Approved Code No. 355 Registry No. 214-05 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR THE 

RUG CHEMICAL PROCESSING 

TRADE 

AS APPROVED ON MARCH 23, 1934 

WE DO OUR PART 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON: 1934 

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Approved Code No. 355 

CODE OF FAIR COMPETITION 

FOR THE 

RUG CHEMICAJJ PROCESSING TRADE 

As Approved on March 23, 1934 

ORDER 

CoDE OF FAIR CoMPETITION FOR THE RuG CHEMICAL PROCESSING TRADE 

An application having been duly made pursuant to and in full 

compliance with the provi ions of Title I of the N atio.nal Industrial 

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

Fair Competition for the Rug Chenlical Processing Trade, and 

hearings having been duly held thereon and the annexed report on 

said Code. containing finding with respect thereto, having been made 

and directed to the President: 

NO'V~ THEREFORE, on behalf of the Pre ident of the United 

States, I Hugh S. John on, Administrator for Industrial Recovery, pursuant to authority yested in me by Executive Orders 

of the Pre ident, including Executive Order No. 6543-A, dated 

December 30 1 1933, and otherwi e; do hereby incorporate by reference 

aid annexed report and do find that said Code complies in all 

re pects with the pertinent provisions 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. 

Approval recommended: 

A. D. 'v HITEsmE, 

HUGH s. JOHNSON' 

Ad1ninistratm· of I ndustrial Recovery. 

Division Administrator. 

WA HINGTON, D.C., 

111 arch ~3, 1934. 

48~00°----425-129----34 (365) 
REPORT TO THE PRESIDENT 

The PRE~IDENT, 

The White House. 

Sm: The Hearing on the Code of Fair Competition for the Rug 

Chemical Processing Trade was held in the Ambassador Hotel, 

Washington, D.C., on January 4, 1934. The Code, which is attached, wa presented by duly qualified and authorized representatives of the trade, complying with statutory requirements, said to 

repre ent 100 percent in number and volume of the trade. 

In accordance with the custoinary procedure, everyone present 

who had filed a request for an appearance was freely heard in public, 

and all statutory and regulatory requirement were complied with. 

The provisions of this Code have been approved by the Industrial Advisory Board, the Consumers' Advi ory Board, the Labor 

Advi ory Board, the Legal Division, and the Division of E conomic 

Re earch and Planning. 

CHARACTERISTICS OF THE TRADE 

A large nnmber of antique and semi-antique Oriental rugs have 

entered into this country during the past forty or more years, but 

the source of upply from the Near East became exhausted in a relatively short time. An increasing demand for reproductions stimulated the weaving of new rugs especially for the American market. 

However, new Oriental rugs are not readily marketable in this country, owing to their crudeness in texture and harshness in color. This 

led to the formation of a line of trade peculiarly adapted to processing rug . It might be said that the processes used by the members 

of this trade are the results obtained after a number of years of 

experimentation. 

This trade is a highly integrated one, in which prosperity is df'-

pendent upon the quantity of Oriental rug imports and in which 

service charges are determined by personal contacts and bargaining 

of the members of this trade with the importers. Perhaps, more than 

90 percent of Oriental rugs imported in this country are turned over 

to this trade. These rugs pass through a chemical mercerization 

process which produces a lustre or sheen over the original har h 

woven pile surface. After this process, some rugs are hand colored 

in order to reduce the vivid colors woven in them. The application 

of each color requires a separate washing and drying. vVhen necessary, the rugs are sheared, and finally the fringes are trimmed and 

tinted. It takes approximately three weeks to complete this work. 

As this work is of a highly specialized nature, requiring knowledae not commonly gained in this country, successful operation in 

the business has been limited to nine firms, of which eight are located in the metropolitan area of New York City and one in Nutley, 

New Jersey, not far away. 

(366) 
367 

LABOR PROVI IONS 

On the ba is of figures ubmitted by the trade, it i estimated that 

there wer approximately 1,300 employee in the Rug Chemical 

Proces ing Trade in 1929, an l that employment decline l about 60 

percent behYeen 1929 and 1933. 

Hour of employment are limit <.1 to 40 hour in any one week, 

with the following exceptions: maintenan e employee shall be permitted to work 48 hours in any one week and watchmen are permitted 56 hours in any one week; executives, foremen, and superintendent are allowed unlimited hours. During a peak period not 

to exceed more than 8 weeks in the Spring and not more than 12 

weeks in the Autumn, maintenance employees may be permitted to 

work 54 hours in any one week and other employee may be permitted to work 48 hours in any one week, provided that time and 

one third ( 11/3 ) shall be paid for hour '':or ked in exce of the 

maximum hours provided in the Code. 

The Code provides minimum wages for accounting, clerical and 

office employees at the rate of $15.00 a week in cities of over 500 000 

population; $14.50 a week in any city between 250,000 and 500,000 

population; and not less than $14.00 a week in any place of les than 

250,000 population. No other employee shall be paid at less than 

the rate of 30 cents an hour. However, learners, office boys and 

messenger may be paid 80 percent of the prescribed minimum rate 

of wage. 

TRADE PRACTICES 

Provisions have been incorporated in the Code to eliminate unfair 

practices which have developed in the trade to the detriment of all 

interests. The trade has sought to eradicate such praotices hy 

making them violations of the Code. 

FINDINGS 

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

having found as herein et forth and on the ba i of all the proceedings in this matter : 

I find that: 

(a) Said Code is well designed to promote the policie and purposes of Title I of the National Industrial Recovery Act, including 

removal of ob tructions to the free flow of inter tate 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 maintaining united action of labor and 

managem nt under adequate governmental anction and supen ision, by eliminating unfair competitive practice, by promoting the 

fulle t po sible utilization of the pres nt prodncti n apacit of 

indu trie , by avoiding undue re triction of production ( :s:c pt as 

may e temporarily required) by increa ing the con umption of 

industrial and agricultural products through increa ing purcha ing 

power, by reducing and relieving unemployment, by impr ving 

tandards of labor, and by otherwi e rehabilitating inclu try. 
368 

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

and is not classified by me as a major industry. 

(c) The Code as approved complies in all respects with the pertinent provi ions of aid Title of said Act, includinrr without limitHtion Sub ·ection (a) of Section 3, Subse tion (a) of Section 7, and 

Subsection (b) of Section 10 thereof; and that the applicant 

association is an industrial a sociation truly representative of the 

afore aid trade; and that said a ociation imposes no inequitable 

re trictions on admission to membership therein. 

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

or monopoli tic practices. 

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

small enterpri es and will not operate to di ·criminate against them. 

(f) Tho e engaged in other steps of the economic pro"es have 

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

Code. . For these reasons, this Code has been approved. 

Respectfully, 

H uGHS. JoHNsox. 

Administ1;ator. 

MARCH 23, 1934. 
CODE OF FAIR COMPETITION FOR THE RUG CHEMICAL 

PROCESSING TRADE 

ARTICLE I-PURPOSES 

To effectuate the policies of Title I of the National Industrial 

Recovery Act, the following provisions are established as a Code of 

Fair Competition for the Rug Chemical Processing Trade, and shall 

be the standard of fair competition for such trade and shall be 

binding upon every member thereof. 

ARTICLE II-DEFINITIONS 

The term "Rug Chem.ical Processing Trade" as used herein 

includes mercerizing, recoloring and finishing domestic and imported 

rugs and carpets. 

The term "employee " as used herein includes any person engaged 

in any phase of the trade in any capacity receiving compensation 

for his services, irrespective of the nature or method of payment of 

such compensation, except a member of the trade. 

The term "employer" as used herein includes anyone by whom 

any such employee is compensated or employed. 

The term "executive" as used herein includes any employee solely 

responsible for the management of a division of the trade or of a 

recognized subdivision. 

The term "member of the trade" includes anyone engaged in the 

trade as above defined, either as an employer or on his own behalf. 

The term "mercerization only" as used herein means the application of a chemical mercerization process to rugs, which acts upon the 

fibre and produces a sheen or lustre. 

The term " mercerization and color work " as used herein means 

the application of a chemical mercerization process to rugs, which 

acts upon the fibre and produces a sheen or lustre, and the recoloring 

of the individual patterns. 

The term ' finishing " as used herein means the shearing of surface and the repairing of fringes on rugs to improve their appearance incidental to mercerizing and coloring. 

The term "trade area" as used herein shall mean any area 

designated as a trade area by the Code Authority and approved 

by the Administrator. 

The term " association " as used herein means the Rug Chemical 

Processing Association-a Trade Association. 

The t rms "President", "Act", and "Admini trator " as u ed 

herein hall mean respectively the President of the Unit d States, 

Title I of theN ational Industrial Recovery Act, and the Admini trator for Industrial Recovery. 

Population for the purpo es of this Code shall be determin d by 

the 1930 Federal Cen us. 

(369) 
370 

ARTICLE III-HouRs 

1. Except as hereinafter expressly stipulated otherwise-

(a) No maintenance employee shall be permitted to work in excess 

of forty-eight (48) hours in any one (1) week. 

(b) No other employee shall be permitted to work in excess of 

forty ( 40) hours in any one ( 1) week. 

2. During a peak period not to exceed more than eight (8) weeks 

in the Spring and not more than twelve (12) weeks in the Autumn, 

maintenance employ es may be permitted to work fifty-four (54) 

hours in any one ( 1) week and other employees may be permitted 

to work forty-eight ( 48) hours in any one (1) week, providing that 

time and one third (11j3 ) shall be paid for hours worked in excess 

of the maximum hours provided in Section 1 (a) and (b) . 3. The maximum hour fixed in this Article ·hall not apply to: 

(a) Watchmen who may not be permitted to \\Ork more than 

fifty six (56) hours in any one week and in no case may they work 

more than six (6) days in any seven (7) day period. 

(b) Executives, foremen and superintendents receiving a salary of 

thirty-five dollars ($35.00) or more a week. 

(c) Employees on emergency maintenance or emergency repair 

work involving breakdowns or protection of life or property, but in 

any such cases at least one and one third (11j3 ) tin1.es the normal 

rate shall be paid for hours worked in excess of the maximum hours 

provided in Section 1 (a) and (b). 

4. No employer shall knowingly permit any employee to work for 

any time which, when totaled with that already performed with another employer or employers, exceeds the maximum permitted herein. 

5. No employee shall be permitted to work in excess of six (6) 

days in any seven (7) day period. 

ARTICLE IV-WAGES 

1. No employee except as hereinafter specified shall be paid at less 

than the rate of thirty cents ($.30) an hour. 

2. No accounting, clerical or office employees shall be paid at less 

than the rate of fifteen dollars ($15.00) a week in any city of over 

500,000 population, or in the trade area of such city; nor less than 

fourteen dollars and fifty cents ($14.50) a week in any city between 

250,000 and 500,000 population, or in the trade area of such city; nor 

less than fourteen dollars ($14.00) a week in any place of less than 

250,000 population. 

3. The wages and rates of pay of employees receiving more than 

the minimum wages and rates hereinabove prescribed shall be readjusted so as to preserve equitable differentials. All such adjustments made since June 16, 1933, shall be reported to the Code Authority within sixty (60) days of the effective date of the Code. 

4. No member of the trade, by reason of the adoption of this Code, 

shall reduce any employee's total weekly wage or that wage actu::tlly 

received on June 16, 1933, whichever shall be the greater, whether 

Lased on an hourly rate or a weekly wage, notwithstanding the fact 

that the hours of work of such employees may be reduced. 

5. This Article e tablishes a minimum rate of pay, regardless of 

whether an employee is compensated on a time-rate, piecework, or 

other basis.. 
371 

6. The minimum wage provided for in Section 1 of this Article 

shall not apply to learners, office boys, and messengers, provided 

that the minimum rate of compensation for these employees shall 

not be le s than eighty percent ( 80% ) of the minimum rates established in Section 1 of this Article, and the total number of persons 

so com pen ated shall not exceed ten percent (10%) of the total 

number of employees engaged by an employer. Learners shall not 

be employed as such for a period in excess of eight (8) weeks. 

ARTICLE V-GENERAL LABOR PROVISIONS 

1. No person under eventeen (17) years of age shall be employed 

in the trade. In any State an employer shall be deemed to have 

complied with this provision if he shall have on file a certificate or 

permit duly i..:sued by the authority in such State empowered to 

issue employment or age certificates or permits, showing that the 

employee is of the r equired age. 

2. Employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall 

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

labor, or their agents, in the designation of such representatives or 

in self-organization or in other concerted activities for the purpose 

of collective bargaining or other mutual aid or protection. 

3. 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. 

4. Employers shall comply with the maximum hours of labor, 

minimun1 rates of pay, and other conditions of employment approved or prescribed by the President. 

5. Every employer shall make reasonable provisions for the safety 

and health of his employees at the place and during the hours of 

their employment. Standards for safety and health shall be submitted by the Code Authority to the Administrator within six (6) 

months after the effective date of this Code. Upon approval by 

the Administrator such standards shall become operative as a part 

of this Code. 

6. vVithin each State this Code shall not supersede any laws of 

uch States imposing more stringent requirements on employers regulating the age of employees, wages, hours of work, or health, fire or 

general working conditions than under this Code. 

7. Employers shall not reclassify employees or duties of occupations performed by employees so as to defeat the purposes of the Act. 

8. Each employer shall post complete copies of this Code in conspicuous places accessible to employees. 

ARTICLE VI-ORGANIZATION, PoWERs AND DuTIES oF THE ConE 

AUTHORITY 

ORGANIZATION AND CONSTITUTION 

1. There shall forthwith be constituted a Code Authority consisting of: 

(a) Three (3) representatives of the trade or such other number 

as may be approv d from time to time by the Admini tratoi', to be 

selected as hereinafter provided. 
372 

(b) Such additional members, without vote, not to exceed three '(3) , a the Administrator may appoint to represent such groups or 

intere ts or such governmental agencies and for such periods as he 

may de ignate. 

2. The representatives of the trade shall be selected in the following manner : 

(a) Three (3) individuals shall be appointed by the Board of 

Directors of the Rug Chemical Processing Association. 

The foregoing individuals shall be appointed immediately after 

the approval of this Code, and shall hold office until December 31, 

1934, and thereafter until their successors are appointed and qualify. 

Their succes ors shall be appointed for a tenn of one (1) year on or 

before December 31st of each year. Appointments of successors 

(which may include reappointments of or'iginal individuals) shall be 

made, and vacancies for unexpired terms may be filled in the same 

manner and by the same agencies as the original appointments. 

(b) Additional representatives of the trade may be appointed by 

the Administrator or selected in a manner prescribed by him. 3. Each trade or industrial association directly or indirectly participating in the selection or activities of the Code Authority shall 

(1) impose no inequitable restrictions on membership, and (2) submit to the Administrator true copies of its articles of association, 

bylaw , regulations, and any am_endments when made thereto, together with such other information as to membership, organization, 

and activities as the administrator may deem nece sary to effectuate 

the purposes of the Act. 

4. In order that the Code Authority shall at all times be truly 

representative of the trade and in other respects comply with the 

provisions of the Act, the Administrator may prescribe such hearings 

as he may deem proper; and thereafter if he shall find that the 

Code Authority is not truly representative or does not in other 

respects comply with the provisions of the Act, may require an 

appropriate modification in the method of selection of the Code 

Authority. 

5. Members of the trade shall be entitled to participate in and 

share the benefits of the activities of the Code Authority by assenting to and complying with the requirements of this Code and sus-. 

taining their reasonable share of the expenses of its administration. 

Such reasonable share of the expenses of administration shall be 

determined by the Code Authority, subject to review by the Administrator, on the basis of volume of business and/ or such other factors 

as may be deemed equitable. 

6. Nothing contained in this Code shall constitute the members 

of the Code Authority partners for any purpose. Nor shall any 

member of the Code Authority be liable in any manner to anyone 

for any act of any other member, officer, agent or employee .of the 

Code Authority. Nor shall any member of the Code Authonty exercising reasonable diligence in the conduct of his duties hereunder, 

be liable to anyone for any action or omission to act under this 

Code, except for his own wilful misfeasance or non-feasance. 

7. If the Administrator shall. determine that any action of the 

Code Authority or any agency thereof may be unfair or unjust or 
373 

contrary to the public interest, the Admini trator may require that 

such action be u pended to afford an opportunity for inve tigation 

of th merit f uch action and further con ideration by such Code 

Authority or agency pending final action, which shall not be effective 

unle s the Administrator approves or unle s he shall fail to di - approve after thirty (30) days' notice to him of intention to proceed 

with uch action in its original or modified form. 

POWERS AND DUTIES 

8. The Code Authority shall have the following further powers 

and duties: 

(a) To in ure the execution of the provisions of this Code and to 

provide, subject to rules and regulations established by the Administrator, for the compliance of the trade with the provisions of the 

Act; provided, however, that this shall not be construed to deprive 

duly authorized governmental agencies of their power to enforce 

the provisions of this Code or of the Act. 

(b) To adopt by-laws and rules and regulations for its procedure 

and for the administration and enforcement of this Code, in accordance with the powers herein granted, and to submit the same to the 

Administrator for his approval together with true copies of any 

amendments or additions when made thereto, minutes of meetings 

when held, and such other information as to its activities as the 

Administrator may deem necessary to effect the purposes of the Act. 

(c) To obtain from members of the trade such information and 

reports as are required for the administration of the Code, and in 

addition to information required to be submitted to any Code Authority all or any of the persons subject to this Code shall furnish 

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

Federal and State Agencies as the Administrator may de ignate; 

nor shall anything in this Code relieve any person of existing obligations to furnish reports to governmental agencies. No individual 

report shall be disclo eel to any other member of the trade or any 

other party except to such governmental agencies as may be directed 

by the Administrator. 

(d) To use such trade associations and other agencie as it deems 

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

herein, provided that nothing herein shall relieve the Code Authority of its duties or re ponsibilities 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 appoint a trade practice committee whi ·h shall meet with 

the trade practice committees appointed under such other odes as 

may be related to th trade for the purpo e of formulating fair 

trade practices to govern the relationships between employers und r 

thi · ode and under such others to the end that such fair trade 

practice may be proposed to th Admini trator as amendm nts to 

thi, Code and u h oth r codes. 

(f) To secure from member of the trad a . nting to the Code 

an equitable and pro~)ortionate paym nt of the rea onable expen es 

of maintaining the Cod Authority and it a tiviti:es. 
374 

(g) To cooperate with the Adrnini trator in regulating the use 

of any N.R.A. insignia solely by those members of the trade who 

have a ented to, and are complying with, this Code. 

(h) To recommend to the Admini trator any action or mea ures 

deemed advisable, including further fair trade practice provisions 

to o·overn member · of the trade in their relations with each other or 

with other trade or industries, measures for industrial planning, 

and stabilization of employment; and including modifications of this 

Code which ·hall become effective as part hereof upon approval by 

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

(i) The Code Authority shall cause to be formulated an accounting system and methods of cost finding and/or estimating capable 

of use by all members of the trade. After such system and methods 

have been formulated, full details concerning them shall be made 

available to all members. Thereafter all members shall determine 

and/ or estimate costs in accordance with the principles of such methods. The Code Authority shall also devise and establish, subject to 

the approval of the Administrator, a uniform invoice and receipt 

adaptable to the needs of the trade. 

ARTICLE VII-OPEN PRICE DATA 

1. Each member of the trade shall file with the Code Authority 

and publish to the trade lists of his prices and also any revision of 

prices, which shall be immediately forwarded to all members of the 

trade. If any member of the trade desires to revise any of his prices 

he shall file with the Code Authority any such revision, which shall 

become effective immediately. Any such revision shall be forwarded 

immediately to all members of the trade, who, thereupon, may file 

any revision, which shall become effective immediately. 

2. No member of the trade shall sell any service for less than his 

published list prices, except as qualified by Article VIII, Section 12. 

ARTICLE VIII-TRADE PRACTICES 

The following practices constitute unfair methods of competition 

for members of the trade and are prohibited: 

1. Using, publishing, or broadcasting any untrue, deceptive, or 

misleading representation, statement, or illustration in connection 

with the service rendered by the trade. 

2. The defamation of competitors by falsely imputing to them 

dishonorable conduct, questionable credit standing, inability to perform contracts or by other false representations or by the false disparagement of the quality of their service. 

3. Giving, permitting to be given, or directly offering 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 
375 

advertising except so far as such articles are actually used for commercial bribery as herein defined. 

4. Inducing or attempting to induce the breach of a contract between a competitor and his customer, or interfering with or obstructing the performance of any such contractual duties or services. 

5. Securing confidential information concerning the business of 

a competitor by a false or misleading statement or representation, 

by bribery, or by any other unfair method. 

6. The secret payment or allowance of rebates, refunds, commissions, credits, or unearned discounts, whether in the form of money 

or otherwi e, or the secret extension to certain customers of special 

services or privileges not extended to all customers on like conditions 

and terms. 

7. In~entionally short measunng merchandise delivered for 

processmg. 

8. Purcha .ing rugs from any customer under a claim that they 

are damaged unless the rugs are actually damaged. 

9. Quoting terms other than those contained in the uniform 

invoice or receipt devised by the Code Authority and approved by 

the Administrator or postdating bills for mercerization only or mercerization and recolor work. 

10. Purchasing merchandise from a customer, or advancing money 

or extending credit to a customer or prospective customer for the 

payment of import duties, or financing a customer or prospective 

cu tomer to unfairly influence such customer for the purpo e of securing and/ or obtaining his business. 

11. Labeling and/ or charging for a rug other than by the name 

recognized in the trade or misrepresenting the grade of any rug 

as other than the grade recognized in the trade. 

12. Rendering any service at a price below the cost of such service 

determined in accordance with the cost accounting plan devised by 

the Code Authority and approved by the Administrator, provided, 

however, that any member may meet the price of a competitor that 

is not in violation of this Code. 

ARTICLE IX-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 National Industrial 

Recovery Act, from time to time to cancel or modify any order 

approval, license, rule, or regulation issued under Title I of said 

Act and specifically, but without limitation, to the . right of the 

President to cancel or modify his approval of this Code or any condition imposed by him upon his approval thereof. 

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

may be modified on the basi of experience or changes in circumstances, such modifi ation to be ba ed upon application to the Administrator and such notice and hearing as he shall sp~cify, and 

to become eff ctive on approval of the Administrator. 
376 

ARTICLE X-MONOPOLIES 

No provision of this Code shall be so applied as to permit monopolies or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprise . 

ARTICLE XI-EFFECTIVE DATE 

This Code shall become effective on the first Monday after its 

approval by the Administrator. 

ApproYec1 Code No. 355. 

Registry No. 214--05. 

0 

UNIVERSITY OF FLORIDA 

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