Code of fair competition for the private home study school industry as approved on May 31, 1934


Material Information

Code of fair competition for the private home study school industry as approved on May 31, 1934
Portion of title:
Private home study school industry
Physical Description:
p. 45-60 : ; 24 cm.
United States -- National Recovery Administration
U.S. Government Printing Office
Place of Publication:
Washington, D.C
Publication Date:


Subjects / Keywords:
Home schooling -- Law and legislation -- United States   ( lcsh )
federal government publication   ( marcgt )
non-fiction   ( marcgt )


Additional Physical Form:
Also available in electronic format.
General Note:
Cover title.
General Note:
At head of title: National Recovery Administration.
General Note:
"Registry No. 1717-07."
General Note:
"Approved Code No. 447."

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 027228724
oclc - 645512066
System ID:

Full Text

Approved Code No. 447 Registry No. 1717-07








For sale by the Superintendent of Documents, Washington, D.C. .--- .- - Prict 5 c DnW

Approved Code No. 447

Registry No. 1717-07

This publication is for sale by the Superintendent of Documents, Government
Priniting Office, Washington, D.I.'., aunl by district offi-es of the. Bureau of Foreign
and Domestic Commnllrc.e.

Atlanta, Ga.: 504 Post Office Building
Birmingham, Ala.: 257 Federal Building.
Bostou, Mass.: 1S01 Customhouse.
Buffalo, N.Y.: Chamber of Commerce Building.
Charleston, S.C.: Chamber of Commerce Building.
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Dallas, Tes.: Chambler of Commerce Building.
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Indianapolis, Ind.: Chamber of Commerce Building.
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Kansas City, Mo.: 1028 Baltimore Avenue.
Los Angeles,. Calit'.: 1163 South Broadway.
Louisville, Ky.: 40S Federal Building.
Memphis, Tenn.: 229 Federal Building.
Minieapolis, Miinu.: 213 Federal Building.
New Orleans, La.: Roomn 225-A, Customhouse.
New York. N.Y.: 734 Customhouse.
Norfolk. Va.: 4I0( Eavt Plume Street.
Philadelphia. Pa.: 422 Commercial Trust Building.
Pittsburgh, Pa.: Chamher of Commerce Building.
Portland, Or(eg.: 215 New Post Office Building.
St. Louis, Mo.: 506 Olive Street.
San Franeisco, Calif.: 310 Customhouse.
Seattle, Wash. : 809 Federal Office Building.

Approved Code No. 447



As Approved on May 31, 1934


An application having been duly made, pursuant to and in full
compliance with the provisions of Title I of the National Indlustrial
Recovery Act, approved June 16, 1933, for approval of a Code of
Fair Competition for the Private Home Study School Industry, and
Hearings having been duly held thereon, and the annexed report
of said Code, containing findings with respect thereto, having been
made and directed to the President:
NOW, THEREFORE, on behalf of the President of the United
States, I, Hugh S. Johnson Administrator for Industrial Recovery,
pursuant to authority vested in me by Executive Orders of the Presi-
dent including Executive Order No. 6543-A, dated December 30
1933, and otherwise; do hereby incorporate by reference said annexed
report and do find that said Code complies in all respects with the
pertinent provisions and will promote the policy and purpose of
said Title of said Act; and do hereby order that said Code of Fair
Competition be and it is hereby approved.
Administrator for Industrial Recovery.
Approval recommended:
H. 0. KING,
Division Administrator.
May 31, 1934.

64004- 6157-2--34



The -1'hitc House.
Sm: This is a report on the hearing on the Code of Fair Compe-
tition for the Private Home Study School Industry, held in the
Department of Commerce Building on March '28, 1934. The Code
which is attached was presented by duly qualified and authorized
representatives of the Industry, complying with statutory require-
ments and claiming to represent seventy (70) per cent by volume
of the Industry.
In accordance with the customary procedure every person who had
filed a request for an appearance was freely heard in public; and
regulatory requirements were complied with.


The Industry comprises alxbut 196 schools having a capital in-
vestment of approximately $5,000,000 and instructing 500,000 stu-
dents annually. In 1929 there were 437 schools. Sales volume has
fallen from $32,000,000 in 1929 to $15,750,000 in 1933, and the num-
)ber of employees in the Industry has dropped from 4,SO0 in 1929 to
about 2,400 at present. A large. per cent of the drop in sales volume
and employment can be laid to the fact that 241 firms have gone out
of business since 1929.
There are two main divisions of the Industry-(1) those schools
which furnish merely a reading course in the subjects covered, and
(2) those schools which correct examination papers submitted by
students in conjunction with the courses of study.


The Code provides a basic work week of 40 hours. The only avail-
able statistics are meager and show that only seven per cent of the
lIdployees in the Industry are working more than 40 hours per week,
and it would appear that very little reemployment will be accom-
plished by this Code. However, these statistics were compiled for
the im-nth of August, 1933, when many employers had already re-
duced the -wor, weil of their employees to 40 hours under the Presi-
dent's Reemplyinent. Agreement.
The Indii.i-try -t renuously opposed the adoption of a 36 hour week,
:imi.l co,,iid,,-d that mire complete statistics would show that the 40
hour wvek will cause cnsi(hderable reemployment. Therefore, the
Code lirvidles that the Code Authority shall collect, such statistical
inforiiitii n as may be requir-,1 by the Administrator and that on
the basis of such iiiformiation the Administrator may revise the pro-
visionts of the Code relating to hours of labor.

A basic minimum wage rate of fourteen dollars ($14.00) per
week is provided. Since approximately thirty per cent of tlje mem-
bers of the Industry have been paying a minimum rate below $14.00
per week, the Code should provide some increase in payrolls.
Because this Industry Ias a direct effect upon the coln,,mer in that
its courses of study appeal to the desire of the norinal person to
improve his economic, status in life, the trade practice 1r,,'isi-ms of
the Code are of extreme importance. Any practice,; in the Industry
which tend to lower its ethical and educational plane can be of great
harm. It is felt that this Code will do much to raise the standardss of
the Industry.
The Code includes a brad trade practice rule prihliliting all false
representation; and in addition such types of mi-replresentation as
have specifically harrassed the Industry in the p:i-t are eliminatedl.
In orler to make this rule equally effective against schools employ-
ing salesmen and schools which contact their prospects solely by mail,
a clause is provided which raises a legal presumption that acts done
in violation of the Code by salesmen are done within the scone of
the authority of such salesmen and done with the knowledge and
consent of their employers.
At the hearing much controversial evidence was introduced on the
subject of the giving of premiums, money-back agreements, and
guarantees of jobs to students. When abused, these practices, tend
to have a bad effect, on the prestige of the Industry, yet legitimate
use of them is made by many schools. The Code Authority is in-
structed to study these questions and present to the Adminitrator its
recommendations for methods to control the abuses without thereby
causing undue hardship.
The Code Authority is instructed to make a study' with a view to
setting up basic educational standards to be proposed as amend-
ments to the Code.
The Deputy Administrator in his final report to me on said Code
having found as herein set forth and on the basis of all the proceed-
ings in this matter;
I find that:
(a) Said Code is well designed to promote the policies and pur-
poses of Title I of the National Industrial Recovery Act. including
removal of obstructions to the free flow of inter-state and foreign
commerce which tend to diminish the amount thereof and] will pro-
vide for the general welfare by promoting the organization of indus-
try for the purpose of cooperative action among the trade groups,
by inducing and maintaining united action of labor and management
under adequate governmental sanctions and supervision, by eliminat-
ing unfair competitive practice, by promoting the fullest possible
utilization of the present production capacity of Industries,-by avoid-
ing undue restriction of production (except as may be temporarily
required), by increasing the consumption of industrial and agricul-
tural products through increasing purchasing power, by reducing
and relieving unemployment, by improving standards of labor, and
by otherwise rehabilitating industry.

(b) Saidl industry norm-ially employs not more than 50,000 em-
ployees; and is not classified by me as a major industry.
(c) The Code as approved complies in all respects with the perti-
neivt pi\i-iioins of said Title of said Act, including without liminita-
tion Sii,-,.ction (a) of Section 3, Subsection (a) of Section 7, and
Siiiso tion (b) of Section 10 thereof; and that the applicant group
is an industrial g.' and that said group imposes no inequitable restrictions on admission
to memnberhlip t i'vin.
(d) The Code is not designdtl to and will not permit monopolies
or monopolistic practices.
(e) The Code is not d(-Uigned to and will not eliminate or oppress
si1,0ll enterprises and will not operate to discriminate against them.
(f) Those endaged in other steps of the economic process have not
been dt-prived of the right to be heard prior to approval of said Code.
For these reasons, this Code of Fair Competition for the Private
Hiin1P Study School Industry has been approved.
AdIr n iist)-(aor.
M.\ 31, 1934.


AirricL I-PuI'trosrs
To effect the policies of Title I (if the National Industrial Recovery
Act, the following provisions are established as a Code of Fair
Competition for the Private Home Studly School Industry, and shall
be the standard of fair cilpetitin for such Industry and shall
be binding upon every member thereof.

SECTION 1. The trm Privatc Home Sltuly School Industry"
as usedl herein shall mean the Industry each member of which is
engaged in (1) the Jublication and or sale of pamphlets, books, or
other educational textual materials advertised or offered to the gen-
eral public as courses of ,study and primarily intended to be sold
directly to the general public and not to wholesalers, retailers, or
other distributors; and or (2) the publishing and or sale of
pamphlets, books, or other edui' national textual materials advertised
or offered to the general public as courses of study and including
instructional services rendered to the purchaser, such as correcting
and grading written reactions in the form of discussions, solutions o
problems, or drawings, submitted by s.aid purehaier for the purpose
of testing his m;-stery of said courses of study, where the contact
between the nmeniher of the Industry and the purchaser is primarily
maintained by mail or other mineth'od of distant communi, ation; and
shall mean such related branches andl gibdivisions of such Industry
as may from time to time be included under the provisions of this
Code by3 the President after such notice nnd hearing as he may
SECTION 2. The term "" mimlilr of the Indutry as used herein
includes, but without limitatiin, ariny individual, partnership, asso-
ciation, corporation or other form of enterprise engaged in the
Industry, either as an employer or on his or its own behalf.
SECTION 3. The termn "employee as used herein shall mean any
and all persons engaged in the Industry, however compensated,
except a member of the Indust-ry.
SECTION, 4. The term employer as used herein includes anyone
by whom such employee is compensated or employed.
SECTION 5. The terms President ", "Act". and "Administrator"
as used herein shall mean respectively, the President of the United
States. Title I of the National Industrial Recovery Act, and the
Administrator for Industrial Recovery.
SECTION 6. The term Executive" as used herein shall mean an
employee responsible for the management of a business or a recog-
nized subdivision thereof.
SECTION 7. The term outside salesman as used herein shall
mean a salesman who is engaged not less than sixty (60) per cent of

his working hours outside of the establishment, or any branch
thereof, by which hlie is employed.
SECTI IN 8. FThe teim in st ruetor" as used herein shall mean an
employee who is engaged not less than sixty (60) per cent. of his
working e iour in giving to students initructtonal services requiring
the exercise of (di.'retion, judgment, teaching ability, and knowledge
Of the 'ouIr.,e of ,tu(ldy under consideration, and shall include, but
without limitation, persons who c)omtpose( courses of study or revisions
thereof; Ibut shall not include per.sos engaged in mechanical check-
ing of exanminationls, quizzes, or either reactions submitted by students,
or coImparig thu hesaanie with model answers, or other work not
requiring the exercise of divcrdtion, judgment, teaching ability and
knowledge of the course of study under consideration.
SEC('TON 9. The term I service school as used herein shall mean a
school the principal part of the curriculinim of which consists of a
coMr,,e (or cotlrses of studly which inluclide the correction and grading
by the schoo.,l of written reactions sulimitted by students to test. said
students' mas.tery of tihe subject.
SEUI'mN 10. The term non-service school as used herein shall
mean a school the principal part of the curricuilumn of which con-
sists of a course or courses of study which include merely the privi-
lege of the student to ask questions thereon, or which do not include
any instructional or advisory servi.-e t(o the student at all.

SECTION 1. No employvt-e, except as provided in Section 2 of this
Article, shall be permitted to work in excess of forty (40) hours in
any one week, nor more than six (6) day's in any consecutive seven
(7) days' period; nor more than eight (8) hours in any twenty-
four (24) ihour period beginningg at. mlidniglit) except that any
employee may bht. permitted to work in aco.'N)rdance with either one
but not both, of the following schedules:
(a) On any one of his working days in any week, he may be
permitted to work nine (9) hours, or
(b On tany two of his working days in any week he may be
perinitted t. work eight alnd] one-half (.!2) hours.
Provided, however, that each employee shall be paid at the rate
of at least time and one-half (112) for all hours worked in excess
of eighlit (S' in any one day, and provided further that the weekly
lirnit:,tion of forty hours shall not thereby be exceeded.
SE' rII N 2. rlI provivions of Section 1 of this Article shall not
ally to executives or instructors who regularly receive thirty-five
dollars ($35) or more p1r week; nor to outside salesmen; nor to
empllovees engage d iln emertncy maintenance or emergency repair
work invol-ing breakdlowtns aind the protection of life or property,
providled that .-.u:i t'li1"Nlergllncy maintenance and repair employees
sliall lbe paid at tlhe rate (if at least time and one-half (112) for all
homiis worked by them in exi'.-s of forty (40) in any one week.
A re.lirt of each such energetncy .lnall be mailed within three days
theri-after to the Code Aut litrity, giving such details as the Code
Athorlity may prescribe.
SECTION 3. No emplliyer shliall knowingly permit any eml)loyee
to work for any time which when totalled with that already per-

formed with another enilplohver or employers in this or any other
industry or trade exceeds thle m.'axima pernmitted lierein.
SECTION 4. 'The provisions of this Article with respect to hours
of tabor are subject to change by the Adnministrator on the basis
of employment statistics to lie conmpild by the Code Authority in
accordance iw ith Article VI, Section 7 (j) of this Code.

SECTION 1. No employee except outside salel .i'n shall be paid in
any payV period less than at the rate of foiurteni dollars ($14) per
week oif forty (40) hours or thirty-five (35) cents per hour, except
as provided( in Section 6 of this Article.
SECTION 2. This Article establishes a mininimumn rate of pay which
shall apply irrespective of whether an eimphloyee is actually compen-
sated on a time-rate, piece-work, or other basis.
SECTION 3. No employee whose wages are in excess of the mini-
mum herein provided shall have his or her full-time weekly wage as
of June 16, l1933, or the effective date of this Code, whichever is
higher, reduced on account of any reduction in his or her full-time
weekly working hours caused by this Code. Adjustments made in
hourly rates of pay from June 16, 1933, to the effective date of this
Code shall be reported to the Code Authority by each employer
within thirty (30) days after the effective date of this Code.
SECTION 4. No employee now employed at a rate in excess of the
minimum herein provided shall be discharged and reemployed at a
lower rate for the purpose of evading the provisions of this Code.
SECTION 5. Female employees performing substantially the same
work as male employees shall receive the same rate of pay as male
employees; and no employer shall discriminate against, employees.
because of sex.
SECTION 6. A person whose earning capacity is limited because
of age, 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. Such Authority shall
be guided by the instructions of the United States Department of
Labor in issuing certificates to such persons. Each employer shall
file each quarter with the Code Authority a list of all such persons
employed by him, showing the wages paid to, and the maximum
hours of work for, such employees.


SECTION 1. No person under sixteen (16) years of age shall be
employed in the Indiustry.
No person under eighteen (18) years of age shall be employed at
operations or occupations which are hazardous in nature or dan-

gerous to health. The Code Authority shall submit to the Adminis-
trntor within six (6) months after the effective date of this Code a
list of such operations or occupations. In any State an employer
shall be deemed to have complied with this provision as to age if
he shall have on file a certificate or permit duly issued by the
Authority in such State empowered to issue employment or age
certificates or permits showing that the employee is of the age
reqjii red by this section.
SECTION 2 (a). Enmployees shall have the right to organize and
bargain collectively through representatives of their own choosing,
and shall be free from the interference, restraint, or coercion of em-
ployers of labor, or their agents, in the designation of such 'repre-
sentatives or in self-organization or in other concerted activities for
the purpose of collective bargaining or other mutual aid or pro-
(b) No employee and no one seeking employment shall be required
as a condition of employment to join any company union or to re-
frain from joining, organizing, or assisting a labor organization of
his own choosing.
(c) Employers shall comply with the maximum hours of labor.
iniiiimum rates of pay, and other conditions of employment approved
or prescribed by the President.
SECTION 3. No employer shall reclassify employees or duties of
occupations performed, or engage in any other subterfuge so as to
defeat the purposes or provisions of the Act or of this Code.
SECTIUN 4. Every employer shall provide for the safety and health
of employees during the hours and at the places of their employment.
Standards for safety and health shall be submitted by the Code Au-
tliority to the Admninistrator within six (6) months after the effective
date of this Code, and upon approval shall become effective as a part
of this Cu"di.
SECTION 5. No lprovision in this Code shall supersede any State
or Fedleral law which imposes on employers mn;re stringent require-
ments as to, age of employees, wages, hours of work, or as to safety,
hcalthl, sanit;a'ry, or general working conditions, or .in-,urance, or fire
pritetion, than are imposed by this Code.
SECTION 6. All employers hall po.t and keep posted complete
copies of the labor provisions of this Code in conspicuous places
easily acce,'.-ible to all employees. Every member of the Industry
shall comply with all rules and regulations relative to the posting
of provisions of Codes of Fair Competition which may from time
to time be prescribed by the Adnministrator.
SECTION 7. All employees who are engaged in any activities falling
within the definition of the Graphic Arts Industries as set forth in
the Code of Fair Competition for the Graphic Arts Industries, shall
be worked under the labor provisions of the said Code of Fair Conim-
petition for the Graphic Arts Industries and not under the labor
provisions of this Code.

,%X I~ ~ A I'! 'h D I'FYr;(I RECD


SECTION 1. There shall forthlwitli be ciatitiitd' a ('C1, Aiuth,,rity
consisting of:
(a) Nine (9) representatives of the Ini-ii-try, or such other num-
ber as miay be al)pp)roved from time to time by tHe Aklhiinii-trat,!', to
be elected in accordance with the prtovi-ion- of Section 2 of this
Article. and to serve for a ter'm of o:i, y,.ar.
(b) Not more than three (3) allititinal rejp'e-entlatives of the
Industry to be appointed by thle Adininistratur if, in his di-cretion,
any group or interest in the Industry is not adiqiiritely rvpr.- t-nthd
by the representatives mentioned in paragrallph (a) of this S.,-ti,,l,
and to serve for a term of one year from the date of their appint-
(c) Such additional nimemibers, to be known as Adriini'.tratimon
Members, without vote and without expense to the Indiiutry, not to
exceed three (3), as the Adnministrator may appoint to ,'p--.vt*n
such groups or interests or such governmental ag,.encies and to .-e'rve
for such periods as he may de-igniate.
SECTIOIN 2. The nine (9) Industry repres itatives providl.l for
in Section 1 (a) of this Article shall be selected as follows:
(a) Eight (8) shall represent service -.h'ools; ai.10 one (1) -1:.1l
represent non-service schools.
(b) Pending the election of the permanent Code Ait.,,rity, the
Code Committee (the body elected 1,N the Ili'iliui-.try to submit this
Code to the National Recovery Administration) shdll act as tem-
porary Code Authority.
(c) After the approval d:ite of this Code and before the effective
date thereof, an,1 a:iiualIly tlhr''i ft'r, the Conle Authrity (tempo-
rary or permanent, whichever is in office at the time) shall select a
li.,t of eighteen (18) nomrinees repre-cntatv- of the various init'r-
ests in this Indu-rh-y. Two (2) of thie-i -i.ill repr,.-lit non-service
schools, and sixteen (16) shall represent service schools; provided,
however, that no member of the Indliitry shall be represented by
more than one nominee. This iAt. with the service school nominees
separate from the non-service :liol niiiiliec,, and with the ,chool
and trade association affiliatioiis of each nominree indi',.-atel shall be
submitted to the Admniini-tratin Member or emei,,-:'I of the Co.le
Authority for his or their approval or aieiiiiieiint. TIi-reafter tho
list with the school affiliatiiiis of each nominee indlicated- shall be
printed on a ballot counrtaining thereon eiiht (8) blank lines under
the list of service school nominees- and one lilaiik line under the non-
service school nominees and a certificate of z.-:ent to and compliance
with thih. Code. The ballot and a copy of this Code shall be mailed
to every member of the Indus.try whose existence can be determined
by diligent search by the Code Authority.
(d) Each meniber of the Indu.-try signing the certificate of assent
and compliance and otherwise complying with Section 7 (f) of this
Article will be entitled to the nunimber of votes indicated on the fol-
lowing table (Schedule A). Only service -cliuols m1ay vote for the


service school nominees; and only non-service schools may vote for
the non-eirvice school nominee--. Each non-'ervice school must
cast all its votes for one n,,,iinee. Any service school may divide
its votes among any eight or less number of nominees or may cast
all of them for one nominee. Selection may be made from the names
printed on the ballot, or by writing in new naimes on the blank lines.
(e) The Administration Member or MNml ers of the Code Author-
ity shall pr.,somnally -Supervise the counting of votes. The eight (8)
service school representatives receiving the greatest number of votes
among the service school nominees and accepting the office, shall
be elected.
The one (1) non-mrvice school representative receiving the great-
est niumiber of votes aingwg the non-service school nominees, and
accepting the office, shall be elected.
(f) The temporary Code Authority shall make such additional
rei.aonl)le rules for the first election as will enable it to be completed
within thirty (30) days after the effective date of this Code, and
siubseq(uent elections shall be completed on or Lefore the anniversary
of the completion of the first.
(g) Vacancies between elections shall be filled for the unexpired
term by the Code Authority subject to disapproval by the Admin-
istrator of the per-,on so chosen.


Members of the Indntry must note upon their ballots the amount
of their cash receipts from enrollment contracts which they have
used in determiningu the number of votes to which they are entitled
by this table. This figure may be used by the Code Authority in
the determination of the member of the Industry's share of the
expenses of administration of the Code in accordance with Section
7 (f) of this Article.
Cash receipts from Enrollment Contracts (in Dollars) for the
calendar year preceding the year in which the election is held:
Number of votes
$5"0.( ili.oi) or less ---------------------------------------------------9
$50,000.01 to $100,000.00------------------------------------- 18
$lli, $2fI 1,'I,. i Il to $500,000.00-------------------- ---- ---- 3
$500,000.01 to $750,000.00----------- -- ---------- ----- 45
$75' 1iii.1. to $1,000,000.00------------ ---- ----------- 54
$1.(00i .(101i I.I to $1,500,000.00--------------------------------- -- 63
$1,5, ,1 (il 1.1 ,I to $2,000,000.00---- ------------- -------- 72
$2.0t.01.liii.01 to $2,500,000.00---------------------------------------- 81
More than $2,500,000.00----------------------------------- -------- DO0
SI:CTION 3. Each trade or indui-trial association directly or indi-
rectly participating in the selection or activities of the Code Author-
ity shall (1) impose no inequitable restrictions on membership, and
(2) sulmit to the Admninistrator true copies of its articles of asso-
ciation, by-laws, reg, ilations, and any amendnients when made there-
to, together with such other information as to membership, organ-
ization, and activities as the Administrator may deem necessary to
effectuate the purposes of the Act.

SECTION 4. In order that tihe Code Autlhorit shall at aill tiles
be truly representative of the Industry andI in other 'l. erts.tC complly
with the provisions of thile Act, tilh Ad\'rt, iniv Pwt-cril'e
such hearings as lie may deemiii propet.r; anl there: ft'r if lie shall
find that the Code Authority is not truly repre.rsent:li t- t r dl',, not
in other respects comply with thile provisins of tli-, Act. in;1y req, ,ire
an appropriate modification in tihe. method of stle.tio,, of the ,Co(de
SECTION 5. Nothing contained in this Code .shall constitute tihe
members of the Code Authority partners for ainy purpose. Nor
shall any member of tlie Code Authority be.' liable in at y man tiner to
anyone for any act of any other memberr, officer, :a-gt.t. o(r .npipl,',,e
of the Code Authority. Nor -shall any iuiniber oif the ('odel Au-
thority exercising reasonable diligence in thle cinilduct of hi..- dtit.,s
hereunder be liable to anyone for any action or omi-sion toi act Junder
this Code, except for his own wilful malfeasarice or n1, 11 f.asai ice.
SECTION 6. If the Administrator shall determine tl;at anyv action
of the Code Authority or any agency tli eretof may 1iw unfaitir or utin-
just or contrary to the public interest, the Administtratopr ma y require
that such action be suspended to afford an oppirtunitv for inves.,ti-
gation of the merits of such action and further consilderatin lIv the
Code Authority or agency pending final action which Jhall not he
effective unless the Administrator approves or unless-, he shall fail
to disapprove after thirty days' notice to him of intention to pro-
ceed with such action in its original or nimlified form.
SECTION 7. Powmrs aMnil [utt/s.--The Code Authorlity .sIall have
the following powers and duties subl)ject to .uich rules and regula-
tions as may be issued by the Administrator:
(a) To insure the execution of the provisions of this Code and
to provide for the compliance of the Industry with thi provisions
of the Act; Provided, however, that this shall not be c',_,nsttr1i'el to
deprive duly authorized governmental agencies of their power to
enforce the provisions of this Code or of the Act.
(b) To adopt by-laws and rules and regulations for its pro,,-edllre
and for the administration of the Code.
(c) To obtain through a confidential agenr'cy fr4,m miemIber of
the Industry such information and reports as are requiri-d frI tlie
administration of the Code, and in addition to information re' lired1
to be submitted to the Code Authority all or any of the lIerJ'CoUn
subject to this Code shall furnish surh s.tatistial information a. tlie
Administrator may deem necess-;ary for the purposes recited in Sec-
tion 3 (a) of the Act, to such Federal andI Statv agencies I-.s tilhe
Administrator may designate; nor shalll a nytlingl..! in tillis Code re-
lieve any person of existing obligations to furnish reports to gov-
ernment agencies. No individual reports shall be dlisclo-ed to any
other member of the Industry or any othwr party except to such
governmental agencies as inay be librected byv tli- P're.sideit.
(d) To use such trade associations and ,other agencies as it deemns
proper for the carrying out of any of its activities provided for
herein, provided that nothing herein shall relieve thie Code Author-
ity of its duties or responsibilities under this Codle and 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 Administrator for the co-
ordination of the administration of this Code with such other codes,
if any, as may be related to the Industry.
(f) (1) It being found necessary in order to support the adminis-
tration of this Code, and to effectuate the policy of the Act. and to
maintain the standards of fair competition established by this Code,
the Code Authority is authorized, subject to the approval of the
(A) To incur such reasonable obligations as are necessary
and proper for the foregoing purposes and to meet such obli-
g4:t ions out of funds which shall be held in trust for the purposes
of the Code and which may be raised as hereinafter provided;
(B) To submit to the Administrator for his approval, subject
to such notice and opportunity to be heard as he may deem
First: An itemized budget of its estimated expenses for the
foregoing purposes; and
Second: An equitable basis upon which the funds necessary
to support such budget shall be contributed by members of the
(C) After such budget and basis of contribution have been
approved by the administrator, to determine and secure equi-
table contribution as above set forth by all members of the
Industry, and to that end, if necessary, to institute legal
proceedings therefore in its own name.
(2) Only members of the Industry complying with the Code and
contributing to the expen.cs of its administration as provided in
paragraph (1) hereof shall be entitled to participate in the selec-
tion of the members of the Code Authority or to receive the benefit
of its voluntary activities or to make use of any emblem or insignia
of the National Recovery Administration.
(g) To recommend to the Administrator any action or measures
deemed adv-:able, including further fair trade practice provisions
to govern members of the Industry in their relations with each other
or with other industries, measures for industrial planning, and sta-
bilization of employment; and including modifications of this Code
which shall become effective as part hereof upon approval by the
Administrator after such notice and hearing as he may specify.
(h) To study the question of the olffering or giving by members
of the Industry of money-back agreements, and guarantees of posi-
ti,,ns or promotions to students, graduates and prospects, and within
sixty (60) days after the permanent Code Authority shall have
been el -ted to formulate such trade practice rules and/or to set up
such uniform contract forms as it deems necessary to protect the
Indu.,try and the consumer, and which shall become effective as
part of this Code on approval of the Administrator after such
notice and hen ring as he may prescribe.
(i) To study the question of setting up educational standards in
the Indui.try and, within one year after the effective date of this
Code, to report to the Administrator for his approval a plan for
detcrmiining and administering such standards, which plan may be

made a part of this Code by the Administrator after iucli notice
and hearing as he may prescribe.
(A) Each member of the Industry shall file with the Code
Authority within thirty (30) days after the effective date of
this Code a complete list. of all c,,ir.-.. of study offered by -,Iuch-
member except such courses as are especially c(miiilcd for and
at the request of an individual customer or group of customers,
and a description of each course filed. Each immber shall
keep such list up to date by promptly filing w\ithl the Code
Authority all changes therein as they occur.
(j) To collect such statistics as the Administrator may require to
determine the effect of the labor provisions of this Cde( upon em-
ployment in this Industry and to submit the same to the Adminis-
trator within sixty (60) days after the permanent, Code Authority
shall have been elected.
(k) To investigate the use of premiums in this Industry and to
report to the Administrator within sixty (60) days after the per-
manent Code Authority shall have been elected, re:,1inmimendations
concerning further fair trade practice provisions to control this

RrLE 1. No member of the Industry shall publish advertising
(whether printed, radio, display, or of any other nature), which is
misleading or inaccurate in any material particular, nor shall any
member in any way misrepresent any service and/or course of study
(including, without limitation, its use, scope, quality, length, ium-n-
ber of lesson assignments, origin, substance, character, nature, educa-
tional content or preparation) or credit terms, vwlitis, policies, or the
nature or form of the business conducted.
Without limitation, the following shall be denied unfair trade
practices under the above rule:
(a) Operating under a firm name which fails to indicate therein
or therewith that the member of the Industry is an educational
institution or offers instruction.
(b) Overstating or misstating actual earnings in any given field
or vocation; representing that unusually high earnings or earnings
of unusual persons are the average or probable earnings in a given
field or vocation; representing that unusual achievements or sala-
ries of outstanding students or graduates of a school are common to
the students or graduates of such school.
(c) Misrepresenting what a particular course of study can enable
a particular prospective student to accomplish.
(d) Overstating or misstating the actual or probable demand for
the service of graduates, or the current demand in any field of em-
ployment; or understating the requisite qualifications for any field
of employment.
(e) Representing that an offer is "limited as to time or other-
wise, or "special" or "for advertising", when in fact it is not so
limited and/or its prices and terms are regular.

(f) Representing any service or commodity as "free" when it
is an integral part of the course with which it is offered and is
covered in the price of such course.
(g) Represnting tuition as being "free" when in reality it is
cove-red in the sale price of required textual or other materials.
(h) iijaciriately stating or listing the relationship between a
school and the members of the faculty, advisory boards, writers or
others connected therewith; or falsely stating that students are given
personal instructions by designated individuals; or representing that
a person is connected with such school when such is not the case.
(i) Using "Help Wanted advertisements to secure. student pros-
pects or using "blind" advertisements (in which the name of the
advertiser does not appear) for the same purpose.
(j) Repri,,.*nting that a school or its instructors or officers are
actively connected with the United States Government, when in fact
they are not thus connected.
(k) Using pictures or other advertising or representation mis-
lekiling prospective student-_ regarding the size of the member of
the Industry's office, or amount of such member's equipment, size
of teaching staff, number of students enrolled, or age ot the
(1) Offering a c'iir-e of study without stating in the contract and
descriptive literature thereof whether such course consists of (1) a
list ot reading aignnent.s only; (2) a list of reading assignments
with merely Tie privilege of asking questions thereon; or (3) a list
of reading aisigiiioeits to which each student is expected to submit
to the school for grading a written reaction in the form of discus-
sion, solution of problenis, or drawings for the purpose of testing
his ina-tery of the subject.
(min) Using marked-up or fictitious prices from which discounts
are offered; or offering a price as marked down when in fact it is
(n) In the case of any member of the Industry teaching physical
devclopiment of the body, the use in advertising of any picture or
likene.. of a perisin in such manner as to induce readers into believing
that such per-on is connected with such school or its course of study
when such is not the case; and/or the use in advertising of any
such picture or likene,.s without clearly stating therewith the name
of the person pictutred and his actual relation to such school and
course of study; and/or the use in advertising of any such picture
or ilkim-ss which is retoucheld or otherwise rendered inaccurate in
dehtil in -ich manner as to falsely or misleadingly portray the degree
of strength of, or the physical development of the person pictured.
RULE 2. Each member of the Industry shall file by registered
mail with the Code A.uthority within thirty (30) days after the
effective date of this Code, his schedulee of prices and terms of sale
in full, including all discounts, allowances, and special offers, and
money back agreements. No member shall offer or sell any service
at any price or .upon any terms except those stated in his filed price
list. Each member, however, may change or revise his price list at
will, and such change or revision shall be considered duly filed
ininiediately upon being mailed to the Code Authority. All such

price lists and revisions shall be kept on file by the Code Autlhority
and shall be available for public inspection.
RULEi 3. No member of tlhe Industry shall set',tly offer or malke
any payment or allowance of a rebate, refund, c,,iiiiis;ionl, c'irdit
unearned discount, or excess allowance, whether in the fin, of
money or otherwise, for the purpose of influencing a sale, nor shall
a member secretly offer or extend to any customer any special serv-
ice or privilege not extended to all customers of the same class
for the purpose of influencing a sale.
RuiLE 4. No member of the Industry shall use advertising or
other representation which refers inaccurately in any material par-
ticular to any competitors or their services and/or courses of study,
prices, values, credit terns, policies, equipment, teaching methods,
teaching personnel, business methods, personal character or 'reputa-
RULE 5. No member of the Industry shall use statements or papers
simulating court documents in the collection of accounts.
RULE 6. No member of the Industry shall attempt to induce the
breach of an existing contract between a competitor and his stu-
dent, prospect, or source of supply; nor shall any member interfere
with or obstruct the performance of such contractual duties or
RULE 7. No member of the Industry shall give, permit to be given,
or directly offer to give, anything of value for the purpose of in-
fluencing or rewarding the action of any employee, agent or repre-
sentative of another in relation to the business of the employer of
such employee, the principal of such agent, or the represented party,
without the knowledge of such employer, principal or party. This
rule shall not be construed so as to prohibit the free and general
distribution of articles commonly used for advertising except so far
as such articles are actually used for commercial bribery as herein-
above defined.
RULE 8. Any act of any salesman, employee, agent, or represenrita-
tive of a member of the Industry which if done by such member
of the Industry would constitute a violation of this Code shall be
presumed to have been done within the scope of the authority of
such salesman, employee, agent, or representative, and done with
the knowledge and consent of such member of the Industry


1. This Code and all the provisions thereof are expressly made
subject to the right of the President, in accordance with the provi-
sions of subsection (b) of Section 10 of the Act, from time to time
to cancel or modify any. order, approval, license, rule or regula-
tion issued under Title I of said Act and specifically, but without
limitation, to the right, of the President to cancel or modify his
approval of this Code or any conditions imposed by him upon his
approval thereof.
2. This Code, except as to provisions required by the Act, may
be modified on the basis of experience or changes in circumstances,
such modification to be based upon application to the Admninistrator
64004 --657-2--34-1---2

and such notice and hean ring as he shall specify, and to become effec-
tive on approval of the President.

No provisions of this Code shall be so applied as to permit
monopolies or monopolistic practices, or to eliminate, oppress, or
discriminate aga inst sinall enterprises.

Whereas, the policy of the Act to increase real purchasing power
will be made more difficult of consummination if prices of goods and
services incr-ease as rapidly as wages, it is recognized that price
increases except such as may be required to meet individual cost
should be delayed. And when made, such increases should, so far
as possible, be limitedI to actual additional increases in the seller's


This Code shall become effective on the second Monday after its
approval by the President.
Appr,,ved Code No. 447.
Registry 1717-07.






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