflict between thle provisions of this supplement and
the provisions of the Basic Cod;e, the pr~ovisions of the latter shall
(5) The Admlnin istra tive Commni ttee shall cause to be formnulated
accounting miethiods and principles o-f cast, findlingo and~, or estimating
capable of use of all members of thle Prodluct Group. After such
methods and princip~les have been formulated and approved bjy the
Admninistrator, full details concerning then shall be miad-e available
to all members. Thier~efter all members shall dletermnine und/'or
estimate costs inl accordance with such m~etho~d and principles.

In addition to the provisions of Secction C of Ar~ticle VI of the
Basic Code, the following described aIcts shall constitute unfair
(1) Se~lling Below lost.--(a) To sell t~he pr1oulc~ts of this P'roduct
Group at prlic'es below cost, determined~ in thle manner' prIovided for
in Article II[I, paragraph 5, of this sup~plemnent.
() Nothing in this suppllemelnt. shanll prev~\ent. a mllemr fromn
sling at below cost as computed in n~cordainnce with thle prov-isions of
~Art:i(-e III, paragraph 5 here~tof, providing that it is necessaryS to do
so to meet a compnletitive price.
(c) W~hen the Administrative Comm-llittee dleter~mines thant an emler-
g'"ncy exists in this PIroduct Group andc that the enuse thereof is
des~tructive pril'e-cutting~r such as to r~ender inetrective or seriously
endanger the mazintenance of the provisions of the Basic Code andl,*or
this supplemenii~t, the Admnlisitrati v~e C'ommittree may cause to be
d'etermlinedt the lowcpest reasonable cost of any of the p~~roducts of this
Product Group, such deltermIinatio~n to be subject, t~o such notice and
hearing as the Administ en;torl may; require. Thle Admninistrlator may
approve, disap'provTe, or modify the dleter~mination. Ther~eaft.e~r, dlur-
ing the period of the nemergenlcy, it shiall be anl unfair trade practice
for any mnemnber of the Product Groulp to sell or offer to sell any
p~rodurcts o~f the ]Product Group for which the lowest reaso~nable cost
has been determined at such prices or upon such termlls or conditions
of sale that the buyer will pay less therefore than thle lowrest rea~son-
able cost of such products.
W7hen it appears that conditions hav\e changed, the Aidministrative
Committee, upo~cn its own initiative or upon t~he request of any in-
terested party, shall cause the d-eterminat~ion to be r~eviewved.
(2) Conrlnerc~ial Bribery.--To give or permit to be given, or offer
to grive, directly or indirectly, money or anythingr of vaRlue, to any
purchaser or prospective purchaser or to any officer., emnploylee, agent,

or representative of such purchaser for the purpose of influencing
their employers or principals in t~he purchase of any commodity, with
or without. the knowledge of their emiployers or principals. This
paragraph shall not. be construed to prohibit free and general dist-
tributionn of articles commnonly used for advertising except insofar
as such articles are actually used for commercial bribery as herein
(3) Im n itation, of t tlc7rriXade-mak-T imitate orr copy a compete itor's
tradle-mark ? mnaklingr, trade name, or exc~lusive and established
design which identifies thle manker or vendor of thre product, w~ith thie
purpose or effect. of misltnding or deceiv8ingr any purchaser or
prospective purchaser.
(4) In~ccuratef advertfisin~g.-To publish advertising whetherr
printed, rad-io, display, or of any other nature), which is minsleadinga
or inaccurate in any material particular, or to misrepresent. in any
way any product (including but without, limnitation its use, trad'e-
mark, grade, quality, quantity, origin, size, substance, character,
nature, finish, material, content, or preparation) or credit. terms,
values, policies, services, or the nature or form of the. business
(5) Guccrantee.--To guarantee against advance or decline in the
price of group products, or to enter into any agrrpeement w~ith a cus-
tomer to protect or reimburse him in any manner against dlecline or
advance in prices as app~lying to the stock of merrchandise already on
hand ald 'or in his or its possession.
(6) ConsignmIren t-Flloarting C~redit or Led~geur Bo77lon~r~s.--To place
group produlrcts with any trade outlet on a c~nisiginment, basis or on
a floating credit, or led-ger balance bansis.
All consigrnments, floating credit, and/or ledger halanlces existinga
on the date of the approval of this sup-plementn shall be terminated
within 60) dlays t~hereaft~er by either of the following me~thods:i;
(a y return of such merchandise to the owrner.
()By customer acce~t~inga billing for such consignmlentsi, float~ing
credlits, andl 'or ledg~er balances~ for payvment, under regullar terms as
set forth in paragraphn 1:3 of this Ar~ticle.
(c) Provided that nothing in this Sectio-n shall require the termi-
nation of existing contracts which, by their termiis, cannot be termui-
nated within 60 days after the date of approval of this suplemltrent~,
subject to the condition th)at copies of such contracts shall be filed
with the Administrative Conuinittee.
If any application of this Section should w-ork any unjust hard-
ship, upon any member of the product group or upon any customne~r,
such member or customer may appeal to the Code Authority and the
Administrator, w~ho shall have powcier to grant such relief as justice
mayr requir~e.
(7) L~ifting Comnpetitore' Stodc.--To liquidate, purchase, or ac-
~ept~ a. cope~~tl.itor '~s product from any buyer or to agree to do the
(83) Coelrion,..--(a) To require that t~he pulrchase of any goods
be a prerequisite to the pur~chase of any Product G~roup gos
(b) To requiire that thne purchanse of any Piroduct Grolup gods by
any customer be a p~rerequisiti e to the neceptance by the member of
the return of any good~s froml such customer.

(9) Filing of prices sch~Feules.-Failuree to file with the Adminis-
trativec Committee a. complete and itemiized schedule of his respec-
tive selling prices applying to each classification of his trade cus-
tomlers in the after-mlarklet.
Thcse selling pr1ices shall be the final net prices or list prices and
dliscounts at wh.lir'h the mnember's group proucLIts are billed to the
resperctive clositie~ntioni of hiis customers as filled and shall also set
forth the poclicy~ olf th~e memberi.~~i as to freight f:low-ances or any other
pr Iice or selling concenstionl to- such~t customers.
After thle tilingr o~f price schedlules a Group l~ieber shall not
make any salle o~f ori offers tor sell any group product, to any of his
clnssified~ cu.stomers~l at a niet r~ealized price other than that set forth in
his own schedu'cllle~ of se~llinlg pr~ices to sulch classification, until hie Imrs
filled a reist\jed~ scheduled~ as pr~ovided for in Paragrap~h 10. Any in-
fraction olf th~i regu~la~tio n in wh)ole or in part shall constitute a Code
Violatio)n ecep-rt inl the cases of members disposing of dropped lines
or surplus tstcksl; or inverntories which must be conver~tte into cash to
meet immeiaii~te hul~ncial needs~, in which cases Article V'I, Section C',
Paragraphl 2 of thle Baii~c Code shall apply.
Each miemb~r~1 of the Product G~roup shall provide and furnish the
Admlinistrativee Conuinittee w~ith suf~ieient. copies of price schledules mn
each instanlce to, p~'.,'roid for t.he mailing of a copy to each member of
the Grou.'~P The~I Administrative Committee shall likewise make such
schedules~ available for inspection byv pur~chasers or prospective pur-
chanser~s of thle c~las~ification or classifications affected.
(10) Change~~Lz;r~~ s i che~dules.-Not~hing in this Codle shall be con-
strued to prieve~nt any m member from changing or revising from time
to timne hiisj 5checule of selling prices andl or the classification of his
tradle customerls~. Th~ese changes or revisions shall not become effee-
tive, however, until ten days after the date of forw~arding by regis-
tc~tered mail to~ the~ Admin;t~ nit.rat Committee by~ t~he filing~ member.
After th~e ten-dayl termI1 has elapsed the new schedlules shall become
finding upon,1 the filing member in the samie manner as was the orig-
inal schlelule w~hichl it replaces.
Prompllltlyg upo~n receipt of any such revision it, shall be the duty of
the Admlini tr~ative CIommittee to notify all other Group members,
furnlishning thetm w~ithi an exact copyL or' duplicate of the revisedl sched-
ule, any of whomli may;1 file, if thley so desire, revisions of their own
bched'cule's. wh~ilch if filed prlior to the date on which the first revised
ychedlules bec~comelt efec~tivet~, may become effective on tlhat dlate. Thle
Adm ini st ra t i e Conunli t tee shallI li kew ise make such rev isedl schedules
available folr insptctionr by p~urchalsers or prospective purchasers of
the classifientionl(I or lass;~ifieations affected.
The using of any r~evisedl or substituted selling price in billing a
classifiedl customeril prioicr to thle exp:iration of t~he ten-day period
herleinz requl~ired~ ihlll co~nistitulte a C'ode Violation. Failure of a
member to file withl the Admliinistrative Committee any revised or
sulbstitutedl p~ic~e .cheldullesi shall constitute a. Code Violation.'
(11~) S~chedl,.a on Irewl Symbeiirs.x, ctr.--In the case of new memi-
ber~s or newv items otleredl as add~itiolns to a miember's Group Products

r see paragraph 2 of ordlcr apiproving this Code.

Line, and where no previous selling price has been fixed by the
member reporting, the ten-dlay interim as outlined under p~aragraph
10 does not apply, but insteadl the initial selling price as established
by the member becomes immlediat.ely effective.
It is compulsory, however, for the member to file withl the Ad-
ministrat~ive Commit~tee a copy of such initial selling prices and
schedules on such new members or new items in the samie manner
as outlined under paragraph 9. Failure to so file constitutes a Code
(12) I~'arehousing.- ( a ) To sell from w arzh ouses or factories
pick-up items at the maximum discounts or minimumi net selling
prices for the particular classification of trade customer involved to
outlets other than those enrrying a representative stock of the
supplying member's products.
(b) To warehouse stocks w~ithl any customer or on premises owned
or controlled in whole or in part., by any~ customer; provided that
nothing heremn contained shall prohibitb the warehousing of stocks
in a duly established public warehouse., whether or not any customer
has an interest therein.
I(13) TermS.--To extend credit terms of sale other than the fol-
(a) Cash Discounts shall not be greater than 2%0 10th, proxy ,
(b) Due date for net payment shall be not later thanll the ~last day
of the month following date of shipmlent.
(c) No cash discount shall be allowed onl Trade Atccepl~tance or
Note Set~tlements.
(d) Each members shall provide that when an account is not paid
on due date, same shall become interest-bearing, at thne r;te. of 6%~,
30 days thereafter, and if Trade Acceptance or Note is accepitedl
for settlement, such Trade Acceptance or Note shall likewise bear
6%~ interest fr~om the end of the 30-day period, as above.
(e) The maximum terms which may be grantedl on initial orders
are to be: limited to three months, without; interest, equal payments
to be made monthly without cash discounts, except wnherle payment
comes within the discount. period.
(f) Customners opening branch stores can be considered to comne
within the three months' plan when placing the initial order -for the
branch st~ore.
(14) S~pecial brands or u~nbran~)ded merchandisve.--To sell to any
purchaser for purpose of resale any products of the Product Group,
except under the member's owfn brand or trade name, subject to the
following exceptions:
(a) Sales pursuant to any existing arrangement with any pur-
chaser of products of the Product Group under the brand- or trade
name of such purchaser; pr-ovided, that within fifteen days after
the approval of this surpplement. each such selling member shall file
a list of such purchasers to whom he sells, together with the discounts
or net prices at which such products are sold to such purchasers,
with the Administrative C~ommittee. If atny member who, at the date
of approval of this supplement, is selling pursuant to such an ar-
rangement to any purchaser, should discontinue, such sales to such
purchaser, any other member may thereafter sell products to such

purchaser under the same brand or trade name as had theretofore
been used by such purchaser.
(b) Sales to any miembe~r under the brand or trade name of such
member, if such member hims~elf manufactures at least 75%r by dollar
value of thle products of the Produc:t. Group sold by him; provided
that each such selling member shall inuinedliately 61le a list of such
p~urcharsingr membe1:ltrs to- whom~ll he sells, together withl their brands
and /or trade namles, wTithl the Administrative Committee.
(c) Sales~ to a p~urrchaser undler thle branid or trade name of such
purchiaser if sulch selling member dloes not sell any product of the
Product Grocupl under hlis orwn brandi or tradte n-ame; provided, how-
ever,. that any\ suc~h .selling m~ember who mnl~ufactures products of
the Protlw-t Grouplll undler the brandl or trade name of thle purchaser
must inalneliatelyv tile w~ith t~he Administrative Committee. a list of
sulch purc'hasers~ to whlom he sells, together wfith their brandls and/or
trade names.2~;
If any app~lientio~n of this Section should work any unjust hardship
upon anly mem~rber of the Product Group or upon any customer, such
mlembler' or custfomerP mayn appeal to~ the Administrator who shall have
power' to grant. slc~h relief as justice may require.
(15) foulvinei Reatefs ---To grant toc any~ customer any rebate or
bonus based up~on the total v~olumie of purichases of such customer
ovecr a period oif t.imne, whether in thle form of money or otherwise.
This Section shall not be construed to prohibit bona fide quantity
(16;) C'ol~lrct te-leram~ns.-- To absorb the transmittal costs of tele-
graph~ or telephone borders.
(17i) Hous~e Org!7l~ans Catauo~los, etc.--To indulge in any prnetice by
whichl miember~s patronlize advertisements or donations in the further-
ance of customers' house organs, customers' catalogs prepared by
tiemn, other than entalog sheets or catalog plates ordinarily supplied
by the manufac-tul~re except as may be authorized by tihe Admninistra-
tiv-e Commnittee
(18i) C'lini~c.v-To exhibit at. any clinic, or show, either National
or Local, except as miay be nut~horized by the Administrative Com-
mittee. If thc A~dministrative Committee should deny authorization
or should fail to ta;e notion upon any application for such aut~horiza-
tion within fifteen dayns, the members affected may appeal to the
Adminirstrator~, whlo shlall hiave power to grant relief.
(19) Re turnled G~ods.--(a) Except in case of breach of warranty
or as many bje otherwise pr1ovided by' applicable State LawV to accept
the return of groupll productss except. for merchandise credit.
(b) Except in case of brechcl of warranty or as mlay be otherwise
prov-idedZ by aIpplica~ble State Law, to allow the return of Group
Products without a handclinlg charge to the customer which ade-
quately refl~ctts the cost of rehandling, except when:
(1) The customerlc returns group products within 60 days
from the dlate of purchase.
(2) Thle customer~i recturnis group products from an initial
stock~ border purlchlased within one year prior to date of return.
(20) Exceptt as may be otherwise pr~ovidedl by the Admninistrative
Committee, subject. to the ap~provanl of the Admlinistrator, the pro-
visions of this Code with regard~ to prices, discounts, deductions,

allowances, extras, commissions, andl or termsll o.f sales, shall not
apply to direct exporilt sales or to sales in course of expor~t (i.e. sales
destined ult~imately~ for~ expor~lt.)j or to sales- of'ials used in the
manufact uree of pr~oduct.- for export.t
(21) The p~rovisions o~f thiis Arlticle shall apply only to sales to
the Trade Classification~ inl Paragraph~n, 14 andl to Tradce Classifien1-
tions established pursuant to thle pr~ovisionss of Paragraph 9 of this


(1) No provision of this Co~de shall be so applied as to permnit
monopolies or monopolistic pr1ac~tices, or to eliminate, op~press, or
discriminate against small enterprises.e~
(2) Such of the provisions of thiis supplemnten as are no~t required
to be included her~ein by the Alct mnay, w~ith the approval of the
Adlminlistrat~or, be mlod~ifiel or elimninated upon proposal byr the
Product Gr~oup or any member thereof if it. appear that the public
needs are not being served: thiereby! andc as changes in circumstances
or experience may' indlicate.
(3) It. is contempin ted tha~t f~omi t ime to t u ne supplemenn t ary pro-
visions to this sruppelemenlt or mnodlifications thereof will be submitted
by the Adlminist~rative Commnittee through the Code ALuthority for
approval to prevent unfair competition mn price and o-th-er unfair
andl destructive competitive practices and to effectuate the purposes
of the Aict.. Upon approval b~y thne Aidministrator after such notice
andl hearings as he may prescribe, such supplementary provisions or
modlifications shall become bindingf as a part of this supplemlent..
(4) As requrir~ed by Section 10 (b) of Title I of the Act, th~e follow-
ing provision is contained in this supplement: The President may
from time to time canlce~l or modify any order, approval, license,
rule, or regulantionl issued~ under said Title.
.(5) No member of this Product Group shall be held to have con-
siented t~o any~ modifientio~n of this supplement or to any provision
or int~erplretation of the National Industrial Recoveryr Act if declared
unc~onstitutio~nal by the. Supreme C'ourt of the Ulnited States.
(6) V'iolation by any member of this Product Group of any pro-
vision of this supplement is an act of unfair competition, and t~he
offender shall b~e subject to the penalties imposed by the Act.
(7) The term "i Effective Date as used herein means the 10t~h day
after this supplements shall have been approved by the President.
Approved C~ode NIo. 105--Supplement No. 2
Registry No. 1404--33.

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