Approved Code No. 201-Supplernent No.8 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 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1934 

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For sale by the Superintendent of Documents, Washinl[ton D.C. • • • • - • - • Price li ~en&a 
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. 

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 ..A:.venue. 

Los Angeles, Calif. : 1163 South Broadway. 

Louisville, Ky.: 408 Federal Building. 

Memphis, Tenn. : 229 Federal Building. 

Minneapolis, Minn. : 213 Federal 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. 

Pittsbmgh, Pa. : Chamber 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 i'HE 

WHOLESALE DRY GOODS TRADE 

As Approved on May 14, 1934 

ORDER 

SuPPLEMENTARY ConE OF F AIR CoMPETITION FOR THE WHOLESALE DRY 

Goons 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 Supplemental Code of Fair Competition for the Wholesale Dry Goods 

Trade to the Code of Fair Competition for the Wholesaling or Distributing 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 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 approved; provided, however, that the provisions of Article V are 

approved for a period of ninety (90) days only, subject to further ord ~ ~t that time as a result of study made of the operation of said 

prOVlSlOnS. 

HUGH S . JOHNSON, 

Ad/ministrator for I ndwstrial R ecovery. 

Approval recommended: 

H. 0. KING, 

Division Adtministrator. 

WASHINGTON, D.C., 

May 14, 1934. 

58901°----544-81----34 (1) 
REPORT TO THE PRESIDENT 

The PREsiDENT, 

The White House. 

Sm : This is a report of the Hearing on the Supplemental Code 

of Fair Competition for the Wholesale Dry Goods Trade, conducted 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 figure3 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 Competition for the Wholesaling or Distributing Trade, it contains no 

labor provisions. 

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 are not considered in any way objectionable. The provision regarding sales below cost is designed to protect the producer as well as the members of this Trade. This provision 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 interstate 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 

(2) 
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and management under adequate governmental sanction and supervision, by eliminating unfair competitive practices, by promoting 

the fullest possible use of the present productive capacity of industries, by avoiding undue restriction of production (except as may 

be temporarily required), by increasing the consumption of industrial and agricultural products through increasing purchasing power, 

by reducing and relieving unemploJinent, 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 desig:ned to and will ~ot 

ehmmate or oppress small enterpnses and Will not operate to discriminate against them. 

( £) 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' . 

Administrator. 

MAY 14, 1934. 
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR 

THE WHOLESALE DRY GOODS TRADE 

A DIVISION OF THE WHOLESALE OR DISTRIDUTING 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 Wholesalin~ 

or Distributing Trade as provided by Article VI, Section 1 ( c J 

thereof and c;.hall be considered a part of and in connection with 

such Wholesaling or Distributing Code. Both Codes shall be binding upon every member of the Wholesale Dry Goods Trade. 

ARTICLE II-DEFINITIONS 

SUPPLEMENTING ARTICLE II OF THE GENERAL CODE 

Wholesaler or Distribu.tor.-The term "wholesaler" or "distributor" 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 industrial 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 Goocls.-The term "dry goods", as used herein, is defined 

to mean textiles, apparel, and the 1niscellaneous products of industry 

generally classed as novelties, notions, and kindred lines. 

National W holesaler.-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. 

T erritorial 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. 

(4) 

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Divisional Oode Authority.-The term "Divisional Code Authority", as used herein, is defined to mean the Divisional Code Authority for the Wholesale Dry Goods Trade, a division of the Wholesaling or Distributing Trade. 

General 0 ode.-The term ~' General Code ", as used herein, is defined to mean the Code of Fair Competition for the Wholesaling or 

Distributing Trade. 

0 onsignment.-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 allowing such goods to be returned as unsold. 

ARTICLE III-ADMINISTRATION 

SUPPLEMENTING ARTICLE VI, SECTI{)N 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 approval 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) members; one for each of seven (7) territorial membership zones as 

established by the vVholesale 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 o£ 

Directors of the "\Vholesale Dry Goods Institute shall publicly count 
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the votes then in its possession. Only those ballots which are accompanied by a signed statement of assent and compliance shall 

be counted. T!_le 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 compliance or by a letter stating that the voter has previously filed such 

a statement with said Board of Directors. The person in each territorial 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 Authority 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 nothing herein shall relieve the Divisional Code Authority of its responsibilities as such. 

(d) The Divisional Code Authority shall appoint a Trade Practice Committee, which shall meet with the Trade Practice Committees appointed under such other Codes as may be related to the 

Trade, excep-t those appointed under other Supplemental Codes to 

the General Code, for the purpose of formulating fair trade practices 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 Administrator 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) The Divisional Code Authority shall, subject to the approval 

of the Administrator, assess each member of the T:rade with a reasonable and fair share of the cost of the administration of this 

Supplemental Code and the General Code. 
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SE<JTioN 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 agTeement to comply with the Constitution and the by-law~ thereof. 

SEcTION 5. Nothing contained in this Supplemental Code shall constitute the members of the Divisional Code Authority partners for 

any purpose nor shall any members of the Divisional Code Authority be liable in any manner to anyone for any act of any other members, 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 

for investigation of the merits of such action and for further consideration 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 OODE 

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 wholesaler 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 circumstances to be defined by the Divisional Code Authority when peculiar circumstances of the Trade make the practice desirable. 

3. To grant rebates, bonuses, trade discounts, buyers' expense allowances, delivery allowances, storage allowances~ overship!llents 

without charge, gifts, advertising allowances or other tangible inducement or economic advantage to any customer unless such rebates, 

bonuses, trade discounts, buyers' expense allowances, delivery allowances, storage allowances, overshipments without charge, gifts, advertising allowances, or other tap.gible inducement or ec-onomic advantages are available to all other customers of the same class in all territories on like terms and conditions. 

4. To sell any merchandise unless the same shall bear a descriptive 

number or name. 
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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 p~rmit the extension of net due 

date, cash discount, special dating, or anticipation interest allowances greater than those established for the several lines of merchandise 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 1 

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 Divisionai 

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 

r elation to the wholesaler's operating costs, or tends to enhance the 

price of the product to buyers or ultimate consumers, the Administrator 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 ma.nufacturer 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 

1 See paragraph 2 of order approving this Code. 
9 

written notice bv the wholesaler of his intention to discontinue handling that line, the wholesaler may proceed to dispose of the stock at 

any price he may desire. 

ARTICLE VI-APPLICATION OF TI-ns S u PPLEMENTAL ConE 

Whenever any Supplemental Code is approved for wholesalers who 

bpecialize in a particular type of dry goods, such specialty wholesalers 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. 

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UNIVERSITY OF fLORIDA 

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