The basic code (administrative order no. X-61)

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Title:
The basic code (administrative order no. X-61)
Series Title:
Work materials ;
Physical Description:
iii leaves, 53 p. : ; 27 cm.
Language:
English
Creator:
United States -- National Recovery Administration
Edmonds, W. H
Swift, W. W
Publisher:
Office of National Recovery Administration, Division of Review
Place of Publication:
Washington, D.C.
Publication Date:

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Genre:
federal government publication   ( marcgt )
bibliography   ( marcgt )
non-fiction   ( marcgt )

Notes

Bibliography:
Includes bibliographical references.
Statement of Responsibility:
prepared by W.H. Edmonds and W.W. Swift.
General Note:
"February 1936."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 020510324
oclc - 55215347
System ID:
AA00018851:00001

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OFFICE OF NATIONAL RECOVERY ADMINISTRATION

DIVISION OF REVIEW


WORfK MATERIALS

No. 33


THE BASIC CODE (ADMINISTRATIVE ORDER NO. X-61)


Prepared by

W. H. EDMONDS AND W. W. SWIFT


February, 1936







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FOREWORD


This study of "The Basic Code (Administrative

Order No. X-61)" was prepared by Mlessrs. W. H. Edmonds

and W. W. Swift of the NRA Organization Studies Section,

Mr. William W. Bardsley in charge.

The study presents a dependable and fairly complete

picture of the formulation and results of the plan that

was designed to complete the code making phase of NRA

activities. The part occupied by this study in the entire

examination of 1iRA afl-inistrative procedure may be seen

by consulTin; "iNr: .'.' :ial. iTo. 17, Tentative Outlines

an,. jr,.n','Rie. ,.t. i ,s -n rF-oc oss.





L. C. Marshall,
Diri.tor, Division of Review.


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OIAGAZINES BOUND
By W. P. A.

MAR 2 1940







TABLE OF CONTENTS

Page

INTRODUCTION................ ..... .. 1

CHAPTER I

1IT.R.A. AS A CODE-MAKING ORGANIZATION ............ 2

I. THE AUTHORITY FOR CODE-MAKING IN THE ACT ................... 2

II. BEGINNING OF CODE MAKING AND THE P.R.A. ..................... 3

CHAPTER II

FACTORS LEADING TO A CHANGE OF POLICY ............ 5

I. CODE MAKING PROBLEMS .......................... ............. 5

II. EARLY PROBLEMS OF ADIINIISTRATIONN ........................... 6

CHAPTER III

THE PLAN FOR THE COK.LETION OF CODE
IM'AKING ......................

I. EARLY DEVELCP!IrJTS IN THIE FORMULATION OF A PLAN ............

II. THE PARTICTPA, -IT 0" THE ADVISORY BOARDS ANrD THE
ADVISORY CCUICIL IN THE DWVELOP:,'NT CF THE PLAN ........... 12

III. FINAL STAGES I' FCRl.aTLATICN OF PLAN ........................ 13

CHAPTER IV

FEATURES OF PLAN FOR COI.PLETI01 OF
CODE MAKING ........................ 16

I. LABOR PROVISIONS .......... ................ ..................... ...... I

II. TRADE PRACTICE PROVISIONS ................................ 16

III. ADMINISTRATION THROUGH GEUiERAL CCDE AUTHORITY .............. 16

CHAPTER V

OPERATION OF PLAI ..................... 1 7

I. PROCEDTJRE FOR HANDLING PLAN ................................ 17

II. INDUSTRIES EXCEPTED FROM PLAN .................................. 18

III. DISCUSSION OF RESULTS OBTAINED ............................. 18

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APP3TilX I.


STATV=21T CF SCOPE OF ST'JDY, !:ET:CD CF TREATr117T,
AND QlUZSTII 1S IEEDI:G F'uRTlrE... RESEARCH. .................... 20

APP:nI'DIX I.
ADMINISTRATIVE ORDER NC. X-61, JITHi BASIC CODE
AiliEXED AS EXiIBIT "A". ...................... ............. 21

APPE:MIX III.
ADMINISTRATIVE C'PE.E2 UC. X-6, SlPPLELIENTINIG ADIIN-
ISTRATIVE CRDER NO. X-cl ZIM BASIC CODE. ................. 26

APPWiDTIX IV.
ADMINISTRATIVE ORDER NO. X-C3, PRESCRIBING RULES
_1TD REJLt.ATIJNS TO SUTPLfEIIT ADI:IL:ISTTATIVE ORDER
NO. X-61 AD BASIC CODE. .................... ... .............. 30

APP2iDTIX V.
OFFICE LEMJURUh-D'!JM Iu. 2 51., PROVIDING PROCEDURE FOR
HAI4DLII:G CCICILETICII C2 CODE 'AZi G. ....................... 31

APPENDIX VI.
ADMIKISCISTATIVE ORDER NO. ::-84, PROVIDIITJG FOR SELEC-
TI&U C7 MEIwBERS OF GEITLRAL NlRA CODE AUJTHCO.ITY. .............. 33

APPENDIX VII.
ADMINISTRATIVE ORDER C. X-39, SL-PPLEEN1TINIG ADM!IN-
ISTRATIVE ORDER :-o. X-61 Z'Y C3F1RI.G A BASIC CODE
TO GROCERY MAIfFJCTJR2 'G II'DJSTRIES. ....................... 34

APPE:IDIX VIII.
MEMORAIDMUi OF JUNE 9, 1934.' FR01. I.R.A ADVISORY COUNCIL
TO TIM ADIINISTRATOR. ................................ ... .... 47

APPEITDIX IX.
REPORT OF COM.iITTEZ C:i COMPLETING OF CODE MAKING. .......... 49

APPENDIX X.
TENTATIVE OUTLINiE. ... ....................................... .51


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SUMMARY OF CONTENTS. FINDINGS AID RECOMMENDATIONS


The title of this'study conveys to. those unfamiliar with NRA activities
very little information as to its true nature. For these, it should be said,
in explanation, that Administrative Order No. X-61 was an order issuP-1 imdpr
date of July 10, 1934 by General Hugh S. Johnson, Administrator for Indus-
trial Recovery prescribing a plan for the completion of code making applica-
ble to all industries then uncodified and presenting in connection there-
with as, Exhibit A, a prescribed form designated as "The Basic Code".

The report on this study contains in narrative form, chronologically
treated, an historical review of the beginnings of code making, the authority
therefore, the factors which resulted in a change of policy culminating in the
formulation of a plan to complete the codification process, the stages through
which this plan traveled to adoption, its operation, and the results obtained.

The Introduction and Chapters I and II have to do with the early days of
NRA, the authority for codes as contained in the National Industrial Recovery
Act, the problems which arose from code making and administration, and the
factors rhich led up to the adoption of a plan to wind up the codification
process.

Chapter III outlines in some detail, the various stages in the develop-
ment and formulation of the plan while Chapter IV discusses various features
of the plan and the basic code prescribed in connection therewith.

Chapter V deals with the operation of the plan, reviews the procedure
for handling and utilizing it, and touches upon the results obtained and
Chapter VI contains certain findings and conclusions which have been reached
as the result of the study.

Summarizing the findings set forth in the report on the above study,
the findings are:

1. The basic code was unsuccessful in accomplishing its plan for com-
pletion of code making.

2. Its timing Was ill-advised and should have been initiated much
earlier in the code-writing process.

3. A thorough and comprehensive classification of industry for admin-
istrative purposes should have been made in connection with the formulation
of the basic code. It seems desirable, from the viewpoint of administrative
preparedness, to stress the importance of endeavoring to prepare in advance
an accurate classification before putting such a plan into operation.

In addition to thcse findings the following question is raised:

In the event any new legislation is enacted which contemplates the
formulation of codes or some sililLr documents for the regulation of industry,
showed a plan for the grouping of the smaller industries under codes with
identical provisions, such as was contemplated by Administrative Order IIo.X-61
X-61


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be formulated in tic errly st-tgcs of the administration of the now law? The
issue is whether such a plan, +ir,'d In this manner, would serve as an effectiw
complement to the codification of the major industries and reduce the number
of individual codes to an appreciable minimum.





















































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THE BASIC CODE (ADMINISTRATIVE ORDER 110O. X-61)


I ITRODUCTION


On July 10, 1934, Administrctive Order No. X-61, entitled "Plan for
the Comroletion of Code Making", vms issued over the signature of General
Hugh S. Joinson, Administrrtor for Industrial Recovery. This order is
attached as ap-iendix "II".

The scom)e of this pepper is defined and limited by the statement of
administrative policy contained in the above order, and supplemented by
various other orders and memorpnda. which will be treated subsequently.
Essential, of course, to a full understanding of the policy itself, is a
knowledge of the background against which it came into being, and the extent
to w-hich it accomplished the purposes for which it ',ps conceived.

Accordingly, therefore, while endeavoring al-ays to restrict this
study to the boundaries outlined by the substance of Administrative Order
X-61, it will be necessary, in order to attain the proper -oerspective, to
indic-.te the sources of authority for the -oolicy; to review earlier methods
and -orocec.ures employed by NIRA in codifying industry; to investigate the
factors leading to a change of ro].icy, and' the circumstances under whichh
this plan 'was enunciated; to trace the various stp.ges in the growth and
development of this policy prior to promulgation, and the extent of participa-
tion in its development by the various boards and divisions of NRA; to
survey the general 1TIA situation at the time of orromulgation; to indicate
the manner in rhich the -olrn was rut into o-oeration and the extent to vhich
it operated; to examine the effects of the policy upon industry, uoon the
Scode-making processes of EIRA, and uron the NIRA organization, and to indicate
the extent of its effectiveness in accomplishing its stated objectives;
to appraise and evaluate the -olan in general as a chase e of NRA administra-
tive policy.


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CHAPTER I.

:TRA as a CC=f MAKING ORGANIZATION

I. The Authority for Cude Making in the Act.

An exr-ninnitiun of tho s)urccs in the Act from which IRA derived its
authority to codify American industry discloses immediately the broad grant of
discretionary po-'er allorl.-d the President, in effectuating the general policies
enumerated in Sectiin 1.

Various alternative methods were enacted for the carrying out of these
general policies. A brief review of the various methods prescribed, and the
extent to -'hich each was used, is a necessary background for an understanding
of developments which later led to the consideration of a Basic Code,

Section 3(a) of the Act provides for voluntary codes of fair competition,
and prescribed the basic procedure for the formulation of codes by "one or moro
trade or industrial associations or groups," and approval by the President.
The President was authorized to aporove codes only in the 'event that he found
(1) that the association or groups sponsoring the codes imposed no inequitable
restrictions on admission to membership among the groups represented; (2) that
the applicants were truly representative of their respective trades or indus-
tries; (3) that such proposed codes were not designed to promote monopolies
or to eliminate or oppress small enterprises and would not operate to dis-
criminate against the latter; and (Q) that the proposed codes would, in his
judgment tend to effectuate the policy of the Act.

When the legislation was being formulated, in June, 1933, it was impossib
to forecast- the degree to which industry would respond by submitting voluntary
codes, -nd so, provision was made in Suction 3(d) to the effect that if in-
dustry failed to take the initiative in code making, the President might do so,
The President- was therein authorized, upon his orn motion, or upon complaint
that abuses inimical to the -ublic interest and contrary to the policy of the
Act were -prevalent in every trade or industry or subdivision thereof, for which
a code had not already been approved, to prescribe and provee a code for that
trade or industry or subdivision, Such a code would be approved by the Presi-
dent only 3fter such notice and hearing as he might specify, and would have
the sBme effect as a voluntary code approved under Section 3(a).

Further powers of imposition were to be found in Section 4(b), by which
the President was authorized to license business enterprises in order to make
effective a code of fair competition or an agreement or otherwise to effectuat
the policy of Title I; and in Section 7(c), wherein the President was granted
the power to prescribe such limited codes of fair competition covering hours,
wages, and other conditions of employment as he might find necessary to
effectuate the policy of Title I. These sowers are mentioned merely for the
purpose of completing the picture. They have no direct bearing upon events
leading to the subject of this study.

A new concept, the idea of agreements for the effectuation of the police
of the Act, is introduced in Section 4(a). Under this provision, the Presi-
dent was authorized to enter into agreements with, and approve voluntary
agreements among persons engaged in a trade or industry, labor organization,
-nd trade or industrial organization, if in his judgment such agreements woul

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aid in effectuating the purposes of the law. It was under the authority of
this section that the President promulgated, the Presidentls Reemployment
Agreement (PRA), asking employers to cooperate by agreeing with him to
maintain certain conditions, particularly regarding wages and hours of em-
ployment.

II. The Be-innin, of Code Making and the PRA,

From among the various possible lines of Pction outlined above, the
President selected the -powers conferred upon him in Section 3-a, to
negotiate voluntary codes, as the basis for carrying out the purposes of
the Act, mand. it was upon the exercise of the functions therein granted that
the early history of IUA was moulded. This course was made possible by the
wide-spread and enthusiastic application for voluntary codes on the part of
industry. While these negotiations were proceeding, however, on a basis
that was ostensibly, and in fact, voluntary, there remained in the back-
ground the Dowers of the President, above mentioned, to impose e-odes should
conditions require such course.

With the submission of tie earliest applications for voluntary codes,
NRA was confronted with the i:Le-idiate problem of interpreting the Act,
formulating policies both of a substantive and administrative nature, and
devising varying procedures and or.Lnzization set-ups as the chanrin needs
made necessary. This assumption of res-ronsibility of interpretation and
policy-making by NRA was the inevitable concomitant of the indefiniteness
of the objectives sought by the Act.

It has been noted above that the President was required under Section
3(a) of the Act to make certain findings of a generally negative nature as
a prerequisite to his approval of a voluntary code. Positive guides to
policy, however, were few. In various sections of the Act it was indicated
that codes should include (1) provisions covering minimum wages, maximum
hours, and "other conditions of employment"; (2) measures to prevent
"destructive wage cutting and price cutting"; (3) fair trade practice
provisions, and (4) provisions protecting certain labor rights of collective
bargaining,

Thus, on the basis of the sources of authority previously noted, and
with the guidance of the general policies enumerated above, NiA set out, in
effect with a carte blanche within the limits of the Act, on its program to
bring about industrial recovery.

In Bulletin No. 2 issued on June 17, 1933, entitled, "Basic Codes of
Fair Coynetition", NBA outlined the -orocedure to be observed in the formula-
tion and Eruroval of voluntary codes. It was stated that so far as
practical the major industries would have the first attention of the
Administrator. Industry was reminded that: "It is not the function of the
National Recovery Administration to prescribe what shall be in the codes to
be subonitted by associations or groups. The initiative in all such matters
is er:ectecL to come from within the industry itself."

And so the work of codification was begun, and every effort was made
to exnedite the process, and have at least the major industries covered by
codes within a few weeks. In site of every endeavor, however, and altho
industry was responsive and made icnny applications for codes, the pro-ress


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of ne oti-.tions '.'ns discourosingly slo--. The rr, royal of Code No. 1 for the
Cotton T.-:tile Industry, required a full month for negotiation; and out of
the -. .ending, onlT eizht had been proved at the end of the second
month. It s feared thit unless a s-eec ier e:)ns could be found for carrw-
in tc -'or, a reaction mi,-ht set in to offsct the stinulus --hich had
oeric te, t.c industrial structure d rin.- the early summer.

.t .. time Ju-i'r 20, 1933, the President's -Reemnlo'nment A;re-iment
C(P2-;) ...;ceived, rn& th1 1,reatezt *e ace-time ca',.ign in the Aistory' of
the o -.- er.t as launched, a-',e;ling to the e-otions, the patriotisn and
the -:," .xiccs cf cml'-iavers, e n.loye':-s, an& consumers alike, to orin.:g success
to t.. 'ce t drive to reduce ItLe ..lo.,'-ent, increase 'a,ses, and snreac.
ourc-.L -i.. o"wer. It "as a sf.-lE -jlon, corceived in necessity, fouxnk.ed on
the .-. s -.r-ci.ted the Presic.'-nt in Section 4(a) to enter into mnd z.n-'rove
volj,-'tcr-" -a 'eerents, and c.,r:-ie( out -ith a drivin- energy.

Ly vti izin- the facilities of the United Stpt:s Post Office systems,
pr-ctic- .1'- rl?. em-loye-s in tie country "-ere cont-icted --ithin three or four
da'ys, ,i% ovc.r 2,300,000 employers si-ned a.-.e-e.ents '1ith the President, by
-'hich' thie r'-:ing conditions of sor.e 14-1/2 million employees were ternorarily
cont-'oll.ed. Unlike the codes of fair competition, no nenr.lti s riere a.tta.ched
to vio7.-tions of these a;rei-.ments. Public o .inion -'Ps expected to be the
ners. s.iv: force for coi-n.liance, and the Blue Za-.le ',as invented as the
s.nbol b- whichh coo-oerating emiloyers should be known.

In zo..:e sections the Blue Eagle '-as more effective than in others ," but
ever'- -.oe its influence "as felt. Public o i-.ion was stron-ly behind the
Presi.. nt, and fe" were the en lo'-ers who did not display the Blue Eagle.
In this '-ay, -!ith public o iinion forcing in-ustry into the PRA, it '--as to
the i:te:-st of en lo-ers to secure separate codes by coo-oerative effort,
and th.us tP.1 e -.dv.-nta.ge of the trade practice and price protection *rovi-
sions bein of."cred by ".IA.

T-us, ith the majority of industry already con'-iitted to the hour -nd
wa.-,e provisions of the PL.A, '-ith such modifications end substitutions as
were ap-oroved, -RA was no-7 ready to 'roceed with the -ork of codification,
and r.-e'-- -..ccility of the or -anization was henceforth directed to that
purpose. Dron ti.,ie to time ne-, substantive policies -ere formulated cand
announced., on the basis of cumulative experience; and rules and regulations,
adni-nist-u-.tive devices 'nd procedures were established with a view to secur-
ing and .intaining an orderly and exneditious process of code formulation.
These -ere -nrescribed either by executive order of the President or by direct
action of the Administrator, I'A was at all times a living organization,
gro'-ing-, developing, changing, to r.eet the ever increasing demaands of the
'-or!: .-ich it had undertz'-en.

The story of the first year of code-na'-inp under NRA-, and the -nroble-is
"-ith vhich the organization z"s confronted, and which it tried in various
ways to :-.eet, is the story of the factors leading to the administrative -oolicy
with v.i.ch this -,aper is concerned.


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CHAPTER II.

FACTOrS LEADING TO A CHANlGE OF POLICY.


The growing belief among NBA officials in the desirability of a change
of code-mLaking policy, resulting finally in the issuance of Administrative
Order X-61, was a cumulative impression lasting over several months. The
considerations upon which this conviction was based fall generally into two
classes, code-mnking problems, and early problems of administration. It
would perhaps be well to treat these subjects separately, insofar as they
may be segregated.

I. Code-Making Problems.

On June 21, 1934, General johnson, looking back on one year of code-
making activity, on the part of MRA, said, in part:lI

"Cnce launched, there was no halting
the code-mrking process. It had to be
carried through ho that every industry
in the country and its workers might
as quickly as possible have an even
break of the recovery program's benefit."

Thus did General Johnson describe the situation which had arisen with
respect to code-making during a year of NRA. FrOm the beginning, NRA had
been confronted with an avalanche of codes of all sizes and all degrees of
importance. During the fall rnd winter of 1933, codes had been expedited
to approval with relative speed. Negotiations were carried on untiringly
by an enthusiastic staff, without thought of time or energy expended.
Policies, during that period, were in an early stage of development, and
the progress of codes was not directed to any great extent by Precedent or
by policy determinations, except for the general policies outlined in the
Act.

The trade practice provisions which found their way into codes represent-
ed, except for such generally accepted prohibitions as commercial bribery,
defamation of competitors, etc., tne final outcome of negotiations between
the IRA and the representatives of the industry concerned. Likewise, the
labor provisions, as they appeared in the codes, were usually the result of
long, and sometimes bitter argument end controversy. Provisions were sub-
mitted, and were approved, covering almost the entire field of industrial
operations. Voluntary agreements of such broad scope, dependent first upon
agreement between competitive groups within the industry itself, and second-
ly upon agreement between representatives of the industry, tho gc:-.crn.a -ilic,
anc c;ne 1 QrA, iQre nocr.si'ilo- rarivc-d at on>-, rfter 6. long series of con.-.c--
C-. LCeaE hev-in-,s, io.vrst'i, Lio.-ns ,i. reuti-o oroc:d.c1re.

As the months passed, and the great majority of industry and labor were
brought under codes, it had been expected, or at least hoped, that there


I/ NRA Release No. 5889.


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would be n marked reduction in the amount of time and energy spend in for-
mulating new codes. The earlier a- rovgd codes had been in effect and
operation for sometime, and the facilities of the staff were needed for the
'-ork of administration.

The hoped-for relaxation in the pressure front industrial groups for the
formulation of new codes, or sunolemental codes, did not seem to occur, It
is true that during the s-pring of 1934, the volume of codes decreased, but
the work of formulating each individual code 'vas becoming more involved and
more difficult, and the codes were proposed by smaller and smaller segments
of industry. Yet, in formulating codes for even the smallest groups, the
samjne controversies and arguments arose as to permissable provisions, the
same procedure as to hearings, conferences, et cetera, had to be followed,
and due consideration hnd to be given to the opinions of the several Advisory
Boards and Divisions of NERA, representing every. conflicting interest in the
economic picture. Frequently months were spent in trying to write even a
very small code in a manner accept-'.ble to all parties in interest.

The intensely human and sometimes dramatic job of codifying American
industry was inevitably drawing to a close. The long hearings and con-
ferences lasting far into the night were becoming fewer; the bickering,
compromising, and bargaining of the code-nmaking period 'ns occupying a
smaller part in the staff's activities, but negotiations were becoming longer
drawn out, and differences less speedily resolved. The fire and the urge
of the early months were dying out, and the Recovery Administration was be-
coming more deliberate in its actions, more careful of its commitments.

riRA was now ready to enter upon a more prosaic, but perhaps more impor-
tant, pnase of its activity, that of administering and enforcing the codes
it had approved, and observing the effects and results of its earlier work.
For the first tine in history, industry was operating under rules of ethics
- codes of fair competition; it wa.; ILA's new job to administer and aid in
securing compliance with these rules, and, in some cases, on the basis of
experience, to change them.

Not only, then, was '1RA faced with the law of diminishing returns-as
regards continued activity in the realm of code-making, but also there was
developing a very real need for the organization to direct its attention to
the subject of code administration. The problem of devising a suitableplan
for bringing the work of code formulation to an end, was occupying the minds
of the highest officials of lLRA. The develo:-ment of such a plan will be
traced in Section III. of this study.

II. Early Problems of Administration

Early experience in the administration of approved codes indicated a
number of ways in which all was not rell '-ith the policies previously pursued
in code-making. To as great an extent as possible, it was sought to correct
in the new policy the mistakes and shortcomings which administrative
experience had pointed out in the old.

An unexpected development, with attendant unexpected problems, had
been presented by the hundreds of codes presented to IRA, for approval, -


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codes of all sizes and degrees of importance, codes with overlapping def-
initions, codes intended to cover only a small portion of a larger industry,
vertical codes cutting through the distribution functions, codes submitted
by rival associations to cover the same industrial group, et cetera. At the
outset, it had been the "lan to codify the larger, basic industries. But
the code idea had become a fever, in which the earlier, sounder conception of
NRA bade fair to be lost from view; and IRA was not prepared for the work
that was thus thrust upon thc organization.

Coincident with the unforseen deluge of smaller codes,, came the gigantic
and equally unforseen problem of unforseen problem of industrial classifica-
tion. Of primary importance wr-s the necessity for insuring uniformity or
similarity cf code provisions, both labor and trade practice; for closely
related or directly competing divisions of industries or trades. The in-
herent difficulty of classifying American industry for administrative purposes,
taken together with the nearly total unpreparedness of IRA for attacking the
problem, presented one of the most troublesome obstacles in the path of
smooth-functioning code administration.

It was natural that the gains secured by an industry through its code
might well be obscured, or even lost sight of, in the light of the know-
ledge that the government had approved a more favorable price protection
provision, or perhaps a less onerous labor orovisicn, for a competing, or
closely related industry. Keeping in mind the facts that codes were being
approved for such snall subdivisions of industry as "Fly Swatter Manufactur-
ing," "Lightning Rod Manufacturing," and the "SJet Mop," "Dry Mop," and "Mop
Stick" Industries and that the negotiations were being carried on at
different st'tges in the development of IRA. policy, and by different per-
sonalities sometimess varying widely in their opinions as to what constitut-
ed fairr competition"), it wrs inevitable that some industries would be more
favorably treated than others, Pnd that consequent dissatisfactions Vwould
ensue.

Becoming more and more bothersome, too, was the problem of overlapping
definitions. This situation ras due in part to the efforts of applicant
groups to secure broad definitions, as a means of covering fully a given
competitive area, and to provide a bread basis for assessing the costs of
code administration; in Dart to the necessarily hasty procedure and the
general unpreparedness of IEA in the matter of industrial classifications.
I
On the other hand, questions were frequently arising concerning the
code coverage of articles not clearly covered by any definition. Hiany
products might reasonably be said to have been included under more than one
code definition, being on the border line of emch, and usually certain to
produce dissatisfaction on one side whichever wa.y it might have been
determined.

More thoublesone, however, end more difficult to remedy than multiple
coverage or non-coverage of particular articles, was the multiple applica-
tion of codes to single enterprises in sone cases, and other instances where
areas of competition were n)t included within the definition of a single
industry cr trade.

A great many cases arose in which the operations of a single firm were


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sutjcct to several coi:s. Someti".ms i firm was presented with a very real
problem in r-ttemoting to isolqt- its or,.r-'tions on the basis of the differ-
ent code definitions an(ecr 'ichi its .,rod. cts hd been classified. Even
where zcLrr-ation of rork V-a: pIhysically pos ible, it was frequently at the
cost of Lfficicl Ic-o -1 .'f1tkn .tjn-c, sGE.ly dIsrupt;ve of the firm's accustom-
-.' r.cthed of optr' tion.

So:;e cod.s, :razn tih bro-d ccv.crr..c of th-ir ,.Xfinitions, reached into
unuxo,.ctI-d laces, .'hilc othLrs ,-ru'- so narrow in their covurge that
directly comB.Uftiiig functions ni-ht 'Le rlloc-tuLd uncr different codes.

.7h,.t gave th. force of rL.---ity to thL su. uucstions of classification w-.s
the Lvkr incrLasing number of E i.Ii codes, each with its own l',bor and trade
practicL provisions. The t.7o developments wLre inseparable. 7ith a general
uniformity or similarity in thu provisionss of codes for the larger divisions
of industry, there would hvc buLn less occasion to dispute the code coverage
on a p rticul.r product.

But as the cod.-s incrcns-Ld in number, they also increased in the in-
tricr..c;T andC comolcxity of their provisions.

I An.-Jthur f-.ctcr of c6dc administration which w-s beginning to claim the
spotli.cht of att,. action v;is the asscss-i.ent and collection of eroenses incur--
rudbor the co-c autirri+iuc in administering codes. :IMA had proceeded very
slo'.ly in granting cod,- a-uth ritics the oor..r to institute the legal procLed-
ings for the collection of fuani.s for the o'x-ocnscs of code administration, and
cven th-n it ras p'-.r-rnt that th, -ifficultics in financing the administration
of small coks 7ire not solved, The small groups desired to maintain their
authority, and oyornto unldcr thcir own code; but.the expenses of administer-
ing th'-ir c-'m coc'.e 'r fr.q.xntly more than the traffic could or would bear.

From th- foregoing, it is -viLJcnt that there .as need for a new policy
determination, dirLct.d toward the following objcctivs:

1. To bring to an cnd the period of code-making, and to
free the organization for the work of administration
and corolinnce.

T. o reach this goal rith the creation of as smMll a
nuxmb.r of nw codes as possible.

To strive for uniformity or sir-.il' rity of provisions
in cods for r-clatLd, or corrzeti-,; industries.

4. To Lffcct consr-lidations with p.p-zroved codes, where
possible.

5 To reliLve small inLustri-s from the onerous o.panscs
of codc ,-.nticn and drdministrztion.

,L may now nroce-d to a study of the formulation of a plan by which it was
hoped to accumnolish the above objectives, -und the various stages and degrees
by which mec plan dLveAloped.


9630





-9-


CHAPTER III

THE PLAIT FOR THE COMPLETION OF CODE-MAKING

I. Early Developments in the Formulation of a Plan

The earliest documentary evidence found of the beginnings of a plan for a
general, or blanket code is contained in a recommendation by Charles P. Ruff,
an Assistant Deputy-Administrator, early in February of 1934, that a "ready-
to-wear" code be drawn up for small industries not already codified, I/ It was
suggested that such a code might be called the "President's Code for Miscel-
laneous Industries."

To substantiate the need for such a plan, LMr. Ruff pointed to the large
amount of time being spent by NRA in formulating and approving codes for small
industries, and mentioned that a number of small groups, while desirous of a
code, were unable to afford trips to Washington to secure a "tailor made job."

The detailed recommendations were that a general code be prepared by NRA
and offered to small industries for acceptance or rejection as they saw fit.
Labor provisions would be established in the code, with the provision that ex-
ceptions might be granted, with the approval of the Labor Advisory Board, for
industries similar or closely related to others operating under more liberal
labor provisions.

It was Mr. Ruff's idea that the general code itself would be so fixed and
standardized that the main work of NRA would be in examining the industries'
proposed definitions for conflicts with other codes, and in establishing true
representation. All that would remain then would be "to publish notice of the
definition and ask for protests by mail. The code having been approved by the
Boards and Divisions would not be reviewed by them."

Mr. Hickling replied that Mr. Raff's suggestions might prove useful in
later developments, but that in his opinion it vould not be practicable to
recommend the adoption of a blanket code at that time.

There is no evidence that there was any direct connection between the idea
put forward by Mr. Buff, and the plan that was finally promulgated as Adminis-
trative Order X-61. That there nay have been some connection is indicated by
the fact that the correspondence is to be found in the file of Blackwell Smith,
Assistant Administrator for Policy, on the Basic Code.

The matter doubtless was the subject of considerable discussion and evi-
dently culminated in the Assistant Administrator for Policy suggesting to the
Director of Research and Planning Division, in a memorandum of date M-,ay 14,
1934, that they make a joint recommendation for a Presidential Agreement to
cover small industries and that the Research and Planning Division suggest the
number of employees at which to draw the line. It was specifically stated
that groups logically integrated with larger industries would be excluded from
such a recommendation. 2/
l/ Undated memorandum to Deputy Administrator C. L. Hicklin- in Assistant Ad-
ministrator for Policy, Blackwell Smith's file on Basic Code, in IIRA files.
2/ LMemorandum from Assistant Administrator for Policy to the Director of Re-
search and Planning Division, Mlay 14, 1934 Blackwell Smith's file on Basic
Code, in NRA files.


9630




-10-


Further exchanges of viewpoint during the next few days culminated in
a memorandum from the Administrator to Colonel G. A. Lynch, Administrative
Officer, under date of May 21, 1934. This memorandum I/

_/ This :.enorandum is located in the file of the Assistant Administrator
for Policy, on the Basic Code, in NRA files, and is here quoted in full:

"ie have got to clean this show of Code making and there is
too much consideration and fumbling in doing it. I want immediate
action along.the following lines:

"1. Lets get up a 'basic Code' containing only the following:

a, 40 hour week and child labor.
b. $12 to $13 per week minimum wage.
c. Provision as to exceptions, etc. which conform
with approved policy.
d. No sale or service below cost,
o. Leon Henderson and Bob Montgomeryls provisions
as to price cutting and cost finding.
f. Statutory mandatory provisions.
g. Provision for Code Authority and Government
right of representation in accordance with
approved policy. This could and should be
done within 48 hours.

"112. Then we will draft communication to every Industry employing
less than 51.00 people with Codes not yet approved and say:.

"IlIn the interest of expedition the President would
like to have you assent to the foregoing basic Code
without further delay.

"I If thereafter you desire additional fair trade
provisions you may submit them and if supported
by 75f of establishments in your Industry and
approved by the Administrator they will auto-
.matically become part of your Code.

"'We will put the basic Code through without re-
ference to anybody but the Administrator.'

"3, The same proposal should .e made to all the big Codes still
hunc up such as Shipoing, Communication, Anthracite, Public Utilities,
etc. with the added remark that 'in the event this is not agreeable
to you the President will impose Codes covering only wages and hours
and child labor in any case in which he finds the labor conditions in
your Industry below the prevailing industrial rates.t

"4. On this formula I expect to complete or abandon all Code making
except hangovers of administration by June 15. This organization
rnztbeirmneciutelyreset for Code administration. The fact that .all
Code Authorities are not organized and functioning is an indictment
of this Administration."

9630 Signed HUGH S. JOHNSON, ADMINISTRATOR





11--


was the actual beginning of the campaign to formulate a plan to end code
making, and laid down general lines along which official thinking was to be
directed.

This memorandum did not bring action within 48 hours, as General
Johnson had suggested. It did, however, serve to define the issues and
concentrate attention on the points which had been raised. Blackwell
Smith, in a memorandum of May 22, 1934, addressed to the Administrative
Officer, the Review Officer, and the Director of the Research and Planning
Division, and in another memorandum of May 23, 1934, addressed to General
Johnson, outlined a number of important points to be clarified and settled
prior to the application of the policy prescribed by the Administrator.
Some of the issues raised by Mr. Smith were: l/

1. Whether the effort should be made to bring all industries
having sending codes under the proposed Basic Code, with a
resultant peak load of administration and compliance work
forthwith, or whether the same thing should be done as to
terms, but on a voluntary basis only, that is, enforceable
by the 3lue Eagle.

2. The difficulties which would be encountered in drawing up
e exact definitions.

3. Whether or not there should'be nublic hearings.

4. Whether provision should be made for maintenance of wages
above the minimum.

5. Should there be a Code Authority set up for each of the
new Codes or should there be a voluntary Committee of the
Industry without administrative facilities?

6. Should the step a oply to supplementary Codes?

7. He also questioned w.rhether it was fully recognized that
the later insertion of trade -practice provisions '7ould mean
practically the same amount of Code making as to have trade
practices in the first instance merely delaying the in-
cidence of the burden.

8. Should the basic Code include the standard, well-recognized
rules against various types of cheating, for example, the com-
mercial bribery rule?



j/ Both memoranda are to be found in Blackwell Smith's file on the
Basic Code, in IRA Files.


9630






Efforts rere now lnder way in the industry divisions to speed up the
formulcttion of codes on which work had been started. On May 24, 1934,
Division Administrator A. R. Glancy reported that his division was attempt.
ing to reduce the number of small oendin; codes cniefly by persuading their
proponents to accept a code already in;.rov-d. for a closely related industry, i

In the meantime, George S. Brrdy, Denuty Assistant Administrator for
Classification Policy, had been working on the nroner groupings and classi-
fications of industry for administrative nurnoses, and on June 4, 1934, the
Assistant Administrator for Policy recommended to the Administrator that the
promulgation of the basic code idea be held in abeyance for a few days,
pending a report from Mr. Brady. It was pointed out in this memorandum
that there were only 162 pending codes before the Administration and that,
in Mr. Bradys o:,inion, all of those logically fell under an approved code
for so:ie othLer industry, or in a fey cases, under a pending important code. 2/

On the same day, General Joihnson modified his original plan to the ex-
tent of ma-ing it anplicable to all uncodified industries, rather than small
ones only, and also introduced for the first time the idea of creating a
single code authority for all small codes, the expenses to be borne by 1TRA,
but uith lee-way for any industry which so desired to erect and bear the ex-
penses of its own code Authority.

The plan was now coming very much into the foreground of official thought
and consideration and was rapidly taking definite form. The general objec-
tions and methods were now sufficiently crystallized to permit of the plan
being referred to the various Advisory Boards and Divisions for their recom-
mendations, prior to promulgation.

II. The Participation of the Advisory Boards and the
Advisory Council in the Development of the Plan.

On June 5, 1934, the Industrial, Consumers and Labor Advisory Boards
were consulted for the first time on the question of a Basic Code. On that
date Mr. Si:ith addressed a memorandum to each of these Boards requesting
their reaction, at the earliest possible moment to the following documents,
which he attached:

(1) Administrative Order setting forth the plan, with
Basic Code attached.
(2) Suopolementary Administrative Orders.
(3) Supplementary Rules and Regulations. 3,

IJ Memorandum from A. R, Glancy to Blackwell Smith Blackwell Smithls
file on Basic Code, in NRA Files.

2/ See Ac-jendix II Exhibit A, page 4).

3f See Ap,-endix II Administrative Order with Basic Code attached -
Exhibit A.
Supplementary Administrative Order Apnendix III.
Supplementary Rules and Regulations A-oendix IV.


9630




-13-


On June 6, 1934, a meeting of the Labor Advisory Board was held for the
purpose of considering the documents submitted by Mr. Smith. At this meet-
ing the fo lowing resolution was passed:

"The Labor Advisory Board recommends as a substitute for
the labor provisions of the Basic Code, the arnolication of the
labor provisions already in effect in kindred codes, the Ad-
ministrator to determine the grouping or consolidation."

In trans:.iitting the above resolution to the Assistant Administrator for
Policy in a memorandum of the same date, Dr. Gustav Peck, Chief of Staff of
the Labor Advisory Board, said in part:

"The Board felt rather strongly that it would be unwise
to ma:e public at this time, one year after the National In-
dustrial Recovery Act went into effect, a Basic Code which
might appear to be and would be easily interpreted as a
standard code. While we sympathize with the ambition of
smaller industries to adopt codes of their own, we are of
the opinion that the number and variety of codes already
approved, leaves ample room for the proper and fair group-
ing of all remaining industries. The approximately 500
codes which will be in effect when this Order is issued
have been the result of fair negotiations by industry,
labor and the NRA, and comparative justice will be done if
the remaining smaller industries are requested to accept
the terms under which kindred industries are operative." l/

At the same time, Dr. Peck attached to his memorandum a point by point
criticism of the Basic Code as submitted, in the event it should still be
deemed desirable to pursue this course.

On the next day, June 7, 1934, Dr. Peck sent a supplementary memorandum
to Mr. Suith recommending the insertion of a provision to the effect that in
no case should hourly earnings be reduced and that there should be no reduc-
tion in weekly earnings to offset any reduction in hours up to 204. "It is
perfectly evident," he stated that rany of the industries to be included
under this catch-all code would be paying far higher rates than those con-
templated for the Basic Code, and, of course, the IFA doeE not want to
sponsor or seem to approve a Code which would permit wage reductions."

The Basic Code, moving rapidly now to the final stages of formulation,
was referred to the Advisory Council for consideration and recommendation.

III. FI':AL STAGES IIT FORi0JLATIOII OF PLAN

The Advisory Council acted promptly in its consideration of the matter
and a-pproved the proposal in a memorandum to the Administrator under date
of June 9, 1934 (See Apoendix VIII), subject to certain specific recom-
mendations which are summarized as follows:


I/ Memorandum from Gustav Peck to Blackwell Smith, June 6, 1934 -
Blackvell Smith's file on Basic Code, in .NRA Files.


9630




-14-

1. That the proposed nlan shall not apply (a) to certain
cesi m-eted industries whose codes were nearing completion; and
(C) to a few ina.jcr industries then uncodified whose importance
see-:eJ: to have warranted the nrenaration of individual codes,
the industries referred to in both instances (a) and (b) to be
,esi:qated by the Administrator;

2. That industries as -et uncodified and not covered
b:- the precedinL pararanhs (a) and (b) be encouraged to
consult with kindred industries, thereby placing them under
the coii)lcte provisions of an existing approved code, the
*eteraiination of the proper kindred industry to be made by
th'ie Adciinistrator;

3. That all other uncodified industries not dealt with
in the two receding papagraphn be urged to adopt the basic
code, the provisions of 'vhich (a) to carry no flat declara-
tion of hours and wages but that provisions dealing with
such maatters for any industry apnrlying for the basic code
be those in effect for kindred industries, and (b) that the
recognized standard labor provisions of existing codes be
included in the basic code;

4. That there be clarification and emphasis to avoid
possible false impressions on the following points: (a)
that the move contemplated purely voluntary action from
industries, with the possible exception of important ex-
ceotional industries, if any, which failed to apply and
were found to have had sub-standard working conditions;
(b) that the proposal was not a move to force remaining
industries under codes; (c) that the Service Code move was
entirely separate and remained unchanged; ]/ and (d) that
the our-oose of the plan was to provide a simple means of
giving a code forthwith to those uncodified industries
vhich desired a code.

The approval of the plan by the Advisory Council with its modified
recoixuiendation, outlined above, apparently provoked renewed discussion
before the Adninistrator, as no definite pronouncement was forthcoming
until one -Ionth later and on July 10, 1934, when the Administrator
announced the plan and made it effective through the issuance of Ad-
ministrative Order Flo. X-61 with the form of the basic code attached as
Exhibit II thereto.

An examination of the plan as embodied in Administrative Order Xr-61
and the two orders issued by the Administrator simultaneously therewith,
Administrative Orders X-62 and X-63 (See Appendices II, III, and IV
res-nectively), reveals that the Administrator to a considerable extent
followecd the above-stated modifications recommended by the Advisory Council
but strengthened the proposal by announcing that, while the Plan was not
-________________________________----------


9630


_/ This refers to administrative action at this particular time on
service codes.





-15-


intended. "to force all remaining, uncodified industries under codes"', the
Administrator should determine as to any uncodified inc.ustry not a-o-lyin-
for the ba-ic code or for consolidation with a proper kindred industry nith-
in thirty days, if the wages, hours and labor conditions in such industries
constituted an abuse inimical to the public interest and contrary to the
policy of tLe Act, the Administrator within forty days after the announce-
ment of the 'lan would provide for a hearing in accordance with Section 3
(d) of i:.I.R.'A. to determine whether a code covering hours of labor, rates
of pay and other working conditions should not be -prescribed.

It is now in order to review in detail the plan.


9630




-16----


CHAPTER IV.

FEATURES OF FLAN FCR COI1LETION OF CODE-k-AKING


I. LABOR PROVISIONS

An .,xanin. tion of Article II and III of the ap-nroved form of the basic
code mna.e a cart of Administrative .,rder X-61 as Exhibit "A" considered
along rith Administrative Order X-63 shows that 'ith respect to these
fe;".t-res the Administrator followed the recommendations of the Advisory
Council in that no flat declaration of hours and wages was made, these
matters being g left open in order that the hours and vwges of kindred indus-
tries raight be arrlied and that the recognized standard labor provisions
be flatly declared.

This arrangement secms to have also taken care of the suggestions of
the Labor Advisory Board, hereinbefore mentioned, as having been voiced by
its Chief of Staff under dato of June 6 and June 7,1934.

II. TRADE PRACTICE PROVISIONS

An examination of Article V of the form and Administrrtive Lrder X-62
reveals thrt the -nricp policies of NRA as announced in Office Memornndum
No. 228 -. "ere rigidly adhered to and that the standard Frovisions, common to
most codes, outlining the powers and duties of the cjde authority were
allowed the notable exception that the plan for administration is entirely
different from that embraced in previous approved codes.

III. ADLIIhISTRATION THROUGH GEbRAL CODE AUTHORITY

Instead of a code authority set up and established by the industry it-
self, co(-es approved under Administrptive Order No. X-61 were to be adminis-
tered by a general NRA code authority at the expense of NRA with the members
thereof to be appointed by the Administrator. It is noted, however, that any
industry ap-olying for a code under the plan and desiring to do so (Article
IV, Basic Code), on approval of the Administrntor, was allowed to elect its
own code authority which would have the same powers and duties prescribed for
the z general NRA code authority and such further rules and regulations as
the Administrntor might prescribe.

Administrative Order No. X-34, Appendix "VI" hereto, provided for the
selection of the members of the general NRA code authority. It was to con-
sist of one member appointed by the Administrator to serve as chairman and
three other members also appointed by the Administr-tor, one of whom was to
be appointed with the advice of the Industrial Advisory Bcard, one with the
advice of the Labor Advisory Board and one with the advice of the Consumers
Advisory Board. These four members were empowered and directed to act upon
all matters considered by this general cod- authority; the said Order, however
prescribed that one additional member should be appointed by the Administrator
with the approval of the Industrial Advisory Board, for each industry whose
code vrs to be administered by such code authority, these additional members
to act only upon matters which -nertained to the respective codes for their
particular industries.
9630





-17-


CHAPTER V.

OPEI-ATION OF PLAN

I. PRCC-DLV_ :-'-R -AIDIG ?LAIK

Acn:V- ith the iss:uance of Adzinistrative Or'ers Pos. X-6l, X-G2 and
X-65, C..so cc..e Office Order 100 and Office i.eriorondum No. 251, the former
epuioiuting a co-raittee of three members to supervise the execution of the
plan ,-Id- the latter nrescribin: procoaure for handling it. The Office Order
desi-nated. lr. Robert K. Straus as chairman of the committee on supervision
with .:essrs. Leon C. tuarshall and George S. Brao.y com.pleting the mne.ibershio.
The procec.ure established by Office Memorandun INo. 251 was as follo',-s:

"1. The Conrqittee will i'niediately distribute to each
Division liaison officer a set of documents, in-
cluding a copy of the Basic Code and related
Administrative Orders, for each code -,hich awaits
approval by each Division.

2. Within a '7eek of the receipt of these documents,
they will be sent out to each uncoded industry with
a covering letter writtene n by the Deputy or Assistant
De-outy Administrator who has been handling any
negotiation with said uncoded industry, recommending
that snid industryts code be disposed of in accordance
rith the principles laid down in Administrative Order
X-61.

3, As soon as these letters have been sent out, progress
reports shall be .iade to the Com.-ittee on the Comple-
tion of Code ,a1.:ing. by the Divisions, indicating to
what industries the letters have been sent, and what
the recommendations of the Division neve been with
regard to these industries.

4. Divisions will continue to submit weekly reports
on Saturday to the Committee on the Completion of
Code Making as to the progress which has been made
during the days covered by these reports.

5. The Committee on the Com-nletion of Code Making may
recom.aend to the Administrator any changes in this
procedure rhich it may deem advisable in order to
complete code 'a'zin. in the thirty-day period allotted,
At the end of this thirty-day period, the Committee
rill make a definitive report, including any recom-
mendations as to further action." (See Arnenkix "DII".)

The Comnittee on Completion of Code l.;aking, as directed in the above-
mentioned office order and the said Office Memorandum No. 251, under date
of Auaust 6, 1934, submitted a report as to the -orogress made which goes
into considerable statistical detail from which the forecast was made that
119 codes nould be disposed of by August 10, 1934, 73 of which were in-
dividual codes, 31 represented consolidations under Administrative Order


9630




-18-


X-El t". 1' covered basic codes urder Ad iinistrative Order X-61. A copy
of t.-is i'o ,nrt is eannexed hereto Ps Aooeidix "IX".

II. iU-DUSI'-IES EXCEPTED I:.0M PT'LUJ

It '-ill be recalleL. that service trades -'ere excepted specifically
from tUe provisionss of Adninistrative Order X-61 as well as such other in-
dusties s the dir.-inistrator for specific cause might designate for
difr.:rent treatment. In the resort, above referred to, from the Corluittue
on Co .-il.etion of Code Linking it -rill be noted that Division VI had on hand
23 se-rvice codes in addition to the 17 shown to be in various stages of
develon:ent in this division. It a.mears that, aside from these service
trad,'s the only exception granted from the provisions of Administrative
Order -o, X-El were the Grocery Manufacturing Industries which were offered
a bssic code of their own under the terms of Administrative Order 7eo. X-39,
dated Se-)te:iber 21, 1934, a copy of which is attached hereto as Appendix
"VII".

III. D:SC'JSSIOIT OF -ZSULTS OBTAINED

It r'h.ould be recalled here that the report from the Chairman of the
Comn:ittee on Comnpletion of Code Eaking predicted that 119 codes would be
disuosccl of b,-y Au,-aust 16, 1S34, 51 of whichh were estimated would be con-
soliO.ations under Administrative Order No. X-61 ond 15 of which would be
a.)rrovls of basic codes thereunder. Furtherroro, the estimate -as made
that a bolanco of 97 codes would be left on August 10, 1934.

It "-.-oears that the Chairman of this Committee in his predictions was
too scn-,uine and that the results predicted were not achieved, as only S
consolidations were made in all and only 5 basic codes were ever approved
under Ac J:inistr.tive Order X-61, Indeed, except in the single case of the
Wire Z.e&:-:. orcement- Industry, a consolidation matter approved August 13, 1934,
all of these consolidations and a.rprovals took place considerably later than
August 10, 1S34.

Lanry factors combined to cause such a poor result. One was the fact
that a considerable number of officials of NRA did not look unon the plan
with favor, This caused it, Then adopted, to be not only unpopular with
the in.-ustries concerned but also with many persons in the Administration,
The movement therefore suffered from lack of complete cooperation.

?urther;aore, the plan was launched at a time when a great many submitted
codes had passed through extended oeriods of negotiations with the result
that the industries sponsoring them preferred to follow them through to
approval rather than accept any consolidation or the basic code. In order
to secure a-y-rroval of codes in this category, instances arose of industries
sacrificing and withdrawing provisions -which had previously been relied on
and insisted upon as being fundamental snd essential to the welfare of those
industries. This attitude was evidently based, in part, upon the fear that
N. R. A. would carry out its announced intention of i losing, in certain
circumstances, provisions relating to hours of labor, wages and conditions
of employment, and also in part because some N. R. A. officials in charge
of these submitted individual codes, obviously reluctant to relinquish
supervision of them, attempted to persuade industries to secure approvals
of their -reviously submitted codes rather than accept the plan offered by


9630





-19-


Administrative Order X-61.

Another unfavorable circumstance ,.as the fact that the proposed basic
code did not providee for trade practice provisions which were specially
adapted to the various industries. In other words, this type of comril.int
was to the ciffect that the proposed basic code was too standardized to take
care of the trade problems peculiar to the various industries. While 1T.R.A.
sought to ieet this objection with- assurances that amendments containing
trade practice provisions. peculiarly anplicable to individual industries
coulC. be ha.d later on, it is obvious that these industries were Iell aware
of the difficulties which attended the path to approvals not only of amrend-
ments but of codes.

A further objection wras made that the theory of industrial self-govern-
ment was rep laced by the idea of having the basic code administered by a
general I, ..A. code authority or, in cases of consolidation, with an
administration conducted by representatives of another industry. To state
the objection differently, autonomy would be lost either by accepting
consolidation under Administrative Order X-61 or by securing a basic code
thereunder.

In addition to the diffidence sho;-rn by industry, the failure of the
plan for the completion of code-iaking can in some measure be traced to
the lack of comprehensive, accurate and thorough classification of industry
for administrative purposes. It seems desirable, from the viewpoint of
administrative preparedness, to stress the desirability and need for the
preparation of such a classification in advance of putting such a program
as the plan for completion of code-making into operation. Had this been
done no doubt some of the difficulties which beset the plan would have been
avoided.

Furthermore, the plan was adopted and put into operation too late in
the code-mnaking process to accomplish the end expected of it. Experience
shows that the program would have achieved greater success had it been
formulated much earlier and used as a complement to the codification of the
major industries. It seems rather safe to say that had this policy been
adopted the number of individual codes would have been materially reduced,
the. C.ifficulties of administration lessened, and the prospects of securing
compliance greatly increased.

From all of which it rather conclusively appears that the plan failed
to realize its objectives; that the results obtained were negligible; that
it was unfavorably received by industry and consequently not utilized ex-
tensively; and that the Administration, when confronted with the failure
of the plan, never put into operation its announced intention of imposing
provisions relating to rages, hours and conditions of employment, under
Section 3(d) of the Act, in those industries found to be operating under
sub-standard conditions.


9630




.-cg r-


APPENDIX I

Statement of Score of StudCy. icthod of Treatment, and Qupstions
Neuding Further Rusearch


This study %,-s truatud very l-irgly from a historical noint of view and
is presented in nnrrntivrc form. The conditions which cul.uina.ted in the
adoption of a ltan to wind up the codification process hive been reviewed and
the stages by which the inlan reached fruition have been traced in detail and
in chronological order. Finally, some nttempt was made to appraise the resul
obtained, point out the f-ilure of the program, analyze the reasons for the
failure, and present certain findings aond recommendations.

Tae subject as developed in the following manner:

First, a tentative outline which is rm.de a part of this report as
Appendix X was carefully prepared before anything else was attempted.

Then, some weeks were sent in searching out sources of information,
finding the material required to fill out the outline, and assembling this
necessary data, nreporatory to the v-riting of this report.

The next st-o consisted in conferring with the various officials of NRA
who participated in the formulation of the plan and had charge of its applies
tion vnd in investigating conditions in ,iTA which gave rise to the need for a
new code-nalzing policy.

When the above details had been completed, the actual preparation of a
report to round out the outline comfl-nccd, with the result that preliminary
report was written and subseQuently revised and out into this final form.

This report leaves little for further study. It is regarded by its
authors as being reasonably complete. It nay, however, at some future time
b. interesting as vell as instructive to ascertain if the industries, un-
codified at the time of the adoption of thu plan for completion of code-mak-
ing, in addition to reasons given for failing to utilize the plan, did not
feel that they were being asked to adopt the hours and pay the wages requir-
ed of kindred industries without being compensated with trade practice pro-
visions designed to benefit and promote their own welfare.

It seems that the only source from which to obtain reliable information
on this sug-ested question is the uncodificd industries of July 10, 1934, an(
their respective trade associations, if any.

A comparison of the tentative outline, Appendix X hereto, with the text
of this report will reveal a few othur features which have only briefly been
alluded to, if at all, such as thu details of the organization of the Goner
NRA Code Authority and the departure from the plan as instanced in the matte
of the Grocery Manufacturing Industrieus. These fields may therefore in the
future be explored with profit, but for the purposes of this particular stu
it -has not seemed advisable to treat them any further.



96;30





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APPENDIX II.

ADMINISTRATIVE ORDER NO. X-61.

PLAIT FOR COMPLETION OF CODE MAKING


By virtue of authority vested in me as Administrator for Industrial Re-
covery under Title I of the National Industrial Recovery Act, and in order to
provide a simple means of giving a code forthwith to those industries remain-
ing uncodified who desire a code and in order thereby to free NRA for admin-
istration of approved codes, it is hereby ordered that:

1. This plan is available to any industry not yet codified under said
Act (with the exception of industries, including local service trades, for
specific cause designated by the Administrator for different treatment). Any
such industry may apply to the Administrator for codification by application
of the Basic Code (Exhibit "A", annexed) as the code for such industry. The
hour and wage provisions to be included in said Basic Code, as to any appli-
cant industry, shall be those already approved for the proper kindred in-
dustry, as determined by the Administrator, after due consideration of rep-
resentations of the applicant industry and other relevant data. An uncodi-
fied industry, instead of applying for the Basic Code, may apply for con-
solidation and complete coverage by thile existing code for the proper kindred
industry, subject to stay as to applicant industry of provisions then incon-
sistent with policy.

2. If any such application is made by a truly representative body of the
industry and if there be no objection to any party in material interest after
ten (10) days published notice to all concerned, such Code shall, without
further hearing, reference to Advisory Boards or other administrative action,
become effective ten (10) days after its approval by the Administrator, in
industries employing less than fifty thousand (50,000) persons, or by the
President in all other industries.

3. All uncodified industries which desire codification (excepting those
specially designated as above) are requested so to apply for such Basic Code
or for consolidation with codes for kindred industries. If, after the approval
of such application for ar-y industry, it desires additional fair trade prac-
tice provisions or modifications as to such industry of the Basic Code, or the
code with which consolidated, such industry may apply therefore at any time and
will be accorded a prompt hearing and determination with respect thereto. Any
industry which desires to consolidate under the code of a kindred industry may
do so on approval of the Administrator even after becoming subject to the
Basic Code.

4. It is not intended by this Plan to force all remaining uncodified.
industries under codes, but as to any such industry not yet codified which
does not apply for such Basic Code, or for consolidation as above, within
thirty (30) days after the date hereof and in which the Administrator shall
determine that wages, hours, and conditions of labor constitute an abuse
inimical to the public interest and contrary to the policy of said Act, the
Administrator will within forty (40) days after the date hereof provide for
a hearing in accordance with Section 3 (d) of said Act to determine whether


9630




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a code covering hours of labor, rates of Poay, and other working conditions
shnll not be prescribed thereunder.


HUGH S. JOHNSON
Administrator for Industrial Recovery.

Washington, D. C.
July 10, 1934.



















































9630




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APPENDIX II,
EXHIBIT "A"
BASIC CODE

July 10, 1934.
-oOo-
,0O-

ARTICLE I

To effectuate the policies of Title I of the National Industrial Re-
: covery Act, the following provisions are established as a basic Code of Fair
Competition which shall govern every industry applying therefore in accordance
with Administrative Order lo. X- 61, dated July 10, 1934.

ARTICLE II

Section 1. Hours.

No employee shall be permitted to work in excess of ____ hours in any
one r-eek, exce-ot that for ____weeks in any one calendar year, any employee
may be permitted to work not more than ____ hours per week. All hours in
excess of !pnr day or per reek shall be paid for at not less than
one and one-half (1-1) times the employee's regular rate.

Section 2. Exceptions.

The provisions of Section 1 shall not apply to employees engaged in
emergency maintenance or emc-rgency repair work involving breakdown nf the
protection of life or property, nor to persons employed in a managerial <~r
executive capacity who earn regularly Thirty-five Dollars ($35.00) per week
or more, nor to any other class of employees which the Administrator shall
find upQn application of true representatives of the trade or industry should
be subjected to an exemption or modification in accordance with IN.R.A. police' ;
provided, however, that employees engaged in such emergency maintenance andi
emergency repair work shall be paid at one and one-half (1--) 'times their
normal rate for all hours worked in excess of forty (40) hours per week.

Section 3. Minimum Wages.

No employee shall be paid in any pay period less than at the rate of
S per week for hours of labor, except in in which region no
employee shall be paid in any pay period less than at the rate of ____
per week for hours of labor.

Section 4. Wagcs in &-neral.

All wages shall be adjusted so as to maintain a differential at least
as great in amount as that existing on June 16, 1933, between wages for such
employment and the then minima. In no crse shall there be any reduction in
hourly rates; nor in weekly earnings fo1r eny reduction in hours of less than
thirty per cent.


9630




-24-


ARTICLE III.

Section 1. Child Lrbor.

ITo )crson under sixteen yua-rs cf age shall be Lmployed in the industry
in any caprcity. ITo ocrscn under cihtueen ;-cars oif age shall be employed at
operations or occupations which arc hazardous in nature or dangerous to health
The Code Authority shall submit to the Administrator for approval before Octob
1, 1934, a list of such operations or occupations. In any State a.n employer
shall be deemed to have cor.lid with this orovision as to age if ho shall
have on file a valid certificate or c:rnit duly signed by the authority in
such State empowered to issue em-loyyi-nt or ago certificates or permits, show-
ing that the employee is of the required age.

Section 2. Apprentices.

The hours and wages of regularly ind.-nturcd apprentices in skilled
trades or occupations of the industry may depart from the standards herein-
above proscribed; provided that the terms of employment and the course of
instruction of such apprentic-.s shall conform to standards uniform through-
out the trade or industry and approved by the Administrator.

Section 3. IIHandicapood Persons,

A person whose earning capacity is limited bucaase of age, physical or
mental handicap, or other infirmity, may be employed on light work a+ a wage
below the minimum established by this Code, if the employer obtains from the
State authority designated by the United Status Department of Labor, a cer-
tificate authorizing such person's emoLloyment at such wages and for such hours
as shall be stated in the certificate. Such authority shall be guided by the
instructions of the United States Dfloartnent of Lr-.bor in issuing certificates
to such persons. Each enoloyer shall file monthly rith the Code Authority a
list of all such persons em-oloyed by him, showing the wages paid to, and the
maximum hours of work for such employee.

Section 4. Safety and Health.

Every cpiloyer shall make reasonable provision for the safety and health
of his employees at the place and during the hours of their employment.
Standards for safety and health shall be submitted by the Code Authority to
the Administrator for aw)reval within six months after the effective date of
this Code. The standards approved shall thereafter be a part of this Code
and enforceable as such.

Section 5. Required Labor Clauses.

The provisions of Section 7 (o) of said Act :.re hereby incorporated here-
in by this reference and shall be complied with,.


9630







-25-


ARTICLE IV.

Administration.

This Code shall oc administered by the Generrl :MA Code Authority which
shall be selected pursuant to, have the por'lrs secifitd in and function in
accordance with Admrinistrative Order X-52, dr-ted July 10, 1934; provided,
however, that, on approval by the Adi.iinistrator, any industry so desiring may
elect its own Code Authority to have powers and to function in the manner
prescribed for the General JTIRA Code Authority and under such rules and regula-
tions as the Administrator nay prescribe.

ARTICLE V.

Trade Practices.

(a) It shall be an unfair method of competition for any member of any
trade or industry subject hereto to violate any rule of fair trade practice
for such trade or industry even if not herein contained when approved by the
Administrator, or, in the case of trade practice provisions for trades or
industries under the jurisdiction of the Secretary of Agriculture when
approved by such Secretary, on apolicrtion concurred in by seventy-five (75)
per cent of the rm;cmbers of such trade or industry.

(b) Prices, rebates, discounts, commissions and conditions of sale
shall be filed as orescribod in Administrative Order No. X-62, dated July 10,
1934, and it shall bo an unfair method of competition to violate or fail to
comply with the terms of that Order.

ARTICLE VI.

Section 10 (b) of said Act is hureb,- incorporated herein by reference
and this Code is expressly maPE subject thereto.


9630




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APPE:'flIX III.

ADI.i.'IIST:ATI7r ORDER NO. X-62

SUPLEI:ZTI-G j-rD i*s.I.T;.TTIE ORDER ITO. X-61I, DATnD J7'.-Y 10, 1934, ANrD TZE
BASIC CODE .T 'EXED THERETO.

*)l<***** * a

By virtue of the authority vested in me as Administrator for Industrial
Recovur'- under Title I of the National Industrial Recovery Act and to sun-
ple:"t Ac'-.iniistrative Order 1o. X-Cl, dated July 10, 1934, and the Basic
Code r.n:-c.-::ec. thereto, it is hereby ordered that:

A. L-enerel '-RA Co.fe Authority

1. The General TRA Code Authority, provided for in Article IV of
said Basic Code, shall oe anointed by the Administrator andCL
shall serve without expense to the Industries subject to such
Code.

2. Such Code Authority shall have the following powers and duties:

(a) To insure the execution of the provisions of the
Code and to provide for the compliance of the trade/
industry -"ith the provisions of the Act.

(b) To -dopt by-laws and rules and regulations for its
procedure.

(c) To obtain from members of the trade/industry such
information and reports as are required for the
aa6ninistrationr of the Code, In addition to in-
fornation required to be submitted to the Code
Authority, rme-ibers of the trade/industry subject
to said Basic Code shall furnish such statistical
information o.s the Administrator alay deem necessary
for the purposes recited in Sectioni 3(a) of the Act
to such Federal and State a-encies ?s he may desig-
nate; provided that nothing in the Code shall relieve
any ne:aber of the trade/ineustrv of any existing
obligations to furnish reports to any Government
agency. Wo individual re-iort shall be disclosed
to any other nermber of the trade/industry or any
other party except to such other Government agencies
as :.ay be directed by the Administrator.

(d) The General 1,MA Code Authority shall submit to the
Administrator within 90 days after the aonorovael of
this Basic Cod.e a list of industries covered by the
Basic Code, in rhich work on any nart of the -oroduct
is performed in the home and/or work is contracted
out. The General NRA Code Authority may also submit
a list of special problems affecting particular
industries operating under the Basic Code, and
recommendations pertaining thereto.


Q6;n




-27-


(e) To make recommendations to the Administrator for the co-
ordination of the administration of the Code and such
other codes, if any, as may be related to or effect mem-
bers of the trade/industry.

(f) To reconrmmend to the Administrator any action or measure
deemed advisable, including.further fair trade practice
provisions to govern members of the trade/industry in
their relations with each other or with other trades/
industries; measures for industrial planning, and stabi-
lization.of employment.

B. Open Price Filing.
i
As provided for in Section (b) of Article V of said Basic Code,
prices, rebates, discounts, commissions, and conditions of sale
shall be filed in accordance with the following provisions:

1. Each member of the trade/industry shall file with a confidential
and disinterested agent of the code authority or, if none, then
with such an agent designated by the Administrator, identified
lists of all of his prices, discounts, rebates, allowances, and
all other terms or conditions of sale, hereinafter in this arti-
cle referred to as "price terms", which lists shall completely
and accurately conform to and represent the individual pricing
oracticos of said member. Such lists shall contain the -rice
terns for all such standard -products of the industry as are
sold or offered for sale by said member and for such non-stan-
dard products of said member as shall be designated by the code
authority. S,-.id price terms shall in the first instance be
filed within 30 days after the date of approval of this prov-
ision. Price terTrs and revised rice terms shall become effec-
tive immediately u-pon receipt thereof by said agent. Immediate-
ly unoon receipt thereof, said aent shall be telegraph or Other
equally prompt means notify said member of the time of such re-
ceint. Such lists and revisions, together with the effective
time thereof, shzll upon receipt be immediately and simultane-
ously distributed to all members of the industry and to all of
their customers rho have applied therefore and have offered to
defray the cost actually incurred by the code authority in the
preparation and distribution thereof and be available for in-
spection by any of their customers at the office of such agent.
Said lists or revisions or any part thereof shall not be made
available to any person until released to all members of the
industry and their customers, as aforesaid; provided, that
prices filed in the first instance shall not be released -until
the expiration of the aforesaid 30 day period after the aoprov-
al of this code. The code authority shall maintain a permanent
file of all price terms filed as herein provided, and shall not
destroy any part of such records except upon written consent of
the Administrator. Upon request the code authority shall furn-
ish to the administrator or any duly designated agent of the
Administrator copies of any such lists or revisions of p-orice
terms.

2. When any member of the trade/industry has filed any re-vision
such member shall not file a higher price within -forty-eight
(48) hours.


9630




-28-


0. To member of the trade/industry shall sell or offer to sell any
product, services of the trade/industryr, for which -orice terms
have been filed oursunant to the Drovisions of this article, ex-
cept in accordance with such price terms.

4. ITo member of the industry shall enter into any agreement, unde
standing, combination or conspiracy to fix or maintain rice
terms, nor cause or attem-ot to cause any member of the industry
to change his orice terms by the use of intimidation, coercion,
or any other influence inconsistent with the maintenance of the
free a.nd open market which it is the purpose of this Article to
create.

C. Costs and Price Cutting.

1. The standards of fair competition for the trade/industry with
reference to pricingg practices are declared to be as follows:

(a) Wilfullyr destructive price cutting is an unfair method of
competition and is forbidden. Any member of the trade/iP'.
dustry or of any other trade/industry or the customers of
either may at any time complain to the Code Authority tha.
any filed price constitutes unfair competition as destruc
tive price cutting, imperiling small enterprise or tending
toward nonoooly or the imroairment of code wages andworki
conditions. The Code Authority shall within 5 days afford
an opportunity to the member filing the rice to answer
such comDlaint and shall Within 14 days make a ruling or
adjustment thereon. If such ruling-is not concurred in b
either partr to the complaint, all papers shall be referr
to the Research and Planning Division of NRA which shall
render c, report and recommendation thereon to the Adminis-
trator.

(b) When no declared emergency exists as .to any given product
there is to be no fixed minimum basis for prices. It is
intended that sound cost estimating methods should be use
and that consideration should be given to costs in the de
termination of pricing policies.

(c) '.hen an emergency exists as to any given product, sale be
the stated minimum price of such product, in violation of
Section 2 hereof, is forbidden.

2. Emergency Provisions.

(a) If the Administrator, after investigation shall at any ti
find both (1) that an emergency has arisen within the tr
industry adversely affecting small enterprises or wages o0
labor conditions, or tending toward monopoly or other acma
conditions nhich tend to defeat the purposes of the Act;
and (2) that the determination of the stated minimum pric
for a specified oroduct within the trade/industry for v.
limited period is necessary to mitigate the conditions co
stituting such emergency and to effectuate the purposes o
9630




-29-


the Act, the Code Authorityr may cause an impartial agency to in-
vestigate costs and to recommend to the Administrator a deter-
mination of the stated minimum price of the product affected by
the emergency and thereupon the Administrator may proceed to de-
termine such stated minimum price.

(b) TWhen the Administrator shall have determined such stated minimum
price for a specified product for a stated period, which rice
shall be reasonably calculated to mitigate the conditions of such
emergency and to effectuate the purpooses ofthei National Indus-
trial Recovery Act, he shall publish such price. Thereafter,
during such stated period, no member of the trade/industry shall
sell such specified products at a net realized price below said
stated minimum -orice and any such sale shall be deemed destruc-
tive price cutting. From time to time, the Code Authority may
recommend review or reconsideration or the Administrator mc.r
cause any determinations hereunder to be reviewed or reconsidered
and appropriate action te-ken.




HUGH S. JOHISO01,
Administrator for Industrial Recovery.






Washington, D. C.
July 10, 19C.4


9630





-30-


APPFETD I X IV.

ADMINISTRATIVE ORDER 10. X-63.

PRESCRIBING RULES AND REGULATIONS TO SUPPLEMENT ADMINISTRATIVE ORDER NO. X-61,

DATED JULY 10, 1934, AND TItE BASIC CODE AiNEXED THERETO.

By, virtue of authority vested in me as Administrator for Industrial
Recovery under Title I of the National Industrial Recovery Act the following
rules and regulations are hereby prescribed to supplement the above-mentioned
Administrative Order and Code:

1. The minimum rates of pay provided for in Article II of said Basic
Co.e shall apply, irrespective of whether an employee is actually
corTocnsL',ted on a time rate, piecework, or other basis.

2. Fer.'ale employees performing substantially the same work as male
emolo'ees shall receive the same rate of pay as male employees.

3. io employer shall permit any employee to '7ork for any time l7hich,
r7hen totaled '*ith that already performed for another employer orempij
ers cxcuoed the naximun permitted herein.

4. "-o enrployer shall reclassify employees or duties of occupations
-cerformed or engage in any other subterfuge so as to defeat the
.r'u-oses or provisions of the Act or of said Basic Code.

5. Ho ernloyer shall dismiss or demote any employee for making a
comolcint or giving evidence with respect to an alleged violation
of the provisions of any Code of Fair Competition.

6. Code Authorities selected by industry in accordance 'vith Article
7IV of said Basic Code shall function at the expense of the industry
in accordance with such further rules and regulations as the
Administrator may prescribe.

7. ITo provision hereof, of said Administrative Order No. X-61 or of
said Basic Code, shall supersede any State of Federal law which
imposes on employers more stringent requirements as to age of
employees, wages, hours of work, safety, health and sanitary
conditions, insurance, fire protection or general working
conditions, than are im-zosed thereby.

8. No Provision hereof, of said Administrative Order No. X-61, or of
said Basic Code shall be so applied as to permit monopolies or
monopolistic practices, or to eliminate, oppress, or discriminate
against small enterprises.

HUGH S. JOHNSON,
Administrator for Industrial Recovery.

Washington, D. C.
July 10, 1934.


9630







APPENDIX V.

OFFICE iiBEAORA'IDUAI NO. 251.

July 10, 1934.

Procedure for Handlinp, the Comoletion of Code Making

Office Order No. 100, establishes a Committee for the Comle-
tion of Code i'aking, and charges that Committee with the supervision of
the execution of the pl.rn embodied in Administrative Order X-61. The
Division Administrators, in accordance with this Order, will name repre-
sentatives to cooperate with this Committee. The method of cooperation
will be as follows:

1. The Committee will immediately distribute to each Division
liaison officer a. set of documents, including a copy of the
Basic Code and related Administrative Orders, for each code
which awaits ip-iroval bby each Division.

2. Within a week of the receipt of these documents, they will
be sent out to each uncoded industry with a covering letter
written by the De-uty or Assistant Deputy Administrator who
has been handlinL any negotiation with said uncoded indus-
try, recommending that said industryvs code be disposed of
in accordance with the orinciDles laid down in Adminis-
trative Order X-61.

3. As soon as these letters have been sent out, progress
reports shall be made to the Committee on the Completion of
Code 1,al:ing by the Divisions, indicating to what industries
the letters have been sent, and what the recommendations of
the Division have been with regard to these industries.

4. Divisions will continue to submit weekl-" reports on Satur-
days to the Committee on the Completion of Code Making as
to the progress which has been made during the days covered
by these reports.

5. The Committee on the Completion of Code Making may recom-
mend to the Administrator any changes in this procedure
which it mayr deem advisable in order to complete code
making in the thirty-dary period allotted. At the end of
this thirty-day -oeriod, the Committee will make a defini-
tive report, including Iany recommendations as to further
action.

By- direction of the AdAiinistrator:


G. A. LYICH,
Administrative Officer.


9630




-32-


OFFICE ORDER 11NO. 100.

July 10, 1934.


Appointment of Committee for the Comoletion of Code Making

A Committee is hereby anointed to supervise the execution of

the -plan embodied in Administrative Order X-61, aosroved by the Aeninis-

trator on July 10, 1934. Membersrnip of the Committee:

Robert K. Straus, Chairman
Leor C. iMarshall
George S. Brady

The Committee will request each Division ACLjninistrator to se-

lect a liaison officer from their respective Divisions to cooperate rith

it in the execution of this nlan.

The Corimittee will make a report to the Administrator thirty

days hence as to thle progress of the plan, including any recommendations

for further action rhich may be necessary at that time.


By direction of the Administrator:






G. A. LYNCH,
Administrative Officer.


96730


d




-33-


APPENDIX VI.

ADMINISTRATIVE ORDER NO. X-84


PROVIDING FOR THE SELECTION OF THE MEMBERS OF THE GENERAL
NRA CODE AUTHORITY



By virtue of the authority vested in me a3 administrator
for Industrial Recovery under Title I of the National Industrial Re-
covery Act, by Executive Orders of the president and otherwise, it is
hereby ordered that the General NRA Code Authority provided for in
Administrative Order No. X-62, dated July 10, 1934, shall be con-
stituted as follows:

There shall be one member who shall act as Chairman,
to be appointed by the Administrator, and three other members
to be appointed by the Administrator as follows: one with the
advice of the Industrial Advisory Board, one with the advice
of the Labor Advisory Board, and one with the advice of the
Consumers' Advisory Board, of NRA. All such members shall act
upon all matters considered by such Code Authority. 00ic ad-
ditional member shall be appointed by the Administrator with
the approval of the Industrial Advisory Board of NRA for each
Industry wtc se code is administered by such Code Authority.
Each such additional member shall wherever practicable have a
special knowv,-edge of the Industry which he is appointed to
represent a.-j shall act as a member of such Code Authority
only upon matters wnich pertain to the code for such Industry.


HUGH S. JOHNSON
Administrator for Industrial Recovery.




Washington, D. C.,
September 7, 1934.


9630






-34-


APPENDIX VII.

ADMINISTRATIVE ORDER NO. X-89

Supplementing Administrative Order No. X-61
by offering a Basic Code to Grocery Manufac-
turing Industries.

By virtue of the authority vested in me as Administrator for Industri
Recovery, and in order to further the purposes of Administrative Order No.
X-61, of July 10, 1934, it is hereby ordered that:

1. The Code of Fair Competition for the Grocery Manufacturing Industr
(annexed hereto aind marked Exhibit "A") is offered to each grocer
manufacturing industry not yet codified under the Act, in lieu of
Basic Code, and to each grocery manufacturing industry now codifio
under the Act, in lieu of its own code.

2. If an application is made for said Code by any group truly repres
ative of a grocery manufacturing industry and if there be no obje
tion by any party in material interest after ten (10) days publish
notice to all concerned, such Code shall, without further hearing
reference to Advisory Boards or other administrative action, beco
effective ton (10) days after its approval by the Administrator,
industries employing less than fifty thousand (50,000) persons, o
by the President in all other industries.

3. For the purposes of this Order, a grocery manufacturing industry
defined as follows: The manufacturing, processing, canning, pack
bottling and/or importing ?ind sale by the manufacturer, processor
canner bottler, packer or importer of any one or related group of
products commonly known as food and/or grocery products, except t
products which are principally sold through other channels than t
viholesele and retail grocery trades.

4. Grocery manufacturing industries are exempted from Administrative
Order X-61.

5. It is recognized that the policies of the Act can better be effec
ed in the grocery manufacturing and distributing industries if al
such industries are subject to codes of fair competition contain
substantially comparable provisions. Accordingly, all uncodified
grocery manufacturing industries which desire codification are re
quested to apply for this Code; and all codified grocery manufact
ing industries arc requested to consult the Administrator with a
to applying for this Code or adopting such modifications of their
codes as will result in such substantially comparable provisions.









ar"M_




-35-


6. In accordance with the intention of paragraph 4 in Administrative
Order X-61, hearings will be held as to any uncodified grocery rmanu-
i acturing industry which has not applied for this Code within thirty
(30) days after the date hereof.

HUGH S. JOHNSON


Administrator for Industrial Recovery.

Order recommended:



Armin. W. Riley,
Division Administrator.


September 21, 1934.


9630






EXHIBIT "A" TO AiFPEDIX VII.

CODE OF FAIR COMPETITION ,
FOR THE
GROCERY MAMJFAOCTU1JRING INDUSTRIES

To effect the policies of Title I of the National Industrial Recovery
Act, thc following provisions are established as a basic Code of Fair Competi-
tion for the Grncory Manufacturing Industries, and its provisions shall be the
standards of fair competition for every such industry and shall be binding
upon every momb,-r of any one or more thereof, as hereinafter in Article I
provided.

ARTICLE I

Aprlicntion of Code

Section 1. The provisions of tnis Co'de shall apply to the members of an]
grocery manufacturing industry upon approval by the Administrator, pursuant tc
Administr tive Order :,o. X-8j., of an arTlication to him by any group truly
representative thereof. The Administrator may make such exemptions with
respect to specific provisions herein as he may deem appropriate to avoid coBm
flict with provisions in any separate approved Code of Fair Competition for
such industry; and he may approve amendments hereto with respect to any
grocery manufacturing industry.

ARTICLE II

Definitions

Section 1. As used herein:

(a) Grocery Manufacturin. Industry. The terms "Grocery Manufacturing
Industry" nd "Industry" mean and include any industry as defined in an appli#
cation and approval thereof by the Administrator pursuant to Administrative
Order No. X-89.

(b) Grocery Manufacturer. The term "grocery manufacturer" or "manufact.
urer" includes, but without limitation, any individual, partnership, associa-
tion, corporation or other form of enterprise wholly or partially engaged in
a grocery manufacturing industry, either as an employer or on his or its own
behalf.

(c) Emploree. The term "employee" means any person engaged in a grocers
manufacturing industry in any capacity and receiving compensation for his
services (except a manufacturer or a broker) irrespective of the nature or
method of payment of such compensation.

(d) Er.ploycr. The term "employer" means any person by whom any such
employee is compensated or employed.

(c) Outside Salesman. The term "outside salesman" means any salesman
who is engagedC not more than twelve (12) hours per week inside the establish-
ment, or any branch thereof, of his employer qnd who does not regularly de-
liver merchandise.


963.1




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(f) Watchman. The term "watchman" means any employee who is engaged dur-
ing at least ninety per cent (90%) of his working hours in watching and guard-
ing the premises and property of any establishment of a member of the industry.

(g) Trade Buyer. The term "trade buyer" means any commercial buyer as
distinguished from an ultimate consumer buyer.

(h) President. Act and Administrator. The terms "President", "Act" and
"Administrator" mean, respectively, the President of the United States, Title
I of the National Industrial Recovery Act, and the Administrator for Indus-
trial Recovery.

Section 2. Population and trade areas for the purposes of this Code
shall be determined b;r reference to the latest Federal Census and metropolitan
areas designated therein.

ARTICLE III

Hours

Section 1. No employee shall be permitted to work more than forty (40)
hours in any week or more than eight (8) hours in any day, with the following
exceptions:

(a) The provisions of this Section shall not apply to employees engaged
in managerial, executive, or supervisory capacities, regularly receiving not
less than thirty-five dollars ($35.00) per week, and outside salesmen.

(b) Watchmen shall be permitted to work not in excess of fifty-six (56)
hours in any week.

(c) Engineers and firemen shall be permitted to work not in excess of
forty-four (44) hours a week or in excess of nine (9) hours in any day.

(d) Deliverymen, outside truck drivers and chauffeurs, shall be permit-
ted to work not in excess of forty-eight (48) hours a week.

(e) The provisions of .this Section shall not apply to employees engaged
in emergency repair and emergency maintenance work involving breakdowns or
protection of life and property; provided that in every such case employees
engaged in such work shall be compensated at a rate of not less than one and
one-third (1-1/3) times their normal hourly rate for all hours worked in ex-
cess of the basic hours provided in this Article.

(f) During any eight (8) weeks in each calendar year, employees may be
permitted to work six (6) hours per week in excess of the foregoing maxima,
provided they are paid at least one and one-third (1-1/3) their normal rates
of pay.

Section 2. No employee shall be permitted to work more than six (6)
days in an seven (7) day period.


9630







Section 3. All cmrloyees, except these enumerated in subsection (a),
Section 1 of this Article, shall be compensated at a rate of not less than one
and one-third (1-1/3) times their normal hourly rate for all hours worked on
the following holidays: Christmas Day, Thanksgiving Day, George Washington's
Birthday, Labor Day, July Fourth, New Year's Day, and such other holidays as
may be proclaimed by the President of the United States,

ARTICLE IV

Wages

Section 1. No employee engaged in clerical, accounting or other office
work shall be paLid less than at the rrte of:

Sixteen dollars ($16.00) per week in cities of over 500,000 population
or in the immediate trade area thereof;

Fifteen dollars ($15.0r,) per week in cities between 250,000 and 500,000
population or in the immediate trade area thereof;

Fourteen dollars ($14.00) per week in other places; except that office
boys and messengers may be employed at a rate of not less than two dollars
($2.00) bcloa- the above minima; provided that where any employees are classi-
fied and comp..ensated as office boys or messengers not more than five per cent
(5I) of all office employees shall be so classified and compensated, except
that eachc establishment may employ at least one office boy or messenger at
such rates.

Section 2. No watchman shall be paid less than at a rate of eighteen
dollars (18.00oo) per fifty-six (56) hour week.

Section 3. No employee, other than those covered in Sections 1 and 2
of this Article, shall be pnid at a rate of less than forty cents. (40o) per
hours except that such employees may be paid at a rate of not less than
thirty-five cents (350) per hour in Virginia, North Carolina, South Carolina,
Tennessee, Alabama, Georgia, Florida, Mississippi, Louisiana, Texas, Arkansas,
Oklahoma, Kentucky.

Section 4. Employees engaged in light work commonly performed by female
operatives may be paid at rates not less than five cents (5e) per hour below
the respective minima established in Section 3,of this Article.

Section 5. Female employees performing substantially the same work as
male employees shall receive the same rates of pay as male employees; and
where they displace male employees they shall receive the same rates of pay as
the male employees displaced.

Section 6. This Code establishes a minimum rate of pay which shall
apply, irrespective of whether an employee is actually compensated on a time
rate, piece work, or ether basis.

Section 7. (a) In the event the normal full time weekly working hours
of any employee shall, under the provisions of this Code be reduced by not
more than sixteen and two-trnirds per cent (l6-2/3%) under the normal full ti*
weekly working hours worked by said employee during the period from January 1i
9630


_M M




-39-

1933, to May 1, 1933, the wages of said employee shall not be reduced blow the
normal full time weekly wage paid said employes during said period frrm Jan'la-
ry 1, 1937, to May 1, 1933.

(b) In the event the normal full time weekly working hours of any rm-
plnyeo shall, under the provisions of this Cede, be reduced by more than six-
teen and two-thirds per cent (16-2/3Z) under the normal full time weekly work-
ing hour worked by said employee during the period from January 1, 1933, tr
May 1, 1933, the wages of said employee shall not be rrdured blow the normal
full time weekly wage paid said employee during said period from January 1,
1933, to May 1, 1933, by more than one-half () of the percentage of hourly
reduction in excess of said sixteen and two-thirds percent (16-2/3%).

(c) In no case shall hourly wage rates be reduced.

sectionn 8. Wages shall be exempt from fines and rebates; and from charg-
es or deductions, except charges and deductions for employees' contributions,
voluntarily made by employees, or required by law, for pension, insurance or
benefit funds. No employer shall withhold wages except upon service of legal
process or other pc-pers lawfully requiring such withholding. Deductions for
other* purposes not heretofore stated may bp made only when the contract is in
writing and is kept on file by the employer for at least six (6) months after
the completion of the contract.

Section 9. Employees shall make payment of all wages in lawful currency
or by negotiable checks payable on demand. All contracts of employment shall
prescribe payment of wages at least every two (2) weeks.

Section 10. A person whose earning capacity is limited because of age or
physical or mental handicap, or other infirmity, may be- employed on light work
at a wage below the minimum established by this Code, if the employer obtains
from the State Authority designated by the United States Department of Labor,
a certificate authorizing such person's employment at such wages and for such
hours as shall be stated in the certificate. Each employer shall file monthly
with the Code Authority a list of all such -ersons employed by him, showing
the wages paid to, and thr maximum hours of work for such employee.

ARTICLE V

General Labor Provisions

Section 1. No person under sixteen (16) ynars of age shall be employed
in the industries. No person under eighteen (18) years of age shall be em-
ployed at operations or occupations which arp hazardous in nature or dangerous
to health. The Code Authority shall submit tr the Administrator within nine-
ty (3Y) days after the cffectiv; dato of tnis Code a list of such nFrer.tions
or occupations. In any jurisdiction an cmployer shall be deemed to have com-
plied with this provision as 'to age if he shall have -n file a certificate or
permit duly signed by the authority in such jurisdiction omprwercd to issue
employment or age certificates or permits showing that the employee is of the
required ago.

Section 2. Employees shall have the right to organize and bargain col-
lectively through representatives of their own choosing, and shall be free
from the interference, restraint, or coercion of employers of labor, or their
963n





-4'_-


*t *. dp i ....r of sum;_ r :1 ;-,i'es -r in ..-l5-cr'-n:- tion or in
other conccrte-l activities for the purpose of collective bargaining .or other
mutual aid or protection.

Section 3. Ni omT'loyeo and no one sockin,- emplo.-nent shall be required
as a condition of employment to join any comr.any union or to refrain from
joininri, or-anizinf.,, or assisting a labor or-aniz tion of his own choosing.

Section 4. Employers shall comply with the maximum hours of labor, mini-
mum r;-tes of pa,, and other conditions of employment, approved or prescribed
by the President.

Section 3. No employee no'-, employed at a rate in excess of the minimum
shall be discharged and re-employed it a lower rate for the purpose of evading
the provisions of this Code.

Section 6. No provision in this Code shall supersede an;' law which im-
poses on emoployurs more strinm.ent requirements .s to age of employees, wages,
hour of work, :r as to safety, health, sanitary or general working conditions,
or insurance, or fire protection, than are imposed by this Code.

Section 7. No employer shall lknowing-ly permit any employee to work for
a total numbr of hours in excess of the number of hours prescribed for his
occupation for etch week nndr'.n whether employed by one or more employers.

Section E. No employer shall reclassify employees, or reclassify the
duties or occupations performed by them, or change the method of compensation
of employees, or engage in any subterfuge which tends to or will defeat the
purpose or provisions of the Act or of this Code.

Section 9. Every employer shill provide for the safety and health of
employees during the hours rtnd at the places of their employment* Standards
for safety and health shall'be submitteli by the Code Authority to the Adminis
trator within three (3) months after the effective date of this Code.

Section 10. All employers shall post .nd keep posted copies of this Cod
in conspicuous -*laces accessible to all employees. Every member of the in-
dustries shall comply with all rules and regulations relative to the posting
of provisions of Cones of Fair Competition which mry from time to time be
prescribed byr the Administrator.

ARTICLE VI

Or'-anization, Powers and Duties of Code Authorities.

Part A Organizntion and Constitution.

Section 1. Immediately upon the approval by the Arlministrator of an
application, pursuant to Article I, Section 1, of the Code, a Code Authority
shall be constituted for the applicant grocery manufacturing industry.

Section 2. Each such Code Authority shall consist of the number of mem-
bers specified in the application for this Code by the industry for which it
is to be constituted; and the members shall be grocery manufacturers engaged


9630


M




-41-


in such industry and shall be selected in the following manner:

(a) withinn fifteen (15) days after the approval of such application the
applicant trade association or group shall institute an election of the members
of the Code Authority for such industry. If candidates are nominated by such
trade association or group, due consideration shall be given to the proportion
of grocery manufacturers who are members and who are non-members of the trade
association or group. Members so elected shall hold office for one (1) year
or until their successors are elected as hereinafter provided. Vacancies in
membership of a Code Authority shall be filled for unexpired terms by the re-
maining members of such Code Authority subject to the approval of the Adminis-
trator.

Each grocery manufacturer engaged in such industry shall be entitled to
one (1) vote for each member to be elected to the Code Authority, and may cast
all votes for one person. At each election the voting may be in person, by
proxy, or by letter.

(c) Any grocery manufacturing industry subject to the provisions of this
Code may, under such rules and regulations as the Administrator shall pres-
cribe, change the method of selection of its Code Authority as provided for in
this Section, and such modified method of selection shall be followed in all
subsequent elections for the Code Authority of such industry.

Section 3. In addition to membership as above provided there may be on
each individual CoC.e Authority from one (1) to three (3) members, without vote,
to be known as Administration Iembers to be appointed by the Administrator to
serve for such terms as he may specify without expense to the industry.

Section 4. Each trade or industrial association or group directly or in-
directly participating in the selection or activities of any Code Authority
shall (1) impose no inequitable restrictions on membership, and (2) submit to
the Administrator true copies of its articles of association, by-laws, regu-
lations, and any amendments wnen made thereto, together with such other in-
formation as to membership, organization, and activities as the Administrators
may deem necessary to effectuate the purposes of the Act.

Section 5. In order that each Code Authority shall at all times be truly
representative of its individual 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 in
question is not truly representative or does not in other respects comply with
the provisions of the Act, may require an appropriate modification of such
Code Authority.

Section 6. Nothing contained in this Code shall constitute the members of
any Code Authority, herein provided for, partners for any purpose, nor shall
any member of any such Code Authority be liable in any manner to anyone for
any act of any other member, officer, agent or employee of such Code Authority.
Nor shall any member of such Code Authority, exercising-reasonable diligence
in the conduct of his duties hereunder, be liable to anyone for any action or
omission to act under this Code, except for his own wilful malfeasance or non-
feasance.


9630






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Section 7. In adQitLorn to th,. i ".iivC..r industry, Code Authorities pro-
vic.d fer in Section 1 of tnis a-tirle, there shall be constituted a National
Food and Groccry i'-Tiufactaring: r-.':r:, r-.H. c.nzistjng of one mcmbcr to be
SL l1ctid by ,rLch individual ind-istry Cde Authority from its industry. In
addition to the membership as -ibcvL provided, the Administrator may apooint
not more than five (5) members withoutt vote to scrve for such time as he may
specify.

(2) The Nationl -od ,oud and Grocery i.i"nufTicturing Advisory Board shall be
an advisory olaanning and coordinating ajency rrithin the rieaning of the Act for
all grocery raanufncturing industri.-s to which all common matters may be re-
ferr-d for advice.

(b) The Nationl Food and Grocery MLnufacturing Advisory Board shall
appoint a represLntative or re-prc sntativLS to serve on a Food and Grocery
Industry Conference Committee to be composed of representatives from food and
grocery wholesalers, retailers, and manufacturers. The Food and Grocery In-
dustry Conference Comnittee I'a" act as planningg and coordinating agency with-
in the moaning of the Act for the Lntire food and grocery trade.

actionn 8. If the Administrator shill at anv time determine that any
action of anr individual Coie Authority or any agency thereof or of the
Advisory Board may be unfir or unjust or contrary to the public interest, the
Administrator nay rcouire tnat such action be suspended to afford an opportunity
for investigation of the merits of such action rnd further consideration by
such Code Authority or agency or Advisory Board pending final action which
shall not be effective unless the Administrator approves or unless he shall
fail to disapprove after thirty (30) days' notice to him of intention to pro-
ceed with such action in its original or modified form.

Pprt B Powers and Dltics

Section 1. Subj ct to such rules and regulations as may be issued by the
Administrator, uachi Code Authority as provided for herein shall have the follow
ing powers and duties rith resopct to the grocery manufacturing industry select
ing it in addition to those authorized by other provisions of this Code.

(a) To insure the execution of the provisions of this Code and to pro-
vide for the compliance of the industry with the provisions of the Act.

,b) To ndopt by-la'ws and rules and regulatiDns for its procedure.

(c) To obtain from grocery manufacturers such information and reports as
are required for the administration of the Code. In addition to information
required to be submitted to thu CoCe Authority, grocery manufacturers shall
furnish such statistical information as the Administrp.tor may deem necessary
for the ournosos recited in Section 3 (a) of the Act to such Federal and State
agencies .s he nay designate; -rovided that nothing in this Code shall relieve
any grocery manufacturer of any e-:isting obligations to furnish reports to any
Government agency. No individual report shall be disclosed to any other grocer
manufacturer or any other party excet to such other Governmental agencies as
may be directLi by, the Administrator.

(d) To use such trade associations and other agencies as it deems proper

9630


p
a






-43-


for the carrying out of any of its activities provided for herein, provided
that nothing herein shall relieve the Code Authority of its duties or re-
sponsibilities under this Code nnd that such trade associations and agencies
shall at all times be subject to and comply with the provisions hereof,.

(e) To make recommendations to the Adi.iinistrator nd the Uational
Grocery Manufacturers Advisory Board for the Coordina.tion of the administra-
tion of this Code and such othor codts, if any, as may Dc related to or affect
members of the industries.

(f) 1. It being found necessary in order to support the administration
of this Code and to maintain the standards of fair competition established
hereunder and to effectuate the policy of the Act, each such Code Authority is
authorized:

(a) 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 hereinfter provided ind which shall be held in trust for
the purposes of the Code;

(b) To submit to the Administrator for his approval, subject to such notice
and opportunity to be heard as he nay deem necessary (1) an itemized
budget of its estimated expenses for the foregoing purposes, and (2) an
equitable basis upon %v-Iich the funds necessary to support such budget
shall be contributed by grocery manufacturers;

(c) After such budget and basis of contribution have been approved by the Ad-
ministrator, to determine and obtain equitable contribution as above set
forth by .all grocery manufacturers, and to that end, if necessary9 to in-
stitute ltgal proceedings therefore in its own name,

2. Each grocery manufacturer shall pay his or its equitable contribution
to the expenses of the maintenance of its individual Code Authority, determin-
ed as hereinabove provided, and subject to rules and regulations pertaining
thereto issued by the Adlministritor. Only grocery manufacturers complying
with the Code and contributing to the expenses of its administration as here-
inabove provided (unless duly exempted from making such contributions) shall
be entitled to participate in the selection if 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 cf the National Recovery Administration.

3. Each Code Authority shall neither incur nor pay any obligation sub-
stantially in excess of the amount thereof as estimated in its approved budget,
and shall in no cvent exceed the total amount contained in the approved budget,
except upon approval of the Administrator; and no subsequent budget shall con-
tain any deficiency item fir expenditures in excess of Drior budget estimates
except those which the Administrator shall hav-o.so-approved,

(g) To delegate to the National Food and Grocery Manufacturing Advisory
Board any or all of its cowers and duties under this Code as now constituted
or hereafter amended.

(h) To recommend to the Administrator any action or measure deemed ad-
visable including further fair trade practice provisions to govern its grocery

--0--------A----------7n----__ _




I


-44-


manufacturers in relation with each other or with other industries; measures
for industrial planning and stabilization of employment, and including .
modifications of this'Code pertaining to its particular grocery manufactur-
ing industry which shall become effective as pnrt hereof upon approval by the
Administrator after such notice and hearing as he may specify.

ARTICLE VII

Unfair Methods 6f Competition

Section 1. Ooen Price. (a) No grocery manufacturer shall offer to sell
-contract to sell, or sell (e::cent pursuant to a mutually irrevocable contract
to sell not in violation oI this Code when entered into) any product to a
trade buyer except upon the basis of an open price which is strictly adhered
to..while effective. The term "open price" as used in this Section means a
-pric? list (a) which is published or available for the equal information of
all trade buyers (actual and solicited) alike locked in the same competitive
market area, and (b) which declares all the manufacturer's orevailing prices,
and discounts, rebates, allowances, and all other terms or conditions for the
sale of such product.

S(.b) 1 o grocery manufacturer shall make or permit to be made any direct
or indiredt price concession to a trade buyer. The term "direct or indirect
price concession" means any variation from the manufacturers open pries,
whether by means of a rebate, allowance, payment, free deal, gift, brokerage
or by any other means whatsoever,

(c) This Section shall not apply to sales of commodities customarily
solar. in bulk or a bid-and-asked basis in open competitive, buying;. not tO sales
for charitable or relief purposes.' .: .

Section 2, Unearned Service Pymnent, No grocery manufacturer shall
designate as an "advertising allowance", a "promotion allowance" or by a
similar term, any price reduction, discount, bonus, rebate, concession, or
other form'of allowance, or any consideration for advertising or.,promotion
services offered or given by him to aiy customer.

No grocery manufacturer shall offer or give any consideration merely for
"pushing", "advertising", or otherwise than for definite and specifip adrer-
tising 'r promotion services. Such consideration shall be given only pursuant
to a separate written contract therefore, which contract shall specifically ani
completely set forth the advertising or promotion services (in such manner
that their specific character may be understood by other members of the in-
dustry and their customers) to be performed by the recipient of said con-
sideration, the precise consideration to be paid or given therefore by said
manufacturer, the method of determining performance, and all other terms and
conditions relating thereto.

No grocery manufacturer shall offer or give any such consideration unless
it is equally available for the same service to all competitive buyers in the
same competitive market, and unless a copy of the written contract therefore is
retained on file for a period of sixty (60) days ifter the expiration thereof
and in no event for less than one (1) year. In order to investigate an alleg-
ed violation of this Code, the Administrator may require a grocery manufactureA


9630




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to report any such contract made by him and/or to produce a copy thereof for
inspection.

Section 3. Destructive Price Cutting. Wilfully destructive price
cutting is an unfair method of competition and is forbidden. Any grocery
manufacturer or member of any other industry or the customers of either may
at any time complain to the ap-oropriate Code Authority that any published
price constitutes unfair competition as destructive price cutting imuoeriling
small enterprises or tending toward monopoly or the impairment of code wages
and working conditions. Such Code Authority shall within five (5) days afford
an opportunity to the manufacturer publishing the price to answer such com-
plaint'and shall within fourteen (14) days nake a ruling or adjustment there-
on. If such ruling is not concurred in by other party to the complaint, all
papers shall be referred to the Research and Planning Division of NRA which
shall render a report and recommendation thereon to the Administrator.

Section 4. ftanntity Price. No grocery manufacturer shall offer or make
a quantity price unless it is based upon and reasonable measured by a saving
resulting from a substantial difference in the quantity sold and delivered.

Section 5. Unearned Discount for Cash. No grocery manufacturer shall
allow a discount for cash which is not earned by payment in accordance with
the cash discount terms specified in his open price list.

Section 6. Payment or Diversion of Brokerage. No grocery manufacturer
shall pay or permit to be paid a brokerage or commission to a trade buyer.
!
Section 7. Fraudulent Prizes or Premiums. lNo grocery manufacturer shall
offer or give prizus, premiums, or anything of value by any of the following
methods:

(a) In ways -'L}ich involve lottery in any form, the term "lottery" as used
herein including bujt without limitation, any plan or arrangement whereby the
premium offered involves the element of chance and/or differs substantially
and inequitable in value from buyer and buyer of the same quantity and/or
distribution class;

(b) In ways which involve misrepresentation or fraud or deception in any
form, including, but without limitation, the word "free", "gift", "gratuity"
or language of similar import in connection with the giving of premiums for
the purpose or with the effect of misleading cr deceiving buyers;

(c) By giving premiums to any buyers when such premiums are not offered
to all customers of the same class in the trade area.

Section 8. Unfair Substitution. No grocery manufacturer shall substitute
without due notice and consent of a trade buyer another product for that order-
ed from him.

Section 9. Commercial Bribery. No grocery manufacturer shall give,
permit to be given, or directly offer to give, anything of value for the pur-
pose of influencing or rewarding the action of any employee, agent, or rep-
resentative of another in relation to the business of the employer of such


9630





-46-


Um)loyec, the orinci)pal of such afu.oLt or t.c ruprcsntcd p-nrty, without the
LD~~~lO~CL,~ -0 tc V.twihu h
knowledge of such :.loy)r, )rilnci.Pl, or -z'.rty. This provision shall not
be cJnstru~d or ,rohibit free and 'enrr.-l distribution of articles commonly
used for advertising L::ceot so for 7.s such articles are actually used for
commercial bribery as hereinabove defined.

Section 10. F-ilsdz Label or AdvertiscnMLnt en Ccntainer. No grocery manu-
facturer (a) hall :ell a Product flscly or deceptively labeled or marked;
or (b) falcl:- or deceitivoly advertise a product; or (c) use a deceptive
container or giv,. short -vcight or ?icr.sure or count,

Section 11. Unfair Intcrf-renrce with Comoetitors' Business. No grocery
manufacturer shall unfairly interfere vrith a competitor's business, by utter-
ing false statenrnts about his business or by unfairly disparaging his busineg
or products or by inducing a breach of his contracts.

ARTICLE VIII

I[odification

Section 1. This Code and all the provisions thereof are expressly made
subject to the richt of the President, in accordance with the provisions of
subsection (b) of Section 10 of the Act, from time to time to cancel or modify
any order, aD)rov?.l, license, rule, or regulation issued under Title I of
sr.id Act.

Si-ction 2. Such of the. rovisi-.ns of this Code as are not required to
be included herein by the Act may, with the approval of the Administrator,
be modified or eliminated in such manner as may be indicated by the needs of
the public, b7 ch-in.:zs in circumstances, or be e.'-perience.

ARTICLE IX

Monopolies

No provision of this Code shall be so applied ns to permit monopolies or
monopolistic practices, or to eliminate, oppress, or discriminate against
small enter-riscs.

ARTICLE X

None nf the provisions of this Code relating to prices or terms of selling
shiponing, or marketing shall apply to export trnde or series or shipments for
export trade. "Ex'-ort Trade" shall be defined ".s sales or shipments outside
of the continental United States.


9630


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APPENDIX VIII.

June 9, 1934.

TO: THE ADIINISTAATOR

FROM: 1RA ADVISORY COUNCIL

SUBJECT: BASIC CODE


The Advisory Council unanimously approves your proposal for the speedy
codificr.tion of industry, if adjusted to care for the following specific
recommendations:

1. That the proposed plan shall not apply (a) to certain in-
dustries to be designated by the Administrator (or the
Advisory Council) whosa codes are nearing completion; and
(b) to certain few major industries as yet uncodified whose
importance warrants the preparation of individual codes in
accordance with existing -orocedure, such major industries
to be designated by the Administrator (or the Advisory
Council).

2. That industries as yet uncodified and not covered above
be encouraged to consolidate with kindred industries,
thereby coming under the complete provisions of some
existing approved code. The determination of the proper
:indred industry shall be by the Administrator.

3. That all other industries now uncodified and not dealt
with by the above provisions be urged to adopt the Basic
Code. The provisions of the proposed Basic Code be moii-
fied as follows:

A. That no flat declaration of hours and wages be
made, but that the hours ani wages for any in-
dustry applying for the Basic Code be those
already approved for kindred industries, the
Administrator to determine the proper kindred.
industry. The provisions of the kindred in-
dustry code shall also apply with regard to
daily and weekly maximum hours, permissible
overtime and overtime wages.

B. That the additional labor provisions set forth
in Exhibit "A" hereto annexed, and now recognized
as standard provisions, shall be included in the
Basic Code.

4. That there be clarification and em-ohasis to avoid possible
false impression (received by all members of the Industrial
Advisory Board) on the following -ooints:


9630





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A. Thrt this ,love corte'..-l:,'.tes surely vouimttry action
fro,.i incu.strinfs, 'itL the Dossible exce.,tion of im-
io: tnt exceptional in:.ustrik s, if an-r, -rhich fail
to aponly a-.c ere fo'.mnd to have sub:te-:,ird rorkinr
conditions;

3. That this is not P. -ove to force all remaining in-
lustries under codes;

C. That tne service code :iove is entirely separate and
re -*-ins unchanged;

D. That the -ur-uose of this move is to -rrovide a simple
;-eans of Lvir.F& n code forth'-.ith to those remaining
industries who desii-e a code, so as to clear the deck
for adrninistr:ition of a-noroved codes.

MRA ADVISORY COTTCIL

Per Willard L. Thorp





































_____________________. _ _____I


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APPENDIX IX


August 6, 1934


Col. G. A. Lynch

Robert K. Straus


Completion of Code Making


'In accordance with your request for information as to thp
progress of the drive to complete code making by August 10, I beg to
submit the following tabulation:


*d
r-rd ,r 1 or
I H- 0 Qi F0 c o r-n p ;-
S-c o H! H ( 0 P + r0 P
t> r- oi n 0 -.-i I r- -,.> o h $* -1 PL( d ( 0-
rd H 0) Id q. HH $ -& rd rd rd 5 1O4
1o. o0 o)- ,0 4" rd *"H 0 4 H Q) 0)
M d3 0 0 (D '-, ( -'-l a) C (1) 0) U) r -1 Vu ai) 0 .)< -r-i cn o rcd Uj U rd Q1
0 r'! r-I r COp-1 sz: r-1 to P4 +-i -1 -r- r o ^ i F; 3 !;--
o ^El H r d 'r-1 4H Ui 'r 0 ! tj iP, rd u r C141^ r
.r- H +- r 43 4' .-P H 4-J Ui s:M 0 -P 0O -0 rd
P.^ ou2 cn o 0 H Q -, O* -I.- W rdH ( 0 rr rP >.- H
r-i -r-1 a)? f 'l? D ? 0 ;4 r o r-i .J -1, rLJ r-q rd rdJ ( T ) H r I 'd
I d i-l H U H 'd i %,D 4-D r__ Lrd
0)0-HO 4) ru d0Cc94C i
H 0 d ,o i ; 0 o o0 o W C. a o o 0 (1) o 0 o
D- o 1> rd I e A u g d


23

1




4




59

,0


0

0

1

0

2

0

0


Cl

0


4

3

2

59 2

0


32

14

17 1

86

7


4 4 44 !4 I I- I 4 4


97


216


i/ In this Division there are 23 Service Codes in addition, which will be
hrendled under Executive Orders

2/ Of comment on Division Report annexed


9630


To:


From:


Subject:


Ii
11


18

3

7

21

2


II

III

IV

V

VI

VII


Total.




SE


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You will note that 119 codes will be disposed of by August 10. A balance
'of 97 coC.es will be left on that date. Of these 97 no action has been taken
of '32 in Division I r-enCi.i the return of the Administrator. This groun in-
clu-es Anthracite, Shion-ing and Public Utility codes. In addition, no deci-
sion hais been reached on 59 codes 1'rhich are charged to Division VI. In every
one of these cases a letter has been sent to the Industry enclosing a copy
of ACjiinistrative Order X-61, but in most of these cases, the industries
have not re-lied. In the fe- cases where they have replied, they have in-
dicated tha-t they will not a-only for codification under X-61 since they can-
not secure trade -ractice '.rovisionu at the same time from the AAA. I have
instructed Livision VI to warn all of these industries that if they do not
apply uf-C'er X-61 for codification byf Au.-ust 10, it may be necessar-' to in-
vestigate labor conditions in these industries with an eye to imposing a
code under Paragraph 3-D of N1IA. I have had several conversations '7ith
officials of the Deoartment of Agriculture, including Under-Secretary Tugrell,
and I have told them that this will probably be necessary. They do not
object to our going ahead on this basis, and indeed, they added that they
see no reason why, an industry should expect to receive trade practice provi-
sions at the sane time as they receive labor provisions. I do not recomraend,
however, that action be taken immediately on Auigust 10 with reference to
these industries in Division VI. It would seem to me preferable that the
Administrator should make a statement, after conference with the Secretary
of AQTiculture, giving these industries some twenty days more (up to
September 1) in which to apply under X-61, but warning them that if they
have not applied by September 1, investigation of labor conditions in these
industries r-ill start immediately.

If vie except the 81 codes which have been held up because of the special
situations described above which exist with reference to them, alnd. if we
except the 23 codes which have been transferred to Division V as Service
Codes, acdL to which the Executive Orders apply, some 18 industries only will
be left on Au-,ist 10 which must be codified. These will be reduced, I aui
sure, ,i'-thin a fe'- days after Aujust 1C.

At t.-.is --oint I wish to call attention to the situation which exists
with r-eference to sup-onlemental codes. Code Record reported on August 3 that
141 sun-)le. ental codes awaiting approval. In my judgment, it was not the
Adminristratorts intention to include these in the drive to complete code
making. These industries are already codified in that they are operating
under lebor provisionss of basic codes. If the Administrator wished to cease
approving supnlenental codes as of August 10, he could do so without in-
flictin-: any injury on labor since the employees of these industries are
already thoroughly protected under codes.

I would like to call attention to the status of Division II. As of
August 10, it will have only one code awaiting disposition, and it is
probable that this industry will be a candidate for a prescribed code, since
it has been unwilling to come to an agreement. I think that much credit is
due ir. Neal Foster for this excellent record. The efficiency and thorough-
ness with which h he has cooperated with me in this drive to complete code
making hc.s indeed been gratifying.

Robert K. Straus, Chairman,
Committee on the Completion
of Code Making.


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APPENDIX X.


Tentative Outline

A. BASIC CODE (x-61)


I. CODE-MAKING AS FIRST PHASE OF NRA
A. Period of intense activity
B. The Code-making process
1, Authority
2. Objectives
(a) Industry urged to take initiative
(b) Major Industries givrn first attention
3. Procedure
(a) NRA Bulletin #2 (Basic Codes of Fair Competition)
C. Industry s-onsored 3 (a) Codes
1. Number submitted and approved to 7/1/34
(a) Major Industries (over 50,000 employees)
(b) Minor Industries (less than 50,COO employees)
(c) Service Trades
2. Number pending as of 7/1/34
D. Agreements under 4 (a)
1. Promulgation of PRA
(a) Effect on Code-making
E. Imposed Codes
1. Powers of President under 3 (d) and 7 (c)
2. Extent used
(a) Imposed Code Amendments
(C) Cotton Garment (36 Hour maximum r"ork week)
(2) Other inztrnc.es

II. FACTORS LEADING TO CHANGE IN POLICY
A. Code-making problems
B. Most of industry codified
1. Small groups left mainly
C. Need for concentration on other problems
1. Administration of approved codes
2. Clamor for compliance and enforcement

III. PLAN FOR COMPLETION OF CODE-MAKING
A. General Theory
1. Expeditious method of codifying remaining uncodified trades
and industries desiring Codes
2. Free IRA from initial codification of industries for adminis-
tration of apDroved codes
3. Relieve smaller industries of expenditure of timp and money
involved in the adoption and administration of an individual
Code.
B. Steps tpken to carry out plan.
1. Administrative )rder No. X-6l
2. X-62
3. X-63


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4. Office Order No. 100
5. Administrative Order Yo. X-84
C. Application
1. Industries excepted
D. Optional methods of codification available
1. By application for the basic Code
2. By apnliction for consolidation rith approved code for
kindred trade or industry
E. Tine limitation on apolications
F. Procedure for handling applications
1. Truly representative body of the trade or industry must
aprly
2. Notice and hearing
C. Approval of applications
(a) Industries employing less than 50,000 persons
(b) All other trades or industries
4. Committee for completion of code-making
(a) Functions
(i) Supervise execution of plan

IV. ADMINISTRATION OF PLAN
A. General IRA Codp Authority
1. Members and how appointed
2. Powers and duties
3. Use for purposes other than administration of basic code.
(a) Cotton Garment Industry Code
(b) Retail Solid Fuel Code
(c) Other codes
4. Questioned legality of functions

V. ACTUAL OPERATION OF PLAN
A. Nuunber of Aprlicntions for Basic C)de
1. Those ap-roved and disapproved
B. Thumber of Applications for Consolidation
1. Those approved and disapproved
2. One joint AAA-IRA Code consolidation
(a) Terminal Grain Elevator Industry placed under Grain
Exchanges Code
C. Deviations and Miodifications Desired by Industry
D. Code-making Continued

VI. DEPARTURE FROM PLAN
A. Administrative Order No. X-89 (Basic Code for Grocery Manu-
facturing Industries)
1. Main purposes:
(a) To facilitate the program outlined in Administrative
Order No. X-61
(b) To bring dif erent industries engaged in manufacture of
food and grocery products, to greatest extent possible,
under comparable code provisions


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VII. CONCLUSIONS
A. Did Plan Accomplish the Desired Objectivps?
B. Was Plan Practical?
C. Would Better Results Have Followed Earlier Adoption of Plan?
D. Was Type of Dotice Used Sufficient?
E. Did the Act Contemplate that Groups Could be Codified in
Such Manner?
F. Delegation and Redelegation of Power.





























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UNIVERSITY OF FLORIDA
32IIIIIIIi42i3 l3
3 1262 08542 5303