NATIONAL RECOVERY ADMIINISTRATION
CODE OF FAI~R COMIPETITIOaN
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Approved Code No. 437
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Approved Code No. 437
CODE OF FAIIR: COMPETITION
BICYCLE MANUFACTURING IND~IUSTRYIR
As Approved on M~lay f21~, 1934
APPROVING CODE OF FAILR COM6PETITIN FOR THE BICYCLE
An application having been dully made pursuant to and inl full
compliance with the provisions of Tiitle I of the ~National Industrial
Recovery Act, approved June 16, 1933, for approval of a Code of
Fair Competition for the Bicycle Manufacturing Industry, and
hearings having been duly held thereon and the annexedl report on
said Code, containing findings with respect thereto, having been
made and directed to the President:
NOlY, THEREFORE, on .behalf of the President of the ULnited
States, I, Hugh S. Johnson, Adminlistrator for Indus-trial Recovery,
pursuant to authority vest~ed in mne by Executive Orders of the
President, including Executive Order No. 6543--A, dated December
30, 1933, andl othlerwise, do herebyg incorporate by reference said an-
nexed report and do find that said Code complies in all rIeespects with
the pertinent provisions and will. promote the policy and purposes
of said Tritle of saidZ Act; and do hereby order that said Code of
Fair Competit~ion be and it is hereby: approved; provid-ed, however,
that the Code Authority for the Bilcycle M~anufacturing Industry
shall, within sixty$ (60) days, report to me facts relative to the wage
rates hereby established to the end that if it appears that th~e said
wage rates do not contribute to the purchasing power of workers
to the extent that might reasonably be expected there will be a
reconsideration of said wage rates.
IIvanE 8. JoHNson
Administrator for Indust~ria Recovery.
Approval recommended :
K. Ml. SIMeson,
WAdSHINGTON, D. C.,
8091 111a 91, 19-34.(8
Th~e WChite: House.
SIR: The original Code of Fair Competition for the Bicycle
Manufacturing Industry was submitted on August 3, 1933, by the
Bicycle Ma~nu~fact~urers Association, an unincorporated membership
society organized in 1910 representing in excess of 871/2ro of the
known members of Industry and 97%0 of the volume of production.
Several revisions of the Code were made prior to the Public Hearingl
which was held on December 13th, 1933. The Code was revised
during the recess of this hearing and submitted in its present form
for approval. Every person who requested an appearance wcPas
properly heard in accordance with statutory and regulatory
The Bicycle Inldustry is represented byr eight members, seven of
whom atre members of the B3icycle ~Manufactuarers Association.
Their plants are all locazted east of the M/ississippi River. The
Industry manufactures and sells Bicycles and Bicycle parts. The
manufacture of bicycle parts for sale to consumer is by no means
an insignificant part of the Industry, thne ratio of value of parts to
the total value of bicycles and parts in 1929 being 40%0.
BZecause of the advent of other forms of transportation the popu-
larity of the bicycle has suffered a, great decline. In order to mailn-
taiti some semblance of popularity the Industry hnas matde a consist-
ent effort to meet the competition of other forms of transportation
by reducing the price of its products.
A review of the general economic tendencies of thre Industry indi-
cate that since 1914 the peak~ production of 486,177 bicycles was
reached in 1923. From 1923 to 1932 the decline in production,
except for 1929, has been consistent. It was during this period that
the demand for the bicycle as a means of transportation became;
secondary to its dlematull as a plaything for children:
Year Nm of va f bi- Year Nby v lue o 1-
biyls cycle biyls cycle
1914...................... 299, 020 $12. 57 1927...................... 255, 456 $22. 7
81919...................... 470, 675 26. 96 1929_..................... 307, 845 20. 0
1921...................... 216, 464 28. 73 1931...................... 260, 029 1&. 20
1923--........ ............ 486, 177 22. 06 1932...................... 205, 000 ............
1925...................... 303, 446 23. 17
~An analysis of the employment data from a, maximum of 1575
wPorkers in 1929 (indicates 100%o) to theB first quarter of 1933, indi-
REPORT T`O TH~E PRESIDENT
cates a decline of 47%. The subsequent recovery, however, brought
employment in the third quare of 1933 to 93%r of the 1929 level.
Year and quarter N mber o ned90 Yaradqa ro
workers '10 eradqatr workers 0)
1920...................... 1,575 100. 0 1932-3d quarter...... 946 60.1
193................ 1,420 00.1 4th quarter~......... 1, 180 fig
1931~~.......... ...... ... 1,200 70. 4 1933-1st quarter ....... 840 S12
1932-ist quarter..~........ 1,005 64.0 2d quarter__......... 1, 045 60. 5
2d quarter~.......... 1, 010 64 1 3d quarter...... .... 1, 465 03.1
The Industry is a highlly seasonal one d~ue to the fact that bicycles
are so largely used as Christ~mas presents for children. The peak
of the Industry)'s production during the past five years, 1928 to
1932, has come in O~ctober. There have been twvo low points, one
in January, after which there has been a slight spring recovery,
and one in June, after whlich the major production activity of the
year has occurred.
As shown in the following table, October total mran-hours have
been on the average 88%0 greater than June man-hours, -while
October emp~loyment hnas be~en 33%0 greater than that of June. The
increase in hours per employee per weekr has been, on the avecragfe,
40% from June to October. In 1933 the situation was strikringly
different for, whereas total mnan-hours increased 70%J, the increase
in employment was nearly as great----62%-oand average hours per~
employee per week increased but 3%l. It would appear, therefore,
that the modified Preside~nt's Reemployment Agreemnent, which pr
mits a 48-hour maximum during the peakr months of the year, a
the effect of forcing thie Industry to follow thie alternative of ema-
ploying more workers to meet peak~ activity than normally would
have been the case:
June to June to
Tota m an ho urs .. .. ............... ....... ........ ............ 8 8 70
Number of wace ear ners.~.......................................... 38 OS
Average hours per employee......... ~... ... -........................ 40
The wages paid in the Industry have declined with the decreased
demand for its prod uct. The average d hou ;"hrly earning in June
1929 was 51.74$, in J~une 1933 it had derae t 72.In JUD
1933 to October, during wlhichi th company adopted a proposed
minimum wage scale, the average hourly wag scale rose to 44.3$.
An analysis of thle distribution of factory workers in. thZe Bicycl
Industry by hourly earnings in 1933 indicates that the Industry has
paid relatively low wages.
Number Percent- Number P~erft-
Earnings per hour fac toy toa f Erig e hu a yT
workers number workers number
Under 15 cents__ ............. 4 0.7 50 cents to 54.9 cents__......... 40 0.:
15 cents to 19.9 cents... ...... 6 1. 1 55 cents to 59.9 cents__...... 29 4
2 un t 9 ens_-_- 6 7 et 7. et__---20 cents to 24.9 cents. ...... .l 32 5. 3 60 cents to 6,9.9 cents .. ....~ ~ 18 8.
80 cents to 34.9 cents .......- 97 16. 3 80 cents or more... ........- 1 0.
85 cents to 39.9 cents .... .._ 70 11. 8 -
45 cents to 49.9 cents .......- 90 15. 1
Under the Presidenlt's ReemnploySment Agreement the avecrage of
5i4 hours per weekr w~as reduced to 48 hours maxrimumn which resulted
in the spreading of some available work: among the workers. With
a maximum of 40 hours per week as outlined in the Code and with
the! minimum of 359t per hour and a provision for the adjustment
of wn gaS above the minimum should result in a further spreading
of not only the available work among the workers but also an
increased consumer purchasing power.
ARTrom; I. Purpose.--States the purpose of the Code.
AnRICLE II. Definit~ions.-Accu~rately defines specific terms atppli-
cable to the Bicycle Ma~nufacturing I~ndustry as used in this cCode.
ARTIcLE III. Hours. -The maximum hours are limited to 40 hours
per week for employlyees engaged in the processing of products and
labor incident thlereto~, except that during thirteen weeks in the last
six months of a 'calendar year in order to meet seasonal peak de-
mands, employees may be permitted to work not more than 45 hour
per week and not more than 9 ho-urs in any one day. Office, salaried
and other employees not covered above who receive less than $35.00
per week shall not be permitted to work in. excess of an average of
40 hours in any one week during any 5 weekz period and ncot to excee~d
48 hours in any one w~eek. Wastchmen shall be permitted to work not
more than 56 hours in any one week~. Employees engaged in an
executive, managerial or supervisory capacity who receive not less
than $35.00 per wTeek, and those engaged in emaerg-ncy repairs or
maintenance where the safety of life or health or the protection of
property necessit~ates longer hours, are not subject to any hourly
limittations. N~o employees shall be permitted to work more than.
six day-s in any seven day period.
Ana~cLE IV. Walzges.--The minimu wage for employees engaged
in the processing of products or in any labor incident thereto is at
the rate of 354 per hour for anly pay period. Female em pl-loyees
shall be paid the sawme rate of pay as male employees for doing the
same work or performing the same duties. No person. employed in
clerical or office work shall be paid less than at the rate of $15.00 per
week, except that offce boys and girls mray be paid a minimum of
809~ of thze establlishled. minim~umn for office employees. T'he estab-
lished minimum rate of pay for wor-k performed in any period shall
apply irrespective of whlether an employee is actually compensated
on a time rate, piece work or other basis. Provision is also made
for the employincr of handicapped persons who shall be paid not
less than 80% of the mzinimlum wage scale. Provision. is al~so made
for the adjustmentl of wages above the minimum fired in this Codre
if such has not been made since July 1st, 1933.
AnaTcLF V. General Labor Pr~ovisosns.-Prov~ides that no employer
shall employ any person under 16 years of age and that no person
under 18 years of age shall be employed at operations or occupations
which are hazardous in nature or dangerous to health. This Article
also sets forth the mandatory provision respectingr the rights of
employees to orgnize and bargain collectively Italoeso proviadesfo
matters having to do with reclassificationofmpyesstnrd
for safety and health, the observance of State laws and the posting
of labor provisions of this Code so that they are accessible to
AnncLI VI. Administrati'orz.-E~stablishes a Code Authority con-
sisting of four members to be selected by a fair method of selection
so as to be truly representative of th~e Industry subject to the
approval of the Admiunistrator. In addition. to the four members
named above there may be one or three representatives, without vote,
and without expense to the Industry to be appointed by the Admin-
istrator for such terms as he may specify~. In1 addition to the
organization of the Code Authority, the powers and duties thereof
are also outlined in this ALrticle.
_ARTICLE VII. Marketing and ITrade Practice En~les.--Sets forth
Trade Practices for the Industry.
ARTICLE VIIICI. Export Trade.-No provision of this Code relating
to terms of selling, shipping, or marketing, shall apply to export,
trade or sales or shipments for export trade.
ARTILE IX. Mlodifeantion .-This Code and all the provisions
thereof are expressly made subject to the right of the Presidenit in
accordance witht Subsection (b) of Section. 10 of the A1~ct, to cancel
or modify alny order, approval, license, rule or regulation issued
under said Act.
~ARTICL X. Mocnopolie~s.--No provision of this Code shall be so
applied as to permit monopolies or monopolistic practices, or to
eliminate, oppress or discriminate against small enterprises.
AROLE XI. Price Increasee.-T'his Article indicates that the in-
crease in selling price, so far as possible, will be limitedi to actual
additional increases in seller's costs.
AnIcLE XII. EjfetivtZLe Date.-T-lhis Code shall become effective
beginning ten days after its approval by the Administr~ator.
The Deputy Administ~rator in his final report to me on this Code
having found as herein set forth and on the basis of all the proceed-
ingfs in this matter;
I find that:
(a) Said Codle is well designed to promote the policies and pur-
poses of Title I. of the N~ational Industrial Recovery Act, includlinga
removal of obstructions to th ~free flow of interstate and foreign
commerce which tend to diminish the amount thereof and will pro\-
vide for the general welfa~re. by promoting the organization of in-
dustry for the purpose of cooperative action among the trade groups,
by inducing an~d maintainig united action of labor and management
under adequate governmental sanctions and supervision, by eliminat-
ing unfair competitive practices, by promoting thre fullest possible
utilization of the present productive capacity of industries, by av~oid-
ing undue restriction of production (except as may be temporarily,
required), by increasing he consumption of industrial ~and agricul-
tural products through increasing purrchasing power, by reducn
and relieving unelmploymntl-I, bly improving standards of labor,an
by otherwise rehabilitating industry.
(b) Said Industry normnally employs not more than 50,000 emp-
ployees;; and is not classified by me as a major industry.
(c) The Code as approved complies in all respects wvithz the perti-
nent provisions of said Title of said APct, including without limitation
Subsection (a) of Section 3, Subsection (a) of Sectionl 7, and Sub-
section (b) of Section 10 thereof ; and that the applicant association
Is, an industrial association. truly representative of the aforesaid
Idustryr, and that said association imposes no inequitable restrictions
on admission to membership therein.
(d) The Code is not designed to and will not permit monopolies
or monopolistic practices.
S(e) The Code is not designed to and will not eliminate or oppress
small enterprises and will not operate to discriminate against them,
P (f) Those engaged in other steps of thLe economic process have Inot
been deprived of the right to be heard prior to approval of said Code.
For these reasons, therefore, this Code has been approved.
HuanH S. JoHNSON,
MaY 21, 1934.
CODE OF ]CAIR COMIPETITION FOR THE JBICYCL;E) RANUFACTU~RING
T'o effectuate3 th polic~ies of Tritle I of th4e National Industr~ial Re-
co~veryv Act, this Code is establishled as a Code of F'air Comnpetition
for the Bicycle Mlanufacturingb Indu~lstry, and its provisions ar~e the
standards of fair comlpettition for such; IndulstryS and are bindlingr
uponi every members thereof.
ARTICLE 11- )EFINVITIONS
Wherever usedl in this Codie, or any suppJlement appertaining
thereto, the terms enumeratedl in th-is Article shall have thlemen
ings herein defined unless the context shall otherwise clearly indicate.
SECTION i., 111 termll "C Pres~iden~t as usedl herein mealnsli th~e Presi-
dent of the United States.
SECTIO:N 2. The1 term "LAct as usedl herein means the NJational
Indust rial Recover ~A~ct.
SEcTION 3. Thle t~ermn "Admrinistrator as used herein. means the
Admninistratorl for Indlustrial Recovery under Tlitle I of said Act.
SECTION 4. T1he term "L Bicycle Malnufacturingn ~ Indlustry or In-
dustry as used hecreinl included s t~he manullflCf Ituringr, sellingi and dis-
tribut~ing by the malnulfacturerc~ of bicy~cles a-nd parts therleof, andl such
related brannches~ andc sub-dtiviio n~s thereof as may~\ fr~oml timle to tim~e
be includedI under the povisions of this Crod3e.
SECTION 5. Thel term 31fetube~r of the Industry inc~lude~s all those
engaged in the Indlustry, either as an employerl3cr or on his or its own
S~ECTIONlr 6. The term Employee as ursedl herein inlc~luders any-
one engaged in the Industry in any cenpn~it~y, receivingf compensa-
tion for his services? irrespective of the nature or methlod of payml~ent
of .suIch comlpensation, extcept a member of the Indust ry.
SECTION 7., Thle termn "" Employer as used herein in~cluldes unvneo
byv wIhom a~ny sulch employee ccis compel~nsatte or e~mployed.
SEC'TION' S. Tile ternu Apprenitice "' as used herein means an indi-
vidual boundic by indeniture executed in comlpliance with the laws of
th~e State whler~e t~e service pr~ovided~ for therein is to be performed
to serve an emnployer for the term of the indentur~e at a pr~edeter-
mninedl w\age for thle period of the indernture in olrder to learn a
tradec, a~t, or craft.
SECTION 0. The t~erml Learner meacns an employee wnithlout
previous experience engagedl to become competent on one or more
operations buIt who shall not. be so classified after ninety (90) days
employment in the Industry.
SECTION 1. 2lMORllhnll UnHoZrS.---No employee shall ~work or be
permitted to work in excess of forty (40) or nayoewe
or egt()husi aytet-or( period, except as herein
otherwise provided. A normal work day shall not exceed eight
OECTION 2. Hours for O~eleica2 anzd OfjFee Employees.--No person
employed in clerical or office work shall be permiltted to work in
excess of an azverazge of forty hours in any one week; during any five
week period a~nd not to exceed forty-eigh 48) hours in any onle
week. A normal wcork day shall not exedeight (8) hours.
SECTION 3. Eweaeptions as to Ho0ursr.--The limitation as to hours of
labor as specified in Sections 1, 2 and 4 of this Article III shall not
appllyr to the followingp:
(a) Production employees, mechanical workers, or artisans in
industry, except as hereinafter provided, shall not be employed in
exo!~m of forty (40) hours per week, nor more than eight (8)
hours in any twenty-four (24) hour period; provided, however, that
during any period in which a concentrated demand upon any divi-
sion of the Industry shall place an unusual and temporary burden1
for production work upon its facilities or to meet seasonal peakl
requirements or emnergencies, an employee of such division may be
permitted to work not more than forty-five (45) hours per week and
niot more than nine (9) hours in any one day in not more than
thirteen (13) weeks in any calendar year. The present known peak
periodJ for t~he Industryr occrsl~ during a thirteen (13) week period
in the last six months of the calendar year.
(b) To employees engaged in emergency maintenance, or emer-
gency repair work, involving breakdown or protection of life or
property, provided that in such special cases at least one and one-
half times the normal wage rate for any employee so employed shall
be paid for a~ll hours worked in excess of forty 4)hours in any
one week; provided that this overtime provision halnot apply
in case of cat~astroph'ies involving loss of life. Such special casess,
however, shall be reported to the Code Authority.
(c) N~or to outside sales or sales service mlen, nor to persons in a
manngecr~if, executive or supervisory capacity, who receive more
than $35.00 per week.
(d) Nor to wvatchmesn, who shall be permitted to work no~t more
than fifty-six (56) hours in any one week.
(e) Th~ere may be a tolerance of 10"/o additional hours over the
forty (4-0) hours in any one week for employees engaged in the
preparation, care and maintenance of machinery and production
f-acilities~, and for stock and shipping clerks and truckmnen engaged
in oultsile delivery an~d pick-up service.
SECTION 4. Standard Weeki.--No employee shall be permitted to
work more than six (6) days in any seven (7) day period.
SECTION 5. Employ~menLt by Soir,ral ~ployers.--No employer
shall knowingly permit ainy em-plolyee to work for any time, which
when totalled with that already performed with another employer
or employers exceeds thze maximum permitted herein.
SECTION 1. Jimilit?>>~l H'ages'.-On and after thre effective date of
this Code no employee shall be paid in any pay periodl less than at
the rate of thirty-five (353) cents per houlr, ex~cept, as o~therw~ise herein
SECTION 2. PiecezoorTk Compe~~cnsatl~fion-M,7inimum Wagesrr.-T-he es-
tablished minimum rante of pay for th~e w\orkI performedc~ in any pay?
period shall a~pplyT irr~espect i ve of whether an emlol~~yee is actuanlly
comlpensated on tulne rate, piece work, or other basis.
SCECTION 3. I`ayedC A 7096 fifthnLum.- Withinh thirty (30) rtays
fro the date, of approval of this Cod~te, an adustmnc~t of wagecrs
above the minimum provided in this Clod shl be mande by thne
members of the Industry who have not heretofore madet sulch ad-
justment. Such adjnustmnent shall mlean that d~ifferen~tials in comn-
pensation between emplloyees receiving the m~inimnum wage and em-
ployees above thle mimmumrr~ existing prior to the dalte of a~ppl~rovl
of this Clode shall be, maintained; provridedl, however, thant in no
event shall rates of pay be: reduced. -Each mnember of the Industry
shall make a report of such adjustment wrhethe madle prior to or
subsequent to the date of approval of this Code to the Code
.SECTION 4. Female E:ntployees.---F'emale employees per~forming
substantially the same work; as male employees shall receive thne
samle rate of pay as male employees.
SECTION 5j. Hlatd~icapped Persons.- person whose earning capac-
ity is limited because of age or physical or mental handicap may be
employed on light work at a wage not below 80%~ of the mninimnum
established by this Code, if the emlployler oibtains from 'the State
Department of Ltabor a certificate aurthorizingr his employment at
such wages a~nd for such hours as shall be stated in the certificate.
Each employer shall file with t~he Code Author~ity a list of all such
persons employed by5 him. Such handicapped pecrsons shall not
constitute more than 5%0 of the? total number of employees of any
SECTION 6. I171-17#-7177 TEG.98e for Cle4rical and Of)ce Em ployces.--
No accounting, clerical, office, sales or service employees w~orkring on
a weekrly basis in any office shall be paid less than at the rate of
$15.00 per week; provided, however, that office boys andl girls and
miessengers shall be paidl at a rate not less than 80%o of the minimum
hereinabove specified, and provided further that thre number of such
boys and girls and messengers so paid shall constitute not more than
5% of the total number of such emlployvees of any one office of anyr one
employer, but in any case such employer shall be entitled to two such
SECTION 7. Apjnrentice8.--The use of apprentices shall be permitted
where they are apprenticed to an employer by an indenture made
pursuant to the laws of the state in which such sierie is to be per-
formed, under any apprentice system established andl maintained by
such employer, provided such indenture agreements are filed with thle
Code Authority. Employers shall not be allowed to have apprentices
exceeding 5%0 of the total number of sk-illed craftsmen of their
See paragraph 2 of order approving this Code.
special class, except that each employer shall be entitled to employ at
least one such emplo~l~yee and in. no case shall they be paid less than
the minimum wage providled in Section 1, of Article IV.
Scenov~r 8. L;earners-- Lealrners for a period of not to exrceedi
ninety (90) days may he paid not less than 80%o of the miinimnumi
rates of wng.nb', provided,? however, the total number of such learners:
in any calendar month shall not exsceted 5%0 of the total number of
ARTICLE V--GENERAL LABiOR PROVISiIONS
SECTION 1. Child Labor.-No person undler sixteen (16) years of
age shall be employed in the Industry. No person under eighteen:
(18) years of age shall be employed at operations or occupations
which are hazardous in nature or alnngelrous~ to health. The Code
Authority shall submit to the Administrator within sixty (60) days
after the effective late of this Code a list of such operations or occu-
pations. I~n anly state, an employer shall be deemed to hlave complied
with this r'Equli remen~lt; if he ha~s on file a certificate or permit duly
signed bty the Authorit~y in neh1 state empowered to issue employ-
ment or age cer~tificates or perit~lis showing that the employee is
of the requiredl age.
SECTION 2. (a) PTOvis8/on8 fr~om7 the Act;.--Employees shall have
the right to organize and bargain collectiv~ely through representa-.
tive~s of their owrn choosing, and1 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 concerc~!ted activities for the purpose of collective bargaining or
other mutual aid or protection.
(b) 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 organi-
zation of his owFn choosing.
(c) Employers shall comply with the maximum hours of labor,
minimum rates of pay and other conditions of employment ap-
provedl or prescribedl by the President.
SECTION 3. R801888ifsCationZ of Em17ployees.--N o empllloyer shall re-
classify employees or duties or occupations performed, or enlgage in
anly other subterfuge for the purpose of defeating the purposes or
provisions of the Act or of this Code.
SECTION 4-. Standards for Safety anld Health.-Everyef employer
shall make reasonable provision for the safety and health of his
employees at the place and during the hours oftheir employment.
Standards of safety and health for t~he IIndustry shall be submitted
to the ~Administrator within six months after approval of this Code.
SECTION 5. State Lasos.-NRo provision in this Codte shall super-
sede any State or F~ederal Law which imposes on employers more
s"""'"r"""" "~ t'" ~L~J ~I ~tringepnt, requirements as to age of empllloyees,?~ wages, hours of workj,
or as to safety, health?, sanitary or general wvorkingf conditions, or
insurance or fire protection, than are imposed by t-his Code.
SECTION 6. Posting.-All employers shall kzeep posted complete
labor provisions of this Code and anyr amendmnts thereto in con-
spicuous places accessible to employees.
ARTICLE, VI--CO~DE AUTlHORIITYB
ORGAN TZATION AND CON STITU'rTION
SC~ECTrION 1. A Code A~uthlority to administer this Code is hereby
established, which shall consist of four members to be elected by a
fair method of selection so us to be truly representative of the Iq
dustry, subject to the approval of the Adm~inistrantor; twTo s
members are to be elected byv the M~embers of the Industry,wil
eac member thereof entitledl to one vote for every one hunre
(100) bicycles, or major fraction thereof, sold during the twelve
calendar months next precedinlg the months whenr the election is
held, and twvo mIembersa to be elected by a major~ityT vote of the
Industry, wherein each member thereof is entitled to one vote t
provided, fu~rt~er, thaLt in the event anyT membhers of the; Industry
constituting in the aggregate less than a majority of all of the mernm-
bers of the Industry~, shall collectively produce ~by number of units
a volume, of 50% or more of the total p~rodluction of the lIndust~ry,
those producing th~e remainder of such volume, shall always have
representation on the Code Authority equal to those producing the
majority of such, volume.
SECTION 2. In addition to members as above prov-ided, there may
be one. andj not more than three members, wFithout vote and without
expense to the Indlustry, to be appointed by the Administrat~or as
he muay) specify for a six-mlonth or twpelve-monthl per~iodl fromr dante
SECTION 3. Each trade or industrial association directly participat-
ing in the selection or activities of the Code Authorit~y shall (1I)
impose. no inequitable restrictions onl membershipad()sbi
to the Administrator true copies of its _Article of Asociation, By-ad 2 umi
Laws, Regula~tions a~nd any amendments when made thereto, together
with such other information as to membership, organization, and
activities as the Administrator mnay deem necessary to effectuate the
purpose of thre Act.
SEcTION 4. In] order that the Code Authority shall at all ties be
truly representative of the Industry and in other respects 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
in other respects comply with the provisions of the Act, he may re-
quire atn appropriate modification in thet method of election of the
SECTION 5. Members of the Industry shall be entitled to partici-
pate in and share the benefits of the activities orf the Code Authority
and to participate in the selection of the members thereof byv asset
ing to and complying with the requirements of this Code and: sustain-
ing their reasonable share of the expenses of its administration.
Such reasonable share of the expenses of administration shall be de-
termined by the Code Authorit~y, subject to review by the Adminis-
trator, on the basis of volume of business and/or suc other factors
as may be deemed equitable.
Bee paragraph 2 of order approving this Code.
SECT'ION 6j. Nothing contained in this Code shall constitute the
members of the Code Authority partners for any purpose, nor shall
any member of the Code A~uthorit~y be liable in any manner to any-
one for any act of anly 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 h~ereunder,
be liable to anyone for any action or omission to act under this Code,
except for his own mxis-feasancte or non-feasance.
POWERS AND DUTIES
SECTION '7. The Code Authority shall have t~he following further
powers and duties, subject to such rules and regulations as may be
Issued by the Administrator, th~e exercise of which shall be
reported to the Administrator and shall be subject to his right, on
review, to disapprove any action taken by thle Code Authoritly. If
the Administrator shall determine that any action of a Code Author-
ity 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 further consideration by such Code Aut~hority 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 of intention to proceed with such action
inl its original or modified form.
(a) To insure the execution of the provisions of this Code and
provide for the compliance of the Industry with the provisions of
(b) To adopt By-Laws, Rules and Regulations for its procedure
and for the administration and enforcement of the Code. 'The Code
Authority shall promptly furnish the Administrator with true
copies of the By-L~aws, Rules or Regrulations adopted pursuant to
(c) To obtain from members of the Industry such information
and reports as are required for the administration of the Code and
to provide for submission by members of such information and
reports as the Adminisstrator may deema necessary for the purposes
recited in Section 3 (a) of the Act, which information and reports
shall be submit ted by members to such administrative and/or
government agenc~ies as the Administrator may designarte; provided
that nothing in this Code shall relieve any member of the Industry
of any existing obligations to furnish reports to any governmental
agency. No individual reports shall be disclosed to any other m~em-
ber of the I~ndustry or any other party except to such governmental
agencies as may be directed by the Adlministrator. In addition to
information required to be submitted to the Code Authiorit~y, there
shall be furnished to government agencies such statistical inor~mal-
tion as the Ac~dministrator may deem necessary for the purposes
recited in Section 3 (a) of the Act.
(d) TIo use such trade associations and other agencies as it deems
proper for the carrying out of any of its activities provided for
herein, provided that nothing herein shall relieve the Code Author-
ity of its duties or responsibilities under this Code and that such
trade associations anad agencies shall at all times be subject to antd
comply with the provisions hereof.
(e) To make recommendations to the Administrator for th co
ordination of the administration of this Code with such other codes,
if any, as may be related to the Indulstry.
(f) TCo cooperate with the Administrator in regulating the use
of any N+.R.A. insignia solely by those members of the Industry who
have assented to, and are complying w~ith, this Code.
(g) To reconunend to the Administra.tor further fair trade prao-
tice provisions to govern members of the Industry in their rela-
tions with each other or with other industries and to recommend
to the Administrator measures for industrial planning, including
stabilization of employment, which upon. approval by tht-e Admin-
istrator shall become effective as a part of this Code.
ARTICLE 711~--TRAD, 1PRA~CTIcE ]RULE
The followiing trade practices are declared to constitute unfair
methods of compIetition between members of the Industry~Z and noyo
meme of the Indulstry shall use any of them, eitherdretyo
indi rectly, through any officer, agent or employee. TChe violation
of any on or more of these, together with. such other tr~ade~ praei-
tice provis~ionls which may be recommended to the Administrator
and approved by him after such notice and hlearingrs as he may
prescrbe, shall constitute a vFiolation of this Code.
1. NPo member of the Industry shall sell anly item which he manu-
factures or purchases belowf his cost of that ite~m. The Cod~e Au-
thority shall cause to be formulate~d an accounting sy~stemn and
mehos of cost finding aind estimating, capable of use by ~eall mnemi-
bers of the Industry Aft~er such system andi methodshaebn
formulated full details concerning themn shall be made available
to all members. Thereafter. all members shall determine and esti-
mate costs in accordance wFith the principles of such methods.
2. Selling terms shasll not exceed 2% 10th proximo, net after 1~t~h
proximo, except on 'factory shipments to Pac~ific Coast points, where
the terms may be 2%0 second 10th proximo.
3. Pre-dating or post-dating pf any invoice or sales contract, ex-
cept to conform to a bona-fide agreement entered, into on t~he pr~e-ate.
4. All shipments shall be f.o.b. point of origin. In any case
where the manufacturer has a warehouse stock. in, any city, freight
need not. necessarily be shown on the invoice, but thte goods shall be
priced to include full cost of freight plus wF~arehouse. expenses.
5. No member of the Industry shall publish advetising w h ether
printed, radio display or any other nature) which is nusleading
or inaccurate mn any material particular, nor shall any member in
any wFay misrepresent any goods (including, but without limitation,
its use, trademark, gradle, quality 7, quantityI, origin, size, substance
character, n~t~ure, finish, material content or preparation) or credit~
terms, values, policies, services, or the nature or form of the business
6. No member of the Industry shall knlowingly w0ithhol0d from
or mnsert in any quotation or invoice any statement that makes it
inaccurate in any material particular.
7. No member of the Industry shall brand or mark or pack any
goods in any manner which is intended to or does deceive~ or mislead
purchasers with respect to the brand, grade, quality, quantity,
origin, size, substance, character, nature, finish, material content or
preparation of such goods,
8. No member of the IndustryT shall publish or circulate unjus-
tified or unwarranted threats of legal proceedings -which tendI to
or have thle effect of harassing competitors or intimidating their
9. No member of the Industry shall secretly offer or make any
payment or allowance of a rebate, refund, commission, credit, un-
earned discount or excess allowance, whether inl the form of moneyg
or otherwise, nor shall a member of the Industry secretly offer or
extend to any customer any special. service or privilege not extended
to all customers of the same class, for the purpose of influencing
10. No member of the Industry shall ship goods on consignment
except under circumstances to be defined by the Code ALuthority,
with the approval of the Administrator, where peculiar circumstances
of the Industry require the practice~.
11. Nro member of the Industry shall give, permit to be given, or
directly offer to give, anything of value for the purpose of influ-
encing or rewarding the action of any employee, agent or represent-
ative of another in relation to the business of the employer of such
employee, the principal of sue'h agent or the represented party,~
without te knowledge of such emzployer, p~cosrinci pohbipal or party. Ti
Commercial bribery provision shall not b osre opoii
free and general distribution of articles commonly used for adver-
tisinga, except so far as such articles are actually used for commercial
bribery- as hereinabove defined.
12. No member of the Industry shall attempt to induce the breach
of an existing contract between a competitor and his customer or
source of supply; nor shallaysuhm beitrerwtho
obstucttheperormnceof uchcontractual duties or services.
13. No member of the Industry shall make allowances in any form
for dating, freight, demonstration, or any other purposes, except that
he mnay provide cuts, electros, and.mats picturing and describing
his own product as assistance to customers mn advertising his
ARTCLE VI[II--ExPronT TRADE
No provision. of this Code relating to prices or terms of selling,
shipping or marketing, shall apply to export trade or sales or
shipments for export trade.
SECTION 1. This Code and all the 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
regulation issued under said Act, and specifically, but without lim-
itation, to the right of the Preside~nt to canzcel or moodify his approval
of this Cod~e, or any conditions imposed by him. upon his approval
SECTION 2. SU011 Of the pr'ovisions of this Cod~e as are not required
to be included therein by the Actl may, with the appr~ovnl of there
Administ rator, be modified or elimma~ted in sucrh manner as may be
indicated~ by th~e needs of the public, by lch anges in circumstances, or
by experience; all the provisions of ti Code, unless mlodifiedl or
eliminated, shall remain in etfee~t during the lif~e o~f the Act.
SECTION 3. An ammenelntn may be proposed byr anyT interested
party, either to the Code Authorityr or directly by or to the Admin.
Istrat~or. All proposed amnelndentts shall be referredl to the Code
Authority, who shall give members o~f the Industry an opportunity
to be heard thereon, and thereafter th~e Code Authority may make
such recommendations thereon as is deemed proper, provided, how-
ever, that w~hen approved by the Administrator as nec-essary to
effectuate the policies of thre Act, after such notice and hearing as
he mayT prescribe, any pro~posedl amendment shall thereupon become
effective as a part of this Code.
SEcTION 4. The Code Authority may make recommendations for
modifications of this Code? to thle Administrator which shall become
effective as a part of this Code upon appr~oval by the Administrator
after such notice and hearing as he may prescribe.
No provision of this Code shall be so applied as to permit monopo-
liens or monopolistic practices, or to eliminate, oppress, or discrirmi
na~te against small enterprises.
ARTICLE X11--RICE INCREASES
Whereas the policy of the Act to increase real purchasing power
will be mnade more difficult of consummation if prices of goods and
services increase as rapidly as wages, it is recognized that price
increases except such as may be required to meett individual cost
should be delayed, but when made such increases should, so far as
possible, be limited to actual additional increases in the seller's
Ancan XLII -ErrcrIva DATE
This Code shall become effective ten days after its approval by
Approved Code N~o. 437.
Registry No. 1407-1--02.
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