i' A rJ nd Code No. 487-Supplement No. 2
Registry No. 246-01
NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
O I1NEN IMPORTING TRADE
(A Division of the Importing Trade)
AS APPROVED ON NOVEMBER 22, 1934
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Approved Code No. 487-Supplement No. 2
SUPPLEMENTARY CODE OF FAIR COMPETITION
LINEN IMPORTING TRADE
As Approved on November 22, 1934
APPROVING SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE
LINEN IMPORTING TRADE
A DIVISION OF THE IMPORTING TRADE
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 approval of the Supple-
mentary Code of Fair Competition for the Linen Importing Trade,
to the Code of Fair Competition for the Importing Trade, and
Hearings having been duly held thereon and the annexed report on
said Code, containing findings with respect thereto, having been
made and directed to the President:
NOW, THEREFORE, on behalf of the President of the United
States, the National Industrial Recovery Board, pursuant to author-
ity vested in it by Executive Orders of the President, including
Executive Order No. 6859, and otherwise, does hereby incorporate
by reference said annexed report and does find that said Supple-
mentary Code complies in all respects with the pertinent provisions
and will promote the policies and purposes of said Title of said
Act; and does hereby order that said Supplementary Code of Fair
Competition be and it is hereby approved.
NATIONAL INDUSTRIAL RECOVERY BOARD,
By W. A. HARRIMAN, Administrative Officer.
ROBERT L. HOUSTON,
WASHINGTON, D. C.,
November 22, 1934.
REPORT TO THE PRESIDENT
The White House.
SIR: This is a report of the Hearing on the Supplementary Code
of Fair Competition for the Linen Importing Trade, conducted in
Room D of the Washington Hotel, on Monday, August 20, 1934.
The Supplementary Code which is attached, was presented by duly
qualified and authorized representatives of the Trade, complying
with the statutory requirements, said to represent 84 per cent in
number and 86 per cent in volume of sales of the Trade which could
be included in this Supplementary Code.
According to statistics furnished by members of the Linen Im-
porting Trade, there are 128 establishments in the Trade with aggre-
gate annual sales of approximately $50,000,000 these firms employ-
ing about 2200 in 1933. Subsequent to the Public Hearing, the
National Recovery Administration conducted a survey by means of
an official questionnaire, the results of which survey indicate that
the establishments in this Trade number 115.
PROVISIONS OF THE CODE
Since this Code is supplementary to the Code of Fair Competition
for the Importing Trade, it contains no labor provisions.
The various Trade Practice Provisions do not appear to be in any
way objectionable. They are designed to eliminate certain unfair
practices in the Trade through which a few members of the Trade
have benefited at the expense of the public and other linen importers
who do not engage in such practices. Among the several Trade
Practice Provisions is one prohibiting consignment of merchandise,
except for fancy linen units with a value of $25.00 or more each, and
except samples for inspection. Another Trade Practice Provision
prohibits lot sales except in cases where articles are commonly sold
in set or ensemble form. This Provision prevents the practice of
selling an article or articles at a price which is contingent upon the
concurrent purchase and sale of other articles, through which prac-
tice inferior or obsolete merchandise is often passed on in combination
with more saleable items, without the buyer being fully aware of the
fact that the entire lot purchase is not the bargain it appears to be.
The Deputy Administrator in his final report to the National
Industrial Recovery Board on said Supplementary Code having
found as herein set forth and on the basis of all the proceedings in
It finds that:
(a) Said Supplementary Code is well designed to promote the
policies and purposes 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 will provide for the general welfare by promoting the organi-
zation of industry for the purpose of cooperative action among trade
groups, by inducing and maintaining united action of labor and
management under adequate governmental sanction and supervision,
by eliminating unfair competitive practices, by promoting the fullest
possible use of the present productive capacity of industries, by
avoiding undue restriction of production (except as may be tem-
porarily 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 Trade normally employs not more than 50,000 employees
and it is not classified by the National Industrial Recovery Board as
a major industry.
(c) The Supplementary 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) of
Section 7 and Subsection (b) of Section 10 thereof; and that the ap-
plicant association is a trade association truly representative of the
aforesaid Trade; and that said association imposes no inequitable
restrictions on admission to membership therein.
(d) The Supplementary Code is not designed to and will not per-
mit monopolies or monopolistic practices.
(e) The Supplementary Code is not designed to and will not elim-
inate or oppress small enterprises and will not operate to discrimi-
nate against them.
(f) Those engaged in other steps of the economic process have not
been deprived of the right to be heard prior to the approval of this
For these reasons, this Supplementary Code has been approved.
For the National Industrial Recovery Board:
W. A. HARRIMAN,
NOVEMBER 22, 1934.
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR
THE LINEN IMPORTING TRADE
A DIISION OF THE IMPORTING TRADm
To effectuate the policies of Title I of the National Industrial Re-
covery Act, this Supplementary Code is established as a Code of Fair
Competition for the Linen Importing Trade pursuant to Article VI,
Section 1 (C) of the General Code of Fair Competition for the Im-
porting Trade, approved on July 20, 1934. All provisions of the said
General Code which are not in conflict with the provisions of this
Supplementary Code are hereby incorporated by reference in this
Supplementary Code and made a part thereof. Such provisions of
the General Code, together with the supplementing provisions of
this Code, are the standards of fair competition for and are binding
upon every member of said Trade.
(Supplementing Article II of the General Code)
SECTION 1. Linen Importer.-For the purposes of this Supple-
mentary Code, a linen importer shall be defined, but without limi-
tation, as any individual, partnership, corporation, association, or
other form of enterprise, or any organized division thereof, prin-
cipally engaged in importing stable linens, fancy linens, and/or ap-
parel, and 'or principally engaged in the sale of imported fancy
linens, staple linens, and/or apparel linens to manufacturers, whole-
salers, retailers, and/or institutional, commercial, and/or industrial
users; provided, however, that this Supplementary Code shall not
govern the importation of merchandise which is solely for consump-
tion of the linen importer, and not for resale. Modifications of, or
extensions to this definition, or any part thereof, may be made when
recommended by the Divisional Code Authority and approved by the
National Industrial Recovery Board.
SECTION 2. Trade.-The term Trade ", as used herein, shall mean
the business in which linen importers, as above defined, are engaged.
SECTION 3. Staple Linens.-The term staple linens", as used
herein, shall mean hemmed or hemstitched linen, damasks, plain
sheets, towels and toweling, pillow cases, peasant types or printed
linens, and household linen in piece goods form.
SECTION 4. Fancy Linens.-The term Fancy Linens as used
herein, shall mean linens which have been decorated, embroidered, or
SECTION 5. Apparel Linens.-The term "Apparel Linens ", as used
herein, shall mean linens in the piece, which are sold for subsequent
conversion into articles of wearing apparel or assessories thereto.
SSECTIO 6. General Code.-The term General Code", as used
herein, shall mean the General Code of Fair Competition for the
Importing Trade, approved July 20, 1934, as heretofore or hereafter
SECTION 7. Divisional Code Authority.-The term Divisional
Code Authority", as used herein, shall mean the Divisional Code
Authority for the Linen Importing Trade, a division of the
SECTION 8. Association.-The term "Association ", as used herein,
shall mean the Linen Trade Association, the Association which has
presented this Supplementary Code on behalf of the Linen Importing
SECTION 9. Consignnent.-The term Consignment ", as used
herein, shall mean delivering to or leaving merchandise with a cus-
tomer, the title to remain with the linen importer until such time as
his or its customer shall sell or return the merchandise.
(Supplementing Article VI of the General Code)
SECTION 1. Divisional Code Authority.-(a) The Divisional Code
Authority for this Trade shall consist of seven (7) persons to repre-
sent the following groups: three (3) shall be elected by the vote of
the entire Trade, to be known as general members "; one (1) shall
be a non-member of the Association, to be elected by the non-members
of the Association; one (1) shall be an importer of fancy linens and
shall be elected by the importers of fancy linens; one (1) shall be
an importer of staple linens and shall be elected by the importers of
staple linens; and one (1) shall be an importer of apparel linens and
shall be elected by the importers of apparel linens.
(b) The members of the Divisional Code Authority shall be elected
as follows: The Board of Directors of the Association, plus a non-
member of the Association to be appointed by the National Recovery
Administration, shall constitute a nominating committee. This nom-
inating committee shall draw up a ballot which shall contain sufficient
names to give a choice of at least two (2) persons for each place on
the Divisional Code Authority and blank spaces in which linen
importers may write their choice if it be different from the names
appearing on the ballot. Cumulative voting shall not be permitted.
This ballot shall be sent to all known linen importers. Fifteen (15)
days after the ballots are mailed to linen importers, they shall be
opened and counted in the presence of the nominating committee.
The linen importers receiving the highest number of votes for each
of the Divisional Code Authority memberships designated shall be
declared to be elected.
(c) The term of office of members of the Divisional Code Author-
ity shall be one (1) year and the method of electing their successors,
whether for new terms or for unexpired terms, shall be the same as
established in Subsections (a) and (b) of this Section.
(d) Until such time as the Divisional Code Authority is elected,
as herein provided, the committee elected by the Association to
present- this Supplementary Code shall act as the temporary
Divisional Code Authority.
SErTON 2. Powers and Duties.-The Divisional Code Authority
shall have the following duties and powers in addition to those
prescribed in the General Code:
(a) To adopt by-laws and rules and regulations for its procedure.
(b) To use such trade associations and other agencies as it deems
proper for the carrying out of its activities provided for herein, pro-
vided that nothing herein shall relieve the Divisional Code Author-
ity of its duties or responsibilities under this Supplementary Code,
and that such trade associations and agencies shall at all times be
subject to and comply with the provisions hereof.
(c) To organize, elect officers, hire employees, and perform such
other acts as may be necessary for the proper administration of this
Supplementary Code, and to recommend to the National Industrial
Recovery Board for adoption, such measures as may be appropriate
to prevent unsound, unfair, or destructive competitive practices
which interfere with the effectuation of the policies of the Act.
(d) To recommend to the National Industrial Recovery Board
such amendments or modifications of this Supplementary Code as
may seem desirable to effectuate the policies of the Act and to assent
to such amendments or modifications on behalf of the Trade.
(e) To appoint a Trade Practice Committee, which shall meet
with the Trade Practice Committees appointed under such other
Codes as may be related to the trade, except other Supplementary
Codes to the General Code, for the purpose of formulating fair trade
practices to govern the relations between the production and distri-
bution employers under this Supplementary Code and under such
others, to the end that suoh fair trade practices may be proposed to
the National Industrial Recovery Board as an amendment to this
Supplementary Code and such other Codes.
(f) In order to assist in making effective the reports from the
Trade and in eliminating unfair competition, the Divisional Code
Authority shall at the order of the National Industrial Recovery
Board appoint a committee so constituted as to give consumer and
governmental representation satisfactory to the National Industrial
Recovery Board, to make a study with a view to the establishment of
standard classifications and standards of quality (grades) of staple
products of the Trade, wherever such standards are deemed feasible.
The findings and recommendations of this committee shall be sub-
mitted to the National Industrial Recovery Board, within a period of
time to be designated by it, and after such hearings and investiga-
tions as it may designate, and upon approval by it, shall be made a
part of this Code and be binding upon every linen importer.
SECTION 3. Payment of Cost of Admdnistration.-The Divisional
Code Authority shall have the powers set forth in Article VI, Sec-
tion 10, of the General Code in order to obtain funds to support the
administration of this Supplementary Code, the General Code as
applied to this division of the Importing Trade, and to effectuate the
policy of the Act, and each linen importer shall be liable for assess-
ments made under this power unless duly excepted from making
such contribution. Nothing in this Supplementary Code shall re-
lieve linen importers of their obligation to pay assessments levied
by the General Importers Code Authority in accordance with Article
VI, Section 10 of the General Code.
SECrION 4. Information for Government Agencies.-In addition to!
the information required to be submitted to the General Importers
Code Authority and the Divisional Code Authority on their agencies,
all or any of the persons subject to this Supplementary Code shall
furnish such statistical information and reports as the National
Industrial Recovery Board may deem necessary for the purposes re-
cited in Title I, Sections 3 (a) and 3 (e) of the Act, to such federal
and/or state agencies as the National Industrial Recovery Board
may designate; but nothing in this Supplementary Code shall re-
lieve any person of any existing or future obligation to furnish
reports to government agencies. No individual report shall be dis-
closed to any other linen importer or any other party except to such
other governmental agencies as may be directed by the National
Industrial Recovery Board.
ARTICLE IV-TRADE PRACTICES
(Supplementing Article VII of the General Code)
SECTION 1. Terms.-The maximum terms in this trade shall be
three per cent (3%) for payment in ten (10) days, with an option of
E. O. M. dating, or two per cent (2%) for longer dating, not in ex-
cess of seventy (70) days from date of invoice. Shipments on the
25th day of the month and after may be allowed as of the first of the
following month; no other advance dating shall be allowed.
SECTION 2. Delivery.-Delivery of merchandise shall be F. 0. B.
city of principal stock-carrying office. The term "New York City"
as a principal stock-carrying office point shall mean only the five (5)
boroughs thereof. Prices at branch offices and/or warehouses must
include all transportation and handling charges between the princi-
pal stock-carrying office and such branch office and/or warehouse,
which charges must be added to the F. 0. B. price at the princi-
pal stock-carrying office. After these transportation and handling
charges have been added, free local city delivery may be made from
said branch offices and/or warehouses.
SECTION 3. No linen importer shall guarantee prices on any order
for future delivery against a possible future decline in price, or
guarantee then existing prices or reserve merchandise at then existing
prices against a possible advance, unless in possession of a bona fide
confirmed contract covering such future delivery, except that a linen
importer may make an offer looking towards a bona fide confirmed
contract containing such a guarantee. In case of complaint of viola-
tion, upon request of the Divisional Code Authority, linen importers
concerned shall present proof of such bona fide confirmed contracts.
SECTION 4. In recognition of unavoidable irregularities in size in
the production of staple, fancy, and apparel linens, Article VII,
Section 1 of the General Code is hereby modified to the following
extent, to permit the following maximum size variations:
(a) No linen importer shall mark goods, or sell or distribute goods
'which are marked, in such a way as to vary more than two per cent
(2%) in the case of staple and apparel linens, or three per cent (3%)
in the case of fancy linens, from the finished size in either length or
width. Any merchandise remaining in warehouse or in stock on the
effective date of this Supplementary Code either must be re-marked,
or the correct finished size, in accordance with this provision, muMt
be directed to the attention of the buyer and the confirmation.of the
order must be marked accordingly. The merchandise shall be so
(b) The use of the terms "linen", "pure linen ", and "all-linen"
and terms of similar import shall be limited solely to articles the
basic fabric of which has a linen content of ninety-five per cent
(95%) or more in weight. No article the basic fabric of which con-
tains less than five per cent (5%) of linen by weight shall be labeled,
marked, branded, stamped, characterized, or named with the word
" linen in any form. Articles the basic fabric of which contains
between five per cent (5%) and ninety-five per cent (95%) in weight
of linen content shall be so labeled as to indicate the exact linen
content expressed in percentage of weight, such figures to be printed
in the same size type as the word linen." The above limitations
shall also apply in the case of fabrics.
SECTION 5. No linen importer shall knowingly handle any goods
for which standards of quality, quantity, size and/or performance,
and/or labeling requirements, are provided for in accordance with
Article III, Section 2 (f) of this Code unless such goods, handled by
such linen importer, comply with all such standards and/or labeling
requirements; provided, however, that such goods, if non-standard,
may be handled when appropriately labeled or otherwise identified
SECTION 6. Consigwment.-Except for fancy linen units with a
value of $25.00 or more each, no merchandise may be shipped or
delivered on consignment, nor may any method of alleged selling be
used which has the effect of shipping or delivering on consignment.
Samples for inspection, however, shall be exempt from the applica-
tion of this provision.
SECTION T. Lot Sales.-No linen importer shall sell any article or
articles at a price which is contingent upon the concurrent purchase
and sale of another article or articles, or other sizes of the article;
nor shall any linen importer sell different articles in group or com-
bination at a special lot or group price; provided, however, that
articles which are commonly sold in set or ensemble form shall not
be subject to the restrictions of this provision,
SECTION 8. Return of Merchandise.-Merchandise purchased and
shipped in good faith and in accordance with the buyer's specifica-
tions may not be received for credit by any linen importer; provided,
however, that when goods do not conform to the specifications con-
tained in the purchase order, the linen importer may allow a maxi-
mum of seven (7) successive business days after the receipt of such
merchandise by the customer in which to accept claim for credit for
such merchandise, and provided further, that this Section shall have
no application to the return of merchandise in which there are de-
fects in the merchandise or manufacture thereof. Whenever a
linen importer shall accept the return of merchandise or allow a
claim for credit after the merchandise has been in the customer's
possession for more than a period of seven (7) successive business
days, he shall report such transaction to the Divisional Code Author-
ity and certify that his action was in accordance with this provision
Upon request of the Division Code Authority any linen importer
concerned shall present proof that such returns or claims for credit
were accepted in good faith and in accordance with the provisions
This Supplementary Code and all provisions thereof are expressly
made subject to the right of the President in accordance with the
provisions of Sub-section (b) of Section 10 of the Act, from time to
time to cancel or modify any order, approval, license, rule or regu-
lation issued under Title I of said Act.
ARTICLE VI-EFFECTrE DATE
This Supplementary Code shall become effective on the tenth
day after approval.
Approved Code No. 487-Supplement No. 2.
Registry No. 246-01.
UNIVERSITY OF FLORIDA
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