Registry No. 1408-1-01 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITJON 

FOR THE 

SHIPBUILDING AND 

SHIP REPAIR INDUSTRY 

' ,. . '

AS APPROVED ON JULY 26, 1933 

BY 

PRESIDENT ROOSEVELT 

WE DO OUR PART 

1. Executive Order 

2. Report of hearing submitted to President Roosevelt 

by National Recovery Administrator Johnson 

3. Text of Code as approved 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1933 

For S!lle by the uperintendent of Documents, Washington, D.C. - - - - - - - - Price 5 cents 

j/ 

EXECUTIVE ORDER 

JULY 26, 1933. 

A Code of Fair Competition for the Shipbuilding and Shiprepairing 

Industry, having been heretofore submitted to the National Recovery 

Administration, hearings having been held thereon, and an Amended 

Code of Fair Competition having been submitted on July 25, 1933, 

said original Code and said Amended Code having been submitted 

by duly qualified and authorized representatives of the Industry 

complying with the Statutory requirements as representing eighty 

percent of the capacity of the Industry, and said Code being in full 

compliance with all pertinent provisions of the National Industrial 

Recovery Act, Now Therefore 

Pursuant to the authority vested in me by Title I of the National 

Industrial Recovery Act, approved June 16, 1933, on the report and 

recommendation of the Administrator appointed by me under the 

authority of said Act, and on consideration: 

It is ordered that the said Code of Fair Competition for the Shipbuilding and Shiprepairing Industry, as amended and submitted on 

July 25, 1933, is hereby approved. 

Approval recommended: 

HUGHS. JOHNSON. 

9676-33 

Sgd. FRANKLIN D. ROOSEVELT. 

(1) 
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NATIONAL RECOVERY ADMINISTRATION 

To :the Pre ident; 

JULY 25, 1933 . 

I-INTRODUCTI01 

Thie. i a report of the hearing on the Code of Fair Competition and 

Trade Practices for the Shipbuilding and Shiprepairing Industry in 

the United States conducted in Washington on July 19, 20, and 21, 

1933, according to the provisions of the National Industrial Recovery 

Act. 

The following exhibits are included or attachedo. 1. Final Code submitted. 

o. 2. Notice of hearing. 

o. 3. Statement of procedure. 

o. 4. Transcript of the record. 

No. 5. List of the witnesses. 

In accordance with the customary procedure, every person who filed 

an appearance was freely heard in public, and all statutory and regulatory requirements were complied with.' 

The Code which is attached was presented by duly qualified and 

authorized representatives of the industry, complying with the statutory requirements, as representing 80% of the capacity of the industry. 

II-CHARACTER AND THE PRESENT CONDITION OF THE INDUSTRY 

The Americ .n Shipbuilding Industry is characterized by a great 

overcapacity of physical facilities which are a heritage of the War. 

Labor in this industry may be characterized as highly paid in compari on with that of other manufacturing industries. Furthermore, 

it labor is mainly semiskilled and skilled and the proportion of 

common labor is smaller than in many other industries. 

The present average conditions of employment and the present 

levels of pay rolls are brought out clearly in the following indices taken 

from the records of the Bureau of Labor statistics. 

Average 

1929 1930 1931 1932 1933 

-----------------------------

Employment index ........................................ ...... ... 100. 0 105. 9 81. 9 65. 2 47. 4 

Pay.roll index .. ·-··--···················· ·········-······· ···· ·-·-- 100.0 103.4 70.0 47.8 29. 6 

It i estimated by the representatives of this industry that with the 

new Ta val Shipbuilding Program and working under the restrictions 

of hour of employment contain d in thi Code, total employment in 

the industry will be increa ed materially above the highest levels of 

employment reached since the War, raising the employment from its 

pre ent levels of about 15,000 nrnn to approximately 60,000. 

(3) 
4 

III-DrscussroN OF ConE 

Following is a brief discussion of each of the sections of the proposed 

Code. In the event that there was no objection raised to these sec- tions in the Hearings no comment is offered thereon. 

1. Defi,nition of Terms.- o objections were offered in this section . . B. General Regulations.-The Labor representatives requested a 

modification of the Statutory regulations regarding the relationship 

between the employer and the employee covered in this Section of the 

Code. 

Our counsel advises 1ne that the regulation in the Code are ade- quate and directly in accordance with the Act. · 3. Regulations of Hours of lVork-(a) Merchant Shipbuilding and 

Ship-repairing.- o employee on an hourly rate may work in excess 

of an average of thirty-six (36) hours per week, based upon a six (6 ) 

months period; nor more than forty (40) hours during any one week. 

If any employee on an hourly rate works in excess of eight (8) hours 

in any one day, the wage paid will be at the rate of not less than one 

and one half (170 times the regular hourly rate, but otherwise accord- ing to the prevailing custom in each port, for such time as may be in 

excess of eight (8) hours. 

(b) Shipbuilding for the United States Government.- o employee 

on an hourly rate may work in excess of thirty-two (32) hours per 

week. If any employee on an hourly rate works in excess of eight (8) 

hours in any one day, the wage paid will be at the rate of not less than 

one and one half (170 times the regular hourly rate, but otherwise 

according to the prevailing custon1 in each port, for such time as may 

be in excess of eight (8) hours. (c) Exceptions.- For a period of six (6) months exception may be 

made in the number of hours of employment for the employees of the 

Shipbuilders engaged in designing, engineering, and in mold loft and 

order departments and such others a are necessary for the preparation of plans and ordering of materials to start work on new ship 

construction, but in no event shall the number of hours worked be in 

excess of forty-eight (48) hours per week, and in no case or class of 

cases not approved by the Planning and Fair Practice Committee 

provided for in Section (8) . 

4-MINIMUM WAGE RATES 

(a) The n1inimum pay for labor, except apprentices, leiuners, 

casual and incidental labor, shall be at the rate of forty-five (45) 

cents per hour in the North and thirty-five (35) cents per hour in the 

South. · 

(1) Apprentices and learners shall not be paid less than the minimum wage af t~r two (2) years of employment. 

(2) Casual and incidental labor to be paid not less than eighty (80) 

percent of the minimum wage, the total number of such casual and 

incidental employees in any calendar month not to exceed eight (8} 

percent of the total number of skilled and semiskilled employees 

during the same period. (b) The amount of difference existing prjor to July 1, 1933, between 

the wage rates paid various classes of employees receiving more than 

the established minimum wage shall not be decreased. In no event 
5 

r pn, an Pmploy a wag rat whi h will ield a 

k f thirt - ix (36) hour than , u h empl ee 

arn Ja~ f w rk f r a fort (40) hour w ek 

It i und r t d that th r hall b n difag ra e on comm rcial work and n naval 

work for the nm rla,. f lab r. 

(c) It hall be a fun tion f th Planning and F air Practi Agr1~ y 

pr idc<l. for in Part rn.ph t (a) of thi od to ob rv th pcrat1 n 

f the e pr TI i n. and r commend such further provi ion a e.·perince may jndicat to be appr priate to effectuat their purp sc. 

The orio·inal hipbuilding Code tipulated a forty (40) h ur w ek 

with a minin1um wag f r common labor at the rate of f rty (40) 

c nts per hour in th N rth and thirty-five (35) cents per hour in the 

..._nuth. 

The provi ion a-ff ct.ing th wage scale, the minimum hourly wage 

rat the w ekly w rk hours, the exemptions in Parts 3 and 4 of th<> 

od and the differential in~ ages between the Iorth and ou h were 

bitt rly conte ted b, the Labor group . 

Repre entativ of fourteen Labor nion unanimously advocat d 

a thirty (30) hour week and an eighty-three and one third ( 3}~ ) 

cent minimum hourly r ate a.nd additional provi ions as follows: 

1. A thirty (30) hour week. 

2. Abolition of overtime except for maintenance purpose~. Double 

wag for uch ov rtime. 

3. Minimum wage of twenty-five (25) dollars per week. Maintenance of pre ent weekly ea.rnings for thirty (3 0) hours work for higher 

wage groups. 

4. Abolition of ub ontracting. 

5. Temporary prohibition of employment of new apprentices. 

At subsequent negotiations the sponsors of the Code and the labor 

representativec, were definitely agreed upon the provisions j or minimum 

wages, maximum hours, arzd the exceptions as stated in the final Code 

attached to tMs memorandum. 

A r pre entative of the Ship Owners Association, who e membership con i t of 90% of the large merchant ship operating companie in th United tate , testified in favor of the employment 

provision of the Code, and emphasized the effect which a radical 

advance in hip-building and ship-repairing co ts would hav on the 

placing of contracts for new ships and repairing, which would add a 

furth r capital charge to all American ships in competition with 

for ign shipping. 

light modification in hours were also requested by the Great Lakes 

Divi ion of the industry and two individual outhern yards requested 

a wider differential than five (5) cents an hour between the orth 

and the outh originally proposed. 

The aval on tru tion Program covered in Title 2 of the .I.R.A. 

i a primar factor in onsidering the hipbuilding Code. From a 

total appropriation of $23 ,000,000, contract amounting to $118,-

000,000 to be exe ut d during the next three years are to be placed 

by th a Department in private yard The a y Department. 
6 

and the aval Ship Construction Department both testified in favor 

of the original ma:\.7.mum hours and minimum wage rates requested 

by the industry because of their effect upon the costs and the deliveries 

of the ships to be ordered and the ships at present under construction 

for the Navy in both private and Navy Yards. 

6-ARBITRATION OF EXISTING CONTRACTS 

Part (6) is a direct copy of the provision included in the Cotton 

Textile Code which was approved by the President. 

7-UNFAIR METHODS OF COMPETITION 

To accomplish the purpose contemplated by this Act, the members 

signatory to this Code agree that the following practices are hereby 

declared to be unfair methods of competition. 

(a) To sell any product(s) or service(s) below the reasonable cost 

of such product(s) or service(s). For this purpose, cost i defined as the cost of direct labor plus the 

cost of materials plus an adequate amount for overhead including 

an amount for the use of any plant facilities employed as determined 

by cost accounting methods recognized in the Industry and approved 

by the Committee constituted for the enforcement of this Code as 

provided in Section 8 (a). 

(b) To give or accept rebates, refunds, allowances, unearned dis- counts, or special services directly or indirectly in connection with 

any work performed or to receipt bills for insurance work until pay- ment is made. 

Enforcement of paragraph (a) will be difficult. Industry, however, 

feels that it would have an influence in prmnoting better accounting 

methods and will result in an improved competitive situation through- out the industry. 

Paragraph (b) of this section was not objected to by anyone at 

the hearing. 

8-ADMINISTRATION 

This section is along the lines of the provisions of the Cotton Tex- tile Code. No objection was raised to these provisions in the hearing. 

Respectfully submitted. HUGH S. JOHNSON, 

Administrator. 
CODE OF FAIR COMPETITION AND TRADE PRACTICE FOR 

THE SHIPBUILDING AND SHIPREPAIRING INDUSTRY IN 

THE UNITED STATES 

To effectuate the policy of Title I of the National Industrial 

Reco ery Act, the following provi ions are established as a Code of 

Fair omp tition for the hipbuilding and Shiprepairing Industry. 

1-DEFINITION OF TERMS 

The terms "shipbuilder" and "shiprepairer", when used in this 

ode, includes a person, partnership, or corporation engaged in the 

business of building, fabricatingbrepairing, reconstructing, remodeling, 

and assembling oceangoing, har or and inland water-way vessels, and 

floating marine equipment of every type above ten tons, including 

the building within their plants of machinery, equipment, and other 

ship's parts. 

2-GENERAL REGULATIONS 

The shipbuilders and shiprepairers will comply with the following 

specific provisions of the National Industrial Recovery Act: 

(a) That employees 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 en1ployers 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. 

(b) That 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 assisting a labor organization 

of his own choosing; and 

(c) That employers shall comply with the maximum hours of labor, 

minimum rates of pay, and other conditions of employment, approved 

or prescribed by the President. 

3-REGULATIONS OF HOURS OF WORK 

(a.) Merchant Shipbuilding and Shiprepairing.-No employee on an 

hour rate may work in excess of an average of thirty-six (36) hours 

per w ek, based upon a six (6) months period; nor more than forty (40) 

hour during any one week. If any employee on an hourly rate 

works in excess of eight (8) hours in any one day, the wage paid will 

be at the rate of not less than one and one half (U~) times the regular 

hourly rate, but otherwise according to the prevailing custom in each 

port, for such time as may be in excess of eight (8) hours. 

(b) Shipbuilding for the United States Government.-No employee 

on an hourly rate may work in excess of thirty-two (32) hours per 

week. If any employee on an hourly rate works in excess of eight (8) 

hours in any one day, the wage paid will be at the rate of not less 

than one and one half (1 }~) times the regular hourly rate, but other-

(7) 
8 

wise according to the prevailing custom in each port, for such time 

as may be in excess of eight (8) hours. 

(c) Exceptions.-For a period of six (6) months exception may be 

made in the number of hours of employment for the employees of the 

Shipbuilders engaged in designing, engineering and in mold loft and 

order departments and such others as are necessary for the prepara- tion of plans and ordering of materials to start work on new ship 

construction, but in no event shall the number of hours worked be in 

excess of forty-eight (48) hours per week, and in no case or class of 

cases not approved by the Planning and Fair Practice Committee 

provided for in Section (8). 

4 -MINIMUM WAGE RATES 

(a) The minimum pay for labor, except apprentices, learners, cm;ual and incidental labor, shall be at the rate of forty-five (45) cents 

per hour in the North and thirty-five (35) cents per hour in the 

South. 

(1) Apprentices and learners shall not be paid less than the mini- mum wage after two (2) years of ernployment. 

(2) Casual and incidental labor to be paid not less than eighty 

(80) percent of the minimum wage, the total nurn.ber of such casual 

and incidental employees in any calendar month not to exceed eight 

(8) percent of the total number of skilled and semiskilled employees 

during the same period. 

(b) The amount of differences existing prior to July 1, 1933, between the wage rates paid various classes of employees receiving more 

than the established minimun1 wage shall not be decreased. In no 

event shall any employer pay an employee a wage rate which will 

yield a less wage for a work week of thirty-six (36) hours than such 

employee was receiving for the same class of work for a forty (40) 

hour week prior to July 1, 1933. It is understood that there shall be 

no difference between hourly wage rates on commercial work and on 

naval work, for the same class of labor, in the same establishment. 

5-PROHIBITION OF CHILD LABOR 

On and after the effective date of this Code, employers shall not 

employ any minor under the age of sixteen (16) years. 

6-ARBITRATION OF ExISTING CoNTRAC'l'S 

Where the costs to the contractor of executing contracts entered 

into in the ship-building and ship-repairing industry prior to the 

presentation to Congress of the National Industrial Recovery Act 

or the adoption of this Code are increased by the application of the 

provisions of that Act or this Code, it is equitable and promotive of 

the purposes of the Act that appropriate adjustments of such con- tracts to reflect such increased costs be arrived at by arbitral proceedings or otherwise and the applicants for this Code constitute 

them elves a Committee to assist in effecting such adjustments. 

7-UNFAIR METHODS OF COMPETITION 

To accomplish the purpose contemplated by this Act, the 1nembers 

signatory to this Code agree that the following practices are hereby 

declared to be unfair methods of competition. 
g 

(a) To ell an produ t( ) or crVI (s) below th rea on ble ost 

f u h pr duct( ) or rvi ( ). 

(1) F r thi purpo , ost i defin d a the o t of dir ct labor plu 

th t of material plu an ad quate amount of overhead, including 

an nm unt for the u~e f any plant facilities employed as determined 

b o t accounting 1nethod r ognized in th industry (and approved 

b th om1rutt onstitutcd for the enforcement of thi Code as 

provid din tion8 (a)). 

(b) To gi e or ncc pt rebates, refunds, allowance , unearned discounts, or special ervic s directly or indirectly in connection with 

an work performed or to receipt bills for insurance work until payment is made. 

8-ADMI ISTRATION 

(a) To pffectuate further the policies of the Act, a Shipbuilding and 

hiprepairing Industry Committee js hereby designated to cooperate 

with the ministrator as a Planning and Fair Practice agency for 

the hipbuj1ding and shiprepairing industry. This Committee shall 

con ist of five representatives of the sbipbuilders and shiprepairers 

elected by a fair method of selection, to be approved by the Administrator and three members without vote appointed by the President of 

the nited States. Such agency may from time to tjme present to 

the Administrator recommendations based on conditions jn their 

indu try as they may develop from time to time which will tend to 

effe tuate the operation of the provisions of this Code and the policy 

of the ational Industrial Recovery Act. 

(b) uch agency is also set up to cooperate with the Adrmnistrator 

in making investigations as to the functioning and observance of any 

provisions of this Code, at its own instance or on complaint by any 

person affected, and to report the same to the Adininistrator. 

( c) This Code and all the provisions thereof are expressly made 

subject to the right of the President, in accordance with the provision 

of Clau e 10 (b) of the National Industrial Recovery Act, from time 

to time to cancel or modify any order, approval, license, rule, or regulation issued under Title I of said Act, and specifically to the right of 

the Pre ident to cancel or modify his approval of this Code or any 

condition imposed by hin1 upon his approval thereof. 

(d) uch of the provisions of this Code as are not required to be 

included therein by the ational Industrial Recovery Act may, with 

the appro al of the President, be modified or eliminated as changes 

in the circumstances or experience may indicate. It is contemplated 

that from time to time supplementary provisions to this Code or 

additional codes will be subinitted for the approval of the President 

to pre ent unfair competition in price and otl er unfair and destructive competitive practices and to effectuate the other purpose and 

policies of Title I of the ational Industrial Recovery Act consistent 

with th pro i ion thereof. 

(e) Thi Code hall become effective not later than ten (10) days 

after it approval by the Pr id nt. 

H. GERRISH MITH, 

President, ational ouncil of American Shipbuilders. 

JosEPH HAGG, Jr., 

ew York & ew J ersey Dry Dock A rz. 

JAMES E. BAR ES, 

615 Southern Building, ll'a hington, D.C. 

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UNIVERSITY OF FLORIDA 

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