HISTORY OF THE COMPLIANCE DIVISION GALVM W.M. N0.S5 N.R.h. Business Library Cl_ASS_ BOOK_ DOC. ROOK OFFICE OF NATIONAL RECOVERY ADMINISTRATION DIVISION OF REVIEW HISTORY OF THE COMPLIANCE DIVISION By W. M. Galvin J. J. Reinstein D. Y. Campbell WORK MATERIALS NO. 85 MARCH, 1936 MAGAZINES BOUND By W. P. A; OFFICE OF NATIOTAL RECOVERY ADMINISTRATION DIVISION OF REVIEW HISTORY OF THE COMPLIANCE DIVISION W. M. Galvin J. J. Reinstein D. Y. Campbell MARCH, 1936 9861 CO.. IF ITS PAitT I - INTRODUCTION Page Chapter I. The Nature of the Compliance Problem 1 Sec. 1. Background of tne passage of the NIRA 1 Sec. 2. Scope of co nplience work 1 Chapter II. Manner of Approach Sec. 1. Tne underlying theories of the compliance system .... 5 Sec. 2. The establishment of on administrative orocedure .... 8 PART II - GOVERNMENTAL ORGANIZATION AND PROCEDURE Chapter III. The Administrative Settlement of Code Violations .... 11 Sec. 1. The need for correcting violations by adminis- trative measures 11 Sec. 2. Source of authority for the administrative settlement of complaints 12 Sec. 3. Tne function of the Compliance Division to adjust complaints 13 Sec. 4. Definition of adjustment 13 Sec. 5. Purpose of adjustment 15 Sec. 6. Evolution of an adjustment policy 16 Sec. 7. The development of standards of adjustment 22 Sec. 8. Instructions issued to tne field offices 24 Chapter IV. The Origin and Development of Field Offices 30 Sec. 1. The establishment of temporary offices 30 Sec. 2. Internal organization - early development 32 Sec. 3. Development of internal organization under the State Office system 34 Sec. 4. Later development under the State Office system 40 Sec. 5. Einal development of organization under the Regional Office system 43 Chapter V. Compliance procedure in Field Offices 49 Sec. 1. Complaints, the basis of procedure 49 Sec. 2. Development of s new compliance procedure 62 Sec./ 3. The development of the use of Field Adjusters 69 Sec. 4. The direction and supervision of Field Adjusters .... 73 Sec. 5. Technique of investigation 82 Sec. 6. The technique of adjustment by conciliatory measures. 93 Sec. 7. Non-disclosure of the source of complaints 98 Sec. 8. Hearings by Local and State Adjustment Boards 102 Sec. 9. Compromising and dropping of cases 108 9661 -ii« Digitized by the Internet Archive in 2013 http://archive.org/details/historycomp36unit Pare Chapter VI. Com jliance Division id Regional Offices 117 Sec. 1. Development of internal organization 117 Sec. 2. General aspects of insignia display and removal 121 Sec. 3. National Labor lioard a ses 125 Sec. 4. The National Compliance 3oard and its successors 126 Sec. 5. Notice of nearings 128 Sec. 6. Procedure at hearings 129 Sec. 7. Evidence 130 Sec. 8. Appeals 131 Sec. S. Development of t-nalysis and review procedure "before hearings — Analysis Branch 132 Sec. 10. Reference of cases for litigation 139 Sec. 11. Contributions section , 146 PART III - OUTSTANDING PROBLEMS 0? THE COMPLIANCE DIVISION Chapter VII. The Method of Handling Complaints 149 Sec. 1. The complaints basis of procedure-labor violations... 149 Sec. 2. Disadvantages of and objections to the complaints system 149 Sec. 3. Practical difficulties in use of complaints system... 152 Sec. 4. Mass compliance as a proposed solution 155 Sec. 5. Mechanics of the mass compliance system 158 PART IV - SUMMARY Chapter VIII. Statistical Summary of the Activity of the Com- pliance Division 161 APPENDICES These appendices ar - not here reproduced except A-17, A-18, and A-32. The others are in NBA files under the caption "NBA Studies Special Exhibits"- 'Vorl-c Materials No. 85. Appendix I. NRA State Office Complaint Statistics 237 List of tables Appendix II. Exhibits. A-l. Win. H. Davis, "NRA Plans for Code Compliance" (December 5, 1933) A-2. Relea.se No. 1847 A-3. Letter from A. J. Altmeyer to Counsel for Compliance Division (March 26, 1935) A-4. "Regulations for the Adjustment by District Compliance Directors of Complaints of Code Violations" (October 19, 1933) 9861 -in- A-5. "For. as to be used as models by District Compliance Directors in correspondence on Complaints" (October lb', 1933) A-6. Office Order 40 A-7. Liaison Circular 75 A-8. Office Order 92 A-9. Administrator's letter appointing District Compliance Directors (October 19, 1933) A-10. Office Order 53 A-ll. Compliance Division i'leiiorandum Uo. 4 A-12. Office Order 85 A-13. Office ..iemorandum 180 A-14. Letter from John Swope, Cnief , Field Branch to State Compliance Directors (June 2, 1934) A-15. Adjusters' report form and instructions A-16. Office Order 74 A-17. Table of c::.ses referred to State Adjustment Boards 249 A-18. Statistics on cases handled by State Adjustment Boards 250 A-19. Examples of rummaries of compromise canes A-20. Letter to Philjaelph-u Office from Chief, Coordinating Branch (rebruaiy 28, 1935) A- 21. Letter from Cornelius Cociirane to Harold Dotterer re Service Trades complaints (September b, 1934) A~22. Compliance Division Memorandum No. 1 A- 23. Compliance Division Memorandum No. 24 A- 24. Office Order 45 A-25. Office Order 90 A-26. Office Order 79 A-27. Office Order 105 A-28. Office Memorandum 309 9861 -IV- A-29. Office Memorandum 305 A- 30. Memorandum from Compliance and Enforcement Director to Chief, Compliance Division (Deceiaber 8, 1934) A-31. Memorandum from L. J. Martin to i.ierton Emerson, Regional Director (January 1, 1935) A-32. Statistical tables on cases referred to Regional Offices 251 A-33. Letter from John Swope, Chief, Exeld Branch to State Compliance Directors (April 27, 1934) A- 34. Memorandum of meeting held in office of A. G. McKnight, director of Litigation on April 3, 1934 (From files of Counsel to Compliance Division) A-35. Memorandum from A. (J. McKnight to Blackuell Smith (April 23, 1934) A-36. Compliance Division Memorandum of June 4, 1934 re Contributions Section Appendix III. Office Manual (including all Executive and Adminis- trative Orders) Appendix IV. Eield Letters Appendix V. Mass Compliance A. Boot and Shoe survey B. Miscellaneous reoorts from State offices ;861 -v- PART I INTRODUCTION Chanter I - The Nature of the Compliance Prou 1 Section 1 - rpc -g round of the Passage of The National Industri al R. cov^ r.7 Act. It is familiar history that in the three and one-third years intervening between the stock market crash of October, 1230 and , 1933, the country had entered into a vast economic and financial crisis. While not without precedent, the situation was dire, and far- reaching in its effects. Almost immediately following his inauguration on March 4, 1933, the President ■ cted to quiet the hysteria of the country'. For the first time in history : ;he President made \ise of the radio to talk informally with the ueople. The importance of this state of circumstances and of this course of action to our subject, lies not so much in its political aspects as in the fact that through this medium there was welded together -quickly and effectively a tremendous and forceful Duplic opinion. It was in this almost unbelievable unification of public support that the national In- dustrial Recovery Act, and the remainder of the Recovery urogram, had its foundation. 'It was in this atmosphere of patriotic fervor, knowing little of party lines and the struggle of capital and labor, and bom chiefly of fear of economic destruction, that the National Industrial Recovery Act became a lav; and the President's Reemployment Agreement and the codifi- cation of industry were begun. This temper of the public, labor and industry, and the general circumstances surrounding the passage of the law cannot be overempha- sized in importance. It was through these means that it was possible to educate the entire country to a program of national industrial regulation and cooperation. On the otner hand, as business began to improve and this temoer cooled, public support waned and public opinion suffered a reaction, so that during the last few months of NBA many individuals regarded the program as oppressive and a deterrent to the country's return to prosperity, Tnis unstable basis of public opinion complicated greatly the inherently intricate and complex problem of adjusting business to the new regulation by codes. Section 2 - The scope of Complian ce work. The work of the Compliance Division in connection with the enforcement of codes of fair competition approved under the National Industrial Recovery Act was designed to meet an administrative problem distinctive -in the history of the Federal Government. Under the authority of Section 3(a) of the Act, codes were approved establishing minimum wages, maximum hours, conditions of em- ployment and s|flandards of fair competitive practice in 555 industries, emoracing 2,500,000 employers and giving employment to 18,500,000 9851 -2- "oersons. (*) The magnitude of the scope of codes and the complexity of the regulations which they contained made it necessary to develop a new administrative technique for securing compliance with code requirements, in which educational and persuasive methods would be predominant. There was sound precedent for the use of this aooroa.ch to the administrative problem presented "by the codes. The introduction of law requiring sig- nificant adjustments in business methods requires the establishment of a general understanding of the substance and purpose of the law and the manner of its administration. In its report to Congress in 1839, the Interstate Commerce Commission stated: "Undoubtedly tne first duty of an administrative officer is to give effect to the law under which he acts. Much depends, however, on the manner in which this is done, and misdirected energy may render a law nugatory. A fanatical or sensational course rarely leads to good results, but on the contrary-, usually provokes antagonism, and often tends to de- fiance of the law itself. "When a law relates to great business- interests intended to be gov- erned by its provisions throughout the whole extent of a vast country with many diverse characteristics, great care is required to so administer the law that it shall be respected and obeyed. In a matter of such mag- nitude and importance . . . many other things are required besides -orose-« cutions for. violations. Careful interpretations of tne provisions of the law, correct knowledge of the subjects to which it applies, and of any ■ distinctions in conditions that may modify its amplication, are necessary, in. .order that it may be intelligently applied. A reasonable time was also required to enable business interests generally to become familiar- ized with the changed methods under the lav/ and .... to adjust their modes of business to the new requirements. "It was deemed a matter of primary importance to bring the interests affected into harmonious relations to the law, and to understand that, while it revolutionizes certain methods, it is something more than a mere- ly punitive statute, definig crimes and providing for their punishment, and that its ultimate purpose is the general good of the country ..... This may involve what is sometimes called an- educational process in deal- ing with intelligent men, not essentially bad or engaged in criminal pur- suits, but whose faults were in many respects wrong metnods in the conduct of a legitimate business, in which they had too often been taught the success might be regarded as justifying the methods "employed. A standard of right and wrong as well as of legal duty was to oe set up, and con- formity to this standard induced, if possible, by the conviction that (*) Estimates are of the statistical section, ITBA Division of Review and are based on monthly employment reports of the Bureau of Foreign and Domestic Commerce, derived in turn from the Bureau of Labor Statistics and other sources. 9861 their true interests would be better promoted." (*) It would have been no& only administratively unwise, but oractic-- ally impossible to have broug i.t each case of infraction of a code pro- vision into> the Federal Courts. If there was precedent for the general approach to the problem of 1 - code enforcement , there was little in the previous experience of govern- mental agencies or in the Act which could serve as a guide to the methods which might be followed. The Act provided methods of enforcement through the courts by injunction and by crimin 1 action in the District Courts of the United States. Code standards were also mode unfair methods of comoetition within the meaning of tne Federal Trade Commission Act and enforceable by the Commission through cease and desist orders. Neitner of these methods offered a solution to tne' -oractical problem of correct- ing a mass of minor violations, many of them unintentional. The oro- cedure followed by the Federal Trade Commission and other semi -judicial bodies could not be followed by \TBA, which labked their legal powers (in particular, the power go compel the submission of evidence and to issue orders enforceable in the Courts). Furthermore, tne procedure of the Federal Trade Commission was adapted to the s-occialized handling of individual complaints. Under its act the Commission was given one power to restrain acts of unfair com- petition. It was, however, Ipft to the Commission in particular cases to decide whether certain practices constituted unfair competition, after a usually thorough-going investigation. Heedless to say, the work of the Commission tended to fall into certain well-established categories. In contrast to this tne codes undertook to specify in advance what particular acts were per se unfair -oractices. The list of prohibited acts was not only inflexible, but was large and va.ried. Tnis enlarged scope of the task, at least insofar as trade practice violations were concerned, served to multiply tne difficulties of admini strati on and enforcement because of its very complexity . Certainly, the proDlems of education were intensified, and oecause of tne additional requirements' placed on adjustment agencies a specialized, intensive handling of even each type of violr-tion was virtually precluded. In the case of labor compliance tne experiences of state labor departments were somewhat more analogous. Labor regulations, both under state laws and the codes, fell into fairly definite classes and there- fore a similarity in oroblems of orocedure was present. There was, how- ever, in tne codes tne additional element of considering labor provisions as an item in fair comoetition. Tnis naturally superimposed the require- ment of coordination of local with national problems, which again served to magnify the task. (*) Third Report of the Interstate Commerce Commission, November 30, 1339, pp. 104-105 9861 As a result of the limitations on the applicability of the ex- periences derived in the administration of these other laws and regula- tions, the development of new administrative methods for the KRA codes became essential. Ghaut t II - Manner of Aryoroach Section 1 - Th2_^d-_rlvin^_tn .ori_;-s of t h ■ compliance system . The preliminary administrative step taken in the enforcement of NBA Codes were based won two ^remises. First, that there would he a substantial numher of violations, most of which could he corrected by conciliatory and educational methods; and second, that public opinion both within industries and on the oart of the general t>ublic could be relied on to sup-ocrt NRA standards. It was contemplated that the punitive provisions of the Act would be invoked only where these methods failed. (*) This urogram stemmed directly out of the Administration's experience with the President's "Reemployment Agreement, particularly in its use of insignia for the purpose of distinguishing industry members complying with and supporting the Reemployment Program. While previous experience with the Reemplojmient Agreement furnished a definite orientation for the manner in which the problem could be attacked, a f inda.mental question of policy immediately developed: To what extent should administrative powers with respect to enforcement be vested in Industrial Agencies? During the first three months of HRA's existence, the energies of both the NPJL staff and the industry members who came to Washington to present codes were concerned Primarily with the formulation of standards of fair practice and only to a small extent with their administration. Through the process of cede formulation and the gradual development of administrative provisions in cedes, ran the concept of "industrial self-government". This notion was expressed in code formulation by the requirement that Codes (at least those approved under Section 3 of the NIRA) be presented by a representative group of the industry members intended to be bound by the code. The auestion which now presented itself was the manner in which industry should participate 'in the administration of the code. In order to provide for continued representation for the industry in its relations with LIRA and for carrying out of some of the administrative functions which showed themselves necessary, the idea of a "Code Authority" developed early in the process of code formulation. The Code Authority was intended to be a legal entity , representative of the industry and vested under the code with adminis- trative powers and planning and research functions. The powers vested in these agencies under the early codes varied greatly. An Industry Committee established by the original Cotton Textile Code had as its functions only planning and the gathering of statistics. Later codes vested in Code Authorities broad powers of determination for the purpose of putting into effect regulations for which the code (*) -Wm. H. Davis, National Compliance Director, "NRA Plans for Code Compliance" (December 5, 1933) p. 4; Bulletin No. 7, p. 7. 9861 -6- only specified standards. Provisions dealing with enforcement, if tiiey a.]yoeared at all, were similarly varied. The second code to "be approved , the Wool Textile Code, provided for a system of mandatory arbitration for the settlement of complaints of code violation. The Men's Clothing Code (Number 15) not only empowered the Code Authority to make investigation of charges of violation, "but imposed upon it a positive obligation to do so. By October, 1933, the problem of enforcement "began to make itself felt in the form of individual instances of code violations which could not he corrected "by conciliatory efforts made in most cases "by Code Authorities or. "by Deputy Administrators. Because of this fact the establishment of a definite procedure for the handling of administrative work connected with enforcement steps became apparent. While, as we have noted above, there was a developing tendency to vest administrative powers in Code Authorities, the Act itself placed the responsibility for enforcement proceedings in the hands of the Government : alone by limiting legal remedies to -the Government. (*•)■■■ On November 22, 1933, General Johnson issued, a statement of. policy with a view to clarifying the ouestion of responsibility for enforcement and defining the part which industry would play in code administration. (**) He stated the aim of NBA as being to give to Code Authorities the widest possible range of self-government. However, the ultimate responsibility of code administration rested with the Government and.FRA would undertake to supervise code.- administration lay Code Authorities. The Administrator segregated code administration into two aspects: one, "normal code administration", extended to such functions as planning, the collection of statistics, the rendering of reports on conditions in the industry, etc; the. other included educational and administrative steps taken with a view to securing compliance with code reauirements. The Administrator's definition of what has since come to be known as "Compliance" may well be ouoted here for the clarity with which it distinguishes this aspect of code administration not only from normal code administration but also from enforcement, the institution of legal proceedings to compel compliance with code requirements: "(a) The instruction and education of those subject to the code as to their responsibilities thereunder so as to anticipate and avoid complaints of non-compliance.. (b) The adjustment of complaints of non-compliance by education, fair findings of facts, and the pressure of opinion within the Industry. (*) See Section 3(c) of the National Industrial Recovery Act. See also Purvis v. Bazemore, Western Powder Manufacturing Co. v. .Interstate Coal Co., and other cases cited in Office Manual, Part- V,' Se'cti'on V, "Jurisdiction and Parties. " (**'; Release No. 1847 (November 22, 1933) 9861 -7- (c) The adjustment of complaints by arbitration, conciliation, and mediation. (d) The rendition of reports to the enforcement agencies of government in those cases where all other means have failed. Such reports should he based unon adenuate findings of fact," (*) Industries which were sufficiently well organized to have agreed unon a code were deemed to be -ore-oared to undertake functions of normal code administration. In the field of compliance, however, industry was not prepared tr eauinoed to deal with enforcement problems. This function, it was declared, "?oald be assumed by }TRk until such time as industry vas organized to carry it out. The following urogram was laid down for the transfer of compliance functions from the Government to industry: "As soon as a Code Authority is set ud and ready to function, it will usually be well enough organized to adjust most complaints of violations of the trade pra^ bice -previsions of the code. Such complaints involve the rights of one employer against another enrol oyer within the -industry. Tre4.e. associations and other existing agenci 3 of industrial self-government are well suited to the handling of this tyoe cf complaint, although, of course, the public intere t must be safeguarded by general governmental exercise of a veto. This governmental veto nower is the substitute for the anti-trust laws in tnis new set-uo. In mest cases, the government representative on a Code Authority sits without vote, but with a veto. "The function of securing compliance with the labor -provisions of codes presents a much more difficult Problem of organization and administration. Very few industries are organized at this time along lines suitable to adjustment and fact finding in this type of case. Complaints cf violations of labor, -provisions should not be referred to Code Authorities (or any agencies of industrial self- government) unless such agencies have adequate labor representation thereon. Most codes do not -provide for such representation. "The -oroblern of Code Comolinnce, by its very nature, requires a regional system of fact finding and adjustment agencies atroro-orir te to the handling of labor complaints. In order to -protect the interests and. rights of an enroloyee under a code, the employee must be furnished with an agency convenient in location and impartial in ne.ture. The government has -provided, twenty-six regional ccnroliance agencies, to which conrolaints of code violations may be referred where there is no ap-oroved machinery within the industry to handle such corn-plaints. (*) Ibid., p. 1 9^61 -8- "This system will fill the "blanks in' industrial self-government. It will act for an industry while the industry is organizing to handle such compliance problems for itself; or where an industry in a certain territory has no agencies of industrial self-government; or where an industry, though organized to handle trade -practice complaints, has no machinery approved to handle labor complaints; or where approved machinery lias failed to adjust a complaint." (*) The original program for compliance administration was followed throughout the greater part of the existence of ERA with little divergence except upon two' points, the cessation of efforts to organize industry for the handling of labor eonrolaints and the attempt made late in the development of compliance administration tc shift the basis for compliance work from merely acting on complaints to inspection. However, although new legal instrumentalities were devised (such as the methods provided for dealing with violations occurring in connection with government contracts) and new administration agencies were established, the fundamental approach to the problem remained the same. Section 2 - The est ajj.ishment_^f_^n. j admini_stra tive procedure . It ha.s been shown that the codification of industry created a vast and novel federal administrative problem. Such precedents and guides as did exist did not furnish a strict analogy for an ap-oroach to the problem. The procedure which was established, therefore, in October, 1933, was in a sense in the nature of an experiment for dealing with the' problem. (**) ■ ■• Inasmuch as employees had been taught to comolain to Local Compliance Boards of PRA. violations, and since so much reliance was placed on public support, it was natural that the new code comoliance •procedure was based entirely on the filing of complaints by employees, .competitors and others. Ho facilities were provided in the new governmental adjustment syet^m for initiating compliance activities, since the procedure was oredicated^on the filing of a- formal complaint which had to meet certain requirements as to legal sufficiency. In this respect the procedure resembled that of the Federal Trade Commission, although it has been shown the problems of the latter were different. There was developed as the method of administering the codes the "adjustment" of complaints. By this was meant the bringing about cf conformity to code provisions. It will bo shown in the succeeding chapter •that the application of this method cf code administration was changed and modified as the growing experience in gaining compliance indicated the need for stress on particular phases of the work. (*) Ibid., p. 2. (**) The development of compliance procedure is discussed in Chapter V and VI, infra. 9861 Generally speaking, th< of cases includ th the id^a of informin the r bs ~ i their obli ;;:tions sn< thus attaii »tj tn insure future compliance, but also, with incri sing b h rtance time passed, the correction of >a.st vi U bions by co . tin ; I parties injured thereby. In labor violations particularly was the latter true. re there was precedent. As outlined in a. letter of March ■', 193J from rornptly than if legal action '".-ore commenced. (-2) It holds over t < v later 1 s head the possi- bility of ;rorsecution for past violations if there are future vio ations. (3) It gives an oppqrtunity to the enforcement agency to make clerr to the violator the funda- mental purooses of the lav? since it illustrates the fact that the government is not °o much interested in punitive measures talcing the form of prosecution as it is in making certain that the puroose of the Iav r is carried out. "All so cessful - c uni-tr-tor- of state laws I am sure "ilc • ;ree that the result is that there is a ;reater jerccntave of '"illing com >liance, upon w ich after all we must ee .end for the successf 1 Operation of a lav.'." (**) At this point is recalled the two iremises, heretofore mentioned, on whic> the compliance pro ram was based, namely, that there would be a. large number of violations which could oe corrected by adjustment, and that public support '"ould be given to the administration of the coo.es. is a corollary to the first premise, the n :rert majority of respondents were believed to act without -ni' deliberate intent to violate the lav.' and it was felt that the remaining few could be ef- fectively dealt with through the legal jroces'es defined by the Act. This, of course, presupposed the enforceability and legal soundness of the coc.es. (*) In URA Studies Special Exhibits Work Materials # 77. (**) Idem. 3861 -io» If the first premise ,rT as a prerequisite of anv sc.justinent machinery, the second wss the herrt of the admini tretive system. It was the cradle ior the use of ERA in i .nis, ior the reliance on complaints as the basis of procedure, and for the re uisite outside influence needed for the effective ediustrnent of viol-- tions. 3361 -11- pa::t ii G0VER1TMK7TAL ORGANISATION AND PROCEDURE Chapter III - The Administrative Settlement of Code Violations Se ction 1 ~ The need, for correcting violations by administrative measures. It is a fundamental concept of industrial regulation and labor legislation, based on the experience of other governmental agencies en :aged in blie administration of new laws of wide and far- -reaching '<■ 'plication rrhich do not dea-1 ' T ith matters considered as malum per se, tliat the successful operation of the statute ultimately depends on the education of persons affected by it to their obliga- tions under the law, and on the presence of a strong public opinion favoring enforcement, (*) This fret was recognized by the Interstate Commerce Commission in its report to Congress in 18o9» (**) It is clearly illustrated by the govern ent's experience in Prohibition Law enforcement. The most obvious, and possibly the most effective method of education and development of support b~ the members of industry r . r as to correct the violations committed, and to briny the employers' business operations into conformity with the codes. Coupled with this there had to be the instruction of employers as to the meaning of code -provisions and the explanation of the benefits to be derived from compliance with the NRA program. Aside from fulfilling the fundamental need described above, the use of a system of administrative settlement of code violations was dictated ~oy the practical limitations of the enforcement systems provided by the Act. (***) This statement is so self-evident that it is hardly necessary more than to mention that approximately lo'0,000 complaints of code violations were docketed b;.' the field offices of the Compliance Division, This figure is exclusive of complaints handled by Code Authorities and complaints charging violations of the President's Reemployment Agreement. The volume of cases mould have increased considerably hod the NRA actively sought out violet ions, under an] system similar to lass compliance. (*) This is the v.nferlyin j theory of the adjustment system, see NBA Bulletin No. 7, P» 3» Core Administration for compliance "includes: (a) The instruction anc education of those subject to the code a.s to their responsibilities thereunder so as to anticipate and avoid complaints of noncompliance, (b) The adjustment of eo 'plaints of noncompliance by education, findings of facts, and th. pressure of opinion within the Industr- - - -. " (**) Supra, P. 2. (***) Title I, section 3 paragraphs (b), (c) , (f) , provided respectively for proceedings by the Federal Trrde Co: mission- under its organic act, suits by the various District Attorneys to restrain code violations, and prosecutions of code violations as misdemeanors. The penalties were re- stricted to transactions in or affecting interstate or foreign commerce, 9S6l -12- Section 2 - Source of author it"" for the administrative settlement of complaints. Nor:here in the National Industrial Recover:" Act is there an}/ expressed delegation of po~rer to the President or his appointed agents to administer the various codes of fair competition, to handle complaints, or adjust cases of violation, nor is there any statement of responsibility to do so. However, without entering on a discussion of the legal questions involved, it is sufficient to treat the function of administering^as implied from the power granted to the President to establish agencies, appoint personnel, and to prescribe their duties and authority (*) and also from the practical necessity of administering the codes once they were approved. Under Section 2(b) of the Act, (**) the President delegated this function with others to the Administrator (***) -rho issued the regula- tions for the adjustment of cases (*#**) and under whose direction the Compliance Division was established and invested with the duty of ob- taining compliance with the various codes and the President's Reemploy- 1 ment Agreement n oj the members of industry. (*****) (*) National Industrial Recovery Act, Title I, Section 2(a) provides as follows: "To effectuate the policy of this title, the President is here- by authorized to establish such agencies, to accept and utilize such voluntary and uncompensated services, to appoint, without regard to the provisions of the civil service laws, such officers and employees, and to utilize such Federal officers and employees, and, with the consent of the State, such State, and Local officers and employees, as he may find necessary, to prescribe their authorities, duties, responsibilities-, and tenure, and, without regard to the CTassif ication Act o_ 1923, as amen- ded, to fix the compensation of any officers and employees so appointed." (**) Note (6,), supra. Section 2(b) provides as fellows: "The President may delegate any of his functions and powers under this title to such officers, agents, and employees, as he may designate or appoint, and majr establish an industrial planning and research agency to aid in carrying out his functions under this title." (***) Executive Orders S173 (June lS, 1933), 6205-A (July 15, 1933). The National Industrial Recovery Board w n s invested -uththe same powers at the tine of its appointment ^ Bxecutive Order 6^59 (September 27, 193^) and 6993 (March 21, 193?)." (****) "Regulations for the adjustment by District Compliance Directors' of complaints of code violations" (October 19, 1933),. signed ''a:- Hugh S. Johnson, Administrator, 0:0.6. approved "ay the Special Industrial Recovery Board; Release Ho. ISU7 (November 22, 1935), statement by General John- son regarding code administration; NRA Bulletin ITo. 7, "Manual for the adjustment of complaints ~q-j State Directors and Code Authorities" (January 22, I93H) ; Administrative Order X-lU (April G, I93H) ;■ Admini- strative Order X-29 (May 12, !&.-) ; Office Manual, III-UlOO et. sec., Compliance (March 27, 1935)' See also Office Order 40 (October 2b", 1933), which among otner things in effect delegated to the Compliance Division the power to issue instructions a,s to the adjustment of ca.ses. (*****) Office Order 40 (October 26, 1933). 9SGl iB . - 13 - Section _5 - The function of the Co-ro H ance Divisio n to ad/just comol.-ii. ti It was the duty of the Compliance Division, as stated in Office Order 40 (*) establishing the Division, to endeavor to adjust all complaints of violations of codes of fair competition, and of the President's Reemploy- ment Agreement. This function was further stated "by the Administrator as the adjustment of complaints of non-compliance "by education, fair findings of fact, and the pressure of opinion within the industry and "by arbitration, conciliation, and mediation. (**) There was provided an ad- ministrative machinery for the handling and adjustment of complaints which had its climax in the procedure provided for removal of NRA insignia from violators and the reference of unadjusted cases to the law enforce- ment agencies of the Government*. (***) Tli is idea of adjustment of cases of violations found precedent in the established practices of the Federal Trade Commission and the State Labor Departments. A report of the Women's Bureau of the U. S. Depart- ment of Labor summed up the administrative efforts of the various States in obtaining compliance with their minimum wage laws, as follows: "In enforcing the laws the commissions have relied much more on gaining compliance through setting rates that would command general support from the employers than on forcing obedience through widespread prosecution of non-compliance. When cases of non-compliance have been found, every effort has been made to adjust these cases informally between the employer and the commission's agents." (****) Part of the adjustments made by State Labor Departments included the collection of back wages as well as obtaining the present conformity of the employer's operations to the lav/. Similarly, the Federal Trade Commission for several years prior to the passage of the National Industrial Recovery Act pursued the practice of dismissing cases on stipulation that the respondent would discontinue the acts obnoxious to the Commission. (*****) While a close parallel between this method of operation by the Federal Trade Commission and the adjustment system of NRA cannot be drawn, it is mentioned to show an established method of administering the law where the volume of complaints of violations is too large to be efficiently handled by the enforcement system provided ~by the statute. Section 4 - Definition of adjust ment. Although, as has been pointed out in the two preceding sections, the functions of the Compliance Division have been stated on numerous occasions to include primarily the adjust- ment of complaints of violation, a thorough search of orders T*) Hote (8) , Supra (**) -Release 1847, November 22, 1933, statement by General Hugh S. Johnson with regard to code administration. This statement was later in- corporated in Bulletin No. 7. (***) The insignia removal procedure is described below in Chapter VI. (****) Bulletin 61, "The Development of Minimum Wage Laws in the United States, 1912 to 1927" (1928), 278-319, inclusive, give a detailed dis- cussion of administrative measures employed by sample States; see also pp. 331-* 390, inclusive, for a further discussion of the subject. (*****) "Annual Report of the Federal Trade Commission" (1932) pp. 44,45 9861 -14- and. instructions pertaining to the subject fails to reveal any attempt to define "adjustment" until a comparatively late date.(*) However, the meaning of the term can be arrived at '"by giving con- sideration to the common usage's of the work, together with the various official statements outlining the functions- of the Compliance Division and the elements of code administration. The standard dictionary definitions give the meaning of the -^ord "adjust" as being to settle, or bring into harmony with the general plan. (**) On the other hand, the. word has been given a special meaning in business transactions, e.g. to settle claims, as in the insurance business. Thus, we see that the meanings credited to "adjustment" by usage embody the id.ea of the payment of claims or damages, i.e. restitution, and the present correction of variations from the general scheme so as to bring conformity with the rule, i»e, future compliance. This amplication of the terra is lent dignity by early utterances regarding code administration and compliance. General Johnson in his release regarding code administration (***) said, "The term 'administration for compliance' is intended to include: (a) The instruction and education of those subjects to the cod.e as to their responsibilities thereunder so as to anticipate and avoid com- plaints of non-compliance, (b) The adjustment of complaints of non-compliance by .education, fair findings of facts, and the pressure of opinion within the Industry, (c) The adjustment of complaints by arbitration, conciliation, and mediation, (d.) The rendition of reports to the enforcement agencies of govern- ment in those cases irT here all other means have failed. Such reports should be based upon adequate findings of fact," The adjustment of cases by education and instruction of respondents as to their code obligations clearly implies bringing the employers into immediate compliance vrith the codes so that continued future observation of the cod.e regulations night be virtually' self-sustaining (except in wilful cases). Stress was laid on building a s@und basis for future code compliance by industry. (*) Field Letter 125 (June 13, 1934) stated certain standards of ad- justment and indirectly defined the word; Field Letter 193 (January 10, 1935) crystallized the meanings heretofore given the. term and. placed them in definition form; Office Manual, III, 1518,221 and 1518.222 (November 21, 1934). •"• ' (**) TTebster's Hew International Dictionary; Funk and ¥agnall',s New Standard Dictionary; "."ins ton' s Simplified Dictionary. (***) Note p. IS .-•» 9861 -15- cognition Fas also given to the fact that some sort of recompense should he sought for the damage already done. This is a natural con- clusion from adjustment by arbitration, conciliation, and mediation! since in composing the differences between the parties to a complaint, it in usually the aim to compensate the aggrieved person. This idea is, of course^ more clearly expressed in violations of wages and hours provisions! where the employee may to paid the deficiency in wage or be compensated for his overtime. Because of the almost limitless variety of situations arising under code compliance, in which no two crses of violation were exactly alike, it is impossible even after two years of experience to dra'< 7 a. precise definition broad enough to cover all contingencies. However, there '-ere developed definitions '"hich sufficiently embodied the principles and basic elements of adjustment to serve as a general guide in the handling and settlement of cases by the field staff and the compliance councils. Section 5 - Pu nc^e of a djustment, (*) Throughout the history of com- pliance the underlying theory of ac justment remained the same. The seem- ing difference in meanings "ts c.a. t.o the changes in stress on particular purposes sought to be ace ore dished by the device, the gradual evolution of adjusts- "nt techniques end policies and the establishment of standards to be fol] "wed in handling cases a.s a result of actual experience, The original purpose of this system of operation was primarily to instruct employers as to their obligations under the codes and to maize them conform to the law both for the- present and the future. The idea that this would serve as the soundest basis for permanent administration, Fnile the value of this method of approach should not be underestimated, it v:as found, that something mere vas needed to prevent recurrences of violations ''oy those employers less cooperative toward the program and (*) The evolution of the Compliance Division was an organic development. It may be divided into four distinct periods: the District office period from October, 1933 through January, 1934; the early State Director period to June, 1934 (when Field Letter 125 and Supplementary Memorandum l"o. 1 ^ere issued and the system of reporting to Washington was changed); the later State Director period from June, 1954 to January, 1935 (when the Regional office system began to function); and the final stage from January, 1935 (under the Regional system 'and when Field Letter 193 was issued) to May 27, 1935 (when the Supreme Court decision in the Schechter Poultry case was announced). This was all presaged by the earlier period of i'TRA activity. Adjustment policies, internal organization, and com- pliance procedure all developed together during these periods. 9861 -16- less receptive to education by instruction. Adjustment then crane to have an apparently different meaning. The original idea of recti tut ion merely to place the parties in status quo was enlarged to include the element of a deterrent to future violations, although in form HPA still clung to the first definition. (*) Thus, in Field Letter 125 and in the Supplementary Memorandum No. 1 to Bulletin No, 7, there was stated for the first time in form of written instructions that a higher rate, varying from time and one- third upward, must be paid for illegal overtime in order to effect a satisfactory adjustment. (**) Likewise, in the absence of records, the field offices were told to accept the employees' statements at their face value (within the discretion of the offices) and to place on the respondents the burden of proof. (* : This change in the purpose of adjustment is reflected in the de- velopment of standards and rules of adjustment, discussed later. Section 6 - Evolution of an adjustment -policy. In the beginning of compliance activities and until June, 1934 there was little attention paic 1 to wage restitutions in adjusted cases. As lias boon stated before, the principal idea in adjusting ca.ses was to make the respon- dent bring his business operations into conformity with the code pro- visions and agree to comply in the future. While the instructions for handling complaints contemplated the payment of bach wages in some cases(****) the restitution principle had a very hazy and in- definite place in adjustments. The adjustment of ca.ses oy concilia- tion, mediation, and arbitration, (*****) while implying restitution (?) Office Manual, III, 4100.2 (Larch 27, 1955) defined restitution as fol- lows: "'Restitution' for a violation means repairing the damage caused by the violation so far as is practicable in the judgment of UFA and in a manner consistent with NBA -policy. " The latter part of the defini- tion contains such general qualifications as to make it unsatisfactory as a guide to field offices for policy in handling cases. (**) "Supplementary Memorandum ITo. 1, "Relative to the Adjustment of Com- plaints", p. 5 (issued attached to Field Letter 125); Field Letter 125, "Manual for the Handling of Labor Complaints" (June 15, 1934) p. 4. (***) Supplementary Memorandum No. 1, p. 6, Field Letter 125, p. 8 stated the principle only ruth relation to cases under codes requiring the keeping of records. For further development of this practice see Chap- ter V and the Part of the History devoted to a discussion of outstand- ing problems. (****) Liason Circular 75 (October 30, 1933), with which were transmitted the initial instructions to District Compliance Directors on adjusting ca.ses, isaid: "There arc circumstances under which a further adjustment is nec- essary other than a. mere explanation of the employer's obligations." For example, it stated that the ".eficiency should be paid in mini) .urn wage violations, (p, 2, par. C-) It went on to say that no restitution could be made in child labor violations, only a correction to conform in the present and future bein necessary, (p. 2, oar. H) . (*****) Ho to (p. A 13 9861 -17- also indicated that the amount of bock wages was to be determined by s reement between the parties as to the facts. This is stated in Bulletin Ho. 7 as follows: "If the respondent admits the violation alleged but furnish satisfactory evidence that he is now complying, is willin to comply in the future and has. made equitable restitution for past violations, the case ••111 be considered as adjusted and the complainant and respondent will be so notified. "(*) Many cases, especially during the period before the establishment of the State office system in January, 1934, were adjusted and closed merely on the agreement of the respondent to comply in the future. Little or no attempt was made to rectify past violations other than b^' - explaining the necessary changes in operation and obtaining agreements to comply in the future, which were often informal and oral. Restitu- tion was required only in infrequent cases, where the complainant was unusually : sistent, anc then was ordinarily the result of compromise between col: ilainant and respondent. It must be remembered in this connection that this was the ini- tial period of experimentation. The personnel, both in Washington and in the field, was with few exceptions totally inexperienced in the administration of industrial regulations. A direct result of the lack of experience was the absence of adequate instructions and working policies, which could be successfully developed only from actual con- tact with .the problems of code administration. Added to this was the fact that the field offices were greatly undermanned* The normal staff consisted of the District Compliance Director, his assistant, a Legal Adviser, and perhaps one other person who divided his time between the field office and the Local Compliance Board. There was also, of course, stenographic and clerical assist- ance. In the Missouri office, for example, there were but two people actually handling the complaints which were pouring in at the rate of about 70 to 80 per week. The lack of an adequate, trained staff grew to be one of the outstandinr problems of the Compliance Division, both in Washington and in the field, and played an important part in the formulation of policies of procedure. With the added experience in obtaining compliance and the in- creased staff under the State office system, came a gradual change in the "adjustment policy. While this step in the development did not be- come really apparent so a,s to be officially adopted by the Compliance Division un..ii June, 1934, it was well recognized in the field several (*) Bulletin No, 7, p. 14, (Underlining supplied). )861 months before. (*) Acting on their own initiative the state offices laid more and more stress on bach wage restitutions and formal assurances of pre- sent and future compliance. Instead of the original policy, dictated bjr necessity of circumstances, of taking the repondent's assurance of cooperation at its face value, stricter standards of adjustment —ere introduced. The requirement of convincing proof of present compliance and payment of all back wages due to the complainant as well as to the other employees of the respondent, tended to become the policy of the field offices in adjusting complaints. (**) This change in adjustment policy was caused not only by experience in handling cases, but Qi r extreme pressure from labor and the more respon- sible employers who saw that this was the only feasible method of deal- ing with ".violations administratively. Coincidentally with the development taking place in the field, and even slightly preceding it, the national Compliance Board began (*) This change in adjustment policy did not occur uniformly throughout the field. Some offices preferred to regard as adjusted any complaint which had been properly cleared, from the record in accordance with the reporting sj^stem then in effect. Thus, when a case was transferred to another agency, either a. Code Authority or the National Compliance Director for instance, for further attempts at settlement, the obligation to adjust the complaint was regarded as terminated. That this was a spurious presumption is clear when it is recalled that many such ca.ses were returned to the State Offices still unadjusted several months later. It was partially because the more pro- gressive offices realized the fallacy/ - of this definition of adjustment that they gravitated toward a stricter policy of ad- justments in fact, rather than through a mere bookkeeping device. This lack of home gehe.it y of the field offices in development of their credos of adjustment and methods of operation was due to variations in personalities and outside influences on the particu- lar offices. This is discussed in more detail .'.under Chapter IV. (**) One should avoid the inference that the changes in adjustment policy sketched in this section were sudden, or unknown to the entire staff in Washington. Those persons who came in contact with field work, even indirectly, were also cognizant of the change and the necessity for it, although perhaps less vividly so, It was only this fa.ct that official recognition could be accorded. The development was a matter of growth rather than a sudden determination. 9861 -19- to tend toward a more strict adjustment policy. Unfortunately, the policies established by the Board were not communicated to the field, except indirectly in isolated cases, until June, 1934, Thus, we ser the National Compliance Board adopting the follow- ing statement of policy at its 23th meeting, on December 13, 1933: "The NBA Policy is well established that the National Compliance Board' or a local Compliance Board may properlj^ require an adjustment by restitution of back pay as a condition to continued display of the Blue Eagle under PBA or as a condition to restoration of the Blue Eagle. "A number o: F local Compliance Boards are on record as refusing to put themselves in the position of collection agencies. As a matter of practical administration, we may advise the local compliance boards to assist in re- covering back pay r The local compliance boards may adopt the policy of withholding recommendations for removal of Blue Eagles from violators of PEA who make restitution to employees. " At the same meeting the Board established the principle that restitution for overtime, in addition to assurance of future compliance, was necessary for restoration of the Blue Eagle. (*) Previously the Board had established the practice of requiring formal agreements to adjust and to comply in the future. (**) These two policies were followed, "oy the Board in handling cases before it until its abolition on Hay 21, 1934 by Office Order 90. (***) Moreover, the National Compliance Board. early recognized, the penalty element in adjustment and shaped its policies to include that direction. In the True Form Corcet Co. case, December 6, 1933, it required as a part of the adjustment that the respondent pay the costs of an audit to determine the amount of restitution and also pay a sum to the Code Authority to reimburse it for investigational expenses. (****) (*) Complaint against Consumers Pood Stores, Bridgeport, Conn. , res- pondent, minutes of 28th meeting, December 13,1933. See also case against lloro Manufacturing Co., New Orleans, La., respondent, minutes of 29th meeting, December 15,1933. See Field Division files. (**) Por example see minutes of hearing of True Form Corset Co., Philadelphia, Pa,. , December G, 1953. See Field. Division files. (***) These policies were carried on by the Advisory Council, shortly changed to the Compliance Council, which was established, by the Compliance Division pursuant to Office Order 90. The Advisory Council tool: over the work of the National Compliance Board- without a break. In fact the change was hardly known to persons outside NBA in Washington. See Chapter VI, infra, for a. further discussion. (****) See Note (27), supra. 9861 -20- This is "better illustrated -by the following statement of policy on February 9, 19- r -4: "IT? fcional Compliance Board regards payment of cost of audit by respondent as a fair and necessary part of the restitution. " ( *) The obvious purpose of this Was two-fold; to conserve compliance facilities of the Compliance Division and the Code Authorities and to add an extra burden on the respondent in making the adjustment so as to tend to minimize any future desire to violate again. (**) In Pield Letter 119 (June 6, 1534) there .was inaugurated a new system of reporting from the field offices to the Compliance Division ill 'Yashin' ton. Beginning with the peri of. of June 16 to Juno 23, 1934 the offices reported the amounts of back wages paid b;- r respondents in adjusting both PPA and code violations complaints. Prom this time on (when field letter 125 and Supplementary Llemo randum ITo. 1 to Bulletin Ho. 7 were also issued) until the termination of compliance activities on May 27, 1935, continued emphasis was laid on wage" restitutions in making adjustments. The reasons for this attitude have been discussed in the preceding section. In this connection it is wo.ll to note that under the new reporting system the field offices were required to show which of the valid com- plaints had been adjusted by the payment of back wages. Where the report to Washington showed complaints which .-had. been closed without, the respondent making restitution to his employees, there was al- ways the distinct possibility of the office being called to account and being made to give sometimes embarrassing explanations of the departures from adjustment standards.- Conversely, the idea was generated that the efficiency of the various offices would be judged - ^oj the number of cased reported as adjusted and the amount of restitu- tion made n oy employers to their workers through the efforts of the particular office. This- served as a very, important psychological factor in causing all field offices to raise their individual standards of adjustment and to become more and more active and thorough in the searching out (*) Linutos- of 67th meeting, February 9, 1934. See Field Division files. (**) The development of the Board's policy to require penalty rates in the case of illegal overtime will be discussed in the subsequent sections of this chapter devoted to a treatment of the creation of standards of adjustment. 9361 -21- and co. :\ of violations of code labor provisio Althou .: not iroctly traceable tc it, nevertheless, it in inter- esting to :-< t this official manifestation of change in • \jui it : Doli coincidental with th ation of the office of Assistant Administrator for rielc. A ministration. (*) tie newly established position carried with it the functions of supervision o\ the execution c_ policies governin compliance, enforcement, i c'ode authority organization; the coordination of the Industry Divi- sions with the Compliance an: 1 . Litigation Divisions; and the making and execution of operating plans for the development of field com- pliance ?.nd 'field agencies. At about this time also, the word -"equi table" was dropped in describing restitution. (**) Fiel ■". Letter 12-3 speaks of "full restitution." (***) The use of the word "equitable" in connection with restitution scons to have been religiously avoided by the Com- pliance Division (except in those few cases of extreme financial in- ability, etc. where compromises were permitted) (****) from that tine on. (*****) The polic; of adjustment of corrolpints was finally' stated in the Of- .ce Manual, III, 4111 (Larch 27, 1935), as follows: "Ho case ma ' be filed as adjusted unless restitution has been made to the extent 'eeraec just and equitable by the Compliance Division." It has already been shown that the "extent "eemed just and equitable by the Compliance Division" '/as full restitution to all employees, except in - those extraordinary cases where compromise settle- ments were permitted. (******) a_-, exclusive, special procedure was finally established for this latter type of adjustment. (*******) (*)Office Order £2 (early June, 1934). (**)See note page 18, supra. (***)Pield ; Letter 125, p. 4. (****)Dis cussed in Chapter V, Section 9. (*****)The tern "equitable restitution" re-occurs in the Office Manual, (Code Authority Organization), III, 1518.221, which states the policy to be, "Upon determination of a violation, the committee nay consider the compliant adjusted if the respondent- makes equitable restitution and gives satisfactory assurance of present and future compliance." Compare this with the statement of policy, prepared by the Compliance Division, contained in the Office Manual, III, 4100.5 and 4111, mentioned in the text immediately following. ******) See note page 20 , supra. P , ******)Pield ietter 194, p. 2. '. «, 9851 wP ,r )_ The corruption of this strict policy of adjustment will be shown later under a discussion of the practice of dropping cases. Section 7 - The <"e yelo"i ment of sta n dards of adjustment . Having considered the definition and purposes of the adjustment and the development of "policies, it is well to look at the standards which were employed to insure that the handling of complaints would "be fairly uniform arc. in accord with the theory. The statement of the functions of the Compliance Division (*) in itself served as a general guide. By it the assurance of present and future compliance was made necessary in all cases. Aside from the definition of adjustment (as shown in sec- tion 4- above) anc the statement of the elements and functions of ad- ministration for compliance "by General Johnson, (**) there were no definite standards for the adjustment of wages and hours violation Until field Letter 125. Definite standards for the adjustment of trade practice cases were never introduced. (***) However, Liaison Circular 75 gave indications of the standards tc be followed in some cases. The only p re-requisite to adjustment in the form of a definite standard to be met was contained in field Letter 2G (December 22, 1933), which provided that whenever a complaint appeared to "be justified, and the complainant had lost his job by reason of filing it, reemploy- ment should "be a condition precedent to closing the case. This was previous to Executive Order 6711, hay 15, 1934, definitely prohibiting discrimination against complaining employees. Closely interrelated with the development of the definition and policy of adjustment, there were evolved standards for the closure of cases of particular types of violations. This has been treated briefly in the foregoing section on the development of policy. With the growth of the idea in the field that it must be made unprofitable to violate codes, there was a natural tightening of requirements for considering a case satisfactorily adjusted. For example, more attention was given to restitution covering violations as to all employees. In cases of overtime violations, the adjustment was required to include payment at time and one-third, or the rate specified in the code for overtime permitted incases of emergencies, etc.. The latter practice, was. adopted 'y the various field offices in the handling of individual cases, without definite instructions "orescribin an overtime rate. (*)See Note page 13 supra. (**)See i!ote pag e 1 3 sup ra . (***)Pielcl Letter 193 (January 10, 1935), p. 9. 9861 ■ ■eflec'ts th sli, ht] ■ l' r 1 tional Compliance 3T> iscussec" 1 in ' section o t.ri t ■ immediately ■ecodi . In | ; c- ses wnere restoration cf the 331u ':(*) the Chrirmr.n of tin •', who ' Lso bion 1 . iice Director, sir) rosso:*, the opinion of the Doard as boing that full restitution 33rurin tli entire period of non-compli- ance should be ■.:? . before the insignia were restored. At -' co! i-aratively early date alro, there \ is considered the settin of standard f( binent 03 maximum, hour violrtions. The Nation? 1 Compliance 3 • ■ 'isapprcve the sct J ;,-j.;\ o . ? a definite rate of ">ayment for aajuc'tment, an* enunciated the principle that no k".: t": --• th rates srovic'ed in tho -o.'or, for legal overtime would be ac:o-t ■ a£ c satisfactory* adjustment. (.**) The right was reserved to increas th remium in particular cases. Short].;; thereafter the 333! o a re disapproved a proposed modifica- tion of the sta: ".art?, that all restitution for illegal over-time should be ?t s rate high r than that for Lour tolerances provided in the co is. (***) This standard remaineo in uro until April 26, r.)34, when the 3E)oard, having had considerable intervening experience in handling cases, hold in a case before it, "Adjustment for overtime employment of an employee, whose employment in excesc of the max- imum hours is a violation of the Co e should always provide payment to such employee at b higher rate tii?.:: that specified in the Sec for overtime employ- ment of an err loyee rho is permitted ~oy the Cole to ■ -orl: overtime. "(****) The forri of adjustment agreement was then changed to include resti- tution at ti: e and one-half for maximum hour violations. (*)loft Candy Scores, Inc.. Washington, D. C, respondent, minutes of 21st meeting, December 5, 1233. See also note page 13 supra. Sec Field Division files. **)Minutes of '57th meeting, February 9, 1"':". See Field Division files. **)3.3inutcs of 71st meeting;, February 15, ]d34*. Sec Field Division files. ' « ■ * * ) Ame ri c an ' 3ea t Co., C 1 ev c Ian ." , Ohi o , re sponden t , minut e s of 122nd meeting, April 36, 1034. See Field Division fills. -24- This announcement of a standard of adjustment is especially signi- ficant since the functions of the National Compliance Board had been restated in Office Order 74 (March 26, 1934) as including furnishing recommendations on general compliance policy and procedure to the National Compliance Director. The Board's decision was adopted by the Compliance Division in es- sentially the same form and issued to the field as instructions in Field Letter 135 and Supplementary Memorandum 1 to Bulletin 7.(*) By May, 1934, then, the National Compliance Board and the State Offices had created standards of adjustment covering cases of violation of the minimum wage and maximum hiurs provisions of the codes, in addition to the instruction contained in Field Letter 28 that reinstatement of an employee discharged for complaining, T -here the compladnt was justified, should be ma.de a condition precedent to filing the case as adjusted. (**) Generally speaking, as to trade practice violations and cases of non- compliance with labor provisioiis other than r: ages and hours, the only requirements for adjustment were present conformity to the codes and formal agreements to comply in the future. As a, corrollary to the creation of standards of adjustment, was the more active interest taken by the state offices and the National. Com- pliance Board in the obtaining of compliance through the adjustment of cases. Thus, even where the complainant withdrew his complaint with assurances that conditions had been corrected, experience dictated the necessity of continuing to handle the case 'until convinced that a satis- factory adjustment had actually been made.(***) We have traced the development of the definition and purposes of adjustment and the evolution of the policy and standards to be followed in closing cases. Consideration should now be given to the instructions issued by the Qompliance Division to its field offices regarding the handling of complaints. Section 8 - In structions issued to the field offices . (****) The issuance of Field Letter 125 marked a new era in administration for com- pliance. In it was contained what was regarded then as a strict set of rules for the adjustment of cases. In fact, however, it was really a collection of the "general principles previously developed in the field, and in cases (*) Note (20), supra. " (**) See p. supra; see also City Bakery Co., De Queen, Ark. respondent, National Compliance Board minutes, 51st meeting, January 22,'1934. See Field Division files. (***)B roadway Motors, Inc., Chicago, 111., respondent, National Com- pliance Board Minutes, 97th meeting, March 22, 1934. See Field Division files. (****) The complete text of instructions issued to the field on standards of adjustment may be found in Supplementary Memorandum No. 1; Field Letters 125, 143, 148, 160, 193 and 194; and Office Manual, III, 4110 et seq. j For obvious reasons this section is devoted merely to a discussion of the general contents of those instructions. 9861 -29*- beforo the National Compliance Board, under which considerable discre- tion was left in the field personnel in the application of those stan- dards . In reading the "Manual for the Handling of Labor Complaints" it is important to remember that, being based entirely on experience, It was both sound and practical, and was used as a bible by the field staff. Under the heading "What Constitutes Satisfactory Adjustment of Complaints " there were enumerated standards of adjustment for violations of the labor provisions of the various codes. In correcting a minimum wage violation the respondent was required to make full restitution of back wages due, based on the code miniiniim for the entire period from the effective date of the code. (*). Like- wise, in adjusting maximum hour violations restitution was made at a higher rate than that for regular working hours. In the event overtime was permitted by the code in certain limited types of situations, such as emergencies and breakdowns requiring the protection of life or pro- perty, for which an overtime rate was specified, the recti tut ion rate was supposed to be placea higher. (**). However, in practice the field offices generally only placed the overtime restitution at time and one-third. TThere the respondent had employed "learners" in excess of the num- ber permitted by the code, or Lad improperly classified workers as 1 ^handi- capped," either failing to obte.in the necessary permit (***) or exceed- ing the allotted ratio, adjustment was ma.de by paying the deficiency in the code minimum wage to these employees necessary to bring the respon- dent into compliance with the code requirements. (****) Restitution was made, in the case of "learners," usually on the basis of seniority in experience, and, in the case of "handicapped workers," generally accord- ing to actual ea.rning capacity. Discretion was placed in the field offices in the application of the standards mentioned above in those cases where the employer seemed financially unable to make full restitution, or where other circumstan- ces-appeared to warrant an exemption from the standard requirements. (*****). In those special cases, adjustment for less than full resti- tution had to depend en the recommendation and approval of the State Adjustment Boards, (******) whose organization and functions will be treated fully under the subsequent chapter on compliance procedure in the field. Standards of adjustment were also stated for those types of cases in which money restitutions were not practicable. ■ (*) Field Letter 125, p. 4. (**) Idem. (***) Under Executive Order 56C6-F (February 17, 1934) "handicapped" workers might be employed at less than the code minimum wage on the obtaining of individual permits issued under regulations prescribed by the U.S. Department ■ of .Labor, (****) Field Letter 125, p. 6. (*****) pieid Letter 125, pr>. 4 and 5. • (******) Ibid, pp. 4, 5 and 34. Q 361 -26- Where the employee had "been discharged for filing a complaint, ad- justment included reinstatement and agreement not to discriminate against him, or where reinstatement on a harmonious "basis seemed impossible, the cooperation of the respondent in securing a new job for the employee. (*) Where the violation was the failure to post code labor provisions, (**) to keep proper records, (***) or the infraction of child labor, home- work, safety, and other labor provisions, (****) the standards of adjust- ment did not generally require any form of restitution. The adjustment of violations of productive hours restrictions (strictly speaking trade practice provisions) was left entirely to the discretion of the field personnel, there being only suggestions as to several possible adjustment devices. (*****) In addition to the particular standards set forth above, Field Letter 125 contained general standards applicable to all cases. Thus, by full restitution was meant adjustment a^ to all employees, regardless of whether or not they had complained. Moreover, there had to be a formal statement of compliance, covering the points on a suggested form, and assurance that steps had been taken to prevent recurrences of violations. (******) ..- The field offices were definitely instructed not to file cases as adjusted until all terms of the adjustment had been complied with, that is, for instance, until the payment of the last installment where resti- tution was made in several payments, unless sufficient security therefor had been furnished. (***#***) Also Field Letter 125 suggested that attempts be made to have the respondents install and agree tc maintain adequate sets of records, so as to help insure future compliance. The importance of this will be developed in later chapters. The standards of adjustment contained in Field Letter 125 were re- stated and included in Supplementary Memorandum itfo. 1 to Bulletin No. 7, issued at the same time. It further summed up the standards of adjust- ment by the following statement: "If violations are discovered or admitted, evidence of proper adjustment must be secured as follows: "A. Evidence that the hours and wages of every employee (or if that is not practical, of certain specified classes of employees) have been verified for the period in question either by examination (*) IBID, pp. 5 and 15. (**) Ibid, p. 5. (***) Ibid, p. 8. (*****) p ield Letter 125, p. 7. (******) itid, pp. 15 and 17. (*******) IMdj p% 1?# 9861 7- "of the employer's hours and wage records or of certified copies tnereof. If the employer has not kept such records, he should at least be required to file a certified copy of his payroll, "B. In all cases involving the payment of back wages, evidence that restitution has actually been made should be required. "C. The employer should be required to file a written statement that he has corrected past violations and that he will comply in the future. 11 (*) With a few minor amplifications of the instructions contained in Field Letter 125 and Supplementary Memorandum No. 1, those standards continued intact until the issuance of Field Letter 193 on January 10, 1935. In the meantime, of course, the further refinement of these standards and the development of their application was continued through the day by day experience of the Compliance Division in handling complaint: Field Letter 193, to a large measure, repeated the instructions theretofore issued, but placed them in more emphatic form and made ad- herence to them more obligatory on the part of the State Offices. A general rule of thumb was announced in the shape of a definition of adjustment: . "A case is adjusted when the employer is in full compliance and restitution has been made." (**) Simple as this definition was, read in the light of field exper- ience and the development of the methods and policies of the Compliance Division it was pregnant with meaning. It was taken literally and full significance was given every word in denoting the. basic policy of adjustment. At this time forms of certificates of compliance for both labor and trade practice complaints, and agreement to make restitution in labor cases, similar to those used by the old National Compliance Board and the Compliance Council, were adopted for field use. (***) Changes were made in the standards of adjustment in that one and one- half times the regular rate of pay or the code minimum, whichever was higher, was definitely stated to be the minimum rate in computing resti- tution for violations of maximum hours; (****) a nd piece-workers were required to be compensated for all plant hours during which they were on their employers' premises and available for work, unless the respondents were able to establish the employees' presence was not required and they had prior notice to that effect. (*****) (*) Supplementary Memorandum No. 1 to Bulletin No. 7, p. 4. (**) Field Letter 193, p. 5. (***) Field Letter 193 pp. 8, 9, 11, 12, 13, 14. (****) Ibid., p. 7 (*****) i^id., p. 8 9861 -38- In Field Letter 194 (January 18, 1935) a further restriction was placed on the application of standards of adjustment. A new, definite procedure was created for the adjustment of cases with less than full restitution. (*) Under prior instructions such special cases were left to the discretion of the State Offices on recommendation and approval of the State Adjustment Boards., . (**) This new procedure,, however, was ex- clusive and was designed to strengthen the standards of adjustment "by making the exceptions to the usual requirements more difficult to obtain. (***) However, since this procedure tended to interfere with the State Offices' practice in suspending action on certain types of cases where deemed advisable, and. adversely affected the use of State and Local Ad- justment Boards, it was not strictly followed "by the field offices. (****) In March,' 1935 the instructions previously, issued by the Compliance Division were 'compiled and in eluded* in the new Office Manual. (*****) Inasmuch as there was no revision or change in the standards of adjust- ment after Field Letter 194, a further discussion of the contents of the Office Manual on this subject is- not deemed necessary. In the last few months of NBA there was a slackening of the strict application of these standards in certain types of cases. This was evi- dne't in the service trades and in some other intrastate industries, es- pecially in states where the courts were not favorably disposed toward the codes. This apparently backward step in policy was the product of both expediency and experience. A further discission of this aspect, however, is postponed until consideration has been given to the procedure developed end followed and study has been made of the various influences entering into the historical growth of the • Compliance Division. (*) Field Letter 194, p. 2, et seq. Similar procedure was established for the 'Regional Compliance Councils, Field Letter 193, pp. 6 and 7. (**) Field Letters 125, 143,-148, Supplementary Memorandum No. 1. See also p< 26, _ supra.- (***) This was indicated as the purpose by the following quotation from Field Letter 194, p. 2: "ADJUSTrFNT O F CASES FOR LESS THAN FULL RESTITUTIO N. It is the' policy of the Compliance Division not to consider violations of labor provisions adjusted except upon the payment of back wages to employees in the full amount necessary to make restitution for past violations,' in addition to sectiring present compliance. In some cases it is not feasible to make adjustments upon this basis. The follow- ing procedure will hereafter govern the settlement of cases involving a departure from the above policy." (****) This is more fully discussed later, under those sections of Chapter V relating to the compromising and dropping of cases and the use of Adjustment Boards. (*****) Office Manual, III, 4110 et seq. 9861 -29- ( Author's note: In this chapter little has boon said concerning the adjustment of trade practice violations. This was done purposely for several reasons. In the first place, standards of adjustment were never developed for trade practice cases and a far greater number of such complaints were handled by Code Authorities rather than by NRA field offices. In most cases in which they were concerned, the state offices acted only in an advisory capacity to and to supplement the activities of the Code Authorities. On the other hand, emphasis has been laid on the labor phase of compliance because: (a) There were many more labor complaints than trade practice complaints filed and therefore it was more necessary to develop policies and procedure for this type of case. (b) Since labor violations fell into certain well-defined categories* whereas unfair trade practices were variegated both in number and character, it was more practical to have a set of general rules of pro- cedure and broad policies for the former class. (c) Closely akin to (b) , is that there was no equitable or prac- ticable way of making restitution for trade practice violations except where the code had a provision for some sort of liquidated .damages. Administratively, it was impossible to determine the amount of the damage occasioned by a violation, and often difficult to ascertain who were the injured parties. Restitution for labor violations, however, was a matter of computing back wages due according to the prescribed formulae. The aggrieved parties were the employee, who was theoretically compensated, and the competitor, who gai-ned indirectly where the com- petitive advantage was removed q-j the respondent paying back wages.) 9861 -30- Chapter IV - The Origin and Development of Field Offices Section 1 - The establishment -of temporary offices . During the first few months after the National Industrial Recovery* Act ^as signed by the President on June 16, 1933, almost the entire energies of the NRA --ere devoted to the task of code making. Since it was soon seen that the slow process of formulating and approving codes for the various trades and industries would take many months, there was announced in July, 1933, a temporary program known as the President's Reemployment Agreement, As a. oart of this NRA program there were necessary, first, an in- tensive national publicity campaign, and, second, a system of ^.minis- tration for the handling of complaints and petitions for exemption from the Agree: lent. Both these objectives, it is clear, required a large field force. Because of the enormity end emergency nature of the task the NBA, through an arrangement with the Department of Commerce, utilized as the core for such organization the District Offices. of the Bureau of Foreign and Domes- tic Commerce, which had long been engaged in activities for the promotion of and assistance to tra.de and industry „ (* ) The balance of the organi- zation was then made up of voluntary workers and agencies, including State and District Recovery Boards, Local Compliance Boards, and various local committees. Through conferences and oral agreement between the two Government agencies, .the District Office staffs of the Bureau were loaned to NRA work. In this connection a liaison office was established in the Bureau between NRA 'and the District Offices. In illustration of the activity of the Bureau in the NRA program, it has been stated that up until Decem- ber 2, 1935, employees of the Bureau worked 11,202 days for NRA at an estimated annual cost of $150,000, (**) • In addition, many former employees of the Bureau of Foreign and Domestic Commerce, whose services had been terminated on July 15, 1933 for economy reasons, were recalled to work directly for NRA on its pay- rolls. On July 11, 1935, the District Managers were called to Washington for a two ~ r eeks period for the purpose of instruction and training in the new NRA program. It was during the latter part of this conference that the NRA campaign was announced and actual responsibility for field organ- izational activity was virtually placed on the District Managers for their respective districts. (*** ) The work of the District Offices during this period and until the creation of the Compliance Division on October 26, 1933 by Office Order 40, was almost entirely of a promotional character. It is to be remembered that the Local Compliance Boards for the handling of NM complaints were not begun to be established until after September (*) France, "Role of Bureau of Foreign and Domestic Commerce in NRA Program" (December 6, 1935), pp. 1, 5. See files cf N. H. Engle, Assistant Director, Bureau of Foreign and Domestic Commerce. (**) Ibid., p. 9. (***) Ibid., p. 3. 9861 -31- 11, 1933, and thus the compliance phase of the work began only about one month before the District I ans ji rs ,-, ere made District Compliance Directors, a. week prior to Cfiice Order 40. It was not until October and llovember of 1933 that most of the local Compliance Boards '-'ere au- thorized to operate. Bearing in mind this history of activity of the District Offices of the Bureau during the initial months of NBA, it is not surprising to note that on October 19, 1933, the Administration, with the approval of the Secretary of Commerce, appointed the District Managers as District Compliance Directors in the field organization of twenty-six offices of the new Compliance Division which was about to be established. (*) At this time there was also issued a set of instructions to the new District Compliance Directors on the handling of code complaints. At the time of their appointment as District Compliance Directors, the District Man- agers were furlou. r hed by the 'Bureau for three months and placed on NBA payrolls. This arrangement was intended only to be temporary pending the establishment of a permanent government code compliance system, which ^as finally done in January, 1934. On the latter da.te there was created a system of State NBA Compliance Officer, and State Directors were appoint- ed from outside the existing organization. This new system was initiated with a meeting of all State Directors in Washington the first of February, 1934. At this meeting, which lasted several days and was composed of a series of group conferences and discussions, the State Directors were informed as t the general outline of organization and policies. Specific questions with relation to compliance work were also taken up. In add- ition, the State Directors had been instructed in advance to bring with them memoranda of local field problems for joint discussion. While the advantages of this type of meeting are obvious, most of the value was lost because the State Directors '-ere new to NBA compliance work a^d for the main inexperienced in industrial regulation. The reasons, other than the need for a full-time government agency to adjust complaints, for the separation of NBA District Compliance Directors from the Bureau of Foreign and Domestic Commerce are sunmed up as follows: "It is felt that as compliance directors the district managers should, not be associated with Buforcom work and thus avoid any cri- ticism which might be directed at these men if they continued as dis- trict office managers while acting as compliance directors. "(**) This statement took recognition of the fact that the work of the Bureau had been chiefly the promotion of trade and relations had been almost entirely with industry rather than with labor. Also, in NBA work, the Bureau offices had been active in stimulating the formation of trade associations and other business groups, and it was therefore felt that accusa.tions of partiality might come alike from labor and (*) In NBA Studies Special Exhibit Work Materials #77. (**) France, "Bole of Bureau of Foreign and Domestic Commerce in NBA Program" (December 6, 1933), p. 75. See files of N. H, Engle, Assistant Director, Bureau of Foreign and Domestic Commerce. 9851 those portions of industry not organized under these trade associations. The importance of the influence of the Bureau in shaping the poli- cies and procedure of the Compliance Division will "be shown in succeed- ing sections of this and in the following chapters. It is sufficient to point o\it here that prior to the State Office system the field was almost entirely staffed "by former Bureau employees. During the remainder of compliance history many key positions, "both in the State and Regional Offices, were filled by these men. Section 2 . - Intern a l Organization - early deve l opment . In order to understand, properly the administrative efforts of K'RA it is important to know the mechanics by which it was sought to accomplish full com- pliance with the law. For just as the successful administration of any new and complicated set of regulations, such as the codes, must ultimately depend on public understanding and support, so also is it based on the practical aspects of application. This naturally brings us to a consideration of the internal work- ings of the. field offices, the primary media of contact with business, so as to view the facilities for educating employers and bringing them Into conformity with the codes. Digressing for the moment, it is important to remember what has been pointed out before, that the field was distinctly non-homogeneous. Field off ices varied widely in their methods of approach to particular problems, their internal organization, and their very fundamental concept of adjustment. These variations, of course, were due primarily to dif- ferences in personalities, and in social and economic outlooks. They were also caused by the nature of the offices' daily associations with business, labor and other outside influences. These differences in field offices were much more marked after the creation of the State Director system, probably because the District Compliance Directors had. served together as District Lanagers of the Bureau of Foreign and Domestic Commerce, and therefore had a fairly standardised background. (*) Then the District Compliance Offices were established by Office Order ho. 40 (October 26, 1933), (**) their personnel consisted in a District Compliance Director, his assistant, a legal adviser (to be appointed), and clerical and stenographic helpc(***) Legal advisers were appointed some two or three ™eeks later. (****) Shortly thereafter the larger and more important offices were allowed very slight increases in personnel, usually in conjunction with the local Compliance Boards. The appointments (*) In spite of this heterogeneous quality, for the sake of convenience the field must be spoken of as a unit, except in particular cases. (**')The District Compliance Directors were actually appointed on October 19, 1933 by letters from the Administrator. Instructions on adjust- ment were issued the same day and amplified in Liaison Circular 75 (October 20, 1933). (***) ' Liaison Circular 73. ' (****) Field Letter 5 (November 10, 1933). 9861 - 53- were all or. a per diem basis since the system of organization was re- garded as temporary. At this time there was no clear definition of duties either by Washington or by the field offices themselves. Generally speaking, of course, the District Compliance Directors had been charged with the re- sponsibility of obtaining compliance with the various codes and (working in conjunction with the local Compliance Boards) with the President's Reemployment Agreement. (* ) Actually, the District Compliance Directors laid stress on oublic relations work, rather than adjustment. Thus, their energies and the time of their assistants, were devoted primarily to fostering relations with tra.de associations and other business groups, and to a lesser de- gree, labor organizations. They also spent considerable time in assist- ing the organization of local code authorities and in publicizing through the press, by radio, and by public addresses, the benefits and aims of NRA, and in attempting to stir up a fervor among business men for sup- port of the Recovery Program. This idea of the District Office period that NRA compliance was almost exclusively a selling campaign was a natural carry-over from the earlier feverish days of the President's Reemployment Agreement drive. Because of the nature of this activity,' and the lack of instructions from Wa.shington, it is next to impossible to determine with any degree of accuracy the functions of the various field officials, except as broadly stated above. There is a partial exception to this lack of definitions of duties, however. The Legal Adviser, it was fairly clear, was to examine com- plaints of code violations for legal sufficiency and to pass on all legal questions arising in the offices, which did not require final interpre- tationr;of codes. (**) The assignment of responsibility to handle and adjust complaints, which was properly the primary duty of the Compliance Division, was left in a nebulous state of disposal. Adjustment of complaints was usually left to members of the clerical staff, assisted sometimes by the Legal Adviser, and the District Compliance Director or his assistant, in a sort of hodge-podge arrangement. Again, practices in different field offices varied so greatly that it is impossible to generalize with more than a fair degree of accuracy. . (*) Office Order 40; Liaison Circular 75; "Regulations for Adjustment", etc, (October 19, 1933); William K. Davis, "N.R.A. Plans for Code Compliance" (December 5, 1933). (**) "Regulations for the Adjustment of District Compliance Directors" etc. (October- 19, 1933), Office Order 53 definitely placing the authority to issue interpretations in the Industry Divisions was not issued until December 29, 1933, but it was generally under- stood prior to the date of that order that there was no authority in the field to issue final rulings or interpretations, 9861 -34- Suffice to say, that in the better field offices, which later -ere to play an increasingly important role in shaping general policies of adjustment and procedure, although organization was undecided, a stronger emphasis wa'S laic 1 on the adjustment function. Thus, a. few of the Legal Advisers r^ent "beyond their regular defined duties of advising on legal questions, to delve into the actual adjustment of complaints. This was also true with a small minority of District Compliance Directors and their assistants. This fact is important "because from this class of field personnel were later dra r n a number of the Labor Compliance Officers and Tro.de Practice Compliance Officers, and, with the inception of the Regional system in December, 1934, some members of the Regional staffs. This personnel angle is mentioned because it was probably the most im- portant internal influence on the development of the Compliance Division. (* Section 5 — Development of internal organization under the State Office system . (**) Following the creation of the State Office system, discussed under Section 1, there was a marked development of the field staff. This was forecast in a statement by the National Compliance Director on December 5, 19S3,(***) in which he described briefly the ne 1 ^ organiza- tion along state lines, saying that each State Director would have a suf- ficient staff of assistants and adjusters to develop the facts and. ad- just the complaints which were filed. Unfortunately, the requisite full conralement of personnel was never realized. The staffs of the District Offices were absorbed by the ne^ State- Offices, There was therefore, little difference between the tvro systems at first, except in form. However, since the State Directors were practically all local men, and chosen from man/ walks of life, the in- jection o:l new personalities soon made the State Office system novel in fact. . ' The State Offices were intended" to be a "permanent governmental regional adjustment system. «(****) It is not surprising, therefore, to note that the plan provided for a more complete and' complex organization. The District Compliance Directors became Office Lanagers in the old. offices and. equivalent positions ^ere created in the new offices; the Legal Advisers and the clerical and stenographic staff's continued in their sane cajoacities; and in addition, under the State Director, were ad.ded the positions of Labor Compliance Officer, Trade Practice Compliance Officer, and several field adjustersl(*****) TJhile these latter positions (*) Nevertheless, the salesmanship feature of compliance ^as always an important one. There vras merely the cue st ion of placing it in its proper relationship to the adjustment of violations. (**) The first instructions to State Directors, relative to their func- tions and. the internal organization of the field offices, r- ere con- tained, in letters sent to them on their appointment by the Admin- istration. (***) Uilliaxn H. Davis, "N.R.A. Plans for Code Compliance." In NBA Studies Special Exhibits Work Materials #77, (****) Idem (*****) Bulletin No. 7, p. 11. 9861 -35- state Director State Adjustment Board Executi've Secretary Legal Adviser Labor Compliance Officer Legal Adviser J Trade Practice Compliance Officer Office Hanazer Clerical and Stenographic .Staff Field Adjuster Note: Compare this chart with the organisation scheme as later developed in its application (infra, pp. 59-62). 9861 were created at the beginning of the State Office system, in many in- stances some "-ere not filled for several reeks and months after that, and, in the case of smaller offices, the functions of several positions were always exercised by one man. Bulletin No. 7 marked the transition of the organic development of the Compliance Division from the District Office stage to the second period. The idea that the adjustment of complaints, as against a mere sales campaign, was a necessary ingredient of compliance, was given real impetus. In creating an enlarged staff for the field offices, Bulletin No, 7 described the functions of the various new positions in such a way as to leave little room for mere public relations vork, except as inci- dental to the adjustment of complaints. (* ) The State Office internal organization was provided in Bulletin No« 7, which was amplified by Field Letter 69, issued February 24, 1934, (**) The plan provided that the staff was to be headed by the State Di- rector, who served in a dual capacity as State Director of the National Emergency Council and State NRA Compliance Director. In the latter posi- tion he was charged with the duty of obtaining compliance with all code provisions and with the administrative responsibility of the office, (***) although in actuality these functions were performed by the State Director in but few offices. Next in general authority to the State Director was the Office Manager (whose title was changed to Executive Assistant in Field Letter 69). His duties included overseeing the general functioning of the of- fice; handling all matters of office routine and details as to space, personnel and equipment; assisting the State Director in maintaining relations with the press and in public relations work; serving as exec- utive secretary to the State Adjustment Board; handling all trade prac- tice compliance matters where there was no Trade Fractice Compliance Officer, (****) (*) N.2.A. Bulletin No. 7, p. 11, "These State Directors are charged with the duty of adjusting, whenever possible, all code violations not adjusted by Industry and to that end, under these Regulations, will do everything within their power to secure compliance through education and explanation"; also, "Until — (field adjusters are appointed), the Labor Compliance Officer and the Trade Practice Compliance Officer may act as their o™n adjusters. The Office Manager and the Legal Adviser may also act in this capacity." (**) On the opposite page is a chart showing the functional organization which ': r as established. (***) N.F.A. Bulletin No, 7, p. 11, "The State Director is responsible for all action taken by his staff under these Regulations and may sake such office rules as he deems desirable for the supervision of the activities of his staff." (****) Field Letter 69, p, 1. 9861 -57- Th e Labor Compliance ftfiicer was charged with all matters concerning compliance vith the labor provisions of the various codes, and reported directly to the State Direcuor(*) . Although not so definitely stated, it generally understood that the Trade Practice Compliance Officer occupied a position similar to the Labor Compliance Cfi'icer, vith respect to tirade practice compliance matters. Under both labor and trade practice compliance officers was a staff #f Field Adjusters wh» B6 duty it was to investigate and adjust all com- plaints assigned tl them by the Labor and Trade Practice Compliance Sff icers. (•* ) There was also a clerical and stenographic staff, which was under the supervision of the Office .Manager or Executive Assistant. The position of the Legal Adviser with relation to the two Compliance Officers and the iffice Manager was never clearly determined. Generally speaking, he was supposed to report direct to the State Director, but advised all members of the staff on legal matters. In addition to the functions of rendering advice and opinions and examining complaints, (*** ) his duties included the adjustment of complaints, -acting (****) as legal adviser to the Stat* Adjustment Board, (*****) and preparing all unad- justed complaints f«r transmittal to the National Compliance Director for further action, (******) In addition to the regular staff, there was a State Adjustment Board, composed of an impartial chairman and equal representation of employees and employers. This body's chief function originally was to hear appeals from decisions tf the State Director's staff and to deter- mine disputed questions of fact* It acted purely in an advisory capacity to the State Director, It's members served without pay. The functions, development and us*s of the State Adjustment Boards will be treated in detail later. The members of the staff were stated by Field Letter 69 to have distinct and separate duties. The State Director was charged with de- termining the necessary lines of administrative authority to insure ful- fillment of his responsibility ©f obtaining complete code compliance within his particular jurisdiction. Thus, it is seen that the original plan of organization provided for a labor compliance division, a trade practice compliance division, and an office management division, all heading up to and under the diredt supervision and authority of the State Director, It should be understood that these divisions of internal or- ganization related more to functions than personnel, ("*) Idem. ' " " : : (**) Bulletin No. 7, p. 19, (***) Supra, p. 33. (****) Bulletin No. 7, p. 11. (******) Ibid., pp. 16, 17, providing for the procedure on unadjusted cases. It was understood that this was the function of the Legal Ad- viser, 9861 . , . , ; • ■*■■■ " •- 38.-, ;•,.:-. "■*,-., The appointment of the new personnel, except the Labor' Compliance Officer, was vested in the State Director, subject to the approval of the Compliance Division in Washington'. (*) The Dehor Compliance Officer was selected by the HHA and the U. S. ^Department of Labor jointly, the latter agency largely influencing the choices. Theoretically, the appointment of Field Adjusters was made by State Directors upon the advice and recommendations t of the Labor Compliance Officers.' (**) ' Actually, Field Adjusters t were appointed by some State Directors without such recommendations and without regard to the qualifications of the appointees to fill the positions. It is quickly apparent that such a situation was inherently trouble- some for the Compliance Division. This first impression is justified, for there later 'developed out of this intangible conflict of authority decided and serious rifts between the Labor ' Compliance Officer and the State Director in many of the. off ices. This internal disruption .was heightened by a sometimes violent dis- agreement on adjustment policies. ■■ .Since the . State Directors, by virtue of their functions and general responsibilities, had little to. do with ■ the every day experience -of handling complaints and making adjustments,'' they tended to under emphasize the. importance of the resti'tution element. This situation, of course, greatly hampered the efficiency of those offices in which it existed. It was partially overcome by -oral instruc- tions from NBA Field Representatives, • traveling out of Washington, virtually placing the entire responsibility and actual authority for the selection of Field Adjusters in the Labor Compliance Officers-. This action occurred in the late spring of • 1934, just preceding or about the time of- the issuance of Field Letter 125, which gave official recognition to the importance of the restitution element in adjustment. ■ This develop- ment, then, really belongs in the beginning of the third phase of the Compliance Division's history. . . •. - ": It must here'again be reiterated with emphasis ' that the metamorphosis which has been just described did not take placeyin all the- field offices, or probably even in a majority of them. It is important to remember that in a fair proportion of the field offices- the staff was more unified in its policies of procedure and adjustment , which were realistically defined. Selections of new personnel, particularly. Field Adjusters, and the administrative organization reflected the balanced judgment of the entire executive staff. In contradistinction, a like-, number of field ■ • ' offices did not fall in the first-mentioned "dissension class" "because (*) Field Letter 66 (February 20, 1034), p. 1. ;>• ,V ' (**) Letter of January IS, 1934, from Donald R e nshaw, Field" Liaj-son • Officer, Compliance Division, to the various State ERA- Compliance Directors, "We do not consider it advisable to appoint any' Field Adjusters for your office until the Labor Compliance Officer has been assigned to you. He should be of invaluable assistance to you in helping to select proper personnel for this important phase of the work." In NRA Studies Special Exhibits Work Materials Ho. 85. 9 861 -39- the Labor Ccmoliance Officers, or other subordinate members of the staf . , were either weaker in their convictions or not inclined to a progressive development of field techniques and field policies. The rift between the Labor Conmli^nce Officer and the State Director, however, occurred in a sufficient number of offices to rank it as an important situation since out of it came a major transformation in the internal organization of the field. 9351 -40- Socti :n 4 - Laorr :.cv c L' r ca t under the Sta'c •'la ..i..: ol the ?u i: er of 1934, the Compliance Division had progressed far in its organic evolution. It ha. just officially taken cognizance of the changes in. adjust nent policy andhad promulgated standards to be followed "by the field iv. the adjustment :f code violations. The ex- periences of i'lBA in compliance administration had begun to crystallize and sake themselves felt in these and certain other concrete reforms. In Washington, there was ereated tae office of Assistant Adminis- trator for Field Administration, whose duty it wa.s to supervise compliance activities and to coordinate the efforts of the Compliance Division with the Industry and Litigation Divisions. (*) The system of travelling Field Representatives of theConpliance Division, to more closely supervise the field staff and to bring into more intimate relationship with the Washington staff, was developed and came into wider use. Thus, the Washington staff of the Compliance Division, as well as general neadquarters of ^BA to a lesser degree, came to realize the import-nice a: the field and to lay more stress on field compliance work. Together with these development- in Washington came changes in the fide 1 staff. Additional Field Adjuster positions were created to attempt to fill the crying neeC for an adequate staff for : ;he investi- gation anch- adjustment of violations. The new Field Representatives 3.1 so undertook to re-train the staffs in the various field offices and to improve the quality of the existing personnel. Consequently, some replacements were made. This improvement of the quality and size of the field personnel occurred through the summer and fall of 1934. In the appointment of new Field Adjusters, the labor Compliance Officers were given more voice, although the authority to appoint personnel,, on the ap; roval o:' the Compliance Division in Washington, remained in the State Directors. As has been previousl pointed rut, there was a tendency on the part of the Field Reioresentatives and the Field "Branch ~,± the Com- pliance Division to make the Labor Compliance Officers autonomous in their particular field. (**) The emphasis on the labor compliance staffs in the organization of the field was increased by charges in the heads of the various offices. During the third period of development, from roughly June, 1934 m, ue to the increased activity of the ilational Emergency Council, a number -f State Directors served their iTDA connections to devote their entire time to their D'.F.C. duties, and for other personal reasons. By November, 1934, a comparatively small number of original State Director appointees (*) Ofii'cc :Ordcr- 2a (early 'Juno, 1934); s ;.-!— -V21 supra". " <(**) Under Compliance division ! !ei;io randtim 4 (December 15, 1933) matters concern! the fiel ' :r anizati n' >r its Personnel were to be referred to th Ficl ' S^cti n, Administrative Branch. Under Office Or cr 3d (Apri" IT,, 1234.) the- x Field . -Secti 'n -as mae'e the Ficlv Branch; see als< Office Memorandum 180 (April Id, 1934). 9861 - a- In filling these vacanci' s tin Compliance " ivision pursued the policy of appointing the hcai f tin" office f r ) i memo ra >f the staff. Thus, Labor Compliance Officers, Trade Practice Compliance Officers, Executive Assistant?, and, in s ic cas s, Legal Advisors were placed in charge of the various of. icc^ as State '.TRA Compliance directors, and later as State NUA Compliance Officers, with resultant changes in the remainder of the exeeutive staff. Since the replacement appointments were nade on the recommendations of those persons in Washington who "believed in emphasis on the labor compliance staffs, it was natural that this idea should "be ca,rried out in the revamping of the internal organization of the field offices "by the new Directors. Conversol , added to this factor was the decreasing relative im- portance of the Trade Practice Compliance Of: icers. With the organization of code authorities to handle trade practice violations, the functions of the State Office, as to this ty-e of case, tended to become advisory in nature and supplementary to the code authorities' effort's. 9861 -42- While the positions in field offices remained virtually the saraej v/ith increases in the number of adjusters, the scheme of organization during this later oeriod under the State Office system came to he differ- ent. The State Director or State Compliance Officer carried the bulk of public relations and -cress relations work, together with general adminis- trative responsibility, nominally, the functions of this position did not change. So it was also with the Executive Assistant and the Trade Practice Compliance Officer, where there was one, except that the functions of the latter came to be centered chiefly in contacts with Code Authorities. In some offices the position of Legal Adviser was for all practical purposes abolished by the simple expedient of not filling vacancies. Legal Advisers were definitely given the task of assisting the Labor Compliance Officers in the exercise of their functions, in addition to their previous duties: By virtue of the enlarged staff under them and the increased empha- sis on this phase of the compliance organization, the Labor Compliance Officers became more executives, rather than adjustment officers- The general function, to supervise and have direct responsibility for all labor compliance activities, remained the same. However, the bulk of the Labor Compliance Officer's time was spent in supervising and planning the activities of the Field Adjusters. The actual handling of cases for adjustment necessarily was limited and restricted to "key cases" in the industry or state and cases involving determinations of compliance policy. This change infunctions, it should be borne in mind, came relatively late in the period and after the development of the idea of placing complete direct authority and responsibility for labor compliance on the Labor Compliance Officer in each particular office. In some states, there were created the positions of Assistant Labor Compliance Officer and Chief Field Adjuster, to assist in the details of supervision and direction of the Field Adjusters. The number of Field Adjusters varied greatly according to the popu- lation and industrial importance of the state in which each office was located and the volume of work of the particular offices. The Adjusters, contrary to the earlier scheme, were under the jurisdiction and authority of the Labor Compliance Officers and consequently devoted the great majority of their time to the investigation and adjustment of labor violations. (*) At the discretion of the Labor Compliance Officer the Field Adjusters were sometimes used on trade practice cases. On june 2, 1934, authority was given to the State Offices to station Field Adjusters at strategic points throughout the state. These fiesident Field Adjusters were under the supervision and control of the Labor Com- pliance Officers, but of necessity were placed more on their own respon- sibility than the Field Adjusters stationed in the State Office itself. (**) (*) Some Offices, however, had Trade Practice Adjusters assigned only to trade practice cases. (**) See infra, pp. 64-65 for a further discussion. 9861 -43- Summing up, in this period of development, the internal organi- zation of a field office consisted in a State Director, who was nominally in charge of all activities, his Executive Assistant, who handled office management, a Trade Practice Compliance Officer, a Legal Adviser, who was at least partially "under the Labor Compliance Officer, and a Labor Compli- ance Officer, under whom were the Adjusters and otner exclusively Labor Compliance Personnel, and vaio was regarded as generally on a par with the State Director in authority over labor compliance activities. (*) This scheme of organization differed from the original plan under Bulletin Ho. 7, and Field Letter 69 in that more emphasis was laid on the labor phase of activities and both the authority and the responsibility for labor compliance were centered in the Labor Compliance Officer. Thus, while the type of organization in effect during this period of development was loose and not adapted to the greatest efficiency, it was, nevertheless, an improvement on the original plan and a step toward the more compact and better-balanced administrative setup that followed. Section 5 - Pinal development of organization under the Regional Office system . The creation of the Regional Office system was announced in Pield Letter 190, issued December 28, 1934. Among the purposes of the new Regional system, chief among which was the relief of the congestion of unadjusted cases before the National Compliance Council, was the decen- tralization of the Compliance Division organization with a consequent closer supervision of the field. Together with other .functions and powers, the Regional Directors were "to direct and be responsible for compliance administration" and "to direct and supervise the State HRA Compliance Directors in their Regions." (**) At the same time that the new Regional system began to operate, in- structions were issued more definitely stating the standards of adjustment to be applied ^oy the field offices. (***) Thus, by Held Letter 194 (January 18, 1935), all compromise cases were required to be submitted to the Regional Directors for their approval before adjustment. (****) The natural result of the creation of the Regional Office system and the issuance of instructions making the standards of adjustment more inflexible, was to draw the field together and to tie it more closely into the Compliance Division organization. (*) Because of the hazy lines of authority as indicated in the text, it is not feasible to chart the functional organization as developed during this period under the State Office System. (**) Pield Letter 190, p. 3. (***) Pield Letter 193 (January 10, 1934); supra, p. 27. (****) Supra, p. 27. 9861 -44- The Regional Offices soon took steps to improve the efficiency of their State Offices "by introducing "better methods of organization and control. T..Q State Directors and State Compliance Officers v/ere in- structed that they were the persons to whom the Regional Offices would lt>ok for the operation of the comoliance -program in their states. In addition, it was again stated that no docketed labor or trade practice comolaint should be closed without the aooroval of the Labor and Trade Practice Comoliance Officers, respectively. The development of the Labor Compliance Officers' jurisdiction over the Field Adjusters was made clear, since when it became necessa^/ to refer a trade -practice case to a Field Adjuster, the case had to be referred. through the Labor Compliance Officer who assigned it to the individual adjuster. Thus, it is seen that the type of organization finally put into effect in the field offices in the last period of development was the same, with one material difference, as that evolved under the later State Office Period, from June, 1934, to January, 1935. That difference was in clearly making the head of the office the focal point for all relations between the State Offices and their respective Regions. ■(*) The chart on the opposite page shows that the Executive Assistant was second in general authority to the State Compliance Officer in addi- tion to being responsible for office management. While the Trade Practice and Labor Compliance Officers reported on, their respective funtions directly to the State Compliance Officer, they were also subject to the general jurisdiction of the Executive Assistant, although the latter status was never definitely determined. Consequently, there existed in some offices a conflict between the Executive Assistant and the Labor Compliance Officer. This manifested itself according to the personali- ties of the individuals holding these positions in the particular offices. The State Adjustment Board continued to act in an advisory capacity, although its use declined after Field Letter 194 (January 18, 1935), which took away the Board's power to approve compromises. In January, 1935, the State Legal Advisers were transferred to the Legal Division and their titles were changed to "Compliance Attorneys." (**) While continuing to advise the State Compliance Officers and State Directors on legal matters, they v/ere subject to the supervision and authority of the Regional Attorneys of the Legal Division. At the time of this transfer.,, however, some of the legal personnel were retained on the Compliance Division payroll in different capacities. The functional organization of the field, of course, differed with various offices. This was natural, because the personnel problem had not been solved. However,, for -purposes of illustration, it is deemed appropriate here to describe the internal structure of several of the field offices, which, it will be seen, differed only in minor details, due chiefly to variations in size and in volume of work. (*) A chart showing this form of organization is reproduced on the opposite page. With minor variations, as described in the body of the text that follows, it is representative of the field offices. (**) Field Letter 194. 9861 -45- State Compliance Officer State Adjustment Board Executive Secretary ~1 Compliance Attorney Executive Assistant Labor Compliance Officer | Trade Practice Officer Assistant Labor Compliance Officer Chief Field Adjuster Field Adjusters (and Investigators) 9861 _. .. The Boston, Massachusetts State Office had an executive staff con- sisting of the State Compliance Officer, and Executive Assistant, a Labor Compliance Officer, and a Trade Practice Compliance Officer. The Executive Assistant was in full charge of the office force and acted as Executive Secretary of the State Adjustment Board, in addition to assisting the State Compliance Officer in his general administrative duties. Under the Executive Assistant was a stenogra-nher-clerk who was in charge of the hulk of the stenographic and clerical staff, the re- mainder reporting directly to the Executive Assistant. A discussion of the mechanical details of the general staff's functions is not deemed material. Tne Trade Practice Compliance Officer was in charge of all trade practice complaints and other matters closely allied with this phase of compliance. He did most of his own investigational and adjustment v/ork and reported to the State Compliance Officer. The Labor Compliance Officer, directly under the supervision of the State Compliance Officer, was responsible for obtaining compliance with the labor provisions of the codes. Under him was an Assistant Labor Com- pliance Officer who assigned complaints to the various adjusters for handling. There was also a Chief Field Adjuster, who in reality acted only as a Senior Adjuster. There were fourteen other Eield Adjustors and two Investigators, who did not make final adjustments. Some Eield Adjus- ters were assigned to particular codes, while others worked on complaints arising in any indxistry. There was also a supplementary investigational staff supplied by the State Department of Labor, in cooperation with the State Office. The Connecticut State Office executive staff consisted only of the State Compliance Officer and the Labor Compliance Officer. The functions of Executive Assistant, Trade Practice Compliance Officer, and Executive Secretary to the State Adjustment Board were all exercised by the State Compliance Officer together with his own duties. Under the Labor Compliance Officer, who had the usual functions, were an Office Adjuster and eight Eield Adjusters, one of whom was supplied by the Federal Emergency Relief Administration. There was also another Office Adjuster who handled both labor and trade practice cases. These Office Adjusters had the function of handling complaint adjustments by conferences m the State Office, as distinguished from Field Adjusters who also made investigations. The Rhode Island State Office organization is interesting because of its uniqueness, the plan which was to have gone officially into effect on June 1, 1935, not providing for either a Labor or Trade Practice Compliance Officer. The State Compliance Officer and the Executive Assistant supervised the general activities of the office as well as the compliance work, the Executive Assistant also acting as Executive Secretary to the State Ad- justment Board. 9861 -47- The general office staff consisted in a Chief Clerk and an Assist- ant Clerk (both of whom handled details on personnel) , two file clerks f two docketing clerks, two receptionists (one of whom was also a file clerk), and five stcnogranher.i (two of whom hava boon previously men- tioned in other caoacities). Labor and trade practice complaints were adjusted "by a staff of three Senior Compliance Adjusters, one of whom also acted as Field In- vestigator, with seven other such investigators under him. Routine correspondence on complaints was handled by two members of the clerical staff. The internal structure of the Missouri State Office followed the same general lines as those described above, although it had a slightly fuller organization more tyoical of the larger offices. The State Compliance Officer exercised general supervision over the entire staff of the office, directing and controlling all activities through a numbered series of memoranda, setting forth general office routine, office policies, assignment of duties, and general instructions. These memoranda usually resulted from weekly conferences with members of the executive staff and weekly meetings with the Field Adjusters. In addition, the bulk of the work connected with relations with other Federal and State agencies, Code Authorities, labor unions, and trade groups, as well as all contact with the Regional and Washington offices, fell on the State Compliance Officer. He also handled all matters of personnel, ex- cept routine, on the advice of a Personnel Committee composed of the Execu- tive Assistant, the Labor Compliance Officer, the special Adjuster, the Compliance Attorney, and sometimes the Chief Field Adjuster. The actual work connected with the issuance of homeworkers' and handicapped workers' permits, with which he was charged, was delegated to the Special Adjuster. Because he had formerly served as Labor Compliance Officer and had handled the Apprentice Training program in the state, the State Compliance Officer continued to carry this function, assisted by the Special Adjuster. The Executive Assistant was responsible for the management of the office and all matters of office routine, and supervised the general clerical and stenographic staff. He also assisted the State Compliance Officer in public relations work and acted as Trade Practice Compliance Officer. In direct charge of the office staff was the Chief Clerk, who also handled personnel details and sorted all incoming complaints for accept- ance, rejection, or transfer to another agency. Where the proper primary action was in doubt, the Chief Clerk referred the question either to the Compliance Attorney or to the Labor Compliance Officer, who had formerly served as Legal Adviser. A member of the clerical staff, so classified because of budget restrictions, acted as Trade Practice Adjuster, reporting to the Execu- tive Assistant. The Labor Compliance Officer directed all labor compliance activities, including the planning of mass compliance surveys and the training, in- struction and supervision of the Field Adjusters. Acting on suggestions from members of his staff, he prescribed standards and policies of inspec- tion and adjustment to supplement the general instructions from Washington. 3861 -43- He supervised the work of the Field Adjusters "by reviewing case files and daily reports. The reviewing of case files and reports was also done "by Special Adjuster, wl -• acted as an Assistant Labor Compliance Officer and also., as a special assistant to the State Compliance Officer, in addition to her regular functions in connection with, the issuance of permits for handicapped and home workers. The assignment of cases to and direct supervision of the Field Ad- justers were delegated to the Chief Field Adjuster. ITewer men were also assigned to the Two Senior Field Adjusters for supervision and training. The twelve Field Adjusters were charged with "both the investigation and adjustment of complaints, unlike the Bhode Island system, which split up these two' functions. More important cases were assigned to the Chief Field Adjuster and the two Senior Field Adjusters, "but there was no specialization of codes. Cases involving .adjustments which were important "because of size or other factors, or containing questions of policy or difficult interpreta- tion were referred to the' Labor Compliance Officer for his personal at- tention. The Compliance Attorney acted as legal adviser to the State Compli- ance Director, hut reported to the Regional Attorney of the Legal Divi- sion. Legal matters, questions of interpretation, and the preparation of unadjusted cases for removal of the Blue Eagle and for litigation com- prised his official functions. He also assisted the Labor Compliance Officer in handling- cases which ve re likely to reach the District Attorney. The last description of field office organization has "been given in considerable detail to more cleraly "bring out the machinery established in State Offices to carry out their functions. It is not to he supposed, that the offices specially mentioned were other than convenient illustra- tions for a proper concept of the field organization. The structures described represent those finally developed by May, 1935, By that time the field force had -been improved from, in most offices, the original top-heavy organization to a fairly well-balanced, smoothly operating staff. Daily experience in handling cases, and the better or- ganization methods which were evolved had begun to combine and solve many of the problems of inadequate personnel and of compliance procedure. Counterbalanced against this was the ever-increasingly apparent weak legal basis for the IJBA program, which also served as a potent influence on efforts to increase the efficiency of the compliance organization. 9861 -49- Chapter V - Compliance Procedure in Field Offices Section I - Com p lain ts, the basi s o f procedur e. TIic original "Regulations for the Adjustment by District Compliance Directors of Complaints of Code Violations" established tile procedure to be followed by the field in carrying out its functions. Under this procedure, and that promulgated fcr the Local Compliance Boards in handling the President' s Reemployment Agreement, (*) the sole basis for activity in obtaining compliance was the filing of complaints by employees, competitors or other interested parties charging the particular respondent with committing a violation of a code cr the PRA. (*) Bulletin No. 5, "Regulations on Proceiure for Local NRA Compliance Boards" (September 12, 1933), pp. 2-6, inclusive. The procedure provided briefly was as follows: In en a complaint of violation was received, it was examined for legal sufficiency by the legal number of the Board. In the event the complaint stated a prima facie viola- tion, notice that it had been filed was given the employer. The notice might be either written, telephonic or personal, and was supposed to assume compliance and that the complaint was due to a misunderstanding. Together with the notice, toe respondent was furnished with copies of the PRA and official explanatory releases. The provisions of the PRA were then explained to the employer by a member or a representative of the Board in an informal personal interview, and the respondent was allowed to explain the facts alleged in the complaint and to make any necessary adjustments in working conditions. In the event the complaint was not adjusted by the foregoing pro- cedure, the respondent was given an opportunity to appear before the Board and state his case. Notice of opportunity to be heard before tile Board was not in a prescribed form but had to *e sent on of* ficial NRA stationery in a franked envelope, and was to include copies of the PRA and official explanatory releases, unless pre- viously furnished. Hearings were to be conducted by the Board on an informal tone, for the purpose of- educating the employer and influencing him to comply voluntarily. The Boards were instructed that they had no power to compel the attendance of .the employer and witnesses, the production of books and papers, or the giving of testimony. Ques- tions were to be confined to the single purpose of determining the validity of the complaint, and were to be used chiefly to aid the respondent in making his voluntary statement. If the respondent refused to answer a material question it was explained to him that such was contrary to the spirit of tne Agreement, and such refusals were noted oy the Board in making its report to NRA. The Board then decided by majority vote whetoer or not the complaint was TTalied. Where no violation was found the case was dropped. Where a violationv/was found, the employer was given an opportunity to rectify conditions. In either event, whether the complaint was adjusted or rejected, tne respondent was given a Letter of Compliance (Footnote (*) continued on next page) 9861 -50- ( Footnote (*) continued) which he might display' near his insignia. Inere the respondent refused to adjust, the Board forwarded a report to MHA' through the Secretary of the District Recovery Board, signed "by all members, with their votes indicated, which included: the original complaint; a signed certificate "by the legal member or other representative that the procedure outlined ±iad "been followed; a summary of the .employer's statement; any additional pertinent facts; a recommendation for further action. Progress reports were made from time to time to the Secretary of the District Recovery Beard. All complaints had to be .in writing and signed by the complaining party. The Boards' jurisdiction extended to all PRA complaints against employers in their particular communities. Two cardinal rules of procedure were laid down: (1) both the fact that a complaint "had been filed against an employer and the complainant's identity were to be kept conf idsntial ; (2) the Board was- not an enforcement agency in any sense of the word, but was to gain compliance through education, explanation, and conciliation. ■ The Board had no general investigational or inquisitorial func- tions, but to txie contrary, was instructed not to use its re- presentatives as investigation agents (p. 10). Second offenders, where the action appeared to be wilful, were to be given no opportunity to adjust complaints. (Note the similarity between the above described procedure and that employed by District Compliance Offices under the October 19 Regulations and by the State Offices under Bulletin, No. 7, which is discussed in the body of the text that follows. This is made especially interesting hy the following quotation from Bulletin No 5, p. 4, which brings out the differing bases of the PRA and the codes," - - - - the President's Reemployment Agreement is not a statute to be enforced oy lay but a voluntary individual covenant.") 9861 - .1- Under the procedure created, complaints of code violations had to be in writing, preferably on tiie officially jre^cribed form. (*) The instructions also state! that where possible, complaints should be sworn to before a notary or witnessed by at least one person familiar witn the facts. "lowever, tms last was never followed extensively by the field offices because, for t\e most part, complaining employees were financially unable to pay notaries' fees and fear of their identities as complainants becoming known precluded the practicability of requiring witnesses. Like- wise, many complainants were relatively uneducated and unable to cope with any technical requirements attached to the filing of complaints. The District Offices were given jurisdiction over all complaints charging violations of approved codes by employers situated within their respective districts, . (**) except where a code authors ty for the part- icular industry had been organized and authorized to handle t:ie type of complaint filed. When a complaint was received, it was docketed and examined by the Legal Adviser to determine whether or not the facts alleged therein, if true, were sufficient to state a violation. If tue finding was in the negative the complaint was rejected and clDsed and the complainant so notified, together with the reasons for holding it invalid. (***) "low- ever, if the complaint was determined to state a prima facie case of violation, it was accepted and put through a regular procedure, described below. (****) It is important to note nere tne emphasis which was placed on legal sufficiency, form, and a set procedure, since the tendency of the field was to interpret tnese instructions literally. This emphasis on form was not wit.iout its purpose. The field offices were very much understaf- fed, and even the limited personael was largely untrained for the work, so that seme device was necessary to conserve compliance facilities by eliminating groundless and crank complaints. . -lowever, the placing of formal requirements proved to be a two-edged sword, for many really bad cases of non-compliance went untouched, only to arise and plague the field offices at a later date. In illustration of this was the manner of treatment of anonymous complaints. As pointed out in the footnote beginning on the first page of this chapter, the instructions to Local Compliance Boards handling tne PRA required all complaints to be in writing and singed by the com- plainant. (*****) This was cianged in tue instructions to District Compliance Directors to the rule that anonymous complaints might be act- ed on at the discretion of the Directors. (******) i n practice this re- sulted in the majority of such complaints being rejected, since the District Offices were looking. for every possible way to lighten their (*) "Regulations for the Adjustment" etc. (October 19, 193S) , p. 1 (**) "Regulations for the Adjustment," etc., p. 1. (***) Ibid, p. 1 (****) Infra, pp. 52-53. (*****) Office Manual, V-3-22, section 1, paragraph 2. (******) "Regulations for tne Adjustment" etc., p. 1. 9861 - 52 own loads so that they could operate with some degree of efficiency. Although this treatment of anonymous complaints was dictated "by immediate necessity, it later was proved to have been an undesirable method of approach. While logic concluded that if a complaint were well-grounded and made in good faith the complainant would sign his name, experience showed that many complaints were filed anonymously and many violations went unreported "because the employees were afraid that the signing of their names on a complaint form meant probable discharge, or at least discrimination on the part of the employer. (*) However, before going further into the gradual modification of the complaints basis of compliance activities, it is well to examine into the procedure created for the handling of code complaints once they had been accepted "by the Legal Advisers. It was originally provided that a complaint valid on its face should take one of two courses of action. If the Code Authority had been author- ized to handle the particular type of complaint, a copy was referred to the authorised agency for adjustment within a specified time and the parties were so notified. (.**) If within' the time specified the case was not reported back as adjusted, the District Compliance Director proceeded to treat it according to the second course Of action. Where the Code Authority made a report to the District Compliance Director within the time limit, from which it appeared a satisfactory adjustment of the complaint had been made, the case was filed as adjusted. (***) (*) ' This fact was recogniz.ed, at least in part, at an early date. Liaison Circular 64 (October 6, 1933), paragraph 3, quoted a memorandum purportedly from the Compliance Division relative to instructions to Local Compliance Boards, which read as follows: "The instructions in Bulletin No. 5 state that 'all complaints should be in writing and signed "by the person making the complaint.' This is intended to protect the Compliance 3oard from following up malicious and anonymous complaints. "If a. Board wishes to receive anorymous complaints, it may do so " Note that this memorandum was written some three weeks before the Compliance Division was officially created by Office Order ITo . 40. (**) "Regulations for the Adjustment" etc., p. 1 (***) "Regulations for the Adjustment" etc., p. 1 9861 - io- If the District Compliance Director Lad not been specifically in- structed to refer tie particular type of complaint to a Code Authority, it was handled in the following manner. (*) A letter of acknowledgment was sent the complainant, and tie respondent was informed of t.ie nature of t.ie complaint, was furnisaed a copy of tiie code and an explanation of oertinent provisions, and was invited to state his side of tae case. In the event the first letter to .the respondent failed to evoke a response, or tae reply was unsatisfactory, a second letter was sent (***) inviting the employer to the office for a personal interview. If this method proved fruitless of adjustment, a form letter was sent informing the respondent that the "case would be sent to the National Compliance Director if satisfactory evidence. of compliance were not furnished in a stated number of days. Another letter was then sent notifying the respondent the case was being forwarded to Washington. After allowing sufficient time for a reply, the file was forwarded to the National Compliance Director for further action. (****) District Compliance Directors were instructed to treat all com- plaints confidentially, because of the danger of the complainant' s dis- cnarge on one haad, and the disastrous effect of adverse public opinion on a respondent's business on tae other hand. (*****) Likewise, it was emphasized that t.ie field officers were not en- forcement agents but were to attain compliance through education, ex- planati:n and adjustment. (******) Tae enforcement arms of tae Govern- ment were specified in the Act as being the Department of Justice and the ■. Federal Trade Commission, (*******) an^ cases went to these two agencies through the National Compliance Director and the National Com- pliance Board. (********) The treatment of second offenders was not mentioned in the "Re- gulations," but m Liaison Circular 75 tae District Compliance Directors were told only to substantiate tae facts in these cases, waere they (*) In NBA Studies Special Exhibits '.York Material #77. ( **) "Regulations for the Adjustment" etc., pp. 2, 3. (***) See note (*) obove (****) "Regulations for tae Adjustment" etc. , pp. 2 and 3. (*****) "Regulations for the Adjustment" etc. , p. 3. (******) Ibid, p. 3; Liaison Circular 75, p. 2. (*******) jura, Title I, Section 3, paragraphs (b) , (c), and (f); see also Chapter III, note (3), p. 16. (********) Office Order 40. 9361 -54- felt t_ie violations were wilful, and to give no opportunity to the re- spondent to adjust. (*) This procedure contained no place for field interviews or real investigation. Nor were the field offices equipped to experiment in this direction. (**) It is little wonder, therefore, that small im- provement, except in isolated offices, was made in compliance pro- cedure during the early days. The procedure, which was created was so ill-adapted to practical use, the facilities provided for the field so inadequate, that the immediate value of the field offices as real compliance agencies was almost nil during the earliest stage. Their use cane more as experimental' stations for the improvement of procedure and organization- and the development of policies, and as agencies for educating industry to the values and benefits of NBA, which did not make itself felt until a later date. Nor xs this a criticism of the method of approach to the gigantic organization problem or of field offices as a class. As has "been pointed out in connection with the evolution of an adjustment policy, (***) a workable compliance system can only be developed successfully after actual experience in code Administration. It was unfortunate that much time was lost in the emergency job of ob- taining compliance because such experience wa,s lacking, or if it were available from other similar systems of industrial regulation, because its lessons were not utilized. On January 22, 1934, there was issued NBA Bulletin No. 7, "Manual for the Adjustment of Complaints by State Directors and Code Authorities." which modified and expanded on the previous procedure. Just about a week prior to the issuance of this "Manual" the State Directors were appointed and the Compliance Division 1 s field organization was changed from .a system of twenty-six District Offices, .leaded oy the former District Managers of the Bureau of Foreign and Domestic Commerce , to one of forty-eight, and later fifty-four, State Offices headed by the new State NBA Compliance Directors. (****) This transformation in organization and procedure reflected to some degree the sad experiences of the District Offices resulting from inadequate, untrained staffs and an inflexible, too limited procedure. The new procedure was broader, and contemplated some use of Field Adjusters, but still remained more or less inflexible and contained several objectionable features from the standpoint of practical applica- tion. (*) Liaison Circular 75, p. 2. (**) Supra, Chapter IV, section 2, "Internal organization - early development" (of field offices). (***) Chapter III, "The Administrative Settlement of Code Violations," p. 24. (****) Chapter IV, "The Origin and Development of Field Offices," supra. 9861 •55- T io underlying tieory of all compliance procedure was the speedy elimination, by adjustment, of such noncompliance as was due to mis- understanding, and the prompt prosecution of all cases of wilful non- compliance. (*) Bearing this in mind it is interesting to note the changes brought about in Bulletin No. 7. At this point there should be recalled the history of the de- velopment of the definition and policy of adjustment and the internal organization of the field offices, both of which have been discussed in previous chapters. A single procedure was established ostensibly for all types of cases. However, the organization of the offices with separate Com- pliance Officers for labor and trade practice, and the application of tiie idea of industrial self-government (**) chiefly to trade practice cases, may be said to have split up this single system, in reality, into two separate procedures which overlapped to a certain, degree in complaints arising under individual codes. This brings us to a consideration of the definition of the terms employed to prescribe the limits of each division of procedure. Com- plaints w ich dealt with violations of the labor provisions of the codes, i.e., the regulations concerning minimum wages, maximum hours, homework, and other terms and conditions of employment, including the prohibition of child labor, were designated as "labor complaints." Conversely, "tra.le practice complaints" were defined to include those cases involv- ing violations of all other provisions, such as, production control, cost determination, regulation of trade terms, and 'other prescribed rules of conduct of members of industry among themselves. This last class also included provisions for the administration of the codes by the par ticular industries. (***) l*t_ Bulletin No. 7, p. 7. (*?) Bulletin No. 7, p. 3 stated tie purpose of the Compliance Div- ision to be to fill in the gaps of industrial self-government, which was the ultimate aim to be accomplished. Thus (continuing on pp. 5 and 6) 1QA would "act for an Industry while the In- dustry is organizing to handle compliance problems for itself; or where an Industry in a certain territory has no Industrial Adjustment Agencies; or where an Industry, though organized to handle trade practice complaint 6 - , has no machinery to handle labor complaints; or where the Industry fails to carry through in its efforts to adjust a complaint; or w :ere for any ether reason it is necessary for tl-e governmental rather than the industrial system to act." (***) Bulletin No. 7 p. 5. 93 61 -56- The definition of a tliird class of complaints, "labor disputes," is not germane to this discussion because they were early removed from the jurisdiction of NBA and placed under • the National Labor Board or other special agencies. (*) Under Bulletin ITo. 7, complaints had to be m writing, pfeferaMy on the ERA complaint form, but were' not required to be notarized or witnessed. Anonymous complaints might be acted upon at the discretion of the State Director. (**) Complaints were routed, according to their nature, to the Labor Compliance and Trade Practice Compliance Officers, respectively. At this point comes an essential departure from the original procedure. A competitor making a labor complaint, against another employer might elect to have it treated as. a trade. practice complaint, and it was thereafter to go through the procedure for the latter type of case. It would thus be referred to a Code Authority authorized to handle trade practice, although not authorized to handle labor violations. If a Code Authority (****) existed in the Industry and was auth- orized to handle the particular type of complaint in the first instance, the driginal complaint was referred to it without further action by the State Office, unless it appeared from the face or substance of the com- plaint that it was purposely filed with the State Director. (*****) A complainant always had the right to file a complaint with the NBA, rather than with an authorized Code Authority, in order to protect his or the public interest. (******) _ _______ (**) Bulletin Ho. 7, p. 11. \ (***) Ibid, p. 12. (****) The term ir Code Authority" is used herein in order not to confuse the reader, although the correct title perhaps should be, "In- dustrial Adjustment Agency," which is 'the name given ''oy Bul- letin Ho. 7, p. 4 to an agency of an industry for obtaining compliance. (*****) Bulletin No. 7, p. 12. (******) Bulletin Ho. 7. This right, however, meant little because jurisdiction over the approval .and appointment, as well as the removal, of Code Authority members and agents, together with their authorization to handle co'mplaints, was vested in the Division and Deputy Administrators, rather than in the Compliance Division. 9861 _ >7- This procedure was much more characteristic of trade practice cases than of labor complaints. il/hile after June, 1934 complaints referred to Code Authorities in the first instance were not docketed by the State Offices and hence no complete figures on the number of cases so referred are available, general experience snowed that t.ie preponderant majority of sucn complaints dealt with trade practice violations. In fact -"69 Code Authorities were authorized to handle trade practice complaints as of -March 25, 1935, while but 31 were given jurisdiction over labor complaints. Complaints which came under the initial jurisdiction of tne State Directors were then examined for legal sufficiency, all doubtful ques- tions being referred to the Legal Advisers. This examination did not differ from that provided in tne original procedure, except that where a complaint indicated a code provision might have been violated, but failed to state sufficient facts, instead of being rejected the com- plainant was requested to furnish the necessary additional informa- tion. (*) Where a Code Authority hod been authorized to handle complaints on reference (usually labor), a digest of the allegations was referred to that body for adjustment within a stipulated' period not to exceed two weeks, and the parties were so notified. If no report was made within the time specified a Progress Report was requested by return mail. If no satisfactory reply was then received the State Director advised the Code Authority he would proceed to adjust the case on the assumption it had been unable to do so, unless immediate word was received to the contrary. Sufficient time for a reply was then allowed to elapse before action was actually started. If the com- plaint was reported back to the State Director as unadjusted, it was then put through a second course of procedure described below. On the other hand, if the Code Authority reported the case as adjusted, the State Office closed the case and so notified the complainant. (**) The difficulty with this arrangement was that, since the Code Authorities were not under tne full supervision and control of the field offices or even the Compliance Division in Washington, their poli- cies of adjustment and procedure natrually were different. An alarm- ing number of cases had to be re-handled after heing reported back to the State Offices as adjusted. The purpose of the plan was probably to train the Code Authorities to be in a position to handle labor com- plaints in the first instance. (***) (*) Bulletin No. 7, p. 13. (**) Bulletin Ho.. 7, pp. 13 - 14. (***) Ibid., p. 14, "The State Director will keep a record of all com- plaints sent to Industrial Adjustment Agencies on reference and when he believes tiiat any such Agency is qualified to handle a particular type of complaint in the first instance he will make such a recommendation to the National Compliance Director." 9861 -58- The bulk of complaints filed in State Offices, and not immediately transmitted in to to to another agency, were handled by them without re- ference to Code Authorities, The following procedure relating to cases handled directly "by Stats Offices, (*) therefore, will form the center of the remainder of this discussion on compliance procedure in the field. The initial steps were virtually the same as provided in the original "Regulations" issued to District Compliance Directors on October 19, 1933. The respondent was informed of the nature of the complaint; the applicable part of the code was explained to him; he was asked for a statement of his position; and he was furnished with copies of the cede and a; printed statement entitled, "Information for Persons Charged with Violation of an NRA Code," which set forth in simple language a brief outline of the pro- cedure and the respondent' s rights. If no reply was received in a reason- able time, a duplicate letter with enclosures was sent to the respondent by registered mail. If. the respondent admitted the violation but furnished satisfactory evidence of present compliance, willingness to comply in the future, and equitable restitution (**) for past violations, the case was considered as adjusted and the parties so notified. In case the respondent denied the facts, or admitted the facts and denied "they constituted a violation, or failed to satisfy the Compliance .Officer that an adjustment had been made, he was invited to be present at an office interview. If this method were not feasible, or if it failed to produce an adjustment, a Field Adjuster was sometimes sent to visit the respondent. This tardy use qf the Field Adjuster indicates that investigations in the field were of secondary importance in develop- ing cases, an unsatisfactory approach dictated largely by budgetary con- siderations which in turn was due to the philosophy which prevailed at the time (early 1934) that most Code Authorities woul.d in due course take over the handling of compliance in their respective trades and industries. ■..If the Field Adjuster 1 s report showed no violation, the complain- ant was so notified. If no further word was received from the complain- ant within a reasonable time (usually ten days to two weeks) the case was filed as adjusted. Where the Field Adjuster's report showed a will- ingness on the part of the respondent to comply and to make equitable restitution, the case was closed on receipt of evidence that that had been done. Unadjusted cases of violations were forwarded to the National Com- pliance Director in the same manner, and after the three warning letters to the respondent, as specified in the original procedure under the "Regulations for the Adjustment by District Compliance Directors," etc. (*) The procedure described in the text was contained in Bulletin No. 7, pp. 14 - 18, inclusive. (**) See Chapter III, section 6, "Evolution of an adjustment policy," supra. 9861 -59- Bulletin No. 7 farther provided that in ca^e either the complainant or respondent were dissatisfied with the decision of the Compliance Officer, he should be afforded an interview wit;i the State Director. If he were still dissatisfied, he had the right to appeal the case to the State Adjustment Board, which made its findings in the form of a recom- mendation to the State Director. All complaints had to be treated confidentially as to both parties. (*) In the event an interpretation of the code were needed to proceed with a case, a request for a ruling had to be made trirough the Washington office to the proper Industry Division. (**) There was no power to con- tinue action on the complaint until such interpretation were issued, sometimes months later. It is apparent to even the casual observer that this system of procedure was much too cumbersome to allow efficient operation of the field. Bulletin No, 7 was so phrased as practically to preclude any departures from it. The whole system was fraught with delays and opportunities to t.ie respondents to frustrate the compliance program. Cases usually developed into correspondence battles, while the compliance situation in the industry might be rapidly deteriorating without any real efforts to check it. T-ie provision for the use of Field Adjusters was a step in the right direction,' but by the time the case had reached that stage much of the damage caused by the barrage of letters had been done. This all resulted in a great deal of wasted effort and time, when by the emergency nature of the job and the inadequacy of facilities to do tiie work, every ounce of energy and evory minute was precious. The formality and inflexibility of the procedure, making the filing of a complaint the sole basis for compliance activities, combined with the limited facilities of the field to cause a tendency to restrict adjustments to the individual complainant and to accept in lieu of an investigation a statement or affidavit from the respondent denying the facts or claiming the required adjustment had been made. This last was the product of necessity, since any desires to investigate a complaint properly were successfully stalemated '.by the absence of a sufficient staff for this purpose and the set procedure provided, which did not allow for a free use cf investigators. Consequently, without varying from the prescribed line of action it was virtually impossible to educate employers sufficiently to lay a firm foundation for healthy conditions of compliance, or even to bring about momentary present conformity and to obtain restitution for past violations. Bear in mind that the field offices were under constant, terrific pressure from complainants, Code Authorities, business men, labor and trade groups, and Washington to handle complaints and get them off the books. In some cf the weaker offices this combination of circumstances served to bastardize their efforts to such an extent that they sought T*) Bulletin No. 7, p. 7. (**) Ibid, p. 3. 9861 -60- to close Ceases 'o:y all sorts of devious reasonings and tlie invocation of technicalities. At this time there was little or no stress laid on wage restitutions. Consequently, the complaining employee was sometimes re- garded as a disloyal "informer" and was required to fully substantiate his charges before they would be recognized. Fortunately, however, this intolerable situation so revolted the larger number of field offices that they threw off, bit ~oy bit, the hampering restrictions of the complaints plan of procedure. Consequently, during the late spring of 1934, coincidentally with the development of adjustment policies and staff organization, these field offices began to cast about for and to find improvements in procedure, whiGh finally caiie to be passed on to the remainder of the field through the medium of Field Letter 125 and the travelling Field Representatives. Before passing on to a discussion of these departures from the pro- cedure, there should be noted two shortcuts which were provided, in order t© take care of unusual cases requiring speedy action. ' Bulletin No. 7 provided that whenever the State Director was con- vinced that a complaint conclusively set forth a violation, which the respondent showed no disposition to correct or adjust, then the State Director might. immediately refer the entire record to the National Com- pliance Director without following the regular procedure. (*) While this looked very good on paper, it had little effect in alleviating the situation. In the first place, it applied only to unusual cases and did not vary the regular procedure as to the great bulk of the complaints received. Moreover, this provision for a shortcut erroneously presup- posed an adequate investigating staff to immediately prepare the evidence for the file, since obviously Bulletin No. 7 could not mean the complaint was to be referred to the National Compliance Director without any in- vestigation. Aside from these two difficulties, even though' a case were properly prepared and transmitted, it bore a likely chance of not being acted on without delay and possibly of being later returned to the State Office for further investigation or attempts at adjustment. The lack of a clear poli'cy of action in Washington, the mechanical difficulties of advancing a complaint to the stage of Blue Sagle removal and' -reference to the enforcement agencies, and the even greater improbability of the case being promptly and effectively litigated, all combined to complete 'the task of- turning this well-meant short-cut of procedure into a mere 'paper plan. (*) Bulletin No. -7, p. 17. 9861 -61- Of more value was Administrative Order X-14, issued April 6, 19 which amended the provision in Bulletin No. 7 juct mentioned, by allowing the State Directors to reiser cases direct to U. "L Attorneys, rather than to the National Compliance Director. (*) At tne time of the reference, the respondent was notified and a transcript in triplicate was sent to the Control Section of t:ie Compliance Division in Washington. This new power was exercised in varying degrees by different offices, but was generally found to be of practical use. It eliminated to some extent the difficulties of mechanical delay in Washington and the absence of a definite plan of action. It was the first major step in the de- centralization of the Compliance Division, and therefore of prime importance, (*) This constituted Amendment 1 to Bulletin No. 7, Order X-14 also contained Amendment 2, granting a similar power to code authorities, and Amendment 3, providing that cases to be referred to the U. 3. Attorneys under X-14 might be first submitted to the State Adjust- ment Boards for advice and recommendations. The power granted State Directors by this order was to all intents and purposes re- voked after the creation of the ilegional Office system, by Field Letter 196 (February 2, 1935). 9861 -62- Incidental to the improvement in procedure as to unadjusted cases, X-14 had the practical aspect of placing tne State Offices in direct con- tact with the various District Attorneys. Through this medium the field adaed to its experience in tne proper investigation and preparation of cases intended for action by tne Department of -justice. But, through these contacts also there was brought home to the State Office personnel with increasing force the constitutional weaknesses and the legal diffi- culties involved in the whole compliance program. i/ioreover, the amended procedure of X-14, by its vary terms, was limited to a small proportion of the cases handled. The vast majority was still suoject to the regular procedure laid down in Bulletin "_"o. 7. Having considered in detail the plan of procedure on the "basis of complaints, it is interesting to recall the underlying theory of com- pliance procedure, expressed at the beginnug of this discussion on Bulletin No. 7, namely. " _ _ 'the speedy, elimination, by adjustment, of such noncompliance as is due to misunderstanding, and the prompt prosecution of all cases of wilful noncompliance.' 1 (*) Tnis purpose failed of accomplishment because of three major reasons: a cumbersome, inflexible procedure, based solely on tne passive policy of waiting for complaints to be filed and for unhealthy situations to become so aggrevated as finally to be reported; a lack of an adequately trained ana sufficiently large field adjustment staff to operate really successfully under any plan of procedure; and tne inherent absence of a sound legal basis for proceeding, concerning the improve- ment of which little was ever done to facilitate the final decision of the Judiciary so that the basis might either be firmly established or discarded for a constitutional one. In connection with the last basis of failure, the weak-kneed and vacillating enforcement policy grew finally to be looked upon by industry, labor and the public as a suffi- cient proof that tne Administration was acting in bad faith. The field offices, and those members of the Washington staff coming into more or less direct contact with field problems, strained every effort to eliminate the first cause by developing and adopting on their own initiative improvements and modifications of the established pro- cedure. These procedure developments did much toward putting the Com- pliance Division on a sound operating basis. However, it was manifestly beyond their power to remove the second and third causes, both of which were fundamental problems in compliance administration. Section 2 - Development of a ne" r compliance procedure . As experience grew in the handling of cases, gradual changes were made m the pro- cedure for action on complaints. As these changes became established in practice they were usually mane known to the field as a whole in the form of instructions in Field Letters. (*) See Note -p. 5'5 supra. 9661 -63- Thus, in Fiela Letter 48 (January :?■. , 195-i) experience with the handling of anonymous complaints reflected itself in thy following clarification of Bulletin No. 7: "Anonymous complaints will be subjected to a more searcning analysis before they .ire acted upon than will signed complaints. If, however, after close exanination an anonymous complaint appears on its face to be genuine and to state a code violc tion it should be handled as any other complaint." (*) The field staff soon learned tne value of thoroughly investigating and fully adjusting a case. adjustment depended to a 1 rge measure on investigation. If the activity oi trie office - was restricted to a single employee who n. a filed a complaint, there w, s likely to be later com- plaints by other employees, ^ hich would necessitate the retracing of steps. This was clearly an inefficient use of facilities, Furtner, it tended to create resentment on the p c rt of the employer at being supposedly singled out for oersecution. Tnen also, under this :nethod viol tions tended to accunulc ?.te so that wnen the complaint reached the adjustment stage beck Wcge restitutions were sometimes large and burden- some. This method also had tne additional disadvantage of not lending itself to a program of educating employers so as to enticipate future cases of noncompliance. Accordingly, it became the practice, as the use of Field Adjusters increysed, to investigate tne entire payroll, so as to discover all the violations which mignt exist. The various offices grew to require a complete adjustment of back wages due all employees. This widened scope of investigation ana adjustment helped to alleviate some of the evils of the complaints system b/ removing the necessity for more than one in- vestigation, except m p rticul rly difficult cases and where the em- ployers were o rsistent violators, and by furnishing an effective medium for educating the employers to bring their op-rations into continued compliance.. This new procedure was also characterized by the placing of more emphasis on the use of Field Adjusters. It was also found necessary to make invest igect ions on what appeared to be bona fide rumors ana , 'ell-grounaed susoicions. This was brought about by the strong insistence of respondents that their competitors be maae to conform also and by tne realization tnat a. permanent compliance program must be based on a thorougn educational program among members of industry ana the protection of tne complying business men from nis com- petitor who violated the code. This v,as tne germ' of a new idea, of operation known as "mass compliance", (**) that is, the direction of com- ( * ) Held Letter 48, p. 1. (**) Discussed in detail below, Part III, Chapter 711, as a solution to the problems arising from tne method of handling labor com- plaints. Thile mass compliance is spoken of nere as a new idea, it found ample precedent in trie administrative efforts of the State Labor Departments, many of wuich used tne inspection system in enforcing labor laws, (U.S. Dept. of Labor, ""omen's '3ureau Bulletin 61, pp. 28o-289, 307-308) and in tne Trade practice Con- ference Procedure in vogue with tne Federal Trade Commission, (Annual report of Federal Trade Commission, 1932, pp. 51-54). 9861 -64- plis.nce activities against a group as a self- initiated project, rather than a single proceeding against one employer on the "basis of a com- plaint filed by some third party. ; In addition to mass compliance activities, which were usually in tne form of a survey, another variation from the complaints plan was o'bservable in isolated investigations, not connected with a survey . or planned project, and originating without tne formal filing of complaints. Thus, there might come to the attention of tne field office a rumor that a certain employer was in violation, or tne office might feel strongly from its general knowledge of industry conditions that a con- dition of noncompliance existed. In such cases, the appropriate Com- pliance Officer caused investigations to be made by Field Adjusters, even though no formal complaint had ever been filed. The procedure followed in adjusting violations found by these methods was tne seme as that used where action was the result of complaints being filed. The abo/e described faults of the complaints system and the correctional developments evolved are more applicable to labor com- pliance than to tne trade practice phase. 3y its very nature the letter type of violation was more susceptible to treatment on a complaint basis. There were wide variations in individual cases, unlike labor violations, which fell in certain fairly well-defined classes. Complaints were usually controversies between tne respondent and particuler competitors, while noncompliance with labor provisions affected the total relations of the employer with his workers' and tended to cause a general disturbance of tne labor standards of the industry. An interesting sidelight on the decreasing emphasis on the strict complaints procedure at this juncture is found in instructions to the field regarding so-called "multiple complaints." (*) This terra was de- fined to include situations where more than one complaint was filed against the same employer charging the same general violation, i.e. failure to pay the minimum wage to pieceworkers, etc. Such "multiple complaints," under the instructions, were to be bound together in one file and docketed as a single case. Immediately following tnis instruction on "multiple complaints," the experiences of the field with the complaints plan of procedure, and the modifications of the system mentioned above', were crystallized and a definite break was made away from the strict complaints basis by the issuance of Field Letter 125. As has been, mentioned before, Field Letter 125 undertook to establish a complete, new framework for compliance activities. The charged procedure thus created recognized the need to discard the complaints basis, and recommended strongly the use of office com- plaints to initiate activities. (**) These office complaints differed T*l Field Letter US (June 6, 1934)", p, 3 (**) Field Letter 125, pp. 9-10. 9861 -65- frora the earlier conception of complaints, in. that the latter were filed by third persons presumably having, a first-hand knowledge of tne vio- lations .alleged, while the- former cL.ss of complaints origin,, ted with members of the compliance staff ana were bas..d on hearsay, rumors, and suspicion, while the use of office complaints was manifestly open to abuse by over-zealous memb-rs of the staff, sufficient safeguard existed in the practical limitations of the investigational facilities of the various offices. Among the occasions where the use of office complaints \7as suggested were: where an employee reported a violation but refused to sign a complaint for fear of discharge; -'here a complaint hod b'-en re- jected but the office considered the situation allegea should be investi- gated;, where the complaint having been substantiated the adjuster be- lieved that violations orobably existed in other establishments under the same management; where repeated rumors existed as to violations in an establishment, industry, 01 locality; where the employer seeking in- formation indicated tne existence of a violation. (*) The grafting of this new type of complaint on the old procedure served as sufficient indorsement of mass compliance. The new theory /of operation continued to expand with practice and the number of. its adherents grew larger, so. that by the time tne Regional Offices began, to function in January, 1935, its use as a method of approach to the solution of compliance problems had attained fairly wide popularity and was well-established among the various field offices. Close]y allied with this departure from the complaints basis was a growing emphasis- on t he use of Field Adjusters. The value of this type of personnel was recognized by the National Compliance Board as early as December 4, 1933. The minutes of the nineteenth meeting, held on that date, contain tne following statement; "Mr. Posner once more raised tne question of procedure where employees were discharged for entering complaints against' their employers. Dr. Altmeyer, (later Second Assistant Secretary of Labor and at one time Chief of tne Compliance Division - ■ Author's note) urged that field representatives were necessary for this type of work. He added that considerable tact and labor experience are necessary. " In May and early June, 1934 the Compliance Division began to appoint "Resident, Field Adjusters", who were stationed at various strategic points outside the cities in which the State Offices were located. "Thile these Resident Field Adjusters were attached to the v riou.s State Directors' staffs, it was contemplated that they should exercise semi- executive functions, in addition to the regular duties of Field Adjusters. Thus, they were generally given a comparitively free hand, in the planning of their own compliance activities and in engaging in public relations (*) See Ilote p-64, supra. 9861 -56- work. Because of the physical distance between their official stations and the State Offices there was necessarily a larger reliance on their individual discretion than in the case of ordinary Field Adjusters. The significance of the appointment of Resident Field Adjusters in connection with the departure from- the complaints has is of procedure is to be found in the following excerpt from Mr. Swooe's letter of June 2, 1934 to Stcte Directors on the subject: "Undoubtedly a resident field Adjuster will hear many rumors of vioL tion although no. written .complaint may have been filed. If the rumor appears to hi vs substance the Field Adjuster should make an investigation even in the absence of a specific complaint. In only rare instances should trie Field Adjuster attempt to ad- just it by writing a letter "The (Resident) Field Adjuster must: spend the greater portion of nis time on outside work, contacting the employers and investi- gating not only filed complaints, but also rumors of violation which may come to him. ."•(*■) This statement was followed eleven days later ''oy the issuance of Field Letter 125 and Supplementary Memorandum ITo. 1 to Bulletin No. 7, which latter, in modifying^ the earlier Manual for State Directors, said;. "The State Director must use his own judgment in determining the procedure which xvill be most effective and expeditious in a particular case. Bulletin 7 does not lay down a set procedure that must be rigidly observed in all cases . For example, instead of csrrying on preliminary correspondence, it may be better to send an adjuster to interview the respondent or to ask the' respondent to appear at the office of the State Director." (**) Field Letter 125 stressed the value, of office and field interviews in Adjustment work. It further suggested the elimination of a formal notice to the respondent giving the substance of the 'complaint, and the substitution therefor of a letter containing merely a brief invitation to call at the Compliance Office. It likewise recommended the practice of dispensing with all preliminary correspondence, and making tne initial contact with the respondent by means of a field interview. (***) (*) In MA Studies Special' Exhibits Work Materials #77. Ibid, p. 5. (**) "Supplementary Memorandum Number One Relative to Adjustment of Complaints", p. 1 (underlining supplied). In spite of the under- lined portion of the quotation, it has been previously 'pointed out that the converse is true. This was clearly an attempt to rationalize and to reconcile this memorandum, Field Letter 125 (both issued by the Compliance Division), and the actions of various field officials with the procedure created by the Admin- istrator in Bulletin No. 7. (***) Field Letter 125, p. 11. 9861 -57- In this connection Field Letter 125 said: "The Compliance p fie--r is under, no obligation to establish the fact that a complaint has been filed, /or the protection of the complainant it is advis« ble in many instances not to inform the employer that a specific complaint has been filed against him." (*) k Field Letter 125 also provided a guide for the thoroughness of investigation. A detailed account of the proper contents of the case files was given, and a questionnaire form for interviews with employers, as well as a form for abstracting payrolls, were included. (**) Thus, it is seen that, beginning with Field Letter 125, June 13, 1934 and in the period of development that followed, marked departures were made from the cumbersome, inflexible, ana largely ineffective procedure established by the Regulations of October 19, 1933 issued to District Compliance Directors and by Bulletin No. 7, covering State Directors and Code Authorities. Under -the old procedure all compliance activity was supposed to be predicated on complaints, which had to fulfill certain technical requirements, and almost the entire burden of proof, as well as the initiative, was thrown on the complaining employees and competitors. The new procedure was developed out of the necessities of experience, influenced greatly by the powerful psychological factor of a new reporting system whereby field offices felt that their efficiency, value and reputations were on constant judgment by the number of violations dis- covered and adjusted and tne amount of back wages collected. (***) Less and less stress was laid on tne filing of complaints and on the important place of the complainant in compliance procedure, except as one source of information. The use of complaints as the basis of proceedings was never entirely eliminated, although it was generally contemplated by persons connected with compliance activities that a decided step would be made in that direction after the passage of the new legislation which was pending when the Supreme Court decision in tne Schechter poultry case abruptly terminated all efforts at code compliance. However, it should be noted in illustration of the final relative unimportance of complaints that on May 21, 1935, in a letter to all Regional Directors, the Chief of the Compliance Division placed a virtual statute of limiations on the filing of complaints, leaving each office to exercise its own discretion, according to certain standards, in determining whether or not the com- plainant had been guilty of laches in failing to report the violation promptly. (****) 7*0 Ibid, p. 12. (**) Ibid, pp. 19-20, 24, 27. (***) See Chapter III, pp. 29-30, for a discussion of the effect of this reporting system on the evolution of an adjustment policy. A brief description of the system of reporting is there given. (****) A copy of this letter is included in tne appendices. It pro- vided that the offices should be guided by the following general rules of thumb: ordinarily, a complainant still employed ought to report the violation within 60 days after it had occurred; an employee who had been discharged or dismissed should file com- plaint within 30 days thereafter. 9851 -63- Of course, between June, 1S34 and iviay 27, 1935 there were many- developments in compliance technique and in minor procedural points. However, for the sake of brevity at this point these developments are left to discussion in subsequent' sections wncre they will be treated in detail. . One more modification of Bulletin No. 7 should be mentioned here as having a noticeable effect on the movement to discard the complaints basis. 3y Administrative Order the practice of sending complaints to Code Authorities "on .reference" for adjustment was abolished as of June 15, 1934. (*) This class of complaints was thus added directly to the onus of the field offices and it became, to a very slight degree, easier to treat all complaints according to the newly formulated procedure. The order further provided that Code Authorities which had been authorized to handle particular types of complaints "in the first in- stance" would continue to operate in the same manner under the designatior "officially authorized". Tnis was important because the Code Authorities which had been authorized to handle labor complaints were mainly organized to operate on an inspection or mass compliance basis and, therefore, indirectly additional impetus was given to the movement away from a strict complaints system. (■*) Administrative Order X-29 (May 12, 1934). 9861 -69- Section 3 « The Kfevelt pm ent of the use of Field Adjusters . Under the original procedure for District Compliance Offices, as shown in the first section of this' chapter, the initial step in the actual handling of an accepted complaint was to notify the respondent of the substance of the violation charged and to invite his answer thereto. A copy of the code and an explanation of pertinent provisions were also furnished. This first contact, which was almost invariably by letter, had a two-fold purpose. In the first place it was supposed to servo as an easy, natural way to lead up to an adjustment. At that time adjustment had as its goal the obtaining of present conformity with the code and the assurance of future compliance. Little attention was paid to re- compense for past violations. Consequently, the simplest method of approach was to say to the respondent, "It has been alleged that you have violated the code for your industry by paying your night watchman less than the minimum wage. The code provide trp,t you must pay this class of employee not less than at the rate of $15.00 per week. Of course, if these facte arc true, we realize the violation was probably due to ignorance or inadvertence. Therefore, we invite you to furnish us with your explanation of the above complaint, preferably in the form of a sworn statement." ('**) The probably effect of such a letter on the respondent in shaping his answer to the complaint is obvious. In the second place, the notification sent to the respondent was intended to fulfill certain legal requirements which were supposed to exist. It was felt that the constitutional prohibition against de- priving a man of his property without due process of law (?9*) made it necessary to adopt a semi- judicial attitude and to furnish the re- spondent with notice of the charges against him and an opportunity to be heard in his own defense. While common fairness supported the latter part of this conclusion, it was found to be administratively unwise to deal with violations in a manner so resembling judicial procedure. This feeling toward the restrictions of due process of law was closely allied with the dual presumption r»f> the innocence of alleged code violators and the leek of intent to violate where noncompliance was established. This, in turn, lead to the logical conclusion that the burden of proof should properly be »n the complainant. The pre- supposition, insofar as labcr complaints were concerned, that the em- ployer and employee stood on an actual parity in ability to enforce their legal equality ef rights, seems to conflict with one of the underlying theories of labor legislation. In an early leading case (*)' This is a paraphrasing of the form letter actually used by District Compliance Directors. See note p. 33 supra. (**) Constitution of the United States, Fifth Amendment, "No person shall be deprived of life, : liberty or property without due process of law." Tfte reasoning placing a strict application of this principle so as to require a formal notice to the respondent in the initial handling of a complaint is of questionable soundness, since neither the regulations were promulgated nor were administrative sanctions invoked at this stage of proceeding. !861 • -70- upholding the right of a state under its' police power to enact labor legislation limiting the hours of employment of men working in mines; and' smelters, the United States Supreme Court said: "The legislature has also recognized the 'fact, which the experience of legislators in many states has corroborated, that the proprietors of these es- tablishments and their operatives do not stand upon an .'equality, and that their interests are, to a certain extent, conflicting. The former naturally desire to obtain as much l.&bor as possible from their employees, while the .latter are often in- duced by the fear of discharge to conform to' regu- lations which their judgment, fairly exercised, would pronounce, .to/be.. detrimental to their health or strength. In other words, the proprietors lay down the rules and the laborers are practically contraineditiO obey them. In such cases self-interest is often an unsafe guide, and the legislature may promptly interpose its authority." ('*) Originally, such investigation as was made had to be conducted through correspondence and office, interviews with the respondent. The respondent usually denied the existence of the violation or pleaded ignorance and good faith and professed, a- desire to comply in the future. On this basis the case was closed as adjusted. Field offices were forced to accept at their face value state- ments and affidavits of respondents, which by experience and better reasoning the field officials knew to be false. Conscientious members of the field staff chafed and fretted under this spurious, legalistic procedure end made varied attempts to improve the situation. The dis- advantages of this system communicated themselves to the off icials in Washington, so that,, in discussing the plan for a permanent govern- ment al compliance machinery, the National Compliance Director said, "Like the temporary arrangement, this plan provides' for a regional system to aid. in the adjustment of complaints of violations of approved codes. Like the temporary arrangement, it is baded upon the hypothesis that the great majority of complaints are due to misunderstandings which can be adjusted by education and information, by correspondence and conference. It is also based upon the hypothesis. that to effect this, there must be well informed agents in the field to adjust the case where it arises and to make fair findings of facts. " These State Directors will have a sufficient staff of .assistants ana. adjusters to develop the facts and adjust complaints by education and information at the place where the complaint a.rises, as far as is prac- ticable." (**) , , 2 (*) Eolden v. Hardy,, 169 IT. S. 366, I.e. 397, 42 L. Ed. 780 (1898). See also Commons and Andrews, "Principles of Labor Legislation (Harper and Brothers, 1916) pp. 28-30. (**) TJilliam H. Davis, National Compliance Director, "UFA. Flans for Code Compliance," December 5, 1933. 9861 Fl -71- It came then to "be realized as a fundamental conception of com- yli.-j.nce administration that investigation and adjustment were inter- dependent and inseparable , and their combination was an indispensable element in the enforcement of the codes. The '/or': of adjustment had as a prerequisite a thorough knowled ;e of the facts, and investigation was of little moment if the evils discovered were not subsequcntly corrected. With the creation of Field Adjuster positions under the State Office sys'-em, and the growing recognition of the value of personal contact wi . h employers and. of active investigation, the new class of personnel soon assumed large importance in the organizations of the various of. ices. In the beginning, Field Adjusters were largely untrained for their fork, although many had practical business experience or a rudimentary knowledge of law or accounting. Their use, at first, as provided in Bulletin ] T o . 7, was to act as a supplement to correspondence and office interviews, investigating only those cases which were not ad- justed by the latter two methods. However, as experience grew in the use of field inspections and field interviews, the compliance staff took greater cognizance of the advantages of an adequate, well-trained group of field men. On the part oi the progressive element in the Compliance Division, at least, there was a corresponding conscious effort to train Field Adjusters and to place some requirements on the positions, which bore a reasonable relation to the determination of. the fitness of applicants and -incumbents to fulfill the functions. It has "been already noted that by June, 1934 the use of Field Adjusters in the initial investigation and adjustment of complaints had been so increased that Field Letter 125 suggested the abandonment of the first letter of notification to the respondent in favor of en informal invitation to an office interview or s,n unannounced visit by the Field Adjuster to the respondent's place of business. (*y In connection with the latter alternative, Field Letter 125 said, "In the resulting interview hours of work and scale of wages are discussed a.nd the situation can "be cleared or adjusted frankly and without resentment, since the djuster has the opportunity to seek the employer's cooperation before he has built up an attitude of resentment and defensiveness ." (**) Thus, it is seen that Field Letter 125 contemplated that the initial steps toward the adjustment of cases should he taken by the Field Ad- justers. This attains significance as a token of the changes going on in the Compliance Division, its policies, methods of organization, when it is compared with the original provision of Bulletin II o . 7, previousl] 7- mentioned, and office interviews. (*) Supra, p. 57 ; Field Letter 125, p. 11 (**) Ibid, p. 12. )861 ~72~ At this point, "brief mention should "be made of the appro intnent of Resident Field Adjusters, as another evidence of the movement to direct adjustment efforts as much as possible to inspections and in- terviews at the situs of the violation, the respondent's place of "business. This was in harmony with the statement of William E. Davis, National Compliance Director, "The plan provides for at least forty-eight State Directors. In certain of the large states, it may be necessary to have branch offices. These State Directors will have a sufficient staff of assistants and adjusters to develop the facts and adjust complaints by education and information at the pla.ce where the complaint arises, as far as is practicable. " it may become necessary for State Directors to place representatives out in the field in coamunities where a great volume of unadjusted complaints arise." (*) The ideas embodied in the above quoted statement received recog- nition after experience in code compliance work had brought about the realization on the part of field executives that a proper under- standing of compliance problems necessitated their "becoming familiar with actual employment and competitive conditions. While apart of this process of attaining familiarity with the problems included actual contact with employers and workers at the place of employment, and, in the case of trade practices, with competing business men, the time element involved in the exercise of executive functions precluded the needed comprehension's being based entirely on first-hand knowledge . Consequently, the State Offices were practically constrained to de- pend largely on the reported experience of their field agents for their factual backgrounds . Therefore, after the definite indorsement placed on their use by Field Letter 125, it was natural that the Field Adjusters were intrusted with a large proportion of the public relations work, in connection with the adjustment of cases „ Included in this term were the creation of in- dustrial good will toward the State Office, and the education of em- ployers to their obligations and to the ar.s and benefits of NBA. Many offices instructed their adjusters to exert themselves to create the im- pressions of fairness and of desire to assist the employers in their difficulties, likewise, it was a standard duty of Field Adjusters to aid the employers in installing and maintaining adequate sets of records. It was also customary to advise and help in preparing petitions for exemption, etc., where considered by the State Office to be justified. It is not to be understood by this last that the State Offices tool: the initiative in this respect, o-ohe'r than by advising respondents of their rights, where necessary. By a careful, slow building up of a reputation for fairness, and by the equally gradual creation of good will through education, the State Offices pursuing this policy were able to gain sufficient prestige to partially offset a shifting public opinion and the enforcement failures in the courts. (*) Note p.6'9 supra. S8S1 -73-. As a part of the cycle of development, the growing popularity of the mass compliance system of operation necessarily added weight to the already strong emphasis on the use of Yield Adjusters. In August, 1934, Field Adjusters received an added minor function. By Office Order it was established that Divisional and Deputy Adminis- trators having before them petitions for essappt ions, etc., might re- quest the Chief of the Compliance Division to assign field investiga- tors to discover any pertinent and desired factual data. ( *) Although definite figures concerning this use of Field Adjusters are not available, it is not 1 ilieved that this procedure ever attained real importance generally. It is mentioned chiefly as an illustration of the trend of opinion on this general subject. Although the main tendency was in conformity with the suggestion in Field Letter 125, tc initiate action on a complaint by making a field investigation, nevertheless correspondence and office interviews continued to be used in a large number of the State Offices, mainly t in connection with cases involving the service trades and other in- trastate industries where i : „ was desired to conserve the time of the Field Adjusters in the interests of efficiency. In at least one office (**) it was the practice throughout the history of compliance ac- tivities to rely chiefly on office interviews. However*, this last was due to unusual circumstances and cannot be t alien as representative of all the field offices. Section 4 - The direction and supervision of Field Adjusters . Closely allied with the development of the internal organization of field offices, discussed in the preceding chapter, and the increased use of Field Adjusters in compliance work, just mentioned, is the topic of the control and supervision over the adjustment staffs of the various offices. It is. obvious that, in an organization in which the actual investigation and adjustment of cases was delegated to subordinates, on whoce individual judgment, discretion and tact much reliance was necessarily placed, it was of prime importance that the executive staff of the field office should devise some thorough-going and workable sj'sten of supervision end control. This problem of the direction and supervision of the daily activities of Field Adjusters did not begin to have significance until about the late spring of 1934, because the occasion f r the development of this phase of intra-office organization had not yc arisen. (***) However, with the developments in compliance procedure which brought the use of Field Adjusters to the fore, the same experience that had pointed out the fallacies in the original organiza- tion scheme of Bulletin Ho. 7 shored the necessity nf the Labor (*) Office Order 107 (August 4, 1934) . Be iterated in Office Manual, 111-3233.3. (**) The New York City Office. Here the extreme concentration of industry in a relatively small area, the presence of a large number of Code Authority offices, and the existence of other local factors and characteristics contributed' to' make this the most effective procedure. (***) For the reason that f'sw Field Adjusters were appointed before that time,. See Chapter IV, "The Origin and Development of Field / Off ices, " supra. 9861 ' -74- Compliance Officer's organizing, directing and supervising the efforts of the persons under him, to whom had been delegated the task of carrying out his broad functions of obtaining labor compliance. (*) However, even as early as Bulletin No. 7 some provision was made which .included the activities of Field Adjusters in the general organi- zation plan. It was there provided that the Labor and Trade Practice Compliance Officers should be responsible for the assignment of com- .plaints to their Field Adjusters and for the supervision of their :_ activities in making necessary investigations. Field Adjusters were also to make daily and weekly summaries of their activities in addition to reports on each complaint handled by them. (**) In addition to these general instructions, there was prescribed a form for the Ad- juster 1 s reioort. (***) This report form included questions, concerning the name and address of the employer, the name and position of the person interviewed, the nature of the records examined, a description of the violation discovered, the employer's attitude and any statements - made by- him, and the Adjuster's recommendations for further disposition of the case. There were also in Bulletin No. 7 (****) and in the form designated as "Instructions to NRA Adjusters", (*****) general state- ments of the method of approach to be taken by Field Adjusters in in- terviewing employers. These instructions stressed the fact that the Field Adjuster had no authority to require the production of records or the furnishing of information. At first glance, it appears that the provisions for the direction and supervision of Field Adjusters, mentioned above, served as an adequate treatment of tire subject. However, it must be remembered in this, connection that there- were few Field Adjusters on the State Office staffs at this time and their use was limited \>y Bulletin No. 7 to supplement the two more popular methods of adjustment, namely, corres- pondence and office -interview. (******) it should be noted also that there was no clear provision for a system of initially training Field Adjusters and of critically reviewing their work. Because of the relative unimportance of this class of personnel in the general com- pliance-procedure provided in the early period under the State Office system,' and also due to the generally loose organization and the intra- office jurisdictional difficulties existing during thir tage of develop- ment, little attention was actually paid by the Statt Offices to the previously described instructions and to the use of the Adjuster's report form. (*******) (*) As'. pointed out in Chapter IY, Section 4, in the late spring and earl;,- - summer of 1934, when the problem of supervising the . . . Field Adjusters became important, the actual organization of field offices had been changed so that the Adjusters were placed under the Labor Compliance Officer, instead of under him and the Trade Practice Compliance Officer, as provided lin Bulletin No. 7, p. 19. (**) Bulletin No. 7, page 19. (***■) In NRA Studies Special Exhibits Work Materials #77 (****) Bulletin No. 7, pages 19. and 20. •' (*****) A copy of this form is included in the appendices. It. was largely a restatement of the provisions in Bulletin No. 7. (******) Section 3, "The development 16 concerning the mechanical, arrangements in the different field, offices for the supervision of Field Adjusters. Although these plans varied widely, following the internal organization schemes of the particular State Offices, (**) there should be indicated, the general lines followed. In has >.een previously pointed out that in some States new Field Ad- justers were assigned, to more experienced, men for training. Some of the offices, notably the Philadelphia, Pennsylvania State Office, went f\irther and made permanent assignments of Senior Ao.justers to supervise the daily work of the other Field Adjusters. Of similar 'nature was the plan pursued. by - few of the offices whereby the functions of investigation and adjust- ment r, ere divided, the latter >eing performed, by Compliance or Office Ad- justers, who were usually older men on the staff. The plan of assigning less experienced Field Adjusters to Senior Adjusters or other higher ranking members of the staff, either for permanent supervision or merely for train- ing, was probably followed by most of the offices. (*) U. S. v. !7. E. Belcher, et al, United States Supreme Court, October term 1934, Jjo, 623. The Government* s appeal in this case, which was designed to test the constitutionality of the Lumber and Timber prod- ucts Code, w.-.s voluntarily withdrawn on April 5, 1935, and the appeal dismissed by the court. Wide publicity had attended the case, which was heralded as supposedly the first step in a new prdgram of vigorous en- forcement of the codes. (**). Supra, Chapter III "The Origin and. Development of Field Offices." 9861 The major problem wr.s to evolve an effective system for the orderly assignment of work and the direction of compliance efforts so as to obtain the maximum results in efficiency, thus avoiding duplication of effort. At the sane tine it was necessary to drive the adjusters to increase the quantity of work handled, and yet to keep such careful supervision over the application of the principles and standards of adjustment that each case handled would oe a constrictive step toward the education of industry and the ultinate condition of universal, permanent code compliance. This standard of accomplishment seemed almost impossible of attainment. The fulfillment of the purpose was hindered "by the absence of a training program, the lack of standard 'qualifications for Field Adjusters, and the careless, non-scientific method of selecting personnel. However, gradual, hut continuous prog ess toward the goal was made through the efforts of in- dividual offices in developing systems of su ervision and training, the fur- ther refinement of standards and policies in TTashington and the field, and the slow improvement of the technique of handling cases of violation. S ection 5 - Technique of investigation . As in the case of methods of super- vision over Field Adjusters, little progress was made in the development of the proper technique of investigation during the first six months of the Com- pliance Division, Under the original instructions to District Compliance . Directors and for several months after the creation of the St, te Office system, the investigation of ca.ses consisted largely in taking the complain- ants' statement, writing the respondent for his side of the story, and perhaps interviewing one or "both the parties in the USA office. Bulletin Ho. 7 provided for the limited use of Field Adjusters and contained some instructions on the technique of investigation. (*) These were limited to a few general rules of conduct and a "brief statement of the procedure to "be followed in field interviews. (**) For example, Field Ad- justers were instructed not to interview employees during working hours or on the business premises without the respondent's permission. In making a field call the Adjusters were told first to -see the respondent and dis- cuss the complaint with him. 'in the event the latter admitted the facts as alleged, a statement proposing the terms of an adjustment was to he obtained. Likewise, if the respondent took issue only as to the application of the Code to the facts, the Field Adj-asters --ere to get a clear explanation of his position. In the more likely t3gpe of case, where the facts alleged were denied, the instructions were equally '"oCant Tr . The Field Adjusters ""ere told to re- quest permission to examine the appropriate records, such as time cards, pay rolls, canceled checks, invoices and sr.les slips. In the event such, permission were refused, Bulletin Ho, 7 stated that Field Adjusters '-'ere not to insist upon access to the records, but merely to explain to the re- spondent that his refusal would be taken as an indication of a desire not to adjust the complaint. (*) See Section 4. "The Direction a.nd supervision of Field Adjusters", supra.. (**) Bulletin po. 7, pp. 19-20. 9861 - 3- These instructions were silent as to obtaining evidence of violation by investi ting other sources of information. As has been pointed out before, since Bulletin No. 7 ^as the official namml Tor field office compliance activities, there was a te dency to interpret it literally. Consequently, the impression created in the mines of the field staff .ed to be that in those cases -'here access to the records was re- \o further investigation was necessary, Fortunately, however, the had effect of these instructions on com- pliance technique was not so serious as would seen. Since there were but few Field Adjusters -..pointed until the latter part of the spring of 1934, there was little occasion to pay attention to investigational technique during the period immediately following the issuance of Bui- letin ITo. 7. Consequently, the cursory methods of investigation which seemed to be indicated by these instructions did not become deeply in- grained in field office procedure. Here it is well to point out that, although the foregoing ma;' be implied as r criticism of Bulletin ITo. 7, at the time those instructions were issued there existed practically no experience in the use of field investigations from whicJ to draw. It w s only after the developed use of yield Adjusters, and the changes in compliance procedure, standards and policies of adjustment, and methods of organization, gradually evolved from the daily experience of handling complaints, that a practicable, ef- fective compliance technique vras created. The improvement of the methods and scope of investigation followed the general pattern of development of the Compliance Division. Indi- vidual offices placed higher standards on the investigation of cases and gave added instructions to their staffs on the actual mechanics of in- specting records and interviewing employees and respondents. Experience taught certain tricks of the trade, such as reconciling pa: r roll -and time records with production records to determine accuracy, and the psychology of obtaining seemingly voluntary access to records. In the period from January to June, 1934 certain other fragmentary instructions were issued to the field. For instance, the offices were told to ascertain the form of business organization before transmitting unadjusted eases to Washington. (*) In this connection, there was sent to the field offices a code complaint analysis form for guidance in pre- paring cases for the National Compliance Board. (**) Shortly after the issuance of t e analysis form it ur.s found desirable to urpe the field offices to include all necessary evidence and information in the files, so as to facilitate action on unadjusted cases in TTashington. ('***) 00 Field Letter 62 (February 15, 1934). (**) Field Letter 68 (February 23, 1034). (•*•) Field Letter 86 (March 22, 1934). 9861 -84- It is to be noted that this 1 \st mentioned group of instructions re- lated only to the very snail percentage of cases which were forwarded to the national Compliance Director for further action. However, it should "be understood that the ideas embodied in these, instructions for the preparation of unadjusted case files n ere applied cy cone of the offices to all con- plaints and thus assisted in shaping their techniques. Again there was a well-defined change with the issuance of Field Letter 125. The standards of adjustment which were promulgated furnished definite lines for the development of the thoroughness of investigations. (*) The departures from the strict complaints oasis of proceedings, moreover, brought about the thorough inspection of the entire payroll and the more adequate examination of the employer and workers through personal inter- views-. (**) Besides laying down standards of the thoroughness and scope of investi- gations, Field Letter 125 also contained -suggestions as to the practical mechanics to be employed. There were included forms for interviews with em- ployees and emplojrers and for abstracts from payrolls. (***) The former n ere designed to serve as guides for the preparation of employees' state- ments and for the information to be secured fro:: respondents. The payroll form was used for the compilation of the specific data needed on hours and wages to determine compliance-. . It was also suggested "by Field Letter 125 that each office develop its own sets of forms, according to its needs, covering other aspects of the handling of cases. This they did, and in January, 1935 they were made the subject of a study ^oy the Coordinating Branch of the Compliance Divi- sion for the purpose of standardization. (*■***) The initial stage of this study was completed and in May, 1935, there were transmitted to the field offices for criticisms and comments the developed forms, including the fol- lowing: report of employer, interview, record of interview, request for investigation, employee's complaint, Field Adjuster^ daily report, resti- tution work sheet, financial statement, transcript of pajrroll record, and record of employees' time (to be used as a time sheet by the employer)***** It is to be noted with interest that in neither Bulletin No, 7 nor in yield Letter 125 was there any reference to the interstate character of transactions involving code violations. This is striking because the Act limited criminal penalties and action oj the Federal Trade Commission to transactions in or affecting interstate or foreign commerce. (******) Moreover, it was the general consensus of legal opinion that the Congress (*) See Chapter HI, "The Administrative Settlement of Code Violations pp. 2'.'.-»36 (**) See section 2, "Development of a new compliance procedure' 1 -, p. 6' (***) These forms are to be found, in the order named, in Field Letter 125, pp. 22, 24, and 27. (****) Field Letter 194, p. 2. (*****) Field Letter 214, pp. 1-2. (******)See Chapter HI, "The Administrative Settlement of Code Viola- tions", p. 12 9 861 had based i ■ authority to enact the national Industrial Recover/ Act on its power to regulate commerce between the several states arc. with forej countries. At any rate, it is fundamental that the interstate aspect is an essential Lngredi eral jurisdiction over regulatory m i of this, character, unless oared on some specific constitutional grant of authori by. Not only V7ere there no instructions during this early period as to including an examination of the interstate aspects in the investigation of complaints, but no distinctions were drawn between the two classes of commerce in the regulations issued to the field governing the adjustment of code violations. Nor did any of the codes contain definitions of industry vrhich "ere so qualified as to exclude intrastate members. (*) With this total lack of emphasis on the interstate character of violations in regular adjustment work, it was natural that this phase of investigational technique was weak, even though some development was made in obtaining proper evidence of the respondent's compliance status. To be sure, the code complaint analysis sent to tne State Offices with Field Letter S8 did include qUostici s touching on this subject, but no sugges- tions were made as to what constituted proper evidence thereof. However, at this point there should be mentioned an important in- fluence on the improvement of investigational technique both as to the question of compliance and as to the problem of whether or not the violations found affected interstate commerce. Under Administrative Order X-14 (April S, 1934) it was provided that the St- te Directors might refer clear cases of unadjusted violations direct to the appropriate United States Attorneys for legal action, with- out following the regular channels leading through the National Com- pliance Director and the National Compliance Board. (**) It has been pointed out in an earlier portion of this chapter that the effect of the shortened -procedure created, by this Administrative Order was to place the various State offices in fairly close contact with the local United States Attorneys. Slightly preceding this the Litigation Division was established to cooperate with the Department of Justice in the handling of all FRA litigation. (***) 3oth the Litigation attorneys, who traveled among the State Offices, and the United States Attorneys served to acquaint the field officials with the legal requirements as to evidence, the essential points to be covered by investigation, and the im- portance of properly preparing cases. Through the medium of preparing cases (*) However, the Motor Bus and Transit Codes had definitions which uere partially oualified by the distinction between inter- and intra- state operations, but only to resolve a, conflict in jurisdiction of the two codes. (**) Supra, section 1, "Complaints, the basis of procedure, " pp. 53—61 (***) Office Order 74 (March 26, 1934). 9861 -85- for litigation, the members of the field staff learned the necessity of conducting themselves in a careful and prudent manner beyond reproach by opposing counsel, of obtaining definite, direct evidence of violations and their effect on interstrte coamerce, and of being thorough in their ^ork. In connection with the preceding di cussion it is interesting to ob- serve the following instruction to the field offices, "The codes regulate transactions 'in or affecting inter- state commerce.' The Adnini strati on' s view is that in the present emergency the vast "bull: of industrial and commercial transactions and activities fall in this category, and the Administration has been verv succes~fu.l in upholding this view in court. Accordingly, in dealing with, respondents , you should not be influenced >- cany contentions on their •part that their transa ctio ns wer e not 'in or affecting interstate commerce. ' " (-underlining supplied). (*) With the influence of preparing cases for litigation, the creation and development of standards of adjustment, the increasing use of Field Adjusters, and the modifications in the complaints plan of procedure, the various field offices embarked on a period of gradual, steady improvement of their techniques of handling cases. It has already been shown that be- ginning about the late spring of 1934 the practice of inspecting the en- tire pay roll came into use. Moreover, the use of mass compliance methods in various degrees necessitated a broadened scope of investigation. In order to cover as much ground as possible inspections were limited to samples of the paj r rolls, chosen usually at random. 3y checking the hours and wages of only a few employees or for sample weeks, a good indication of the extent of compliance could be obtained. Where violations were discovered in more than occasional numbers, a further audit was made either by the pield Ad- juster, the respondent's bookkeeper, or by a/a. independent accountant. Pausing a moment to analyze what has been said, it is seen that the investigation of code violations, whether under a mass compliance or a single complaint system, depended on the keeping of adequate, correct records lij the respondent. (**) Without such records resort had to be made to the oral testimony of employees. Of course, in a small percentage of cases the workers kept their own hour and wage records, but these were usual!] 7- inadequate and were worthless unless coupled with the statements of the particular employees. It was, of course, extremely difficult to prove the existence of a definite violation without records, where the respondent denied the facts. Then too, some instances were found where disgruntled employees gave false statements and made up bogus records, actuated ^r per- sonal grudges against their employers or merely by the desire to obtain money. (*) Field Letter 155, p. 1 (August 25, 1934) (**) This dependence of investigation on the keeping of adequate records is discussed in .More detail in Chapter VII, "The Method of Handling Complaints. " 0861 ■ . The fal ification, incompleteness, and, in r.omo cases, the total e ■■ sence of records placed a serious obstacle in the -ay of the field staff in handling cases. This difficulty was partially met by the Field Ad- justers' attempts to educate employers to install adequate records, as a regular part of adjustment work. As a purely voluntary proposition, how- ever, results were far from satisfactory, since the respondents had be- fore the:; fresh evidence of the advantages enjoyed by them in not keeping good records. Pew codes contained provisions requiring the keeping of books, r.n.C. there was no general Executive or Administrative Order on the subject. (*) There being no general requirement for the keeping of records and no legal authority in the Compliance Division to make inspections, it was natural that some other means should be invented to bolster the cam- paign of "education. no such means was provided for in the Act, in that it sta-ed that, "Upon request of the President, the Federal Trade Com- mission shall make such investigations as may be necessary to enable the President to carry out the provisions of this title." (**) An informal arrangement was male whereby HRA turned over certain funds to the Federal Tr >r e Commission to be used for investigating code violations, pursuant to this section. This plan was employed by the Na- tional Compliance Soard in a number of cases (***) and also by some field offices unofficially before iiay 1934. Finally, in Field Letter 107 it was announced to all the State Offices that where a general survey of a situation was called for, or where ac- cess to records had been refused, they might request the services of a Federal Trade Commission investigator through the Field Branch of the Compliance livision. (****). This announcement had importance because of its effect on the investigational technique of the field. (*) The ITational Industrial B.ecovery Act, Title I, section 3 (a) contained the following provision," - - - The President, may, as a condition of his approval of any such code, impose such con- ditions (including requirements for the making of reports and the keeping of accounts) for the protection of consumers, com- petitors, employees, and others, and in furtherance of the public interest, — as the President in his discretion deems necessary to effectuate the policy herein declared." (**) national Industrial Recovery Act, Title I, section 6 (c). (***) For examples see minutes of the National Compliance Board, 35th meeting, December 27, 1933, case against Ramsey' s "They Cannot Rip", New York City; 37th meeting, January 2, 1934, cases against Truckers Ice and Cold Storage Co., Ltd., Kenner, La. and TJulf Bros , Inc., New York City; 40th meeting, January 5, 1934, case against Edward T. Jones, Kansas City, Ho. (****) Field Letter 107 (May 8, 1934), p. 2. 9861 -88- There was prevalent the mistaken "belief that the Federal Trade Com- ra ission Attorney Examiners had the power to compel the production of hooks and records. (*) Consequently, this working arrangement with the Federal Trade Commission for the investigation of ERA cases was used effectively as a lever to obtain access to records '"'here permission to inspect- was first refused. (**) Still another important adjunct to the field technique of investi- gation was stated in a later instruction to the State Offices. In order to guard against falsified records and erroneous information the Compliance Division invoked the aid of a federal statute imposing heavy penalties of fine and imprisonment on persons knowing!;'" making false statements to any official of the United States with regards to any; matter within the juris- diction of any department of the Government. (***) 7/hile the applicabili- ty of this statute to compliance activities is probably doubtful legally, nevertheless, it served as a useful weapon for the field staff in those ca.se s where the respondents attempted to falsify or conceal the facts. Again the importance of this was not in its strict legal implications, but rather in the practical use to which it was put by the field offices. It is, of course, apparent that the indiscriminate use of anything resembling threats of action Oy the Federal Trade Commission or of prose- cution under the criminal statute on falsification, just mentioned, would likely cause resentment and create a harmful effect on the ERA program. It should be borne in mind that the practical necessities -of the situation required that the Compliance Division implement its extremely doubtful authority to operate on even a modified inspection system, which experience disclosed to be the soundest plan of activity. Generally speaking, these two methods, above described, of filling the gap of authority, were used comparatively rarely and only with tact and care. (*) However, the Federal Trade Commission Act provides for the compulsory production of records and information only on the issuance of sub- poenas by members of the Commission as to matters before it. See 15 • U. S. C. A. sec. 49, 38 Statutes~At-Large, C. 311, sec. 9. The is- suance of such subpoenas, of course, involves the following of a certain procedure, and natural persons so required to produce evidence are granted amnesty from criminal prosecutions based thereon. Idem. (**) This arrangement for the investigation of cases should not be con- fused with the provision in the National Industrial Recovery Act, Title I, section 3 (b) that 'any violation of a code in a transaction in or affecting interstate or foreign commerce should be deemed an unfair method of competition within the meaning of the Federal Trade Commission Act. Under the latter section action by the Federal Trade Commission was under its power to issue cease and desist orders as provided in the organic act. (***)Field Letter 185 (November 30, 1934), p. 1, paraphrasing Section 35, U. S. Criminal Code, as amended June 18," 1934, 18 U. S. C. A. sec. 80, as amended. 9861 -89- The skill of the field offices in makin Lnv s I ;ations, and their scope and thorou hness in ex i to the facts improved gradually with experience. 3ut , as shown in the preceding section on the direction and supervision of Field Adjusters, this improvement was attained through a "catch— on" -process. It ras iot until after the announcement of the creation of the Re- gional Offices that any worthwhile attempt was made to instruct the field in the proper preparation of cases. In a Field Letter (*) at that time Instructions v, ere issued to the State Offices regarding the preparation of affidavits. Stress was laid on the fact that the successful litiga- tion of a case depended to a large measure on its initial preparation. There was pointed out also the practical value of securing affidavits or witnessed statements from employees, in case they later retracted or changed their testimony through fear of discharge or for other reasons. These i: itructions '/ere valuahle "because they included specific suggestions as to the contents of the affidavits. Briefly, the following general rule tn the data to be included, was announced. The statement or affidavit should be in simple terms, preferably in the signer's own language. I should contain the name, age and ad- dress of the worker, the nature of the work in. sufficient detail to show the employee's code classification, the period of employment, the nature of the violation alleged in very specific tor is, and the employer's at- titude toward compliance and his knowledge of the violation. The fol- lowing form was recommended to show the nature of violation: "On August^ , 1954, at the request of .„__________. (name of employer) "by whom I am employed, I commenced work at 8 a.m. and worked, until 6 p.m., with one (l) hour for lunch. During that ': r eek, ending August . , 1934, I worked fifty-two (52) hours for which I was paid ■? ; at the rate of $ — per day/hour." (**) Besides the employee's affidavit, mentioned above, it was stated that the file should contain at least one general sworn statement covering the following points; ; ;he form of business organization, and the state of incorporation and officers' names if a corpor. tion, the nature of the em- ployer' s business in detail, with the size, branches, and number of em- ployees, and the principal markets and sources of raw materials. These affidavits were intended for use only in those cases which ware likely to become subjects of litigation. It was pointed out that the failure to include this evidence in the file resulted in unnecessary (*) Field Letter 191 (December 28, 1934). The contents are discussed in the paragraphs which follow. (**) Field Letter 191, p. 2. 9861 -en- delays in the final preparation of cases and the i;msti tuition of action. Of like import was the fret that in many cases it was exceedingly diffi- cult to supply this evidence at a later date if not secured during the initial investigation. Employees became afraid to give further state- ments and respondents grew reluctant to supply further information and to alio 7 / additional inspection of their records. At this point there should be mentionec a proposal to improve field investigation technique, which was developed in the late fall of 1934, Through conferences between representatives of the litigation and Com- pliance Divisions and the Chief Examiner of the Federal Trade Commission there was evolved a plan for' the training of State Compliance Office staffs in the preparation of cases.<^)Under the proposed project certain Attorney Examiners of the Commission were to hold short training sessions in the State Offices na:ied on the specified list. It was felt that the technique developed ''oy the Federal Trade Con dssion through its larger experience in investigating complaints would be of great benefit to the Compliance Division' s field offices in improving the quality of their work. That hiere was need for some such system was fairly evident. How- ever, the practical difficulties of placing the plan in operation caused the initiation of the project to be -postponed several times, so that it was never given a trial. The creation of the Regional Office system had little noticeable effect on the development of investigational technique. The closer supervision of the field offices and the additional personal contact through the visits by Regional Field Representatives or their equiva- lents, furnished another medium for instructing and training the State Office staffs. The improvement of technique, however, was mainly brought about by daily experience in handling cases and continued to be gradual. The restatement of the standards of adjustment in Field Letter .193 is somewhat more complete and definite form only served to emphasize the developments which had been already made. However, it is not to be understood that no further attempts were made by the Compliance Division to improve field technique. On the con- trary, beginning with Field .Letter 191 and in the five months of com- pliance activities that followed, several noteworthy attempts at improve- ment were made. The point is that the majority of the field offices had attained the improved stage of development through experience prior to the issuance of these additional instructions. In this connection, the form for analyses of cases to be heard by the Regional Counciles (**) furnished a guide as to the points to be covered ''oy investigation. A few weeks later a new complaint analysis form was sent to the field, giving more detail on evidence of interstate (*) In IIRA Studies Special Exhibits "York Materials #77 (**) Field letter 193' (January 10, 1' 35). 9861 -91- comraerce-, i.e., as to the respo ldent 1 s size, markets, sources of raw ma- terials, competitors, character a irtisin , and met hoc of distribu- tion, and direct evidence of interstate sales. (*) A more aggressive psychology of investigation was also indicated by an instruction suggesting that the State Offices have their Field Adjxist- ers check firms who' e labor exemption petitio is ore denied. (**) How- ever, a backward stop was later made restricting the initiation of mass compliance industry surveys. In May, 1955, possibly because of unfavorable publicity -received by NBA in hearings before the Senate Finance Committee on the proposed extending legislation, and possibly because of the pending decision of the Supreme Court on the constitutionality of the Live Poultry Code, the State Offices were instructed not to conduct any industrial mass compliance surveys without prior specific approval from Washington. (***) Probably the most important contribution to the development of field technique and field office organization during the period under the Re- gional Offices was the evolution by the Coordinating Branch of new types of forms for State Office use. This came as a result of a survey of non- standard forms in use by various State Offices, conducted during the spring of 1935. Their value lay in the fact that they tended toward a more order- ly and uniform preparation of cases. These forms, which have been de- scribed briefly earlier in this section, were on important part of the me- chanics employed by the State Offices in the handling of cases. (****) During this same general period of development a memorandum from the Compliance and Enforcement Director was sent to the field offices reitera- ting the instructions contained in Field Letter 191 relative to affidavits. This memorandum contained only a general admonition that the files sent to the Regional Offices should contain at least o.,e affidavit from a person having a direct knowledge of the facts, or from the investigator. Field offices were cautioned to make findings of violations only where justified Dy the evidence and to consider the sufficiency of the proof for a council hearing in preparing a case. (*****) Reviewing what has been said concerning the evolution of a technique of field investigation, it is striking that the majority of the development came from the experience of the State Office staffs themselves. No uniform standards of investigation were ever created, nor was there any system for training and. directing the field staff ever placed in operation. Some pro- gress was made in the direction of uniform improvement by the non-standard form study by the Coordinating Branch, by the development of standards of ■adjustment ay the slow process of growth of the Compliance Division's ( * ) Field Letter" 197 (February" 4, 193577" (**) Field Letter 205 (March 23, 1935), p. 2. (***) Field Letter 219 (May 22, 1935), p. 1. (****) See page 84 supra. (*****) Field Letter 209 (April 20, 1934). See also page 89 • supra. 9861 -92-' policies and methods of operation, and by the continual interchange of ideas and experiences among the field offices themselves. This gradual, natural improvement of the use of field investigations, however had cer- tain practical limitations on its growth as regarded the technical legal requirements s.s to the character and sufficiency of proof. This last fact probably had general recognition in the Compliance Division as well as in the Litigation Division, xhich was charge-", with the actual handling of cases presented for legal action. In vie 1 :? of the fact that fen of the field Adjusters were lawyers, and there was no regular system of trailing, the existence of these limi- tations is not surprising. There already was a knowledge of compliance conditions and ITRA policies and a familiarity with the practical problems and the methods of investigating cases, gained from actual experience. There was lacking only the knowledge of the technical legal aspects of the preparation of cases. In a few of the offices, however, depending on the personnal and on local conditions, the staff finally attained a. completed technique of in- vestigation, including a working knowledge of the legal requirements as to the form aid sufficiency of evidence » In this connection^ some steps were initiated to complement the technique of field investigation of the rest of the offices. Under date of March jO, 1935 the Acting General Counsel of ISA sent a memorandum on the preparation of cases for litigation to the "Regional Directors, mem- bers of Regional Compliance Councils, State Directors, Regional Attorneys, Regional Litigation Attorneys and Assistant Compliance Attorneys. This memorandum called attention to the problems of proper investigation and requested the full suggestions and comments of the State Directors and their staffs for a, solution. There was attached a copy of suggested in- structions and report for investigators, prepared by the Chief Assistant U. S. Attorney for the Southern District of New York. This pamphlet, which contained many practical and helpful suggestions, was also made the subject of comments 'oy the field offices. However, further efforts in this direc- tion were halted by the termination of all compliance activities on Hay 27, 1935. 9861 -93- Section 6 - The technique of adjustment by conciliatory measures . It has been shown in a orevious ch-oter that the function of obtaining compliance had as an essential element the adjustment of comolaints of code violations. Adjustment in turn gradually came to moan the edu- cation of the resoondent to his obligations, the bringing about of oresent conformity to the code provisions, and, at least in the case of wage and hour violations, restitution in full by the emoloyer of the amount found to be due the employees by the adjustment agency. Coincidentally with the development of the standards and policies of adjustment to the -ooint just described, there ca.me about certain changes in the technique end mechanics of adjusting cases. These changes were closely correlated with the improvements in investiga- tional technique, discussed in the oreceding section. Under the original )lan contained in the "Regulations for the Adjustment by District Coimli-nce Directors of Complaints of Code Violations," issued October 19, 1°33j the only means for adjustment "orovided v. r ere by correspondence pnd office interviews. (*)- .Due-- to ■> the large volume of comol-ints and the extremely limited "oersonnel the District Compliance Offices were constrained to handle cases by the unsatisfactory method of correspondence, augmented so far as possible by office intervie-s -rath the respondents. "~ith the grpdua.l' development of the field organisation under the State Office system and the gro^in^ experience in o^t-pcning con- "oliance, modifications r ere made in these methods of c~o -ration. Tnile correspondence and office interviews continued to be ussd, they assumed a different asr>ect. In their stead there came into use field inter- views and other additions to the adjustment technioue. inasmuch as the evolution of field comoliance -orocedure has been treated in earlier sections of this ch^oter, the following discussion "'ill not reiterate p description of the historical development of the v-rious 'sheets of adjustment technique. The field personnel quickly recognized the disadvantages to adjustment m ork of restricting their activities to correspondence and office interviews. Sxoerience dictated the necessity of familiarity "ith the -ctu~l business o-oer-^tions of the respondent for a proner performance of the compliance functions. Accordingly, after Field Adjusters beg»n to be added to the various State Office staffs in the spring of 193^> p - n ^- the needed facilities were to some measure pro- vided, the use of field interviews assumed large importance. The value of interviewing the respondent, at his place of business end attempting to obtain an adjustment on the s"oot, is stated in the following extract from a Field Letter: "In the resulting interview hours of work and scale of wages are discussed and the situation can be cleared or adjusted frankly and without resentment, since the adjuster has the opportunity to seek the employer's cooperation before he has built u^ an atti- tude of resentment and d.efensiveness." (**) (*) See suora, p. 53. (**) Field Letter 125, *>• 12. 9861 -94- Field interviews received their greatest use in the labor "ohase of comoliance. It has already "been shown, that the developed policies and standards of adjustment brought about the investigation of the res- pondent' s payroll at his place of business. The natural procedure was at least, to initiate the arrangements for adjustment at that time. A certain psychological' advantage was gained by calling the violations to the respondent's attention .immediately that they were discovered, a.nd placing the employer in the position of having to show his good faith by agreeing to make an adjustment. Moreover, the Field Adjuster making the investigation usually established an entree in the course of the inspection and was able to attain familiarity with all aspects of the case. Certainly, it wa.s more efficient in most cases to allow the Field Adjuster making the investigation to apply his knowledge of the facts to a correction of the violations. Thus, it is seen that the advantages of field interviews as a. means of adjustment are three-fold. This procedure was a more. simple and more na rural one, and therefore easier to follow in every- day practice. It 'made a more efficient use of the limited compliance facilities, since it properly .'correlated the two interdependent features >f invo tigrtl^n and; adjustment,' and tended to avoid dup- lication of effort...- .■:•■•.■...-•'•• ■'■ Secondly, closely related to the first aspect, it enabled the adjustment staffs to handle cases with a fuller and more intimate knowledge of the facts and the causes of the violation. From such a starting point it was possible to give the proper treatment to ca.ses so as to create permanent compliance. It must be remembered that compliance work was not a mere mechanical •■••task of discovering violations and seeking restitution of back wages. Much more important was the education of employers to their obligations, convincing them of the benefits of comoliance.,. obtaining the installation of adequate records and other systems to make the mechanics of code observance com- paratively ea.sy, and the attempted alleviation of competitive and other outside influences which were fundamental causes of violations. Finally, there was a certain psychological effect attached to field interviews which facilitated the adjustment of en ses. It is al- most a truism that speedy, coordinated handling of a case is con- ducive to a satisfactory adjustment." The informal procedure of im- mediately calling the respondent's attention to violations and re- questing a.n adjustment was consistent with the pronouncements' of the Compliance Division officials that they desired to cultivate the good will of business men. Further, employers felt less resentment than they did where they were required to leave their places of business and come to the State Office for a conference. Likewise, in the comparatively small number of trade practice complaints handled by State offices, field interviews were Droved to be of value. This was Particularly true in those cases in which friction had previously developed between the respondent and the Code Authority. A personal call at the respondent's place of .business 9S6l -91 wps often found to be the medium of restoring friendly relations and of clearing up misunderstandings. However, a larger number of trade practice cases was handled by- inviting respondents to aopear in the State Offices for conferences. This was because most State Offices found it necessary to aosign their Field Adjusters to labor violations • Also, as has been pointed out before, by their very nature trade practice violations were more susceptible of treatment by conciliation and mediation under the complaints plan of procedure. Office interviews on trade practice complaints were also used in a number of cabes where the State Trade Practice Compliance Officer acted to supplement the Code Authority's efforts. These usually took the form of conferences between the representative cf the State Office, the respondent, and the com- plainant or the Code Authority's members, which were almost solely for purposes of composing the differences of the parties. Little fact finding was necessary. In labor complaints office conferences .had a slightly broader aspect, although their use was more restricted. Office interviews as part of the adjustment machinery for dealing with labor com- plaints took two forms. In a minor percentage of cases the final arrangements for adjustment could not be completed in the field. It became necessary then to invite the respondent to the State Office to discuss the settlement of the case. This might be due to the fact that certain important questions of policy were involved in the case which made it advisable for the adjustment to be personally super- vised by the Labor Compliance Officer or a member of the adminis- trative staff. Also, because of peculiar circumstances in a case or on account of the personality of the respondent, it was sometimes ad- vantageous to seek an adjustment through an office interview rather than in the field. In the latter connection there should be noted another cause operating for the employment . of office interviews in the adjustment of cases. 'The internal organization scheme used in some of the offices was so devised that the functions of investigation and ad- justment were largely divided, so that the latter was chiefly the province of the office staff, rather than the field staff. (*) The latter was notably true in mass compliance surveys, discussed in a later chapter, although it was used by a few larger offices as a regular system of operation. The second form of office interviews was the joint conference be- tween respondent and complainant. This closely combined fact finding and adjustment. This type of interview, which was more in the nature of an informal arbitration hearing, was used mainly where no adequate records existed or where for other reasons the facts were obscure. Its use extended chiefly to the codes covering industries characterized by small establishments, such as Retail Food and Grocery, Restaurant, and the like. The procedure at such conferences was to dra^ out the facts, as far as possible, by questioning both parties, and then to attempt to arrive at a mutually satisfactory adjustment. Such procedure, (*) See discussion on the finally developed internal organization of field offices, Chapter IV, pp. 45-17, 9S6l -96- it is true, left considerable room for departures from adjustment standards. However, it is to "be remember*e0. that this tyne of joint hearing was used almost solely in the more or less small, unimportant intrastate and service trade cases. In the absence of a uniform re- quirement for the keening of records end -oower to conroel the pro- duction of evidence, the practice was regarded as a makeshift to take care of an immediate situation, in the seme generrl category as the suspending of final administrative action on certain codes deemed not susceptible of successful enforcement. As a sumolcment to the methods of rdjustment just described, the State Offices continued to make use of correspondence. It has "been shown that originally practically all comaliance efforts were carried on by this means. Its disadvantage as a primary method of operation are apparent. It undoubtedly bred delay and deceit on the part of industry members, -and served to create the impression of in- efficiency and ineffectiveness in the comoliance machinery which be- came a great handiea.w to the field offices in their relations with industry, labor and the wublic. As quickly as possible, therefore, the State Offices ceased to use this tyve of procedure, except for the initial notice to the respondent and for such correspondence as was necessary incidental to the investigation and adjustment efforts in the field. Moreover, following the suggestion to that effect in Field Letter 125, even the initial notice to respondents was largely, eliminated. (121) However, in the last few months of comnliance history, correspond- ence came again to be used for the handling of the 'service trades and some intrastate codes. 'It was felt that the time and energy of the Field Adjusters ought to be conserved for the larger, more important codes covering industries which were considered to be engaged in or affecting interstate commerce. This also was regarded as a temporary arrangement sending the determination by the officials in Washington as to the disposition of the codes in question. In the course of the months of experience in preparing unadjusted complaints for further administrative and legal action, the State Offices evolved another part of the rdjustment technique which may be called the formal hearing. This may be distinguished from the office interview and the State Adjustment Board hearing in that it was essentially a last opportunity to a'oiDear before a member of the State Office staff and make an adjustment of the case. When investigated comolaints had reached the stage where it was felt that little more of an administrative character could be done by the State Office, it was determined whether the further action should be suspended, a.s in a limited class of codes, or the case should be transmitted to a higher agency with the recommendation that adminis- trative and legal sanctions be invoked. (121) Supra, p. 66. 9S6l -97- Prrtly on the suggestion of the Litigation Division's field men and to some measure on their own initiative, a number of the State Offices came to use the formal ".caring as a regular steo in the handling of unadjusted cases. A notice was sent to the respondent, usually by telegraph or registered mail, stating that an investigation had dis- closed the violation of certain named code provisions which he had failed or refused to adjust, and informing him of a last ooaortunity to appear and correct the violations or show cause why further action should not be taken. The notice s-oecified the time and place of the hearing and the person before whom the respondent was to appear. At the hearing the member of the State Office staff, usually the appropriate compliance officer or his assistant or the Legal Adviser, informed the respondent of the general nature of the charges, and read and exolained the pertinent code provisions. A request for adjustment was then made with the explanation that in the event of re- fusal the case would be recommended for action by the United States Attorney, minutes of the hearing were taken and a transcript included in the file. These formal office hearings served two purooses. A certain per- centage of respondents were influenced to adjust their operations ac- cording to the prescribed standards. On the other hand, the notice took the place of the required notice of violation provided by Bulletin No. 7« The hearing before a higher ranking member of the staff, after contact had been made by the Field Adjuster, served to repla.ee the "orocedure prescribed in Bulletin No. 1 for a respondent to appeal the decision of the compliance officer to the State Director, and from the latter to the State Adjustment Board. (*) In the latter connection, the Litigation Division apparently felt that the granting of a hearing with notice to the respondents iT ould tend to eliminate some objections of the courts ,v ith reference to due process of law. One other phase of the adjustment procedure also provided an im- partial hearing and a means of appeal for complainants and respondents. Bulletin No. 7 provided for the creation of a State Adjustment Board, to serve in an advisory capacity to the State Director, and to hear appeals by respondents and complainant?: from decisions of the State Office. (**) This came to be an important part of adjustment procedure, since in practice the Board' s use wa.s extended beyond the rather narrow limits probablv intended by Bulletin No. f. (*) Bulletin No. 7» P» 15* However, the replacement was not entire, especially as to .State Adjustment Board hearings, as will be noted below. (**) Bulletin No. 7, pp. 15, 16. The origin, development, and use of State Adjustment Boards is the subject of a subsequent section and will not be discussed here. 9S6l Being a voluntary, .iraoartial agency established apart from the Compliance Division, its decisions carried an inherent prestige. The keynote of the Board was impartiality. The majority' of the cases referred to the State Adjustment Boards (and also the Local Adjustment Boards) were ones involving disouted questions of fact. It was each Board's function to de- termine the facts in the particular case "before' it rnd then to reach a decision as to the adjustment required; in the event violations were found. Because respondents generally regarded the hearing "before the Boa_rd as a. semi- judicial proceeding, it followed as a natural con- sequence that the decision of the impartial agency carried much weight in influencing the adjustment of cases. Moreover, this value as a part of the adjustment technique extended even further, i.iany respondents we're sufficiently awed by the proceedings before what was considered a higher tribunal that they preferred to adjust their cases rather then allow them to be referred to the State Adjust- ment Boards for hearings. There has been stated a. description of the procedure and general methods followed in adjusting cases. In applying these methods successfully the use of practical psychology, tact, and other intangible personal qualities was of paramount importance. More often than not the character and quality of the field personnel was the de- termining factor in successful compliance work. It was necessary that the regular means of adjustment not only be used skillfully, so as to attain the best results, but that they be augmented by whatever devices the ingenuity of .the State office staffs could conjure. The complicated nature of the problem of regulating the every- day economic relations of so many people naturally necessitated the invention of ways of making the procedure "orovided adaptable and effective under local conditions. These supplementary adjustment de- vices' -^ere so many and varied that a discussion of them will not be attempted at this point. The more important ones will be mentioned in a subsequent chapter on the problems arising out of the settlement of complaints. "Jithout entering into an analysis of complaint statistics it may be stated at 'this time that 50»2^0 cases of labor violations were ad- . justed by the state offices against 3»^73 which were referred to higher authority because the state offices were unable to adjust them. About half of the latter number were eventually adjusted by the Com- pliance Division in Washington or by Regional offices. There were 19,67^ trade practice violations adjusted by the State offices and 2,950 referred to higher authority. Section 7 - Nori-disclcsure of the source of complaints . The instructions to field offices,' it has been shown, were clear that the source of com- plaints was to be kept strictly confidential unless the complainant gave express permission for the use of his name. (124) (124) Supra, pp. 53-59-5 Office Manual III - U121.011 9S6l -99- The immediate re-son for this nlo was, of course, that the disclosure of the complainant's identity often lend to measures of retaliation "by the respondent, especially in the crse of l^bor complaints. (*) The importance of this fr.ct to the compliance orogram lay in the basis of proceedingS| the filing of comol ints. Since the initial stec in the procedure was the entering of a complaint, it was essential to -oromote the willingness of employees, competitors • nd others to report violations. However, rs long as the field offices wore undermanned, and . s long as they were forced to follow the procedure of notifying the respondent of the contents of the complaint and of- accepting his explanation, no satisfactory progress could he made. Either further efforts on the c se would have to be dropped, or the complainant would he called u:on to support his allegations* In the latter case, of course, and also even sometimes where the complaint was closed, the respondent could readily a.scert'in the source of the report. This consequence of the complaints procedure resiilted either in . making the compliance officials appear ridiculous or in deterring other employees from complaining, usually both. The ramifications of this problem were soon seen by field officials and remedial steps were taken wherever possible. This is reflected in the treatment of anonymous complaints. The original rule that complaints of PEA violation before the Lo- cal Compliance Boards hrd to be signed, was changed on 'October 19, 1933 t° make action on anonymous complaints discretionary with the District Compliance Directors. (**) The latter was reiterated in Bulletin No. 7. (***) But two days after the issuance of Bulletin No. 7, however, it was thought necessary to clarify the rule and by inference to urge the handling of anonymous complaints except where palpably false or unfounded. (****) With the addition cf Field Adjusters to the State Office staffs, and the development of their use, it has been shown that modifications were made in the procedure of handling cases. (*****) Thus, investi- gation came to include inspection of the entire payroll, and the use of office complaints and mass compliance methods became increasingly popular. By changing to these methods of approach in the handling of violations, the source of information automatically tended to become impersonal. This was found to be the most successful way of dealing with the problem, although it in turn was handicapped by the absence of adequate records in numbers of cases and by the lack of legal authority to make such inspections. (*) This entire subject of protection of complainants' identities was an outstanding problem of the Compliance Division and is so discussed in Chapter VII, infra.. (**) Supra, pp. 51, 52 (***) Bulletin No. 7, p. 11 (****) Field Letter Ug, p. 1. "See also Supra, p. S3- £gg***) Supra, pp. 6^58 \ 59-73. -100- This unofficip.l method of meeting the issue -as supplemented on May 15, 1S3^" ^y ^ le issuance of Executive Order 67H, which pro- hibited under penalties of fine and imprisonment the dismissal or demotion of employees for filing complaints or giving evidence in connection with code violations. Since we are primarily concerned here with the effect of the protection of complainants' identities on the procedure followed in the field in adjusting cases, however, a discussion of the application of this order -.ill he left until a later chaoter. As an outgrowth of the development of compliance procedure, it became the practice to withhold the name of the complainant at all costs. Thus, there was seen the situation, incongruous with our basic legal conceptions, that respondents were told that they had been found to be in violation of their respective codes but were • not - informed as to exactly what particulars. :7ith the statements of employees always a prime source of information under the com- plaints plan of procedure and also under the mass compliance system where records were lacking, it vras practically impossible to protect the source of complaint and at the same time to name the specific employees with regard to -'horn the violations had been committed. This presupposed an almost implicit confidence in the impar- tiality of the InTRA. a feeling which was not always present. On the other hand, many respondents resented what they considered to be star chamber proceedings, feeling that had the right to face their accusers, r at lea.st be informed as to the exact particulars of the violations charged. It is recognized that this attitude by respondents was partially fallacious, since except in the case of large employers, they were ordinarily in a position to know how their businesses were conducted. Nevertheless, that feeling was to some measure the genesis of the reaction against ItBA which so mani- fested itself during the 1.-st few months under the codes. Therefore, the requisite confidence with which the source of complaints was treated was important for two reasons. There was, in the first place, a. troublesome administrative problem created, which had to be met. In the second place, the observance of this cardinal rule of secrecy was a large motivating influence in the de- velopment of the methods and technique of investigating and ad- justing violations. In the latter respect, the resulting encroach- ment on fundamental legal principles has already been mentioned. However, while the practice of refusing to disclose the source of information lead to resentment on the part of respondents and was regarded in some quarters as a dangerous invasion of consti- tutional rights, some relief from this opinion was found in the provision for hearings before impartial boards. These agencies which wore known as State and Local Adjustment Boards, were designed primarily to hear appeals from the decisions of the various State Directors and their staffs. (*) Through their in- tervention it was possible in a large proportion of such cases both (*) A discussion of origin,- purpose -'wnd use of these boards is con- q_,r, tained in the next section. -3,01- to protect the complainant 1 s identity and at the seme time ret-in the respondent' s good will rand confidence. It should be made clear, however, that the attitude of res- pondents described in the foregoing r)cragraphs ■:.' s= by no means univer- sal. There were s few of the employers who were able to understand and agree with the neeC. for keeping the source of information confidential. They recognized the inherent limitations of the comolaants plan of procedure and realised that it::- siccecs sfeoended to a large degree on their coot)err>t ion. They also took cognizance of the fairness of the rule of confidence, since as a corollary to it, the field offices vere instructed not to give any oublicity to the f-ct that a com- plaint had been filed aa-inst a Particular res->onc ; ent. (*) The la.tter instruction, however, being not so essential to the conduct of com- pliance activities, never received the strict ronlication imoosed on the -orotection of the source of comolaints. (*) Bulletin ITo. 7, p. 7 926l -102- Secoioii 8 - Hearings "by Local and State .Adju s tment Boards . The idee, of a system of voluntary, impartial boards to assist in the handling, of complaints of violations was not new with the provision for State Ad- justment .Boards by Bulletin To. ?.(*)■ As early as September 11, 1933- there had been announced the establishment of a system of Local Com- pliance Boards to handle Complaints and petitions for exemption under the PEA. These earlier boards were so constituted that, generally speak- in.;., they were supposed to recuiicile the conflicting interests of the employer, .the worker and the consumer. Moreover, some such type of agency was apparently contemplated when the rational Industrial Recovery Act was massed, for Title I, section ?,(a) authorized the President "to establish such agencies, to accept and utilize such voluntary and uncompensated services" as he might deem ne- cessary. During the experimental stage of the field offices from October, 1933, to January, 1934, it became apparent that a number of improvements in the compliance field organization were needed. Included among these were the needs for a better defined procedure and for a more adequate personnel. To fill partially both these requirements there was provided a system of impartial, voluntary agencies to supplement, the activities of the regular field organization. In a letter, dated January 30, 1934, to the new State Directors knd in Bulletin Ho. 7 (issued two days later), it was announced that a State Adjustment Board would be established in each state as part of the permanent compliance system. (**) The purpose of these boards was to create an orderly procedure for the hearing of appeals by those parties dissatisfied with the decisions of the State Directors or their staffs. They were also to hear cases referred by the State Directors and were to serve purely in an advisory capacity to the latter. (***) Such was the apparently limited scope of the Adjustment Boards. Uith experience in the use of this type of agency, however, their utility was found to extend much further and they came to be an important adjunct of the governmental code compliance system. The first State Adjustment Boards were organized and began to func- tion in February, 1934. Their number and location was made to depend upon the volume of cases submitted and on local needs. (****) Inasmuch a.s the Boards were to serve as a forum for those dissatis- fied with the State Offices' decisions, it was imperative that they be truly impartial. Therefore, they were composed of equal representation from employers and workers, with an impartial chairman to represent the (*) Bulletin No. 7, pp. 15-16. (**) In ERA Studies Special Exhibits Work Materials #85 (***) .Bulletin Ho. 7, -r^. 15-16. (****) Ibid., p. 15. 9861 -103- ■ public, 'greed nuon b _r t i • i ) i l bh.< 1 it. f*) l-i this o ■ •. bi , t .■ car< L1 . -'hich the various State Offices select i^r ' these Adjustmenl io< rd s s ? ortant factor in deti ■ ' ency, since ob- viously t ■ hafl to be of s Ly .i\ t . ?.lcul tor", to com- mand the respect i ■ i i ence of jot! comnlainant? an' 1 respondents. The n ■ ■■ ' boti"! Sta1 '.ocl ' 'it Boards, described belo™, server without compensation, staff :-f the State Adjustment oard consisted of ^o Executive Secretar - "", "ho -as the State Office B::- ecutive Assistant, th I : ; ' viser, and such members of the clerical f :' C c p s ••( re i e e d e d . Tith the termination of Local Compliance Board? —a the appointment of Be si dent pield Adjusters in June, 1934, there mere also organized lo- cal boards in the lore important CO' ? i i t. i )f each state "here the" could oe efficiently and econo iica.ll" assisted b :r the local " T 1A repre- sentative. (**) Th se Local Adjust e:it oards, -'ere selected and consti- tuted in a manne* similar to the State Adjustment boards, except the chairmen - r erc appointed b the State Directors. In many instances the membership -ts ~ra i from tlie ">ld Looa] Comrnliance Boards, but in such crse, only after the labor and indus r groups had Lven t leir endorse- lents. These Local Boards. had the same functions, but ^ere generally subordinate to the Sta.te Boards. The majority of the cants referred to the Adjustment Boards con- cerned violations of • '?,;os and ho- rs mi in very fern instances ma.s it felt necessary to submit trade ora ;tice co;.iplaint s . Therefore, the larger percentage of cases -ores en ted ma." be divided iito the following types: (1} There the ^ompl?»in-ant or resnondent nas d.is satisfied "ith the find.ings of the Stat Office. (2) There the fielc : ffi.ee felt it mas advisable to submit a cose to the Board for the ourooso c ' solving a d-ifficult factual situa- tion or to determine a method Df arbitration. (***) (3) '.There the Compliance Officer or State Director felt that the psychological effect of a: hearing before an impartial bod" rould fa cilitate adjustment . (4) "here it • — s felt the amount of restitution &xe night be reduced because of oeculiar conditions or because of the financial in- ability of the resuond.ent to -o"". r ba.c' ' : ages in full. ( _ ) There it mas felt that a hear in ; before the Board, mould strengthen the ca.se for its later reference to the annrooriate Conoliance Council or united States Attorney. ■(*) Ibid., p. IS; see also note (**) * ' (**) In "TBA Studies Special -.mhibits "'orh Materials =7. (***) "Tote that t.iese t"o classes con rise! the ori Lnal scope of the Board-S 1 functions as laid. do 1 i : . ■ Bulletin "o. ?. C CG1 ~104- It is seen that the latter three classes ~ T <-~ later development s in the tj~oes of cases considered b" the 3oards. The category mentioned in paragraph (4), compromise cor.es, formed a large proportion of the "ork, follo'daT the issuance of Field Letter 125 on June 13, l r 34. In the latter instructions i ; ; •"■'■ s provided £hat in al 1 eases "here less than full restitution mas sought the adjustment had to "be ammroved "by the State Adjust -lent 3^ard.(*) The remaining t"o additional t;,'~oes of cases "ere also included in Field Letter 125 in defining, the jurisdiction of the Boards. It "a.s there stated that all cases -.'hi ch could not he adjusted in accordance "ith the standards set forth therin (**) as mell as coses in mhich there "'os aide conflict in statements of facts should be referred to the State Adjustnent Board. (***) Thus, it is seen that the use of the Adjustment Boards as contem- plated by yield Letter 135 covered r v.\cl\ larger number of crses than •'~s described hy the original provision of Bulletin ~ Tr >. 7. By the time the field offices had entered on their third stage of development, in June, l c 34, it hod been discovered that the State Adjustment Board hear- ings formed an important part o^ the adjxi-st ient technique. There were three chief values to the system. A number of trouble- some ca.ses in vhich the facts "ere so oh scare a.s to be airiest impossible of definite proof "ere omicably disposed of through hearing end arbitra- tion by the Boards. There mas thus a physical relief of the extreme pressure of ^orh on the field offices. In the second place, the psycho- logical effect of a hearing before an impartial agency, "hose members '"'ere draftee 1 from private life, "■- s an important factor in bringing ahout the adjustnent of difficult coses. This "a.s a potent influence on the gaining of voluntary compliance, particular!;/ in the case of smaller op- erators. Fino-lly* a certain orderliness mas injected into compliance procedure, and the advice and recommendations of persons not official^" connected • nth "'TBA nor so amenable to governmental regulations served a.s a useful, steadying influence on the development of compliance policies and mractices. The original provisions concerning the use of State Adjustment Boards "ere silent as to the procedure to be fol?Loming in hearings and as to the manner in "Tiich crses "ere to be presented. TJ 0"ever, experi- ence in holding these hearings showed the necessity -of formulating some standards of practice. Therefore, in order that cases mi ,ht be disposed of :ost expeditiously the following outline mas laud ; ? o r m ^:~/ Field Let- ter 135, and generally followed oy the Sta.te Offices. (•****) (*) Field Letter 125, p. 5; Supplementary hemorandum "To. 1 (to Bulle- tin "o. 7) a. 4. This -oo'^er, ho - aver, "as removed by Field Letter l c 4. See discussion of procedure for compromise cases in neat section* (**) See supra, y}. 33-26 (***) Fielc" Letter 123, a. 34. (****) yield Letter 125, mm. 34-55. c 361 -10! - Arrangements were made for canes to "be heard according to a fixed schedule. Both respondents and complainants were invited to be present and to bring their witnesses, e: cept that where deemed exoedient, the parties were heard on different days. There was no instruction as to the rule to be followed in selecting case? for presentation to the Board, the matter being left to the determination of the particular office. A brief outline of each case was usually .-riven each member prior to the hearing. Some offices found it advantageous to require the Field Adjuster submitting the case to prepare u comprehensive report and an- alysis of the file, both better to acquaint the Boa.rd with all facts in the case and to minimize any tendency on the part of the staff to abuse the Board's services. This last was a later development and the practice of requiring such comprehensive preparation of the file was followed in only a few of the offices. In addition to the factual outline mentioned above,- the Field Adjuster or Labor Compliance Officer often appeared be- fore the Board to give additional relevant information. ■ Having become acquainted with the general facts and the issues in- volved in a case, the parties and their witnesses were heard. Here there was little uniformity. Some Boards heard each party and each witness separately, some allowed the witness to testify in each other's presence, but the majority followed both courses, depending on the conditions aris- ing in particular cases. Witnesses ordinarily did not testify under oath. No formal rules of evidence were followed, although the question- ing was limited to pertinent issues and was usually conducted by a mem- ber of the Board. Here it is important to note that each Board established its own rules of procedure, none of which was inflexible, for the conduct of hearings. Meetings were more in the nature of conferences for arriving at the facts on which to base an adjustment, rather than in the character of trials. These hearings were usually private, although Code Authority representatives were allowed to be present to offer advice. However, it was within the discretion of the Board to make any hearing open to the public. (*) But few public hearings were held, however, and where used with care and discretion they were found to be of value in effecting ad- justments. Their chief effectiveness lay in the fear of publicity on the part of respondents. Decisions were reached by the Boards usually in executive session immediately following the hearing. Tftiile technically the decision had the force only of an advisory opinion to the State Director, as a prac- tical matter these recommendations were followed auLmost a matter of course except in a very small percentage of cases. Minutes of each meeting were kept by the Executive Secretary, although an exact tran- script of the testimony was taken in only a very small number of cases. Reports submitted by fifty-one of the fifty-four State Offices fol- lowing the termination of compliance activities show a consensus in fa- vor of the Boards' usefulness as part of the adjustment machinery, al- ( *) Field Letter 125, p. 34; Field Letter 160 (September 12, 1934), p. 4. 9861 -106- though their value necessarily varied, according to the individual experi- ence of each office. The caliber of personnel was generally found, to "be the determining factor and the greater care with which the member shio was chosen perhaps accounts for the larger success of Adjustment Boards over Local Compliance Boards. On the basis of these reports from the State Offices it is estimated that 3 9 000 cases were referred to State and Local Adjustment Boards throughout the country. (*) The number considered varied greatly from state to state, with the largest number, *+51, being heard by the Phila- delphia, Pennsylvania State Adjustment Board, which used three -oanels of members. The coordination of the Boards with the compliance program is well illustrated by the statistics obtained from a representative sanrole of eighteen offices, (**) These figures show the disposition of cases hand- led by both State and Local Adjustment Boards in the states selected* Practically all decisions were unanimous and but one and one-half per- cent ^ere overruled by State Directors. This is highly indicative of the close cooperation existing between the State Offices and the Boards. An analysis of the d.is"oosition o f the 1,^-13 cases handled by these eighteen sets of Adjustment' Boards, slightly less than half the total number considered, shows that violations were found to exist in eighty percent of the cases. On the other hand, fifteen and one-half percent were rejected either for lack of evidence, on a positive finding of no violation, or because the Board felt it had no jurisdiction. But four and one-half percent of the cases referred were pending on May 27, 1335 with no action having been taken and the question of compliance undecided* The smallness of the latter number is accounted for by the fact that the activity of the Boards decreased considerably in the spring of 1335$ af- ter the power to approve compromises had been removed by Field Letter I94 , and with the growth of the practice of dropping certain types of cases by the field offices. This will be discussed further in the next section. The usefulness of Adjustment Boards as part of the adjustment tech- nique is manifested by the large number of violations which were either adjusted in full or were settled on a compromise arrangement. Of the 1,126 cases in which violations were found, fifty-five and one-half oer cent were adjusted in accordance with regular standards and eighteen and one-half percent were compromised, a. total of seventy-four percent. This number is all the more striking when it is remembered that the cases re- ferred to the Boards were the more difficult ones, where previous attempts at satisfactory settlement had failed. (*) A table showing the number of reported cases by State Offices is included in the appendices. For the purposes of these statistics where a number of complaints -ere handled a.s a single ca.se, only one has been counted. (**) This table is included in the appendices. 3S6i - 107 - though their value necessarily varied according to the individual exper- ience of each office. The caliber of personnel was generally found to "be the determining factor and the greater care with which the member- ship was chosen perhaps accounts for the larger success of Adjustment Boards over Local Compliance Boards. On the basis of these reports from the Stote Offices it is estimated that 3,000 cases were referred to State and Local Adjustment Boards throughout the countr;.'. (*) The number considered varied greatly from state to state, with the largest number, 451, being heard by the Phila- delphia, Pennsylvania State Adjustment Beard, which used three panels of members. The coordination of the Boards with the compliance program is well illustrated by the statistics obtained from a representative sample of eighteen offices. (**) These figures show the disposition of cases handled by both State and Local Adjustment Boards in the states selected. Practically all decisions were unanimous and but one and one-half per cent were overruled by State Directors. This is highly indicative of the close cooperation existing between the State Offices and the Boards. An analysis of the disposition of the 1,413 cases handled by these eighteen sets of Adjustment Boards, slightly less than half the total number considered, shows that violations were found to exist in eighty per cent of the cases. On the other hand fifteen and one-half per cent were rejected either for lack of evidence, on a positive finding of no violation, or because the Board felt it had no jurisdiction. But four and one-half per cent of the cases referred were pending on May 27, 1935 with no action having been taken and the question of compliance undecided* The smallness of the latter number is accounted for by the fact that the activity of the Boards decreased considerably in the spring of 1935, after the, power to approve compromises had been removed by Pield Letter 194, and with the growth of the practice of dropping certain types of cases by the field offices. This will be discussed further in the next section. The usefulness of Adjustment Boards as part of the adjustment tech- nique is manifested by the large number of violations which were either adjusted in full or were settled on a compromise arrangement. Of the 1,126 cases in which violations were found, fifty-five and one-half per cent were adjusted, in accordance with regular standards and eighteen and one-half per cent were compromised, a total of seventy-four per cent. This number is all the more striking when it is remembered that the cases referred to the Boards were the more difficult ones, where previous attempts at satisfactory settlement had failed. (*) A table showing the number of reported cases by State Offices is included in the appendices. For the purposes of these statistics where a number of complaints were handled as a single case, only one has been counted. (**) This table is included in the ap-oendices. 9861 —1 aiR— It is see:-., therefore, that the boards nlayed en important part in cut tin ' c.o"~i the number of cases to "be considered d" Compliance Councils for removal 'of insignia and for litigation. This cohclusio:i is empha- sized by the fact that in only sixteen percent of the violation cases were the boards unable to reach adjustments. Of the remainder, five percent of the cases -"ore drowoed because further action was not deemed advisable and five "oercent were pending "hen the Boards cea.sed to fune- tion. During the course of co nlipr.ee activities so : :e difficulty "as ex- perienced in arranging meetings at times when all members could attend, thus placing a restriction On the use of the Boards. This situation ,_r as somewhat alleviated by granting the State Offices authority to annoint alternates on Bovember 30, 19S4.(*) It is felt, ' ho'-ever, that had some measure of' ndecuate c mwen sat i 0:1 for the tine consumed ^oee-^. provided the nroblem of attendance world have been largely • elimina.tecU At any rate, the experience of the Compliance Division in 'the use of State and Local Adjustment Boards is strongly indicative of the advantages and v^lue of providing a method of impartial her rings. The sharp decrease in the use of the Boards with the spring of 1935 strongly reflected the gradual disintegration of the WBA program. An adverse press* a. growing attitude of opposition or. the part of industry and the public, and reverses in the courts, all heightened by the la.ch of clear, definite policies of action cr. the part of 3L1A, so disheartened the more conscientious members- of the Boards that little enthusiasm was left to carry on "the won-. The field offices, meanwhile, attempted to salvage what they could of the deteriorating coFfbliance situation "ay suspending action on those codes which had become for bracti-cal purposes virtual^ unenforceable, in order to concentra-te their efforts on retain- ing the labor pno. business standards which had been rained in the larger, better organized industries. Such a. course of action, tenwora.r" in its nature, left little room for the use of the Adjustment Boards. Accord- ingly/", D3" ] ay, 1035, but few Boards were continuing to function, the ac- tivity of the majority having temporarily ceased. Section 9 - Corroror'isin" ; and Or^-yof.i" of cases . Prior to June, 1034, it has been shown, no standards of adjustment had been" adopted by the Com- pliance Division, although some development along this line had been in- itiated through the e:coerience of individual field offices. " oreover,- daring the ajcr mart of the seven and one-half months preceding Field Letter 1~'5 very little emnhasls was laid on the mahing of restitution for past violations in the adjustment of cases. "While this nolicy of adjustment on the basis of assurance of future compliance only '"as soon recognized by compliance officials as unsatisfactory", the development of definite standards of adjustment ' as left to bo shaped by the daily ex- periences of persons in the field who "'ere actually engaged in dealing wi t h co d e v i lat ions. ( * * ) (*) Field Letter 132, (**) The development of .the standards p^*:. policy of adjustment' has • been discussed si.nra, Chanter III, ;ow. 15—03 0861 -109- During this period many complaints were adjusted without any pay- ment of hack wages at all, or with restitution only to the complainant in a sum determined hy conference with both parties. Thus, it was com- mon for wage claims to be compromised by agreement between the complain- ing employee and the respondent, often at* only a small fraction of the full amount alleged to be due. This was a natural result of the lack of definite standards, the absence of an adequate adjustment staff, and the restrictions placed on the improvement of compliance technique by strict adherence to the principle that all proceedings had to be' initiated by the filing of a formal complaint by someone presumably acquainted with the facts. Moreover, Bulletin No. 7 provided that arbitration was a proper means of adjustment. (*) This problem was much more acute in cases involving labor violations than in those concerning trade practice since in the latter type it was generally impracticable to include restitution as a feature of adjustment. The reasons for this already have been briefly stated and will be shown further in the subsequent discussion on outstanding problems in the handling of trade practice complaints. Finally, on June 13, 1934, the Compliance Division acted to end this unsatisfactory condition in the compliance practices of the field offices. At that time there was issued a complaint manual, attached to Field Letter 125. It contained instructions on the proper handling of labor complaints and promulgated standards of adjustment, based on ex- periences in the field and compiled largely from the observations and knowledge of the travelling Field Representatives. In setting up guides to be followed in adjusting cases, Field Let- ter 125 recognized that the practical aspects of "code administration for compliance" required some elasticity in those standards for unusual cases. Accordingly, it was provided that where there was a question as to the financial ability of tne respondent to make full restitution, or where the payment of an overtime rate constituted a hardship, or where other circumstances suggested an exception from the general rule, the case should be referred to the State Adjustment Board for decision as to whether a compromise settlement ought to be accepted. (**) The chief reason for this procedure was stated to be that the aim was to obtain as nearly as possible the full amount due the employee. It was stated that a compromise was sometimes necessary to prevent the employee from receiving even less or nothing at all. (***) This provision was reiter- ated and made the exclusive procedure for compromising cases by Supple- mentary Memorandum No. 1, issued with Field Letter 125. (****) (*) Bulletin No. 7, p. 15. (**) Field Letter 125, pp. 4,5. (***) Ibid, p. 4. (****) Supplementary Memo. No. 1, pp. 4, 7. This was also- repeated in Field Letter 143, p. 1. -110- stated in Field. Letter 115 and Supplementary memorandum l~o. 1 was closely folio- e" by the Strte Offices in all case? 'here adjustment mas sought at lc-ss than the full amount which had been definitely determined to be . i.;. There was, however, a large number of cases in which the facts '"ere obscure and in vrhich conflicting state- merits by employees snd responc..enty r.ad.e it difficult to determine the degree of violation with accuracy. In such cases it vras the practice for the field offices to arrive at the amount of restitution by mating an arbitrary decision on the facts, vjhich usually represented a com- promise between the statements "oresented ~oy the complainant and the respondent. 'The line of distinction between these two .lasses of cases .is thin. There the amount of restitution had been determined but it vras desired to accept a lesser amount because of the respondent's inability to pay in full, the case was classed a." a .co - -promise and referred to the State Adjustment Board. (*) Ii , however, the case wer one '-'here the evidence was, conflicting and _jncon elusive, so that it was njecessary to make an arbitrary finding of fact which attempted to partially reconcile the two opposing stories of the complainant and the re- spondent, it vras not classified as a compromise and reference to the State Adjustment Board was made unnecessary. The latter type usually involved small employers who kept. little or no records, and comprised a substantial proportion of the complaints handled bj r the Compliance Division. Such cases were sometimes referred to State Adjustment Boards, but only for assistance in detenning the facts. The procedure created by field Letter 1S5 and Supplementary Memorandum To. 1 remained, in effect until January 18, 1935. On that date there was issued field Letter 194, which divested the Strte Ad- justment Boards of their jurisdiction to .approve compromises* and. placed the sole power to.- authorize this tyoe of adjustment in the Regional Directors. The new instructions statec the m'olicy of the Compliance Division to be hot to consider violations adjust -jc unless full restitution to all employees was me.de, in addition to securing present compliance. (**) The exclusive procedure to je followed in departures from this policy was as follows: (***) '/here them was an. industrial adjustment agency authorized, to handle labor complaints -.and its views on the settlement agreed with the State Director's, the latter could close the case on the compromise basis. A summary statement of the compromise en-", the reasons therefore had to be sent to the Coordinating "ranch, with a copy to the Regional Director, T ere the industrial adjustment agency and the State Director failed to r. reo, or ' here there was no such (*) The procedure before the Board ha- been treated in the preceding section. The number of such cares is indicated in a table in the appendices, note footnote p. 105 supra. (**) field Letter 194, p, 2. (***)lbid. , p. 3. This procedure was repeated, in Office '. annual, 111-4113.23. 9351 [38 1 -] Ll- agency, the file 'rith a sum u / of th' erse ancl the reasons for the conroi^e recorv endation in 11 c bo cent to the Regional Director. The Regional Director then reviered the file, referring it to the Regional Compliance Council for recommendations anc" hearing within his discretion. His decision was the final HRA action except in those cases involving considerations of major policy or questions affecting industry members in other regions, in which event the case was trans- mitted to Washington for disposition. If the Regional Director ap- proved the compromise the summary prepared by the State Office was sent to the Coordinating Branch with comments. (*) Although the instructions of Field Letter 194 were explicit in stating that all cases adjusted for less than full restitution had to he approved in accordance with the procedure provided therein, actually few cases were so handled. An analysis of State Office case files disclosed that hut 44 complaints were referred to Regional Directors for approval of compromise adjustments during the four months following the issuance of these instruction;:, (**) while allowances for error may place this number slightly higher, nevertheless the number is significant, A partial clue to the snail number of compromise' cases approved by Regional Directors is the following extract from a letter to the Philadelphia Office by the Chief of the Coordinating Branch, "The proposed adjiistnent need not be submitted to the Regional Director in cases which have oeen submitted to the State Adjustment Board because of the difficulty in establishing the facts. The type of cases which should be sent to 'Jasliington are those in which a compro- mise has been mode on the amount due. ,T (**?) This distinction in the definition Of compromise cases was re- cognized in the field under the instructions issued in Field Letter 125, It is mentioned here again because- many of the offices, to avoid follow- ing the procedure provided ^oy Field Letter 194, preferred to treat cases (*) Several examples of summaries of compromise cases approved in accordance with this procedure have been included in the appendices to illustrate more clearly the methods used and types of Cases in which compro lises were recommended, ilote that financial inaoili'ty was often coupled with some other reason for reducing the amount of restitution, (**) See .table in appendices, (***)ln ITRA Studies Special Hxhibits ffork Materials -'' : S5 9861 -112- as compromised en "the faces rather than en the amount. This procedure, together with the standards stated in Field Letter ±93, were clearly de- signed to raise the ouality of adjustments in the field. Although the . purpose of intended progress in raising the standards of work and in emphasizing full restitution for part violations was Laudable, it failed of fulfillment because the compliance structure already had become too greatly undermined by ether factors, such as the change in public opinion, the hack of a clear enforcement policy, and internal organization difficulties in the LIRA. Closely related to the compromise of cases, another practice developed out of the exigencies of the situation for relieving the pressure of work was the dropping of cases. This originally arose in connection with the service trades, where the large volume of complaints and the in- determinate status cf the codes following their partial suspension (*) made the problem acute. It has been shown in the earlier sections of this chapter that the plan of procedure provided by Bulletin ho. 7 and the inadequate facili- ties for handling complaints in the field had resulted in congestion and . a gradual piling up of work in the State Offices. The similar situation which presented itself in Washington served to emphasize the problem. Some idea of the magnitude of the burden of complaints on hand, many of . them entirely untouched by the adjustment procedure, is disclosed ''oy the periodical statistical reports of the field offices to Washington. These show that about the time Field Letter 125 was issued over 15, "00 labor complaints and slightly less than 2,000. trade practice cases were pending in the various field offices. (**) These figures grew even larger in the months that followed, partly because of the standards of adjust- ment for labor cases created by Field-Letter 125, partly because the in- creased use of Field Adjusters tended to stimulate the filing of complaints, and for a variety of other reasons. .. The picture that presented itself, then, was field organization staffed without a sufficient, number of Field Adjusters, with no experience and with little chance for training, which was charged with the enormous task of administering the provisions of 556 cedes covering 2,500,000 employers. (***) This is emphasized by the fact that many field people interpreted the duty of obtaining compliance as including a positive obligation to take the initiative in searching out and correcting violations, rather than waiting "or complaints to be formally filed. This was the discouraging picture of the field offices' situation in the early summer of 103d. In the succeeding months, as, the personnel be- came experienced and new positions were added and as methods and tochniqn.es became more nearly perfected, the outlook become brighter. However-, until the close of compliance activities the specter of a large volume of un- adjusted and untouched cases remained. (*) Executive Order '-725 (hay 2^, 1934 ^ Administrative Orders X37, X50, X54. (**) See statistical reports from field offices, files of Co®rdinating branch, field Division. $***) S ce Suora p. 2. 9 Sol' -113- It is a manifest truth that ro onerous a burden was "bound to hind' r the efficiency of the Coir liance organization. This restriction on the field offices was accentuated by the character of a large proportion of the comolaints. A substantial part concerned the retail and service tradei , which, although large in number of establishments and employees, were made u"^ of many small units which Here practically unorganized. Many such enterprises were submarginal in character, v;ere poorly managed, s few had adequate records. Although individual cases were unimportant, each required a die-proportionately large amount of the Field Adjuster's tine. Virtually every practical problem of compliance was present in Lr handling, the lac:: of any reasonable ground for federal jurisdiction, a comparatively low order of intelligence among both employers and workers, the absence of adequate employment records, and their smallness and generally poor financial condition. In dealing with this type of employer, cases against which consti- tuted the bulk of the back—breaking load of unad usted complaints, two courses were open . One had been indicated by the President in Bulletin No. 1 as a declaration of the policy to be followed: "In my inaugral I laid down the simple proposition that nobody is going to starve in this country. It seems to be equally plain that no business which depends for existence on paying less than living wages to its workers has any right to continue in this country. By 'business' I mean the whole «f commerce as well a? the whole of industry; by workers I mean all workers - the white collar class as well as the men in overalls; and by living wages I mean more than a bare subsistence level - I mean the ■ates of decent living." (*) In spite of the clearness of this statement of policy it was not ftllowed, nor was there another policy adopted to take its place. Instead, as a direct outgrowth of the complaints plan of procedure, action was taken only against those members of industry willing to adjust their violations and against larger operators, while cases against members of these retail and service trades, who refused to cooperate or who were financially unable to comply, were dropped. This dropping of cases was primarily a field practice, designed, however, to rid the adjustment staffs of the useless burden of unadjusted complaints, on which legal enforcement steps could not be maintained. (**) Therefor*, pending determination of the policy to be followed with respect to the industries mentioned, which was not within the power of the Compliance Division, it proceeded to meet the situation as best it could, and at the same time to force the issue. *) Bulletin do. 1 (statement by the President outlining ERA policies) p. 1, Office Manual V-3-1. (**) For example, see case against Mann Overall Co., 31 Paso, Texas, Hational Compliance Board minutes, April 2, 1954. 98ol -114- Accordingly, on August 4, 1934 the State offices were instructed that cases of violation in the service trades where the respondent had no NBA insignia to "be ordered removed need not "be sent to Washington. (*) Such cases were reported as ."Ref erred, to Compliance Division", with a special notation, and the files .were -closed. and retained in the State Office. This was followed on September 4, 1934 by a procedure for dropping complaints against small establishments which refused to comply, where the violations were not important because of special cir distances. (**) It was felt that if such complaints were allowed to remain in the files- unadjusted they v/ere a constant source of irritation and uncertainty of procedure, and constituted a' real mental hazard to more important ad- justment work. The State Offices v/ere instructed to segregate these cases in a special suspense file to be examined oy the HRA Field Representatives who would authorize them to be dropped. For all practical purposes, however, the cases were treated as dropped when placed in the suspense file, since the Field Representatives were accustomed to rely upon the judgment of the particular State Office, unless manifestly wrong. There were no instruc- tions governing notification to complainants and respondents that cases had been dropped and practices in this respect varied greatly with in- dividual offices. This procedure continued to be followed, although it was hampered somewhat by the small number of Field Representatives and the consequent infrequency with which they were able to visit. all State Offices. Since the instructions just mentioned were issued in connection with service trades complaints, it was found necessary later to make it clear that the procedure applied to all old unadjusted complaints. (***) It was a natural step from the procedure for dropping old, unad lust- ed cases, to attempt to devise some means for eliminating new complaints of the same type. The Field Representatives instructed the various State Offices not to docket new service trade complaints unless they appeared on their face to be important. The State Offices also made use of a supple- mentary employee's statement on wages and hours to weed out illegitimate complaints and to -furnish them better information before beginning the handling of such cases. ('****) >jew complaints under the service codes wer- thus treated as "primary rejects" ana the complainants were notified that no action would be taken. With the establishment of the Regional Offices and the issuance of Field Letters 193 and 194 there -was a change in this situation. The latter provided standards of adjustment and an exclusive method for adjustment of cases at less than full restitution, mentioned earlier in this section. This was interpreted by some persons as superseding previous instructions on the dropping of cases, but the fallacies of this viewpoint were soon recognized and the distinction between compro- mised and dropped cases pontiiiued.^ _ . „ ^ if*)" Field Letter 14fi,' p7 2." " "see" also' Field Le 1 1 er ~154,~ pYTo (iVem 64).*"" (**) Field Letter 158, pp. 1-2 (***)Field Letter 188 t p". 2 (****) In ERA Studies Special Exhibits Work Materials £35 9C^1 ""ith the closer con1 - ie State Offices the ••■ came more into use. The Regional lleld Representatives wer< t \i b] 1 to become familiar v/ith local situations and with the personnel of each State Office, so that, they couli adequately determine the course of action to be followed in each state. As finally developed, the class of dropped cases was based on a number of reasons for suspending further efforts at adjustment. These reasons were usually present in combination in individual cases. These cases of suspension, mentioned briefly, were: financial inability of the respondent to make restitution and comply with the code; either legal or ecoro lie unenforceability of code provisions; lack of sufficient de- finite evidence of violations to support Blue Eagle removal or reference to the Department of Justice (as in case of small operators where records 3 lacking); the existence of such general violations as to render ■jnnliance by conciliatory measures in the particular industry impossible where legal enforcement could not be obtained (such as Wrecking and Salavage, Restaurant and Motor Vehicle Retailing Industries); closely allied to the foregoing, where the industry was engaged solely in intra- state commerce and was purely local in character; and where the modifi- cation or suspension of code provisions made it inqui table to proceed further. The application of ea h of the above reasons for dropping cases varied according to local conditions, some offices dropping cases after making some efforts at adjustment and others suspending all efforts under particular co'es. This disorderly handling of cases reflected the confusion growing out of the failure to enforce the codes in the courts, the indecision of heads of IIRA in regard to certain ouestions of policy, and the con- sequent loss of prestige by the IIRA program in the eyes of industry and the oublic. Its worst effect was on the morale of the field staff, which lost most of the enthusiasm and energy needed to carry on the intensive compliance program necessary to place the codes on a sound, permanent basis* It was, however, a realistic approach tc the problem of conserv- ing time and facilities and enabling the concentration of efforts on the parts of the ambitious code program capable of and worth being salvaged. This -./hole situation was a striking indication of the deterioration of the total compliance picture and the shakiness of the structure, v/ith its resulting inequities as to firms willing to comply. Only one hope was left, that with the passage of the contemplated new law it would be possible to renovate the compliance scheme and to arrive at a sound basis for accomplishment of the original, basic objectives of raising the standards of employment and business practices by eras tic reorganiza- tion and code revision, coupled v/ith a strong , efficient program of enforcement. That this hoped-for solution must be regarded with cynicism as rather problematical is understandable in the light of the history of NRA during its two years of existence. :8S1 -116- A bare summary of dropped cases follows: of a total of 113, £7? labor cor.rolaints docketed, l<-:, r ->P,3 were dropped as outlined in this section. Of a total of 3^,425 trade practice complaints docketed, 5,295 v/ere so dropped.' With reference merely to the service trades listed in Adminis- trative Orders X-37 (May 23 T 1934), X-50 (June 13, 1934), X-54 (June 20, 1934), (*) the figures are as follows? of a total cf 17,7fil labor complaints docketed, 3736 were dropped; of 1725 trade practice cases docketed in these trades, 645 v/ere dropped. Naturally-, with the suspension of the trade practice provisions of the codes involved all pending cases as of May and June 1934 v/ere dropped and so listed. (*) These Administrative Orders suspended the trade practice provisions of certain service trades. 9861 -117- COMPLIANCi; DIVISION AIT 1U.GIONAL OF7ICSS CHAPTER vl Section 1 - Development of internal or - ..iz^tion. MA began as pn ex ~ periinent in industrial self- ;overn ie t. It was :ontemplate* that _ the governmental administrative agencies would act only in _ thc i** eriin while industry became sufficiently well or janized t« administer its own col.c regulations. (*) This philosophy is lar^ 1 * responsible for the failure to «ovide for an adeouate com ,l- ncc machinery in the be^nr.^. '''ith the inception of industry coedfication, complaints of violations began to come into Wash ^ ton rnd the VRA w?s soDn "looded with them, for the apprewp* of co.es was a slo™ process and ,_ e program of industrial self -government lagged considerably behind tici jr-ti ons. -r the an It became apparent that a special governmental agency wruld have to be created to handle these complaints, at least until th.6 Code Authorities ".-ere organized and functioning. ".hile the National In- cus trial Recovery Act contained no express Dover to estaolish a ©ompliance organization, it was inferred, from the clause "To effectuate the policy of this title, the President is hereby authorized to establish such agencies ... as he may find necessary. "(**) Accordingly, the compliance Division was set up on October 26, 1933. (***) On that date the Administrator defined the duties of the National Compliance Director, the National Coraplian.ce Board and the Compliance Division and delegated to these cgoncies the authority in compliance matters which the President in ,r'. e:\al terms had i.ele ated to the Administrator under Ex- ecutive Orders To. 6173 (June 16, 1933) and 6205-A (July 15, 1933). General John -son named himself interim National Compliance Director. 3~y the uime the Compliance Division had ^oeen set up, sixty- three codes of fair competition had been approved by the President. These included codes for automobile manufacturing, coat and suit, cotton, silk and wool textiles ana rayon, electrical manufacturing, hosiery, ice, iron and steel, lumber and timber products, men's clothing, motor vehicle retailing, retail trade, throwing, and underwear and allied products. The paramount emphasis therefore in NRA was, and for some time continued to be, on code malting. Complaints of violations of- the approved codes, however, were being received daily in increasing number's. The problem of organizing for compliance forced itself on the busy Administrator and his immediate assistants. This is not to imply that General Johnson had lost sight of compliance. In fact many (*) The method of pp iroach to the compliance problem is discussed in Chapter II. pp. —5-10 supra. (**) National Industrial Recovery Act, Title I, Sec. 2(a). (***) Office Order 40. 9861 -118- weeks prior to the crea.tion of the Compliance Division he had detailed his son, Lieutenant Kilbourne Johnston, to the Blue Bagle Division, to assist in working out a compliance organization in connection with the President's Reemployment Agreement, which procedure was later adapted to coce compliance. Nevertheless over three and a* half months elapsed between the approval of the first code on July 9, 1933 and the delegation to someone less "busy than the Administrator of authority to deal with complaints of code violations. In the meanwhile, of course, efforts were made by coue authorities and deputy administrators to adjust violations "by education end the pressure of opinion from within the industry. In at leaot one in<"ustry - lumber and Timber Products - a number of cases which had failed of adjustment were forwarded to NEA with the request that enforcement steps- be taken. (*) These complaints were considered by the deputy administrator and his legal advisor and were sent to the Attorney General' s Office for informal opinion, The outcome at that juncture is not apparent from a study of the files. The cases were returned to, NEA., held for some time in the legal division and then mislaid. When duplicate files covering the cases had been assembled by the Code Authority the National Compliance Board and the Compliance Division were operating. The Compliance organization as set up on October 25, 1933 was relatively simple. It consisted of (a) the Compliance Division with its twenty-six offices in the field and (b) the National Compliance Board. The National Compliance Director was head of both the division and the council. The function of the Compliance Division was to bring about compliance with approved codes and of the PEA by education and conciliation. This function was to be exercised in both the pre- liminary and final stages except insofar as agencies of industrial self-government had been authorized to handle such matters. Failing adjustment, it was the further duty of the Compliance Division to obtain prima facie evidence of violation and present it in convenient form to the National Compliance Board. The Board afforded the violator an opportunity to be heard before it invoked the powers of the enforce- ment agencies of the government, the courts and the Federal Trade Commission. That is, the semi- judicial Compliance Board, under the Administrator, made policies and in specific cases made decisions, The Compliance Division exhausted every reasonable effort to adjust violations and prepared cases for presentation to the Board, and took the necessary administrative steps to carry out the decisions of the Board. (*) See files of Belcher Lumber Company, Oenterville, Alabama, and cases listed in National Compliance Board minutes of January 31, 1934. 9861 -119- Changes to be noted later brought the Deputy Administrator of the code and his legal advisor more end more prominently into the final stages of compliance irocedure, (*) but in the beginning the organiza- tion was in broad outline os simple as above described. The internal organization of the Compliance Division under Office Order 40 consisted of four branches - administrative, labor, trade practice and Blue Eagle. The Administrative Branch handled matters pertaining to personnel, property, end finance for the Compliance Division headquarters and the twenty-six field offices, ana dso the distribution of orders and instructions and the receiving end consolidation of reports. The Labor Branch was charged with the examination of files of coin jlaints charging violations of labor provisions of approved codes to ascertain whether or not the evidence contaned in a file constituted a prima facie case of violation. These files "ere received from the field offices and from Code Authorities. In most instances an ad- ditional effurt was made to adjust the case by correspondence. This effort at adjustment still held out the olive branch, but none the less it contained, the threat that, failing adjustment, the case would be referred to the rational Compliance Board, Over the whole period of Compliance Division activity this so-called "last chance" letter was retained and resulted in the adjustment of about 2-5'j of all cases referred to '7a shin ton by the field and Code Authorities. (**) Failing to obtain an adjustment as a result of the last chance letter, the branch summarized the aalient facts in the case for the convenience of the members of the National Compliance Board, and obtained the recommendation of the Deputy Administrator. On the basis of this summary given to board members in advance of a meeting, the Board decided whether or not it would set a date to hear the case. At the hearing, the evidence was presented by counsel to the Compliance Division or by assistant counsel assigned to the Labor Branch. After the hearing the Board might refer the case, through its counsel and the Legal Division, to the Department of Justice, cr it might return it to the Labor Branch with instructions to obtain additicnal evidence or to make further attempts at adjustment, or for reference to the Fecleral Trade Commission fnr investigation. (*) Office Order 85 (April 12, 103-:-). (**) See copy of "last chance" letter In NRA Studies Special Exhibits Work Material vr'85 9861 (The United States District Court? and the Federal Trace Commission -ire named in the rations! Industrial . ecovery Act as the agencies to enforce 'the ret. As a matter of fact x,i^ one or two cases were handled by the Federal Trade Commission under Section 3(c) of Title I of the Act. The time element decided the almost invariable reference given the courts. "while there is no such thing as a typical FTC case, an examination of random cases made by the Compliance Division in 1933 showed that ordinarily two years or acre pre required from the time an initial complaint is filer with the Commission to the issuance of a cease and desist order. As. an investigating agency, however, the Federal Trade Commission rendered invaluable help to the BBA. It was well established and accepted by the vast majority of members of trade and industry. Its technique v- "s base; on experience. Its investigators were oetter trained and. oetter ;aid t:i:-n those in ERA. An allotment of BBA f -ic s was made to the Commission to cover the costs of investigations made by the latter. One hund.red and ..even "BRA cases, several being surveys of industries or parts of industries, "/ere investigated and reported on by the FTC. ) The Trade Practice Branch handled, cases involving violation of trab-e practice provisions of approved cod.es in the manner just out- lined for Labor complaints. The Blue Eagle Branch was charged with the duty of administering the PRA. These duties were shortly assigned to the Labor 3ranch. (*) Other functions formerly performed bj? the Blue Eagle Division were assi ned elsewhere. The Tra.de Association Section was constituted a separate Division (**) and the Insignia. Section was placed under the Administrative Division of BRA proper, Much of the procedure for handling PDA. complaints was adapted to code violations and most of the jersonnel of the Blue Bagle Division was taken over by the Compliance Division. A thorough ndersta'ndlina. of the evolution of code compliance is not possible without a knowledge of the history of the President's Be- employment Agreement. ('.Tor;: Materials Bo. _) In January, 1934, the field, organization of the Compliance Division was expanded. (***) State Directors were appointed, 'by the National Emergency Council, who also acted as State NRA Directors for each State. They too]-: over the duties of the former District Directors. Continuity of administration was insured, in most 'States by transferring personnel from the District to the State Offices. Branch offices were established in some of the populous States. (****) (*) Compliance Division i emo random Bo. 1 (Bov. 29, 1933). (**) Office Older No. 46 (December 12, 1933). (***) Refer to Chapter IV. , su >ra. (****) Branch offices were established in Albany and Buffalo, N. Y. , Pittsburgh, Pa., Houston , Tex-:, and Los Angeles, Calif. 9861 -121- By Office Order 85, (*) the Compliance Division was r> A Government Contracts and Competition Section was erected which later was constituted a separate division. (**) Ihe Labor Branch and the Trace Practice Branch were abolished. An Analysis 3rench was created which took over the personnel of the Labor and Tra> ; Practice Branches and those functions of the two former branches having to do with analysis of cases for sufficiency of evidence and efforts at adjustment. PEA matters "/ere also handled by this Branch. The presentation of cases oefore the National Compliance Board and its successor the Compliance Council thereafter was made by the code legal advisor of the code involved in each case. The Field Section was elevated to a branch separate from the Administrative Branch. A Control Section was set up in the Administrative Branch designed t expedite the handling of cases. The positions of National ©oimliance Director and Assistant National Compliance Director was abolished, The head of the division became Chief, Compliance Division. As under Office Order 40, the counsel to the Compliance Division continued to oe a member of the Legal Division. Section 2 - General aspects of insignia display and removal . It must be repeated that the National Industrial Recovery Act provided no administrative sanctions. The Act made the violation of a code a misdemeanor punishable by fine (***) ?nd also made it an unfair trade practice within the meaning of the Federal Trade Act. (****) We may disregard the latter because of its non-use. (Previous chapters have outlined the popular support accorded the program, part of which at least was ©notional, ana the gradual waning of popular enthusiasm due to delays in bringing violators to book, but chiefly, perhaps, to the subsidence of the feeling of panic which gripped the nation early in 1935.) Some employers from the outset were non-cooperative. The sheer volume of violations made administrative penalties desirable from an enforcement standpoint. The legality of such administrative penalties must he left to the legal historian, They involve, among others, the question: May the Federal Government sanction and promote an organized economic boycott? Such administrative penalties were devised in the form of removal of FEA insignia (*****) and later by rendering violators under certain conditions ineligible to obtain government contracts. ( ** ****) (*) April 12, 1934. (**) See History of Government Contracts Division, FEA files. (***) FIRA, Title I. Sec. 5 (f). (****) Ibid, Sec. 3 (b). (*****) Administrative Order X-Al (October 17, 1933); Office Order 40. (****»*) Executive Order Fo. 6646 (Larch 14, 1934). 9351 The Bine Eagle, a design patented by the United States Government, was issued t: employers who coorjerated in the President's Reemployment program. By its display those of the public who were in sympathy with the President's program could tell where to buy. Absence cf the Blue Eagle told the same public whom to boycott. Since signing the President's reemployment Agreement was voluntary - except fur the pressure uf public opinion - some hedge ras necessary. Since also the public could, not be kept currently educated to the growing number of industries placed under approved Codes and in order to avoid bring- ing members of coded industries under the displeasure of the ouying public the privilege of displaying the Blue Eagle was immediately extended to employers who were com >lying with the provisions of an approved code. This is at least a plausible explanation cf the anamoly of awarding an employer a badge of honor for doing what the lav/ says he must do under >enalty of fine. The Blue Eam:le Insignia took two' forms. One was a placard 12'xl6' to be displayed in the '"tore or plant of an employer. This later evolved into the Code Blue Eagle. The other was- a label used for the most part in the needle industries where each dress, hat, suit, coat, nechtie or other article of apparel was required to bear the label of approved design. There is no. doubt that the Blue Eagle in both placard and label forms had a tremendous drawing power throughout 1933. The label continued to be an effective instrument for obtaining compliance in the garment industries up to the end.. This was not true of the placard. The effectiveness of the placard in the beginning was due to a very general enthusiasm and a. genuine spirit of cooperation on the part of employers as well as employees and of these same individuals and their families turned consumers. This enthusiasm required stii.iula.tion, which it received-. The fervor could not be, or, at least was not, prolonged indefinitely. The period of indoctrination was too short to educate the innividual tc the point where he would consciously ask himself if the Blue Eagle were displayed before he would make a purchase. Nevertheless, the insignia was effective long after the first burst of enthusiasm had subsided. The removal of the Blue Eagle with attendant publicity fixed the name of the violator's establishment in the minds of many who refused to patronize an adjudged non- compiler . This form of sanction was more effective in the di otributive trades then in manufacturing. The orocedure for removing a Blue Ea'-;le contemplated (a) oatient efforts on the part of the field staff or Code Authority to obtain an adjustment as described in preceding chapters; (b) further efforts by Compliance Division headquarters, except in urn sual cases, to obtain compliance by moans of the "last chance" -letter; and. (c) a hearing by a three-member Compliance Board composed of a representative of labor, a representative of industry eac. an impartial chairman. Zven in the event of a. finding of violation by the Board, the respondent was still given an opportunity to adjust the violation by sinning a certificate of future compliance (*) e.nC: making restitution of back (*) For typical certificate of eomoliancc see a:opendices. 9861 -- 1 13- wages to employees in cases involving violation of wages and hours provisions. With rare exceptions, no feasible restitution was ever devised for trade iractice violations so that adjustments wore made solely on the basis of e certificate of compliance. In cases h-ere the Board found a violation ant" 1 the respondent refused or failed to adjust, that fact was entered in the record and a telegram was prepared for the Administrator's signature direct- ing the violator to cease displaying the Blue Eagle and to deliver sill NBA insignia in his possession to his local Postmaster. (*) At this juncture it was customary for the Compliance Division to refer the case to the courts for jrosecution. At first the channel of reference was through a liaison officer to the Department Of Justice. With the creation of the Litigation Division (**) the file was sent to that Division. As previously noted, State NBA Directors were authorized on April 6, 1934 (***) to refer flagrant violations directly to the United States District Attorney. Returning tc the removal of the Blue Eagle, the penalty orovided for illegal display was both line and imprisonment. (*■***) This was under authority of Section 10-(a) of NIBA. ho effort was ever made to invoke these penalties in court. .■.lost employers immediately took down their Blue Ea~le when instructed to do so. A few stubborn ones were bluffed into removing the insignia from display, mostly by NBA personnel but in a few in- stances by the United States Attorney. The instruction to deliver the insignia to the Postmaster was seldom followed up and never to the point of. invoking legal action. It appears, therefore, that the Blue Eagle placard was effective in the beginning, grew less and less so, until toward the end of NBA it is doubtful if it had any force whatever. The history of labels is quite different. 'The principal users of labels were the garment industries. Prior to NBA they had been in a most chaotic condition, the prey of many demoralizing influences ranging from cut- throat competition to racketeering. The codes very definitely helped these industries. There Was strong pressure of opinion within these industries to compel compliance. A number of the garment industries were authorized at an early date to handle their own labor compliance. The label adequately financed cod.e administration. Por copy of telegram ordering removal of Blue Eagle insignia See NBA Studies Special Exhibits Work Material : .' r 35 (**) Office Order 74 (March 26, 1934). (***) Administrative Order X-14. (****) Executive Order #6337 (Oct. 14, 1955); Administrative Order X-Al, X-A2. 9861 The large department stores and chain stores cooperated ~'oy requiring merchandise .; bear labels and. the Hete.il. .Tr^de Code mad.e it a viola- tion to purchase, sell or exchange unlabel led garments, "here labels were required by the Manufacturing .Code, (*) The net result was an effective instrumentality of compliance. The legal questions raised by requiring the use of labels are many and cannot be dealt with here. It was inevitable that the administra- tion of compliance by an agency "ithin the industry would lead to arbitrary acts in some instances. (**) The procedure for withholding or suspending label", was laid down in Administrative Order No. x-3. (*--*) Code authorities or agencies set up by them were empowered to refuse labels to industry members found by them to be in violation of the code. A report of the suspension was to be sent to the Compliance Division together with a transcript of the hearing accorded the respondent within one day. By an amendment to Administrative Order X-3, inadvertently or other- wise, the time limit set on 1? bel code authorities for submitting the record, of a case for review to the Compliance Division was omitted. (****) This gave rice to abuses which led to the establishment of a Label Review Officer in Uew York City, the center of the garment in- dustries. This officer reported to the Compliance Division. (*****) A more precise procedure for handling label suspensions was set forth in Administrative Order do. X135, (******) o ;1 <\ the time limit on submitting ca.ses for review to the Compliance Division was reestablished. Briefly, cases of suspension of labels or refusal to issue labels in the first instance t>y the Code Authority were subject to prompt review by the Label Review Officer and the Compliance Division and were given preferential treatment to insure an early hearing. The subject of administration of label provisions of codes is more adequately treated, in Dean G. Edward's report to the Chief of the Compliance Division. (■*******) *) Code for Retail Trade, Article IX. Section 2. **) See Coat and Suit Code history. . • ***) Jan. 17, 1934. ****) Administrative Order X-38 (May 28, 1934). *****) Compliance Division Office u'emo. do. 24 (Aug. 8, 193''') Administrative Order X133. ******) February 25, 1935. *******^ June 28, 1935 - incorporated in the appendices hereto. 9861 Section '3 - National labor Board Cases. In addition to the rotxtine manner of removing NHA insi ,ni re was a special procedure in connection with so-called "7a" ca. : ;cs, (*) the tral ion of v;hich was intrusted to the National Labor Board nd Lts successor, the National Labor Relations Board. The Executive Order confirming the previously appointed National Labor ioard made its "findings" ( oresumable both as to law and facts) binding on all other adminis- trative agencies of the government. (**) '.'..en, therefore, the National Labor Board found an employer in viol; tion of the collective bargaining or related clause, there would seem to be an automatic finding of code violation because the statute required every code or agreement under the act to contain the collective bargaining guarantee. The penalty for code violation was loss cf the Blue Eagle. The administration of the Blue Eagle was a function of NHA. Did this make NHA a rubber stamp for carrying out the findings of the National Labor Board? In practice it did not. A certain degree of administrative latitude v/as acknowledged to rest in NBA as a result of conferences between representatives of NHA and the NLB. In most cases NHA acted favorably on the request of the Labor Board. (***) But in other cases it did not cornoly with the Board's request, as in the case of Colt's Patent Fire Arms Manufacturing Company (perhaps because the company is oatentee of the Browning machine gun, standard equipment of the United States military Services) and the San Francisco Call-Bulletin (where the President later affirmed the final jurisdiction of the Special Labor Board for the Newspaper Code) in the case, (**•■'-*) which was tantamount to saying the Labor Board was in error in attempting to handle the case. In the two cases last mentioned as well as in other ca r :es NHA made decisions on disputed questions of lav; and policy. The situation was not satisfactory to either NHA or the NLH3. It crea.ted Administrative difficulties, gave rise to embarassing situations and caused delays. Many so-called "7a" cases received wide publicity due to the prominence of the respondents and to the fact that the courts were prone to rule against NHA. in such cases. NHA took a.way the Blue Eagle and. also took the blame. On the other hand, the Labor Board was not always given the cooperation it desired. The history of the relationship between the NHA and the Labor Board indicated the advisability of a separation of the so-called "7a" provision from other code )rovisions. (*) A misnomer, as Section 7a of NIHA made mandatory the inclusion of hour aid wage provisions and the prohibition of child labor as well as guaranteeing the right of collective bargaining, etc. (**) Executive Order S612-A (February 23, 1934). (***) See files of Harriman Hosiery Co., Harriman, Tenn, ; Budd Mfg. Co., Philadelphia; Weirton Steel Co. , Weirton, W, Va. (****) President Roosevelt's letter of January 22, 1935 to Francis Biddle, Chairman, rational Labor Relations Joard, NLR3 release #261. 9861 -ico- Sec tion 4 - The National, Compliance Board and Its Successors. The National Compliance Hoard was established by Office Order 40 (October 26, 1933). It consisted of the National Compliance Director, #ne member of the Industrial Advisory Board (appointed by the Chairman of that board; and one member of the Labor Advisory ^oard (appointed by the Chairman of that board). Permanent advisers to the National Compliance Board were assigned by the Legal Division of the Research and Planning Division. The Board was orovided with a. secretary and necessary assistants. The duties of the National Compliance Board were, upon reference of complaints from the Compliance Division, to undertake ftirther attempts at adjustment, recommend exceptions, remove the Blue -^agle, or recommend reference to the Federal Trade Commission or the Attorney General for appropriate action. The Board also assumed the duties formerly performed ^oy the PEA Policy Board, namely, the interpretation of PEA, the granting of exceptions from PEA and the reco:nme:ic.atio:i of substitute paragraphs of the PEA to the Administrator, PSA exceptions were passed on by a subcommittee of the 3oard comoosed of the Labor and the Industry members. The Board held its first meeting October 30, 1933. William H. Davis was appointed Chairman and National Compliance Director on November 24 , 1933 (*) and served until the Board was abolished. Prior to his appointment, meetings were conducted by various acting Chairman. Three assistant National Directors were appointed. The Board met almost every day and as time went on its delibera- tions called for virtually the full time of its members. It devoted most of its time to hearing cases charging violation of approved codes and of the PRA, determining policies to be pursued by the Compliance Division, interpreting the PEA and passing on exceptions from the PEA. It also considered several cases involving strikes and the right of employees to bargain collectively through representatives of their own choosing. (**) Pressure of work led to the separation of the duties of Chair- man of the National Compliance Board from those of Chief of the Compliance Division (***') both of which had been held by the National Compliance Director. Arthur J. Altmeyer was made Chief of the Comoliance Division. (*) Office Order 45. (**) See file of Ford S otor Company, Chester, Pennsylvania. (***) Office Order 85, (April 12, 1934). 9861 -1! ■ Without v ■'•-: the ^rational Compliance Bo^rd i boliu i 21, 1934. (*) The Chairmen of 4 "■. ■■ • under attack by the Phil ihia Record and other >ro-'.U.bor journals oec; f hi ; handling 3udd Ivlanofacti rin ^o ipanj case, t. ca ie which never should have been referred to t ; --" National Compliance Board inasmuch as it involved a question of collective r pining and the National Labor Board was in operation at the time. It if. also generally supposed that the notions of and statements emanating from another board - the Review Advisory (Harrow) Board - gave the Administrator a distaste for boards in general. The abolition of the National Compliance Board and the transfer of all its functions to the Chief of the Compliance Division created a >roblem. The administrative duties of the Chief of the Compliance Division called lor his full time and overtime. It was physically impossible for him to sit all day hearing cases and perform his other duties. Dr. Altmeyer protested the abolition of the Compliance Board (**) but the Board was not revived. The situation was met by the Chief of the Compliance Division requesting and authorizing the members of the abolished National Compliance Board to serve as counselors until further notice. The counselors comprised the Advisory Council, Compliance Division FRA and served under that name from May 23, 1934 to June 8, 1934. It was the same board with the same duties, except that responsibility for decisions was placed on the Chief of the Compliance Division whose other- duties prevented him from being more than an occasional visitor with the Advisory Council during its deliberations. The name of the Advisory Council was changed to Compliance Council, NBA on June 8, 1934 because of confusion resulting from fche existence of several other, advisor:" beards. The burden of work placed on the Compliance Council gradually increased until it became apparent th; t one council could not handle all the cases arising everywhere throughout the country. The choice was between creating additional panels or decentralizing the work into regional councils. The latter course finally was taken with the establishment of the Regional Office system. (***) (*) Office Order 90. (**) Memo. A. J. Altmeyer to the Administrator, April 22, 1934. (***) Field Letter 190 (December 28, 1934). 9861 -128- Washington had become a "bottle-neck. Delays v/ere occurring in the Analysis Branch, in the Deputy Administrators' offices, in the Code Legal Advisors' offices, in waiting for a place on the do'cke_t. ■ These cumulative delays had a seriously detrimental effect on compliance morale. Besides, considerable hardship was' involved in bringing" respondents to Washington' from a distance at' their ov/n expense. . -- Early in 1935, not all on the same late, Regional Compliance. Councils were set up in Boston, Few York, Washington, Atlanta, Cleveland, Chicago, Omaha, Dallas and San Francisco.. The Regional Compliance Councils were counterparts of the original - Compliance Council. Each consisted of an impartial chairman, a labor member and an industry member. A lawyer experienced in litigating cases was chosen as chairman because the Regional Councils had the responsibility in fact but not in theory of referring cases to the United States Attorney for prosecution and it was the desire of the Administration to prosecute only strong cases. There was also a legal advisor who performed in the regions the duties formerly performed by the code legal advisors in Washington. The secretariat comprised a secretary, an analyst, reporters and necessary clerical assistants. Section 5 - Notice of Hearings. When the National Compliance Board, Compliance Coxtncil or Regional Compliance Council decided to hear a. case, telegraphic notice of that fact was sent the respondent. He was informed that the State Director charged him with violation of a given article of a given code by paying less than the minimum wage, or whatever the allegation might be. To exact statement of the charge was made in the notice until very late in the development of compliance procedure. (*) Normally a respondent was given at least a week's notice; more, if he was located at a distant point. There were no regulations on this point. The respondent was invited to attend the hearing. No agency in NRA could issue a subpoena. The Litigation Division raised questions as to the adequacy of the notice both as to form and as to the time given the respondent to prepare for a hearing and also as to the reasonableness of re- quiring the respondent to travel considerable distances to attend a hearing even after regional councils were set up. The only instance of a hearing awa;y from the seat of the Board or Council is furnished by the National Compliance Board's hearing on the Ford Llotor Company case held in Chester, Pennsylvania. It was necessary because the striking employees could not get to Washington. The respondent did not appear. Postponements were allowed for caxi.se. Until the establishment of the regional system, no statement of the procedure followed in the conduct of a hearing was given a respon- dent before the hearing itself. (*) Field letter 213 (May 2, 1935). 9861 -129- Section 6 - Procedure at Hearings* The jrocedure at hearings ooforc the i . . , — — — i — National Complirnce toar<5 pne t G i plirnce Councils was informal. The meetings i-, ere not o oen t< the folic, "rior to l ecentrrlization the col e le ,al re' visor am frequently the Dert, Administrator of the code were present. The respondent li ht be accomoaniec by counsel or represented bj counsel without himself ? \ learin ;. The Chairman, havin : informed himself of the nature of the case from the analysis of the evidence prepared in the Analysis "ranch or from the brief ore jpred p. the code legal advisor, informed the respond- ent of the nature of the violation with r'hich he was charged, A verbal explanation of the jrocedure was ;iven. It.^was explained that the identity of the complainant could not be revealed. If necessary the case against the res indent was presented by the code legal advisor or later, by counsel to the Regional Council, who, in a sense, stood in the shoes of the prosecuting attorney, Opportunity was afforded the respondent or* his counsel to rebut the evidence of violation insofar as that evidence could be made specific without revealing the identity of the complainant. Where a violation was evident the respondent was asked to adjust the violation by signing a certificate of future compliance and, in labor cases, making restitution of wages due. The respondent was told that failure to adjust would result in the loss of his right to display NRA insignia and possibly in prosecution in the courts. In cases of disputed facts the respondent was informed that the Board would take the matter under advisement and that he would be in- formed of the decision. Usually decisions were made promptly after consultation among board members and counsel after the respondent had withdrawn so that the latter could be informed of it within an hour or at most a day after the hearing. A small proportion of the cases did not lend themselves to this >rompt handling. If a respondent failed to attend the hearing a decision was made on the record. The secretary of the board took notes of salient points which were incorporated in the minutes of the meeting, but with one or two exceptions, verbatim reports were not made. The procedure briefly outlined herein was that followed by the National Compliance Board and the Compliance Council. Variations occurred, of course, after the nine Regional Councils were created depending largely upon the chairman and other board members. For example, one council for a. time discussed the evidence and reached its decisions in the presence of respondents. The Compliance Division, however, reviewed copies of the minutes of all Regional Councils which had a. tendency to bring about uniformity of procedure and adherence to precedents set oy the National Compliance Board and the Compliance Council. 0861 -130- _ '- A manual of procedure was prepared for the Regional Councils on December 10, 1934. This was later modified and re-issued attached to a field Letter. (*) Upon a finding of violation "by the National Compliance Board or later "by the Compliance Council or by a Regional Compliance Council and failure on the part of the respondent to adjust the violation, the Board or Council recorded its decision in its minutes and instructed the secretary;- to inform the respondent to cease displaying the Blue Eagle and to surrender to the local postmaster all NBA insignia in his possession. Office Order 40 gave the National Compliance Board authority to "remove the Blue Eagle". Office order 79 (**) provided "The (national Compliance) Board will make final decisions on the issue of the right to display 7- the Blue Eagle." Nevertheless all telegrams removing Blue Eagles were sent over the name of the Administrator or later of the National Recovery Board. (***) At this stage it was customary to refer the case to the Litigation Division with the recommendation that legal action he taken. While the above described procedure may be said to have worked exceedingly well in a practical way so far as it went, due in large part to the high calibre of the Board members, it had its obvious defects. A respondent in the usual ca.se had to come a considerable distance to ob- tain a hearing. He was not and in the nature of things could not be confronted ~bj his real accuser and cross-examination of witnesses in the ordinary case did not exist. After the abolition of the National Com- pliance Board the hearing was before a body that had only advisory powers. In the long run respondent was deprived of property rights — the right to display the insignia or use labels — ~by an official who had not heard the facts. For purposes of appeal there was no transcript of the hearing. Section 7 - Evidence . No strict rules of evidence were applied by the National Compliance Board or its successors. Previous chapters have described the evolution of the material in a file from merelj' - the complainant's statement plus sundry correspondence with the respondent down to reports of field adjusters, and, in some instances, records of hearings before State Adjustment Boards. The difficulty of .obtaining affidavits from the complainant or his fellow employees pervades the compliance picture from beginning to end. The Litigation Division always complained that the cases received from the Compliance Division were inadequately prepared and that an in- ordinate burden was placed on its trial lawyers in obatining evidence (*) Field Letter 199 (February 13, 1935) (**) March 26, 1934. (***) Note ;■■■>,,•, 1T«3 suprfi 9861 -131- that would stand up in court. The view of the Compliance Division wa that it was impossible w.Lth the staff provided to prepare each case as though it were goin, ; ; to be prosecuted. The statistics seem to supoort the position of the Compliance Division. A total of 155,102 code cases were docketed by the state NRA offices. Only 1435 cases were referred to the Litigation Division. A better picture is obtained by eliminating cases where no violation was found upon investigation and those pend- ing at the time of the Schechter decision. Accordingly, there were 89,872 valid complaints handled to a conclusion b' r the Compliance Di- vision and its field offices. Only 1455, or considerably less than 2% were referred for litigation. Had the Compliance Division sought to implement each file with the evidence desired by the Litigation Divi- sion in the other 88,437 cases, or even in the 7136 cases ultimately docketed by the national Compliance Board and the Compliance Councils, it would have needed a vastly larger field staff and an enormous amount of work would have been performed that would have served no good pur- pose. In the end, however, the Litigation Division set the standard that a complaint file must contain at least one affidavit of a person who had knowledge of the facts m a violation before it would accept a case from the Compliance Division. (*) Unquestionably sworn statements in the record of a case were desirable to support a finding of violation for Blue Eagle removal on the one hand and for a finding of no viola.- tion and dropping the case on the other. "*Vhat was possible of attain- ment with a field staff, which at its height included fewer than 400 adjusters, is another matter. Section 8 - Appeals . No specific procedure was outlined for taking appeals from the decision of the National Compliance Board or its successors until July 16, 1934, (**) and no encouragement was given respondents to appeal such decisions either before or after that date. It was tacitly admitted \f the Board that appeals could be taken to the Administrator, and a few such were Heard "oy him. In at least one instance the Administrator reversed the Board's decision without consultation with the Board. (***) After the abolition of the National Compliance Board (****) and the transfer of its functions to the Chief of the Compliance Division, an appeal from the Compliance Council's decision naturally was taken to the Chief of the Compliance Division. Theoretically it was his decision anyhow, although he did not have the benefit of the arguments and evidence adduced at the hearing . before the council. Presumably an appeal would still lie from a decision of the Chief of the Compli- ance Division to the Administrator. (*) Supra, chapter V, section 5, "Technique of investigation. " (**) Office Order 105. (***) Loft, Inc., New York, II. Y. (****) Office Order 90 (hay 21, 1934). 9861 -132- Sorae time "between June.l and June 14, 1934 (*) the position of Assistant Administrator for Field Administration was created. The Chief of the Compliance Division reported directly to him. This interposed another step in the possibilities of appealing decisions. More or less at a tangent to this hierarchy of executives who could entertain appeals from decisions of what had now come to he The Compliance Council was the Industrial Ar peals Board. It was created July 16, 1934 (**) and was authorized among other things to: "Hear and recommend to the Administrator the proper disposition of : Complaints concerning IIRA or any agency or branch thereof, especially those alleging that code provisions are designed to or tend to eliminate, oppress or discriminate against snail enterprises, or to favor monopolistic tendencies; and complaints of non-compliance. " The Industrial Appeals Board was its own judge of what appeals it would accept. In the ten months of its. operation it took jurisdiction in 84 cases appealed from the decision of the Compliance Councils, 15 of which were pending hearings on L'ay 27, 1935. The position of Director of Compliance .and Enforcement was created November 21, 1934. (***) So far as appeals are concerned it was merely a change in title from that of Assistant Administrator for Field Admin- istration. In spite of these possible steps of appeal, no orderly workable procedure wa.s ever created. Section 9 - Development of analysis and Review procedure before hearings - Analysis Branch . Preliminary review and examination of unadjusted complaints filed with the Compliance Division was the only feasible procedure ^oj which alleged code violations could be prepared for iIRA compliance and enforcement machinery. A number of important developments in the code administration ;:program_of KRA strongly empha- sized the need for such procedure. The number of complaints to be acted upon by the Compliance Divi- sion increased to such an extent that it was incumbent upon URA to provide for an adequate method for handling of such cases. Many of the alleged violations had been investigated by MA State Offices or ^j Industrial Agencies while others were original complaints from employees or other interested persons which were unsupported by substantial evie* dence. There was also an apparent need for a close coordination of effort of the several agencies responsible for proper code administra- tion, namely, the Compliance Division, the national Compliance 3oard, (*) Office Order 92 (undated) (**) Office Order 105. (***) Office Memorandum 309. 9861 -133- the Legal Division and the Industry Li visions. By the beginning of the spring of 1934 it had "become apparent that the success of the codes must depend in the final analysis on the methods of their administration and enforcement. This realization took the form of an attempt by an Office Order to reorganize the compliance and enforcement machinery of MA along more efficient lines. (*) The Order outlined in Section I the responsibility of Deputies in code administration "by stating, "from the date of this Order, each Deputy will "be responsible to his Division Administrator for prompt ac- tion on complaints of violation of the codes assigned to him"'. Section II of this Order provided that the field offices of ITRA under the supervision of the Lield Branch of the Compliance Division, were organized as a service for all industries whose code authority organization was inadequate to carry out the field contact work neces- sary for proper code administration. There was also included in this section of the Order an important statement of policy in the following words, "However, it is not intended, that the Compliance Division is to undertake the administration of all codes for compliance and. enforce- ment. This remains the responsibility of the Code Authority, the Ad- ministration member, and the Deputjr and Division Administrator for each code . " The general policy on procedure to be followed in the handling of compliance and enforcement matters "oy HRA was outlined in Section III of this Order. Its purpose was clearly stated as follows: "In order to insure prompt, efficient and coordinated, action on the part of Code Authorities and their agents, the Compliance Division and its agents, Administration Members, Deputy and. Division Administrators, and the Legal and Litigation Divisions". Section III defined the part which each Division was to take in the compliance and enforcement activities on transcripts and unadjusted, comolaints submitted to "Washington. A specific procedure for hand.ling such cases was outlined in Section 'III A of Cffice Order 79. All transcripts of cases in litiga- tion, une„djusted cases and original complaints involving alleged vio- lations of IJRA cod.es and agreements were to be routed to the Control Section of the Compliance Divisioii. The responsibility of sorting and acknowledging the complaints and of returning to their sources all obviously erroneous or misdirected complaints was placed in that Section. It was also the duty of this Section to jacket and control all properly investigated cases and to follow up the case until proper disposition had been made of the complaint. Briefly, the Analysis Branch was charged, with the d.uty of anal- yzing all transcripts and complaints referred, to it by the Control Section and. of making appropriate disposition thereof as outlined in (*) Office Order 79 (March 26, 1S34) 9861 -134- detail in the following paragraph. A general reorganization of the Compliance Division was affected on April 12, 1934, "in order to coordinate its work with the Industry- Division , the Legal Division and the National Compliance Board in the new program for increased enforcement". (■*) By this Order an Analysis Branch was established, the chief thereof reporting directly to the Chief of the Compliance Division. The personnel formerly assigned to the Labor and Trade Practice Branches (**) of the Compliance Division was absorbed "by the Analysis Branch, with W. M. Galvin appointed as Chief of the Branch. (***) The functions and duties of the Analysis Branch were broadly out- lined in Section III A of Office Order 79 (****)but the actual work and procedure of the Branch was governed by experience and changing conditions at the direction of the Chief of the Compliance Division. Due to the enormous volume of complaints of alleged code viola- tions and the resultant load placed upon the compliance and enforcement machinery of MA, it became imperative that all complaints be thorough- ly examined by the Analysis Branch for the purpose of separating the "wheat from the' chaff". In performing this function it may be said that the Analysis Branch constituted in fact a primary deliberative agency. The decision as to the appropriate disposition of a complaint of alleged 'code: -violation was based on a number of pertinent factors. Primarily, it was necessary to determine if the facts submitted in substantiation of the complaint actually constituted a clear case of violation. The facts in each case were carefulLy considered by the analyst and if it developed that the evidence was not adequate in every respect, the file was either returned to its source with explanations as to its deficiency or the necessary additional evidence and informa- tion was requested and the file was placed in suspense pending the receipt of such information. • For purposes of coordinating administrative action it was often necessary to check with the Industry Division concerned as to the pre- sent status or contemplated revision of the code, or in some instances, (*) Office Order 85 (April 12, 1934), "Reorganization of the Com- pliance Division". (**) Conplirnce Division Memorandum #1 (November 29,1933), provided in Section I, "The Blue Eagle Branch is amalgamated and consoli- dated into the Labor, Trade Practice and Administrative Branches of the Compliance Division " (***) Office Memorandum 180 (April 12, 1934) (****) Note p. 133 supra. 9861 -135- to secure au official interpretation of some disputed provision of the code. If the file contained sufficient evidence to warrant action "by the Administration, the analyst prepared a "brief digest of the perti- nent facts of the case for the information of all who had occasion to handle or review the complaint - the Chief of the Compliance Division, the members of the Compliaace Coxincil, the Counsel to the Complirnce Division, the Deputy Administrators and Division Administrators and the Code Legal Advisors. The scope and function of the digest prepared by the Analysis Branch was governed "by the following statement of policy: "as provided in Office ord^r 79, the Analysis Branch of the Compliance Division makes an analysis of each un- adjusted complaint. The function of this analysis is to enable persons interested in the case .'to determine prorrptly the 'general nature of the issues involved. The analysis also contains the recommendation of the Complirnce Division to the national Compliance Board. It is not intended to be a full statement of the issues or the evidence in the case o-iC is not sufficient as a statement of facts to trie National Compliance Board". (*) Briefly, it mas considered necessary to include the following points in the digests of unadjusted complaints prepared by the Analysis Branch: (1) pertinent information relative to the respondent anc the complainant , (2) code involved and the Televisions alleged to hav^ been violated, (3) extent and nature of evidence offered in substantiation of the complaint, (4) period covered ~oy the violation, (5) relpvant information as to the respondent's attitude, (5) brief history of the attempts at adjustment before the case was cent to Tlashiivton, (7) per- tinent information relative to interstate commerce, (3) evidence as to display ^i 7 respondent of Blue Eagle or Code Eagle, (9) history of res- pondent's compliance with PHA before coc.e was effective and respondent's participation in business financed by Pederal. funds, (in) recommended finding of fact warranted by the evidence in t'he file, (11) specific recommendations for a.ction — removal of Blu^ Eagle, reference to en- forcement agencies of Government, or dropping of case. (**) Administrative polic;;- wos an important factor in determination of recommended compliance action on complaints of code violations. Out- standing examples of groups of cas^s affected b~ r oolicy were those involving the local service trades and industries designated in (*) Excerpt from memorandum of 31ac:r;ell Smith to all Assistant Counsels (April 25, 1934). (**) tlemorandtim of instructions to Analysts from 77. M. Calvin, Chief, Analysis Branch ay 11, 1934) 9361 -136- . Adnini strati ve Orders (*) as being exempt from the trade practice pro- visions of such approved codes. In like manner, adnini strati ve policy on compliance action against small establishments served- as a "basis for determining the appropriate recommendation for disposition of a substantial percentage of complaints submitted to the Compliance Division. The form and contents of the digests prepared by the Analysis Branch did not change to any appreciable extent during the life of the Branch. However, it was found advisable to make minor deviations from and additions to the scope of the digests in respect to the source of the complaint, suspension of labels and recommendation of the Compli- ance Division to the Compliance Council. Due to the need for expeditious handling, all transcripts of cases in litigation and unadjusted, complaints involving the suspension of 1IBA labels by CocLe Authorities were given, whenever possible, twent3r-four hour service by the Control Section and. Analysis Branch. The efforts of the Analysis Branch at obtaining adjustment of investigated complaints forwarded to the Compliance Division ay State Offices and. Code Authorities were confined, to a so-called "last chance" letter sent by registered, mail to the respondent. This letter advised the respondent that a specific complaint, supported '"oy evidence, had been filed, against him end. requested that any explanation of his posi- tion as to the charges be furnished to the Compliance Division within a d.efinite time limit. A suspense sheet with a definite recall date cor- responding to the limit specified, in the "last chance" letter was then placed, on the file and compliance action on the case was withheld pend- ing the receipt of information from the respondent or until the period of suspense had elapsed.. This effort to induce voluntary compliance without the necessity of further action by the Administration proved effective in about 35$ of all cases sent to the Compliance Division. (**) The complete file, with the digest and the recommendations of the Compliance Division a.s to the disposition of the case from a general standpoint of compliance, was transmitted through the Control Section to the Assistant Counsel assigned to the code involved. The complaint was reviewed by the Assistant Counsel and presented to the Deputy Ad- ministrator with recommendations on its legal pha.se s and from the stand- point of legal policy. The Deputy Administrator then added his recom- mendations, from an administrative standpoint, to the record and the case was ready for presentation to the ilational Compliance Board, (later (*) Administrative Orders 37 (Hay 23, 1934), X-50 (June 15, 1954), X-54 (June 28, 1S34; all issued, pursuant to Executive Order 3723, (May 26, 1934) (**) Supra, p. 119 9861 -137- the National Compliance Council) b T ,- the Assistant Counsel at the call of the Secretary of the Board. For the purpose of coordinating administrative action, copies of the digests of code complaints and recommendations were sent to the Litigation Division (on transcript cases only), Control Section, Coordi- nating Branch, and to members of the Advisory Com It toe ( Compliance Council) . w An important development in Analysis Branch procedure and functions as brought about by the increasing amount of correspondence with the various State IIRA Offices and Code Authorities. The major -ocrtion of this work dealt with unadjusted cases which hod "been submitted to the Compliance Division for farther action, although in the last si:: months of the existence of the Analysis Branch, a large volume of correspon- dence dealing with general compliance problems was routed to the Analysis Branch for handling. Similarly, inquiries from, respondents, complainants and other interested persons relative to unadjusted cases filed with the Compliance Division v, ; ere answered by the Analysis Branch. The Contributions Section of the Analysis Branch was established by Office Lemorandum 305, November 12, 1934. Its powers and duties were "to receive complaints made in accordance with .Administrative Order ITo. X-36 by Code Authorities against members of trade or industry for non-payment of contributions; to receive protests by members of trade or industry on the svxbject of contributions; to acknowledge and complete the record of such complaints and protests; and to carry out the routine handling thereof in accordance with established policies". (*) Because of time limitations it is not possible to enter into a discussion of the work of the Contributions Section in this History. The complex nature of its functions is indicated by the provisions of Administrative Order X-36 and by the fact 158,620 complaints of non- payment of assessment and 1,954 protests were handled by it. In order to increase the e ffectiveness of compliance administra- tion and enforcement and to relieve the burden placed upon the compli- ance and enforcement machinery in Washington, the Chief of the Compli- ance Division on December 8, 1934 was authorized to take all steps necessary to establish and administer a. system of Regional Administra- tion. (**) Acting upon the authority conferred in the above mentioned memorandum, the Chief of the Compliance Division divided the United States into nine regions with offices located at Boston, Hew York City, (*) Office Memorandum 305 (November 12, 1934). (**) Memo, from Compliance and Enforcement Director. 9861 -138- vTashingtcn, Atlanta., Cleveland, Chicago, Omaha, Dallas and San Francisco. Regional Directors, responsible to the Chief of the Compli- ance Division, were appointed and delegated certain porers and functions within their respective Regions on behalf of LIRA. (*) The decentralization of compliance and enforcement activity neces- sitated the transfer of "unadjusted cases previously docketed by the Control Section 01 the fclonpli nee Division to the various Regional Offices having jurisdiction over the adjustment of the complaints. Ror obvious reasons, unadjusted complaints which had ^oeen heard before the national Compliance Council, cases which '-"ere in an advanced stage of adjustment and other selected cases were held in the Compliance Divi- sion in Washington, The remainder of the docketed cases and. temporary files were forwarded to the appropriate Regional Offices for action. An analysis of the unadjusted complaints docketed by the Control Section of the Compliance Division which were referred to the Regional Offices for the "oeriod beginning December IS, 1934, shows a total of 1,403 such cases sent to the field. Of this number, the analysis indicates that 1,155 of the complaints were adjusted oy the Regional Offices mc, the remaining 243 cases were pending as of lay 11,1935. (**'•) In fairness to the records of the Regional Offices, it should be point- ed out at this time that the 243 unadjusted referred ca.ses represented complaints, the majority of which the Compliance Division had previous- ly been unsuccessful in adjusting over a, long period of time. Summarizing briefly, it can be stated that the decentralization of compliance administration and enforcement wa.s marked improvement over the old method of handling unadjusted complaints. The average length of time necessary?" to bring about adjiistment of compla,ints or to initiate action on unadjusted causes was substantially reduced, and although it is impossible to judge accurately the increased efficiency due to the closer contacts with, local conditions and litigation proceedings, it is submitted that the decentralization of compliance activity was in the best interests of sound administration. (*) Memorandum from L. J. Liar tin, Chief, Compliance Division to Regional Directors (January 1, 1955). In hRA Studies Special Exhibits Work Materials l T o. 85 (**) A table showing statistical data, on docketed cases referred to Regional Offices is included in the a:o"oendices. 9861 -l: . - Section 10 - Reference of casrr, for L i tigation . Few cases rrere referred for litigation, prior to the establi shment of the State Compliance Offices in January, 1934. This was due largely to the fact that it had been found -possible to adjust most cases by 'administrative procedure. Then too, the Compliance agencies were inadequately prepared to develop proper cases for reference for litigation* ■(*) The State Compliance offices were established in January, 1934 but there was no immediate change of procedure in referring cases for litiga- tion. However, Bulletin No. 7, which was issued shortly after the appoint- ment of the State Compliance Directors, contained a statement of slightly stronger policy in regard to referring cases to the enforcement agencies of the Government. This provision of 3ulletin To. 7 is quoted as follows: "The system outlined by this Manual is designed to insure the speedy elimination, by adjustment, of such noncompliance as is due to mi sunder standing, and the prompt prosecution of all cases of wilful noncompliance. Through the various industrial ad- justment agencies and the St,- te Directors, all persons against whom complaint have been lodged will be given ample opportunity to demonstrate their desire to cooperate and to make restitution for any violation due to misunderstanding or ignorance. But cases of wilful violation, will always be forwarded promptly to Washington for reference to the enforcement agencies of the Government. " (**) Soom after the ince-otion of the State, office system, the volume of unadjusted complaints referred, to the Compliance Division began to steadily increase. This increase in volume was parti-/ due to the fact that many industrial adjustment agencies haft started to functionl This was particularly true with regard to the Cleaning and Dyeing Code Auth- ority which was sending in a constant stream of cases involving alleged violations of the minimum price provisions of the code for that industry. In fact, complaints involving this code constituted a majority of the cases received by the Compliance Board during that period. Out of the large number of complaints referred to the Compliance Division, only a few were considered adequate for reference to the enforcement agencies. In a large number of cases the complaint in- volved a questionable or' unenforceable provisions of the code. The outstanding problem, however, was that of securing cases pro- perl"- prepared for litigation purposes. Most of the cases received by the Compliance Division were deficient as to evidence of violations, etc. The main cause for the high percentage of poorly prepared cases can be laid to the fact that the field, offices were understaffed and untrained in the type of investigation necessary. (*) Refer to Chapter 17, supra. (**) Bulletin ITo. 7, p. 7. 9051 -140- There was another outstanding fault with the procedure, of which the ' field agencies were in no way responsible. It nas "been -oointed out elsewhere that all unadjusted conrolaints were referred to Washington and that in the event the Compliance Division' was unable to effect a.djust~ /ments in such ca.ses they were submitted to the "ational Compliance Board for appropriate action. Since complaints could only he referred for litigation a.t the recommendation of the 3oa,rd, a "bottleneck 1 ' was created which was responsible for a great amount of delay in the pro- gress of cases. In view of the large volume of unadjusted "complaints it was a physical impossibility for the Board to handle all of them promptly. These delays and lack of action from Washington were bringing in many protests from the compliance agencies. There wa.s a. tremendous amount of pressure being brought upon the compliance agencies by both complainants and competitors. These agencies in turn were insisting that they be given stronger support from Washington "by having their cases acted upon promptly. Industrial Adjustment Agencies were espe- cially critical of the procedure in Washington and in many instances were demanding that their cases he immediately referred for litigation. It was apparent that the program would be seriously retarded unless these man;/ shortcomings in the procedure were eliminated or greatly improved. Consequentlj'", there were a number of important devel- opments:-, made in the procedure beginning the latter part of March, 1934. Under date of March 26, 1934 a. Litigation Division was established to perform the following functions: "(a) Coordinate all HBA litigation. (b) Examine and review transcripts of all cases turned over to the courts. (c) In the name of the Department of Justice prepare and cany through litigated, cases. (d) Furnish information a.t any time on the exa.ct status of litigation on any point. (e) Present ca.ses to the national Compliance Doard for its recommendations on policy and cis'oosition. (f) Maintain close liaison with the Department of Justice, the Na-tional Compliance Board, the Industry Divisions (through assistant counsel), the Compliance Division and the Office of the First Assistant Administrator, to ins'o.re coordination of compliance and. enforcement efforts." (*) There had l>een a decided need, for specialized attorneys capable of ■preparing cases as well as assisting the United States District attorneys in presenting them in the Courts. These were the principal duties assigned to the Litigation Division. (*) Office Order ho. 74, (March 26, 1934). 9861 -141- Shortly after the establi shment of the Litigation Division there './a? another important development in the procedure. 3v Administrative Order To. 14 dated April 6, 1934, Bulletin To. 7 was amended as folio bS T. Reference To The District Attorney By The State Director. If at any time the State Director is convinced that the facts relative to a complaint conclusively establish a violation which the re*-- spondent shows no disposition to correct or adjust, the State Direc- tor may immediately refer the entire record in the case to the appropriate District Attorney of the United States for action instead of to the national Compliance Director as provided in paragraph D. (Page 17 above), whenever- a case is so referred, under this paragraph-, the State Director will inforr. the respondent of such reference and will immediately transmit a complete transcript, in triplicate, of the entire record of the case to the Control Section of the Compliance Division of 3.R.A. " The same Administrative Order authorized Code authorities to refer cases to District Attorneys through the appropriate State Director. On April 8, 1934, the Administrator in explaining the above action made the following official statement: ■ "Heretofore, it has been necessary, in order to coordinate the Administrations litigation and to avoid the institution of weak or unfounded cases, to have all cases referred to Washington for recommendations before proceedings v:ere started: How, however, the field agencies of I7RA a.nd of the Code Authorities have had sufficient actual experience to justify simplicatibn of the procedure. " (*) This new procedure was to be effective in ten cays after the issu- ance of the amendments to Bulletin ho. 7. Iiieanwhile, however, State Directors and Code Authorities were requested to send immediately to the Control Section, Compliance Division all cases suitable for liti- gation. The cases sent in to Washington in compliance with these requests vrere docketed by the Control Section and referred to the Litigation Division for further action. On April 9, 1934 the Attorney General directed a letter to United •States Attorneys in which he authorized them to accept ca.ses submitted by State Directors and, if in their judgment such action was warranted, to institute legal proceedings in the form of a suit in equity, or both. (**) The primary reason for this change in procedure was to expedite en- forcement proceedings by lessening the "bottle neck" in Washington. (*) Release No. 4293, April 0, 1934. (**) Copy of letter from Homer S. Cummings, Attorne]/ General to U.S. District Attorneys, (April 9, 1934). Attached to Field Letter 103. -142- There were other benefits, however, to be derived from these changes. The privilege of dealing directly with District Attorneys afforded the State Directors their first real opportunity to learn the requisites of a properly prepared case. It also gave- them a better insight to I32A 1 s legal status. A letter dated April 27, 1934, from Chief, Field 3ranch, Compliance Division contained the first concrete information given the State Direc- tors relative to the preparation of cases for enforcement proceedings. In this letter the State Directors nere requested to weigh the following considerations "before referring a ce.se to the District Attorney: "1: whether the violation is clear and flagrant. 2: TThether the case can he effectively proved. 3: The nature of the concern which is alleged to he violating, whether it is large or small. Proceedings against large concerns will be more effective than those against small enterprises. 4:* TThether the activities of the concern are in or affect inter- state commerce in a manner which can he clearly proved. 5: The effect of the violation upon general conditions in the trade or industry, 6: The general feeling of the community in rega.rd to: (a) The Recovery Program (h) The Code provisions involved (c) The paa"ticula,r concern complained against 7: TThether removal of I!?A Emblems a.lone would have the desired effect. 0: Proper preparation of the cases referred to the District Attorney's is half the battle. If possible, the record re- ferred to the District Attorne;- should contain the necessary documentary evidence to establish violations. In any event it should contain a careful description of the violations and a complete statement of the evidence which is available or which will be available to establish violations. 1 ' (*) At the same time it was explained that it was not essential that each of these considerations be resolved in favor to prosecute, but that they were important considerations which should effect the decision. Further, the State Directors were urged to ca.ll upon their State Adjustment Boards for recommendations in doubtful cases. \**) In May, 1934 the State Directors were furnished with a form to follow in preparing the digest to be submitted with all cases referred to Dis- trict Attorney's. The digest contained the following pertinent information: (1) Pacts as to respondent: (Size of establishment, financial con- dition, nature of business, etc.) (2) Pacts as to Violation: (Code provisions involved, nature of evidence, extent of violations, effect of violation on compe- titors, etc. . . (*) Letter from Chief, Pield Branch, Compliance Division to State Direc- tors (April 27, 1954) (*?*) Ibid, p. 2. '861 -1- (3) Histor' r of case: (Attempts at adjustment, attitude of respon- dent, seriousness of cr,se, etc.) (4) Evidence of interstate commerce. • (5) Information as to display of Blue Eagle, n*) Administrative Order X-14 contained the provision that "hen the State Director referred a case to the United States Attorney, a complete transcript, in triplicate, s.iould be immediately transmitted to the Control Section of the Compliance Division.^**' TThen transcripts were received in the Control Section they were jacketed, given a control number and routed to the Analysis Branch of the Convpliance Division. The procedure by that branch has been describ- ed in the preceding section. Soon after the Sta.te Directors were authorized to refer cases direct to District Attorneys, the Compliance Division in reviewing the trans- cripts observed that some of the offices were not using proper care in mailing such references. In one instance, for an e::ample, a case involv- ing an alleged violation of the minimum price provision of the Cleaning and Dyeing code was referred by a State Director to the District Attorney. At that time no minimum price had been established for the local area which included the city where the respondent was located. Obviously such a case could not be successfully litigated. There were other instances of a similar nature, but as the program progressed the State Offices improved greatly in this regard. There were a large number of cases referred to District Attorneys which involved small or sub-marginal operators. In the letter from Chief, Field Branch, Compliance Division to all Sta.te Directors, dated A^ril 27, 1934, (previously quoted in this section) it was pointed out that enforcement proceedings against large establishments would be more effective than those against small enterprises. A clear policy on this point, however, was never determined and it was responsible for much criticism directed at the Administrator's enforcement program. After the State Director:; were authorized to submit ca.ses direct to District Attorneys there continued to be a large number of cases re- ferred to T7ashington. Host of these wore submit t-ed to the Compliance Division for further attempts at adjustment or removal of ISA insignia. From the beginning there was an apparent misunderstanding between the various Division of ITIXk as to the part each was to play in the compliance and enforcement >rogram. As a result there was a lack of cooperation 'oci-:oe:i. these Divisions, which at times proved detrimental to the procedure. Tor instance, the Compliance and Litiga.tion Divi- sions had difficulty in arriving at an understanding a.s to whether the latter should settle or adjust cases without the approval of the Com- pliance Council. It was alleged that the Litigation Division effected adjustments in some few cases that did not conform with the adjustment •procedure of the Compliance Divisi o n. Conferences '."ere held between (*) See Field Letter 111 (May 17, 1934). (**) The procedure for handling tr£ adscripts was set forth in Office Order 79 (Llarch 25, 1934). 9361 -144- officials of the tvzo divisions, but it is doubtful if a clear under- standing was ever reached. (*) There were similar misunderstandings between the Compliance Divi- sion and the Industry Divisions which tended to reduce the effective- ness of the procedure. Liany of these, however, 'were ironed out in the later stages of the program... In attempts to solve the problems just described two important steps were taken in late 1934. Since there was a lack of cooperation between the various divisions of 1~RA as well as between 1I3A and the enforcement agencier of the government, it was obvious that there was need for someone in position to coordinate these various functions. As a result, on November 21, 1934 the Office of Director of Field Ad- ministration and Enforcement was established for this purpose. (**) In order to increase the effectiveness of compliance administra- tion and enforcement a system of Regional Offices was established, in December, 1934. Nine Regional Offices were set up a.t strategic points throughout the country. A regional Director was placed in charge of. each office with authority to refer cases to the United States Attorney through the Litigation Attorney assigned to the Region. After February 2, 1934 State Directors were not permitted to refer cases direct to District Attornej^s. Instead they were required to sub- mit them through the Regional Director and Litigation Attorney for the Region. Since Field Letter Ho. 196 states very clearly the new proce- dure for the reference of cases to United States Attorneys, it is ouoted in full: (***) " 1 . Reference of cases to United States Attorneys : A. By State Directors. It is desirable to have, unadjusted complaints heard by the Regional Compliance Council so that if possible the violation can be adjusted without court action. ' It is also desirable before a case is referred to a. United. States Attorney for prosecution that the respondent's Llue Eagle be removed if he is displaying one and such action necessi- tates a hearing before the Regional Council. Similarly, in those cases in which the respondent d.oes not display the Blue Eagle, but (*) See Memorandum of meeting held in LIr. i.icICnight' s office, April 3, 1934 - also Llemo. from A. G-. IIcKnight to 31ackwell Smith dated Awril 23, 1934. In FRA Studies Special Exhibits Work Material 485 , (**) Office Memo.. I T o. 309 (Tovernber 21, 1934). (***) Field Letter 196 (February 2, 1935). 9861 . -14-5- where removal of the right to display it and consequent publicity would be effective, a hearing by the Council would also be desir- able. The normal practice trill therefore be a reference of unad- justed complaints to the Regional Office for a hearing by the Regional Compliance Council. In special cases where adjustment is impossible or unsatisfactory and where immediate court action is necessary, the State Director should refer the case and the file to the Regional Office with a reouest that it be transmitted to the Litigation Counsel for the Region for reference by him to the appropriate United States Attorney. The State Director should also state whether the respon- dent displays the Blue Eagle and whether s hearing and deprivation of the right to display the Blue Eagle before reference to the Litigation Counsel is desirable. The Litigation Counsel will ex- amine the file and if he and the Regional Director decide that court action prior to a Compliance Council hearing is advisable, he will refer the case to the appropriate United States Attorney if it is ready Tor prosecution. The Litigation Counsel will re- tain or prepare sufficient evidence in the form of copies of affidavits on which to base a hearing by the Regional Compliance Council and removal of the Blue Eagle in the event that such a hearing is held. He will also advise the State Director of the reference to the United States Attorney. The above instructions to the Litigation Counsel are supplementary to those previously issued by the Litigation Division and are not intended to super- sede the latter. 3. By Regional Directors. Regional Directors will contact the United States Attorney through, the Litigation Counsel for the respective Region. Unadjusted com- plaints in which court action is thought desirable by the Regional Director should be referred by him to the Litigation Counsel with a request that he, after properly preparing the case, refer it to a United States Attorney. normally, a case should not be so referred until after a. hearing by the Regional Compliance Council especially when the respondent displays the Blue Eagle. In case of tuire solved disagreement between the Regional Director and the Litigation Counsel as to whether a particular case should be re- ferred to a United State Attorney, the Regional Director should report the matter to the Chief of the Compliance Division. C. Publicity. It is important that immediate and carefully prepared publicity be given to the reference of cases to United States Attorneys and to favorable court decisions and court action. The Litigation Counsel acting with the Region:! Director and the various State Directors will prepare and give publicit' r to a reference of a case to the United States Attorney and to subsequent favorable decisions and court action after obtaining the approval of tiie United States Attorney is officially responsible for the prosecution of the vio- lation, it is necessary to secure his approval of publicity con— 9861 cerriing that aspect of the case. Copier, of all such publicity should be sent by Regional Di rector s.axd State Directors to the Coordinating Branch, Compliance Division." The lart quoted instructions remained in effect until the close of compliance activities. Section 11 - Contr ihut ion Section . A Contribution Section was set up in the Compliance Division, June 4, 1934, (*) to handle "all matters pertaining to code contributions' by members of industry to Code Autho- rities". J. S. Peebles was appointed Chief of the Section. The powers and duties of the Section were more particularly de- scribed in Office Memorandum Ho. 305 (iTovember 12, 1934) as follows: "To receive complaints made in accordance with Administrative Order ho. X-3S by Code Authorities against members of trade or industry for non— payment of contributions? to receive protests by members of trade or industry on the subject of contributions; to acknowledge and complete the record of such complaints and protests; and to carry out the routine handling thereof in accordance with established policy*' 1 The so.me memorandum authorized the Section "to call upon the appropriate Industry Division whenever questions under a particular code" arose. Authority for making findings of default on code contributions was given to the Section in an unnumbered, special memorandum dated ITovember IS, 1934, from i7. A. Harriman, Administrative Officer of the national Industrial Recovery Board to L. J. Martin, Chief of the Compliance Division. 'Whenever there is a finding by the Chief of the Compliance Divi- sion or- ~by the Contribution Section thereof that any person is in default in his obligation (as defined in Executive Ord.er I T o. 8678, April 14, 1934, and Administrative Order X-36, May 26, 1934) to make payment of a contribution to a Code Authority, the Chief of the Compliance Division may notify such person that he has been deprived of the right to display any Blue Eagle or other 1T.R.A. Insignia or to obtain or use II. R. A. labels, and, may notify the appropriate Code Authority to withhold the issuance of labels to such person. The Chief of the Compliance Division, without herring or recommendation by the Compliance Council, may thereafter give notice of the restoration of any stick right to such person and may give notice to the appropriate Code Authority to resume the issuance of labels to such a person." The jurisdiction of the Contribution Section over alleged, viola- tions of mandatory contribution provisions of codes was exclusive. Field. Offices of I'.R.A. were instructed to forward all complaints of this natn.ro without docketing to the Contribution Section. (**) (*) Unnumbered Compliance Division Memorandum, copy in IIRA Studies Special Exhibits T;'ork Material #85 (**) Eield Letter 164, September 21, 1934, pi; Field Letter 169, October, 19, 1954. 9C61 Office i.Ienorandulh ho. 340, P br ary 27, 1934, created a Code Con- t ribi.it ion 3oard consisting of three members, the Chairman representing the Code Administration Director, one member representing the Assistant to the Administrative Officer in charge of Budgets and 3ases of Assess- ment and third member representing the Chief of the Compliance Division. The functions of the Board were described as follows: "The Code Contributions Board will be responsible for all and will direct the dispositions of protests against payment of code con- tributions and all Certificates of Ton-payment of Code Contribu- tions filed in accordance with Administrative Order ITo. X— 36; e::cept that the authority to deprive industry members of their privileges either to display or use the Blue Eagle or i'.R.A. Labels, or to participate in work financed in whole or in part by Eederal funds, or in appropriate cases of restoring such privileges, will continue under the Compliance and Enforcement Director." In effect, however, curtailment of discretion, functions and re- sponsibilities of the Section was relatively small. The Board authorized the Section to continue to reject certificates from Code Authorities which failed to meet administrative standards and conferred blanket authority to handle specified t;;rpe of protests. Approved codes provided for Cede Authorities entrusted with the duty of administering the codes, subject to supervision of h.R.A. The Code Authorities required money in order to function. At first it was taken for granted that Code Authority funds would, be obtained from voluntary contributions. By the Spring of 1934, however, it became obvious that the idea of industrial self— government brought about through Code Authority Administration of Cod.es was in danger of paralysis because the expected voluntary con- tributions were not forthcoming in many industries. Confronted with this desperate reality resort was had to mandatory contribution provisions in many codes. (*) The procedure to be followed by Code Authorities in demanding con- tributions from industry members and in registering formal complaint was outlined in Administrative Order To. X-3S. The Contribution Section divided its work between a Certificate Unit and a Protest Unit, the former to examine the validity of com- plaints of non-payment and the latter to prepare protests for the con- sideration of the Code Contribution Board end to carry out the decisions of the Board. A fuller report on the operations of the Section, pre- pared by J. E. Peebles, is in the records of the Eield Division. It may be well, however, to point out here the extent of the activity of the Section. There were 153,620 certificates of non-payment received.; 130,514 demands upon industry to pay contributions made by h.R.A; 726 Blue Eagles removed and 56 restored, on recommendation of the Section. (*) Executive Order ho. 6S73, April 14, 1934: Administrative Order ho. X-20, April 14, 1934; Administrative Order ho. X-56, Llay 26, 1934. 9861 -• Findings of violation . : : ' mandatory ■ itribution provisions ^erd ppiied. the Government Contracts Divis in 1 cases and Code norities nere authorized to institut hi . lit's in 31C cc.ses. There was probably less legal basis for tl e mandatdrj'"contribu<- on provision than for. any other activit; of H.H.A. J -143- pa?: 1 in outstaiD3;i:g ??.o:;f.::s or rr .: co ilia:;:": division Chapter VII - The ethoc of Handling Complaints Section 1 - The corn Irints V tjs of •proc edure - lab or violatio ns. It ua.s the function of the Compliance Division to ad.iinister the provisions of the various cbd.es, >7here there ••ore no agencies of industrial self- government had. "been authorised to perform this task. The procedure and mechanics ac.optec. for t... performance of this phase of code acLministra-r tier., :.iore commonly known as "compliance", have been discussed in detail in previous chapters. The ultimate purpose of compliance "orl: was the obtaining of the highest possible degree of uniform observance of the coder,. In the ac- complishment of this ain there wer t -n major aspects, namely, the actua] investigation an r . adjustment of complaints, discussed above under Chapter V, and the careful and thorou ;h education- of members of industry, labor and the public so as to invest the results of the adjustment phase with a character of permanence. It is apparent that both aspects -'ere essential, although o:° the t"o, education was the more important. It '- r as necessary that compliance >e uniform, not only in particular industries, but among the entire national business structure, because the code progr: i had been based on the r p.lation of the "hole of com- merce and industry. It vas necessary to avoid inequities, to guard against non-compliance in one segment spreading to other lines of in- dustry and causing a general breakdown of the .com" liance stricture. The magnitude of this task cm scarcely be appreciated by a mere perusal oj" figures, but some indication is given '^r the ft st that the codification of industry induce; £9^ code;:' and supplements covering 2,R00.000 em- ployers, (*) n o accomplish this gi v itic poal the Compliance Division was es- tablished on October 2b, 1933- (**) The compliance program was based on a procedure which depended on the filing of complaints ^oy employees, competitors and other interested perrons -presumably having knowledge of violations. (***) Out of this administrative method of approa.ch.many problems arose. Since the "hole compliance program was primarily a field problem, this discus -ion "ill relate chief ly to that phase. Section 2 - Disadvrn t - "cs of a nd e .jection" - to the complaints system. The most potent evidence of the inadequacy of the complaints plan of procedure to accomplish the compliance goal is the history of develop- ment of compliance procedure in the field, offices.' (****) (*) See note -■,,, q bvove (**) Office Orc.er kO. (***) See Chapter V, "Compliance Procedure in Field Offices", p. 75, supra. (****) Chapter V, "Compliance Procedure in field Offices", F. 75, supra. 93Sl -150- In general, the shortcomings of the complaints system nay "be seen "by its comparison with the purpose of compliance! to obtain the highest possi- "ble degree of permanent, uniform conformity with the lau. 3y its very nature, the complaints system of procedure was spasmodic, depending as it did on the reporting of individual employers. This nat- urally resulted in c ertain inequities among members of the sane indus- tries. The objection of respondents '"/as common that their competitors were violating with immunity while they were made to suffer a competitive disadvantage "by complying with the la". Added to this item of apparent discrimination among competitors was the fact that in many cases viola- tions 'rent unreported for long periods of time.(* ; ) Consequently, when conrcla-int was finally made the wa/;e restitutions were often excessively "burdensome. True, the employers "ere charged with the knowledge of their obligations and with the duty of observing the law. As a practical mat- ter, however, except in aggrp.vs.ted and deliberate ca,ses of violation', the requirement of large restitution was apt to coxi.se resentment and to defeat the efforts to win the confidence, good "ill and support of in- dustry. I.Ioreover, the use of the complaints system had a profound effect on the ability of the Compliance Division to fulfill its function of obtaining code compliance. (** ) The inefficiencies resulting from the use of this system of procedure made themselves felt partially in the relatively high travel expense, which was out of proportion to the concrete results obtained. It v, as not uncommon for a Field Adjuster to be sent a hundred miles to adjust a half dozen complaints involving a total of 25 or 30 employees. This was particular!]/ true in less indus- trialized states '".'here the respondents might be located in small, scattered communities. It also held generally true, however, even in larger towns end cities. Taking as a IrrpotheticaJ. sitxxation a short trip of two hundred miles, the truth of the above assertion will be seen. Such a trip would usually be nr.de by private automobile and would consume two full days. Lly working o:j ro*:imately a t"-elve-hour day or more a fast, experienced Field Adjuster might investigate and close not to exceed ten cases in the t"o days. The travel expense for such atrip would be ^10.00, per diem allowance "ould be $10.00, and the Adjuster's salar- r , figured at the minimum grade, would amount to $10.00, a total of $30.00. Probably fifty percent or less of these cases would be adjusted in full with restitution. It must be understood that the expenses have been figured at an absolute minimum ano the results have been estimated on the assumption the most favorable conditions -'ere present. Actually, six to eight cases would be a good average production for such a trip. It is impos- sible to estimate the average wage restitution per case since the fig- ure of £112. iS (***•) for all eases handled by the field offices was C*) For complaints statistics on periods of violations, see table XXIV, appendices. (**) See tables VII and VIII, appendices, which disclose that the arithmetical average of time consumed in handling a case was 7 days from docketing to first action, one. UH.6 days till closing, a tota.l of 51*^ days. (***) Derived from analysis of State Office cases. See Table X, appendices. 9S6l - ' 1- increased by - number of u^nisuV.lly 3 'ge djustmentV in industries not apprecio ly represented in c lajority of states nor ordinarily found, in smaller com: runities . The foregoing hypothetical illustration o:5 tin relatively high ex- pense of administering the codes un< r r complaints 'stem is emphasized ••lion it is remembered t) ten complaints were later received against the same respondent. This mad.e it necessary tc re-visit the employer and. to retrace the steps of Live r-tigrt ion and adjustment. (*) N The obvious disadvantages of this orocedurf rere the repetition of effort and consequent loss of ef "iciency and the resentment usually created on the part of the respondent at being harassed by com; laints. it is true, the effect of this disadvantc 'e on the fficiency of the field offices -as allayed, to some d.egree "by the modification's of the complaints system introduced by field Letter 12 j. ('**) However, it was inherently impos- sible to so control the influx of complaints as ! ".o be able to map out a systematic handling of the corr_r.lirjn.ee problems in an industry or locality. Furthermore, the extent of the activities of the field offices was controlled, by the volume of complaints filed under jarticular codes. The importance of this point is shown op the fact that out of r. total of 112,577 labor complaints docketed, by all field offices, 50,001 fell under 23 codes end. their supplements. (**■*) Zmirthermore, b5,&70 con- plaints "ell under the following six codes: ((*****) Code I\ T o. Com-.laints Ratio of Imhloyees in entire trad.e or industry to Comwl a ints . Hi. 5 Hi. 3 i * "- I 57.6 7.3 These figures are prima "~ he evidence in thensel\ : )f the inadequacy of coverage under the comrnlaintF :1 n of )rocec:are. The above mentioned, d.is ".vantr _s were d ■•"fed. in importance by the fact that the strict complaints plan failed o~s accomplishment of the ultimate purpose of compliance work. Handling each complaint separrtely, without a coord.inated. attack on the compliance problems of an industry or locality, it was impossible to folic " an effective educational pro- gram. Such r progrrm necessarily pr supposed, a planned campaign of dis- seminating information and. the instruction of industry as to its obliga- tions under the law. It included, convincing employers of the benefits Restaurant iH,oGH detail food. and. Grocery 13,520 Retail 10,228 Construction r 077 - » ■ ■ l 1 'ho tor Vehicle Retailing r 060 Hotel ■:' \*~y Sec table V Part IV append.ices. (*=*) Sec supra, -jc. 6.3-68 ' £***) See table XX, appendices. (***•#*) Idem. Se? also table XXIX, append.ices. These figures on ratio of employers, to complaints filed, arc especially significant ,f hen compared with those for Boot and Shoe, 12". o, and foi Electrical Manufacturing, H41.2. The high ratios on Retail and Construction are explained by the extensive cover- :e of the t~'o cod.es. 9261 -152- to be derived from compliance and the development of easy mechanics for voluntary conformity to the law, such as the installation and maintenance of adequate wage and hour records. Manifestly, the problem of education was too broad a one for spasmodic handling under individual, scattered com- plaints, requiring as it did uniformity of approach and a coordinated and intensive plan of activity. That this aspect of the work hc.d to be neglected is a severe indictment of the complaints system, for without the education of industry permanent compliance was impossible to obtain and even present conformity was made very difficult of achievement. Likewise, experience showed that the total compliance picture was infinitely involved and complex. It was useless to attempt the adjust- ment of individual violations without alsc removing their causes, for they were then sure to recur and perhaps in more aggravated form. Thus, it was essential to ascertain whether the condition of non-compliance was due to strong competitive pressures or to misconceived labor policies on the part of the employer, etc. here again, the fulfillment of the objective required a broad knowledge of conditions in the industr3 r or locality and an approach to the whole problem rather than the correction of a single violation. The objections which have been voiced are by no means all-inclusive. Attempt has been made here only to mention those which .were fundamental disadvantages. These were the competitive inequities placed on respon- dents, the delay in correcting violations and the consequent piling up of large amounts of restitution, the concentration of efforts on rela- tively unimportant codes, the duplication of effort caused by repeated complaints, the increase in administrative expense, and the impossibility of achieving permanent results because of the inability to conduct an edu- cational program or to remove the causes of violations and because the volume of work could not be controlled and compliance activities system- atized. Section 3 - Practical difficulties in use of complaints system . In ad- dition to the disadvantages already mentioned and indicated in the fore- going sections and in Chapter 7, there existed one major practical dif- ficulty in the use of the system that is sufficient condemnation in it- self of the reliance placed solely on complaints as the basis of pro- cedure. This was the basic problem of protection of the complainant 1 s identity. (*) This problem presented itself immediately with the use of complaints as the basis of procedure. Quite logically, employees who complained expected not only that the violations would be corrected but that they would be protected against any measures of retaliation on the part of the respondent. Cn the contrary, however, letters received from complainants and reports from field offices, end even from Local Complaince Boards under the PSA, indicated strongly that the filing of a complaint by an employee was often followed by discharge or demotion. It was realized that, theoretically,, such action did not increase unemployment, because generally speaking, the vacancies thus created had to be filled. Moreover, it is unlikely that the number so dis- (*) A total of 352 complaints were docketed by the field offices alleg- ing discrimination for filing complaints. Table XIII, appendices. 9361 -1 . - charged hac 1 any appreciable effect on the normal turnover in the en- country. r " e j Len arose "ron tJio fact that ' loyees --ere deterred from filing con ■ i its by fear: of losing their jobs, liany of those ^ho could furnish evih ice of violat ions' -ere loathe to do co, feeling that it *»rs better bo vrork for less than mini- mum ' v ' s or in excess of code hours than I ave no "job at all. The ice" tras advanced among employees th. t the Administration vra-s reruestin : everyone to report violations, but ts doing nothing to protect then fro: 1 , discharge. Since compliance procedure "as based en- tirely on the complaints method, it ras a; .-rent that the existnece of such an icier, in the minds of the -orkers mould result in • tany flagrant violations going undiscovered. Employees assumed that "hen they con- plied -ith the Government's request by furnishing evidence of violations, the Government ■•/oulc" reciprocate by at least protecting then from dis- charge, '..hen it -as nitnessed that employees "ere actually being dis- charged and that the Administration w s taking little or no corrective action, they began to lose confidence in the • hole compliance program. There -ere four main force:- oper ting to deter enployees froi.i fil- ing complaints. These --ere the fear of discrimination, just mentioned, the desire of individual workers to e.: rn higher pry by rrorking longer hours (especially ^ith pieceworkers)', the employees' 'ignorance of rights and procedure, end lack of confidence on the part of enployees in the KHA., including both distrust of ' local officials and a general feeling of ineffectiveness. The last trro "'ere capable of being removed ''oy edu- cating and instructing erroloyees. The second could have "ocen obviated b^ 7- the maintenance of thorough, adequate "aye ant hour records and provi- sion for their systematic inspection, anc also b~ r excluding the employee involved from the restitution - here guilty of collusion with the employ- er, 3Tear o'f discrimination was by far the strongest deterring force. Some attempt "e.s made to renec: ■ this situation by instructing the field offices to protect the identity of complainants. (*) ' This, how- ever, was unsatisfactory in dealing "ith the problem. These instructions were supplemented 1 on hay IS, 1$3^ by an Executive Order prohibiting the dismissal or demotion of employees for complaining or giving evidence, under penalty of fine and imprisonment. (**)' Tnile the Executive Order -as difficult to enforce, it had value in its moral effect on employers cn<\ employees, However, it failed to dispose of the problem because of the impracticability of its enforce- ment in the courts. This is "ell illustrated by the consideration of one of the fe~ cases referred to the courts under this order. (*V Supra, Chapter V, section 7, "ITon-disclosure of sources of com- plaints"; "Regulations for Adjustment, etc." (October IS, 153;;), p. k; Bulletin Ifo. 7, pa. 7-S; field Letter 125, ?• 12; field Letter hg } p.l. ('**) Executive Order No. S7II (hr:y 15, 155U) . 9SS1 Shortly after the issuance of the Executive Order a conplaint s'as filed shth the Louisiana State Office against an- industry member in he- Orleans, La. (*) » I r.ediately after "being notified o:^ the con- plaint respondent called all his employees together and told then that ■ unless the nan "^-- e case '-/as on suspense in the files of the Litigation Division vrith the notation that "no inter- state Commerce ass shovrn",'. The record of the above mentioned case clearly illustrates the difficulties encountered "o-j the Administration in its efforts to enforce the Executive Order of hay 15, Ipp-h In vie^ 'of the fact that this -as one of the strongest cases developed by the Compliance offices it also shevs that ''he enforcement officials rrere skeptical of court action in cases b' se." on this O rder. (*) See Litigation Division case files, docket no. L-U57* 9S6l -155^ The gravity of tnis basic practical problem of irotecting the source of complaints was in tne fact that information derived from em- ployees constituted the major amount of evidence of violations. '(*) While no accorate and comprehensive figures exist as to the number of employers keeping adequate wage and hour records, general experience with mass compliance surveys, notably in Onio, indicate the figure to be about 30 percent. The Boot and Snoe survey, the only one of national scope, snowed 58 percent of the establishments inspected maintained adequate records. Tnis number, nowev^r, is considerably higher than average because of the high type of management encountered and the size of tne plants, the normal number of workers employed being in excess of 150 persons. In connection with what has been said it is interesting to note the statistics of ten selected offices concerning changes in the sources of labor complaints during the several periods of the Compliance Division's history. These periods correspond roughly with the four stages of develop- ment mentioned in earlier chapters. From August to December, 1933, out of 390 complaints docketed by the ten offices, 3 percent were anonymous, 40 percent came from present employees, and 15.5 percent originated with former employees. In the next period, from January to June 15, 1934, 4117 complaints were filed, of which S 'percent were anonymous, 34.4 per- cent were from present employees, and 20.3 percent were filed by former employees. The suceeding period, from June 15 to December, 1934, show- ed a marked change. 5255 complaints were filed, of which -±.5 percent were anonymous, 27 percent minus originated with present employees, and 34.5 percent were filed by former employees. The last named source in- creased 117.8 percent over the number in tne preceding five and one- half months period. In the last five months of compliance activities, from January to May 27, 1935, 3356 complaints were filed. Out of this number but 2,6 percent were anonymous. Present errnioyees dropped to 13.3 percent end former employees decreased to 31 percent, due to a large increase in the volume of office complaints, including those which were the result of mass compliance surveys. Section 4 - i.'g.ss compli a nce as a "U'o osed solution. (**) In the pre- vious pa^es of this history an attempt has been made to record the developments which took pl^ce in tiie compliance program as a result of the experiences of the- -Compliance Division and its nine Regional and (*) See table III, appendices, which shows that roughly 56 percent of complaints were filed by employees while slightly less than 19 per- cent of the balance were filed anonymously or by the NBA office staffs. (**) Time limitations have not permitted a detailed study and analysis of the results of mass compliance surveys. However, there has been collected in a special appendix a selected number of reports on specific surveys and other material for further study by the reader. The general conclusions stated herein, however, are well establish- ed and are based on the various experiences of tne Compliance Division in this type of activity, 9861 -156- and fifty-four State Offices. The course of development of compliance procedure in the field, traced in Chapter V, as well as the analysis of the complaints system presented in the preceding three sections of this chapter, disclose that the reliance placed on connlaints as the sole oasis of procedure was unsatisfactory. Numerous experiments were made with shifting the basis of procedure to an inspection system, and this was found to answer many of the objec- tions a tta.Ciied to the original complaints plan. These experiments, which were popularly known as "mass compliance surveys", took several forms, but ~ere. similar in. that they involved the elements of mass production plus a positive . ctivity in searching out violations and obtaining compliance. (* Mass compliance was essentially a. plan for dealing "with the bro-d . comoliance problems of a related group of employers. Thus, it was possible to deal with a situation with a full knowledge of the facts and of the fundamental causes of the. violations, This was the intelligent way of attacking the problem, since, as has been stated, without such a method of treatment, the solution of compliance oroblems by correcting the vio- lations of • individual employers had only a temporary effect. This type of procedure was based on the dealing with a group of employers more or less as a unit.. There was obviated to a large degree the objection that individuals proceeded against were placed at conroet- titive disadvantages, since, theoretically at least, all employers in the grouo were inspected and were dealt with on the same basis. (**) 'Moreover, being a s.elf-initiated project,, camoliance .activities under a mass comnlianc'e sys.tem were subject to direction and control by the administrative agency. Efforts could be concentrated en partic- ular industries or localities or could be proportionately distributed among several groups, subj-ect to certain mechanical limitations. This was a more efficient use of compliance facilities, since although the gross administrative exnense might be increased, the relative results ob- tained were much higher. Little data exists for an adequate and accurate appraisal of the results under mass coimliance surveys as against the adjustment of single complaints. As a striking illustration, however, figures co/tniled in Ohio in connection with three cities show the follow- ing record of restitution before and after surveys had b een conducted: (***) (*) A discussion of the origin of mass comoliance is contained in Chapter V, section 2. (.**) In the following section there are pointed out the needs of an effective ma.ss coui"oliance system, to place this tneory of procedure in actual operation. (***) See Ohio State Office report on mass compliance activities, August 1, 1935. 9861 -157- CITY RESTITUTION Pull Year 1934 " Jan. 1 - May J 5, 1935 (prior to survey) (after survey) ron - - >1,179.96 - - $4,551.37 Canton - - f:S2.35 - - 5,156.03 Youngstown - 962.41 - - 15,547.9.? While during the latter period adjustment technique had been developed, this was counterbalanced by an increased "sales resistance" on the -part of respondents. Reports from other offices show large amounts of restitution re- sulting from mass compliance surveys, but are not arranged so as to be so easily compared with results under the complaints system. By way of example, the Los Angeles State Office handled -:-89 cases under a survey conducted in the city of Los Angeles, out of which 278 were adjusted with restitution amounting to $46,476.66. The balance of 211 cases were pending on Hay 37, 1935. (*) It is impossible to estimate accurately the actual cost of operat- ing under an inspection system since there is scarcely any information now available on this point. Time has not permitted a study of the number of personnel used and needed in making various tynes of surveys. Moreover, it is felt 'the value of this data must necessarily depend on the nature of any future industrial regulations, and whether they are applicable to all or to a selected group of industries. One of the chief disadvantages of the complaints system was that no action could be taken until a complaint had been filed and accepted as stating a prima facie case. As a result, it has b een shown, viola- tions went unreported for long periods of time and conditions of non- compliance became aggravated through neglect. Mass compliance had this advantage, that the State Offices took the initiative in search- ing out violations and thus tended to eliminate the piling up of vio- lations in individual establishments. The complete accomplishment of this aim, "of course, was not attained because the use of mass compliance surveys was still more or less in its experimental stages. By changing the basis of procedure, likewise, the problem of pro- tection of complainants' identities was greatly minimized. The source of information was made impersonal and the complainant's place was taken by the State Office staff. (**) In the proposed mass compliance or inspection system complaints would have been used only as one in- cidental source of information, investigation relying chiefly on the inspection of records and the interviewing of employees. See Los Angeles State Office report on mass compliance, July 24, 1935. (**) See Chapter V, section 2, and section 7 9851 -IS - Surveys fell into two general classes: educational surveys and compliance investigations. The former was trie most widely employed, considerable experience with .-educations! surveys having "been had especially in Ohio. The most notable example of the latter class was the nationsl 3oot and Shoe survey, beginning March 25, 1934. (*) While the ultimate goal of the development of compliance procedure was the development of a regular inspection system, for investigating the code compliance of employers, there had to be an intermediate step. This was trie educational process which is always of prime importance in the administration of regulations affecting the daily business activities of large numbers of persons. The employer had to be furnished with a copy of his obligations and convinced of the advisability of installing and maintaining time card and payroll systems which would simplify the task of checking on compliance. Such preliminary groundwork for permanent compliance could best be done by a survey devoted to that purpose. Educationsl surveys were con- ducted in several of the states with marked success. Under each of the 'two general classes mentioned above there were two types of surveys: by industry .and by locality. The latter was used mainly to cover distributing trades, while the former was more adapted to large industrial centers. Usually a combination of both types was used* Section 5 - Mechanics of the mass complia n ce system. (**) Having briefly considered the advantages of operating on an inspection, rather than on a complaints basis} note should be taken of some of the mechanics employed in mass compliance surveys. It was important in the planning of surveys first to gather com- plete information on the size of the industries, the names of employers, and the -past compliance experience. This entailed conferences with labor and trade groups, a study of complaints files and of available in- dustry lists, and further conferences w ith members of the staff. Special attention had to be paid to peculiar characteristics of the industry, such as the type cf records likely to be encountered, the location of the units, the general attitude of the group toward compliance, and other similar pertinent information. The next step was the s. election and training of the personnel to be used in the survey. Where regular Field Adjusters were concerned, this stage comprised only the giving of instructions concerning the assignments. However, in a number of surveys additional personnel was obtained on a temporary basis from the State Emergency Relief Adminis- tration. In the latter case, the new workers had to-be carefully chosen, (*) Reports of several State Offices taking part in thi^ survey are included in the special mass compliance appendix. (**) For descriptions of mechanics of particular surveys, see reports included in special appendix. 9861 -le - usually on the basis of mental alertness, personality, and experience in meeting the puolic. Relief workers were used ordinarily only on educational surveys. The new workers had go oe carefully trained in the data to be secured, the method of approach to particular types of employers, and in the technique of making field calls. (*) The personnel used in the survey was usually divided into teams, each headed by a captain. The captains in turn were under a supervisor, who was directly responsible to the L>bor Compliance Officer or other member of the State Office staff in ultimate charge of the survey. Assignments might be on the basis of territories, as in locality survoya, or lists of specific establishments to be inspected. In educational surveys the workers usually filled out card reports on eacn call and turned them in to the supervisor for checking each day. The latter then followed up any reports of employers' refusing to give information. In conroliance drives this procedure was necessarily different. The Field Adjusters made inspections and usually attempted to obtain a signed agreement to adjust the violations which were found. The details of tne adjustment were then worked out oy members of the staff assigned to that particular phr.se of the work. (This scheme of organization was regularly used 'oy some offices in the handling of complaints, see Chapter IV, section 5, supra.) Where the immediate adjustment of the violations could be made at the time of inspection, the case was usually so handled. This, however, was possible in only a small percentage of cases. Following the day's inspection, the Field Adjusters made individual reports on each case. These were reviewed, and those showing violations were turned over to the adjustment staff. The latter then arranged con- ferences with the various employers and attempted to work out adjust- ments. Following the completion of the survey, the results were tabulated and the data gathered was prepared for future use. From the foregoing there are indicated certain necessary elements of an effective and efficient inspection system. For purposes of summary these are mentioned briefly, without a repetition of the experiences on which the conclusions are based. First, there must be intelligent and careful planning of surveys and all relevant facts must be available. Second, there is needed an adequate and trained staff. Selection of the personnel should be on a merit basis with due regard for the requisite qualifications of the particular jobs. Especially, the Field Adjusters should be thoroughly trained in the oolicies of the organi- zation and in methods and techniques of investigation and adjustment (*) See particularly the Ohio State Office reports, 9861 -160- - before being assigned to actual work.: In setting up the scheme of organization useless executive positions should be eliminated and the emphasis laid on creating a large enough' staff of Field Adjusters to carry out the program. The importance of... Field Adjusters is reflected by the fact that over 54 percent of the docketed labor complaints were closed through this medium. (*) Third, the authority to make inspections should be clear. It is highly important that not only there be authority to inspect records, but that reasonable requirements be introduced for the maintenance of wage and hour records. Fourth, there should be an effective system for following utd inspections with a speedy procedure for enforcement (including adminis- trative relief). There should be a centralization of responsibility for completing adjustments not disposed of immediately in the field. In advancing these recommendations in the form of conclusions, it is contemplated that the most effective permanent procedure is a routine inspection system, under which the efforts of local offices would be coordinated into a national scheme. This would hme to be supplemented, however, by special investigations, and should be presaged by educational surveys to acquaint industry with its obligations and to establish goodwill. It is. unfortunate that the rapid strides being made in the develop- ment of mass compliance methods were abruptly terminated by the invali- dation of the codes. However, sufficient experience hadbeen had in this field to convince members of the Compliance Division staff that the use of mass compliance methods presented a more practical means of ad- ministration of labor standards than the reliance originally placed on complaints as the sole basis of activity. (*) See table V, appendices. 9861 -161- PAHT IV Chapter VIII - Statistical Summary of tne activity of tne Compliance Division Section 1. - A. Basic Data. A system of reporting w« s maintained by the Compliance Division tnroughout the operating period of NBA. reports v/ere designed to pro- vide the National Office ' ith an indication of the rel. tive efficiency of the field offices and to give those directly responsible for the .inistration of the various codes a picture of compliance conditions in tne industries v. ith which they ?/ere concerned. Because of a series of changes m de at different times in the d,.ta required in tne current reports and tne inadequacy of the reports for statistical purposes an entirely nev* analysis of state and regional office cases was m.ae subsequent to tne Schechter decision. The follow- ing tables nave been compiled from these more or less uniform analyses. The figures do not include all reported violations of NRA codes due to the limitations on the jurisdiction of the Compliance Division. They do not include ca.ses originally received ■<. nd acted on by Code Authorities and other special adjustment agencies, (*) nor do they include complaints received by the compliance offices and forwarded to Code Authorities. Tne figures presented here are tnose for the ERA State Offices, excluding those which were referred to the Compliance Division and regional Offices for special administrative action. In analysing tne case record, ill cases wnich were handled to a con- clusion by the state offices and the files closed by them were included. In addition, all cases pending on Hay 27, 1935, which had been developed sufficiently to indicate the existence of a violation and its character ,: ere analysed and included in the tabulations. Omitted from the count were; a. All cases which had been referred to higher agencies or to en- forcement agencies after the state offices had exhausted methods designed to secure an adjustment. The number of these cases is shown in Table XXIV. b. Cases refered to Code Authorities on reference prior to June 16, 1934, were excluded. (**) These complaints were referred with the re- quirement that a report be submitted on t heir disposition and subject to the right, of the compliance office to resume jurisdiction and to handle the case if the Code Authority's actions were not deemed adequate. Since the files on most of- these cases had pc.ssed out of the possession of NRA, the detailed information required in the case analysis was not available (*) Txiese include tne National Labor Board, National Labor Relations Board, the various Regional Labor Boards; the Cotton Textile In- dustrial Relations 3oard and its successors; tne Petroleum Adminis- trative Board and the petroleum Labor Policy Board; the Agricultural Adjustment Administration; the federal Alconol Control Administration; and a number of special boards established for particular industries. Footnote continued on next page. 9861 -162-- and, although the Compliance Division Was responsible for their being satisfactorily closed, it has been necess.ry to exclude them from these stdt istics. The number of sucn complaints is given in Table 24. c. Cases referred to the Code Authority in the first instance prior to June 16, 1S34, are omitted. d. Mass compliance inspections, or requests for an investigation by a Government purchasing agency, were not included unless violations were disclosed. e. Complaints pending on May 27, 1935, which had not been investi- gated at the termination of the Compliance Division activities. The number of these cases is also given in the following chapter. 2. Method o f Preparation of Statistics . As has been explained, the data on state office operations has been compiled from case analyses prepared by the field offices from their records subsequent to May 27, 1935. These analyses were checked in Washington to ascertain whether reports had been prepared in accordance witn instructions, (*) all questionable items being checked against the cas'e file. The material was transcribed by the "fashington staff to a form suitable for punbh-card tabulation. Arrangements were made with the Bureau of the Census for machine tabulation on the basis of plans worked out by the Statistical Section of the Field Division. The cases analyzed were divided into two principal classes: labor cases, comprising those cases dealing with violations or alleged vio- lations of wage, hour and general labor provisions of codes and of the Executive Orders dealing with the oosting of labor provisions, discharge of employees for making complaints and employment of handicapped workers; and trade practice cases, including cases arising under price, fair trade practice and general administrative provisions, ^nile there may be some objection to the inclusion of "administrative violations" in the trade practice group, certain of them, such as failure to file prices, rates and tariffs, failure to supply statistical reports and failure to comply with various types of registration requirements, are closely related to (*) For instructions issued to State offices governing prep; ration of analyses see mimeographed letters from J. H. Ward, Assistant Field Division Administrator to Regional and Stjte MBA Directors, dated July 10, 1935, and August 3, 1935, subject "Analysis of State Office Cases". For instructions for periodic statistical reporting during the active period. of the codes, see Field Letter Ho. 154, August 25, 1934. In NRA Studies Special Exhibits Work l»iaterials #85. Footnote "from preceding page, (**) Original plans for the survey included cases sent on reference to the Code Authority prior to June 16, 1934. Analyses were received for 475 labor and 126 trade practice cases only, and these were omitted 'from the majority of the tabulations. 9861 -1 trade practice regulations. Furthermore, since this brealsdown was used in classifying cases for reporting and for filing purposes prior to the Supreme Court decision, it ■ rr, s not thought advisable to introduce a basic change in classifications. An additional >:rour> of cases analyzed ''ere those involving alleged, violations of the President's Reemployment Agreement. 3. Definitions of Terms U'ced . C,-,SS : In general, all coarolaints which were valid on their face were docketed for investigation. Since the formal acceptance raid docketing of a comolaint in- volved the preparation of several cards for various card, files and the making uo of a jacket, it "became necessary to except certain classes of complaints from this "orocedure "because of their volume. Large numbers of complaints charging violations of administrative provisions of codes, usually failure to file prices or statistics, and failure to register - ith the Code Authority for the ind.ustry, were filed -Ith State Offices of the Compliance Division by Code Authorities. Since these complaints were usually in the form of long lists of industry members, or concerns supposed to be subject to the Code, d.ocketing a comolaint against each concern would have imposed a heavy burden of clerical work in offices which were already over- burdened. Often many of the concerns charged with violations were no longer in business or not subject to the code alleged to have been violated. Field offices -ere therefore granted permission to act on these comolaints, usually by writing letters to the respon- dents in an effort to secure compliance, without the formality of making uo a docket. (*) Non-payment of assessment cases, properly, certified, by the Code Authority, and containing no other type of violation, were forwarded without docketing by the State office to the Contribution Section of the Comoliance Division in Washington. (**) . Except for complaints such as those described in the foregoing paragraph, the first complaint against a concern was normally docketed. During the early period of compliance activity, efforts were directed towards adjusting individual complaints, (***) Later, stress was placed on the necessity of clearing up all violations in any establish- ment complained against.' In line with this development, instructions were issued to state offices on August 25, 193^» that all successive complaints against a concern on which there was an open file were to be joined to the previous file, with the purpose of securing one ad- justment of all violations. ' Separate files against one establishment which were open at the time were to be consolidated. (****) If new (*)■ This occurred notably in the case of the Trucking Code. See Field Letters No. 156, August 28, I93H, p.1; No. 167, Oct. 1, 193H, p. 1; and No. 176, November 3, I93U, p. 1. (**) See Field Letters No. l6U, Sept. 21, I93H, p. 1, and No. 169, October 10, l^U, p. 1. ■(***) Chanter V, Section I. (****) Field Letter No. 15U, August 25, I93U. 9S61 -164- comola.ints were-" filed after the closing of files on previous com- plaints-, it was customary to make wo a new docket. Labor and trade prrctice conrolaints,' against the seme establishment --ere frequently carried on separate docket numbers. The term "case" as used in the c e statistics does not 4 therefore, necessarily represent an individual complaint, nor does: it always represent all of the ma.terial against a single c oncer:.). -, The most nearly accurate definition which can be given is that it con- stitutes a docket of complaints, usually against one establishment or branch establishment, which was handled as an entity by the field office. Figures on the number of successive comolaints against the same establishment are. included in thece tables, and are discussed in the following section. Adjusted Cases: These cases represent dockets satisfactorily closed by the State Office. ¥hile the Division' s policy as to adjustment underwent development and change during the nineteen months of its existence, the adjustment of business practices or of working conditions within an establishment to bring about full conformity with code requirements was always considered essential. The "Manual for the Adjustment of Complaints" (iffiA Bulletin ITo. 7) issued in January, 193^» specified the making of "equitable restitution for oast violations" as a condition precedent to the filing of a comolaint as adjusted. In June, 193^ » standards for restitution uayment were defined as the payment of all wage defici- encies plus a penalty rate for all illegal overtime worked. These standards were further elaborated and refined during the following year. A large number of cases were settled without the requirement of back-wage oayment, however. (*) In connection with violations of trade practice and adminis- trative regulations, the "adjustment" of a. case normally required the cessation of the violation and the filing of a "certificate of compliance", an agreement to comply with code requirements in the future. TThile Bulletin ITo. 7 made no distinction between labor and trade practice complaints in the requirement of "equitable resti- tution", in practice it was- usually imoossible to determine the ex- tent of damage caused by violations of trade practice provisions or the -oersons who had been directly injured. Ho Violati o n Gase sj These c~ses represent complaints accepted as adequate but found after investigation to be without a basis in fact. "Primary rejects", as explained above, are not included. Dropped Cases ; These, represent cases in which violations were found to exist but which could not be settled by administrative action and were not considered suitable for litigation or further action. Labor totals include 5?b cases in the nine service trades and in the Restaurant Industry, which were dropped after removal of the HRA in- signia 'by the State NBA Compliance Director. (*) See below, topic of ""Jrge Restitution" and also Tables VIII. 9S61 -165- In trade practice cases, if the practice convolained of ceased to be a code violation, because of a change in the 'code (e.g., price-fixing under the Cleaning and Dyeing Code), unadjusted violations were normally dropped. A similar circumstance arose when compliemce with the Lumber and Timber Products Code was made voluntary after April 11, 1935. The majority in this classification of cases were dropped, however, because they were unsuitable for litigation, sometimes because the violation was minor or of a technical nature, often because the respondent was small and only an unimportant factor in his industry. (*) Pending Cases : This classification includes those cases pending on May 27, 1935, which had been investigated sufficiently to disclose the nature of the violation. Violation ; A violation represents a failure to adhere to one code pro- vision. In the count of violations, each code provision involved in a. case is shown as a separate violation. 4. limitations of Data : In using 1TRA State Office figures to evaluate the extent of compliance with KRA code provisions, one must consider cer- tain definite limit?vtions on the data.. It should be emphasized that these figures represent statistics of non-compliance rather than strti sties of compliance. Furthermore, the volume of complaints is for the most part the result of individual initia- tive of those who suffered from code violation rather than the result of a census of compliance conditions in the industry. (**) It is known that a widespread condition of non-compliance could exist in certain codes and certain areas without statistical evidence in the form of complaints lodged h~f individual complainants. The figures of NRA State Offices do not represent the entire volume of complaints because of the division in complaint activity between NEA State Office and Compliance Division and Regional Offices, the Code Autho- rities, and the group of special adjustment agencies, such as the Petroleum Labor Policy Board, and other agencies listed above. A dramatic illus- tration of this division is found in the Schechter case, which originated with an agent of the Code Authority, and went to the courts without passing through either the KRA State Offices or the Compliance Division. The figures do not represent the entire volume of cases passing through the State Offices, since the survey is confined to docketed cases only. Cases referred to other agencies, causes rejected at the outset as not violations, cases involving assessments or registration, inspections for mass complianc <^ or at the request of Government purchasing agencies not resulting in the discovery of violations, a.re all excluded. There are also variations between offices in docketing practices and in the interpretation of the instructions given, which result (*) Chapter V, Section 9. (**) For a discussion of the two types of approach to compliance, indivi- dual complaints, or mass compliance, see Chapter VII, Section 4. 9861 -166- in some consistent biases in the figures. These will "be "oointed out in connection with individual tables. (*) Section 2. . Serie.s of Tables of Complaint Statistics . The figures have been reported according to the provisions alleged to have been violated. They fall accordingl;/ into three groups, one for labor violations; a second for violations of trade practice and administrative provisions; and a. third for violations of the President's Reemployment Agreement. Violations of code provisions have been tabulated first by State Office, and second by code. Only selected tables are presented here. Of those included many show only national totals. Detailed figures are available in the records of the Statistical Section of the Field Division. (**) Evaluation of code experience necessitptes comparison of re- ported figures with census data,, to determine volume of complaints in relation to an external standard. Figures for relative numbers of employees and establishments in the industry are essential to the interpretation of the code figures. (*)■ There is also a margin of error resulting from the mere number of ca.ses to be subjected to case analysis. '.Thile it was intended that the analyses should be prepared by compliance officers, field adjusters and others familiar with code orovisions, in some instances the clerical staff was drafted for the work. Al- though the reports as submitted to Washington were checked for consistency and numerous correction letters were written to the field, it is probable that miscoding r.n& transcription errors remain in the original reports received from the states. The final coding which was done in hashing ton was checked and edited, and the punch cards verified, so that mechanical errors of this type were cut to a minimum. (**) See Appendix I, Index of Tables. -167- (HEiri&I SIMiAHY 0? CODE CO. PLAINTS The summary fi [ures for the NBA State Office .;o \ laints reported in the survey are slicm in the following table: IfilA ST:VJE OFFICE COiiPLAlKT STATISTICS Cases ..ccepted f r I nve s t i gj t i on October 15, 1933 ~ liny 27, 1935 d Labor Trade Practice Docketed 123,1>2 36,977 Adjusted 50,240 19,674 No violation found 47,312 8,094 Dropped 14, 263 5,295 Pending 10,377 3,914 Investigated 6,4$2 3,362 ITo t inve st i gat e d 4,515 552 a/ The KRA State Offices -.-ere officially active from October 19, 1933, to May 27, 1935* A tot: 1 of 114 labor complaints accepted by other agencies prior to that date have \)een included, figures for 475 labor and 12o trade pr ctice complaints sent on reference to code authorities prior to June lo, 1934, have been excluded. Labor totals also exclude 236 cases reported as trade practice and subsequently found to be labor. 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O -rl -H B rid a h* «> h ■ a o • « H • * tlDPd OH o o e S >> o SB CO IB (2 I* o -* t-< -n (0 «H o k» rH W a h> a »-i «H O rH O a « 4 ») «3 « 3 a) 3 a q u XI XI OS B XI i* rHaobe]Moa oSHpsi^kO^iil r? u & :3 •rl « «H _. O XI XI « *» »H 3 V, -4 »h ■ • a ■O 0) O rH °J O t. CM rH>J> rO 4» « 12 8g m o •• »H KrH a A O "H O r> *0 *4 *4 e *» O ha K\ a ^ -o j 0<*» rH J* B * • lH Ih •*» hH I oi in t* w -170- A. Summary of Labor Co int Statistics * 1. Number of Labor Cases. Table I is the basic table showing the number of labor complaints under codes accepted for investigation and the relative share of each office. This table includes labor cases docketed from October 19, 1^33 » to May ( ?7, 1935 » the period daring which the offices were officially active. In addition to these it includes llU cases received prior to October 19, and accepted by cooperating agencies such as the Dureau of foreign and Domestic Commerce. From this table are excluded ^75 reported crses which -/ere sent on reference by the St to Offices to the Code Authorities prior to June l6, 193^« Inadequate recor'.s in the offices made it impossible to make an- alyses for cases in this category. A total of 6,409 had oeen reported as cases sent on reference to Code Authorities, in weekly reports to June 16, I93U. The table also excluded 237 labor cases which -..-ere originally report- ed by State offices as trade practice cases and were subseouently found to be labor cases. The reported volume of complaints is affected markedly by the om- ission of ^,515 labor cases pending on May 27, 1335? which had not been investigated sufficiently to ascertain the extent of violation or the amount of wa<=;e restitution due.(*) It should be emphasised that Table I shows volume of docketed com- plaints only. The right hand portion of Table I shows cases containing first com- plaints against respondents. This is presented in an effort to approxi- mate the number of establishments against which complaints were filed. First conrolaint s represent 78.2 per cent of the total complaints docketed; 7^.6 per cent of adjusted complaints; 79*9 P er cent of no vio- lation cases; 72.2 per cent of dropped cases; and 76. S ? er cen t of pend- ing cases. A separate count was taken of cases reported by docket number and code number, but cross referenced to another docket number for their basic information. There were 1,5^-1 cases of anccessive complaints of this type reported as dropped. Of these, 135^ were reported ^j the New York City Office. This should be noted in commenting on the large number of cases dropped ^crj the dew York City Office. Figures in Table I show a total of 5.056 cases dropped by this office, 'tn.it that only 3i^l^ cases were first complaints against respondents. The difference between the total number of dropped cases, and the number of first complaints reflects these cross-referenced cases. (*) See Table XdV. 9S6l -171- To complete the picture, reference should be ::c. ".e also to the volume of complaints handled by State Offices under bhc President's Reemployment Agreement. 2 . Mature of Violation, Labor Cpmplnints . In a study of the ad linistration of a series of regulations on the conditions of labor, perhaps the most significant data are those which show the provisions riost frequently cited in violations. From these can be ascertained the relative administrative burden of different regula- tions. The study of provisions most frequently violated has been made in terms of the individual codes violated, and these resu.lt s have been com- piled separately by code.(*) These offer a fruitful field for investiga- ting such problems as "nether there were relatively more hour violations in manufacturing codes, and relatively more wage violations in service or distributing codes. TJhether the incidence of co:. plaints in one industry is greater than in another can be ascertained only by reference to exter- nal data, such as Census figures for the size of the industry. (**) ( a) Method of preparation . The classification of types of labor violations listed was fur- nished to the field agencies responsible for the analysis as a part of the original reporting instructions. Symbols representing these types were noted directly on the report forms.. Since the information included in case files night- not always disclose the exact nature of the biolation, general headings for wage and hour violations were given for use where further detail was not available. A. classification covering violations of provisions dealing with equitable adjustment of wages above the miniittun, maintenance of weekly earning, maintenance of differential and similar provisions was omitted from the original reporting instructions by error, "..""vile such a classi- fication was established later, it was impossible to re— examine all of the files which had been analyzed in order to correct this oversight. The violations so classified in these tables include only those definitely known to fall under this heading. Estimates based on special reports from (*) There is a master file included in the records of the Statistical Section of the [Field Division, while other copies have been released to the Labor and Industries Studies Section. Copies of these analyses were 'also supplied to the Code History Section, (**) See Scope of Industries under MIA Codes , Post Code Analysis, Nos. 60, 60A and 60B, March 25, 193U, May k, 193^ and October 6, I93H, and Classification of Approved Codes in Industry Groups,' V/ork Materials No. 13, Division of Review, NBA. 9S6l field offices show a, total number of 50^ cases. Of these 20*1 were report- en. bv docket number and ~n additional 300 were estinated in percentages of total la tor violations. Of the 20U specifically reported cases, 87 were adjusted, 100 no violation, 11 dropped, and 6 pending. The 20U cases include 105 cases of violation of the equitable adjustment provisions shown in the general su\r.:ary. General "administrative'" violations which touched on the field of labor regulation, other than violations of the labor poster regula- tions, are included in the tables showing violations of trade practice and administrative provisions. Each separate violation is shown against the classification under which the practice was placsd. The sum of the violations is, of course, equal to or greater than the total number of cases docketed. (b) Margin of error . The method of compilation used and the volume of cases which were analyzed has prevented the checking of the t~-~pe of violation data against provisions of all codes for consistency. Some notes on e ifications will throw lig part of the errors in the der the heading "Fad lure mitted overtime", ho pro codes, and in the other f of proportion, due to the for emergency repair work simply violations of the rrors in assigning violations to particular class- lit on the limitations of the data. The larger figures on seven major codes inspected were un- to pay overtime rate specified ''ay code for per— vision of this, type was included in three of the our, the number of violations shown seemed out fact that the overtime rate was provided only • It would. appear that these violations were maximum hours provisions. In the instance just cited and in a number of other cases, it is likely that the analyst has assigned the violation to a particular classification because it assumed that form rather than because the prac- tice was specif ically prohibited by the code. 7or example, 198 instances of Sunday work occur in the tabulation of adjusted Restaurant cases, and 101 under the Retail l ? ood and Grocery Code, although Sunday work is not prohibited in either. It is probably safe to assume that these instances were actually violations of the six-day week provision, and that the em- ployee complained because he was compelled to work every day of the week, including Sunday. 'There violations of provisions dealing with method and time of payment are shown, despite the absence of specific regulations in the code, it may also be assumed that the violator was resorting to subter- fuge in wage payments in order to evade the minimum wage. The classifications which seem particularly affected by errors are as follows: Exceeding daily limitation ITahlure to average down Sunday work Saturday work Failure to pay overtime rte specified by code Method and time of payment 9861 -173- Table II pre sre shows the natj on. 1 tot Is for labor code provisions violated. The table is based on nori;l cases investigated by the State Offices bet-een October 19, 1933, and Lay 27, 1935, (nnd llh coses accepted prior to that time). It excludes cases sent on reference to the Code Authorities prior to June 16, 193'-'» cvs el] an all other cases referred to special iguctnent agencies. It includes both first complaints against respondents, and all successive complaints which ere docketed separately. 3 . Compla int by Co< '-es . Table III shows 'ho number of Labor cases by codes and net hod of dis- position. Table IV li:;\ ~ the twenty-five code-', violations of which were reported most frequently. h . Size of he s : o ' ~d.e at s ' E s t ■ - "0 1 i s i un e :■ its. The topic of the incidence of code regulations on labor conditions upon the small estab.lislu.ient has been one to which attention has been de- voted, both by the Darrow Committee and by a section of the Research and Planning division of IGA. Airing the active period of field office t administrrtion, practically no data v, ere. available on the size of establishments n ;ainst which com- plaints were lodged. (*) In the present survey size of establishment has 'oeen measured in terms of the number of employees in the unit est blishment. (**) Figures have been grouped to show first, number of employees in individually operated estab- lishments, (Table V) , and second the number of e:mlo v eoc in units of chain distributing or service organizations. (Table Vl) . Offices were instructed to report the normal sir.e of staff to avoid list or tin;; the figures by show- ing the seasonal low point. Figures tend, however, to reflect size of staff at time of investigation. In tabulating the figures, first complaints have been segregated from successive complaints against respondents, in order to provide size figures in which each establishment has been counted only once, regardless of the number of complaints :. ;ainst it. (*) A survey of sine data in selected offices, including Ohio, Philadel- phia, Tennessee and Minnesota, was made in March of 1935 > but the results were not tabulated. (**) deport schedules provided also for the collection of information on dollar volume of business, but this figure was so poorly reported that no tabulation could be made. The schedule also provided for reporting the total number of employees of chains or combinations as well as the nui ber in unit establishments belonging to chains, but this information was inadequate for tabulation. 9361 i / : \ / / / ; r \ ■ / / / { \ \ / / / 1 ^^-^ -1 >- ^' *$ Os ^ o oZ no State Office Series -175- TABLI II ERA STATS OFFICE COMPLAINT STATISTICS VIOLATIONS OF LABOR. PROVISIONS Total of all Offices - October, 1933, - May, 1935 jj TOTAL NUMBER OF CASES TOTAL NUMBER OF VIOLATIONS TOTAL HOUR VIOLATIONS Marl Mara hours (if no more definite information is available) Exceeding daily limitation Exceeding weekly limitation Failure to average down or exceeding limitation of more than one week Sunday work Saturday work Violation of six-day week Working during hours of the day not permitted by code Employer working more than code maximum where prohibited Exceeding permitted number of persons working unlimited hours Split shifts 9861 TOTAL ADJUSTED DROPPED PENDING 71,507 i/ 50,311 14,731 6,465 121 ,157 85,235 23,506 12,416 57,684 39,769 12,011 5,904 17,290 10,213 4,941 2,136 9,435 6,707 1,740 988 24,551 18,233 3,997 2,321 201 106 71 24 947 670 189 88 330 198 73 59 3,635 2,608 798 229 218 142 61 15 391 312 66 13 86 77 6 3 600 503 69 28 -176- SABIfi II (Cont'd) TOTAL ADJUSTED DROPPED PMDIHGr 58,039 40,754 11,045 6,240 105 87 11 7 26,226 19,629 4,086 2,511 1,306 1,000 165 141 660 483 136 41 TOTAL WAGE VIOLATIONS Minimum wage violation (if no more definite Information is available) 20,394 12,608 5,289 2,497 Equitable adjustment, mainte- nance of weekly wage, etc. jg/ Minimum wage (definitely known) Failure of piece rates to equal minimum Deductions not authorized by the code Failure to pay overtime rate specified by code for permitted overtime 6,963 5»212 900 851 Learners, apprentices or junior employees in excess of code allowance Employing handicapped workers without certificate Exceeding permitted number of handicapped workers Violation of handicapped workers* certificate Violation of provisions dealing with method of payment, time of payment, etc. Female discrimination Reclassification, improper classification and miscellane- ous subterfuge Waiting time not paid for 9861 338 262 37 39 104 85 7 12 25 14 6 5 37 28 5 4 674 467 159 48 78 54 19 5 873 634 173 66 256 191 52 13 -177- T1BU II (Cont'd) TOTAL ADJUSTED DROPPED PENDI TOTAL GENERAL PECTISIOHS 5,434 4,712 450 272 Child Labor 316 254 43 19 ^allure to post labor provisions 4,470 4,012 259 199 Employment and payroll records (see Trade Practice Classifica- tion) &/ Homework, permitting homework where prohibited Violation of homework regulations where permitted Discharge or discrimination for filing complaint Miscellaneous 2 2 — — 204 154 24 26 62 36 18 8 352 229 104 19 28 25 2 1 sj The offices were officially active from October 19, 1933, to May 27, 1935. Also included are 14 adjusted and 43 dropped cases accepted prior to October 19, 1933. b./ Total case count includes 70 adjusted, 68 dropped and 3 pending cases transferred from Trade Practice reports, not listed in Table I. c/ See supplementary Table XIII-A for revised figures. d/ State Offices generally reported this item as Failure to Pile Labor Statistics which is included in Violations of Trade Practice Provisions. 9861 Prepared by: Statistical Section Field Division, HRA March 14, 1936 -178- Code Series TABLE XX NBA. STATS OFFICE COMPLAINT STATISTICS NUMBER OF LABOR CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 a/ Codes Method of Disposition Total Adjusted No Violation Dropped Pending Total all Codes 118,958 50,311 47,451 14,731 6,465 Abrasive Grain Industry Academic Costume Industry Advertising Display Install- ation Trade Advertising Distributing Tr. Advertising Specialty Mfg. Ind. Air Transport Industry Air Valve Industry Alcoholic Beverage Importing Tr. Alcoholic Beverage Wholesale Industry All-Metal Insect Screen Ind. Alloy Casting Industry Aluminum Industry American Glassware Ind» American Match Industry American Petroleum Equipment Industry & Trade Animal Glue Industry Anti-Friction Bearing Ind. Anti-Hog Cholera Serum Ind. Art Needlework Industry Artificial Flower & Feather Ind. Artificial Limb Mfg. Ind. Asbestos Industry Asphalt and Mastic Tile Ind. Asphalt Shingle & Roofing Ind. Assembled Watch Industry Athletic Goods Mfg. Ind. Auction and Loose Leaf Tobacco Warehousing Trade Automatic Sprinkler Ind. Auto Rebuilding and Refiniahing Trade Automobile Mfg. Industry Automotive Chemical Special- ties Mfg. Industry Automotive Parts & Equipment Mfg. Industry 3 3 5 1 2 2 57 20 28 7 2 158 80 65 13 57 21 28 5 3 17 7 7 2 1 1 1 15 6 5 1 3 389 218 91 26 54 20 14 1 4 1 1 1 5 1 1 1 2 54 14 29 8 3 10 4 6 174 91 74 6 3 3 1 2 11 3 8 10 5 3 2 11 2 7 2 404 48 238 100 18 4 2 1 1 23 6 12 2 3 5 3 1 1 16 7 5 4 4 1 3 40 19 17 3 1 27 12 5 7 3 12 2 10 59 22 13 5 19 151 48 85 14 4 1 1 441 198 201 27 15 9861 Code Series -179- TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOR CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1936 (Continued) Codes Method of Disposition T , otal Adjusted No Violation Dropped Baking Industry Ball Clay production Ind. Band Instrument Mfg. Ind. Bank & Security Vault Mfg. Ind. Bankers Industry Barter Shop Trade Batting A Padding Ind. Beauty A Barber Shop Mechanical Equipment Mfg. Ind. Bedding Mfg. Ind. Beet Sugar Ind. Beverage Dispensing Equipment Industry Bias Tape Industry Bicycle Manufacturing Industry Bituminous Coal Industry Bituminous Road Material Distributing Industry Bleached Shellac Mfg. Ind. Blouse & Skirt Mfg. Ind. Blue Print & Photo Print Ind. Boat Building A Boat Repairing Industry Bobbin A Spool Mfg. Ind. Boiler Mfg. Ind. Boot A Shoe Mfg. Ind. Bottled Soft Drink Industry Bottling Machinery A Equip- ment Mfg* Industry Bowling A Billiard Equipment Industry A Trade Bowling A Billiard Operating Tr. Brattice Cloth Mfg. Ind. Brewing Industry Broom Manufacturing Ind. Brush Manufacturing Ind. Buff A Polishing theel Ind. Buffing A Polishing Composition Industry 3340 4 6 5 1620 16 29 222 40 33 2 4 91 2 1 362 7 36 7 38 1584 254 4 119 3 288 57 29 3 1466 3 1 112 821 11 12 74 32 16 1 4 30 1 150 3 12 4 15 583 117 49 149 18 12 1208 2 2 3 146 563 4 13 110 7 12 1 41 402 264 1 1 1 1 270 14 216 20 1 3 1 17 21 1 20 130 46 36 3 1 18 2 4 1 2 15 6 2 770 103 128 100 20 17 1 1 2 1 39 23 8 3 76 30 33 26 5 8 12 3 2 2 1 9861 -180- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOR CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Qodeg Method of Disposition Total Adjusted Mo Violation, Dropped PegdlBfl Builders Supplies Trade Bulk Drinking Straw Industry Burlesque Theatrical Industry Business Furniture, Storage Equip- ment and Filing Supply Ind. Fire Resistive Safe Industry Can Manufacturing Industry Candle Manufacturing Ind, Candlewick Bedspread Industry Candy Manufacturing Industry Canned Salmon Industry Canning Industry Canning & Packing Machinery Ind. Canvas Goods Industry Cap & Closure Industry Cap & Cloth Hat Industry Ind. Carbon Black Mfg. Ind. Card Clothing Industry Carpet & Rug Mfg. Industry Cast Iron Boiler & Radiator Ind. Cast Iron Pressure Pipe Ind. Cast Iron Soil Pipe Ind. Celluloid Button, Buckle and Novelty Mfg. Industry Cement Industry Chemical Mfg. Industry Chewing Gum Industry Chilled Car Wheel Industry China Clay producing Ind. Chinaware & Porcelain Mfg. Ind. Cigar Container Industry Cigarette, Snuff, Chewing, & Smoking Tobacco Mfg. Ind. Cigar Mfg. Ind. Cinders, Ashes & Scavenger Tr. Clay & Shale Roofing Tile Ind. Clay Drain Tile Mfg. Ind. Clay Machinery Ind. Cleaning & Dyeing Trade Clock Mfg. Ind. Cloth Reel Industry Coal Dock Industry Coat & Suit Industry 167 56 82 24 5 1 1 11 4 4 3 66 15 36 11 4 8 6 2 48 8 36 1 3 7 2 3 2 5 1 2 1 1 310 114 142 22 32 63 21 42 483 143 217 53 70 8 1 7 107 46 53 3 5 10 4 4 1 1 60 26 23 6 5 9 3 6 1 1 39 10 24 3 2 10 5 5 14 1 8 4 1 15 7 6 2 22 5 6 7 4 40 11 26 2 1 109 25 67 11 6 2 1 1 11 6 4 1 3 2 1 34 11 18 2 3 25 5 12 4 4 5 1 3 1 76 22 34 11 9 147 38 60 47 2 5 1 2 2 5 3 1 1 1 1 2376 861 905 506 104 2 2 2 1 1 10 2 3 2 3 239 58 117 59 5 9861 -181- Code Series TABLE XX HRA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOR CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes Method of Disposition Total Adjusted fp violation Dropped Pending Coated Abrasives Industry Cocoa & Chocolate Mfg. Ind. Coffee Industry Coin Operated Machine Mfg. Ind. Collapsible Tube Industry Commercial Aviation Industry Commercial Breeder & Hatchery Ind* Commercial Fixture Industry Commercial Refrigerator Ind. Commercial Vehicle Body Ind. Compressed Air Industry Concrete MasonAVy Industry Concrete Pipe Mfg. Ind. Construction Industry Building Granite Industry Cement Gun Contractors Construction News Service Ind. Cork Insulation Contracting Ind. Electrical Contracting Ind. Elevator Mfg. Industry General Contractors Ind. Heating, Piping & Air Condi- tioning Contracting Ind. Highway Contractors Ind. Insulation Contractors Ind. galamien Industry Marble Contracting Ind. Mason Contracting Ind. Painting, PaperhangLng and Decorating Contracting Ind. Platering & Lathing Contracting Industry Plumbing Contracting Ind. Resilient Flooring Contracting Industry Roofing & Sheet Metal Contracting Industry Terrazo & Mosaic Contracting Industry Tile Contractors Ind. Wood Floor Contracting Ind. Construction Machinery Distrib- uting Trade 1 1 28 12 11 1 4 59 31 23 5 29 10 5 11 3 3 3 3 3 , 98 49 33 9 7 130 25 70 28 ' 7 61 20 29 9 3 42 23 12 3 4 7 2 2 3 36 15 13 2 6 23 12 9 2 3603 1521 1471 323 288 4 1 3 12 3 6 1 2 27 6 16 1 4 1 1 437 155 208 49 25 16 4 11 1 85 26 47 3 9 118 40 58 9 11 13 7 a 3 17 9 6 1 1 8 2 1 1 4 1 1 74 34 29 3 8 601 243 243 58 57 383 143 156 40 44 1211 449 540 144 98 11 4 6 1 303 127 147 9 20 4 2 2 36 13 20 3 12 3 8 1 15 5 6 • 3 1 )861 -182- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS mJMBER OF LABOH CASES, BY CODE AND METHOD OP DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) CQfleS Method of Disposition Total Adjusted No Violation Dropped Pending Cooking & Heating Appliance Mfg. Industry Copper Industry Copper & Brass Mill Products Ind. Cordage & Twine Industry Cork Industry Corn Cob Pipe Ind. Corrugated & Solid Fiber Shipping Container Mfg. Ind. Corset & Brassier Industry Cotton Cloth Glove Mfg. Industry Cot torn Garment Industry Cotton Ginning Machinery Ind. Cotton Pickery Industry Cotton Textile Industry Counter Type Ice Cream Freezer Mfg. Industry Country Grain Elevator Ind. Crown Mfg. Industry Crushed Stone, Sand & Gravel and Slag Industry Curled Hair Mfg. Industry Cylindrical Liquid Tight Paper Container Industry Daily Newspaper Publishing Business Dental Goods & Equipment Ind. and Trade Rental Laboratory Industry Die Casting Mfg. Industry Distilled Spirits Industry Distilled Spirits Rectifying Ind. Dog Pood Industry Domestic Frei^it Forwarding Ind. Dowel Pin Manufacturing Ind. Drapery & Upholstery Trimming Industry Dress Mfg. Industry Dropped Forging Industry Dry and Polishing Mop Mfg. Ind. Dry Color Mfg. Ind. Dry Goods Cotton Batting Ind. Earthenware Mfg. Ind. 46 11 27 5 3 4 2 1 1 34 6 15 10 2 70 17 39 14 8 3 4 1 1 1 36 12 17 4 3 95 33 36 20 6 50 21 21 3 5 1160 546 466 127 21 1 1 4 3 1 184 36 98 43 2 1 1 69 36 22 6 5 1 1 474 213 190 39 32 2 1 1 156 42 93 18 18 10 7 1 153 75 54 17 7 12 2 9 1 51 22 18 4 7 53 30 15 1 7 11 8 1 2 76 31 31 10 4 1 1 34 7 11 13 3 409 144 176 87 :> 6 1 4 1 1 1 6 3 2 1 1 1 22 9 9 2 2 -183- Oode Series TABLE XX NBA STATS 0771 CE COMPLAINT STATISTICS NUMBER 07 LABOR CASES, BY CODE AND METHOD 07 DISPOSITIC ! Total of all Offices, October, 1933 - May, 1935 (Continued) Codes, Method of Disposition Total Adjusted No Violation Dropped Pen ding Electric A Neon Sign Ind. Electric Hoist A Monorail Mfg. Ind. Electric Storage A Wet Primary Battery Mfg. Ind. Electric Mfg. Ind. Electro typing A Stereotyping Industry End Grain Strip Wood Block Ind. Envelope Ind. Excelsior A Excelsior Products Industry Expanding A Specialty Paper Products Industry Tabricated Metal Products Ind. Tan A Blower Industry Tarm Equipment Industry Teed Mfg. Induat-y Teldspar Industry Tertiliter Industry Tibre A Metal Work Clothing Button Industry Tibre Can A Tube Industry Tibre Wallboard Industry Tire Extinguishing Appliance Mfg. Industry Tisheries Industry Atlantic Mackrel Fishing Ind. Blue Crab Industry California Sardine Processing Ind. Fresh Oyster Industry New England Fishing Ind. Tishing Tackle Industry Flag Manufacturing Ind. Tlftt Class Mfg. Ind. Flavoring Products Ind. Tloor Machinery Ind. Tloor A Wall Clay Tile Ind. Fluted Cup, Pan Liner A Lace Paper Industry Tolding Paper Box Industry 108 31 60 2 15 1 1 77 39 31 5 2 745 213 385 111 36 38 12 17 8 1 6 3 3 32 12 13 7 24 10 6 4 4 3 2 1 961 410 391 92 68 1 1 73 36 33 1 3 139 60 52 11 16 2 1 1 72 12 45 12 3 6 1 4 1 9 3 5 1 1 1 8 1 6 1 266 77 140 40 9 1 1 4 1 2 1 2 1 1 30 3 16 11 1 1 28 13 8 3 4 3 2 1 5 1 4 8 5 1 2 3 3 25 12 11 2 6 1 5 92 29 40 8 15 9861 -184» Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOH CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes Method of Disposition Total Adjusted No Violation Dropped Pending Food Dish and Pulp & Paper Plate Industry Foundry Supply Industry Fresh Water Pearl Button Ind. Fullers Earth Producing and Marketing Industry Funeral Service Industry Funeral Supply Industry Fur Dealing Trade Fur Dressing & Fur Dyeing Ind. Fur Manufacturing Ind 9 Far Trapping Contractors Ind* Furniture & Floor Wax & Polish Industry Furniture Mfg. Ind. Terminal Grain Elevators Garter, Suspender & Buckle Mfg. Industry Gas Appliances & Apparatus Ind. Gas Cock Industry Gasoline Pump Mfg. Ind. Gear Mfg. Industry Glass Container Industry Glazed & Fancy Paper Industry Grain Exchanges & Members Thereof Graphic Arts Industry Intalgio Printing Process Group Lithographic Printing Process Gr. Helief Printing Process Group Trade Mounting & Finishing Ind. Gray Iron Foundry Industry Grinding Wheel Industry Gummed Label Embossed Seal ^ndo Gumming Industry Gypsum Industry Hair & Jute Felt Industry Hair Cloth Mfg. Industry Handkerchief Industry Hardwaod Distillation Ind. Hat Manufacturing Ind. Hatters Fur Cutting Ind. Heat Exchange Industry Hide & Leather Working Machinery Industry 7 3 3 1 4 2 2 59 7 18 31 3 8 2 5 1 205 80 . 96 15 14 99 42 40 8 9 25 8 10 6 1 76 15 39 16 6 333 78 155 87 13 9 4 3 2 28 12 9 6 1 904 358 373 96 77 42 4 23 9 6 48 13 24 9 2 35 15 13 5 2 10 1 7 2 9 6 2 1 9 4 4 1 63 26 34 2 1 14 5 9 12 3 8 1 1440 459 631 231 119 17 7 5 3 18 11 6 1 1199 536 426 166 71 2 2 178 76 82 12 8 6 3 3 9 4 4 1 1 1 5 2 1 2 7 3 4 9 7 1 1 57 21 25 9 2 12 1 11 121 40 65 11 5 5 1 3 1 9 2 6 1 9861 -ie5- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NOMBER OF LABOH CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) £&djUL Total Adjusted 2 2 1 1 355 119 4321 1534 194 82 28 11 1033 423 66 10 11 4 1 25 10 9 5 Method of Disposition HP YiQlatlon. IfrPaped. P en&laE Horse Hair Dressing Industry Horse fhoe and Allied Producing Mfg. Ind. Hosiery Industry Hotel Industry Household Goods Storage and Moving Trade Household Ice Refrigerator Ind. Ice Industry Ice Cream Cone Industry Imported Date Packing Ind. Imported Green Olive Industry Importing Trade Industrial Furnace Mfg. Ind. Industrial Oil furner Equipment Mfg. Ind. Industrial Safety Equipment Industry & Trade Industrial Supplies & Machinery Distributing Trade Ion-Ferrous Ingot Metal Ind. Industry of Collective Mfg. for Door-to-Door Distribution Infant's & Children's Wear Ind. Inland Water Carrier Trade (H.T. Canal System) Insecticide & Disinfectant Mfg. Industry Insulation Board Industry Investment Bankers Iron & Steel Industry Knitted Outerwear Ind. Lacs Mfg. Ind. Ladder Mfg. Ind. Ladies Handbag Ind. Laundry Trade Laundry & Dry Cleaning Machinery Mfg. Industry Lead Industry Leather Industry Leather & Woolen K nit Glove Industry 38 7 18 126 12 1 25 213 232 40 11 166 1041 18 22 289 75 14 3 6 39 9 48 64 16 5 68 253 6 5 107 18 176 1771 74 12 442 42 5 1 5 3 18 3 10 54 4 1 11 137 124 18 6 63 387 12 8 150 37 42 18 904 112 19 19 3 2 123 45 3 11 1 1 7 3 1 1 1 6 1 1 1 21 12 2 1 1 5 23 5 31 13 4 2 23 12 347 54 7 2 9 23 16 9861 -186- Code Series TABLE XX NBA STATE 0771 CE COMPLAINT STATISTICS NUMBER 07 LABOR CASES, BY CODE AND METHOD 07 DISPOSITION Total of all Ofiices, October, 1933 - May, 1935 (Continued) SSdea_ Method of Disposition Total Adjusted No Violation Dropped Pending Leather Cloth & Lacquered Tabrics Industry- Legitimate Tull Length Dramatic Theatrical Industry Lightning Bod Mfg. Industry Light iewing Industry except Garments Industry Lime Industry Limestone Industry Linoleum & 7elt Base Mfg. Ind. Linseed Oil Mfg. Ind. Liquefied Gas Industry Live Poultry Industry of Metro- politan New Tork Area Loose Leaf & Blank Book Ind» Luggage & 7ancy Leather Goods Industry Lumber & Timber Products Ind. Lye Industry Macaroni Industry Machine Applied Staple & Stapling Machine Industry Machine Knife & Allied Steel Products Industry Machine Tool & Equipment Distri- butors Industry Trade Machine Tool & Torging Machinery Industry Machined Waste Mfg. Industry Machinery & Allied Products Ind. Malleable Iron Industry Malt Industry Malt Products Manganese Industry Mfg. & Wholesale Surgical Ind. Marble Quarrying & Pinishing Ind. Marine Auxiliary Machinery Ind. Marking Devices Industry Mayonaise Industry 10 4 3 2 1 52 11 19 19 3 2 1 1 44 11 29 2 2 34 7 21 4 2 27 6 14 2 5 8 3 4 1 2 1 1 7 3 2 2 1 1 11 1 8 2 255 115 86 33 21 2809 762 1445 493 109 2 1 1 115 41 54 9 11 6 2 1 3 6 2 4 12 7 3 2 26 10 12 3 24 3 21 150 62 72 8 38 5 30 2 1 1 7 2 4 1 1 14 6 5 2 8 7 1 8 1 4 36 12 19 4 31 12 12 5 2 9861 -187- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOB CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes, Method of Disposition Total Adjusted No Violation Dropped Pending Mechanical Packing Ind. Medium & Low Priced Jewelry Mfg. Men's Clothing Industry Men's Neckwear Industry Merchandise Warehousing Tr. Merchant A Custom Tailoring Ind. Metal Itching Industry Metal Hat Die & food Hat Block Industry Metal Hospital Furniture Mfg. Industry Metal Lath Industry Metal Tank Industry Metal Treating Industry Metal Window Industry Mica Industry Milk Filtering Materials Ind. Millinery Industry Millinery & Dress Trimming Braid and Textile Industry Mop Stick Industry Motion Picture Industry Motion Picture Laboratory Ind* Motor Bus Industry Motor Fire Apparatus Mfg. Ind* Motor Vehicle Maintenance Tr. Motor Vehicle Retailing Trade Motor Vehicle Storage & Parking Trade Motorcycle Mfg. Industry Music Publishing Industry Musical Merchandise Mfg. Ind* Mutual Savings Banks Narrow Fabrics Industry Natural Organic Products Ind. Newsprint Industry Nickel & Nickel Alloys Industry Non-Ferrous & Steel Convector Mfg. Industry Non-Ferrous Foundry Industry Nottingham Lace Curtain Ind* Novelty Curtains, Draperies and Bedspreads Industry 2 247 351 156 112 320 9 1 3 42 1 8 10 4 329 41 4 1944 22 210 9 194 6060 3327 4 2 15 2 48 2 8 2 4 53 4 99 91 121 45 38 121 4 1 13 4 5 4 89 10 2 725 14 62 3 102 3152 1239 2 20 2 1 2 17 3 31 2 107 167 72 53 151 4 1 24 4 3 166 13 2 888 4 102 6 52 2163 1201 2 6 1 27 1 4 34 15 56 7 28 11 16 5 15 33 1 25 1 40 2 5 1 2 50 24 15 3 232 3 33 99 1 13 6 417 34 328 715 172 2 1 1 1 2 1 1 1 6 5 17 11 9861 -188- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOR CASES, BT CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes Total Adjusted Method of Disposition Ho Violation Dropped Pending Office Equipment Mfg. Ind. Oil Burner Industry Open Paper Drinking Cup Industry Optical Mfg. Industry Optical Retail Trade Optical Wholesale Ind* & Trade Ornamental Moulding, Carving and Turning Industry Outdoor Advertising Trade Oxy-tAcetylene Industry Pacific Coast Dried Fruit Ind. Packaged & Processed Cheese Ind. Package Medicine Industry Packaging Machinery Ind. & Trade Paint, Varnish & Lacquer Mfg. Ind. Paper & Pulp Industry Paper Bag Mfg. Ind. paper Disc Milk Bottle Cap Ind* Paper Distributing Trade Paper Makers Felt Industry Paper Making Machine Builders Paper Stationery & Tablet Mfg. Lnd. paperboard Industry pasted Shoe Stock Ind. Peanut Butter Industry Pecan Shelling Industry Perfume, Cosmetics & Other Toilet Preparations Mfg. Ind. Petroleum Industry Pharmaceutical & Biological Mfg. Industry Photo-Engraving Ind. Photographic Mount Industry photographic Mfg. Ind, photographic and Photo Finishing Piano Manufacturing Industry Pickle Packing Industry Picture Moulding & Picture Frame Industry Pipe Hippie Mfg. Industry Pipe Organ Industry Pleating, Stitching & Bonnaz & Hand Embroidery Industry Plumbago Crucible Industry 65 23 39 3 89 37 35 10 7 3 3 76 18 47 7 4 33 11 16 5 1 30 12 16 1 1 10 1 6 2 1 45 16 27 2 15 6 7 2 9 3 6 3 1 2 32 12 16 3 1 5 3 2 93 37 42 8 6 184 36 104 24 18 43 7 27 4 5 10 1 5 2 2 91 42 36 7 6 1 1 6 1 3 2 22 8 8 3 3 18 6 8 3 1 9 4 3 1 1 16 9 6 1 10 3 4 3 96 26 37 15 18 138 40 33 53 2 7 2 3 1 1 58 32 19 3 4 6 5 1 13 3 9 1 244 93 97 35 19 15 7 5 3 51 20 13 6 12 54 19 19 10 6 8 3 5 8 4 2 2 212 40 53 104 15 3 1 2 9861 -189- Code Series TABLE XX HRA STATE OFnCE COMPUINT STATISTICS NUMBER 07 LABOR CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes Method of Disposition Total Adjusted Ho Violation Dro-pped Pending Plumbing Fixtures Ind. Ptrcelain Breakfast Furniture Assembling Industry Pottery Supplies & Backwall & Radiant Industry Powder Puff Ind, Precious Jewelry Producing Ind* Preformed plastic Products Ind* Preserve, Maraschino Cherry and Glace Fruit Industry Pretzel Industry Print Holler & Print Block Mfg. Industry Printers Rollers Industry Printing Equipment Industry Printing Ink Industry Private Home Study Schools Public Seating Industry Pump Manufacturing Industry Punchboard Mf g* Industry Pyrotechnic Mfg. Industry Quicksilver Industry Radio Broadcasting Ind* Railway Brass Car & Locomotive Journal Bearings Industry Railway Car Building Ind. Railway Safety Appliance Ind. Haw Peanut Milling Ind* Rayon & Silk Dyeing & Printing Industry Rayon & Synthetic Tarn Producing Industry Heady-made Furniture Slip Cover Industry Ready Mixed Concrete Industry Real Estate Brokers Reclaimed Rubber Mfg. Refractories Industry Refrigerated Warehouse Ind. Reinforcing Materials Fabricating Industry Restaurant Industry Retail Farm Equipment Industry 94 29 7 31 70 2 25 33 7 4 13 6 2 11 18 3 18 2 95 1 20 3 12 67 34 25 22 102 4 31 50 14 14,664 86 28 4 12 22 1 13 9 1 1 3 1 1 8 8 9 1 46 1 5 1 1 26 8 10 6 41 1 6 25 6 6822 43 42 14 10 19 3 3 4 3 10 8 1 38 8 2 1 8 2 2 18 1 5 5 1 2 1 7 2 1 3 2 1 3 8 1 1 2 1 4 4 1 1 38 5 6 13 2 2 9 2 23 13 5 23 3 10 2 3 11 4 1 39 12 10 2 1 20 2 3 12 8 5 7 1 5073 2198 571 29 9 5 9861 -190- Code Series TABLE XX NBA STATS OFFICE COMPLAINT STATISTICS NUMBER OF LABOB CASES, BY CODE AND 1ETH0D OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codea Method of Disposition Total Adjusted No Violation Dropped Pending Retail Food & Grocery Trade 13,620 Retail Jewelry Trade 227 Retail Lumber Trade 653 Retail Meat Trade 298 Retail Monument Industry 89 Retail Rubber Tire & Battery Tr. 564 Retail Solid Jtael Industry 1273 Retail Tobacco Trade 104 Retail Trade 9483 Retail Custom Millinery Trade 11 Retail Drug Trade 734 River & Harbor Improvement Ind. 19 Road Machinery Mfg. Industry 22 Robe & Allied Products Ind. 46 Rock & Slag Wool Mfg. Industry 7 Rock Crusher Mfg. Industry 1 Rolling Steel Door Industry 1 Roofing Granule Mfg. Industry 9 Rubber Manufacturing Industry 171 Rubber Tire Mfg. Industry 50 Rug Chemical Processing Ind. 3 Saddlery Manufacturing Industry . 56 Safety Razor & Safety Razor Blade Mfg. Industry 6 Salt producing Industry 25 Sample Card Industry 44 Sand Lime Brick Industry 3 Sandstone Industry 2 Sanitary & Waterproof Special- ties Industry 2 Sanitary Napkin & Cleansing Tissue Mfg. Industry Savings Building & Loan Ass 8 ns. Saw & Steel Products Mfg. Ind. Schiffli, Hand Machine Embroidery Industry Scientific Apparatus Industry Scrap Iron, Non-Ferrous Scrap Metal Industry Secondary Aluminum Industry Secondary Steel Products Warehouse t 1 11 3 52 45 911 2 7433 99 220 107 37 292 495 61 4471 4 401 10 12 16 3 1 2 65 15 2 30 3 4 13 1 1 17 13 380 1 4432 1136 569 106 17 5 343 52 38 109 18 64 38 10 4 197 35 40 590 97 91 29 5 9 4019 655 338 5 2 278 34 21 7 2 7 1 2 22 6 2 3 1 1 4 3 81 16 9 30 5 1 18 6 2 1 1 1 20 1 11 13 7 ] 1 1 7 2 21 23 350 1 1 1 12 7 106 2 2 75 9861 -191- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBEB OF LABOE CASES, BT CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes Method of Disposition Total Adjusted No Violation Dropped Pending Seed Trade Set-Up Paper Box Mfg. Ind. Sewing Machine Industry Shipbuilding & Shiprepairing Ind. Shoe & Leather Finish and Polish Industry Shoe Last & Shoe Form Industry Shoe Machinery Industry Shoe Pattern Mfg. Industry Shoe Rebuilding Trade Shoulder Pad Mfg. Ind. Shovel, Dragline & Crane Ind. Shower Door Industry Silk Textile Industry Silverware Mfg. Industry Slate Industry Slide Fastener Industry Slit Fabric Mfg. Industry Small Arms & Ammunition Ind. Smoking Pipe Mfg. Ind« Soap & Glycerine Industry Soft Fibre Mfg. Ind. Soft Lime Bock Industry Solid Braided Cord Industry Southern Bice Milling Ind. Special Tool, Die & Machine Shop Industry Specialty Accounting Mfg. Ind* Spice Grinding Ind. Spray Painting & Finishing Equip- ment Mfg. Ind* Stained & Leaded Glass Ind* Stay Mfg. Industry Steam Heating Equipment Ind* Steel Casting Industry Steel Plate Fabricating Ind* Steel Tubular & Firebox Boiler Industry Steel Wool Industry Stereotype Dry Mat Industry Stock Exchange Firms Stone Finishing Machinery and Equipment Industry Structural Clay Products Ind* 41 263 30 115 40 26 39 15 998 11 12 1 300 17 12 4 12 5 23 72 6 1 2 11 310 8 6 2 1 28 1 37 19 11 2 1 35 1 130 22 101 9 26 14 8 16 6 356 2 6 90 9 4 3 2 1 5 21 2 6 94 4 3 1 9 10 6 4 11 103 15 75 22 17 21 9 386 7 2 164 13 7 7 3 15 42 6 39 183 4 1 15 1 21 12 4 2 13 3 71 2 31 1 11 225 2 1 37 3 1 3 . 2 6 17 1 3 1 1 15 6 28 5 3 2 1 2 31 3 1 9 2 1 1 1 3 16 1 1 1 1 5 1 14 9861 -192- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF IABOE CASES, BY CODE AND METHOD OP DISPOSITION Total of ell Offices, October, 1933 - May, 1935 (Continued) Method of Disposition Codes Total Adjusted No Violation Dropped pending Sulphonated Oil Mfg. Ind. Surgical Distributors Trade Surgical Dressing Industry Structural Steel & Iron Fabricating Industry Table Oil Cloth Industry Tag Industry Talc & Soapstone Ind. Tank Car Service Tanning Extract Industry Terra Cotta Industry Textile Bag Industry Textile Examining, Shrinking, and Refinishing Industry Textile Machinery Mfg. Ind. Textile Print Roller Engraving Industry Textile Processing Industry Throwing Industry Toll Bridge Industry Toy & Playthings Industry Trailer Mfg. Industry Transit Industry Transparent Materials Convertors Industry Trucking Industry Umbrella Mfg. Industry Umbrella Frame & Hardware Mfg. Industry Undergarment & Negligee Ind. Underwear & Allied Products Ind. Unit Heater & Unit Ventilator Ind. Upholstery & Drapery Textile Ind. Upholstery Spring & Accessories Upward Acting Door Industry Used Textile Bag Industry Used Textile Machinery and Accessories Distributing Ind. Used Machinery and Equipment Distributing Industry Vacuum Cleaner Manufacturing Valve & Fittings Industry Vegetable Ivory Button Ind. Velvet Industry Venetian Blind Industry 3 1 2 9 3 5 1 10 5 4 1 22 4 16 2 6 4 2 18 4 12 1 1 3 2 1 1 1 1 1 2 2 54 16 35 3 2 2 28 12 14 1 1 1 1 102 34 44 15 9 55 9 30 12 4 5 3 2 285 96 103 69 17 14 7 3 1 3 220 55 109 36 20 6 2 2 2 3557 1421 1412 413 311 24 9 13 2 5 1 1 3 256 100 114 30 12 374 89 219 54 12 11 3 5 1 2 36 7 15 10 4 20 8 10 • 2 2 2 118 53 55 7 3 7 1 1 4 i 7 3 3 1 28 11 15 1 1 39 24 14 1 2 1 1 m 6 1 3 1 1 8 6 1 1 9861 -193- Code Series TABLE XX NBA STATS OFFICE COMPLAINT STATISTICS NUMBEB 07 LABOB CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933 - May, 1935 (Continued) Codes. Method of Disposition Total Adjusted No Violation Dropped Pending Titrified Clay Sewer Pipe Mfg. fall Paper Mfg. Warm Air Furnace Mfg. Ind. Washing & Ironing Machine Mfg. Industry Watch Case Mfg. Ind. Waterproof Paper Industry Waterproofing, Dampproofing, Caulking Compound Industry Waxed Paper Industry Welt Mfg. Ind. Wet Mop Mfg. Industry Wheat Flour Milling Industry Wholesale Automotive Trade Wholesale Coal Industry Wholesale Confectioners Ind. Wholesale Food & Grocery Trade Wholesale Fresh Fruit & Vege- table Distributing Trade Wholesale Monumental Granite Wholesale Monumental Marble Wholesale or Distributing Trade Charcoal & Package Fuel Fur Wholesaling & Distributing Tr. Wholesale plumbing & Heating Products Wholesale Tobacco Trade Window Class Mfg. Industry Wine Industry Wiping Cloth Industry Women's Belt Industry Women 1 s Neckwear & Scarf Wood Cased Lead Pencil Ind. Wood Heel Industry Wood Plug Industry Wood Preserving Industry Wood Turning & Shaping Ind. Wooden Insulator Pin and Bracket Manufacturing Industry Wool Felt Mfg. Wool Textile Industry Wool Trade Wrecking & Salvage Industry least Industry Not Reported 9 7 2 9 5 3 1 38 17 19 2 13 4 8 1 11 7 1 3 1 1 1 1 10 1 7 2 2 1 1 12 5 3 1 3 208 101 59 16 32 247 107 95 23 22 10 4 5 1 147 68 53 16 10 1302 533 571 158 40 594 282 233 36 43 22 15 5 2 1 1 1270 606 450 160 54 44 15 25 2 2 3 3 45 17 11 15 2 108 47 37 10 14 3 1 2 69 44 15 2 8 70 28 15 22 5 59 15 27 12 5 8 3 2 1 2 6 2 4 56 25 23 1 7 1 1 12 2 9 1 34 13 14 4 3 4 3 1 5 3 2 239 93 127 16 3 4 2 1 1 329 159 95 46 29 8 4 3 1 35^ 14 10 10 2 9861 -194- Code Series TABLE XX NBA STATE OFFICE COMPLAINT STATISTICS NUMBER OF LABOR CASES, BY CODE AND METHOD OF DISPOSITION Total of all Offices, October, 1933- May, 1935 ( concluded) sj 5be offices were officially active from October 19, 1933. to May 27» 1935* Included are 14 adjusted, 57 no violation and 43 dropped cases accepted prior to October 19, 1933. Prepared by* Statistical Section Field Division, NBA March 20, 1936 9861 -195- SABLE IT NRA STATE OFFICE COMPLAINTS STATISTICS Twenty-five Codes with Greateet Number of Labor Complaints, -October, 1933-May, 1935 Name of Code Total a«J listed No Violation bropped Ending Total 90,001 39 ,930 34,593 11,002 4,476 Restaurant industry 14,664 6 ,822 5,073 2,198 571 Retail Food & Grocery 13,620 7 ,483 4,432 1,136 569 Retail Trade 10,228 4 ,876 4,302 689 361 Construction industry 6,977 2 ,794 2,961 645 577 Motor vehicle Retail 6,060 3 ,152 2,163 417 328 Hotel Industry 4,321 1 ,534 1,771 904 112 Trucking industry 3,557 1 ,421 1,412 413 311 Baking Industry 3,340 1 ,466 1,208 402 264 Motor veh. Stg. & pkg. 3,327 1 ,239 1,201 715 172 Lumber & Timber products 2,809 762 1,445 493 109 Graphic Arts industry 2,674 1 ,013 1,068 400 193 Cleaning & Dyeing ind. 2,376 861 905 506 104 Motion picture industry 1,944 725 888 232 99 Barber Shop Trade 1,620 821 563 216 20 Boot & shoe industry 1,584 583 770 103 128 Whse. Distributing Trade 1,317 624 475 162 56 Whse. food & Grocery 1,302 533 571 158 40 Retail solid Fuel 1,273 495 590 97 91 Cotton Garment industry 1,160 546 466 127 21 Laundry industry 1,041 253 387 347 54 ice industry 1,033 423 442 123 45 Shoe Rebuilding Trade 998 356 386 225 31 Fabricated Metals 961 410 391 92 68 Scrap Iron-Non Ferrous Met. 911 380 350 106 75 Furniture Mfg. 904 358 373 96 77 prepared by: statistical section, Field Division, NRA March 20, 1936 9861 -196- Interpretaticn of sise figures should be n, de onl ■ after reference to census data to ascertain the typical size of establishments covered by the codes. It should he borne in mind that the figures are very heavily weighted *.-ith complaints against firms in the Service and Dis- tributing Traci.es, - r hich would characteristica.ll' show a small number of employees. (a) Lii-ii ';.-t:.ons of the reportin g Savolo. There are limita- tions in the size of the reporting sample. Of the total labor ccmplaints, cases in which the sise of the respondent's organisation was not reported constituted 36. 1 per cent, For individually "operated establishments, using one case per establishment, 3^«7 per cent of the establishments show no size data for labor oases. For all cases against chains and com- binations 20. k per cent were not reported. Adjusted labor cases showed 27.7 P er cent cases not reported, as contrasted with "'S.S per cent for no violation cases, 5^-S ^ or cent for dropped cases, and 3*+»l per cent for pending cases. The percent e of units reported as belonging to chains and com- binations to total reported cases is 3»7» Using only first complaints against respondents chains and combinations comprise 2.3 per cent. Chains comprise 2.6 per cent and branch plants and sales offices two-tenths-of- one per cent. These fiures for branch plants and branch sales offices are probably low because the symbals for reporting these --ere not included in the original instructions. The figures for chains are probably some- what low also, as five states reported no data, on chains. (b) Individually Operated Establishmen ts. This count is based on individually operated establishments, and represents experience for all State Offices combined. It includes all normal cases, but differs from the basic figures shown in Table I, by the number of chains and comoinations which have bee:: reported separat- ely. First and successive complaints against respondents are shown separately. First complaints present a measure of size of respondents based on one entry per establishment regardless of the number of success- ive complaints against that establishment. The 237 labor cases first classified as trade practice and subsequently found to be labor are not included. The summary of si'-.e figures for independently operated establishments shows that the most typical respondent employed from 2 to 5 employees. Discounting ca.ses in which size was not reported, ]>h,S per cent of the total cases were shown as having 2 to 5 workers. Fifty per cent of the cases had approximately 6 or fewer employees. The ration of employees to establishments in the SO largest industries covered 'oj the codes was 2.2 (*) These figures are weighted by the 31 manufacturing codes in which the average was ^S«5 employees. Service trades showed an average (*) Scope of Industries under approved Codes, Post Code Analysis Publica- tion Ho. 60, March 25, I93U, and supplements Ho. 60-A, Hay k, 193-, and Ho. S0-3, October 6, I93U. 3S6l -197- 3 8 ^ in rn eh m m m W en V o o u © u •H «H o •3 o •3 ■3 « Eh to 3 CO 6 H N CO O 3 s g p. i-i o ■ £ o 23 o d ri eH si- 5 0) fl &8 4* 4* • fl rH iH P. d MS 4> Si 1 4» • fl Pi OS O C • ■** ri **i-l ^ i-t p 5 is ri to m vp m BO fu- ss a l-H l-H rH iH 05 * 80 m CM rH CM * to JO r-t r— In m i-t in ITV* NKMOOVOHHCA »*-»X> in o to roco cnto In mCM CM i-l .* o in I ^D mrH J* CM in r-t ONKMO mr»-rnmf-rH CM invO In m in o> o> so J; oowy) cm i-i o cr>to mmi-i ih '3 CNHVD^t mm** ITiCTufl fHVO rn rt^o en in to cr»vo cnrncM h to o to t— in-* u> cx\>-o * h ih r-T i-T rA* tn i-t rn o o m to m _ cntn* cm i-hvo .* m HHH rH Q t0 60 OS * min r— inmrt u> mc\i ih ft crvr—Q incMvc in r-- in to i~- H q tn in r- invo h m in o In m irS'vrj r-4 to o r^ cr»in r^i ,h to CM CM r-l ICV* rH CT>< to ( inoh o>cr»i»K»to o* q ■ i-l CTNVX3 vOOtO^^rHCMiHcrv mCM CM r-l i-l o\ CM rH to J- ir»cr\to cr\ CS r- • o W r- yJrtOHN OCMrnCTiCUCM K% H in CM CM tO* CM «H CM rH in m cr» CM tn »n cr> ■3 Vl o a> & a « O tH >»I-H •> IH r' « "H O p- - Ih to a «h, tj ,P »' ai ® h 9661 -198- 95 a CO o I (4

» o PS •0*3 ^ c ,£1 m E4 a -p a 3 09 6 © a ih i\» ir»r*-c\) OMr»r»- I t lo f\C\] C\J C\J H hmo .* kv* o evi k> r«-» I r-4 IT 04 W J* r-t fti H r-1 J5 «0 ir\K%K%H H r<- - CO O K\ •• ri(r\ Srj 0» rH > • ■0 ft ft .* • "S QM V) ■^ -0 A |4» f-t O • h *« •♦» f-l m w ^ s H cu WrjH irv-o r«^Q ir»o i-t CW J" 0>r-» C\J £ in cvT ITV* r*>CU r-« iH >«0 *1> 5> lTk«0 0> K\-JD BO -5 J* mo l*">r* OvO -X) K%( «-• C> ■ B S B S IS • I* O r-« ITNO rH ft O CJ lf\ S O O 4» 4» 4* 4» 4» o o a hvo ^ 13 o cu .O H m ■a *8 O CM r-l o o *» o o +» +» r-i O ir\r-i o o CVJ Lf> 38 •0 Q +> 8 g 4) 4* l» O 0"! Kr 1 O ■*» CX\ o o a o u employees per i . ishraent, and the xyer;-,ge for 11 Distributing codes was 3*6. A dccellaneous group of 11 codes including Trucking and Construction showed an verage of 11.1 employees^ The largest number of complaints reported •ere under the Restaurant Code and the second lax 'est under the Retail Food and Grocery. The ratio of employees to est blishments in these industries ere U.l and k.k, respectively. Labor complaints reported in 11 Service trades totalled 25i75S, or 21.7 per cent of the total labor complaints* A large number of co iplaints against establishments ruth no employ- ees are shown not to be . etual violations. Investigation of original reports shows that a large proportion of adjusted complaints against establishments having no employees were Barber Shop cases. (*) A nunber of these concerned labor poster violations. The majority of these were reported oy the Massachusetts Office. 5 . Establishments Omerrted as Units, of Chai ns or Comb inations. Separate compil .tions of figures "ere made for establishments oper- ated as units of chains or combinations, so that these might be disting- uished from independent units, in determining the typical violator, and also in measuring the incidence of wage restitution payments on small establishments (See Table Vl). a total of first and s~o.ccessive complaints against respondents is most representative for chains since complaints against a series of units belonging to chains "ere usually carried on one docket number. Additional data showing counts for local, sectional, national chains, branch plants and branch sales offices are available in the records of the Field Divi- sion. 6. Source of Labor Co:'. l,-; ints . a summary shoring typical source of complaints docketed by the 5H State Offices, appears in Table VII • The totals are based on all normal labor compl; ,ints docketed by State Offices, (emcluding ?37 cases originally reported as labor cases and subsequently found to be trnde practice case;;). Cases subseuquently referred to the code authority, either on reference or in the first instance, are excluded, unless they '/ere again returned to the State Office for action. There -ere relatively few instances of that type. Grand totals of 5^- st ,te offices show that approximately the same number of adjusted complaints were filed by present employees and former employees. There -'ere, however, marked differences in the proportions reported by individual offices. For example, hew "fork shows UoU adjust- ed cases concerning present employees, as compared with 929 concerning (*) Note there is some rue st ion as to whether Barber Shop cases might properly be considered code cases, since the labor provisions were contingent upon the putting into effect of trade practice area agreements which -ere never made. 9361 State Office Series -200- TABU IIT N.B.A. ST ATI 0T7ICI COMPLAINT STATISTICS soma Labor Code Cases, Total of all Offices, October, 1933 - May, 1935 aj iL. _________ Ho Source of Complaints Total Cases Adjusted Violation Dropped Pending All sources 118,677 50,240 47,312 14,663 6,462 Anonymous 7,846 2,021 4,308 1,141 376 .Employee (status unknown) 8,209 2,928 3,763 1,179 339 Present employee 27,794 13,122 10,412 2,759 1,501 -former employee 29,880 13,983 10,018 3,545 2,334 Competitor 2,959 939 1,586 331 103 Office staff 14,388 7,885 5,029 885 589 Code authority 6,288 2,288 2,639 912 449 State agency 1,245 501 512 152 80 Gov't purchasing agency 317 142 137 8 30 Labor union 4,085 1,609 1,879 423 174 Trade association 781 272 389 87 33 Other sources 13,137 4,399 6,456 1,877 405 Source unknown 1,748 151 184 1,364 49 The offices were officially active from October 19, l c 33»to May 27, 1935. Also included are 14 adjusted, 57 no violation, arl 43 dropped cases accepted prior to October 19, 1933. Prepared by* Statistical Section, field Division, SB! March 3, 1936 9861 -201- former employees, Indiana showed 282 adjusted cases concerning present employees and 678 concerning former employees. On bhe other hand, Mass- achusetts showed 7< ;; adjusted casus against present employees compared with U-79 a ainst former employees. The relationship is evidently affect- ed by the mass compliance program, i. seems probable that there were in- herent differences in reporting between offices, since San Francisco re- ports .5 pen-cent while, Los Angeles shows 66.0 per cent cases against former employees as compared with the total of former and present employ- ees. B. Conroliance Factors. The tables which have been reviewed above show general totals which disclose the magnitude of the compliance problems, and illustrate the general characteristics of it. Figures ^ere cited to show the provisions most frequently violated, the source of the complaints, the size of the respondent's establishment, and the proportion of employ- ees affected by violation. These show general statistics of administra- tion of labor regulations. , The following roup of tables is devoted specifically to the problems of securing compliance. The figures can show only the observed results in terms of wage restitution collected, and in berms of the amount of time invested in adjusting cases, with additional data on methods used in clos- ing cases. (a) T .7age Restituti on. The Compliance division attempted to secure restitution for both hour and wage cases. The amount 'oir which payments had failed to equal the code minimum was usually more easily ascertained, in spite of falsified records,, than the correct amount due for overtime. The issue concerning overtime was confused, crnc.e many codes provided no legal rate for overtime, The Compliance Division, however, made an effort to secure compensation with a penalty rate for illegal overtime worked. In the analysis of cases ma.de after the Schechter decision, an effort was made to confine wage restitution figures to money which was actually paid. (*) National totals for the amoimt of wage restitution collected, and the number of employees paid, in labor adjusted cases are shown in sum- mary in Table VIII. These figures represent collections from October 19, 1933, to May 27, 1935» the period during which ITILA. State Offices were officially active. Included also are 25 ca.ses accepted prior to October !9, 1933. by other agencies for iffiA. 1. Quoli f i cati ons . The total of $3»6ll,-'-3S»Sl reported in the present survey is to be contrasted with .the cumulative total of statisti- cal reports between June l6, I93U, and May 27, 1$35> °^ $3, ^l, 186.9*4 ° n (*) Instructions dated July 10, 193 L : » stated that amounts of restitution reported on adjusted cases should ir.-lude amounts in money or negotiable instruments actually secured from the respondent. The figure for number of employees receiving restitution was to represent those actually re- ceiving restitution, or in behalf of whom restitution funds v 'ere collect- ed by the State office including employees not located. 986l -202- code cases. That the inc?.usion of figures for eight additional months makes a negligible difference in the total is the result of the fact that survey figures represent actual payments, while bi-weekly reports were sometimes inflated by inclusion of money due "but not yet paid, because the offices Mere attempting to make a rood efficiency rating. Figures reported here represent money collected on adjusted ca.ses only. A small proportion, probably not over 5 per cent of the total of $lUO,6US.76 wage re sti tilt ion collected on compromised cases, represents collections on dropped and pending cases which should be added to the figures quoted above to five total sums collected. There is an additional qualification that wage restitution funds in the ; possession of ISA State. Offices on May 27, 1535, but not disbursed to employees subsequently, are included in the totals quoted. Furthermore, the totrls include $235,908.11 paid in notes. This represents 6.5 per cent of the total collected on adjusted cases. Notes were used as the method of payment in 9^1 or 2,9 per cent of the cases. Notes have been counted at full value, although there is a possibility of default, particularly on any notes outstanding on hay 27, 1935«(*) The figure of $112, l6 reported as the average amount of restitution per case is an abnormally high figure affected by some extremely large cases. For example, reference to Table IX shows that the largest number of establishments perming wage restitution employed from 2 to 5 workers, and that the average per case in this group was $US,oS. The -arithmetic average cited above is influenced by 10 cases in establishments employing over 5»000, and averaging $601.00 per case, and by 1^-2 cases, in firms with 501-1000 workers in which an average of $523.66 per case was paid, 2. Prop orti on of Cases in which Restitution was Not Collected . As shown in Table VIII, there were 17,^+lH cases in which no figures ^ere quoted for amounts of wage restitution paid, or number of employees affected. These constitute 3^»^ per cent of the total number of adjusted cases shown in Table VIII, In addition, there were S55 cases in which no amount of restitution was reported, although the number of employees receiving restitution was shown. One approach to the problem of measuring the extent to which restitution might hove been collected in the 17,Hlk cases is to examine the figures for the numbers of hour and wage violations in proportion to the total number of cases. As shown in Table II, a total of 85,235 adjusted labor violations occurring in 50,3H ca.ses were reported. Of these violations 39>76S' or U6.7 per cent were hour violations, ^0,75^ or U7.8 per cent were wage violations, and U, 712 or 5-5 P er cent were violations of general provisions. (*) The figure for amount paid in notes is inflated slightly by the fact that only one method of payment could be tabulated for a case, Those cases in which both notes and cash were used were tabulated with the entire amount under notes. 986l -203- Nearly all hour Kit. wage violations are of the type which should carry wage restitution. To ascertain the number of cases which should carry wage restitution, however, an unduplicated count of cases involv- ing either hour or \.t ;;e violations or "both is required* This figure is not available and can be approximated only by observing that there were 3^,228 adjusted cases involving hour violations, and l6, 083 i- n which there were no hour violations. There were also 37»->29 adjusted cases involving wage viol tions raid 12,682 cases in which no wage violations occurred. Since restitution was collected in a nar:inur.i of 33 > 133 cases, there were k t h~l6 cases in which compensation .for wr e violations were not obtained. Using bhc sane reasoning, there were 1,073 cases in which hour violations were not compensated. If we make bhe most conservative assumption possible and consider that all the uncompensated hour cases occurred in cases in which wage violations were also uncompensated, we have a minimum of '!-,hy6 adjusted cases in which wage restitution might have been obtained, but no collections were made. 3. Wage destitution, by Size of Es tablishme nt , A study of the amount of wage recti tut ion paid by individually operated establish- ments and by units belonging.. to: chains and combination's^ according to size of establishment was made on the basis of figures reported by ten offices. (*) The tables were based on all types of code cases, that is, normal code cases, cases received by State Offices from Compliance District Offices, reported cases sent on reference to Code Authorities prior to June lb, 1S3^» ^ oot and Shoe Cases originating in the New Eng- land mass compliance program, and duplicate entries for payment of wage restitution in kind. Doth first and successive complaints against res- pondents are used. The Tables show restitution amounting to $832,333*87* Of this $801,^76.96 or 96.3 per cent was reported as paid by individually oper- ated establishments and $30,362.91 or 3*9 P er cent was reported as paid by units of chains or combinations. Payments by individually operated establishments were made in 7j073 ca.ses or 96,2 per cent, and in units of chains and combinations ay 276 cases or 3»S per cent. It seems prob- able that the figures for chains and combinations is low, and that there are additional units belonging to chains or combinations which were re- ported without special designation and so have been included with indi- vidually operated establishments. Table IS presents data on independent establishments only. h. T 7as-;e P.estitr.tion Summa ry. After a review of the figures one is impressed with the practical difficulties of the problem of ob- taining wage restitution for all hour and wage violations that were docketed. The fact that the majority of the cases were against establish- ments employing 2 to 3 workers, and that in these establishments all (*) Table., IX Amount of Pestitution and Number of Employees Paid, by Size of Independently Operated Establishments, ^en Selected Offices. 9261 s ^ a s * I 3 i I! sil "if «3 •1 h V • rs -204- ON UN 3 vo vo § B 5 fHlH CJ«* ID RS £ I ££SSJ££S3J&-3 I« • • • • • I K\KMrvVD VO VO lf\ I • ••••••••• j$£S&v1i& , §£&§ i so i»Mr»c1 «Tkj» mmvovo I ri r-i H 8 CVJ • VO \i 1 ^ I * f ON SHHSI!« Cst r*r4 KN ■ • • til" ££cU 4 A ! 8 rt vo « O K\ ■°1* - lis 3 9661 employees tended to hr.ve experienced hour or wage violations or "both, made it difficult to secure restitution fron the respondent. Payroll records to establish the extent of the violation were often inadequate, and com- promise, usually informal in such cases, had to "be adopted. For the cas- es adjusted, the pr Tient of an average of $2^.05 per errployee and agree- ment for future co spliance was a "boon to the individuals. The proble: 1 . of wage restitution collections have been discussed in Chapter V of Section 1$. The above observations hr.ve been inserted here only to give emphasis to the reported figures. 5« Time gler.ent in Closing Complaints* Special attention was given to the time factors in the problem of handling complaints. First, information on tine elapse.". between docketing the co .plaint, and starting the investigation was reported. (Table X) Second, the elapsed time be- tween the beginning of the investigation and the final closing of the case was indicated, (Table XI ) From these figures it was possible to compute an average for the -umber of days elapsed before action was be- gun, and a second ever, ge for time elapsed in closing the case after the investigation started, 6. Meth od of C losing Labor Cases , Cases included in this table are normal cases invert! "at ed by the State Offices, excluding cases sent on reference to the Code Authority prior to June l6, l v 33^» Both first and successive complaints against respondents have been included, but certain categories of cases used in preceding tables hrve been omitted from the present table. Auon ; these are U3S adjusted cases and lhU no violation cases, which were cross— referenced to another case, and in which the method of closing was _■ eported under that case. Cases docketed prior to October 19, 1933, were also omitted. In the reporting of cases, offices were instructed to show the method deemed most effective in closing the case. Tor example, if both correspondence and the field adjuster were used, only the activities of the field adjuster were recorded as the method of closing the case. Sim- ilarly, office conference was quoted in preference to Field Adjuster. "Court suit instigated by complainant," was not included in the list of methods provided in the instructions, but in five cases notes to this effect were appended. It seems probable that this is not a representative figure. National totals show that the field adjuster was used in clos- ing 5S. 2 per cent of the adjusted cases and ^0.2 per cent of the no vio- lation cases. Correspondence was effective in closing 28.0 per cent of the no violation cases as compared with lU.o per cent of the adjusted cases. 9861 State Office Seri* -206- TABL1 Z H.S.A. STATS OPFICI COMPLAIHT STATISTICS Time Elapsed between Docketing and First Action Labor Code Cases, Total of all Offices, October, 1933 - May, 1935. jj Days elapsed Ho between docketing Total Adjusted Tiolation Dropped Pending and first action Total 118,675 50,238 47,312 14,663 6,462 Action on day of receipt 17,263 9,225 6,079 1,182 777 1 day 18,494 8,556 6,782 1,964 1,192 2 days 12,212 4,969 5,229 1,237 777 3 days 7,845 3,375 3,109 871 490 4 days 7,142 2,927 2,994 754 467 5-7 days 19,025 7,405 8,128 2,400 1,092 8-10 days 10,472 4,096 4,420 1,428 528 11-14 days 8,133 3,314 3,472 998 349 15-28 days 10,445 4,174 4,443 1,440 388 Over 28 days 4,628 1,761 2,067 607 193 Hot reported 3,016 436 589 1,782 209 The offices were officially active from October 19, 1933, to May 27, 1935. Included are 14 adjusted, 57 no violation, and 43 iroprsd cases accepted prior to October 19, 1933. Prepared byj Statistical Section, Yield Division, NBA March 3, 1936 9861 8tate Office Serie. „ — 207» TABU XI n.s.a. sTin omci complaint statistics TIMS SLAP SB) BETWEEN FIRST ACTION AND CLOSING Labor Coda Cases, Total of all Offices, October, 1933 - Kay, 1935 aj Time elapsed "between No first action and Total Adjusted Violation Dropped closing Total 112,215 50,340 47,312 14,663 Closed on day of receipt 1-6 days 7-13 days 14-30 days 21-30 days 31-45 days 46-90 days 91-182 days 6-12 months 13-18 months Over 18 months Sot reported sJ The offices were officially active from October 19, 1933 to May 27, 1935. Also included are 14 adjusted, 57 no violation and 43 dropped cases accepted prior to October 19, 1933. Prepared by* Statistical Section, Field Division, NBA March 3, 1936 9861 6,609 3,968 2,339 302 19,414 9,574 8,571 1,269 14,687 6,629 6,798 1,260 11,454 5,120 5,398 936 13,632 6,065 6,225 1,342 12,485 5.567 5,616 1,302 17,999 7,827 7,413 3,759 9,892 3,942 3,603 2,347 3,687 1,293 1,069 1,325 151 59 24 68 15 13 1 1 2,190 183 255 1,752 State Office Series -208- TABU HI NRA STATE OFFICE COMPLAINT STATISTICS METHOD OF CLOSING Labor Code Cases, Total of all Offices, October, 1935 - May, 1935 a/ Method of Closing Total Adjusted No Violation Cases Percentages Cases Percentages Cases Percentages Total of all methods 96,897 Correspondence 20,579 Field Adjuster 52,579 Office Conference 19,249 State or Local Adjust- ment Board 749 Code Authority 2,440 State Agency (Dept. of Labor, etc.) 567 100 21.5 54.3 19.9 .7 2.5 .6 49,785 7,381 28,959 10,811 500 1,489 268 100 14.8 58.2 21.7 1.0 3.0 .6 47,112 13,198 25,620 8,438 249 951 299 a/ Offices were officially active from October 19, 1933 to May 27, 1935 Prepared by; Statistical Section Field Division, NRA February 1, 1936 100 28. 50.2 17.9 .5 2.0 .6 Court suit instigated by complainant 5 .0 4 .0 1 .0 Daknown 729 .7 573 .7 356 .8 9861 ■ Section 3 . Trade Practice Complain t.?. A. Nature of Violation, Trade Pract i ce Cases . The relative adminis- trative difficulty arising from trace practice provisions is reflected in the summary figures shov/ing the tot 1 number of violations, by class of provision violated, as presented in Table XIV. A separate analysis by type of violation has been prepared for each code and each supplementary code in which violations hove been investi- gated by State Offices. (*) In using tnese figures as an index of the total difficulty with given trade practice provisions, allowance must be made for the even greater volume oi trade practice complaints handled by the Code Auth- orities. (**) Furthermore, general limitations discussed in the intro- ductory section are equally applicable in studying this data. For ex- ample, trade practice figures are a particularly unsatisfactory index of compliance, because they are markedly affected ''oy sporadic efforts on the part of Code Authorities to enlist the aid of the State Offices in se- curing price filings, statistical reports, or the use of labels. The interpretation of the figures for individual types of violations has been left to the Trade Practice Studies Section of the Division of Review. (***) (*) Copies of analyses of individual codes are available for in- spection in the records of the Field Division of KRA. Additional copies were distributed to the Industry and Trade Practice Studies Section, and to the Code History Section for inclusion in the copies of the histories. (**) On April 30, 1935, there were 493 codes and supplementary codes officially authorised for the handling of trade practice com- plaints. Somewhat incomplete reports from Code Authorities for the bO major codes (chosen on the basis of size) and their supplements for a reporting period July 7, 1934, to May 25, 1935, showed 198,707 trade practice complaints. The figures are af- fected by serious discrepancies in definition and reporting per- iods, but are cited only to indicate that the volume of trade practice complaint?, handled by code authorities was in excess of that handled by state offices. (***.)/ Report of Price Filing Unit, Chapter VI, contains an analysis of the proportion of price filing violations to total violations. Report of Commodity Information Unit also contains an analysis of trade practice complaint statistics. 9861 210 m KV b i o • 8 I M & : o «o < m *J o co <-i i I 1 ■8 1 g Ja"**^^* £Wf|f ^§&Ka P^SRr g^RRS^Rr R&jg"^ CM OMH |SK\« J* CM int— O O -tf »0 t— J* CM J* H HHHI-H I O «H HU)Jt CJ ff\ in M iH W04S r— J* O K\ {p J* jH K\IO 1M HH to iH r-l J* CM CM I | ^KS^Hg! gj&Pfc $)§l&S fe &*8 R g^RFdi&FlK^ gK&HS' CVI O h-»—tr>Hcf\ wmmcM ri invo r- crivc vo p cm oJHM^iripN into mvovo jot- ih cm tovo onhvch j* J* cru* injy m p on w inji*- to t-vo K »— pkitmtih VO iH &VO incr> OVO KSKN rlrlB oH CM i-l ri 10 K\VO H in kv cm •A CVI 00 CM iH 10 J— VO VOf— OCTv O OVIOh-H K\0 W K\ K\ ON f<> in K*> K\VO J* !•- <£> H to in HiOKiSov* i-itoK\sv# omh »-- j* •vSI In' CVI tO VO lf\HH CVI VO K\ CVI * J in I evi evi I J* ovO QKvcr>incvi rM^^trt vovc oTvino ovinr-in to k-uj c/nsP c\j \p «o HQK\ori ff\ to r— AS CVI 10 in m CM QVO M? |r\HOJVDOK\ 10 inVO CM CM CM CMvZ CMpf— KvCM 5 j\ va r-i © cm PS in kvCvi t^fH i-t iH K cvl to IQ in e— K- kvvo «o r- H cr> J* r^w o crir-cvi p to *> o-v r- r4 0\ H in KN CM ft fH in icH-a-j jjj-h to cm rr\K> o>* cm vo to crv g> g> cm to to < ■ i o3 ti * SS"* 4 J to^H » 13 — 1 » -*» h h O cfi oo »h O •1 •& r-l ■3 to -,« 5 w • ►< 33SI II 3s^ 388 3 -\" rH*» * K-» to*» e & o £ e e ■i 9861 211 > i K\ K\ K> <7V O «H 1-1 IS h t-t ■ n £ i 5 i 1 * 8 4 M S O 10 O M S I rH I 1 i "8 Pi g 03 v» o RJTSIG 1 ^ ^^K^^-r.M.^D £«-»-©CJ| jpppRRga |^8& ^"^.SS |8££ §|£*? M ^ ^J w ^ Hr ^S.R Cf> rH l»-\ 05 rH iH K\ rH rH t^r-t CMrHCTvCM cm r-i3- cr\ omhk\ 3 rH ir\N eo rHt«~iCM »o rH rH .=* cvi eo to J* rO © oJ- OMH rH cvij* so«oQit>kv* MOOrl^WWWt-fi g»H>vo Sjc* &-3 t-vx> mvr> «o crv^^" k>c*\ to rH i~- a\vp m to <£ q S jJKjI^rHCM CTiCMJtfrH CTiKWO JO J-HKVl-J- >3 CM rH CM vfl mvB CM kjcm cTSlrv sri r™*3>&| j^j"-^^^ »— to CM lr> O t- HHH hCKH H r»-K\ ct rH i i» r—vo J* i-4 rH iH CM iH Ml CVI ITU* tO lf\ Q Q KWP.* O OVO H CM l»\r— K\K> rH 10 Jt h- £-VO .* K\K\ OMT> c-— vo hqn crSvo f--ir\rj{\loM^ cm k\ r«vjO r*\ as t- V© iHJ* |K- rH CM ITS rH CM l?>rH CMrHCT>C\j CM Q CM rH ON IP J- O CVI Wit J- mm to Cn {TWO CU CM ITv rH p CM J* O I— K\ CTi t*1 ih uSvo bo «h .=? oj* ifNfH ihvo o cr\ KvaNoSc-vitvo fij ir\ cm o ct. eo kmo k-\ cm »0 KM"-I*M»\ KNK-iCTVrH rH C^-KIt— Jr «T\rH K-\C^ l?\ kOCMCMrHCM KiK^ ■a 5 e co a « c a o o - O *4 ■ rH a Ih C -9 a -h in n B O ill .3 o - ■a 5 p3 a ca § a a -*» 3 ^ ccs n ja So rHg(Da>«-iaf> h1£ ►3 » ^* vo t— t— 1<-\ cu kvvs sm) kmc cm m j* j* kv* cm h r^\K\ cm cm r*~, f— K-VO rH lf\ KV* l~-Vfl q> p «0 CT\ rH KSuD OJT UOM^H^nOOO S J-rHJ*V£,H CM CM K\ ^ CM OS CM H H cSj3 m PS H rH CM llSc*\CSO O % K rH •a co ova «TV Aclsl 9861 - La- it should "be oointed out that the experience of individual codes, with almost identical provisions, has varied widely, Tvelve co ^re found to "be responsible for more than naif of the reported instances in all codes of failure to adhere to filed prices, and for 36.9 per cent of the violations of failure to file prices. Interpretation of the summary firures, accordingly, is dependent upon a study of conrolaints, and their concentration by code, and the contribution of each code to the total vio- lations of a given type of provision. See table XV for a list of the 25 codes with the largest number of trade practice complaints. B. Case Coverage The figures included in table XIV are based on normal cases under codes, excluding any cases sent on reference to Code Authori- ties prior to June 16, 1954. C. Violations Each violation is shorn against the classification under which the provision violated was placed. The sun of the violation is, accordingly, eaual to or greater than the total number of cases docketed. D. Method of preparation An analysis of each trade practice case file was transmitted to Washington by the State ISA office, the information be- ing recorded partly in symbols, and partly in descriptive words. Except for four types of code provisions, data on the nature of the violation or alleged violation was furnished by reference to the article and section of the code concerned. The provisions were assigned to a particular classi- fication by the Washington staff. This method was made necessary oi T the complexity of the regulations and the variety in the language used. As will be seen below, a certain amount of detail was necessarily lost. Problems encountered in classifying provisions . The difficulties encountered in making a completely accurate classi- fication of trade practice provisions may be divided generally into two group s . (a) Those arising from the numerous refinements and variations of pro- visions of a similar nature in different codes. In such cases, all similar violations have been grouped together, as far as possible, under a single heading indicating the general nature of the practice which was the com- mon object of regulation. (b) Those arising from the fact that in a number of codes, several kinds of trade practices were made the subject of regulation in a single section or subsection of the code. It was impossible, therefore, when reference was made to one of these "orovisions, to kno r: which of the regu- lations had been violated. In such cases, violations were arbitrarily as- signed to the most common kind of practice included in the section. The principal classification difficulties which were encountered in classifying the practices occurred in connection with the topics listed below. An examination of these problems will throw light on the general value of the data, and will also serve to indicate the content of the headings listed. (i) Prohibition of "destructive price cutting' 1 was in many codes in- cluded in the same section with prohibition of "sales below cost." Thus it was not possible to determine which prohibition had been violated. Since "destructive price cutting" was in these cases a vague and undefined concept, and since cost was an important element in determining the "destructive" nature of a price, violations of such sections were assigned to the prohi- bition of "sales below cost". (2) In classifying violations of "sales below cost" provisions, a .distinction was made between provisions prohibiting sales below a cost 9861 *3 . ir-t i I 3^ & v. P -214- SABLE XX NRA STATE OFFICE COMPLAINT STATISTICS VIOLATIONS OF TRADE PRACTICE AND ADMINISTRATIVE PROVISIONS Total of all codes for all offices, October, 1933, - May, 1935 a/ CODE NAME P. 9. SUMMARY Alphabetical Symbol. TOTAL NUMBER OF CASES 36.425 TOTAL NUMBER OF VIOLATIONS 41.197 NO ADJUSTED VIOLATION DROPPED PENDING 19,674 8,09* fi.aqfi 3,362 21.960 9,306 6.153 _2*flgCL STATISTICAL REPORTING 27 (,1) Failure to file statistics .(2) Failure to file labor statistics PRICE FILING 28 (1) Failure to file prices (2) Failure to post prices (3) Failure to file rates and tariffs MAXIMUM AND MINIMUM PRICES 29 (1) Sales below minimum prices speci- fied by code or Code Authority (2) Sales below emergency prices- established (3) Failure to comply with "Lfcmita- tion-on-Price-Increase" 942 336 440 124. 3.550 1.229 §1 . 2Q_ 4.Q6Q 1,709 225 5S. JSSL .123. _155_ JSL _fi£2- -152. _2ia_ .102. JSL . mn -256. 222. JSL -SL 30 DESTRUCTIVE PRICE CUTTING PRICE ADHERENCE 31 (1) Failure to adhere to filed prices (2) Failure to adhere to posted prices SALES BELOW COST 32 (1) Sales below cost (manufacturing and non-distributing industries) 33 (2) Violations of mark-up and loss- limitation provisions (distributing trades) 3 4 (3) Cost determination (Graphic Arts Industries) (4) Failure to establish individual cost- accounting system and miscellaneous costing violations 249 .392. JLZ6. 741 3.2? ? Jfi. JLZL JJJJL JSL _483_ -2Q2L -62. J± JLQL -22. -243. 338 -ia- JQ. jo. JH. 9861 9861 -216- IiBt> XX (C*Bt>A) Alphabetical Symbol. NRA STATE OFFICE TRADE PRACTICE COMPLAINT STATISTICS - Page 2 NO ADJUSTED VIOLATION DROPPED PENDING 35 RESALE PRICE MAINTENANCE Provision requiring adherence by customers or salesmen to: (1) Members' published prices (2) Minimum price provisions' (3) Manufacturer's or wholesaler's published prices 48 ^2. JIL 36 DISCOUNTS (1) Cash (2) Quantity (in one order or shipment) (3) Volume (over a period of time) 59 10 _2L 24 _16_ 12 37 CREDIT TERMS 14 19 38 CONTRACTS (1) Non-enf-Tcement of contracts (2) Failure to file with Code Authority contracts ante-dating, and excepted from, emergency price provisions (3) Adjustment of prior contracts 17 11 15 Ji __ia. 39 FALSE AND INADEQUATE AGREEMENTS OR DOCUMENTS 106 48 &L 40 BIDDING (1) Failure to file bids (2) Bid peddling and shopping (3) Collusion in bidding (4) Other bidding practices 432 55 jar 178 36 JSL 121 189 -Ifi. 41 IMPROPER AWARDING OF BIDS 100 49 18 _2fi_ rosQ -216- TABXZ XX (Coat «4) Alphabetical Symbol. NRA STATE OFFICE TRADE PRACTICE COMPLAINT STATISTICS - Page 3 42 CONDITIONAL SALES (1) Consignment sales (2) Other conditional sales NO ADJUSTED VIOLATION DROPPED PENDING 78 16 23 43 RETURNED GOODS (1) Accepting returned goods (2) Allowances for returned goods 44 EXCESSIVE TRADE-IN ALLOWANCE 45 ALLOWANCES (1) Advertising allowances (2) Allowances for definite service 2fi- 102 88 1 1 — _ _ 67 J* 1 46 47 48 49 50 9861 PRICE GUARANTEES (1) Price guarantees (definite prohibition) (2) Other provisions re price guarantee except guarantee of product PRODUCT GUARANTEES TRANSPORTATION CHARGES (1) Transportation charges (2) Basing point provisions PREMIUMS, LOTTERIES, ETC. (1) Giving premiums, coupons, etc. (2) Lotteries (3) Contests (4) Auctions (5) All of foregoing in one provision FREE GOODS OR FREE DEALS 22 61 76 155 173 19 30 273 18 30 15 33 39 11 80 A 6 2 1 _ 1 10 3 7 lt a * 6 l 3 40 6 AvO& ••21T" CABIX XX (CwtU) Alphabetical Symbol. NRA STATE OFFICE TRADE PRACTICE COMPLAINT STATISTICS - Page 4 NO ADJUSTED VIOLATION DROPPED PENDING 51 FREE SERVICE (1) Free service or maintenance 39 63 SHIPMENT REQUIREMENTS (1) Requirements relative to time, etc. (2) Split-box sales at wholesale, etc 56 LABELING REQUIREMENTS (Except NRA Labels) 60 CUSTOMER CLASSIFICATION AND TRADE DIFFERENTIALS (1) Filling customer classification, by class definition or name, and adhering to same (2) Adherence to customer classes, or restrictions, established by code (2) Inadequate deposit on equipment 99 21 52 GIFTS, SUBSIDIES, FINANCIAL ASSISTANCE 9 * 54 SALES OF SUB-STANDARD GOODS 6 1 14 58 PRODUCTION CONTROL (1) Restrictions on productive capacity IT 12 (3) Adherence to trade differentials 11 13 (4) Limitations relative to salesmen 3 5_ 57 DESIGN AND STYLE PIRACY 30 31 13 (2) Production quotas (allotments, etc) jti 13 10 (3) Inventory limitations 1 «~ 1 59 HOUR LIMITATIONS (1} Machine, plant fooujr limitations 80 6 13 (2) Hours of business. Distributing and Banking Codes 304 275 181 55 COMMODITY STANDARDS 147 67 1*? 14 151 64 28 15 9861 -218- SAB1* XX (Cont'd) Alphabetical Symbol, NRA STATE OFFICE TRADE PRACTICE COMPLAINT STATISTICS - Page 5 61 DISCRIMINATION AND SECRET REBATES (1) Discrimination between buyers of same class (2) Rebates or discounts used as a subterfuge (3) Monopolizing and discriminating against small enterprises (4) Splitting fees, commissions NO ADJUSTED VIOLATION CROPPED PENDING 92 265 17 62 85 31 19 42 25 62 MARKET PROTECTION ' (1) Direct sales in competition with retailer or other factor (2) Extra zone sales (3) Violation of territorial agency franchise 43 48 21 4 4 1 30 5 2 11 4 ; 63 COERCION, INTERFERENCE, FREDATORY COMPETITION, COMMERCIAL BRIEERY 304 179 68 57 64 MISREPRESENTATION AND DECEPTION (1) Deceptive selling methods (2) Deception in filling orders (3) Inaccurate underselling claims 108 35 12 23 17 8 38 12 5 63 17 2 65 66 67 tttl ADVERTISING REGULATIONS (1) False, misleadii.g and inaccurate advertising or statements (2) Inaccurate advertising and defama- tion of competitor (3) Advertising regulations in the Retail Trade and Retail Food and Grocery Codes (4) Restrictions on certain types of advertising FAILURE TO PAY CODE ASSESSMENTS REGISTRATION (1) Registration with Code Authority 501 79 279 203 1 .285 329 (2) Failure to register trucks, buses, etc. 703 (3) Failure to register new construction 18 (4) Failu«M$ Register production, or productive equipment 216 59 105 35 368 372 144 66 25 112 -1S- _£B_ _1ZL 221 99 408 119 16 -219- TABLJ TL (Cont'd) Alphabetical Symbol. NRA STATE OFFICE TRADE PRACTICE COMPLAINT STATISTICS - Page 6 NO ADJUSTED VIOLATION DROPPED PENDING 617 333 31 10 13 1 8 5 11 6 6 4 5 28 18 2 57 1 40 57 28 11 8 68 NRA LABELS AND NRA INSIGNIA (1) Failure to use labels or insignia (2) Provision governing retail sale of manufactured product requiring NRA label (3) Improper use of labels or insignia (4) Code members purchasing from firms not displaying insignia (5) Sales to code violators 69 ADMINISTRATIVE (1) Investigation costs (2) Access to records 131 General administrative 70 LICENSE - ADDRESSES (1) Working without license (2) Failure to establish business address (3) Permitting loan or transfer of license 71 CERTIFICATE OF COMPLIANCE (1) Failure to file, or filing false certificate - Government Contracts (2) Failure to file certificate on demand of Code Authority 72 MISCELLANEOUS (1) No code provision applicable (2) Failure to comply with Workmen's Compensation Laws (3) Prison made goods (4) Lumping or subletting. labor (5) Selling tile unset, etc* (6) Soliciting 15 days after death (Retail Momanent Code) (7) Bio eta-booking (Motion picture) (8) Renting or loaning Mfg. space to another Mf r. (Precious Jewelry Producing)— lot reported a/ The offices were officially active from October. 19, 1933, to Prepared by: Ha? 27,. 1935. Statistical Section, Fife i-k^^vis ion. National Recovery Administration Date MM-ch 6 , 1936_ 9861 *C 255 223 10 JA. 21 11 1 5 17 53 24 12 15 2 1 1 40 18 1 3 2 — — 13 16 4 10 __. 1 ing) 4 . 1 1 1 11 .15. 20 -220- TABLE XX- B NRA STATE OFFICE COMPLAINTS STATISTICS Twenty-five Codes with Greatest Number of Trade Practice Complaints, October, 1933 — Hay, 1935 Name of Code Trucking Industry Construction (Total) Retail Food & Grocery Retail Trade (Total) Retail Solid Fuel Wholesale or Distribut- ing Trade Merchant & Custom Tailoring Graphic Arts Ind. (Total) Baking Industry Retail Monument Ice Industry Retail Rubber Tire & Battery Cleaning & Dyeing Trade Wheat Flour Milling Builder's Supplies Tr. Retail Lumber, etc. Electrical Manufacturing (Total) Shoe Rebuilding Motor Vehicle Retailing Household Goods & Stor. Photographic & Photo Finishing Canvas Goods Motor Vehicle Storage and Parking Trade Retail Tobacco Trade Merchandise Warehousing Total Adjusted No Violation Droppei 2995 1676 471 559 2956 1463 757 285 2601 1599 641 302 2547 1628 515 322 1700 962 354 259 1318 803 280 110 1178 473 278 210 1106 391 233 330 1096 748 106 127 895 573 203 75 772 499 136 131 770 364 369 29 666 321 99 536 67 145 2 525 303 97 62 494 279 81 113 477 228 51 47 459 79 235 145 444 172 147 97 .434 265 50 118 416 270 115 20 395 219 118 58 375 154 40 181 371 261 58 15 369 217 117 27 Pending 289 450 59 82 125 125 217 152 115 44 6 8 2 322 63 21 151 28 1 11 37 8 Prepared by: Statistical Section, Field Division, NRA, March 20, 1936 9861 - 81- to be - etermined cc to a uni ■ method of cost accounting (. enere Lly •" wii i . burin i ' n- Lstri In, • ulations 'equiring 'mi. ■ -up n I e Licati n E s1 ttis- tical mode to invoice cost • ;r Fix< ' ''ices in bher istry ( ener- ally encountered in distrib cc .). because of the complexity of Section 26 of the Graphic Arts Code and a lor, e volume of cases arisi under it, >arate classification was established for this provision. A miscellaneous croup of regulations usually based m the requirement. that an establishment maintain some sort of costing system was assigned •to a separate sub-classification, numbered (4) under the heading "Sales below Cost", although there is some overlap with the first classifica- tion und.er the heading, (o) In a few eases, violations were reported of several provisions iling with the same subject and classified! under same general heading in one classification system use:''-. For mechanical reasons, it was im- possible to list inert than one of these violations, and in such cases violation was assigned to the most important sub— classification, usually the first under the heading. 4.9. =L?. P n c * f-ssiihi. c at i pns ._ A further note on the types of provisions included under certain neadings may be helpful in the examination of these tables. The follow- ing classifications seem to require ad.ditional explanation: Contracts Sub-class (l), "ITon-enforcement of contracts", includes provisions dealing with the following practices: Departure fro.:) credit terms of contract Settlement of old accounts below full value Permitting improper deductions when buyer remits Permitting buyer's cancellation or repudiation Substituting higher quality or quantity goods Extending or exceeding contract Retroactive settlements False and Inadequate Agreements or Document s This classification includes all provisions whose object is, by positive requirements or by prohibitions, to insure a full and com- plete, accurate or itemized record of each sale or transaction, and the form of such records. Conditiona l g ales Sub-class (2) includes provisions governing the following practices: .Sales subject to trial or approval • Repurchase agreements Shipments without order (Transit Stock, etc.) Storing goods with customer Resale Guarantee Agreements in which buyer is not bound Exchanging merchandise 9861 Renting or leasing industry products -222- Allowances Sub-class (l) includes all provisions prohibiting or regulating in any way the payment for advertising service rendered by customer. Sub-class (2) includes regulations of- allowances for any other definite service or value rendered by a customer, except trade-ins or advertising. (This heading was not used for discrimitatory allowances and rebates, which were included under "Discrimination and Secret Rebates"] Price Guarantees Sub-class (l) includes only definite prohibitions of price guaran- tees as such. Sub-class (2) includes other similar provisions covering options, contracts for deferred delivery with guaranteed price, price agreements indefinite as to time or quantity of goods, and related subjects. Product Guarantees This classification includes all provisions prohibiting, or regulating in any way, the giving of guarantees on products, i.e. deviation fron standard guarantees set forth in coc\e , or violation of provision prohibiting ce - tain kinds of guarantees (maintenance, etc.). Transp or tat ion Charge s Sub-class' (l) applies to all provisions allocating or regulating transportation charges in any way, such as provisions requiring an F.O.E., or delivery basis of selling, prepayment of freight charges, prohibitions of transportation allowances, etc. Free Goods or Free Deals This classification lias been used to cover all provisions regulating the giving of free goods, including such items as special containers or equipment, free industry products, advertising and display materials, samples, etc. F ree S ervice Under sub-class (l) have been included violations of provisions regulating the giving: of sales heln and demonstrations, plans and draw- ings, repair and maintenance, warehousing and storage, etc. G ifts, subsidies, Financial Assist ance This heading includes all provisions prohibiting or regulating in any way concessions rendered a buyer through financial assistance or favors, i.e. gifts, entertainments, payment of expenses, etc. Sliipmen t Re oui r erne nts All provisions relating to time, method, or size of shipment are 9861 -223- cove ■ y sub-class (1), includin s Lit shipment, shipments wcl^ ■ ocificd minimum, di livery , etc. Sales of c ub-sta ndard G- 'ods Under lave been included only those provisions im- posing regulations on the sale of other than new, unused, first class products, for the protection of the consumer. Provisions for quality requirements in the initial manufacture of- the product are not included, nor are any provisions relative to price or cost. The '"leading covers damaged* goods, seconds, used goods, demonstrators, discontinued lines, etc. Commodity Standards All provisions establishing definite standards in the manufacture of a product, positive or negative in character, arc included here, i.e. standards of quality, quantity, grade, ingredient, etc. Label Re qui r orients This heading covers provisions, positive or negative in character, relative to descriptive, accurate labelling requirements, for the informa- tion of the consumer, i. e. positive requirements in labelling as to quality, quantity, grade or ingredient, or prohibitions of deceptive labelling. h arket Protection The sub-classification entitled "Extra Zone Sales" includes anti- dumping provisions. Advertising P.egulationq Uri- or sub-class (4) have been included -provisions containing positive restrictions on specific kinds of advertising, not in them- selves inaccurate or misleading, such as the use of the word "free", or the advertising of fixed down payment and weekly payments without regard to price, etc. !B61 -224- s o u E 9 9 : B i 5 S % I 8 9 4* .SR I* i* •S3 ■ o 8° I' '. t* i "2 w e 1 H 2 tf o • • • » a Ji *- 1 3 4* 311 3 &a. 1 II! lag Q I I J* I Nrt ! I* l w *MII I I I £ I HKUt WWWHW I J |K> I I I JVJ I VO^H H l & R M H4rtJMO»itVflVfl H 0>KSh K\iH r-4 H »-« 12 g I w sua* a* ^WHW J W £ | w gg£RRKl»3&|$ s w ■■•J w» fi sgi ON •H 3 R 8 »4 1 e o s i-t 3 6 I J3 S It VA 98C1 State Office Seriea -225- tami xni I.R.JL. STATI OJPIC1 COUPLAIHT STATISTICS SOTS01 Trad* Practice Code Caaea, Total of all Offices, October, 1933 - Hay, 1935 jj Bo Source of Complaint ■ Total Cases Adjusted Violation Dropped Pending ill sources 36,425 19,674 8,094 6,295 3,362 Anonymous 274 150 74 44 6 fcsployee (status unknown) 142 50 35 57 • Present employee 62 29 19 6 8 former employee 71 14 48 5 4 Competitor 7,912 4,172 2,396 1,187 157 Office staff 1,267 710 313 62 182 Code authority 23,756 13,112 4,305 3,408 2,931 State agency 140 80 23 30 7 Qov't purchasing agency 12 8 2 1 1 Labor union 152 67 71 12 2 Trade association 1,282 627 366 256 33 Other sources 1,154 584 421 125 24 Source unknown 201 71 21 102 7 jjj The offices were officially active from October 19, 1933, to Hay 27, 1935. Prepared by] Statistical Section, Field Division, SRA March 3, 1936 9861 State Office Series -226- 2ABLS ZnZZ N.R.A. STATE OFFICE COMPLAINT STATISTICS METHOD OF CLOSING Trade Practice Code Cases, Total of all Offices, October, 1935 - May, 1955 a/ Total Adjusted ftp Violation Method of Closing Cases Percentages Cases Percentages Cases Percentages Total of all methods 27,768 100 19,674 100 8,094 100 Correspondence 14,079 50.7 9,465 48.2 4,614 57. Field Adjuster 6,407 25.1 4,509 21.9 2,098 25.9 Office Conference 5,763 20.7 4,627 25.5 1,156 14. State or Local Adjust- ment Board 76 .5 50 .2 26 .5 Code Authority 1,164 4.2 1,021 5.2 145 1.8 State Agency (Dept. of Labor, etc.) 91 .5 80 .4 11 .2 Court suit instigated by complainant 4 .0 5 .0 1 .0 Unknown 184 .7 119 .6 65 .8 a/ Offices Were officially active from October 19, 1935 to May 27, 1955 Prepared by: Statistical Section I Field Division, N.R.A J February 12, 1956 ( 9861 State office series -227- TABLX XIX N. R. A. STATE OFFICE COMPLAINT STATISTICS Time Elapsed between Docketing and First Action Trade practice Code Caees - Total of all Offices, - October, 1933-Hay,1935 a/ Days elapsed No between docket ing Total Adjusted Violation Dropped Pending and first action Total 36,425 19,674 8,094 5,295 3,362 let ion on day of receipt 4,496 2,398 1,292 480 326 1 day 8,751 4,983 1,522 1,774 472 2 days 4,142 2,355 767 624 396 3 days 3,080 1,613 666 390 411 4 days 2,378 1,289 564 311 214 5-7 days 5,411 2,962 1,225 706 518 8-10 days 2,591 1,435 655 278 223 11-14 days 2,066 1,128 510 199 229 15-28 days 1,818 932 458 162 266 Over 28 days 946 465 298 104 79 No action 32 1 1 1 29 Not reported 714 113 136 266 199 a/ The offices were officially actiwe from October 19, 1933 to May 27, 1935, prepared by: Statistical Section Field Division, N. R. A. March 4, 1936 9861 State Office Series -228- TABLS XX N.R.A. STATE OPTICS COMPLAINT STATISTICS TIMS ELAPSED BETWEEN FIRST ACTION AND CLOSING Trade Practice Code Cases, Total of all Offices, October, 1933 - May, 1935 a/ Time elapsed between No first action and Total Adjusted Violation Dropped closing Total 33,063 19,674 8,094 5,295 Closed on day of receipt 1-6 days 7-13 days 14-20 days 21-30 days 31-45 days 46-90 days 91-182 days 6-12 months 13-18 months Over 18 months - - Not reported 222 41 60 121 996 537 340 119 7,019 4,631 1,603 785 6,161 4,117 1,405 639 4,323 2,645 1,059 619 4,231 2,461 1,157 613 3,552 1,950 909 693 4,444 2,375 1,103 966 1,743 783 376 584 336 131 80 125 36 3 2 31 a/ The offices were officially active from October 19, 1933, to May 27, 1935. Prepared by: Statistical Section, Field Division, NBA March 3, 1936 9861 229 8 i . 8 1 E t I J M O § ■H M ! c 5 o rl 9861 s I 1 3 o <* to •-< 3 . 5 o a) * 5 ! I 3 | -S R j »^ j j j I *■ S J ^3 j | i j Zf | ~ ^i" j P I I I I i '• I S3 S s l HWH l!l! *» ^^ It ^- { { - ki S3 i w<\j i— wir\so rj r— bo .-« i hj tig kmh .-h .-i I 3- Si j r-i qitnn W R 8ow HHr\ i ni I r-1 r-l I J* .* I I K\OIIO VQVOfHCTt ^ r-l t— f»- BO lf> J- I K\ r^,^ r-l V0 rlHK\H>JI 1 kv* ir>.ij eo eg o r-i itvj* r*\ I j nh t— vd hain i w f— .-i k\ ^o k\ bo j* K1 CO f>- J± rH eg KNCO Al ri O ir, I HAI »*N I KMT, I I j I I — Ml t-f-l I I I I r-l f— IT» I e> i • i i I I I I I K\ CU l>- I r-IKtW I j I i i i i i w c\J i I t i O O CTiBO IT>BO I I h-t-« CM <-i 5> SRi rr\OWO « tow asc on! so w irxn j* m m i-i o r^-r— vo r* *•» i t— ir\ir»ir\r-i i-c »rno I Q s NHSMH I CM «0 K\H r-4 r-l I v£ i r»-K\fH CTl &sf"a IJ*I— K\ rH CT\ r-l r-l r— I K\ir\ N4 so •a 2 i S£U r— ir\ oihh I o Tr\IrYcr> i cm i-t i CO i 9861 OJ-OHI^lBinHH rtHH CVI J* R SSK? ! pi K?"™S 1 i- |« a o <4 (31 rH t— K\ir\eo cm t— o 0>J3 ir\ f\t^i-i OJ 230 & Mi I 1 1 f\Kv* t-t I iHQCTiaot— Ri ITllO t»-rH iT\^±^t\0 O J* iH K\ t-t I nf-K\ \T\tr\rtr4 - WH J-KMfMTl 1T\ CM rH II J* J* J- t-l I HWHOIA 0-~03 CM f-W l*> i-l I— K> i-l •-! Q t*Mf\r-l j Q r-l CM l*Mr\v2> s % s i s^ cm kv* cri o J- rH vo in eo u> i-i ir> r«- i * OfitrvH^ inosK\o\ to lrTo ih ir\ t^ o~> r-» r-i k> vd K>rr\ I r— m-> id tvi i~-OiHcK <-l r-l rf P\^t In HHCVI | vO 0\r**r\r4 $3 o q ffl co o3 d -p ! -I :t - 2 ° • •a PRA SERIES mt2Zlm TABLE XIII ERA STATE OFFICE COMPLAINT STATISTICS VIOLATIONS 07 TBS PRESIDENT'S REEMPLOYMENT AGREEMENT Total of all Offices, October, 1933 - May, 1935 Total Adjusted Dropped Pending Total Somber of Cases Total Number of Violations Total Hour Violations Total Wage Violations Total General Violations 5,933 4,365 806 762 9,921 7,564 1,353 1,004 4,765 3,795 684 286 5,012 3,644 654 714 144 125 15 4 sJ The offices were officially active from October 19, 1933, to May 27, 1935. Included are 1,683 adjusted, 192 dropped and 6 pending cases accepted prior to October 19, 1933. Prepared by: Statistical Section Field Division, BRA March 19,1936 9861 -232- State Office Series TABLE X NRA STATE OFFICE COMPLAINT STATISTICS AMOUNT OF RESTITUTION AND NUMBER OF EMPLOYEES PAID Cases -under President's Reemployment Agreement, Total of all Offices, October, 1933 — May, 1935 Number of Cases 4370 Amount (Dollars) 204,184.01 Employees 7497 Prepared by: Statistical Section, Field Division, NRA March. 13, 1936 9861 Statistical Summary of the Activity of the Compliance Division ■WO IABIS HIT SUMMARY, NRA COMPLIANCE DIVISION AND REGIONAL OFFICE CASES November 11, 1933 - May 27, 1935 a/ Complaints Complaints closed by Docketed administra- tive action Complaints NRA On referred to Insignia Hand Litigation Removed May 25,1935 TOTAL 7,136 3,634 1,435 1,795 2,067 Labor Complaints 3,673 1,810 657 916 1,206 Trade Complaints 2,950 1,574 603 692 773 Labor & Trade Practice Complaints against same respondent 513 250 175 187 88 a/ This is a report of cases referred by NRA State Offices or by the Code Authorities to the Compliance Division in Washington, or after January 1, 1935 to the Regional Offices for special administrative action. These totals were compiled from the card files of the Control Section of the Compliance Division in Washington, and from daily reports submitted by the 9 Regional Offices. Prepared by: Statistical Section Field Division, NRA July 23, 1935 9861 Statistical Summary of -234- the activity of the Compliance Division TABU JXT NRA STATE OFFICE COMPLAINT STATISTICS Uninvestigated Complaints Pending May 27, 1935 = Total all offices Total, Region 1 Maine New Hampshire Vermont Massachusetts Bhode Island Connecticut Total, Region 2 Albany, N.Y. Buffalo, N.Y. New York, N.Y. Total, Region 3 New Jersey Philadelphia, Pa. Pittsburgh, Pa. Delaware Maryland District of Columbia Virginia North Carolina Total, Region 4 South Carolina Georgia Florida Tennessee Alabama Mississippi Louisiana Labor Trade Practice 4,515 552 332 51 35 3 17 5 1 2 68 32 65 -__ 146 9 1,435 34 132 5 45 10 1,258 19 365 231 129 15 — 69 110 — — 2 1 110 130 5 — 9 16 — — — 339 16 19 „ 2 46 3 9 — 39 6 100 126 5 9861 -335- TABL* XX? (Ce*t»i) RRA STATE OFFICE COMPLAIHT STATISTICS Uninrestigated Complaints Pending May 27, 1935 a/ Total, Region 5 Michigan Ohio feat Virginia Kentucky Labor Trade Practice 623 44 260 9 353 34 10 1 Total, Region 6 Wisconsin Indiana Illinois Missouri 279 24 15 35 205 66 2 5 42 17 Total, Region 7 Minnesota Iowa Borth Dakota South Dakota Uebraaka Kansas Wyoming Colorado 110 16 16 1 77 Total, Region 8 Arkansas Oklahoma Dallas, Texas Houston, Texas Hew Mexico 360 46 138 163 13 18 7 3 6 9861 -236- ZABLI ZZ7 (Cont'd) HRA STATE OFFICE COMPLAIHT STATISTICS Uninvestigated Complaints Pending May 27, 1935 &/ Total, Region 9 Montana Idaho Utah Nevada Arizona Washington Oregon Los Angeles, Calif* San Francisco, Calif. Labor Trade Practice 672 86 1 1 5 15 — 21 8 2 — 122 31 134 5, 62 28 315 8 a/ Instructions for the analysis of HBA State office cases, July 10, 1935, provided that cases which had not been investigated sufficiently to ascertain whether a violation existed, or to determine the amount due, were to be excluded from the analysis. The number of univestigated cases pending on May 27, 1935, but not analyzed, was reported by JZ^ offices. In other cases, the figure was computed by subtracting the number of analyzed cases reported as pending, from the total number shown On hand May 27, 1935, in the report of that date. Prepared by: Statistical Section, Field Division, N.R.A. March 4, 1936. 9861 - . IX I :86i -238- A3 pundit i ITEA STATS OITIC". CO!.I?LAI! T T STATISTICS Survey of Cases Invests tor. October IS, 1933-lfe.y :7, 19G5 LIST 0! kCLbS Tables showing violations of coc.es are roupec into three series, "The State Cffice Series", showing information broken down "by office handling the complaint, "The Coc ; Series", with items by code, and the "Special Series" showing interrelated factors based or combined experience of r soloctod group of offices, "ithin these groups are separate sets oi figures for labor en-", for trafe tractive complaints. There is ?.n additional _to"J'i of tables showing violations of the Presi- dent's Reemployment Agreement. Te.bles showing the same type of information for labor and trade practice cases he.ve been given the same number. Indication as to whether tables cover labor or trP.de, and adjusted, no violation, dropped or pending cases is furnished by symbol" such as L or TP, and the members of the reports from which the information ^oy method of disposition was drawn. fables were received fro." the tabulating section of the Census in two forms, first in pencil entries on rotonrinted work sheets which have word captions and also column anc" symbol members by which the information was recorded on punch cards, anc. secon . in the form of machine shoots, showing totals printed by the adding tabulator. In- formation shown on machine sheets needs to be f.e coded in order to read easily. Finished tables have been prone red from the work sheets either by India ink transcriptions to rotoprinted forms, or by typewritten copies of selectee items on sheets c. correct size for duplication andbinding. In addition multi graphed blanks showing labor and tra.de practice provisions violate - ', have been ■ re a red for ea.ch code in which complaints were docket. The infer shows bote: the tables covered by the original won: sheet:, an.' also the transcriptions made free them, are whether these heva boon 'uo lice. tec 1 .. >861 -21 sum jm' o: "A. I.3S ri.v.: crricj stj.:s(*) fable 1, ITumber of Cases, and iTumber of Peroondcr.ts Table J, Size of He sr> or. fonts ' Establishment (ITumber of Employees in Infivif.ua.lly Operated Es tali 1 i shnien t s , an ". in Units of Chains and C o nib i na t i o n s ) Labor ] ■ : Practice All methods of All methods of di s-oosition c'.i sioosition All methods of All methods of "isr>osition c.is'oosition Table 3, Source of Conplaint Table 4, Lletho:" of Payment of '."a;_e Restitution, by lumbc -_■ c f Cases (See also Tables 10, 11, 12) Table 5, Llethod of Closing Cases Table G, honth P.eceived it Adjusted Adjusted, Adjusted, no violation no violation ana dropped cases All methods of disposition cases All methods of "isposition Table 7, Time Elapsed botv.-ecr. Jo cheti:„_ anl first Action All methods of All methods of disposition Table 8, Time Elapsed betv/een First Action end .osin Table 0, Slue Eagles remove d by State Directors S Service Trades A "..justed, no violation and dropped c?ses Dropped cases (*) Table numbers correspond to those of the original study, rather than tc numbers of text tables. .361 -240- STATR OFPICI! S5RIRS (continued) Labor Trade Practice Table 10 Amount and Number of Employees Re c e i v i ng Wag e Restitution Adjusted cases Estimated Amount and Employees Owed ;roppec and pending cases Table 11 Count of Cases not Reporting Wage Re sti tut ion Adjusted cases Table 12 Method of Payment of Wage Restitution by Amount Adjusted cases Table 13 Nature of Violations, Adjusted ^ay State dropped, pending (See also Table 20, Code Seriesfcases Table 14 lumber of cases by code Ail methods of disposition See Table 20 Table 15 Code by State (omitted) Table 16 Individually operated e s tab 1 i s hm en t s by size (Selected list of 84 codes and 31 supplements) (*) Adjusted dropped and pending cases Adjusted, dropped and pending (Selected list of 32 codes and 6 supplements) (*) Table 17 Number of Units of local, sectional, national chains (Selected list of 84 codes and 31 supplements) (*) Adjusted, d ropp od , pending cases Adjusted, dropped, pending (Selected list of 52 codes anf 6 supplements) (*) (*) Sec belov for list of codes •241- CODZ SERIES. or TABLED continued) labor Trade Practice Talle 18, imraber of Branch Adjusted Adjusted, plants or Branch dropped, dropped, sales offices, pending pending (Selected list of cases (Selected list C4 co;" es an: 1 . 31 of 32 coC.cs supp 1 emen t s ) ( * ) an d 6 supp 1 emen t s ) ( * ) 'Table 19, Source of Complaints - - - - - - (omitted) Table 20, Type of Viol? t ion All methods of All methods of dispo si ti on di spo s i t i on Sep?/. ate 3 Separate 6 page analysis page analysis for e?.ch code for each do do and supplement and supplement, (Sec table 13 also national for national total summary totals) Table 20B, Types of Violations, Adjusted, by Size and State dropped, pending, (Selected list of 105 b?.sic cof.es and 218 supp 1 emen ta ry codes) Table 21 i Associated Violations - - - (omitted) Table 22, Employee Classifications Adjusted - - - cases (national totals only) Table 23, Extent of violation Percentage of employees affected by violation; excluding units of chains and combinations (84 ccf.es and 31 supplements) (*) See belor for list of codes -242- CODE SERIES OP TABLES (continued) Labor Table 24, Period of Violation Adjusted, based on individually dropped, operated establishments pending (Selected list of cases 84 codes and 31 s upp 1 ernen t s ) ■ Trade Practice Adjusted, dropped, pending (Selected list 52 basic codes and 6 supplements) Ta"ble 2-5, Amount and number of Employees Receiving Tibs, e Re s t i tut ion Adjusted cases Table 26, Cases not reporting wage restitution (omitted) Table 27, Amount ^oy Method of Payment (omitted) Table 28, Time received All methods of "isposition (Selected list of 52 codes and 6 supplements) SPECIAL SERIES OP TABLES Taole 23, Employee Classifications "(transferred from code series) Ldjusted dropped, pending (national totals) Table 29, Size of Individually Adjusted operated establishments cases by source of complaint (10 selected State Offices) Table 30, Source of Complaints hy Month Received Adjusted no violation cases (all offices) Tabic 31, Size of individually Adjusted operated establishments (10 selected by extent of violation State Offices 9861 -243- SPZCIAL SERIES OF TABLES (continued) Labor Trade Practice Table 32, Size of Individually Adjusted Operated establishments cases by E-mount and number (10 selected of employees receiving State Offices) rage restitution Table 33L3, Size of Units Adjusted - - - oi chains or cases Combinatio: s, by' (10 selected Amount and Number ^ State Offices) of Employees Receiving Wage destitution Table 34LL, Size of Adjusted Individually cases Operated (10 selected Establishments State Offices) by Let hod of Closing Table 35L1, Size of Adjusted - - - I n d i v i dua 11 y cases Operated (10 selected Establishments State Offices by Time Elapsed in Closing Table 36, Time Elapsed All methods All methods in Closing by of disposition of disposition honth Received . (all offices (all offices) CASES UHD3R PRESIDENT ' S HESMPLOIEEHT Table 1,(*) ITumber of Cases All methods and lumber of of disposition Respondents Table S, Rcnth Received All methods of disposition (Rational totals only) Table 10, Amount and l T umber Ac justed cases of Employees only Eeceiving ".,"?.: £ restitution (*) Table numbers correspond to tables showing similar items in the State Office 9851 -244- CASES UNDER PRESIDIUMS REEMPLOTMEHT AGREEMENT (continued) labor Trade Practice Table 13, Type t>f Violation Adjusted, dropped end pending cases (national totals only) List of codes to "be included in; Ta"ble' 24, Period of Violation Ta"bie 16, Size, Unit of Establishments Table 17, Size, Chains and Combinations Table 18, Size, Branch Plants and Brand State Offices TRADE PRACTICE CODE SERIES Alphabetical Symbol Humber CODE HAM 036 050 058 059 085 102 130 149 154 165 222 231 346 375 408 412 470 563 564 622 690 691 692 694 695 696 697 698 Automotice Parts and Equipment (Basic Code) Baking Beauty and Barber Shop Equipment Bedding- Bui lde r s ' Supp lies Canvas Goods Cleaning & Dyeing Construction' (Jiasic) Electrical Contracting Plumbing- Electrical Manufacturing (Basic) Fabricated Metal Products (Basic) Graphic Arts (Basic) Commercial Belief Printing household Goods, Storage and Moving- Ice Lumber and Timber Motor Vehicle Retail Motor Vehicle Storage and parking Photographic & Photo Finishing Retail Food & Grocery Retail Jewelry Retail Lumber Retail Monument Retail Rubber Tire & Battery Retail Solid Fuel Retail Tobacco Retail Trade 9861 -245- fBABB PPAC.TICB C0Z5 SSPJUS (continued) Alphab c t i c~ 1 Syiric o 1 number CODB NAM 699 Booksellers Trace 702 :.otail Drug Trade 737 Set-up Paper Box Mfg. Ind. 744 Choc Rebuilding 304 /Trucking 359 Wheat ".'lour 843 '.Viiolcsale Confectionery 844 '.'.'hole sale Food ft Grocery 348 Wholesaling 855 electrical VJholesale 32 codes 6 surra lements C0D3S IBCBUDBD III TABLBS 16, 17, 18, 23 and 24, LABOP. COBB SBPJBS Alp hab e t i ca 1 Code Symbol cobt HAM 010 Alcholic Beverage wholesale 033 Automobile Mfg. 036 Automotive Parts &. Equipment 050 Baking Industry 035 Bankers Industry 056 Barber Shop Trace 059 Bedding Industry 064 Bituminous Coal 068 Blouse and Shirt 074 Boot and Choc 075 Bottlec Soft Brink 098 Candy Manufacturing 100 Canning Industry 114 Chemical Manufacturing 125 Cigar Manufacturing 130 Cleaning and Dyeing 134 Coat an<. Suit 149 Construction Industry 150 ♦Building Granite 151 *Cement Gun Contractors 132 *Construction llev/S Service 153 *Cork Insulation Contractors 154 *Blectrical Contracting 155 *Blovato-r Mfg. 156 *General Contractors J861 -246- codhs iitcluded if tables 16, 17, 18, 23" and 24, (continued) LABOR CODE SERIES Alp babe tier. 1 Code Synbol CODS HAL 157 138 159 160 161 162 163 164 155 166 167 168 169 170 171 183 186 192 210 222 225 231 298 322 335 346 347 352 373 382 383 387 407 425 430 435 443 446 460 470 475 431 542 ♦Heating, Piping and Ai ♦Highway Contractors * I n s ul a t i o n C o n t ra c t o r s *Ka 1 am sir. I n dus t ry ♦Marble Contracting ♦Mason Contractors ♦Painting & Paperhaiiging ♦Plastering d Lathing *P lumb i n; C o n t ra c t i ng ♦Resilient Flooring ♦Roofing Cz Sheet Metal ♦Stone Cutting Contractors ♦Terrazo d Mosaic Contr. ♦Tile Contractors ♦Hood Floor Contractors ;ond Cotton Garment Industry Cotton Textile (Sasic) Crushed Stone, Sand d G ravel Jress nuiacturm,'-, Electri cal Manufr c curing' ♦Wiring Device Fabricated Metals (D a sic) Fertilizer Industry Folding Paper Box dig. Fur Manufacturing Fumi ture Manuf a c turing Graphic Arts (Total) ♦Intalgio Printing Process Group) ♦Lithographic Printing Process ♦Relief Printing Process Group! ♦Trade Lithographic Plate Baking ♦Trade Mounting C: Finishing c.ray Iron Foundry Hotel Industry Infants d Children's dear Iron d Steel Knitted Outerrear Laundry Trad c Leather I n c .us t ry Luggage d Fancy Leather Goods Lumber d Tinber Macaroni Manufacturing Machinery d Allied Products (Basic) Men' s Clothing 9861 -247- CODBS I17CLUDSD 111 TABLBS 16, 17, 18, 23 and 24, (continued) LABOR CODE SSRI3S (continued) Alphabetical Code Symbol 543 555 560 562 563 564 605 617 622 678 687 620 621 692 693 695 696 697 698 699 701 702 732 737 739 744 749 756 763 797 800 802 804 810 811 816 839 841 844 845 848 873 CODD 2U1.B Men T :S Neckwear Millinery Motor Eus Motor Vehicle Maintenance Motor Vehicle Retail Motor V e hicle Storage & Parking Paper d Pulp Pe t ro leum I nc us t ry Photographic & Photo finishing Rayon Silk Dye and Print Resturant Retail Food an" Grocery Retail J^welrj Retail Lumber Retail I.ieat Retail Rubber Tire d Battery Retail Solid Fuel Retail Tobacco detail Trade (Basic) ♦Booksellers ♦Retail Custom Millinery ♦Retail DvUg Scrap Iron (Basic) Set-Up Paper Box Mfg. Industry Shipbuilding d Repairing S ho e Rebui 1 di ng Silk Textile Soap and Glycerine Special Tool, Die d Mach. Shop. Ind. Textile Processing Toy d Playthings Transit Trucking Undergarment d IT e gligee Underwear d Allied Products Used Textile Bag Wheat PI our Milling Wholesale Auto Trade Wholesale Pood d Grocery "dholesale Fresh Fruit d Vegetable Wholesale Trade Wholesale Tobacco Trade J861 -248- C0D3S IHCLUUED I1 T TABLES IS, 17, 18, 23 and 24 LAUO?. CODZ SBPJ3S (continued) Alphabetical Code Symbol C0E5 IIAI.S ■ 882 Wood Heel Industry 889 Wood Textile 892 Wrecking & Salvage 712 Paibber Mfg. Industry * Supplemental codes with, separate labor provisions are designated "by an asterisk. 9861 -• • CASES REPORTED HANDLED 3Y SIEAEE AND LOCAL ADJUSOMENT 30A DS A-17 Alabama Arizona* — Arkansas -k California Los Angeles 67 San Francisco 31 Colorado c j Conne cticut 72 Delaware ?s Dist. of Columbia Ik Florida 52 Georgia IMS Iadho 1 — Illinois 70 Indiana 275* Iowa IS Kansas 5s Kentucky- 2S Louisiana 151 Maine ■ s Maryland \\ Massachusetts 31 Mi chigan Go Minnesota 5 Mississippi pp Missouri 57 Montana 23 Nebraska 33 New Hampshire 7 New Jersey New !!e::ico New York • Albany 3u.ffalo New York ?ity Nevada North Carolina North Dakota Ohio Oklahoma Oregon Pennsylvania Philadelphia Pitt sair ; ;h Rhode Island South Carolina South Dakota Tennessee Texas Dallas Houston Utah Vermont Virginia fashin ;ton 7est Virginia Wisconsin 110 20 6 52 3 16U S3 23 H51 37 57 91 6 15 ^7 1 6 1 21 2 11 6 Total (Estimate based on 103 cases by 11 local Boards 72 cases by State Board 13 local Boards not repo ed) 2,813 9S61 * e I 1 " 5 2 & n ass 'ill ill a - a jjt; 5fi 1 ■3X H ► o o o • I-a s S .65 t »S i 6. 51 £ S fa *» o a O O -* O O 250 v*\r4\AOO**40l"t'*00 OJO o o o »*"» w o o C N " SI 9 o o o o ~ °ts ONOft'*^OHrHOa'r*tOc\(o k> n* r— o| O -D ^D O ^ J»|i J* M> iH O KNHlfN^iH O O lT\ O <-* 0|H"l a ^ a - °[y CXJrHOJOOOOCVJI fe OOOOOOOOOr-lOOOOOOO Olr< :? « r-oc\iQOtQ --tLa- .H W KN r-< t— r4 *-i M TO 3 E "rA M> K\ <\j 3 i o • "5 W K\ r*\ cQ k\ • Sir 9 a a j s 1 3 3 1 £ 9861 w^ir*sO»ot\jwcuir. j* <\j 3 -< li 3 3 a t i 1 1 s i U 4* a i •- ■ 3 -251 A~32 1*4 STATISTICS ,'DATA 01. Eo. o: f Sock 3 CASES' PREZEB IlED TO .lefe- I017AL OZ? ICES eted :red Cases Referred Cases ' Cac-es Refer c '. pates Closed or .adjusted Pending Hi&iofi tr' Co' iTDlirll 5S oe Diy, Referred by Reg] Lonrl Office Hay 11. 1935. i 12/20/34 3/9/35 to 53 5 ii * 60 1/25/35 3/8/35 to 54 6 in 66s 2/19/35 to jSS 103 IV 117 12/19/3^ 2/16/35 to SI 36 . V 96 12/21/3U 3/12/35 to 76 20 VI 165 12/19/3 1 * 3/1/35 to, 124 4i VII gU 12/20/3U 3/16/35 to 70 l4 ■ VIII 56 12/21/3)1 3/9/35 to 51 5' - IX 98 - 12/20/34 3/15/35 to so - IS-- TOTAL lU03 1155 24g 9861 —