Citation
Supplementary code of fair competition for the wholesale dry goods trade

Material Information

Title:
Supplementary code of fair competition for the wholesale dry goods trade (a division of the wholesaling or distributing trade) : as approved on May 14, 1934
Portion of title:
Wholesale dry goods trade
Creator:
United States -- National Recovery Administration
Place of Publication:
Washington, D.C
Publisher:
United States Government Printing Office
Publication Date:
Language:
English
Physical Description:
9 p. : ; 24 cm.

Subjects

Subjects / Keywords:
Wholesale trade -- Law and legislation -- United States ( lcsh )
Dry-goods -- Law and legislation -- United States ( lcsh )
Genre:
federal government publication ( marcgt )
non-fiction ( marcgt )

Notes

General Note:
Cover title.
General Note:
"Includes amendment No. 1."
General Note:
"Registry No. 229-3-06."
General Note:
"Approved Code No. 201--Supplement No. 8--Reprint."
General Note:
At head of title: National Recovery Administration.

Record Information

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:
005021384 ( ALEPH )
63654418 ( OCLC )

Downloads

This item has the following downloads:


Full Text

Approved Code No. 201-Supplement No. 8-Reprint Registry No. 229-3-06
I, .1


NATIONAL RECOVERY ADMINISTRATION




SUPPLEMENTARY

CODE OF FAIR COMPETITION

FOR THE


WHOLESALE DRY GOODS

TRADE

(A Division of the Wholesaling or Distributing Trade)

AS APPROVED ON MAY 14, 1934


WE DO OUR PART


INCLUDES AMENDMENT NO. 1






UNITED STATES
GOVERNMENT PRINTING OFFICE
WASHINGTON: 1934


For b Superintendent of D ments Wshington D.. rice ce
For ale by the Superinteondeni of Doemnents. Washington D.C. Price 5 cents






















This publication is for sale by the Superintendent of Documents, Government
Printing Office, Washington. D.C., and by district offices of the Bureau of
Foreign and Domestic Commerce.
DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE

Atlanta, Ga.: 504 Post Office Building.
Birmingham, Ala.: 257 Federal Building.
Boston, Mass.: 1801 Customhouse.
Buffalo, N.Y.: Chamber of Commerce Building.
(harleston, S.C.: Chamber of Comnuerce Building.
Chicago, Ill.: Suite 1706, 201 North Wells Street
Cleveland, Ohio: Chamber of Commerce.
Dallas, Tex.: Chamber of Commerce Building.
Detroit, Mich.: 801 First National Bank Building.
Houston, Tex.: Chamber of Commerce Building.
Indianapolis, Ind.: Chamber of Commerce Building.
Jacksonville, Fla.: Chamber of Commerce Building.
Kansas City, Mo.: 1028 Baltimore Avenue.
Los Angeles, Calif.: 1163 South Broadway.
Louisville, Ky.: 408 Federal Building.
Memlphis, Tenn.: 220 Federal Building.
Miliiijioolis, Minn.: 213 Federal Building.
New Orleans. La.: Room 225-A. Custumbouse.
New York, N.Y.: 734 Customhouse.
Norfolk, Va.: 406 East Plume Street.
Philadelphia, Pa.: 422 Commercial Trust Building.
Pittsburgh, Pa.: C'hamber of Commerce Building.
Portland, Oreg.: 215 New Post Office Building.
St. Louis, Mo.: 506 Olive Street.
San Francisco, Calif.: 310 Customhouse.
Seattle, Wash.: 809 Federal Office Building.











APPROVED CODE NO. 201--SUPPLEMENT NO. 8


SUPPLEMENTARY CODE OF FAIR COMPETITION
FOR THE

WHOLESALE DRY GOODS TRADE

As Approved on May 14, 1934


ORDER

SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE DRY
GOODS TRADE

A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE

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 approval of a Supple-
mental Code of Fair Competition for the Wholesale Dry Goods
Trade to the Code of Fair Competition for the Wholesaling or Dis-
tributing Trade, and hearings having been duly held thereon and
the annexed report on said Supplemental Code, containing findings
with respect thereto, having been made and directed to the President:
NOW, THEREFORE, on behalf of the President of the United
States, I, Hugh S. Johnson, Administrator for Industrial Recovery,
pursuant to authority vested in me by Executive Orders of the 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 Supplemental Code complies in all re-
spects with the pertinent provisions and will promote the policy and
purposes of said Title of said Act; and do hereby order that said
Supplemental Code of Fair Competition be and it is hereby ap-
proved; provided, however, that the provisions of Article V are
approved for a period of ninety (90) days only, subject to further
order at that time as a result of study made of the operation of said
provisions.
HUOH S. JOHNSON,
Administrator for Industrial Recovery.
Approval recommended:
H. O. KING
Division Administrator.
WASHINGTON, D.C.,
May 1,5 1934.
98225"--1325-66----34 (11












REPORT TO THE PRESIDENT


The PRESIDENT,
The White House.
SIR: This is a report of the Hearing on the Supplemental Code
of Fair Competition for the Wholesale Dry Goods Trade, con-
ducted in the Chinese Room of the Mayflower Hotel, on December
20, 1933. The Supplemental Code, which is attached, was presented
by a duly qualified and authorized representative of the Trade.

THE TRADE
According to statistics furnished by members of the Wholesale
Dry Goods Trade, there are approximately 1071 establishments
with aggregate annual sales of $890,000,000. The Trade employs
about 26,000 persons. It should be noted that these figures include
what is known to the Trade as General Line Wholesalers.

PROVISIONS OF THE CODE
Since this Code is supplemental to the Code of Fair Competi-
tion for the Wholesaling or Distributing Trade, it contains no
labor provisions.
The provisions containing supplemental definitions are consid-
ered inclusive and accurate.
The supplement to the Administrative provisions of the Gen-
eral Code establishes a Divisional Code Authority which is fairly
and adequately representative of all the different elements in the
Trade.
The Trade Practices are not considered in any way objection-
able. The provision regarding sales below cost is designed to pro-
tect the producer as well as the members of this Trade. This pro-
vision has been thoroughly probed and it is felt that the result
gives very adequate consumer protection.

FINDINGS
The Deputy Administrator in his final report to me on said
Supplemental Code having found as herein set forth and on the basis
of all the proceedings in this matter;
I find that
(a) Said Supplemental' Code is well designed to promote the
policies and purposes of Title I of the National Industrial Recovery
Act, including removal of obstructions to the free flow of inter-
state and foreign commerce which tend to diminish the amount
thereof, and will provide for the general welfare by promoting the
organization of industry for the purpose of cooperative action among
trade groups, by inducing and maintaining united action of labor






and management under adequate governmental sanction and super-
vision, by eliminating unfair competitive practices, by promoting
the fullest possible use of the present productive capacity of indus-
tries, by avoiding undue restriction of production (except as may
be temporarily required), by increasing the consumption of indus-
trial and agricultural products through increasing purchasing power,
by reducing and relieving unemployment, by improving standards
of labor, and by otherwise rehabilitating industry.
(b) Said Trade normally employs not more than 50,000 employees
and it is not classified by me as a major industry.
(c) The Supplemental Code as approved complies in all respects
with the pertinent provisions of said Title of said Act, including
without limitation Subsection (a) of Section 3, Subsection (a)
of Section 7 and Subsection (b) of Section 10 thereof; and that the
applicant association is a trade association truly representative of
the aforesaid Trade; and that said association imposes no inequi-
table restrictions on admission to membership therein.
(d) The Supplemental Code is not designed to and will not permit
monopolies or monopolistic practices.
(e) The Supplemental Code is not designed to and will not
eliminate or oppress small enterprises and will not operate to dis-
criminate against them.
(f) Those engaged in other steps of the economic process have
not been deprived of the right to be heard prior to the approval
of this Supplemental Code.
For these reasons, the Supplemental Code has been approved.
Respectfully,
IHUGHI S. JOHNSON,
Administrator.
MAY 14, 1934.












SUPPLEMENTARY CODE OF FAIR COMPETITION FOR
THE WHOLESALE DRY GOODS TRADE

A DIVISION OF THE WHOLESALE OR DISTRIBUTING TRADE

ARTICLE I-PURPOSES

To further effectuate the policies of Title I of the National
Industrial Recovery Act the following provisions are established
as a Supplemental Code of Fair Competition for the Wholesale Dry
Goods Trade to the Code of Fair Competition for the Wholesaling
or Distributing Trade as provided by Article VI, Section 1 (c)
thereof and shall be considered a part of and in connection with
such Wholesaling or Distributing Code. Both Codes shall be bind-
ing upon every member of the Wholesale Dry Goods Trade.

ARTICLE II--DEFNITIONS
SUPPLEMENTING ARTICLE II OF THE GENERAL CODE
Wholesaler or Distributor.-The term wholesaler or distrib-
utor as used herein, is defined to mean a person or firm or division
thereof, definitely organized to render and rendering a general
distribution service, which buys and maintains at his or its place of
business a stock of dry goods or of one or more lines of dry goods
(except when the provisions of Article VI become applicable) and
which through salesmen, advertising and/or sales promotion devices
sells to retailers and/or to institutional, commercial, and.'or indus-
trial users; but which does not sell in significant amounts to ultimate
consumers.
Member of the Trade.-The term member of the Trade as used
herein, is defined to mean a wholesaler" or distributor" as
defined above.
Dry Goods.-The term dry goods ", as used herein, is defined
to mean textiles, apparel, and the miscellaneous products of industry
generally classed as novelties, notions, and kindred lines.
National Wholesaler.-The term "national wholesaler ", as used
herein, is defined to mean a person or firm or division thereof, which
sells dry goods at wholesale predominantly in fifteen or more of the
states and/or territorial possessions of the United States.
Territorial Wholesaler.-The term "territorial wholesaler ", as
used herein, is defined to mean a person or firm, or division thereof,
which sells dry goods at wholesale predominantly in less than fifteen
of the states and/or territorial possessions of the United States.
Specialty Wholesaler.-The term specialty wholesaler ", as used
herein, is defined to mean a person, firm or division thereof, which
deals at wholesale in one or more lines of dry goods, but does not
deal in a general line.






Divisional Code Authority.-The term "Divisional Code Author-
ity ", as used herein, is defined to mean the Divisional Code Au-
thority for the Wholesale Dry Goods Trade, a division of the Whole-
saling or Distributing Trade.
General Code.-The term General Code ", as used herein, is de-
fined to mean the Code of Fair Competition for the Wholesaling or
Distributing Trade.
Consignment.-The term consignment ", as used herein, is defined
to mean the delivery by a distributor to any person, agent, purchaser,
or otherwise under any agreement or understanding, expressed or
implied, pursuant to which the seller retains any lien upon or title
to or interest in the goods delivered for the primary purpose of allow-
ing such goods to be returned as unsold.
ARTICLE III-ADMINISTRATION

SUPPLEMENTING ARTICLE VI, SECTION 2 (E) OF THE GENERAL CODE

SECTION 1. (a) For the purpose of administration, the Dry Goods
Division of the Wholesale Trade may be sub-divided into specific
commodity subdivisions, the following being authorized upon the ap-
proval of this Supplemental Code:
1. A Hosiery and Underwear division.
2. A Piece Goods division.
3. A Notions division.
4. A Men's Furnishings division.
5. A Knitted Outerwear division.
6. A Ready-to-wear division.
7. A House Furnishings division.
Additional subdivisions may be made when and as approved by
the Administrator.
(b) Each of these subdivisions, subject to the approval or consent
of the Administrator, shall be entitled to appoint a representative
on the General Code Authority established by the General Code.
SECTION 2. (a) The Divisional Code Authority for the Dry Goods
Division of the Wholesaling or Distributing Trade shall be composed
of not less than nineteen (19) nor more than twenty-one (21) mem-
bers; one for each of seven (7) territorial membership.zones as
established by the Wholesale Dry Goods Institute; one for each
of the subdivisions established in Section 1 (a) of this Article and
five (5) to be appointed by the Board of Directors of the Wholesale
Dry Goods Institute.
(b) The members of the Divisional Code Authority shall be
elected as follows:
1. The Board of Directors of the Wholesale Dry Goods Institute
shall send to every member of the Trade discoverable by diligent
search a nominating ballot upon which the member of the Trade may
enter nominations for the members of the Divisional Code Authority
for the territorial district and commodity subdivision to which he
belongs. To each ballot shall be attached a statement of assent and
compliance to this Supplemental Code and to the General Code.
2. Fifteen days after the mailing of such ballots the Board of
Directors of the Wholesale Dry Goods Institute shall publicly count





6

the votes then in its possession. Only those ballots which are ac-
companied by a signed statement of assent and compliance shall
be counted. The two persons in each territorial district and in each
commodity subdivision receiving the highest number of votes shall
be declared to be the nominees.
3. The Board of Directors of the Wholesale Dry Goods Institute
shall then prepare ballots including the names of these nominees.
The procedure followed in mailing these ballots shall be the same
as that described in subsection (b) 1, above.
4. Fifteen days after the mailing of such ballots the Board of
Directors of the Wholesale Dry Goods Institute shall publicly count
the votes then in its possession. Only those ballots shall be counted
which are accompanied by a signed statement of assent and com-
pliance or by a letter stating that the voter has previously filed such
a statement with said Board of Directors. The person in each ter-
ritorial district and in each commodity subdivision who receives the
highest number of votes shall be declared elected.
5. The Board of Directors of the Wholesale Dry Goods Institute
shall make certification to the Administrator of its compliance with
the above method of election and of the results thereof.
SECTION 3. (a) The Divisional Code Authority may appoint for
each commodity subdivision a Control Committee of five members
which shall include one representative of specialty wholesalers, one
representative of territorial wholesalers and one representative of
national wholesalers.
(b) The several Control Committees shall have such duties and
powers as may be delegated to them by the Divisional Code Author-
ity but nothing herein shall be construed to relieve the Divisional
Code Authority of any of its duties or responsibilities as such.
(c) The Divisional Code Authority may appoint a regional agent,
or agents, in each of such regions as it may establish, to assist it in
administering the Supplemental Code, provided however, that noth-
ing herein shall relieve the Divisional Code Authority of its respon-
sibilities as such.
(d) The Divisional Code Authority shall appoint a Trade Prac-
tice Committee, which shall meet with the Trade Practice Com-
mittees appointed under such other Codes as may be related to the
Trade, except those appointed under other Supplemental Codes to
the General Code, for the purpose of formulating fair trade prac-
tices to govern the relationships between production and distribution
employers under this Supplemental Code and under such others, to
the end that such fair trade practices may be proposed to the Admin-
istrator as amendments to this Supplemental Code and such other
Codes.
(e) The Divisional Code Authority shall have power to organize,
elect officers, hire employees, and perform such other acts as may
be necessary for the proper administration of the Supplemental Code
and the General Code.
(f) (1) It being found necessary in order to support the adminis-
tration of this Code and to maintain, the standards of fair competi-
tion established hereunder and to effectuate the policy of the Act,
the Code Authority is authorized:







a. To incur such reasonable obligations as are necessary and proper
for the foregoing purposes and to meet such obligations out of funds
which may be raised as hereinafter provided and which shall be held
in trust for the purposes of the Code;
b. To submit to the Adrin itrator for his approval, subject to
such notice and opportunity to be heard as he may deem necessary
(1) an itenmiLed budget of its estimated c penses for the foregoing
purposes, and (2) an equitable basis upon which the funds nec-
essary to support such budget shall be continued by members of the
Trade
c. After such budget and basis of contribution have been approved
by the Administrator, to determinne and obtain equitable contribution
as above set forth by all members of the Trade, and to that end, if
necessary, to institute legal proceedings therefore in its own name.
(2) Each member of the Trade shall pay his or its equitable con-
tribution to the expenses of the maintenance of the Code Authority,
determined as hereinabove provided, and subject to rules and regu-
lations pertaining thereto issued by the Administrator. Only n len-
bers of the Trade complying with the Code and contributing to the
expense of its administration as hereinabo-ve provided, unless duly
exempted from making such contributions, shall be entitled to
participate in the selection of members of the Code Authority or
to receive the benefits of any of its voluntary activities or to
make use of any emblem or insignia of the National Recovery
A administration.
(3) The Divisional Code Authority shall neither incur nor pay
any obligation substantially in excess of the amount thereof as esti-
mated in its approved budget, and shall in no event exceed the total
amount contained in the approved budget, except upon approval of
the Administrator; and no subsequent budget shall contain any
deficiency item for expenditures in excess of prior budget estimates
except those wh/ch the Administrator shall have so approved.?
SECTION 4. Any person or firm now or hereafter engaged in the
wholesale distribution of dry goods and related lines as herein
found is eligible for and shall be admitted to membership in the
Wholesale Dry Goods Institute upon payment of dues and agree-
ment to comply with the Constitution and the by-laws thereof.
SECTION 5. Nothing contained in this Supplemental Code shall con-
stitute the members of the Divisional Code Authority partners for
any purpose nor shall any members of the Divisional Code Author-
ity be liable in any manner to anyone for any act of any other mem-
bers, officers, agents, or employees of the Divisional Code Authority.
Nor shall any member of the Divisional Code Authority, exercising
reasonable diligence in the conduct of his duties hereunder, be liable
to anyone for any action or omission to act, under this Supplemental
Code, except for his own wilful misfeasance or nonfeasance.
SECTION 6. If the Administrator shall determine that any action
of the Divisional Code Authority or any agency thereof may be
unfair or unjust or contrary to the public interest, the Administrator
may require that such action be suspended to afford an opportunity
1 Italicized words added by Amendment No. 1, approved Sept. 14, 1934.








for investigation of the merits of such action and for further consid-
eration by such Divisional Code Authority or agency, pending final
action, which shall not be effective unless the Administrator approves
or unless he shall fail to disapprove after thirty days' notice to him
of intention to proceed with such action in its original or modified
form.
ARTICLE IV-TRADE PRACTICES

SUPPLEMENTING ARTICLE VII OF THE GENERAL CODE

The following practices constitute unfair methods of competition:
1. To deliver merchandise on any basis other than F.O.B. the city
in which the wholesaler is located or, in case of direct shipments,
F.O.B. city where factory is located.
Free deliveries of merchandise may be made by a wholesaler within
but not beyond the metropolitan area of the city in which the whole-
saler is located. The Divisional Code Authority may define the
metropolitan area in any specific case.
This rule does not apply to those items on which it is the trade
practice of the manufacturer to prepay transportation charges to the
retail store on goods sold by the wholesaler.
2. To place merchandise on consignment except under circum-
stances to be defined by the Divisional Code Authority when pecul-
iar circumstances of the Trade make the practice desirable.
3. To grant rebates, bonuses, trade discounts, buyers' expense al-
lowances, delivery allowances, storage allowances, overshipments
without charge, gifts, advertising allowances or other tangible in-
ducement or economic advantage to any customer unless such rebates,
bonuses, trade discounts, buyers' expense allowances, delivery allow-
ances, storage allowances, overshipments without charge, gifts, adver-
tising allowances, or other tangible inducement or economic advan-
tages are available to all other customers of the same class in all ter-
ritories on like terms and conditions.
4. To sell any merchandise unless the same shall bear a descriptive
number or name.
5. To allow or to refund personal transportation costs or any part
thereof to customers or prospective customers, or their agents or
employees.
6. To sell goods on terms which permit the extension -of net due
date, cash discount, special dating, or anticipation interest allow-
ances greater than those established for the several lines of merchan-
dise by the Divisional Code Authority and approved by the
Administrator.
7. (a) To sell any merchandise at less than a price which includes
net invoice purchase price, plus incoming transportation costs.
(b) Nothing herein shall prohibit sales made in good faith to
anticipate changing market conditions or to maintain clean and well
balanced stocks of merchandise. Such sales shall be immediately
reported to the Divisional Code Authority. Upon demand by the
Divisional Code Authority any wholesaler making such sale shall
supply proof that such sale was made in good faith.








ARTICLE V-PERMISSIVE TRADE PRACTICES 2
SUPPLEMENTING ARTICLE VIII OF THE GENERAL CODE
Section 1. (a) No wholesaler shall sell or offer to sell to any
purchaser of a product upon which the manufacturer thereof shall
have granted to such wholesaler a fair price differential as provided
by Article VIII Section 1 of the General Code, a lower price than
that quoted on such conunodity by said manufacturer to the same
class of purchasers.
(b) If such differential is greater than the operating cost of any
member of the Trade such member of the Trade shall be permitted,
upon furnishing proof of his lower operating cost to the Divisional
Code Authority, to sell at less than the differential so established
but not less than his invoice cost plus said operating cost.
(c) Any member of the trade may sell at a price lower than that
established in paragraph (a) of this Section in order to meet the
competition of any other member of the trade who is permitted
under paragraph (b) of this Section to reduce his price below that
established in paragraph (a) of this Section.
(d) The Administrator may, from time to time, collect statistics
of the operating expenses of the members of the Trade. If such
investigation shall show that the price differential established under
paragraph (a) above is in any way inequitable or unduly high in
relation to the wholesaler's operating costs, or tends to enhance the
price of the product to buyers or ultimate consumers, the Adminis-
trator may, after proper notice and hearing, suspend it or declare
it permanently inoperative.
(e) An exception to the rule in paragraph (a) of this Section may
be granted by the Divisional Code Authority in case a wholesaler
wishes to discontinue handling a manufacturer's line and has stock
on hand to be disposed of. In such case the manufacturer shall be
given the option of taking back at the manufacturer's then market
price the wholesaler's stock on hand or any portion thereof. If
the manufacturer fails to exercise this'option within ten days after
written notice by the wholesaler of his intention to discontinue han-
dling that line, the wholesaler may proceed to dispose of the stock at
any price he may desire.
ARTICLE VI-APPLICATION OF THIS SUPPLEMENTAL CODE
Whenever any Supplemental Code is approved for wholesalers who
specialize in a particular type of dry goods, such specialty whole-
salers shall no longer be subject to this Supplemental Code; provided,
that only upon order of the Administrator shall the sale of such
specialty products by wholesalers governed by this Supplemental
Code be governed by the trade practice provisions of such dry goods
specialty Supplemental Codes.
ARTICLE VII-EFFECTIVE DATE
This Supplemental Code shall become effective on the tenth day
after its approval by the Administrator.
Approved Code No. 201. Supplement No. 8.
Registry No. 229-3-06.
See paragraph 2 of order approving this Code.




UNIVERSITY OF FLORIDA
II 1262 08482 I I
3 1262 08482 8895




Full Text

PAGE 1

Approved Code No. 201-Supplement No. 8-Reprint Registry No. 229-3-06 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE DRY GOODS TRADE (A Division of the Wholesaling or Distributing Trade) AS APPROVED ON MAY 14, 1934 WE DO OUR PART INCLUDES AMENDMENT NO. 1 UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents, Washin2ton D.C. Price S cents

PAGE 2

This publication is for sale by the Superintendent of Documents, Government Printing Office, Washington, D.C., and by district offices of the Bureau of FQreign and Domestic Commerce. DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE Atlanta, Ga. : 504 Post Office Building. Birmingham, Ala. : 257 Federal Building. Boston, M ass . : 1801 Customllouse. Buffalo, N.Y.: Chamber of Commerce Building. Charleston, S.C.: Chamber of Commerce Building. Chicago, Ill.: Suite 1706, 201 North Wells Street. Cleveland, Ohio: Chamber of Commerce. Dallas, Tex. : Chamber of Commerce Building. D e troit, Mich.: 801 First National Bank Building. Houston , Tex.: Chamber of Commerce Building. Indi a nap o lis, Ind.: Chamber of Commerce Building. Jacksonville, Fla.: Chamber of Commerce Building. Kansas C ity, Mo.: 1028 Baltimore Avenue. Los Angeles, Calif.: 1163 South Broadway. L o uisville, Ky. : 408 Federal Building. l\lemphis, Tenn.: 229 Federal Building. l\linneapolis, Minn.: 213 F e deral Building. New Orleans, La.: Room 225-A, Customhouse. New York, N.Y.: 734 Customhouse. Norfolk, Va.: 406 East Plume Street. Philadelphia, Pa. : 422 Commercial Trust Building. Pittsburgh, Pa.: Chamber of Commerce Building. Portland , Or e g. : 215 New Post Office Building. St. Louis, Mo.: 506 Olive Street. San Francisco, Calif.: 310 Customhouse. Seattle, Wash.: 809 Federal Office Building.

PAGE 3

APPROVED CODE NO. 201-SUPPLEMENT NO. 8 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE DRY GOODS TRADE As Approved on May 14, 1934 ORDER SUPPLEMENT.ARY CODE OF F .AIR COMPETITION FOR THE w HOLES.ALE DRY Goons TRADE .A DIVISION OF THE WHOLESALING OR DISTRIBUTING TR.ADE An application having been duly made pursuant to and in full compliance with the provisions of Title I of the National Indu s trial Recovery Act, approved June 16, 1933, or approval of a Supple m e ntal Code of Fair Competition or the Wholesale Dry Goods Trade to the Code of Fair Competition or the vVholesaling or Dis tributing Trade, and hearings having been duly held thereon and the annexed report on said Supplemental Code, containing findings with respect thereto, having been made and directed to the Pre s ident: NOW, THEREFORE, on behalf of the President of the United States, I, Hugh S. Johnson, Administrator or 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 Supplemental Code complies in all re spects with the pertinent provisions and will promote the policy and purposes of said Title of said Act; and do hereby order that said Supplemental Code of Fair Competition be and it is hereby ap proved; provided, however, that the provisions of Article V are approved or a period of ninety (90) days only, subject to further orde~ ~t that time as a result of study made of the operation of said prov1s10ns. HUGH s. JOHNSON, Admiin-istrator for lndwstrial Recovery. Approval recommended: H. 0. KrNG, Div-ision Admin-istrator. w .ASHINGTON, D.C., May 14, 1934. 98225-1325-66----34 (1)

PAGE 4

REPORT TO THE PRESIDENT The PRESIDENT, The White House. Srn: This is a report of the Hearing on the Supplemental Code of Fair Competition for the Wholesale Dry Goods Trade, con ducted in the Chinese Room of the Mayflower Hotel, on December 20, 1933. The Supplemental Code, which is attached, was presented by a duly qualified and authorized representative of the Trade. THE TRADE According to statistics furnished by members of the Wholesale Dry Goods Trade, there are approximately 1071 establishments with aggregate annual sales of $890,000,000. The Trade employs about 26,000 persons. It should be noted that these figures include what is known to the Trade as General Line Wholesalers. PROVISIONS OF THE OODE Since this Code is supplemental" to the Code of Fair Competi tion for the Wholesaling or Distributing Trade, it contains no labor provisions. The provisions containing supplemental definitions are consid ered inclusive and accurate. The supplement to the Administrative provisions of the Gen eral Code establi s hes a Divisional Code Authority which is fairly and adequately representative of all the different elements in the Trade. The Trade Practi c es are not considered in any way objection able. The provision regarding sales below cost is designed to pro tect the producer as well as the members of this Trade. This pro vision has been thoroughly probed and it is felt that the result gives very adequate consumer protection. FINDINGS The Deputy Administrator in his final report to me on said Suppl e m e ntal Code having found as herein set forth and on the basis of all th e pro c eedings in this matter; I find that (a) S a id Supplemental Code is well d es igned to promote the poli c ie s and purposes of Titl e I of the National Indu s trial Recovery A c t, includin g removal of ob s tructions to the free flow of inter state and foreign commerce which tend to dimini s h the amount thereof, and will provid e for the g e n e ral welfare by promoting the or g anization of indu s try for the pur pos e of cooperative action among trade groups, by inducing and maintaining united action of labor (2)

PAGE 5

3 and management under adequate governmenta l sanction and super vision, by eliminating unfair competitive practices, by pr o moting the fulle t possible use of the pre se nt productive capacity of indus tries, by avoiding undue restriction of production ( except as may be temporarily required), by in c rea s ing the con s umption of indus trial and agricultural products through increasing purcha s ing power, by reducing and relieving un emp lo yme nt, by improving standar ls of lab o r , and by otherwise rehabilitating industry. (b) Sa id Trade normally employs not more than 50,000 employees and it i not classified by me as a major indu s try. ( c) The Supplemental Code as approved complies in all resp ec ts with the pertinent provisions of said Title of said Act, including without limi tation Subsection (a) of S ect ion 3, Subsection (a) of Section 7 and Sub sect ion (b) of Section 10 thereof; and that the applicant as socia tion is a trade association truly repres e ntative of the aforesaid Trade; and th a t said association imposes no inequi table restrictions on admission to membership therein. (cl) The Supplemental Code is not designed to and will not permit monopolies or monopolistic practices. ( e) The Supplemental Code is not designed to and will not eliminate or oppress small enterprises and will not operate to dis criminate against them. (f) Those engaged in other steps of the economic process have not b ee n deprived of the right to be heard prior to the approva l of this Supplemental Code. For these rea ons, the Supplemental Code has been approved. Respect ull y, MAY 14, 1934. HUGH s. JOHNSON' Administrator.

PAGE 6

SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE DRY GOODS TRADE A DIVISION OF THE WHOLESALE OR DISTRIBUTING TRADE ARTICLE I-PURPOSES To further effectuate the policies of Title I of the National Industrial Recovery Act the following provisions are established as a Supplemental Code of Fair Competition for the Wholesale Dry Goods Trade to the Code of Fair Competition for the Wholesaling or Distributing Trade as provided by Article VI, Section 1 ( c) thereof and ~hall be considered a part of and in connection with such Wholesaling or Distributing Code. Both Codes shall be bind ing upon every member of the Wholesale Dry Goods Trade. ARTICLE II-DEFINITIONS SUPPLEMENTING ARTICLE II OF THE GENERAL CODE Wholesaler or Di,stributor.-The term "wholesaler" or "distrib utor " as used herein, is defined to mean a person or firm or di vision thereof, definitely organized to render and rendering a general distribution service, which buys and maintains at his or its place of bu s iness a stock of dry goods or of one or more lines of dry goods ( except when the provisions of Article VI become applicable) and whi c h through salesmen, advertising and / or sales promotion devices sells to retailers and / or to institutional, commercial, and/or indus trial users; but which does not sell in significant amounts to ultimate consumers. M e mb e r of the Trad e .-The term "member of the Trade " as used her e in, is defined to mean a "wholesaler" or "distributor" as defined above. Dry Goods.-The term "dry goods", as used herein, is defined to mean textiles, apparel, and the miscellaneous products of industry generally clas s ed as novelties, notions, and kindred lines. National Whol e sal e r.-The term "national wholesaler", as used herein, is d e fined to mean a person or firm or division thereof, which sells dry g oods at wholesale predominantly in fifteen or more of the stat es a n d / or territorial possessions of the United States. T e rritorial Whol e sal e r.-The term "territorial wholesaler", as used herein, is defined to mean a person or firm, or division thereof, which sells dry goods at wholesale predominantly in less than fifteen of the states and / or territorial posse s sions of the United States. Sp e cialty Wholesaler.-The term "specialty wholesaler", as used herein, is defined to mean a person , firm or di vision thereof, which deals at wholesale in one or more lines of dry goods, but does not deal in a general line. (4)

PAGE 7

5 Divisional Code A11,thority.-The term "Divisional Code Author ity", as used herein, is defined to mean the :p~v~sional Code Au thority for the "\Vhole sa le Dry Goods Trade, a d1v1s10n of the Whole saling or Distributing Trade. General O od e .-The term H General Code ", as used herein , is de fined to mean the Code of Fair Competition for the \Vholesaling or Distributing Trade. 0 onsignm ent .-The term " consignment ", as used her~in, is defined to mean the delivery by a distributor to any person , agent, purcha se r, or otherwise under any agreement or understanding, expressed or implied, pursuant to which the se ller retains any lien upon or title to or interest in the goods delivered for the primary purpose of allow ing such goods to be returned as unsold. ARTICLE III-ADMINISTRATION SUPPLEMENTING .ARTICLE VI, SECTION 2 ( E) OF THE GENERAL CODE SECTION 1. (a) For the purpose of administration, the Dry Goods Di vision of the vVholesale Trade may be sub-divided into specific commodity subdivisions, the following being authorized upon the ap proval of this Supplemental Code: 1. A Hosiery and Underwear division. 2. A Piece Goods division. 3. A Notions division. 4. A Men's Furnishings division. 5. A Knitted Outerwear division. 6. A Ready-to-wear divi ion. 7. A Hou se Furni s hings division. Additional subdivisions may be made when and as approved by the Administrator. (b) Each of these subdivi s ions , subject to the approval or consent of the Administrator, shall be entitled to appoint a representative on the General Code Authority establish e d by the General Code. SECTION 2. (a) The Divisional Code Authority for the Dry Goods Divi sion of the vVholesaling or Di stributing Trade shall be composed of not less than nineteen (19) nor more than twenty-one (21) mem bers; one for each of seven (7) territorial membership zones as established by the Wholesale Dry Goods In s titute; one for each of the subdivisions established in Section 1 (a) of this Articl e and five ( 5) to be appointed by the Board of Dire ctors of the Wholesale Dry, Goods Institute. ( b) The members of the Divisional Code Authority shall be elected as fallow s : 1. The Board of Directors of the \Vholesale Dry Goods Institute hall se nd to every m e mber of the Trade discoverable by diligent sea rch a nominating ballot upon which the member of the Trad e may enter nominations for the memb e rs of the Divisional Code Authority for the territorial district and commodity s ubdivision to which he belongs. To each ballot sha ll be attached a statement of assent and compliance to this Supp l emental Code and to the General Code. 2. Fifteen days after the mailing of such ballots the Board of Directors of the vVhole sa le Dr y Goods In stitute shall publicly count

PAGE 8

6 the votes then in its possession. Only those ballots which are ac companied by a signed statement of assent and compliance shall be counted. T!_ie two persons in each territorial district and in each commodity subdivision receiving the highest number of votes shall be declared to be the nominees. 3. The Board of Directors of the Wholesale Dry Goods Institute shall then prepare ballots including the names of these nominees. The procedure followed in mailing these ballots shall be the same as that described in subsection (b) 1, above. 4. Fifteen clays after the mailing of such ballots the Board 0 Directors of the "\Vholesale Dry Goods Institute shall publicly count the votes then in its possession. Only those ballots shall be counted which are accompanied by a signed statement of assent and com pliance or by a letter stating that the voter has previously filed such a statement with said Board of Directors. The person in each ter ritorial district and in each commodity subdivision who receives the highest number of votes shall be declared elected. 5. The Board of Directors of the \Vholesale Dry Goods Institute shall make certification to the Administrator of its compliance with the above method of election and of the results thereof. SECTION 3. (a) The Divisional Code Authority may appoint for each commodity subdivision a Control Committee of five members which shall include one representative of specialty wholesalers, one representative of territorial wholesalers and one representative of national wholesalers. (b) The several Control Committees shall have such duties and powers as may be delegated to them by the Divisional Code Author ity but nothing herein shall be construed to relieve the Divisional Code Authority of any of its duties or responsibilities as such. ( c) The Divisional Code Authority may appoint a regional agent, or agents, in each of such regions as it may establish, to assist it in administering the Supplemental Code, provided however, that noth ing herein shall relieve the Divisional Code Authority of its respon sibilities as such. ( d) The Divisional Code Authority shall appoint a Trade Prac tice Committee, which shall meet with the Trade Practice Com mittees appointed under such other Codes as may be related to the Trade, except those appointed under other Supplemental Codes to the General Code, for the purpose of formulating fair trade prac tices to govern the relationships between production and distribution employers under this Supplemental Code and under such others, to the end that such fair trade practices may be proposed to the Admin istrator as amendments to this Supplemental Code and such other Codes. (e) The Divisional Code Authority shall have power to organize, elect officers, hire employees, and perform such other acts as may be necessary for the proper administration of the Supplemental Code and the General Code. (f) (1) It being found necessary in order to support the adminis tration of this Code and to maintain the standards of fair c01npeti tion established hereunder and to etf ectuate the policy of the Act, the Code Authority is authorized:

PAGE 9

7 a. To incwr s-uch reasonahle obligations as are necessary and proper for the for e going pwrposes and to m,e e t sw c h obl i gations out of fwnds which 1nay b e rau e d as her ei naft e r p r ovided and which shall b e held in trust for the pu;rpos e s of th e Code,b. To submit to th e Administrator for hu approval, s ' u , bj e ct to such not i c e and opportunity to b e heard as he may d ee m nece ssary (1) an it e miz e d budg e t of its e stimwt e d e wp e ns e s for th e for e going pu r poses, and ( 2 ) an e quitable basis upon whi c h the fwnds ne e ssa1y to s-up port suich budg e t shall b e contin we d by 1nemb e rs of the Trade/ c. After such budg e t and basu of co n tribution ha v e been approv e d by the Adminutrator, to det e rmine and obtain e quitabl e contrib i1, t i on as above set forth by all 1ne1nbers of th e Trad e , and to that end, if n ece ssary, to institute legal proce e dings th e r e for in i ts ow n nam e . ( 2 ) Ea c h 1n e mb e r of the T r ade shall pay hu or its e qu i table con tribution to the ewp e ns e s of th e maint e nanc e of the Cod e Authority, d e t e rmined as hereinabov e provid e d, and subj e ct to rul e s and regu lations pertaining th e r e to usu e d by the Administrator. Only m,em b e rs of the Trad e complying with the Code and contribu,ting to the exp e nse of its admlinutration as h e r e inabo1Je prrov i ded, unl e ss duby ex e mpt e d from making swch contributions, shall be e ntitled to participate in the s e l e ctwn of m,emb e rs of the Code Authority or to receive the b e nefits of amy of its voluntary a c tivities or to -mak e use of any emblem or insignia of the National Recovery Ad11iinutration. (3) The Divuioncrl, Code Awthority shall neither incwr nor pay . any obligation s-ubstantially in e wc e ss of the a11iownt thereof as e sti mated in its approved budget, and shall in no event ewceed the total, amount contained in the appr01Jed budget, ewcept upon appro1Jal of the Adminutrator,and no subsequent bwdget shall contain any deficiency item for ewpenditur e s in ewoess of rprior budget estimates ewcept thos e which the Adminutrator shall have so appr01Jed. 1 SECTION 4. Any person or firm now or hereafter engaged in the wholesale distribution of dry goods and related lines as herein found is eligible for and shall be admitted to membership in the Wholesale Dry Goods Institute upon payment of dues and agree ment to comply with the Constitution and the by-laws thereof. SECTION 5. Nothing contained in this Supplemental Code shall con stitute the members of the Divisional Code Authority partners for .any purpose nor shall any members of the Divisional Code Author ity be liable in any manner to anyone for any act of any other mem bers, officers, agents, or employees of the Divisional Code Authority. Nor shall any member of the Divisional Code Authority, exercising reasonable diligence in the conduct of his duties hereunder, be liable to anyone for any action or omission to act, under this Supplemental Code, except for his own wilful misfeasance or nonfeasance. SECTION 6. If the Administrator shall determine that any action of the Divisional Code Authority or any agency thereof may be unfair or unjust or contrary to the public interest, the Administrator may require that such action be suspended to afford an opportunity 1 Italicized words added by Amendment No. 1, approved Sept. 14, 1934.

PAGE 10

8 for investigation of the merits of such action and for further consid eration by such Divisional Code Authority or agency, pending final action, which shall not be effective unless the Administrator approves or unless he shall fail to disapprove after thirty days' notice to him of intention to proceed with such action in its original or modified form. ARTICLE IV-TRADE PRACTICES SUPPLEMENTING ARTICLE VII OF THE GENERAL CODE The following practices constitute unfair methods of competition: 1. To deliver merchandise on any basis other than F.O.B. the city in which the wholesaler is located or, in case of direct shipments, F.O.B. city where factory is located. Free deliveries of merchandise may be made by a wholesaler within but not beyond the metropolitan area of the city in which the whole saler is located. The Divisional Code Authority may define the metropolitan area in any specific case. This rule does not apply to those items on which it is the trade practice of the manufacturer to prepay transportation charges to the retail store on goods sold by the wholesaler. 2. To place merchandise on consignment except under circum stances to be defined by the Divisional Code Authority when pecul iar circumstances of the Trade make the practice desirable. 3. To grant rebates, bonuses, trade discounts, buyers' expense al lowances, delivery allowances, storage allowances, overshipments. without charge, gifts, advertising allowances or other tangible in ducement or economic advantage to any customer unless such rebates, bonuses, trade discounts, buyers' expense allowances, delivery allow ances, storage allowances, overshipments without charge, gifts, adver tising allowances, or other tangible inducement or economic advan tages are available to all other customers of the same class in all ter ritories on like terms and conditions. 4. To sell any merchandise unless the same shall bear a descriptive number or name. 5. To allow or to refund personal transportation costs or any part thereof to customers or prospective customers, or their agents or employees. 6. To sell goods on terms which permit the extension of net due date, cash discount, special dating, or anticipation interest allow ances greater than those established for the several lines of merchan dise by the Divisional Code Authority and approved by the Administrator. 7. (a) To sell any merchandise at less than a pri c e which includes net invoice purchase price, plus incoming transportation costs. (b) Nothing herein shall prohibit sales 1na.de in good faith to anticipate changing market conditions or to maintain clean and well balanced stocks of merchandise. Su c h s ales shall be immediately reported to the Divisional Code Authority. Upon demand by the Divisional Code Authority any wholesaler making such sale shall supply proof that such sale was made in good faith.

PAGE 11

9 ARTICLE V-PERMISSIVE TRADE PRACTICES 2 SUPPLEMENTING ARTICLE VIII OF THE GENERAL CODE Section 1. (a) No wholesaler shall sell or offer to sell to any purchaser of a product upon which the manufacturer thereof shall have granted to such wholesaler a fair price differential as provided by Article VIII Section 1 of the General Code, a lower price than that quoted on such commodity by said manufacturer to the same class of purchasers. (b) If such differential is greater than the operating cost of any member of the Trade such member of the Trade shall be permitted, upon furnishing proof of his lower operating cost to the Divisional Code Authority, to sell at less than the differential so established but not less than his invoice cost plus said operating co t. ( c) Any member of the trade may sell at a price lower than that established in paragraph (a) of this Section in order to meet the competition of any other member of the trade who is permitted under para.graph (b) of this Section to reduce his price below that established in paragraph (a) of this Section. (d) The Administrator may, from time to time, collect statistics of the operating expenses of the members of the Trade. If such investigation shall show that the price differential established under paragraph (a) above is in a . ny way inequitable or unduly high in relation to the wholesaler's operating costs, or tends to enhance the price of the product to buyers or ultimate consumers, the Adminis trator may, after proper notice and hearing, suspend it or declare it permanently inoperative. ( e) An exception to the rule in paragraph (a) of this Section may be granted by the Divisional Code Authority in case a wholesaler wishes to discontinue handling a manufacturer's line and has stock on hand to be disposed of. In such case the manufacturer shall be given the option of taking back at the manufacturer's then market price the wholesaler's stock on hand or any portion thereof. If the manufacturer fails to exercise this option within ten days after written notice by the wholesaler of his intention to discontinue han dling that line, the wholesaler may proceed to dispose of the stock at any price he may desire. ARTICLE VI-APPLICATION OF THIS SUPPLEMENTAL CODE \Vhenever any Supplemental Code is approved for wholesalers who specialize in a particular type of dry goods, such specialty whole salers shall no longer be subject to this Supplemental Code; provided, that only upon order of the Administrator shall the sale of such specialty products by wholesalers governed by this Supplemental Code be governed by the trade practice provisions of such dry goods spe c ialty Supplemental Codes. ARTICLE VII-EFFECTIVE DATE This Supplemental Code shall become effective on the tenth day after its approval by the Administrator. Approved Code No. 201, Supplement No. 8. Registry No. 220-3-06. 2 See paragraph 2 of order approving tbis Code, 0

PAGE 16

UNIVERSITY OF FLORIDA \\ \ \\ \\\\\\ \\\ \\\ \\\\\ \\\\\ \\ \\\\\\ \\ \\\\\ \\\ \\\\ \\\\\ \\\\\ \\\ \ \ 3 1262 08482 8895