Registry No. 1404-1-11 

NATIONAL RECOVERY ADMINISTRATION 

PROPOSED CODE OF FAIR COMPETITION 

FOR THE 

FABRIC AUTO EQUIPMENT 

INDUSTRY 

AS SUBMITTED ON AUGUST 31, 1933 

, A I 

u. 

The Code for the Fabric Auto Equipment Industry 

in=its present form merely reflects the proposal of the above-mentioned 

industry, and none of the provisions contained therein are 

to be regarded as having received the approval of 

the National Recovery Administration 

as applying to this industry 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1933 

For sale by the Superintendent of Documents, Washington, D.C. - • - - - - - - Price 5 cents 

✓ 
UBMITTEO BY 

'rHE FABRIO AUTO EQUIPMENT ASSOCIATION 

(II) 
,._ 

PROPOSED CODE OF F AlR COMPETITION FOR THE FABRIC 

AUTO EQUIPMENT INDUSTRY 

F r the I urpo e of effectuating the policy of the United States 

oYernm nt au declar cl in Title 1, ection 1, of the National Inclu - trial R ov ry Act, the members of the Fabric Auto Equipment 

In lu try her by apply to the Pre ident pur uant to Section 3 of the ·ail t to approve the following Code of Fair Competition for 

th Fabric Auto Equipment Indu try, within the area herein defined a1 d. ubject to uch approval, they hereby agree to all of the 

term of thi ode. 

ARTICLE I-APPLICATION OF THE CODE 

1. Thi Co le of Fair Competition (hereinafter referred to as tl.te 

·Cole ') shall apply to all manufacturers of Seat and Slip Covers, 

Tire Co, ers, Top Covers, Side Curtains, Auto Cushions, Auto Awning Automotive Mechanics' Garments, Fabric Accessories for automobile , a defined in Schedule 1 hereto attached and made a part 

hereof. who are doing business in the United States. 

2. This Co le shall apply to all business done in said Fabric Auto 

Equipment Industry by members of the industry in the manner defined in Article II, except export bu iness. 

ARTICLE II-DEFINITIONS 

1. Automotive fabrics are defined for the purpo e · of the Code of 

Fafr ompetition to include the following products: Seat and Slip 

Cover Tire Covers, Top Covers, Side Curt ins, Auto Cushion , Auto Awning , Automotive Mechanics' Garments, Fabric Accessories 

for Autom bile. . Of the e l roduct the Fabric Auto Equipment 

Inclu try repre ents 80% of the total production of the country Ea t 

of the Rockie . 2. othino- ontaine l in this Code of Fair Competition hall be 

on true l a. prohibiting any member of the industry from exercising 

:111 it an 1/ or their lawful patent rjo-ht. or a requiring any member 

f the inclu tr. 7 to do any act in conflict with the terms of a patent 

li en ing aoT ment 1 o-ally bin ling upon . nrh member. 

Ann 'LE III- PE 'IFIC AGREE IENT , WITH THE GovER::-;' MENT 

1. Participation in thi · l and any ub ·equ nt revi i n of, or 

a ldition to th ocl hall b xten led to any p r. ·on partn r hip. 

a · ·o iation or corporation in the fabri auto quipm nt in lu try who 

hall a pt hi . har of the co t an l th re 1:5011 ibili , a · well a. the 

ben fit, of uch parti ipati n. Thi may b effect 1 by member hip 

in ,·he Fabric Auto Equipment As ociation or by the payment to this 

9945-33 (1) 
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organization of an amount equal to the dues paid by its members for 

the creation and administration of this Code of Fair Competition. 

2. The members of the industry who subscribe to this Code are 

hereinafter referred to as the " parties hereto ", and they agree that 

the provisions of the Code shall be the standards of fair competition 

for the Fabric Auto Equip1nent', Industry in the territory designated 

herein, and that every violation of the standards established in the 

Code shall be deemed an unfair method of competition in commerce 

within the meaning of the Federal Trade Commission Act as 

amended and shall subject the party guilty of any such violation to 

penalties as provided in Title 1 of the National Industrial Recovery 

Act. 

3. The parties hereto agree with each other, and agree jointly and 

severally with the Government of the United States, as a consideration of obtaining the President's approval of this Code: 

4. That the parties hereto will impose no inequitable restriction 

on admission to membership in the Association or group of which 

they are a part, and that the parties hereto are truly representative 

of the Fabric Auto Equipment Industry. 

5. That this Code is not designed to promote monopolies or to 

eliminate or oppress small enterprises, and will not operate to discriminate against them, and will tend to effectuate the policy of Title 

1 of the National Industry Recovery Act. 

6. That the parties hereto will abide by such conditions (including 

requirements for the making of reports and the keeping of accounts) 

for the protection of customers, competitors, employees, and others, 

and in the furtherance of the public interest, as the President in his 

discretion deems necessary to effectuate the policy declared in said 

Act. 

ARTICLE IV-LABOR CooE 

1. Employees of the Fabric Auto Equiprn.ent Industry shall have 

the right to organize and bargain collectively through representatives 

of their own choosing, and shall be free from the interference, 

restraint, or coercion of employers of labor, or their agents, in the 

designation of such representatives or in self-organization or in other 

concerted activities for the purpose of collective bargaining or other 

mutual aid or protection. 

2. No employee and no one seeking employment in the Fabric Auto 

Equip1nent Industry shall be required as a condition of employment 

to join any company union or to refrain from joining, organizing, or 

assisting a labor organization of his own choosing. 

3. Employers in the Fabric Auto Equipment Industry shall comply 

with the maximum hours of labor, minimum rate of pay, and other 

conditions of employment approved or prescribed by the President 

of the United States. 

4. The provisions of Article III hereof, however, are not to be 

deemed to impair in any particular the constitutional rights of the 

employee or employer to bargain as may be mutually satisfactory to 

them. Nothing in this· code is to prevent the selection, retention, 

discharge, or advancement of employees on the basis of their indiYidual merit. 
J. Th Pr ident of the United Stat s may from time to time can el 

r modify any ord r, approval licen e rule, or regulation i ued 

un ler Title I of th ational Indu trial Recovery Act. 

\hrr LE -THE F BRIC AuT EQUIPMENT As OCIATI0J.. 

1. The partie. h reto who are members of an incorporated a ociati n known a the Fabric Auto Equipment Association (hereinafter 

r £erred to as the "Association") shall continue as members of aid 

A. ociation ubject to withdrawal therefrom, as provided in the 

onstitution of the Association. 

2. The approval of this Code by the President shall constitute a cancelation of the Constitution and By-Laws of the A sociation as now 

in :ffect and from the date of said approval the Constitution and 

By-Laws of sajd As ociation shall be in the form hereto attached, 

an l the parties to this Code who are members of said association agree 

to take all action necessary to make said Constitution and By-Laws 

e:ffe tiYe immediately upon the approval of this Code by the 

Pr ident. 

3. The As ociation will serve a an agency for collecting statistical 

lata a to costs, production, sales, and other matters affecting the 

indu try a to which the Government may require information, and 

the manufacturers engaged in the industry shall furnish such information and make such reports to the Association as may be 

nece sary in order to enable the As ociation to collect and furnish 

to the GoYernment the information required under the terms of the 

X ational In lu. -trial RecoYery Act. The manufacturers shall keep 

their account in uch form as may be necessary to enable them to 

furni h information lesired by the Government. 

ARTICLE VI-PROTECTION OF EMPLOYEES AND OF THE PUBLIC INTERE ~1.' 

1. The A· ·ociation acting through its Executive Committee and 

agents duly appointed, ·hall proceed with due diligence to gather 

:from member of the indu try in:formation as to cost of production, 

accounting } tern , wage , working hour and other relevant data 

for th purpo e of preparing and submitting to the President for 

approYal nn agr ement between members of the industry which will 

adequately 1 rotect employee , con ·umer , competitors, members of 

th tra le, and other in furtherance of the public interest a contemplated by Title 1, Section 4, of the National Industrial Recovery .A. t . 

ARTICLE VII-Ho RS AND WAGES 

1. On an l aft r the effective late the minimum wage that shall 

be pai 1 b emplo ers in the Fabric Auto Equipment Indu try shall 

be at the rate of $13.00 per week when employed in that section of 

the in In tr: north of he l\!Ia on an l Dixon lin , and $12.00 per week 

-wh n mplo. cl in that . ection of the industry outh of the Mason 

and Dixon lin . 

Exception hall be ma le in the ca ·e of b ginners, who may be 

emplo rel up to t n week at not le than 7~ % of the minimum 

wage but in no case hall beginners constitute more than 15% of 
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1he employees in any plant. Exceptions shall also be made for 

cleaners and outside employees. 

2. On and after the effective date employers in the Fabric Auto 

Equipment Industry shall not operate on a chedule of hours of 

labor for their employees-except repair-shop crews, engineers, 

electricians, firemen, office and supervisory staff, shipping, watching 

ancl outside crevvs, and cleaner -in excess of 40 hours per week, 

and they shall not operate productive machinery in the Fabric Auto 

Equipment In lustry for more than two shifts of 40 hour each per 

week. 

3. On and after the effertiYe date eml)loyer in the Fabric Auto 

Equipment Industry shall not employ any minor under the age of 

16 years. 

4. On and after the effective date, employers in the Fabric Auto 

Equipment Industry shall not employ prison labor or use or offer for 

sale the product of any penal institution. 

5. On and after the effective date, in establishments where there 

are numerous owners or partners. those who perform the manual 

labor shall work in conformity with the maximum hours and minimum wages provided in this Code. 

6. On and after the effective date the practice of performing any 

operation in a home, residence, or place other than a recognized 

manufacturing plant of fabric auto equipment shall be a violation 

of this Code. 

7. The Code of Ethics attached hereto shall constitute a Code of 

Ethics for the Fabric Auto Equipment Industry. The parties hereto 

agree that they will not engage in any practice condemned or prohibited in said Code of Ethics of therein designated as an unfair 

trade practice. The Code of Ethics shall constitute an integral 

part of this Code of Fair Competition. 

8. This Code of Ethics may be changed from time to time by vote 

of two-thirds of the members of the Association provided such 

changes hall first have been approved by the Executive Committee 

of the Association and shall be effective for the industry upon approval by the President of the Unite l States. 

ARTICLE VIII-ENFORCEME TT OF THE CODE 

1. The Executive Committee of the Association shall designate 

an agent or agents to investigate complaints of violations of this 

Code. The members of the industry shall facilitate such investigation by opening their correspondence, books, and accounts for examination by the authorized representatives of the Association and by 

furnishing r elevant information. In the event of any wilful violation being disclosed the Executive Committee may present evidence 

thereof to the proper department, agency or judicial branch of 

the Government. 

The foregoing Code of Fair Competition has been agreed to by 

the memb r of the Fabric Auto Equipment Industry, acting 

through their officers thereunto duly authorized. 

ARTICLE IX-CODE OF ETHIC ' 

l. Em,ployees-(a) Enticing en ployees from., conipetitors.-Maliciously enticing away an employee or employees of competitors 
with th intent of uncluly hampering, injuri1w, or mbarra.· ··ing a 

· )llll titor or ·omp ,titors in the ·011tln ·t of th ir busi1Ps. is an 

unfair trac.1 pra ·ti· . 2. Jfc1·clw)/{1i · '-(a) Jfisbl'ancling.-J\lisr pre. entation a · to the 

,v i ·ht, quantity quality, ·ize, or Tade 0£ any pro luct ol l or 

ff r d for al is an unfair trade practi e. Failure to mark or bran l 

ea h produ t with re pect to the quantity quality or grade thereof 

with th intent of mi leading purcha er or pro pective cu tomer i 

an unfair trade practice. 

( b) , econc1 '.-No fir t-quality mer han Ii can be sold as econ l ·. .1. 11 se mh; mu t b -' label cl or mark c.1 s as to be vi ible by 

th l ur ha er. 

;-t lnL•oicin_q-(a) Omission of data.- Any item pertaining to the 

.:al omitted from the invoice, uch a · allowance of overriding di -

count payabl at ·ome future date, shall be considered an unfair 

tra 1 practice. Extra terms or allowance must be noted on invoice 

and in no ca e ·hall terms exceed 2 cash di count. 

(b) Unautho1•ized deductions.-Permitting a customer to make 

any de luction from the i1woice not covered by the terms of ale in 

making hi remittance hall be c n ·idered an unfair trade practice. 

) Free goods.- o rn.anufacturer hall ship or in any way deli, er free good of any kin 1 to any customer for resale by that 

u tomer. 

( l) 'a1nples.-Samples of completed products must be invoiced. 

(e) Othe1· prroclucts.-No manufacturer shall subnormally price 

any products manufactured or sold by him for the purpo e of furthering sale of any other products. 

(f) The present 2% excise tax is to be shown on the invoice as a 

separate item excepting in the case of tho e manufacturers who sell 

to the jobbing or wholesale trade who are to include the excise tax 

in their selling price. The followino· articles are subject to the 2;3⁄4 

ex i e tax: Auto Seat and Slip Covers; Top Recovers· Top De k ; 

ide Curtains · Rear Curtains; Top Boots; Auto Floor Carpets; 

Auto Awnings; Inside Auto Shades and any other anto fabric cut 

to ize. All tire covers, advertising or nonadvertising cover with 

tread bands, paper or fabric, are taxable. Tire cover fronts are not 

taxable· the painting and art work if shown eparate on invoices is 

not taxable. 

4. T1·anspo1·tation- (a) Diversion of ship1nents.-All merchanli e to be old F:O.B. factory. 

5. Advertisi? g- (a) 111isrepresen tation.-A lverti ement tat ement or ref rence which directly or indirectly reflect falsely upon 

the merchandi e, policies, or financial standing of any competitor 

or which ar d trimental to the be t interests and welfare of the 

in lu try are unfair trade practice . 

6. ub iclies-(a) La ish entertaiwnent.-Manufactnrer hall 

n t encourage nor permit lavish entertainment of a cu tom r by 

th m Ives or their mployee . 

(b) Bets g1·atwi,ties loans, etc.-N o officials, salesman, or other 

mployee hall make b t or in any way o·amble with any cu tomer 

or cu tomer mployees for the purpo e or" ith the int nt f lo ing, 

nor hall any sale man r employee giYe any aratuit, , a:h, or pre:-

ent of sub tantial valn to any n tom r or l ro, pectiv u tomer or 
UNIVERS ITY OF FLORIDA 

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customer's employee. No officials, salesman, or employee shall make 

loans of any kind to any customer or prospective customer or customer's employees. 

( c) Oonsignments.-There shall be no consignments of goods made 

to any customer. · ( d) Splitting oommissions.-Salesmen or other employees shall 

not split nor otherwise share their commissions or compensation with 

any present or prospective customer or customer's employees. 

( e) Excessive allowwnce and adjustm,ents.-N o manufacturer shall 

make any excessive allowance to a custo1ner for alleged defective 

merchandise, alleged shortages, or for adjusting complaints of any 

kind. 

7. Out-throat ooni.petition.-Selling goods below manufacturers' 

own cost is an unfair trade practice. Costs shall be calculated on the 

following basis which must include market quotation of all materials 

within two weeks of the date quotation is made, plus all direct labor 

costs, plus 35% as a minimum selling price. For example, the cost 

of a tire cover would be the cost of fabric, thread, elastic, seaming 

cord, shipping carton, individual carton or wire hoop, paint, and 

other materials, together with labor, such as cutting, sewing, finishing, packing, making stencil, imprinting, and all other direct labor 

plus an additional 35% to cover administrative, warehousing, transportation, collection, taxes, depreciation, depleting, and obsolescence. 

It is generally recognized that the proper" mark-up" is 50 to 70% 

and the minimum figure of 35% is only mentioned to be used where a 

company is figuring on a large order in which there are no advertising or selling expenses involved. 

8. Sundries.-( a) Resales.-The manufacturer will encourage his 

own customers to maintain a fair margin of profit in resales and to 

make possible a profitable handling of his products by other similar 

customers. 

(b) Arbitration.-Where the costs of executing contracts entered 

into in the Fabric Auto Equipment Industry prior to the presentation 

to Congress of the National Industrial Recovery Act are increased 

by the application of the provisions of that Act to the industry, it is 

equitable and promotive of the purposes of the Act that appropriate 

adjustments of such contracts to reflect such increased costs be arrived 

at by arbitral proceedings or otherwise, and the Fabric Auto Equipment Association, the applicant for this Code, is constituted an agency 

jn effecting such adjustments. 

( c) Blanket orders and futwre oYf'dJ.ers.-It is a violation of this 

Code for a manufacturer of advertising tire covers to sell and deliver a quantity of tire covers at a price lower than the price actually 

applying to the quantity shipped at each time and such action is an 

unfair trade practice. 

( d) General.-N o practice or subterfuge contrary to the spirit of 

this Code of Ethics shall be indulged in by any employee of any 

manufacturer. 

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