Approved Code No. 201-Supplement No. 23 Registry No. 231-11 

NATIONAL RECOVERY ADMINISTRATION 

SUPPLEMENTARY 

CODE OF FAIR COMPETITION 

FOR THE 

WHOLESALE EMB-ROIDERY 

TRADE 

(A Division of the Wholesaling or Distributing Trade) 

AS APPROVED ON AUGUST 24, 1934 

WE DO OUR PARTUNITED STATES 

GOVERNMENT PRINT!NG OFFICE 

WASHINGTON: 1934 

For sale by the Superintendent of Documents, Washington, D.C. Price 5 cents 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Sm: This i,s .a report of the Hearing on the Supplemental Code 

of Fair Competition for the Wholesale Embroidery Trade conducted 

in the Green Room of the Raleigh Hotel on Saturday, May 5, 1934. 

The Supplemental Code which is attached was presented by a duly 

qualified and authorized representative of the Trade complying with 

the statutory requirements. 

THE TRADE 

According to statistics furnished by mern.b@rs of the Wholesde 

Embroidery Trade, it is estimated that there are approximately ,seventy-five (75)' concerns with aggregate annual sales of approximately 

$7,000,000. These concerns employ approximately four hundred 

( 400) persons. According to the statements of the Industry, employment has not been reduced since 1929. 

PROVISIONS OF THE CODE 

Since this Code is ,suppl~m@ntal to the Code of Fair Competition 

f9r_ the ,vholesaling or Distributing Trade, it contains no labor prov1s10ns. 

The provisions containing supplemental definitions are considered 

inclusive and accurate. 

The supplement to the Administrative pr.ovision.s of the General 

Code establishes a Divisio:n:;Ll Code Authority which is fairly and 

adequately representative of all the different elements in the Trade. 

The Trade Practices proposed arB not considered in ~ny way 

objectionable. 

FINDINGS 

'Ihe Deputy Administrator in hi.s final report to 111,e on said Supplemental Code having found a.s herein set forth and on the basis 

o.f 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 o·bstructions to the free flow of interstate 

and foreign commerce which tend to dimini h the amount thereof, 

and will provide :for the general welfare by promoting the organization of tra<le 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 

(2) 
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possible use 0£ the present prod11ctive 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 standards of 

labor, and by otherwise rehabilitating industry. (b) Said Trade normally employs not more than 50,000 employees 

and it is not classified by me as a major industry. 

( c) The Supplemental Code as a pp roved com plies 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 assoGiation imposes no inequitable 

restrictions on admission to membership therein. 

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

1nonopolies or monopolistic practices. 

( e) 'l'lie 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 reasons, the Supplemental Code has been approved. 

Respectfully, 

AUGUST 24, 1934. 

HUGH s. JOHNSON' 

A-d1ninis trcr:t or. 
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR 

THE WHOLESALE EMBROIDERY TRADE, A DIVISION 

OF TlIE WHOLESALING OR DISTRlBUTING TRADE 

..;\..RTIOLE I-PURPOSES 

To effectua,t.e the policies of 'l)tle I of the N a,tional Industrial 

Recovery Act, this Supplemental Code is established as a Code of 

Fai: Competitio~ for the Wholesale Embroider:y 'l'ra~e, pursua1;1t_ to 

Article VI, Section 1 ( c) of the General Code of Fair Competition 

for the Wholesaling or Distributiug 'l'rade app1:oved· by the President 

of the United States on January · 12, 1934. All provisions of the 

General Code which are not in conflict wi.th the provisions of the 

Supplemental Code are hereby specifically incorporated by reference 

in this Supplemental Cod_e ~,nd m_ade part her~~f. Such provisions 

of the General Code, together with the provis10ns of the Supplemental Code, are the standards of fair competition for, ancl are binding upon every member: of the said Wholesale Emb.roi_dery Trade. 

ARTICLE II-DEFINITIONS 

JPPLEMENTING ARTICLE II OF THE GENERA:(._ CODE 

SECTION 1. The term " embroidery merchant " or " member of the 

Trade " as used herein, is defined to mean any individual, partnership, association, corporation or other form of enterprise or definitely 

organized division thereof, other than a. manufacturer, which sells to 

retailers and/or to institutions, commercial and/or industrial users, 

the products of the Schiffii and other embroidery machines except 

Bonnaz. Any person who sells to institutiona_I, commercial and/or 

industrial users for resale to the ultimate consumer, or in significant 

amounts to ultimate consumers, shall be considered a wholesaler only 

to the extent of that part of his business which fulfills the qualifications stated in the preceding sentence. It is the character of a concern's selling rather than the character of its buying which distinguishes it us a wholesaler. 

SECTION 2. The term " the Trade " as used herein is defined to mean 

the business in which embroidery merchants are engaged. 

SECTION 3. The tern1 " Association " as used herein is defined to 

mean the Embroidery Merchants Association, Incorporated. 

SECTION 4. The term "Divisional Code Authority" as used herein 

is defined to mean the Di vision al Code Authority for the vVholesale 

Embroidery Trade, a division of the Wholesaling or Distributing 

Trade. 

SECTION 5. The term "General Code" as used herein is defined to 

mean the Code of Fair Competition for the '\Vholesaling or Distributing Trade. 

(4) 
5 

SECTION 6. The term " consignment " as used herein shall include 

the delivery by any embroidery merchant as agent, purchaser, or 

otherwise, under any agre 0 ment or understanding, expressed or implied, pursuant to which the seller retains any lien upon or title to 

or interest in the goods delivered, or pursuant to which the customer 

may at his option return any of the goods or claim any credits with 

respect thereto. 

ARTICLE III-ADMINISTRATION 

SUPPLEMENTING ARTICLE VI, OF THE GENERAL CODE 

SECTION 1. The Divisional Code Authority for the Wholesale Embroidery Trade shall be composed of five ( 5) representatives of such 

Trade, four ( 4) of w horn shall be selected from the Association in 

accordance with a plan to be approved by the Adnunistrator, and 

one (1) to be appointed by the Administrator from members of the 

Trade who are not members of said Association. 

SECTION Z. The Divisional Code Authority shall have the following duties and powers in addition to those prescribed in the General 

Code, subject to such rules and regulations as may be prescribed by 

the Administrator : 

(a) To organize, e1e-ct offioors, hire employees, and perform such 

other acts as may be necessary for the proper administration of this 

Supplemental Code. 

(b) To adopt by-laws, rules and regulations for procedure_. 

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

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

nothing herein shall relieve the Divisional Code Authority of its 

duties or responsibilities under this Supplemental Code, and that 

such trade associations and agencies spall at all times be subject to 

an.cl comply with the provisions hereof. 

(d) To appoint a Trade Practice Committee, ~hich shall meet 

with the trade practice committees appointed under such other 

Codes of Fair Competition as may be related to the Trade, except 

such other Supplemental Codes of Fair Competition to the General 

Code, for the purpose of :formulating fair trade practioos to govern 

the relationship between production and distribution employers tinder this Supplemental Code and under such others, to the end that 

such fair trade practices may be proposed to the Administrator, us · an amendment to this Supplemental Code and such ·other Codes. 

( e) To obtain from members of the Trade such information and 

reports as are required for the administr.ation of this Supplemental 

Code. In addition to information required to be submitted to the 

General Code Authority and to the Divisional Code Authority, 

members of the Trade subject to this Supplemental Code shall furnish such stati~tical information as the Administrator may deem 

necessary for the purposes recited in Section 3 (a) of the Act, to 

such Federal and State agencies as he may designate, provided. that 

nothing in this Supplemental Code shall relieve any member of the 

Trade of any existing obligations to furnish reports to any governmental agency. No individual report shall be disclosed to any other 

member of the Trade or any other party except to such other governmental agencies as may be directed by the Administrator. 
(i 

( f) It being found necessary in order to support the administration of this code and to maintain the standards of fair competition 

established hereunder and to effectuate the policy of the Act, the 

Code Authority is authorized: 

(1) To incur such reasonable obligations as are necessary and 

proper for the foregoing purposes, and to meet such obligations out 

of funds which may be r aised as hereinafter provided and which 

shall be held in trust for the purposes of the Code; 

(2) To submit to the Administrator for his approval, subject to 

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

(a) an itemized budget of its estima.ted expenses :for the foregoing 

purposes, and (b) an equitable basis upon which the funds necessary 

to support stlCh budget shall be contributed by members of the 

Trade· 

(3) ' After such budget and basis of contribution have bee-n approved by the Administrator, to determine and obtain equitable 

contribution. as above set forth by a.11 members_ of the Trade,_ a-nd to 

that end, if necessary, to institute legal proceedings therefor in it-s 

own name. 

(g) Each member of the Trade shall pay his or· its equitable contribution to the expenses. of the mainteiiance of the- Code Authority, 

determined as hereinabove provided, and subject to rules an<l regulations pertaining thereto issued by the Administrator. Only rnembe,rs of the Trade complying with the Code and cont1;ibuting to the 

expenses of its administration as hereinabove provided} unless dttly 

exempted from making such contributions,. shall be entitled_ to participate in the selection of members-of the Code Authority or to receive the benefits of any voluntary activities or•to 111J1;ke use of a_ny 

emblem or insignia of the N atio_nal Recovery Aclministration. 

(h) The Code Authority shall neither incur nor pay any obligation in excess of the amom1t thereof as estimated in its approved 

budget, except upon approval of the Administrator; and no subsequent budget shall contain any deficiency item fo.r 0 xpen_ditures in 

excess of prior budget e -timates except those which th~ Administrator shall have so approved. 

SECTION 3. Nothing contained in this Supplen1ental Code shall 

c.onstitute the m.embers of the Divisional Code Authority partners 

for any purpose nor shall any member of the Divisional Code Authority be. liable in any manner to a11yone for any act of any other 

memb~r, officer, agent, or employee of the Divi ional Code Authority. 

Nor shall any member of the Division.a.I Code Authority, exercising 

reasonable diligence in the conduct of his duties hereunder, be liable 

to anyone for any action o_r omission to act, m1d~r this Supplemental 

Code, except for his own willful mailfeasance or non-feasance. 

SECTION 4. If the Administrator shall deter:mine that any action 

of the Divisional Code Autho:i:-ity or any agency thereof 1nay oo 

unfair or unjust or contrary to the public interest, the Administrator 

may require that uch action be suspended to afford an opportunity 

for investigation of the me,rits of such action and for further consideration by such Divisional Code Autl10rity or agency, pending 

:fina,l action, which shall not be effective unle s the. Administrator 

approves or unless he shall fail to disapprov after thirty (30) days' 

notice to him. of intention to proceed with such action in its oTiginal 

or modified form. 
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SECTION 5. The Divisional Co~e Authority shall have the power 

to devise and set up a design registration service for the embroidery 

merchants, including branches where necessary, and to adopt such 

rules and regulations, with the approval of the Administrator, as 

may be necessary to carry out the provisions of Article IV, Section 5 

hereof. 

ARTICLE IV-TRADE PRACTICES 

SUPPLEMENTING ARTICLE VII OF THE GENERAL CODE 

The following practices constitute unfair niethods of competition 

and the act of any member of the Trade, directly or indirectly, 

through an officer, employee, agent or representative, knowingly using, employing or permitting to be employed any such unfair practices, shall constitute a violation of this Supplemental Code: 

SECTION 1. To deliver merchandise to any customer beyond the 

metropolitan area of a city within which the member of the Trade is 

located, unless such merchandise shall be shipped f.o.b. seller's war-ahouse. The Divisional Code Authority is empowered to define the 

term "metropolitan area " subject to the approval of the 

Adrninistrator. 

SECTION 2. To sell or place merchandise on consignment except 

when permitted by the Divisional Code Authority in cases where a 

member of the Trade shall certify by registered mail that damaged 

goods must be disposed of by the consignment method. The Divisional Code Authority shall act upon such certification within one 

(1) week after its receipt, and shall approve the sale unless_ it finds 

that there is in fact no necessity for the disposal of such damaged 

goods or that the goods are not in fact damaged goods. If the Divisional Code Authority shall not approve the sale it shall at once 

notify the member of the Trade of its action and shall also notify 

the Administrator, who may prohibit the sale. If the proposed 

consignment sale is not prohibited by the Administrator within ten 

(10) days after the receipt of notice from the Divisional Code 

Authority, the mem.ber of the Trade shall have the right, at the 

expiration of said ten (10) day period, to proceed to sell or place · the damaged goods on consignment. 

SECTION 3. To ship sample pieces on memorandum, except under 

the following terms and conditions: Such shipment not to contain 

more .than one piece of any one pattern of one color and not to be £or 

a period of more than ten (10) days and with the understanding and 

declaration that in the event such goods are not returned within ten 

(10) days they are to be charged as of the date of shipment. 

SECTION 4. To grant terms or cash discounts greater than those 

established herein : 

(a) Either eight per cent (8% ) ten (10) days at E.O.M., or six 

per cent (6% ) ten (10) days, sixty (60) ctays extra, on trimmings 

and neckwear; and three per cent (3 % ) ten (10) days or two per 

cent (2%) ten (10) days, E.O.M., sixty (60) days extra, on all em- broideries. No additional dating shall be given on any bills. 

(b) These terms shall include no greater discount than those above 

mentioned, except, however, that where payment is made on the basis 

of ten (10) days E.O.M., it shall be permissible to grant dating as 
8 

of the first (1st) of the following month on shipments made on and 

after the twenty-fifth (25th) of the month. 

( c) Anticipation of the payments may be allowed at a rate of not 

more than six per cent ( 6% ) per annum, or the.legal rate, whichever 

is lower. 

SECTION 5. To make or cause to be made a, "colorable imitation" 

of an original design of any other embroidery merchant. 

ARTICLE V-MODIFICATION 

This Supplemental Code and all the provisions thereof are expressly made subject to the right of the President in ac.cordance with 

the provisions of Sub-section (b) of Section 10 o:f the Act, fr01n 

time to time to cancel or nioclify any orde1·, approval,' license, rule 

or regulation issued under Title I of said Act. 

ARTICLE VI-EFFECTIVE DATE 

This Supplemental Code shall become effective on the tenth (10th) 

day after its approval by the Administrator. 

AJ)proved Code No. 201-Supplement No 23. 

Registry No. 231-il. 

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