NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
(A Division of the Machinery and Allied Products Industry)
AS APPROVED ON AUGUST 2, 1934
WE DO OUR PART
UNIV. OF FL LIE.
4:.iT T r c
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Approved Code No. 347-Supplement No. 41
Registry No. 1399-59
This publication is for sale by the Superintendent of Documents, Government
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Approved Code No. 347-Supplement No. 41
SUPPLEMENTARY CODE OF FAIR COMPETITION
HYDRAULIC MACHINERY INDUSTRY
As Approved on August 2, 1931
APPROVING SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE
HYDPHAULIC MAICHINERY INDUSTRY
A DIVISION OF THE MACHINERY AND ALLIED PRODUCTS INDUSTRY
An application having been duly made pursuant to and in full
compliance with the provisions of Title I of the National Indus-
trial Recovery Act, approved June 16, 1933, for approval of a
Supplemental Code of Fair Competition for the Hydraulic Ma-
chinery Subdivision of Machinery and Allied Products Industry,
and hearings having been duly held thereon and the annexed report
on said Supplemental 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, I, Hugh S. Johnson, Administrator for Industrial Recovery,
pursuant to authority vested in me by Executive Orders of the
President, including Executive Order No. 6543-A, dated December
30, 1933, and otherwise; do hereby incorporate by reference said
annexed report and do find that said Supplemental Code complies
in all respects 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
approved subject to the following condition:
(1) That the provisions of Article VIII, Section 2 (a) be and they
hereby are stayed pending my further order.
HUGH S. JOHNSON,
Administrator for Industrial Recovery.
BARTON W. MURRAY,
August 2, 1934.
REPORT TO THE PRESIDENT
The White House.
SI: This is a report on the Supplemental Code of Fair Competi-
tion for the Hydraulic Machinery Subdivision of Machinery and
Allied Products Industry, a Public Hearing on which was held in
Washington, D.C., on December 21, 1933. The Hearing was con-
ducted in full acnord nce with the provisions of Title I of the
National Industrial Recovery Act.
The Hydraulic Machinery Subdivision, being truly representative
of the manufacturers of the products defined in Article II of the
Supplemental Code, ha.; elected to formulate and submit a Supple-
mental Code of Fair Competition as provided in the second para-
graph of Article I of the Code of Fair Competition for the Machinery
and Allied Products Industry, approved by you on the seventeenth
day of March, 1,-34.
The Hyraulic Machiniery Subdivision means the manufacture for
sale, erecting, and selling of hydraulic machinery of all kinds and
parts thereof, whether using water or any other liquid as enumerated
in detail in the Supplemental Code attached thereto. It excludes,
however, prime movers such as turbines, water wheels, and their
accessory equiipni.nt, hydraulic brakes and/or parts therefore, hy-
drilulic shock absorbers, hydraulic bumpers and hydraulic dump
trucks. It includes all those engaged in such manufacture for sale.
This Subdivision has been severely affected by the recent depres-
sion. This is evidenced by the steady decline in annual sales since
1929. The volume of production as reported by the Division of
E'onomnic Research and Planning declined from $10,000,000 in 1929
to $2,000,000 in 1932, or 80Oc. Sales as reported for the first six
months in 1'.33 amounted to only $700,000. However, an increase in
production is indicated by an increase in man-hours reported since
the second quarter of 1933.
Employment, of approximately 1,456 factory workers in 1929
declined to about 651 workers, or 55%, during the first quarter of
1903. Since then employment has increased.
Approximately 44"; of the factory workers in June 1933 were
working more than 40 hours per week. The average work week
in October 1::33 was 37.8 hours.
In June 1~I3 about 2.5'; of the f;mctory workers were receiving
less than 40 cents pir lhour. The lowest minimum wage as of Oc-
tuil.r l1',:3 reported by the Industry was 30 cents per hour.
The wage provisions for the Subdivision, which is operating under
the Code of the Machinery and Allied Products Industry, provide
that employees engaged in plant operations shall be paid as follows:
(1) in cities of more than 50,000 population and their immediate
vicinity, 40 cents per hour; (2) in cities of more than 10,000 but not
more than 50,000 population and their immediate vicinity, which
cities are not in the immediate vicinity of a city of more than 50,000
population, 38 cents per hour; (3) in cities of 10,000 population or
less and their immediate vicinity, which cities are not in the imme-
diate vicinity of a city of more than 10,000 population, 36 cents per
hour, except that employees engaged in plant operations in all local-
ities in the states of Virginia, North Carolina, South Carolina,
Georgia, Florihi, Tennessee, Alabama, Mississippi, Arkansas, Louisi-
ana, Texas, and Oklahoma, shall be paid not less than 32 cents per
When females do substantially the same work as males or replace
males, they shall receive the same pay. However, no female em-
ployee shall be paid less than 871/2% of the proper rate for the local-
ity in which employed.
Office boys and girls and apprentices shall be paid not less than
80% of the minimum wage.
Employees other than those engaged in plant operations shall
receive not less than $15.00 per week.
The Code provides that no person under 16 years of age shall be
employed in the Subdivision.
ESTIMATED NUMBER OF FACTORY WORKERS RECEIVING LESS THAN
DESIGNATED HOURLY RATES
Distribution of factory workers receiving less than the minimum, regardless
Proposed minimum hourly rates mate per mate num-
40 cents (other U.S.).--................-----------------.----------------.. 24.7 181
38 cents (other U.S.)--................... -------------------------------.. 20.4 150
86 cents (other U.S.) ....---..-------....... -----------.-----------------.. 16.1 118
S2 cents (South) ..--. ------------------------_.----------------------.. 8.9 65
1 Based on the distribution as of June 15, 1933, and on the specified percentages of the number of factory
workers receiving less than the designated rates shown in the above table, the adoption of the proposed mini-
mum rates will probably cause an increase in factory pay rolls. The estimated increase probably will not
exceed four percent.
RESUME OF SUPPLEMENTAL CODE
Article I states the purpose of the Supplemental Code.
Article II accurately defines specific terms applicable to the Sub-
division as used in this Supplemental Code.
Article III provides for the adoption of the employment provi-
sions of the Code of Fair Competition for the Machinery and Allied
Products Industry, as approved by you on the seventeenth day of
March, 1934, and as from time to time amended.
Article IV provides for the adoption of Articles II, VI, VIII, and
IX of the Code of Fair Competition for the Machinery and Allied
Products Industry in accordance with the conditions of this Article
governing their adoption.
Article V provides for the establishment of the Code Authority
and defines its powers and duties.
Article VI provides for an accounting system and methods of
cost finding and/or estimating.
Article VII provides that no products shall be sold or exchanged
below a reasonable cost when the Code Authority determines that
an emergency exists.
Article VIII contains provisions relating to revisions and terms
of employers proposals.
Article IX sets forth trade practices for the Subdivision.
Article X establishes that no provision of this Supplemental Code
relating to pricing and marketing shall apply to export trade.
Article XI. This Supplemental Code and all the provisions thereof
are expressly made subject to the right of the President, in accord-
ance with Subsection (b) of Section 10 of the Act, from time to
time to cancel or modify any order, approval, license, rule or regula-
tion issued under said Act. Provision is also made that modifications
may be submitted by the Code Authority to the Administrator for
Article XII. No provision of this Supplemental Code shall be so
applied as to permit monopolies, or monopolistic practices, or to
eliminate, oppress, or discriminate against small enterprises.
Article XIII states the effective date of this Supplemental Code.
The Assistant Deputy Administrator in his final report to me on
said Supplemental Code having found as herein set forth and on
the basis of all the proceedings in this matter:
I find that:
(a) Said Supplemental Code is well designed to promote the
policies and purposes of Title I of the National Industrial Recovery
Act, including removal of olbistructions 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 organ-
ization of industry for the purpose of coolwrative action among the
trade groups, by inducing and maintaining united action of labor
and management under adequate governmental sanctions and super-
vision, by eliminating unfair competitive practices, by promoting
the fullest possible utilization of the present productive capacity of
industries, by avoiding undue restriction of production (except as
may be temporarily required), by increasing the consumption of in-
dustrial and agricultural products through increasing purchasing
power, by reducing and relieving unemployment, by improving
-tandards of labor, and by otherwise rehabilitating industry.
(b) Said Subdivision normally employs not more than 50,000
employees; and is not classified by me as a major industry.
(c) The Supplemental Code as approved complies in all respects
with the pertinenlt provisions of said Title of said Act, including
without limitation Subsection (a) of Section 3, Subsection (a) of
Section 7, Subsection (b) of Section 10 thereof; and that the appli-
cant. association is an industrial association truly representative of
the aforesaid Subdivision; and that said asso-iaItion imposes no
inequitable restrictions on admission to membership therein.
(d) The Suppleme'ntal Code is not designed to and will not permit
monopolies or monopolistic practices.
(e) The Supplemental Code is not design-'d to and will not elimi-
nate 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 approval of said
For these reasons, therefore, I have approved this Supplemental
HUGH S. JOHNSON,
Admh; i.s rator.
AucUST 2, 1934.
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR
THE HYDRAULIC MACHINERY INDUSTRY
A DIVISION OF THE MACHINERY AND ALLIED PRODUCTS INDUSTRY
To effectuate the policy of Title I of the National Industrial Re-
covery Act, the following provisions are established as a Supple-
mental Code for the Hydraulic Machinery Subdivision of the Ma-
chinery and Allied Products Industry, and together with the Code
of Fair Competition for the Machinery and Allied Products Indus-
try shall be the standard of fair competition for this Subdivision,
and shall be binding on each employer therein.
"Applicant" means the Hydraulic Machinery Manufacturers' As-
sociation, a trade irg nnization, all members of which are engaged
in the manufacture and/or sale of the products of the Hydraulic
Machinery Subdivision of the Machinery and Allied Products
"Industry" means the IMarhirnery and Allied Products Industry,
as defined, in its Code as approved by the President, and as such defi-
nition may from time to time be amended.
"Subdivision" nimcan; this Hydraulic Machinery Subdivision of
the MaIchinery and Allied Products Industry as defined and set
forth in Paragraph 15, Article II of the Code of the Machinery
and Allied Products Industry, as follows:
"Hydraulic MaJchinery Subdivision means the manufacture for
sale, erecting, and selling of hydraulic machinery of all kinds and
parts thereof, whether using water or any other liquid, including
specifically but without in any way limiting the generality of the
foregoing, hydraulic machines and pre-se-, hydraulic testing ma-
chines (made to special order), hydraulic accumulators, and also
other accessoris sui'h as pumpl), valves, and fittings and parts thereof
incident to the operation of such hydraulic equipment. It excludes,
however, prime movers such as turbines, water wheels, and their
necessa ry a,'ct.---ry eqilipmc'nt, hydra ulic brakes and/or parts thereof,
hydliraiulic shock ;Ia'rbers, hydraulic bumpers and hydraulic dump
trucks. It includes all those engaged in such manufacture for sale ".
Code" mi;ani the Code of Fair Competition for the Machinery
and Allied Prociicts Industry, as approved by the President, March
17, 19.34, and as from time to time amended.
Per.un means a natural person, a partnership, a corporation,
an association, a trust, a trustee a trustee in bankruptcy, a receiver
or other entity.
Employer means any person engaged in the Subdivision either
as an employer of labor or in his own behalf.
"Employee means any one who is employed in the Subdivision
by any such employer.
"The Act" means Title I of the National Industrial Recovery
"The President means the President of the United States.
"The Administrator" means the Administrator for Industrial
Basic Code Authority means the Code Authority for the Ma-
chinery and Allied Products Industry as constituted by the Code.
Code Authority means the Code Authority constituted for this
Subdivision as provided by the Code and by this Supplemental Code.
"Group Code Authority" means the Code Authority for any
group or product classification within this Subdivision.
ARTICLE III-EMPLOYMENT PROVISIONS
The following Articles of the Code, viz: Article III, "Working
Hours"; Article IV, Wages "; and Article V, General Labor
Provisions ", are hereby made a part of this Supplemental Code,
with the same effect as if they were written into this Supplemental
ARTICLE IV-ADOPTION OF OTHER PRoVisi(oNs OF CODE
The following Articles of the Code, viz: Article II, "Defini-
tions "; Article VI, "Administration ", to the extent that they shall
be applicable to this Supplemental Code as such or as it may herein-
after be administered as an autonomous Code; and Article IX
"Withdrawal "; are hereby adopted and made a part of this Sup-
plemental Code, with the same effect as if they were written into this
(a) This Subdivision, having held an election for permanent Code
Authority under the provisions of the Code of Fair Competition for
the Machinery and Allied Products Industry, the Code Authority so
elected shall constitute the first permanent Code Authority for this
Subdivision if this method of election meets with the approval of
the Administration. If this method of election does not meet with
the approval of the Administration then the provisions hereinbelow
provided shall apply for the election of the first permanent Code
Authority. For elections after the first, the provisions of this Sup-
plemental Code for election of a permanent Code Authority shall
(b) The Code Authority for this Subdivision shall consist of:
(1) The Executive Committee of Applicant, consisting of 6
(2) One additional member to be elected in any fair manner ap-
proved by the Administrator, by employers in this Subdivision not
members of the Applicant, if so desired by such nonmembers.
(3) One additional member to be appointed in the discretion of
the Administrator (without vote and without expense to the Sub-
(c) Any employer in this Subdivision shall be eligible for mem-
bership in Hydraulic Machinery Manufacturers' Association.
(d) It being found necessary in order to support the Administra-
tion of this Code and to maintain the standards of fair competition
established hereunder and to effectuate the policy of the Act, the
Code Authority is authorized:
(1) To incur such reasonable obligations as are necessary and
proper for the foregoing purposes, and to meet such obligations out
of funds which may be raised as hereinafter provided and which
shall be held in trust for the purposes of the Code;
(2) To submit to the Administrator for his approval, subject to
such notice and opportunity to be heard as he may deem necessary
(a) an itemized budget of its estimated expense for the foregoing
purposes, and (b) an equitable basis upon which the funds necessary
to support such budget shall be contributed by employers of the
(3) After such budget and basis of contribution have been ap-
proved by the Administrator, to determine and obtain equitable
contribution as above set forth by all employers, and to that end,
if necessary, to institute legal proceedings therefore in its own name.
(e) Each employer shall pay his or its equitable contribution to
the expenses of the maintenance of the Code Authority determined
as hereinabove provided, and subject to rules and regulations per-
taining thereto issued by the Administrator. Only employers com-
plying with the Code and contributing to the expenses of its admin-
istration as hereinabove provided, unless duly exempted from mak-
ing such contribution, shall be entitled to participate in the selection
of members of the Code Authority or to receive the benefits of any
of its voluntary activities or to make use of any emblem or insignia
of the National Recovery Administration.
(f) The Code Authority shall neither incur nor pay any obliga-
tions in excess of the amount thereof as estimated in its approved
budget, except upon approval of the Administrator; and no subse-
quent budget shall contain any deficiency item for expenditures in
excess of prior budgets estimates except those which the Administra-
tor shall have so approved.
(g) Each employer shall pay his proper pro-rata share of the
reasonable cost of creating this Supplemental Code as determined
by the Code Authority.
(h) In order that the Code Authority shall at all times be truly
representative of the Subdivision and in other respects comply with
the provisions of the Act, the Administrator may provide such hear-
ings as he may decmi 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, may require an
aplprpriate modification in the method of selection of the Code
(i) Employers in this Subdivision having a common interest and
c'unmon proldclmis, may be grouped by Code Authority for admin-
There shall be a Group Code Authority approved or appointed
by Code Authority for each such group.
(j) If formal complaint is made to Code Authority, that pro-
visions of this Supplemental Code have been violated by any em-
ployer, the Code Authority or the proper Group Code Authority
shall investigate the complaint and to that end, may to the extent
permitted by the Act, cause such further investigation, examination
or audit to be made., as may be deemed necessary. If such investiga-
tion is made by Group Code Authority, it shall report the results
of such investigation, examination or audit to Code Authority for
(k) The Code Authority may appoint a trade practice committee
which shall meet with the trade practice committees appointed under
such other codes as may be related to the Subdivision for the pur-
pose of formulating fair trade practices to govern the relationships
between employers under this Supplemental Code and employers
under such other codes to the end that such fair trade practices may
be proposed to the Administrator as amendments to this Supple-
mental Code and such other codes.
ARTICLE VI-A('CiUNTING AND COSTING
The Code Authority shall cause to be formulated an accounting
system and methods of cost finding and/or estimating capable of
use by all employers of the Subdivision. After such system and
methods have been formulated, full details concerning them shall
be made available to all employers. Thereafter all employers shall
determine and/or estimate costs in accordance with the principles
of such methods, with such variation therefrom as may be required
to meet individual conditions affecting any member or group of
members; provided, however, that any such variation shall not
destroy the validity, and/or accuracy of the said accounting prin-
ciples and methods.
ARTICLE VII-SEILINIG ]ELOW REASONABLE COST
SECTION 1. When the Code Authority determines that an emer-
gency exists in this Subdivision and that the cause thereof is de-
structive price-cutting such as to render ineffective or seriously en-
danger the maintenance of the provisions of this Supplemental Code,
the Code Authority may cause to be determined the lowest reason-
able cost of the products of this Subdivision, such determination to be
subject to such notice and hearing as the Administrator may require.
The Administrator may approve, disapprove, or modify the deter-
mination. Thereafter, during the period of the emergency, it shall
be an unfair trade practice for any employer of the Subdivision to
sell or offer to sell any products of the Subdivision for which the
lowest reasonable cost has been determined at such prices or upon
such terms or conditions of sale that the buyer will pay less therefore
than the lowest reasonable cost of such products.
When it appears that conditions have changed, the Code Authority,
upon its own initiative or upon the request of any. interested party,
shall cause the determination to be reviewed.
SECTION 2. The foregoing Section (1) shall not apply to (a)
dropped lines, or (b) seconds, or (c) inventories which must be
converted into cash to meet emergency needs, all of which may be
disposed of by any employer at any price and on any terms or con-
ditions, but only if such employer, not less than two weeks before
such proposed disposal, has filed with Code Authority a statement
in writing setting forth the facts of, and reasons for, such proposed
disposal and the price and terms and conditions of sale, and Code
Authority has not, (with the approval of the Administrator), before
the termination of such two week period, in writing, disapproved
the proposed disposal. Notice of such disposal, if not disapproved,
shall be sent immediately to all employers manufacturing products
of equivalent design, character, quality or specifications, who may
sell such products at prices and on terms and conditions as favor-
able as those stipulated in the proposed disposal, when meeting the
competition of such proposed disposal.
SECTION 3. The foregoing Section (1) shall not apply to a sale
made in order to meet competition on products manufactured out-
side the United States. For such disposal, any employer may sell,
at prices and on terms and conditions as favorable as those of the
competing foreign product, but only if he has first reported to the
Code Authority his intention so to sell, and the facts as to the
competition which justifies such action.
1. Proposals submitted by an employer shall not be revised except:
(a), when a change in the specifications is to be made, in which
case the revised proposal must equal only the change in the specifi-
cations; (b), upon the general reopening of bids.
2. Proposals shall not specify: (a) any discounts except one to
cover cash payment in ten (10) days which discount must not
exceed /2 of 1% ; (b) any allowance for freight or transportation.
ARTICLE IX-TRADE PRACTICES
Each of the following acts and practices is deemed to be inimical
to the best interests of the Subdivision and of the public, and each
is, therefore, hereby declared to be and to constitute an unfair
method of competition, and is hereby prohibited; viz:
1. Destructive Price-Cutting.-Indulging in destructive price-
2. Inducing Breach of Contract.-Inducing or attempting to in-
duce the breach of a commercial contract between a competitor and
his customer during the term of such contract.
3. Defamation of Competitor or Disparagement of his Work.-
The defamation of a competitor by words or acts imputing to him
dishonorable conduct, inability to perform contracts, or questionable
credit standing, and the false disparagement of the grade or quality
of his goods.
4. Enticement of Employees.-Wrongfully enticing away the em-
ployees of competitors with the purpose and effect of unduly
SSee paragraph 2 (1) of order approving this Code.
hampering, injuring, or embarrassing competitors in their busi-
ness. Nothing in this paragraph shall be so interpreted as to in
any manner restrict the right of any employee to seek empllldoymnt
with any employer at any time.
5. l;ib~prel''c.s'iifton by False or Mi.s~rld 1adi Adverti.-;,ys.-The
making or causing or knowingly permitting to be made or published
any false, materially inaccurate or deceptive statement, by way of
advertisement or otherwise, including misbrandiing and overrating
6. Espionage of Compctitors.-Procurling confidiential informa-
tion concerning the business of a competitor by a false or mislead-
ing statement or by misrepresentation, by a false impersonation of
one in authority, or by bribery.
7. Commercial Bribery.-To give, permit to be given, or directly
offer to give anything of value for the purpose of influencing or
rewarding the action of any employee, agent, or representative of
another in relation to the business of the employer of such em-
ployee, the principal of such agent or the represented party, without
the knowledge of such employer, principal, or party. This provi-
sion shall not be construed to prohibit free and general dist ribution
of articles commonly used for advertising except so far as such
articles are actually used for commercial bribery as hereinabove
8. Secret Rebates.-The secret offering or making of any payment
or allowance.of a rebate, refund, commi,,siozi credit, unearned dis-
count or excess allowance, whether in the form of money or other-
wise, nor shall any employer of the Subdivision 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 a
9. Used Hydrauic Equi prn, t.-(a) The sale of used hydraulic
equipment without so classifying it as used equipment. (b) A copy
of any offer to purchase used hydraulic machinery as part payment
shall be made to the Code Authority at the time of the offer.
10. Tlhrcats of Suit for Patent or Trade-Mark Infringemirnt.-
The circularization of threats of suit for infringement of patent or
trade-mark among customers of a competitor not made in good faith
and for the purpose of harassing and intimidating customers.
11. Improper Use of Competitor's Design.-Knowingly to submit
a quotation to a prospective customer based on original drawings
and designs prepared by a competitor and submitted to the customer
as the competitor's drawings and designs, without the competitor's
ARTICLE X-SALES FOR EXPORT
The provisions of this Supplemental Code concerning pricing and
marketing shall not apply to direct export sales of any product. A
similar exemption may be granted by the Code Authority as to sales
of any product destined ultimately for export. The term export"
shall include all shipments to all places without the several states of
the United States and the District of Columbia; provided, however,
that no shipment to any territory or possession of the United States
shall be considered as export when any employer is engaged in the
Subdivision in such territory or possession.
(a) As provided by Section 10 (b) of the Act, the President may
from time to time cancel or modify any order, approval, license,
rule or regulation issued under Title I of the Act.
(b) Any amendments, additions, revisions, or supplements of this
Supplemental Code, approved by a (i6 3% vote of the employers
shall be in full force and effect upon approval of the Administrator.
The eligibility requirements, method, and effect of such voting shall
be the same as provided by Article VI of the Code.
Applicant imposes and shall impose no inequitable restrictions on
membership therein. The Code presented by it is not designed to
promote monopoly, and shall not be so construed or applied as to
oppress or eliminate small enterprises or discriminate against them,
and is designed to effectuate the policy of the Act.
ARTICLE XIII-EFFECTIVE DATE
This Supplemental Code shall become effective and binding on all
persons engaged in the Subdivision on the eleventh day after its
Approved Code No. 347-Supplement No. 41.
Registry No. 1399-59.
UNIVERSITY OF FLORIDA
I 1 I i 1lllllll II11Ull ill B ll l 1111
3 1262 08583 0353