Approved Code No. 201— Supplement No. 23 Registry No. 231—11 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE TRADE (A Division of the Wholesaling or Distributing Trade) AS APPROVED ON AUGUST 24, 1934 WE DO OUR PART UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents, Washington, D.C. -------- Price 5 cents 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 Embroidery Trade conducted in the Green Room of the Raleigh Hotel on Saturday, May 5, 1934. The Supplemental Code which is attached was presented by a duly qualified and authorized representative of the Trade complying with the statutory requirements. THE TRADE According to statistics furnished by members of the Wholesale Embroidery Trade, it is estimated that there are approximately sev- enty -five (75)' concerns with aggregate annual sales of approximately $7,000,000. These concerns employ approximately four hundred (400) persons. According to the statements of the Industry, em- ployment has not been reduced since 1929. PROVISIONS OF THE CODE Since this Code is supplemental to the Code of Fair Competition for the Wholesaling or Distributing Trade, it contains no labor pro- visions. The provisions containing supplemental definitions are considered inclusive and accurate. The supplement to the Administrative provisions of the General Code establishes a Divisional Code Authority which is fairly and adequately representative of all the different elements in the Trade. The Trade Practices proposed are not considered in any way objectionable. FINDINGS The Deputy Administrator in his final report to me on said Sup- plemental 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 interstate and foreign commerce which tend to diminish the amount thereof, and Avill provide for the general welfare by promoting the organ- ization of trade for the purpose of cooperative action among trade groups, by inducing and maintaining united action of labor and management under adequate governmental sanction and supervision, by eliminating unfair competitive practices, by promoting the fullest (2) possible use of the present productive capacity of industries, by avoiding undue restriction of production (except as may be tempo- rarily required), by increasing the consumption of industrial 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 inequitable 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 elimi- nate or oppress small enterprises and will not operate to discriminate 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, Hugh S. Johnson, Adminis trcct or. August 24, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE EMBROIDERY TRADE, A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE Article I — Purposes To effectuate the policies of Title I of the National Industrial Recovery Act, this Supplemental Code is established as a Code of Fair Competition for the Wholesale Embroidery Trade, pursuant to Article VI, Section 1 (c) of the General Code of Fair Competition for the Wholesaling or Distributing Trade approved by the President of the United States on January 12, 1934. All provisions of the General Code which are not in conflict with the provisions of the Supplemental Code are hereby specifically incorporated by reference in this Supplemental Code and made part hereof. Such provisions of the General Code, together with the provisions of the Supple- mental Code, are the standards of fair competition for, and are bind- ing upon every member of the said Wholesale Embroidery Trade. Article II — Definitions JPPLEMENTING ARTICLE II OF THE GENERAL CODE Section 1. The term " embroidery merchant " or " member of the Trade " as used herein, is defined to mean any individual, partner- ship, association, corporation or other form of enterprise or definitely organized division thereof, other than a. manufacturer, which sells to retailers and/or to institutions, commercial and/or industrial users, the products of the Schiffli and other embroidery machines except Bonnaz. Any person who sells to institutional, commercial and/or industrial users for resale to the ultimate consumer, or in significant amounts to ultimate consumers, shall be considered a wholesaler only to the extent of that part of his business which fulfills the qualifica- tions stated in the preceding sentence. It is the character of a con- cern's selling rather than the character of its buying which distin- guishes it as a wholesaler. Section 2. The term " the Trade " as used herein is defined to mean the business in which embroidery merchants are engaged. Section 3. The term " Association " as used herein is defined to mean the Embroidery Merchants Association, Incorporated. Section 4. The term " Divisional Code Authority " as used herein is defined to mean the Divisional Code Authority for the Wholesale Embroidery Trade, a division of the Wholesaling or Distributing Trade. Section 5. The term " General Code " as used herein is defined to mean the Code of Fair Competition for the Wholesaling or Dis- tributing Trade. (4) Section 6. The term " consignment " as used herein shall include the delivery by any embroidery merchant as agent, purchaser, or otherwise, under any agreement or understanding, expressed or im- plied, pursuant to which the seller retains any lien upon or title to or interest in the goods delivered, or pursuant to which the customer may at his option return any of the goods or claim any credits with respect thereto. Article III — Administration SUPPLEMENTING ARTICLE VI, OF THE GENERAL CODE Section 1. The Divisional Code Authority for the Wholesale Em- broidery Trade shall be composed of five (5) representatives of such Trade, four (4) of whom shall be selected from the Association in accordance with a plan to be approved by the Administrator, and one (1) to be appointed by the Administrator from members of the Trade who are not members of said Association. Section 2. The Divisional Code Authority shall have the follow- ing duties and powers in addition to those prescribed in the General Code, subject to such rules and regulations as may be prescribed by the Administrator : (a) To organize, elect officers, hire employees, and perform such other acts as may be necessary for the proper administration of this Supplemental Code. (b) To adopt by-laws, rules and regulations for procedure. (c) To use such trade associations and other agencies as it deems proper for the carrying out of any of its activities, provided that nothing herein shall relieve the Divisional Code Authority of its duties or responsibilities under this Supplemental Code, and that such trade associations and agencies shall at all times be subject to and comply with the provisions hereof. (d) To appoint a Trade Practice Committee, which shall meet with the trade practice committees appointed under such other Codes of Fair Competition as may be related to the Trade, except such other Supplemental Codes of Fair Competition to the General Code, for the purpose of formulating fair trade practices to govern the relationship between production and distribution employers un- der this Supplemental Code and under such others, to the end that such fair trade practices may be proposed to the Administrator, as an amendment to this Supplemental Code and such other Codes. (e) To obtain from members of the Trade such information and reports as are required for the administration of this Supplemental Code. In addition to information required to be submitted to the General Code Authority and to the Divisional Code Authority, members of the Trade subject to this Supplemental Code shall fur- nish such statistical information as the Administrator may deem necessary for the purposes recited in Section 3 (a) of the Act, to such Federal and State agencies as he may designate, provided that nothing in this Supplemental Code shall relieve any member of the Trade of any existing obligations to furnish reports to any govern- mental agency. No individual report shall be disclosed to any other member of the Trade or any other party except to such other gov- ernmental agencies as may be directed by the Administrator. (f) It being found necessary in order to support the administra- tion of this code and to maintain the standards of fair competition established hereunder and to effectuate the policy of the Act, the Code Authority is authorized: (1) 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 ; (2) To submit to the Administrator for his approval, subject to such notice and opportunity to be heard as he may deem necessary (a) an itemized budget of its estimated expenses for the foregoing purposes, and (b) an equitable basis upon which the funds necessary to support such budget shall be contributed by members of the Trade ; (3) After such budget and basis of contribution have been ap- proved by the Administrator, to determine and obtain equitable contribution as above set forth by all members of the Trade, and to that end, if necessary, to institute legal proceedings therefor in its own name. (g) 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 mem- bers of the Trade complying with the Code and contributing to the expenses of its administration as hereinabove provided, unless duly exempted from making such contributions, shall be entitled to par- ticipate in the selection of members of the Code Authority or to re- ceive the benefits of any voluntary activities or to make use of any emblem or insignia of the National Recovery Administration. (h) The Code Authority shall neither incur nor pay any obliga- tion in excess of the amount thereof as estimated in its approved budget, except upon approval of the Administrator; and no subse- quent budget shall contain any deficiency item for expenditures in excess of prior budget estimates except those which the Administra- tor shall have so approved. Section 3. Nothing contained in this Supplemental Code shall constitute the members of the Divisional Code Authority partners for any purpose nor shall any member of the Divisional Code Au- thority be liable in any manner to anyone for any act of any other member, officer, agent, or employee 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 willful malfeasance or non-feasance. Section 4. 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 for investigation of the merits of such action and for further con- sideration 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 (30) days' notice to him of intention to proceed with such action in its original or modified form. Section 5. The Divisional Code Authority shall have the power to devise and set up a design registration service for the embroidery merchants, including branches where necessary, and to adopt such rules and regulations, with the approval of the Administrator, as may be necessary to carry out the provisions of Article IV, Section 5 hereof. Article IV — Trade Practices SUPPLEMENTING ARTICLE VII OF THE GENERAL CODE The following practices constitute unfair methods of competition and the act of any member of the Trade, directly or indirectly, through an officer, employee, agent or representative, knowingly us- ing, employing or permitting to be employed any such unfair prac- tices, shall constitute a violation of this Supplemental Code : Section 1. To deliver merchandise to any customer beyond the metropolitan area of a city within which the member of the Trade is located, unless such merchandise shall be shipped f.o.b. seller's ware- house. The Divisional Code Authority is empowered to define the term " metropolitan area " subject to the approval of the Administrator. Section 2. To sell or place merchandise on consignment except when permitted by the Divisional Code Authority in cases where a member of the Trade shall certify by registered mail that damaged goods must be disposed of by the consignment method. The Divi- sional Code Authority shall act upon such certification within one (1) week after its receipt, and shall approve the sale unless it finds that there is in fact no necessity for the disposal of such damaged goods or that the goods are not in fact damaged goods. If the Divi- sional Code Authority shall not approve the sale it shall at once notify the member of the Trade of its action and shall also notify the Administrator, who may prohibit the sale. If the proposed consignment sale is not prohibited by the Administrator within ten (10) days after the receipt of notice from the Divisional Code Authority, the member of the Trade shall have the right, at the expiration of said ten (10) day period, to proceed to sell or place the damaged goods on consignment. Section 3. To ship sample pieces on memorandum, except under the following terms and conditions : Such shipment not to contain more than one piece of any one pattern of one color and not to be for a period of more than ten (10) days and with the understanding and declaration that in the event such goods are not returned within ten (10) days they are to be charged as of the date of shipment. Section 4. To grant terms or cash discounts greater than those established herein : (a) Either eight per cent (8%) ten (10) days at E.O.M., or six per cent (6%) ten (10) days, sixty (60) days extra, on trimmings and neckwear; and three per cent (3%) ten (10) days or two per cent (2%) ten (10) days, E.O.M., sixty (60) days extra, on all em- broideries. No additional dating shall be given on any bills. (b) These terms shall include no greater discount than those above mentioned, except, however, that where payment is made on the basis of ten (10) days E.O.M., it shall be permissible to grant dating as 8 of the first (1st) of the following month on shipments made on and after the twenty-fifth (25th) of the month. (c) Anticipation of the payments may be allowed at a rate of not more than six per cent (6%) per annum, or the. legal rate, whichever is lower. Section 5. To make or cause to be made a " colorable imitation " of an original design of any other embroidery merchant. Article V — Modification This Supplemental Code and all the provisions thereof are ex- pressly made subject to the right of the President in accordance with the provisions of Sub-section (b) of Section 10 of the Act, from time to time to cancel or modify any order, approval, license, rule or regulation issued under Title I of said Act. Article VI — Effective Date This Supplemental Code shall become effective on the tenth (10th) day after its approval by the Administrator. Approved Code No. 201 — Supplement No 23. Registry No. 231-11. o 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/supplementarycod7822unit ■1 liflll