Approved Code No. 291 Registry No. 1647- 01 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR C·OMPETITION 

FOR THE 

WOOD CASED LEAD PENCIL 

MANUFACTURING 

INDUSTRY 

AS APPROVED ON FEBRUARY 17, 1934 

WE DO OUR PART 

A ' 0 ~ =- ~·-

U.l. DEPO ,'~" UNITED stATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON : 1934 

For sale by the Superintendent of Documents, Washington, D.C. - - - - - - - • Price 5 cents 
This publication is for ale by the Superintendent of Documents, Government 

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

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 of Commerce Building, 

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

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

Cleveland, Ohio: Chamber of Commerce. 

Dallas, Tex.: Chamber of ommerce Building. 

Detroit, Mi h.: 801 Fir ·t National Bank Building. 

Houston. Tex.: 'hamber of ommerce Building. 

Indianapolis, Ind.: hamber of Commerce Building. 

Jacksonville, Fla.: hamber of Commerce Building. 

Kansas City, 1\Io.: 1028 Baltimore Avenue. 

Los Angeles, Calif.: 1163 South Broadway. 

Louisville, Ky.: 408 Federal Building. 

Memphis, Tenn. : 229 Federal Building. 

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San Francisco, Calif.: 310 ustomhouse. 

Seattle, Wa~h.: 809 Federal Office Building. 
Approved Code No. 291 

CODE OF FAIR COMPETITION 

FOR THE 

WOOD CASED LEAD PENCIL MANUFACTURING 

INDUSTRY 

As .£\.pproved on February 17, 1934 

ORDER 

APPROVING ConE OF FAIR CoMPETITION FOR THE W oon CASED LEAo 

PENCIL MANUFACTURING INDUSTRY 

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

compliance with the provisions of Title I o the National Industrial 

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

Fair Competition for the Wood Cased Lead Pencil Manufacturing 

Industry, and hearings having been duly held thereon and the 

annexed report on said Code, containing findings with respect thereto having been made and directed to the President: 

~OW, THEREFORE, on behalf of the President o.f the United 

State, I, Hugh S. Johnson, Administrator for Indu trial 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 Code complies in all respects 

with the pertinent provision.s and will promote the policy and purposes of said Title of said Act; and do hereby order that said Code 

of Fair Competition be and it is hereby approved, provided that 

the continued participation of the trade association participating in 

the selection or activities of the Code Authority after thirty days 

from the effective date .of this Code shall be contingent upon its constitution and by-laws being amended to the satisfaction of the 

Administrator and, provided further, that the provi, ions of Section 

I of Article VII and Sections 8, 9, 10, 11, 12, 13, 14 and 15 of Article 

X are u pended pending .further study and determination by the 

Admini trator. 

HuGH S. JoHN oN, 

Administrator for Industrial Recovery. 

Approval recommended : 

GEo. L. BERRY 

Division. Ad1nini t1·ator. 

w A HINGTON, D.C., 

F ebruary Pl, 1931,. 

41320°----376--103----34 (109) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Srn: A public hearing on the Code of Fair Competition for the 

Wood Cased Lead Pencil Industrj of the United States was conducted in ~Tashington on the 6th of November, 1933, in accordance with the provision of the National Industrial Reco-ver3 Act. 

The In titute claims to represent 97 perc nt of the Indu try. 

The maximum hour established in the Cod for the 'Vood Ca eel 

Lead Pencil 1\1anufacturing Indu try are 40 p r week except firemen 

and employees in hipping and cartage service who shall be allowed 

a maximum of 46 hours per week. Kiln tenders, cleaners and watchmen may be employed in pairs and hall not work more than 36 and 

48 hours on alternate weeks or an average of 42 hours per week. 

Persons employed in a managerial or executive capacity and supervisory taff · receiYing $35.00 per week or more, traYeling salesm.en and 

employees engaged in emergency repair work are excepted as to hours 

provid d emergency repair crew receive tim and one third for all 

honr: worlreJ. per week in excess of forty. To provide for peak 

demand perio ls all employees except those tatecl above who are 

exceptions to the maximum hour · may be employed a total of 46 

hours per week averaged to forty during any thirteen week period 

an<.l time and one third shall be paid for all hours worked in exce s of 

forty per week. Each employee in the industry is guaranteed one 

day of ret in Yery . eYen unle . specifically excepted by the Code 

Authority. 

The 'Vood Ca eel Lead Pencil1\1anufacturing Indu try operated on 

an average, according to the Bureau of Census figures, of 50 hours 

per week in 1929 and 45 hours per week in 1931. In 1929 this industry employed 4,476 individuals of whom 3,756 were wage earners. rage earner employment declined 24.5 percent from 1929 to 1931. 

To bring the number of wage earners back to the 1929 level of employment or to 3 756 wage earners it would be nece ary for the 

industry to adopt a 34 hour week, assuming that employment since 

1931, the latest data available has been fairly constant. However, 

since 1931 the industry has reemployed a number of persons and, 

therefore, a 40 hour week seems the most advisable basis to use in 

establishing an approximation a to the number of additional wage 

earners who might be benefited through reemployment. On the 

basis of a 40 hour week 564 wage earner . hould benefit through 

reemployment. 

The wages established by the Code for thi · indu try are 36 cents 

per hour or $14.40 per week of 40 hours except in the State of Tennes ee, where no employee shall be paid less than at the rate of 

30 cents per hour or $12.00 per week of forty hours. The industry 

agrees to maintain the policy of not reducing the compensation for 

(110) 
111 

employment which compen ation was, prior to June 16, 1933, in 

exc of the 1ninimum wage established in the code, notwith tanding that the hours of employment may be reduced; and unle since 

such date such adjustments have been made, all members of the industry agree to endeavor to increase the pay of all employ es in 

exce of the minimum "TI"ag by an equitable adjustment of all pay 

schedules. Office boy an l offi e girls; 18 years of age or le , may 

be engaged at not le s than 0 percent of the minimum rates e tablished, the number of such employees to be limite l to 5 percent of 

the total office staff but in no case less than one such employee. 

The average hourly rate for wage earners in this industry in 

1929, ba ed on a 50 hour week, was 42.7 cent , while in 1931, using 

a 45 hour week as the basis, the average was 40.2 cents per hour. On 

the basis of the 1931 hourly average, the average alary per wage 

earner amounted to $18.12 per week. On the same hourly basis for 

a 40 hour week the average alary would amount to $16.08 per week. 

With regard to the marketing provisions in Article X of the Code 

careful consideration has been given these provisions by the Research and Planning Division and the Legal Division and in Yarious 

conferences held with the industry these provisions were amended, 

modified and changed to eliminate undesirable features and in its 

present form it is felt to be equitable and necessary to this industry. 

These provisions will not work to the disadvantage of the con umer. 

On the contrary it is felt that they would work to their advantage 

inasmuch as quality would become more of a factor in competition 

than price. 

The Deputy Administrator in his final report to me on said Code 

having found as herein set forth and on the ba is of all the 

proceedings in this matter; 

I find that: 

(a) Said 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 

comn1erce which tend to diminish the amount thereof and will 

provide for the general welfare by promoting the organization of 

industry for the purpose of cooperative action among the trade 

groups, by inducing and maintaining united action of labor and 

management under adequate governmental sanctions and supervision, by eliminating unfair competitive practices, by promoting 

the fullest possible utilization of the pre ent productive capacity 

of industries, by a voiding undue restriction of pro luction (except 

as may be temporarily required), by increasing the consumption of 

industrial and agricultural products through increa ing purcha ing 

power, by reducing and relieving unemployment, by improving 

standard of labor, and by otherwise rehabilitating indu try. 

(b) Said Industry normally employs not more than 50,000 mployees; and is not clas ified by me as a major indu try. 

(c) The Code as approved complies in all re pect with th pertinent provisions of ajd Title of said Act, including without limitation Sub ection (a) of Sectjon 3 Sub tion (a) of ecti n 7 an l 

Subsection (b) of ection 10 thereof· and that the applicant a ociation i an indu trial a ociation truly repre ~ ntative of th aforesaid indu try; and that said a so iation will amend th ir c n titu- · 
112 

tion and by-la"""s to the ati faction of the Administrator so that no 

inequitable restrictions on membership will be imposed therein. 

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

or monopolistic practices. 

(e) The Code is not designed to and will not eliminate or oppress 

small enterprises and will not operate to discriminate against them. 

(f) Tho e enga.ged in other steps of the economic process hav~ 

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

Code. 

This industry has cooperated in a most satisfactory manner in 

the preparation of this Code. From the evidence adduced during 

the hearing and from reconunendations and reports of the various 

Advisory Bo·ards, it is believed that this Code in its present form 

as approved represents an effective, practical, equitable solution for 

this Industry and for these reasons this Code has been approved. 

Respectful! y, 

FEBRUARY 17' 1934. 

HUGH s. JOHNSON' 

Ad1ninistr·ator. 
CODE OF FAIR COMPETITION FOR THE WOOD CASED 

LEAD PENCIL MANUFACTURING INDUSTRY 

ARTICLE I-PURPOSES 

To effectuate the policies of Title I of the National Industrial 

Recovery Act, this code is established as a code of fair competition 

for the Wood Cased Lead P encil Manufacturing Industry, and its 

provisions shall be the standard of fair competition for such industry 

and binding upon every member thereof. 

ARTICLE II-DEFINITIONS 

1. The term " Wood Cased Lead Pencil Manufacturing Industry " 

shall include the production in continental United States of wood 

cased lead pencils, commencing with the assembly of wood slats 

and leads and the processing of these materials in combined form, 

resulting in the completed wood cased pencil, either with, or without, 

the tip andjor eraser. The term shall also include such related 

manufacturing branches or subdivisions of the industry as may, from 

time to time, be included under the provisions of this code by the 

President of the United States, after such notice and hearing as he 

may prescribe. 

2. The term "Member of the Industry" or "Member" includes 

each of those engaged in the industry as defined above operating 

as an employer. 

3. The term "Employee" as used herein includes any and all 

persons engaged in the industry, however compensated, except a 

member of the industry. 

4. The term "Institute" shall mean the Lead Pencil Institute, 

Incorporated. 

5. The term "Dealer" shall include each of those who is regularly 

engaged in the wholesaling andjor retailing of wood cased lead 

pencils (except blanks) in the ordinary course of business. This 

shall not include the sale of pencils for use as advertising. 

6. The term " Distributor " shall include each of those purchasing pencils in blank form and re-selling in that form and/ or imprinting or stamping such blank pencils and re-selling them for 

advertising purposes. 

7. The term" Consumer" shall mean any purchaser of wood ca ed 

lead pencils who is not a dealer or distributor as defined above. 

Commissaries and other buying agencies operated by corporations 

or groups of corporations for the procurement of upplies for their 

own use, and boards of education, are included. 

8. The term " Sales Agents " or "Agent" hall include each of 

those who or which shall erve the n1ember of the industry in the 

distribution of wood cased leal pencils to deal rs, in the ame capa - ity as the members' sales departments. Such agents shall be ap-

(113) 
114 

pointed only in accor lance ·with regulations adopte<1 by the Code 

Authority and approved by the Admini tr·ator. 

9. The term '' Products " ·hall mean woo l ca. ·ed leac1 pencils with 

or without tip · or erasers. 

10. The terms "Act ' and 'Administrator" as used herein mean 

re ·pectively Title I of the ~ ational Industrial Re O\ery Act and the 

Administrator for Indu. trial Recovery. 

11. Population for the purposes of this Code hall be determined 

by reference to the late. t Federal Censu . 

ARTI LE III 

SECTION 1. .~{ n. ·Jmum Ii O'UJ's.-N o employee shall be permitted to 

work in ex:ce. ·s of 40 hours in any one week, exeept as herein 

otherwise proYided. 

SECTION 2. ExcepUons as to H ou1· .-Firemen and employees in 

shipping and cartag ervice, shall be allowed a maximum of 46 

hours per week. 

SECTION 3. Kiln tenders, cleaners and watchmen may be employed 

in pairs, and hall not work more than 36 an l 48 honrs in alternate 

weeks or an average of 42 hours per week. 

SECTION 4. The provisions of this Article shall not apply to per ons 

employed in a managerial or executive capacity or supervisory staff 

who earn $35.00 per week or more; traveling ale men; or to employees enga o·ed in emergency repair work; provided, however, that 

time and one third hall be paid emergency repair r ws for all hours 

over 40 'vorked per week. 

SECTION 5. To provide for peak period labor other than as provided for in sections (2), (3) and ( 4), may be employed a maximum 

of 46 hours per week provided that during any 13 week period the 

total number of hours worked shall not exceed 520; and further 

provided that time and one third shall be paid for all hours worked 

In excess of 40 per week. 

SECTION 6. Employment by everal Employers.-No employee 

shall work or be permitted to work, for a total number of hours in 

excess of the number of hours herein pre crib d. ither if he be 

employed by one or more employers. 

SECTION 7. Standa1·d W eek.-U nless specifically excepted by the 

9ode Authority every employee shall be guaranteed one day of rest 

In every seven. 

ARTICLE IV-'iV AGE 

SECTION 1. MinitJnwm W ages.-N o employee shall be paid in any 

pay period less than at the rate of 36 cents per hour or $14.40 per 

week of 40 hours for males and 321;2 cents per hour or $13.00 per 

week of 40 hours, for females, except as otherwise herein provided. 

SECTION 2. Mini?nun~ Wage Rates by Locality.-In the State of 

Tennessee no employees shall be paid in any pay period less than at 

the rate of 30 cents per hour or $12.00 per week of 40 hours. 

SECTION 3. Additional zoning classifications may be provided by 

the Code Authority subject to the approval of the Administrator. 

SECTION 4. Piece-Work 0 01npensation.-This article establishes a 

minimum rate of pay which is applied irrespective of whether an 
115 

employee is actually compcn ated on a time rate, piece-work performan e or other ba i , in whi h ca ·e employee · hall be paid once 

a week. · 

SEcTION 5. lYage Ab01Je the Mini?nU?n.-lt is the policy of the 

members of thi industry to refrain from reducing the compensation 

for employment \\hich compen ation wa prior to June 16, 1933 in 

exces of the minimum wage herein et forth, notwithstanding that 

the hours of work in uch employment may be reduced; and, unl s 

since such date uch adju -tments have been made, all members of 

this indu try hall endeavor to increase the pay of all employee in 

excess of the nunimum wage, as herein set forth, by an equitable 

adju tment of all pay schedules proportionate to the increa e in 

compensation as determined by the minimum wage herein provided. 

SECTION 6. Fe1nale Employees.-Female employees performing 

ub tantially the ·arne work as male employees shall receive the same 

rate of pay a male employees. 

SECTION 7. Handicapped Pe1•sons.-A person who e earning capacity is limited because of age or physical or 1nental handicap may 

be employed on light work at a wage below the minimum established 

by this code if the employer obtains from the State authority de. ignated by the United States Department of Labor a certificate authorizing his employment at such wages and f or uch hours as shall be 

stated in the certificate. Provided that such employees have been in 

the service of their present employers for a period of not less than 15 

year. . Each employer shall file with the Code Authority a list of 

all uch per ons employed by him. 

SECTION 8. Wages B elow the llfinimwm.-Office boys and girls, 

eighteen years or younger, may be engaged at not les than eighty 

per cent of the minimum rate established in Sections 1 and 2 of thi 

article-number to be limited to 5 per cent of total office staff, but 

in no case less than one such employee. 

ARTICLE V-GENERAL LABOR PROVISIONS 

SECTION 1. Child Labor.-No person under sixteen year of ao·e 

hall be employed in the industry. No per on under eighteen years 

of age hall be employed at any operations or occupation which are 

hazardous in nature or dangerous to health. The Code Authority 

shall ubmit to the Admini trator within 60 days after the approYal 

of thi code a li t of such hazarclou occupation . In any State an 

employer hall be deemed to have complied with this provision a to 

age if he hall have on file a certificate or permit duly igned by the 

authority in such State empowered to i. ne employment or age 

certificate or permit howino· that the employee is of the r quir c1 

age. 

SECTION 2. P1·ovisions fro·m the Act.-ln complian e with Section 

7 (a) of the Act, it i provided: 

(a) That employee hall have the riD"ht to organize and bargain 

collectively through repre entati' e of their own choo ing, and hall 

be free from the interferen e, re. traint or c r ion of employ r of 

labor, or their ao·ent. in the de,.io·nation of uch repre entative or in 

If-or ·anization or in oth r con erted a tivitie for th purpo of 

collectiYe bargaining or other mutual aiel or prote tion. 

41320°----376--103----34----2 
116 

(b) That no employee and no one seeking employment shall be required as a condition of employment to join any company union or 

to refrain from joining, organizing,-or assisting a labor organization 

of his own choosing, and 

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

labor, minimum. rates of pay, and other conditions of employment 

approved or prescribed by the President. • 

SECTION 3. Reclassification of employees.-Employers shall not 

reclassify employees or duties of occupations performed or engage in 

any other subterfuge to defeat the purpo es of the Act or of this 

Code. 

SECTION 4. Standards for S{])fety and health.-Every employer shall 

1nake reasonable provi ions for the safety and health o.f his employees at the place and during the hours of their employment. 

SECTION 5. State laws.-No provision in this code shall supersede 

any State or Federal law which imposes more tringent requirements as to age of e1nployees, wages, hours of work, or as to safety, 

health, sanitary or general working conditions than are impo ed by 

this code. 

SECTION 6. Posting.-All employers shall post and keep posted 

com.plete copies of the wage and hour and general labor provisions 

of this code in conspicuous places accessible to employees. 

SECTION 7. Home work.-On and after the effective date of this 

code all home work shall be prohibited. 

SECTION 8. No employee shall be required a a condition of employm.ent : 

(a) To live in a hou e rented from an employer. (b) To trade at a store designated by an employer. 

(c) To accept as payment for wages anything other than cash or 

11egotiable check, payable on demand. 

ARTICLE VI-ORGANIZATION, PmVERS AND DuTIEs oF THE CoDE 

AuTHORr.rY 

ORGANIZATION AND CON TITUTION .. SECTION 1. A Code Authority is hereby established to cooperate 

with the Administrator in the admini tration of this code and shall 

consist of seYen members to be cho en by the industry through a fair 

method of selection, approved by the Administrator, and shall serve 

for a period of one year from the date of their election. The Administrator, in his discretion, may appoint not more than three additional members without vote, and without compensation from the 

industry, to serve for such period of time and to represent the Adminjstrator or such group or groups as he may designate. 

SEcTioN 2. Vacancies in the personnel of the Code Authority 

selected by the industry shall be filled through appointment by the 

Admini trator upon nomination of the Code Authority. 

SECTION 3.-Any trade or industrial association directly or indirectly participating in the activities of the Code Authority shall sub- mit to the Administrator true copies of its articles of association, 

by-law ·, regulations, and any amendments when made thereto, together with such other information as to membership, organization, 
117 

and activities as the Administrator may deem nece ary to effectuate 

the purposes of the Act. 

SECTION 4. No inequitable re trictions on admi sion to member hip 

in the Lead Pencil In titute or any other trade as ociation or organized group, participating in the activitie of the Code Authority 

·hall be impo eel, and any n1ember of the indu try shall be eligible 

for men1ber hip in any u h trade a sociation or organized group 

upon complianc with the pro1i ion of the by-la" relating to menlber hip, provi led that any person applying for u h member ·hip 

shall, in addition to the payment of uch due as are impo. eel upon 

and paid by all other member , accept a rea onable and equitable ·hare of the co-t of code administration. Such members of the in-

(lu try who do not choo e to become 1nembers of any trade association 

or organized group n1ay participate in the activities of the Code 

Authority upon the payment of uch proportionate part of the ·o t 

of code adnuni tration as the Code Authority, subject to the Administrator's approval, hall prescribe as fair and equitable. 1 

SECTION 5. Nothing contained in thi Code shall constitute the 

member of the Code Authority partner for any purpose. Nor shall 

any me1nber of the Code Authority be liable in any nlanner to any 

one for any act of any other member, officer, agent or employee of 

the Code Authority. 

SECTION 6. Powen and d1.dies.-The Code Authority shall haYe the 

following further powers and duties, the exercise of which hall be 

reported to the 4-dministrator, and ·hall be subject to hi right, on 

review, to disapproYe any action taken by the Code Authority, inconistent with the provisions of thi code or of the Act. 

(a) To administer the provisions of thi code and the regulations 

of the Code Authority which are approved by the Administrator. 

(b) To adopt by-law and rule and regulation for it proce lure 

and for the administration and enforcement of the Code. 

(c) To obtain from members of the indu try, monthly reports 

upon form to be provided by it, under a code nam_e to be known 

only to the member and the agency appointed by the Code Authority, 

complete and accurate stati. tics showing the members' production, 

new order , unfilled order , shipment and inventory of fini heel an l 

processed stock of industry product.·, samples delivered free, and 

returned goods, net and gro s price received, upon a clas ification 

of product into commodity group as adopted by the Code Authority. In addition the indu try hall furni h such other information 

and report a the Admini. trator may deem nece ary for the purl o. es recit c1 in Section 3 (a) of the Act, which information hall be 

submitte l by member to uch admini t.rative andj or governmental 

agencies a the Administrator may de ignate; provided that nothinO' 

in thi. Code ·hall relieve any member of the indu try of any exi ting 

obligation. to furni. ·h report to any goYernmental ao·ency. No inchvi lual r port · ·hall be eli clo eel to any other member of th indu try 

or any other party exc pt to . ·uch gov rnmental agen ·ie a · ma be 

directed by the Admini. h·ator. 

(d) To u e the Lea l Pencil In titut and nch other agen ie as 

it deem. proper for the carrying out f any of it activitie provided 

1 ce paragraph 2 of onlrr approYiug this Code. 
118 

for herein, provided that nothing herein shall relieve the Code Authority of its duties or responsibilities under this Code and that such 

trade associations and agencies shall at all times be subject to and 

comply with the provisions hereof. 

(e) To make recommendations to the Administrator for the coordination of the administration of this Code with such other codes, 

if any, as may be related to the industry. 

(f) To secure from members of the industry an equitable and proportionate payment of the reasonable expen es of maintaining the 

Code Authority and its activities. 

(g) To cooperate with the Administrator in regulating the use 

of any N.R.A. in ignia solely by those member of the industry who 

have assented to, and are complying with, this Code. 

(h) To recommend to the Administrator further fair trade practice provisions to govern members of the industry in their relations 

with each other or with other trades/industries and to recommend 

to the Administrator measures for industrial planning, including 

stabilization of employment. 

ARTICLE VII-TRADE PRACTICE RULES 

1. After the effective date of the implification-standardization 

schedule provided for in Article VIII, no member of the industry 

shall sell or deliver any wood cased lead pencils at lower prices 

than 25 per cent discount from list, to any dealer or distributor who 

sells foreign made lead pencils which do not conform to the standard 

specifications contained in such schedule and which were imported 

after the effective date thereof. 2 

2. No member of the industry shall represent or stamp any pencil 

or mark its box, sleeve, or container with any degree of lead hardness 

which does not correspond to the grading commonly applied to that 

1 ad by the pencil manufacturer ; provided, however, that this regulation shall n~t apply to types in which degraded pencils are permitted by the standard specifications, in which a standard marking 

is particularly specified. 

3. No member of the industry shall use espionage in any manner, 

form, or degree against any other member as to the processes, operation methods, and other trade secrets of any other member. 

4. No member of the industry shall give, permit to be given, or 

directly offer to give, anything of value for the purpose of influencing or rewarding the action of any employee, agent or representative 

of another in relation to the business of the employer of such employee, the principal of such agent or the represented party, with 

or without the knowledge of such employer, principal or party. 

This commercial bribery provision shall not be construed to prohibit 

free and general distribution of articles commonly used for advertising except so far as such articles are actually used for commercial 

bribery as herein above defined. 

5. The Code Authority shall submit recommendations for regulations concerning sampling. After the approval thereof by the 

Administrator, no wood-cased lead pencils shall be given away free 

2 See paragraph 2 of Order approving this Code. 
119 

or sold at r luced J?ri es as an indue ment to the ale of other pencils 

or other commodities except as provided ther in. 

6. vVh never the ale of wood-cased lead pencil i omhined by the 

manufacturers with the ale of other comn1odities, p neil ·hall not 

be given away free nor old at reduc d price as an indu ement to or 

rewar 1 for the ale of other commodities, or vice versa. Tor hall 

such sp cial price quoted upon a combination offer a to represent a variation from the normal selling price of either or any commodity joined in such offer. 

7. No member of the industry shall buy, trade in ex hano·e, or 

receiv from any dealer, distributor, or consum r any pencil male 

by an competing me1nber a an inducement to the ale or li ting f r 

ale of his own products or a a part of the under tood term of c.;ale 

of such products. 

. No member of the industry shall discriminate in price b tween 

differ nt purcha ers of the arne type, except on account of difference 

in quality and quantity. 

9. No member of the industry shall give, allow or pay any ·ecret 

di count, rebate, refund, or credit, no matter in what form or at 

what time, as a means of effecting or concealing price di criminations or of extending pecial preferences or privilege to particular 

cu tomers. 

10. Whenever any prospective purchaser of wood-ca ed lead pencil shall invite competitive bids upon specifications which call for 

any recognized quality or standard of pencil, no member nor any 

member's agent, hall use any endeavor to sell to such purcha er, 

pencils of a quality or standard lower than that provided in the 

specifications as indicated by the class and type in the standardization 

(;:chedule. 

11. No member of the indu try shall accept or fill any contract or 

order for wood-cased lead pencils which is not specifi a to the 

quality and price of pencil to be furni heel thereunder and/ or 

which continues beyond twelve months after the date wh n the ord r 

i placed and/or which does not specify the quantity which the 

manufacturer i obligated to furnish and the purcha er i obligated 

to accept. " Requirement " contracts which are definite a to time 

but indefinit as to quantity or definite a to quantit but indefini e 

a to time, hall not be accepted. · 

12. No member of the industry hall make or authoriz I rmit, 

or tol rate Hny action, . tatement, or repr sentation on the part of 

any of hi. employee which falsely di credit or defames a ompetinomf'mb r hi r putation or credit or hi produ t . 

13. No m mb r f the industry hall imitate, imulate, or therwi endeavor to appropriate to his own advantao-e the bran name 

or numb r of any member s competing p neil or pen il , hi trad -

mark th le. ign marking, col r, or oth r di tingui hing f c tur of 

hi lee band box packao-e, or carton. The Auth rity hall 

e tabli h an appropriate impartial ao· n y with whi h the abo 

brand , nam r number an 1 oth r di tingui. hin~ featur hall 

b r gi t r d and hall tabli. h a1 pr priat rul . an l recrulati n by 

whi h thi impartial ag n y . hall a mini ter thi. para 0 raph and 

arbitrate any li put ari in ther un 1 r. 
120 

14. No member of the industry shall knowingly, under any pretext whatever, issue or allow to be issued any invoice or other document relating to the sale of wood-cased lead pencils and purporting 

to tate the terms of uch ale, which does not accurately and completely exhibit the exact terms of such sale as they are understood in 

their finality, by the parties thereto. 

15. No member of the industry shall imitate, simulate, or copy 

any new, distinctive, or unique type of pencil which any member 

may produce, for a period of twelve (12) calendar months after 

uch pencil i put on sale. Provided, however, that this regulation 

shall be ineffective unless and until the producer of such novelty no- tifies the Code Authority of the introduction of such novelty. The 

Code ~uthority shall promptly notify each member of the introduction of such novelty, send each member a sample thereof, and call 

attention to this regulation. The Code Authonty shall establish an 

appropriate impartial agency with which said new, distinctive or 

unique types of pencils shall be regi terecl and shall e tablish appropriate rules and regulations by which thi impartial agency hall administer thi paragraph and arbitrate any eli putes arising thereunder. 

16. No member of the inclu try hall sell or offer to sell any wood 

ca ·eel lead pencils to any export house except upon condition guaranteeing that the order is for bona fide consumption in the market 

for which the goods are ordered. 

17. No product of this industry shall be accepted for return by 

any member of this industry, except such return is due to the fault 

of a member by reason of defects in production or packing or errors 

in shipment unless such member's approval has been obtained in 

advance of such r eturn, and then only in exchange for other merchandise unles credit conditions justify a credit memorandum to 

cover. When the return of merchandise by customers for exchange 

is approved by the member, if the return is for other reasons than 

the fault of the member by reason of defects in production or packing or error in shipment, a reconditioning charge of not less than 

ten (10 %) per cent of the original net value of the returned goods 

shall be made, and charge shall also be made for transportation 

both ways. 

18. No member of the industry shall pay or make any allowance, 

directly or indirectly, for space in catalogs, house organ , or any 

other form of pubhcity issued by a customer or prospective customer; provided, that electros for one-color printing may be furnished free by any member to any o£ his or its customers for the 

purpose of representing the member's product in the cu tamer's 

catalog or other publicity material. 

19. No member of the indu try shall furni h printed pages or 

insert sheets, whether in color or in black and white, for customers' 

catalogs for distribution to their trade. Pages for insertion in the 

catalogs of ston <3rs' sale men, printed in black and white only, 

may be furni heel without charge. 

20. No member of the industry shall participate in or make any 

contribution, either in money or goods, to any cooperative ne"· paper 

aclverti ing promoted or carried on by his or its customers. Each 
121 

member shall conduct his or its adverti ing independent of any participation with or by his or it distributor . 21. No member of the indu try shall make any contribution, conce ion, di count, rebate, or consideration of any nature, for erecting 

and/or .maintaining or painting any outdoor advertising device or 

sign used or to be used by a cu t01ner. Advertising material may 

be furni hed free for window and indoor di play but no merchandi ·e 

shall be given free or sold at reduced price· or loaned for display 

or advertising purpo es. 

22. No member of the industry shall furnish any sample display 

equipment except the standard sample cards, flaps, or folders. No 

mounted sample boards of any kind shall be furnished customer for 

display in their sample rooms under any pretext whateYer. · 

23. No permanent, refillable display case for wood-ca ·eel lead 

pencils shall be furni hed to any customer for le s than one ($1.00) 

dollar net for each gross of full capacity. 

24. No prizes-in m.oney or goods shall be offered or given to trade 

conventions, trade outings, or outings or celebrations of customers, by members or their officials, representatives or sale men. This provi ion on prizes shall not be construed to prohibit free and general 

distribution of articles other than pencils commonly used for advertising unless such articles are actually used as prizes. 

25. The use of color in printing member's or member's sales agents 

catalogs shall be re tricted to the cover and back pages of such catalogs. The inside pages shall be uniform in ink and paper throughout. 

26. No member and no member's representative shall make any 

exhibition or display of his or its products at any trade convention 

or meeting of wholesale and/ or retail dealers. Exhibits or eli plays 

may be made at special conventions or exhibitions, educational or 

otherwise, for the purposes of consumer information. 

ARTICLE VIII-STANDARDS 

1. The Code Authority with the approval of the Administrator, 

hall have power to adopt a schedule for the ·implification of the 

variety of industry products and for the tandardization of pecifications for the prescribed classes and types of indu try products and 

their packaging, including the designation of types which may be 

sold as blanks and imprints or for adverti ing purpo es. Such chedule when approved by the Bureau of Standar l of the Department 

of Conm1erce, and the Administrator, shall be di tributed to all 

members of the industry whose addres es are known, with an effective date fixed by the Code Authority. After uch effective elate, all 

members of the industry shall conforn1 to the provi ions of uch 

schedule. 

ARTI LE IX-CLASSIFICATION OF 1IEMBERS 

1. Class A member are those me1nber of the industry each of 

whom has fifteen (15 % ) per cent or more of the total sales volume 

of the industry. 

2. Class B members are tho e 1nember each of whom ha m re 

than five ( 5%) per cent and less than fifteen ( 15%) per cent of the 

total ale · volume of the industry. 
122 

3. Cla s C members are those m.embers each of whom has less than 

five ( 5%) per cent of the total sale volume of this industry. 

ARTICLE X-MARKETING TERMS 

The approval of the following marketing tenn is conditioned 

upon the continued availability of wood ca eel lead pencils to the 

public at the long established customary prices, viz. : one cent each, 

three for five cents; two for five cent ; five cents each; three for ten 

cents and ten cents each in rea onably relative qualitie at the e 

Yariou price. . The 1nembers of the industry severally and collectively voluntarily invite the Aclmini trator to and agree that he may 

examine any or all of their book or records at any rea onable time 

to determine whether these marketing term are being admini terecl 

to effectuate the National Industrial Recovery Act. If the Administrator hall find after rea onable notice and hearing, that these marketing terms are not being so admini tered the members of the indu try hall make ·uch cha.nge in ales policies and prices a may be 

necessary in default of which the approYal of the following marketing terms may be rescinded. ' 

1. The member list prices hall be the prices at which the member hall ·ell on gro · of hi or it ~ products t the con umer. These 

list price . hall be subject to the d duction of the standard quantity 

discount and credit terms. 

2. The member's list price hall include free delivery on shipments of any quantity to New York City and hall include free 

delivery throughout the balance of the domestic market only when 

the weight of shipment is one hundred (100) pounds or more. Any 

tran portation charge in exce · of the min~mum freight rate on 

such hipments hall be paid by the buy r, a shall all charge for 

delivery on hipment weighing les than one hundred (100) pound , except shipment to New York City. Freight charges shall not be 

prepaid by member , and -when allowable a · hereinbefore provided, 

hall be deducte l by cu ·tomer upon remittance for merchancli e. 

3. Each member hall, within ten clays after the effective date of 

this code, file with the Code Authority a gro s price list prepared by 

him in conformance with the requirement in the code and of Article 

X, showing hi current price and the standard discounts and term 

of payment. Subject to the provi ion of paragraph 4, the ·e price 

lists shall be effective imn1ediately upon filing. 

4. No member hall sell or quote in his or its pri e list or otherwise, any product of the indu try at a price, which less the applicable standard discounts, hall be less than the fair minimum price 

thereof as ascertained by the. Code Authority with the approval of 

the Administrator. Nothing in this provision or in any other provision of this code hall be con trued so as to permit the determination of minimum prices for any pencils retailing at the rate of more 

than five cents each. The Code Authority shall reject any price 

list which does not conform to the proYision of this paragraph, an l 

o notify the member filing it. Until it is corrected, such price li. t 

hall be ineffective and any sales made by such member which. do 

not conform to an effective price list on file with the Code Authonty, 

hall be deemed an unfair method of comr etition. 
123 

5. Revised price li t ·, -n·ith or without discount ·heet , may b filed 

from time to time thereafter with the Code Authority by any mem- ~er to become effective ubject to the provi ions of paragraph 4, 

Immediately upon filing. The e price lists hall be available at r asonable hours to partie in intere t. Revi cl price lists shall be 

subject to the same condition a to minimum pri e. 'Yhich are proYided above for original price li ts. 

6. No m mber hall sell any procluct of the industry at prices 

lower or li count greater, or on more favorable term of payment 

than those on file at the office of the Code Authority a above pro- vided. Provided that ob olete number , imperfect and damaged 

goods may be old upon uch term and condition a the ode 

Authority may ·pecifically appro1e. 

7. The uniform standard terms of credit hall be sixty (60) lays 

net or two (2% ) per cent for cash in ten (10) day., or two (2 % ) 

per cent, ten (10) days. E.O.l\1. The pring lating practice on fall 

shipments is hereby abolished. The terms for fall dating on pring 

shipments shall be as follows: Orders may be taken from dealers 

(not consumers), including syndicates and chain tores (for warehouse shipments only), for shipment during April, May, June, and 

July upon invoices due and payable September 1st, subject to the 

standard two (2% ) per cent, ten (10) days ca h discount. Payments made after September lOth are past due. Provided, however, 

that this advance dating privilege shall not be allowed by any 

Class A member on orders for single shipment of le than $100.00 

net value; or by any Clas B member on similar orders for le than 

$75.00 net value; nor by any Class C member on similar orders for 

less than $50.00 net value. Subsequent orders placed after April 1st 

for shipment before August 1 t may be given the dating privilege 

provided the or ler amounts to the minimum quantities a above 

tate d. 

8. The maximum quantity discount which may be allowed by the 

member to the consumer on standard lines, and special imprints, 

not for advertising, shall be as follow : 1 to 4 gross, one kind or 

a orted no discount ; 5 to 9 gross, one kind or assorted, 10 per cent 

off li t; 10 to 24 gross, one kind or as orted, 15 per cent off li t · 25 to 49 gross, one kind or a. sorted, 20 per cent off list; 50 to 99 

gro s, one kind or assorted, 25 per cent off list; 100 to 499 gro one 

kind or a orted, 30 per cent off li t; 500 gro and ov r one kind 

or as. orted 331/3 per cent off list. 

(a) The quantity order c1 for one hipment ::)hall govern the 

application of the above sche lule. When quotation i made on a 

tatecl minimum quantity an order hall not b ac ept d for a 

smaller shipment except at the lower discount sp ifie l for nch 

. maller quantity. 

9. The minimum t rms at whi h the member hall ell p ncils 

specially imprinted for a lverti ing purp e. hall b a · follows: 

1,000 pencils (or 7 gro s) nickel tip, li t plu 60 per cent p r gro s; 

1 000 pencil (or 7 gro s), all other li t plus 40 per nt p r oTo s. 

The. e are hereinafter referred to a the" ba. e : 

Less than 1 000, ba e per gro pin 10 per c nt 

2,500 pencil , ba e less 5 p r cent 

5 000 pencil ba e l . p<:>r c nt 
124 

10,000 pencils, base less 20 per cent 

25,000 pencils, base less 25 per cent 

50,000 pencils, base less 331j3 per cent 

100,000 pencils or more, base less 40 per cent 

10. The member's lowest selling prices to dealers for standard 

lines and special imprints, not for advertising, shall be the effective 

list price filed as herein provided, less a maximum trade discount 

of 40 per cent off list and subject to the standard credit and cash 

discount terms, except in case of Class I, Type I, in which case the 

discount shall be 331j3 per cent off list. This standard trade discount 

is further subject to the provisions of paragraph 14 of Article X; 

provided, however, that commencing January 1, 1935, when a dealer's purcha es of industry products during the previous calendar 

year from a Class A member are le s than $200.00 net or from a 

Class B member are less than $150.00 net or from a Class C member 

are less than $100.00 net, the member hall sell to the dealer at no 

more than the following quantity discounts: 1 to 4 gross, assorted, 

20 per cent off list; 5 gross ::Jnd over, assorted, 25 per cent off list. 

Nothing contained in this provision shall operate as a limitation 

upon the opening of any new account with the allowance of normal 

discounts if said new accounts are opened in accordance with the 

provisions of paragraph 16 of this article. 

11. The Code Authority, with the approval of the Administrator, 

may establish an additional scale of cumulative discounts based on 

the dealer's or distributor's entire annual purchase of industry products from all members of the industry combined, the payment of 

which by the members shall not constitute a violation of the minimum price 1?rovisions of Article X. Each member may pay this 

additional d1scount at the rate ascertained by the Code Authority, 

upon the amount of his individual sales to the particular dealer or 

distributor. 

12. Blank pencils for imprinters of advertising pencils shall not 

be sold to the general trade but directly only to recognized distributor of advertising pencils, whose names shall be filed with the Code 

Authority. With reference to the sale of blank pencils for imprinting for advertising purposes, it shall be the duty of the Code Authority with the approval of the Administrator, to establish an orderly 

system and method of distribution and sale of blank pencils, directed 

to the prevention of unfair competition in the advertising pencil 

business or between blank pencils and the standard commercial products of the industry. . 

To all recognized distributors o£ advertising pencils, the n1.aximum 

discounts on blank pencils for shipment at one time, shall be as 

follows: 

1 to 6 gross, no discount 

7 to 49 gross, 10 per cent off list 

50 to 99 gross, 20 per cent off list 

100 to 499 gross, 25 per cent off list 

500 to 999 gross, 3311:3 per cent off list 

1000 _gross and over, 40 per cent off list. 

13. The Code Authority, with the approval o£ the Administrator, 

shall prescribe such rules and regulations as it shall deem proper by 
125 

which the que tion as to whether any purcha ·er or pro.·pectiv purcha er i a sale agent, dealer, eli tributor, or con ·umer, hall be 

determined and ·hall arbitrate all uch di puted que tion . The 

Code Authority shall notify each ·member of the indu. try of ·uch 

rules, regulation , and decisions in this regard. Any uch deci ion 

may be referred to the Administrator upon petition, and hi 1 ci ion 

·hall be final. 

14. No member of the industry hall sell and deliver or contract 

to sell and deliver, to any dealer, distributor or agent, any indu ·try 

pro luct including imprint , which r etail at the rate of 5 ent or 

le · each, at a greater discount than 25 per cent off list unles and 

until uch member shall ecure from such dealer, d.i -tributor or 

agent, an agreement ubstantially in the form previou -ly approved 

by the Code Authority and by the Admini trator, obligating the 

dealer, eli tributor or agent-

( a) that he or it will not without the con ent of the Code Authority, sell such product including imprints, to any consumer at a price 

which at the time of the ale thereof shall be les than the price 

at which the n1ember might then ell such product including imprints, to the con umer : 

(b) that the dealer, distributor or agent will not sell such product 

including imprints, to any other dealer, distributor or agent for 

resale to consumers, except upon a like agreement between the dealer 

andjor distributors and/ or agents, and 

(c) that the failure of compliance with such agreement by the 

dealer, eli tributor or agent, hall operate as a modification of the 

said agreement by which the applicable eli count rate shall be reduced 

to 25 per cent off li t. 

Any dealer, distributor or agent which exe utes, deliver., and 

complies with the provisions of such agreement, hall be quoted or 

sold by the member at a eli count of 40 percent off list. 

The failure by the member to comply with the provi ions of this 

paragraph shall be a violation of the code. 

15. In all sales of trade-marked or branded product to lealer for 

resale, members and dealers may by contract, require purchaser · to 

resell such products at the manufa ·turer' effective price and liscounts and may further require that if uch product are th reafter 

sold by such pur ·ha er for re ·ale, th onginal purcha er hall 

incorporate a similar provi ion in the contra t with th pur ha r 

for resale. 8 

16. la s A members hall not op n an} new· a ount with a 1 aler 

who or which has not bought since January 1, 1931, from th m mber1 

upon le s than a minimum quantity for shipm nt at on tim ot 

$100.00 net worth of wood -ca eel lead pencils; Cla B member i1all 

not open a new a count with any ·u h dealer upon le s than a 

minimum order for hipment at on tim of $75.00 n t worth o£ 

wood-ca. eel lead p n il · las · C memb r hall not open a new 

a ·count with any u ·h d. aler upon le · than a minimum ord r £or 

hipment at one tim , of $50.00 n t worth of w d-ca ell ad p n il . 

17. No memb r hall eYa 1 th minimum pri pr vi ion of this 

1 See paragraph 2 of Order appro\ing thi ode. 
126 

code by submitting a bid on fractions of a gross at a price which is 

not extended to the exact common fraction of a cent in event that the 

division does not figure out to an even cent. 

18. No manufacturer shall ship to any direct factory accounts on 

an order for less than $15.00 net worth of pencils, at the maximum 

discount off list price. Orders for smaller quantities shall be billed 

at twenty-five (25% ) percent off list. 

19. Except as provided in paragraph 6 of Article X, no member 

shall sell any imprints, jobs, seconds, blanks, pencils for premiums, 

advertising pencils, or pencils purchased by manufacturers of other 

products to be used in connection therewith, in the domestic market 

which includes Hawaii and Puerto Rico, at any lower prices or on 

any other terms or conditions than tho e which are applicable to 

the standard commercial numbers of the equivalent class and type. 

20. After the adoption of the standardization schedule in accordance with this code, no pencil types shall be sold to distributors in 

blank form or as consumer or advertising imprints which are not 

provided for therein. No pencils shall be so imprinted unless the 

standard specifications so provide. 

21. The prices to dealers for dealer imprints shall not be less 

than the prices for the equivalent types of standard brand pencils 

to dealers. 

22. No member .shall sell special imprints not for advertising, nor 

member's standard brands back stamped, on orders for single shipments and billing of less than 1,000 gross of Type 1, Class 1, or 100 

gross of Type 3, Class 1, or 25 gros · of any other type of Class I, 

Class IV or Class V, or 50 gross of any type in any other class, nor 

less than 15 gross of lead degrees 2, F, or 3, nor less than 5 gross of 

lead degrees 1 and 4. 

23. Nothing contained in Article X shall apply to export trade to 

the Philippine Islands or any foreign country or its possessions. 

ARTICLE XI-MoDIFICATION 

1. This Code and all the provisions thereof are expressly made 

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

of subsection (b) of Section 10 of the Act, from time to time to cancel 

or modify any order, approval, license, rule, or regulation issued 

under said Act, and this Code is further subject to right of the 

Administrator to review and veto any action of the Code Authority 

he deems inconsistent with the Act or the Code. 

2. This Code, except as to provisions required by the Act, may 

be modified or amended on the basis of experience or changes in 

circumstances, such modifications or amendments to be ba.sed upon 

application through the Code Authority to the Administrator and 

such notice and hearing as he shall specify, and to become effective 

on approval of the President, unless otherwise provided. 

ARTICLE XII-:MoNoPoLrns, ETC. 

1. No provision of this Code shall be so applied as to permit 

monopolies or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprises. 
127 

ARTI LE XIII- PRICE IN 'REA 'E,. 

1. Where a th policy of th A t to increa e real pur ha. ·ing pow r 

will be made more difficult of con ummation if price of o·oo l and 

rvice in rea e a rapidly a. wag , it i r cogniz d that price 

increa e exc pt uch a ma3 be required to meet indivi lual · . t 

hould be delayed but when made, u h increa s houll o far as 

po. ible be limited to actual a lditional incr a. e. in the . eller , ts. 

ARTICLE XI' -EFFECTIVE DATE 

1. Thi Code ·hall become effectiYe n the tenth day after its 

approval by the Pre,jdent. 

Approved Code No. 291. 

Regi try No. 1647-01. 

0 


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