V Approved Code No. 347 — Supplement No. 34 Registry No. 1107—04 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE SPROCKET CHAIN INDUSTRY (A Division of the Machinery and Allied Products Industry) AS APPROVED ON JULY 21, 1934 WE DO OUR PART UNIV. OF FL LIB. nOCUMENTS DE_PI 1 U.S. DEP0S1T0ISY UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents, 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, Birmmgham, Ala. : 257 Federal Building. Boston, Mass.: 1801 Customhouse. Buffalo, N.Y. : Chamber of Commerce Building. Charleston, S.C. : Chamber of Commerce Building. Chicago, 111.: Suite 1706, 201 North Wells Street. Cleveland, Ohio: Chamber of Commerce. 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Approved Code No. 347— Sup. #84 Registry No. 1107-04 ERRATA SHEET CODE OF FAIR COMPETITION FOR THE SPROCKET CHAIN INDUSTRY As Approved on July 21, 1934 Approved code #347, Suppl. #34, Page 10, Article V, Section 8 (f), last word in first line. The word " not " should be " act." 80516° 1044-49 34 0. S. 50VERNMENT PRINTING OFFICE: 1934 1 ApproT«d Cede No. 347-Snpp. No. 34 Reinatr7 No. 1107-0* ERRATA SHEET CODE OF FAIR COMPETITION FOR THE SPROCKET CHAIN INDUSTRY As Approved on July 21, 1934 Page 7, first word, 15th line " baisc " should be "basic". The heading, Article IV should appear between the two paragraphs now contained in Article III, page 10, first line last word "not" should be " act ". 81481° -1044-87- -34 u. s. eovcimacKT pmartae omcziviku Approved Code No. 347 — Supplement No. 34 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE SPROCKET CHAIN INDUSTRY As Approved on July 21, 1934 ORDER AppEO\T:]srG Supplementary Code of Fair Compeiitign for the Sprocket Chain Industry a di-stision of the machinery and allied products 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 Sprocket Chain Subdivi- sion of Machinery and Allied Products Industry, and a hearing hav- ing been duly held thereon and the annexed report on said Supple- mental 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 President, 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 respects 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 VTII, Sec- tion (a), insofar as they prescribe a waiting period between the filing with the Code Authority (or such agency as may be designated in the Supplemental Code) and the effective date or price lists, as originally filed and/or revised price lists or revised terms and condi- tions of sale, be and they hereby are stayed pending my further order. Hugh S. Johnson, Administrator for Industrial Recovery, Approval recommended : Barton W. JSIurray, Division Adininistrator. Washington, D.C, July 21, 193^. 75357° 829-122 34 (1) REPOKT TO THE PRESIDENT The President, The White House. Sir : This is a report on the Supplemental Code of Fair Competi- tion for the Sprocket Chain Subdivision of Machinery and Allied Products Industry, a public hearing on which was held in Wash- ington, D.C. on December 21, 1933. The hearing was conducted in full accordance with the provisions of Title I of the National In- dustrial Recovery Act. GENERAL STATEMENT The Sprocket Chain Subdivision, being truly representative of the manufacturers of the products defined in Article II of the Supple- mental Code, has elected to formulate and submit a Supplemental Code of Fair Competition as provided in the second paragraph of Article I in the Code of Fair Competition for the Machinery and Allied Products Industry, approved by you on the seventeenth day of March, 1934. The Subdivision includes the manufacture for sale of sprocket chains of malleable iron, steel, and other metals for conveying, ele- vating, and the transmission of power of the types generally known as roller chains, rollerless bushing chains, block chains, malleable and other cast detachable pintle and roller chains, balance and leaf chains, bar link chains, steel detachable link chains, combination cast and bar link chains, drop forged and rivetless chains, draw bench and haul-up chains, taintor gate and bridge chains, and parts for such chains and sprockets for same, and includes all those engaged in such manufacture for sale ; except that there shall not be included therein the manufacture for sale of chains for hand hoists and those generally known as round link or coil chains, nor machine finished chains, as defined in the definition of the Roller and Silent Chain Subdivision. The manufacture of sprocket chain by farm equipment manufac- turers is excluded from the manufacturing provisions of this Code but the marketing and trade provisions shall apply to all sprocket chain sold by such farm implement manufacturers for all purposes other than for use on farm implements. ECONOMIC EFFECT Annual sales of malleable iron sprocket chains and sprockets for elevating, conveying and transmission of power declined from $5,431,000 in 1929 to $1,408,000 in 1932, or 74 per cent. The Subdi- vision has estimated the value for the year 1933 at $1,535,000 which indicates an increase of 9 per cent over the 1932 level. (2) Aggregate invested capital has declined 9 per cent since 1929, while production capacity has remained constant. The trade association, in its code application, has estimated that this Subdivision employed approximately 585 employees in the year 1929. A tabulation of questionnaire returns from five establishments of the Subdivision shows that in 1929, 83.2 per cent of the total number of employees were factory workers; on this basis 98 office workers have been segregated from the 1929 figure, leaving 487 factory workers. Factoi-y employment declined from 487 Avorkers in 1929 to a mini- mum of 21G in the third quarter of 1932, or nearly 56 ]oer cent. Since then employment increased almost constantly to 256 factory workers in the third quarter of 1933, or nearly 19 per cent. Factory employ- ment as of October 15, 1933 declined again to 234 workers or nearly 9 per cent. A summarized tabulation of five National Recovery Administra- tion questioimaire returns shows average hours per week for factory workers of this Subdivision as follows : Hours per week June 15, 1929_- 49. 4 June 15, 1933 24. 4 October 15, 1933 34. 2 After 1929 man-hours declined steadily from 24,060 to a minimum of 6,965 in the first quarter in 1933. For the third quarter of 1933 man-hours increased to 9,421 but since then have decreased again to 8,003 or 15 per cent as reported on October 15, 1933. Based on the man-hour requirements as of October 15, 1933, on the average the 40-hour provision will probably cause little further reemployment. The wage provisions for the Subdivision, which is operating under the Code of the Machinery and Allied Products Industry, provide that employees engaged in plant operations shall be paid as follows : (1) in cities of more than 50,000 population and their immediate vicinity, 40 cents per hour; (2) in cities of more than 10,000 but not more than 50,000 population and their immediate vicinity, which cities are not in the immediate vicinity of a city of more than 50,000 population, 38 cents per hour; (3) in cities of 10,000 population or less and their immediate vicinity, which cities are not in the immedi- ate vicinity of a city of more than 10,000 population, 36 cents per hour, except that employees engaged in plant operations in all locali- ties in the states of Virginia, North Carolina, South Carolina, Geor- gia, Florida, Tennessee, Alabama, Mississippi, Arkansas, Louisiana, Texas, and Oklahoma, shall be paid not less than 32 cents per hour. When females do substantially the same work as males or replace males, they shall receive the same pay. However, no female employee shall be paid less than 871/2% of the proper rate for the locality in which employed. Office boys and girls and apprentices shall be paid not less than 80% of the minimum wage. Emploj^ees other than those engaged in plant operations shall receive not less than $15.00 per week. Distributions of the number of factory workers receiving classified rates in the specified areas are not available. Consequently, it is only possible to estimate the approximate number of factory workers who win receive the benefit of the proposed minimum hourly rates, re- gardless of location, on the basis of the number of factory workers receiving less than the designated hourly rates as of June 15, 1933. Estimated number of factory workers receimnff less than designated hourly rates Proposed minimum hourly rates 40 cents (other U.S.) 88 cents (other U.S.) 86 cents (other U.S.) 82 cents (South) Distribution of factory workers receiving less than the mini- mum regardless of location Based on the distribution as of June 15, 1933, and on the specified percentages of the number of factory workers receiving less than the designated rates shown in the above table, the adoption of the pro- posed minimum rates will probably cause an increase in factory pay rolls. The estimated increase as of June 15, 1933, regardless of location of the workers, will probably, under the most favorable conditions, not exceed 14.0 percent assuming only upward adjustment in the brackets below the 40 cent minimum and no change in man- hour requirements. RESUME OF SUPPLEMENTAL CODE Article I states the purpose of the Supplemental Code. Article II accurately defines specific terms applicable to the Sub- division as used in this Supplemental Code. Article III provides for the adoption of the employment provisions of the Code of Fair Competition for the Machinery and Allied Products Industry, as approved by you, and as from time to time amended. Article IV provides for the adoption of Articles II, VI, VIII, and IX of the Code of Fair Competition for the Machinery and Allied Products Industry. Article V provides for the establishment of a Code Authority and defines its powers and duties. Article VI provides for an accounting system and methods of cost finding and/or estimating. Article VII provides that no products of the Subdivision shall be sold or offered for sale below a reasonable cost when the Code Authority determines that an emergency exists. Article VIII provides for methods of setting up, revising and filing price lists and discount sheets and terms of sale and payment. Article IX sets forth trade practices for the Subdivision. Article X states that no provision of this Supplemental Code relat- ing to pricing and marketing shall apply to export sales. Article XI provides that this Supplemental Code and all the pro- visions thereof are expressly made subject to the right of the Presi- dent, in accordance with Subsection (b) of Section 10 of the Act, from time to time to cancel or modify any order, approval, license, rule or reoulation issued under said Act. Provision is also made that moditications may be submitted by the Code Autliority to the Administrator for approval. Article XII. No provision of this Supplemental Code shall be so applied as to permit monopolies, or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprises. Article XIII states the effective date of this Supplemental Code. riNDINGS The Assistant 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 '>vell designed to promote the policies and purposes of Title I of the National Industrial Kecovery Act, including removal of obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof and will provide for the general welfare by promoting the organi- zation of industry for the purpose of cooperative action among the trade groups, by inducing and maintaining united action of labor and management under adequate governmental sanctions and supervision, by eliminating unfair competitive practices, by promotinfr the fullest possible utilization of the present productive capacity of industries, by avoiding undue restriction of production (except as may be tem- porarily 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 inclustry. (b) Said Subdivision normally employs not more than 50,000 em- ploj'-ees; and 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 an industrial association truly representa- tive of the aforesaid Subdivision ; and that said association imposes no inequitable restrictions on admission to membership therein. (d) The Supplemental Code is not designed to and will not per- mit 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 approval of said Supplemental Code. For these reasons, therefore, I have approved this Supplemental Code, provided that certain provisions relating to price publication are stayed, as stated in the Order. Respectfully, Hugh S. Johnson, AdTninistrator, July 21, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE SPROCKET CHAIN INDUSTRY A DIVISION OF THE MACHINERY AND ALLIED PRODUCTS INDUSTRY Article I — Purposes To effectuate the policy of Title I of the National Industrial Re- covery Act, the following provisions are established as a Supple- mental Code for the Sprocket Chain Subdivision of the Machinery and Allied Products Industry, and together with the Code of Fair Competition of Machinery and Allied Products Industry, to which it is a supplement, shall be the standard of fair competition for this Subdivision, and shall be binding on each employer therein. Article II — Definitions "Applicant " means the Association of Sprocket Chain Manufac- turers, a trade organization, all members of which are engaged in the manufacture for sale of the products of the Sprocket Chain Sub- division of Machinery and Allied Products Industry. " Industry " means the Machinery and Allied Products Industry, as defined in its Code of Fair Competition, as approved by the Presi- dent, and as such definition may from time to time be amended. " Subdivision " means the Sprocket Chain Manufacturing Sub- division of the Machinery and Allied Products Industry as defined and set forth in Paragraph 32 of Article II of the Code of Fair Competition for the Machinery and Allied Products Industry, as follows : " ' Sprocket Chain Subdivision ' means the manufacture for sale of sprocket chains of malleable iron, steel and other metals for con- veying, elevating, and the transmission of power of the types gen- erally known as roller chains, rollerless bushing chains, block chains, malleable and other cast detachable, pintle, and roller chains, balance and leaf chains, bar link chains, steel detachable link chains, com- bination cast and bar link chains, drop forged and rivetless chains, draw bench and haul-up chains, taintor gate and bridge chains, and parts for such chains and sprockets for same, and includes all those engaged in such manufacture for sale; except that there shall not be included therein the manufacture for sale of chains for hand hoists and those generally known as round link or coil chains, nor machine finished chains, as defined in the definition of the Roller and Silent Chain Subdivision. The manufacture of sprocket chain by farm equipment manufacturers is excluded from the manufacturing provi- sions of this Code but the marketing and trade provisions shall apply to all sprocket chain sold by such farm implement manufacturers for all purposes other than for use on farm implements." (6) "Code" means the Code of Fair Competition for the Machinery and Allied Products Industry, as approved by the President, March 17th, 1934, and as from time to time amended. " Person " means a natural person, a partneiship, a corporation, an association, a trust, a trustee, a trustee in bankruptcy, a receiver, or other entity. " Employer " means any person engaged in this Subdivision of the Industry, either on his own behalf or as an employer of labor. " Employee " means any one who is employed in this Subdivision by any such employer. "Act " means Title I of the National Industrial Recovery Act. " President " means the President of the United States. "Administrator " means the Administrator for Industrial Re- covery. " Baisc Code Authority " means the Code Authority for the Ma- chinery and Allied Products Industry as constituted by the Code. " Code Authority " means the Code Authority constituted for this Subdivision or provided by the Code and by this Supplemental Code. " Group Code Authority " means the Code Authority for any Group or product classification within this Subdivision, constituted under the authority of Article V of this Supplemental Code. Article III — Employment Provisions The following Articles of the Code, viz : Article III, " Working Hours"; Article IV, "Wages"; and Article V, "General Labor Provisions ", are hereby made a part of this Supplemental Code, with the same effect as if they were written into this Supplemental Code. The following Articles of the Code, viz : Article II, " Defini- tions " ; Article VI, "Administration ", to the extent that they shall be applicable to this Supplemental Code as such or as it may here- after be administered as an autonomous Code; Article VIII, "Mod- ifications and Termination"; and Article IX, "Withdrawal", are hereby made a part of this Supplemental Code with the same effect as if they were written into this Supplemental Code. Article V — Administration (a) During the period not to exceed sixty days, following the ef- fective date of this Supplemental Code, the code committee of the Applicant shall constitute a temporary Code Authority. The Ad- ministrator, in his discretion, may appoint one additional member (without vote and without expense to this Subdivision). This Subdivision, having held an election for permanent Code Authority under the provisions of the Code of Fair Competition for the Machinery and Allied Products Industry, the Code Authority so elected shall constitute the first permanent Code Authority for this Subdivision if this method of election meets with the approval of the Administrator. If this method of election does not meet with the approval of the Administrator then the provisions hereinbelow provided shall apply for the election of the first permanent Code Authority. For elections after the first, the provisions of this Sup- plemental Code for election of a permanent Code Authority shall apply. To permit representation of emploj^ers who are not members of Applicant, the latter ,shall, within sixty clays after this Supple- mental Code becomes elfective, set up a permanent Code Authority to succeed the temporary Code Authority to administer, supervise and facilitate the enforcement of this Supplemental Code. Such pei-manent Code Authority shall be elected at a meeting called for . this purpose to which all known employers in this Subdivision shall be invited, with the right to vote either in person or by proxy, or by mail. This permanent Code Authority shall consist of not legs than o and not more than 8 members, and in addition thereto, the representative of the Administrator as referred to in the paragraph above. Of the elective membei-s of Code Authority, one member may be chosen in any fair manner approved by the Administrator, by the employers (if any) who are not members of the Applicant pro- vided such representation shall be desired by such employers. Action by the Subdivision at any meeting for the transaction of business, adoption of procedural rules and regulations, subsequent election of Code Authority, and amendment of this Supplemental Code, shall be by vote of the employers in the Subdivision, present in person or by proxy, or voting by mail, wherein each such employer shall have one vote; providecl, however, that on any question except the elec- tion of Code Authority, any such employer shall have the right to call for an additional vote and to have the same voted upon by each employer, weighted on the basis of one vote for each $100,000.00 of sales within the Subdivision, made by such employer in the two pre- ceding years, each such employer, however, being entitled to one vote, and in every such case action on the question shall be by both such methods of voting. Members of the Code Authority so elected shall hold office for terms provided for in the procedural Rules and Regu- lations adopted by this Subdivision. (b) 1. It being found necessary in order to support the admin- istration of this Supplemental Code and to maintain the standards of fair competition established by this Supplemental Code and to effectuate the policy of the Act, the Code Authority is authorized; subject to such rules and regulations as may be issued by the Administrator : 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 SuiDplemental Code; b. To submit to the Administrator for liis approval, subject to such notice and opportunity to be heard as he may deem necessary, (1) an itemized budget of its estimated expenses for the foregoing purposes, and (2) an equitable basis upon which the funds necessary to sup- port such budget shall be contributed by members of the Subdivision. c. After such budget and basis of contribution have been approved by the Administrator, to determine and obtain equitable contribu- tions as above set forth by all employers of the Subdivision, and to that end, if necessary, to institute legal proceedings therefor in its own name. 2. Each emploj^er of the Subdivision shall pay his or its equitable contribution to the expenses of the maintenance of the Code Au- thority, determined as hereinabove provided, and subject to rules and regulations pertaining thereto issued by the Administrator. Only emploj^ers of the Subdivision coinplying with the Supplemental Code and contributing- to the expenses of its administration as hereinabove provided shall be entitled to participate in the selection of members of the Code Authority or to receive the benefits of any of its volun- tary activities or to make use of an}^ emblem or insi<^nia of the National Recovery Administration, 3. The Code Authority shall neither incur nor pay any obligation in excess of the amount thereof as estimated in its approved budget, except upon approval of the Administrator; and no subsequent budget shall contain any deficiency item for expenditures in excess of prior budgets estimates except those which the Administrator shall have so approved. (c) For the purpose of administering and facilitating the enforce- ment of the provisions of this Supplemental Code, Code Authority, by its duly authorized representatives (who shall not be in the employ of any employer affected by this Supplemental Code), shall have access to any and all statistics, data and information, filed in accordance with the provisions of the Code and this Supplemental Code. All individual statistics, data and information of individual employers as filed in accordance with the provisions of the Code and this Supplemental Code shall be kept confidential, except with the consent of such employer pertaining to his own statistics, and pro- viding that nothing herein shall prevent publication of general summaries of such statistics of this Subdivision. (d) For administrative purposes, emplo3^ers may be grouped by Code Authority to bring into working association emploj^ers having common interests and problems that are not common to all employ- ers in this Subdivision. Each such group shall designate from among its members a Group Code Authority, and may adopt such rules for the conduct of the business of the Group as are not in- consistent with the provisions of this Supplemental Code and the Code; provided, however, that provisions of this Article V shall control the making of all examinations or audits and the use to be made of information so obtained with respect to any employer. (e) Except as otherwise provided in this Supplemental Code, a Group Code Authority shall have power to hear all matt^ers per- taining to the provisions of this Supplemental Code having relation to the employers in said Group, or any of them, and to that end may, to the extent permitted by the Act, investigate and ascertain the facts through such examination or audit as such Group Code Authority maj' deem necessary. Provided, however, that nothing in this Article shall preclude the Code Authority from taking action, to the extent permitted by the Act, either upon complaint of an employer, or upon its own initiative, with respect to any matter. Any decision of the Group Code Authority shall be final, unless appeal is taken to the Code Authorit}^ or such decision involves matters requiring to be reported to the Code Authority, in which case pertinent information, papers and data in the possession of the Group Code Authority shall be turned over by it to the Code Author- ity, and the Code Authority shall pass on the merits of the case and niake final decision or report thereon to the Basic Code Authority or the Administrator. 10 (f) The Code Authority or a Group Code Authority may not, within its powers, on the affirmative vote of not less than three- fourths of its members entitled to vote; provided that any proposal receiving less than the three-fourths majority vote shall be sub- mitted upon the request of any member of the Code Authority or Group Code Authority having jurisdiction to a vote of all employers cooperating under this Supinemental Code or the cooperating em- ployers comprising the Group affected, and the Code Authority or Group Code Authority having jurisdiction shall act as determined by the majority of the number of votes so cast. (g) If formal complaint be made to Code Authority that pro- visions of this Supplemental Code have been violated by any em- ployer, the Code Authority shall investigate the facts, and to that end may, to the extent permitted by the Act, cause such examination to be made as it maj'- deem necessary, subject to the limitations con- tained in Section (c) of this Article V. (h) If any employer in this Subdivision is also an employer in any other Subdivision of the Industry, or in any other industry, the provisions of this Supplemental Code, and the jurisdiction of the Code Authority hereunder, shall apply to and affect only that part of his business and product w^hich is included in this Subdivision. (i) An appeal from any action taken, or any rule or regulation established affecting the right of any employer or employee in this Subdivision, may be taken to the Basic Code Authority and there- after to the Administrator. (j) Nothing contained in this Supplemental Code shall constitute the members of the Code Authority or any Group Code Authority as partners for any purpose. Nor shall any member of the Code Authority or of any Group Code Authority be or become liable in any manner to anyone for any act of any other member, officer, agent, or employee of the Code Authority or any Group Code Authority. Nor shall any member of the Code Authority or Group Code Author- ity, exercising reasonable diligence in the conduct of his duties here- under, be or become liable to anyone for any action or omission to act under this Supplemental Code and the Code, except for his own wilful misfeasance or non-feasance. Article VI — Accounting and CosTiNa The Code Authority shall cause to be formulated an accounting system and methods of cost finding and/or estimating capable oi use by all employers of the Subdivision. After such system and methods have been formulated, full details concerning them shall be made available to all employers. Thereafter all employers shall determine and/or estimate costs in accordance with the principles of such methods. Article VII — Selling Below Reasonable Cost Section 1. When the Code Authority determines that an emer- gency exists in this Subdivision and that the cause thereof is destruc- tive price-cutting such as to render ineffective or seriously endanger 11 the maintenanco of the provisions of this Supplemental Code, the Code Authority may cause to be determined the lowest reasonable cost of the products of this Subdivision, sucli determination to bo subject to such notice and hearing as the Administrator may require. The Administrator may approve, disapprove, or modify the determi- nation. Thereafter, during the period of the emergency, it shall be an unfair trade practice for any member of the Subdivision to sell or offer to sell any products of the Subdivision for which the lowest reasonable cost has been determined at such prices or upon such terms or conditions of sale that the buyer will pay less therefor than the lowest reasonable cost of such products. When it appears that conditions have changed, the Code Author- ity, upon its own initiative or upon the re(|uest of any interested party, shall cause the determination to be reviewed. Section 2. The foregoing Section (1) shall not apply to (a) dropi^ed lines, or (b) seconds, or (c) inventories which must be con- verted into cash to meet emergency needs, all of which may be dis- posed of by any employer at any price and on any terms or condi- tions, but only if such employer, not less than two weeks before such proposed disposal, has filed with Code Authority, a statement in writing setting forth the facts of, and reasons for, such proposed disposal and tlie price and terms and conditions of sale, and Code Authority has not, (with the approval of the Administrator), before the termination of such two week period, in writing, disapproved the proposed disposal. Notice of such disposal, if not disapproved, shall be sent imme- diately to all employers manufacturing products of equivalent de- sign, character, quality or specifications, who may sell such products at prices and on terms and conditions as favorable as those stipulated in the proposed disposal, when meeting the competition of such pro- posed disposal. Section 3. The foregoing Section (1) shall not apply to a sale made in order to meet competition on products manufactured out- side the United States. For such disposal, any employer may sell, at prices and on terms and conditions as favorable as those of the competing foreign product, but only if he has first reported to the Code Authority liis intention so to sell, and the facts as to the com- petition which justifies such action. Aktigle VIII — Methods of Pricing and Terms or Payment (a) If and when the Code Authority determines that in any branch or group of the Subdivision, it has been the generally recog- nized practice of at least two-thirds of such branch or group of the Subdivision, to sell a specified product on the basis of net price lists or price lists with discount sheets and terms of sale and pay- ment, each manufacturer of such product, shall, within ten days after notice of such determination, file with the proper Group Code Au- thority (or with Code Authority if there is no Group Code Authority having jurisdiction) , net price lists or price ligts with discount sheets and terms of sale and payment, individually prepared by him, and the Group Code Authority shall immediately send copies thereof to the employers of this Subdivision cooperatmg under this Code, as 12 described in Article V, and who manufacture like products. Revi- sions of the price lists and/or discount sheets and/or terms of sale and payment may be filed, in like manner, from time to time there- after with the proper Group Code Authority or Code Authority by any manufacturer of such products, each such revision to become operative upon the date specified therein, but such revised price lists and/or discount sheets and/or terms of sale and payment shall be filed with the proper Group Code Authority or Code Authority ten day3 in advance of the operative date. Copies thereof with notice of the operative date specified, shall immediately be sent to all manu- facturers of such product, cooperating under this Supplemental Code, as described in Article V, any of whom may file, if he so de- sires, revisions of his price lists and/or discount sheets and/or terms of sale and payment which shall become effective upon the date when the revised price lists and/or discount sheets and/or terms of sale and payment first filed shall go into effect. All price lists and/or discount sheets and/or terms of sale and payment so filed shall be published on the operative date by making available to each consumer or resale buyer the price lists and/or discount sheets and/or terms of sale and payment applicable respec- tively to such buyers trade classification.^ (b) If and when a Group Code Authority or Code Authority shall determine that in any branch or group of the Subdivision not now selling its products on the basis of price lists, with or without dis- count sheets, with terms of sale and payment, the distribution or marketing conditions in said branch or group are the same as, or similar to, the distribution or marketing conditions in a branch or group of the Subdivision where the use of pricfe lists, with or without discoimt sheets, is well recognized, and that a system of selling on net price lists or price lists with discount sheets and/or terms of sale and payment, should be put into effect in such branch or group, then each manufacturer of the product or products of such branch or group, shall within twenty days after notice of such determination, file with Group Code Authority or Code Authority net price lists, or price lists and/or discount sheets and/or terms of sale and payment, and such price lists and/or discount sheets and/or terms of sale and payment may be thereafter revised in the manner hereinabove provided, and coj)ies of such methods of pricing and revisions thereof shall be sent in accordance with paragraph (a) of this Article ; provided that Group Code Authority or Code Authority shall make no determination to place an^ product of the Subdivision (not now on a price list basis) on a price list basis as provided in this Paragraph (b) of Article VIII, unless two thirds of the employers cooperating under this Supplemental Code, as described in Article V, who are at that time engaged in manufacturing such product, shall affirmatively consent that such determination be made. (c) No employer shall sell directly or indirectly any product of this Subdivision at prices or discounts different than those provided in his own current price lists and/or discount sheets and/or terms of sale and payment or on more favorable terms of sale and payment as covered by the provisions of this Article VIII and proceedings • See paragraph 2 of order approving this Code. 13 thereunder unless such employer is meeting competitive prices as provided in Article VII, Sections 2 and 3, of this Supplemental Code. Article IX — Trade Practices Each of the following acts and practices is deemed to be inimical to the best interests of the Subdivision and of the public, and each is therefore, hereby declared to be and to constitute an unfair method of competition, viz : 1. No employer shall secretly offer or make any payment or allow- ance of a rebate, refund, commission, credit, unearned discount or excess allowance, whether in the form of money or otherwise, nor shall an employer secretly offer or extend to any customer any special service or privilege not extended to all customers of the same class, for the purpose of influencing a sale. 2. No employer shall give, permit to be given, or offer to give, anything of value for the purpose of influencing or rewarding the action of any employee, agent, or representative of another in rela- tion to the business of the employer of such emploj^ee, the principal of such agent or the represented party, without the knowledge of such employer, principal or party. This provision shall not be construed to prohibit free and general distribution of articles com- monly used for advertising except so far as such articles are actually used for commercial bribery as hereinabove defined. 3. No employer shall publish advertising (whether printed, radio, display or of any other nature), which is misleading or inaccurate in any material particular, nor shall any employer in any way mis- represent any goods (including but witliout limitation its use, trade- mark, grade, quality, quantity, origin, size, substance, character, nature, finish, material, content or preparation) or credit terms, values, policies, services, or the nature or form of the business con- ducted. 4. No employer shall defame a competitor by falsely imputing to him dishonorable conduct, inability to perform contracts, question- able credit standing, or by other false representation, or by falsely disparaging the grade or quality of his goods. 5. No employer shall engage in destructive price cutting. 6. No employer shall cooperate in a violation of the provisions of this Supplemental Code or of the Code, or amendments thereto, either directly or indirectly through a distributor or agent. 7. No employer shall publish or circulate unjustified or unwar- ranted threats of legal proceedings which tend to or have the effect of harassing competitors or intimidating their customers. 8. Each emploj^er shall require compliance with the provisions of this Supplemental Code, and of the Code, by the agents of such employer, whether such agents are directly employed on salary or are employed on a commission basis. Article X — Sales for Export The provisions of this Supplmenetal Code concerning pricing and marketing are not to apply to direct export sales of any product, or to any product destined ultimately for export. The term " export " UNIVERSITY OF FLORIDA 14 3 1262 08855 5734 shall include all shipments to all places without the several states of the United States and the District of Columbia; provided, however, that no shipment to any territory or possession of the United States shall be considered an export when any employer is engaged in the industry in such territory or possession. Article XI — Modifications (a) As provided by Section 10 (b) of the Act, the President may from time to time cancel or modify any order, approval, license, rule or regulation issued under Title I of the Act. (b) As study of the needs of the Subdivision is continued after the effective date, amendments, additions, or revisions to this Supple- mental Code may be proposed by Code Authority, which upon being assented to in writing by two-thirds vote of members cooperating under this Supplemental Code shall be in full force and effect from and after approval thereof by the Administrator. Article XII — Monopolies This Supplemental Code is not designed to permit monopoly, and shall not be so construed or applied as to oppress or eliminate small enterprises or discriminate against them and is designed to effectuate the policy of the Act. Article XIII — Effective Date This Supplemental Code shall become effective and binding on all employers of the Subdivision on the eleventh day after its approval by the President. Approved Code No. 347 — Supplement No. 34. Registry No. 1107-04. o