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Approved Code No. 16-Amendment No.6 Registry No. 24l-02 

NATIONAL RECOVERY ADMINISTRATION 

AMENDMENT TO 

CODE OF FAIR COMPETITION 

FOR THE 

HOSIERY INDUSTRY 

AS APPROVED ON APRIL 6, 1935 

WE DO OUR PART 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

W ASBINGTON: 1935 

For sale by the Superintendent oC Documents, Washineton, D. C. - - - - - - - • - Price 5 cents 
This publication is for sale by the Superintendent of Documents, Government 

Printing Office, Washington, D. C., and by the following N. R. A. offices: 

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Atlanta, Ga.: 625 Citizens & Southern National Bank Building. 

Baltimore, Mll. : 130 Customhouse. 

Birmingham, Ala.: 201 Liberty National Life Building. 

Bo ton, l\Ia <>s. : R oom 1200, 80 Federal Street. 

Buffalo, N. Y.: 219 \\rhite Building. 

Chicago, Ill.: Room 204, 400 North Michigan Avenue. 

Cleveland, Ohio: 520 Bulkley Building. 

Da llas, Tex. : 1212 Republic Bank Building. 

Detroit, l\Iich.: 415 New Federal Building. 

Hou ton, Tex. : 403 Milum Building. 

Jacksonville, Fla.: 425 United States Courthouse and Post Office 

Building. 

Los An<Yeles, Calif.: 751 Figueroa Street, South. 

Louisville. Ky. : 408 Federal Building. 

Minneapolis, Minn. : 900 Roanoke Building. 

Nashville, Tenn.: 415 Cotton State· Building. 

Newark, N. J.: 434 Industrial Office Building, 1060 Broad Street. 

New Orleans, La.: 214 Customhou e. 

New York, N. Y.: 45 Broadway. 

Oklahoma City, Okla. : 427 Commerce Exchange Building. 

Philadelphia, Pa.: 933 Commercial Trust Building. 

Pittsburgh, Pa.: 401 Law and Finance Building. 

Portland, Oreg. : 407 Park Building. 

Providence, R. I.: National Exchange Bank Building, 17 Exchange 

Street. 

St. Louis, Mo.: Suite 1220, 506 Olive Street. 

Sun Francisco, Calif. : Humbolt Bank Building, 785 Market Street. 

SeatUe, Wash . : 1730 Exchange Building. 
Approved Code No. 16--Amendment No. 6 

AMENDlVIENT TO CODE OF FAIR COMPETITION 

FOR THE 

HOSIERY INDUSTRY 

As Approved on April 6, 1935 

ORDER 

ArrRov:rNG AMENDl\IENT OF ConE OF FAIR CoMPETITION FOR THE 

I-IosrERY 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 16i 1933, for approval of an amendment to the Code of Fair Competition for the Hosiery Industry, and 

hearings having been duly held thereon, and the annexed report on 

said amendment containing findings with respect thereto, having 

been made and directed to the President : 

NO,V, THEREFORE, on behalf of the President of the United 

States, the National Industrial Recovery Board, pursuant to authority vested in it by Executive Orders of the President, including Executive Order No. 6859, dated September 27, 1934, and otherwise; 

does hereby incorporate, by reference, said annexed report and does 

find that said amendment and the Code as constituted after being 

amended comply in all respects with the pertinent provisions and 

will promote the policy and purposes of sa1d Title of said Act, and 

does hereby order that said amendment be and it is hereby approved, 

and that the previous approval of said Code is hereby amended to 

include an approval of said Code in its entirety as amended. 

NATIONAL INPUSTRIAL RECovERY BoARD, 

By ,V. A. HARRIMAN, Ad1ninistrative Officer. 

Approval reco'mmended: 

M. D. VINCENT, 

Acting Division Ad1ninistrator. 

w .ASHINGTON, D. c., 

April 6, 1935. 

127170°----1749-25----35 (1) 
REPORT TO THE PRESIDENT 

The PREsiDENT, 

The White H mtse. 1 SIR: An application has been duly made pursuant to and in full 

compliance with the proYisions of Title I of the National Industrial 

Recovery Act for certain amendment to the Code of Fair Competition for the Hosiery Industry, and H earings have been duly conducted thereon. 

Article 8, Section 1 of the amendment prescribes uniform conditions of sale ; Section 2 prohibits price guarantees; Section 3 prohibits bonuses, rebates, honor, and credits, etc. This Section also 

deals in customers' subsidies, return of merchandise, special services, 

cooperative advertising, etc. Section 4 .prohibits the sale of merchandise below the low cost and deals also in the billing of sample , the marking of close-outs, and with cost finding; Section 5 prohibits shipments on consigmnent; Section 6 prohibits commercial 

bribery; Section 7 prohibits the r·eturn of merchandise for refinishing unless the Manufacturer is compensated for the actual cost 

therefor; Section 8 deals with the classification of hosiery; Section 

9 prohibits substitutions without the knowledge or consent of the 

purchaser; Section 10 prohibits the misbranding and misrepresentation of materials; Section 11 prohibits the imitation of competitors' 

marks; Section 12 deals with the observance of the Code; Section 13 

deals with arbitration. 

The Deputy Administrator in his final report on said amendment 

to said Code having found as herein set forth and on the basis of 

all the proceedings 111 this matter : 

The National Industrial Recovery Board finds that: 

(a) The amendment to said Code and the Code as amended are 

well designed to promote the policies and purposes of Title I of the 

National Industrial Recovery Act, including the 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 actwn of labor and management under adequate governmental sanction and supervision, by eliminating unfair competitive practices, by promoting the fullest possible utilization of the present productive capacity of industry, by avoiding 

undue restriction of production (except as may be temporarily required), by increasing the consumption of industrial and agricultural p~o~ucts through increasin.g purchasing power, by reducing 

and rehevmg unemployment, by rmproving standards of labor and 

by otherwise rehabilitating industry. ' 

(b) Th~ .Code as .ame~cled cot.nplies in all respects with the pertinent provision of said Title of said Act includinO' without limitation 

subsection (a) of section 3, subsecti01~ (a) of ~ection 7 and subsection (b) of section 10 thereof. ' 

{2) 
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(c) The Code empowers the Code Authority to present the aforesaid amendment on behalf of the industry as a whole. 

(d) The amendment and the Code as amended are not designed 

to and will not permit monopolies or monopolistic practices. 

(e) The amendment and the Code as amended are not designed 

to and will not eliminate 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 

amendment. 

For these reasons this amendment has been approved. 

For the National Industrial Recovery Board: 

w. A. HARRIMAN' 

Adm.inistrative Officer. 

APRIL 6, 1935. 
AMENDl\1ENT TO CODE OF FAIR COl\1PETITION FOR 

THE HOSIERY INDUSTRY 

Amend Article VIII by deleting Sections 1, 2, 3, 5, 6, 7, 8, 9, 10, 

11, 12, 13, 14, 15 and 16 and Section 4 (b), (c) and (d) of the present 

Article, and substituting therefor the following: 

1. Unifm·m Conditions of Sale.-The :following conditions o:£ sale 

shall ba binding on all members of the Hosiery Industry: 

(a) All orders are subject to acceptance by the mill. 

(b) All orders are accepted subj ect to delays, partial delivery 

and non-delivery caused by labor difficulties, or conditions beyond 

control of the seller. In ·uch cases, the seller shall promptly notify 

the buyer, and the buyer hall have the right to cancel any undeliYered or unfinished portion of the order. Failure of the buyer 

to either cancel or confirm within tei1 (10) days after receipt of notice 

shall be construed as cancellation. 

(c) (1) Anticipation of payment, if allowed, shall not be at a 

rate in excess of . ix per cent (6 % ) per annum. 

(2) Any invoices not paid on due date shall be subject to interest 

at the rate of six per cent ( 6% ) l?_er annum. 

(3) Dating in excess of sellers established terms shall be subject 

to interest at the rate of six per cent ( 6%) per annum. 

( 4) A discount becomes "unearned discount" and is forfeited 

upon failure of payment of invoices on the clue date, according to 

terms. 

(d) Cancellation may be effected only : 

(1) By the buyer, because of failure of the seller to make deliveries on the specified delivery dates, provided the buyer has furnished 

details in keeping with contract commitments, and provided the 

buyer has given the seller at least t~n (10) days written notice, 

(either before or after due date) of his intention to cancel past due 

deliveries. Until or unless a past due delivery is cancelled in the 

manner provided herein, the commitment of the buyer therefor remains in force. 

(2) By the seller, because of impairment of customer's credit. 

(3) In accordance with sub-section (b) of this section. 

(e) Any controversy or claim arising out of or relating to this 

contract or the breach thereof, shall be settled by arbitration, in 

accordance with the rules, then obtaining, of the American Arbitration Association, and judgment upon the award rendered may be 

entered in the highest court of the forum, state or federal, having 

jurisdiction; provided this provision f.or arbitration shall not have 

been deleted by the purchaser upon, or prior to, the execution o:£ 

this contract. 

2. Price Gum·antees.-To guarantee prices against decline, whether 

by lowering the price o:£ an existing contract, cancellation o:£ an 

existing order and the substitution therefor o:£ a new order at lower 

prices, or by any other means, is an unfair trade practice. 

(4) 
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3. Bonuses, Rebates, Discounts, Etc.-(a) It is an unfair trade 

practice to allow a customer commissions, bonuses, rebates, refunds, 

unearned credits and unearned discounts. 

(b) It is an unfair trade practice to a.llow a customer subsidies 

of any kind, whether in the form of money, merchandjse, payment 

of any J?art of the wages of a customer's employees, or advertising, 

or premmms, or otherwise, that are not specifically permitted in other 

paragraphs of this Section. 

(c) All sales of merchandise shall be final and no member of the 

Industry shall accept the return of any merchandise except for mill 

in1perfections or tor failure to make legal delivery of the goods in 

accordance with the terms of the order. 

(d) It is an unfair trade practice to extend to a customer special 

services which are not extended to all customers under like terms and 

conditions. This provision is not intended to conflict with the provisions of subsection " e " of this section, nor with any specific prohibitions in this Code. 

(e) Hosiery manufacturers selling merchandise having their own 

brands, may enter into agreement tor cooperative advertising of 

such brands upon the following conditions: 

(1) Agreements for cooperative advertising shall be separate frmn 

agreements of sale of merchandise, and shall define the amount to 

be contributed by the manufacturer, which shall not exceed fifty 

per cent (50%) of the amount actually spent. The .nature and 

amount of advertising and the period to be covered shall be specifically set forth in the agreement. Cooperative advertising agreelnents shall be restricted to newpaper or radio advertising and 

printed matter, and the name of the manufacturer or of his brand 

must appear along with the name o£ the customer. 

No cooperative advertising agreement shall be used as a rebate, 

refund, or merchandise allowance, but shall be for advertising 

only. The manufacturer shall pay his share o£ such advertising 

only upon receipt o£ proper evidence of the amount actually so 

spent, and his share shall in no case exceed fifty per cent (50% ) 

of the total expended. 

(2} Full records oi all cooperatiYe advertising agreements shall 

be kept by hosiery manufacturers, so as to permit auditing at any 

time o£ such expenditures and their use. Accurate reports, based 

on such records, shall be furnished \Y hen required by the Code 

Authority. 

(3) The above restrictions on cooperative advertising are not 

meant to exclude the furnishing of display materials, signs, or 

cards, etc., o£ branded lines, provided the customer is in no way 

compensated or subsidized thereby. 

(£) Hosiery manufacturers selling merchandise bearing their own 

brands may offer on such branded hosiery exchange merchandise 

services, provided such services are part o£ their regular and established merchandising methods and are available to all of their 

customers. 

(g) Returns made under "exchange merchandise services" mentioned in subsection (f) shall not be credited to customer's account 

until effect by an additional order for immediate delivery for merchandise of at least an equal value. The per dozen value of the 
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returned go.o~s, as well as the replacement or de~, ~hal~ be at the 

price prevaihng the day the replacemen.t ?rder IS Invoiced. 

4. Selling B ehw Cost, etc.-(b) The bilhJ?-g o~ customer'~ sample 

requirements at less than regular stock pnces Is an unfall' trade 

practice. 

(c) (1) All closeouts of discontin_u~d styles, and/or broken asso_rtments, if sold below cost, shall be VISibly marked on each hose With 

an indelible transfer reading : 

DISCONTINUED 

or DiSCONTINUED PATTERN 

or DISCONTINUED STYLE 

or DISCONTINUED FIRST QUALITY 

Such transfers shall be in full face type letters of not less than 

lfs" in height, except for infants' hose, where smaller size type must 

be used. These transfers must be ordered through the Hosiery 

Code Authority. 

(2) If any hosiery cannot be marked with transfers or in other 

indelible manner, it shall be marked in such manner as the Hosiery 

Code Authority shall prescribe after consultation with the Advisory 

Committee of the branch of the Industry affected. 

(d) Each manufacturer shall determine costs in accordance with 

the principles of Cost Accounting adopted by the Code Authority 

and approved by the National Industrial Recovery Board. 

5. Shipntents on Consignnwnt.-To ship hosiery on consignment, 

on memorandum, or any basis other than outright sale, is an unfair 

trade practice. · 6. C01n1nercial Bribery.-No member of the Industry 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 relation to the business of the employer of such employee, the principal of such agent or the repre- • 

sented party, without the knowledge of such employer, principal or 

party. This provision shall not be construed to prohibit free and 

general distribution of articles commonly used for advertising except so far as such articles are actually used for commercial bnbery 

as hereinabove defined. 

7. R eturn of Me1·chandise for Refinishing.-To repair, re-condition, 

refinish, or re-dye merchandise belonging to a customer without 

rharging actual cost therefor, is an unfair trade practice. 

8. Classification of Hosiery.-(a) Hosiery shall be classified as 

follows: 

(1) Firsts: There shall be only one classification of firsts for any 

given style. 

(2) Other than firsts (Imperfects): Under this heading there 

may be the following sub-classifications only: 

Irregulars 

Seconds 

Thirds 

A mill choosing not to have four classifications may eliminate 

classifications of either "Irregulars" or ""Seconds." 

(b) The sale of a lot of hosiery, containing more than one of the 

above given classifications, as "Mill Runs ", is an unfair trade 

practice. 
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(c) All hosiery which is not first quality shall be stamped or 

transferred either "Irregulars", " Seconds", or "Thirds" on the 

toe, sole, or outside the welt of each hose according to classification. 

All such marking must be visible and indelible, in full face typo 

letters of not less than -A," in height, except that in the case of 

infants' hose the letters may be 1j 8 " in height. 

(d) The end label of all boxes, containing goods other than first 

quality, shall be marked in accordance with the stamping of the 

goods therein, in full face type letters of not less than " in height. 

9. Substitution.-To ship or deliver hosiery which does not conform in quality and value to the samples submitted or representations made prior to securing the order, without the knowledge or 

consent of the purchaser to such substitution, is an unfair trade 

practice. 

10. Misbranding and !,fis?'epresentation of Materials.-(a) To sell 

hosiery marked, or branded, falsely with the effect of misleading, or 

deceiving, purchasers, or buyers, with respect to price, quantity, 

quality, gauge, grade, substance or value of the merchandise, is an 

unfair trade practice. 

(b) If any definite section or sections of the hose be made of a 

material entirely different from that of the bulk or body of the 

stocking, when such material gives the appearance of silk, the hose 

must be stamped with the names of both materials. 

(c) No material content shall be stamped on any hose unless it 

represents at least 5 percent ( 5%) of the hose by weight. vVhen 

two or more contents exist, if any content is stamped on the hose 

all contents constituting five percent ( 5.% ) or more of the weight 

of the hose shall be stamped and in the order of the major content. 

In hosiery having an all-silk, or all-rayon, or a mixture of rayon 

and silk body or boot, with cotton top and/or cotton toe, heel, sole 

and highsplicing, the "weight" referred to in this paragraph shall 

exclude the weights of the cotton portions mentioned. Such hosiery 

may be marked respectively "silk ", "rayon" or "rayon and silk" 

without reference to the cotton content. 

(d) If hosiery is marked with any material content in terms of 

percentage, the percentage of each material content must be shown. 

11. !?nitation of Competitor's M arks.-The imitation of trade 

marks, trade names, slogans or other marks of indentification of 

competitor.s, having the. tendency to mislead or deceive any buyer 

is an unfair trade pract1ce. 

12. Observance of Oode.-The failure to observe any rule in this 

Article of the Code, even if it does not contain the words " unfair 

trade practice ", is a violation of the Code. 

Approved Code No. 16-Amendment No. 6. 

Registry No. 241-02. 

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