Approved Code No. 361 Registry No. 604-03 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR THE 

PERFUME, COSMETIC AND 

OTHER TOILET PREPARATIONS 

INDUSTRY 

AS APPROVED ON MARCH 23, 1934 

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UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1934 

I I 

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Approved Code No. 361 Registry No. 604---03 

ERRATA SHEET 

CODE OF FAIR COMPETITION 

FOR THE 

PERFUME, COSMETIC, AND OTHER TOILET 

PREPARATIONS INDUSTRY 

As Approved on March 23, 1934 

Page 447, Article XII, Section 5, Subsection (a) last sen~nce, the 

word "liberal " should be "Literal." 

71315°-829-7-34 (1) 

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Approved Code No. 361 

CODE OF FAIR COMPETITION 

FOR THE 

PERFUME, COSMETIC AND OTHER TOILET 

PREP ARAT,IONS INDUSTRY 

As Approved on March 23, 1934 

ORDER 

CooE OF FAIR COMPETITION FOR THE PERF ME, Cosl\rnTic A xo OTHER 

TOILET PREPARATIO s I NDUSTRY 

An application ha,ino- been duly made pur uant to and in full 

compliance with the pro ision of Titl I of the National Indu trial 

Recovery Act, approved June 16, 1933, for approYal of a Code of 

Fair Competition for the Perfume, Co metic and other Toilet 

Preparations Indu try, and hearing having been duly held thereon and the annexed report on aid ode containing finding · with 

respect thereto, ha Ying been made and directed to the President. 

NO,v, THEREFORE, on behalf f the President of the United 

States, I, Hugh S. John on Admini -trator for Industrial Recovery, 

pur uant to authority vested in me by Executive Order · of the 

President, including ExecutiYe Order o. 6543-A, dated December 

30, 1933: and otherwi e; do hereby incorporate by reference said 

annexed n'port and do find that said Code complies in all respects 

with th pertinent provisions and will promote the policy and 

purposes of aid Title of said Act; and do hereby order that said 

Code of Fair Competition be and it i hereby approved. 

HUGH 8. JOHNSON, 

Admini1:drator for Industrial R eco'very. 

ApproYal recommended: 

A. D. ,v HITESIDE, 

Divisfon Adminristrator. 

,vAsHrNaToN, n.c., 

March f3, 1934 

48303°-425-135-34 (435) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Srn: This is a report on the Hearing on the Code of Fair Competition for the Perfume, Cosmetic and Other Toilet Preparations 

Industry, held in the Carlton Room of the Carlton Hotel on January 

17, 1934. The Code, which is attached, was presented by duly qualified and authorized representatives of the Industry, complying with 

statutory requirements and claiming to represent seventy (70) percent by volume of the Industry. 

In accordance with the customary procedure every person who had 

filed a request for appearance was freely heard in public; and regulatory requirements were complied with. 

THE INDUSTRY 

The Industry comprises about 650 concerns, having an investment in 

1929 of approximately $80,000,000. Aggregate annual sales fell from 

$201,689,000 in 1929 to about $140,000,000 in 1932. In 1929 the 

Industry employed 19,495 persons of whom 13,109 were wage earners. 

PROVISIONS OF THE CODE 

The Code provides a basic work week of 40 hours which is a 

reduction in working time of 13% in the Northern states and 25% 

in the Southern states from the respective 1929 figures. It is believed that the 40 hour week will maintain employment in normal 

periods almost equal to the 1929 figure whereas during peak periods 

employment will be more than the 1929 average. 

The basic minimum hourly rate of 35¢ in the North and 321⁄2¢ in 

the South should provide minimum weekly earnings noticeably 

above those in effect prior to the President's Reemployment Agreement. It is estimated payrolls will be increased 15% in normal and 

about 25% in peak periods above July 1933 figures and average 

purchasing power will be restored nearly to the 1929 level. 

At the public hearing considerable controversial material was 

presented pertaining to the employment of demonstrators and to 

the corrollary questions of the payment of commissions by manufacturers to retail sales clerks, and other forms of special sales concessions incident thereto. For a number of years the Industry has 

indulged in these practices and as a consequence many competitive 

abuses have arisen, which can not be directly eliminated without 

danger of destroying some bona fide merchandising methods. This 

Code provides an open price system designed to put these competitive abuses into the open and it is believed this procedure will cause 

their elimination. However, to be sure the Code will be effective in 

(436) 
437 

this respect, the Code Authority is instruct~d to gather evidence as 

to the effect of the trade practice provisions in correcting these 

conditions and to report its finding to the Administrator at the end 

of a six months' trial period. 

The Code provides for the appointment of representatives to 

serve on a Drug Industry Coor linating Council which sb,'1.ll have 

representatives from all the various branche of the drug industry 

and be constituted to act as an advisory and planning body for the 

whole drug industry. 

FINDINGS 

The Deputy Admini trator in his final report to me on said Code 

having found as herein set forth and on the ba is of all the proceedings in this matter; 

I find that: 

(a) Said 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 inter- tate and foreign 

commerce which tend to dimini h the amount thereof and will provide for the general welfare by promoting the organization of industry for the purpose of cooperative action among the trade groups, 

by inducing and maintaining united action of la.bar and management under adequate governmrntal sanctions and supervision, by 

eli1ninating unfair competitive practice, by promoting the fulle -t 

possible utilization of the pre ent production capacity of Indu tries, 

by a voiding 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 unemployment, by improving tandards of 

labor, and by otherwi e rehabilitating industry. 

(b) Said trade industry normally employs not more than 50 000 

employees; and is not classified by me as a major indu try. 

(c) The 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 representative of the aforesaid Industry; and that said association imposes no inequitable 

restrictions on admission to membership therein. 

( d) The Code is not designed to and will not permit monopolies 

or monopolistic practices. 

( e) The Code is 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 

Code. 

For these reasons, this Code of Fair Competition for the Perfume, 

Cosmetic and Other Toilet Preparations Industry has been 

approved. 

Respectfully, 

MARCH 23, 1934. 

HUGH s. JOHNSON' 

Administrator. 
CODE OF FAIR COMPETITION FOR THE PERFUME 

COSMETIC AND OTHER TOILET PREPARATIONS 

INDUSTRY 

ARTIOLE I-PURPOSES 

To e:ffe tuate the policy of Title I of the National Industrial 

Reco ery Act, the following provisions are established as a Code of 

Fair ompetition for the Perfume, Cosmetic and Other Toilet Preparations Industry, and shall be the standard of fair competition for 

such industry and shall be binding upon every member thereo,f. 

ARTICLE II-DEFINITIONS 

SECTION 1. (a) The term " Perfume, Cosmetic and Other Toilet 

Preparations Industry " as used herein shall mean the industry each 

member of which is engaged in the manufacturing, and/or in having 

manufactured for him under his own brand and specifications, and/ 

or in importing in consumer packages for resale, and/or in packaging from bulk materials under his name or brand, perfume, toilet 

waters, face powders, face creams, toilet soaps, compact powders, 

skin lotions, lipsticks, rouges, shaving creams, shaving soaps, and 

other shaving preparations, bath salts and bath preparations, hair 

tonics, hair lotions, shampoos, depilatories, personal deodorants, manicure preparations, and similar substances and preparations designed 

and intended for external application to the person for the purpose 

of cleansing, improving the appearance of, refreshing, or preserving 

the person; and such related branches or subdivisions as may from 

tin1e to time be included under the provisions of this Code by the 

President of the United States, after such notice and hearings as he 

may prescribe. 

(b) This definition does not include dentifrices and mouth washes. 

( c) This industry does not include the manufacture of soap or 

soap products as defined in the Code of Fair Competition for the 

Soap and Glycerine Industry-#623/03, a approved by the President on November 2 1933, nor does this Code or any amendments 

thereto that may subsequently be approved, apply in any manner 

whatsoever to members of the Soap and Glycerine Manufacturing 

Industry as defined in the aforementioned ode of that Industry. 

( d) This definition does not include any retailer operating under 

a retail cod who performs any of the acts specified herein solely for 

the purpose of sale at retail to hi own cu tamers, and not for the 

purpose of ale to other di tributor ; pro ided however that where 

a retailer op rates a laboratory or plant di tin t from hi retail operation , and mploys a special group of mploy e to work primarily 

in su h laboratory or J?lant distinct from that group of his mployees 

who work primarily 1n his retail tabli. hment ( ) , and such laboratory or plant perform any of the a t1 pe ified h rein, whether for 

(438) 
439 

sale to such retailer's own customers or to other distributors, such 

laboratory or plant is subject to the provisions of this Code. 

SECTION 2. The term " member of the industry " as used herein 

shall mean any individual, partnership, association, corporation, or 

other form of enterprise en~aged in the industry, either as an 

employer or on his or its own behalf. 

SECTION 3. The term "employee" as used herein shall mean and 

include any and all persons engaged in the industry, howe--\ er compensated, except a member of the industry. 

SECTION 4. The term "employer" as used herein includes anyone 

by whom such employee is compensated. 

SECTION 5. The term " establishment " as used herein hall mean 

any plant, laboratory, business, branch or department thereof engaged 

in this industry. 

SECTION 6. The terms "Act " and "Administrator " as used herein 

shall n1ean, respectively, Title I of the National Industrial Recovery 

Act, and the Administrator £or Industrial Recovery. 

SECTION 7. The term " export " as used herein shall include, in 

addition to shipments to foreign countries, shipments to territories 

and possessions of the United States. 

SECTION 8. The term "manufacturer 0£ private brands" as u ed 

herein shall mean a manufacturer of products embraced by this Code 

who manufactures for individuals, firms or corporations or others 

who own or control the brand or trade-mark under which the article 

is sold or distributed. 

SECTION 9. The term " primary distributor ' a used herein shall 

mean a wholesale dealer or retail dealer to whom a member of the 

industry sells its products directly. 

SECTION 10. The term "P.M.'' as used herein shall mean a commission or payment made by a member of the indu try directly or 

indirectly to any sales employee 0£ any retail establishment not 

owned by such member of the industry, for the purpo e of inducing 

such employee to exert special sales e:ff orts on behalf of the goods of 

such member of the industry; but shall not include payments or 

commissions paid by such member 0£ the industry to his own 

demonstrators. 

SECTION 11. Definitions of Personnel.-(a) The term" executive" 

as used herein shall mean an employee solely respon ible :for the 

management of a business or a recognized subdivision thereof. 

(b) The term "outside salesman" shall mean a salesman who jg 

engaged not less than sixty (60) percent of his working hours outside the establishment or any branch thereof, by which he is 

employed. 

( c) The term " research and scientific worker " as used herein shall 

mean an employee engaged primarily in research and scientific ,vork 

where special education or scientific training is essential. 

( d) The term " outside service employee " as used herein shall 

mean an employee engaged not less than 60% of his working hours 

in delivering, installing, and/or servicing merchandise out ide of 

the establishment and shall include stable and garage employees. 

( e) The term " watchman " as used herein shall mean an employee 

engaged primarily in safeguarding the premises and property of a 

member of the industry. 
440 

( f) The terms "firemen " and " engineers " as used herein shall 

mean employees engaged primarily in the upkeep, preservation, 

operation and repair of furnaces, boilers, engines, pumps, compressors, heating and ventilating equipment, electrical generating plants, 

or other machinery used for supplying heat, light, ventilation, or 

power to a building or plant of a member of the industry; but do not 

include such employees as porters, elevator operators, cleaners, or 

operators of machines used directly in a manufacturing process. 

(g) The term "apprentice office worker" as used herein shall 

mean an office employee with less than six (6) months total offire 

work experience. 

(h) The terms "beginner" and "learner" as used herein shall 

mean an employee with less than sixty (60) days working experience in the Industry. 

(i) The term "demonstrator" as used herein shall mean a special 

representative employed to work in retail stores not owned by a 

member of the industry and whose salary is paid in whole or in part 

directly or indirectly by such member of the industry. 

ARTICLE III-HouRs 

SEOTION 1. No watchman, fireman, engineer, or outside service 

employee shall be permitted to work in excess of forty-eight ( 48) 

hours per week averaged over a consecutive two weeks' period and in 

no event shall be permitted to work in excess of twelve (12) days 

in any consecutive fourteen (14) days' period. 

SECTION 2. No other employees except pharmacists, chemists, executives, and research and scientific workers, earning in excess of 

thirty-five (35) dollars per week, and outside salesmen, shall be 

permitted to work in excess of forty ( 40) hours in any one week or 

eight (8) hours in any twenty-four (24) hour period, except as hereinafter provided in Sections 3 and 4 of this Article, and in no event 

shall any such employee be permitted to work in excess of six ( 6) 

days in any consecutive seven (7) days' period. 

SECTION 3. (a) The maximum hours fixed in the foregoing section 

shall not apply to any employee on emergency maintenance or emergency repair work involving breakdowns or protection of life or 

property, but in any such special case such employees shall be paid at 

the rate of at least time and one third ( 11/2) for hours worked in 

excess of the maximum hours herein provided. 

(b) No employee working on continuous process operations shall 

be permitted to work in excess of twelve (12) hours in any one day or 

more than forty ( 40) hours in any one week. 

SECTION 4. During a peak period, of not to exceed eight (8) weeks 

in any calendar year, any employee shall be permitted to work not in 

excess of forty-eight ( 48) hours in any one week, provided that he 

shall not be permitted to work more than eight (8) hours in any 

twenty-four (24) hour period, and that hours in excess of forty ( 40) 

per week shall be compensated for at the rate of time and one third 

(11/3). 

SECTION 5. No employer shall knowingly permit any employee to 

work for any time which when totaled with that already performed 

with another employer, or employers, exceeds the maxima permitted 

h&cin. . 
441 

ARTICLE IV-WAGES 

SECTION 1. No employee, other than apprentice office workers and 

beginners and learners, shall be paid at less than the rate of thirtyfive (35) cents per hour, except employees in the States of North 

Carolina, South Carolina, Georgia, Florida, Tennessee, Alabama, 

Mississippi, Arkansas, Louisiana, Oklahoma and Texas where the 

minimum rate shall be two and one half (21⁄2) cents less per hour. 

SECTION 2. No apprentice office worker, beginner or learner shall 

be paid less than eighty ( 80) per cent of the rates specified in Section one of this Article. Employees of this class thus compensated 

shall not exceed five (5) per cent of the total number of employees in 

any establishment. 

SECTION 3. The weekly compensation for all employees as of June 

16, 1933, shall not be reduced, notwithstanding that the hours worked 

in such employment may be hereby reduced. Methods of adjustment 

in hourly rates made since June 16, 1933, shall be reported to the 

Code Authority. 

SECTION 4. Female employees performing substantially the sa1ne 

work as male employees shall receive the same rate of pay as male 

emvloyees. 

SECTION 5. This Article establishes a minimum rate of pay which 

shall apply irrespective of whether an employee is actually compensated on a time-rate, piece-rate, or other basis. 

SECTION 6. No employee now employed at a rate in excess of the 

minimum shall be discharged and reemployed at a lower rate for 

the purpose of evading the provisions of this Code. 

SECTION 7. A person whose earning capacity is limited because of 

age or physical1 handicap may be employed on light work at a wage 

below the minimum established by this Code if the employer obtains from the State Authority designated by the United States 

Department of Labor a certificate authorizing his employment at 

such wages and for such hours as shall be stated in the certificate. 

Each employer shall file with the Code Authority a list of all such 

persons employed by him. 

ARTICLE V-GENERAL LABOR PROVISIONS 

SECTION 1. No person under sixteen (16) years of age shall be 

employed in the industry. 

No person under eighteen (18) years of age shall' be employed at 

operations or occupations hazardous in nature or dangerous to 

health. The Code Authority shall submit to the Administrator 

within six (6) months after the effective date of this Code a list of 

such operations or occupations. In any State an employer shall be 

deemed to have complied with this provision as to age if he shall 

have on file a certificate or permit duly issued by the Authority in 

such State empowered to issue employment or age certificates or 

permits showing that the employee is of the required age. 

SECTION 2. In compliance with Section 7 (a) of the Act, it is 

provided: 

(a) That employees shal1l have the right to organize and bargain 

collectively through representatives of their own choosing, and shall 
442 

be free from the interference, restraint, or coercion of employers of 

labor, or their agents, in the designation of such representatives or 

in elf-organization or in other concerted activities for the purpose 

of collective bargaining or other mutual aid or protection. 

(b) That no employee and no one seeking employment shall be 

required as a condition of employment to join any company union 

or to refrain from joining, organizing, or assisting a labor organization of his own choosing, and 

(c) That employers shall comply with the maximum hours of 

labor, minimum rates of pay, and other conditions of employment 

approved or prescribed by the President. 

SECTION 3. No employer shall reclassify employees or duties of 

occupations performed, or engage in any subterfuge, for the purpose 

of defeating the purposes or provisions of the Act or of this Code. 

SECTION 4. Every employer shall provide for the safety and 

health of his employees at the place and during the hours of their 

employment in accordance with the standards for safety and health 

which shall be submitted by the Code Authority to the Administrator within six (6) months after the effective date of this Code, 

and upon approval by the Administrator such standards shall 

become operative as part of this Code. 

SECTION 5. No provision in this Code shall supersede any State 

or Federal Law which imposes more stringent requirements on 

employers as to age of employees, wages, hours of work, or as to 

safety, health, sanitary 011 general working conditions, or insurance, 

or fire protection, than are imposed by this Code. 

SECTION 6. All employers shall post complete copies of this Code 

in conspicuous places accessible to employees. 

SECTION 7. The hours worked by any employee, except outside 

salesmen, during each day shall be consecutive, provided that an 

interval not longer than one hour may be allowed for each regular 

meal period, and such interval not counted as part of the employee's 

working time. Any rest period which may be given employees shall 

not be deducted from such employee's working time. 

SECTIO :r 8. No homework shall be allowed in this industry. 

ARTICLE VI-ORGANIZATION, PowERS, AND DuTIES OF THE ConE 

AUTHORITY 

ORGANIZATION 

SECTION 1. A Code Authority is hereby constituted to aclmini ter 

this Code. 

SECTION 2. The Code Authority ·hall consist of: 

(a) Seven (7) representatives of the industry, or 'UCh other number as may be approved from time to time hy the Admini trator, to 

be sel cted as hereinafter provided. 

(b) ~uch additional members, without Yot and with ut expen e 

to the rndn-try, not to exceed thr e (3), a the dmini trator may 

appoint to rer resent such groups or interc t or governmental 

agenci s and to serve for uch period as h may designate. 

. ( c) The Adn~inistrator !1all appoint a t mp rary -,ode uthor1ty to serve until the select10n of a permanent Code Authority can 
443 

be accomplished. Such temporary Code Authority shall devise an 

equitable method of selection of the Code Authority and submit the 

same to the Administrator for approval within thirty (30) days 

after the effective date of this Code. 

SECTION 3. Members of the industry shall be entitled to participate 

in and share the benefits of the activities of the Code Authority and 

to participate in the selection of the members thereof by assenting 

to and complying with the requirements of this Code and sustaining 

their reasonable share of the expense of its administration. Such 

reasonable share of the expense of the administration shall be deter- mined by the Code Authority, subject to review by the Administrator, on the basis of volume of business and/or such other factors 

as may be deemed equitable. 

SECTION 4. Nothing contained in this Code shall constitute the 

members of the Code Authority partners for any purpose. Nor shall 

any member of the Code Authority be liable in any manner to any- one for any act of any other member, officer, agent, or employee of 

the Code Authority. Nor shall any member of the Code Authority 

exercising reasonable diligence in the conduct of his duties here- under be liable to anyone for any action or omission to act under 

the Code, except for his own wilful misfeasance or non-feasance. SEOTION 5. Each trade or industrial association directly or indirectly participating in the selection or activities of the Code Authority shall (1) impose no inequitable restrictions on membership, and 

(2) submit to the Administrator true copies of its articles of association, by-laws, rules or regulations, and all amendments when 

made thereto, together with such other information as to membership, organization, and activities as the Administrator may deem. 

necessary to effectuate the purposes of the Act. 

SEOTION 6. In order that the Code Authority shall, at all times, 

be truly representative of the industry and in other respects comply 

with the provisions of the Act, the Administrator may provide such 

hearings 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 

an appropriate modification in the method of selection of the Code 

Authority, or any sub-Code Authority. 

POWERS AND DUTIES 

SECTION 7. The Code Authority shall have the following powers 

and duties: 

(a) To adopt by-laws and rules and regulations for its procedure 

and for the administration and enforcement of this Code, in accordance with the powers herein granted, and to submit the same to the 

Administrator for his approval together with true copies of any 

amendment or additions when made thereto, minutes of meetings 

when held, and such other information as to its activities as the 

Administrator may deem necessary to effect the purposes of the Act. 

(b) To obtain from. members of the industry for use of the Code 

Authority, for the Administrator in th~ administration and enforcement of the Code, and for the information of the President, reports 

based on periods of one, two or four weeks, or multiples thereof, as 
444 

soon as the necessary readjustment within the industry can be made, 

and to give assistance to members of the industry in improving 

methods, or in prescribing a uniform system, of accounting and 

reporting. All individual reports shall be kept confidential as to 

,members of the industry and only general summaries thereof may be 

published. 

( c) Subject to rules and regulations issued by the. Administrator 

to receive complaints of violations of this Code1 make investigations 

thereof, and bring to the attention of the Administrator recommendations and information relative thereto for such action as, in his discretion, the facts warrant. 

( d) To use such trade associations and other agencies as it deems 

proper for the carrying out of any of its activities provided for 

herein and to pay such trade associations and agencies the cost 

thereof, provided that nothing herein shall relieve the Code Authority of its duties or responsibilities under this Code and that such 

trade associations and agencies shall at all times be subject to and 

comply with the provisions thereof. 

( e) To coordinate the administration of this Code with such 

other codes, if any, as may be related to the industry, or any subdivision thereof, and to delegate to any other administrative authority, with the approval of the Administrator, such powers as will 

promote joint and harmonious action upon matters of common interest, provided that nothing herein shall relieve the Code Authority 

of its duties or responsibilities under this Code. 

(f) To secure an equitable and proportionate payment of the expense of maintaining the Code Authority and its activities from 

members of the industry assenting to the Code. 

(g) To cooperate with the Administrator in regulating the use 

of the NRA Code Insignia solely by those members of the industry 

who have assented to, and are complying with, this Code. 

(h) To initiate, consider and make recommendations for the modification or amendment of this Code. 

(i) The Code Authority shall appoint representatives to serve on 

any Drug Industry Coordinating Council which may be established 

to be composed of representatives from the various code authorities 

governing codes which are directly related to the drug industry, and 

to act as a planning and coordinating agency, and as an agency 

for the stabilization of employment, for the entire drug industry. 

SECTION 8. If the Administrator shall determine that any action 

of a 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 further consideration by such 

code authority or agency pending final action which shall not be 

effective unless the Administrator approved or unless he shall fail 

to disapprove after thirty (30) days' notice to him of intention to 

proceed with such action in its original or modified form. 

SECTION 9. General Ad?ninistrative P1·ovisions.-In addition to the 

information required to be submitted to the Code Authority as set 

forth in this Article members of the industry shall furnish such statistical information as the Administrator may deem necessary for the 

purpo es recited in Section 3 (a) of the Act to such Federal and 
445 

St~te agencies as t~e Administrator may d~signate; and nothi_n~ in 

this Code shall relieve any member of the industry of any existing 

obligations to furnish reports to Government agencies. 

SECTION 10. An appeal from any section by the Code Authority 

affecting the rights of any employer or employee in the industry may 

be taken to the Administrator. 

ARTICLE VII-ThADE PRA.CTICE PROYISIONS 

The Code Authority shall collect evidence as to the effect of the 

following trade practice provisions in correcting the competitive 

abuses in this industry. The Code Authority shall report to the 

Administrator six months after the effective date of this Code, or 

before if the facts warrant, on the conditions in the industry. If 

the trade practice provisions in this Code are not adequate to correct 

the competitive abuses, the Code Authority shall recommend such 

modifications of or additions to the trade practice provi ions which 

they deem necessary and upon approval by the Administrator, after 

such hearings as he hall specify such recommendations shall become 

operative as a :part of thi Code. 

SECTION 1. (a) Where a commodity or article sold by a member 

of the industry bears ( or its label or container bears), the trade-mark, 

brand, or name of the producer or owner of such commodity or article 

it shall be sold only on the basis of open prices to those engaged as 

primary distributors of its products, clearly setting forth the basis 

for granting of discounts, (specifying the particular function which 

must be performed or the quantities which mu t be purcha ed) which 

are uniform to all trade buyers of the same class o:f distributors and 

which are strictly adhered to while effective. 

No member of the industry shall offer a discount, payment, or 

allowance on a functional basis except where an effective means exists 

for assuring the Code Authority that the function for which the 

payment is made can be actually and faithfully performed. 

(b) The term "open prices" as u eel in this section means a price 

list which is published by each member of the industry for the equal 

information of all primary distributors in the separate or the several 

classes of primary distributors, and which states all the prevailing 

terms of sale for the separate or the several cla ses of primary 

distributors. ( c) This Section shall be trictly construed to prohibit any direct 

or indirect price conces ion and/ or payment of compensation for 

the functions performed by those engaged a primary distributors 

which is not declared in the published price list. The term " indirect 

price concession" as used in this paragraph means any concession 

or payment indirectly made by a member of the industry to a primary distributor or his agent, or his employee, through a rebate 

or allowance or commission or refund or P. M. or payment or deal 

or gift or by any other means whatever. 

(d) Nothing in this section shall be interpreted so as to limit the 

right of a member of the industry to select or classify his primary 

distributors as he shall see fit. 

( e) Each member of the industry shall file his current price list 

with the Code Authority within thirty (30) days after the approval 
446 

of this Code. Each member of the industry shall file (by registered 

mail) any subsequent revision of such price list with said Code 

Authority. 

(f) Within thirty (30) days after the effective date of this Code, 

every member of this industry shall file with the Code Authority 

all brand names owned or used by them. And thereafter new trade 

marks, brands or trade names shall be filed with the Code Authority 

within five ( 5) days after the adoption thereof. 

This section shall not apply to the sale of private brand products 

on contract by a manufacturer or private brancls to the owner of such 

private brand, nor to the sale of products for export, nor to bids 

submitted to governmental units. 

SECTION 2. (a) No member of the industry shall give, permit to 

be given, or directly 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 employees, 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 commonly used for advertising except so far 

as such articles are actually used 10r commercial bribery as hereinabove defined 

(b) No member of the industry or his agent shall pay p. m.'s or 

commissions directly or indirectly to employees of retail dealers to 

influence the sale of his products. 

(This paragraph (b) is stayed for a period of six months after 

the effective date of this Code, and shall go into effect at the end of 

this period only upon the approval of the Administrator after suc.h 

hearing as he shall deem necessary, provided the Code Authority 

shall have presented to the Administrator sufficient evidence to justify 

such approval.) 

SECTION 3. (a) No member of the industry shall employ or permit to be employed for him any demonstrator or sales employee in a 

retail establishment whose salary is wholly or partially directly or 

indirectly paid by the member of the industry or his agent to work 

in such retail establishment unless such demonstrator or sales employee is clearly and openly identified .to the public as the employee 

or agent of the member of the industry; provided, however, that 

the demonstrator shall be available at all times for the sale of 

merchandise. 

(b) The payment of wao-es of a demonstrator or special sales 

representative by the member of the industry in a retail establishment whose identity is clearly and openly disclosed to the public as 

being an employee or agent of the member of the industry shall not 

be considered a form of unfair trade practice or of price discrimination. 

SECTION 4. (a) Cooperative advertising, the expense of which is 

borne or shared by the member of the industl'y and retailer, shall not 

be considered a form of price discrimination, but no payment shall 

be made for cooperative advertising until the member of the industry 

has received proof of insertion and statement of the co t of such 

advertising and the member of the industry's hare thereof. 
447 

(b) No mem.ber of the industry or his agent shall make payment 

for advertising, where such payment is made for the purpo e of pay- ing for the services of a special demonstrator or for the payment 

of p. m.'s or other gratuitie to the dealer's employees. 

SECTION 5. The term "advertising shall include all forms of 

printed or oral recommendation of products manufactured or controlled by the member of the indu try and shall include publicity 

o:f all kinds, including new paper and magazine advertising, circulars, labels, booklet , radio adverti ing, and statements made orally 

in the promotion of sales of such products by ale ·men or others 

employed directly or indirectly by a member of the industry. 

(a) No member of the industry shall make or cause or permit to 

be made or published any fal e, untrue, or deceptiYe statement by 

way of advertisement or otherwise concerning the grade, quality, 

quantity, substance, character, origin, size, or preparation of any 

product of the industry having the tendency and capacity to m.islead 

or deceive purchasers or prospective purchasers or to affect injuriously 

the business of competitors. The truth of an acl-vertisement shall 

be judged by its intended effect as "ell as by a liberal rendering 

thereof. 

(b) No member of the industry shall use fictitiou or deceptive 

prices in advertising or selling merchandise, such as affixing labels 

to nierchandise with fictitious or deceptive prices thereon. SECTION 6. (a) No member of the industry shall u e advertising 

or other representa.tion which refers inaccurately in any material 

particular to any competitors or their commodities, prices, values, 

credit terms, policies, or services. 

(b) No member of the industry shall brand or mark any commodity in any manner which tends to deceive or mislead purchasers 

with respect to the brand, grade, quality, quantity origin, size, 

material content, or preparation of such commodity. 

( c) No member of the industry shall, in selling or advertising 

his merchandise, offer said merchandise as copie , blends, reprodnctions or imitations o:f another member of the industry where the 

name or brand of such other member of the industry is used without 

his consent. 

SECTION 7. No member of the industry shall withhold from or insert in any quotation or invoice any sta.tement that makes it inaccurate in any material particular. 

SECTION 8. No member of the industry shall procure, otherwise 

than with the consent of another member of the industry, any information concerning the business of such other member which is 

properly regarded by it as a trade secret or confidential within its 

organization other than information relating to a violation of any 

provision of the Code. 

SECTION 9. No member of the industry who has performed his 

part of the agreement of sale shall accept return of merchandise, 

by the vendee, damaged or shop-worn without previous written 

authorization by the said member of the industry. A charge to 

cover the cost of reconditioning and handling such merchandise 

shall be made. 
448 1111111111~1\ H~11iillll11i1f 11111\ rnl1i111i 111111111 

3 1262 08584 7548 

ARTICLE VIII-MODIFICATION 

SECTION 1. This Code and all the provisions thereof are expressly 

made subject to the right of the President, in accordance with the 

provisions of subsection (b) of Section 10 of the National Industrial Recovery Act, from time to time to cancel or modify any order, 

approval, license, rule, or regulation issued under Title I of said 

Act and specifically, but without limitation, to the right of the P resident to cancel or modify his approval of this Code or any condi- tions imposed by him upon his approval thereof. 

SECTION 2. This Code, except as to provisions required by the Act, may be modified on the basis of experience or changes in circumstances, such modifications to be based upon application to the Ad- ministrator and such notice and hearing as he shall specify, and t o 

become effective on the approval of the President. 

ARTICLE IX-MONOPOLIES, ETC. 

No provision of this Code shall be applied as to permit monopolies 

or monopolistic practices, or to eliminate, oppress, or discriminate 

against small enterprises. 

ARTICLE X-PRICE INCREASES 

Whereas the policy of the Act to increase purchasing power will 

be made more difficult of consummation if prices of goods and 

services increase as rapidly as wages, it is recognized that price increases except such as may be required to meet individual costs 

should be delayed. But when made such increases should, so far as 

possible, be limited to actual increases in the sellers' cost. 

ARTICLE XI-GENERAL 

SECTION 1. No member of the industry shall use any subterfuge 

to frustrate the spirit and intent of this Code which is, among 

other things, to increase employment, to remove obstructions to commerce, to shorten hours of work, and to raise wages. 

SECTION 2. Except as may be subsequently provided in a specific 

or supplementary export Code for this industry, the provisions of 

this Code now or hereafter adopted with regard to prices, discounts, deductions, allowances, extras, commissions, or methods 

and/or terms of sale, are not to apply to direct export sales in course 

of export, i.e., sales destined ultimately for export. 

ARTICLE XII-EFFECTIVE DATE 

This Code shall become effective on the second Monday after 

its approval by the President. 

Approved Code No. 361. 

Registry No. 604--03. 

0