UNIVERSITY OF FLORIDA
3 1262 08483 0156ll iillll
3 1262 08483 0156
Registry No. 263-01
NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
SILK TEXTILE INDUSTRY
AS APPROVED ON OCTOBER 7, 1983
WE DO OUR PART
1. Executive Order
2. Letter of Transmittal
8. Text of Code
UNIV. OF FL LIa.
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CODE OF FAIR COMPETrION FOR THE SILK TEXTILE INDUSTRY
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 16th, 1933, for my approval of a
Code of Fair Competition for the Silk Textile Industry, and hear-
ings having been held thereon and the Administrator having rend-
ered 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
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, it being distinctly
understood that the minimum wage fixed in Article IV applies only
to the lowest paid class of labor in the industry and is a minimum
wage for that class only, and that weavers, warpers, loom fixers, and
other skilled and semi-skilled workers shall be paid upon a higher
wage scale which maintains the dollar differential above the lowest
paid class as they existed on July 1 1933, in accordance with the
provisions of paragraph 3 of Article IV.
TmH WHmrE HouSE
October 7, 1933.
FRANKLIN D. ROOSEVELT.
HUGH S. JOHNSON,
OCTOBER 6, 1933.
To the President:
Submitted herewith is the report of the Hearing on the Code of
Fair Competition for the Silk Textile Industry in the United States
as submitted by the Silk Association of America, Incorporated. of
New York City, conducted in the small ballroom of the Willard
Hotel, in Washington D.C on September 12, 1933, in accordance
with the provisions of the National Industry Recovery Act.
The following papers are included and annexed:
1. Code as finally proposed
2. Notice of Hearing
3. By-Laws of the Silk Textile Industry
4. Statement of procedure
5. List of witnesses
6. Transcript of the records
7. Statistical analysis
8. Report of Deputy
In accordance with the customary procedure every person who had
filed a request for an appearance was freely heard in public, and all
statutory and regulatory requirements were complied with.
The Code which it attached was pre-ented by duly qualified and
authorized representatives of the Industry, complying with the
statutory requirements, as representing 47.6% in its own membership
and approximately 90% in authorization for presentation of the
Evidence presented showed that in 1931 the industry employed
109.000 persons and the value of the product was 376,000,000, shrink-
age in the value from $680,000,000 in 1929 being largely represented
by decreasing prices rather than unit volume. This industry is par-
ticularly characterized by the existence of large numbers of small
units. Only one third of the manufacturers have investments above
In the presentation of the Code, representatives of the Industry
submitted data to show (1) that a great portion of their own goods
are manufactured of rayon; and (2) that a great portion of the rayon
manufactured is sold at prices above a great deal of the silk merchan-
dise, the contention being that silk is not to be distinguished as a
luxury article but as competitive. While opinion was sharply di-
vided as to the desirability of establishing higher minimum rates for
weavers in the Industry, witnesses agreed that on account of direct
competition no more could be paid for weaving rayon cloth in so-
called silk mills than in so-called cotton mills. It was repeatedly
testified that weaving must be on the same cost basis for both sets
The wage level proposed in this code is identical with that in the
cotton textile code, under which the National Rayon Weavers Asso-
ciation is operating.
Objection to the wages and hours provision relied on the conten-
tion that both the Cotton Code and the Silk Code, if adopted, would
provide too low a level rather than that silk alone should bear a
A great deal of the testimony in this respect failed to understand
the extent to which provision for the maintenance of differentials
protects wages in the upper brackets. Explanation for this is found
partly in the fact that in contrast to the other textile industries,
the minimum wage will apply to only about 10% of the employees
in the Silk Textile Industry. As the public at large and to a con-
siderable extent the witnesses gave attention only to the minimum
rate and not to provision for maintenance of differential, they
were primarily conscious of the fact that the minimum is substan-
tially below the wage rate of about 90% of the Industry. In spite
of the consequent protest against the wage rate itself, no evidence
was submitted against the claim to equal treatment with rayon
RESUME OF PROVISIONS OF THE CODE
The code provides for a forty hour work week, allowing for a
10% tolerance in the case of certain classes of maintenance em-
ployees, and an average of forty hours over a twelve weeks period
with respect to others, including office workers.
Minimum wages are at the rate of $12 in the southern section
and $13 in the northern section for forty hours of labor. An excep-
tion from this minimum is with respect to learners, not to exceed 5%
of the total pay roll, during a six weeks apprenticeship, during
which time they are to receive 80% of this minimum. Provision
is made for maintaining previously existing differences between
classes receiving more than the minimum and special provision is
made for adjustment with the approval of the Administrator of
those cases where this provision results in disparity of wage rates
for the same work. It will be noted that numerous classes of labor
exempted from minimum wage provisions in other textile codes
are not so exempted in this one.
Provision is made to keep on the pay rolls some of the physically
incapacitated by permitting the employment of 1% of the total
number of such employees at not less than $8 per week.
Child labor is prohibited.
Trade objections to the application of details of the provision have
been largely met by revision of the code.
The general planning committee set up by the code and designated
to cooperate with the Administrator consists of eleven representa-
tives, so that each of the several branches of the industry as defined
can be given a voice on the planning and fair practice agency.
Method of election is to be approved by the Administrator.
Extensive provisions are made against style piracy, discriminating
between customers similarly situated, selling below cost, and the
making of unconfirmed contracts. Consignment is rigidly restricted.
Standard terms are set up for nine divisions of the industry.
Productive machinery is limited in its operation to two shifts of
40 hours per week.
The Administrator finds that:
(a) This code complies in all respects with the pertinent provi-
sions of Title I of the Act, including without limitation subsection
(a) of Section 7 and subsection (b) of Section 10 thereof.
(b) The Silk Association of America to be truly representative of
the Silk Textile Industry. The By-Laws of this association provide
no inequitable restrictions to membership.
(c) The code is not designed to promote monopolies or to eliminate
or oppress small enterprises and will not operate to discriminate
against them and will tend to effectuate the policy of Title I of the
National Industrial Recovery Act.
(d) While not generally understood by the public, the code pro-
vides protection for substantially higher wage level than prevailed
prior to the initiation of the recovery program.
(e) The code provides trade practices calculated to bring some
uniformity of practice into an industry of many small units.
I recommend that the code be approved.
HUGH S. JOHNSON,
CODE OF FAIR COMPETITION FOR THE SILK TEXTILE
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 Silk Textile Industry, and upon approval
by the President shall be the standard of fair competition for such
Industry, and shall be binding upon every member thereof.
1. The term "industry" as used herein, means the manufacture
of silk and/or rayon and/or acetate yarn (or any combination
thereof) woven fabrics or any of the processes of such manufacturing
except throwing, but it shall not include such manufacturing of rayon
and/or acetate yarn fabrics as are governed by the provisions of the
Cotton Textile Code. The term shall include also the converting of
the woven fabrics enumerated above, the manufacture of silk, rayon,
and/or acetate yarn sewing threads, spun silk, woven labels, and shall
include such other related branches whether engaged in merchandis-
ing or manufacturing as may from time to time be brought within
the provisions of this Code.
2. The term "employer ", as used herein, means any person who
employs labor in the conduct of any branch of the industry.
3. The term employee ", as used herein, means any person em-
ployed in the conduct of any branch of the industry (including a
proprietor, his family, and his relatives doing production work).
4. The term productive employee ", as used herein, means any
employee in the industry, except office employees, repair-shop crews,
engineers, electricians, firemen, supervising staff, and shipping,
watching, and outside crews.
'5. The term "productive machinery" as used herein means all
looms, and all winders, warpers, coppers, or quillers, when used for
commission work, dressing frames for the spun-silk industry, spool-
ing, coning, balling, tubing, and skeining for the sewing thread and
6. The term "person as used herein means any individual, part-
nership, association, trust, or corporation.
7. The word "Association ", as used herein means "The Silk Asso-
ciation of America, Inc.", or its successor.
8. The word "Division" as used herein means any branch of the
industry having a Divisional Committee and operating through the
9. The term "converting" as used herein means the business of
owning unfinished or greige goods for the purpose of having same
processed for one's own account, having same bleached, dyed, or
printed, and subsequently selling same to the jobbing, cutting, or
Employers shall comply with the requirements of the National
Industrial Recovery Act as follows:
1. 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, oi 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;
2. That no employee and no one seeking employment shall be re-
quired 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
3. 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.
ARTICLE III-HouRs OF LABOR AND MACHINERY HOURS
1. Employers shall not operate on a schedule of hours of labor for
their productive employees in excess of forty (40) hours per week
and they shall not operate productive machinery in the industry for
more than two shifts of forty (40) hours each per week.
2. No other employee (excepting repair-shop crews, engineers,
electricians, firemen, supervising staff, shipping, watching, and out-
side crews) shall work more than 480 hours in any twelve weeks, an
average of 40 hours a week; and not more than 48 hours in any one
3. The maximum hours of labor of repair-shop crews, engineers,
and electricians shall, except in case of emergency work, be 40 hours
a week with a tolerance of 10 percent. Any emergency time in any
establishment shall be reported monthly through the Association to
the General Planning Committee hereinafter provided. A schedule
of maximum hours for outside crews shall be submitted to the Ad-
ministrator for approval not later than January 1, 1934. Overtime
above 40 hours to be paid for at time and one third.
4. Where a State law specifies a lower maximum number of hours
that must not be exceeded, the requirements of such State law shall
govern within that State.
5. The provisions for maximum hours establishes a maximum num-
ber of hours of labor per week for each employee so that under no
circumstances shall any employee be employed or permitted to work
for more than one employer in the aggregate in excess of the pre-
scribed number of hours.
ARTICLE IV--MINIMM WAGES
1. The minimum wage that shall be paid by employers to any of
their employees-except learners-shall be at the rate of $12 per
week when employed in the Southern section and at the rate of $13
per week when employed in the Northern section, for forty hours
of labor. The Southern section shall include the States of Virginia,
North Carolina, South Carolina Georia, Tennessee, Alabama, Miss-
issippi, Louisiana, Texas, and Florida; the words Northern sec-
tion are defined to mean the rest of the United States.
2. A learner is hereby defined as one who has served an apprentice-
ship of less than six weeks in the industry and the rate of pay of such
employees shall not be less than 80 per cent of the minimum rate.
For the purpose of wage classification, learners in any plant shall
not exceed 5 percent of the total number of employees in that plant.
3. The amounts as of July 1, 1933, by which wages in the higher-
paid classes, up to $30 per week, exceed wages in the lowest-paid
classes, shall be maintained. But no employer, upon obtaining the
consent of the Administrator, need increase wages in the higher-paid
classes beyond those maintained by other employers who have in-
creased their wages in accordance with the above provision for the
same class or kind of labor in the same wage district.
4. Employees who are physically incapacitated may, of their own
volition, waive their right to minimum wages, but no employer shall
employ such workers at less than standard piece rates or at less than
the rate of $8.00 per week for time work; no employer employing
one hundred (100) or less employees may include within the category
of physically incapacitated employees more than one (1) such em-
ployee; and no employer employing more than one hundred (100)
employees shall include within such category more than one (1)
percent of his employees.
ARTICLE V-AGE Lmrrr
No person under the age of sixteen shall be employed in the indus-
try it is provided, however, that where a State law provides a
higher minimum age, no person below the age specified by such State
law shall be employed within that State.
AnTTcLE VI-ADMINISTRATIVE AGENCY
1. To effectuate further the policies of the Act, a General Planning
Committee is hereby designated to cooperate with the Administrator
as a Planning and Fair Practice Agency for the industry. The
Committee shall consist of eleven representatives of the industry
elected by the members of the Association and such other employers
as agree to bear their proportionate cost of the administration of this
Code. This Committee shall be chosen by a fair method of selection,
approved by the Administrator, and shall have in addition not more
than three members without vote appointed by the President of the
United States. Such agency may from time to time present to the
Administrator recommendations, based on conditions in the industry
as they may develop, which will tend to effectuate the operations of
the provisions of this Code and the policy of the Act. Such recom-
mendations, when approved by the Administrator, shall have the
same force and effect as any other provisions of this Code.
2. Such Committee shall not present to the Administrator any
Code or proposed amendment of any Code affecting any Division"
of the Industry without first conferring with that "Division" or
its representatives, and if such Division" does not consent thereto,
giving the division notice of date of proposed presentation.
3. No Division shall make any application to the Administrator
for the approval of any Code or amendment thereof without first
notifying such Committee and giving it notice of the proposed date
of presentation and hearing thereof.
4. The expenses of the administration of this Code shall be equi-
tably assessed by the Committee against the members of the Associa-
tion and all other employers who signify their assent to bear a pro-
portionate share of such expenses.
1. With a view to keeping the President informed as to the ob-
servance or nonobservance of this Code of Fair Competition, and
as to whether the industry is taking appropriate steps to effectuate
the declared policy of the Act, each employer will furnish the General
Planning Committee, as and when required, with duly certified re-
ports in substance as follows and in such form as may hereafter
(a) Wages and hours of labor.-Returns every four weeks showing
actual hours worked by the various occupational groups of employees
and minimum weekly rates of wages.
(b) Machinery data.-Mills having no looms but doing commission
warping, winding copping and/or quilling, and other activities speci-
fied under productive machinery must furnish every four weeks
such reports and information called for pursuant to th provisions
of this or any amended Code. In the case of mills that have looms
returns shall be made every four weeks, showing the number of
looms in place, the number of looms actually operated each week,
the number of shifts, and the total number of loom hours each week.
(c) Reports of production, stocks, and orders.-Weekly returns
showing production, in terms of the commonly used unit, i.e., linear
yards or pounds or pieces; stocks on hand, both sold and unsold,
stated in the same terms, and unfilled orders stated also in the same
terms. The "Association" address 468 Fourth Avenue, New York
City, is constituted the agency to collect and receive such reports.
2. Each person shall, from time to time, upon request of the
Administrator or of the General Planning Committee approved by
the Administrator, furnish any other reports and information called
for pursuant to the provisions or pertinent to the purposes of this or
any amended Code.
ARTICLE VIII-COMPETITIVE PRACTICES
1. Every employer shall grant equal terms and prices to all persons
making the same or similar purchases or offers to purchase from him.
2. No employer shall sell or take orders to manufacture below his
cost of production. The General Planning Committee shall, subject
to the approval of the Administrator, define "cost of production"
for the purposes of this Code, and the foregoing provision of this
paragraph shall not become effective until such definition has been
approved by the Administrator.
8. Where goods are shipped on consignment or memorandum, every
employer shall require payment within ten days of receipt, at the
invoice rate of the date of shipment, unless goods are sooner re-
turned, except where defects are not discoverable by the buyer after
reasonable inspection at the time of delivery, in which case he must
require an immediate claim upon discovery.
4. Employers must require all disputes as to claims on finished
merchandise to be made in writing, within ten working days after
the receipt of the goods by the buyer, and shall refuse to make any
allowance on goods after they have been cut, except where defects are
not discoverable by reasonable inspection at any time prior to the
cutting, in which event the employer must require an immediate
claim upon discovery.
5. No employer shall take orders for, or print, or jacquard weave
any design not registered with the Textile Design Registration
Bureau of the Silk Association of America, Inc., or its successor; or
do any work on any registered design except with the written consent
of the person making the registration. This rule shall not apply to
sewing threads, tie fabrics, tinsel fabrics, and flosses.
6. Every employer shall require confirmatory signed contracts in
all transactions in excess of $500 between himself and buyers from or
sellers to him; shall keep all documents, records, and book entries as
are necessary to reflect and permit easy ascertainment of on inspec-
tion, all transactions, and all modifications thereof; and shall not
omit to make or obtain, in whole or in part, any record or document
usually made in the normal course of business.
7. Every employer shall endeavor to effect appropriate adjust-
ment in contracts entered into prior to the effective date of this
Code, where increased costs or delay will result from the operation
of this Code. The Association is hereby constituted an agency to
assist in effecting such adjustments where the facts are not agreed
upon by the parties.
ARTICLE IX--AM ENDMENTS, MODrFICATIONS, AND ADDITIONS
1. Such of the provisions of this code as are not required to be
included therein by the National Industrial Recovery Act may, with
the approval of the President, be modified or eliminated in such
manner as may be indicated by the needs of the public, by changes
in circumstances, or by experience; all the provisions of this code,
unless so modified or eliminated, shall remain in effect until the
expiration date of Title I of the national Industrial Recovery Act.
2. In order to enable the industry to conduct its operations sub-
ject to the provisions of this code, to establish fair trade practices
within the industry and with those dealing with the industry and
otherwise to effectuate the purpose of Title I of the Act, supple-
mentary provisions of this code or additional codes may be sub-
mitted from time to time for the approval of the President.
3. This Code and all the provisions thereof are expressly made
subject to the right of the President, in accordance with provisions
of Clause 10 (b) of the National Industrial Recovery Act, from
time to time to cancel or modify any order, approval, license rule,
or regulation issued under Title I of said Act, and specifically to
the right of the President to cancel or modify his approval of this
Code or any conditions imposed by him upon his approval thereof.
A committee of three shall be appointed by the Administrator to
study machine load per operative and report to the Administrator.
The following standard terms for each of the respective divisions
shall be adhered to:
BROAD GOODS WEAVERS AND CONVERTERS
For raw broad goods, terms shall not exceed 60 days. For fin-
ished broad goods, the terms shall not exceed 6/10/60 or a maximum
of 8/10 e.o.m. Additional dating as of the first of the following
month may be given on any merchandise delivered after the 25th of
the month and no anticipation shall be allowed at any rate higher
than 6% per annum. No optional terms to be given.
For wholesale manufacturers of hats in the United States of
Terms, 10/10, e.o.m., 25th of the month as of the first of the fol-
lowing month; payment to be made in currency check, or if made
in trade acceptance or note, interest must be paid at the rate of 6%
per annum; anticipation to be at the rate of 6% per annum.
All sales shall be made on the basis of f.o.b. shipping point. Six
months after date of contract, any goods undelivered shall be billed
and such billing shall constitute delivery.
All sales of ribbons shall be on the basis of 6/10/60 or 7/10 e.o.m.,
or its equivalent, shipped after the 25th of the month as of the
first of the following month. Anticipation at the rate of 6% per
annum. No seasonal dating shall be granted. All past due bills
shall bear interest at the rate of 6%. No ribbon manufacturer shall
ship merchandise on consignment or memorandum except to duly
accredited factors and/or authorized selling agents. Each ribbon
manufacturer shall register with the Silk Association his authorized
and accredited agents and/or factors. No goods shall be redyed
or reprocessed free of charge. No exchanges shall be made; no
tender of return shall be accepted after ten days, except in the
case of merchandise originally submitted as samples and except in
the case of manufacturing defects not discoverable by reasonable
inspection at time of delivery, in which case an immediate claim
must be required upon discovery. All merchandise shall be shipped
f.o.b. shipping point. The provision in Article VIII, paragraph 6,
in regard to confirmation of all orders by signed contracts shall
apply only to orders for future delivery in excess of three weeks.
Where a contract covers the sale of goods in which the assortments
are not determined at the time of sale, there must be three weeks
time allowed for delivery to be made.
SEWING THREADS AND FLOSSES
No goods may be consigned or shipped on memorandum. No
dating may be allowed. The goods of other sewing thread and
floss manufacturers must not be purchased or exchanged for the
purpose of substitution. Cash discount, 2;, 10 days, e.o.m., may
not be exceedded, but goods shipped between the 25th and the end of
the month may, for discount purposes, be considered as shipped
as of the first of the following month. No protection to retail ac-
counts on their unsold stocks in case of decline in price. Stock pro-
tection to Notion Jobbers on 30-day purchases previous to date of
decline is proper, provided such purchases do not exceed the stock on
hand at the time of de.line. Should the purchases amount to more
than the stock on hand, the protection will be stock on hand.
Shipping on memorandum and billing at a later date constitutes
an unfair method of competition as it defeats uniform selling terms.
Any goods invoiced on memorandum which are subsequently in-
voiced regularly shall be billed on the date of shipment on memo-
randum. At the beginning of the spring season spring goods are to
be dated no later than December 1, and at the beginning of the fall
season fall goods are to be dated not later than July 1. On finished
merchandise the maximum terms are to be 6%, 10 days, and 60 days'
dating, or a. maximum of 8%, 10 days e.o.m., goods shipped after
the 25th of the month to be dated from the first of the following
Maximum discount shall be 2%, 10 days, e.o.m. Allowance for
cooperative advertising and sale promotion between buyer and seller
may be permitted on novelty yarns. Purchasers shall not be allowed
any commissions, bonuses, rebates, subsidies, or privileges of any
kind, whether in form of money, services, or otherwise. No close-
out sales shall be made without the permission of the Divisional
6/10,.'60, no e.o.m., dating. Anticipation at the rate of 6% per
annum. Interest shall be paid on deferred deliveries at the rate of
6%, per annum. Not more than sixty days shall elapse between
delivery of samples and delivery of merchandise. No orders for
sample lengths shall be taken without orders for goods for later de-
livery. No extra dating shall be given on samples. No member of
the Tie Silk Industry shall ship merchandise on consignment or
memorandum except to his duly accredited agent.
Shipping on memorandum and billing at another date constitutes
an unfair method of competition and no goods shall be billed more
than sixty days after date of shipment. Terms, 2/10 e.o.m.
THROWN SILK, THROWN RAYON, AND SYNTHETIC YARN DEALERS
All transactions between buyer and seller shall be confirmed by
signed contracts and subject to following terms: To Hosiery Manu-
facturers, 1/10 e.o.m., net 60 days' trade acceptance from date of
shipment; to Weavers, 10 days, 1%~ net 60 days' trade acceptance
from date of shipment. Interest shall be paid on deferred deliveries
at the rate of 6% per annum.
This Code shall become effective on the second Monday following
its approval by the President.