Approved Code No. GO-Amendment No. 2 Registr y No. 1625- 2-02 

NATIONAL RECOVERY ADMINISTRATION 

AMENDMENT TO 

CODE OF FAIR COMPETITION 

FOR THE 

RETAIL TRADE 

AS APPROVED ON MARCH 29, 1934 

WE DO OUR PART 

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(II) 
Approved Code No. 60-Amendment No. 2 

AMENDMENT TO CODE OF FAIR COMPETITION 

FOR THE 

RETAIL TRADE 

As Approved on March 29, 1934 

ORDER 

l\1oDIFICATION OF CoDE OF FArn COMPETITION FOR THE RETAIL TRADE 

Th National Retail Drug Code Authority having submitted for 

my approval, in accordance with Schedule A, Section 5 (2) (d) of 

the Code of Fair Competition for the Retail Trade the annexed 

modification of Article VIII, Section 1 of said Code as a pp lied to 

drug and allied product , and an opportunity to file objections 

thereto having been given by notice dated February 20, 1934, and 

the annexed report on said modification, containing findings with 

respect thereto, having been made, 

NOW, THEREFORE, on behalf of the President of the United 

State , I, Hugh S. John on, Administrator for Industrial Recovery, 

pur nant to the authority vested 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 modification and the Code as 

constituted after being modified comply in all respects with the 

pertinent provisions and will promote the policy and purposes of said 

Title of said Act, and do hereby order that said modification be and 

it is hereby approved, and that the previous approval of said Code 

is hereby modified to include an approval of said Code in its entirety 

as modified, said modification to become effective ten (10) days after 

the elate hereof. 

Approval recommended: 

A. D. WHITESIDE, 

HUGHS. JOHNSON, 

Administrator for Indust1-ial Recovery. 

Division Administrator. 

WASHINGTON, D.C., 

March 29, 1934. 

60005°-425- 182-34 (1) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Srn: The National Retail Drug Code Authority has submitted the 

annexed modification of Schedule A of the Code of Fair Competition 

for the Retail Trade as applied to drugs and allied products. 

It has been found in the several months during which this Code 

has been effective that the" loss limitation provi ion" has been unenforceable, and as the re ult the competitive abu e of "loss leader" 

selling has continued in about five per cent of the total number of 

retail drug outlets to the great hardship of the remaining ninety-five 

per cent of the trade. 

This modification does not alter the principle set forth in the 

original provision. It establishes a definite standard base price 

which is universally subject to exact interpretation which the original failed to provide. 

This modification prevents the five per cent of the trade which has 

continued to indulge in predatory price cutting on standard articles 

from selling below the cost price paid by the vast majority of smaller 

enterprises in the trade. 

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

of all the proceedings in this matter : 

I find that: 

(a) The modification of said Code and the Code as modified are 

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

National Industrial Recovery Act including the removal of obstructions 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 industry for the purpose 

of cooperative action among trade groups, by inducing and maintaining united action of labor and management under adequate governmental sanction and supervision, by eliminating unfair competitive practices, by promoting the fullest possible utilization of the 

present productive capacity of industries, by avoiding undue restriction of production ( except as may be temporarily required), by increasing the consumption of industrial and agricultural products 

through increasing purchasing power, by reducing and relieving unemployment, by improving standards of labor, and by otherwise 

rehabilitating industry. 

(b) The Code as modified 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. 

(2) 
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( c) The Code empo, er th J ational Retail Drug Cod Authority 

to pr nt the afor aid mo lification on behalf of the indu try as a 

whole. 

( d) The modification and th Code as modified are not designed 

to and will not p rmit monopolies or monopolistic practices. 

( e) The modification and the Code as modified are not designed 

to and will not eliminate or oppress small enterprises and will not 

operate to di criminate again t them. 

(f) Tho e eno·agcd in other steps of the economic process have 

not been deprived of the right to be heard prior to approval of said , 

modification. 

For these reasons the modification has been approved. 

Respectfully, 

MARCH 29, 1934. 

HUGH s. JOHNSON' 

Administrat01'. 
MODIFICATION OF CODE OF FAIR CO1\1PETITION FOR 

THE RETAIL TRADE 

Schedule A of the Code of Fair Competition for the Retail Trade 

i hereby amended by the addition of a new Section, number 6, as 

follows : 

"SECTION 6. Loss Limitation Provision.-In place of the pro-\ isions of Article VIII, Section 1 the following provi ion shall apply 

to all r etailers selling the product specified hereinafter: 

"' Inasmuch as the vast prepon lerance of drug store product are 

distributed through small drug retailers who are unable to purcha ~e 

on a quantity basis but who perform services which are essential to 

the welfare of those in thell' communities, and wherea uch services 

cannot adequately be performed throuo·h the facilities provide l by 

their competitor , and wher ea in ome case ales are made t o consumers by such competitors at price below the lowest cost of purchase normally obtainable for such mer chandise by small drug 

r etailers, and wher eas in most instances uch ale prices are not a 

true indication of the general level of prices of uch competitors and 

n o gener al benefit to those in the community accompanies the same, 

but such prices are in f act in the nature of bait offers of merchandi e to attract trade, it is her eby declared an unfair trade practice 

and is prohibited by this code for any drug retailer to sell any drugs, 

medicines, cosmetics, toilet preparations or drug sundries at a price 

below the manufacturer's wholesale list price per dozen provided, 

however, that in the case of biologicals or other of the above-mentioned products which are not customarily sold in dozen or greater 

lots the Code Authority may fix a comparable unit quantity, and 

provided further that any discount, free deal, or rebate which is 

made available to all purchasers of dozen lots or comparable quantities, shall be considered as part of the manufacturer's whole ale 

list price.' " 

Approved Cotle No. 60. Amendment No. 2. 

Rr gistry No. 1625-2- 02. 

(4) 

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