*/ Approved Code No. 347 — Supplement No. 22 Registry No. 1342—01 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE CONVEYOR AND MATERIAL PREPARATION EQUIPMENT MANUFACTURING INDUSTRY (A Division of the Machinery and Allied Products Industry) AS APPROVED ON JUNE 19, 1934 WE DO OUR PART UNIV. Of* FL Lit DOCUMENTS PEP j.S. DEPOSITORY UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by ths 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. Birmingham, Ala. : 257 Federal Building. Boston, Mass. : 1801 Customhouse. Buffalo, N.Y. : Chamber of Commerce Building. Charleston, S.C. : Chamber of Commerce Building. 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Approved Code No. 347 — Supplement No. 22 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE CONVEYOR AND MATERIAL PREPARATION EQUIPMENT MANUFACTURING INDUSTRY As Approved on June 19, 1934 ORDER Supplementary Code of Fair Competition for the Conveyor and Material Preparation Equipment Manufacturing Industry a division 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 approval of a Sup- plemental Code of Fair Competition for the Conveyor and Material Preparation Equipment Manufacturing Subdivision of Machinery and Allied Products Industry, and hearings having been duly held thereon and the annexed report on said Supplemental Code, con- taining 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 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 approved subject to the following conditions: (1) That the provisions of Article VIII, Section (b) 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 of price lists, as originally filed and/or revised price lists or revised terms and conditions of sale, be and they hereby are stayed pending my further order. (2) Provided, however, that the application of the provisions of Article IX, Section (2) be, and it hereby is, stayed for a period of sixty (60) days, or such additional period as I, by my further 68648° 657-120 34 (1) order, may direct, in order that the Code Authority may submit a suitable plan for determining trade-in allowances. (3) That the provisions of Article IX, Section (15), be and they hereby arc stayed pending the submission of satisfactory evidence concerning distribution of the products of the Subdivision to the Administrator. Hugh S. Johnson, Administrator for Industrial Recovery. Approval recommended : Barton W. Murray, Acting Division Administrator. Washington, D.C., June 19, 1934. REPORT TO THE PRESIDENT The President, The White House. Sir: This is a report on the Supplemental Code of Fair Competi- tion for the Conveyor and Material Preparation Equipment Manu- facturing Subdivision of Machinery and Allied Products Industry, a public hearing on which was held in Washington, D.C., on No- vember 24, 1933, and reconvened on December 21, 1933. The hear- ings were conducted in full accordance with the provisions of Title I of the National Industrial Recovery Act. GENERAL STATEMENT The Conveyor and Material Preparation Equipment Manufactur- ing Subdivision, being truly representative of the Manufacturers of the products defined in Article II of the Supplemental 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 vou on the seventeenth day of March, 1934. The Subdivision includes the designing, manufacturing, and as- sembling for sale, and installing when required, of equipment (sta- tionary or portable), for handling, transporting and elevating mechanically, materials and articles (either packaged or loose), and also equipment for cleaning, preparing and processing bulk ma- terials while being mechanically handled (excepting, however, ma- chinery and/or equipment wherein a conveyor or material prepara- tion mechanism is an integral part thereof, and one or more processes or functions are performed within such machinery and/or equip- ment for the processing of food products or seeds), and includes all persons so engaged. In connection with the designing, manufacturing, assembling, and installing of such equipment, the Subdivision uses only the following mechanisms, or one or more of them : chains, belts and cables with or without drag scrapers ; cleats, trolleys and buckets ; gravity chutes ; power driven and gravity rollers, wheels and balls ; belt idlers ; screw conveyors; screens and mechanical cleaning devices; and mecha- nisms and supports required for their operation. The Subdivision shall include the designing, manufacturing, assembling and install- ing of power driven and gravity rollers and wheels, belt idlers, screw conveyors, screens and mechanical cleaning devices ; provided that it shall not include the designing and/or manufacturing for sale of other mechanisms, although such mechanisms are used as parts of the equipment designed, manufactured and assembled by it for sale. (3) ECONOMIC EFFECT Annual sales declined from $53,000,000 in 1929 to $14,500,000 in 1932, a decrease of 72.6 per cent. No estimate was made by the Subdivision of the value of sales for the year 1933, but the seven- month average of sales indicates that sales in 1933 will be approxi- mately the same as the 1932 level. Estimates of approximate employment for the entire Subdivision submitted by the Trade Association, indicate employment has de- clined to slightly less than one-half the 1929 level. In 1929, 10,300 wage earners were reported, and 4,900 in 1933, representing a decrease of 52.4 per cent. Average hours per week were reported to be 49.9 in June, 1929; 32.7 in June, 1933 ; and 33.2 in October, 1933. In October, 1933, the average hours were 33.5 per cent less than the June, 1929 average, and 1.5 per cent greater than the June, 1933 average. The effect of the 40-hour provision with production at more normal levels may be estimated on a basis of total man-hours per weelc in 1931 divided by the number of hours prescribed in the Code. After 1929, man-hours declined steadily from 513,970 to a minimum of 147,673 in 1933 (first six months), or approximately 70 per cent. If it is assumed that the 244,120 man-hours for 1931 are representa- tive of the volume of production for that year, and a reasonable measure of man-hour requirements in a more normal period, the adoption of the 40-hour week would require a force of approximately 6,103 employees, or 59.3 per cent of the 1929 working level. However, considering all employees of the Subdivision would not work the full 40-hour week, the average work week would be shorter; with 36 assumed effective hours, and employment cor- respondingly greater, 6,781 workers would be required to produce the. 1931 volume. The minimum wage provisions proposed for the Subdivisions which are operating under the Code of the Machinery and Allied Products Industry are based on a flat minimum hourly rate of 32 cents per hour for the South and the following city population differentials for all other sections of the United States: Over oO.uoo population 40 cents per hour Over 10,000 to 50,000 population 58 cents per tour 10,000 population :iu it may hereafter be administered as an autonomous Code; Article VIII, "Modifications and Termination''; and Article IX. "Withdrawal"; are hereby made a pari of this Supplemental Code with the same effect as if they were written into this Supplemental Code. Article V — Administration in) The permanent ('<><}'• Authority t<> administer, supervise and to facilitate the enforcement of the Code and this Supplemental Code, heretofore dulj constituted in accordance with Article VI, 9 Section (g) of the Code, shall be the Code Authority of this Sub- division until its successors are duly elected and qualified in ac- cordance with the procedural rules and regulations of this Subdivi- sion (duly adopted in accordance with Article VI, Section (g) of the Code) and with the following Sections of this Article V. When its successors shall have been duly elected and qualified, they shall constitute the permanent Code Authority. (b) Each elective member of the Code Authority shall be an employer, an executive officer of, or a partner in, an employer entitled to participate in the activities of the Subdivision as de- scribed in Article V, Section (f ) of this Supplemental Code. Sucji number, not fewer than five (5) and not more than nine (9) mem- bers, shall be elected as may be determined at a meeting of the Sub- division, and the Administrator, in his discretion, may appoint one (1) additional member (without vote and without expense to the Subdivision). Of these members to be elected, four shall be des- ignated and voted upon as Chairman Vice- Chairman Secretary Treasurer If, as a result of said election, any Group, as provided for by this Article V, Section (e), does not have on the Code Authority one representative of the employers comprising such Group, the employ- ers of such Group may elect an additional member of the Code Au- thority, who shall have the qualifications hereinbefore recited. (c) In order that the Code Authority shall at all times be truly representative of the Subdivision and in other respects comply with the provisions of the Act, the Administrator may provide such hear- ings as he may deem proper; and thereafter if he shall find that the Code Authority is not truly representative or does not in other respects comply with the provisions of the Act, may require a modifi- cation of method of selection of Code Authority, or any Group Code Authority. (d) 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, wherein each such employer shall have one vote; provided, however, that on any question except the election of Code Authority, any such employer shall have the right to call for an additional vote and to have the same voted upon b}^ each such em- ployer, weighted on the basis of one vote for each $500,000.00 of sales within the Subdivision made by such employer in the two pre- ceding calendar 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. (e) For administrative purposes, employers shall be grouped by Code Authority. The purpose of such grouping shall be to bring into working association employers having common interests and problems, based on products and /or geographical location. Each Group shall elect from the employers of such Group a Group Code Authority, and ma}' adopt such rules for the conduct of the business 10 of the Group as are not inconsistent with the provisions of this Supplemental Code and the Code; provided, however, that the provi- sions of Article VI of the Basic Code shall control the making of all examinations or audits and the use to be made of information so obtained with respect to any employer. Except as otherwise provided in this Supplemental Code, a Group Code Authority shall have power to hear all matters pertaining to the provisions of this Supplemental Code which may be submitted to it by any employer in its Group, having relation to the employers in said Group, or any of them, and to that end may, to the extent per- mitted by the Act and the Code, investigate and ascertain the facts through such examination or audit as such Group Code Authority may deem necessary; provided, however, that nothing in this Article shall preclude the Code Authority from taking action, either upon complaint of an employer or upon its own initiative, with respect to any matters, except those pertaining to relations between employer and employees. Any decision of the Group Code Authority shall be final, unless appeal is taken to the Code Authority or such decision involves matters requiring to be reported to the Basic Code Authority, in which case all pertinent information, papers and data in the posses- sion of the Group Code Authority shall be turned over by it to the Code Authority, and the Code Authority shall pass on the merits of the case and make final decision or report thereon to the Basic Code Authority. (f) It being found necessary, in order to support the administra- tion of this Supplemental Code and to maintain the standards of fair competition established by this Supplemental Code and to ef- fectuate the policy of the Act, the Code Authority is authorized, subject to the approval of the Administrator: (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 this Supplemental Code. (2) To submit to the Administrator for his 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, arid (2) an equitable basis upon which the funds necessary to support such budget shall be contributed by members of the Subdivision. (3) After such budget and basis of contribution have been ap- proved by the Administrator, to determine and secure equitable contribution as above set forth by all such employers of the Subdi- vision, and to that end, if necessary, to institute legal proceedings therefor in its own name. Only members of the Subdivision complying with this Supple- mental Code and contributing to the expense of it^ administration as provided in Section I hereof shall be entitled t<> participate in the selection of the members of the Code Authority or t<> receive the benefit of it- voluntary activities or to make use of ;m\ emblem or insignia of the National Recovery Administration. 11 Article VI — Accounting and Costing The Code Authority shall cause to be formulated an accounting system and methods of cost finding and/or estimating capable of 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 Seasonable Cost (a) When the Code Authority has reason to believe that an emergency exists as to any product or products of the Subdivision, and that the cause thereof is destructive price-cutting such as to render ineffective or seriously endanger the purposes and the main- tenance of the provisions of this Code, the Code Authority may cause an investigation of costs and pricing to be made by an im- partial agency in order to determine the existence of the emergency and may cause to be determined the lowest reasonable cost of any product or products of this Subdivision, such determination to be subject to such notice and hearing as the Administrator may require. The Administrator may approve, disapprove, or modify the deter- mination. Thereafter, during the period of emergency, it shall be an unfair trade practice for any employer 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 request of any interested party, shall cause the determination to be reviewed. (b) The foregoing Section (a) shall not apply to (a) dropped lines, or (b) seconds, or (c) inventories which must be converted into cash to meet emergency needs, all of which may be disposed of by any employer at any price and on any terms or conditions during a period not to exceed sixty (60) days, but only if such employer not less than three 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 the price and the terms and conditions of sale, and Code Authority has not, before the termination of such three week period, in writing, dis- approved the proposed disposal. Notice of such disposal, if not dis- approved, shall be sent immediately to all employers manufacturing products of equivalent design, character, quality or specifications, and participating in this Supplemental Code as described in Article V, Section (c), who may sell such products within said sixty (60) day period at prices and on terms and conditions as favorable as those stipulated in the proposed disposal. (c) When prices of competing products manufactured outside the United States are lower than the established lowest reasonable cost, any employer may sell at prices and on terms and conditions as favorable as those of the competing foreign product, but only if 12 such employer has filed with Code Authority, a statement in writ- ing setting forth the facts of, and reasons for, such proposed sale and the prices to be charged and the terms and conditions of sale, and Code Authority has not, within one week, disapproved such proposed sale. Article VIII — Methods of Pricing and Terms of Sale and Payment (a) Each employer shall, within thirty (30) days after approval of this Supplemental Code, file with the proper Group Code Au- thority (or with Code Authority if there is no Group Code Au- thority having jurisdiction), a statement showing his current method of pricing and terms of sale and payment, for such of his products as are within the scope of this Subdivision. Such statement shall conform to the requirements of the proper Group Code Authority, as to details of information and number of copies thereof, together with copies of price lists, discount sheets, catalogs, anil other papers as may be necessary to set forth such current method of pricing and terms of sale and payment for the various products, which copies shall, by the said Group Code Authority, be immediately distributed among the employers of this Subdivision who are entitled to par- ticipate in the activities of such Subdivision, and who design, manu- facture, assemble and install like products. (b) Revisions of the method of pricing and terms of sale and payment may be filed, in like manner, from time to time thereafter with the proper Group Code Authority by any employer, each such revision to become effective not later than ten (10) days from filing, and copies thereof, with supporting price lists, and other data, with notice of the effective date, immediately shall be sent to all the employers and be available to buyers as above provided. 1 (c) No employer shall sell directly or indirectly by any means whatsoever, any product of this Subdivision, at a lower price, or on more favorable terms of sale and payment, than those provided in his own current method of pricing and terms of sale and payment as covered in his statement filed in accordance with the provisions of this Article VIII, except in the cases, and under the conditions provided for in Article VII, Sections (b) and (c). Article IX — Trade Practices Each employer shall comply with the following provisions per- taining to trade practices and any deviation therefrom, direct or indirect, shall be deemed an act of unfair trade, practice and a violation of this Supplemental Code, and is hereby prohibited: (1) Sales of products, except pails for repair or replacement, and except merchandise sales of standard items, shall be evidenced by written or printed contract-, which shall be uniform for each Group as to terms of sale and payment, replacement guarantees, and all other conditions of sale, except those relating to performance. When a form id' sale- contract shall have been adopted by a Group and approved by Code Authority and the Administrator, such form 'See paragraph 2 (1) "i order approving this Code 13 shall thereafter be used by all employers of that Group in contract- ing with purchasers for the furnishing of equipment designed, manu- factured and assembled by such employers. Provided, however, that in connection with Public Works, purchase orders or contracts executed by the proper Government Authorities may be used. (2) No employer shall take used equipment in trade for more than its scrap value, on the purchase price of new equipment, or make allowances or grant credit, directly or indirectly, for used equipment ; provided, however, that this provision shall not be applicable to any employer of any Group, after the adoption by Group Code Authority of such Group with the approval of the Administrator, of a standard method of appraisal for such used equipment; and provided further that each employer of such Group may make allowances for used equipment so traded in, no greater than shall be prescribed by such standard method of appraisal. 2 (3) In quoting on any business, the original price submitted shall not be altered, unless a change in specifications or requirements shall have been made by or at the request of prospective purchaser affect- ing the cost, or unless, prior to acceptance by the purchaser, a revised method of pricing has been filed with the proper Group Code Authority and become effective, in which event the original quotations shall be revised. Such revised quotations shall be in accordance with the employer's current method of pricing and terms of sale and payment. (4) Charges for services of any employee engaged to supervise the erection of any products of this Subdivision, including his traveling expenses, shall not be absorbed by the employer. (5) No equipment shall be furnished to a customer for trial pur- poses without a definite order and advance agreement that if the equipment be returned, the customer will pay transportation and cost of reconditioning. This provision shall not apply to equipment in process of development, or to equipment to be used in a manner novel to the Subdivision, until after one machine is in successful commercial operation. (G) No employer of the Subdivision 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 misrepresent any goods (including but without limitation its use. trademark, gra-de, 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 conducted. (7) No employer shall make or agree to make any secret payment or rebate, credit or discount, in money or otherwise, with intent to influence any sale. (8) No employer shall pay or promise to pay any money or other valuable thing to any agent, fiduciary, or other representative of a purchaser, with or without the knowledge of his principal, for the purpose of influencing any sale; provided that no provision of this Supplemental Code shall be construed to prohibit free and general distribution of articles commonly used for advertising, except insofar 2 See paragraph 2 (2) of order approving- this Code. 14 as such articles are actually used for commercial bribery as herein- above defined. (9) No employer shall falsely advertise, represent, or mark any product with intent to deceive or mislead prospective purchasers. (10) No employer shall make false claims with regard to or deliberately misrepresent the scope of patents either granted to him or applied for by him. (11) No employer shall disseminate false or misleading informa- tion relative to competitors' products, selling prices, reputation, credit or financial standing, ability to perform work, or labor condi- tions among competitors' employees. (12) No employer shall wrongfully entice away the employees of competitors with the purpose and effect of hampering, injuring, or embarrassing such competitors in their business. Nothing in this paragraph shall be so interpreted as to in any manner restrict the right of any employee to seek employment with any employer at any time. (13) Each employer 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. (14) No employer shall furnish to any purchaser of equipment, detailed shop drawings of standard units, whether purchased or manufactured, without filing a statement in advance of such proposed action with the Code Authority which shall approve or, with the approval of the Administrator, disapprove, within twenty (20) days. The Code Authority shall immediately notify the employer making application of the action taken. (15) No employer shall cooperate in the evasion of this Supple- mental Code, or of the Code by selling to or through any distributor who does not agree to resell only in accordance with the provisions of this Supplemental Code and of the Code. 3 Article X — Sales for Export The provisions of this Supplemental Code concerning pricing and marketing (Articles VII, VIII and IX) shall not apply to direct export sales of any product or to sales of any product destined ulti- mately for export. The term "export" shall include all shipments to all places without the several states of the United Stale- 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 located 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 oi the A.ct. (b) Any amendments, addition- revisions, or supplements u> this Supplemental Code, proposed by Code Authority, and approved by two-thirds of the employers shall be in full force and effect upon ■See paragraph 2 (8) of order approving this Code. 15 approval by the Administrator. The eligibility requirements, method, and effect of such voting shall be the same as provided by Article V hereof. Article XII— Monopolies This Supplemental Code is not designed to promote 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 persons engaged in the Subdivision on the eleventh day after its approval by the President. Approved Code No. 347 — Supplement No. 22. Registry No. 1342-01. O UNIVERSITY OF FLORIDA 3 1262 08853 8144