Approved Code N o. 326 Registry No. 163C-l-03 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR THE 

FIBER WALLBOARD INDUSTRY 

AS APPROVED ON MARCH 10, 193~ 

f A I 

WE DO OUR PART 

I 

==---· 

UNITED STATES 

GOVERNMENT PRINTING OFFIC;E 

WASHINGTON : 1934 

For sale by the Superiatendent of Documents, ·ashington, D.C. - - - - - - - - Price 5 cents 
This publication is for sale by the· Superintendent of Documents, Government 

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Approved Code No. 326 

CODE OF FAIR COMPETITION 

FOR THE 

FIBER WALLBOARD INDUSTRY 

As Approved on March 10, 1934 

ORDER 

APPROYIXG CooE OF FAIR COMPETITION FOR THE FrnEn ,vALLDOARD 

INDUSTRY 

An application having been duly made pur uant to and in full 

compliance with the provisions of Title I of the National I ndu ·trial 

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

Fair Competition for the Fiber vVallboard Indus'Ty, and hearings 

having been duly held thereon and the annexed report on said Code_., 

containing findings with respect thereto, haYing 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 RecoYery, 

pursuant to authority Yested in me by Executive Order 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 Code com1 lies in all re ·pects 

with the pertinent provisions and will promote the policy and purposes of said Title of said Act; and do hereby order that said Code 

of Fair Competition be and it is hereby approYed. 

HUGH S. J O.HNSO:N' 

Acl?ninisfrator for Industrial R ecovery. 

Approval recommended: 

,v. A. HARnI:i\fa:N, 

Division Acl1ninistrator. 

' ASHI:NGTON, D.C., 

111 arch 10, 1934. 

4~806°-425-65-34 (565) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Sm: This is a r eport on the Code of Fair Competition for the 

Fiber "\Vallboard Industry in the United States, as revised after a 

public hearing conducted in Washington on December 6 1933, in 

accordance with the provisions of Title I of the National Industrial 

Recovery Act. 

PROYISIONS AS TO HOURS AND WAGES 

Employees are not permitted to work more than forty hours per 

week or eight hours per day except as otherwise provided. 

To meet peak production periodsh plant and factory employees 

may be permitted to work forty-eig t hours per week during any 

six ,-veeks in each six-month period provided one and one-half times 

the normal rate is paid :for hours worked in excess of eight per day 

and :forty per week. 

Chauffeurs and truckmen may not be permitted to work in excess 

of ten hours per day, :forty-eight hours per week and one-hundred 

and sixty-eight hours in any four-week period provided one and 

one-half times the normal rate is paid for hours worked in excess of 

forty per week and eight per day. 

Engineers and certain other classes of employees, not exceeding 

ten per cent o:f an employer's total number of plant employees, are 

permitted a tolerance of ten per cent over their normal hours but 

in no event in excess of forty-eight hours per week provided time and 

one-half is paid for all hours worked in excess of forty a week and 

eight a day. vVatchmen are permitted to work fifty-six hours a week. 

Office service and sales employees are permitted to work forty 

hours a week. A normal work day shall not exceed eight hours. 

Hourly limitations do not apply to outside sales or sales service 

men; or to executives, managers or supervisors, receiving thirty-five 

dollars or more per week. 

H ourly limitations do not apply to employees engaged in emergency work involving breakdowns or in the protection of life or 

property provided one and one-half times the normal rate is paid 

for all hours worked in excess of forty per week or eight per day. 

Employees are not permitted to work in excess of six days in any 

seven day period. 

The minimum hourly rate for all emproyees shall be :forty cents 

an hour, except as otherwise provided. " Tith the permission of the state authority, handicapped persons, 

not exceeding five per cent o:f an employer's total number of employ es may be employed on light work at a wage not less than 

eighty per cent of the minimum rate provided. 

(566) 
567 

Regardless of whether an employee is compensated on a time rate, 

piece-work or other basis a minimum rate of pay i established. 

Compensation of employees receiving more than the minimum 

shall be equitably adjusted and reported to the Code Authority but 

in no case shall hourly or piece work rates be reduced. 

Office and sales employees shall receive fifteen dollars per week 

except office boys or girls not exceeding five per cent of an employer's 

total number of office employees who may be paid it,hty per cent 

of this amount. 

Female employees performing substantially the same work as male 

employees shall receive the same pay as male employees. 

No one under sixteen year of age shall be employed in the industry 

nor anyone under eighteen years of age on machin operations. 

ECONOMIC EFFECTS OF THE CODE 

By operating under the President's Reemployment Agreement, this 

industry's payrolls were increased eighteen per cent. This Code will 

effect further increases in the industry's payrolls. 

The ·weekly income of fourteen per cent of the industry s office 

employees will be raised to fifteen dollars per week by this Code. 

The minimum hourly rate which this Code proYides for factory 

employees is substantially above that which has prevailed in the pa t. 

The fifty-one hour work week for factory employees, which prevailed in 1929, will be reduced by this Code to forty hours a week, 

with minor exceptions. This reduction in working hours hould 

substantially increase employment in the industry. 

This Code will eliminate many unfair trade practices and facilitate the rendition of better service to the construction indu try. 

Fl:I'li7)INGS 

The Deputy Administrator in his final report to me on said Code, 

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

I find that: 

(a) Said Co,:le is well designed to promote the policies and purposes of Title I of the National Industrial Recovery Act, including 

remoyal of ob tructions 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 indu try for the purpose of cooperatiYe action among the trade groups, 

by reducing and maintaining united action of labor and management 

under adequate goYernmental sanctions and supervision, by eliminating unfair competitive practices, by promotino- the fullest possible 

utilization of the present productive capacity of industries, by avoiding undue restriction of production ( except as may be temporarily 

required), by increa ing the consumption of industrial and agricultural products through increa ing purchasing power, by re lucing 

and relieving unemployment, by improving standards of labor, and 

by otherwise rehabilitating industry. 

(b) Said indu try normally employs not more than 50,000 employee ; an l is not clas ified by me as a major industry. 
568 

( 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 as ociation imposes no inequitable restrictions on admis ion 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, therefore, I have approved this Code. 

Respectfully, 

MARCH 10, 1934. 

HUGH S. JOHNSON, 

Adniinistrator for Industrial Recovery. 
CODE OF FAIR CO:1\1:PETITION FOR THE FIBER vVALLBOARD INDUSTRY 

ARTICLE I-PURPOSES 

To effectuate the policie of Title I of the National Indu trial Recovery Act, the following provi ions are established as a Code of 

Fair Competition for the Fiber Wallboard Industry, hall be the 

standard of fair competition for this industry, and hall· be binding 

upon every member thereof. 

ARTICLE II-DEFINITIONS 

The term "Fiber vVallboard Industry", or "the industry", as 

used herein means and includes the manufacture and sale by the 

manufacturer of fiber wallboard, and the sale of such fiber wallboard 

by manufacturers of roofing products, insulation products or gypsum products who do not manufacture fiber wallboard but purchase 

it for resale from the manufacturers thereof. 

The term "fiber wallboard" as used herein means and includes 

all products principally composed of mechanical, chemical, and/or 

re-worked vegetable fibers manufactured in laminated sheets or plys, 

and having a caliper thickness of .125 of an inch or more and sold or 

offered for sale, principally for use for walls, ceilings, partitions, signs, "cut-outs" and/or displays. · The term "employee" as used herein includes all persons engaged 

in the industry, however compensated, except a member of the industry. 

The term "employer" as used herein includes any one for whose 

benefit such an employee is so engaged. 

The term "member of the industry'' includes but without limitation any individual, partnership or corporation, association or other 

form of entity engaged wholly or in part in the industry as herein 

defined. 

The term ' Pre ·ident " as used herein shall mean the President of 

the United States. 

The terms "Act ' and "Administrator" as used herein shall mean, 

respectively Title I of the National Industrial Recovery Act, and 

the Admini trator for Inclu trial Recovery. 

ARTICLE III-HouRs 

SECTION 1. o employee shall be permitted to work in excess of 

forty ( 40) hours in any 11eek and eight (8) hours in any day except 

as otherwise provided in this Article III. 

SECTION 2. In order to provide for peak production periods, plant 

and factory employees may during any six weeks in each six month 

period beginning January 1 and July 1 of each year, be permitted 

(569) 
570 

to work up to but not in exce s of forty-eight (48) hours in · any 

one week but all such time ,Yorked in exces of eight hours in any 

one day and forty ( 40) hours in any week shall be paid for at not 

less than one and one-hal:f (11⁄2) times the normal rate except as 

provided in Section 3. 

SECTION 3. (a) Chauffeurs and truckmen may not be permitted 

to work in excess of ten hours per day, forty-eight ( 48) hours per 

week and one-hundred and sixty-eight (168) hours in any four week 

period, beginning the effective date of this Code. If any such 

employee works in excess of eight hours per day and/or forty (40) 

hours per week, he shall be compensated for such excess hours at 

the rate of at least one and one-half times the normal rate. 

(b) Engineers, firemen and electric operators may be permitted 

to work not more than ten percent more hours than are permitted 

in Section 1 and may not be permitted to work in excess of fortyeight ( 48) hours per week for the peak periods provided in Section 2 

but all work in excess of forty ( 40) hours per week and eight hours 

per day shall be compensated by at least one and one-half (11⁄2) 

times the normal rate. The number of such employees shall not 

exceed ten percent of an employer's total number of employees. 

SECTION 4. The maximum hours for watchmen shall be fifty-six 

(56) hours in any week. 

SECTION 5. No accounting, clerical, office or sales employee shall 

be permitted to work in excess of forty ( 40) hours. A normal work 

day shall not exceed eight hours. 

SECTION 6. The provisions of this Article shall not apply to out- side sales or sales . ervice men; or to executives, managers or supervisors, receiving thirty-five (35) dollars or more per week. 

SECTION 7. The provisions of this Article shall not apply to 

employees engaged in emergency work involving breakdowns or the 

protection of life or property provided they are paid at least one 

and one-half (11⁄2) times the normal rate for all hours worked in 

exce s of eio-ht hours per day and forty ( 40) hours per week. 

SECTION 8. No employer hall knowingly permit any employee to 

work any time which, when totaled with that already performed for 

another employer or employers exceeds the maximum permitted 

herein. 

SECTION 9. No employee shall be permitted to work in excess of 

six <lays in any seven day period. 

ARTICLE IV-vv AGEs 

S:ccrroN 1. No employee shall be paid at less than at the rate of 

f orty ( 40) cents per hour except as otherwise provided in this Article. 

SECTION 2. Section 1 establishes the guaranteed minimum rate of 

pay regardless of whether the employee is compensated on the basis 

of a time rate or a piece-work performance or other basis. 

SECTION 3. An equitable adjustment will al o be made of compensation in excess of such minimum rate by all members of the Industry 

who have not heretofore made such an equitable adjustment and 

within sixty (60) days from the effective date hereof, each employer 

shall report to the Code Authority, for submission to the Admin-
571 

istrator the action taken b3 uch employer in ursuance of this 

pro ision but in no case hall hourly or piece-work rate be r duced. 

SE TION 4. All employers shall make payment of all wages due in 

lawful currency or by nego iable check therefor payable on demand. 

These wao-e hall be exempt from any payment for pension , insurance or sick benefit other than those voluntarily paid b3 employees 

or required by state and federal law. Employees or their agents 

shall accept, directly or indirectly, no rebates on uch wages nor give 

anything of value nor extend favors to any per on for the purpose 

of harmfully influencing rat s of wages or working conditions of 

employees. 

SECTION 5. No accounting, clerical, office or sake employee hall 

be paid at less than the rate of fifteen (15) dollars per week, except 

office boys or girls receiving less than such minimum, who shall be 

paid at lea t eighty (80) percent of the minimum provided in this 

ection. The number of such office boys or office girls shall not exceed 

fiye percent of any employer's total number of office employees, except that any employer may employ at least one such office boy or 

office gir I. 

SECTION 6. A person whose earning capacity is limited because of 

age or physical or mental handicap may be employed on light work 

at a wage not less than eighty ( 80) percent of the minimum rate 

established by this Code, provided the employer obtains from the 

State Authority designated by the United States Department of 

Labor, a certificate authorizing his employment at such wages as 

shall be stated in the certificate. The State Authority shall be 

guided by the instructions of the United Stat.es Department of Labor 

in issuing such certificates. The number of such employees shall not 

exceed five percent of any such employer's total number of employees. Each employer shall file with the Code Authority a list of 

such persons employed by him. 

SECTION 7. Female employees performing sub tantially the ame 

work as male employees shall receive the same pay as male employees. 

ARTICLE V-GENERAL LABOR PROVISIONS 

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

employed in the Indu try. No person under eighteen (18) years 

of age shall be employed on machine operations. 

SECTION 2. In c01npliance with Section 7 (a) of the Act, it is 

provided that (a) employee shall ha.ve the right to organize and 

bargain collecti\"ely through representative of their own choo ing, 

and shall be free from the interference, restraint, or coercion of employers o:£ labor, or their agents, in the designation of such repreentatfr s or in self-organization or in other concerted activities for 

the purpo e o:£ collective bargaining or other mutual aid or protection, (b) 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 as isting a labor organization o:£ his own choosing, and ( c) employers hall comply with the 

111aximum hours of labor, minimum rate of pay, and other condi- tion of employment approved or prescribe l by the President. 
572 

SECTION 3. No provision in this Code shall supersede any state or 

Federal law which imposes on employers more stringent require- ments as to sanitary or general working conditions or insurance or 

fire protection than are imposed by this Code. 

SECTION 4. No employer shall re-classify employees or duties of 

occupations performed or engage in any other subterfuge for the 

purpose of defeating the purposes or provisions of the Act or of this 

Code. 

SECTION 5. Each employer shall keep posted, under such rules as 

the Administrator may prescribe, in a conspicuous place at every 

plant or factory in which Industry products are manufactured a 

copy of this Code. . . SECTION 6. Each employer shall make reasonable prov1s10n for the 

health and safety of his workmen at the place and during the hours 

of their employment. Standards for safety and health shall be submitted by the Code Authority to the Administrator for approval 

within six months after the effective date of this Code. 

ARTICLE VI 

SECTION 1. The Code Authority shall cause to be formulated an 

accounting system and methods of cost finding and/ or estimating 

covering cost of industry products sold capable of use by all members of the Industry. After such system and methods have been 

formulated and approved by the Administrator, full details concerning them shall be made available to all members. Thereafter all 

members shall determine and/or estimate costs in accordance with 

the principles of such methods. 

SECTION 2. No member of the industry after the adoption by the 

Code Authority and approval by the Administrator of a uniform 

cost formula shall price or sell any industry product below such 

member's cost as deter1nined by such formula except to meet an 

established market price for the product. Established market price 

on any industry product to any class of trade, except to another 

member of the industry, means, for the purpose of this Section, the 

price at which any competitor is selling such product to such class 

of trade. 

SECTION 3. When the Code Authority determines that an emergency exists in this industry and that the cause thereof is destructive 

price-cutting such as to render ineffective or seriously endanger the 

maintenance of the provisions of this Code, the Code Authority may 

cause to be determined the lowest reasonable cost of the products of 

this indu try, such determination to be subject to such notice and 

hearing as the Administrator may require. The Administrator may 

approve, disapprove, or modify the determination. Thereafter, during the period of the emergency, it shall be an unfair trade practice 

for any member of the industry to sell or offer to sell any products of 

the industry for which the lowest reasonable cost has been determined 

at such prices or upon snch terms or conditions of sale that the buyer 

will pay less therefor than the lowest reasonable cost of such 

products. 
573 

When it appears that condition haY hano·e<l the C Lle Authority, 

upon its own initiative or upon the r qu t of any i11tere. ted party, 

shall cause the determination to be revie" ed . 

.ARTICLE VII-PUBLICATION OF PRICE 

SECTION 1. Each member of the industry shall, v,'ithin five days 

after the effective date of this Code, file with the ode Authority or 

such other agency as the C de Authority may designate, a complete 

list or schedule of prices and terms and condition of sale of all fiber 

wallboard products offered for sale by such member, and shall thereafter publish and file with the Code Authority, or with its designated 

agency, all changes or revisions in such price list or schedule of prices 

and terms and conditions of sale. The price list or schedule of prices 

and terms and conditions of sale so filed shall, for the purpose of this 

Code, be treated as the published price list and terms and connitions 

of sale of the member filing the same and shall be available for distribution to all members of the industry and to any interested party. 

The Code Authority shall promptly cause a copy of all such price 

lists and terms and conditions of ale, and all chang s therein er revisions thereof, to be sent to each member of the industry. 

SECTION 2. No member of the industry shall sell any fiber wallboard 

product at a price or prices less than, or upon terms and conditions 

more favorable to the purchaser, than those stated in the price list 

and terms and conditions of sale published and filed by such member 

an l then in effect, except to another member of the industry. 

SECTION 3. If at any time hereafter the Administrator shall give 

his approval to the requirement that subsequent changes or revisions 

of price li -ts or terms and conditions of sale as provided in Section 1 

hereof hall be filed a specified period of time prior to effective date 

thereof, the Code Authority may require that all changes in such 

price lists or terms and conditions of sale or revisions thereof thereafter filed shall be filed five ( 5) days ( or such other period of time 

as may be approved by the Administrator) prior to the effective date 

of any such subsequent changes or revisions and any such price li t 

and terms and condition of sale and changes therein or revisions 

thereof as afore aid so filed shall ( unless the member filing such 

change or revision shall cancel the same before the effective elate 

thereof) for the purpose of this code be treated as the published price 

list and terms and conditions of sale of the member filing the same 

and hall be aYailable to each member of the Industry and after 

effective elate thereof to any intere ted party. The Code Authority 

shall promptly cau e a copy of all such price Ii t and terms and conditions of ale and all changes therein or revision thereof to be sent 

to each member of the Industry. In the event that any industry 

member , hall not receiv.e sufficient notice of the filinb by any other 

indu try member of changes in such other member's prices or terms 

and condition of sale a will enable such member to meet such 

changes on the effectiYe date thereof, such member may file with the 

appropriate agency such changes in his prices or term. and conditions of ..,ale as may be required to meet the changes filed by uch 
574 

other member. Changes so filed shall become effective on the ·same 

date as the effective date for the changes of such other member first 

filing as aforesaid, or, if those changes shall have already become 

effective, then the changes sub equently filed as. aforesaid, shall 

become effective immediately. 

ARTICLE VIII-TRADE PRACTICES 

SECTION 1. A Trade Practice Code for the Industry is attached 

hereto as Exhibit A. Any deviation from the standards of fair 

dealing set forth in Exhibit A shall be a violation of this Code. 

ARTICLE IX-Am,nNISTRATION 

To further effectuate the policies of the Act, a Code Authority 

is hereby set up to administer this Code in cooperation with the 

Administrator. 

SECTION 1. The Code Authority shall consist of one representative 

from each member of the industry who shall subscribe to the Code 

and pay his pro rata share of the expense, as provided in Section 6 

hereof and in addition, there may be three members, without vote 

and without cost to the Industry, appointed by the Administrator 

to serve for such periods as he may designate. 

SECTION 2. The Code Authority shall have the following powers 

and duties. 

(a) To make rules and regulations for its own conduct in the 

adm.inistration of this Code; 

(b) from time to time to require such reports from members 

of the industry with respect to capacity, production and orders for 

shipment, persons employed, wage rates, wages and hours of labor, 

prices, costs, and other items as may be necessary to advise it and 

the Administrator adequately in the administration and enforcement 

of this Code; 

( c) to investigate complaints of violations of this Code and to 

seek adjustments thereof within the requirements hereof subject to 

such rules and regulations as the Administrator from time to time 

may prescribe. 

( d) to prepare and promulgate for the industry from time to 

time, subject to the approval of the Administrator, a merchandising 

plan, or changes in or additions to any such plan which may be 

adopted under this Code, containing such provisions as may be 

necessary or proper to insure fair selling methods by the industry 

and to prevent unfair competitive practices, and to provide for the 

standardization of products by the members of the industry, subject, 

however, to the approval of the Administrator; 

In addition to information required to be submitted to the Code 

Authority, all or any of the persons subject to this Code, shall 

furnish such statistical information as the Administrator may deem 

necessary for the purposes recited in section 3 (a) of said Act to 

such Federal and State agencies as the Administrator may designate; nor shall anything in this Code relieve any person of any 

existing obligation to furnish reports to government agencies. 
575 

In order to a sure confidential tr atm0 1 t of individual .fio-ures, 

all reports data, and information whi ·h the aid Cod uthority 

is empowered to collect or recei, e shall be coll ct l or re 'eivecl by 

an agency appointed by the Cod Authori r, not a memc r or con- nected with a n ember of the indu try. The Code Authority may 

likewise appoint such an agency to inYe tigate complaint of violation of this Code. All reports, data, and information o collected 

or recei ed or o obtained on any such inve tiaation, shall be k pt 

confidential by uch agency collectinrr receiYing or obtaining the 

same except that in the event any such report , data, or information 

shall substantiate any alleged violation of this ode, then the Code 

Authority shall be informed and shall, if requested by the Administrator, present evidence of any such violation to the A lmini -trator or to such agency as he may designate. 

Collusion between any industry member an l any such confidential 

agency £or the purpose of examining any report or data or obtaining any information collected or received by such confi lential agency 

shall constitute a violation of this Code. 

SECTION 3. The Code Authority may delegate any of its powers 

or functions to committees of not less than three members of the 

industry or to such agency as it may designate but the Code Authority shall be responsible for the act of any such committee or 

agency. 

SECTION 4. At any duly called meeting of the Code Authority the 

affirmative vote of a majority of the manufacturing members ( or 

their representatives) of the Code Authority present, and which 

majority repre ents at lea t two-thirds of the total production for 

the preceding calendar year of the then manufacturing member of 

the industry subscribing to the Code, shall be required to make 

effective any action of the Code Authority. 

SECTION 5. 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 considerations 

by such Code Authority or agency pending final action, which shall 

not be effective unless the Administrator approves or unless he 

shall fail to di approve after thirty clays' notice to him of intention 

to proceed with such action in its original or modified form. 

SECTION 6. All expenses involved in administering the Code shall 

be determined by the Code Authority and prorated equitably among 

me1nbers of the industry subject to the jurisdiction of this Code 

and subscribing thereto. The proration of all such expen es shall 

be on the basis of domestic footage of industry produ ·ts shippecl 

during such specified period of time as the Code Authority shall 

determine. 

SECTION 7. Nothing 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 of the Code Authority. Nor hall 

any member of the Code Authority exercising diligence in the condu t of his duties hereun ler be liable to any one for any a t or 
576 

omission to act under this Code except for his own wilful misfeasance or non-fca ance. SECTION 8. The Code Authority shall have the power to propose 

amendments to thi.s Code. · 

ARTICLE X 

SECTION 1. 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, regulations, and any amendments when 

made thereto, organization, and activities as the administration may 

deem necessary to effectuate the purposes of the Act. 

SECTION 2. No provisions of this Code shall be interpreted or 

applied in such manner as to promote or permit monopolies or 

monopolistic practices; permit or encourage unfair competition; 

eliminate or oppress small enterprises or discriminate against them. 

SECTION 3. Articles VI, VII, and VIII of this Code, and any 

Trade Practice Code or Merchandising Plan adopted by the industry, shall apply only to sales for consumption in the United States, 

its possessions and territories. 

SEC'IIO 4. A required by Section 10 (b) of Title I of the Act 

the following provision is contained in this Code: The President 

may from time to time cancel or modify any order, approval, license, 

rule or regulation issued under this said Act. 

SECTION 5. Such of the provisions of this Code as are not required to be included herein by the Act may upon submission to the 

industry and approval of the Administrator be modified or eliminated as changes in circumstances or experience may indicate. It 

is contemplated that from time to time supplementary provisions 

to this Code or additional codes may be submitted for the approval 

of the Administrator, to prevent unfair competition in price and 

other unfair and destructive competitive practices and to effectuate 

the other purposes and policies of Title I of the Act consistent with 

the proYisions hereof and any such supplementary provisions or 

additional codes, after submission to the industry and approval by 

the Pre ident shall become a part of this Code. The Code Authority is authorized to recommend to the Administrator, in the 

manner provided herein, any such proposals for modification, supplementary provisions or additional codes. 

SECTION 6. Violation by any member of this industry of any of 

the provisions of this Code or of any approved amendment hereof 

is a violation of the Code. 

SECTION 7. This Code and all of the provisions thereof shall cease 

to be in effect on June 16, 1935, or sooner if the President shall 

by proclamation or the Congress shall by joint resolution declare 

that the emergency recognized by Section 1 of the said Act has 

ended. SECTION 8. This Code shall be in effect beginning the second 

:Monday after its approval by the President. 

ApproYed Code No. 326. 

Registry No. 1630-1-03. 
EXHIBIT A 

TRADE PRACTICE CODE 

SEC'I'ION 1. D efinition.-For all purposes of this Trade Practice Code the acts 

desc:r'ibed herein shall con titute unfair methods of competition. Any memb r 

of the industry who shall directly, or indirectly through any officer, employee, 

a crent or representative, knowingly use, employ or permit to be employed any 

of such unfair practices shall be guilty of a violation of the Code. The term 

"cu tomer ", as used in this Trade Practice Code, shall include purchasers and 

prospective purchasers of products of this industry, the officers, employees or 

representatives of such purchasers or pro pective purchasers and any other 

party in a position to influence materially the sale of industry products. 

SECTION 2. Price Disarimvnation.-No member shall discriminate in price, 

either directly or indirectly, between different purchasers of commodities, ex. cept on account of difference in quantity, quality or grade of products sold and 

except the making of a reasonable differential in price charged to different 

classe of trade, and except the making of different prices in diffe1·ent markets 

according to usual distribution of such products pre,ailing in the industry; prnvided, however, that nothing herein contained shall prevent the members of the 

industry from selecting their own customers. No member shall make any 

discrimination in price by falsely classifying a customer ; by pooling shipments 

on specified contracts destined to various purchasers for the purpose of reducing prices below the published price for the quantity destined to an individual 

purcha er ; b extending to any customer more liberal terms than those regularly 

publi bed by such member for, or extended to, all other customer of the same 

cla s; by allowing o,er-riding discounts payable at some future date; or by 

carrying notes for a customer past the due dates unless interest is payable 

thereon at the rate of at least six percent per annum, or at less than the legal 

rate, if the legal rate be less than six percent per annum. 

SECTION 3. Rebates.-No member of the industry shall, directly or indirectly, 

make or permit to be made any payment or allowance of any secret or unearned 

rebate, refund, credit discount, commission, bonus, or other allowance or subsidy of any character whatsoever, whether in the form of money, service, excessive allowances for alleged defective merchandise, shortages, adjustments 

of complaints, or returned goods; or by extension of guarantees to customers 

against price advances or price declines; or by issuance of credit allow·ances 

or refunds on inventory stocks of customers because of price changes or otherwise; or by rendering fictitious invoices or making shipments of merchandise 

in quantities different than shown on the invoices ; or by permitting deductions 

on payment of invoices of items not covered by the terms of sale; or by disposing to a customer at reduced prices material which has been shipped to a 

customer and not paid for; or in any other form or manner whatsoever. 

Without limitation upon the foregoing provisions of this section, the follow• 

ing particular practices which likewise result in secret rebates and allowances, are prohibited : 

(a) assuming any portion of the expenses of operation of a customer's business including the placing of advertising in any customer's individual publication or catalog; 

(b) assuming any credit responsibility for the a ccounts of a customer, by 

guarantee or othenvise; 

( c) splitting or sharing a salesman's com pen a tion with a customer ; 

( d) selling or disposing of securities to customers at less than the market 

value thereof ; 

( e) as urning or paying any expense incurred in painting si!!;n, on ·a cu - tomer s place of bu iness adverti. ing the products of a member of the indu.-try 

except such actual expense therefor a.· may be specified in nn invoi e for the 

c t of . uch work signed by the ign painter employed to perform .-uch work; 

(f) retaining or compensatinrr any truckin o- company, owned either " ·holly 

or in part by a cu. tomer, for tran porting goods f r such customer'· account; 

(577) 
UNIVERSITY OF FLORIDA 

578 

II I II IIIIII Ill Ill lllll lllll II IIIIII II IIIIII II IIIIII IIII IIII Ill I I 

3 1262 08584 3554 

(g) purchasing any materials from customers at prices in excess of such 

customer's current market prices therefor; and then only to fill a bona fide 

order; 

( h) making any loans to customers ; 

(i) encouraging or permitting lavish entertainment of a customer, or betting 

or any form of gambling with a customer ; 

(j) renting or leasing for any purpose any part of the premises of a purchaser of industry products; 

(k) storing goods on premises in which a purchaser of industry has an 

interest except a public warehouse in which such purchaser's business is not 

located; 

(1) acquiring any financial interest of any character in the business of any 

customer except through the purchase of securities regularly listed on a 

public exchange, or except to participate in the liquidation of an insolvent 

customer or except when such purchase of an interest or securities represents 

at least 51 % of the voting or controlling securities of such business; 

(m) giving a customer any donations of cash or articles of value or any 

free industry products except samples as hereinafter permitted in Section 4 

hereof. 

SECTION 4. Commercial Bribery.-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 employee, the 

principal of such agent or the represented party, without the knowledge 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 bereinabove defined. 

SECTION 5. Inducing Sales by Oth,er Products.-No member of the industry 

shall sell or offer for sale as inducement for the purchase of any industry 

products any article or commodity, whether an industry product or not, at 

prices below such member's current prices therefor. 

SECTION 6. D efarnation of Oompetitors.-No member of the industry shall 

defame or disparage a competitor, directly or indirectly, by words or acts 

which untruthfully challenge bis business integrity, his ability to perform bis 

contracts, his credit standing, bis policies, or the grade, quality or quantity of 

bis goods. 

SECTION 7. Inaccurate Advertising and Misrepresentation.-No member of the 

industry shall use advertising (whether printed, radio, display or of any other 

nature) or other representation which is inaccurate in any material particular 

or in any way misrepresent any commodity, (including its use, trade mark, 

grade, quality, quantity, origin, size, substance, character, nature, finish, material content or preparation) or credit terms, values, policies, services, or the 

nature or form of the business conducted. 

'ECTION 8. False Branding.-No member of the industry shall brand or mark 

or pack 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 pre11aration of such commodity. 

E.CTWN 9. Standard Forrns of Quotations and Oontraats.-Standard forms 

of Quotations may be adopted by the Code Authority subject to the approval 

by the Administrator after such notice and hearing as he may prescribe. After 

such np11r0Yal, all quotations shall be made in accordance with the terms and 

conditions of . uch forms of quotations nnd all contracts shall be made in 

substantial accordance with the terms and conditions set forth in any standard 

form of contract o adopted and approved, and no member of the indu try shall 

depart in any material particular from such standard terms and conditions 

in the making of any quotation or contract in any transaction. 

SECTION 10. Oonsign,ments.-No member of the industry shall ship commodities on con ignment except under circumstances to be defined by the Code 

Authqrity, where peculiar circumstances of the trade require the practice. 

SE TION 11. Lump Sum Contracts.-No member slrnll accept any order for 

contracts of sale at a lump sum where the contract does not specify the exact 

quantity, quality and unit price of the industry products purchased. 

SECTION 12. Diversion and Stopovers.-No member shall divert shipment in 

transit for the purpose or with the effect of allowing concessions or reducing 

prices. 

0