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Code of fair competition for the rayon and synthetic yarn producing industry

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Title:
Code of fair competition for the rayon and synthetic yarn producing industry as submitted to the administrator August 3, 1933 and as approved by President Roosevelt on August 26, 1933
Added title page title:
National Recovery Administration
Creator:
United States -- National Recovery Administration
Place of Publication:
Washington, D.C
Publisher:
U.S. G.P.O.
Publication Date:
Language:
English
Physical Description:
9 p. : ; 23 cm.

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Subjects / Keywords:
Rayon industry and trade -- Law and legislation -- United States ( lcsh )
Synthetic fabrics -- Law and legislation -- United States ( lcsh )
Genre:
federal government publication ( marcgt )
non-fiction ( marcgt )

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General Note:
Cover title.
General Note:
"Registry no. 259-01".

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Source Institution:
University of Florida
Rights Management:
This item is a work of the U.S. federal government and not subject to copyright pursuant to 17 U.S.C. §105.
Resource Identifier:
004857021 ( ALEPH )
31966465 ( OCLC )

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UNIVERSITY OF FLORIDA

3 1262 08482 9950


NATIONAL RECOVERY ADMINISTRATION



CODE OF FAIR COMPETITION

FOR THE


RAYON AND SYNTHETIC

YARN PRODUCING INDUSTRY

AS SUBMITTED TO THE ADMINISTRATOR AUGUST 3, 1933
AND AS APPROVED BY PRESIDENT ROOSEVELT
ON AUGUST 26, 1933




REGISTRY No. 259-01


UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1933


For sale by the Superintendent of Documents, Washington, D.C. - Price 5 cents












































Digitized by the Internet Archive
in 2011 with funding from
University of Florida, George A. Smathers Libraries with support from LYRASIS and the Sloan Foundation


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REPORT TO THE ADMINISTRATOR-CODE OF FAIR COM-
PETITION, RAYON AND SYNTHETIC YARN PRODUCING
INDUSTRY
AUGUST -, 1933

EXECUTIVE ORDER
CODE OF FAIR COMPETITION, RAYON AND SYNTHETIC YARN
PRODUCING INDUSTRY
An application having been duly made pursuant to and in full
compliance with the provisions of title I of the National Industrial
Recovery Act, approved June 16, 1933, for my approval of a Code of
Fair Competition for the Rayon and Synthetic Yarn Producing
Industry, and hearings hav-ing been held thereon and the Adminis-
trator having rendered his report containing an nidalysis of the said
Code of Fair Competition together with his receiirncndations and
findings with respect thereto, and the Adiiiisitritor having found
that the said Code of Fair Competition complies in all respects with
the pertinent provisions of tile I of said act and that the requirements
of crlauses (1) and (2) of subsection (a) of section 3 of the said act
have been met:
Now, therefore, I, Franklin D. Roosevelt, President of the United
States, pursuant to the authority vested in me by title I of the
National Industrial Recovery Act, approved June 16, 1933, and
otherwise, do approve the report and adopt the findings of the Admin-
istrator and do order that said Code of Fair Competition be, and it is
hereby, approved on the condition, compliance with which is hereby
required, that reports shall be furnished from time to time to the
Administrator by each employer of the industry setting forth infor-
mation on wages, hours of labor, and such other matters in such form,
manner, and detail as he may require.
FRANKLIN D. ROOSEVELT.
Approval Recommended:
HUGH S. JOHNSON,
Adm i iastrator.
THE WHITE HOUSE,
Augulf 26, 1933.
QjO03-33 1\









REPORT TO THE PRESIDENT
NATIONAL RECOVERY ADMINISTRATION
TO THE PRESIDENT:
INTRODUCTION
This is a report of the Henring on the Code of Fair Competition for
the Rayon and Synthetic Yarn Producing Industry conducted in the
Caucus Room of the Senate Office Building in Washington, D.C., on
July 27, 1933, in accordance with the provisions of the National
Industrial Recovery Act.
The following exhibits are included and attached:
1. Final Code submitted.
2. Notice of Hearing.
3. Statement of procedure.
4. Transcript of the Records.
5. Report of the Deputy.
GENERAL CHARACTERISTICS OF THE INDUSTRY
The proponents of the Code represented:
(a) That the Rayon and Synthetic Yarn Producing Industry in the
United States is composed of eighteen different companies, the total
production of which is approximately 224,900,000 pounds per year.
(b) That there are four processes used in the manufacture of rayon
and synthetic yarn at the present time. These processes are:
First-Viscose, 14 companies, 175,500,000 lb. per Yr.
Second-Cellulose Acetate, 5 companies, 35,400,000 lb. per Yr.
Third-Nitro-cllulo-.e, 1 company, 8,000,000 lb. per Yr.
Fourth-Cupra-umnionIiim, 2 companies, 6,000,000 lb. per Yr.
(c) Thn t all four of these processes are alike in that they start from
the same raw materials, either purified cotton or wood pulp, and by
chemical rent'tions make solutions which are afterwards spun into
threads, the only differences being the chemicals used in the prepara-
tion of the solutions.
(d) That all the yarns made by all four of the above processes are
sold to the same classes of customers, in the great majority of cases
interclaingeably. This is not true in all cases, but does apply as a
general rule. For example, the largest outlet for rayon and synthetic.
yarns is in the weaving industry and this industry uses yarns made
by all four processes.
(e) That the differences between the yarns are minor ones, such as
differences in dying, differences in degree of lustre, differences in
melting point, etc.
From a review of the records it appears that this industry, in con-
trast to most other manufacturingg industries, has shown a remarkable
resistance to the forces of the depression. Estimated yearly output
has shown an increase in each year since the industry became com-
mercially important, until the year of 1932 when a recess of 9 percent
was reported. However, it is estimated that the production for the
year of 1933 may exceed all previous records.
The remarkable growth in the consumption of rayon since the war
is explained in no small degree by the trend of prices. The average
price in the peak year of 1919 was approximately $4.77 per pound
(150 denier grade A), since which time prices have been reduced until










the record low price of $0.55 per pound for the same grade was reached
in April of 1933. Since that time prices have been increased to $0.65
per pound, which is approximately 47.5 percent below the average
1929 level.
The industry now employs approximately 41,000 persons, and in
contrast to most other industries the number of wage earners in the
industry in June of 1933 exceeded the average number employed in
the industry in the year of 1929, :ind it is estimated that, after giving
effect to the maximum hours in the Code, the number of employees
will exceed by more than ten percent the greatest number previously
employed in the industry.
No accurate statistics are available as to the average hours of work
per week in the industry, but study of the available data indicates an
average employment week of 44.8 hours in the year of 1930 with a
minimum of 37.4 in July of 1932 and 45.3 per week in June of 1933-
the code provides for a maximum of 40 hours per week.
The average wages paid in the industry have been somewhat lower
than the average wages for all manufacturing industry-$1,000 per
annum in 1931 as compared to $1,102 for all manufacturing indus-
try. As the Division of Research and Planning points out, this may
be attributed to (a) a larger proportion of female employees (about
30 percent compared with 13 percent for all industries) and (b) a
a lesser degree of skill required than is generally true in other brIanches
of industry.
On the other hand wages in this industry have suffered much less
during the depression than those of other industries. Average
weekly earnings of worl.ers vary between a high of $21.87 in November
1929 and a low of $15.62 in July 1932-however, records show such
average to have reached $16.27 in May 1933. A calculation on the
basis of 1929 purchasing power of the dollar indicates that the afore-
said average wage in May, of 1933 had an actual "real wage" of
$23.55, or, in other words, the real earnings of labor in the rayon
industry have increased during the depression.

CONCLUSIONS
The proponents of the Code, in their application for approval, stated
that. they represented approximately 80% of the number of companies
engaged in the industry and approximately 90% of the production of
rayon and synthetic yarn.
In the report of the Deputy Administrator, which I hereby approve,
it appears that:
(1) The code establishes maximum hours and minimum wages for
all employees in the industry, except those serving in executive,
administrative, supervisory, outside sales and/or technical capacities.
(2) The provision of the code relating to maximum hours of labor
will bring about the employment of from 3,500 to 4,500 additional
employees.
i,3) The minimum wage of $13.00 will directly affect more than
6,000 employees and will result in a substantial increase in the wage
rate paid to all employees. Moreover, that the minimum wage
expressed in terms of "real wage" adjusted to the cost of living index
for the month of June of 72.8 percent (U.S. Department of Commerce
Report of August) will exceed the minimum prevailing in the industry
in the year of 1929.









(4) No employer in the industry will employ any minor under the
age of 16 years, or provide a wage for apprentices of less than S5% of
the minimum wage established by the Code.
I find that-
(a) The Code complies in all respects with the pertinent provisions
of Title I of the Act, including, without limitation, sub-section (a)
of Section 7, and subsection (b) of Section 10 thereof; and that.
(b) The Code is not designed to promote monopolies or to eliminate
or oppress small enterprises and will not operate to discriminate
against them, and will tend to effectuate the policy of Title I of the
National Industrial Recovery Act.
Accordingly, I hereby recommend the approval of the Code of Fair
Competition for the Rayon and Synthetic Yarn Producing Industry.
Respectfully submit ted.
HUGH S. JonNsoN, Adm in istrator.
REPORT OF DEPUTY ADMINISTRATOR ON THE CODE OF FAIR COM-
PETITION FOR THE RAYON AND SYNTHETIC YARN PRODUCING
INDUSTRY
Attached to this report are:
1. Original Application for Approval.
2. Code as finally revised.
3. Reports by-
(a) Industrial Advisor.
(b) Labor Advisory Committee.
(c) C.onsilumers Committee.
(d) Approval of Legal Division.
4. Copy of the Order calling a Public Hearing on the Code.

RECOMMENDATIONS
I recommend (a) the approval of the Code of Fair Competition for
the Rayon and Synthetic Yarn Producing Industry, (b) that the
agency provided for in the Code, shall be required to file with the
Ad mini'tra tor reports set ting forth, in a manner and detail approved
by the Administrator, statistics and information as to wages, hours
of labor, and such other data required by the Administrator as will
further the purpose of the Act and facilitate enforcement of this
Code; because on material presented at the hearings and otherwise it
appears that:
1. The Code establishes maximum hours and minimum wages for
all employe(-c of that industry except, those serving in executive, ad-
miinistrative, *.-;lpervisory, outside sales and/or techincal capacities.
2. The maximum hour, of labor established by the Code will
require the employment of from 3,500 to 4,500 additional employees-
an increase of approximately 10%. This will result in the employ-
ment by the industry of a greater number of persons than at the peak
of operations in 1929 or at any other time during the history of the
industry. The maximum hours established are 40 hours per week,
subject to the flexible provision that the average hours of work per
week by any individual employee not exempt from this provision
shall not exceed the maximum established when figured over a period
of four weeks, and further that. in the case of emergency the maximum
hours as applied to maintenance and repair crews may be extended









for the time of the emergency only and in which hitter event a record
shall be made of the circumstances and reported to the z;gen.y set up
within the industry for cooperating with ilnd reporting to the
Administrator.
3. The Code establishes minimum wages which are at the rate of
$13.00 per week except for apprentices who for a six weeks' period
may receive remuneration at the rate of 835 of the established
mininmum-such minimum applies throughout the entire industry
including South as well as North, there being no geographical differ-
ential.
4. The minimum wage of $13.00 will-
(a) Affect more than 6,000 employees.
(b) Establish minimum weekly earnings, the purchasing power of
which, adjusted to a cost of living index of 72.8 (United States
Department of Commerce Survey of Current Business for August),
will substantially exceed that. of the lowest wages prevailing in the
industry in the year 1929. The minimum wage of $13.00 per week
has a purchasing power equivalent to $17.80 per week in 1929, whereas
the 6,000 lowest paid employees in the industry in 1929 received an
average wage of approximately $14.00 per week, according to the
best available statistics.
(c) Provide a minimum wage for apprentices the purchasing power
of which is today greater than the purchasing power received by
higher paid classes of employees in this industry in the year 1929.
5. The rates of all employees other than those receiving the mini-
mum are to be raised so that the dirffrentials between classes of em-
ployees will be maintained by payment of a rate which must result in
their receiving no less for 40 hours a week than was receive'l or would
have been received for that class of work for 48 hours per week on
May I, 1933. The effect of such adjustments cannot be determined
accurately because of the lack of detailed statistics. but estimates
based on the best information av.-ilable indic~ite that the application
of the Code will result in an average wage of more than $20 a week.
Such a wage would have a purchasing power equivalent to that of
$27.50 per week in 1929, or substantially greater than the average
wage paid in 1929 which was $20.68.
The negotiations with the committee representing the industry
carried on prior to the hearing were conducted with the advice of
Mr. Rufus Scott (Advisor for Industry, selected by the Industrial
Advisory Committee) and Mlr. Francis J. Gorman (Labor Advisor
selected by the Labor Advisory Committee) and all provisions of said
Code so negotiated were conceded by all to be reasonable and fair
and in full compliance with the spirit of the Recovery Act. The
difficulty of obtaining accurate statistics resulted in failure on the
part of the Division of Research and Planning to participate in the
negotiations or in the 1he.'ring. Their report, subsequently completed
(copy of which is attached), supports the above outlined conclusions
except that it suggests that the relative prosperity of the industry
warrants a higher minimum wage.
Notwithstanding the relative prosperity, which the industry has
experienced, no higher minimum than that established in the Code is
recommended at this time because of the fact:
(a) Provisions of the Code seem to fully comply with the purpose
of the Act.








6

(b) Provisions as to wages and hours were conceded by other
advisors to be fair and reasonable, and
(c) Any calculations resulting in higher minimum should be based
upon more accurate statistics. The compilation and filing of such
statistics should be required of the industry immediately and modifica-
tions be made in the Code as warranted by such reports.
The Code was presented by a group of 14 manufacturers claiming
to represent 80% in numbers and 90% of the production of synthetic
yarn in the United States. The application for approval of the Code
was signed by the duly authorized officers of each company.
BRIEF REVIEW OF HEARING
CI7naue II of the Code defines the Rayon and Synthetic Yarn Pro-
ducing Industry "to mean the manufacture of rayon and/or synthetic
yarns from cellulose, put up and packaged in forms suitable for the
various consuming and fabricating branches of the textile industry."
At the hearing, protest was filed by two companies, the Cellanese
Corporation of America and the Tennessee-Eastman Corporation,
who objected to the Code definition of the Industry on the grounds
that it would include their operations under the Code. The protes-
tants, representing themselves as the producers of more than 80%
of the cellulose acetate type of synthetic yarn, testified that they did
not consider themselves a part of the "Rayon" industry and wished
to file a separate code. (Transcript of hearing Page 42 to 75.)
The protestants did not deny that their product was synthetic
yarn and did not object to any of the provisions of the Code-except
that they insisted that all supervision of their industry should be
through an agency of their own selection.
At the conclusion of the hearing, the Deputy Administrator en-
deavored through negotiation to reconcile the differences between
these two groups but being unsuccessful, recommends the approval of
this Code and upon application of the protestants the granting of a
hearing on their plea for exemption.
CONCLUSIONS
I find that-
(a) The Code complies in all respects with the pertinent provisions
of Title I of the Act, including, without limitation, subsection (a)
of Section 7, and subsection (b) of Section 10 thereof; and that
(b) the Code is not designed to promote monopolies or to eliminate
or oppress small enterprises and will not operate to discriminate
against them, and will tend to effectuate the policy of Title I of the
National Industrial Recovery Act.
Accordingly, it is recommended that the Code of Fair Competition
for the Rayon and Synthetic Yarn Producing Industry be approved.
Respectfully submitted.
W. L. ALLEN,
Deputy Ad in idtrator.
AUGUST 19, 1933.









APPLICATION-CODE OF FAIR COMPETITION, RAYON AND SYN-
THETIC YARN PRODUCING INDUSTRY
APPLICATION TO THE PRESIDENT OF THE UNITED STATES FOR AP-
PROVAL OF A CODE OF FAIR COMPETITION FOR THE RAYON AND
SYNTHETIC YARN PRODUCING INDUSTRY
This application is made on behalf of the firms or corporations
listed hereunder (all being producers of rayon and/or synthetic yarn),
and representing approximately 80% in numbers and 90% in pro-
duction of the "Rayon and Syntheti Yarn Industry." And the
firms or corporations listed hereunder (all being producers of rayon
and/or synthetic yarn), where signed immediately beneath the name
of the firm or corporation, subscribe to this application and to the
following documents.

CODE FOR RAYON AND SYNTHETIC YARN PRODUCING INDUSTRY AND
BRIEF OF THE RAYON AND SYNTHETIC YARN PRODUCING INDUSTRY
AS SUPPLEMENTARY INFORMATION FOR ITS APPLIED FOR CODE
Acme Rayon Corporation, by Chas. A. Huttinger, vice president.
American Bemberg corporation, by S. R. Fuller, Jr., president.
American Enka Corporation, by C. Me. Carr.
American Glanzstoff Corporation, by S. R. Fuller, Jr., pre-ident.
Belamose Corporation, by G. T. Loveridge, plant manager.
Delaware Rayon Corporation, by Leon H. Ryan, treasurer.
Du Pont Rayon Company, by L. A. Yerkes, president.
Hampton Company, by William F. Guinan.
Industrial Rayon Corporation, by H. B. Kline, vice prn-ident.
New Bedford Rayon Company, by A. Ruth, plant superintendent.
Skenandoa Rayon Corporation, by Beecher M. Crouse, president.
Turbize Chatillon Corporation, by Rufus W. Scott, chairman,
executive com.
The Viscose Company, by S. A. Salvage, president.
Woonsocket Rayon Corporation, by George R. Locklhard, pirsi-
dent.

UNITED STATES OF AMERICA,
Di..f'rct of Co,,-li b;, ss:
I, E. R. Van Vliet, being duly sworn, do hereby certify that I am
the Secretary of the Code Committee for the Rayon and Sylnthitic
Yarn Producing Industry and that attached hereto is a true and correct
copy of the Code of that Industry as adopted by the foregoing com-
panies; and I further certify that each of the foregoing have 'i.gned
and adopted the attached Code.
E. R. VAN VLIET.
Subscribed and sworn to before me this 3rd day of Augu-st A.D.
1933.
E. M. NOL..AS.
Notary Public in and for the District of Columbia. My com-
mission expires July 10, 1938.









CODE OF FAIR COMPETITION, RAYON AND SYNTHETIC YARN
PRODUCING INDUSTRY
To effectuate the policy of Title I of the National Industrial
Recovery Act, during the period of the emergency, by reducing and
relieving unemployment and improving the standards of labor, the
following provisions are established as a code for the rayon and/or
synthetic yarn producing industry:
I. This code is based upon the fnct that an inherent characteristic
of the manufacture of synthetic yarns is that production must; of
necessity be continuous-the chemical and textile departments being
in balance; thus any limitation of the hours of machinery cannot
economically apply to the rayon and synthetic yarn producing indus-
try and still have the industry survive. (See brief attached.)
II. The term "rayon and synthetic yarn producing industry", as
used herein is defined to mean the manufacture of rayon and/or
synthetic yarns from cellulose put up and packaged in forms suitable
for the various consuming and fabricating branches of the textile
industry.
III. The term "effective date" as used herein is defined to be the
fourteenth day after this code shall have been approved by the
President.
IV. The term "employees" as used herein shall include all persons
employed in the conduct of the rayon and synthetic yarn producing
industry. The term "employers" as used herein shall include all
natural persons, partnerships, associations, corporations, and trusts,
including trustees in bankruptcy and receivers, who employ labor in
the conditct of any branch of the rayon and synthetic yarn producing
industry.
V. On and after the effective date, employers in the rayon and
synthetic yarn producing industry shall operate on the following
sclhedulle of hours of labor and wages:
(a) The nmximnum hours of labor of all employees-except those
irvivng in e(xc-.utive, admiiinistr, tire, supervisory, outside sales and/or
technical capacitiets-shall be forty per week, subject to the flexible
provi-'ion that the average hours worked per week by any individual
employee not exempt from this provision shall not exceed the maxi-
mum established when figured over a period of four weeks. In cases
of emerltcru'y the maximum hours as applied to maintenance and
repair crews may be extended for the time of the emergency only, in
which latter event a record shall be made of the circumstances and
reported to the agency hereinafter provided for in Article VIII.
(b) Inasmuch as som(e n manufacturers of this industry have already
made some adjustments in hours and wages, and have recently raised
rates of pay, and in-smuluch as this code now proposes in Clause (a)
next preceding to establish a uniform practice of 40 hours maximum
employment for employees, no employee-except those exempted in
Clause (a) next preceding-shall after the effective date receive for the
said 40-hour period of work less compensation than was received or
would have been received by said employee for 48 hours of labor, as
of 1 May 1933; and on and after the effective date, the minimum wage
which shall be paid by employers in the rayon and synthetic yarn
producing industry to ainy employee-except those exempted in
Clause (a) next preceding-whether the wage is based upon productive
effort or efficiency or hourly rates, shall be at the rate of $13.00 per









week for 40 hours of labor-except apprentices during a period limited
to six weeks shall be paid at the rate of 85% of the minimum wage
specified herein.
VI. No employer in the rayon and synthetic yarn producing indus-
try shall employ any minor under the age of -ixteen years.
VII. Employers shall comply with the requirements of Section 7
(a) of Title 1 of the National Industrial Recovery Act as follows:
1, Employees shall have the right, to organize and bargain collec-
tively through representatives of their own choosing, and shall be
free from the interferencee, restraint, or coercion of employers of labor,
or their agents, in the designation of such representatives or in self-
organization or in other concerted activities for the purpose of collec-
tive bargaining or other mutual aid or protection.
2. No employee and no one seeking employment shall be required
as a condition of employment to join any company union or to refrain
from joining, organizing, or assisting a labor organization of his own
choosing.
3. Employers shall comply with the maximum hours of labor,
minimum rates of pay, and other conditions of employment, approved
or prescribed by the President.
VIII. The industry shall set up within itself an agency to cooperate
with the Administrator in the administration and enforcement of this
Code.
IX. The President may from time to time cancel or modify any
order, approval, license, rule, or regulation issued under Title I of the
National Industrial Recovery Act.
The undersigned companies being engaged in the Rayon and
Synthetic Yarn Producing Industry hereby subscribe to the above
Proposed Code of Fair Competition and request its recommendation
by the National Industrial Recovery Administration to the President
of the United States for approval.





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Full Text

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IIIII 111111' mi ill il /Ill IIIII 3 1262 08482 9950 NATIONAL RECOVERY ADMINISTRATION CODE OF FAIR COMPETITION FOR THE RAYON AND SYNTHETIC YARN PRODUCING INDUSTRY AS SUBMITTED TO THE ADMINISTRATOR AUGUST 3, 1933 AND AS APPROVED BY PRESIDENT ROOSEVELT ON AUGUST 26, 1933 REGISTRY No. 259-01 UNITED STATES GOVERNME: T PRINTING OFFICE W ASHI -GTON : 1933 For sale by the Superintendent of Documents, Washington, D . C . ---Price 5 cents

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Digitized by the Internet Archive in 2011 with funding from University of Florida, George A . Smathers Libraries with support from LYRASIS and the Sloan Foundation http: // www.archive.org / details / codeoffaircompet9950unit

PAGE 3

REPORT TO THE ADMINISTRATOR-CODE OF FAIR COMPETITION, RAYON AND SYNTHETIC YARN PRODUCIN G INDUSTRY A GUST-, 1 933 EXECUTIVE ORDER CoDE oF FAIR CoMPETITION, RA Yo A D SY 'THETIC YARN PRODUCING INDUSTRY An application havi ng be n duly made pursuant to and in full comp li ance w ith the provisions of title I of the National Industri a l Recov-ery Act, approved Jun 16, 1933, for my approval of a Code of Fair Competition for the Rayon and Synthetic Yarn Producing Indu try, and hearings ha.ving been held thereon and the Adminis trator having rendered his report containi ng n.n analysi s of the sa id Code o f Fair Competition together with his reccmmendn.tions n.nd findin g with r e pect thereto and the Administr tor having found that the said Code of Fair Competition comp lies in a ll re pects w ith the p ertinent provi i ons of tile I of sai d act and that the requirements of claus s ( 1 ) and (2) of subsection (a) of s ction 3 of the aid a t have be e n met: Now, therefo r , I, Franklin D. Roos velt, President of the United States , pursuant to the authority vested in me by title I of the National Indu trial Recovery Act, approved June 16, 1933, and otherwi e, do n,pprove the report and adopt the findin gs of the Admin istrator and do order that said Code of Fai r Competition be, and it is hereby, approved on the condition, com pli a n ce \vith wh ich is hereby required, that r ports shall be furnished from time to time to the Administrator by en,ch em pl oyer of the industry setting forth informati on on wages, hour of l abor, and such other matters 'in such form , manner, and detail s he may require. Approval R ecommende d: HuGHS. JoHKS01., Administrator . THE WHITE HousE, A ' ngust 26 , 1 933 . FRA TKLIN D. RoosEVELT. (1)

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2 REPORT TO THE NATIONAL RECOVERY ADMINISTRATION To THE PRESIDE T: INTRODUCTION This i a report of th Hearing on the Code of Fair Competition for the Rayon and $ynthetic Yarn Producing Industry conducted in the Caucus Room of the Senate Office Building in Washington, D.C., on July 27, 1933, in ::tecordance with the provisions of the Nationn1 Industrial Recovery Act. The following exhibits are included and attached: 1. Final Code submitted. 2. Notice of Hearing. 3. Statement of procedure. 4. Tran cript of the Records. 5. Report of the Deputy . GENERAL CHARACTER! TICS OF THE I DUSTRY The proponents of the Code represented: (a) That the Rayon and Synthetic Yarn Producing Industry in the United States is composed of eighteen different companies, the total production of w hich i approximately 224,900,000 pounds per year. (b) That there are four proce sses used in the manufacture of rayon and synthetic yarn at the present time. These processes are: First-Visco e, 14 companie , 175,500,000 lb. per Yr. Second-Cellulose Acetate, 5 companies, 35,400,000 lb. per Yr. Third-Nitro -cellulo se, 1 company, 8,000,000 lb. per Yr. Fourth-Cupra-ammonium, 2 com panies, 6,000,000 lb. per Yr. (c) That all four of these processes are alike in that they start from the same r aw matnrials, either purified cotton or wood pulp, and by chem ic" l r acti ons make solutio n s whi c h are afterwards spun into threads, the only differences being the chemicals used in the preparation of the solutions. (d) That all the yarns n1ade by a ll four of the above proce ses are sold to the sa1ne classes of customers, in the great majority of case interchangeably. This i not true in all ase , but does apply as a general rule. For example , the largest outlet for rayon and synthetic. arn is in the '''eaving industry and this industry uses yarns made by all four pro"es es . (e) That the differences between the yarn are minor ones, such a differ ences in dying, differ nces in degree of lustre, differ nee in 1nelting point, etc. From a review of the records it appears that thi industry, in contrast to 1nost other manufacturinoindustries, ha shown a r markable r si tance to the for e of the depres ion. Estimated y arly output ha show n an increase in eac h year since the indu try became commer ially important, until the year of 1932' hen a r ce of 9 percent was reported. However, it is stimated that the production for the y ar of 1933 may exceed all previous records. The remarkable growth in the consumpti n of ra on ince the war i explained in no mall d o T by he tr nd of pri s. The a erage price in the p ak year of 1919 wa approximately $4.77 per pound (150 deni e r grade A), since whi h tim price ha e b n reduced until

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3 the record low price of $0.55 per pound for the same grade was reached in April of 1933. Since that time prices h ave be en in crea ed to $0.65 per pound, which i s approximately 4 7.5 percent below the average 1929 level. The indu try now employs approximately 41,000 persons, and in contrast to most other industries the numbe r of wage earners in the industry in June of 1933 exceeded the average number emp loyed in the indu try in the year of 1929, and it is estimated that, after giving effect to the maximum hours in the Code, the nun1ber of employees will ex eed by more than ten percent the g r atest number previously employed in the indust r y. No accurate statisti cs are available as to the average hours of work per week in the industry, but study of the available data indicates an average employment week of 44.8 hours in the year of 1930 with a minimum of 37.4 in July of 1932 and 45.3 per week in June of 1933-the code provides for a maximum of 40 hours per week. The average wages paid in the industry have been somewhat lower than the average wages for all manufacturing industry$1,000 per annum in 1931 as compared to $1,102 for all manufacturing industry. As the Division of R esearch and Planning points out, this may be attributed to (a) a larger proportion of female employees (about 30 percent compared with 13 percent for all industri es) and (b) a a l esser degree of skill required than is generally true in other branch s of industry. On the othe r hand wages in this industry hav-e suffered much l ess during the depression than those of other industries. Average weekly earnings of workers vary between a high of $21.87 inN ovember 1929 and a low of $15.62 in July 1932-however, rec ords show such average to have reached $16 .27 in May 1933. A calculation on the bas is of 1929 purchasing power of the dollar indica tes that the aforesaid average wage in 11ay, of 1933 had an actual 'real wage ' of $23.55, or, in other words, the r ea l earnings of labor in the ra on have increased during the depression. CONCLUSIONS The proponents of the Code, in their application for approval, statoo that they represented approximately 80% of the number of companie s engaged in the industry and approximately 90% of the production of rayon and synthetic yam. In the report of the Deputy Administrator, which I hereby appro,Te, it appears that: (1) The code establishes maximum hours and minimum wage::> for all employees in the industry, except those serving in executive, administrati e, supervisory, out ide sales and/or technica l capacities. (2) The provis ion of the code relating to maxin1um hours of labor will bring about the employment of from 3,500 to 4,500 additional employees. (3) The minimum wage of $13.00 will directly affect more than 6,000 employees and will result in a subsfantial i ncrease in the wage rate paid to all employe es . Moreover, that the minin1um waae expressed in terms of 'real wage" adjusted to the cost of living index for the month of June of 72.8 percent (U.S. Department of Commerce Report of August) will exceed the rninii11um prevailing in the industry in the year of 1929.

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4 (4) No employer in the industry will employ any minor under the age of 16 years, or provide a wage for apprentices of less than 85% of the minimum wage established by the Code. I find that-(a) The Code comp-lies in e-ll respects with the pertinent provisions of Title I of the Act, including, without limitation, subsection (a) of Section 7, and subsect ion (b) of Section 10 thereof; and that (b) The Cod"' is not designed to promote monopolies or to eliminate or oppress sn1all enterprises and will not operate to discriminate against them, and will tend to effectuate the policy of Title I of the National Industrial Recovery Act. Accordingly, I hereby recommend the approval of the Code of Fair Competition for the Rayon and Synthetic Yarn Producing Industry. Respectfully subm.itted. HuGH S. JoHNSON, Administrator. REPORT OF DEPUTY ADMINISTRATOR ON THE CODE OF FAIR COMPETITION FOR THE RAYON AND SYNTHETIC YARN PRODUCING INDUSTRY Attached to this report are: 1. Original Application for Approval. 2. Code as finally revised. 3. Reports by-(a) Industrid Advi sor. (b) Labor Advisory Co mmittee. (c) Consumers Committee. (d) Approval of Legal Division. 4. Copy of the Order calling a Public Hearing on the Code. RECOMMENDATIONS I (a) the approval of the Code of Fair Competition for the Rayon and Synthetic Yarn Producing Industry, (b) that the agency provided for in the Code, shall be required to file with the Administrator reports setting forth, in a manner and detail approved by the Administrator, statistics and information as to \Yages, hours of labor, and such other data required by the Admin i stl"ator as will further the purpose of the Act and facilitate enforcement of this Code; because on material pTesented at the hearings and otherwise it appears that: 1. The Code establi shes maximum hours and minimum wage for all employees of that industry except thoso serving in executive, administrative, supervisory, outside sales and/or techincal capacities. 2. The maximum hours of labor established by the Code will require the employ1nent of from 3,500 to 4,500 additional employeesan increase of approximately 10%. This will result in the employ ment by the industry of a greater number of perso n s than at the peak of operations in 1929 or at any other time during the hi toTy of the indu try. The maximum hours establish e d are 40 hour"' per week, subject to the flexible provision that the average hour of work per week by any individual employ e not exempt from thi provision shall not exceed the maximum establi shed when figured over a period of four week , and further that in the case of en1ergency the maximum hours as applied to maintenance and repair crews may be extended

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5 for tl1e time of the mergency only and in whic 1 la tt r event a record shall be made of the circum tance nd reported t th a()"en"y s t up within the industry for cooper tino with and report ing to the Administrator. 3. The Code stablishe minimum wages which are at the rate of $13.00 per week except for apprenti es who for a six week ' peri d may receive remuneration at the rate of 85 0 f th e tabli hed minimum-such minimum applies throughout the entire indu try including South as well a North, there being no geogTaphlcal differ ential. 4. The minimum wage of $13.00' ill(a) Affect more than 6,000 employee . (b) Establish minimum weekly earnings, the purcha ing power of which, adjusted to a cost of living index of 72.8 (United States Department of Commerce Survey of Current Bu iness for August), will substantially exceed that of the lowe t wages prevailing in the industry in the year 1929. The minimum wage of $13 .00 per week has a purchasing power equivalent to $17.80 per week in 1929, whereas the 6,000 lowest paid employ ees in the industry in 1929 received an average wage of approximately $14.00 per week, according to the best available statistics. (c) Provide a minimum wage for apprentices the purchasing pO\\er of which is today greater than the purchas ing power received by higher paid classes of employees in this industry in the year 192g. 5. The rate of all employees other than tho e receiving the minimum are to be rai ed o that the differen+ials between of em ployee s will be maintained by payment of a rate which must resu]t in their receiving no less for 40 hours a week than was receive or would have b een received for that class of work for 48 hours per \veek o n May 1, 1933. The effert of such adju tment cannot be determined accurately because of the lack of tutistic but estimates based on v the best information a\ ailable indi"ate that the application of the Code will re ult in an average \vage of more than $20 a vveek. Such a wage would have a purchasing power equivalent to that of $27.50 per week in 1929, or substantially greater than the average wage paid in 1929 which was 520.68 . The negotiations with the committee representing the industry carried on prior to the hearing were conducted with the advice of Mr. Rufus Scott (AdYisor for Industry sel cted bv the Industrial Advisory Committee) and Mr. Francis J. Gorman (Labor Advi or selected by the Labor Advisory Committee) and all provisions of saicl Code so negotiated were conceded by all to be reasonable and fair and in full co pliance with the pirit of the Recovery Act. The diffi,..ulty of obtaining accurate tatistics re ulted in faihue on the part of the Divi ion of Research and Planning to participate in the negotiations or in the hearing. Their report, sub equently completed (copy of which is attached), supports the above out1in d conclusions except that it uggest that the relati\e pro sw•rity of the jndu try warrants a higher minimun1 wage. Notwithstanding the relative prosperity, which the industry has experienced, no higher minimum than that established in the Code is recommended at this time bcause of the fact: (a) Provisions of the Code seem to fully comply with the purpose of the Act.

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6 (b) Provisions as to wages and hours were conceded by other advisors to be fair and reasonable, and (c) Any calculations resulting in higher minirnum should be based upon more Hccurate statistics. The con1.pilation and filing of such statistics should be required of the industry immediately and modifica tions be made in the Code as warranted by such reports. The Code was presented by a group of 14 manufacturers c l aiming to represent 80% in numbers and 90% of the production of synthetic yarn in the United States. The application for approval of the Code was signed by the duly authorized officers of each company. BRIEF REVIEW OF HEARING Clause II of the Code defines the Rayon and Synthetic Yarn Pro ducing Industry "to mean the manufacture of rayon and/or synthetic yarns from cellulose, put up and packaged in forms suitable for the various consuming and fabricating branches of the textile industry." At the hearing, protest was filed by two companies, the Cellanese Corporation of America and the Tennessee-Eastman Corporation, who objected to the Code definition of the Industry on the grounds that it would include their operations under the Code. The protestants, representing themselves as the producers of more than 80% of the cellulose acetate type of synthetic yaTn, testified that they did not consider themselves a part of the "Rayon" industry and wished to file a separate code. (Transcript of hearing Page 42 to 75.) The protestants did not deny that their product was synthetic yarn and did not object to any of the provisions of the Code-except that they insisted that all supervision of their industry should be through an agency of their own selection. At the conclusion of the hearing, the Deputy Administrator en deavored through negotiation to reconcile the differences between these two groups but being unsuecessful, recomn1.ends the approval of this Code and upon application of the protestsnts the granting of a hearing on their plea for exemption. CONCLUSIO S I find that-(a) The Code complies in all respects with the pertinent provisions of Title I of the Act, including, without limitation, subsection (a) of Section 7, and subsection (b) of Section 10 thereof; and that (b) the Code is not designed to promote rnonopolies or to eliminate or oppress small enterprises and will not operate to di criminate against them, and will tend to effectuate the policy of Title I of the National Industrial Recovery Act. Accordingly, it is recommended that the Code of Fair Competition for the Rayon and Synthetic Yarn Producing Industry be approved. Respectfully submitted. AUGUST 19, 1933. W. L . ALLEN, Deputy Administ1atoT .

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7 APPLICATION-CODE OF FAIR COMPETITION, RAYON AND SYNTHETIC YARN PRODUCING INDUSTRY APPLICATION TO THE PRESIDE T OF THE UNITED STATES FOR AP-PROVAL oF A CoDE oF FAIR CoMPETITIO FOR THE RAYON A D SYNTHETIC yARN PROD CI G I -D STRY Thi application is made on behalf of the firms or corporations listed hereunder (all boing producers of rayon and/or synthetic arn), and epre enting approximately O% in numbers and 90 % in production of the 'Rayon and Synthetic Yarn Indu try. " And the firms or corporations listed hereunder (a ll being producers of rayon and/or synthetic yarn) , where signed immediately beneath the name of the firm or corporation, subscribe to this application and to the following documents. CODE FOR RAYO A D SL THE'l'IC YARN PRODUCI G L.D TRY A .D BRIEF OF THE RAYON AND SY l'HETIC YARN PROD ciNG IXD"G TRY AS UPPLEME TARY I .FOR;i,1ATION FOR APPLIED FOR CODE Acme Rayon Corporation, by Chas. A. Huttinger, vice pre ident. American Bemberg corporation, b y S. R. Fuller, Jr., president. American Enka Corporation by C. Me. Carr. American Gla.tJ.z toff Corporation, by S. R. Fuller, Jr., pre ident. Belamos e Corporation, by G. T. Loveridge, plant manager. D elaware Rayon Corporation, by Leon H. Ryan, treasurer. Du Pont Raj on Company, by L. A. Yerke , pre ident. Hampton Company, by Wil liam F. Guinan. Industrial Rayon Corporation, by H. B. Kline \ic pr s ident. New Bedford Rayon Company, by A . Ruth, plan uperL.1.tendent . Skenandoa Ra. on Corporation, by B eecher M. Crou e, president. Turbize Chatillon Corporation by Rufus W. "ott, chairman, executive com. The Viscose Company, by S. A. Sahr age, presi ent. Woonsocket Rayon Corporation, by G eorge R. L c k , ard pre i dent. u T ITED STATE OF AMERICA, District of Columb ia, ss : I, E. R. \an Vliet b eino-duly S\\
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8 CODE OF FAIR COMPETITION, RAYON AND SYNTHETIC YARN PRODUCING INDUSTRY To effectuate the policy of Title I of the National Industrin 1 R ecovery Act, during the period of the emergency , by r ed ucing and r elieving unemplo ment and improving the standards of l a bor, the following provis i ons are establi hed as a code for the rayon and/or synthetic yarn producing industry: I. This cod is ba ed upon the fact that an inherent characteris t ic of the manufacture of synthetic arns i s that production must of ity be continuous-the chemical and textil e departments being in balance; hus any limitation of the hours of machinery cannot economically appl to the rayon and synthetic yarn producing industr and still ha e the industr survive. (See brief attached. ) II. The term "ra on and synthetic yarn producing industry", as used herein i s defined to mean the manufacture of rayon and/or syn hetic yarns from ce llulo se put up and packaged in suitable for the Yariou consuming and fabricating branches of the textile indu trJ. III. The term "effective date" as used herein is defined to be the four eenth day aft r this code shall ha e been approved by the Pre ident. I\ . The term "employees: a used herein shall include all persons employed in the condu t of the ra on and yntheti c yarn producing industry. The term "employers" as usad herein hall include a ll natural person , partner hips, a ociations, corporati ons, and trusts, including tru ees in bankruptcy and receivers , who employ labor in the conduct of any branch of the rayon and yntheti c yarn produeing industry. Y. On and after the effective date, employers in the ra on and syntheti yarn producing industry hall operate on the following schedule of hour of labor and wage : (a) The maxin1un1 hour of labor of all emp loyees-except those erving in execut ive , admini trativ , supervi ory, outside sales and/or technical capacities-hall b forty per week subject to the fie:._-ible p:rovi ion that the averug hours worked per week by an individual emplo:yee no exempt from this provision shall not exceed the nlaxi mum establi hed ,,hen figured over a perod of four weeks. In ca e of emergenc the maximum hours a applied to maintenance and rep air rew rna be extended for the time of the emergenc on ly, in which latter vent a record hall be made of the circumstanoes and reported to th ageney hereinafter provided for i n Artic l e YIII. (b) Ina mu has ome manufacturer of thi industry have alread mad some adju tments in houT and wage , and have recentl rai ed rate of pa and ina much as this code now propo es in Clause (a) next preceding to establi h a uniform pra ti of 40 houTs maximum emplo ment for employees no ernplo ee-x ept those exempted in Clau e (a) next preceding-hall after the effecti date receive for the said 40 -hour peri d of work le s compensation than " -as recei d or ' ould hav been receiv d b aid employee for 4 hour of l abor, as of 111a 1933; and on and aft r the eff ctiv date, th minimun1 wa e which shall b paid b:y mployers in th rayon and yntheti c yarn producing indu tr to any mployee-except tho e xempted in Clause (a) next pr eding-wh th r th wag is based upon productive ffort or effic ien y or hourly rate , shall be at th rate of $13.00 per

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9 week for 40 hours of l abor-except appr nticcs during a p eriod limited to ix weeks s hall b e paid at th r a e f 85% of the mjnimum wage p cified her in. VI. No emp loyer in the ray nand yntheti c yarn producing indu -try s hall employ any mino r under the ag f si:'.:teen years . VII. Employ rs shall comp l y vvith the requirements of Section 7 (a) of Title 1 of the National Industrial Recovery A t as follows: 1 Employees shall h ave t h e right to organize and bargain coll ec tively through representatives of their own choosino, and shall be free from the interfm nee, restraint, or coercion of empl yers of l abor, or their agen s, in t h e d ignation of such representati ves or in se lf organization or in other c oncerted activities for the purpose of collec tive bargainin g or other mutual aid or protection . 2. No employe e and no one seeking employment shall be re quired as a condition of emp loyment to j o i n any company union or to refrain from joining, orga ni zin g, or ass isti ng a labor organ ization of hi s own choosing. 3. Employers s h all com ply with t h e maximum h o urs of labor, minimum rates of p ay, and other condit ions of empl oyment, approved or pres c ribed by t he Presid ent. VIII. The industry shall set up within i t elf a n agency to cooperate with the Adn1inistrator in the administration and enforcement of this Code . IX. The Presiden t may frorn t i me to time cance l or modify any order, approval, li cense, rule, or regulation i sued under Tit l e I of the National Industrial R ecoverv Act. The unders i gne d companies bein g engaged i n the Rayon and Synthetic Yarn Producing Industry hereby sub c rib e to the above Propose d Code of Fair Competition and request its recommendation by the National Industrial Recovery Administration to the Presiden t of the United States for approval. 0