IS Approved Code No. 105 — Supplement No. 8 Registry No. 1404 — bd NATIONAL RECOVERY ADMINISTRATION SUPPLEME] CODE OF FAIR COMPETITION FOR THE (A Product Group of the Automotive Parts and Equipment Manufacturing Industry) AS APPROVED ON DECEMBER 18, 1934 WE DO OUR PART UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1934 For sale by the Superintendent of Documents, Washington, D. C. -------- Price 5 cents This publication is for sale by the Superintendent of Documents, Government Printing Office, Washington, D. C, and by ddistrict offices of the Bureau of Foreign and Domestic Commerce. DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE Atlanta, Ga. : 504 Post Office Building. Birmingham, Ala. : 257 Federal Building. Boston, Mass. : 1S01 Customhouse. Buffalo, N. Y. : Chamber of Commerce Building. Charleston, S. C. : Chamber of Commerce Building. Chicago, 111.: Suite 1706, 201 North Wells Street. Cleveland, Ohio : Chamber of Commerce. Dallas, Tex. : Chamber of Commerce Building. 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Approved Code No. 105 — Supplement No. 8 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE POWDERED METAL BEARING MANUFACTURING INDUSTRY As Approved on December 18, 1934 ORDER Approving Supplementary Code of Fair Competition for the Powdered Metal Bearing Manufacturing Industry a product group of the automotive parts and equipment manu- facturing 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 a Supple- mentary Code of Fair Competition for the Powdered Metal Bear- ing Manufacturing Industry, a Product Group of the Automotive Parts and Equipment Manufacturing Industry, and hearings having been duly held thereon and the annexed report on said Supplemen- tary 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, the National Industrial Recovery Board, pursuant to author- ity vested in it by Executive Orders of the President, including Executive Order No. 6859, and otherwise, does hereby incorporate by reference said annexed report and does find that said Supplemen- tary Code complies in all respects with the pertinent provisions and will promote the policy and purposes of said Title of said Act; and does hereby order that said Supplementary Code of Fair Competi- tion be and it is hereby approved. National Industrial Recovery Board. By W. A. Harriman. Administrative Officer. Approval recommended : Barton W. Murray, Division Adm in istrator. Washington, D. C, December 18, 1934. 103804° 1385-106 34 (i) REPORT TO THE PRESIDENT The President, The White House. Sir: This is a report on a Supplementary Code of Fair Competi- tion for the Powdered Metal Bearing Manufacturing Industry, a Product Group of the Automotive Parts and Equipment Manufac- turing Industry. A proposed Supplementary Code was submitted on March 26, 1934, by the Code Authority Committee of the Automo- tive Parts and Equipment Manufacturing Industry, on behalf of the Powdered Metal Bearing Product Group which represents ap- proximately 95% of the total volume of sales and 50% of the number of members of the Industry. The Public Hearing n the proposed Supplementary Code was conducted in Washington on June 25, 1934, in accordance with the provisions of the National Industrial Recovery Act. It was later revised and approved in its present form. This Supplementary Code is designed primarily to put into legal effect certain Fair Trade Practice rules which long have b?en recognized in the Industry, but which have been without binding legal effect. The labor provisions of this Supplementary Code are those of the Basic Automotive Parts and Equipment Manufacturing Industry Code. The purpose of the Supplementary Code is stated in Article I, and Article II is devoted to definitions. An Administrative Committee to administer the Supplementary Code is set up in Article III. This Committee is composed of four members elected in accordance with the voting provisions provided in the By-Laws of Automotive Parts and Equipment Manufacturers, Incorporated, and one non-voting member may be appointed by the National Industrial Recoveiy Board to serve without expense to the Product Group for such time as the National Industrial Recovery Board may specify. Trade Practice Rules are set forth in Article IV. FINDINGS The Deputy Administrator in his final report to the National In- dustrial Recovery Board on said Supplementary Code having found as herein set forth and on the basis of all the proceedings in this matter : The National Industrial Recovery Board finds that: (a) Said Supplementary 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 organiza- (2) tion 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 sanction and super- vision, by eliminating unfair competitive practices, by promoting the fullest possible utilization of the present productive capacity of industries, by avoiding undue restriction of production (except as may be temporarily required), by increasing the consumption of in- dustrial and agricultural products through increasing purchasing power, by reducing and relieving unemployment, by improving standards of labor, and by otherwise rehabilitating industry. (b) Said Product Group normally employs not more than 50,000 employees; and is not classified by the National Industrial Recovery Board as a major industry. (c) The Supplementary Code, as approved, complies in all re- spects with the pertinent provisions of said Title of said Act, includ- ing without limitation Subsection (a) of Section 3, Subsection (a) of Section 7 and Subsection (b) of Section 10 thereof; and that the applicant Product Group is an industrial group truly representa- tive of the aforesaid Industry; and that said Product Group im- poses no inequitable restrictions on admission to membership therein. (d) The Supplementary Code is not designed to and will not per- mit monopolies or monopolistic practices. (e) The Supplementary Code is not designed to and will not elim- inate or oppress small enterprises and will not operate to discrimi- nate 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 Supplementary Code. For these reasons, therefore,' the National Industrial Recovery Board has approved this Supplementary Code. For the National Industrial Recovery Board : W. A. Harriman, Administrative Oiflcer. December 18, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE POWDERED METAL BEAMING MANUFACTURING INDUSTRY A PRODUCT GROUP OF THE AUTOMOTIVE PARTS AND EQUIPMENT MANU- FACTURING INDUSTRY Article I — Purpose Pursuant to the provisions of Article II of the Code of Fair Competition for the Automotive Parts and Equipment Manufac- turing Industry, duly approved by the President on November 8, 1933, the following provisions covering trade practices and the ad- ministration thereof are hereby established as the standards of Fair Competition for the Powdered Metal Bearing Manufacturing Indus- try, which has been organized into an administrative unit of the Automotive Parts and Equipment Manufacturing Industry, and shall be binding upon every member of said Product Group. Article II — Definitions The term " Product Group "' as used herein is defined to mean the production and/or manufacture of Powdered Metal Bearings, Bush- ings, Washers, and/or related powdered metal products, excepting, however, the production and/or manufacture of such products when produced or manufactured by a manufacturer for use exclusively in his own finished product. The term " Member " or " Member of the Product Group " as used herein includes, but without limitation, any individual, partnership, association, corporation, or other form of enterprise engaged in the production and/or manufacture and/or the sale as a manufacturer of the products of the Product Group (hereinafter termed "Prod- ucts ") either as an employer or on his or its own behalf. The term " Class 'A' Products " as used herein is defined to mean the products of the Product Group which are sold to ' manufacturers of motor vehicles or internal combustion engines ' for original equip- ment, and provided always that this definition shall not include an}' products hereinabove described, or parts thereof or therefor not designed for and used mainly as automotive original equipment, re- placement parts, and/or accessories, and which are included within the scope of the definition of any other industry as defined in any approved Code of Fair Competition. The term " Class ' B ' Products " as used herein is defined to mean the products of the Product Group which are sold to customers, other than buyers of original equipment, for any purpose other than original equipment. (4) The term " Group " is defined to mean the Powdered Metal Bear- ing Manufacturing Group, a " Product Group r ' as herein defined, at present having its headquarters' office in Detroit, Michigan. The term " Basic Code " as used herein is defined to mean the Code of Fair Competition for the Automotive Parts and Equip- ment Manufacturing Industry, as approved by the President on November 8, 1933. and as amended. The term " Code Authority " as used herein is defined to mean the Code Authority designated in the Code of Fair Competition for the Automotive Parts and Equipment Manufacturing Industry. Article III — Administration (1) The Administrative Committee of the Group shall consist of: (a) Four members to be elected at the annual meeting of the Group in accordance with the voting provisions provided in the By-Laws of Automotive Parts and Equipment Manufacturers, Inc. (b) In addition to the membership as above provided, there may be one additional member, without vote, to be appointed by the National Industrial Recovery Board, to serve without expense to the Product Group for such term as the National Industrial Re- covery Board may specify. (2) The Administrative Committee of the Group is hereby desig- nated to assist the Code Authority and the National Industrial Re- covery Board in the Administration of the trade practice provi- sions hereinafter set forth and the provisions of the Basic Code, to which these trade practices are a supplement. (3) (a) It being found necessary in order to support the admin- istration of this Supplementary Code and to maintain the standards of fair competition established hereunder and to effectuate the policy of the Act, the Administrative Committee is authorized : (1) 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 this Supplementary Code : (2) To submit to the National Industrial Recovery Board for its approval, subject to such notice and opportunity to be heard as it may deem necessary, (a) an itemized budget of its estimated ex- penses for the foregoing purposes, and (b) an equitable basis upon which the funds necessary to support such budget shall be contrib- uted by members of the Product Group ; (3) After such budget and basis of contribution have been ap- proved by the National Industrial Recovery Board, to determine and obtain equitable contribution as above set forth by all members of the Product Group, and to that end, if necessary, to institute legal proceedings therefor in its own name. (b) Each member of the Product Group shall pay his or its equit- able contribution to the expenses of the maintenance of the Admin- istrative Committee, determined as hereinabove provided, and sub- ject to rules and regulations pertaining thereto issued by the National Industrial Recovery Board. Only members of this Product Group complying with this Supplementary Code and contributing to the expenses of its administration as hereinabove provided, (unless duly n exempted from makiTig such contribution,) shall be entitled to par- ticipate in the selection of members of the Administrative Commit- tee or to receive the benefits of any of its voluntary activities or to make use of any emblem or insignia of the National Recovery Administration. (c) The Administration Committee shall neither incur nor pay any obligation substantially in excess of the amount thereof as esti- mated in its approved budget, and shall in no event exceed the total amount contained in the approved budget, except upon approval of the National Industrial Recovery Board; and no subsequent budget shall contain any deficiency item for expenditures in excess of prior budget estimates except those which the National Industrial Recov- ery Board shall have so approved. (4) (a) The Administrative Committee shall, subject to the ap- proval of the Code Authority and the National Industrial Recovery Board, have the power to adopt by-laws and rules and regulations for its procedure and to obtain from members, through an impartial agency, such information and reports as are required for the admin- istration and enforcement of this Supplementary Code; to cooperate with the National Industrial Recovery Board under such rules and regulation's as may be prescribed by it in regulating the use of any N. R. A. insignia, and in hearing and adjusting complaints; to initiate, consider, and recommend to the Code Authority for trans- mittal to the National Industrial Recovery Board further fair-trade practice provisions to govern the members of this Product Group. (b) If the National Industrial Recovery Board shall determine that any action of the Code Authority and or the Administrative Committee or any agency thereof may be unfair or unjust or con- trary to the public interest, the National Industrial Recovery Board may require that such action be suspended to afford an opportunity for investigation of the merits of such action and further considera- tion by such Code Authority and /or the Administrative Committee or agency thereof pending final action which shall not be effective unless the National Industrial Recovery Board approves or unless it shall fail to disapprove after thirty days' notice to it of intention to proceed with such action in its original or modified form. (c) Each trade or industrial association directly or indirectly par- ticipating in the selection or activities of the Administrative Com- mittee shall (1) impose no inequitable restrictions on membership, and (2) submit to the National Industrial Recovery Board true copies of its articles of association, by-laws, regulations, and any amendments when made thereto, together with such other informa- tion as to membership, organization, and activities as the National Industrial Recovery Board may deem necessary to effectuate the purposes of the Act. (d) In order that the Administrative Committee shall at all times be truly representative of the Product Group and in other respects comply with the provisions of the Act, the National Industrial Recovery Board may prescribe such hearings as it may deem proper; and thereafter, if it shall find that the Administrative Committee 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 Administrative Committee. (5) All members of this Product Group shall be bound by the provisions of the Basic Code. For this purpose all provisions, including specifically the wage, hour and labor provisions, of the Basic Code are hereby declared to be a part of this Supplementary Code. In case of any conflict between the provisions of this Supple- mentary Code and the provisions of the Basic Code, the provisions of the latter shall govern. As required by Section 7 (a) of Title I of the National Industrial Recovery Act, it is hereby provided : (1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; (2) that no employee and no one seeking employment shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing; and (3) that employers shall comply with the maximum hours of labor, minimum rates of pay and other conditions of employment, approved or prescribed by the President. (6) The Administrative Committee shall cause to be formulated methods of cost finding and accounting capable of use by all members of the product group, and shall submit such methods to the National Industrial Recovery Board for review. If approved by the National Industrial Recovery Board, full information concerning such methods shall be made available to all members of the Product Group. Thereafter, each member of the Product Group shall utilize such methods to the extent found practicable. Nothing herein con- tained shall be construed to permit the Administrative Committee, any agent thereof, or any member of the Product Group to suggest uniform additions, percentages or differentials or other uniform items of cost which are designed to bring about arbitrary uniformity of costs or prices. (7) The Administrative Committee shall be empowered to obtain from members of the industry such information and reports as are required for the administration of the Code. In addition to infor- mation required to be submitted to the Code Authority, members of the Industry subject to this Code shall furnish such statistical infor- mation as the National Industrial Recovery Board may deem neces- sary for the purposes recited in Section 3 (a) of the Act to such Federal and State agencies as it may designate; provided that noth- ing in this Code shall relieve any member of the industry of any existing obligations to furnish reports to any Government agency. No individual report shall be disclosed to any other member of the industry or any other party except to such other Governmental agencies as may be directed by the National Industrial Recovery Board. Article IV — Trade Practices In addition to the provisions of Section C of Article VI of the Basic Code, the following described acts shall constitute unfair practices and acts of unfair competition : 8 (1) Costs and Price Cutting. — (a) Wilfully destructive price cut- ting i.s an unfair method of competition and is forbidden. Any member of the Product Group or of any other industry or the cus- tomers of either may at any time complain to the Administrative Committee that any filed and/or offered price constitutes unfair competition as destructive price cutting, imperiling small enterprises or tending toward monopoly or the impairment of code wages and Avorking conditions. The Administrative Committee shall within 5 days afford an opportunity to the member filing and/or offering the price to answer such complaint and shall within 14 days make a ruling or adjustment thereon. If such ruling is not concurred in by either party to the complaint, all papers shall be referred to the Research and Planning Division of the National Recovery Admin- istration which shall render a report and recommendation thereon to the National Industrial Recovery Board. (b) When no declared emergency exists as to any given product, there is to be no fixed minimum basis for prices. It is intended that sound cost estimating methods should be used and that con- sideration should be given to costs in the determination of pricing policies. (c) When an emergency exists as to any given product sale below the stated minimum price of such product, in violation of the pro- vision of paragraphs (d) and (e) hereof, is forbidden. (d) If the National Industrial Recovery Board, after investiga- tion shall at any time find both (1) that an emergency has arisen within the Product Group adversely affecting small enterprises or wages or labor conditions, or tending toward monopoly or other acute conditions which tend to defeat the purposes of the Act; and (2) that the determination of the stated minimum price for a specified product of the Product Group for a limited period is neces- sary to mitigate the conditions constituting such emergency and to effectuate the purposes of the Act, the Administrative Committee may cause an impartial agency to investigate costs and to recom- mend to the National Industrial Recovery Board a determination of the stated minimum price of the product affected by the emer- gency and thereupon the National Industrial Recovery Board may proceed to determine such stated minimum price. (e) When the National Industrial Recovery Board shall have determined such stated minimum price for a specified product for a stated period, which price shall be reasonably calculated to mitigate the conditions of such emergency and to effectuate the purposes of the National Industrial Recovery Act, it shall publish such price. Thereafter, during such stated period, no member of the Product Group shall sell such specified products at a net realized price below said stated minimum price and any such sale shall be deemed destruc- tive price cutting. From time to time, the Administrative Commit- tee may recommend review or reconsideration of the National Indus- trial Recovery Board may cause any determinations hereunder to be reviewed or reconsidered and appropriate action taken. (2) Commercial Bribery. — To 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, without the knowledge of such employer, principal or party. Commercial brib- ery provisions 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. (3) Inducing Breach of Contract. — To induce the breach of existing contracts between competitors and their customers by any means or device whatsoever, or to interfere or to obstruct the performance of any such contractual obligations or service. (4) Repudiation of Contract. — To repudiate or cancel accepted orders or other contracts, except for legal cause or by mutual consent. (5) Misbranding. — To brand falsely or fail to brand products of the Group for the purpose or with the effect of misleading or deceiv- ing purchasers in some material particular or consumers with respect to the quantity, quality, grade, origin, or substance of the products purchased. (6) Imitation of Tradr-niarlc*. — -To imitate a competitor's trade- mark, marking, or trade name, with the purpose or effect of mis- leading or deceiving any purchaser or prospective purchaser. (7) Inaccuratr Advertising — To publish advertising (whether printed, radio, display, or of any other nature) which is misleading or inaccurate in any material particular, or in any material way to misrepresent any product (including but without limitation its use, trade-mark, grade, quality, quantity, origin, size, substance, charac- ter, nature, finish, material content, or preparation) or credit terms, values, policies, services, or the nature or form of the business conducted. (8) Substitution. — To furnish products more or less expensive, of better or inferior quality, or of larger or smaller size than specified without clearly indicating the nature of the substitution. (9) Price Guaranty. — To sell or offer for sale products of this Group under any form of guaranty to a purchaser or prospective purchaser against either advance or decline in the price of said products. (10) Lump-Sum Bidding. — To quote a total price on any schedule of products which does not show, or which is lower than the sum of, the regular unit prices of the products comprising the schedule. Where a product consists of two or more parts, which themselves are considered units by the Group, the unit price of the combination product shall not be less than the sum of the unit prices of the parts which comprise it. (11) Defective Products. — To allow credit for any defective prod- uct until the fact of such defect shall have been established by an authorized representative of the member and the product shall have been destroj^ed or returned to the member. (12) Obsolescence. — To accept the return of obsolete products for credit or exchange. (13) Replacing Competitor's Stock. — To liquidate, purchase, or accept another member's product from any buyer. (14) Coercion.. — To require that the purchase of any goods or products be a prerequisite to the purchase of any goods or products. 10 (15) Tools. — To fail to make a fair charge to customers for tools, dies, jigs, and equipment necessary for the manufacture of Class U A" Products. Article V — General (1) No provision of this Supplementary Code shall he so applied as to permit monopolies or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprises. (2) Such of the provisions of this Supplementary Code as are not required to be included herein by the Act may, with the approval of the National Industrial Recovery Board, be modified or elimi- nated upon proposal by the Product Group or any member thereof if it appears that the public needs are not being served thereby and as changes in circumstances or experience may indicate. (3) It is contemplated that from time to time supplementary pro- visions to this Supplementary Code or modifications thereof will, after approval by the Product Group, be submitted by the Adminis- trative Committee through the Code Authority for approval to pre- vent unfair competition in price and other unfair and destructive competitive practices and to effectuate the purposes of the Act. Upon approval by the National Industrial Recovery Board after such notice and hearing as it may prescribe, such supplementary provi- sions or modifications shall become binding as a part of this Supple- mentary Code. (4) As required by Section 10 (b) of Title I of the Act, this Sup- plementary Code and all of the provisions thereof are expressly made subject to the right of the President from time to time to cancel or modify any order, approval, license, rule, or regulation issued under said Act. (5) By assenting to this Supplementary Code no member of this Product Group shall be held to have waived any of his constitutional rights. (6) Violation by any member of this Product Group of any pro- vision of this Supplementary Code is an act of unfair competition, and the offender shall be subject to the penalties imposed by the Act. (7) The u Effective Date " of this Supplementary Code shall be the tenth (10) day after it shall have been approved. Approved Code No. 105 — Supplement No. 8. Registry No. 1404-53. O UNIVERSITY OF FLORIDA Minium 3 1262 08584 3414