Registry No. 619-1-03 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR THE 

PAINT, VARNISH 

AND LACQUER MANUFACTURING 

INDUSTRY 

AS APPROVED ON OCTOBER 31, 1933 

BY 

PRESIDENT ROOSEVELT 

-----·- U.S. DEPOS'ff'Ji , ,Executive Order ___ ., _____ • etrer 'of Transmittal 

3. Code 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1933 

For sale by the Superintendent of Documents, Washington, D.C. - - - - Price 6 cents 

✓ 
This publication is for sale by the Superintendent of Documents, Government 

Printing Office, Washington, D.C., and by district offices of the Bureau of Foreign 

and Domestic Commerce. 

DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE 

Atlanta, Ga.: 504 Post Office Building. 

Birmingham, Ala. : 257 Federal Building. 

Boston, Mass. : 1801 Customhouse. 

Buffalo, N.Y.: Chamber oi Commerce Building. 

Charleston, S.O.: Chamber of Commerce Building. 

Chicago, Ill.: Suite 1706, 201 North Wells Street. 

Cleveland, Ohio: Chamber of Commerce. 

Dallas, Tex.: Chamber of Commerce Building. 

Detroit, Mich.: 2213 First National Bank Building. 

Houston, Tex. : Chamber of Commerce Building. 

Indianapolis, Ind.: Chamber of Commerce Building. 

Jacksonville, Fla. : Chamber of Commerce Building. 

Kansas City, Mo.: 1028 Baltimore Avenue. 

Los Angeles, Calif. : 1163 South Broadway. 

Louisville, Ky. : 408 Federal Building. 

Memphis, Tenn. : 229 Federal Building. 

Minneapolis, Minn. : 213 Federal Building. 

New Orleans, La. : Room 225-A, Customhouse. 

New YoJk, N.Y.: 734 Customhouse. 

Norfolk, Va.: 406 East Plume Street. 

Philadelphia, Pa. : 933 Commercial Trust Building. 

Pittsburgh, Pa.: Chamber of Commerce Building. 

Portland, Oreg.: 215 New Post Office Building. 

St. Louis, Mo. : 506 Olive Street. 

San Francisco, Calif. : 310 Customhouse. 

Seattle, Wash.: 809 Federal Building. 

(II) 
EXECUTIVE ORDER 

CODE OF FAIR COMPETITION FOR THE PAINT, VARNISH AND LACQUER 

MANU FACTURING INDU STitY 

An application having been duly made, pursuant to and in full 

compliance with the provisions of title I of the ... N ational Industrial 

Recovery Act, approved June 16, 1933, for my approval of a Code 

of Fair Competition for the PAINT, VARNISH AND LACQUER 

MANUFACTURING INDUSTRY, and hearings having been held 

thereon and the Administrator having rendered his report containing 

an analysis of the said code of fair competition together with his 

recommendations and findings with respect thereto, and the Administrator having found that the said code of fair competition 

complies in all respects with the pertinent provisions of title I of 

said act and that the requirements of clauses (1) and (2) of subsection (a) of section 3 of the said act have been met: 

NOW, THEREFORE, I, Franklin D. Roosevelt, President of tho 

United States, pursuant to the authority vested in me by title I of the 

National Industrial Recovery Act, approved June 16, 1933, and otherwise, do adopt and approve the report, recommendations, and findings of the Administrator and do order that the said code of fair 

competition be and is hereby approved. 

THE WHITE HousE, 

October 31, 1933. 

Approval recommended: 

HUGH 8. JOHNSON, 

Administrator. 

18S74°-188-115-33 

FRANKLIN D. ROOSEVELT. 

(Ill) 
THE PRESIDENT, 

OCTOBER 27, 1933. 

The TV hite House. 

SrR: This is a report of the hearing on the Code of Fair Competition for the Paint, Varnish, and Lacquer Manufacturing Industry 

conducted in Washington on the 26th of September, 1933, in accordance with the provisions of the National Industrial Recovery Act. 

EcoNol\nc EFFECT oF THE CooE 

Paint is a manufa ctured product used in part for new production 

of industrial and consumers goods, and in part as a maintenance 

material. The quantity required for the former purpose bears a 

positive relation to general manufacturing activity. For the latter 

purpose, where the need may be deferred, the current financial condition of the owner of the property has considerable bearing upon 

the quantity of paint used. For this latter purpose also the cost of 

the paint is a factor of considerable importance. 

The quality of paint in general may be judged by the effectiveness of the covering produced, either as protection or appearance, or 

both, and the life of that covering. These qualities are. not only a 

function of the ingredients of the paint, but also are a function of 

the method of preparation of the ingredients and their mixing. It 

is possible, therefore, to produce paint of varying degrees of quality 

through a wide scale of costs, and the public is not necessarily in a 

position to judge quality other than by price. As a consequence of 

this condition, many practices involving the sale of cheap paint have 

grown up in the industry, which, coupled with the financial situation 

of the last few years, has tended to cause demoralization. 

The Code, as submitted herewith, contains in Part Two an unusual number of trade practices which are considered detrimental to 

the industry arid consequently are prohibited. In the form in which 

they now stand they meet the approval of the Consumers' Advisory 

Board. 

The provisions contained in this Code as to minimum wages and 

maximum hours are generally in line with approved codes employing labor of the same quality and under similar conditions. 

The reduction in the number of hours from 47.5 of June 1933, to a 

maximum of 41.2 average for a six months' period provided by the 

Code will mean an increase in employment of approximately 25%. 

It is estimated that at the low point of employment there were approximately 18,000 workers in early 1933, and that the provisions of 

this Code, even under present conditions, should increase the number employed to nearly 25,000. 

The wages set up in the Code will increase the pay of only about 

20% of the workers in the Northern area and 30% of the workers 

(IV) 
V 

in the Southern area, but the resulting increase in purchasing power, 

when coupled with the increase in number of workers in the industry, will be material. 

FINDINGS 

The Administrator finds that-

( a) The Code as recommended com plies in all respects with the 

pertinent provisions of Title I of the Act, including, without limitation, subsection (a) of Section 7 and subsection (b) of Section 10 

thereof; and that 

(b) The applicant group imposes no inequitable restrictions on 

admission to membership therein and is truly representative of the 

Paint, Varnish, and Lacquer Manufacturing Industry; and that 

( c) The Code as recommended 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 I of the National Industrial Recovery Act. 

It is recommended, therefore, that this Code be immediately 

adopted. 

Respectfully, 

HUGHS. JOHNSON, 

Administrator. 

CODE OF FAIR COMPETITION FOR THE PAINT, VARNISH, 

AND LACQUER MANUFACTURING INDUSTRY 

ARTICLE I-PURPOSE 

F or the purpose of effectuating the policy of Title I of the Act of 

June 16, 1933, known as the National Industrial Recovery Act, the 

following provisions are established as a Code of Fair Competition 

for the Paint, Varnish, and Lacquer Manufacturing Industry. 

AnncLE II-DEFINITIONS 

The term "The Industry" means all per ons in the continental 

United States engaged in the manufacture of paint, kulsomine and 

water paint, varnish (including shellac varnish lacquer, and kindred 

products, including putty, semifinished base materials for lacquers, 

thinners, and diluents ( when such semifinished base materials are 

sold or offered for sale in competition with the finished products of 

this Industry), liquid and plastic roof coatings and roof cements, and 

artists' colors; and/ or such branches or subdivisions thereof as may 

from time to time be included under the provisions of this Code, 

provided that if any member of the Industry also manufactures products of any other industry, the provisions of this Code shall apply 

only to that part of his business which is included in this Code. 

The term " Export Trade" means any business transacted with any 

purchaser for shipment of products of the Industry outside of the 

continental United States. The term "employee" as used herein includes any person engaged 

in any phase of the Industry in any capacity in the nature of employee irrespective of the method of payment of his compensation. 

The term" employer" as used herein includes anyone for whose benefit such an employee is so engaged. The term " member of The 

Industry" includes any manufacturer who shall be subj eGt to this 

Code. The term " member of the Code " includes any member of The 

Industry who shall expressly signify assent to this Code. The term 

"Association" herein me.ans the American Paint and Varnish Manufacturers' Association, Inc., and the National Paint Oil and Varnish 

Association, Inc., or their successor or successors. · The term "Association Headquarters" means the office maintained jointly by the Asfiociations at 2201 New York Avenue, NW., Washin~ton, D.C. The 

term" Trade Sales" as used herein means all sales to jobbers, dealers, 

painters, automotive refinishing shops, and sales made directly to the 

consumer, with the exception of such sales as are hereinafter defined 

as "Industrial Sales." The term "Industrial Sales" as used herein 

means all sales to the following classes of buyers, covering products 

of The Industry used by such buyers on their products or for the 

finishing of their equipment and for the painting, upkeep, and 

(1) 
2 

maintenance of their plants, equipment, tenements, and for any other 

purpose. 

Industrial plants of all kinds (such as automobile manufacturers, implement m.anufacturers, furniture manufacturers, 

etc., etc.) 

Transportation companies (including street railways, bus, and 

air transportation companies) 

Car and locorn.otive builders 

Public service companies 

Oil refiners and pipe-line companies 

Packing houses 

Steel manufacturers and those who fabricate their own products 

Bridge builders and bridges 

Coal or other mining operations 

Steamship lines, shipyards, wharves, and docks 

All departments of any State, County, Municipal, or other 

political subdivisions, but only for the following products: 

traffic paint; road paint; products used on bridges, trucks, 

and machinery; automobile license tag coatings; or materials for finishing furniture, or any other products manufactured in prisons or reformatories. All other busi.ness 

from State, County, Municipal, and other political subdivisions, such as prodncts used on buildings, institutions, etc., 

to be classified as " Trade Sales." 

All Departments of the United States Government, regardless 

of usage. 

ARTICLE III-INDUSTRY LA w :AND EFFECTIVE DATE 

· On and after the :fifteenth calendar day after the President of the 

:United States shall have approved this Code, the provisions hereof 

shall constitute standards of fair competition for The Industry and 

shall be automatically binding upon all members of The Industry, 

except that all articles of this Code which a.re included in Part 2 

hereof shall not apply to export trade. 

ARTICLE IV-COLLECTIVE BARGAINING 

In accordance with Section 7 (a) of the Act of June 16, 1933, 

known as the National Industrial Recovery Act, it is agreed: ( 1) that 

employees shall have the right to organize and bargain collectively 

through representatives of their own choosing, and shall be free from 

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) 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 (3) 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 

ARTICLE V - MINIMUM WAGES AND MAXIMUM HoURS 

(a) No employee engaged in accounting, clerical, office, or delivery 

service in any office or in any other place or manner, excepting employees in retail stores and excepting outside salesmen, shall work or 

be permitted to work in excess of 40 hours per week for 20 weeks 

and 48 hours per week for 6 weeks in any 26-week period. 

(b) No factory or mechanical worker or artisan shall work or be 

permitted to work more than 40 hours in one week nor more than 8 

hours in any one day; provided, however, that during· any 6 weeks 

of a 26-week period (the first period to begin on the effective date 

of this Code) employees may work not more than 45 hours a week, 

nor more than 9 hours in any one day, with the exception of (1) 

supervisory staff (including foremen), (2) maintenance workers, 

engineers, and firemen, which excepted employees may not work in 

excess of the maximum hours stated above except by payment of one 

and one third rate for overtime if such employees are compensated 

on an hourly basis. Each week during any 26-week period shall be 

considered as a complete unit of employment for the purpose of paying for overtime to excepted employees. If an excepted employee on 

an hourly basis works more than 40 hours and not more than 45 

hours in any one week, the employer shall compensate him at the end 

of said week for the hours worked in excess of 40 hours at the extra 

rate or shall declare to the employee that such week will be considered 

as one of the 6 weeks in which a maximum o:f 45 hours is permitted. 

This does not, however, mean that an excepted employee, when necessary, may not work more than 45 hours at the extra compensation. 

If such excepted employees are paid by the week, month, or on a 

yearly basis and enjoy vacation periods, sick leaves, and other benefits 

granted to salaried workers they shall not be paid an additional 

amount for any reasonable overti1ne work. 

( c) The maximum hours fixed in the foregoing Paragraphs (a) 

and (b) shall not apply to watchmen, janitors, or other caretakers; 

nor to employees in a managerial, executive, or other capacity who 

receive $35.00 per week or more; provided that with respect to the 

exceptions in this Paragraph and in Paragraphs (a) and (b) of this 

Article there shall be no evasion o:f this Code b:y reclassification of 

the function of workers. A worker shall not be included in any one 

of the above exceptions unless the identical functions which he 

performs were identically classified on June 16, 1933. 

( d) The provisions :for maximum hours set forth in Paragraphs 

(a) and (b) of this Article establish a maximum number of hours of 

labor per 26-week period for each employee so that under no circum- _ stances shall any employee knowingly ·be employed or permitted to 

work for one or more employers in The Industry in the aggregate 

in excess of the prescribed number of hours. 

( e) Employers in The Industry, subject to the exception provided 

in Paragraph (h) of this Article, shall not pay any of the classes o.f 

employees covered by Paragraph (a) less than $15 .00 per week in any 

c:;ity of over 500,000 population, or in the immediate trade area of 

such city; nor less than $14.50 per week in any city of between 250,000 

and 500,000 population, or in the immediate trade area of such city; 

nor less than $14.00 per week in any city or town of less than 250,000 

1887 4 °--188-llf>--33~··-2 
4 

population, or in the immediate trade area of such city or town; 

provided that employers in The Industry may pay to any class of 

em:e_loyees covered by Paragraph (a) who perform the work of office 

boys and office girls, not less than 80 percent of the minimum wage 

designated by this P aragraph, provided that the number so excepted 

shall not exceed 5 percent of the total employees of the employer and 

provided, further, that each employer may have at least one such 

employee. Population for the purposes of this Code shall be determined by reference to the 1930 Federal Censns. 

(f) Employers in The Industry, subject to the exception provided 

in Paragraph (h) of this Article, shall not pay any employee of the 

classes covered by Paragraph (b), or employees excepted therein, 

namely, supervisory staff (including foremen), maintenance workers, 

engineers, and firemen, less than 40 cents per hour to male employees, 

or less than 35 cents per hour to female employees. The foregoing 

distinction in minimum rates between male and female employees is 

not a discrimination by reason of sex but because of a difference in 

the work done. Where female employees do the same kind and 

amount of work as male employees they shall receive the same wages. 

It is agreed that this Paragraph establishes a guaranteed minimum 

rate of pay regardless of whether the employee is compensated on 

the basis of a time rate or on piecework performance. 

(g) The provisions of Paragraphs (e) and (f) of this Article 

shall not apply to any employee partially incapacitated through age 

or otherwise, who has served not less than 10 years in the continuous 

employment of the employer, provided that the number so excepted 

shall not exceed 5% of the total employees of the employer, and 

provided that each employer may have at least one such employee, 

and provided further that the minimum wage paid to such employee 

shall not be less than 30c per hour. 

(h) Employers in The Industry shall not pay less than 90 percent 

of the minimum wages provided in Paragraphs (e) and (:f) of this 

Article, to employees in the Southern states. For the purpose of this 

Article, the Southern states are defined asAlabama North Carolina 

Arkansas Oklahoma 

Florida South Carolina 

Georgia Tennessee 

Kentucky Texas 

Louisiana Virginia 

Mississippi 

I 

(i) No person under the age of 16 shall be employed 1n The 

Industry. 

ARTICLE VI-PRESIDENTIAL AUTHORITY 

As required by Section 10 (b) of Title I of the National Industrial Recovery 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 Title I 

thereof. 
5 

ARTICLE VII-MONOPOLIES 

No provision in this Code shall be interpreted or applied in such 

a manner as to: (1) Promote monopolies; (2) Permit or encourage 

unfair com petition; ( 3) Eliminate, oppress, or discriminate against 

small enterprises. 

ARTICLE VIII-STATE LA ws 

Within each state, members of The Industry shall comply with 

any laws of such state imposing more stringent requirements, regulating the age of employees, wages, hours of work, or general working 

conditions, than under this Code . • 

ARTICLE IX-REPORTS 

The Paint Industry Recovery Board, through Association Headquarters, shall collect and provide all reports required by the Administrator under the National Industrial Recovery Act. Every member 

of The Industry shall furnish such reports as are required pursuant 

to such requirements. 

In addition to information required to be submitted through the 

Paint Industry Recovery Board, there shall be furnished to government agencies such statistical information as the Administrator may 

deem necessary for the purpose recited in Section 3 (a) of the 

National Industrial Recovery Act. 

ARTICLE X-ADMINISTRATION 

After this Code shall have been a pp roved by the President of the 

United States, it shall be administered through the Association by a 

board to be immediately created and to be known as the " Paint 

Industry Recovery Board." 

This Board shall be composed of the following members: Not 

more than 3 members without voting power to be appointed by the 

President, the 8 members of the present General Code Committee, 

20 members, representing commodity groups, 20 members representing communities. 

The members of the Board representing commodity groups shall 

be elected as fallows : 5 members to be elected by paint manufacturers, 5 members to be elected by varnish manufacturers, 5 members 

to be elected by lacquer manufacturers, 5 members to be elected by 

kalsomine and water-paint manufacturers. 

Provided that each of these groups shall contain 2 members from 

the Eastern States, 1 member from the States in or west of the Rocky 

Mountains and 2 members from the remaining states. Nominations 

for election to the Board for said Commodity groups shall be made 

by members of The Industry at large, regardless of membership in 

any association, and the nominations so made shall be submitted to a 

mail vote of all members of The Industry throughout the United 

States and those receiving the highest number of votes in each Group 

shall be declared to have been elected to represent the Commodity 

groups. The members of the Board representing communities shall 

be elected in the following manner : 1 each to be elected by the members of The Industry doing business in the logical trading areas of 

the following cities, which manufacturers shall be called together for 
6 

the purpose of such election by the President of the Local Paint 

Club, or local paint manufacturers' &ssociation if any such exists: 

Atlanta-New Orleans Kansas City 

Baltimore Los Angeles 

Boston Louisville 

Buffalo 1Iinneapolis-St. Paul 

Chicago New York 

Cincinnati Philadelphia 

Cleveland Pittsburgh 

Dallas-Houston Saint Louis 

Denver San Francisco 

Detroit Seattle-Tacoma-Portland 

No person shall be eligible for membership on this Boa;cl who is 

not directly engaged in the manufacture of products of The Industry except the members to be appointed by the President of the 

United States. Furthermore, no company or group of affiliated companies shall have more than one representative on this Board. 

Vacancies which may occur in the Board for any reason whatsoever 

shall be filled by election in the same manner as hereinbef ore provided. This Board, subject to the approval of the Administrator, 

shall elect its own Chairman, adopt its own rules of procedure (not 

in conflict with any other proYisions herein contained), appoint such 

committees as may to it seem necessary from time to time, and may 

delegate its authority to such committees. A majority of the Board 

shall have the power to recommend to the Administrator for his 

approval the addition of representatives of other groups or communities to its membership; provided that such additional members 

shall be elected in the same manner as above described. 

The staff, Association Headquarters, and other facilities of the 

Association shall be employed in carrying out the work of the 

Paint Industry Recovery Board. Such funds as may be required for 

the work of this Board shall be subject to appropriation by the 

Bu lget and Finance Committee of the Association. All members 

of the Industry or groups thereof who qualify as such under this 

Code are eligible to membership in the American Paint & Varnish 

Manufacturers' Association, Inc., or its successor, without payment 

of initiation fee, which has been temporarily waived. If group 

membership, such groups shall pay into the Treasury of the American Paint and Varnish Manufacturers' Association, Inc., a total 

amount equal to the dues of each member of such group as if each 

member were a direct member of the American Paint and Varnish 

Manufacturers' Association, Inc. If for any reason an eligible manufacturer does not desire to join this Association he may, nevertheless, receive all of its benefits, including participation in this Code, by 

paying a fee to its Treasurer equal to the dues, provided that should 

any member of this Code desire not to become a member of the Association and desire not to pay to its Treasurer a sum equal to the 

dues, he shall nevertheless pay his proportionate share of the 

amounts required to pay the cost of assembly, analysis and publication of necessary reports and data and of the maintenance of this 

administrative authority and its activities and the Paint Industry 

Recovery Board shall assess each such member of the Industry with 

his proportionate share based upon the value of sales or otherwise 
7 

as the Paint Industry Recovery Board may prescribe, subject to the 

approval of the Adiministrator. 

The Paint Industry Recovery Board shall have full responsibility 

for its expenditures within the limits of such appropriations as are 

made from time to time, provided that no traveling or other expenses of Board members shall be paid out of the Association funds 

when attending Board meetings, but actual expenses of members of 

the Board when engaged in the business of the Board, other than 

attendance at Board meetings, may be paid out of such funds provided prior authority for such expenditure or expenditures has been 

given by the Board. 

ARTICLE XI-AMENDMENTS 

Such of the provisions of this Code as are not required to be included therein by the National Industrial Recovery Act of June 16, 

1933, may, with the approval of the President, be modified or eliminated as changes and circumstances or experience may indicate. It 

is contemplated that from time to time supplementary provisions to 

this Code will be submitted for the approval of the President 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 National Industrial Recovery Act, consistent 

with the provisions hereof. :Members of The Industry or a local 

paint manufacturers association, if any ~uch exists, shall submit 

desired amendments of this Code to the Paint Industry Recovery 

Board through Association H eadquarters. By agreement of a majority of the Board, an amendment, so received or one initiated by 

the Board itself, shall be referred to The Industry in the following 

_manner: those members of the Board who represent the commodity 

groups shall submit the proposed amendment to their respective 

groups, if in their opinion it is germane to the interests of such 

groups; those members of the Board who represent manufacturers 

from the several cities shall call meetings of the manufacturers in 

their communities. The several Board members shall then submit 

individual reports to Association Headquarters, which shall collate 

them and submit a full report to the Board. Thereafter the Board 

shall vote on submitting the Amendment to the Government and 

shall so submit it if at least two thirds of the Board vote to do so, 

provided that the proponent of any amendment shall have the right 

to submit such amendment direct to the National Recovery Administration for its consideration. 

By presenting this Code the members of The Industry do not 

thereby consent to any modifications thereof and reserve the right 

to object individually or jointly to any such modifications. 

PART 2-TRADE PRACTICES 

ARTICLE XII-MISBRANDING, MISLABELING, AND FALSE ADVERTISING 

Misbranding, mislabeling, and false, deceptive, and misleading advertising are prohibited by this Code. 
8 

ARTICLE XIII-GIFTS TO E~t:PLOYEES OF ANOTHER 

It shall be a violation of this Code for any person engaged in The 

Industry, to offer or give-or to permit any representative of his to 

offer or give-any commission, gratuity, or other thing of substantial 

value to employees of his customers or prospective customers, except 

in the case of payments made with the consent of the employer for a 

definite service rendered. 

ARTICLE XIV-..... 1 AN U F ACTURING RESTRICTIONS 

It shall be a violation of this Code for any manufacturer to fail 

to abide by the manufacturing restrictions as set out in Schedule 

A which is attached hereto and made a part of this Code, provided 

that this Article shall not apply to export trade and provided :further that Paragraphs 2, 4, 5, and 6 o:f Schedule A shall not apply 

to products commonly known as 5-, 10-, and 25-cent merchandise 

which is sold at retail to the consumer at not more than 25 cents per 

package. 

ARTICLE XV-EXCHANGE OF GOODS 

The practice of taking in exchange :for one's own goods, Industry 

products o:f another manufacturer, distributor, or dealer, is unethical, unfair, and is hereby prohibited. It shall be a violation o:f 

this Code :for any manufacturer in the Industry to take or allow to 

be taken in exchange :for his own products, any products of the 

Industry, or to give or permit the giving o:f any advice or assistance 

in facilitating such exchange or replacement, or to make or permit 

to be made any concessions, allowances, or gifts of any kind to 

promote or facilitate such exchange. 

Every member of the Industry is required to enter into a written 

agreement with his jobbers and/ or distributors whereby such jobbers and/ or distributors agree to refrain from the practice prohibited 

by this Article. It shall be a violation of this Code for any member 

of the Industry to deal or continue to deal with any jobber and/ or 

distributor who shall have acted contrary to such agreement, pro-

~ided that no member of the Industry shall be held responsible :for 

such dealings as he may have engaged in prior to the time he has 

received notice of the breach o:f such agreement by a jobber 

and/ or distributor, and provided that no member of the Industry 

shall be held responsible for such dealings after the Paint Industry 

Recovery Board has given approval for further dealings with a 

jobber and/ or distributor who may have violated such an agreement. 

The Paint Industry Recovery Board may require each member of 

the Industry to file a copy of each agreement which he may make 

with a jobber and/ or distributor. 

ARTICLE XVI-STANDARD TERMS OF CASH DISCOUNT 

On and after the effective date the terms granted by manufacturers, excluding export trade, shall not exceed : Trade sales accounts, 

2% for cash in 10 days, net 60 days; industrial sales accounts, 1 % 

:for cash in 10 days, net 30 days; except that the discount to trade 
9 

sales accounts may be extended to the 10th day of the month following purchase and the discount to industrial sales accounts may be 

extended to the 20th day of the month following purchase to customers who regularly discount in the month following purchase, and 

provided that no discount shall be allowed after the discount date. 

ARTICLE XVII-DATINGS 

Except as specifically provided by this Article, members of The 

I ndustry shall not gTant any datings on the sales of any Industry 

products. 

(a) Spring Stock Orders.-Datings on orders to established dealer 

and/or jobber accounts, excluding export trade, shall be limited to 

datings on Spring Stock Orders shipped at the manufacturer's convenience after October 15, with an April 1 dating and regular terms; 

one order to an account. 

(b) New Accounts.- The maximum dating on trade sales stock 

orders (initial stock order only) to new dealer and/or jobber accounts, excluding export trade, shall be limited to four months from 

the date of shipment and with standard terms, provided that orders 

shipped between October 15 and December 1 in any year may be with 

an April 1 dating and with regular terms. 

(c) Roof Coatings and Oements.-A maximum dating of four 

months may be given on a carload of not less than 40,000 lbs. of 

liquid and plastic roof coatings and/ or roof cements, not including 

other products, whenever the lowest published less-than-carload 

freight rate (by rail or water) is more than 50 cents per cwt. 

( d) Antici,patecl Discount.-If any dating shall be permitte4 

under this Article, an anticipated discount may be allowed to the 

extent of one half of one percent a. month. 

ARTICLE XVIII-GUARANTEES 

(a) Price Guarantees.- Guarantees against ]?rice decline shall be 

prohibited except in the case of an order on which a dating has been 

allowed under Article XVII, when such a price guarantee may be 

given for a time not to exceed the dating period granted. 

(b ) Tilme Gitarantees.-Definite time guar~ntees on the life and/or 

service of the products of The Industry are hereby prohibited. 

ARTICLE XIX- CONSIGNMENT 

The practice of supplying accounts on consignment and/ or trust 

certificate agreements, except as hereinafter provided, is prohibited. 

This also includes consignments which are sometimes made under 

so-called " warehouse agreements " but does not prohibit manufacturers from carrying a stock of their goods in a public or private 

warehouse at their own expense in any section of the United States, 

provided that such stocks must not be warehoused with or for the 

account of any person, firm, or corporation dealing in or handling 

( as a merchant) or using ( as a painter) products of the industry. 

Every manufacturer -who has any such consignment stocks in the 

hands of buyers on the effective date of this Code may continue th~ 
10 

same but he shall file a detailed list of such accounts within 60 days 

of the effective date of this Cqde with Association Headquarters 

and/ or the office of a local paint manufacturers' association, if any 

such exists, where reference may be made to it at any reasonable time 

by interested parties. Until such time as an account as listed above 

is discontinued, such accounts may be similarly supplied by any 

manufacturer in the Industry. The Paint Industry Recovery Board 

shall, subject to the approval of the Administrator, develop such 

plans as will effectuate the ultimate elimination of consignments 

from the Industry. This Article shall not apply to export trade. 

ARTICLE XX-FREE DEALS 

Except as otherwise provided herein, free deals in or connected 

with Industry products are prohibited. "Free deals" for the purpose of this Code means all forms of marketing devices, including 

the gift or loan of spraying or other valuable equipment, whether 

the full cost thereof or only a part of said cost is borne by the manu. 

facturer, whereby the said manufacturer furnishes goods of any kind 

other than such of his own products as have been contracted for on 

his usual terms : Provided that the term " Free Deals " shall not 

apply to the furnishing of advertising accessories of small value, 

such as the usual circulars, color cards, window displays, display 

racks2 and posters which accompany paint and varnish products as a 

description thereof, nor shall it apply to novelties of small value such 

as caps, yardsticks, paddles etc. 

Furthermore, the term d Free Deals " shall not be construed to 

include any advertising allowance which is made for a definite service rendered and for which there is a proper accounting that is auditable as a direct charge for cooperative advertising. 

Illustrative of the practices which are prohibited are included the 

:following : 

(a) Premiums (gifts of unrelated merchandise) such as blankets, 

articles of furniture, etc. . (b) Prizes and awards. This does not refer to prizes and awards 

given within a manufacturer's own organization. , 

(c} Free Goods (extra amounts of one's own products). 

( d) Merchandising practices of the type commonly known as 

" One-cent sales." 

( e) Free Samples. (But the term " Free Deals " does not apply 

to samples given for test purposes; neither does it apply to trade-sale 

samples given for demonstration purposes, provided that no size 

larger than 5-lb. samples of water-paint goods in dry form or 1/32 

gallons of other industry products shall be so used and that such 

samples are plainly labeled "Samples." 

(f) The sale of alcohol, turpentine, linseed oil, or any other products not manufactured by The Industry at prices less than the resale 

market price. 

AnncLE XXI-DrscoNTINUANCE OF SHADES AND CoLons 

When it becomes necessary and advisable for any manufacturer to 

discontinue certain shades or colors in any trade-sales line, he shall 

give his dealer and/or jobber customers who purchase such lines six 
11 

months advance notice prior to discontinuing the manufacture of 

such shades or colors, providing that this Article shall not apply to 

export trade. 

ARTICLE XXII-SELLING BELOW CosT 

Products of The Industry shall not be sold at less than cost as 

herein defined : 

( 1) The cost of Lacquer Thinners in full tank cars or tank wagons 

containing not less than one thousand gallon quantity, when sold and 

delivered to one purchaser, shall be not less than the sum total of the 

current market replacement price of each and every ingredient in the 

completed Thinner. 

The cost of all other products shall include the following: 

(2) The seller's total market replacement cost of raw materials 

(based on cost furnished monthly, or oftener if necessary, by authority of the Paint Industry Recovery Board through Association Head.: 

quarters, subject to approval by the Administrator) ; and if any raw 

materials are used (such as varnishes, japans, driers, etc., purchased 

in finished form by the seller) for which costs are not furnished 

monthly or oftener, as herein provided, the cost used for such item 

or items shall be the seller's total current delivered replacement cost. 

(3) Containers and/ or packages. 

(4) Oost of P1·ocessing.-To include all direct costs (such as power 

and labor), depreciation figured in accordance with provisions of the 

Federal Income Tax laws, plus a proper proportion of all indirect 

factory expenses ( excepting interest on investment), in accordance 

with the share each product should bear, provided that the distribution of indirect factory expense per unit of production shall be on 

the basis of the average rate of utilization of plant facilities of profit 

making producers during the years 1928 to 1932 inclusive, and provided that such average rate shall not include any plants not in 

operation. 

( 5) There shall also be included in the cost a proportion of the 

general and administrative expenses, such proportion to be determined and to be recommended by the Paint Industry Recovery Board 

to the Administrator for approval. 

(6) Transportation charges when goods are sold f.o.b. destination. 

In the case of any complaint by an interested party that a manufacturer is violating the above cost provisions the burden of proof of 

compliance shall rest upon the accused manufacturer. If the Code 

Authority or the Administrator is not satisfied by the proof furnished 

by the defendant manufacturer the matter is to be referred to the 

Federal Trade Commission who shall audit the cost accounting of 

the defendant and review his allocation of burden; and the report 

of that Commission shall be final regarding the costs of the defendant manufacturer. 

ARTICLE XXIII-CoMPETITIVE RELATIONS 

(a) Inducing Breach of Oontract.-No manufacturer either directly or indirectly or through his salesmen, representatives, or 
12 

agents, shall encourage any purchaser 0£ the products of The Industry to disregard or fail to live up to his commitment to another 

member of the Industry. 

(b) Disparage11wnt of Co11ipetitors.-The use of or participation 

in the publishing or the disseminating of any false statement, representation or insinuation which disparages the business of a competitor, or attacks the reputation, goods, prices, credit, service, or advertising of any competitor or of any other industry, is an unfair and 

uneconomic practice and is prohibited. 

( c) Enticing Employees.-tfembers of The Industry shall recognize the right of employees to use all honorable and reasonable e.ff orts 

to better their conditions, but shall refrain from directly or indirectly 

soliciting or bidding for the services of the employee of another 

member. Only when such an employee takes the initiative shall a 

member of The Industry have the right to negotiate with him about 

prospective employment. 

ARTICLE XXIV-RETURNED Goons 

No member of The Industry shall accept the return of merchandise from any customer without having given prior consent to the 

return thereof. On such goods as are accepted for return a reasonable char~e shall be made and the freight charges must be charged 

to the shipper returning the merchandise, except in the case of defective products or where in some other way the manufacturer may 

be responsible. 
SCHEDULE .A. 

Manufactwrvng restriction.s.-Industry products, excepting those for export 

trade, shall not be manufactured for the purpose of marketing them as trade 

sales goods in containers of sizes and types prohibited by this rule, nor shall 

they be produced in tints or shades to a greater number than allowed by this 

rule, subject to Article XXI hereof, provided that Paragraphs 2, 4, 5, and 6 

hereof shall not apply to products commonly known as 6--, 10-, and 25-cent 

merchandise which is sold to the consumer at not more than 25 cents per 

package. 

1 .. (a) No two-pound cans in any line, except floor wax. 

(b) No three-pound cans in any line. 

2. (a) No sizes less than quarter-gallon in barn and roof paint. 

( b) No sizes less than gallon cans in shingle stain. 

(3) No half-gallon cans in the following products: Aluminum paints, barn 

paints, roof paints, auto-top dressing, wagon and caniage paints and enamels, 

oil stains, spirit stains, and varnish stains. 

4. No half-pint cans in first-grade house paints. 

15. No half-pint cans in first-grade flat paints. 

6. No quarter-pint cans in all house paint and flat paint. 

7. No oblong or square varnish cans in sizes smaller than one half gallon 

for any product, excepting shellac varnishes, carriage and automotive finishes 

( clear and colors), lacquers, lacquer thinners, liquid wax, liquid polish, varnish 

remover, bronzing liquid, Japan and Liquid driers, penetrating stains and spirit 

stains. 

8. No shades or tints in excess of the following maximum numbers for each 

brand and/or color card : 

Interior floor paints and floor enamels_____________________ 10 House Paints ____________________________________________ 32 

Flat Wall Paints _________________________________________ 20 Enamels _________________________________________________ 18 

Porch Paints_____________________________________________ 8 

Roof and Barn Paints___________________________________ 4 

Shingle Stains___________________________________________ 14 

Wagon and Carriage Paints or Enamels------------------- 10 Oil Stains ______________________________________________ 10 

Varnish Stains__________________________________________ 8 

Spirit and Penetrating Stains_____________________________ 14 

(All the foregoing exclusive of black & white) Oil Colors __ _____________________________________________ 32 

(Including black, but counting the several shades of a 

single color as one color.) 

8. (a) The maximum number of grades for the following products shall be: 

Architectural and Marine Varnishes______________________ 10 

(Interior and exterior) Other Varnishes _________________________________________ 28 

(Including all not previously specified, such as Japan 

Driers, Asphaltum, etc.) 

9. No oil colors in other than liquid measure or in other than three sizes, 

namely, gallons, quarts, and half-pints, with the exception of tubes, and excepting also glass jars when sold as a part of a sales unit with white base paint 

to be tinted with such colors in oil in glass jars to standard colors, which sales 

unit has been especially developed for this purpose by the manufacturer. 

(13) 
14 111111111111,~m,11,u111111111111~m~1m111111111 

3 1262 08851 8179 

Manufacturing Restrictions for Kalsoniine and Water Paints.-10. No shades 

01· tints in excess of the following numbers for each color card: 

•Kalsomine (Hot Water)_________________________________ 20 

*Kalsomine (Cold Water) _________________________________ 20 

Water Paint, interior non-washable _______________ White only 

Exterior water-mixed paints washable paste and powder form __________________________________________________ 20 

Interior Water-Mixed Paints washable paste and powder form ______________________________________________ ___ 20 

Fresco or Positive, Art or Deep Colors__________________ _ 20 

Plastic Paints___________________________________________ 8 

Cement and/or Lime Water Mixed Paint_________________ 16 

11. Kalsomine (Hot or Cold) in the following sizes only: Barrels weighing 

not less than 300 lbs. net, except for the Pacific Coast, where the 280 lb. barrel 

1s authorized; kegs containing 100 lbs. net weight; 25 lb. net weight packages; 

6 lb. net weight containers. 

(Existing contracts covering Kalsomine in containers differing in weight 

content from standards covered herein shall be completed prior to December 

81, 1933, provided that should a purchaser, now under contract with a manufacturer extending beyond that date, decline to accept a readjustment of his 

contract to bring the packages into line with these provisions, the manufacturer party to the contract shall refer the matter to the Paint Industry 

Recovery Board prior to December 31, 1933, for such amicable adjustments as 

the Board may be able to work out with the parties at interest.) 

12. Interior Cold Water Paint, powder form, nonwashable. Barrels weighing not less than 350 lbs. net, 25 and 100 lb. containers, 5 lb. net weight 

containers; to be made in White only. 

13. Plastic or Texture Paints (Dry), in the following sizes only: 5, 10, 25, 

60, and 100 lb. net weight containers and not less than 300 lb. net weight 

barrels. 

Paste form in same size containers as First Grade Flat Paints. 

14. Patching Plaster to be sold in sizes as now marketed. 

15. Interior and Exterior Water-Mixed Paints, Washable, in the following 

sizes only: 

(a) Dry Powder Form.-5 lb., 25 lb., and 100 lb. containers; barrels of 300 

lbs. net, or more. 

(b) Paste Form.-1 quart, 1 and 5 gallon cans and 30 gallons drums. 

16. Cement and/or Lime Bound Water Mixed Paints in the following sizes 

only: 5 and 10 lb. containers, 50 and 100 lb. containers, barrels of 300 lbs. net, 

or more. · 17. Fresco Colors (Positive, Deep, or Art Colors) to be packed in the following sizes only : 

(a) Powder Form.-1 lb. cartons or cans, 25 and 100 lb. containers, Barrels 

or 300 lbs. net or more. 

(b) Paste Form.-To be packed in 1⁄2 pint, quart, and 1 gallon cans only. 

18. Dry Sizes, Water-Mixed. To be packed in the following sizes only: 

1 lb. cartons, 100 lb. containers, and 300 lb. Net Barrels, or more. 

• Means material commonly known and described by this term. 

0