Approved Code No. 201 — Supplement No. 22 Registry No. 1631—1—07 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE JEWELRY (A Division of the Wholesaling or Distributing Trade) AS APPROVED ON AUGUST 21, 1931 UNIV. Of FL Li3. we do our part U.S. DEPOSITORY UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents, Washington, D.C. Price 5 cents This publication is for sale by the Superintendent of Documents, Government Printing Office, Washington, D.C., and by district offices of the Bureau of Foreign and Domestic Commerce. DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE Atlanta, Ga. : 504 Post Office Building. Birmingham, Ala. : 257 Federal Building. Boston, Mass. : 1801 Customhouse. Buffalo, N.Y. : Chamber of Commerce Building. Charleston, S.C. : Chamber of Commerce Building. Chicago, 111. : Suite 1706, 201 North Wells Street. Cleveland, Ohio : Chamber of Commerce. Dallas, Tex. : Chamber of Commerce Building. Detroit, Mich. : 801 First National Bank Building. Houston, Tex. : Chamber of Commerce Building. Indianapolis, Ind. : Chamber of Commerce Building. Jacksonville, Fla. : Chamber of Commerce Building. Kansas City, Mo. : 1028 Baltimore Avenue. Los Angeles, Calif. : 1163 South Broadway. Louisville, Ky. : 408 Federal Building. Memphis, Tenn. : 229 Federal Building. Minneapolis, Minn. : 213 Federal Building. New Orleans, La. : Room 225-A, Customhouse. New York, N.Y. : 734 Customhouse. Norfolk, Va. : 406 East Plume Street. Philadelphia, Pa. : 422 Commercial Trust Building. Pittsburgh, Pa. : Chamber of Commerce Building. Portland, Oreg. : 215 New Post Office Building. St. Louis, Mo. : 506 Olive Street. San Francisco, Calif. : 310 Customhouse. Seattle, Wash. : 809 Federal Office Building. Approved Code No. 201 — Supplement No. 22 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE JEWELRY TRADE As Approved on August 21, 1934 ORDER Approving Supplementary Code of Fair Competition for the Wholesale Jewelry Trade a division of the wholesaling or distributing trade An application having been duly made pursuant to and in full compliance with the provisions of Title I of the National Industrial Recovery Act, approved June 16, 1933, for approval of a Supple- mental Code of Fair Competition for the Wholesale Jewelry Trade to the Code of Fair Competition for the Wholesaling or Distributing Trade, and hearings having been duly held thereon and the annexed report on said Supplemental Code, containing findings with respect thereto, having been made and directed to the President: NOW, THEREFORE, on behalf of the President of the United States, I, Hugh S. Johnson, Administrator for Industrial Recovery, pursuant to authority vested in me by Executive Orders of the Presi- dent, including Executive Order No. 6543-A, dated December 30, 1933, and otherwise ; do hereby incorporate by reference said annexed report and do find that said Supplemental Code complies in all respects with the pertinent provisions and will promote the policy and purposes of said Title of said Act; and do hereby order that said Supplemental Code of Fair Competition be and it is hereby approved; subject, however, to the condition that the provisions of Article V, Section 1 (a), (b), (c) and Section 2 be deleted from said Code and the following provisions substituted therefor : " Section 1 (a). Destructive price cutting is an unfair method of competition and is forbidden. Any sale shall be deemed prima facie destructive price cutting if the net sales price shall be less than the seller's net invoice cost plus transportation charges to seller's ware- house. " Notwithstanding the provisions of this Section any wholesaler may sell any article of merchandise at a price as low as the price set by any competitor on merchandise which is identical or essentially the same, where such competitor's price does not violate this Sec- tion or where such competitor is not subject to the provisions of this Supplemental Code. 81592° 1044-94 84 (1) " Notwithstanding the provisions of this Section it shall not be deemed destructive price cutting for a wholesaler to sell the follow- ing merchandise at less than net invoice cost plus transportation charges, as provided above : obsolete goods, bona fide closeout mer- chandise, damaged merchandise, stocks being liquidated, merchan- dise sold for charitable purposes or to unemployment relief agencies, and such other merchandise as may be designated by the Divisional Code Authority. " (b) If the Administrator shall at any time find (1) that an emergency has arisen within the trade, adversely affecting small enterprises or wages or labor conditions, or tending toward mo- nopoly or other acute conditions which tend to defeat the purposes of the Act, and (2) that the finding of a basis for determining minimum price for all or any specified products sold by the trade is necessary for a limited period to correct the conditions constitut- ing such emergency and to effectuate the purposes of the Act, the Code Authority may cause an impartial agency to investigate costs and to recommend to the Administrator a basis for determining minimum prices of said products. Thereupon the Administrator may fix a basis for determining the minimum price of any of said products for a stated period. During such period no member of the trade shall sell such products at a net realized price below the minimum price determined in accordance with the base so fixed. From time to time the Code Authority may recommend review or reconsideration or the Administrator may cause any determination hereunder to be reviewed or reconsidered, and appropriate action taken." Hugh S. Johnson, Administrator for Industrial Recovery. Approval recommended : Robert L. Houston, Division Administrator. Washington, D.C., August 21, 1931^. REPORT TO THE PRESIDENT The President, The White House. Sir : This is a report of the Hearing on the Supplemental Code of Fair Competition of the Wholesale Jewelry Trade, conducted in the Cabinet Room of the Willard Hotel, on April 26, 1934. The Supple- mental Code, which is attached, was presented by duly qualified and authorized representatives of the Trade. THE TRADE Due to the considerable overlapping in this Trade with others, accurate statistics are not available. According to data submitted by the Trade, in 1929 there were approximately 1,666 concerns with aggregate annual sales of $355,085,847. The Trade employed about ] 2,648 persons. PROVISIONS OF THE CODE This Code contains no Supplemental Labor Provisions, the em- ployees being subject to the wage and hour provisions of the Code of Fair Competition for the Wholesaling or Distributing Trade. The provisions containing supplemental definitions are consid- ered inclusive and accurate. The administrative provisions establish a Divisional Code Au- thority which fairly represents all the different elements in the Trade. The Trade practices proposed are not considered to be objectionable. FINDINGS The Deputy Administrator in his final report to me on said Sup- plemental Code having found as herein set forth and on the basis of all the proceedings in this matter : I find that (a) Said Supplemental Code is well designed to promote the policies and purposes of Title I of the National Industrial Recovery Act, including removal of obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof, and will provide for the general welfare by promoting the organ- ization of trade for the purpose of cooperative action among trade groups, by inducing and maintaining united action of labor and management under adequate governmental sanction and supervision, by eliminating unfair competitive practices, by promoting the fullest possible use of the present productive capacity of industries, by avoiding undue restriction of production (except as may be tem- (3) porarily required), by increasing the consumption of industrial and agricultural products through increasing purchasing power, by re- ducing and relieving unemployment, by improving standards of labor, and by otherwise rehabilitating industry. (b) Said Trade normally employs not more than 50,000 employees and is not classified by me as a major industry. (c) The Supplemental Code as approved complies in all respects with the pertinent provisions of said Title of said Act, including without limitation Subsection (a) of Section 3, Subsection (a) of Section 7 and Subsection (b) of Section 10 thereof; and that the applicant associations are trade associations truly representative of the aforesaid Trade; and that said associations impose no inequitable restrictions on admission to membership therein. (d) The Supplemental Code is not designed to and will not permit monopolies or monopolistic practices. (e) The Supplemental Code is not designed to and will not elim- inate or oppress small enterprises and will not operate to discrim- inate against them. (f) Those engaged in other steps of the economic process have not been deprived of the right to be heard prior to the approval of this Supplemental Code. For these reasons the Supplemental Code has been approved. Respectfully, Hugh S. Johnson, A dministrator. August 21, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE WHOLESALE JEWELRY TRADE A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE Article I — Purposes To effectuate the policies of Title I of the National Industrial Recovery Act, this Supplemental Code is established as a Code of Fair Competition for the Wholesale Jewelry Trade pursuant to Article VI, Section 1 (c) of the General Code of Fair Competition for the Wholesaling or Distributing Trade, approved by the Presi- dent of the United States on January 12, 1934. All provisions of the said General Code which are not in conflict with the provisions of this Supplemental Code are hereby incorporated by reference in this Supplemental Code and made a part hereof. Such provisions of the General Code together with the supplementing provisions of this Supplemental Code are the standards of fair competition for and are binding upon every member of said Wholesale Jewelry Trade. Article II — Definitions Supplementing Article II of the General Code. Section 1. The terms " wholesaler " or "distributor ", as used herein, are defined to mean any individual, partnership, association, corporation or other form of enterprise or a definitely organized division thereof, definitely organized to render and rendering a gen- eral distribution service, which buys and maintains at his or its place of business a stock of jewelry, men's novelty jewelry, or watch- makers' and jewelers' supplies which it distributes and which through salesmen, advertising and/or sales promotion devices sells to retailers, and /or to institutional, commercial and/or industrial users for use in the conduct of their enterprises. Any person who sells to in- stitutional, commercial and/or industrial users for resale to the ulti- mate consumer, or in significant amounts to ultimate consumers, shall be considered a wholesaler only to the extent of that part of his business which fulfills the qualifications stated in the preceding sen- tence. It is the character of a concern's selling rather than the character of its buying which distinguishes it as a wholesaler. Section 2. The term " the Trade ", as used herein, is defined to mean the business in which the wholesaler or distributor as defined in this Supplemental Code is engaged. Section 3. The term " member of the Trade ", as used herein, is defined to mean any wholesaler or distributor engaged in the Trade. Section 4. The term " jewelry ", as used herein, is defined to mean diamonds and other precious and semi-precious stones, pearls, cul- (5) 6 tured pearls, synthetic stones and any imitations of any of these articles, articles for personal wear and adornment of any character whatsoever commonly and commercially known as " jewelry ", watches, clocks, silverware, goldware, precious metal ware of the platinum group, and wares plated with any of the precious metals. Section 5. The term " men's novelty jewelry ", as used herein, is defined to mean articles for the personal wear or adornment of men, made from base metals, roll-plated precious metals and/or gold of a fineness less than ten karat, such as : Collar pins, tie pins, cuff links, collar buttons, studs, and belt buckles. Section 6. The term " watchmakers' and jewelers' supplies and materials ", as used herein, is defined to mean any or all articles (except those articles which are commonly and commercially known as jewelry as enumerated and defined in Section 4 of this Article II) used, consumed, assembled, or resold by watchmakers, jewelers, op- tometrists or repairers and manufacturers for the purpose of repair- ing, replacing, assembling, manufacturing or reselling. Section 7. The term " memorandum ", as used herein, is defined to mean submitting merchandise to the customer for a specified time for approval or selection, the title to remain in the wholesaler or distributor until such selection has been reported to the wholesaler or distributor and the sale completed in accordance with the terms specified in the contract under which the goods were delivered. Section 8. The term " consignment ", as used herein, is defined to mean leaving merchandise with a customer for an indefinite period, the title to remain in the wholesaler or distributor until such time as the customer shall report to the wholesaler or distributor that he has sold the merchandise and that the sale has been completed in accordance with the terms specified in the contract under which the merchandise was delivered. Section 9. The term " guaranteed sale ", as used herein, is defined to mean a sale made with a guarantee by the wholesaler or distributor that if the merchandise sold to the customer is not resold by said customer, the latter shall have the right to return said merchandise, or any part thereof, to the wholesaler or distributor for cash, credit or exchange. Section 10. The term " General Code ", as used herein, is defined to mean the Code of Fair Competition for the Wholesaling or Distributing Trade. Section 11. The term " Supplemental Code ", as used herein, is defined to mean this Supplemental Code of Fair Competition for the Wholesale Jewelry Trade. Section 12. The term " General Code Authority ", as used herein, is defined to mean the General Code Authority authorized by Section 2 of Article VI of the General Code. Section 13. The term " Divisional Code Authority ", as used herein, is defined to mean the Divisional Code Authority for the Wholesale Jewelry Trade, a division of the Wholesaling or Dis- tributing Trade. Article III — Administration Supplementing Article VI of the General Code. Section 1. A Divisional Code Authority is hereby established which, in addition to the members appointed by the Administrator, shall be composed of twenty-one (21) members, three (3) of whom shall be representative of the Men's Novelty Jewelry Trade, and eighteen (18) of whom shall collectively be representative of the following branches of the Wholesale Jewelry Trade : clocks, watches, watchmakers' and jewelers' supplies, diamond jewelry, silverware, precious metals, jewelry and novelties, and gift ware. Such repre- sentatives shall be elected as hereinafter provided. Section 2. (a) The three (3) representatives on the Divisional Code Authority to be elected by the Men's Novelty Jewelry Trade shall be nominated by an Electoral Committee composed of officers of the National Wholesale Men's Novelty Jewelry Association. In selecting these nominees and in conducting the election the Elec- toral Committee shall provide for adequate representation of all members of the Men's Novelty Jewelry Trade including those wh3 are not members of the National Wholesale Men's Novelty Jewelry Association. (b) Within ten (10) days after the effective date of this Supple- mental Code, the Electoral Committee shall prepare ballots, on which shall be listed the three (3) nominees selected as provided in paragraph (a) of this Section 2. (c) The ballots prepared by the Electoral Committee shall con- tain, in addition to the names of the nominees selected by such Committee, three (3) blank spaces in which any member of the Men's Novelty Jewelry Trade may write his personal choices. Such ballots shall be mailed to every member of the Men's Novelty Jew- elry Trade ascertainable after diligent search by the Electoral Com- mittee. Each ballot shall have attached to it a statement of assent to and compliance with this Supplemental Code and the General Code. (d) Twenty (20) days after the mailing of these ballots the Elec- toral Committee shall publicly open and count the votes which it has received. Only those ballots shall be counted which have at- tached to them signed statements of assent to and compliance with this Supplemental Code and the General Code. The three candi- dates receiving the largest number of votes shall be declared elected. (e) The Electoral Committee shall certify to the Administrator the method of election of these three members and the results of such election. Section 3. (a) The election of the eighteen (18) members of the Divisional Code Authority representing the several branches of the Wholesale Jewelry Trade shall be conducted by an Electoral Board composed of the President of the National Wholesale Jewelers Asso- ciation, the President of the Silverware Wholesalers Association, and one other person selected by the above two. (b) This Electoral Board shall send out nominating ballots to every member of the Trade (except those primarily engaged in the distribution of men's novelty jewelry) discoverable by diligent search. Each such ballot shall have attached to it a letter of assent to and compliance with this Supplemental Code and the General Code. Each voter shall be entitled to eighteen (18) votes which he may distribute among several candidates or cast all for oiw candi- date, as he sees fit. 81592° 1044-94 34 2 8 (c) Twenty clays after these ballots have been mailed the Electoral Board shall publicly count those votes which it has received. Only those ballots shall be counted which have attached to them signed statements of assent to and compliance with this Supplemental Code and the General Code. The thirty-six (36) persons receiving the largest number of votes shall be declared to be candidates. (d) The Electoral Board shall then prepare ballots containing the names of these thirty-six candidates together with at least nine (9) blank spaces in which voters may write their personal choices. Such ballots shall be sent to all those members of the Trade to whom nominating ballots were originally sent. To each ballot shall be attached a statement of assent to and compliance with this Supple- mental Code and the General Code. (e) Each voter shall have eighteen (18) votes which he may distribute among several candidates or cast all for one candidate as he sees fit. (f) Twenty (20) days after these ballots have been mailed the Electoral Board shall publicly count those votes which it has received. No ballot shall be counted which is not accompanied by a signed statement of assent to and compliance with this Supplemental Code and the General Code, or by a statement that such statement of assent and compliance has previously been filed, which statement upon examination proves to be correct. The eighteen (18) candi- dates receiving the largest number of votes shall be declared to be elected. (g) The Electoral Board shall certify to the Administrator the method of election and the results thereof. Section 4. (a) Two (2) of the three (3) members representing the Men's Novelty Jewelry Trade on the Divisional Code Authority shall hold office for one (1) year and one (1) for two (2) years, the tenure of office of each to be decided by casting lots. (b) Nine (9) of the remaining eighteen (18) members of the Divisional Code Authority shall hold office for one (1) year and nine (9) for two (2) years, the tenure of office to be decided by casting lots. Section 5. The successor to any member of the Divisional Code Authority, whether to fill an unexpired term or a full new term, shall be nominated and elected in the same manner as provided in Sections 2 and 3 of this Article. Section 6. (a) The Divisional Code Authority shall elect from among its members an Executive Committee of five (5). The Ad- ministration member or members of the Divisional Code Authority shall function as members of the Executive Committee to the same extent as on the Divisional Code Authority. (b) The Executive Committee shall have such powers and duties as may be fixed by the Divisional Code Authority in its by-laws, provided that all the acts of this Committee shall be subject to the review and disapproval of the Divisional Code Authority. Section 7. The Divisional Code Authority shall have the fol- lowing duties and powers, in addition to those prescribed in the General Code, subject to such rules and regulations as may be pre- scribed by the Administrator: (a) To appoint a Trade Practice Committee, which shall meet with the Trade Practice Committees appointed under such other Codes as may be related to the Trade, except other Supplemental Codes to the General Code, for the purpose of formulating Fair Trade Practices to govern the relationships between production and distribution employers under this Supplemental Code and under such others, to the end that such Fair Trade Practices may be pro- posed to the Administrator as amendments to this Supplemental Code and such other Codes. (b) To appoint a Regional Committee in each of such regions as the Divisional Code Authority may establish to assist the Divisional Code Authority in administering this Supplemental Code and the General Code; provided, however, that nothing herein shall relieve the Divisional Code Authority of its responsibilities as such. (c) To organize, elect officers, hire employees, appoint agents, and perform such other acts as may be necessary for the proper adminis- tration of this Supplemental Code. (d) To adopt by-laws, rules and regulations for its procedure. (e) To use such trade associations and other agencies as it deems proper for the carrying out of any of its activities provided for herein; provided, however, that nothing herein shall relieve the Di- visional Code Authority of its duties or responsibilities under this Supplemental Code and that such trade associations and agencies shall at times be subject to and comply with the provisions hereof. (f) To obtain from members of the Trade such information and reports as are required for the administration of this Supplemental Code. In addition to information required to be submitted to the General Code Authority and to the Divisional Code Authority, mem- bers of the Trade subject to this Supplemental Code shall furnish such statistical information as the Administrator may deem neces- sary for the purposes recited in Section 3 (a) of the Act to such federal and state agencies as he may designate; provided that nothing in this Supplemental Code shall relieve any member of the Trade of any existing obligation to furnish reports to any governmental agency. No individual report shall be disclosed to any other mem- ber of the Trade or any other party except to such other govern- mental agencies as may be directed by the Administrator. (g) To appoint, within one month after the effective date of the Supplemental Code, a committee so constituted as to give producer, consumer, and governmental representation satisfactory to the Ad- ministrator, to make a study with a view to the establishment of classifications and standards of quality of staple products of the Trade, wherever such standards are deemed feasible. The findings and recommendations of this Committee shall be submitted to the Administrator within six (6) months of date of appointment and after such hearings and investigations as he may designate, and upon approval by him, shall be made a part of this Supplemental Code and be binding upon every member of the Trade. (h) To recommend to the Administrator any actions or measures deemed advisable, including further fair trade practice provisions to govern members of the Trade in their relations with each other or with other trades, measures for industrial planning and stabilization 10 of employment, and including modifications of this Supplemental Code which shall become effective as part hereof upon approval by the Administrator after such notice and hearing as he may specify. Section 8. Nothing contained in this Supplemental Code shall constitute the members of the Divisional Code Authority partners for any purpose nor shall any member or members of the Divisional Code Authority be liable in any manner to anyone for any act of any other member, officer, agent, or employee of the Divisional Code Authority. Nor shall any member of the Divisional Code Authority, exercising reasonable diligence in the conduct of his duties here- under, be liable to anyone for any act or omission to act, under this Supplemental Code, except for his own wilful malfeasance or non- feasance. Section 9. If the Administrator shall determine that any action of the Divisional Code Authority or any agency thereof may be unfair or unjust or contrary to the public interest, the Administrator may require that such action be suspended to afford an opportunity for investigation of the merits of such action and for further con- sideration by such Divisional Code Authority or agency, pending final action, which shall not be effective unless the Administrator approves or unless he shall fail to disapprove after thirty days' notice to him of intention to proceed with such action in its original or modified form. Section 10. (a,) It being found necessary in order to support the administration oi this Supplemental Code and to maintain the stand- ards of fair competition established hereunder and to effectuate the policy of the Act, the Divisional Code Authority is authorized : 1. To incur such reasonable obligations as are necessary and proper for the foregoing purposes, and to meet such obligations out of funds which may be raised as hereinafter provided and which shall be held in trust for the purposes of this Supplemental Code ; 2. To submit to the Administrator for his approval, subject to such notice and opportunity to be heard as he may deem necessary (1) an itemized budget of its estimated expenses for the foregoing purposes and (2) an equitable basis upon which the funds necessary to support such budget shall be contributed by members of the Trade ; 3. After such budget and basis of contribution have been approved by the Administrator, to determine and obtain equitable contribution as above set forth by all members of the Trade, and to that end, if necessary, to institute legal proceedings therefor in its own name. (b) Each member of the Trade shall pay his or its equitable con- tribution to the expenses of the maintenance of the Divisional Code Authority, determined as hereinabove provided, and subject to rules and regulations pertaining thereto issued by the Administrator. Only such members of the Trade complying with the Supplemental Code and contributing to the expenses of its administration as here- inabove provided, unless duly exempted from making such contri- butions, shall be entitled to participate in the selection of members of the Divisional Code Authority or to receive the benefits of any of its voluntary activities or to make use of any emblem or insignia of the National Recovery Administration. (c) The Divisional Code Authority shall neither incur nor pay any obligation in excess of the amount thereof as estimated in its 11 approved budget, except upon approval of the Administrator; and no subsequent budget shall contain any deficiency item for expendi- tures in excess of prior budget estimates except those which the Administrator shall have so approved. Article IV — Trade Practices Supplementing Article VII of the General Code. The following practices are hereby declared to be unfair methods of competition and are prohibited : SCHEDULE A (The following unfair trade practices are to apply to all whole- salers or distributors unless otherwise indicated in the Schedules B or C.) Section 1. To use any subterfuge to frustrate the spirit and intent of this Supplemental Code or the General Code. Section 2. To sell on terms of payment except the following : (a) Maximum cash discount shall be two per cent (2%) for pay- ment on or before the 15th day of the month following date of invoice. Accounts not paid within the discount period shall be payable net. (b) The maximum credit period shall not exceed sixty (60) days from the 15th day of the month following date of shipment. Ten days after the net due date, interest shall be charged at the rate of at least six per cent (6%) per annum or at the legal rate governing the contract. (c) Invoices for merchandise sold or shipped in the months of October, November and December shall become due and payable not later than January 15th of the following year, subject to a two per cent (2%) cash discount. (d) No discount shall be allowed other than the regular cash discount from the wholesaler's selling price, provided that this shall not prohibit the allowance of quantity or volume discounts or dis- counts allowed on the basis of services actually rendered without discrimination among customers of the same class. This subsection shall be construed to prohibit the practice of arriving at a whole- saler's net selling price by means of a series of discounts from a fictitious list price and shall not be construed as requiring or author- izing in any way the establishment of maintenance of any whole- saler's selling price. (e) The Divisional Code Authority, subject to review by the Ad- ministrator, may change terms of credit on specific commodities in order to enable wholesalers to meet the competition of primary sellers operating under manufacturers' Codes of Fair Competition. (f ) The period of time allowed after net due date shall not exceed three and one-half (3y 2 ) months or three and one-half (3V2) months average when installment notes are accepted. If the original notes are extended, interest shall be charged at not less than the rate of six per cent (6%) per annum or at the legal rate of such extension. Such extension shall not exceed ninety (90) days. (g) No cash discount shall be allowed on any note settlement, nor shall a non-interest-bearing note be accepted in payment of a ma- 12 tured obligation. Notes accepted after the net due date with a toler- ance of ten (10) days must bear interest from the net due date at a rate not less than six per cent (6%) per annum or at the legal rate governing the contract; provided that unsecured and non- interest-bearing notes may be accepted from insolvent debtors. Notes so accepted shall be immediately reported to the Divisional Code Authority. Section 3. To make allowances and/or donations to customers for advertising purposes. Nothing in this Section shall be construed to prohibit the payment by any member of the Trade of the expense of bona fide cooperative advertising actually incurred in the advertising of items trade-marked or branded by such member of the Trade, provided such payment be made in cash to an advertising medium or enterprise owned and operated independently of the parties in whose interest such expense is incurred. Section 4. To ship or deliver merchandise on a guaranteed sale basis, provided that the Divisional Code Authority may permit such shipments or deliveries under unusual circumstances justifying the same. Section 5. To ship or deliver merchandise on memorandum and authorize its retention by the retailer for longer than ten (10) days; provided, however, that the Divisional Code Authority may permit such shipments or deliveries under unusual circumstances justifying the same. Section 6. To ship or deliver any merchandise on consignment, provided that the Divisional Code Authority may permit such ship- ments or deliveries under unusual circumstances justifying the same. Section 7. To make memorandum shipments unless transportation charges both ways shall be paid by the firm requesting such snipment. Section 8. To allow any cash discounts to a retailer and/or insti- tutional, commercial and/or industrial user on merchandise sold for his or its account to the consumer by the wholesaler. Section 9. To prepay transportation charges except where de- livery is by messenger or local package delivery service within a twenty-five mile radius of the wholesaler's or distributor's place of business. Section 10. To make allowance for transportation charges on shipments of merchandise, except that an allowance for transporta- tion charges may be made on items which are ordinarily stocked and available but which were temporarily out of stock at the time of the shipment of the order. Section 11. To use the power of appointment of Watch Inspectors by any member of the Trade who is a General Watch Inspector for railroads in order to force retailers to buy goods from him, and to furnish railroad passes by such a General Watch Inspector in order to influence retailers to buy merchandise from him. Section 12. To accept for credit or exchange merchandise when shipped in accordance with customer's orders unless — (a) Such merchandise be obviously defective in material or manu- facture and be returned for credit within ten (10) days after receipt of the same, or (b) Such merchandise be latently defective and be returned within such time as a reasonably prudent retailer in the exercise of ordinary care would discover the defect, or 13 (c) Such merchandise be guaranteed by the manufacturer, in which case the wholesaler may accept such merchandise in accord- ance with the terms of the guarantee and during the lifetime of the guarantee, or (d) Such merchandise be shipped as a result of an error in order- ing or shipping and be returned for credit within ten (10) days after receipt of the same, or (e) Such credit be made on account of insolvency of the customer and be reported to the Divisional Code Authority. Section 13. To sell second-hand or rebuilt watches, or watches containing second-hand or rebuilt movements, unless at the time of sale and delivery there shall be affixed to each such watch a tag which states that the watch is second-hand rebuilt. Section 14. To give or offer to give directly or indirectly any free watch material, except that such watch material may be supplied without charge for purposes of replacing demonstrably defective material previously sold to the recipient. Section 15. To make and send any invoice which does not include a clear and complete statement of the terms and conditions upon which the transaction was based. Section 16. To sell or offer for sale any watch case either as a separate entity or fitted with a movement as a complete watch unless the said watch case shall have stamped indelibly and legibly in some visible place on its outside surface the manufacturer's name or duly registered trade mark accompanied by a quality mark equally in- delibly and legible, in accordance with the standards and conditions established with the standards and conditions established in Article VIII of the Code of Fair Competition for the Watch Case Manu- facturing Industry as approved by the President on December 23rd, 1933 ; provided, however, that this provision shall not apply to watch cases completely manufactured prior to the effective date of this Supplemental Code and for the possession and ownership of which the distributor shall submit to the Divisional Code Authority, before offering the same for sale, an executed bill of sale dated prior to July 1, 1934, or such reasonable extension beyond said date as may be granted by the Divisional Code Authority upon application therefor. Section 17. For a member of the Trade to make or permit his agents or employees to make or publish any statement, oral or writ- ten, which falsely disparages in any material particular any com- petitors or their goods, prices, values, credit terms, policies or services. schedule b (The following unfair trade practices are to apply exclusively to the sale by members of the Trade of watchmakers' and jewelers' materials, tools, supplies and equipment.) Section 18. To allow trade-ins for more than a fair market value of the merchandise taken in trade. Section 19. To allow more favorable terms of credit discounts or datings on sales of coupon books than are specified in this Article for the sale of the merchandise represented by the coupons. Section 20. To ship or deliver merchandise to retailers on memo- randum when its retention for longer than ten (10) days by the 14 retailer is authorized. Merchandise of this character kept beyond the specified time shall be considered as sold. The Divisional Code Authority may permit such shipments or deliveries under unusual circumstances justifying the same. Section 21. To guarantee the sale by any retailer of any merchan- dise, provided that the Divisional Code Authority may permit such guarantee under unusual circumstances justifying the same. SCHEDULE C (None of the trade practice rules in Schedule A of this Article except Sections 1, 4, and 6 shall apply to the sale by members of the Trade of men's novelty jewelry. The following unfair trade practices shall apply exclusively to the sale by members of the Trade of men's novelty jewelry.) Section 22. To accept for credit or exchange merchandise when shipped in accordance with customers' orders unless: (a) Such merchandise be obviously defective in material or manu- facture and be returned for credit within ten (10) days after receipt of the same, or (b) Such merchandise be latently defective and be returned within such time as a reasonably prudent retailer in the exercise of ordinary care would discover the defect, or (c) Such merchandise be guaranteed by the manufacturer, in which case the wholesaler may accept such merchandise in accordance with the terms of the guarantee and during the lifetime of the guarantee, or (d) Such merchandise be shipped as a result of an error in order- ing or shipping and be returned for credit ten (10) days after receipt of the same. (e) A wholesaler may, however, accept the return of not more than ten per cent (10%) of the merchandise sold by him to a customer during the four (4) months previous to the time the returned mer- chandise is received by the wholesaler. Said returned merchandise so accepted by the wholesaler shall be credited to the customer to the extent of not more than eighty per cent (80%) of the wholesaler's current selling price for said merchandise. The wholesaler shall thereafter make a triplicate record of the transaction; one copy of which shall be sent to the customer, one copy shall be sent to the Divisional Code Authority, and one copy shall be kept by the wholesaler for his own record. The Divisional Code Authority may permit return privileges more liberal to the customer than those established in Subsection (e) where special circumstances justify the same. (f) A member of the Trade may accept in lieu of payment the return for credit of merchandise sold by said member to a customer in the case of insolvency or financial embarrassment of said cus- tomer, provided that the acceptance of this returned merchandise is reported immediately to the Divisional Code Authority. Section 23. To give discounts to purchasers more favorable than three per cent (3%), ten (10 ) days E.O.M. or two per cent (2%), ten (10) days, plus sixty (60) days extra dating, except that ship- ments made during the period from September 1st to November 1st, inclusive, may be made on the following terms: 15 Three per cent (3%), ten (10) days E.O.M., plus thirty (30) days extra dating, or two per cent (2%), ten (10) days, plus ninety (90) days extra dating. Merchandise shipped after the 25th of any month may be dated as of the first of the month immediately following. Section 24. To deliver to a purchaser any merchandise in excess of the merchandise charged. Section 25. To give display materials of a value in excess of ten per cent (10%) of the amount of the sale with which it is given. Section 26. To make any allowance to a purchaser for advertis- ing purposes. Nothing in this Section shall be construed to pro- hibit the payment by any member of the Trade of the expense of bona fide cooperative advertising actually incurred in the advertis- ing of items trademarked or branded by the member of the Trade, provided such pa} T ment be made in cash to an advertising medium or enterprise owned and operated independently of the parties in whose interest such expense is incurred. Section 27. To ship or deliver merchandise to retailers on memor- andum when its retention for longer than ten (10) days by the re- tailer is authorized. Merchandise of this character kept beyond the specified time shall be considered as sold. The Divisional Code Authority may permit such shipments or deliveries under unusual circumstances justifying the same. Section 28. The Divisional Code Authority with the consent of the Administrator may change or eliminate any of the provisions of this Supplemental Code for the purposes of placing the members of this Trade on a fair competitive basis with primary sellers or members of other wholesale or distributive trades. Article V — Permissive Trade Practices Supplementing Article VII of the General Code. Section 1. (a) No goods shall be sold or offered for sale at less than the cost to the seller. Such cost shall be defined to mean the actual net invoiced purchase price or market price, whichever is lower, plus transportation charges to seller's warehouse plus actual wages involved in the delivery of goods by the seller when deter- mined in accordance with an accounting formula developed by an impartial agency chosen with the advice of the Administrator and published from time to time by the Divisional Code Authority after approval by the Administrator. (b) Notwithstanding the provisions of this Section, any whole- saler may sell any article of merchandise at a price as low as the price set by any competitor on merchandise which is identical or essentially the same, and where such competitor's price does not violate this Section or where such competitor is not subject to the provisions of this Supplemental Code. (c) Notwithstanding the foregoing provisions of this Section a wholesaler may sell the following merchandise at less than the prices established under the said provisions : obsolete goods, bona fide close- out merchandise, damaged merchandise, stocks being liquidated, merchandise sold for charitable purposes or to unemployment relief 18 agencies, and such other merchandise as the Divisional Code Au- thority may designate. 1 Section 2. With the advice and consent of the Administrator, the Divisional Code Authority may at any time determine that an open price plan of selling such commodity or commodities of the Trade as it shall specify shall be put into effect. Notice of such determina- tion and the details of such plan shall be announced to all known members of the Trade who distribute such commodities. Article VI — Power of President to Modify This Supplemental Code and all the provisions thereof are ex- pressly made subject to the right of the President in accordance with the provisions of Sub-section (b) of Section 10 of the Act, from time to time to cancel or modify any order, approval, license, rule or regulations issued under Title I of said Act. Article VII — Effective Date This Supplemental Code shall become effective on the tenth day after its approval by the Administrator. Approved Code No. 201— Supplement No. 22. Registry No. 1631-1-7. 1 Amended — See paragraph 3 of order approving this Code. o UNIVERSITY OF FLORIDA 3 1262 08728 5424