NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
(A Division of the Fabricated Metal Products
1Manufacturing and Mletal Finishing
and Metal Coating Industry)
AS APPROVED ON MAY 10, 1934
For sale by the Superintendent of Documents. Washington, D.C. - Price 5 cents
Approved Code No. 84--Supplement No. 23
Registry No. 1104-06
GOVERNMENT PRINTING OFFICE
This publication is for sale by the Superintendent of Documents, Government
Printing Offce, WVashington, D.C., and by district offices of the Bureau of Foreign
and Domestic Commerce.
DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE
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Approved Code No. 84---Supplernent No. 23:
SUPPLEMENTARY CODE OF FAIR COMPETITION
MACHINE SCREW MANUFACTURING INDUSTRY
As Approved on May 10, 1934
APPROVITNG SUTPPLEMRENTARY CODE OF FAIR COMPETITION FOR THE
11ACHINE ScREV DLANUJFACTURING INDUSTRY
A DIVISON OF THE FABRICATED MIETAL PRODUCTS MAINUTFACTURING AND)
~METAL FINISHING AND MIETAL; COATING INDUSTRY
~An application having been duly made pnursuant to and in full
compliance with the provisions of Title I of the Nat~ional Industrial
Recovery Act, approved June 16, 1933, and in accordance with the
provisions of Section I of Article VI of the Basic Code for the Fatb-
ricated Mletal Products M~anufacturing and 1Metal Finishingo and
Metal Coating Industry', approved Nov-emb~er 2, 1933, for apoa
of a Supplementary Code of Fair Competition for theMchn
Screw MZanufacturinga Industry, and hearing having been duly held
thereon; and the annexed report on said Supplemenltary Code, con-
taining findings with respect thereto, having been made and directed
to the P~resident:
3NOW, THEREFORIE, on behalf of the ]President of the U~nited
States, I, Hugh S. Johnson, Administrator for Industrial Recovery,
pursuant t~o authority vreste~d in mle bNy, Executive Orders of the
President, including Executive Order No 543--A dated December
30, 1933, and otherwise; do hereby incorporate reference said
annexed report and do find that said Supplsementary Code complies
in. all respects with the pertinent provisions and will promote the pol-
icy and purposes of said Title of said Act; and do hereby order that
said Supplementary Code of Fair Competit~ion be and it is hereby
approved; provided, however, that the provisions of Article V, Sec-
tion 2, insofar as they prescribe a w~aitinga period between the filing
with the Code Authority (or such agency as may be designated in the
Code) and t~he effective dat.e of price lists, as originally filed and/'or
revised price lists or revised terms and conditions of sale, be and they
hpherb are stayedl pndngln my furrther Order.
Huou S. JOHNSON,
Administr'ator for Inldustrial Recovery
A. R. GLBNCY,
11ay 10, 0934.
REPORT TO THE PRESIDENT
The White Ho~sle.
SmR: This is a report on the Supplementanry Code of Fair Com-
petition for the Manchine: Screw M~anufacturing Industry, a diviision
of the Fiabricated Metal Products Mannufacturing and M~etal Fin-
ishingr and Me~tal ~Coatingr Ind~ustry, the hearing having been con-
dulctedl thereon in Washington, I).C., Februaryg 2, 19;34, in accordance
wgith the provisions of TIitle I of the National TIndust~rial Recovery
The. Machine Screw Mlanufacturing Industry! being truly repre-
sentative of this division of the Fabricated M\;et~al Products Mlanu-
facturing and M~etal Finishiingr and Mietal Coating Indulstry, has
elected to availzi itself of the option of submit~tin g a. Supplementary
Code of Fair Comp~etition, as provided for in Sect~ion 1 of Article
VI of t~he BIasicCoe for the Fabrient~ed Mietal Products Maanu-
facturing and M~etal Finishing and M~etal Coating Industry ap-
proved by you on the second dlay of Novetmber, 1)3;3.
RisemiE OF THIE COD)E
Article I states the purpose of the Supplemlenta~ry Code.
Article II accurately defines specific. terms emnployed in the Sup-
Article IIII: This Industry is a div-ision of t~he Fabricated Metal
Products M~anufacturing and Metal Fiinishing anld Mect~al Coating
Industry and t~he Inbor provisions of it~s Basic Code, as approved
November 2, 1933, are the labor provisions of this S~upplem~entary
Article IV establshes a S~upplemnentary Cod Authorit~y consisting
of five (5) members to be elected by the members of thle Industry
at a meeting called by the Temporary~ .Supplementary Code Com-
mittee, and gives the Adinistrator the authority to appoint one
additional member without vote andl provides machinery for ob-
taining statisticsi and the adminlistration of the Supplementary
Article V provides for methods of setting up andl revising price
Article VI provides for determining thle lowecst reasonable costs
of the products of this Industry.
Article VII, sets forth the unfair trade practices of this Supple-
mentary Code which has been especially designed t~o off set unfair
competition in this division of the Indlustry.
Article VIII provides against mlonop~olies and moonopolistic
Article IX contains the mandatory provisions contained in See-
tion 10 (b) and also provides for the submission of proposed amend-
ments to the Supplementary Codle.
Article X recognizes that price increases be limited to actual ad-
ditional increases in the seller's costs.
Article XI states the effective date and duration of this Supple-
The Deputyg Admninistrator in his final report to me on said Sup-
nplmentury Codel having found as herein set forth and on the basis
of all the proceedings in this matter:
I find that:
(a) Said Supplementary Code is well designed to promote the
policies and purposes of Title I of the National Industrial Recovery
Act, including removal of obstruction to the free flowr of interstate
and foreign commerce which tend to diminish thLe amount thereof
and will provide for the general werlfareS by prmonting the organiza-
tion of industry for the purpose of cooperative action among the
trade groups, by inducing and maintaining united action of labor
and management under adequate governmiental sanctions and super-
vision, by elimlinating unfair competitive practices, by promoting
the fullest possible utilization of the present productive capacity o
industries, by avoiding undue restriction of production (except as
may be temporarily requiredl, by increasing the consumption of inJ-
dustrial and agricultural products through increasing purchasing
power, by reducing and relieving unemployment, by improving
standards of labor, and by otherwise rehabilitating industry.
(b) Said Industry normally employs not more than 50,000 em-
ployrees; and is not classified by me as a major industry.
(c) The Supplementary Code~ as approveed complies in all respects
with the pertinent provisions of said Title of said Act, including
without limitation Subsection (a) of Section 3, Subsection (a) of
Section 7, and Subsection (b) of Section 10 thereof ; and that the
applicant group is an industrial garoupl truly. representative of the
aforesaid Indust~ry; and that said association imnposes no inequitable
restrictions on admission to membership th~eremn.
(d) The Supplementary Code is not designed to andl wiUl not per-
mit monopolies or monopolistic practices.
(e) The Supplementary Code is not designed to and will not elim-
inate or oppress small enterprises and will not operate to discrimi-
nate against them.
(f) Those engaged in other steps of the economic process have not
been deprived of the right to be heard prior to approval of said Sup-
For these reasons, therefore, I have approved this Supplementary
Honc S. JoHNSON,
MAY 10, 1934.Amnsrtr
SUPPLEMENTARY CODE OF FAIR COMPETITION F'OR
T"HE MACHIINE SCREW MANUFACTURING INDUSTRY
A DIVSION OF THE FABRICATED MrETAL PRODUCTS MANUFrrACTIURING ANq
MIETA~L FINISHING AND METAL COATING INDUSTRY
ARTICLE I FURPOSES
To effectuate thle policy of Title I of t~he National Industrial Re-
cover~y Act, thle fLollowing provisions a~re established as a Supplemen-
tary Code of Fiair Competition fo thte M~achine Screw Manufacturing
:Industryr, pursuant to Article VI of the Basic Codle of Fa~ir Com-
petition for the Fab~ricated Muetral Produicts M~anufact~uring and
MIetal 3Finishing and MSJetal Coat~ing 'Industry, approved by the
President. on the! 9nd day o~f November, 1933, the provisions of this
Supplementary Code shall be the standard of fair competition for
such Industry and shall be binding upon every member thereof.
ARTICLE 11- EFINITIONS
SECTION 1. The terms C" President ", '" Act "' and "L Administrat~or ",
as used herein, shllPI mean respectively, the President of the United
States, the National Industrial Recovery Act, and the Admiinistrator
for Industrial Recovery, under satid Act.
SECTION 2. The term Aladine Screws means all ferrous and
noni-ferrojus sc~ewfs commonly known to the trade as machine screws
muanufactulred by a cold or hot upsetting process having screw
threads conforming to American National Screv Threads as ap-
proved by the United States Department of Commerce, Bureau of
Standards, April 10, 1933 (MRiscellaneous Publication No. 141) and
heads conformnin~g to .American Standard Association Report No.
B18C0-1930 as indiorsed by thre United States Departmnent of C~om-
muerce, Bureau of Standards (Miscellaneous Publication No. 141,
page 116i), or threaded product by any other name having screw
threads of the same standard, and head dimensions and, or other
characteristics the same as, or similar to, those embodied in machine
screws, w-ithr slotted, not slotted, flat, round, oral, fillister, or other
style or shape of head m~anufactured by a cold or hot upsetting
process, and used with nu~ts or in tapped holes.
SECTION 3. The term '"product means and includes `L Maichine
Screws as that term is defined inr Section 2, and also includes
headed, threaded, punhed and/or bent products fabricated with
ferrous or non-ferrous mnetals by thie producers of "' Machine Screws ",
but not including products which are subject to other particular
code or codes appr~oved or which are hereafter appr~oved by the
President. The term Machine Screws also includes all stove
bolts irrespective of type of screw thread.
SECTION 4. The term "L Industry means and includes the business
of manufacturing Miachine Screws and/,or product for sale.
SECTION 5. The term M~ember of the Industry as used herein
includes, but without limitation, any individual, partnership, asso-
ciation, corporation or other form of enterprise engaged in, the
Industry either as an employer or on his or its own behalf.
SECTION G. The terml employee as used herein includes anyone
engaged in the Industry in any capacity receiving compensation for
his services, irrespective of the nature or method of payment of
SECTIONu 7. The terml employer as used herein includes anyone
by w~homn any such employee is compensated or employed.
SECTroN 8. The termn Basic Code as used herein is defined to
mean the Basic Code of Fair Competition for the Fabricated M~etal
Products Ma~nufacturing and Mietal Finishingr and M~letal Coating
Industry as approved by the Presidlent on the 2nd day of November,
SECTION 9. The term member of the Code as used herein shall
mean any member of the Industry who shall have assented to the
provisions of this Sup~plementary Code by instrument in writing
duly filed with the Secretary.
SECTION 10. The term "' Supplementary Code Authorit~y as used
herein is defined to mean the agency which is to administer this
SupplementaryF Code as hereinafter provided.
SECTION 11. The term "L Bureau as used herein is defined to m~ean
the United States Manchine Screw Selrvice Bureau, or irts successor.
SECTION 12. The term "L Executive Committee as used herein is
defined to mean Executive Committ~ee of the United States M~achine
Screw Service Bureau.
SECTION 13. The term Secretary as used herein is defined to
mean Secretary of the United States Manchine Screw Service Bureau,
or such other impartial and confidential agency as the Supple-
mentar~y Code Authority may designate.
ARTICLE III--EI\1PLOY31ENT PROlTSIONTS
This Industry is a division of the Fabricated M~etal Products
Mranulfacturing and Mletal Finishing and Mletal Coating Industry
and the wange, hour and labor provisions in ArIt~icle III of its basic
code as approved by the Presidient. November 2, 1933, including
Section 1 of said Article III by which the provisions of Subsections
(1), (2) and (3) of Section 7i (a) of Title I of the Act are made
conditions of this Code, are specifically incorporated herein and
made a part hereof as the wFage, hour and labor provisions of this
ARTICLE IV--ORGANIZATION AND ADMINISTRATION
SECTION 1. During t.he period not to exceedl sixty (60) days followv-
ing the effective date, the Executive Committee shall constitute a
Temporary Suplplementary Codle Authority, who shall have all the
powers and duties of the Supplementary Code Authorit~y herein set
forth, until the Supplementar~y Code Authority is elected. There
shall beti~ constituted within the sixty-day period a Supplementary
Code Authorint~y consisting of five (5) members to be elected by the
members of the Indusjtry, as hereinafter provided, at a mleetinga called
by t~he Temzporalry Supplementary Code Authority, upon ten days'
notice sent by registered mail to all members of the Industry whose
names can be ascertained after diligent search, who may vote either
in person or by proxy. The members of the Supplementary Code
Authority first elected shall serve until the following annual meeting
of the Bureau and/or untl their successors are elected, and there-
a after, members of the. Supplementary Code Authorit~y shall be elected
immediately afte suc annual meeting of thle Bureau to serve until
their successors are. elected, and a ny ember shall be eligible for
re-election. Notice of eachl election shall be sent in the manner above
provided. The membership of the Supplemnentary Code Authority
shall be made up as follows:
(a) 1. Fitour (4) members who shall bLe mnembers of the Industry
elected byr a maJorityS v\ote of the members of the Bureau present in
person or represented by proxy, each member to have one vote;
2. At any' timle upon the, requst in writing of twenty-five per
cent (259') of the members of th Bureau, the rSupplemenltary Code
Authority~ shall call a meeting of the members of the Bureau upon
the notice above provided, for the purpose. of electing successors to
such. four mebers of the Supplem~rentaryr C~ode Authorityv to be
elected in the samne manner as provided 1in Sub-Paragrraph 1 of this
Prtrp(b) One (1) member who is not. a member of the Bureau elected
by majority vote of the members of the Industry, not members of the
Bureau, present in person or r~epresentedl by3 proxy, eachl mlembler to
havre one vote;
(c) A vacancy in thne mIembership of thec Supplementary Code
Authority may bje filled byp majority vote of thle remnaininga members
of the SupplementayS code Authority;
id) In addition to the above the Aidministra~tor may appoint one
(1) repre~sentativ~e without vote and without expense t~o the Indlustry
an ess the Supplementary Code Authority agrees t~o pay suchl expense,
to serve on said Supplemnentar~y Code Authority in the ad.ministrantion
of this S5upplemecntary Code. Said represent~ative shall be given
reasonable notice of all meetings of .the Sulpplement~ary Ciode
SECTION 2. AQny Associatio:n~/Institut~e and/or Bureau directly or
indirectly participating in the selection or activities of tle Sp
pIlementary Codle Authority shall (1) impose no inequitable restric-
tions on membership, and (21) submit to the Adlministrator true
copies of its Art~icles of Association, Byp-L~aws, Regulations and any
amendments when made thleretoj, to~gethner with such other informa-
tion as to membership, organization, and activities as the Adminis-
tr~atorr may deemn necessary to effectuate the purposes of the Act.
SECTIONI 3. Ill Order that the Suppleme~ntary Code Authority shall,
at all times, be tirul :repr~esentative of the~ Indust~ry and in other
respects comply with the provisions of the Act, the Admninistrator
mnay ~prescribez such Hearings as he may deem proper; and, there-
after, If he ~shall find that the Supplementary Code Authority is not
truly r~epresentative or does not in other respects comply with the
provisions of the Act, may require removal of any or all of the
members thereof and/or may make an appropriate modification or
modifications in the method of selection of the Supplementairy Code
SECTION 4. The Supplemientary Code Authorityv is hereby consti-
tuted the Agency to administer the provisions of this Supplemnentaryy
Code and to collect and distribute all statistical reports of the In-
dustry. With a view to keeping the President informed as to ther
observance or non-observannce of this Supplemnentary Code, said
agency shall collect., through the Secretary, such statistics as called
for by t~he President andl or the Admninistrator and send thlem in
such form as the President and.'or the Adm~inistrator ma~y require
to the Fabricated M~etal Products Federation, or successor organiza-
tion, as the agency admiinistering saidl Basic Code. Alidvda
reports shall be tretatedl as con~fid-ential byr the Secr-etary and shall
not be disclosed to any muember of thle Industry or any othI~er party
except where necessary in the enforcement of this Code and except
to such governmnental agencies as mlay be d directed by theIt
SECTION 5. Said Agency shall also from time to time furnish to the
Basic Code Authority, designated in said Basic Code, such informa-
tion as may be required to be furnished under~ tihe terms of said
SECTION 6. The Supplemlentary~ Code Authiority shall have power
from time to time to require each members of th~e Ind~ustryr to furnish
to the Secretary such inforlmation concerning the production, ship-
ments, sales an~d orders of su~ch mmlberl and the hours of labor,
rates of pay and other condit~iions of employment at the plant or
plants of such member and such other information as the said Sup-
plementary Code Authority shall deem necessary or propjer in order
to effectuate the purposes of this Sup~lplemelntary Code and the policy
of the Act. All individual reports shiall b~e treated as confide~cntial
by the Secretar~y and shall not be dlisclosed to any member of the
Industry or any other party except where necessary in thec enfor~ce-
ment of this C'ode andc except to~ such grovernmentllcl agencies as ma~y
be directed byv the Administrator.
SECTIONI ri. The Supplemlentary' Cod~te A-uthority may require that
any such information be fur~nished pecriodically at such times as it
shall specify and miay require that any~ or all information furnished
be sworn to or othlerw~ise certified or -authenticate\td as it shalll pre-
scribe. Failure of any mlembler of the Industry promptly to furnish
to theSeretary in formation requiredi by the said Sup pleme nta ry
Code Authority and substantially in the for prescribed by it shall
constitute a violation of t~he Code. The 'Supplemnentary Code
Authority shall not require any information r~egardiingr trade secrets.
SECTION 8. Any or all information furnished to the Secretary by
any corporate member of the Industry specifically assentinga hereto *e
pursuant to the provisions of this Code shall be subject to v~erifica-
tion by an examination of the pertinent or necessary books, accounts
and records of such member by the Secretary or by' any accountant
or accountants or other person or persons designatedl by the Supple-
mentary Code Authority (none of whom shall be connected with any
member of the Industry) and shall be so checked for such purpose,
if t~he Supplementary Code Authority shall require it. The cost of
each such examination shall be treated as an expense of adminmsteringa
SECTION 9. All members of the Industry are subject to the juris-
diction of t~he Supplementary Code Authority; shall be entitled to
participate in and share the benefits of the Supplementary Code
Authority; shall be entitled to vote in the selection of the Supple-
mentary ~Code Authority as provided in Section 1 of this Article;
and shall pay to the teretary as the agent of the Supplementary
Code Authority their reasonable share of the expenses of the Admin-
istration of this Suppelementary Code, such reasonable share to be
determined by the Supplementary Code Authority, subject to re-
view by th-e Administrator, on the basis of volume of business and,/or
such other factors as may be deemed equitable by the Supplementary
gECTION 10. Nothing contained in this Supplementary Code shall
be deemed to constitute the members of the Supplementary Code
Authority partners for any purpose whatsoever. Nor shall any
member of the Supplemecntary Code Authority be liable in any
manner to anyone for any act of any other member, officer, agent,
or employee of the Supple~mentary~ Code Authority. Nor shall
any mlemb'ter of the Supplementary C'ode A~uthorityr, exercising rea-
sonable diligence in the conduct of his duties hereunder, be liable
to anyone for any action or omission to act under this Code, except
for his own willful misfeasance or non-feasance.
SECTION 11. The Supplementary Code Authority may adopt, sub-
ject to the approval of the Administ rator, and thereafter all members
of the Industry shall maintain, uniform credit terms. Such credit
terms shall clearly appear on all quotations, invoices and acceptance
SECTION 1-2. If any member of the Industry as defined herein is
also a member of any other Industry, the provisions of this Code
shall apply to and affect only that part of his business which is
included in the Industry.
SECTION 13. The Supplementary Code Authority shall without
any limitation on the for~egoing have the following further general
powers and duties subject to such rules and regurlaltions as the
Administrator may prescribe:
(a) To insure ihe executiion of the pr~ovisions of this Supple-
mientnry Code and p~rovidet for the compliance of the Industry with
the pr~ovisionsl of thle Ac~t;
(b) To adopt by-law~ anrd rules and regulations for its procedXure
and for the administration of the Supplemnentary Code;
(c) To obtain from members of the Industry such information
and report; as are requiredl for t~he administration of the Supple-
mentary Code. In addition to information required to be submitted
to thle Supplemlentary Codle AiuthorityT, all or any of the persons
subject to this Supp,~lemenntary Code shall furnish such statistical
infoirmationl as the Aidministrator mayv deemn necessary for the pur-
poses recited in section :3 (a) of: the Act to such Federal and State
agencies as the AdmIni nist rantor may designate. Provlided that nothing
in this Supplementary C'ode shall relieve any member of the Indus-
try of any existing obligations to furnish reports to any govern-
(d) To use such. trade associations and other agencies as it deems
proper for the carrySinga out of any of its activities provided for
herein, provided that nothing herein shall relieve the Supplemnen-
tary Code Authority~ of its duties or responsibilities under this Sup-
plementary Code and that such trade associations and agencies shall
at all times be subject to andl complyr writh the povisions hiereof ;
(e) To make recomm~lendaltions to the Adtministrantor for the co~-
ordination of the ad~ministratfionI of this Supplementaryr Code wi~th
such other codes, if any, as may3 be related to t~he `Industry;
(f) To secure froml members of t~he ~Industry an eq-uitalble and
proportionate payment of the reasonable expenses of miaintain~inga
the Supplementar~y Code Aulthority and its aictivities;
(g) To cooperate wTithl the Admninistrator in regulating the use
of any N.R.A. insignia solely by those .members of thle Industry
who have assenlted to, and are comlplyin~ wit~h, t~his Suppilnemetary
(h) To recomm-endl to the A~dministr~a tor further fair trade prac-
tice provisions to govern members of the IndustryS in their relations
with eachl other or with other indlustrie-s and to recommrendl to thle
Administrators measuresj fo-r indusltr~ial planningr including stabilii-
zation of emlployment.
SECTION 14. If thle Adicninistarnto.r believes that any action of the
SupplemnentaryS Code Author~it y~ or any agency thle~reof is unfair-
or unjust or contr~ary3 to the public ilt~erest, the Adm~inistrator may
require that. such action be suspendedl to afford an opportunityg for
investigation of the mierits of such action. Further action by such
Supplemerntary Clode Authority3 or agency rrgarnlding the matter
complained of may b-e takien if approved by the Administrator but
shall not be taken if disapprovedl by the Admlinistra~tor within thirty
days of notice to him of intentionl to proceed with such action.
ARTICLE VT--RICE LIlars
SECTION 1. The Sulpplementary? Code Aut'hority mas.y require thtlt
each mlember o~f the Indusltry3 w~ho ma~nulfactures aind sells a~ny prod-
uet of t~he Industry7 not used~ by himself in t~he manufacture of
another pr'odlCt, shalll file withl thet Secretary and publish, a ne price
list and, or a prlice list and discount sh~eet individrually prep~ared by
himi show~ing h-is current pr'ic'es and /or prices and discounts, anda
other conditions of sale, including discounts for various classes of
customers or for quantity. Said price list and any revised price
list shall be made available to all interested parties.
SECTION 2. The Sec~ret~ary shall immediately send copies thereof
to all other members of the Code. Suc-h price lists, discounts, and
conditions may be. revised from time to time thzerea~fter, and notifi-
cation of such revision shall be filed with the Secretary and pub-
lished. Such revision shall be dleemned filed and effective withiin the
mleanmg~ of this provision w-hen telegraphic acknowledgement of
receipt of suchl r~evision sh~all hav~e been receivedl by the person mak-
ing such revision, and copies of suchl revision shall be immediately
sent by the Secre~tary to all other, members of the Code, who there-
upon may file, if they so desire, revisions of their price lists, dis-
counrts, and conditions which ma~y become effective upon the date
whenl the revised price data first filed shall go into effect.z
SECTION 3. No memmber of the I~ndustry shall sell directly or indi-
rectly through an affilinted company, or otherwise, by any means
whatever any product of the Industry at a price lower, or at dis-
counts greater, or on conditions more favorable to the buyer than
those provided in his current price data filed with the Secretary as
above providled; provided, however, that at any time a member of
the Industry may meet the lawFful price, and *'or conditions of any
competitor for products of an equal grade or quality, or for products
competing with products of the Industry. Any such meeting of a
blaw.ful price by a member of the Industry~ must be reported at once
by such member to the Secretar~y. An "L affiliated company for the
purpose of this section means a company the majority of whose vot-
ing stocks is owned or controlled by a member of the Industry. For
all purposes of this Article a delivery of any product made pursuant
to a contract of sale shall be. regaardedl as a sale thereof made at the
time of the making of such contract. Lawful price for the purposes
of this Section is dlefinedl to mean any price which a, member.0f the
Industry may make pursuant to this Code, or any price which a
competitor of any member of the Industry may make without violat-
ing any provision of any Code or Codes to which such competitor
is subject or without violating any Federal Law, State Law, or the
LawP of any political subdivision thereof.
SECTION 4. No provision of this Code relating to prices or terms of
selling, shipping or marketing shall apply to export trade or sales
or shipments for export trade withlin the meaning of the term ex
port trade as it is used in the Es port Trade Act.
IIRTICLE VI SALES B3ELOw REASONAlBLE COST
hNf~otwihsta nd;ng any other provisions of this Supplementary Code,
wIhen the Supplem'entary Code Authority determines that an emer-
gency exists in this Indust~ry and that the cause therreof is destruc-
tivFe price-cutting such as to render ineffective or seriously endanger
the maintenance of the provisions of this Supplementary Code, the
Supplementary Code Authority mlay cause to be determined the
lowest reasonable cost of thle products of this Industry, such deter-
mination to be subject to such notice and hearing as the Adminis-
trator mayr require. The Adlminist~rator mlay approve, disapprove,
or mod~ify thle determination. Thereafter, during the period of the
emergency, it shall be an unfair trade practice for any member of
the Industry to sell or offer to sell any products of the Industry for
which the lowest reasonable cost has been determined at such prices
orr upon such terms or conditions of sale that the buyer will pay
less ther~efor than such lowest reasonable cost of such products.
WChen it appears that conditions have changed, the Supple-
mentary Code Authority, upon its own initiative or upon the request
of any Interested party, shall cause the determination to be reviewed.
I See paragraph 2 of order app~roving thise Code.
AnrlICLE VII -UNFAIR PRACTICES
SECTION 1. For all purposes of this Supplementary Code the fol-
lowing described acts shall constitute unfair practices. Such~ un-
fair practices shall be deemed t~o be unfair methods of competition
in commerce within t.he meaning of the Federal Trade Commission
Act as amnendedl, andl any member of the Industry who shall directly
or indlirectly~ through any! officer, emp~loyee. agent or representative
use or emp~loy any of such~ unfair practices shall be guilty of a vTio-,
lation of this C'ode.
A. The p~rovisions of Article VT paragrlaphls B to Gr, inclusive, of
the Basic Code are a part of this Supplemnentar~y Code to thie same
extent als though here repeatedly nid set forth at length.
B. The s~ale or echa1~nge of any product in whole or inl part below
the cost of such product to t~he particular member of thle Ind-ustr~y,
such cost to be complutedl according to a cost formula to be prescribed
or approved by the Sulpplepmentary? Code. Authority and appr)!oved by
the Ad mi n ist rator ;
Provided, hiowe~ver, that dropped lines, or seconds, or inveCtllories
which must. be c~onve~r~ted~ into cash. to meet emergency need~s may be
disposedl of b.y anyr! membl:er of thle Industry, at. any pr~ic~e andl on
any sterns andt rcondlcit~i~ions b~ut only if such. member of the Indcustry
has filed withl Supp~lrementar Colder Author~ity, not less than. two
weeks before such1I d:iSp)osal a statement in wr~iting, settings forth the
fact of and~ r~easons~ forl, suc~h pr1op~osedt disposal.
Provided, fur.th~er, t~hat, selling below cost (as definedc in Palragr~aph
1 of this subsection B) to- meet exiisting competition oni products of
equivalent design. charanter,, quality or specifications shall not be
deemed a violation of this Alrticle.
C. Using or su.bstituting any material superior mn quality to that~
specified byr the purchaser of anly product, for t~lhe purpose. of in-
fluencing purchase or future p~urchase.
D. Cancelling in whlole or in part, or permit~ting t~he enancellat~ion
in whole or in parflt, of any' conltract. of sale of any product, P~excet
for justifiable cause or a fair consideration.
E. Inducing or attem~ptingr to induce the breach of' an provision
of a contract to whichl a member of the Code is a pa rty. This clause
shall not. be construedl tno apply to contracts of employment..
F. Aiding or abetting an. person, firm, association or corporation
mn any unfair prnet~ice.
G. -Offering or griv-ing to any purchaser of any product any guar-
anty or protection in any form against decline in the market price
of such product after the date o f hipmen t..
H. Selling o~r otffering to sell special MIachine Screws below the
lawful price of the corresponding or th~e next larger or longer stand-
ard or listed size M1achine Screw determined in accordance with the
provisions of Article Y hlereof, plus the cost of the special feature or
I. Soliciting by any member of the Industry the pooling of orders
from several buyers in a manner to give the buyers advantage of
more favorable price or terms than those to whichl the buyers would
be entitled i nd ivi d ually.
J. Consigning merchandise for any reason whatsoever, except to a
wholly owned or controlled subsidiary, or except under circum-
stances to be defined by the Supplementary Code Authority where
peculiar circumstances in the Industry require the practice.
IC. Making contracts of sale that permit the buyor to cancel and/or
provide for a reduced price inl event of a, market decline, but which
do not permit the seller to cancel alnd,/or do not provide for an
enhanced price, in the event of a market rise.
L. Making contracts requliring delivery of specified quantity or
quantities inz specified time, if demanded by buyTer, but not requlringo
tthe buyer to accept such quantity or quantities wGithin the specified
M. M~akinng contracts at a specified price for an unspecified quan-
tity for delivery as demandled by tlhe~ buyer during thle period, unless
the contract is for a, fixed percentage of the total consumption re-
qmremients of thee purchaser of the particular product and unless
itis agreed in such contract that specifications placed during the
last third thereof shall not exceed the total pieces specifle~ for
shipmeent during the first twio-thirds thereof; or making any such
unspecifiedl quantity conltract above described except on a standard
form or forms approved by thle Supp~lementary Code Authority
andr t~he~ Ad~ministatolr; or failing* to fie ith the Secretary a copy
of each and everyg different form of contract entered into by a mem-
ber of the Industr~y within five dlays after entering into a contract
in such form.
N. Making contracts for periods in excess of three months (all
contracts to expire not later than the last days of M~arch, June,
September or Decemnber) or quoting on or making any quarterly
contract more than thirty (30) dlays prior to the first day of the
calendar quarter covered by the contract, or shipping pursuant to
any contract more th~an fifteen (15) days after the expiration t.hereof,
or as soon thereafter as seller can mIanufacture and ship the same,
or making contracts containing anl option of extension or renewal
on the part of either buyer or seller.
mO. Accepting~ o oreorders for deliveries extending beyond four (4)
P. Appointing, continuing to employ or paying a commission,
salary or any other form of compensation to a jobber or dealer or
syndicate buyer of any character as an. agent, except under circum-
stanlces where such jo~bber, dealer or Syndica-te buyer acts clearly
as an agent and does not simultaneously perform the functions of
a jobber, dealer or syndicate buyer in a specific transaction or trans-
actions, or entering mto any kind of an exclusive territory arrange-
ment with a jobber, dealer or syndicate buyer.
Q. Continuing to employ any salesman, agent or employee who
shall give any or all of his commission to any purchaser.
No provision of this Supplementary Code shall so be applied as
to permit monopolies or monopolistic practices, or to eliminate,
oppress or discriminate against small enterprises.
SECTION 1. This Supplementary Code and all the provisions there-
of Are expressly made subject to the right of the President, in ac-
cordance with prov-isions of subsection (b) of Section 10 of the Act,
fromt time to time, to cancel or modify any order, approval, license,
rule or regulation issued under said Act.
SECTION 2. ThiS Supplementary Code, except as to provisions
required by thle Act, may be moditied or amended on the basis of
experience or changes in circumstances, such miodifientionis or amlend-
ments to be based upts application by the Supplemnentary Code
Authority or other representative group wFithiin t~he Indu ltry to the
Administrator and such Notice and Hearing as he shanll specify and~
to become effective and be a part of this S~upple~mentaryI Code on
app~rov-al by the Administrator.
ARTICLE X--PRICE INCREASES
Wht-ereas t~he policy of the Act to increase real purchasing power
w~ill be made more difficult, of consummnation if prices of goods and
services increase as rapidlly as waiges?? it is recognized that price in-
crea~ses except such as may be required to meet individtual costs
should be delayed, but. when made, such increases should, so far as
possible, be limited to actual additional increases in the seller's
ARTICLE XI--EFFECTIV'E DATE
This Supplement~ary Code shall become effective at 12:01 o'clock
A.MI. Eastern Standard Timne of the tenth day after it .is app~roved
by the President, and shall1 continue in effect until June 16, 1935,
or the earliest. date prior thereto on wohichl the Presidlent shall, b~y
proc'lamnation, or t.he Congress shall, by joint resolution, declare
that the emergency recognized by Section 1 of the Atct, htas ended.
Allp:roved Code No. 84--Suppilemen No. 23.
Registry No. 1104-06.
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