NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR THE 

DEALERS IN 

MOTION-PICTURE AND THEATRE 

SUPPLIES AND EQUIPMENT INDUSTRY 

AS SUBMITTED ON AUGUST 29, 1933 

.REGISTRY No. 1659-3-02 

The Code for the Dealers in 

Motion-Picture and Theatre Supplies and Equipment Industry 

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

industry, and none of the provisions contained therein are to 

be regarded as having received the approval of the 

National Recovery Administration as applying 

to this industry 

U . . nE- ~-oo~· ..,., u····· . ~ 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1933 

I I I 

l 

( 

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

Application to the President of the United States for the Approval of a 

National Industrial Recovery Code of Fair Competition for the 

Dealers in Motion-Picture and Theatre Supplies and Equipment 

under the Provisions of Section 3, Title I, of the Statute Entitled 

"An Act to Encourage National Industrial Recovery, to Foster 

Fair Competition, and to Provide for the Construction of Useful 

Public Works, and for Other Purposes" 

PREAMBLE 

The purpose of this code is to effectuate the policy of Title I of The 

National Industrial Recovery Act to remove obstructions to the free 

flow of interstate and foreign c01nmerce and to promote cooperative 

action to reduce and relieve unemployment, improve standards of 

labor, eliminate unfair competitive practices, avoid restriction of production, and to prohibit monopolies, increase purchasing power and 

rehabilitate industry, particularly as it pertains to the dealers in 

motion-picture and theatre equipment and supplies with the express 

purposes of revitalizing it upon a profitable basis for all dealers 

engaged in this field by eradicating prevalent unethical and unfair 

practices which in the past and at present are proving destructive. 

The following is adopted as a code of fair competition for the dealers 

in motion-picture and theatre equipment and supplies in the United 

States. 

The provisions of this code shall not be interpreted or administered 

as to eliminate or oppress small enterprises or to discriminate against 

them. 

ARTICLE I-DEFINITIONS 

1. The National Industrial Recovery Act when referred to in this 

code shall be called the "Act." 

2. The term "dealer" refers to any person, firm, association, or 

corporation engaged in the business of repairing equipment or buying 

and selling equipment and supplies for the theatre and other places 

where motion pictures may be exhibited without regard to whether 

or not a stock of merchandise is maintained. 

3. The terms "equipment" and "supplies" are to be deemed to 

include not only equipment and supplies which can only be used in 

connection with theatres and other places where motion pictures may 

be exhibited, but also any equipment and supplies which, although 

useable for other purposes, are sold to be used in connection with the 

exhibition of motion pictures, or for use in theatres, auditoriums, etc. 

4. The term "employee" as used herein shall include every person 

employed by any dealer as above defined. 

5. The term "persons " as used herein shall include without limitation natural persons, partnerships, associations, and corporations. 

6. The term "cost" as hereinafter used is defined as the cost of 

direct labor plus the invoice cost of materials (excepting any cash 

discounts or rebates allowed by the manufacturer under terms of sale 

8229-33 ( 1) 
2 

to all dealers) plus transportation, cartage, and hauling, plus an adequate amount of overhead, including an amount for the use of any 

plant facilities employed, as determined by cost accounting methods 

recognized in the industry and approved by the Administration Board 

constituted for the enforcement of this code as provided hereinafter. 

7. The .term "President" refers to the President of the United 

States. 

8. The term "effective date" as used herein is defined to be 'the 

lOth day after this code shall have been approved by the President 

of the United States. 

ARTICLE II-LABOR PROVISIONS 

GENERAL 

The following provisions shall apply with respect to labor under 

this code: 

1. That employees shall have the right to organize and bargain 

collectively through representatives of their own choosing, and shall 

be free from the interference, restraint, or coercion of 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. 

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. 

MINIMUM WAGES 

1. The minimum wage or salary to be paid by Dealers to employees, 

including every class of employees, employed on a half-monthly basis, 

shall be at the rate of sixty-five dollars per month. 

2. The minimum weekly wage to be paid by Dealers shall be fifteen 

dollars ($15 .00). 

3. The minimum wage to be paid by Dealers to employees hired 

on an hourly basis shall be forty cents per hour. 

4. Salesmen may be employed on a straight commission or salary 

and commission basis. 

MAXIMUM HOURS OF LABOR 

1. Employees, except those engaged as traveling salesmen, emergency repair men, and service n1en, shall not work more than 40 

hours per week, nor 182.5 hours during a calendar month of 31 days. 

2. These limitations shall not apply in cases of emergency, but at 

the end of each calendar month every dealer shall report to the Administration Board hereinafter provided for, in such detail as may 

be required, the number of man-hours worked in that month for 

emergency reasons and the ratio which said emergency man-hours 

bears to the total number of man-hours of labor during said month. 
3 

MINIMUM AGE LIMIT 

Dealers shall not employ any person under the age of 18 years. 

ARTICLE III-ADMINISTRATION 

1. With the approval of the President there shall be constituted 

an Administration Board for dealers in motion picture and theatre 

supplies and equipment to consist of one duly authorized representative from the Independent Theatre Supply Dealers' Association who 

shall be its President and one duly authorized representative from 

National Theatre Supply Company who shall be its President, and 

not more than 3 members without v:ote appointed by the Administrator of the National Industrial Recovery Administration. 

2. With the approval of the President such Adininistration Board 

shall be empowered to assist the National Recovery Administrator 

in administering the provisions of the Act as set forth in this code; 

may initiate and shall consider such recommendations and regulations and interpretations, including those relating to trade practices, 

as may come before it and in such case shall, in deliberations held 

without publicity and recorded in writing, submit to the National 

Recovery Administrator its advice setting forth in each instance 

whether said Administration Board unanimously approves or unanimously rejects or is disagreed upon a proposal, and in such event the 

National Recovery Administrator shall decide. 

3. Such Administration Board shall also supervise the application 

of this code and shall notify any and all persons subject to the jurisdiction of this code of its provisions and regulations and shall designate 

such agents and delegate such authority as may be necessary to effectuate such purposes. 

4. Such Administration Board is also set up to cooperate with the 

Administrator in making investigations as to the functioning and 

observance of any provisions of this code, at its own instance or on 

written and signed complaint by any person affected, and to report the 

same to the Administrator. 

5. If formal complaint is made to the Administration Board that 

the provisions of this code have been violated by any dealer, the proper 

supervisory agency shall investigate the facts and to that end may 

cause such exainination or audit to be made as may be deemed 

necessary. 

6. As and when any question shall be deliberated upon by the 

Administration Board with respect to the unfair trade practices by 

dealers which involve manufacturers of such equipment, two duly 

authorized representatives from The Theatre Equipment and Supply 

Manufacturers Association shall thereupon and only with reference 

to such questions in the interim become members of said Administration Board. 

7. The Administration Board may from time to time present to the 

President recommendations based on conditions in the industry as 

they may develop from time to time which will tend to effectuate the 

operation of the provisions of this code and the policy of the Act. 

8. After the completion of any investigation that the Administration Board may make upon the signed complaint of any person, if 

the findings of the investigator show that the complaint was un-
4 

founded, the party making the complaint may be assessed the expenses 

of the investigation and the cost of the same shall be billed immediately and shall be payable upon receipt of the statement. If the 

investigators report that the complaint is warranted and justified, 

the party guilty of violation of the code, or any amendment thereto 

or any rule or regulation issued thereunder and approved by the 

Administrator of the National Industrial Recovery Act shall pay all 

expenses of the investigation. 

9. Any dealer may participate in any endeavors of the Administration Board in the preparation of any revisions of, or additions or 

supplements to, this code by accepting and paying the proper pro 

rata share of the cost and responsibility of creating and administering it. 

10. The Administration Board is hereby designated the agency for 

administering, supervising, and promoting the performance of the 

provisions of this code for dealers in motion-picture theatre supplies 

and equipment. 

ARTICLE IV-PARTICIPATION IN ConE 

Any existing dealer as herein defined, or dealer who shall become 

such hereafter, whether a member of any association or not, may 

participate in the code and any subsequent revisions, additions, or 

amendments thereof, by indicating his intention of fully subscribing 

to the provisions of the code and by assuming the responsibilities of 

such participation. 

ARTICLE V-UNFAIR CoMPETITION 

1. No dealer shall sell at a price destructive of the capital investment 

and likewise of the earning power of labor; and no dealer shall enter 

upon or engage in any price cutting. 

2. No dealer shall sell, offer for sale, or advertise any service, or 

exchange any product, at a price or upon such terms or conditions 

that will result in the customer paying for the services or goods received less than the "cost" to the dealer, determined in accordance 

with the uniform and standard method of defining "costs", hereinbefore prescribed, provided, however, that dropped lines of merchandise, seconds, or inventories which must be converted into cash to 

meet emergency needs may be disposed of in such manner and on such 

terms and conditions only as the Administration Board may approve 

and as are necessary to move such products in the buyer's hands. 

3. No dealer shall sell directly or indirectly by any means whatsoever 

any service or any product of the industry covered by the provisions 

of this Article at a price lower or at discounts greater or on more 

favorable terms of payment than those provided in current schedules 

set up by the Administration Board with the approval of the Administrator of the National Recovery Administration. 

4. Nothing in the preceding paragraphs shall be deemed to prevent 

the extending of quantity discounts for quantity purchases, provided, 

however, that such quantity discounts must be predicated on actual 

quantity purchases and not on estimated requirements over a period 

of time, and provided that no increased discounts for quantity shall 

reduee the price below the fair minimum prices defined in paragraphs 

1, 2, 3 of this article. 
5 

5. Quotations and billings to purchasers by Dealers shall be at unit 

prices. The practice of lump-sum bidding and billing shall be deemed 

to be unfair competition. 

6. The following practices shall also be deemed to be unfair competition within the meaning of the Act: 

A. Advertising (written, verbal, printed, radio, or display) which 

misrepresents merchandise, values, or services; or selling methods 

which tend to mislead the consumer. 

B. Reference in Dealers' advertisements to the goods, services, or 

prices of competing retailers shall be regarded as an act of unfair 

competition. 

C. The use of, participation in, publishing or broadcasting of, any 

statement or representation which lays claim to a policy or continuing 

practice of generally underselling con1petitors. 

D. The sale by Dealers of any product of a penal institution. 

E. The giving of secret rebates, refunds. credit, or unearned discounts, whether in the form of money or otherwise, or the giving of 

premiums or extending to certain purchasers special services or privileges not extended to all purchasers under like terms and conditions. 

F. The offering of allowances on trade-in equipment in excess of 

the allowances scheduled by the Administration Board shall be 

eonsidered a violation of this code. The Administration Board shall 

set, from time to time, a schedule of allowance prices on used equi'p- , ment, such prices to be based on age of equipment and model of same. 

Identifying factor shall be serial number of such equipment taken in 

trade. 

G. The defamation of a competitor by words or acts, falsely imputing to him dishonorable conduct, inability to perform contracts, or 

questionable credit standing, or by the false disparagement of the 

grade or quality of his merchandise. 

H. The payment to an employee of a customer or prospective 

customer of a commission or consideration of any character for the 

purpose of inducing, or compensating for, a sale. 

I. The absorption of freight charges or any portion thereof. 

J. Commercial bribery in whatever form it may be attempted, 

whether by giving commissions, prizes, premiums, or excessive entertainment as an act of commercial bribery to anyone in connection 

with the sale, purchase, or use of merchandise, or as an inducement 

thereto. 

K. Sale or contract to sell in violation of the provisions of this 

Article shall be deemed an unfair method of competition within the 

meaning of the Act. 

L. The practice of rebuilding used equipment and selling it as new, 

the changing of any factory serial number, shall be a violation of this 

code. 

M. No Dealer shall misrepresent or make oral or written guarantees 

that conflict with or exceed the manufacturers' guarantees or recommended applications of his product. 

N. Original manufacturers' identification make or number on 

equipment or accessories shall not be altered. 
6 

ARTICTE VI-STATISTICS AND REPORTS 

1. With a view to keeping the President of the United States and 

the Administrator informed as to the observance or nonobservance of 

this code and as to whether the .dealers are taking appropriate steps 

to effectuate in all respects the declared policy of theN ational Industrial Recovery Act, each dealer shall, not less than once in each year, 

prepare and file with the Administration Board an earnings statement 

and balance sheet in a form approved by said Administration Board 

or in a form acceptable to any nationally known banking institution. 

Each Dealer shall likewise prepare and file with the Administration 

Board such current information concerning wage and salary rates, 

hours of work, stocks on hand, sales and prices as the Administration 

Board may from time to time require for the purpose of determining 

conditions within the industry. The failure to furnish the required 

data, or the furnishing of false or misleading information, or the 

making of false statements relating thereto, shall be regarded as a .violation of this code of fair competition. 

2. Except as otherwise provided in the National Industrial Recovery Act all statistics, data, and information filed in accordance with 

the provisions of Article III shall be confidential, and the statistics, 

data, and information of one dealer shall not be revealed to any other 

dealer except that, for the purpose of facilitating the administration 

and enforcement of the provisions of this code, the Administration 

Board or their duly authorized representative shall have access to 

any and all statistics, data, and information that may be furnished in 

accordance with the provisions of this code. 

3. The Administration Board shall establish uniform credit practices, including a uniform plan of installment sales, which when 

approved by the members of the Administration Board and by the 

Administrator of the National Industrial Recovery Act shall be 

.binding upon all dealers. 

ARTICLE VII-AMENDMENTS 

· 1. This code and all the provisions thereof are expressly made subject to the right of the President, in accordance with the provision of 

clause 10 (b) of the National Industrial Recovery Act, from time to 

time to cancel or modify any order, approval, license, rule, or regulation, issued under Title 1 of said Act, and specifically to the right of 

the President to cancel or modify his approval of this code or any 

conditions imposed by him upon his approval thereof. 

2. Such provisions of this code as are not required to be included 

therein by the National Industrial Recovery Act may, with the 

approval of the President, be modified or eliminated as changes in 

the circumstances or experience may indicate. It is contemplated 

that from time to time supplementary provisions to this code or 

additional codes will be 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 1 of the National Industrial Recovery Act consistent 

with the provisions thereof. 

3. This Code shall become effective not later than ten (10) days 

after its approval by the President. 
7 

ARTICLE VIII-VIOLATIONS 

Violations by any person subject to the publication of this code or 

any provisions of this code, or of any approved rule or regulation 

issued thereunder, or of any agreement entered into by him with the 

aforementioned Administration Board to observe and conform to 

this code and said rules, is an unfair method of competition and the 

offenders shall be subject to the penalties imposed by the National 

Industrial Recovery Act. 

ARTICLE IX-SAVING PROVISION 

If any court of competent jurisdiction shall finally determine that 

any Article or section of any Article in this Code shall be invalid, all 

other Articles and sections of this Code shall nevertheless remain and 

continue in full force and effect in the same manner as though they 

had been separately presented for approval by the President. 

Respectfully submitted. 

NATIONAL THEATRE SuPPLY CoMPANY INc., 

By W. N. GREEN, President. 

INDEPENDENT THEATRE SuPPLY 

DEALERS' AssociATION, INc. , 

By J. E. RoBIN, President. 

0 
Digitized by the Internet Archive 

in 2011 with funding from 

University of Florida, George A. Smathers Libraries with support from LYRASIS and the Sloan Foundation 

http://www.archive.org/details/codeoffaircompet6708unit 


• 
• 

UN IVERSITY OF FLORIDA 

11111111111 11111111111111111111111111111111111111111111111111111 

3 1262 08855 6708