Approved Code No. 235-Amendment No. 3 Registry No. 299-1-13 

NATIONAL RECOVERY ADMINISTRATION 

AMENDMENT TO 

CODE OF FAIR COMPETITION 

FOR THE 

TEXTILE 

PROCESSING INDUSTRY 

AS APPROVED ON AUGUST 6, 1934 

WE 00 OUR PARt 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

W ASIDNGTON: 1934 

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Approved Code No. 235-Amendment No. 3 

AMENDMENT TO CODE OF FAIR COMPETITION 

FOR THE 

TEXTILE PROCESSING INDUSTRY 

As Approved on August 6, 1934 

ORDER 

MoDIFICATION OF CoDE oF. FAIR Co:MPETITION FOR THE TExTILE 

PROCESSING INDUSTRY 

An application having been duly made pursuant to and in full 

compliance with the provisions of Title I of the National Industrial 

Recovery Act, approved June 16, 1933, for approval of a modification 

of a Code of Fair Competition for the Textile Processing Industry, 

and hearings having been duly held thereon and the annexed report 

on said modification, 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 modification and the Code as 

constituted after being modified comply 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 modification be and 

it is hereby approved2 and that the previous approval of said Code 

is hereby modified to Include an approval of said code in its entirety 

as modified. 

Approval recommended : 

HUGH s. JOHNSON' 

Admini8trator for lndU8trial R ecovery. 

RoBERT L. HousTON, 

Divi8ion Admini8trator. 

WASHINGTON, D.C., 

August 6, 1934. 

78663°----1044--35----34 (1) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Srn: This is a report on the Hearing covering the Amendments 

to the Code of Fair Competition for the Textile Processing Industry, 

held in Room A at the Washington Hotel, Washington, D. C., April 

20. The Amendments, which are attached, were presented by duly 

qualified and authorized representatives of the Industry, complying 

with statutory requirements and being the same Agency that originally submitted the Code. 

In accordance with customary procedure every person who had 

filed a request for appearance was freely heard in public, and all 

statutory and regulatory requirements were complied with. 

PROVISIONS OF THE AMENDMENTS 

There are four groups of Amendments as follows: 

1. The addition to Article I of new Sections as follows: 

Section 9 which defines the term "Division." 

Section 10 which defines the term "Member of the Industry." 

Section 11 which defines the term "Member of the Division." 

Section 12 which defines the term "Service Charge." 

Section 13 which defines the term " Selling Price." 

2. Additions to Article III of new Sections as follows: 

Section 4 regarding the liability of members of the Code 

Authority. 

Section 5 which provides for certain further powers and duties 

for the Code Authority. 

Section 6 which provides for the establishment of the various 

divisions of the Industry, and also sets up the machinery whereby 

the divisions may make recommendations to the Code Authority 

and the method of voting on these recom1nendations by the divisions. 

3. The addition of a new Article, number VII, as follows: 

Section 1 which provides for the registration of productive 

machinery. 

Section 2 which provides that any division in the Industry may 

recommend to the Code Authority a plan for restricting or prohibiting the installation of productive machinery and equipment and 

also that the Code Authority shall submit such a plan to the 

Administrator. 

4. The addition of a new Article, number VIII. 

This Article provides certain trade practice rules for the Industry. 

FINDINGS 

The Deputy Administrator in his final report to me on said amendments to said Code having found as herein set forth and on the 

basis of all the proceedings in this matter: 

I find that: 

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

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

(2) 
3 

National Industrial Recovery Act including the removal of obstructions to the free flow of interstate ap.d 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 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 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 the standards of lj-bor, and by other-

''ise rehabilitating industry. 

(b) The Code as amended 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. 

(c) The Code empowers the Code Authority to present the aforesaid amendments on behalf of the Industry as a whole. 

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

to and will not permit monopolies or monopolistic practices. 

(e) The amendments 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 

amendments. 

For these reasons these amendme~ts have been approved. 

Respectfully, 

AuGUST 6, 1934. 

HuGHS. JoHNSoN, 

Administrator. 
MODIFICATION OF CODE OF FAIR COMPETITION FOR 

THE TEXTILE PROCESSING INDUSTRY 

Article I is hereby amended by the addition of new sections, to 

read as follows: 

"9. The term "division" as used herein n1eans a group of members of the Industry engaged in the same part or parts of the Industry, which groups are set up in Article III, Section 6 of this Code, or 

which may hereafter be set up pursuant to the provisions of such 

section. 

" 10. The term "member of the Industry" includes, but without limitation, any individual, partnership, association, corporation 

or other form of enterprise engaged in the Industry, either as an 

employer or on his or its behalf, including enterprises operating 

under receivership. 

"11. The term "member of the division" means any member of 

the Industry engaged in operations included within the scope of a 

particular division herein named or hereafter organized. 

" 12. The term " service charge " as used herein means the amount 

paid or to be paid to any member of the Industry for any of the 

services performed by members of the Industry as defined in Article 

I, Section 1, including the actual cost of incidental supplies and 

materials furnished by members of the Industry in connection with 

such services. 

" 13. The term " selling price " as used herein means the amount 

paid or to be paid to any member of the Industry for the sale of any 

products made and/or distributed by the Industry, as defined in 

Article I, Section 1." 

Article III is hereby amended by the addition of new sections, to 

read as follows : 

" 4. Nothing contained in this Code shall constitute the members 

of the Code Authority partners for any purpose; nor shall any 

n1ember of the Code Authority be liable in any manner to anyone 

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 the duties hereunder, be 

liable to anyone for any act or omission to act under this Code, ex- ce~t for his own wilful malfeasance or nonfeasance. 

'5. The Code Authority shall have the following further powers 

and duties: · 

(a) To insure the execution of the provisions of this Code and to 

provide, subject to .rules and regulations established by the Administrator, for the compliance of the Industry with the provisions of 

the Act; provided, however, that this shall not be construed to deprive duly authorized governmental agencies of their power to 

enforce the provisions of this Code or of the Act. 

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

for the administration and enforcement of the Code. 

(4) 
5 

(c) To use such agencies and to establish such committees as it 

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

for herein, provided that nothing herein shall relieve the Code 

Authority of its duties or responsibilities under this Code and that 

such agencies and committees shall at all times be subject to and comply with the provisions hereof, and provided that representatives 

designated by the Administrator shall be ci ven full opportunity to 

attend all hearings of such agencies and committees. 

(d) To co-operate with the Administrator in regulating the use 

of any National Recovery Administration Code Insignia solely by 

those members of the Industry who are complying with this Code. 

(e) To appoint, within six weeks after the effective date, a committee so constituted as to give consumer and governmental representation satisfactory to the Administrator, to make a study with a 

view to the establishment of classifications, nomenclature and standards of quality (grades) of staple products and services of the Industry wherever such standards are deemed feasible. The findings and 

recommendations of this committee shall be submitted to the Administrator, within six months after such hearings and investigations as 

he may designate, and upon approval by him shall be made a part 

of this Code and be binding upon every member of the Industry. 

"6. (a) The following divisions of the industry are hereby established and set up : 

Cotton Yarn Dyers and Bleachers 

Cotton Yarn Glazers 

Cotton Yarn Mercerizers 

Cotton and vVool Yarn Winders, W arpers and Slashers 

Rayon Yarn Dyers 

Rayon Yarn General Converters 

Rayon Yarn Straight Twisters 

Novelty Yarn Twisters 

Rayon Yarn Winders, W arpers, Slashers and Beamers 

Woolen and Worsted Yarn Dyers 

vV oolen and Worsted Woven Piece Goods Dyers and Finishers 

Woolen and vVorsted Knitted Piece Goods Dyers and Finishers 

Cotton and Rayon Tubular !(nit Goods Dyers and Finishers 

Raw Stock and Top Dyers 

Hosiery Dyers 

Hosiery Finishers. 

(b) Every member of the Industry who manufactures or sells any 

product of the Industry or performs any of the services included in 

the Industry, shall, as to each product or service, operate under the 

rules formulated for the division andjor divisions set up in subdivision (a) of this section into which such product or service falls, and 

shall be a member of that division andjor divisions. 

"The Code Authority may, £rom time to time, with the approval 

of the members of the divisions concerned, create new divisions, or 

subdivide, combine and/or discontinue divisions, or add new products or services to any division. 

" (c) ~1embers of each division of the Industry may, subject to the 

approval of the Code Authority and of the Administrator after such 

notice and/or hearing as hQ may specify, adopt for such division, 

and binding upon all members of such division, rules of fair practice 
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and methods of procedure not inconsistent with the provisions of 

this Code or o:f the Act, including, but without limitation, measures 

for industrial planning, stabilization of employment, standard sales 

contracts, open price provisions, rules :for determining costs, and prohibiting the furnishing o:f services or the selling Df products below 

prices filed and/ or costs. 

"(d) Members o:f each division o:f the Industry may cause to be 

:formulated, :for such division, an accounting system and/ or methods 

o:f cost finding and/ or estimating capable o:f use by all members o:f 

the division. After such system and/ or methods have been formulated, and when approved by the members of the division pursuant 

to subdivision (f) o:f this section and approved by the Code Authority and the Administrator, full details concerning them shall be 

made available to all members of the division and thereafter all 

members of the divisron shall determine and/ or estimate costs in 

accordance with the principles o:f such system and/or methods. 

" (e) Members o:f each division o:f the Industry or part thereof 

may determine closing hours :for plant operations for such division 

or part thereof between the hours o:f midnight Friday and 6 A.M. 

Monday, and after such determination has been approved by the 

men1bers of the division pursuant to subdivision (:f) of this section 

and approved by the Code Authority, such determination, upon the 

approval of the Administrator, shall have the same force and effect 

as any other provision o:f this Code. 

"(f) For the purposes o:f this section each division shall take 

action by either : 

(1) The affirmative vote o:f a majority of those attending a meeting of members o:f such division duly held after adequate prior 

notice mailed to all members in such division, provided that no 

action shall be taken at such meeting unless at least one-third of 

the members of such division are present either in person or by 

proxy, or 

(2) The affirmative vote of a majority o:f those voting on ballots 

mailed to all members o:f the division at least ten days prior to the 

day on which such ballots are to be counted. No action by mailed 

ballot shall be binding unless affirmative ballots are received :from 

at least one-third of those to whom ballots are mailed." 

This Code o:f Fair Competition is hereby amended by the addition o:f a new Article, number VII, to read as follows: 

ARTICLE VII 

"1. Within 90 days :from the effective date, each member of the 

Industry shall file with such agency as the Code Authority may 

designate complete inventory o:f its productive machinery and equipment in place or otherwise; owned or on order as o:f April 1, 1934, 

or thereafter installed, in such form as the Code Authority may determine and only certified to as to its completeness and correctness. 

Productive machinery and equipment :for this purpose shall be defined by each division and when approved by the Code Authority, 

said definitions o:f productive machinery or equipment :for the respective divisions shall be transmitted to each member o:f the respective divisions to :facilitate proper compliance with this provision. 
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"Any changes in inventory filed shall be duly reported and certified within thirty days of such change. 

" 2. Any division in the Industry may recommend to the Code 

Authority a plan for restricting or prohibiting the installation of 

producti e machinery or equipment. After approval of said plan 

by a majority of such diviswn, in accordance with the requirements 

of the Administrator t-the Code Authority shall submit said plan to 

the Administrator. lf the Administrator, after investigation and 

such notice and hearing as he may require, shall find both ( 1) that 

an emergency has arisen within the division adversely affecting small 

enterprises or wages or labor conditions, or tendin~ toward monopoly 

or other acute conditions which tend to defeat the purposes of the 

Act; and (2) that the proposed plan for restricting or prohibiting 

the installation of productive machinery and equipment is necessary to mitigate the conditions constitutrng such emergency and to 

effectuate the purposes of the Act, he may approve said plan. Such 

a plan may include limitations on the replacement of productive machinery where the new machinery will have greater productive capacity than the machinery replaced, and may include recommendations regarding the disposal of old machinery. After such a plan 

has boon approved, no member of such division shall install productive machinery or equipment, except in accordance with the requirements thereof." 

This Code of Fair Competition is hereby amended by the addition of an Article, number VIII, to read as follows: 

ARTICLE VIII-TRADE PRACT-ICE RULEs 

"The following rules shall govern all members of the. Industry, 

notwithstanding that divisions of the Industry may hereafter adopt 

fair trade practice rules to govern said divisions: 

"1. False Billing.-N o member of the Industry shall knowingly 

withhold from or insert in any quotation, contract, or i!1vo.ice any 

statement which makes it inaccurate in any material particular. 

"2. Dating.-N o invoice shall be dated later than the actual date 

of shipment. 

"3. Guarantee of Service Charge or S elling Price.-No member 

of the Industry shall guarantee any service charge or selling price 

against either advance or decline or give a customer an option for 

services to be performed or goods to be sold which would have the 

same effect. 

"4. Commercial Bribery.-N o member of the Industry shall give, 

permit to be gi-ven, 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 employee, the principal of such agent or the represented party, without the express consent of such employer, principal, 

or party. Commercial bribery provisions 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 bribery as hereinabove defined. 

" 5. R ebates and Allowances.-N o member of the Industry shall 

secretly offer or make any payment or allowance of a rebate, refund, 
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commission, credit, unearned discount or excess allowance, whether 

in the. form of money or otherwise, nor secretly offer or extend to 

any customer any special service or privilege not extended to all 

customers of the same class. 

"6. Inaccurate ref erence to competitors.-No member of the 

Industry shall make any statements, whether published or otherwise, 

which refer inaccurately in any material particular to any competitors or their goods, prices, values, credit, terms, policies, or service. 

" 7. Inducing breach of contract.-N o member of the Industry 

shall attempt to induce the breach of a contract between a competitor 

and his customer, or source of supply; nor shall any member interf ere. with or obstruct the performance of such contractual duties or 

services. 

"8. Misrepresentation.-N o member of the Industry shall publish 

advertising (whether printed, radio, display, or of any other nature) 

which is misleading or inaccurate. in any material particular, nor 

shall any member in any way misrepresent any service or product 

(including but without limitation its use, trade mark, grade, quality, 

origin, size, substance, character, nature, finish, material, content, or 

preparation) or credit terms, value , policies, services, or the nature 

or form of the business conducted. 

"9. Inducing violation of the code.-No member of the Industry 

shall induce or participate in inducing any member of the Industry 

to violate any provisions of this Code." 

Approved Cod·e No. 235-Amendment No. 3. 

Registry No. 299-1-13. 

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