THE BASIC CODE Caominist;^/1TIV£ .ORDER NO.XrGl) my- ^ Lili,' f Iff 1; ^^^^^^^^^^B|n\fw IS-' ■ ■ Hk.w.M.ND.:ss ■ ' ' i * t , '^^^^^^^^^^^^^^^H mm:. ■ 1 ' ' ■ s , '; , -, ■ , ■ ' - * i^^^^^^^^^^l ' i . ' iHv" Business Library Class BOOK- BOC. KOOM OFFICE OF NATIONAL RECOVERY ADMINISTRATION DIVISION OF REVIEW WORK MATERIALS No. 33 THE BASIC CODE (ADMINISTRATIVE ORDER NO. X-61) Prepared "by W. H. EDMONDS AND W. W. SWIFT February, 1936 FOHEWORD This study of "The Sasic Code (Administrative Order No. X-6l)" was prepared by Llessrs. W. H. Edmonds and ¥. W. Swift of the NRA. Organization Studies Section, Mr. William W. Bardsley in charge. The study presents a dependable and fairly complete picture of the formulation and results of the plan that v;as desifgned to complete the code making phase of ITEA. activities. The part occupied "by this study in the entire examination of ITRA. administrative procedure may he seen "by consultizig "'i' orl: ¥g/:-'::r ials ITo, 17, Tentative Outlines and S">)rimaries ov" Si-i'.f.^5 9630 MAGAZINES BOUND By VV. P. Aj MAR ^- ^ 1940 TA5LE CF CONTENTS INTRODUCTION 1 CHAPTER I N.R. A. AS A CODE-MAKING "ORGAinZATION 2 I . THE AUTHORITY FOR CODE- MAKING- IN THE ACT 2 II . BSGINIH N G OF CODE MAKING AI^ THE P.R.A. 3 CHAPTER II FACTORS LEADING TO A CHANGE OF POLICY 5 I. CODE MAKING PROBLEMS 5 II. EARLY PROBLEMS OF ADMINISTRATION 6 CHAPTER III ■ ■ • THE PLAN FOR THE COIviPLETICN OF CODE MAiaNG 9 I . E ARLY DEVEL CP iiENTS IN THE FORI.iULATION OF A PLAI\r 9 1 1 . THE PARTICTF A^ICN 0'^ TI3; .AI^VISORY BOA.RDS A ND THE ADVISORY CCUITCIL IN THE DEVELOFI.'IENT OF THE PLAN 12 III. FINAL STAGES IN FCRI.iULATICN OF PLAI\r 13 CHAPTER IV ■ • • FEATURES OF PLAIT FOR COliPLETION OF CODE MAKING 16 I. LABOR PROVISIONS _.. .^ 16 II. TRADE PRACTICE PROVISIONS 16 III. ADMINISTRATION THROUGH GEI-JERAL CODE AUTHORITY 16 CHAPTER V OPERATIC^N OF PLAN 17 I. PROCEDTJRE FOR HANDLING PLA N 17 II. INDUSTRIES EXCEPTED FROM PLAJ^T 18 III. DISCUSSION OF RESTJLTS OBTAINED 18 9630 -i- iiPPSlTDIX I. Pa,Te STATEJ.G1IT OF SCOPE OF ST'JDY, IIITHGD OF TKEATl HIT , AITO CilESTICNS KEEDIi-TG FLETiffiH RESEAilCH 20 APPZhDIX II. JffiMIia STRATI VE CRUSE NO. X-61, ,7ITIi BASIC CODE Ai\[i>lEXED AS ZXIiI3lT "A" 21 APPZIIIIX III. ADMIIIISTRATIVE ORDE?. 'JO, X-62, SUPPLEMENT I IIG ADMIN- ISTRATI\^ L.RDER NO. X-31 AIO BASIC CODE 26 AP?SiZ)IX lY. ADMINISTRATIVE ORDER NO. X-o3, PESSCRILIITG R'JIES .hI-tD REOl^LATIoNS TO SUPPLEMENT ADI>;r.TISTI.ATIVE ORDER NO, X-d1 ALU) BASIC CODE 30 APPZl^IX V. OFFICE I.iEl;iORAl.n)UlI NO. 251, PROVIDING PROCEDURE FOR HAIDLING CC.IvZ^LETICN 05^ CODE l''JiXli."G 31 APPENDIX VI. ADMINISTRATIVE 0FJ)SR NO. X-84, PROVIDING FOR SELEC- TION OF MEIvSERS OF GEIIERAL NRA CODE AJTHCRITY 33 APPENDIX VII. ADI.IINI STRATI VE 0FJ3ER NO. X-39, SUPPLEI.3ENTING ADMN- ISTRATIVE ORDER ITO. X-61 ZY Ci FIRI.'G A BASIC CODE TO GROCERY IvlANUFACTURIl.'G INDUSTRIES 34- APPEIIDIX VIII. l/IEMORAlDUI-i OF JUNE 9, 1904, FROM N.R..I, ADVISORY CCU^ICIL TO THE ADUINISTRATOR 47 APPENDIX IX. r^EPCRT OP COLUvilTTEE ON COMPLETION OF CODE llAKING 49 APPENDIX X. TENTATIVE CUTLIi^ ' 51 9630 -J.1- SUT.1MAR Y OF CONTENTS, FIM)IHG5 AND RECOmtEiroAIIONS The title of this- 'study conveys to- those unfamiliar wilrh NRA activities very little information as %o its true nature. For these, it should be said, in explanation, tha.t Administrative Order No, X-61 was an order issued imder date of July 10, 1934 by General Hugh S, Johnson, Administrator for Indus- trial Recovery prescribing a plan for the completion of code making applica- ble to all industries then uncodified and presenting in connection there- with as, Exhibit A, a prescribed form designated as "The Basic Code", The report on this study contains in narrative form, chronologically treated, an historical review of the beginnings of code making, the authority therefor, the factors which resulted in a change of policy culminating in the formulation of a plan to complete the codification process, the stages through which this plan traveled to adoption, its operation, and the results obtained. The Introduction and Chapters I and II have to do with the early days of NRA, the authority for codes as contained in the National Industrial Recovery Act, the problems which arose from code malcing and administration, and the factors which led up to the adoption of a plan to wind up the codification process. Chapter III outlines in some detail, the various stages in the develop- ment and formulation of the plan while Chapter IV discusses various features of the plan and the basic code prescribed in connection therevvith. Chapter V deals with the operation of the plan, reviews the procedure for handling and utilizing it, and touches upon the results obtained and Chapter VI contains certain findings and conclusions which have been reaced as the res^alt of the stvidy. Summarizing the findings set forth in the report on the above study, the findings are: 1, The basic code was unsuccessfiJ. in accomplishing its plan for com- pletion of code making, 2, Its timing was ill-advised and should have been initiated much earlier in the code-writing process, 3, A thorough and comprehensive classification of industry for admin- istrative purposes should have been made in connection with the formulation of the basic code. It seems desirable, from the viewpoint of administrative preparedness, to stress the importance of endeavoring to prepare in advance an accurate classification before putting such a plan into operation. In addition to these findings the following question is raised: In the event any new legislation is enacted which contemplates the formulation of codes or some sililar documents for the regulation of industry, showed a plan for the grouping of the smaller industries under codes with identical provisions, such as was contemplated by Administrative Order No,X-61 X-61 9630 -iii- te forraulatod in the errly st.igcs of the adninistration of the new law? The issue IS ^7hcther such a pl.an, -,im-d in this manner, v/ould serve as an effective complement to .the codification of the major industries and reduce the number of individual codes to an appreciable minimum. > 9630 -IV- A THE BASIC CODE (iODMINISTRivTIVE OKDER NO, X-6l) IITTRODUCTION On July 10, 1934, Administrative Oraer No. X-61 , entitled "Plaii for the Completion of Code Making", wp.s issued over the signature of G-enersJ. Hugh S. Johnson, Administrator for Industrial Recovery. This order is attached a.s appendix "II", The scope of this ppper is defined and limited hy the statement of adDiinistrative policy contained in the above order, and supplemented hy various other orders and memoranda which will "be treated subsequently. Essential, of course, to a full understanding of the policy itself, is a knov/ledge of the background against which it ceme into being, and the extent to \7hich it accomplished the pvirposes for which it '-'as conceived. Accordingly, therefore, while endeavoring always to restrict this study to the boundaries outlined by the substance of Administrative Order X-61, it will be necessary, in order to attain the proper Derspeetive, to indicate the sources of authority for the -oolicy; to review earlier methods and "orocedures employed by NRA in coaifying industry; to investigate the factors leading to a change of -oolicy, and the circi;jnstances under which this plan was enunciated;- to trace the various stages in the growth and development of this policy prior to promulgation, and the extent of participa- tion in its development by the various boards and divisions of IIRA; to survey the general NEIA situation at the time of "oromulgation; to indicate the manlier in which the plan was "out into OToeration and the extent to which it operated; to examine the effects of the policy upon industry, upon the code-malcing processes of FHA, and unon the NHA organiza.tion, and to indicate the extent of its effectiveness in accomplishing its stated objectives; to a:ppraise and evalua.te the -plan in general as a phase of ERA administra- tive policy. 9630 *-2- CHAPTER I. IJRA as a CODS MJ^CING OR&AIJIZATIGN I, The Authority for Code Malcing in the Act . An expinination of the sources in the Act from which IJRA derived its authority to codify American industry discloses immediately the "broad grant of discretionary pov^er allowed the President, in effectuating the general policies en\amerated in Section 1. Various alternative methods were enacted for the carrying out of these general policies, A "brief review of the various methods prescribed, and the extent to r^hich each was used, is a necessary "background for an \aiider standing of developments which later led to the consideration of a Basic Code, Section 3(a) of the Act provides for voluitary codes cf fair competition, and prescri'bed the "basic procedure for the formulation of codes "by "one or more trade or industrial associations or groups," and approval "by the President. The President was authorized to ap^Drove codes only in the 'event that he found (1) that the association or groups sponsoring the codes imposed no inequitable restrictions on admission to membership among the groups represented; (2) that the applicants were truly representative of their respective trades or indus- tries; (3) that such proposed codes were not designed to promote monopolies or to eliminate or oppress small enterprises and would not operate to dis- criminate against the latter; and (4) that tne proposed codes wovild, in his judgment tend to effectuate the policy of the Act, liThen the legislation was being formulated, in June, 1933, it was impossibl to forecast- the degree to which industry would respond by submitting voluntary codes, p.nd so, provision was made in Section 3(d) to the effect that if in- dustry failed to tal:e the initiative in code making, the President might do so. The President' was therein authorized, upon his o^.ti motion, or xqoon complaint that abuses inimical to the public interest ,?jid contrary to the policy of the Act v/ere prevalent in every trade or industry/ or subdivision thereof, for which a code had not already been approved, to prescribe and approve a code for that trade or industry or subdivision, Such a code would be approved by the Presi- dent only .-^fter such notice and hearing as he might specify, and would h\ve the sr^me effect as a vol\antary code approved under Section 3(a). F-'orther powers of imposition were to be fo-und in Section 4(b), by which the President was authorized to license business enterprises in order to make effective a code of fair competition or an agreement or otherwise to effectuate the policy of Title I; and in Section 7(c), wherein the President was granted the power to prescribe such limited codes of fair competition covering hours, wages, and other conditions of employment as he might find necessary to effectuate the policy of Title I, These powers are mentioned merely for the purpose of completing the picture. They have no direct bearing upon events leading to the subject of this study . A new concept, the idea of agreements for the effectuation of the policies of the Act, is introduced in Section 4(a). "Under this provision, the Presi- dent was authorized to enter into agreements with, and approve voluntar;/' agreements among persons engaged in a trade or industry, labor organization, ^nd trade or industrial organization, if in his judgment such agreements would ( 9 c 30 -3- aid in effectuating the purposes of the law. It was under the authority of this section that the President promulgated, the President's ReemplojTnent Agreenent (PRA) , asking employers tx)> cooperate hy aj^reeing with him to maintain certain conditions, particularly re,o:arding wages and hours of env- ployr.ient, II. The Be'-innin,-^ of Code Making and t he F BA» Prom among the various possible lines of action outlined above, the Presi6.ent selected the powers conferred upon him in Section 3-a, to negotiate vol-ontary codes, as the basis for carrj'-ing out the purposes of the Act, and it was upon the exercise of the fujnctions therein granted that the early history of KRA was moulded. This course was made possible by the wide*-Epread and enthusiastic application for voluntary codes on the part of industry, Uliile these negotiations were proceeding, hovrever, on a basis that V7a,s ostensibly, and in fact, voluntary'-, there remained in the back- ground the "oo'.Ters of the President, above mentioned, to impose codes should conditions require such course, Uith the submission of the earliest applications for voluntary codes, NRA was confronted with the ii.T-.iediate problem of inter'oreting the Act, formulating policies both of a substantive and administrative nature, and devising varying ■orocedures and or.'^:anization set-uos as the changing needs made necessary. This assumption of res"ionsibility of interr)retation and policy-mo,king by NKA was the inevitable concomitant of the indef initeness of the objectives sought by the Act, It has been noted above that the President was required under Section 3(a) of the Act to maice certain findings of a generally negative nature as a prerequisite to his a'orjroval of a voluntary code. Positive guides to policy, however, were few. In various sections of the Act it was indicated that codes should include (l) provisions covering minimum wages, maximum hours, and "other conditions of employment"; (s) measures to prevent "destriictive wage cutting and price cutting"; (3) fair trade practice provisions, and (4) provisions protecting certain labor rights of collective bargaining. Thus, on the basis of the sources of authority previously noted., and with the guic-ance of the general policies enumerated above, NEA set out, in effect with a carte blanche within the limits of the Act, on its program to bring about ind.us trial recovery. In Biilletin No, 2 issued on June 17, 1953, "entitled, "Basic Codes of Pair Conpetition", "MA outlined the nrocedure to be observed in the formula^ tion and. approval of voluntary codes. It was stated that so far as practical the major industries \70uld have the first attention of the Administrator, Industry was reminded that: "It is not- the function of the National Recovery Administration to prescrilse what shall be in the codes to be subnitted '^oy associations or groups. The initiative in all such matters is expected, to come from within the industry itself," And- so the work of codification was begun, and every effort was made to e^roedite the process, and have at least the m.ajor industries covered by codes within a few weeks. In spite of every endeavor, however, and altho industry was responsive and made many applications for codes, the progress 9630 of ne.;otic.tions v/r.s discoure singly slo"'. The rT)-.roval of Code No, 1 for the Cotton Te;;tile Industry, reouired a full :nonth for neirotiation; and out of the livnc'.i'ec s -/ending, only eight had been an-iroved at the end of the second month. It ■ ■; s feared that \mless a s-oeecier leans cou'^ d "be found for co.rr^'-. ing o.\ t>x urogram, a rec.ction nirht set in to offset the stinulus ''hich had pennor.tec". the industrial structure d-.ring the early summer. At t."i3 time July 20, 1933, the President's Reera^olo-nnent Agreenent (P-l/"i) r.s 3(jrxeived, and the greatest -"Deace-tirae ca'ri?ign in the history/- of the JO-', err.. :ent v.-as launched, a-i-iealing to the e-iotions, the patriotisn and the prejudices of em-nloyers, eroloyees, and cons'oraers alike, to orin^; sv.ccess to the .ret drive to reduce xuie : .lo^.'i'-'.ent , increase -'a,-^es, and soread purcl.i£:--si.^j -^ouer. It v'as a si^Tole -plan, corceived in necessity, founded on the ;.:)0--2rs grcjjted the Presicsnt in Section 4(a) to enter into .^.nd cp-^rove voluiitar;- a .reenents, and cprriec out -ith a driving ener-^v. 3y uti? izing the facilities of the United States Post Office syster., practicr.lly all employers in the country '-fere contacted "ithin three or four days, r:nC. over 2,300,000 emoloyers sined agreements 'vith the President, oy -.vhich the • or':ing conditions of soine 14-1/2 million em'oloyees rere tera-oorarily cont-i'olled. Unlike the codes of fair competition, no -nenrlti'-s nere attached to violations of these agreements, Puhlic o inion 'ts expected to be the -oers-LiD.sivc force for cortjliance, and the Blue Za;:le nas invented as the symbol by -.vhich coo-oerating emjlo.j'-ers should be 'cnO'Tn, In so:.:e sections the Blue Eagle '-"as more effective than in others,"' o-'j.t ever:* he-^e its iinfluence -.as felt. Public o li -.ion was stron-^ly behind the Presi<..ent, and fe^- were the era doners v;ho did not display the Blue Eagle, In this "•a^-, v;ith public 0)inion forcing industry into the PIIA., it -as to the i-nterest of en lo"ers to secure ser)arate codes by coooerative effort, and thus trJ/e advantage of the trade practice and price protection irovi- sions be in;: offered by JIIiA, Thus, -ith the majoritj"- of industry already connitted to the hour rnd wage revisions of the PF_A, i-ith such -lodif ications end substitutions as were approved, KHA was no-7 ready to rooeed r/ith the -ork of codification, and every facility of the organization was henceforth directed to that purpose. 7rom ti.ae to time new substantive policies '-^ere forrn-ulated cjid announced, on the basis of cujnulative experience; and rules and regulations, administrative devices and procedures were established with a view to secur- ing and .:e,intaining an orderly and exneditious process of code form"ulation. These -ere prescribed either by executive order of the President or by direct action of the Administrator, NRA was at all times a living organization, grordng, developing, changing, to r.eet the ever increasing demands of the "ork •. hich it ha,d vjiderta'-:en. The story of the first vee.r of code-nal'ing under NRA, and the problems "'ith \.'hich the organization ■■-.s confronted, and which it tried in vr.rious ways to -.eet, is the story of the factors leading to the administrative -Dolicy with vrhich this ^)aper is concerned. 9630 CHAPTER II. FACTORS LEADIIIG TO A CH.INGE OF PO LICY. The growing belief among NRA' off icials in the desirability of a change of code-making policy, resulting finally in the issuance of Administrative Order X-61, was a cujnulative impression lasting over several months. The considerations upon v/hich this conviction was "based fall generally into two classes, - code-making prohlems, and early prolDlens of administration. It would perhaps "be well to treat these subjects separately, insofar as they may be segregated. I , Co de-Making Problems . On June 21, 1S34, General Johnson, looking back on one year of code- making activity, on the part of IIEA, said, in part:!/ "Cnce la.unched, there was no halting the code-mrking process. It had to be carried through so that every industry in the country and its workers might as quickly as possible have an even break of the recovery program's benefit." Thus did General Johnson describe the situation which had arisen with respect to code-making during a year of NBA. Prom the beginning, lIRk had been confronted with an avalanche of codes of all sizes a,nd all degrees of importance, Diiring the fall Tid winter of 1933, codes had been expedited to approval with relative speed. Negotiations were carried on untiringly by an enthusiastic staff, without thought of time or energy expended. Policies, during that period, were in an eo.rly stage of development, and the progress of codes was not directed to any great extent by ;^recBdent or by policy determinations, except for the general policies outlined in the Act, The trade practice provisions which found their wa.y into codes represent- ed, except for such generally accepted prohibitions as commercial bribery, defamation of competitors, etc, the final outcome of negotiations between the MBA and the representatives of the industry concerned. Likewise, the labor provisions, as they appeared in the codes, were usually the result of long, and sometimes bitter argument and controversy. Provisions were sub- mitted, and were approved, covering almost the entire field of industrial operations. Voluntary agreevaents of such broad scope, dependent first upon agreement between competitive groups within the industry itself, and second- ly upon agreement between representatives of the industry, tlic gcr.cro„l puolic, and the V3A, v.'Qre necessaril-^^ arrived at only cf ter o. long scries of co:'i'(-T- oncec^ heari:igs, iiivostig-.tions , --"hI routi-e prococaire. As the months passed, and the great majority of industry and labor were brought undei" codes, it had been expected, or at least hoped, that there T] mA Release No. 5889. ' ' ' 9530 would be ,^ marked redaction in the amount of tir.e and enerf^ spend in for- mulating new codes. The earlier a" orov9d codes had been in effect and operation for sometime, and the faciliti-es of the staff were needed for the vrork of administration. The hoped-for relaxation in the pressure from industrial groups for the formulation of new codes, or supolemental codes, did not seem to occur. It is true that d^oring the spring of 1934, the volume of codes decreased, hut the v.'ork of formulating each individual code 'vas becoming more involved and more difficult, and the codes were proposed by smaller and smaller segments of industry. Yet, in formulating codes for even the smallest groups, the same controversies and arguments arose as to permissable provisions, the same procedure as to hearings, conferences, et cetera, had to be followed, and due consideration hnd to be given to the opinions of the several Advisory Boards and Divisions of NEA., representing every conflicting interest in the economic picture. Frequently months were spent in trying to write even a very small code in a maniier accept'vble to all parties in interest. The intensely h-umaji and sometimes dramatic job of codifying American industry was inevitably drawing to a close. The long hearings and con- ferences lasting far into the night were becoming fewer; the bickering, compromising, and bargaining of the code-malcing period was occupying a smaller part in the staff's activities, but negotiations were becoming longer drawn out, and differences less speedily resolved. The fire and the urge of the early months were dying out, and the Recovery Administration wa.s be- coming more deliberate in its actions, more careful of its commitments, iraA was now ready to enter upon a more 'orosaic, but perhaps more impor- tant, phase of its activity, - that of administering and enforcing the codes it had approved, and observing the effects and results of its earlier work. For the first tine in history, industry was operating under rules of ethics - codes of fair competition; it was EISA's new job to administer and aid in securing compliaiice with these rules, and, in some ca.ses, on the basis of experience, to cliange them. Not only, then, was IIEA f^ced vrith the law of diminishing returns as regards continued activity in the realm of code-making, but also there was developing a very real need for the organization to direct its attention to the subject of code administration. The problem of devising a suitable plan for bringing the work of code formulation to an end, was occupying the minds of the highest officials of IIEA. The development of such a plan will be traced in Section III, of this study, II. Early Problems of Administration Early experience in the administration of approved codes indicated a n-umber of ways in which all was not r^ell ^-ith the policies previously pursued in code-making. To as great an extent as possible, it was sought to co-^-rect in the new policy the mistakes and shortcomings which administrative experience had pointed out in the old. An unexpected development, with attendant 'Onexpected T)roblems, ha.d been presented by the hundreds of codes presented to IIRA for approval, - 9630 -7- codes of all sizes and degrees of importance, codes with overlapping def- initions, codes intended to cover only a small portion of a larger industry, vertical codes cutting through the distribution functions, codes submitted "by rival associations to cover the same industrial' group, et cetera* At the outset, it had "been the -ilan to codify the larger, "basic industries. But the code idea had "become a fever, in which the earlier, sounder conception of NPJl "bade fair to "be lost from view; and NRA. was not pi^epared for the work that was thus thrust upon the organization. Coincident with the unforseen deluge of smaller codes,* came the gigantic and equally unforseen pro"blem of unforseen problem of industrial classifica- tion. Of primary importance was the necessity for insuring uniformity or similarity cf code provisions, both labor and trade practice; for closely related or directly competing divisions of industries or trades. The in- herent difficulty. of classifying American industry for administrative purposes, taken toget'ner with the nearly total unpreparedness of KRA for attacking the problem, presented one of the most troublesome obstacles in the path of smooth-fxxnctioning code administration. It was natural that the gains secured by an industry through its code might well be obscured, or even lost sight of, in the light of the know- ledge that the governnent had approved a more favorable price protection provision, or perhaps a less onerous labor orovision, for a competing, or closely related industry. Keeping in mind the facts that codes were being approved for such snail, subdivisions of industry as "Fly Swatter Ma.nufactur- ing, '^ "Lightning Rod Manufacturing," and the ""Jet Mop," "Dry Mop," and "Mop Stick" Industries and that the negotiations were being carried on at different st-iges in the development of MIA policy, and by different per- sonalities (sometiiaes varying widely in their opinions as to what constitut- ed "fair competition"), it w^s .inevitable that some industries would be more favorably treated than others, and tha.t consequent dissatisfactions would ensue. Becoming more and* more bothersome, too, was the problem of overlapping definitions. This situation was due in part to the efforts of applicant groups to secirre broad definitions, as a means of covering fully a given competitive area, and to provide a bread basis for assessing the costs of code administration; in part to the necessarily hasty- procedure and the general "unpreparedness of MA in the matter of industrial classifications. On the other hand, questions were frequently arising concerning the code coveage of articles not clearly covered by any definition. Many products might reasonably be said to have been included under more than one code definition, being .on the border line of each, and usually certain to produce dissatisfaction on one side whichever way it might have been determined. More thoublesone, however, and more difficult to remedy than multiple coverage or non-coverage of particular articles, was the multiple applica- tion of codes to single enterpris.es in sone cases, and other instances where areas of competition were not included within the definition of a single industry cr trade. A great many cases arose in which the operations of a single firm were 9630 sutjcct to several codos, Soinetirnes i firm was presented with a very real problem in pttemptinf; to isol-'^tc its opur'^.tions on the basis of the differ- ent code definitions oncer v;,:ich its products h^.d been classified. Even where Gcgro£;ation of work van physically posible, it was frea/aently at the cost cf t-ff icitUGy ^nd of t<. n \;nn-Cr ss' vily disruptive of the firm's accustom- uc r.cthcd of opt rat ion. SoT.ie codv.s, iron thu bro^d covor^^.'^c of th^ir '^.i-f initions, r<-achud into unexpected places, \/hilc others '-'ere so narrow in their covurage that directly computing functions nif^t bo rlloc-ted -under different codes, Jnp.t gave the force of re-.^ity to thuso uuestions of classification was the ever incruasing number of sn.all codes, each with its o\7n I'bor ?nd trade practice provisions. The t'.vo developments were inseparable, "7ith a general uniformity or similarity in the -orovisions of codes for the larger divisions of industry, there would have ue^n less occasion to dispute the code coverage on a p rticul^r product, But as the cod^.s increased in nuriibcr, they a.lso increased in the in- tricac"'' and complexity of th^ir provisions. Another factor of code administration wiiich w.as beginning to claim the spotlight of attention was the assessment and collection of e>roenses incur"- redby the code auth'-ritics in administering codes, IIRA. had proceeded very slo'/lj'- in granting code auth- ritics the pow'.-r to institute the legal proceed- ings for the collection of f-onds for the expenses of code- administration, and even then it was rppar^nt that tlie difficulties in finaricing the administration of small codi^s ic-rc not solved. The small groups desired to maintain their authority, and operate under their own code; but . the expenses of administer- ing their o\m code ^'ere frequently more than the traffic could or would bear. Prom the foregoing, it is evident that there '^as need for a new policy determination, direct. a toward the following objectives; 1. • To bring to an tnd the period of code-making, and to free the organization for the work of administration and compliance. To reach this goal with the creation of as small a number of n^w codes as possible, o. To strive for ^aniformity or sirdlv.rity of provisions in codes for related, or competing industries, 4, To effect consolidations with p.pproved codes, where possible. 5, To relieve small industries from the onerous erp-.nses of code ado-Dtion and administration. We may now proceed to a study of the formulation of a plan by which it was hoped to accomx)iish the above objectives, .and the various stages and degrees by which tne pl-in developed. 9630 CHAPTER III THE PIAII FOR THE COIffLETION OF CODE-MKINa I . Early Developnients in the Fonnulation of a Flan The earliest documentary evidence found of the beginnings of a plan for a general, or blanket code is contained in a recommendation "by Charles F. Raff, an Assistant Deputy -Adninistrator, early in Fehruar;'- of 1934, that a "ready- to-wear" code be dra^vn up for small industries not already codified. 1/ It uas suggested that such a code might be called the "President's Code for Miscel- laneous Industries. " To substantiate the need for such a plan, I.Ir. Ruff pointed to the large amount of time being spent by NRA in formulating and approving codes for small industries, and mentioned that a number of small groups, v/hile desirous of a code, Tzere unable to afford trips to Washington to secure a "tailor made job." The detailed recommendations \7ere that a general code be prepared by URA. and offered to small industries for acceptance or rejection as they sau fit. Labor provisions would be established in the code, with the provision that ex- ceptions might be granted, with the approval of the Labor Advisory Board, for industries similar or closely related to others operating under more liberal labor provisions. It was Mr, Ruff's idea that the general code itself would be so fi:ced and standardized that the main work of IIRA would be in examining the industries' proposed definitions for conflicts with other codes, and in establishing true representa.tion. All that would remain then would be "to publish notice of the definition and ask for protests by mail. The code having been approved by the Boards and Divisions would not be reviewed by them." Mr. Hickling replied that Mr. Ruff's suggestions might prove useful in later developments, but that in his opinion it would not be practicable to recommend the adoption of a blanket code at that time„ There is no evidence that there v/as any direct connection between the idea put forward by Mr, Raff, and the plan tnat was finally promulgated as Adminis- trative Order X-61. That there r^ay have been some connection is indicated by the fact that the correspondence is to be found in the file of Blackwell Smith, Assistant Administrator for Policy, on the Basic Code. The ma.tter doubtless was the subject of considerable discussion and evi- dently culminated in the Assistant Adrainistrator for Policy suggesting to the Director of Research and Planning Division, in a memorandum of date May 14, 1934, that they mal^e a joint recommendation for a Presidential Agreement to cover small industries and that the Research and Planning Division suggest the number of employees at v/liich to draw the line. It was specifically stated that groups logically integrated with larger industries would be excluded from such a recommendation. 2/ 1/ Undated memorandum to Deputy Administrator C. L. Hickling in Assistant Ad- ministrator for Policy, Blackwell Smith's file on Basic Code, in NRA files. 2/ Memorandum from Assistant Administrator for Policy to the Director of Re- search and Planning Division, May 14, 1934 - Blaclavell Smith's file on Basic Code, in NRA files. 9630 Furtlier exchanges of viewpoint during the next fevr days culminated in a meno rs'jidura from the Administrator to Colonel G, A. Lynch, Administrative Officer, "under date of Hay 21, 1934, This menorandum 1/ 1/ This nenorandura is located in the file of the Assistant Administrator for Policy, on the Basic Code, in KRA files, and is here quoted in full: "I7e have got to clean this show of Code making and there is too much consideration and fumhling in doing it. I want immediate action along the follov/ing lines: "1, Let's get up a 'oasic Code' containing only the follorring: a, 40 hour week and child la"bor, D, $12 to $13 per vicelz minintun wage* c. Provision as to exceptions, etc, v/hich conform with approved policy, d, No sale or service below cost, o, Leon Henderson and Boh Mont;'-^omery' s provisions as to price cutting and cost finding, f , Statutory mandatory provisions, g. Provision for Code Authority and Government right of representation in accordance with approved policy. This could and should he done within 48 hours, "2, Then we will draft communication to every Industry employing less than 5C00 people with Codes not yet approved and say: . "'In the interest of expedition the President would like to have you assent to the foregoing "basic Code without further delay, '"If thereafter you desire additional fair trade provisions you may suhrait them and if supported "by 75)0 of establishments in your Industry and approved by the Administrator they will auto- . matically become part of your Code, I" We will put the basic Code tlirough without re- ference to anybody but the Administrator.' "3. The same proposal should ..e made to all the big Codes still hung up such as Shipping, Comm-ijinication, Anthracite, Public Utilities, etc, with the added remark that 'in the event this is not agreeable to you the President will impose Codes covering only wages and hours and child labor in any case in which he finds the labor conditions in your Industry below the prevailing industrial rates,' "4, On this formula I expect to complete or abandon all Code making except hangovers of administration by J\me 15, This organization must beimmeriiLitelyreset for Code administration. The fact that all Code Authorities are not organized and functioning is an indictment of this Administration," 9630 Signed - HUGH S. JOffl^ISON, ADMINISTRATOR -11- was the actual "beginning of the campaign to formulate a plan to end code malcing, and laid down general lines along which official thinking v/as to he directed. This memorandum did not hring action within 48 hours, as General Johnson had suggested. It did, however, serve to define the issues and concentrate attention on the points which had "been raised, Blackwell Smith, in a memorandum of May 22, 1934, addressedtb the Administrative Officer, the Review Officer, and the Director of the Research and Planning Division, and in another memorandum of May 23, 1934, addressed to General Johnson, outlined a number of important points to he clarified and settled prior to the application of the policy prescrihed "by the Administrator, Some of the issues raised by Mr, Smith were: 1/ 1, ITliether the effort should he made to hring all industries having sending codes under the proposed Basic Code, with a resultant peak load of administration and compliance work ■ forthwith, or whether the same thing should he done as to terms, hut on a voluntary has is only, that is, enforceable hy the Blue Eagle, 2, The difficulties which would he encountered in drawing up •f exact definitions, 3, Uhether or not there should' he nuhlic hearings, 4, Wliether provision should he made for maintenance of wages above the minimum, 5, Should there be a Code Authority set up for each of the new Codes or sho-ald there be a volxintary Committee of the Industry without administra,tive facilities? 5, Should the step apply to supplementary Codes? 7, He also questioned whether it was fully recognized that the later insertion of trade practice lorovisions would mean practically the same amoruat of Code making as to have trade practices in the first instance merely delaying the in- cidence of the burden, 8, Should the basic Code include the standard, well-recognized rules against various types of cheating, for example, the com- mercial bribery rule? 1/ Both memoranda are to be found in Blackwell Smith's file on the Basic Code, in NRA Files, 9G30 -13- OLscincatiorS °^°rb.f; ""t^' ''^^"■*'' ^^■^^^*'"* Administrator for fications of indus ry'for aidnirtriV"-" "" *'" ""™' groupings and olassi- Assistant AclnlnistSor for P^? ^^ r^i^'^oses. and on June 4. 1934, the pronul.~.tio^o? t .e bl^i ° od ldL":°h:?f in 'I *'' Administrator thit the pendins a reoort from Hr Bmdv Tt ■ f abeyance for a few days, that there „ere cnlv lRp*„»r^^* "" Pomtod out in this memorandum • in Mr. Erac=J's o°iMon a'nof "f, °°'''f '^'''°"^' "'^ Aininlstration and that. for sone other Ldus?"; Ir in TfT '"S^^^^y '^^^ '^■^^er an approved code r industry, or m a fev; cases, under a pending important code. 2/ tent °f ^^in7lt'ZkTclllt\''''T'' ™"^^=^ "- original plan to the ex- ones oniyr::;! aLni ?:a'i ,i°f: \;siirstiimf rr^^r' r^^^ '^^^ ^^-^^ single code authority for all snail rnJ^tv, ^'^"^ "^ creatine a • tut with lee-,7ay for aiw ind,>J^f \ v ' ! ^=^^"=6= to be borne by jmA, penses of its oL code LJhorityf ''' '° ^'^'^'^ *° "''''' ^' ^^ *'>^ «- and con'siS^tl" ^I S:? rfJL'v ta? '"*%*'° foreground of official thou^t tions and methods ^re no,v tSf1clentlv^crv^Ja,'l '."T* '"^ ^"'^^^ ^''^'^ beinf referr»d t^ n,= 1 suiiiciently crystallized to permit of the ulan II. The Participation of the Advisory Boards a^d the ..dvisory Council in the Development of the Plan. were consSLd'for'the'f Lsf K '''"'' ..'°"^"°^^^ ""' ^^^°^ ^^--^^ ^^-^^ date I.lr. Sith addressedrl n"' T '^" ^^''*'°^ °^ ^ ^^^^^ C°^^- 0^ ^mt their reaction .t the p.^t . "^.^^ °^^^ °^ '^^"^^ ^°^^^^ requesting which L auached: '' '''''''^' ^'^°"^^^ ^° ^^^ followin/documents, (1) Ad.-ninistrative- order setting forth the vlan, T7ith Basic Code attached. (2) STTDplenentar^r Administrative Orders {^) Su-oplenentary Hules and Regulations. 3/ ^ file'ofSsirr ^- ''• ^iSr^ '° Blackwell Smith - Blackwell Smith's ii±e on Basic Coae, m NEA Piles. 2/ See Ao23endix II - Exhibit A, pa,-e 40. ^ SitiH!" '' " A-i-istrative Order with Basic Code attached . Supplementary Administrative Order - A^^^endix III. Supplementary Rules and Regulations - Appendix IV. 9630 -13- On June 6, 1934, a meeting of the Labor Advisory Board was held for the purpose of considering the documents submitted "by Mr, Smith, At this meet- ing the following resolution was passed: "The Labor Advisory Board recommends as a substitute for the labor provisions of the Basic Code, the aioplication of the labor provisions alree,dy in effect in kindred codes, the Ad- ministrator to determine the grouping or consolidation," In trans:.iitting the above resolution to the Assistant Administrator for Policy in a memorandum of the same date, Dr. Gustav Peck, Chief of Stoi"f of the Labor Advisory Board, said in part: "The Board felt rather strongly that it would be unwise to ma]:e public at this time, one year after the National In- dustrial Recovery Act went into effect, a Basic Code which might appear to be and v;ould be easily interpreted as a standard code. While we sympathize with the ambition of smaller industries to adopt codes of their ovm, we are of the opinion that the n-uiaber and variety of codes already ajpproved, leaves ample room for the proper and fair group- ing of all remaining industries. The approximately 500 codes which will be in effect when this Order is issued have been the result of fair negotiations by industry, labor and the NSA, and comparative justice will be done if the remaining smaller industries are requested to accept the terms under which kindred industries are operative," 1^/ At the same time, Dr. Peck attached to his memorandum a point by point criticism of the Basic Code as submitted, in the event it should still be deemed desirable to pursue this course. On the next day, June 7, 1934, Dr, Peck sent a supplementary memorandum to Mr, Smith recommending the insertion of a provision to the effect that in no case should hourly earnings be reduced and that there should be no reduc- tion in v;eekly earnings to offset any reduction in hours up to 20^. "It is perfectlj'- evident," he started that many of the industries to be included under this catch-all code would be paying far higher ra.tes than those con- templated for the Basic Code, and, of course, the MRA does not want to sponsor or seem to approve a Code which would permit wage reductions," The Ba.sic Code, moving rapidly now tp the final stages of formulation, was referred to the Advisory Council for consideration and recommendation, III. PIITAL STAGES IIT FOPIvIULATIOlI OP PLM The Advisoi-y Council acted promptly in its consideration of the matter and ajpproved the proposal in a memorandum to the Administrator under date of June 9, 1934 (See ApiDendix VIIl), subject to certain specific recom- mendations which are suinma.rized as follovTs: 1/ Memorandum from Gustav Peck to Black^^ell Smith, June 6, 1934 Blaclc\7ell Smith's file on Basic Code, in .NRA Files, 9630 -14- 1, That the proposed plan shall not apply (a) to certain desi^ia-ted industries vrhose codes vere nearing completion; and (o) to a few major industries then uncodified uhose importance seened to have warranted the pre-oaration of individual codes, the industries referred to in both instances (a) and ("b) to be designated by the Administrator; 2. That industries cs --et uncodified a.nd not covered by the preceding paragra-ohs (a) and (b) be encoura^d to consult with kindred industries, thereby placing them under the coi.iplete provisions of an existing approved code, the determination of the proiDer kindred industry to be made by the Adiiiinistrator; 3. That all other uncodified industries not dealt with in the two "oreceding papagraphn be urged to adopt the basic code, the provisions of which (a) to carrj"- no flat declara- tion of hours and wages but that provisions dealing with such matters for any industry applying for the basic code be those in effect for kindred industries, and (b) that the recognized standard labor provisions of existing codes be included in the basic code; 4, That there be clarification and emphasis to avoid possible false impressions on the following points: (a) that the move conteraplated purely voluntary action from industries, with the possible exception of important ex- ceptional industries, if any, which failed to apply and were found to have had sub-standard working conditions; (b) that the proposal was not a move to force remaining industries under codes; (c) that the Service Code move was entirely separate and remained unchanged; 1/ and (d) that the purpose of the plan was to provide a simple means of giving a code forthwith to those uncodified industries which desired a code. The approval of the plan by the Advisory Council with its modified recororiendation, outlined above, apparently provoked renewed discussion before the Administrator, as no definite pronouncement was forthcoming until one month later a,nd on July 10, 1934, when the Administrator announced the plan and made it effective through the issuance of Ad- ministrative Order No. X-61 with the form of the basic code attached as Exhibit II thereto. An examination of the plan as e.mbodied in Administrative Order X-61 and the two orders issued by the Administrator simultaneously therewith, Administrative Orders X-62 and X-63 (See Appendices II, III, and IV res~^ectively) , reveals that the Administrator to a considerable extent followed the above-stated modifications recommended by the Advisory CoToncil but strengthened the proposal bj'- announcing that, while the nlan was not 1/ This refers to administrative action at this particular time on service codes. 9630 II -lb- intended "to force call remaining uncodified industries under codes", the Adrainistro.tor should determine as to any uncodified industry not ap'i^lyin.^' for the bajic code or for consolidation with a proper kindred industry nith- in thirty days, if the wages, hours and In.hor conditions in such industries constituted an ahuse inimical to the putlic interest and contrary to the polic;- of the Act, the Administrator within forty days after the announce- ment of the plan would provide for a hearing in accordance with Section 3 (d) of i\', I,R,A, to determine whether a code covering hours of labor, rates of pay and other working conditions should not he ■prescrihed. It is no\; in order to review in detail the Dlan, 9630 -16- CHAPTER IV. i'JilATURES OF fl;^ ycR COliPLETION OF CODE- -kAKING VISIONS " ^r>^■ T r^T ^ TT ^r^A TTT n-r +-Vi^ code mac".e a -cart of Mministrative crder X-61 as Exhibit "A" considered along vith Administro-tive Order X-63 shovs that 'dth respect to these fer.t-ares the Administrator follonod the recommendations of the Advisory Covuicil in that no flat declaration of hours and wages was made, these matters jeing left open in order that the hours and weges of kindred indus- tries might "be apr.lied and that the recognized standard lator provisions he flatly declared. This arrangement seems to have aJ. so taken c,?re of the suggestions of the Lahor Advisory Board, hereinhefore mpntion»d, as having been voiced "by its Chief of Staff under date> of June 6 and June 7, 1934. II. TRADE PRACTICE PROVISIONS An exa:ination of Article V of the form and Administrrtive trder X-62 reveals thpt the -orice policies of I^IRA as announced in Office Meraorcuidum No. 228 -ere rigidly adhered to and that the standard provisions, common to most codes, outlining the powers and duties of the cjde authority v;ere allowed the notrhle exception that the plan for administration is entirely different from that embraced in -orevious approved codes. III. ADLIIHISTRaTION through general code AUTHORITY Instead of a code authority set up and established by the industry it- self, coLes approved -under Adrainistrptive Order No, X-61 were to be adminis- tered by a general NRA code authority at the expense of NRA v/ith the members thereof to be appointed by the Administrator. It is noted, however, that any industry ap-olying for a code under the plan and desiring to do so (Article IV. Basic Code), on approval of the Administrator, was allowed to elect its own code authority which would have the same powers and duties prescribed for the .\;eneral NRA code authority and such further rules and regulations as the Adrainistrrtor might prescribe. Administrative Order No. X-34, Appendix "VI" hereto, provided for the selection of the members of the general NRA code authority. It was to con- sist of one member appointed by the Administrator to serve as chairman and three other members also appointed by the Administr-tor, one of whom was to be appointed with the advice of the Industrial Advisory Beard, one with the advice of the Labor Advisory Board and one with the advice of the Consumers Advisory Board. Th-^^se four members were empowered and directed to axit ur)on all matters considered by this general code authority; the said Order, however, prescribed that one additional nembcr should be appointed by the Administra.tcr, with the approval of the Industrial Advisory Board, for each industry whose code wrs to be administered by such code authority, these additional members , to act only upon matters which -oertained to the respective codes for their J particular industries. 1 9630 ' "17- CHAPTER V. OPEIIATION OF PLAN I. PROCIDUP:: fop. ILA.]©LIiJG PLAIT A?.c:v,- -ith the iss:ua.nce of Administrative Orders l-'os, X-61, X-62 and X-6o, r.lso cone Office Order 100 and Office I.;enorG,nduin No. 251, the fory.ier PT^nointinr; a co'-^mittee of three laenbers to supervise the execution of the plan rnd the latter r)rescrioin;_; procc-dure for handling it. The Office Order desi;2;nated i.ir. Robert K, Straus as cha.iriaan of the committee on supervision with iiescrs, Leon C. inarshall and George S. Brad.y co/.ipleting the neubership. The procedure established by Office Memorand-um No. 251 was as follo\-s: "1. The Com-iittee will immediately distribute to each Division liaison officer a set of documents, in- cluding a copj'' of the Basic Code and related Administrative Orders, for each code v/hich awaits approval by each Division. 2, Within a ^Teek of the receipt of these documents, they will be sent out to each uncoded industry with a covering letter written by the Deputy or Assistant Deputy Administrator who has been handling any negotia.tion with said uncoded industry, recommending that said industry's code be disposed of in a.ccordance with the princiioles laid down in Administrative Order X-51. 3, As soon as these letters have been sent out, progress reports shall be iiade to the Cora.n.ittee on the Comple- tion of Code Kahing by the Divisions, indicating to what industries the letters have been sent, and what the recorahiendations of the Division nave been with regard to these industries, 4, Divisions will continue to submit weekly'- reports on Saturda^ys to the Committee on the Completion of Code Making as to the progress which has been made during the days covered by these reports, 5, The Committee on the Com-oletion of Code Making may recomraend to the Ad_ministrator any changes in this procedure which it may deem advisable in order to complete code laking in the thirty-day period allotted. At the end of this thirty- day period, the Committee will make a definitive report, including any recom- mendations as to further action." (See Ari^end.ix "D".) The Connittee on Completion of Code I.Iaking, as directed in the above- mentioned office order and the said Office Memorandum No. 251, under date of Auc,ust 5, 1934, submitted a report as to the "orogress made which goes into considerable statistical detail from which the forecast was made that 119 codes i.TOuld be disposed of by August 10, 1934, 73 of which were in- dividual codes, 31 represented consolidations under Administrative Order 9530 -Ic- X-61 sjid 15 covered basic codes tunder Ad.iinistrative Order X-61, A copy of f.'-is re;.)ort is annexed hereto as Aooendix "IX". II. IlIDUSZRISS SXCEPTZD i'P.OM PL^^J? It \;ill be recalled that service trades '-'ei-e exce-oted specifically from f..o Tovisions of Ad;7iinistrative Order X-61 as well as such other in- dustries as the Adr.iinistrator for sr)ecific cause mi^ht designate for different treatment. In the reoort, above referred to, from the Coiriittee on Cor/pletion of Code i.iaking it v;ill be noted that Division VI had on hand 23 service codes in addition to the 17 shovm to be in various stages of develop::ent in this division. It a^i^ears that, aside from these service trades the only exception granted from the provisions of Administrative Order "o, X-61 V7ere the Grocery I.iantifacturing Industries vrhich were offered a br.sic code of their own under the terms of Administrative Order lio, X-39, dated Se-)te;:ber 21, 1934, a copy of which is attached hereto as Appendix "VII", III. DISCUSSION OF H2SULTS OBTAIl\tED It shoiild be recalled here that the report from the Chairman of the Committee on Comr)letion of Code I.iaking predicted tliat 119 codes woxild be disposed of bj- Aii^v^ust IC, 1934, 51 of -.'hich -.leve estinated would be con- solidations under Administrative Order Fo, X-61 a.nd 13 of which would be aio-orovals of basic codes thereunder, ?urther'-:ore , the estimate '-as made that a balance of 97 codes would be left on Avigust 10, 1934. It appears that the Chairman of this Connittee in his predictions was too sa^iguine and that the re smalts predicted were not achieved, as onl^'' 5 consolidations were made in all and only 5 basic codes vrere ever a-oproved under Afxiinistrative Order X-61, Indeed, except in the single case of the Wire ?.ei:'if or cement Industry, a consolidation natter approved August 13, 1934, all of these consolidations and approvals took place considerably later than August 10, 1934. Manj'" factors combined to cause such a "DOor result. One was the fact that a considerable number of officials of KRA did not look u-non the plan with fa.vor. This caused it, when adopted, to be not only unpopular with the industries concerned but also with many persons in the Administration, The movement therefore suffered from lack of complete cooperation, ITurtheriJore , the plan was laiinched at a time when a great many subr.itted codes had passed through extended periods of negotiations with the result that the industries sponsoring them preferred to follow them thro\agh to approval rather thaoi accept any consolidation or the basic code. In order to secui'e ap;oroval of codes in this category, instances arose of industries sacrificing and withdrav;ing provisions which had previously been relied on and insisted upon as being fundamental aiid essential to the welfare of those industries. This attitude was evidently based, in part, upon the fear that N, H, A. would carry out its announced intention of iiposing, in certain circumstances, provisions relating to hours of la.bor, wages and conditions of employment, and also in part because some N, H, A, officials in charge of these submitted individual codes, obviously reluctant to relinouish supervision of them, attempted to persuade industries to secure ap"orovals of their previously submitted codes rather than accept the plan offered by 9630 -19" Administrative Order X-61, Anothjr -unfavorable circuiastance was the fact that the proposed basic code did not orovide for trade practice provisions which uere sioecially adapted to the various industries. In other \Tords, this type of complaint was to the effect that the proposed basic code \/as too standardized to talce care of the trade problems peculiar to the various industries. While IT.R.A, sought to leet this objection with' assurances that amendments containing trade practice provisions, neculiarly applicable to individual industries could be had later on, it is obvious that these industries were well aware of the difficulties which attended the path to apiirovals not onlj'- of ar.end— ments but of codes, A further objection was made that the theory of industrial self-govern- ment v/as replaced by the idea of having the basic code administered by a general H.Il.A. code authority or, in cases of consolidation, with an administration conducted by representatives of another industry. To state the objection differently, autonomy woiild be lost either by accepting consolidation under Aciministrative Order X-61 or by securing a basic code thereimder. In addition to the diffidence shown by industry, the failure of the plan for the completion of code-i.iaking can in some measure be traced to the lacl: of comprehensive, accurate and thoroi\gh classification of indv.strj^ for administrative, purposes. It seems desirable, from the viewpoint of administrative preparedness, to stress the desirability and need for the preparation of such a classification in advance of putting such a program as the plan for completion of code-making into operation. Had this been done no doiiot some of the difficulties which beset the plan would have been avoided, Jurthermore, the plan was adopted and put into operation too late in the code— making process to accom]Dlish the end expected of it, Experience shows that the program vrould have achieved greater success had it been formulated much earlier and used as a complement to the codification of the major industries. It seems rather safe to say that had this policy been adopted the number of individua.l codes would have been materially reduced, the. difficulties of administration lessened, and the prospects of sectoring compliance greatly increased, j?rom all of which it rather coiiclusively appears that the plan failed to realize its objectives; that the results obtained were negligible; that it was unfavorably received by industry and consequently not utilized ex- tensively^; e.nd that the Administration, when confronted Y?ith the failure of the plan, never put into operation its annoimced intention of imposing provisions relating to wages, hours and conditions of employment, under Section 3(d) of the Act, in those industries found to be operating under sub--standard conditions. 9630 ■tl APPENDIX I Statement of Scorie of Study, Method of Treatment, and Qacstions Needing: Farther Ro search This st-udy \7"S treated very largely from a historical "ooint of view and is presented in narrative form. The conditions which culr,iina.ted in the adoption of a plan to wind up the codification process have been reviewed and the stages "by which the -olan reached fruition have been traced in detail and in chronological order. Finally, some attempt was made to appraise the result obtained, point out the failure of the program, analyze the reasons for the failure, and present certain findings and recommendations. The subject • -as developed in the following manner: First, a tentative outline which is made a part of this report as Appendix X was carefully prepared before anything else was attempted. Then, some weeks were spent in searching out sources of information, finding the material required to fill out the outline, and assembling this necessary data, -oreparatory to the ;.Titing of this report. The next stop consisted in conferring with the various officials of KRA , who participated in the formulation of the plan and had charge of its applica-^ tion and in invostiga.ting conditions in JRA. which gave rise to the need for a TiQV! code-nalcing policy. VVhen the above details had been conplcted, the actual preparation of a report to roLind out the outline commenced, with the result that preliminary report was vritten and subsequently revised and ;'out into this final form. This report leaves little for further study. It is regarded by its authors as being reasonably complete. It nay, however, at some future time be interesting as vrell as instructive to ascertain if the industries, un- codified at the time of the adoption of the plan for completion of code-mak- ing, in n.ddition to reasons given for failing to utilize the plan, did not feel that they were being asked to adopt the hours and pay the wages req"uir- ed of kindred industries without being compensated with trade practice pro- visions designed to benefit and promote their own welfare. It seems that the only source from which to obtain reliable information on this sug;:^osted question is the uncodified industries of July 10, 1934, and their respective trade o.ssociations, if any. A comparison of the tentative outline, Appendix X hereto, with the text of this report will reveal a few other features which have only briefly been alluded to, if at all, such as the details of the orgaiaization of the Goneral MA Code Authority and the departure from the plan as instanced in the matter of the Grocery Manufacturing Industries. These fields may therefore in the future be explored with r^rofit, but for the purposes of this particular stu it -has not seemed advisable to treat them any further. 1 9630 -21- APPEl'TSIX I I. ADMINISTRATIVE ORDER NO. X-61. PIAII FOR COMPLETIOII OE CODE MAKING By virtue of authority vested in me as Administrator for Industrial Re- covery under Title I of the National Industrial Recovery Act, and in order to provide a simple means of giving a code forthwith to those industries remain- ing uncodified who desire a code and in order therehy to free NRA for admin- istration of approved codes, it is hereby ordered that: 1. This plaji is available to any industry not yet codified under said Act (with the exception of industries, including local service trades, for specific cause designated hy the Administrator for different treatment). Any such industry may apply to the Administrator for codification "by application of the Basic Code (Exhibit "A", annexed) as the code for such industry. The hour and wage provisions to he included in said Basic Code, as to any appli- cant industrj'-, shall he those already approved for the proper kindred in- dustry, as determined by the Administrator, after due consideration of rep- resentations of the applicant industry'- and other relevant data. An uncodi- fied industry, instead of applying for the Basic Code, may apply for con- solidation and complete coverage by the existing code for the proper kindred industrj^, subject to sta^'' as to applicant industry of provisions then incon- sistent with policy, 2. If any such application is made by a truly representative body of the industrj^ and if there be no objection to any party in material interest after ten (10) days published notice to all concerned, such Code shall, without further hearing, reference to Advisory Boards or other administrative action, become effective ten (10) days after its approval by the Administrator, in industries employing less than fifty thousand (50,000) persons, or by the President in all other industries. 3. All uncodified industries which desire codification (excepting those specially designated as above) are requested so to apply for such Basic Code or for consolidation with codes for kindred industries. If, after the approval of such application for any industry, it desires additional fair trade prac- tice provisions or modifications as to such industry of the Basic Code, or the code with which consolidated, such industry may apply therefor at any time and will be accorded a prompt hearing and determination with respect thereto. Any industry vrhich desires to consolidate under the code of a kindred industrj^ may do so on approval of the Administrator even after becoming subject to the Basic Code. 4. It is not intended by this Plan to force all remaining uncodified- industries under codes, but as to any such industrjr not yet codified which does not apply for such Basic Code, or for consolidation as above, within thirty (30) days after the date hereof and in which the Administrator shall determine that wages, hours, and conditions of labor constitute an abuse inimical to the public interest and contrary to the policy of said Act, the Administrator will within forty (40) days after the date hereof provide for a hearing in accordance with Section 3 (d) of said Act to determine whether 9630 a code covering hours of later, rates of pay, and other working conditions shnll not "be TDrescrited thereunder. liUGH 5. JOHNSON AdministrT-tor for Industrial Recovery • Washington, I). C. July 10, 1934. 9630 • APPENDIX II. EXHIBIT "A" BASIC CODE July 10, 1934. -oOo- ■ ■ ' ARTICLE I To effectuate the policies of Title I of the National Industrial Re- 'covery Act, the following provisions are established as a "basic Code of Pair ■ Competition which shall govern every industry applyihg therefor in accordance with Administrative Order llo, X- 61, dated Jiily 10, 1934, A RTICLE II Section 1* Hours. No employee shall he permitted to work in excess of hours in any one '-eek, exceiot that for ^vveeks in any one calendar year, any employee may be permitted to work not more than hours per week. All hours in excess o f p er day or per vsek shall be paid for at not less than one and one-half (1--|) times the employee's regular rate. Section 2. Excentions, • '' ■ The provisions of Section 1 shall not apply to employees engaged in emergency maintenance or emergency repair work involving breakdown of the protection of life or loroperty, nor to persons employed in a managerial or executive capacity who earn reg-ularly Thirty-five Dollars ($35,00) per week or more, nor to any other class of employees which the Administrator shall find upon application of true representatives of the trade or industry should be subjected to an exemption or modification in accordance with N.R.A. policy; provided, however, that employees engaged in such emergency maintenance and emergency repair work shall be paid at one and one-half (l-'g) 'times their normal rate for all ho-ors worked in excess of forty (40) hours per week. Section 3 . Minimtun I7ages . "No employee shall be paid in any pay period less than at the rate of p er week for hours of labor, except in ^in which region no employee shall be paid in any pay period less than at the rate of per week for h ours of labor, ^ ■■■'.. * '• Section 4. Wages in General, All wa.ges shall be adjusted so as to maintain a differential at least as great in amount as that existing on June 16, 1933, between wages for such employment and the then minima. In no cr..se shall there be any reduction in hourly rates; nor in weekly earnings for any reduction in hours of less than thirty per cent. 9630 ARTICLZ III. Section 1 . Child Lr.bor » No oorson under sixteen years of age shall oc employed in the industry ■in any caprcity. ITo person iindor ei^^htecn years of age shall be eraployed at operations or occupations which arc hazardous in nature or dangerous to health. The Code Authority shall submit to the Administrator for approval before Octol', 1, 1934, a list of such operations or occupations. In any State an employer shall be deemed to have coripliod with this orovisicn as to age if he shall have on file a valid certificate or ocrnit duly signed by the authority in such State empovvered to issue eraDloynent or age certificates or permits, show- ing that the employee is of the required ago. Section 2 , Apprentices, The hours and rages of regularly indentured apprentices in skilled trades or occupations of the industry may depart from the standards herein- above proscribed; provided that the terms of employment and the course of instruction of such apprentices shall conform to sta:idards uniform throvigh- out the trade or industry and approved by the Administrator. Section 3. Ii?ndica"D"ood Persons? A person whose earning capacity is limited because of age, physical or mental handicap, or other infirmity, may be employed on light \7ork a.'^ a wage below the minimum established by this Code, if the employer obtains from the State authority designated by the United States Department of Labor, a cer- tificate authorizing such person's employment at such wages and for such hours as shall be stated in the certificate. Such authority shall be guided by the instructions of the United States D^-partnent of Lr'.bor in issuing certificates to such persons. Each erroloyer shall file monthly rrith the Code Authority a list of all such persons emploj'-ed by him, showing the wages paid t0| and the maximum hours of work for such employee. Section 4 . Safety and Health. Every enployer shall make reaso?iable iDrovision for the safety and health of his employees at the place and during the hours of their employment. Standards for safety and health shall be submitted cy the Code Authority to the Administrator for aT)rcval within six months after the effective date of this Code. The standards approved shall thereafter be a part of this Code and enforceable as such. Section 5 . Bequircd Labor Cla-uses. The provisions of Section 7 (o) of said Act are hereby incorporated here- in by this reference and shall be complied with. 9630 -25- JiBTICLE IV. Admini strati on. This Code shall be administered "by the General IIEA Code Authority which shall he selected pursuant to, have the pov/ers specified in and function in accordance with Adninistrative Order X-52, dated July 10, 1934; provided, however, that, on aporoval hy the Adi.iinistrator , any industry so desiring may elect its own Code Authority to have powers and to function in the manner prescrihed for the General aRL Code Authority and under such rules and regula- tions as the Administro-tor may prescribe, ARTICLE V. Trade Practices . (a) It shall he an unfair method of competition for any meraher of any trade or industry subject hereto to violate any rule of fair trade practice for such trade or industry even if not herein contained when aporoved by the Administrator, or, in the case of trade practice provisions for trades or industries under the jurisdiction of the Secretary of Agriculture when approved by such Secretary, on apnlicrtion concurred in by seventy-five (75) per cent of the members of such trade or industry* (b) Prices, rebates, discounts, commissions and conditions of sale shall be filed as prescribed in Administrative Order ITo, X~62, dated July 10, 1934, and it shall be an unfair method of competition to violate or fail to comply with the terms of that Order, ARTICLE VI. Section 10 (b) of said Act is hereby incorporated herein by reference and this Code is expressly male subject thereto. 9630 APPEJTDIX III. ADMiriSTrji-Ti^/:^. order wo. x-62 supple: ZiTT I" G ;j)i;r:'IST".i;-T'I\rE OIUER no. X-61, DATZD cJlTiY 10, 1934, AH) TIiE BASIC C0I3E .U-r^JCED THERETO. 3y virtue of the authority vested in me as Administrator for Industrial Recovery- iijider Title I of the National Industrial Recovery Act and to suo- plenent Acli^inistrative Order IJo, X-Cl, dated July 10, 1934, and the Basic Code rjinexed thereto, it is herehj;- ordered that: A, Generel iHA Code Authority 1, The General ITRA Code Authority, provided for in Article IV of said Basic Code, slia.ll be ao^ointed hy the Ad'ninistrator and shall serve v/ithout expense to the Industries subject to such Co de . 2. Such Code Authority shall have the following povrers and duties; (a) To insure the execution of the provisions of the Code and to orovide for the compliance of the trade/ industry -.'ith the iDrovisions of the Act. (h) To :~,dopt "by-laws and rules and regulations for its procedure, (c) To obtain from members of the trade/ industry such |i information and re-oorts as are required for- the ad^ninistration of the Code, In addition to in- formation required to be submitted to the Code Authority, raenbers of the trade/ industry subject to said Basic Code sliall furnish such statistical information as the Administrator -.lay deem necessary for the purT)Oses recited in Section 3(a) of the Act to such Federal and State a^^encies as he may desig- na.te; provided that nothing in the Code shall relieve any member of the trade/inc'ustrv of any existing obligations to furnish re-oorts to any Government agency. No individxial re-oort shall be disclosed to any other nemoer of the trade/ industry or anir other party except to such other Government agencies as may be directed oy the Administrator. (d) The General l^EA Code Authority shall submit to the Administrator ' ithin 90 days after the a-oiDroval of this Basic Code a list of industries covered b3'- the Basic Code, in '^hich work on any -oart of the •':)roduct is i^erforroed in the home and/or work is contracted out. The General NRA Code Authority may also submit a list of special problems affecting particular industries oi^erating under the Basic Code, emd recommendations pertaining thereto. 9630 (e) To make recommendations to the Administrator for the co- ordination of the administration of the Code and such other codes, if any, as me-y he related to or effect mem*- hers of the trade/ industry. (f ) To reconraend to the Administrator any action or measure deemed a-dvisahle, including, further fair trade practice provisions to govern memhers of the trade/ industry in their relations \7ith each other or T/ith other trades/ industries; measures for industrial planning, and stahi- lization.of employment, B, Open Price Filing. As provided for in Section (h) of Article V of said Basic Code, prices, rehates, discounts, commissions, and conditions of sale shall he filed in accordance v/ith the following provisions: 1, Each memher of the trade /industry shall file with a confidential and disinterested agent of the code authority or, if none, then v/ith such aji agent designated hy the Administrator, identified lists of all of his prices, discounts, rehates, allov/ances, and all other terms or conditions of sale, hereinafter in this arti- cle referred to as "price terms", ivhich lists shall completely and accurately conform to and represent the individual pricing practices of said memher, . Such lists shall contain the price terms for all such standard prod\icts of the industry as are sold or offered for sale hy said meraher and for such non-stan- da,rd products of said memher as shall he designated hy the code authority. ' Said price terms shall in the first instance "be filed vrithin 30 days after the date of approval of this prov- ision. Price terrs and revised price terms shall hecome effec- tive immediately upon receipt .thereof 'i^y said agent. Immediate- ly upon receipt thereof, said agent shall he telegraph or other equally prompt means notify said memher of the time of such re- ceir)t. Such lists and revisions, together with the effective time thereof, shall upon receiT)t he immediately and simultsuae- ously distrihuted to all memhers of the industry and to all of their- customers T'ho have applied therefor and have offered to defray the cost actiially incurred hy the code authority in the preparation and distrihution thereof and he availahle for in- ■ • spection hy any of their customers at the office of such agent. Said lists or revisions or any part thereof shall not he made availahle to anj?" person until released to all memhers of the indv.stry and their customers, as aforesaid; provided, that prices filed in the first instance shall not he released imtil the expiration of the aforesaid 30 day period after the approv- al of this code. The code authority shall maintain a permanent file of all price terms filed as herein provided, and shall not destroy any part of ^uch records except upon written consent of the Administrator. Upon request the code authority shall furn- ish to the administrator or any duly designated agent of the Administrator copies of any such lists or revisions of price terms, 2, When any memher of the trade/ industry has filed any revision' such memher siiall not file a higher price within +>rty-eight (48) hours. -28- • o.. To member ,of the trade/industry shall sell or offer to sell any ^ product, services of the trade/ industry, for which -orice terms have been filed oiirsuant to the -Drovisions of this article, ex- cept in accordance \7ith such nrice terms. 4. No member of the industry shall enter into any agreement, under- standing, combination or conspiracy to fix or maintain price terms, nor cause or attempt to cause any member of the industry to change his orice terms by the use of ' intimidation, coercion, or any other influence inconsistent v.dth the maintenpjice of the free and open msirket \;hich it is the purpose of this Article to create. C. Costs and Price Cutting. 1. Tlie standards of fair competition for the trade/industry \7ith reference to oricing practices sxe declared to be as follo'js: (a) Wilfully destructive price cutting is an unfair method of competition siid is forbidden. Any member of the trade/ii>- dustry or of any other trade/industry or the customers of either may at any time complain to the Code Authority tha.t. any filed price constitutes unfair competition as destruc- tive price cutting, imperiling small enterprise or tending toward monopoly or the impairment of code wages rndworkini conditions. The Code Authority shall within 5 dajrs afford an opportunity to the member filing the urice to answer such complaint and shall ".Tithin- 14 days make a ruling or adjustment thereon. If such ruling' is not concurred in by either -narty to the complaint, all oapers shall be referrei to the Research and Planning Division of IJRA which shall render a report and recommendation thereon to the Adminis- trator, (b) liThen no declared emergency exists as .to any given product, there is to be no fixed minimum basis for prices. It is intended that sound cost estimating methods should be used and that consideration should be given to costs in the de- termination of oricing -oolicies. \' (c) '.^en an emergency exists as to any given product, sale be the stated ninimuia price of such product, in violation of Section 2 hereof, is forbidden. 2. Emergency Provisions . (a) If the Administrator, after .investigation shall at any tin find both (l) that an emergency has arisen within the trac industry adversely affecting small enterprises or wages or labor conditions, or tending toward monopoly or other acui conditions which tend to defeat the purposes of the Act; and (2) that the determination of the stated minimum pric for a specified product vathin the trade/industr3'- for a limited period is necessary to mitigo.te the conditions cor stituting such emergency and to effectuate the pvirposes o 9630 -29- the Act, the Code Author! tv rnriy cause an impartial agency to in- vestigate costs and to recommend to the Administrator a deter- mination of the stated minimum price of the product affected by the emergency and thereupon the Administrator may proceed to de- termine such stated minimum price, (h) When the Administrator shall have determined such stated minimum price for a specified product for a stated period, which -orice shall he reasonably calculated to mitigate the conditions of such emergency and to effectuate the -ourposes of 'the national Indus- trial Recovery Act, he shall nublish such pr*icfe. Thereafter, during such stated period, no member of the; :trade/ Indus try shall sell such specified products at a net realized price below said stated minimum price and. any such sale shall be deemed destruc- . tive price cutting. From time to time, the Code Authority may recomnend review or reconsideration or the Administrator may cause any determinations hereunder to be reviewed or reconsidered and appropriate action taken. mj&H S. JOHNSOH , Acuninist rater for Industrial Recovery* Washington, D, C, July 10, 19G4 9S30 -oU- APPElvDIX IV. ADLINiSTRATIVE OHDEH ]-0. X-63. PEESCRI3DTG RULES MD REGULATIONS TO SUPPLEMENT ADMINISTRATIVE 0RI3ER NO. X-51, DATED JULY 10, 1934, AlW THE BASIC CODE AlTl^TEXED THERETO. B'j virtue of authority vested in me as Administrator for Industrial Recover;^ uiider Title I of the National Industrial Recovery Act the follovdng rules and regulations are herehy prescribed to supplement the above— mentioned Adnini strati ve Order and Code: 1, The ninimum rates of pay provided for in Article II of said Basic Code shall apply, irrespective of whether an employee is actually conponsi'.ted on a time rate, piecerrork, or other basis, 2, Eer.ale employees performing substantially the same work as male employees shall receive the same rate of pay as male employees. 3, ITo employer shall permit any emoloyee to 'vork for any time rrhich, \7hen totaled 'Tith that already performed for another employer or empl QT3 exceed?, the naxirvmn pci-nittod heroin, 4, "Jo employer shall reclassify em-oloyees or duties of occupations performed or engage in any other subterfuge so as to defeat the purposes or -nrovisions of the Act or of said Basic Code. 5, No enployer shall dismiss or demote any employee for making a complaint or giving evidence with respect to an alleged violation Ox the provisions of any Code of Fair Competition, 6, Code Authorities selected ^:/ industry in accordance ^vith Article IV of said Basic Code shall function at the exmense of the indvistry in accordance v/ith such further rules and regulations as the Adriinistrator may prescribe, 7, No provision hereof, of said Administrative Order No. X-61 or of said Basic Code, shall supersede a.ny State of Eed'^ral law uhich imposes on employers more stringent requirements as to age of employees, wages, hours of work, safety, health and sanitary conditions, insurance, fire iirotection or general working conditions, than are im-joscd thereby, 8. . No provision hereof, of said Administrative Order No, X-61, or of said Basic Code shall be so ap-olied as to permit monopolies or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprises, HUGH S. JOHNSON, Administrator for Industrial Recover^'-, Washington, D. C, July 10, 1S34. 9630 -31- APPEMSIX V. OFFICE iviE-kOHAlIDUwI NO. 251* July 10, 1954. P rocedure for Handling: the Cormpletion of Code Making Office Order No, 100, establishes a Committee for the Cornole- tion of Code l.iaking, and charges that Committee with the supervision of the execution of the plo.n emhodied in Administrative Order X-61. The Division Administrators, in accordance with this Order, will name re"3re- sentatives to coooerate with this Committee. The method of cooperation will be as follows: 1» The Committee will immediately distribute to each Division liaison officer a set of doci-uaents, including a copy of the Basic Code and related Administrative Orders, for each code v/hich awaits ^iporoval by each Division, 2, Within a week of the receipt of these documents, they will be sent out to each 'encoded industr" with a, covering letter written by the De'jaty or Assistant Deputy Administrator who has been handlinj;; any negotiation with said uncoded indus- try, recommending thp.t said industry's code be disposed of in accordajice with the lorinciples laid G.own in Adminis- trative Order X-61. 3, As soon as these letters have been sent out, progress reports shall be made to the Committee on the Completion of Code Iv:al:ing by the Divisions, indicating to what industries the letters have been sent, and what the recommendations of the Division have been with regard to these industries. 4, Divisions v;ill continue to submit weekly reports on Satur- da.ys to the Committee on the Completion of Code Making as to the progress which has been made during the days covered by these reports. 5, The Committee on the Completion of Code Making may recom- mend ^to the Admini strait or any changes in this procedure v/hich it may deem advisable in order to complete code making in the thirty-day period allotted. At the end of this thirty-day -oeriod, the Committee vifill make a defini- tive rer)ort, including a,ny recommendations a.s to further action. By direction of the Administrator: G. A. LYUCH, Administrative Officer, 9630 OFFICE OIDSR NO. 100. July 10, 1934. Ao-pointinent of Committee for the Completion of Code IvIalcin;S: A Committee is hereby ap"oointed to suoervise the execution of the plan embodied in Administrative Order X-51, aoc-roved "by the Adminis- trator on July 10, 1934. Merabersnip of the Committee: Robert K, Straus, Chairman Leon C, Marshall George S. Brady The Committee will request each Division AcaJiinistrator to se- lect a liaison officer from their resoective Divisions to cooperate r;ith it in the execution of this ^lan. The Corunittee will make a report to the Administrator thirty'' days hence a.s to the progress of the plan, including rjiy recommendations for further action rhich may be necessary at that time. By direction of the Administrator: G. A. LYNCH, Administrative Officer. 9630 -33- A PFM'dIX VI . ADMINISTRATIVE ORDEH NO. X-84 PROVIDING FOR TFIE SELECTION OF THE I.fflMBERS OF THE GEl-IERAL NRA CODE AUTHORITY By virtue of the authority vested in me as administrator for Industrial Recovery under Title I of the National Industrial Re- covery Act, "by Executive Orders of the president and otherwise, it is herety ordered that the General NRA Code Authority provided for in Administrative Order No. X-62, dated July 10, 1934, shall he con- stituted as follows: There shall "be one memher who shall act as Chairman, to "be appointed "by the Administrator, and three other memhers to he appointed hy the Administrator as follows: one with the advice of the Industrial Advisory Board, one wi^bh the advice of the Lahor Advisory Board, and one with the advice of the Consumers' Advisory Board, of NRA. All such raemhers shall act upon all matters considered by such Code Authority. Qnc ad- ditional mender shall he appointed hy the Administrator with the approval of the Industrial Advisory Board of NRA for each Industry whuse code is administered "by such Code Authority. Each such addj.tional meraher shall wherever practicable have a special knowriedge of the Industry which he is appointed to represent ai^.a shall act as a member of such Code Authority only upon matters which pertain to the code for such Industry, HUGH S. JOHNSQN Administrator for Industrial Recovery. Washington, D. C. , September 7, 1934. 9630 -34- APFEITEIX VII . ADMI1JISTR.4TIVE 03DE3 NO. X-89 Supplementing Administrative Order No. X-61 "by offering a Basic Code to Grocery Manufac- turing Industries. By virtue of the authority vested in me as Administrator for Industrial Recovery, and in order to further the purposes of Administrative Order No. X-61, of July 10, 1934, it is hcrehy ordered that: 1. Tile Code of Fair Competition for the Grocery Manufacturing Industri (annexed hereto and marked Exhibit "A") is offered to each grocery manufacturing industry not yet codified under the Act, in lieu of Basic Code, and to each grocery manufacturing industry now codifioi under the Act, in lieu of its ovm code. 2. If an application is made for said Code "by any group truly represei ative of a grocery manufacturing industry and if there be no objec tion by any party in material interest after ten (lO) days publish! notice to all concerned, such Code shall, without further hearing, reference to Advisory Boards or other administrative action, bccom* effective ten ( 10) days after its approval by the Administrator, ij industries employing less than fifty thousand (50,000) persons, or'f^ by the President in all other industries. 3. ?or the parposes of this Order, a grocery manxifacturing industry i| defined as follows: The manufacturing, processing, canning, packil bottlin;"; and/or importing ;:nd sale by the manufacturer, processor, canner bottler, packer or importer of any one or related group of products commonly known as food and/or grocery products, except thi products which are principally sold through other channels than t v/holesale and retail grocery trades. 1 4. Grocery manufacturing industries are exempted from Administrative Order X-61. 5. It is recognized that the policies of the Act caii better be effect' ed in the grocery manufacturing and distributing industries if all! such industries are subject to codes of fair competition containini substantially comparable provisions. Accordingly, all uncodified grocery manufacturing industries which desire codification are re-4 quested to apply for this Code; and all codified grocery manufactti ing industries arc requested to consult the Administrator with a Vf to applying for this Code or adopting such modifications of their codes as will result in such substantially comparable provisions. ]^xr 6. In accordr.nce with the intention of paragraph 4 in Administrative Order X-61, hearin^js will "be held as to any -oncodified grocery manu~ iacturins industry which has not applied for this Code within thirty (30) days after the date hereof. HUGH S. JOHNSON Administrator for Industrial Recovery. Order recomrnendedS Armin. W. Riley , Division Administrator, September 21, 1934. 9630 EXHIBIT "A" TO .AlFEITDIX VII . CODE OF FAIR COlvffSTITION FO:^ TH3 GHOCEHY lulAirJFACTURING IlIDUSTRISS To effect the policies of Title I of the National Industrial Recovery- Act, the following provisions ,aro established as a "basic Code of Fair Competi- tion for the Grocery Manufacturing Industries, and its provisions shall "be the st.'uid-irds of fair competition for every such industry and shall "be "binding upon every mom'bor of any one or more thereof, as hereinafter in Article I provided. ARTICLE I ApT)lication of Code Section 1. Tiie provisions of tnis Code shall apply to the members of any grocery manufacturing industry upon approval by the Administrator, pursuant to Adrainistr-tive Order :Jo. X-8'J., of an application to him by any group truly representative thereof. The Administrator may make such exemptions vrith respect to specific provisions herein as he may deem appropriate to avoid con- flict with provisions in nny separate approved Code of Fair Competition for such industry; and he may ap].irove amendments hereto with respect to any grocery manufacturing industry. ARTICLE II Definitions Section 1. As used herein: (a) Grocery Mnnufacturin.~ Industry . The terms "Grocery Manufacturing j Industry" rnd "Industry" mean and include any industry as defined in an appli- cation and approval thereof by the Administrator pursuant to Administrative Order No. X-89. (b) Grocery Manufacturer . Tiie terra "grocery manufacturer" or "manufact- urer" includes, but without li.Tiitation, any individual, partnership, associa- tion, corporation or other form of enterprise wholly or partially engaged in a grocery manufacturing industry, either as an employer or on his or its own behalf. (c) Emolovjee. The term "employee" means any person engaged in a grocery, manufacturing industry in any capacity and receiving compensation for his | services (except a manufacturer or a broker) irrespective of the nature or method of payment of such compensation. (d) Err.-ploycr . T"ne term "employer" means any person by whom any such employee is compensated or employed. (c) Outside Salesman . The term "outside salesman" means any salesman who is engaged not more than tv/olve (l2) hours per week inside the establish- ment, or any branch thereof, of his employer and who does not regularly de- liver merchandise. 9630 (f) Watchman. The term "watchman" means any employee who is engaged dur~ ing at least ninety per cent (90>) of his working hoiors in watching and guard- ing the premises and property of any estahlishment of a raeraher of the industry. (g) Trade Buyer . The term "trade "buyer" means any commercial "buyer as distinguished from an ultimate consumer buyer. (h) President, Act and Administrator . The terms "President"", "Act" and "Administrator" mean, respectively, the President of the United States, Title I of the National Industrial rfecovery Act, and the Administrator for Indus- trial Recovery. Section 2. Population and trade areas for the purposes of this Code shall "be determined "b^' reference to the latest Federal Census and metropolitan areas designated therein. 'article III Hours Section 1. No employee shall "be permitted to work more than forty (40) hours in any week or more than eight (8) hours in any day, with the following exceptions: (a) The provisions of this Section shall not apply to employees engaged m managerial, executive, or supervisory capacities, regularly receiving not less than thirty-five dollars ($35.00) per week, and outside salesmen, ("b) Watc-Mien shall "be permitted to work not in excess of fifty-six (56) hours in any week* (c) Engineers and firemen shall "be permitted to work not in excess of forty-four (44) hours a week or in excess of nine (9) hours in any day. (d) De liverymen, outside truck drivers and chauffeurs, shall "be permit- ted to work not in excess of forty-eight (48) hours a week. (e) The provisions of .this Section shall not apply to- employees engaged in emergency repair and emergency maintenance work involving breakdowns or protection of life and property; provided that in every such case employees engaged in such work shall be compensated at a rate of not less than one and one- third (l-l/S) times their normal hourly rate for all hours worked in ex- cess of the basic hours provided in this Article. (f) During any eight (8) weeks in each calendar year, employees may be permitted to work six (6) hours per week in excess of the foregoing maxima, provided they are paid at least one and one-third (l-l/3) their normal rates of pay. Section 2. No employee shall be permitted to \7ork more than six (S) days in an seven (?) day period. m 9630 Scction 3. All cmployoes, except those enumerated in subsection (a), Section 1 of this Article, shall be corapcnsoted at a rate of not less than one and one- third (l-l/3) times their normal hourly rate for all hours worked on the following holidays: Christmas Day, Thanksgiving Day, G-eorge Washington's Birthday, Labor Day, July Fourth, Hew Year's Day, and such other holidays as may be proclaimed by the President of the United States, ARTICLE IV Wa^Te s Section 1. No employee engaged in clerical, accounting or other office work shall be paid less than at the rrte of: Sixteen dollars ($16,0C) per week in cities of over 500,000 population or in the immediate trade area thereof; Fifteen dollars ($15.00) per week in cities between 250,000 and 500,000 population or in the immediate trade area thereof; Fourteen dollars (|14.00) per week in other places; except that office boys and messengers may be employed at a rate of not less than two dollars ( $2,00) bclov.' the above minim.a; provided that where any employees are classi- fied and compensated as office boys or messengers not more th,an five per cent (5'j) of all office employees shall be so classified and compensated, except that each establishment may employ at least one office boy or messenger at such rates. . Section 2. No watchman shall be paid less than at a rate of eighteen dollars ($18.00) per fifty-six (56) hour week. Section 3, No employee, other than those covered in Sections 1 and 2 ■of this Article, shall be paid at a rate of less than forty cents (4C(;^) per hours except that such employees may be paid at a rate of not less than thirty-five cents (35^) per hour in Virginia, North Carolina, South Carolina, Tennessee, Alabama, Georgia, Florida, Mississippi, Louisiana, Texas, Arkansas, Oklahoma, Kentucky, i Section 4. Employees engaged in light work comrtonly performed by female operatives may be paid at rates not less than five cents (5.^) per hour below the respective minima established in Section 3»of this Article. Section 5, Female employees performing substantially the same work as male em.ployees shall receive the same rates of pay as male employees; and where they displace male employees they shall receive the same rates of pay as the male employees displaced. Section 6. This Code establishes a minimum rate of pay which shall apply, irrespective of whether an employee is actually compensated on a time rate, piece v/ork, or other basis. Section 7, (a) In the event the normal full tim.e weekly working hours of any employee shall, under the provisions of this Code be reduced by not more than sixteen and two~tnirds per cent ( 16-2/3^) under the normal full time weekly working hours worked by said employee during the period from January 1, 9630 ; -39- 1933, to May 1, 1033, the wages of said employee shall not "be reduced "below the normal full time weekly wage paid said employee d'^oring said perii'd frr-m Janua- ry 1, 193C, to May 1, 1333. (h) In the event the normal full time weekly working hoiars of any om- plnyec shall, under the provisions of this Cede, he reduced "by more than six- teen and two«thirds per cent ( IG-S/S'^) under the normal full time weekly work- ing hours worked hy said employee during the period from January 1, 1033, tr May 1, 1033, the wages of said employee shall not he r?^durcd helow the normal full time weekly wage paid said employee during said period from January 1, 1033, to May 1, 1933, hy more than one-half (^) of the percentage of hourly reduction in excess of said sixteen and two-thirds percent (16-2/35^), ( c) In no case shall hourly wage rates be reduced. Section 8, Wages shall he exempt from fines and rotates; and from charg- es or deductions, except charges and df^ductions for employees' contrihutions, voluntarily made hy employees, or required hy law, for pension, insurance or henefit funds. No employer shall withhold wages except upon service of legal process or other pcpcrs lawfully requiring such withholding. Deductions for other, piirposes not heretoforp stated may he made only when the contract is in writing and is kept on file hy the emploj'-er for at least six (6) months after the completion of the contract. Section 0. Employees shall make payment of all wages in lawful currency or hy negotiahle checks payable on demand. All contracts of employment shall prescribe payment of wages at least every two (2) weeks. Section 10, A person whose earning capacity is limited because of ago or physical or mental handicap, or other infirmity, may be- employed on light work at a wage below the minim-am established by this Code, if the employer obtains from the State Authority designated by the United States Department of Labor, a certificate authorizing such person's employment at' such wages and for such hours as shall be stated in the certificate. Each employer shall file monthly .with the Code Authority a list of all such persons employed by him, showing the wages paid to, and the maxim"um hours of work for such employee. ARTICLE y G-eneral Labor Provisions Section 1. No person under sixteen (l6) years of age shall be employed in the industries. No person under eighteen (18) years of age shall be em- ployed at operations or occupations which aro hazardous in nature or dangerous to health. The Code Authority shall submit to the Administrator within nine- ty (on) days after the effective dato of tnis Code a list of such operations or occupations. In any jurisdiction an employer shall be deemed to have com- plied with this provision as to age if he shall have on file a certificate or permiit duly signed by the authority in such jurisdiction empowered to issue employment or age certificates or permits showing that the employee is of the required ago. Section 2. EKiployces shall have the right to organize and bargain col- lectively through representatives of their own choosing, and shall be free from, the interference, restraint, or coercion of employers of labor, or their 963n -4u- agi^r.ts i-.i t'\t) desitTno-tirn of such re pre se:it -.tires or in Golf-cr^TJiir.r.tior: or in other concerted rctivitios for the purpose of collective "bargaining .or other mutual aid or protection. Section 3. Ho employee and no one soekin;:-;: emplo.r'ment shall be required as a condition of employment to join any company \mion or to refrain from joining, or^anizinF,-, or assisting a labor or^aniz- tion of his own choosincj;. Section 4, Employers shall com-oly with the raaxiinum hours of labor, mini- mum rates of pa."", and other conditions of eraploiTnent, approved or prescribed by the President. Section 5. No employee nc? employed at a rate in excess of the minimum shall be discharged and re-employed at a lower rate for the purpose of evading the provisions of this Code. Section 6, No provision in this Code shall supersede any law which im- poses on em.ployors more strin+jent requirements ?..s to ago of employees, wa.'^cs, ho-ar of v;ork, or as to safety, health, snnitary or general working conditions,, or insurance, or fire protection, than are imposed by this Code. Section 7. No employer shall knowingly permit any employee to work for a total number of hours in excess of the nijmber of hours prescribed for his occupotion for erch week sndclny whether employed by one or more employers. Section 6.* No employer shall reclassify enrployees, or reclassify the duties or occuprtions performed by them, or change the method of compensation of employees, or engage in any subterfuge v/hich tends to or will defeat the purpose or provisions of the Act or of this ■Code. Section 9. Svery employer shall provide for the safety and health of employees during the hours and at the places of their employnient. Standards for safety and health shall "be submitted by the Code Authority to the Adminis- trator within three (3) months after the effective date of this Code. Section 10. All employers snail post and keep posted copies of this Code in conspicuous places accessible to all employees. Svery member of the in- dustries shall comply with all I'ules and regulations relative to the posting of provisions of Cooes of Fair Competition which rary from time to time be prescribed by the Administrator, ARTICLE VI Or~anization. Powers and Duties of Code Authorities ' Part A - Organization and Constitution, Section 1. Immediately upon the approval by the Administrator of an application, pursunnt to Article I, Section 1, of the Code, a Code Authority shall be constituted for the applicant grocery manufacturing industry. Section 2. Each such Code Authority shall consist of the niamber of mem- bers specified in the application for this Code by the industry for which it is to be constituted; and the members shall be grocery manufacturers engaged 9630 -11- in such industry and shall te selected in the follovvring manner: (a) Within fifteen (15) days after the approval of such application the applicant trade association or group shall institute an election of the members of the Code Authority for such industry. If candidates are nominated hy such trade association or group, due consideration shall "be given to the proportion of grocery manufacturers who are members and who are non-members of the trade association or group. Members so elected shall hold office for one (l) year or until their successors are elected as hereinafter provided. Vacancies in membership of a Code Authority shall be filled for i.uiexpired terms by the re- maining members of such Code Authority subject to the approval of the Adminis- trator. Each grocery manufacturer engaged in such industry shall be entitled to one ( l) vote for each member to be elected to the Code Authority, and may cast all votes for one person. At each election the voting may be in person, by proxy, or by letter, (c) . Any grocery manufacturing industry subject to the provisions of this Code may, under such rules and regulations as the Administrator shall pres- cribe, change the method of selection of its Code Authority as provided for in this Section, and such modified method of selection shall be followed in all subsequent elections for the Code Authority of such industry. Section 3. In addition to membership as above provided there may be on •each individual Cof'.e Authority from one ( l) to three (3) members, without vote, to be known as Administration Iv^embcrs to be appointed by the Administrator to serve for such terms as he may specify without expense to the industry. Section 4, Sach trade or industrial association or group directly or in- directly participating in the selection or activities of any Code Authority shall (l) impose no inequitable restrictions on membership, and (2) submit to the Administrator true copies of its articles of association, by-laws, regu- lations, and any amendments when made thereto, together with such other in- formation as to membership, organization, and activities as the Administrators may deem necessary to effectuate the purposes of the Act, Section 5, In order that each Code Authority shall at all times be truly representative of its individual industry and in other respects comply with the provisions of the Act, the Administrator may prescribe such hearings as he. may deem proper; and thereafter if he shall find that the Code Authority in question is not truly representative or does not in other respects comply with the provisions of the Act, may require an appropriate modification of such Code Authority. Section 6» Nothing contained in this Code shall constitute the members of any Code Authority, herein, provided for, partners for any purpose, nor shall any member of any such Code Authority be liable in any manner to anyone for any act of any other member, officer, agent or employee of such Code Authority, Nor shall any member of such Code Authority, exercising- reasonable diligence in the conduct of his duties hereunder, be liable to anyone for any action or omission to act under this Code, except for his own wilful malfeasance or non- feasance. 9630 -42- Section 7. In addition to the individan.1 industry'- Code Authorities pro- vided for in Section 1 of this Artirlo, there shall "be constituted a National Food and Grocery I^nufactaring: aidvicor;,'- j:..-.rd ci^ncistxn,?; of one nerahL,r to he s«.l<.cted by each individual industry Code Authority from its industry. In :::ddition to the membership as above provided, the Administrator may apooint not iTiOre than five (5) members \7ithout vote to serve for such time as he may specify. (a) The NationaJ. Tood and Grocery lirnufacturing Advisory Board shall be an advisors'- planning?; and ccordino.ting agency Tiithiu the rieaning of the Act for all grocery raanuf acturing industries to which all common matters may be re- ferred for advice. (b) • The National Food and Grocery Mr^nufacturing- Advisory Board shall appoint a representative or representatives to serve on a Food and Grocery Industry Conference Committee to be composed of representatives from food and grocery wholesalers, retailers, and manuf act^ircrs. The Food and Grocery In- dustry Conference Committee lla:'- act as jlanning and coordinating agency with- in the meaning of the Act for the entire food and grocery trade, Section 8. If the Administrator shall at any time determine that any action of any individual Code Authority or any agoncy thereof or of the Advisory Board may be unfair or unjust or contrary to the public interest, the Administrator may require that such action be suspended to afford an opportunit; for investigation of the merits of such action and further consideration by such Code Authority or agency or Advisory Board pending final ^.ction which shall not be effective unless the Administrator approves or unless he shall fail to disapprove after thirty (30) days' notice to him of intention to pro- ceed with such action in its original or modified form. Part 3 - Powers and Baties Section 1. Subj. ct to such rules and regulations as may be issued by the Administrator, uach Code Authority as provided. for herein shall have the follow ing powers and duties with respect to the grocery m.anufac taring industry select- ing it in addition to those authorized by other provisions of this Code. (a) To insure the ej;ecution of the provisions of this Code and to pro- vide for the compliance of the industry with the provisions of the Act. (b) To ndopt by-laws and rules and regul.ations for its procedure. (c) To obtain from grocery manufacturers such information and ret)orts as are required for the administration of the Code, In addition to information required to be submitted to the Cocl.e Authority, grocery manufacturers shall furnish such statistical inf orm-^tion as the Administrator may deem necessary for the purposes recited in Section 3 (a) of the Act to such Federal and State agencies as he nay designate; provided that nothing in this Code shall relieve any grocery manufacturer of any existing obligations to furnish reports to any Government agency. No individ-aal report shall be disclosed to any other grocer manufacturer or any other party except to such other Governmental agencies as may be directed hy the Administrator, (d) To use such trade associations and other agencies as it deems proper SS50 -43- for the carrying out of any of its activities provided for herein, provided that nothing herein shall relieve the Code Authority of its duties or re- sponsibilities under this Code and that such trade associations and agencies shall at all times "be subject to and comply with the provisions hereof* (e) To make recommendations to the Adhiinistrator and the National Grocery Manufacturers Advisory Board for the Coordination of the administra- tion of this Code and such other codes, if; any, as may be related to or affect members of the industries, (f) 1j It being found necessary in order to supioort the administration of this Code and to maintain the standards of fair competition established hereunder and to effectuate the policy of the Act, each such Code Authority is authorized: (a) 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 -"orovided .-md v/hich shall be held in trust for the purposes of the Code; (b) To submit to the Administrator for his approval, subject to such notice and opportunity to be heard as he nay deem necessary (l) an itemized budget of its estimated expenses for the foregoing purposes, and (2) an , equitable basis upon v/hich the funds necessary to support such budget shall be contributed by grocery manufacturers; (c) After such budget and basis of contribution have been approved by the Ad- ministrator, to determine and obtain eqiiitable contribution as above set forth by all grocery manufacturers, and to that end, if necessary, to in- stitute legal proceedings therefor in its own name, 2, Each grocery manufacturer shall pay his or its equitable contribution to the expenses of the maintenance of its ijidividual Code Authority, determin- ed as hereinabove provided, and subject to rules and regulations pertaining thereto issued by the Administrator. Only grocery manufacturers complying with the Code and contributing to the e>rpenses of its administration as here- inabove provided (unless duly exempted from making such contributions) shall be entitled to particip.ate in the selection of members of the Code Authority or to receive the benefits of a.ny of its voluntary activities or to make use of any emblem or insignia of the National Recovery Administration, 3, E?.ch Code Authority shall neither incur nor pay anjr obligation sub- stantially in excess of the amount the-reof as estimated in its approved budget, and shall in no event exceed the total amount contained in the approved budget, except upon approval of the Administrator; and no subsequent budget shall con- tain any deficiency item fcr expondit-'jr es in excess of prior budget estimates except those which the Administrator shall have--, so •'approved, (g) To delegate to the National Food and Grocery Manufacturing Advisory Eoard any or all of its -oowers and duties under this Code as now constituted or hereafter amended, (h) To recommend to the Administrator any action or measure deemed ad- visable including further fair trade practice provisions to govern its grocery -44- raanxif act lire rs in relation with each other or with other industries; measures for industrial planning and stabilization of employment, and including • modifications of this' Code pertaining to its particular grocery raan\ifactur- ing industry which shall "become effective as p^'rt hereof upon approval by the Administrator after such notice and hearing as he may specify. ARTICLE VII Unfair liethods 6f Competition Section 1. Qoen Price . (a) Ho grocery manufacturer shall offer to sell contract to sell, or sell (e::cept pursuant to a mutually irrevocable contract to sell not in violation of this Code when entered into) any product to a trade buyer except upon the basis of an open price v;hich is strictly adhered to. .while effective. The term "open price" as used in this Section means a -pric^ list (a) which is published or available for the equal information of all trade buyers (actual and solicited) alike locqt- ed in the same competitive market area, and (b) which declares all the manufacturer's orevailing prices, and discounts, rebates, allowances, and all other terms or conditions for the sale of such product, ■ • (-b)/ IJo grocery manufacturer shall make or permit to be made any direct or' indirerft price concession to a trade b-uyer. The term "direct or indirect price concession" means any variation from the ma-n"af acturer' s open pri«3, whether by means of a rebate, allowance, payment, free deal, gift, brokerage or by any other means whatsoever. (c) this Seetion shall not apply to sales of commodities customarily sold in bulk or a bid- and- asked basis in open competitive, buying; not to sales for charitable or relief purposes.' Section 2. . Unearned Service F'-^yment . No grocery manufacturer shall desigilate as an "advertising allo-jance" , a "promotion allowance" or by a similar term, any price reduction, discount, bonus, rebate, eoncession, or other form 'of allowajice, or any consideration for advertising or, promotion services offered or given by him to any customer, ■ , ■ No grocery manufa,cturer shall offer or give any consideration merely for "pushing", "advertising", or otherwise than for definite and specific adver- tising n'r promotion services,/ Such consideration shall be given only pursuant to a separate written contract therefor, which contract shall specifically ani completely set forth the advertising or promotion services (in such manner that their specific character may be understood by other members of the in- dustry and their customers) to be performed by the recipient of said con- sideration, the precise consideration to be paid or given therefor by said manufacturer, the method of determining performance, and all other terms and conditions relating thereto. No grocery man-ufacturer shall offer or give any such consideration \inless it is equally available for the same service to all competitive buyers in th« same competitive market, and -unless a copy of the written contract therefor is retained on file for a period of sixty (60) days .afiter the expiration thereof and in no event for less than one (1) year. In order to investigate an alleg- ed violation of this Code, the Administrator may require a grocery manufacturer 9630 ♦45- to report any such contract made "by him and/or to produce a copy thereof for inspection. Section o, Destructive Price CuttinjP; . Wilfully destructive price cutting is an unfair method of competition and is forbidden. Any grocery manufacturer or member of any other industry or the customers of either may at any time complain to the aporopriate Code Authority that any published price constitutes unfair competition as destructive price cutting imperiling small enterprises or tending toward monopoly or the impairinent of code wages ajid working conditions. Such Code Authority shall within five (5) days afford an opportimity to the manufacturer publishing the price to answer such com- plaint ' and Siia.ll within fourteen (14) days make a ruling or adjustment there- on. If such ruling is not concurred in by other party to the . complaint, all papers shall be referred to the Research and Planning Division of NRA which shall render a report and recommendation thereon to the Administrator, Section 4. Quantity Price . No grocery manufacturer shall offer or make a quantity price unless it is based upon and reasonable measured by a saving resulting from a substantial difference in the quantity sold and delivered. Section 5* Unearned Discount for Cash . Ho grocery manufacturer shall allow a discount for cash which is not earned by payment in accordance with the cash discount terras specified in his open price list. Section 6, Payment or Di ver sion of Brokerage . No grocery manufacturer shall pay or permit to be paid a brokerage or commission to a trade buyer, t Section 7. Fraudulent Prizes or Premiums . No grocery manufacturer shall offer or give "Prizes, premi'ams, or anything of value by any of the following methods: (a) In ways -'Lich involve lottery in any form, the term "lottery" as used herein including bujb without limitation, any plan or arrangement whereby the premium offered involves the element of chance and/or differs substantially and inequitable in value from buyer and buyer of the same quantity and/ or distribution class; (b) In ways which involve misrepresentation or fraud or deception in any form, including, but without limitation, the word "free", "gift", "gratuity" or language of similar import in connection with the giving of premiums for the purpose or with the effect of misleading or deceiving buyers; (c) By giving premiums to any buyers when such premiums are not offerei. to all customers of the same class in the trade area. Section 8. Unfair Substitution . No grocery manuf actxirer shall substitute without due notice and consent of a trade buyer another product for that order- ed from him. Section 9. Commercial Bribery . No grocery manufacturer shall give, permit to be given, or directly offer to give, anything of value for the pur- pose of influencing or rewarding the action of any employee, agent, or rep- resentative of another in relation to the business of the emioloyer of such 9630 -4G- emploj'-ee, the principal of such ageut or tlic repre stinted pnrty, without the knowledge of such LP.nloyer, principal, or p-^rty. This r)rovision shall not be construed or prohibit free and general distribution of articles commonly used for advertising e::cept so f'^r n.s sucl\ articles are -actually used for commercial bribery as hereinabove defined. Section 10. False Label or Advertisenent en Container . No grocery manu- facturer (a) shall jell a product falsely or deceptively labeled or marked; or (b) falsely or deceptively advertise a product; or (c) use a deceptive container or givi, short 'weight or ncnsure or count. Section 11. Unfair Interference '.dth Competitors' Business . Ho grocery manufacturer shall unfairly interfere vrith a competitor's business, "by utter- ing false statements about his business or by -unfairly disparaging his businesi or products or by inducing a breach of his contracts, AHTICLE VIII I.iodification Section 1, This Code and all the provisions thereof are expressly made subject to the ri^ht of the President, in accordance viith the provisions of subsection (b) of Section 10 of the Act, from tir.ie to time to cancel or modify any order, aporovol, license, rule, or regulation issued under Title I of said Act. Section 2. Such of the. provisions of this Code as are not required to be included herein by the Act may, v^ith the -approval of the Administrator, be modified or eliminated in such manner as may be indicated by the needs of the public, by ch.-mges in circjinstances, or be experience. ARTICLE IX I.lonopolies No provision of this Code shall be so applied as to permit monopolies or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprises. ARTICLE X None of the provisions of this Code relating to prices or terns cf selling! shipping, or marketing shall apply to export tmde or sales or shipments for export trade, "E^'iport Trade" shall be defined as sales or shipments outside of the continental United States. 9630 -47- APPEl-IDIX VIII. June 9, 1934. TO: TIIE /iDMINISTiUTOR FROM: mA ADVISORY CO'JlvCIL SUBJi:CT: BASIC CODE The Advisory Council unani^aously apr)roves your proposal for the speedy codification of industry, if adjusted to care for the following sToecific reconmendations: 1, That the proposed plan shall not aDply (a) to certain in- dustries to he designated hy the Administrator (or the Advisory Council) whose codes are nearing completion; and (h) to certain few major industries as yet uncodified whose importance warrants the preparation of individual codes in accordance with existing procedure, such major industries to he desit?;nated hy the Administrator (or the Advisory Couiicil) . 2, That industries as yet uncodified and not covered ahove he encouraged to consolidate with kindred industries, therehy coming under the complete provisions of some existing approved code. The determination of the proper kindred industry shall he hy the Administrator, 3, That all other industries now uncodified a.nd not dealt with hy the ahove provisions he urged to adopt the Basic Code, The provisions of the proposed Basic Code he moAi- fied as follows: A, That no flat declaration of hours and wages he made, hut that the hours and wages for any in- dustry applying for the Basic Code he those already approved for kindred industries, the Adiainistrator to determine the proper kindrei industry. The provisions of the kindred in- dustry code shall also apply with regard to daily and weekly maximum hours, permissihle overtime and overtime wages. B, That the additional lahor provisions set forth in Exiiihit "A" hereto annexed, and now recognized as standard lorovisions, shall he included in the Basic Code, 4, That there "be clarification and emphasis to avoid possihle false impression (received hy all memhers of the Industrial Advisory Board) on the following points; 9630 ■p -10- A, Zhrt this raove contei.rolc'ites purely vo Lvjitr.ry action fro;a industries, v.ith the possible exceotion of im- oortpnt exceptional industries, if any, nhich fail to apply and. are foijnd to have substanc"ard \7orl:ing conditions; 3. That this is not e. nove to force all remaining in- dustries under codes; C. That the service code :aove is entirely separate and regains iinchanged; D, That the -ouroose of this move Is to "orovide a simple means of giving a code forthrvith to those remaining industries who desire a code, so as to clear the deck for administr,'.Ltion of aDorovod codes. NEA ADVISORY COF/CIL Per iTillard L. Thorx) 9630 -49- APPENDIX IX August 6, 1934 To: Col. G. A. Lynch From: Robert K. Straus Subject: Completion of Code Making 'In accordance with your request for information as to thp progress of the drive to complete code making by August 10, I beg to submit the following tabulation: o •H CO •r) !> • H R individual Codes (Ready AU;gUSt 10) X-6l Consoli- dations (Ready August 10) X-6l Basic Codes (Ready August 10) Industries still uncodified on Au2U-st 10 Herring still to be held - vfill not be ready Aug. 10 Action delayed pending Gen- eral's return YiO decision as to disposition reached on August h Deadlock - Prob- able candidate for 3rd code Has Refused to | apply under X-6l candidate for 3r.d H cd 4^ o EH I II III IV V VI VII 11 11 . 18 3 7 21 2 2 7 9 3 1 5 3 4 4 2 1 23 1 5 4 5 59 1 2 22 4 3 2 59 2/ 1 1 1 1 35 24 32 14 17 1/ 86 7 Totals 75 31 15 97 3 22 68 2 2 215 l/ In this Division there are 23 Service Codes in addition, which will be hrjidled under Executive Orders 2_/ Of comment on Division Report annexed 9630 -5u- .. You v;ill note that 119 codes v/ill be disposed of by Auf^st 10, A balance 'of 97 codes vail be left on that date. Of these 97 no action has been talcen of 22 in Division I :^endinp; the retxirn of the Administrator. This ■^tov:;-) in- cludes Anthracite, ShiT)-oing and Public Utility codes. In addition, no deci- sion has Qeen reached on 59 codes rvhich are charg:ed to Division VI. In every one of these cases a letter has been sent to the Industry enclosing a copy of Acaninistrative Order X-61, but in most of these cases, the industries have not replied. In the fe-.? cases where they iiave replied, they h£>.ve in- dicated that they will not a"oply for codification under X-61 since they can- not secxire trade practice provisionti at the same time from the AAA. I have instructed Division VI to warn all of these industries that if thej;- do not appl^'- u:ic.er X~61 for coaification by AU|?nist 10, it may be ne ce s saj.':'' to in- vestigate labor conditions in these industries with an eye to inposing a code vrnder Paragraph 3-D of ITIHA. I have had several conversations '^ith officials of the DeiDartnent of Ar;riculture , including Under- Se ere tarj-- Tu^.rell, and I have told them that this will probably be necessary. They do not object to our going ahead on this basis, and indeed, they added that they see no reason why an industry should expect to receive trade practice provi- sions at the same tine as they receive labor provisions. I do not recoruiend, however, that action be talcen imnediately on August 10 with reference to these ind'dstries in Division VI, It would seem to me preferable that the Administrator should malce a statement, after conference with the Secretary of Agriculture, giving these industries some twenty days more (up to September l) in v/hich to apply under X-61, but warning them that if they have not av)plied by September 1, investigation of labor conditions in these industries rill start immed.iately. If v/e except the 81 codes which have been held up because of the special situations described above which exist with reference to them, and if we exceiot the 23 codes which have been transferred to Division V as Service Cedes, and to which the Executive Orders apply, some 18 industries only v;ill be left on Awaist 10 which must be codified. These will be reduced, I an sure, within a fev; days after Aumst IC, At this point I wish to call attention to the situation which exists with reference to sup-olemental codes. Code Record rer)orted on August 3 that 141 supple. .ental codes awaiting approvaj. In ay judgment, it was not the Administrator's intention to include these in the drive to complete code making. These industries are already codified in that they are operating under labor provisions of basic codes. If the Administrator wished to cease approving supplemental codes as of August 10, he could do so without in- flicting a.n-f injury on labor since the eniplo7^es of these industries are already thoroughly protected under codes, I wo^ald like to call attention to the status of Division II, As of August 10, it will have only one code awaiting disposition, and it is probable that this industry will be a candidate for a nrescribed code, since it hr.s been unwilling to come to an agreement, I think that much credit is due i.j:. Heal IToster for this excellent record. The efficiency and thorough- ness with vrhich he has cooperated v.dth me in this drive to complete code making lir.s indeed been gratifying, Robert K. Straus, Chairman, Committee on the Completion of Code Making, 9630 -51- APPENDIX X. • Tentative Outline A. BASIC CODE (X-6l) I. CODE-MAKING AS FIRST PHASE OF NRA A. Period of intense activity B. The Code-makiiig process ' 1« Authority 2. Objectives . (a) Industry urged to take initiative (b) Major Industries given first attention 3. procedure (a) NRA Biilletin #2 (Basic Codes of Fair Competition) C. Industry sponsored 3 (a) Codes 1. Number submitted and approved to 7/l/34 (a) Major Industries (over 50,000 employees) (b) Minor Industries (less than 50, COO employees) (c) Service Trades 2, Number -pending as of 7/l/34 D. j\greements under 4 (a) 1. Promulgation of PEA (a) Effect on Code-making E. Imposed Codes 1. Po\7ers of President under 3 (d) and 7 (c) 2. Extent used (a) Imposed Code Amendments (l.) Cotton G-ai-ment (36 Hour maximum work week) (2) Other instrnccs II. FACTORS LEADING TO CH.4NGE IN POLICY A. Code-making nroblems B. Most of industry codified 1. Small groups left mainly C. Need for concentration on other problems 1, Administration of approved codes 2, Clamor for compliance and enforcement III. PLAN. FOR COMPLETION OF CODE-MAKING A. General Theory 1. Expeditious method of codifying remaining uncodified trades and industries desiring Codes 2. Free KRA from initial codification of industries for adminis- tration of approved codes 3. Relieve smaller industries of expenditure of timp and money involved in* the adoption and administration of an individual Code. B. Steps taken to carry out plan. 1. Administrative Order No. X-61 2. " " " X-62 3. " " " X-63 9630 4. Office Order No. 100 5. Administrative Order, No. X-84 C. j^plicfition 1. Inaustries excepted D. Ootionsl methods of codif icp.tion availa.ble 1. By api5lic?_tion for the "basic Code 2. By applic^-.tion for consolidation v^/ith approved code for kindred trade or industry E. Time limitation on apnlicr.tions F. ProcecAire for handling applications 1, Truly representative "body of the trade or industry must aprly 2, Notice and hearing 0. Approval of applications (a) Industries employing less than 50,000 persons (h) All other trades or industries 4. Committee for completion of code~making (a) Functions (l) Supervise execution of plan IV» ADlilNISTRATIOK OF PLAN A. General l^IEA Cods Authority 1. Members and how appointed 2. Porers and duties 3. Use for puriooses other than administration of basic code, (a) Cotton Garment Industry Code (h) Retail Solid Fuel Code (c) Other codes 4. Questioned legality of functions V. ACTL'AL OPERATION. OF PLAN A» Nui-iher of Applications for Basic Code 1, Those ap'-^roved and disapproved B. Nujmher of Applications for Consolidation 1. Those aprroved and disap-oroved 2. One joint AAA-NRA Code consolidation (a) Terminal Grain Elevator Industry placed under Grain Exchanges Code C, Deviations and Modifications Desired by Industry D, Code-making Continued VI. DEPARTURE FROM PLAN A, AdJiiini strati ve Order No. X-89 (Basic Code for Grocery Manu- facturing Industries) 1. Main purposes: (a) To facilitate the program outlrned in Administrative Order No. X-61 (b) To bring difrerent industries engaged in manufacture of food and grocery -oroducts, to greatest extent -Doscible, under comparable code provisions 9630 -53- VII. CONCLUSIONS A, Did Plan Accomplish the Desired Cbjectives? B, Was Plan Practical? C. Wotild Better Results Have Followed Earlier Adoption of Plan? D. Was Tj-pe of Notice Used Sufficient? E, Did the Act Contemplate that Groups Could "be Codified in Such Manner? F. Dele^gation and Redelegation of Fov/er, 9630# ?To»K noaM U» S. National recovery ad- ministration. no. 55 Work materials. UNIVERSITY OF FLORIDA 3 1262 08542 5303 '^M:''- ■<• .■i ..t^.u,.; ■)«■ ^mmm