IFor sale la the Superintendent of Documents, Washington, D.C. . Price i cnent
Approved' Code No. 201-Supplement No. 16
Registry No. 1135--03
NATI ONAL RE COV ERY ADMnI NIS TRATI ON
CODE OF FAIR COMPETITION
SHEET M RETAL
(A Division of the Phrolesaling or Distributing Trade)
AS APPROVED ON JULY 27, 19341
WE DO OUR PART
GOVERNMENT PRINTING OFFICE
This publication is for sale by the Superintendent of Documents, Government
Printing Office, W~ashington, D.O., and by district offices of the Bureau of
Foreign and Domestic Commerce.
DISTRICT OFFICES OF TH DEPARTMENT OF COMMERCB
Atlanta, Ga.: 504 1Post Office Building.
Birmingham, Ala.: 257 Federal Building.
Boston, Mase.: 1801 Custombouse.
Buffalo, N.Y'.: Chambetr of Commerce Building.
Charleston, 8.C.: Chamer of Commerce Building.
Chicago, Ill.: Suite 1700, 201 North Wells Street..
Cleveland, Ohio: Chsamber of Commerce.
Dallas. Tex.: Chamber of Commerce Building.
Detroit, Mich: 801 First National Bank Building.
H~ouston, Tex.: Chaber of Commerce Building.
Indianapolis, Ind.: Chamber of Commerce Building.
Jacksonville, Fla.: Chamber of Commerce Building
Kansas City, Mbo.: 1028 Baltimore Avenue.
~Los Angeles, Calif.: 1163 South Broadway.
Louisville, Ky.: 408 Federal Building.
Memphisl, Tenn.: 229 Federal Building.
MinneapDolis, M~linn.: 213 Federal Buildiing.
New Orleans, ZLa.: Room 225-A, Cu8tombouse
New York, N.Y.: 7~34 Customhouse.
; I\Norfolk, Va.: 406 East Plulme Street.
Philadelphia, Pa.: 422 Commercial Trust Building
Pittsburgh. Pa.: Chamber of Commerce Building.
Portland, Oreg.: 215j New Poet Office Building.
St. Louis, M~o.: 506 Olive Street.
San Francisco, Calif.: 310 Custombouse.
Seattle, Was.: 809 Federal Office Building
Approved Code No. 201--Supplement~ No. 16
SUPPLEMENTAIRY CODE: OF FAIR COMPETITION
SHEET METAL DISTRIBUTING TRADE
As Approved on. July 27, 1934
ArenRovING SUPPLMENTARY CODE OF FAIR COMPETITION FOR THE
SHEET MAETAL DISTRIBUTING; 'RPADE
A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRDE
An application having been duly made pursuant to and in full
compliance with the provisions of Title I of thie Natidnal Industrial
me aRecovery Act, approved June 16, 1933, for approval of a Supple-
meta CdeofFair Clompetitionl for the Sheect 1Metal Distributing
Trade to the Code of Fair CompIetition for the Wholesaling or
Distributini Traden, and hearings having been duly held thereon and
the annexed report on said Supplemnentatl Code, containing findings
with respect thereto, having been made and directed to th~e President:
NOW, THEREFORE, on behalf of the President of the United
States, I, Hugh S. Johnson, Administrator for Indlust~rial Recovery,
pursuant to authority vested in me byExecutive Order~s of thle
President, including IExecutive Order bNo. 6543---A, dated December
i30, 1933, and otherwise do hereby incorporate byp reference said
annexed report and do find that said Supplemental Code complies
in, all respects with the pertinent provisions and will promote the
policy and purposes of said Tle of said AQct; anJd do h~ereby order
that said Supplemental Code of Fair Competition be and it is
hereby approved; subject, however, to the condition that the pro-
visions of Article IV, Section 1 be deleted ~from said Codle and the
follow in g provisions substituted therefore :
"' SECTION 1(a) DeStructive price cutting is an unfair method of
competition and is forbidden. Any sale shall be deemed prima facie
destructive price cutting if the nest sales price shall be less than the
seller's net invoice cost plus transportation charges to seller's
Notwit~hstandingr the provisions of this Section any wholesaler
may sell any article of merchandise at a price as low as the price
set by any competitor on maerchiandise which is identical or essen-
tially the sam, where: uchu completitor's price does niot violate this
Section or where such competitor is not subject to thre provisions of
this Supplementbal Code.
76467*-829-159 ----4 11 1
Notwithstanding the provisions of this Sect~ion it shall not be
deemed destructive price cutting for a wholesaler to sell the follow-
ing merchandlise at less than net invoice cost plus transportation
charges, as provided above?: obsolete goods, bona fidle closeout mer-
chandist~e. damagedl merchandise, stocks being liquidated, merchandise
sold for charitalble purposes or to ulnemplloymlent relief agencies, and
such other mler~chandlise as may be designated by the Divisional Code
(b) ~~dIfr~ the Adin~istarator shall at any timne find (1) that an
emelrlgency h~as ar~isen1 w\ithlin the trade, adviersely affecting small
e~nte~rpr'ises or wagses or labor conditions, or tending toward monoop-
oly or other neu~rte conditions wThich tendl to defeat. the p~urposes o
the Aqct, and~l (2) th~t thle find~iwvt of a ba1sis for determiningr mini-
mum rice forall r an spci~iedl products sold by the trade is
necessary" for a lmte peri"od to correct the conditions constituting
such emergency and to offectulate thle purposes of the Act, the Code
Autlor~ity may cause an- impartial agency to investigate cosjts and
to recomimendl to the Admninistrator a basis for determining mini-
mum prices of said products. Thereupon" the Administrator may
fin a basis. for detelnnrminin the minimum pr~ice of any of said prod-
ucts for a stated period. During such period no member of the trade
shall sell such products at a ne~t realized price below the minimum
p rice dleterminedl in accordance with the base so fixed. From time
to time the: Code Authority may recommend review or reconsidera-
tion or the Administrator mnay cause any determination hereunder
to be reviewed or reconsidtered, and appropriate! action taken."'
HeanH S. JoRnsonu,
Admninistrator for Indzustrial Recovery.
ROBERT L;. HousTON.
Ad y rs7, 1934
REPORT TO THE PRESIDENT
Tihe W"Fhite H~ouse.
SmR: This is a report of the Hearing on the Supplement~al Code
of Fair Competition for thec Sheet M~etal Distributmg Trade, con-
ductedd in Room 2069, Depa rtmnenlt of Comlmerce Building, Washr~ling-
ton, D. C., on April 6, 19J34. The Supplemental Code which is
attached was presentted by duly qualifiedl and authorizedl rIepresenta-
tives of the Trade, complying with. the statutory reqluiremnents, said
to represent about 68 per cent ini number and about 68 per cent in
voluume of sales oJf the T'rade which could be includedi under this
The Census of W~holesale Distribution does not separately classify
this Trade. According to what appear t~o be- carefully and inte~llh-
gently compiled statistics furnished by members of th~e Trade there
a~re at. the present t~imeI 185r concerns; engagrd in this business. In
19'29 there were approximately 185 concerns so engage~d. Total
annual sales in the T~rade in 1929 were about $;3c',000,000), and emn-
ployees were approximately 5,000 in lnumber. In 1933 sales had
declined to about. $22,0)00,00)0, whlile the number of employees had
fallen to about 4,500.
PROVISIONS OF THE SUPPLLEMENTAL GODE
Since thlis Code is supplemental t~o the Codte of; Fair Comnpettition
for the Wholesaling or Distributing T'rade, it contains no labor pro-
visions. The provisions containing supplementary definitions are
inclusive and accurrate.
The supplement to the admninisrtrative provisions of th~e General
Code establishes a Divisional Code Authnority which is fairly and
adlequately representative of all the different elements in the jT'rade.
The Cons~titution and ]By-laws contain no inequitable restrictions on
membership. The mlethlod provided for the election of the members
of thle Divisional Code Authority adequat~ely protects those members
of th~e T~rade which are not members of the! Association.
The Trade P~ractice rules contained in this Suppelemental Code are
not in any' respect. objectionable and are dresiganedl to promote fair
competition in the T~rade.
The Deputy Administrator in his final report to me on said Pup-
plemnental Code, havingi found as h~erein set forth, anrd on the basis
of all the proceedings in this matter;
]I find that- .
(aZ Said Supplemental Code is well designed to promote the
policies and purposes of Ttler I of the National Industrial Recovery
Act, including removal of obstructions to the free flow of inter-
state and foreign commerce which tend to diminish the amount
thereof, and will provide for the general welfare by promoting the
organization of mldustr for the purposes of cooperative action
among trade groups, by inducirw~ and miaintainingr united action of
labor and mana rement under aieqjuate governmental sanction and
supervision, by iiminating unfair competitive practices, by promnot-
ing theflest possible use of the present productive capacity of in-
dustries, by avoid ding undue restriction ofh prodsuction (exep as may
be tempora rily rqie) by increasing h osupinofids
trial and agricultural products through increasing p urchasi ng
power, by reducing and relieving unemployment, by improving stand-
ards of labor, ail i and by otherwise rehabilitating industry.
(b) aid rade normally employs' not more than 50,000 employees
anld is not classified by me as a maoor industry.
(e) The Supplemental Code as approved complies in all respects
~wit the pertinent p revisions of said Title of said Act, including
without Elmitation Sjubsection (a) of Section 3, Subsection (a) o
Section 7, and 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 unposes no equitable
restrictions tob maembership therein.
(d) The Supplemental Code is not designed to and will not per-
mit moopolie~s or monopolistic practices.
(e) The, Supplemental Code is not designed to and will not elim-
inste or oppress small enterprises and will not operate to discrim-
.Inate against them.
(f) Those engaged in other steps of the economic process have not
been deprived of the right to be heard prior to the approval of this
For these reasons the Supplemental Code has been approved.
Hona S. JoHNSON,
Jrrrr 27, 1984.
SUPPLEM\ENTARY CO>E: OF FAIIR COMPETITION FOR
THE SHEET' METAL DISTRIBUTING TRADE
Ah DIVISION OF THE WHOLE3SALING OR DISTRIBUTINGI TRADE
To effectuate the policies of T'itle I of the Nat~ional 'Irdustrial Ri~e-
covery Act, this Supplem~ental Code is established as a Code? of Fair
Competition for th~e Sheet Mietal Distributing TIrade pursuant to
Article VI, Section 1 (c) of the Code of Fair Competition for the
Wholesaling or Dist~ributingr Trade, approved by the President of
the United States on Janluary 12, 1934. All pr~ovisions of the said
General Code which are not in conflict with the provisions of this
Supplemental Code3 are hereby incorporated byv reference in this
Supplemental Code and made a part hereof. Such provisions o-fthe
General Code together with the supplementing pr~ovisions of this
code are the standards of fair competition for and are binding upon
every member of said Sheet Ml~etal Distributing Trade.
ARTICLE 11- D EFINrPIONS
SECTION 1.'~ The erm. Distr-ibutor ", as used herein, shall mean
any individual, partnership, corporation, association, o~r other form
of enterprise or definitely organized division thereof, specifically set
up to render a general: distribution service, whose business is selling
to sheet metal contractors, roofers, fabricators, retailers, industrial,
and other users; wFho carries an ade~quate~ly iesfe t ffr
rous and/or ferrous coated sheet metals incldingif bu t without limi-
tation, galvanized sheets, metal roofing and sidling, trin plate, sheet
zine, and kiindre~d lines diefned as eaves trough conductor pipe and
elbows, tinners' tools, solder, but not including iron and steel sheets,
except galvanized sheets; buys such merchandise; warehouses a re-
serve stock of it for servicing the Trade through salesmen, advertis-
ing, and/or sales promotion devices; resells it; assumes thle credit risk
and/or such other obligations as are incident to the transportation,
warehousing and distribution of sheet metals and kindred lines.
The term shall not include any distributors whose business is prin-
cipally the distribution of sheet steel seconds.
SECTION 2. The term "C Divisional Code Authority as usbeda herin,
shall mean the Divisional Code Au~thorityv for the SetMtlDs
tributing Trade, a, Division of t~he Wholesaling or Distributing
SECTION 3. The term General Code ", as used herein, shall mean
the Code of F~air Competition for the W~holesaling or Distributing
SUPPLEM1ENT'ING ARTICLE VI OF T GENERAL CODE
SucrroN 1i. Thle Divisional Code Atluthorty for t~he Sheet Muetal
Distributing Trrade shall be composed~ of fifteen (15) members.
SECTION 2. The members of such D~ivisionlal Code Authority shall
be elected as follows:
(a) TIhe Exrecutie. Committee of the N4ational Association of
Sheet Mietal Distributors shall nominate as candidates, twenty (20)
persons from among the members of the Trade who are mlember~s of
the Association. The Administrator shall nomlinate ten (10) can-
didates from members of the Trade who are not members of the
(b) The Executive Committee of the Association shall send out to
all members of the Association, a ballot upon which are listed the
names of the twenty (20) candidates nominated by the Association.
At least ten (10) alddtionalt blankr spaces shall appear on the ballot
in which a voter may write his personal c~hoices. To each ballot
shrall ~b attached a letter of assent to and compliance with this Sup-
plemental Code and the G~eneral Code. At the same time, the Execu-
tive Committee of the Aliociation shall send out to all members of
the Trade, not members of the Association, who names are discover-
abl'e after diligent search, the ballot containing the ten (10) candi-
dlates nominated by the Administration. At least five (5) addi-
tional blankc spaces shall appear on the ballot in which a voter may
write his personal choices. Toeaich ballot shall be attached a letter
of assent to and compliance with this Supplemental Code and the
(c) Twenty (20) days a~fter the mailing of these ballots, the Exec-
utive Committee of the National Association of Sheet Mletal Dis-
tributors sha~ll publicly count the votes which it has received, only
those ballots being counted which are accompanied by a si~n e~d letter
of assent and compliance. The ten (10) members of the TrAde, who
are members of the Association receiving the highest number of votes
and the five (5) members of the Trade not members of the Associa-
tion, receiving the highest number of votes, shall be declared elected
members of th~e Divisional Code Authority.
(d) The Executive Committee of the National Association of
Sheet Mletal Distributors shaUl certify toesl the Amiisraorth
method of conductincr the election and terslsteef
SECTION 3. VacRHcles in the membership of the Divisional Code
Authority whether to fill unexpired terms or full new terms shall be
filled by the same method of election as that provided in Section 2
of this Acrticle III.
SECTION 4. The Divisional Code Authority shall cause to be so-
lected a Regional Committee of not more than three (3) members
for each of such regional areas as it may establish to act as its agent
in handling such matters as may be: referred to such Committee
provided that nothing herein shall relieve the Divisional Code Au-
thority of any of its responsibilities under this Supplemental Code
or underthGeneral C~ode and provided further that such regi~onalt
committee shall at al times be subject to and comply wt h
SECTION 5j. Th Divisional Code Authority shall have the follow-
ing duties and powers, in, addition to those prescribed in the G~eneral
Code, subject to such rules and regculations as may be issued from
time to timae by the A~dministrator:
(a) To adopt by-laws, and rules an~d regulations for its procedure.
(b) To use such trade associations and other agencies as it deems
proper for the Calr3lryin out of any of its activities provided for
herein provided that nothing herein shall relieve the Divisional Code
Aut'hority of its duties or responsibilities under this Code, and thl~at
such trade associations andC' agencies shall at all times be subject to
and compyly with the provisions hereof.
(c) To organ~ize, elect officers, hire: employees, appoint agents, and
perform such other acts as may be necessary for the proper admin-
Istrat~ion of this Supplemlent~al Code and the General Code.
(d) ~To obtain from members of the Trade such information and
reports as tare reqiuiredl for the administration of the Code. In addi-
tion to infor~matoncl required to be submitted to the General Code
Authority and to the Divisio~nal Code Autority members of the
Tradle subject to this Code shall furnish such statistical info~rmtion
as the Admlinistrator may deem necessary for the3 purposes recited
in Section 3 (a) of the Act, to such federal and state agencies as he
may designate; providled that nothing in this Code shall relieve any
member of the Trade of any existing: obligations to furnish reports
to any government agency. No individual report shall be disclosed
to any other mnemaber of the Trade or any other party except to such'
other governmental agencies as may be directed by the Adminis-
(le) To appoint a Trade Practice Committee, which shall meet
with the Trade Practice Commlittees appointed under such other codes
as meqy be related to the Trade (except those appointed by another
Divisional Co~de Anthorityf under the Gaeneral Code) for the pur-
peotse of formulating Far Trade Practices to govern the relationships
been production and distribution employers under this Supple-~
mental C~ode and under such others, to the end that such Fair Trade
Practices may be proposed to the Administrator as an amendment
to this Supplemental Code and such other Codles.
bSECTION 6. Nothing contained in this Supplemental Code shall
constitute the mlembers of the Divisional Code Authority partners
for any purpose, nor shall any member or membes of the DIlvisional
Code Authority or any Regional Conmmittee be liable in any manner
to anyone for an~y action or omission to act, under this Supplemental
Code, except for his own willful malfeasance or nonfeasance.
SECTION ?. If the Administrator shall determline that any action
of the Divisional Code Authority or any agency thereof! may be
unfair or unjust or contrary to the public interest, the .Administrator
may require that sllch action be suspended to afford an opportunityT
for investigation of th~e .merits of such action anld for further con-
sideration by such D~ivisional Code .Authority or asgency, pending
final action, which shall be effecive in case the Administrator ap-
proves or unless he shall fail to disapprove alfte thirty days' notice
to him of intention to proceed with such action in its original or
SECTION 8. (a) I~t bein4 found necessary in order to support the
'administration of this supplemental Code and to maintain the
standards of fa.ir competition established hereunder and to effectuate
the poicy' of the Act., the Divisional Code Authority is authorized:
(1) To incur such reasonable obligations as are necessary and
pro[per 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 the purposes of t~he Code;
(2) To sutmit. to the Administrator for his approval, subject
to sulch notice and opportunity t.o be heard as he may deem
nrecessaryr (1) anl 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;
(3) After such budget and basis of contribution have been
approved by the Administrator, to determine and obtain equita-
ble contribution as above set forth by all members of the Trade,
andc to th~at end, if necessary, to institute legal proceedings
therefore in its own name.
(b) Each member of the Trade shall pay his 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 Admlinistrator.
Only members of the Trade complying with the Code and contribut-
ing to the expenses of its administration as hereinabove provided,
unless duly exempted from making such contribution, shall be en-
titled to participate in the selection of members of the Divisional
Code Authority or to receive the benefits of any of its voluntary ac-
tivities or to makre use of any emblem or insignia of the National
(ec) he rdiitaonDivisional Code Authority shall neither incur nor pay
any obligation in excess of the amount thereof as estimated in its
appo vbedun budget, excp upon aPproval of the Administrator; and
no sbseuen budet hal contain any deficiency item for expendi-
tures in excess of prior budget estimates except those which the
Administrator shall have so approved.
ARTcIC IV-TRADE PRACTICES
SUPPLEMETING ARTICLE 1TI OF THE GENERAL CODE
It shall be an unfair trade practice for any member of the Trade:
SSECTION 1. (a) To sell or offer for sale any goods at less than the
cost to the seller. Such cost shall be defined to mean the actual net
invoiced purchase pries or market price whichever is lower plus
transportation charges to seller's warehouse plus actual wages in-
volved in the delivery of goods by the seller when determined in
accordance with an accounting formula developed by an impartial
agency chosen with the advrice of the Administrator and published
from time to time by the Divisional Code Authority after approval
by the Administrator.
(b) Notwithstanding the provisions of this Section, any wholesaler
may sell any article of merchandise at a price as low as the price set
by any competitor on merchandise which is identical or essentially
the same, and where such. competitor's price does not violate this
Section or where such competitor is not subject to the provisions of
this Supplemental Code.
(cl) N;otwrithistanding the foregoing provisions of this Section a
wholesaler m~ay sell the following merchandise at less than the prices
established under the said provisions: obsolete godbona fide
closeout merchanld~siise, damag merchandise, stocks bigliquidated
muerchan~dise sold for charitable purposes otoueployme~cntrei
agencies, and such other mlerch~andise as the Diivisional Code
Authority may designate.'
SECTIONu 2. To buy,-carry in stock, or sell what is commordyi known
as shecet steel seconds "~ unless plainl5 stamped "L seconds on each
sheet and unless invoi'ceA as seconds
SECTION 3. To allows for shipmienlt direct from the mill, terms
of credit or cash discounts other than those which are received by the
Arranzn V--PE RMI~SSIVE TRADE PRAscTICES
ISUPPLEMLENTING ARTICLE VII OF THE GENERAL COD)E
SECTION 1. Wliithin ten (10) days after request to do so by the
Divisional Code Authority each member of. the T'rade shall file with
a confidential and disinterested agent of thte Divr~isional Code Au-
thority, or if none then with such an agent designated by the Admin-
istrator, a price schedule for each of such regions as may be desig-
nated, such identified list to include all ofr his prices, discounts,
rebates, allowances and all other terms or conditions of sale herein-
after in this Article referred to as price terms", which lists shall
completely and accurately conform to and represent the individual
prices and practices of such member. Such lists shall contain the
price terms for all such standard products of the Trade as are sold
or offered for sale by said member and for such nonlstandard products
of said member as shall be designated by- the Divisional Code
Au thori ty.
Price terms alnd revised price terms shall become effective im-
nedliately upon receipt thereof by said agent. Immediately upon
receipt thereof, said agent shall by telegraph or other equally prompt
means notify said member of thze time of such receipt. Such lists
and revisions, together with the effective time thereof, shall upon
receipt be immediately and simultaneously distr~ibutedr to all members
of the Trade and to all of their customers who have applied therefore
and have offelred to dlefrayl) the cost actually incurred by the Divi-
sional Code Authority in the preparation and distribution1 thereof
and be available for inspection by any of their customers at the
ofli~ce of such agent. Said lists or revisions or anry part thereof shall
not be mnade available to any person until released to all members
of the Trade and their customers, as aforesaid; provided that prices
filed in the first instance shall. not be released until the exp~iration of
the aforesaid tetn (10) day period after the request of the Div~isional
Code Authority. The Divisional Code Authority shall maaintain a
I Amended--See paragraph 2 of order approving this Code.
permanent file of all price tdermis fled as herein provided, and shall
not destroy any p~art of such records exTcept upon written consent
of the Adlministraitor. Upon request the Divisional Code Authority
shiall furnishi to thle Adminlistrator or any duly d~esignated agent of
the Adcminiistratori cop~ies of any such lists or revisions of price terms.
SlETCnoS 2. Wh`len any memberr of the Trade has filed any revision,
such members~ shlall not file a hligher price within forty-eight (48)
SECTI-ON 3. hO muember of thle Trade shall sell or offer to sell any
prod~uc~t of thle Tlrad~e, for which pr1ice termiis have been filed pursuant
to the prov\isionis of this Article, except in accordance with such price
SEcTION 4. NO membelnrr of the Trade shall enter into any agree-
mlent. u~ndecrcstanl nding comibination or conspiracy to fix or mnaintain
price terms, nor cause or attempt to cause any member of the Trade
to changec his price termnls by thle use of intimidation, coercion, or any
o~theri influence inc~onsistenit w~ith the mlainte~lnance of thle free and
openl ma;1rket. whichl it is thle purpose of this Article to create.
SEC-TIOS 5. Subject to thet approval of the Administrator the
Divisional Code Authiority may establish for shipment out of ware-
house, a mIiaximiumi periodl of fr~ee credit, discount for early payment,
and rate of interest for invoices not paid inl full within such period,
in accordance with the requirements of th~e different areas.
Annr~cLE VI-POWER OF PRESIDENT TO 1\IODIFY
This Supplemental Code and all the provisions thereof are ex-
pressly made subject to the right of the Presidenit in necordance with
thea provisions of the Sub-section (b) of Section 10 of the Act, from
time to timne to cancel or miodify any order, approval, license, rules
or regulations issued under Title I of said Act.
ARICLE V III-EFFECTIVE DATE
This Supplemental Code shall become effective on the tenth day
after it approval.
Approved Code No. 201--Supplement No. 10.
Registry' No. 113503.
lIlIlI llllllilllllllllllilll lllllI 111111 11111111NI III l