Approved Code No. 60-Amendment No. 2 Registry No. 1625-2-02
NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
AS APPROVED ON MARCH 29, 1934
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Approved Code No. 60-Amendment No. 2
Registry No. 1625-2-02
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Approved Code No. 60-Amendment No. 2
AMENDMENT TO CODE OF FAIR COMPETITION
As Approved on March 29, 1934
MODIFICATION OF CODE OF FAIR COMPETITION FOR THE RETAIL TRADE
The National Retail Drug Code Authority having submitted for
my approval, in accordance with Schedule A, Section 5 (2) (d) of
the Code of Fair Competition for the Retail Trade the annexed
modification of Article VIII, Section 1 of said Code as applied to
drugs and allied products, an an opportunity to file objections
thereto having been given by notice dated February 20, 1934, and
the annexed report on said modification, containing findings with
respect thereto, having been made,
NOW, THEREFORE, on behalf of the President of the United
States, I, Hugh S. Johnson, Administrator for Industrial Recovery,
pursuant to the authority vested in me by Executive Orders of the
President, including Executive Order No. 6543-A, dated December
30, 1933, and otherwise, do hereby incorporate, by reference, said
annexed report and do find that said modification and the Code as
constituted after being modified comply in all respects with the
pertinent provisions and will promote the policy and purposes of said
Title of said Act, and do hereby order that said modification be and
it is hereby approved, and that the previous approval of said Code
is hereby modified to include an approval of said Code in its entirety
as modified, said modification to become effective ten (10) days after
the date hereof.
HUGH S. JOHNSON,
Administrator for Industrial Recoecry.
A. D. WHITESIDE,
March 29, 1934.
REPORT TO THE PRESIDENT
The White House.
SIR: The National Retail Drug Code Authority has submitted the
annexed modification of Schedule A of the Code of Fair Competition
for the Retail Trade as applied to drugs and allied products.
It has been found in the several months during which this Code
has been effective that the loss limitation provision has been unen-
forceable, and as the result the competitive abuse of "loss leader "
selling has continued in about five per cent of the total number of
retail drug outlets to the great hardship of the remaining ninety-five
per cent of the trade.
This modification does not alter the principle set forth in the
original provision. It establishes a definite standard base price
which is universally subject to exact interpretation which the orig-
inal failed to provide.
This modification prevents the five per cent of the trade which has
continued to indulge in predatory price cutting on standard articles
from selling below the cost price paid by the vast majority of smaller
enterprises in the trade.
The Deputy Administrator in his final report to me on said modifi-
cation of said Code having found as herein set forth and on the basis
of all the proceedings in this matter:
I find that:
(a) The modification of said Code and the Code as modified are
well designed to promote the policies and purposes of Title I of the
National Industrial Recovery Act including the removal of obstruc-
tions to the free flow of interstate and foreign commerce which tend
to diminish the amount thereof, and will provide for the general
welfare by promoting the organization of industry for the purpose
of cooperative action among trade groups, by inducing and main-
taining united action of labor and management under adequate gov-
ernmental sanction and supervision, by eliminating unfair competi-
tive practices, by promoting the fullest possible utilization of the
present productive capacity of industries, by avoiding undue restric-
tion of production (except as may be temporarily required), by in-
creasing the consumption of industrial and agricultural products
through increase ng purchasing power, by reducing and relieving un-
employment, by improving standards of labor, and by otherwise
(b) The Code as modified complies in all respects with the per-
tinent provisions of said Title of said Act, including without limi-
tation Subsection (a) of Section 3, Subsection (a) of Section 7 and
Subsection (b) of Section 10 thereof.
(c) The Code empowers the National Retail Drug Code Authority
to present the aforesaid modification on behalf of the industry as a
(d) The modification and the Code as modified are not designed
to and will not permit monopolies or monopolistic practices.
(e) The modification and the Code as modified are not designed
to and will not eliminate 2r oppress small enterprises and will not
operate to discriminate 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
For these reasons the modification has been approved.
HUGH S. JOHNSON,
MARCH 29, 1934.
MODIFICATION OF CODE OF FAIR COMPETITION FOR
THE RETAIL TRADE
Schedule A of the Code of Fair Competition for the Retail Trade
is hereby amended by the addition of a new Section, number 6, as
"SECTION 6. Loss Limitation P'roiv;x.on.--In place of the provi-
sions of Article VIII, Section 1, the following provision shall apply
to all retailers selling the products -peeified hereinafter:
"' Inasmuch as the vast preponderance of drug store products are
distributed through small drug retailers who are unable to purchase
on a (lquantity basis but who perform services which are essential to
the welfare of those in their communities, and whereas such services
cannot adequately be performed through the facilities provided by
their competitors, and whereas in some cases sales are made to con-
sumers by such competitors at prices below the lowest cost of pur-
chase normally obtainable for such merchandise by small drug
retailers, and whereas in most instances such sales prices are not a
true indication of the general level of prices of such competitors and
no general benefit to those in the community Iccompanies the same,
but such prices are in fact in the nature of bait offers of merchan-
dise to attract trade, it is hereby declared an unfair trade practice
and is prohibited by this code for any drug retailer to sell any drugs,
medicines, cosmetics, toilet preparations or drug sundries at a price
below the manufacturer's wholesale list price per dozen, provided,
however, that in the case of biologicals or other of the above-nmen-
tioned products which are not customarily sold in dozen or greater
lots the Code Authority may fix a comparable unit quantity, and
provided further that any discount, free deal, or rebate which is
made available to all purchasers of dozen lots or comparable quan-
tities, shall be considered as part of the manufacturer's wholesale
list price.' "
Approved Code No. 60. Amendment No. 2.
Registry No. 1625-2-02.
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