Approved Code No. 110-Arnendrnent No. 1 Registry No. 699-03 

NATIONAL RECOVERY ADMINISTRATION 

AMENDMENT TO 

CODE OF FAIR COMPETITION 

FOR THE 

HARDWOOD DISTILLATION 

INDUSTRY 

AS APPROVED ON MARCH 21, 1934 

WE DO OUR PART 

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• 
Approved Code No. 110-Amendment No. 1 

AMENDMENT TO 

CODE OF FAIR COMPETITION 

FOR THE 

HARDWOOD DISTILLATION INDUSTRY 

As Approved on March 21, 1934 

ORDER 

APPROVING AMENDMENT OF Co DE OF FAIR COMPETITION FOR THE 

HARDWOOD DISTILLATION 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 approval of amendment 

to a Code of Fair Competition for the Hardwood Distillation Industry, and hearing having been duly held thereon and the annexed 

report on said amendment, 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 amendment and the Code as 

constituted after being amended comply 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 amendment be 

and it is hereby approved, and that the previous approval of said 

Code is hereby modified to include an approval of said Code in its 

entirety as amended. 

Approval recommended: 

GEO. L. BERRY, 

HUGHS. JOHNSON, 

Administrator for Industrial Recovery. 

Division Administrator. 

w ASHINGTON, D.C., 

March 21, 1934. 

47772°-425-107-34 (1) 
REPORT TO THE PRESIDENT 

The PRESIDENT, 

The White House. 

SIR: This is a report on the A1nendment to Articie IX, Section 1, 

of the Code of Fair Competition for the Hardwood Distillation Industry, and on the hearing conducted thereon in Washington, D .C.i 

on February 9, 1934, in accordance with the provisions of Title I ot 

the National Industrial Recovery Act. 

GENERAL STATEMENT 

The Hardwood Distillation Industry, through its Code Authority, 

has availed itself of the provision in Article VI, Section C, Operative 

Provisions, of the Code of Fair Competition for the Hardwood Distillation Industry, approved by you on November 10, 1933, which 

reads as follows: 

"The Code Authority shall study the functioning and operation of 

the industry under this Code, with a view to making recommendations to the Administrator which it deems desirable for modification 

or addition to the trade practice regulations and rules and regulations 

contained in this Code." 

OBJECT AND ECONOMIC EFFECT OF THE AMENDMENT 

Section 1 of Article IX and the preceding paragraph in the approved 

Code provide as follows: " The Code Authority shall study trade practice rules and the O:(>eration thereof, and shall make any recommendations from time to time 

to the Administrator which it deen1s desirable for modification or 

addition thereto, which, upon the approval of the President, shall 

become a part of this Code and have full force and effect as provisions 

hrreof. The following trade practices are hereby prohibited: 

"1. For any member of the Industry to sell the products of the 

Industry below his individual cost of production of such products as 

determined in accordance with the uniform system of accounting referred to in Article VIII, after it has been approved by the Administrator." 

The amendment to this Section consists principally of adding the 

following to Section 1 in the approved Code: 

"Except to meet price competition either within or outside of the 

Hard wood Distillation Industry and in such case, each member of the 

Industry shall notify the Code Authority of the fact and his reasons 

therefor." 

This additional provision is necessary in this Industry because two 

of the three principal products of the Industry, namely, acetic acid 

(or acetate of lime) and methanol (wood alcohol), are produced 

synthetically by chemical manufacturers who are not covered by the 

definition of the Hardwood Distillation Industry Code. It is generally believed that the synthetic producers of these two products have 

lower cost of production than members of the Hardwood Distillation 

Industry an~ to some extent at least, the price which members of the 

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Hardwood Distillation Industry can realize on these products is determined by the price set by synthetic producers. It is, therefore, 

conceivible that members of the Hardwood Distillation Industry 

would have to violate the provision in Section 1 of Article IX in order 

to sell these two products of the Industry in competition with prices 

which may be set by synthetic producers. This amendment is in accord with the policy of the Administration 

as stated subsequent to the time when the Hardwood Distillation 

Industry Code was sent forward for approval. In general, without 

such a provision and ignoring for the moment, competition of synthetic producers in the two above mentioned products, if a member 

of the Industry could not sell below his cost to meet the competition 

of a more favorably situated or equipped plant, it would have the 

effect of allowing the more favorably situated or equipped plant to 

get more and more business and further · reduce their costs. The 

tendency would be to concentrate all business in the hands of the most 

favorably situated or equipped plants. This consideration applies 

to the third product of the Industry, namely, charcoal, as well as to 

the above mentioned products which are in direct competition with 

synthetic producers. 

I find that: 

(a) The amendment to said Code and the Code as amended are 

well designed to promote the policies and purposes of Title I of the 

National Industrial Recovery Act including the 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 trade groups, by inducing and maintaining 

united action of labor and management under adequate governmental sanction and supervision, by eliminating unfair competitive 

practices, by promoting the fullest possible utilization of the present 

productive capacity of the industries, by avoiding undue restrictions 

of production (except as may be temporarily required), by increasing 

the consumption of industrial and agricultural products through 

increasing purchasing power, by reducing and relieving unemployment, by improving standards of labor, and by otherwise rehabilitating industry. 

(b) The Code as amended 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. 

(c) The Code empowers the Code Authority to present the aforesaid amendment on behalf of the Industry as a whole. 

(d) The amendment and the Code as amended are not designed to 

and will not permit monopolies or monopolistic practices. 

(e) The amendment and the Code as amended are 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 

amendment. 

Respectfully, 

MARCH 21, 1934. 

lluGH S. JOHNSON, 

Administrator. 
AMENDMENT TO CODE OF FAIR COMPETITION FOR THE 

HARDWOOD DISTILLATION INDUSTRY 

ARTICLE IX-SECTION 1 

It is proposed to make this section read as follows: 

"For any member of the Industry to sell the products of the 

Industry at prices below the cost to the individual producer as determined by the methods prescribed by the Code Authority, with the 

approval of the Administrator, except to meet price competition 

either within or outside of the Hardwood Distillation Industry and 

in such case each member of the Industry shall notify the Code 

Authority of the fact and his reasons therefor. 

Approved Code No. 110. Amendment No. 1. 

Registry No. 699-03. 

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