Approved Code No. 201-Supplement No. 22 Registry No. 1631-1-07 

NATIONAL RECOVERY ADMINISTRATION 

SUPPLEMENTARY 

C·ODE OF FAIR COMPETITION 

FOR THE 

WHOLESALE JEWELRY 

TRADE 

(A Division of the Wholesaling or Distributing Trade) 

r ,. ' 

AS APPROVED ON AUGUST 21, 1934 

0-= -·--- "' """- --

U NITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1934 

For sale by the Superintendent of Documents, Washingtcm, D.C. - - - - - - - - Price 5 cents 
Tlds publication is for sale by the Superintendent of Documents, Government 

PI·inting Office, Washington, D.C., and by district offices of the Bureau of Foreign 

and Domestic Commerce. 

DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE 

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• 

Approved Code No. 201-Supplement No. 22 

SUPPLEMENTARY CODE OF FAIR COMPETITION 

FOR THE 

WHOLESALE JEWELRY TRADE 

As Approved on August 21, 1934 

ORDER 

APPROVING SuPPLEMENTARY CoDE OF FAIR CoMPETITION FOR THE 

WHOLESALE JEWELRY TRADE 

A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE 

An application having been duly made /ursuant to and in full 

compliance with the provi ions of Title I o the National Industrial 

Recovery Act, approved June 16, 1933, for approval of a Supplemental Code of Fair Competition for the \Vholesale Jewelry Trade 

to the Code of Fair Competition for the Wholesaling or Distributing 

Trade, and hearings having been duly held thereon and the annexed 

report on said Supplemental Code, containing findings with r espect 

thereto, having been made and directed to the President: 

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

States, I, Hugh S. Johnson, Administrator for Industrial Recovery, 

pursuant to authority vested in me by Executive Orders 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 Supplemental Code complies 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 Supplemental Code of Fair Competition be and it is hereby 

approved l subject, however, to the condition that the provisions of 

Article V, Section 1 (a), (b) , (c) and Section 2 be deleted from 

said Code and the following provisions substituted therefor: 

"SECTION 1 (a). Destructive price cutting is an unfair method of 

competition and is forbidden. Any sale shall be deemed pri1n.(J) facie 

destructive price cutting if the net sales price shall be less than the 

seller's net invoice cost plus transportation charges to seller's warehouse. 

"Notwithstanding the provisions of this Section any wholesaler 

may sell any article of merchandise at a price as low as the price set 

by any competitor on merchandise which is identical or essentially 

the same where such competitor's price does not violate this Section or where such competitor is not subject to the provisions of this 

Supplemental Code. 

81592°----1044-94----84 (1) 
2 

_ "Notwithstanding the provisions of this Section it shall not be 

deemed destructive price cutting for a wholesaler to sell the following merchandise at less than net invoice cost plus transportation 

charges, as provided above: obsolete goods, bona fide closeout merchandise, damaged merchandise, stocks being liquidated, merchandise sold for charitable purposes or to unemployment relief agencies, 

and such other merchandise as may be designated by the Divisional 

Code Authority. 

"(b) If the Administrator shall at any time find (1) that an 

emergency has arisen within the trade, adversely affecting small 

enterprises or wages or labor conditions, or tending toward monopoly or other acute conditions which tend to defeat the purposes 

of the Act, and (2) that the finding of a basis for determining 

minimum price for all or any specified products sold by the trade 

is necessary for a limited period to correct the conditions constituting such emergency and to effectuate the purposes of the Act, 

the Code Authority may cause an impartial agency to investigate 

costs and to recommend to the Administrator a basis for determining 

minimum prices of said products. Thereupon the Administrator may 

fix a basis for determining the minimum prioe of any of said 

products for a stated period. During such period no member of 

the trade shall sell such products at a net realized price below the 

minimum price determined in accordance with the base so fixed. 

From time to time the Code Authority may recommend review or 

reconsideration or the Administrator may cause any determination 

hereunder to be reviewed or reconsidered, and appropriate action 

taken." 

HuGH S. JoHNSON, 

Administrator for Industrial Reoove1'1J. 

Approval recommended: 

RoBERT L. HousToN, 

Division Administrator. 

wASHINGTON, D.C., 

Auqust 131, 1934. 

• 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White Howse. 

Srn: This is a report of the Hearing on the Supplemental Code of 

Fair Competition of the Wholesale Jewelry Trade, conducted in the 

Cabinet Room of the Willard Hotel, on April 26, 1934. The Supplemental Code, which is attached, was presented by duly qualified and 

authorized representatives of the Trade. 

THE TRADE 

Due to the considerable overlapping in this Trade with others, 

accurate statistics are not available. According to data submitted by 

the Trade, in 1929 there were approximately 1,666 concerns with 

aggregate annual sales of $355,085,847. The Trade employed about 

12,648 persons. 

PROVISIONS OF THE CODE 

This Code contains no Supplemental Labor Provisions, the employees being subject to the wage and hour provisions of the Code 

of Fair Competition for the Wholesaling or Distributing Trade. 

The provisions containing supplemental definitions are considered inclusive and accurate. 

The administrative provisions establish a Divisional Code Authority which fairly represents all the different elements in the 

Trade. 

The Trade practices proposed are not considered to be 

objectionable. 

FINDINGS 

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

of all the proceedings In this matter: 

I find that 

(a) Said Supplemental Code is well designed to promote the 

policies and purposes of Title I of the National Industrial Recovery 

Act, including removal of 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 trade for the purpose of cooperative action among trade 

groups, by inducing and n1aintaining united action of labor and 

management under adequate governmental sanction and supervision, 

by eliminating unfair competitive practices, by promoting the fullest 

possible use of the :r:resent productive caJ?acity of indu tries, by 

avoiding undue restnction of production { exce_{)t as may be tem-

(3) 
4 

porarily required), by increasing the consumption of industrial and 

agricultural products through increasing purchasing power, by reducing and relieving unemployment, by improving standards of 

labor, and by otherwise rehabilitating industry. 

(b) Said Trade normally employs not more than 50,000 employees 

and is not classified by me as a major industry. 

(c) The Supplemental Code as approved 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; and that the 

applicant associations are trade associations truly representative of 

the aforesaid Trade; and that said associations impose no inequitable 

restrictions on admission to membership therein. 

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

monopolies or monopolistic practices. 

(e) The Supplemental Code is not designed to and will not eliminate or oppress small enterprises and will not operate to discriminate against them. 

(f) Those engaged in other steps of the economic process have 

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

this Supplemental Code. 

For these reasons the Supplemental Code has been approved. 

Respectfully, 

AuGusT 21, 1934. 

HUGH s. JOHNSON' 

Administrator. 
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR 

THE WHOLESALE JEWELRY TRADE 

A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE 

ARTICLE I-PURPOSES 

To effectuate the policies o:f Title I of the National Industrial 

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

Fair Competition for the Wholesale Jewelry Trade pursuant to 

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

for the Wholesaling or Distributing Trade, approved by the President of the United States on January 12, 1934. All provisions of the 

said General Code which are not in conflict with the provisions of 

this Supplemental Code are hereby incorporated by reference in this 

Supplemental Code and made a part hereof. Such provisions of the 

General Code together with the supplementing provisions of this 

Supplemental Code are the standards of :fair competition for and 

are binding upon every member of said Wholesale Jewelry Trade. 

ARTICLE II-DEFINITIONS 

Supplementing Article II of the General Code. 

SECTION 1. The terms " wholesaler " or "distributor ", as used 

herein, are defined to mean any individual, partnership, association, 

corporation or other form of enterprise or a definitely organized 

division thereof, definitely organized to render and rendering a general distribution service, whiCh buys and maintains at his or its 

place of business a stock of jewelry, men's novelty jewelry, or watchmakers' and jewelers' supplies which it distributes and which through 

salesmen, advertising and/ or sales promotion devices sells to retailers, 

and/ or to institutional, commercial and/ or industrial users for use 

in the conduct of their enterprises. Any person who sells to institutional, commercial and/ or industrial users for resale to the ultimate consumer, or in significant amounts to ultimate consumers, shall 

be considered a wholesaler only to the extent o:f that part of his 

business which fulfills the qualifications stated in the preceding sentence. It is the character of a concern's selling rather than the 

character of its buying which distinguishes it as a wholesaler. 

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

mean the business in which the wholesaler or distributor as defined 

in this Supplemental Code is engaged. 

SECTION 3. The term " member of the Trade ", as used herein is 

defined to mean any wholesaler or distributor engaged in the Trade. 

SECTION 4. The term " jewelry ", as used herein, is defined to mean 

diamonds and other precious and semi-precious stones, pearls, cul-

(5) 
6 

tured pearls, synthetic stones and any imitations of any of these 

articles, articles for personal wear and adornment of any character 

whatsoever commonly and commercially known as "jewelry", 

watches, clocks, silverware, goldware, precious metal ware of the 

platinum group, and wares plated with any of the precious metals. 

SEcTION 5. The term " men's novelty jewelry", as used herein, is 

defined to mean articles for the personal wear or adornment of men, 

made from base metals, roll-plated precious metals and/ or gold of 

a fineness less than ten karat, such as: Collar pins, tie pins, cuff 

links, collar buttons, studs, and belt buckles. 

SEcTION 6. The term "watchmakers' and jewelers' supplies and 

materials ", as used herein, is defined to mean any or all articles 

(except those articles which are commonly and commercially known 

as jewelry as enumer ated and defined in Section 4 of this Article II) 

used, consumed, assembled, or resold by watchmakers, jewelers, optometrists or repairers and manufacturers for the purpose of repairing, replacing, assembling, manufacturing or reselling. 

SEOTION 7. The term "memorandum", as used herein, is defined 

to mean submitting merchandise to the customer for a specified time 

f or approval or selection, the title to remain in the wholesaler or 

distributor until such selection has ~en reported to the wholesaler 

or distributor and the sale completed in accordance with the terms 

specified in the contract under which the goods were delivered. 

SECTION 8. The term " consignment", as used herein, is defined to 

mean leaving merchandise with a customer for an indefinite period, 

the title to remain in the wholesaler or distributor until such time 

as the customer shall report to the wholesaler or distributor that 

he has sold the merchandise and that the sale has been completed 

in accordance with the terms specified in the contract under which 

the merchandise was delivered. 

SECTION 9. The term "guaranteed sale", as used herein, is defined 

to mean a sale made with a guarantee by the wholesaler or distributor 

that if the merchandise sold to the customer is not resold by said 

customer, the latter shall have the right to return said merchandise, 

or any part thereof, to the wholesaler or distributor for cash, credit 

or exchange. 

SECTION 10. The term "General Code", as used herein, is defined 

to mean the Code of Fair Competition for the Wholesaling or 

Distributing Trade. 

SECTION 11. The term " Supplemental Code", as used herein, is 

defined to mean this Supplemental Code of Fair Competition for 

the Wholesale Jewelry Trade. 

SECTION 12. The term "General Code Authority", as used herein, 

is defined to mean the General Code Authonty authorized by 

Section 2 of Article VI of the General Code. 

SECTION 13. The term "Djvisional Code Authority'~, as used 

herein, is defined to mean the Divisional Code Authority for the 

Wholesale J ewelry Trade, a division of the Wholesaling or Distributing Trade. 

ARTICLE III-ADMINISTRATION 

Supplementing Article VI of the General Code. 

SECTION 1. A Divisional Code Authority is hereby established 

which, in addition to the members appointed by the Administrator, 
7 

shall be composed of twenty-one (21) members, three (3) of whom 

shall be representative of the Men's Novelty Jewelry Trade, and 

eighteen (18) of whom shall collectively be representative of the 

following branches of the "\Vhole ale Jewelry Trad. : clocks, watches, watchmakers' and jewelers' supplies, diamond jewelry, ilverware, 

precious metal , jewelry an l novelties, and gift ware. Such representatives hall be elected as h reinafter provided. 

SECTION 2. (a) The three ( 3) representatives on the Divisional 

Code Authority to be electe l by the Men Novelty Jewelry Trade 

shall be nominated by an Electoral Committee compo ed of officers 

of the National Wholesale ~1 n's Novelty J ewelry \..ssociation. In 

selecting these nominees and in conducting the election the Elec- toral Committee shall provide for adequate representation of all 

members of the 1!fen's Novelty Jewelry Trade including those who 

are not members of the National ' Vholesale Men's Novelty Jewelry 

Association. 

(b) 'Vithin ten (10) days after the effective date of thi Supplemental Code, the Electoral Committee shall prepare ballots, on 

which shall be listed the three ( 3) nominees electe l a_ provide l in 

paragraph (a) of this Section 2. 

(c) The ballots prepared by the Electoral Committee shall contain, in addition to the names of the nominees selected by such 

Committee, three (3) blank spaces in which any member of the 

:Men's Novelty Jewelry Trade may write his personal choices. Such 

ballots shall be mailed to every member of the Men's Novelty Jewelry Trade ascertainable after diligent search by the Electoral Committee. Each ballot shall have attached to it a statement of assent 

to and compliance with this Supplemental Code and the General 

Code. 

(d) Twenty (20) days after the mailing of these ballots the Electoral Committee shall publicly open and count the votes which it 

has received. Only those ballots shall be counted which have attached to them signed statements of assent to and compliance with 

this Supplemental Code and the General Code. The three candidates receiving the largest number of votes shall be declared elected. 

(e) The Electoral Committee hall certify to the Administrator 

the method of election of these three members and the results of 

such election. 

SEcTION 3. (a) The election of the eighteen (18) members of the 

Divisional Code Authority representing the several branches of the 

Wholesale Jewelry Trade shall be conducted by an Electoral Board 

composed o~ the President of the National ~olesale J ewelers Asso- ciation, the President of the Silverware vVholesalers Association, and 

one other person selected by the above two. 

(b) This Electoral Board shall send out nominating ballots to 

every member of the Trade (except those primarily engaged in the 

eli tribution of men's novelty Jewelry) discoverable by diligent 

search. Each such ballot shall have attached to it a letter of assent 

to and comrliance with thi Supplemental Code and the General 

Code. Ea h voter shall be entitled to eighteen (18) votes which 

he 1nay distribute among several candidates or cast all for o~ candidate, as he sees fit. 

81592°----1044-94----34----2 
8 

(c) Twenty days after these ballots have been mailed the Electoral 

Board shall publicly count those votes which it has received. Only 

those ballots shall be counted which have attached to them signed 

statements of assent to and compliance with this Supplemental Code 

and the General Cod-e. The thirty -six ( 36) persons receiving the 

largest number of votes shall be declared to be candidates. 

(d) The Electoral Board shall then prepare ballots containing the 

names of these thirty-six candidates together with at least nine (9) 

blank spaces in which voters may write their personal choices. Such 

ballots shall be sent to all those members of the Trade to whom 

nominating ballots were originally sent. To each ballot shall be 

attached a statement of assent to and compliance with this Supplemental Code and the General Code. 

(e) Each voter shall have eighteen (18) votes which he may 

distribute among several candidates or cast all for one candidate as 

he sees fit. 

(f) Twenty (20) days after these ballots have been mailed the 

Electoral Board shall publicly count those votes which it has 

received. No ballot shall be count~d which is not accompanied by a 

signed statement of assent to and compliance with this Supplemental 

Code and the General Code, or by a statement that such statement 

of assent and compliance has previously been filed, which statement 

upon examination proves to be correct. The eighteen (18) candidates receiving the largest number of votes shall be declared to be 

elected. 

(g) The Electoral Board shall certify to the Administrator the 

method of election and the results thereof. 

SECTION 4. (a) Two (2) of the three (3) members representing 

the fen's Novelty Jewelry Trade on the Divisional Code Authority 

shall hold office for one (1) year and one (1) for two (2) years, the 

tenure of. office of each to be d~ci~ed by casting lots. (b) Nme (9) of the rema1nmg eighteen (18) members of the 

Divisional Code Authority shall hold office for one (1) year and nine 

( 9) for two ( 2) years, the tenure of office to be dec1ded by casting 

Jots. 

SECTION 5. The uccessor to any momber of the Divisional Code 

Authority, whether to fill an unexpired term or a full new term, 

shall be nominated and elect~d in the same m~nner as provided in 

Sections 2 and 3 of this Article. 

SECTION 6. (a) The Divisional Code Authority shall elect from 

among its members an Executive Committee of five ( 5). The Administration member or members of the Divisional Code Authority 

shall function as members of the Executive Committee to the same 

extent as ·on the Divisional Code Authority. 

(b) The Executive Committee shall have such yowers and duties 

as may be fixed by the Divisional Code Authonty in its by-laws, 

provided that all the acts of this Committee shall be subject to the 

review and disapproval of the Divisional Code Authority. 

SECTION 7. The Divisional Code Authority shall have the fol~ 

lowing duties and powers, in addition to those prescribed in the 

General Code, subject to such rules and regulations as may be pre~ 

scribed by the Administrator: 
9 

(a) To appoint a Trade Practice Committee, which shall meet 

with the Trade Practice Committee appoint d under su h oth r 

Codes as may be related to the Trade, except oth r Suppl mental 

Codes to the General Code, for the purpose of formulatinO' ~i r 

Trade Practices to govern the relationships between production and 

distribution employers under this Supplemental Code and und r 

such others, to the end that such Fair Trade Practices may be proposed to the Administrator as amendments to this Supplemental 

Code and such other Codes. 

(b) To appoint a Regional Committee in ach of such regions as 

the Divisional Code Authority may e tablish to assi t the Divisional 

Code Authority in administering this Supplemental Code and the 

General Code; provided, however, that nothing herein shall relieve 

the Divisional Code Authority of its responsibilities a such. 

(c) To organize, elect officers, hire employees, appoint agents, and 

perform such other acts as may be necessary for the proper administration of this Supplemental Code. 

(d) To adopt by-laws, rules and regulations for its procedure. 

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

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

herein; provided, however, that nothing herein shall relieve the Divisional Code Authority of its duties or responsibilities under this 

Supplemental Code and that such trade associations and agencies 

shall at times be subject to and comply with the provisions hereof. 

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

reports as are required for the administration of this Supplemental 

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

General Code Authority and to the Divisional Code Authority~ members of the Trade subject to this Supplemental Code shall furnish 

such statistical information as the .Administrator may deem necessary for the purposes recited in Section 3 (a) of the Act to such 

federal and state agepcies as he may designate; provided that nothing 

in this Supplemental Code shall relieve any member of the Trade 

of any existing obligation to furnish re12orts to any governmental 

agency. No individual report shall be disclosed to any other member of the Trade or any other party except to such other governmental agencies as may be directed by the Administrator. 

(g) To appoint, within one month after the effective date of the 

Supplemental Code, a committee so constituted as to give producer, 

consumer, and governmental representation satisfactory to the Administrator, to make a study with a view to the establishment of 

classifications and standards of quality of staple products of the 

Trade, wherever such standards are deemed feasible. The findinO'S 

and recomm.endations of this Committee shall be submitted to the 

Administrator within six (6) months of date of appointment and 

after such hearings and investigations as he may designate, and upon 

approval by him, shall be made a part of this Supplemental Code 

and be binding upon every member of the Trade. 

(h) Tore ommend to the Administrator any actions or measures 

deemed ad vi. abl , including further fair trade practice provision to 

go' ern m mbers of the Trade in their relation with each other or 

with other trades, measures for industrial planning 3-nd stabilization 
10 

o£ employment, and including modifications of this Supplemental 

Code which shall become effective as part hereof upon approval by 

the Administrator after such notice and hearing as he may specify. 

SECTION 8. Nothing contained in this Supplemental Code shall 

constitute the members of the Divisional Code Authority partners 

for any purpose nor shall any member or members of the Divisional 

Code Authority be liable in any manner to anyone for any act of 

any other member, officer, agent, or employee of the Divisional Code 

Authority. Nor shall any member of the Divisional Code Authority, 

exercising reasonable diligence in the conduct of his duties hereunder, be liable to anyone for any act or omission to act, under this 

Supplemental Code, except for his own wilful malfeasance or nonfeasance. 

SECTION 9. If the Administrator shall determim~ that any action 

of the Divisional Code Authority or any agency thereof may be 

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

may require that such action be suspended to afford an opportunity 

for investigation of the merits of such action and for further consideration by such Divisional Code Authority or agency, pBnding 

final action, which shall not be effective unless the Administrator 

approves or unless he shall fail to disapprove after thirty days' 

notice to him of intention to proceed with such action in its original 

or modified form. 

SECTION 10. (a) It being found necessary in order to support the 

administration of this Supplemental Code and to maintain the standards of fair competition established hereunder and to effectuate the 

policy of the Act the Divisional Code Authority is authorized: 

1. To incur suci1 reasonable obligations as are necessary and proper 

for the foregoing purl?oses, and to meet such obligations out of 

funds which may be raised as hereinafter provided and which shall 

be held in trust for the purposes of this Supplemental Code; 

2. To submit to the Administrator for his approval, subject to 

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

(1) an itemized budget of its estimated expenses for the foregoing 

purposes and (2) an equitable basis upon which the funds necessary 

to support such budget shall be contributed by members of the Trade; 

3. After such budget and basis of contribution have been approved 

by the Administrator, to determine and obtain equitable contribution 

as above set forth by all members of the Trade, and to that end, 

if necessary, to institute legal proceedings therefor in its own name. 

(b) Each member of the Trade shall pay his or its equitable contribution to the expenses of the maintenance of the Divisional Code 

Authority, determined as hereinabove provided, and subject to rules 

and regulations pertaining thereto issued by the Administrator. 

Only such members of the Trade complying with the Supplemental 

Code and contributing to the expenses of its administration as hereinabove provided, unless duly exempted from making such contributions, shall be entitled to participate in the selection of members 

of the Divisional Code Authority or to receive the benefits of any of 

jts voluntary activities or to make use of any emblem or insignia of 

the National Recovery Administration. 

(c) The Divisional Code Authority shall neither incur nor pay 

any obligation in excess of the amount thereof as estimated in its 
11 

approved budget, except upon approval of the Aclmini trator; and 

no subsequent budg t shall contain any deficiency item for expendi- ture in excess of prior budget estimate except those which the 

Admini trator shall have so approved. 

ARTICLE IV-TRADR PRACTICES 

Supplementing Article VII of the General Code. 

The following practices are hereby declared to be unfair methods 

of competition and are prohibited : 

SCHEDULE A 

(The following unfair trade practices are to apply to all wholesalers or distributors unless otherwise indicated in the Schedules B 

or C.) 

SECTION 1. To use any subterfuge to frustrate the spirit and intent 

of this Supplemental Code or the General Code. 

SECTION 2. To sell on terms of payment except the following: 

(a) ~faximum cash di count shall be two per cent (2%) for payment on or before the 15th day of the month following date of 

invoice. Accounts not paid within the discount period shall be 

payable net. 

(b) The maximum credit period shall not exceed sixty (60) days 

from the 15th day of the month following date of shipment. Ten 

days after the net due date, interest shall be charged at the rate of 

at least six per cent ( 6% ) per annum or at the legal rate governing 

the con tract. 

(c) In~'oices for merchandi~e sold or shipped in the months of 

October November and December shall become due and payable not 

later than January 15th of the following year, subject to a two per 

cent (2% ) cash discount. 

(d) No discount shall be allowed other than the regular cash 

discount from the wholesaler's selling price, provided that this shall 

not prohibit the allowance of quantity or volume discounts or discounts allowed on the basis of services actually rendered without 

discrimination among customers of the same class. This subsection 

shall be construed to prohibit the practice of arriving at a wholesaler's net selling price by means of a series of discounts from a 

fictitious list price and shall not be construed as requiring or authorizing in any way the establi hment of maintenance of any wholesaler elling price. 

(e) The Divisional Code Authority, subject to review by the Administrator, may change terms of credit on specific commoditie in 

order to enable wholesalers to meet the competition of primary ellers 

operating under manufacturers' Codes of Fair Competition. 

(f) The period of time allowed after net due date shall not exceed 

three and one-half (3:Y2 ) months or three and one-half (3:Y2 ) 

month average when installment notes are accepted. If the oriP"inal 

note are extended, interest shall be charged at not le s than the 

rat of . i:s: per cent (6% ) per annum or at the legal rate of such 

ext n ion. Such extension "hall not cxc ed ninety (90) days. 

(g) No ca h discount shall be allowed on any note ettlement, nor 

shall a non-interest-bearing note be accepted m payment of a rna-
12 

tured obligation. Notes accepted after the net due date with a tolerance of ten (10) days must bear interest from the net due date at 

a rate not less than six per cent (6%) per annum or at the legal 

rate governing the contract; provided that unsecured and noninterBst-bearing notes may be accepted from insolvent debtors. Notes 

so accepted shall be immediately reported to the Divisional Code 

Authority. 

SECTION 3. To 1nake allowances and/or donations to customers for 

advertising purposes. Nothing in this Section shall be construed to 

prohibit the payment by any member of the Trade of the expense of 

bona fide cooperative advertising actually incurred in the advertising 

of items trade-marked or branded by such member of the Trade, 

provided such payment be made in cash to an advertising medium 

or enterprise owned and operated independently of the parties in 

whose interest such expense is incurred. 

SECTION 4. To ship or deliver merchandise on a guaranteed sale 

basis, provided that the Divisional Code Authority may permit such 

shipments or deliveries under unusual circumstances JUstifying the 

same. 

SECTION 5. To ship or deliver merchandise on memorandum and 

authorize its retention by the retailer for longer than ten (10) days; 

provided, however, that the Divisional Code Authority may permit 

such shipments or deliveries under unusual circumstances justifying 

the same. 

SEcTION 6. To ship or dBliver any merchandise on consignment, 

provided that the Divisional Code Authority may permit such shipments or deliveries under unusual circumstances JUstifying the same. 

SECTION 7. To make memorandum shipments unless transportation 

charges both ways shall be paid by the firm requesting such shipment. 

SECTION 8. To allow any cash discounts to a retailer and/ or institutional, commercial and/ or industrial user on merchandise sold for 

his or its account to the consumer by the wholesaler. 

SECTION 9. To prepay transportation charges except where delivery is by messenger or local package delivery service within a 

twenty-five mile radius of the wholesaler's or distributor's place of 

business. 

SECTION 10. To make allowance for transportation charges on 

shipments of merchandise, except that an allowance for transportation charges may be made on items which are ordinarily stocked and 

available but which were temporarily out of stock at the time of the 

shipment of the order. 

SECTION 11. To use the power of appointment of Watch Inspectors 

by any member of the Trade who is a General Watch Inspector for 

railroads in order to force retailers to buy goods from him, and to 

furnish railroad passes by such a General Watch Inspector in order 

to influence retailers to buy merchandise from him. 

SECTION 12. To accept for credit or exchange merchandise when 

shipped in accordance with customer's orders unless-

( a) Such merchandise be obviously defective in material or manufacture and be returned :for credit w1thin ten (10) days after receipt 

of the same, or 

(b) Such merchandise be latently defective and be returned within 

such time as a reasonably prudent retailer in the exercise of ordinary 

care would discover the defect, or 
13 

(c) Such merchandise be guaranteed by the manufacturer, in 

which case the wholesaler may accept such merchandise in accordance with the t€rms of the guaranree and during the lifetime of the 

guaranree, or 

(d) Such merchandise be shipped as a result of an error in ordering or shipping and be returned for credit within ren {10) days after 

receipt of the same, or 

(e) Such credit be made on account of insolvency of the cu tomer 

and be reported to the Divisional Code Authority. SECTION 13. To sell second-hand or rebuilt watches, or watches 

containing second-hand or rebuilt movements, unless at the time 

of sale and deli very there shall be affixed to each such watch a tag 

which states that the watch is second-hand rebuilt. 

SEcTION 14. To give or offer to give directly or indirectly any free 

watch material, except that such watch material may be supplied 

without charge for purposes of re~lacing demonstrably defective 

material previously sold to the recipient. 

SECTION 15. To make and send any invoice which does not include 

a clear and complete statement of the terms and conditions upon 

which the transaction was based. 

SECTION 16. To sell or offer for sale any watch case either as a 

separate entity or fitred with a movement as a complete watch unless 

the said watch case shall have stamped indelibly and legibly in some 

visible place on its outside surface the manufacturer's name or duly 

registered trade mark accompanied by a quality mark equally indelibly and legible, in accordance with the standards and conditions 

established with the standards and conditions established in Article 

VIII of the Code of Fair Competition for the Watch Case Manufacturing Industry as approved by the President on December 23rd, 

1933; provided, however, that this provision shall not apply to 

watch cases completely manufactured prior to the effective date of 

this Supplemental Code and for the possession and ownership of 

which the distributor shall submit to the Divisional Code Authority, 

before offering the same for sale, an executed bill of sale dated prior 

to July 1, 1934, or such reasonable extension beyond said dare as may 

be granted by the Divisional Code Authority upon application 

therefor. 

SECTION 17. For a member of the Trade to make or permit his 

agents or employees to make or publish any statement, oral or written, which falsely disparages in any material particular any competi~ors or their goods, prices, values, credit terms, policies or 

services. 

SCHEDULE B 

(The following unfair trade practices are to apply exclusively to 

the sale by members of the Trade of watchmakers' and jewelers' 

material , tools, supplies and equipment.) 

SECTION 18. To allow trade-ins for more than a fair market value 

of the merchandise taken in trade. 

SECTION 19. To allow more favorable terms of credit discounts or 

datings on sales of coupon books than are specifi d in this Article 

for the sale of the merchandise represented by the coupons. SECTION 20. To ship or deliver merchandise to retailers on memorandum when its retention for longer than ten {10) days by the 
14 

retailer is authorized. Merchandise of this character kept beyond 

the specified time shall be considered as sold. The Divisional Code 

Authority may permit such shipments or deliveries under unusual 

circumstances justifying the same. 

SECTION 21. To guarantee the sale by any retailer of any merchandise, provided that the Divisional Code Authority may permit such 

guarantee under unusual circumstances justifying the same. 

SCHEDULE C 

(None of the trade practice rules in Schedule A of this Article 

except Sections 1, 4, and 6 shall apply to the sale by members of 

the Trade of men's novelty jewelry. The following unfair trade 

practices shall apply exclusively to the sale by members of the Trade 

of men's novelty jewelry.) 

SEcTION 22. To accept for credit or exchange merchandise when 

shipped in accordance with customers' orders unless: 

(a) Such merchandise be obviously defective in material or manufacture and be returned for credit within ten (10) days after receipt 

of the same, or 

(b) Such merchandise be latently defective and be returned within 

such time as a reasonably prudent retailer in the exercise of ordinary 

care would discover the defect, or 

(c) Such merchandise be guaranteed by the manufacturer, in which 

case the wholesaler may accept such merchandise in accordance with 

the terms of the guarantee and during the lifetime of the guarantee, 

or 

(d) Such merchandise be shipped as a result of an error in ordering or shipping and be returned for credit ten (10) days after receipt 

of the same. 

(e) A wholesaler may, however, accept the return of not more than 

ten per cent (10%) of the merchandise sold by him to a customer 

during the four ( 4) months previous to the time the returned merchandise is received by the wholesaler. Said returned merchandise 

so accepted by the wholesaler shall be credited to the customer to the 

extent of not more than eighty per cent ( 80%) of the wholesaler's 

current selling price for said merchandise. The wholesaler shall 

thereafter make a triplicate record of the transaction; one copy of 

which shall be sent to the customer, one copy shall be sent to the 

Divisional Code Authority, and one copy shall be kept by the 

wholesaler for his own record. The Divisional Code Authority may 

permit return privileges more liberal to the customer than those 

established in Subsection (e) where special circumstances justify the 

same. 

(f) A member of the Trade may accept in lieu of payment the 

return for credit of merchandise sold by said member to a customer 

jn the case of insolvency or financial embarrassment of said customer, provided that the acceptance of this returned merchandise 

is reported immediately to the Divisional Code Authority. 

SECTION 23. To give discounts to purchasers more favorable than 

three per cent (3%), ten {1~ days E.O.M. or two per cent (2%), 

ten {10) days, plus sixty (60 days extra dating, except that shipments made during the perio from September 1st to November 1st, 

inclusive, may be made on the following terms: 
15 

Three per cent (3%), ten (10) days E.O.M., plus thirty (30) 

days extra dating, or two per cent (2%), ten (10) day , plus ninety 

(90) days extra dating. :Merchandise shipped after the 25th of any 

month may be dated as of the first of the month irrunediately 

following. 

SECTION 24. To deliver to a purchaser any merchandi e in excess 

of the merchandise charged. 

SECTION 25. To give display materials of a value in excess of ten 

per cent (10% ) of the amount of the ale with which it is given. 

SECTION 26. To make any allowance to a purchaser for advertising purposes. Nothing in this Section shall be construed to prohibit the payment by any member of the Trade of th expense of 

bona fide cooperative advertising actually incurred in the advertising of items trademarked or branded by the member of the Trade, 

provided such payment be made in cash to an advertising medium 

or enterprise owned and operated independently of the parties in 

who e interest such expense is incurred. 

SECTION 27. To ship or deliver merchandise to retailer on memorandum when its retention for longer than ten (10) days by the retailer is authorized. Merchandise of this character kept beyond 

the specified time shall be considered as sold. The Divisional Code 

Authority may permit such shipments or deliveries under unusual 

circumstances justifying the same. 

SECTION 28. The Divisional Code Authority with the consent of the 

Administrator may change or eliminate any of the provisions of this 

Supplemental Code for the purposes of placing the members of this 

Trade on a fair competitive basis with primary sellers or members 

of other wholesale or distributive trades. 

ARTICLE V-PERl\IISSIVE TRADE PRACTICES 

Supplementing Article VII of the General Code. 

SECTION 1. (a) No goods shall be sold or offered for sale at less 

than the cost to the seller. Such cost shall be defined to mean the 

actual net invoiced purchase price or market price, whichever is 

lower plus transportation charges to seller's warehouse plus actual 

wages involved in the delivery of goods by the seller when determined in accordance with an accounting formula developed by an 

impartial agency chosen with the advice of the Adn1ini trator and 

published from time to time by the Divisional Code Authority after 

ap:proval by the Administrator. 

(b) Notwithstanding the provisions of this Section any wholesaler may sell any article of merchandise at a price as low a the 

price set by any competitor on merchandise which i identical or 

essentially the arne, and where such competitor's price does not 

violate this Section or where such competitor i not ubject to the 

provi ion of this Supplemental Code. 

(c) Notwithstanding the foregoing pro vi ions of this Section a 

whole aler may ell the following merchandise at less than the prices 

e tabli hed under the aid provi ion : ob olete goods, bona fide clo - out merchandi e damaged m rchandi e, stock being liquidat d 

merchandise sold for charitable purposes or to unemployment relief 
16 

agencies, and such other merchandise as the Divisional Code Authority may designate. 1 

SECTION 2. With the advice and consent of the Administrator, the 

Divisional Code Authority may at any time determine that an open 

price plan of selling such commodity or commodities of the Trade 

as it shall specify shall be put into effect. Notice of such determination and the details of such plan shall be announced to all known 

members of the Trade who distribute such commodities. 

ARTICLE VI-PowER OF PRESIDENT TO MoDIFY 

· This Supplemental Code and all the provisions thereof are expressly made subject to the right o£ the President in accordance 

with the provisions of Sub-section (b) of Section 10 of the Act, 

from time to time to cancel or modify any order, approval, license, 

rule or regulations issued under Title I of said Act. 

ARTICLE VII-EFFECTIVE DATE 

This Supplemental Code shall become effective on the tenth day 

after its approval by the Administrator. 

Approved Code No. 201-Supplement No. 22. 

R egistry No. 1631-1-7. 

1 Amend€d-See paragraph 3 of order approving this Code. 

0 

UNIVERSITY OF FLORIDA 

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