NATIONAL RECOVERY ADMINISTRATION
CODE OF FAIR COMPETITION
GREETING CARD INDUSTRY
For sale by the Superinlandent of Documents, Washington, D.C. Price 5 cente
AS SUBMITTED ON AUGUST 22, 1933
REGISTRY No. 505--02
The Code for the Greeting Card 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
WE DO OUR PART
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1933
CODE OF FAIR COMPETITION FOR THE GREETING CARD
ARTICLE I PIURPOSE OF THE CODE
To effectuate the policy of Title I of the National Industrial
Recovery Act, during the period of the emergency, by, reducing andi
relieving unemployment, improving the standard-s of labor, elimi-
nat~ing competitive practices destructive of the interests of the public,
employees and employers, relieviing the disastrous effects of over-
production and in other respects, the following provisions a~re estab-
lished as a code of fair competition, for the greeting card industry.
It is the consensus of opinion of this industry thiat certain v'ery
definlite action, as herein outlined. must be takenl to preserve the
very existence of the greeting card inlus~try andi thus continue thle
opportunity for employment to the mnany thousands of workers en-
gaged in both production and dlistribuition anid also to continue the
postal revenue to the United States now estimated~ at twent~y million
The very life of this industry is seriously thr~eatenled if the pre-
vailing tendency to cheapen the product, continues. Greeting cards
were conceived and dlevelopedl to fill a definite and u~sefuil place in
our social or~der. Thley are usedl by folks ~\everywer to convey p~er-
sonal messages of good will and good wishes and w~ill survive only
as long as they retain t~he dlignity and sincerity which must surround
all social cuIstoms. The Amnerican public w~ill not. continue a prac-
tice so cheapened that it. has lost its social siganificance anid quali-
fications. G~reetling cards~ belong~ to that. brancr h of creative art.
through which~ thie individual seeks to express personality in t~he
social graces, and competition in such a fieldl should b wTholly within
the realm of charml, adaptbability. cleverness of design, appropriate-
ness of caption and verse, and expert cr~aftsmanshiip, rather than
mere physical size andl price. The public interest is benefitted by
maintaining a quality rather than a quantity product. Highly in-
telhigent creation, expert execution, and skilled craftsmanship, will
reest~ablish greeting cards in the public consciousness and preserve
this industry with incr~easing opplortunity for emiploylment at better
wages; whereas the present tendency toward cheaply made machine
products unwisely distribultedl, will seriously curtail employment.
oppress small ente~rprises, andl netually destroy t~he industry.
ARTICLE III--DEFINPTION OF INDUSTRY Y
The greeting card industry within the meaning of this codle in-
cludes all manufacturers, jobbers;, w~holesalers, direct sellers, andl
distributors of greeting cards, whether firms, corporations, or indi-
viduals, and includes all methods and phases of production and d7is-
tribution and each and every operation necessary to the delivery of
the finished product to those who sell the ultimate consumer, whether'
by persons or corporations engaged regularly in the industry, or by
others not in such manner regularly engaged, but who, in whole or
in part, at irregular int~ervlals participate in any of its functions.
This code recognizes the legitimate functions of the manufacturer,
the jobber, the retailer, and t~he distributor by mail and/or through
agents, and seeks to stabilize both production and distribution in
full accord with the National Industrial Recovery Act.
A~rrICLE I17-HOURS OF LABSOR! RATES OF PAY, A3ND OTHER
CONDITIONS OF EMVPLOYMTENT
As required by Section 7 (a) of Title 1 of the National Industrial
itecovery Act, the follow ing provisions are conditions of this Code:
SECT~ION 1. Employees shall have the right to organize and bar-
gamn 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 barganingn or other mutual aid or protection.
SEO. 2. No employee and no one seeking employment shall be re-
qluired as a condition of employment to join, any company union
or to reframn from jommig, organizing, or assisting a labor organiza-
tion of his own choosing. Nothing in this code is to prevent the
selection, retention, and/or advancement of employees on the basis
of their individual merit, without regard to their affiliations, or
nonaffiliations with any labor organization.
SEc. 3. Employers shall comply with the maximum hours of labor,
minimum rates of pay, and other conditions of employment, ap-
proved or prescribed by the President.
(a) No employer shall cause or permit any employee to work at an
average of more than forty (40) hours per week; in any~ six (6)
months npriod_ except~ingr executives, outside salesmen, those em-
ploy'ed in supervisory capacities, and those employed in emergency
maintenance and repair wFork. This is not intended to limiit the
number of days or shifts. Owing to the seasonal nature of the busi-
ness, which forces manufacturing plants to meet excessive demalnds
for production which must be shipped in time for seasonal use or
canceled, such manufacturers, or distributors, may be permitted to
oIperate during such rush periods on a schedule not exceeding forty-
eight (48) hours per week, provided that no employee shall be per-
mitted to work more than one thousand and forty (1,040) hours
during anyl six (6s) months' period.
(b,) Tlhe minimum wage that shall be paid by employers to any
of their employees shall be at the rate of thiirtyr (304d) cents per hour,
e~xcep~t learners and apprentices, for an initial six (6) weeks' period,
providled this class of employees shall not at any time exceed five
percent (5%~) of the total number of employees.
(c) No employer shall employ any person under sixteen (16)
years of age.
ARTICLE VT-STANDARDIZATION or PRODUCTION AND DISTRIBUTION
SECTION 1. Since its inception the. products of this industry have
been sold at established prices to thle ultimate consumer such as 2
for 54, 5d, 10e, 150, 25$, 35$, 506, and $1.00 each. Because of these
inflexible price limits a uniform trade discount or mark-up is neces-
sar~y to prevent unfair competition.
SEO. 2. In order to standardize and stabilize distribution in ac-
cordance with Section I of this A~rticle, trade discounts fromi t~he
retail list price shall not be greater than fifty percent (509~) to the
retailer nor greater than fifty! percent. (50%0) and fort~y-fiv~e percent
(4~5%) to the wholesaler. Any retailer who owns anld oper~at~es a
sufficient number of stores to Justify buying speciarllU made items
in sufficiently large quantities to enab~le sub~stantial reductions in pro-
duction cost's t~o be effected, m~ay be entitled to qluantity discounts
based upon such actual savings but in no case shall the total discount
to such customers exceedl the wholesale discount. or be in violation of
Section 8 of Article V;3 and further providing no such quantity dis-
count shall apply to cards listed at retail for less than five (56) eachl.
Schedule A attached to and considered part of this code sets forth
standardization details wit~h respect to the various products of the
SEC. 3. Where it is necessary to furnish sample books of Christ-
mas Personal Grreeting Canrds that include services fo-r jimrinting
consumners' personal nam-es no greater than forty percent (40%1)
discount. shall be allowed on orders resulting from such samples.
SEC. 4i. In1 order to preserve this industry no mannufacturrer ori
wholesale distributor shall sell or offer for 'sale any greeting card
to anyone for resale at retail for less than two for fiv~e (50) cents.
This is not intended to prevent the sale of the established penny
SEC. 5. All meeting cards shall b~e sold F.O.B. Factory.
SEC. 6. (8) FOr mannufocturPYS selling retailers, jobbers, and/lor
wholesaler~s the maximum billing dating shall be
Everyrday cards, end of month.
Christma~s and New Y~ear Cards, December 1st.
Valentine, Washington's, and Lincoln's Birthday Cards, Feb-
Easter and St. Patrick's Cards, April 1st.
Another's Day and Father's Day C'ards, M~ay 1st.
Hallowe'en and Thanksgiving Ca~rds, November 1st.
Greetimg eards produced for special lines as defined in Article V,
Section 2, where imnmeliat~e payment is a consideration, shall be sold
andl billed on terms no be~ttr than two percent (2%Tc) ten (10) days.
(~b) Ainximumn cash dliscorunts shall be tw~o percent (29~) ten (10)
days, net thirty (30) dlays.
(c) Terms of sale sh~all be shown on all order b~lanks and; or
(d) No price quotntions shall be guaranteed for a periodl longer
than ninety (00) days either to prospective purchaser wrho is con-
sidering sanmples or on unconfirmed memnorandu ml orders. The date
of quotation is to be established in writing.
(e) The acceptance of payments with unearnedl discounlts; of' notes
without interest for past-due accounts, or of trade acceptance either
in settlement of past-due accounts, or for the purpose of extending
net terms on all or any part of new shipments, or of giving extra
dating in any manner wThat~soever is a violation of this Code.
SEc. 7. Lack of uniformityv in credit practices prevents stabili-
zation and encourages unfair competition. This code contemplates
the formation of a central crediit interchange and collection bureau,
mlember~ship in which will be open to all members of this industry.
SEC. 8. It is the consensus of opinion of this industry that over-
prodluction is a serious menace to t~he stabilization of distribution
and continuity of employment; therefore all manufacturers should
control production to prevent carry-overs. Only seasonal greeting
cards carried in stock after the season for which they were made and
any everyday greeting cards carried one year after first offered for
sale shall be considleredl as close-outs within the meaning of this code
and shall be sold at. no greater discount than forty percent (40%~)
from the price to which the purchaser would have been entitled if
buying same items as new merchandise in accordance with his status
as retailer or wholesaler, as determined by Article V, Section 2.
Provilinlg further that no close-out greeting cards shall be sold in
violation of Article V, Section 4.
SEc. 9. Selling below cost is a violation of the code. Close-outs
as defined in Section 8 of Article V excepted. The term cost is
understood to include all expenses of whatsoever nature necessary
and incidental to the shipping of the finished product and must in-
clude among other items labor, material, original drawings, plates,
creative and plant burden, administration, selling expense, interest,
taxes, depreciation, had debts, and all other factors as determined
by standard accounting practices.
SEc. 10. The variable practice of supplying samples encourages
unfair competition. The practice which shall govern the supplying
of samples is as follows:
(a) In cases where sample are required by retail stores for mer-
chandising their own stocks of Everyday andl/or seasonal counter
cards, loose samples shall be charged' for at one half and mounted
samples shall be charged for at t~he full established net price to the
retailer. All loose samples shall be indelibly marked "' sample."
(b) Where it is necessary for a manufacturer to submit samples
to a prospective customer for the purpose! of obtaining stock orders
for special lines as defined in Article V, Section 2, such samples may
be supplied without charge providing such samples are unmounted
and each card indelibly marked "L sample."
(c) W\here ten or more sets of samples are required by distribu-
tors selling by means of sample books such samples shall be billed
at full price when shipped and a sample allowance made at the end
of the season which allowance shall in no case exceed the amount of
the sample bill, or five percent (5S'o) of t~he amount purchased from
items thus samp~led.
(dl) No free s:nmples of! boxed assortments shall be supplied by
any mnanulfacture~r or dlist~ributor to sales agents or customers unless
eac cad i suh bx i inelilymarked sam~ple." If unmarked
salable samrlples are supplied a cag rdpsteult h e
wholesalle p~ric~e of the box shall be required.
(e) W'hen sets of sampllles arec r~equrired~ by jobbers or wholesalers
such samples shall be solld andl billed as follows:
Where twcenty-five (25) sets or less ar~e required, a discount not to
exceed twenty-five (25%r) percent from r~egular net. wholesale price of
cards may be allowed, but the cost of mounts anid mlountilgr shall
be added thereto.
Where more than twenty-five (25) sets are required, thet Airst
twenty-five (25) sets miay be supplied as provided ab~ovet andl all sets
in excess of twenty-five (25) shall be charged for at. full ne~t whole-
sale priceP of ca rds pJlu the nct of mouin ts andn mon~ ltin g.
(f) No dating of any kind shall be given onl samplesi sold at a
SEO. 11. (a) H'here, a manufacturer or' distributor desires to supply
retail display fixtures theyr shall be sold at no less thanl the purchase
price paid by said manufacturer or distribuutor plus ten (10%'r) p~er-
cent. This provision is not intended to prevent. manufacturer or diis-
tributor from supplying w~it~hout extr~a charge cardiboard~ cartons for
counter display which aire in the~me~lves shipping cartons.
(b) In cases where any metal or car~dboard dispay~ distr~ibutedl
through wholesalers is not in itself a shipping car~ton, but is an in-
tiegral part of an assortment of merchandise. a charge shall be made
for such~ displays, which shall not be less than ten (10f'9) percent
of the net wholesale value of the mierchandlise in the assortment.
SEc. 12. In order to stabilize distribution no samples shall be
shown, dlisplays made, or orlrder taken prior to thec followingr dates:
(a) For those selling retailers:
Christmas and New Year Cards, February 15th.
Valentine and Easter Cards, June 1st..
Mother's Day and Father's Day, Septembler 1st.
(b) For those selling jobbers and/'or wh~olesalers:
Christmas and Newo Year items, February 1st..
Valentine items, February 1st.
Easter, M~other's Day, and Father's Day items, July' 1st.
(c) For those selling special lines as defined in Article \', Sec-
Clhristmas and New Year items, January 1st..
Valentine items, January 1st.
Easter, Mother's Day, an~d Father's Day items, June 1st..
(d) For those selling special items and 'or lines to direct sellers:
No restrictions on showing dates.
(e) I~t is the intent of para.graphs (a), (b), (c), and (d) imme-
dliately nprecedingr that in all cases of mixed distribution where any
manufacturer or distributor sells to more than one of these classifica-
tions he shall conform to thie showing dates for such items anrd lines
only as prescribed for each classification. For example, any manu-
facturer selling Christmas items to both jobbers andl retailers shall
not show to retailers prior to February 15th.
ARTICLE VI-UNFAIR TRADE PRACTICES
For all pu rposes of th is code the follow ing-descri bed nects shanll con-
stitute unfair practices:
SECTION 1. (a) Piracy of designrs originated a~nd used by mnemiber
of the industry is seriously contributing to its priesenit state of dis-
organization and to the gradual elimination of pr~oducinig units, with
consequent reduction in number of employees fur~ther, the continula-
tion of this practice, by destroying the element of quality of product
upon which the future of the industry necessarily depends, seri-
ously threatens the very existence of the industry, and reflects a disr-
honest cost of production.
(b) Within the meaning of this code, any attempt to copy, imomi-
tate, or simulate any design, or verse, originated and used by any
manufacturer is an unfair method of competition -and a violation of
SEC. 2. Greeting cards shall be sold outright; any delivery on con-
signment or with return privilege is a violation of this code, subject
to Article VII, Section 5.
SEO. 3. The production and/or sale of vulgar, indecent, or sacri-
ligious greeting cards is a violation of this code.
SCEc. 4. Any minsmarkinga, misbrandinga, or misrepresentation of
merchandise is a violation of this code.
SEc. 5. Any campaign, concerted action or specifically directed
effort, act., or conduct, t~he purpose or intent of which is to cause
breaches of a competitor's contracts; or inducing or attempting to
induce a breach of contract between a seller and ~his customers Is a
violation of this code.
SEc. 6. To promote, encourage, or carry on, directly or indirectly,
for or in behalf of any member or members of this industry, any
campaign or propaganda, designed or intended to create or develop
ill will or sales resistance against any of the channels of production
and,/or distribution herein recognized, is a violation of this code.
SEc. 7. The act of enticing or hiring or attempting to entice or
hire away the employees of a competitor for the purpose of obtaining
secret or confidential trade information or otherwise injuring his
business, is a violation of this code.
SEc. 8. Making or promising to an~y purchaser or prospective pur-
chaser of any product or to any officer, employee, agent, or repre-
sentative of any such purchaser or prospective purchaser, any bribe,
gratuity, gift, or other payment or remuneration, directly or indi
rectly is a violation of this code.
SEc. 9. The payment or allowance of secret rebates, refunds, or
credits, whether in the form of money or other-wise, or extending to
certain purchasers special services or privileges not extended to all
purchasers under like terms and conditions is a violation of this
SEc. 10. To improve labor conditions and to control hours of work
and rates of wages as provided in Article IV, Section 3, of this code,
the employment of workers at home, whether directly, through con-
tractors, or in any other way that would place them beyond the con-
trol of the provision of subsection 3, paragraph (a) of Section 7 of
the National Industrial Recovery Act is a violation of this code.
SEc. 11. Ainy member of the industry which shall directly or in-
dilrectly through any officer, employee, agent., or representative, use
or employ any unfair p~ractice as defined in this code or which shall
aid or ahe~t any person, firm, association, or corporation, in any un-
fair practice shall be jiuiltyr of a violation of this code.
Annancr~ VII--SPECIA~L PnovisIows FRo DIRECT SELLERS
SECTION i. The compensation to salespersons for the sale of per-
sonal greeting enrdlts d~ir~ect to the consumer shall not exceed a maxi-
mum of forty (40%0) percent of the retail selling price plus trans-
portation and, such percentage shall include any and all bonuses
and/or premiums to such salespersons.
SEC. 2. The compensation to salespersons on boxed assortments
of greeting cards sold direct to the consumer shall not exceed a maxi-
mum of forty (40%0) percent of the retail selling price plus trans-
portation and said percentage shall include any andl all bonuses
and/or premiums allowed to such per~sons.
SEC. 3. The maximum compensation set forth in Sections 1 and 2
of Article VI~I does not include, a bona fide additional commission
to sulbdiistribu~tors, but, whelrer distribution is effc~ted t~hrougbh such
subdlistributors the maximum of such additional commission shall
not exceed ten (10%o) percent of the retail selling price.
NOTE.--A subdistributor is an agent selling on a, commission basis
who redistributes through ten or miore subagents and who pays said
subagents a portion of his cor-miission.
SEc. 4.--Publishing rates of commission or profit on grreeting card
sales in advertisements in newspapers or general magazines is a vio-
lation of this code. This, however, does not apply to the publica-
tion of such data in trade magazines.
SEc. 5. Nothing in this code i's intended to prevent direct sellers
from retaining title to merchandise placed in the hands of agents
for delivery and collection; nor to prevent the return for credit or
refund of Christmas merchandise sold to agents; nor is it intended
to prohibit direct by mail sellers from granting a return privilege.
ARTCLE VTIII--GENERAL PROVISIONS
SECTION i. NOthing contained in this code shall be interpreted
or applied in such a manner as to:
(a) Promote monopolies.
(b) Permit or encourage unfair competition.
(c) Eliminate or oppress small enterprises.
(d) Discriminate against small enterprises.
SEC. 2. TO the extent required or permitted under the provisions
of Title I of the National Indlustrial Recovery Act, the provisions
of this code shall be binding upon every member of t~he Indusitry.
SEC. 3. Participatibn in this code and any subsequent revision of
or addition to the codle shall be extended to any person, p~artnershiip,
or cor~pora~tion manufacturing or dlistributing greetingr cards whio
accepts his share of the cost and responsibility, as well as the benefit
of such participation.
SEC. 4. PurSURit. 10 subsection (c) of ~Section 10 of the ~Ntionlal
Industrial Recovery Act., the President may from time to timie
cancel or modlify any order, approval, license, ruile, or regulation
issuedl under Title I of said Act.
ARTICLE IX- ADMINhISTRATION OF THIE CODE
SECTION 1. The administration of thie code shall be unditer thle
direct supervision of thle Board of Dir~ectors of the National GIreet-
ing Card Association.
SEc. 2. All complaints regarding violations of a~ny provisionsl of
this code shall be reported in wFritinga to the aforesaid~ B~oardc of
Directors which shall review such complaints, and if necessary
alrrazg~e for an investigating committee of three. One member of
this committee shall be nominated by the complainant, one bhy the
alleged violator, and the third by the Boa~rd of Directors. If either
the complainant and./or the alleged violator fails to nomiinate a
representative for this committee within ten (10) days after written
notification from the Board, then in such event the Board shall fil
the vacancy, or vacancies, thus created and the committee thus
formed shall have full power and authority to act. It shall be the
duty of this committee to investigate the complaints brought to
its attention. F~or the purpose of obtaining necessary information,
or evidence, this committee may employ auditors, or other agencies,
and all members of the industry shall be bound by this section of the
code to cooperate fully, afford access to their records, and otherwise
carry out the spirit and mntent of this provision. If, mn the opinion
of the committee, the complaint is well founded and cannot be
otherwise adjusted to the entire satisfaction of the Board of Direc-
tors, then all evidence shall be turned over to the UTnited States Dis-
t~rict Attorney in accordance with paragraph (c) of Section 3 of the
National Industrial Recovery ASct.
ARTICLE X--DarE EFFECTIVE
This code shall be in effect immediately upon its approval by the
President so far as all mandatory provisions of the National Indus-
trial Recovery Act are concerned but its other provisions shall not
necessarily apply to lines or items already made and/'or sampled such
as Christmas 19313 and Valentine. Easter, Miother's Day, and,/or
Everyday items on which sales will continue into 1934. Nor shall
these other provisions apply to any lines or items produced and
delivered prior to September 15, 1933, provided, however, that. from
t.he date of approval by t.he President all new work must conform
to this code in its entirety.
Wit~h the approval of the industry this code m~ay be amended at
any tim~e. Such amendments shall become effdetive when approved
by the President.
UNIVERSITY OF FLORIDA
3 1262 08582 8084