Approved Code No. 347-Supplement No. 34 Registry No. 1107-04 

NATIONAL RECOVERY ADMINISTRATION 

SUPPLEMENTARY 

C·ODE OF FAIR COMPETITION 

FOR THE 

SPROCKET CHAIN INDUSTRY 

(A Division of the Machinery and Allied Products Industry) 

AS APPROVED ON JULY 21, 1934 

WE DO OUR PART 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1934 

\ 1 

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Approved Code No. 847-Sup. #84 Registry No. 1107-04 

ERRATA SHEET 

CODE OF FAIR COMPETITION 

FOR THE 

SPROCKET CHAIN INDUSTRY 

As Approved on July 21, 1934 

Approved code #347, Suppl. #34, Page 10, Article V, Section 

:8 (f), last word in first line. The word "not" should be "act." 

80516°-1044-49-34 

0 . S , GOVERNMENT PRlflTING OFFICE : 193' 

Appron4 Cede No. 347-Supp. No. 34 

ERRATA SHEET 

CODE OF FAIR COMPETITION 

FOR THE 

SPROCKET CHAIN INDUSTRY 

As Approved on July 21, 1934 

B-eiriatrT No. 1107-0ll 

Page 7, first word, 15th line " baisc " should be "basic". T he 

heading, Article IV should appear between the two paragraphs now 

contained in Article III, page 10, first line last word " not " should 

be " act". 

81481°--1044--87--34 

U . S . GOYEIIIIMf:IIT rllJS1'lAG OYTJCJ! 1 d ~ 
\ 
Approved Code No. 347-Supplement No. 34 

SUPPLEMENTARY CODE OF FAIR COMPETITION 

FOR THE 

SPROCKET CHAIN INDUSTRY 

As Approved on July 21, 1934 

ORDER 

APPROVING SUPPLEMENTARY CoDE OF FAIR COMPETITION FOR THE 

SPROCK.ET CHAIN INDUSTRY 

A DIVISION OF THE MACHINERY AND ALLIED PRODUCTS INDUSTRY 

An application having been duly made pursuant to and in full 

compliance with the provisions of Title I of the National Industrial 

Recovery Act, approved June 16, 1933, for Sprocket Chain Subdivision of Machinery and Allied Products Industry, and a hearing having been duly held thereon and the annexed repor.t on said Supplemental Code, containing findings with respect thereto, having been 

made and directed to the President: 

NOW, 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; provided, however, that the provisions of Article VIII, Section (a), insofar as they ~rescribe a waiting period between the 

filing with the Code Authority ( or such agency as ma; be designated 

in the Supplemental Code) and the effective date o price lists, as 

originally filed and/or revised price lists or revised terms and conditions of sale, be and they hereby are stayed pending my further 

order. 

Approval recommended : 

HUGHS. JOHNSON, 

Administrator for I ndustrial Recovery. 

BARTON vv. ~1URRAY, 

Division Administrator. 

"\VASHIXGTON, D.C., 

J uly f l, 1934. 

75337 °-820-122-34 (1) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

Srn: This is a report on the Supplemental Code o:f Fair Competition for the Sprocket Chain Subdivision o:f Machinery and Allied 

Products Industry, a public hearing on which was held in Washington, D.C. on December 21, 1933. The hearing was conducted in 

full accordance with the provisions o:f Title I of the National In- dustrial Recovery Act. 

GENERAL STATEMENT 

The Sprocket Chain Subdivision, being truly representative o:f the 

manufacturers of the products defined in Article II of the Supplemental Code, has elected to :formulate and submit a Supplemental 

Code of Fair Competition as provided in the second paragraph of 

Article I in the Code of Fair Competition ifor the Machinery and 

Allied Products Industry, approved by you on the seventeenth day 

of March, 1934. 

The Subdivision includes the manu:facture :for sale of sprocket 

chains of malleable iron, steel, and other metals for conveying, elevating, and the transmission of power of the types generally known 

as roller chains, rollerless bushing chains, block chains, malleable 

and other cast detachable pintle and roller chains, balance and leaf 

chains, bar link chains, steel detachable link chains, combination cast 

and bar link chains, drop forged and rivetless chains, draw bench and 

haul-up chains, taintor gate and bridge chains, and parts for such 

chains and sprockets for same, and includes all those engaged in such 

manufacture for sale; except that there shall not be included therein 

the manufacture for sale of chains for hand hoists and those generally 

known as round link or coil chains, nor machine finished chains, as 

defined in the definition of the Roller and Silent Chain' Subdivision. 

The manufacture of sprocket chain by farm equipment manufacturers is excluded from the manufacturing provisions of this Code 

but the marketing and trade provisions shall apply to all sprocket 

chain sold by such :farm implement manufacturers for all purposes 

other than for use on farm implements. 

ECONOMIC EFFECT 

Annual sales of malleable iron sprocket chains and sprockets for 

elevating, conveying and transmission of power declined from 

$5,431,000 in 1929 to $1,408,000 in 1932, or 74 per cent. The Subdivision has estimated the value for the year 1933 at $1,535,000 which 

indicates an increase of 9 per cent over the 1932 level. 

(2) 
3 

A ·gregate invest d capital ha line 1 9 per nt sin e 1G2D, while 

production a1 acity has r mained on. tant. 

The trade a sociati n, in its code apr lication, has estimated that 

this SubdiYision em1 loyed a1 proximately 5 5 mploy s in the y ar 

HL9. tabulation of questionnaire returns from five establishments 

of the Subdivision shows that in 1929, 83.2 per cent of the total 

number of employees were factory worker ; on this basis 98 offico 

workers have been segr gated from the 1929 figure, leaving 487 

factory workers. 

Factory employment declined from 487 workers in 1929 to a minimum of 216 in the third quarter of 1932, or nearly 56 per cent. Since 

then employment increased almost constantly to 256 factory workers 

in the third quarter of 1933, or nearly 19 per cent. F actory employ- ment as of October 15, 1933 declined again to 234 workers or nearly 

9 per cent. 

A summarized tabulation of five National Recovery Administration questionnaire returns shows average hours per week for factory 

workers of this Subdivision as follows: 

Hours per wee'/o 

June 15, 1929_· ----------------------------------------------------- 49.4 June 15, 1933 _____________________________________________________ 24. 4 

October 15, 1933 _____________________________________________________ 34.2 

After 1929 man-hours declined steadily from 24,0o0 to a minimum 

of 6,965 in the first qua~ter in 1933. For the third quarter of 1933 

man-hours increased to 9,421 but since then have de.creased again to 

8,003 or 15 per cent as reported on October 15, 1933. Based on the 

man-hour requirements as of October 15, 1933, on the average the 

40-hour proV1sion will probably cause little further reemployment. 

The wage provisions for the Subdivision, which is operating under 

the Code of the Machinery and Allied Products Industry, provide 

that employees engaged in plant operations shall be paid as follows: 

(1) in cities of more than 50,000 population and their immediate 

vicinity, 40 cents per hour; (2) in cities of more than 10,000 but not 

more than 50,000 population and their immediate vicinity, which 

cities are not in the immediate vicinity of a city of more than 50,000 

population, 38 cents per hour; (3) in cities of 10,000 population or 

less and their immediate vicinity, which cities are not in the immediate vicinity of a city of more than 10,000 population, 36 cents per 

hour, except that employees e~~aged in plant operations in all localities in the states of Virginia .North Carolina, South Carolina, Georgia, Florida, Tennessee, Alahama, Mississippi, Arkansas, Louisiana, 

Texas, and Oklahoma, shall be paid not less than 32 cents per hour. 

\Vhen females do substantially the same work as males or replace 

males, they shall receive the same pay. However, no female employee 

shall be paid less than 871⁄2% of the proper rate for the locality in 

which employed. 

Office boys and girls and apprentices shall be paid not less than 

80% of the minimum wage. 

Employees other than those engaged in plant operations shall 

receive not less than $15.00 per week. 

Distributions of the number of factory workers receiving classified 

rates in the specified areas are not available. Consequently, it is only 

possible to estimate the approximate number of factory workers who 
4 

will receive the benefit o:f the proposed minimum hourly rates, regardless of location, on the basis of the number of factory workers 

receiving less than the designated hourly rates as of June 15, 1933. 

liJstimatea number of factory workers r eceiving less thoo aesignatea hourly 

rates 

Proposed minimum hourly rates 

40 cents (other U.S.~ __ --------------------------------------------------

~ ~:~~~ ~~rn:~ g l) = = ================================================== 82 cents (South) __ ___ ___________________________________________________ _ 

Distribution of factory workers 

receiving less than the mini- mum regardless of location 

Approximate Approximate 

percent number 

45.1 

43.3 

41. 5 

36.0 

115 

111 

106 

92 

Based on the distribution as of June 15, 1933, and on the specified 

percentages of the number of factory workers receiving less than the 

designated rates shown in the above table, the adoption of the proposed minimum rates will probably cause an incn~ase in factory pay 

rolls. The estimated increase as of June 15, 1933, regardless of 

location of the workers, will probably, under the most favorable 

conditions, not exceed 14.0 percent assuming only upward adjustment 

in the brackets below the 40 cent minimum and no change in manhour requirements. 

l'tESUME OF SUPPLEMENTAL CODE 

Article I states the purpose of the Supplemental Code. 

Article II accurately defines specific terms applicable to the Subdivision as used in this Supplemental Code. 

Article III provides for the adoption of the employment provisions 

of the Code of Fair Competition for the Machinery and Allied 

Products Industry, as approved by you, and as from time to time 

amended. 

Article IV provides for the adoption of Articles II, VI, VIII, and 

IX of the Code of Fair Competition for the Machinery and Allied 

Products Industry. 

Article V prov1des for the establishment of a Code Authority and 

defines its powers and duties. 

Article VI provides for an accounting system and methods of cost 

finding and/or estimating. 

:Article VII provides that no products of the Subdivision shall be 

sold or offered for sale below a reasonable cost when the Code 

Authority determines that an emergency exists. 

Article VIII provides for methods of setting up, revising and 

filing price lists and discount sheets and terms of sale and payment. 

Article IX sets forth trade practices for the Subdivision. 

Article X states that no provision of this Supplemental Code relating to pricing and marketing shall apply to export sales. 

Article XI provides that this Supplemental Code and all the pr~-

visions thereof are expressly made subject to the right of the President, in accordance with Subsection (b) of Section 10 of the Act, 
5 

n1 r, a ppr val, li ense, Provi i n i al o made 

ode Authority to the 

from time to time t can 1 or modify any 

rule l' r zulati n i sued Ull l r said A t. 

that m lifi ati n n ay be submitt cl by th 

Admini 'trator for ar proval. 

Article XII. provi ion of this upplcm ntal ode hall be so 

appli d a t p rmit rnon polie , or monopoli tic pra ti , or to 

eliminate, or I re , or cl' criminate ao-ain t mall nteq rises. 

Arti le XIII stat s th effective date of thi uppl rn ntal Code. 

}T~mINGS 

The Assi tant Deputy Admini trator in hi final report to me on 

said Supplemental Co le having found as herein s t 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 industry for the purpose of cooperative action among the 

trade groups, by inducing and maintainina united action of labor and 

management under adequate governmental sanctions and supervision, 

by eliminating unfair competitive practices, by promotino- the fullest 

possible utilization of the present productive capacity of industries, 

by avoiding undue restriction of production ( excel?t as may be temporarily required), by increasing the consumpt10n of industrial 

and agTicultural products through increasing purchasing power, by 

reducing and relieving unemployment, by improving standards of 

labor, and by otherwise rehabilitating industry. 

(b) Said Subdivision normally employs not more than 50,000 em- ployees; 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 association is an industrial association truly representative of the aforesaid Subdivision; and that said association imposes 

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 approval of said 

Supplemental Code. 

For these reason , therefore, I have approved this Supplemental 

Code, provided that certain provisions relating to price publication 

are stayed, as stated in the Order. 

Respectfully, 

JULY 21, 1934. 

HUGH s. JOHNSON, 

Ad11iinistrator. 
BUPPLEMENTARY CODE OF FAIR CO1\1PETITION FOR 

THE SPROCKET CHAIN INDUSTRY 

A DIVISION OF THE MACHINERY AND ALLIED PRODUCTS INDUSTRY 

ARTICLE I-PURPOSES 

To effectuate the policy of Title I of the National Industrial Recovery Act, the following provisions are established as a Supplemental Code for the Sprocket Chain Subdivision of the Machinery 

and Allied Products Industry, and together with the Code of Fair 

Competition of Machinery and Allied Products Industry, to which 

it is a supplement, shall be the standard of fair competition for this 

Subdivision, and shall be binding on each employer therein. 

ARTICLE II-DEFINITIONS 

"Applicant " means the Association of Sprocket Chain Manufacturers, a trade organization, all members of which are engaged in 

the manufacture for sale of the products of the Sprocket Chain Subdivision of Machinery and Allied Products Industry. 

"Industry" means the Machinery and Allied Products Industry, 

as defined in its Code of Fair Competition, as approved by the President, and as such definition may from time to time be amended. 

" Subdivision" means the Sprocket Chain Manufacturing Subdivision of the Machinery and Allied Products Industry as defined 

and set forth in Paragraph 32 of Article II of the Code of Fair 

Competition for the Machinery and Allied Products Industry, as 

follows: 

"' Sprocket Chain Subdivision' means the manufacture for sale 

of sprocket chains of malleable iron, steel and other metals for conveying, elevating, and the transmission of power of the types generally known as roller chains, rollerless bushing chains, block chains, 

malleable and other cast detachable, pintle, and roller chains, balance 

and leaf chains, bar link chains, steel detachable link chains, combination cast and bar link chains, drop forged and rivetless chains, 

draw bench and h~ul-up chains, taintor gate and bridge chains, and 

parts for such chains and sprockets for same, and includes all those 

engaged in such manufacture for sale; except that there shall not 

be included therein the manufacture for sale of chains for hand hoists 

and those generally known as round link or coil chains, nor machine 

finished chains, as defined in the definition of the Roller and Silent 

Ch~in Subdivision. The. manufacture of sprocket chain by farm 

e9uiprn.ent_manufacturers is excl-t~ded from the manufacturing provisions of this Code but the marketing and trade provisions shall apply 

to all sprocket chain sold by such farm implement manufacturers for 

all purposes other than for use on farm implements." 

(6) 
7 

"Code" m ans the od of Fair Competiti n for the Ma hinery 

and Allied Products Indu try, as approv cl by the Presid nt, March 

17th, 1934, and as from tim to time am ml l. 

"Person " m ans a natural per on, a p. rtn r hip, a rporation, 

an asso iation, a trust, a tru tee, a tru t e in bankrupt y, a rec iver, 

or other entity. 

"Employer" means any person engag d in thi Subdivision of 

the Industry, either on his own behalf or as an employer of labor. 

"Employee" means any one who is employe l in this Subdivision 

by any such employer. 

"Act " means Title I of the National Industrial Recovery Act. . " President " means the President of the United States. 

"Administrator" means the Administrator for Industrial Recovery. 

" Baise Code Authority " means the Code Authority for the Machinery and Allied Products Industry as constituted by the Code. 

"Code Authority" means the Code Authority constituted for this 

Subdivision or provided by the Code and by this Supplemental Code. 

"Group Code Authority" means the Code 'Authority :for any 

Group or product classification within this Subdivision, constituted 

under the authority of Article V of this Supplemental Code. 

ARTICLE III-EMPLOYMENT PROVISIONS 

The following Articles of the Code, viz : Article III, "Working 

Hours "; Article IV, " Wages "; and Article V, " General Labor 

Provisions", are hereby made a part of this Supplemental Code, 

with the same effect as if they were written into this Supplemental 

Code. 

The following Articles of the Code, viz : Article II, " Definitions"; Article VI, "Administration", to the extent that they shall 

be applicable to this Supplemental Code as such or as it may hereafter be administered as an autonomous Code; Article VIII, "Modifications and Termination"; and Article IX, "Withdrawal", are 

hereby made a part of this Supplemental Code with the same 

effect as if they were written into this Supplemental Code. 

ARTICLE V-AnMINISTRATION 

(a) During the period not to exceed sixty days, following the effective date of this Supplemental Code, the code committee of the 

Applicant shall constitute a temporary Code Authority. The Administrator, in his discretion, may appoint one additional member 

( without vote and without expen e to this Subdivision). 

This Subdivision having held an election for permanent Code 

Authority under the provi ions of the Code of Fair ompetition 

for the Iachinery and Allied Products Industry the Code \.uthority 

so elected shall constitute the fir t permanent Code Authority for 

this SubdiYi ion if this method of election meet with the approval 

of the A lministrator. If thi method of election doe not meet with 

the , ppro al of the Adininistrator then the provisions hereinbelow 

provided ..,hall a1 ply for the election of the fiLt permanent ode 

Authority. For lection after the fir t, the provi ion of thi Sup- plemental Code for election of a permanent Code Authority shall 

apply. 
8 

To permit representation of employers who are not members of 

Applicant, the latter ,shall, within sixty clays after this Supplemental Code becomes effective, set up a permanent Code Authority 

to succeed the temporary Code Authority to administer, supervise 

and facilitate the enforcement of this Supplemental Code. Such 

permanent Code Authority shall be elected at a meeting called for 

. this purpose to which all known employers in this Subdivision shall 

be invited, with the right to vote either in person or by proxy, or 

by mail. This permanent Code Authority shall consist of not le,ss 

than 3 and not more than 8 members, and in addition thereto, the 

representative of the Administrator as referred to in the paragraph 

above. Of the elective members of Code Authority, one member may 

be chosen in any fair manner approved by the Administrator, by 

the employers (if any) who are not members of the Applicant provided such representation shall be desired by such employers. Action 

by the Subdivision at any meeting for the transaction of business, 

adoption of procedural rules and regulations, subsequent election 

of Code Authority, and amendment of this Supplemental Code, shall 

be by vote of the employers in the Subdivision, present in person or 

by proxy, or voting by mail, wherein each such employer shall have 

one vote; provided, however, that on any question except the election of Code Authority, any such employer shall have the right to 

call for an additional vote and to have the same voted upon by each 

employer, weighted on the basis of one :vote for each $100,000.00 of 

sales within the Subdivision, made by such employer in the two preceding years, each such employer, however, being entitled to one vote, 

and in every such case action on the _question shall be by both such 

methods of voting. Members o.f the Code Authority so elected shall 

hold office for terms provided for in the procedural Rules and Regulations adopted by this Subdivision. 

(b) 1. It being found necessary in order to support the administration of this Supplemental Code and to maintain the standards 

of fair competition established by this Supplemental Code and to 

effectuate the policy of the Act, the Code Authority is authorized; 

5ubject to such rules and regulations as may be issued by the 

Administrator: 

a. To incur such reasonable obligations as are necessary and proper 

for the foregoing purposes 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 the Supple.mental Code; 

b. 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 Subdivision. 

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

by the Administrator, to determine and obtain equitable contributions as above set forth by all employers of the Subdivision, and to 

that end, if necessary, to institute legal proceedings therefor in its 

own name. 

2. Each employer of the Subdivision shall pay his or its equitable 

contribution to the expenses of the maintenance of the Code Authority, determined as hereinabove provided, and subject to rules and 
9 

regulations fertaining thereto issu d by th A lmini trat r. nly 

empl ycrs o the Sub livision omplyin · with th ~ uppl n ntal de 

and contributin · to the expenses of its administration as h r inab ve 

provid d shall be entitled to participate in the sole -tion of m mb 'rs 

o:f the Code Authority or to receive the benefits of any of it voluntary activities or to make use of any emblem or in ignia of the 

National Recov ry Administration. 

3. The Code Authority shall neither in ur nor pay any obligation 

in excess of the amount thereof as estimated in its approved budget, 

except upon approval of the Administrator; and no sub equent 

budget shall contain any deficiency item for expenditures in excess 

of prior budgets estin1ates except those which the Administrator 

shall have so approved. 

( c) For the purpose of administering and facilitating the enforce- ment of the provisions of this Supplemental Code, Code Authority, 

by its duly authorized representatives (who shall not be in the 

employ of any employer affected by this Supplemental Co<le), shall 

have access to any and all statistics, data and information, filed in 

accordance with the provisions of the Code and this Supplemental 

Code. All individual statistics, data and information of individual 

employers as filed in accordance with the provisions of the Code and 

this Supplemental Code shall be kept confidential, except with the 

consent o:f such employer pertaining to his own statistics, and providing that nothing herein shall prevent publication of general 

summaries of such statistics of this Subdivision. 

( d) For administrative purposes, employers may be grouped by 

Code Authority to bring into working association employers having 

common interests and problems that are not common to all employ- ers in this Subdivision. Each such group shall designate from 

among its members a Group Code Authority, and may adopt such 

rules for the conduct of the business of the Group as are not inconsistent with the provisions of this Supplemental Code and the 

Code; provided, however, that provisions of this Article V shall 

control the making of all examinations or audits and the use to be 

made of information so obtained with respect to any employer. ( e) Except as otherwise provided in this Supplemental Code, 

a Group Code Authority shall have power to hear all matters pertaining to the provisions of this Supplemental Code having relation 

to the employers in said Group or any of them, and to that end may, 

to the extent permitted by the Act, investigate and ascertain the facts 

through such examination or audit as such Group Code Authority 

may deem nee ssary. Provided, however, that nothing in this 

Article shall preclude the Code Authority from taking action, to the 

extent permitted by the Act, either upon complaint of an employer, 

or upon its own initiative, with respect to any matter. 

Any d ci ion of the Group Code Authority shall be final unle s 

appeal is taken to the Code Authority or such decision involves 

matters requiring to b reported to the Code Authorit) in ,Yl1ich 

case pertinent information, papers and data in the possession of the 

Group Code Authori y shall be turned over by it to the Co le Authorit3, and the Code Authority shall pa s on the merit of the a e an 1 

make final decisi n or report thereon to the Basic Code \.uthority 

or the Administrator. 
10 

( f) The Code Authority or a Group Code Authority may not, 

within its powers, on the affirmative vote of not less than threefourths of its members entitled to vote; provided that any proposal 

receiving less than the three-fourths majority vote shall be subn1itted upon the request of any member of the Code Authority or 

Group Code Authority having jurisdiction to a vote of all employers 

cooperating under this Supplemental Code or the cooperating employers comprising the Group affected, and the Code Authority or 

Group Code Authority having jurisdiction shall act as determined 

by the majority of the number of votes so cast. 

(g) If formal complaint be made to Code Authority that provisions of this Supplemental Code have been violated by any employer, the Code Authority shall investigate the facts, and to that 

end may, to the extent permitted by the Act, cause such examination 

to be made as it may deem necessary, subject to the limitations contained in Section ( c) of this Article V. 

(h) If any employer in this Subdivision is also an emJ?loyer in 

any other Subdivision of the Industry, or in any other rndustry, 

the provisions of this Supplemental Code, and the jurisdiction o:f 

the Code Authority hereunder, shall apply to and affect only that 

part of his business and product which is included in this 

Subdivision. 

(i) An appeal from any action taken, or any rule or regulation 

established affecting the right of any employer or employee in this 

Subdivision, may be taken to the Basic Code Authority and thereafter to the Administrator. 

(j) Nothing contained in this Supplemental Code shall constitute 

the members of the Code Authority or any Group Code Authority 

as partners for any purpose. Nor shall any member of the Code 

Authority or of any Group Code Authority be or become liable in 

any manner to anyone :for any act of any other member, officer, agent, 

or employee of the Code Authority or any Group Code Authority. 

Nor shall any member of the Code Authority or Group Code Authority, exercising reasonable diligence in the conduct of his duties hereunder, be or become liable to anyone for any action or omission to 

act under this Supplemental Code and the Code, except for his own 

wilful misfeasance or non-feasance. 

ARTICLE VI-AccouNTING AND CosTINo 

The Code Authority shall cause to be formulated an accountin<Y 

system and methods of cost finding and/ or estimating capable of 

use by all employers of the Subdivision. After such system and 

methods have been :formulated, :full details concerning them shall 

be made available to aU employers. Thereafter all employers shall 

determine and/ or estimate costs in accordance with the principles 

of such methods. 

ARTICLE VII-SELLING BELOw REASON ABLE CosT 

SECTION 1. When the Code Authority determines that an emergency exists in this Subdivision and that the cause thereof is destructive price-cutting such as to render ineffective or seriously endanger 
11 

th maint nance of th provi ions of this Snpplcm ntal Code, the 

od Authority may ans t b d t rmincd the low st r asonable 

o t of the procln t of thi , nb liYi. ion, u h d t rmination to be 

ubj t to u h noti' and h aring as th A lministrat r may r quire. 

Tho A lministrat r may appr v disappr v , r modify the det rmination. Th r aft r, durincr the period of the m rg ncy, it hall 

be an unfair trade practi e for any member of the Subdivi ion to 

ell or offer to sell any produ ts of th Subdivision f r which the 

lowest r asonable ost ha been determine l at such prices or upon 

su h terms or conditions of sale that th buy r will pay l s therefor 

than the lowe t rea nable cost of such products. ,vhen it appears that conditions have changed, the Code Authority, upon its own initiative or upon the request of any interested 

party, shall cause the determination to be reviewed. 

SECTION 2. The foregoing Section ( 1) shall not apply to (a) 

dropped lines, or (b) seconds, or ( c) inventories which must be converted into cash to meet emergency needs, all of which may be disposed of by any employer at any price and on any terms or conditions, but only if such employer, not less than two weeks before such 

proposed disposal, has filed with Code Authority, a statement in 

writing settin~ forth the facts of, and reasons for, such proposed 

disposal and the price and terms and conditions of sale, and Code 

Authority has not, ( with the approval of the Administrator), before 

the termination of such two week period, in writing, disapproved the 

proposed disposal. 

Notice of such disposal, if not disapproved, shall be sent in1.mediately to all employers manufacturing products of equivalent design, character, quality or specifications, who may sell such J?roducts 

at prices and on terms and conditions as favorable as those stipulated 

in the proposed disposal, when meeting the competition of such proposed disposal. 

SECTION 3. The foregoing Section ( 1) shall not apply to a sale 

made in order to meet competition on products manufactured outside the United States. For such disposal, any employer may sell, 

at prices and on terms and conditions as favorable as those of the 

competing foreign product, but only if he has first reported to the 

Code Authority his intention so to sell, and the facts as to the competition which justifies such action. 

ARTICLE VIII-METHODS OF PRICING AND TERMS OF p AYMENT 

(a) If and when the Code Authority determines that in any 

branch or group of the Subdivision, it has been the generally recognized practice of at least two-thirds of such branch or group of 

the Subdivision, to sell a specified product on the basis of net price 

lists or price lists with discount sheets and terms of sale and payment, each manufacturer of such product, shall, within ten days after 

notice of such determination, file with the Pr<?per Group Code Authority ( or with Code Authority if there is no Group Code Authority 

having jurisdiction), net price lists or price li,sts with discount sheets 

and terms of sale and payment individually prepared by him and 

the Group Code Authority shall immediately send copies thereof to 

the employers of this Subdivision cooperating under this Code, as 
12 

described in Article V, and who manufacture like products. Revisions of the price lists and/ or discount sheets and/ or terms of sale 

and payment may be filed, in like manner, from time to time thereafter with the proper Group Code Authority or Code Authority by 

any manufacturer of such J?roducts, each such revision to become 

operative upon the date specified therein, but such revised price lists 

and/ or discount sheets and/or terms of sale and payment shall be 

filed with the proper Group Code Authority or Code Authority ten 

days in advance of the operative date. Copies thereof with notice 

of the operative date specified, shall immediately be sent to all manufacturers of such product, cooperating under this Supplemental 

Code, as described in Article V, any of whom may file, if he so desires, revisions of his price lists and/or discount sheet,s and/ or terms 

of sale and payment which shall become effective upon the date when 

the revised price lists and/ or discount sheets and/or terms of ,sale 

and payment first filed shall go into effect. 

All price lists and/or discount sheets and/or terms of sale and 

payment so filed shall be published on the operative date by making 

available to each consumer or resale buyer the price lists and/or 

discount sheets and/ or terms of sale and payment applicable respectively to such buyers trade classification.1 

(b) If and when a Group Code Authority or Code Authority shall 

determine that in any branch or grou:p of the Subdivision not now 

selling its products on the basis of price lists, with or without discount sheets, with t&ms of sale and payment, the distribution or 

marketing conditions in said branch or group are the same as, or 

similar to, the distribution or marketing conditions in a branch 

or group of th~ Subdivisi0'Il where the use of price lists, with or 

without discount sheets, is well recognized, and that a system of 

selling on net price lists or price lists with discount sheets and/or 

terms of sale and payment, should be put into e.ffect in such branch 

or group, then each manufacturer of the product or products of such 

branch or group, shall within twenty days after notice of such 

determination, file with Group Code Authority or Code Authority 

net price lists, or price lists and/or discount sheets and/or terms of 

sale and payment, and such price lists and/ or discount sheets and/or 

terms of sale and payment may be thereafter revised in the manner 

hereinabove provided, and copies o:f such methods of pricing and 

revisions thereof shall be sent in accordance with paragraph (a) o:f 

this Article; provided that Group Code Authority or Code Authority 

shall make no determination to place any product of the Subdivision 

(not now on a price list basis) on a price list basis as provided in 

this Paragraph (b) of Article VIII, unless two thirds of the 

employers cooperating under this Supplemental Code, as described 

in Article V, who are at that time engaged in manufacturing such 

product, shall affirmatively consent that such determination be made. 

( c) No employer shall sell directly or indirectly any product of 

this Subdivision at prices or discounts different than those provided 

in his own current price lists and/ or discount sheets and/ or terms 

of sale and payment or on more favorable terms of sale and payment 

as covered by the provisions of this Article VIII and proceedings 

1 See paragraph 2 of order approving this Code. 
13 

thereunder unl s su h emRloyer is m eting compctitiv prices as 

provided in A'rticle VII, S ctions 2 and 3, of this Supplemental 

Code. 

ARTICLE I X-TRADE PRACTICES 

Each of the following acts an l practices is deemed to be inimical 

to the best interests of the Subdivision and of th public, and each is 

therefore, hereby declared to be and to constitute an unfair method 

of competition, viz : 

1. No employer shall secretly offer or make any payment or allowance of a rebate, refund, commission, credit, unearned discount or 

excess allowance, whether in the form of money or otherwise, nor 

shall an employer secretly offer or extend to any customer any special 

service or privilege not extended to all customers of the same class, 

for the purpose of influencing a sale. 

2. No employer shall give, permit to be given, or 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, without the knowledge of 

such employer, principal or party. This 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 hereinabove defined. 

3. No employer shall publish advertising (whether printed, radio, 

display or of any other nature), which is misleading or inaccurate 

in any material particular, nor shall any employer in any way misrepresent any goods ( including but without limitation its use, trademark, grade, quality, quantity, origin, size, substance, character, 

nature, finish, material, content or preparation) or credit terms, 

values, policies, services, or the nature or form of the business conducted. 

4. No employer shall defame a competitor by falsely imputing to 

him dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representation, or by f alsely 

disparaging the grade or quality of his goods. 

5. No employer shall engage in destructive price cutting. 

6. No employer shall cooperate in a violation of the provisions 

of this Supplemental Code or of the Code, or amendments thereto, 

either directly or indirectly through a distributor or agent. 

7. No employer shall publish or circulate unjustified or unwarranted threats of legal proceedings which tend to or have the effect 

of harassing competitors or intimidating their customers. 

8. E ach employer shall require compliance with the provisions 

of this Supplemental Code, and of the Code, by the agents of such 

employer, whether such agents are directly employed on salary or 

are employed on a commi sion basis. 

ARTICLE X-SALES FOR EXPORT 

The provisions of this Supplmenetal Code concernino· pricing and 

marketing are not to apply to direct export sales of any product, or 

to any product destined ultimately for export. The term ' export " 
.. 

1111111111m1l\1~1~11ill\~11 ll~11 \I~ [1~1 \11~1111111111 3 1262 08855 5734 

14 

shall include all shipments to all places without the several states of 

the United States and the District of Columbia; provided, however, 

that no shipment to any territory or possession of the United States 

shall be considered an export when any employer is engaged in the 

industry in such territory or p(?ssession. 

ARTICLE XI-MODIFICATIONS 

, (a) As provided by Section 10 (b) of the Act, the President may 

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

or regulation issued under Title I of the Act. · (b) As study of the needs of the Subdivision is continued after 

the effective date, amendments, additions, or revisions to this Supplemental Code may be proposed by Code Authority, which upon being 

assented to in writing by two-thirds vote of members cooperating 

under this Supplemental Code shall be in full force and effect from 

and after approval thereof by the Administrator. 

ARTICLE XII- MONOPOLIES 

This Supplemental Code is not designed to permit monopoly, and 

shall not be so construed or applied as to oppress or eliminate small 

enterprises or discriminate against them and is designed to effectuate 

the policy of the Act. 

ARTICLE XIII-EFFECTIVE DATE 

This Supplemental Code shall become effective and binding on all 

employers of the Subdivision on the eleventh day after its approval 

by the President. 

Approved Code No. 347-Supplement No. 84. 

Registry No. 1107-04. 

0