NATIONAL RECOVERY ADMI ary i. &i --uN
NATIONAL RECOVERY ADMINISTRATION
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CARPET AND RUG
: A,:jANUFACTURING INDUSTRY
AS APPROVED ON JANUARY 12, 1934
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1. Executive Order
2. Letter of Transmittal
GOVERNMENT PRINTING OFFICE
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CODE OF FAIR COMPETITION
This publication is for sale by the Superintendent of Documents, Government
Printing Office, Washington, 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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Louisville, Ky.: 408 Federal Building.
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Norfolk, Va.: 406 East Plume Street.
Philadelphia, Pa.: 422 Commercial Trust Building.
Pittsburgh, Pa.: Chamber of Commerce Building.
Portland, Oreg.: 215 New Post Office Building.
St. Louis, Mo.: 506 Olive Street.
San Francisco, Calif.: 310 Customhouse.
Seattle, Wash.: 809 Federal Building.
Approved Code No. 202
CODE OF FAIR COMPETITION
CARPET AND RUG MANUFACTURING INDUSTRY
As Approved on January 12, 1934
An application having been duly made, pursuant to and in full
compliance with the provisions of Title I of the National Industrial
Recovery Act, approved June 16, 1933, for my approval of a Code of
Fair Competition for the Carpet and Rug Manufacturing Industry,
and hearings having been held thereon and the Administrator having
rendered his report containing an analysis of the said Code of Fair
Competition together with his recommendations and findings with
respect thereto, and the Administrator having found that the said
Code of Fair Competition complies in all respects with the pertinent
provisions of Title I of said Act and that the requirements of clauses
(1) and (2) of subsection (a) of Section 3 of the said Act have been
NOW, THEREFORE, I, Franklin D. Roosevelt, President of the
United States, pursuant to the authority vested in me by Title I of
the National Industrial Recovery Act, approved June 16, 1933, and
otherwise, do adopt and approve the report, recommendations and
findings of the Administrator and do order that the said Code of
Fair Competition be and it is hereby approved, subject to the con-
dition that the provisions of Article VII, Section 19 (a) be stayed
pending further investigation and determination by the Adminis-
trator of the issues raised with respect thereto.
FRANKLIN D. ROOSEVELT.
HUGH S. JOHNSON,
THE WHITE HOUSE,
January 1i, 1934.
The White House.
Sm: This is the report on the Code of Fair Competition for
the Carpet and Rug Manufacturing Industry as proposed by the
Institute of Carpet Manufacturers of America, Inc.
The hearing was conducted in Washington, D.C. on October 4,
1933. Every person who requested an appearance was freely heard
in accordance with statutory and regulatory requirements. The
code was presented by duly qualified and authorized representatives
of the industry representing 95 percent of the volume of business
and 86 percent of the number of establishments.
I. DESCRIPTION OF INDUSTRY
At the present time the carpet and rug manufacturing industry is
composed of 35 plants with a potential annual productive capacity
of $215,000,000. Sales during 1933 are estimated at $60,000,000,
which is a marked decrease from the sales of $167,000,000 that were
obtained in 1928. Under these circumstances, it is entirely natural
that there should be a similar decline in employment from 32,800 in
the latter year to approximately 16,000 at the present.
Several considerations set this industry apart from other enter-
prises in the textile manufacturing field. Although carpets and rugs
are woven on looms, the principles of construction vary materially
from any other type of weaving. The looms are extremely complex
and certain types often cost as high as $35,000 apiece. It is generally
true that the capital investment per productive employee is extremely
Both large and small plants exist in the industry, but in this par-
ticular branch of textiles even a small plant is relatively large when
compared with textile mills generally. The three largest manufac-
turers produce roughly 50 percent of the entire volume of the
Design and quality are of extreme importance. The industry
naturally follows the trend in interior decoration and furniture de-
sign which, although variable, does not have the sharp swings found
in the apparel trades. The proponents of the code stressed the neces-
sity for minimum quality specifications and substantiated their con-
tentions by citing numerous instances of fabrics, ingrain carpets for
example, which actually passed out of existence, due to long-continued
debasement of quality. Constant cheapening of both material and
construction finally brought this product into such extreme consumer
distrust that it was no longer merchantable at any price. They
pointed out that unless reasonable minimum specifications were
established and conscientiously adhered to several of the currently
manufactured items would disappear in the same manner.
Those proposing the code presented a comprehensive set of fair
trade practices which have the practically unanimous approval of
the entire industry and have been very carefully reviewed by the
Administration. At the hearing, strong objections were made to
several of these provisions as they were originally submitted and
it is believed that most of these objections, when valid, have been
met. The extreme decline in sales over the last five years was con-
clusive proof that destructive competitive practices among manu-
facturers, unless checked, would destroy a capital investment of over
$900,000,000 and destroy the working opportunity for several thou-
sand highly skilled workers.
Intermediate distribution channels, it was claimed, had added
further to the chaos brought about by the practices within the in-
dustry itself. The mills through their own direct sales to retailers
and also through their branch warehouses, control the great majority
of goods going to the retailer. For this reason, it is vital that inter-
mediate distributors should be bound in their selling practices by
the same conditions as the manufacturer in selling direct to retail
channels. Otherwise no reforms could be effected.
From the figures of productive capacity and sales previously cited,
it is obvious that control of production is essential, but the sponsors
of this code believed it impracticable to achieve this result by restrict-
ing machine hours. Any kind of machine-hour restriction that would
allow the flexibility necessary to meet seasonal and style peaks would
be unnecessarily involved and impossible of administration. Several
of the leading firms in the industry made a careful study of their
sales and production records over the last ten years. From this they
evolved a production-control feature, which provides that at no time
can a manufacturer maintain an inventory of more than one third
of his sales for the previous twelve months. When the inventory
reaches this allowable figure, the manufacturer is granted 120 days to
readjust his inventory to the allowed figure before curtailing produc-
tion. In this way, a mill may start building its stock two or three
months before the anticipated peak demand and then can taper off
production after the selling season. By this, it is hoped that there
will be a leveling out of the peaks and valleys of production and
hence furnish more stable employment throughout the year.
II. LABOR PROVISIONS
Except for learners and physically handicapped employees, the
industry proposes to pay a minimum wage of 35 cents per hour in
the North and 30 cents per hour in the South. Hours of labor are
limited to 40 hours per week and 8 hours in any one day. To
take care of peak periods, employees may be permitted to work up to
48 hours per week for a period of six weeks during any six months'
period, in which case an employee may work up to 10 hours in any
The provisions for the administration of this code are capable of
providing the N.R.A. and the Carpet and Rug Manufacturing In-
dustry with sufficient data to recommend any modifications or amend-
ments Chat may be indicated by experience.
The Deputy Administrator in his final report to me on said Code
having found as herein set forth and on the basis of all the proceed-
ings in this matter.
I find that:
(a) Said Code is well designed to promote the policies and pur-
poses of Title I of the National Industrial Recovery Act, including
removal of obstructions to the free flow of interstate and foreign
commerce which tend to diminish the amount thereof and provide
for the general welfare by promoting the organization of industry
for the purpose of cooperative action among the trade groups, by
inducing and maintaining united action of labor and management
under adequate governmental sanctions and supervisions, by elim-
inating unfair competitive practices, by promoting the fullest pos-
sible utilization of the present productive capacity of industries, by
avoiding undue restriction of production (except as may be tempo-
rarily required), by increasing the consumption of industrial and
agricultural products through increasing purchasing power, by re-
ducing and relieving unemployment, by improving standards of
labor and by otherwise rehabilitating industry.
(b) Said Industry normally employs not more than 50,000 em-
ployees; and is not classified by me as a major industry.
(c) The Code as approved complies in all respects with the perti-
nent provisions of said Title of said Act, including without limita-
tion Subsection (a) of Section 3, Subsection (a) of Section 7, and
Subsection (b) of Section 10 thereof; and that the applicant asso-
ciation is an industrial association truly representative of the afore-
said Industry; and that said association imposes no inequitable re-
strictions on admission to membership therein.
(d) The Code is not designed to and will not permit monopolies
or monopolistic practices.
(e) The Code is not designed to and will not eliminate or 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, I recommend that you approve this Code.
'HUGH S. JOHNSON,
JANUARY 11, 1934.
CODE OF FAIR COMPETITION
it' FOR THE
CARPET AND RUG MANUFACTURING INDUSTRY
To effectuate the policies of Title I of the National Industrial
Recovery Act the following provisions are submitted as a Code of
Fair Competition for the Carpet and Rug Manufacturing Industry
and upon approval by the President shall be binding upon every
1. The term industry as used herein means the manufacture
and original sale of all woven floor coverings and the spinning of
carded wool or worsted sales yarn for carpets and rugs. Woven
floor coverings, the principal content of which is cotton, grass, or
paper, are specifically excluded.
2. The term "auto and airplane carpets" as used herein means
those floor coverings manufactured for original sale to automobile
manufacturers, to airplane manufacturers, to automobile body manu-
facturers, and to automobile carpet jobbers for installation in auto-
mobiles and airplanes.
3. The term "employee as used herein includes anyone engaged
in the industry in any capacity receiving compensation for his serv-
ices, irrespective of the nature or method of payment of such
4. The term employer as used herein includes anyone by whom
any such emplo ee is compensated or employed.
5. The term member of the industry" as used herein includes
anyone engaged in the industry as above defined, either as an em-
ployer or on his own behalf.
6. The term "subscriber as used herein includes that member of
the industry who voluntarily and formally declares to the authority
which shall administer this Code that he will be bound by its pro-
visions and will bear his proportionate share of expense in the
administration of this Code.
7. The term regular merchandise as used herein means all mer-
chandise other than mill seconds, drops, private patterns, samples,
remnants, and mill ends.
8. The term wholesale distributor as used herein means a firm
or organization maintaining an establishment and performing a
warehousing and distributing function by carrying a stock of rugs
or carpets, and also maintaining a selling organization to contact
floor covering outlets and assuming the credit risks involved in such
9. The term "contract order" as used herein means an order in
which the fabric is sold for a specific installation and not for a part
of any dealer's stock.
10. The term "automobile jobber" as used herein means a firm
or organization maintaining an establishment and performing a
warehousing and distributing function by carrying a stock of auto-
mobile carpets and also maintaining a selling organization to con-
tact automobile manufacturers and automobile body manufacturers
and assuming the credit risks involved in such distribution.
11. The term low basis price" as used herein means the manu-
facturer's published list price, less maximum published trade dis-
12. The term drops as used herein means discontinued patterns.
13. The term "perfect merchandise" as used herein means mer-
chandise which is free from defects, as determined by the inspec-
tion department of the manufacturer.
14. The terms President ", "Act ", and "Adhninistrator as used
herein shall mean respectively the President of the United States,
Title I of the National Industrial Recovery Act, and the Adminis-
trator for Industrial Recovery.
1. No employee shall be permitted to work in excess of forty (40)
hours per week, nor more than eight (8) hours per day, provided,
however, that during a period not to exceed six (6) weeks during any
six months' period, employees may not work in excess of forty-eight
(48) hours per week, but no more than ten (10) hours in any twenty-
four (24) hour period.
2. It is provided further, that the maximum hours prescribed above
shall not apply to professional workers employed in their profes-
sional capacity or to any person on a managerial staff receiving in
excess of thirty (30) dollars per week, or to watchmen.
3. It is provided further, that a tolerance of ten (10) percent
above the maximum hours prescribed above may apply to engineers,
electricians, firemen, employees engaged oh repair-shop or outside
crews, or in the operation of shipping, except common labor.
4. In any special case where restrictions of hours of highly skilled
workers would unavoidably reduce the total employment in a plant,
or where employees are engaged in emergency maintenance or repair
work involving breakdowns or the protection of life or property, em-
ployees may be permitted to work in excess of the maximum hours
prescribed above. Any emergency time shall be reported monthly
to the Code Authority.
5. All hours in excess of the maximum prescribed in the foregoing
paragraphs of this Article shall be compensated for at the rate of
one and one third (1% ) of the time or piece work rate.
1. No employee in the northern section shall be paid less than at
the rate of thirty-five (35) cents per hour, except as herein' other-
2, No employee in the southern section shall be paid less than at
the rate of thirty (30) cents per hour, except as herein otherwise
3. The southern section as used above shall include the states
of Virginia, Kentucky, North Carolina, South Carolina, Georgia,
Florida, Alabama, Mississippi and Tennessee.
4. This article establishes a minimum rate of pay which shall
apply irrespective of whether an employee is actually compensated
on a time rate, piece work, or other basis.
5. The dollar differentials in wages between skilled and unskilled
employees as existing at August 15, 1933, shall not be decreased.
This provision shall not be binding as to employees earning in excess
of thirty (30) dollars for forty (40) hours of work.
6. A person whose earning capacity is limited because of age or
physical or mental handicap may be employed on light work at a
wage below the minimum established by this Code. Each employer
shall file with the Code Authority a list of all such persons employed
by him, provided, however, that such class of employees shall not
exceed five (5) percent of the total employees in any plant.
7. Learners shall not be paid less than eighty (80) percent of the
minimum wage, and shall not constitute more than ten (10) percent
of the total number of employees in any plant. Learners are persons
who have been employed in the industry not longer than six (6)
weeks, except as listed below:
Weavers, Pickers, Threaders, Spoolers, Spinners, and
Dyers-------------------_ --------------- two months
Setters and Jacquard Creelers-- --------- ------- four months
ARTICLE V-GENERAL LABOR PROVISIONS
1. No person under sixteen (16) years of age shall be employed
in the industry. In any State an employer shall be deemed to have
complied with this provision as to age if he shall have on file a
certificate or permit duly issued by the Authority in such State
empowered to issue employment or age certificates or permits show-
ing that the employee is of the required age.
2. In compliance with Section 7 (a) of the Act, it is provided:
(a) That employees shall have the right to organize and bargain
collectively, through representatives of their own choosing, and shall
be free from the interference, restraint, or coercion of employers
of labor, or their agents in the designation of such representatives or
in self-organization or in other concerted activities for the purpose of
collective bargaining or other mutual aid or protection.
(b) That no employee and no one seeking employment shall be
required as a condition of employment to join any company union or
to refrain from joining, organizing, or assisting a labor organization
of his own choosing, and
(c) That employers shall comply with the maximum hours of
labor, minimum rates of pay, and other conditions of employment,
approved or prescribed by the President.
3. No employer shall reclassify employees or duties of occupations
performed for the purpose of defeating the provisions of the Act
or of this Code.
4. No provisions in this Code shall supersede any State or Federal
law which imposes more stringent requirements on employers as to
age of employees, wages, hours of work, or as to safety, health,
sanitary or general working conditions, or insurance, or fire protec-
tion. than are imposed by this Code.
5. All employers shall post complete copies of this Code in con-
spicuous places accessible to employees.
1. To provide for the administration of this Code within the
industry, a Code Authority is hereby established to consist of the
Board of Trustees of the Institute of Carpet Manufacturers of Amer-
ica, Inc., or its successor organization. This Board shall have power
to appoint any committees or delegate any of its powers to same
and utilize any agencies it may deem best for the purpose of admin-
istering this Code.
In the public interest and in order to carry out any of the powers
of the President of the United States under the National Industrial
Recovery Act, the President may appoint one or more representatives
who may without cost to the Industry attend meetings 'of the Code
Authority, but without vote, or confer with the Code Authority as
to methods or measures for the administration of the Code.
2. Each trade or industrial association directly or indirectly par-
ticipating in the selection or activities of the Code Authority shall
(1) impose no inequitable restrictions on membership for participa-
tion in the formation of this Code or in the adoption of any amend-
ments thereto, or in its administration, and (2) submit to the Admin-
istrator any articles of the association's By-Laws, regulations, and
any amendments when made thereto, which in any way affect the pur-
poses of the National Industrial Recovery Act in the administration
of the Code.
3. In order that the Code Authority shall at all times be truly
representative of the Industry and comply with the provisions of the
Act, the Administrator may prescribe such hearings as he may deem
proper; and thereafter if he shall find that the Code Authority is
not truly representative or does not comply with the provisions of
the Act, may require the membership of the Industry to make an
appropriate modification in the method of selection of the Code
4. Members of the Industry shall be entitled to participate in and
share the benefits of the activities of the Code Authority and to par-
ticipate in the selection of the members thereof by sustaining their
reasonable share of the expenses of its administration; such reason-
able share of the expenses of administration shall be determined by
the Code Authority on the basis of such factors as may be deemed
5. Nothing contained in this Code shall constitute the members of
the Code Authority partners for any purpose. Nor shall any mem-
ber of the Code Authority be liable in any manner to anyone for
any act of any other member, officer, agent, or employee of the Code
Authority, nor shall any member of the Code Authority exercising
reasonable diligence in the conduct of his duties hereunder be liable
to anyone for any action or omission to act under this Code.
6. The Code Authority shall have the following further powers
To obtain from members of the Industry for use of the Code
Authority, and for the information of the President, such reports or
statistical information listed below, and/or any other reports or in-
formation as shall later be deemed necessary for such purposes.
Such data shall be furnished to an individual not in the Industry,
to be designated by the Code Authority. The source of such data
shall not be disclosed to any member of the Industry, except where
any such member specifically consents in respect to his own statistics,
or where it is specifically provided for in this Code. Each member
of the Industry shall furnish:
A. Such information on cost practices as will enable cost experts
employed by the Code Authority to recommend a set of principles of
cost practices as hereinafter provided.
B. The following statistics:
Monthly.-(1) Analysis of total shipments in square yards of-
(2) Divided by carpets and rugs, also by weaves:
Orders received in square yards,
Production of finished goods in square yards
Inventory of finished goods in square yards
Shipments of finished goods in square yards
Sales billed in dollar value of:
(a) Regular Merchandise
(d) Mill Ends
Semiannually.-A certified report showing the proportion sepa-
rately of dollar billed sales of drops, seconds, and mill ends, to the
dollar billed sales of regular merchandise.
7. The Code Authority shall have power to initiate, consider, and
make recommendations for the modification or amendment of this
8. In addition to the information required to be submitted to the
Code Authority as set forth in this Article there shall be furnished
to Government agencies such statistical information as the Admin-
istrator may deem necessary for the purposes recited in Section 3 (a)
of the Act.
9. Where any member of the Industry finds that any other mem-
ber of the Industry in his operation is presuming an interpretation
of any provision of the Code which appears contrary to a proper
interpretation, he may complain to the Code Authority and all mem-
bers of the Industry shall refrain from competitive action on such
interpretation pending an interpretation from the Code Authority.
10. The Code Authority upon receipt of a written complaint from
any member of the Industry shall, within two weeks, render an in-
terpretation to be binding on all members of the Industry subject
to appeal to the Administrator.
11. Each member of the Industry shall file with the person not in
the Industry, designated by the Code Authority, the beginning and
termination dates of any agreement or contract involving the sale
of his product, to the terms of which he remained legally bound
beyond the 24th day of November 1933.
12. If the Administrator shall determine that any action of the
Code Authority or any subdivision thereof is unfair or contrary to the
public interest, the Administrator may require that such action be
suspended for a period of not to exceed thirty (30) days to afford
an opportunity for investigation of the merits of such complaint and
further consideration by the Code Authority pending final action
to be taken only upon approval by the Administrator.
ARTICLE VII-FAIR TRADE PRACTICES
1. Inasmuch as the members of the Industry control a prepon-
derant share of the distribution of carpets and rugs to retailers and
consumers, which distribution is to be governed by the following
trade practices, it shall be an unfair trade practice for any member of
the Industry to distribute through intermediate channels in such a
manner as shall create unfair competition as defined in Articles VII,
VIII, and IX with members of the Industry distributing direct to
the retailer and consumer.
2. Control of Production.-The finished goods inventory of square
yards of merchandise wherever located, owned by any member of the
Industry shall not exceed one third (1/3) of his sales in square yards
of merchandise for the immediately preceding twelve (12) months.
A member of the Industry whose inventory shall at the end of any
month exceed the aforementioned allowed figure shall be allowed
a period of one hundred twenty (120) days in which to restore the
balance between his inventory and sales before curtailing produc-
tion. Should any person or company enter the industry as a manu-
facturer or should any existing member of the industry have with-
drawn or withdrew his lines from the market for a period of not
less than three (3) months the above provisions shall be suspended
in their case for the period of twelve (12) months; during this
twelve (12) months such person or company may carry an inventory
of finished merchandise not to exceed that which is allowed to mem-
bers of the Industry of commensurate capacity under the provisions
of this Code.
3. Selling Below Cost.-No member of the Industry shall sell any
regular merchandise at a net price or net prices below his cost, ex-
cepting that any such member may sell under the provisions of this
Code at a price below his cost (a) to meet current prices on regular
merchandise of essentially equivalent grade and quality sold by any
competitor complying with the provisions of this Code, or (b) where
the Code Authority grants him permission to sell below his cost
because exceptional conditions have been presented. The Code Au-
thority shall, through expert cost accountants, determine the prin-
ciples of a cost practice, both as to the character of the items to be
included and the method of their application to the finished products,
and each member of the Industry shall set up and maintain records
which will conform to the principles recommended and be governed
thereby in all computations and reports required for the adminis-
tration of this Code.
4. Open Price Data.-(a) Each member of the Industry shall file
with the Code Authority and publish to the trade certified lists of
his prices and discounts and also any revision of prices, which shall
be immediately forwarded to all members of the Industry. If any
member of the Industry desires to revise any of his prices he shall
file with the Code Authority any such revision which shall become
effective not less than seven (7) days thereafter, exclusive of the
date of the filing thereof. Any such revision shall be forwarded
immediately to all members of the Industry, who, thereupon, may
file any revision of prices which may become effective upon the
date when the revised price first filed shall go into effect.
(b) No member of the Industry shall sell any regular merchandise
for less than his published list prices, which shall be subject to no
greater discount than his maximum trade discount as filed with
the Code Authority.
5. Rebates.-No member of the Industry shall rebate to any pur-
chaser any part of the purchase price either in the form of trade
discounts, advertising allowances, or any other allowances, excepting
allowances filed with the Code Authority.
6. Donations.-No member of the Industry shall make any dona-
tion or contribution in the form of cash, credit, advertising, or other
gratuitous consideration to any purchaser.
7. Contracts.-No member of the Industry shall accept a contract
order at less than his published list price, less his published trade
8. Quality Specifications.-Each member of the Industry accepts
the minimum specifications for Axminster, Wilton, and Velvet fab-
rics, which have been adopted by the Institute of Carpet Manu-
facturers of America, Inc., which shall be filed with the Bureau of
Standards at Washington, and shall not manufacture any Axminster,
Wilton, or Velvet merchandise inferior to these specifications except
to complete the weaving of any fabric in the looms. It is under-
stood that automobile carpets and rugs and also carpets and rugs
whereof the surface yarns are composed entirely of jute are excepted
from the quality specifications above referred to. Any member of
the Industry may require of the Code Authority an interpretation
regarding such specifications as to his product.
9. Copying of Patterns.-No member of the Industry shall pro-
duce in an inferior grade a copy of a running line pattern by any
10. Invoicing and Marking.-All merchandise shipped to custom-
ers shall be correctly described and priced on the invoices which are
issued covering such merchandise. Rugs other than perfect" shall
be plainly and permanently marked "mill seconds."
.. .. ., ,
11. Return Merchandise.-All sales of merchandise shall be final,
and no member of the Industry shall accept the return of any mer-
chandise, either for exchange or credit, except where the quality of
the merchandise is in question or where an error has been made in
size or pattern, or for credit reasons, or where such return is author-
ized by the Code Authority or its agent.
12. Credit Terms.-The following maximum credit terms will ap-
ply in all sales of merchandise with the understanding that any
member of the Industry be permitted to exercise his option as to
which terms best suit the needs of his company:
(a) 4% 70 days from date of invoice, or
b) 4% 60 days from end of month.
Abatement of discount beyond maturity date to be at the rate of
one (1) percent a month, left to the option of each member of the
Industry, but in no case should abatement of discount be permitted
beyond thirty (30) days after maturity date of invoice. Any devia-
tion from the above terms shall be only upon approval of the Code
13. Compensation for Losses.-No member of the Industry shall
guarantee any purchaser against, or compensate him for, any losses
arising through the operation of his business.
14. Protection.-No member of the Industry shall extend price
protection or stock protection to purchasers other than wholesale
distributors or firms performing a similar distributing function in
the event of any decline in prices.
15. Consignment.-No member of the Industry shall consign the
products of his manufacture to retail dealers or consumers.
16. Consumers.-No member of the Industry shall sell direct to the
ultimate consumer or his agent, with the exception of sales to city
state, and federal governments, railroads, steamship companies, and
common carriers or employees. Sales made through contract depart-
ments of wholesale distributors shall not be considered as being made
to the ultimate consumer or his agent.
17. Drops.-The dollar billed sales of drops by any member of
the Industry shall not exceed ten (10) percent of his dollar billed
sales of his regular merchandise at his regular published prices, for
any calendar year, beginning January 1, 1934. In the case of any
excess above the foregoing, then a subscriber shall pay to the Code
Authority, as and for liquidated damages, the sum of twenty (20)
percent of the amount of such excess, such sum to be devoted to
meeting the expenses of the administration of this Code.
18. Slow-Moving Merchandise.-Slow-moving merchandise which
remains in stock after having been offered for sale as mill seconds,
drops, and mill ends for a period of not less than three (3) months,
may be sold at discounts necessary to move same, but such slow-
moving merchandise shall be sold only during the months of June
and December and without further price or stock protection.
19. Allowances.-(a) Retail stores are to be credited or paid the
volume allowances based only on merchandise invoiced to an in-
dividual company. No manufacturer shall pay or allow credit for
any cost of re-shipping merchandise shipped and invoiced to a
Provisions of this subsection stayed; see paragraph 2 of Executive Order approving
(b) All members of the Industry shall lodge with the person not
in the Industry, designated by the Code Authority, at the beginning
of each season, schedules of all their allowance'i to wholesale dis-
tributors and to other purchasers. Allowances for dollar volume
shall be calculated and paid or credited to retailers for no less a
period than six (6) months, and in accordance with the schedule
filed as provided herein. Notification of any proposed revision in a
schedule of allowances shall be given the-person not in the Industry,
designated by the Code Authority, not less than one (1) week prior
to the date upon which any such revision shall become effective.
ARTICLE VIII-AUTO AND AIRPLANE CARPETS
The following additional provisions shall apply to the sale of auto
and airplane carpets:
1. 0/f Goods.-Merchandise consisting of seconds, returned goods,
and overweavings may be offered to the automobile trade at any
time, but if offered to the regular floor-covering trade all provisions
of the Code shall apply.
2. Con8ignment.-No member of the Industry shall consign auto-
* 3. Credit Terms.-Each member of the Industry shall abide by
the following terms in the sales of his merchandise:
(a) No cash discount or volume allowances to be allowed to pur-
chasers of auto and airplane carpets; sales to jobbers on four (4)
(b) Terms of sale shall specify for payment for merchandise not
later than the 25th of the month following the date of the invoice.
(c) Shipments shall be f.o.b. mill.
4. Filing of Orders.-Each member of the Industry shall file with
the person not in the Industry, designated by the Code Authority,
certified copies of all orders received in excess of five hundred (500)
dollars; such lists to be filed on the 12th of each month, showing the
orders taken during the preceding month. Orders must show quan-
tity, price, terms, life of such agreement and quality and construction
specifications, consisting of all-over weight per square yard and pile
weight per square yard. After a lapse of three (3) months speci-
fications and price particulars of any order will be considered avail-
able for the information of any member of the Industry who may
so request. Name of member of the Industry and purchaser shall
not be disclosed unless in the opinion of the person not in the Indus-
try, designated by the Code Authority, it is necessary in the event
of a claim of unfair practice.
5. Protection.-Price protection or stock protection shall not be
extended to automobile manufacturers or to distributors or retail
dealers in automobile carpets.
6. Shipping Specifcations.-All orders shall be specified quan-
tities and stipulate the period during which the entire order must be
released for shipment or billed. No goods shall be manufactured
except against written orders.
ARTIcLE IX-WooL SALES YAN
The following additional provisions shall apply to those members
of the Industry spinning carded and worsted wool sales yarn for
carpets and rugs, with the understanding that Section 6 (b) of
Article VI and Article VII of this Code, shall not apply to said
members of the Industry:
1. Control of Production.-The finished yarns inventory of pounds
of merchandise, wherever located, owned by any member of the
Industry defined in this Article shall not exceed one sixth (14) of
his sales in pounds of merchandise for the immediately preceding
twelve (12) months. Since, however, seasonal variations require
fluctuating inventories of finished yarns, a said member of the In-
dustry whose inventory shall at the end of any month exceed the
aforementioned allowed figure shall be allowed a period of one
hundred twenty (120) days in which to restore the balance between
his inventory and sales, before curtailing production. Should any
person or company enter the industry as a manufacturer or should
any existing member of the industry have withdrawn or withdrew
his lines from the market for a period of not less than three (3)
months the above provisions shall be suspended in their case for the
period of twelve (12) months; during this twelve (12) months such
person or company may carry an inventory of finished merchandise
not to exceed that which is allowed to members of the Industry of
commensurate capacity under the provisions of this Code.
In order to inform the President of the United States as to the
regulation of production conformable with sales, a return shall be
made each month to the person not in the Industry, designated by the
Code Authority, by each said member of the Industry showing the
sales in pounds for the month and the inventory of finished yarns at
the end of the month.
2. Standard Spinning Contract.-The said members of the In-
dustry, through the Code Authority, shall set up a standard contract
for the sale of carpet yarns, which shall include a description of the
yarn, a definite date, price, quantity, and a specific time for comple-
tion, and it shall be considered unfair practice to allow customers to
specify deliveries which shall carry any contract past its completion
date. All sales shall be final and any of the said members of the
Industry shall not allow rebates of any sort, whether for stock pro-
tection, financial protection, or anything else that would change the
terms of the contract.
3. Arbitrations.-Upon any question arising under this Code which
would involve dispute between any said member of the Industry and
a weaver to whom he has sold yarn, the complaint of either may be
brought to the attention of the Code Authority for its recommenda-
tion. If it is determined by said Authority that the contention of any
said member of the Industry or of the weaver is without justification
then the person not in the Industry, designated by the Code Author-
ity, will be requested to seek an arbitration between the said member
of the Industry and weaver involved.
4. Options.-Options that are given in yarn purchases shall not
exceed ten (10) days.
I ..;: .:*. .. ..
5. Seconds, Damaged, or Off-Colored Merchandise.-All merchan-
dise sold at prices below the contracted price of such merchandise
because of yardage, quality, or color, must be reported to the Code
Authority monthly. Sales of such merchandise shall not exceed more
than 212% of the yearly sales in pounds of each said member of
the Industry. This includes such items as inferior or damaged yarn,
discontinued or slow-moving colors or any types of merchandise that
might properly be classified under these headings.
6. Donations.-It shall be considered as unfair competition for any
said member of the Industry to make any donation or contribution in
the form of cash, credit, advertising, or other gratuitous considera-
tion to any customer in connection with any sale.
7. Terms.-Each said member of the Industry shall abide by the
following credit terms in the sales of his yarn:
3%% ----------------------------------- 10 days
3% ---------------------------------- 30 days
Net -------------------------------- 60 days
f.o.b. shipping point.
From date of invoice which shall be date of delivery.
Interest shall be charged at the rate of one half of one (1/2 of 1)
percent per month in excess of 60 days. Any deviation from the
above terms shall be only upon approval of the Code Authority.
1. This Code and all the provisions thereof are expressly made
subject to the right of the President, in accordance with the provi-
sions of subsection (b) of Section 10 of the National Industrial Re-
covery Act, from time to time to cancel or modify any order, ap-
proval, license, rule, or regulation issued under Title I of said Act.
2. This Code, upon recommendation to the Administrator by the
Code Authority, based on conditions in the Industry which tend
to effectuate the operation of this Code or the purposes of this Act,
may be modified or amplified, except as to provisions required by
the Act; such modification or amplification to have the same force
or effect as any other provision of this Code after approval by the
Administrator under such notice or hearing as the Administrator
No provision of this Code shall be so applied as to permit monopo-
lies or monopolistic practices, or to eliminate, oppress, or discrimi-
nate against small enterprises.
ARTICLE XII-EFFECTIVE DATE
This Code shall become effective the second day after date.
Approved Code No. 202.
Registry No. 214-1-04.
UNIVERSITY OF FLORIDA
II 1111 lll IlllllllllA11111J11I IfIIf11111 1111
3 1262 08486 8149
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