Registry No. 1404-1-11
NATIONAL RECOVERY ADMINISTRATION
PROPOSED CODE OF FAIR COMPETITION
FABRIC AUTO EQUIPMENT
AS SUBMITTED ON AUGUST 31, 1933
The Code for the Fabric Auto Equipment Industry
in its present form merely reflects the proposal of the above-mentioned
industry, and none of the provisions contained therein are
to be regarded as having received the approval of
the National Recovery Administration
as applying to this industry
GOVERNMENT PRINTING OFFICE
For ale by the Superintendent of Documents, Washington, D.C. Price 5 cents
THE FABRIC AUTO EQUIPMENT ASSOCIATION
PROPOSED CODE OF FAIR COMPETITION FOR THE FABRIC
AUTO EQUIPMENT INDUSTRY
For the purpose of effectuating the policy of the United States
Government as declared in Title 1, Section 1, of the National Indus-
trial Recovery Act, the members of the Fabric Auto Equipment
Industry hereby apply to the President pursuant to Section 3 of the
said Act, to approve the following Code of Fair Competition for
the Fabric Auto Equipment Industry, within the area herein de-
fined, and. subject to such approval, they hereby agree to all of the
terms of this Code.
ARTICLE I-APPLICATION OF THE CODE
1. This Code of Fair Competition (hereinafter referred to as the
"Code") shall apply to all manufacturers of Seat and Slip Covers,
Tire Covers, Top Covers, Side Curtains, Auto Cushions, Auto Awn-
ings, Automotive Mechanics' Garments, Fabric Accessories for auto-
mobiles, as defined in Schedule 1 hereto attached and made a part
hereof. who are doing business in the United States.
2. This Code shall apply to all business done in said Fabric Auto
Equipment Industry by members of the industry in the manner de-
fined in Article II, except export business.
1. Automotive fabrics are defined for the purposes of the Code of
Fair Competition to include the following products: Seat and Slip
Covers, Tire Covers. Top Covers, Side Curtains, Auto Cushions,
Auto Awnings, Automotive Mechanics' Garments, Fabric Accessories
for Automobiles. Of these products, the Fabric Auto Equipment
Industry represents 80% of the total production of the country East
of the Rockies.
2. Nothing contained in this Code of Fair Competition shall be
construed as prohibiting any member of the industry from exercising
all its and,'or their lawful patent rights or as requiring any member
of the industry to do any act in conflict with the terms of a patent
licensing agreement legally binding upon such member.
ARTICLE III-SPECIFIC AGREEMENTS WITH THE GOVERNMENT
1. Participation in this Code, and any subsequent revision of, or
addition to the Code, shall be extended to any person, partnership.
association, or corporation in the fabric auto equipment industry who
shall accept his share of the cost and the responsibility, as well as the
benefit, of such participation. This may be effected by membership
in the Fabric Auto Equipment Association or by the payment to this
organization of an amount equal to the dues paid by its members for
the creation and administration of this Code of Fair Competition.
2. The members of the industry who subscribe to this Code are
hereinafter referred to as the "parties hereto ", and they agree that
the provisions of the Code shall be the standards of fair competition
for the Fabric Auto Equiprient' Industry in the territory designated
herein, and that every violation of the standards established in the
Code shall be deemed an unfair method of competition in commerce
within the meaning of the Federal Trade Commission Act as
amended and shall subject the party guilty of any such violation to
penalties as provided in Title 1 of the National Industrial Recovery
3. The parties hereto agree with each other, and agree jointly and
severally with the Government of the United States, as a considera-
tion of obtaining the President's approval of this Code:
4. That the p1 ties hereto will impose no inequitable restriction
on admission to membership in the Association or group of which
they are a part, and that the parties hereto are truly representative
of the Fabric Auto Equipment Industry.
5. That this Code is not designed to promote monopolies or to
eliminate or oppress small enterprises, and will not operate to dis-
criminate against them, and will tend to effectuate the policy of Title
1 of the National Industry Recovery Act.
6. That the parties hereto will abide by such conditions (including
requirements for the making of reports and the keeping of accounts)
for the protection of customers, competitors, employees, and others,
and in the furtherance of the public interest, as the President in his
discretion deems necessary to effectuate the policy declared in said
ARTICLE IV-LABOR CODE
1. Employees of the Fabric Auto Equipment Industry shall have
the right to organize and bargain collectively through representatives
of their own choosing, and shall be free from the interference,
restraint, or coercion of employers of labor, or their agents, in the
designation of such representatives or in self-organization or in other
concerted activities for the purpose of collective bargaining or other
mutual aid or protection.
2. No employee and no one seeking employment in the Fabric Auto
Equipment Industry shall be required as a condition of employment
to join any company union or to refrain from joining, organizing, or
assisting a labor organization of his own choosing.
3. Employers in the Fabric Auto Equipment Industry shall comply
with the maximum hours of labor, minimum rates of pay, and other
conditions of employment approved or prescribed by the President
of the United States.
4. The provisions of Article III hereof, however, are not to be
deemed to impair in any particular the constitutional rights of the
employee or employer to bargain as may be mutually satisfactory to
them. Nothing in this- code is to prevent the selection, retention,
discharge, or advancement of employees on the basis of their indi-
5. The President of the United States may from time to time cancel
or modify any order, approval, license, rule, or regulation issued
under Title I of the National Industrial Recovery Act.
AiTICLE V-THE FABRIC AUTO EQUIPMENT ASSOCIATION
1. The parties hereto who are members of an incorporated associa-
tion known as the Fabric Auto Equipment Association (hereinafter
referred to as the "Association ") shall continue as members of said
Association subject to withdrawal therefrom, as provided in the
Constitution of the Association.
2. The approval of this Code by the President shall constitute a can-
celation of the Constitution and By-Laws of the Association as now
in effect, and from the date of said approval the Constitution and
By-Laws of said Association shall be in the form hereto attached,
and the parties to this Code who are members of said association agree
to take all action necessary to make said Constitution and By-Laws
effective immediately upon the approval of this Code by the
3. The Association will serve as an agency for collecting statistical
data as to costs, production, sales, and other matters affecting the
industry as to which the Government may require information, and
the manufacturers engaged in the industry shall furnish such in-
formation and make such reports to the Association as may be
necessary in order to enable the Association to collect and furnish
to the Government the information required under the terms of the
National Industrial Recovery Act. The manufacturers shall keel)
their accounts in such form as may be necessary to enable them to
furnish information desired by the Government.
ARTICLE VI-PROTECTION OF EMPLOYEES AND OF THE PUBLIC INTEREST
1. The Association, acting through its Executive Committee and
agents duly appointed, shall proceed with due diligence to gather
from members of the industry information as to cost of production,
accounting systems, wages, working hours, and other relevant data
for the purpose of preparing and submitting to the President for
approval an agreement between members of the industry which will
adequately protect employees, consumers, competitors, members of
the trade, and others in furtherance of the public interest as con-
templated by Title 1, Section 4, of the National Industrial Recovery
ARTICLE VII--HOURS AND WAGES
1. On and after the effective date the minimum wage that shall
be paid by employers in the Fabric Auto Equipment Industry shall
be at the rate of $13.00 per week when employed in that section of
the industry north of the Mason and Dixon line, and $12.00 per week
when employed in that section of the industry south of the Mason
and Dixon line.
Exceptions shall be made in the case of beginners, who may be
employed up to ten weeks at not less than 75% of the minimum
wage, but in no case shall beginners constitute more than 15% of
the employees in any plant. Exceptions shall also be made for
cleaners and outside employees.
2. On and after the effective date employers in the Fabric Auto
Equipment Industry shall not operate on a schedule of hours of
labor for their employees-except repair-shop crews, engineers,
electl.ricin., firemen, office and -Ipervisory staff, shipping, watching
and outside crews, and cleaners-in excess of 40 hours per week,
and they shall not operate productive machinery in the Fabric Auto
Equliplment Industry for more than two shifts of 40 hours each per
3. On and after the effective date employers in the Fabric Auto
Equipment Industry shall not elliploy any minor under the age of
4. On and after the effective date, employers in the Fabric Auto
Equipment Industry shall not employ prison labor or use or offer for
sale the product of any penal institution.
5. On and after the effective datv, in establishments where there
are nuimeroius owners or partners, those who perform the manual
labor shall work in conformity with the inmaxinium hours and min-
imum wages provided in this Code.
6. On and after the effective date the practice of performing any
operation in a home, residence, or place other than a recognized
manufacturing plant of fabric auto equipment shall be a violation
of this Code.
7. The Code of Ethics attached hereto shall constitute a Code of
Ethics for the Fabric Auto Equipment Industry. The parties hereto
agree that they will not engage in any practice condemned or pro-
hibited in said Code of Ethics of therein designated as an unfair
trade practice. The Code of Ethics shall constitute an integral
paIrt of this Code of Fair Competition.
8. This Code of Ethics may be changed from time to time by vote
of two-thirds of the members of the A-.or.intion provided such
changes shall first have been approved by the Executive Committee
of the A,,oci:ation and shall be effective for the industry upon ap-
proval by the President of the United States.
ARTICLE VIII-ENFORCEMENT OF THE C'IDE
1. The Executive Committee of the Association shall designate
an agent or agents to investigate complaints of violations of this
Code. The members of the industry shall facilitate such investiga-
tion by opening their correspondence, books, and accounts for exam-
ination by the authorized representatives of the Association and by
furnishing relevant information. In the event of any wilful viola-
tion being disclosed the Executive Committee may present evidence
thereof to the proper department, agency or judicial branch of
The foregoing Code of Fair Competition has been agreed to by
the members of the Fabric Auto Equipment Industry, acting
through their officers thereunto duly authorized.
ARTICLE IX-CODE OF ETHICS
1. Employees-(a) Eti fc;imj c.p,,l n/,ees from copiiit;fors.-Ma-
liciously enticing away an employee or employees of competitors
with the intent of unduly hampering, injuring, or embarrassing a
competitor or competitors in the conduct of their bu, iness i.- an
unfair trade practice.
2. ~,Merchandise-(a) .Misb'rdling.-Misrepresentation as t t the
weight, quantity, qit, lty, size, or grade of any product sold or
offered for sale is an unfair trade practice. Failure to mark or brand
each product with respect to the quantity, quality or grade thereof
with the intent of misleading purchasers or prospective customers is
an unfair trade practice.
(b) Seconds.-No first-quality merchandise can be sold as sec-
onds. All seconds must be labeled or marked so ;is to be visible by
3. Iino;chig-(a) Om)nis;ot of data.-Any items pertaining to the
sale omitted from the invoice, such as allowance of overriding dis-
count payable at some future date, shall be considered an unfair
trade practice. Extra terms or allowance must be noted on invoice
and in no case shall terms exceed 2%r cash discount.
(b) 'nauthorizcd dedctions.-Permitting a customer to make
any deductions from the invoice not covered by the terms of sale in
making his remittance shall be considered an unfair trade practice.
(c) Free goods.-No manufacturer shall ship or in any way de-
liver free goods of any kind to any customer for resale by that
(d) Samples.-Samples of completed products must be invoiced.
(e) Other products.-No manufacturer shall subnormally price
any products manufactured or sold by him for the purpose of fur-
thering sale of any other products.
(f) The present 2% excise tax is to be shown on the invoice as a
separate item excepting in the case of those manufacturers who sell
to the jobbing or wholesale trade who are to include the excise tax
in their selling price. The following articles are subject to the 29C.
excise tax: Auto Seat and Slip Covers; Top Recovers; Top Decks;
Side Curtains; Rear Curtains; Top Boots; Auto Floor Carpets;
Auto Awnings; Inside Auto Shades and any other auto fabrics cut
to size. All tire covers, advertising or nonadvertising covers with
tread bands, paper or fabric, are taxable. Tire cover fronts are not
taxable; the painting and art work if shown separate on invoices is
4. Transportation-(a) Diversion of shipmernts..-All merchan-
dise to be sold F.O.B. factory.
5. Advertising-(a) Misrepresentation.-Advertisements, s t a t e-
ments, or references which directly or indirectly reflect falsely upon
the merchandise, policies, or financial standing of any competitor
or which are detrimental to the best interests and welfare of the
industry are unfair trade practices.
6. Subsidies-(a) Lavish. entertainmen.t.-fManufacturers shall
not encourage nor permit lavish entertainment of a customer by
themselves or their employees.
(b) Bets, gratuities, loans, etc.-No officials, salesman, or other
employee shall make bets or in any way gamble with any customer
or customer's employees for the purpose or with the intent of losing,
nor shall any salesman or employee give any gratuity, cash, or pres-
ent of substantial value to any customer or prospective customer or
UNIVERSITY OF FLORIDA
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customer's employee. No officials, salesman, or employee shall make
loans of any kind to any customer or prospective customer or cus-
(c) Consignments.-There shall be no consignments of goods made
to any customer.
(d) Splitting commissions.-Salesmen or other employees shall
not split nor otherwise share their commissions or compensation with
any present or prospective customer or customer's employees.
(e) Excessive allowance and adjustments.-No manufacturer shall
make any excessive allowance to a customer for alleged defective
merchandise, alleged shortages, or for adjusting complaints of any
7. Cut-throat competition.-Selling goods below manufacturers'
own cost is an unfair trade practice. Costs shall be calculated on the
following basis which must include market quotation of all materials
within two weeks of the date quotation is made, plus all direct labor
costs, plus 35% as a minimum selling price. For example, the cost
of a tire cover would be the cost of fabric, thread, elastic, seamino
cord, shipping carton, individual carton or wire hoop, paint, ani
other materials, together with labor, such as cutting, sewing, finish-
ing, packing, making stencil, imprinting, and all other direct labor
plus an additional 35% to cover administrative, warehousing, trans-
portation, collection, taxes, depreciation, depleting, and obsolescence.
It is generally recognized that the proper mark-up is 50 to 70%
and the minimum figure of 35% is only mentioned to be used where a
company is figuring on a large order in which there are no advertis-
ing or selling expenses involved.
8. Sundries.-(a) Resales.-The manufacturer will encourage his
own customers to mantatain a fair margin of profit in resales and to
make possible a profitable handling of his products by other similar
(b) Arbitration.-Where the costs of executing contracts entered
into in the Fabric Auto Equipment Industry prior to the presentation
to Congress of the National Industrial Recovery Act are increased
by the application of the provisions of that Act to the industry, it is
equitable and promotive of the purposes of the Act that appropriate
adjustments of such contracts to reflect such increased costs be arrived
at by arbitral proceedings or otherwise, and the Fabric Auto Equip-
ment Association, the applicant for this Code, is constituted an agency
in effecting such adjustments.
(c) Blanket orders and future orders.-It is a violation of this
Code for a manufacturer of advertising tire covers to sell and de-
liver a quantity of tire covers at a price lower than the price actually
applying to the quantity shipped at each time and such action is an
unfair trade practice.
(d) General.-No practice or subterfuge contrary to the spirit of
this Code of Ethics shall be indulged in by any employee of any