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: NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
OLESALE DRY GOODS
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(A DiviEni -of the Wholesaling or Distributing Trade)
i:' AS APPROVED ON MAY 14, 1934
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6 No. 201-Supplement No. 8
Registry No. 229-3-06
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This publication is for sale by the Superintendent of Documents, Go a
Printing Ofice, Washington, .D.0., ad by district offices of the I.rMtS
Foreign and Domestic Commervc.
DISTRICT OFFICES OF THE DEPARTMENT OF COMMUCSE
Atlanta, Ga.: 504 Post Of:ie Building.
Birmingham, Ala.: 257 Federal Building.
Boston, Mass.: 1801 Customhouse.
Bubalo, N..: Chamber of -Commeree Building.
Charleston, B.C.: Chamber of Commerce Building.
Chicago, Ill.: Suite 1708, 201 North Wells Street.
Cleveland, Ohio: .Chamber of Commerce.
Dallas, Tex.: Chmber of Commerce Building.
Detroit, Mich.: 801 First National Bank Building.
Houston, Tex.: Chamber of Commerce Building
Indianapolis, Ind.: Chamber of Commerce Building.
Jacksonville, Fla.: Chamber of Commerce Building.
Kansas City, Mo.: 1028 Baltimore Avenue.
Los Angeles, Calif.: 116 South Biroadway.
Louisville, Ky.: 408 Federal Building.
Memphis, Tenn.: 229 Federal -Building.
Minneapolis, Minn.: 213 Federal Building.
New Orleans, La.: Room 225A, Customhouse..
New York, N.Y.: 734 Customhouse.
Norfolk, Va.: 406 East Plume Street.
Philadelphia, Pa.: 422 Commercial Trust Building.
Pittsburgh, Pa.: Chamber of Commerce Building.
Portland, Oreg.: 215 New Post Ofice Building.
St. Louis, Mo.: 506 Olive Street. .
San Francisco, Calif.: 310 Customhouse. ...
Seattle, Wash.: 800 Federal Ofice Building.
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APPROVED CODE NO. 201-SUPPLEMENT NO. 8
SUPPLEMENTARY CODE OF FAIR COMPETITION
WHOLESALE DRY GOODS TRADE
As Approved on May 14, 1934
.i SiJP:LEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE DRY
S A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE
i An application having been duly made pursuant to and in full
oi ..mpliance with the provisions of Title I of the National Industrial
Z recovery Act, approved June 16, 1933, for approval of a Supple-
mental Code of Fair Competition for the Wholesale Dry Goods
l Trade to the Code of Fair Competition for the Wholesaling or Dis-
Stbuting Trade, and hearings having been duly held thereon and
Sthe annexed report on said Supplemental Code, containing findings
with respect thereto, having been made and directed to the President:
SNOW THEREFORE, on behalf of the President of the United
:States, 1, Hugh S. Johnson, Administrator for Industrial Recovery,
p=rsuant to authority vested in me by Executive Orders of the Presi-
dent, including Executive Order No. 6543-A, dated December 30,
1983, and otherwise; do hereby incorporate by reference said annexed
report and do find that said Supplemental Code complies in all re-
spects with the pertinent provisions and will promote the policy and
purposes of said Title of said Act; and do hereby order that said
Supplemental Code of Fair Competition be and it is hereby ap-
S: proved; provided, however, that the provisions of Article V are
; approved for a period of ninety (90) days only, subject to further
order at that time as a result of study made of the operation of said
HUGH S. JOHNSON,
Administrator for Industrial Recovery.
H. O. KING,
SMay 14, 1934.
8901 --544-81--34 (1)
REPORT TO THE PRESIDENT.
The White House.
Sin: This is a report of the Hearing on the Supplemental Codt
of Fair Competition for the Wholesale Dry Goods Trade, con'
ducted in the Chinese Room of the Mayflower Hotel, on Dece~mberl
20, 1933. The Supplemental Code, which is attached, was presented:'
by a duly qualified and authorized representative of the Trade.:
According to statistics furnished by members of the Wholesale l
Dry Goods Trade, there are approximately 1071 establ ishmweD3 j
with aggregate annual sales of $890,000,000. The Trade empioysa:!!.
about 26,000 persons. It should be noted that these figures include
what is known to the Trade as General Line Wholesalers.
PROVISIONS OF THE CODE
Since this Code is supplemental to the Code of Fair Compet"i
tion for the Wholesaling or Distributing Trade, it contains' B:
The provisions containing supplemental definitions are conm.id-:
ered inclusive and accurate. :
The supplement to the Administrative provisions of the Ge0!.
eral Code establishes a Divisional Code Authority which is fairlyt
and adequately representative of all the different elements in tlhe
The Trade Practices are not considered in any way objection.l
able. The provision regarding sales below cost is designed to p...
tect the producer as well as the members of this Trade. This p
vision has been thoroughly probed and it is felt that the
gives very adequate consumer protection.
The Deputy Administrator in his final report to me on
Supplemental Code having found as herein set forth and on the
of all the proceedings in this matter;
I find that
(a) Said Supplemental Code is well designed to promote t
policies and purposes of Title I of the National Industrial Reoove'
Act, including removal of obstructions to the free flow of inte
state and foreign commerce which tend to diminish the amoxnt3
thereof, and will provide for the general welfare by promoting M
organization of industry for the purpose of cooperative action am .
trade groups, by inducing and maintaining united action of
.?Inpd management under adequate governmental sanction and super-
vision, by eliminating unfair competitive practices, by promoting
the fullest possible use of the present productive capacity of indus-
tries, by avoiding undue restriction of production (except as may
: 'be temporarily required), by increasing the consumption of indus-
ii::ii and agricultural products through increasing purchasing power,
i':y reducing and relieving unemployment, by improving standards
labor, and by otherwise rehabilitating industry.
(b) Said Trade normally employs not more than 50,000 employees
sndit is not classified by me as a major industry.
(c) The Supplemental Code as approved complies in all respects
: with the pertinent provisions of said Title of said Act, including
without limitation Subsection (a) of Section 3, Subsection (a)
Sq section 7 and Subsection (b) of Section 10 thereof; and that the
Saiplicant association is a trade association truly representative of
S the aforesaid Trade; and that said association imposes no inequi-
Sfable restrictions on admission to membership therein.
i: (d.) The Supplemental Code is not designed to and will not permit
i mnpolies or monopolistic practices.
(e) The Supplemental Code is not designed to and will not
eliminate or oppress small enterprises and will not operate to dis-
criminate against them.
S () Those engaged in other steps of the economic process have
Snot been deprived of the right to be heard prior to the approval
of this Supplemental Code.
M : ''For these reasons, the Supplemental Code has been approved.
y HUGH S. JOHNSON,
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SUPPLEMENTARY CODE OF FAIR COMPETITION ...
THE WHOLESALE DRY GOODS TRADE :.
t. i. :.
A DIVISION OF THE WHOLESALE OR DISTRIBUTING TRADE
To further effectuate the policies of Title I of the' NatMiti
Industrial Recovery Act the following provisions are established:,
as a Supplemental Code of Fair Competition for the Wholesal BIry!
Goods Trade to the Code of Fair Competition for the Wholesal -
or Distributing Trade as provided by Article VI, Section 1('
thereof and shall be considered a part of and in connection with
such Wholesaling or Distributing Code. Both Codes shall be biMs I
ing upon every member of the Wholesale Dry Goods Trde.
ARTICLE II-DEFINTIONS .:
SUPPLEMENTING ARTICLE H OF THE GENERAL CODE -
Wholesaler or Distributor.-The term wholesaler or "diEt b'
utor as used herein, is defined to mean a person or firm or division
thereof, definitely organized to render and rendering a general
distribution service, which buys and maintains at his or its place of
business a stock of dry goods or of one or more lines of dry-goodps
(except when the provisions of Article VI become applicable) and
which through salesmen, advertising and/or sales promotion devices i'.
sells to retailers and/or to institutional, commercial, and/or indus-
trial users; but which does not sell in significant amounts to ultimate t
Member of the Trade.-The term "member of the Trade as used '..1
herein, is defined to mean a wholesaler" or "distributor" as
Dry Goods.-The term "dry goods as used herein, is defined
to mean textiles, apparel, and the miscellaneous products of industry -
generally classed as novelties, notions, and kindred lines. *1
National Wholesaler.-The term "national wholesaler ", as used i
herein, is defined to mean a person or firm or division thereof, which-iii
sells dry goods at wholesale predominantly in fifteen or more of thi4
states and/or territorial possessions of the United States.
Territorial Wholesaler.-The term "territorial wholesaler ", as
used herein, is defined to mean a person or firm, or division thereof"
which sells dry goods at wholesale predominantly in less than fiftee4i
of the states and/or territorial possessions of the United States.
Specialty Wh.olesaler.-The term specialty wholesaler ", as usedi
herein, is defined to mean a person, firm or division thereof, whicbii
deals at wholesale in one or more lines of dry goods, but does a
deal in a general line. :
:. ,:DXvisioAal Code Authority.-The term "Divisional Code Author-
"ity, as used herein, is defined to mean the Divisional Code Au-
5 dthority for the Wholesale Dry Goods Trade, a division of the Whole-
isaling or Distributing Trade.
General Code.-The term "General Code ", as used herein, is de-
fned to mean the Code of Fair Competition for the Wholesaling or
Ci: Gonsignment.-The term '-consignment ", as used herein, is defined
to mean the delivery by a distributor to any person, agent, purchaser,
Slor otherwise under any agreement or understanding, expressed or
I; m' plied, pursuant to which the seller retains any lien upon or title
: to or interest in the goods delivered for the primary purpose of allow-
Sig such goods to be returned as unsold.
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SUPPLEMENTING ARTICLE VI, SECTION 2 (E) OF THE GENERAL CODE
SriS' ECTION 1. (a) For the purpose of administration, the Dry Goods
Division of the Wholesale Trade may be sub-divided into specific
; commodity subdivisions, the following being authorized upon the ap-
Sproval of this Supplemental Code:
..1. A Hosiery and Underwear division.
2. A Piece Goods division.
3. A Notions division.
:7". 4. A Men's Furnishings division.
5. A Knitted Outerwear division.
S 6. A Ready-to-wear division.
7. A House Furnishings division.
S Additional subdivisions may be made when and as approved by
-.::(b) Each of these subdivisions, subject to the approval or consent
of -the Administrator, shall be entitled to appoint a representative
on the General Code Authority established by the General Code.
P STrION 2. (a) The Divisional Code Authority for the Dry Goods
: Division of the Wholesaling or Distributing Trade shall be composed
.of .not less than nineteen (19) nor more than twenty-one (21) mem-
: .ers; one for each of seven (7) territorial membership zones as
i. established by the Wholesale Dry Goods Institute; one for each
o' f the subdivisions established in Section 1 (a) of this Article and
S: five (5) to be appointed by the Board of Directors of the Wholesale
Dry Goods Institute.
i (b) The members of the Divisional Code Authority shall be
elected as follows:
S,1. The Board of Directors of the Wholesale Dry Goods Institute
ii shall send to every member of the Trade discoverable by diligent
searchh a nominating ballot upon which the member of the Trade may
enter nominations for the members of the Divisional Code Authority
for the territorial district and commodity subdivision to which he
belongs. To each ballot shall be attached a statement of assent and
Compliance to this Supplemental Code and to the General Code.
2. Fifteen days after the mailing of such ballots the Board of
Directors of the Wholesale Dry Goods Institute shall publicly count
the votes then in its possession. Only those ballots which' :at ..
companies by a signed statement of assent sad compliance ,."l
be counted. The two persons in each territorial district and .in ii
commodity subdivision receiving the highest number of votes;:xiia
be declared to be the nominees. I
3. The Board of Directors of the Wholesale Dry Goods :Inasthial
shall then prepare ballots including the names of these nomiaiei
The procedure followed in mailing these ballots shall be the same
as that described in subsection (b) 1, above. :
4. Fifteen days after the mailing of such ballots the Board at.
Directors of the Wholesale Dry Goods Institute shall publicly :racornm
the votes then in its possession. Only those ballots shallbe contend |i
which are accompanied by a signed statement of assent .anda:..:
pliance or by a letter stating that the voter has previously filed such.
a statement with said Board of Directors. The person in each ter- ".i
ritorial district and in each commodity subdivision who receives thfe ,I;
highest number of votes shall be declared elected.
5. The Board of Directors of the Wholesale Dry Goods Institute ::
shall make certification to the Administrator of its compliance wit :"I
the above method of election and of the results thereof.
SECTION 3. (a) The Divisional Code Authority may appoint for :
each commodity subdivision a Control Committee of five membes
which shall include one representative of specialty wholesalers, one
representative of territorial wholesalers and one representative:of
(b) The several Control Committees shall have such duties iAnd :..
powers as may be delegated to them by the Divisional Code Author-.. ;
ity but nothing herein shall be construed to relieve the Divisional
Code Authority of any of its duties or responsibilities as such.
(c) The Divisional Code Authority may appoint a regional agent. .
or agents, in each of such regions as it may establish, to assist it i ti
administering the Supplemental Code, provided however, that noth-':i
ing herein shall relieve the Divisional Code Authority of its respoaL
sibilities as such.
(d) The Divisional Code Authority shall appoint a Trade Prao
tice Committee, which shall meet with the Trade Practice O 2
mittees appointed under such other Codes as may be related toi
Trade, except those appointed under other Supplemental CGodes ..
the General Code, for the purpose of formulating fair trade
tices to govern the relationships between production and distribit
employers under this Supplemental Code and under such others(
the end that such fair trade practices may be proposed to the A
istrator as amendments to this Supplemental Code and such
(e) The Divisional Code Authority shall have power to or
elect officers, hire employees, and perform such other acts as.
be necessary for the proper administration of the Supplementat
and the General Code.
(f) The Divisional Code Authority shall, subject to the ap
of the Administrator, assess each member of the Trade with a
sonable and fair share of the cost of the administration iof i:
Supplemental Code and the General Code.
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i.ii:larrow 4. Any person or firm now or hereafter engaged in the
h::e etEle distribution of dry goods and related lines as herein
ri::;:ound is eligible for and shall be admitted to membership in the
hoi": leo le Dry Goods Institute upon payment of dues and agree-
a:; Mit.to comply with the Constitution and the by-laws thereof.
,1: : aoN C 5. Nothing contained in this Supplemental Code shall con-
ti .itute the members of the Divisional Code Authority partners for
I.: fany purpose nor shall any members of the Divisional Code Author-
ity: be liable in any manner to anyone for any act of any other mem-
:bers, officers, agents, or employees of the Divisional Code Authority.
i or shall any member of the Divisional Code Authority, exercising
i reasonable diligence in the conduct of his duties hereunder, be liable
to anyone for any action or omission to act, under this Supplemental
S ode, except for his own wilful misfeasance or nonfeasance.
i4iS CIIsoN 6. If the Administrator shall determine that any action
Sof the Divisional Code Authority or any agency thereof may be
unfair or unjust or contrary to the public interest, the Administrator
may require that such action be suspended to afford an opportunity
for investigation of the merits of such action and for further consid-
eration by such Divisional Code Authority or agency, pending final
action, which shall not be effective unless the Administrator approves
or unless he shall fail to disapprove after thirty days' notice to him
Iof intention to proceed with such action in its original or modified
ARTCLEm IV-TRADE PRACTICES
SUPPLEMENTING ARTICLE VII OF THE GENERAL OODE
S The following practices constitute unfair methods of competition:
i:. :1. To deliver merchandise on any basis other than F.O.B. the city
|:.... which the wholesaler is located or, in case of direct shipments,
i: O.B. city where factory is located.
:'rle deliveries of merchandise may be made by a wholesaler within
t not beyond the metropolitan area of the city in which the whole-
ni is located. The Divisional Code Authority may define the
tropolitan area in any specific case.
:Th::Tis rule does not apply to those items on which it is the trade
d;ice of the manufacturer to prepay transportation charges to the
i store on goods sold by the wholesaler.
:To place merchandise on consignment except under circum-
i*ies to be defined by the Divisional Code Authority when pecul-
:.rcumstances of the Trade make the practice desirable.
7 ''To' grant rebates, bonuses, trade discounts, buyers' expense al-
*fi ces, delivery allowances, storage allowances overshipments
hout charge, gifts, advertising allowances or other tangible in-
p ent or economic advantage to any customer unless such rebates,
auses,, trade discounts, buyers' expense allowances, delivery allow-
: storage allowances, overshipments without charge, gifts, adver-
pog.allowances, or other tangible inducement or economic advan-
*~g. are available to all other customers of the same class in all ter-
e on like terms and conditions.
To sell any merchandise unless the same shall bear a descriptive
unrOmber or name.
I, .- .
o. Ju aSnw or to rMunu pwermulz raznspurtaulon UctM ur.r any q-I.
thereof to customers or prospective customers, or their agent -:ti....f
6. To sell goods on terms which permit the extension of net die :
date, cash discount, special dating, or anticipation interest allow '
ances greater than those established for the several lines of merchn- ::I
dise by the Divisional Code Authority and approved by' th "i:!
7. (a) To sell any merchandise at less than a price which includes '.
net invoice purchase price, plus incoming transportation costs. ':. :
(b) Nothing herein shall prohibit sales made in good faith tb ..
anticipate changing market conditions or to maintain clean and well .......
balanced stocks of merchandise. Such sales shall be immediately
reported to the Divisional Code Authority. Upon demand by the
Divisional Code Authority any wholesaler making such sale shall
supply proof that such sale was made in good faith.
ARTICLE V-PERMISSIVE TRADE PRACTICES 1
SUPPLEMENTING ARTICLE VIII OF THE GENERAL CODE
Section 1. (a) No wholesaler shall sell or offer to sell to any
purchaser of a product upon which the manufacturer thereof shall
have granted to such wholesaler a fair price differential as provided
by Article VIII Section 1 of the General Code, a lower price than
that quoted on such commodity by said manufacturer to the same
class of purchasers.
(b) If such differential is greater than the operating cost of any
member of the Trade such member of the Trade shall be permitted
upon furnishing proof of his lower operating cost to the Divisional
Code Authority, to sell at less than the differential so established
but not less than his invoice cost plus said operating cost.
(c) Any member of the trade may sell at a price lower than that
established in paragraph (a) of this Section in order to meet the
competition of any other member of the trade who is permitted
under paragraph (b) of this Section to reduce his price below that
established in paragraph (a) of this Section.
(d) The Administrator may, from time to time, collect statistics
of the operating expenses of the members of the Trade. If such
investigation shall show that the price differential established under
paragraph (a) above is in any way inequitable or unduly high in
relation to the wholesaler's operating costs, or tends to enhance the
price of the product to buyers or ultimate consumers, the Adminis-
trator may, after proper notice and hearing, suspend it or declare:
it permanently inoperative.
(e) An exception to the rule in paragraph (a) of this Section may
be granted by the Divisional Code Authority in case a wholesaler
wishes to discontinue handling a manufacturer's line and has stock.
on hand to be disposed of. In such case the manufacturer shall be
given the option of taking back at the manufacturer's then market
price the wholesaler's stock on hand or any portion thereof. :If
the manufacturer fails to exercise this option within ten days after
See paragraph 2 of order approving this Code.
: written notice by the wholesaler of his intention to discontinue hand-
iug that line, the wholesaler may proceed to dispose of the stock at
S any price he may desire.
S. .. ARTICLE VI-APPLICATION OF THIS SUPPLEMENTAL CODE
Whenever any Supplemental Code is approved for wholesalers who
Specialize in a particular type of dry goods, such specialty whole-
ialers shall no longer be subject to this Supplemental Code; provided,
that only upon order of the Administrator shall the sale of such
S specialty products by wholesalers governed by this Supplemental
Code be governed by the trade practice provisions of such dry goods
Specialty Supplemental Codes.
ARTIcL VII-EFFECTIVE DATE
This Supplemental Code shall become effective on the tenth day
after its approval by the Administrator.
Approved Code No. 201. Supplement No. 8.
Registry No. 229--06.
UNIV ERSITy OF FLORIDA
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