Approved Code No. 201-Supplement No. 8-Reprint 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 

INCLUDES AMENDMENT NO. 1 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1934 

For sale by the Superintendent of Documents, Washin2ton D.C. • • • • • • • • Price S 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 

FQreign and Domestic Commerce. 

DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE 

Atlanta, Ga. : 504 Post Office Building. 

Birmingham, Ala. : 257 Federal Building. 

Boston, Mass. : 1801 Customllouse. 

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. 

D etroit, 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 Avenue. 

Los Angeles, Calif.: 1163 South Broadway. 

Louisville, Ky. : 408 Federal Building. 

l\lemphis, Tenn.: 229 Federal Building. 

l\linneapolis, Minn.: 213 F ederal 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. 

Pittsburgh, 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 THE 

WHOLESALE DRY GOODS TRADE 

As Approved on May 14, 1934 

ORDER 

SUPPLEMENT.ARY CODE OF F .AIR COMPETITION FOR THE w HOLES.ALE DRY 

Goons TRADE 

.A DIVISION OF THE WHOLESALING OR DISTRIBUTING TR.ADE 

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, £or approval of a Supplemental Code of Fair Competition £or the Wholesale Dry Goods 

Trade to the Code of Fair Competition £or the vVholesaling 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 £or 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 £or a period of ninety (90) days only, subject to further 

orde~ ~t that time as a result of study made of the operation of said 

prov1s10ns. 

HUGH s. JOHNSON, 

Admiin-istrator for lndwstrial Recovery. 

Approval recommended: 

H. 0. KrNG, 

Div-ision Admin-istrator. 

w .ASHINGTON, D.C., 

May 14, 1934. 

98225°-1325-66----34 (1) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Srn: 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 figures include 

what is known to the Trade as General Line Wholesalers. 

PROVISIONS OF THE OODE 

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) 
3 

and management under adequate governmental sanction and super- vision, by eliminating unfair competitive practices, by promoting 

the fulle t 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 unemployment, by improving standar ls 

of labor, and by otherwise rehabilitating industry. 

(b) Said Trade normally employs not more than 50,000 employees 

and it i 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. 

(cl) The Supplemental Code is not designed to and will not permit 

monopolies or monopolistic practices. 

( e) The Supplemental 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 the approval 

of this Supplemental Code. 

For these rea ons, the Supplemental Code has been approved. 

Respect£ ull y, 

MAY 14, 1934. 

HUGH s. JOHNSON' 

Administrator. 
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR 

THE WHOLESALE DRY GOODS TRADE 

A DIVISION OF THE WHOLESALE OR DISTRIBUTING 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 Wholesaling 

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

thereof and ~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 Di,stributor.-The term "wholesaler" or "distributor " as used herein, is defined to mean a person or firm or di vision 

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 Goods.-The term "dry goods", as used herein, is defined 

to mean textiles, apparel, and the miscellaneous products of industry 

generally classed as novelties, notions, and kindred lines. 

National Wholesaler.-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 di vision thereof, which 

deals at wholesale in one or more lines of dry goods, but does not 

deal in a general line. 

(4) 
5 

Divisional Code A11,thority.-The term "Divisional Code Authority", as used herein, is defined to mean the :p~v~sional Code Authority for the "\Vholesale Dry Goods Trade, a d1v1s10n of the Wholesaling or Distributing Trade. 

General O ode.-The term H General Code ", as used herein, is defined to mean the Code of Fair Competition for the \Vholesaling or 

Distributing Trade. 

0 onsignment.-The term " consignment ", as used her~in, 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, SECTION 2 ( E) OF THE GENERAL CODE 

SECTION 1. (a) For the purpose of administration, the Dry Goods 

Division of the vVholesale 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 divi ion. 

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 vVholesaling 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 Wholesale 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 fallows : 

1. The Board of Directors of the \Vholesale Dry Goods Institute 

·hall 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 of 

Directors of the vVholesale Dry Goods Institute shall publicly count 
6 

the votes then in its possession. Only those ballots which are accompanied by a signed statement of assent and compliance shall 

be counted. T!_ie 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 clays after the mailing of such ballots the Board 0£ 

Directors of the "\Vholesale 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 \Vholesale 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, except 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) (1) It being found necessary in order to support the administration of this Code and to maintain the standards of fair c01npetition established hereunder and to etf ectuate the policy of the Act, 

the Code Authority is authorized: 
7 

a. To incwr s-uch reasonahle obligations as are necessary and proper 

for the foregoing pwrposes and to m,eet swch obligations out of fwnds 

which 1nay be raued as hereinafter provided and which shall be held 

in trust for the pu;rposes of the Code,-

b. To submit to the Administrator for hu approval, s'u,bject to 

such notice and opportunity to be heard as he may deem necessary 

(1) an itemized budget of its estimwted ewpenses for the foregoing 

purposes, and (2) an equitable basis upon which the fwnds necessa1·y to s-up port suich budget shall be continwed by 1nembers of the 

Trade/ 

c. After such budget and basu of contribution have been approved 

by the Adminutrator, to determine and obtain equitable contribi1,tion 

as above set forth by all 1ne1nbers of the Trade, and to that end, if 

necessary, to institute legal proceedings therefor in its own name. (2) Each 1nember of the Trade shall pay hu or its equitable contribution to the ewpenses of the maintenance of the Code Authority, 

determined as hereinabove provided, and subject to rules and regulations pertaining thereto usued by the Administrator. Only m,embers of the Trade complying with the Code and contribu,ting to the 

expense of its admlinutration as hereinabo1Je prrovided, unless duby 

exempted from making swch contributions, shall be entitled to 

participate in the selectwn of m,embers of the Code Authority or 

to receive the benefits of amy of its voluntary activities or to 

-make use of any emblem or insignia of the National Recovery 

Ad11iinutration. 

(3) The Divuioncrl, Code Awthority shall neither incwr nor pay .any obligation s-ubstantially in ewcess of the a11iownt thereof as estimated in its approved budget, and shall in no event ewceed the total, 

amount contained in the appr01Jed budget, ewcept upon appro1Jal of 

the Adminutrator,- and no subsequent bwdget shall contain any 

deficiency item for ewpenditures in ewoess of rprior budget estimates 

ewcept those which the Adminutrator shall have so appr01Jed. 1 

SECTION 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 agreement to comply with the Constitution and the by-laws 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 

1 Italicized words added by Amendment No. 1, approved Sept. 14, 1934. 
8 

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 CODE 

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, overshipments. 

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 tangible inducement or economic 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. 

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 permit 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 1na.de 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. 
9 

ARTICLE V-PERMISSIVE TRADE PRACTICES 2 

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 Divisional 

Code Authority, to sell at less than the differential so established 

but not less than his invoice cost plus said operating co t. 

( 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 para.graph (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 a.ny way inequitable or unduly high in 

relation 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 manufacturer 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 

written notice by 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 THIS SUPPLEMENTAL CODE 

\Vhenever any Supplemental Code is approved for wholesalers who 

specialize 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. 220-3-06. 

2 See paragraph 2 of order approving tbis Code, 

0 




UNIVERSITY OF FLORIDA 

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