• Approved Code No. 347 — Supplement No. 31 Registry No. 1399—57 NATIONAL RECOVERY ADiMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE ENVELOPE MACHINE MANUFACTURING INDUSTRY (A Division of the Machinery and Allied Products Industry) AS APPROVED ON JULY 20, 1934 V/E DO OUR PART UNIV. OF FL LIB. DOCUAI£MTS PEPT._ / ■ U.S. DEPOSITS- UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the ^iperintendent of Documents, Washington, D.C. ........ Price 5 rent* This publication is for sale by the Superintendent of Documents, Government Printing Office, Washington, D.C., and by district offices of the Bureau of Foreign and Domestic Commerce. DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE Atlanta, Ga.: 504 Post Office Building. Birmingham, Ala.: 257 Federal Building. Boston, Mass.: 1801 Customhouse. Buffalo, N.Y.: Chamber of Commerce Building. Charleston, S.C.: Chamber of Commerce Building. Chicago, 111.: Suite 1706, 201 North Wells Street. Cleveland, Ohio: Chamber of Commerce. Dallas, Tex.: Chamber of Commerce Building. Detroit, Mich.: 801 First National Bank Building. Houston, Tex.: Chamber of Commerce Building. Indianapolis, Ind.: Chamber of Commerce Building. Jacksonville, Fla.: Chamber of Commerce Building. Kansas City, Mo.: 1028 Baltimore Avenue. Los Angeles, Calif.: 1163 South Broadway. Louisville, Ky.: 408 Federal Building. Memphis, Tenn.: 229 Federal Building. Minneapolis, Minn.: 213 Federal Building. New Orleans, La.: Room 225- A, Customhouse. New York, N.Y.: 734 Customhouse. Norfolk, Va.: 406 East Plume Street. Philadelphia, Pa.: 422 Commercial Trust Building. Pittsburgh, Pa.: Chamber of Commerce Building. Portland, Oreg.: 215 New Post Office Building. St. Louis, Mo.: 506 Olive Street. San Francisco, Calif.: 310 Customhouse. Seattle, Wash.: 809 Federal Office Building. Approved Code No. 347 — Supplement No. 81 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE ENVELOPE MACHINE MANUFACTURING INDUSTRY As Approved on July 20, 1934 ORDER Aitroving Supplementary Code of Fair Competition for the Envelope Machine Manufacturing Industry a division of the machinery and allied products industry An application having been duly made pursuant to and in full compliance with the provisions of Title I of the National Industrial Recovery Act, approved June 16, 1933, for approval of a Supple- mental Code of Fair Competition for the Envelope Machine Manu- facturing Subdivision of Machinery and Allied Products Industry, and hearings having been duly held thereon and the annexed report on said Supplemental Code containing findings with respect thereto, having been made and directed to the President: NOW, THEREFORE, on behalf of the President of the United States, I, Hugh S. Johnson, Administrator for Industrial Recovery, pursuant to authority vested in me by Executive Orders of the Presi- dent, including Executive Order No. 6543-A, dated December 30, 1933, and otherwise; do hereby incorporate by reference said an- nexed report and do find that said Supplemental Code complies in till respects with the pertinent provisions and will promote the policy and purposes of said Title of said Act; and do hereby order that said Supplemental Code of Fair Competition be and it is hereby approved subject to the condition that the provisions of Article IX, Section (1) be and they hereby are stayed, pending the submission of satisfactory evidence concerning distribution of the products of the Subdivision to the Administrator. Hugh S. Johnson, Administrator for Industrial I Recovery. Approval recommended : Barton W. Mi i.kay, Division ■ ! drniiristrator. Washington, D.C., July 20, 1934. 75210° 820-113 34 (1) REPORT TO THE PKESIDENT The President, The White House. Sir: This is a report on the Supplemental Code of Fair Competi- tion for the Envelope Machine Manufacturing Subdivision of the Machinery and Allied Products Industry, public hearing having been conducted thereon in Washington, D.C., December 21, 1933, in accordance with the provisions of Title I of the National Industrial Recovery Act. Every person who filed a request for an appearance was freely heard in public and all statutory and regulatory require- ments were complied with. GENERAL STATEMENT The Envelope Machine Manufacturers Association, being truly representative of this Subdivision of the Machinery and Allied Products Industry, has elected to avail itself of the option of sub- mitting a Supplemental Code of Fair Competition, as provided in Article I of the Basic Code for the Machinery and Allied Products Industry approved by you on the seventeenth day of March, 1934. This Subdivision represents a part of the capital goods industry, manufacturing and selling machinery and/or parts thereof for use in the manufacture and/or production of envelopes of all kinds. ECONOMIC EFFECT Employment in this Subdivision of the Industry, in 1929, of approximately 250 wage earners, declined to approximately 121 wage earners in 1933, or 52 per cent. Annual sales of this Subdivision of the Industry declined 60% from 1929 to 1932. The Subdivision anticipated a possible further decline in 1933 sales. The average work week in October 1933 was 45.3 hours ; with pro- duction remaining at present levels, an increase of approximately 13 per cent in employment may be expected with the adoption of the 40-hour week. The minimum hourly rates in the approved Basic Code consist of one differential for the South and three city population differentials for all other sections of the United States as follows: Over 50,000 population, 40 cents per hour; 10,000-50,000 population, 38 cents per hour; 10,000 population and under, 36 cents per hour; South, 32 cents per hour. In addition to the minimum wage rates shown above, the Basic Code provides that women engaged in substantially the same work as men shall receive the same rate of pay as such men employees ; that the minimum wage for women employees engaged in plant operations (2) shall bo not loss than 87.5 percent of the proper rate for the locality in which employed as specified; and that the minimum in he South shall be not loss than 32 cents per hour. A distribution showing the number of factory workers receiving classified hourly rates is not available, consequently, the number of factory workers receiving less than the specified minimum rates provided in the Basic Code cannot be estimated, nor the effect which the minimum rates will have on the pay rolls of this Subdivision of the Industry. RESUME OF THE SUPPLEMENTAL CODE Article I states the purpose of the Supplemental Code. Article II accurately defines specific terms employed in this Sup- plemental Code. Article III. The labor provisions of the Basic Code for the Ma- chinery and Allied Products Industry, as approved March 17, 1934, are incorporated by reference as the labor provisions of this Supple- mental Code. Article IV adopts the relevant portions of Article VI "Adminis- tration ", and Article VIII, " Modifications and Termination ", of the Basic Code for the Machinery and Allied Products Industry, as approved March 17, 1934. Article V establishes a code authority consisting of three mem- bers. The Administrator maj^, in his discretion, appoint one addi- tional member, without vote and without expense to the Subdivision. Together with the applicable provisions of the Basic Code, mecha- nism is provided for the administration of this Supplemental Code. Article VI provides for an accounting system and methods of cost finding and/or estimating. Article VII provides that during an emergency, the lowest reason- able cost of products of the Subdivision may be determined, and that during said emergency, it shall be an unfair trade practice to sell at less than the determined reasonable cost. Article VIII sets forth the trade practices which have been espe- cially designed to offset unfair competition in this Subdivision. Article IX provides for the filing with the Code Authority, by employers in this Subdivision, of their discount periods and terms of sale, as well as for the filing of any modifications thereto. Article X defines export territory and provides that filed discount periods and terms of sale are not applicable to export shipments. Article XI contains the mandatory provisions contained in Section 10 (b) of the Act, and also provides for the submission of proposed amendments to the Supplemental Code. This Article also states that this Supplemental Code shall terminate June 1G, 1935. Article XII provides for the withdrawal of this Subdivision from the jurisdiction of the Basic Code Authority and for the continued functioning of this Subdivision as an individual industry under its own Code. Article XIII stipulates that there shall be no inequitable restric- tions and provides against monopolies. Article XIV gives the effective date of this Supplemental Code. FINDINGS The Deputy Administrator in his final report to me on said Sup- plemental Code having found as herein set forth and on the basis of all the proceedings in this matter : I find that : (a) Said Supplemental Code is well designed to promote the policies and purposes of Title I of the National Industrial Kecovery Act, including removal of obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof, and will provide for the general welfare by promoting the organiza- tion of industry for the purpose of cooperative action among the trade groups, by inducing and maintaining united action of labor and management under adequate government sanctions and super- vision, by eliminating unfair competitive practices, by promoting the fullest possible utilization of the present productive capacity of industries, by avoiding undue restriction of production (except as ma}' be temporarily required), by increasing the consumption of industrial and agricultural products through increasing purchasing power, by reducing and relieving unemployment, by improving standards of labor, and by otherwise rehabilitating industry. (b) Said Subdivision normally employs not more than 50,000 employees; and is not classified by me as a major industry. (c) The Supplemental Code as approved complies in all respects with the pertinent provisions of said Title of said Act, including without limitation Subsection (a) of Section 3, Subsection (a) of Section 7, and Subsection (b) of Section 10 thereof; and that the applicant association is an industrial association, truly representative of the aforesaid Subdivision; and that said association imposes no inequitable restrictions on admission to membership therein. (d) The Supplemental Code is not designed to and will not permit monopolies or monopolistic practices. (e) The Supplemental Code is not designed to and will not elim- inate or oppress small enterprises and will not operate to discrim- inate against them. (f ) Those engaged in other steps of the economic process have not been deprived of the right to be heard prior to approval of said Supplemental Code. For these reasons, therefore, I have approved this Supplemental Code, on the condition that the provisions of Section 1, Article IX be stayed, as stated in the Order. Kespectfully, Hugh S. Johnson, A d?rwiistrator. July 20, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE ENVELOPE MACHINE MANUFACTURING INDUSTRY, A DIVISION OF TIIE MACHINERY AND ALLIED PRODUCTS INDUSTRY Article I — Purposes To effectuate the policy of Title I of the National" Industrial Re- covery Act, the following provisions are established as a Supple- mental Code for the Envelope Machine Manufacturing Subdivision of the Machinery and Applied Products Industry, and together with the Code of Fair Competition of Machinery and Allied Products Industry, shall be the standard of fair competition for this Sub- division, and shall be binding on every employer therein. Article II — Definitions "Applicant " means the Envelope Machine Manufacturers Asso- ciation, a trade organization, all members of which are engaged in the manufacture for sale of the products of the Envelope Machine Manufacturing Subdivision of the Machinery and Allied Products Industry. " Industry " means the Machinery and Allied Products Industry, as defined in its Code of Fair Competition as approved by the Presi- dent, and as such definition may from time to time be amended. " Subdivision " means this Envelope Machine Manufacturing Sub- division of the Machinery and Allied Products Industry as defined and set forth in Paragraph 11 of Article II of the Code of Fair Competition of the Machinery and Allied Products Industry as follows : " Envelope Machine Manufacturing Subelivision means the manu- facture for sale of machinery and/or parts thereof for use in the manufacture and/or production of envelopes of all kinds, including the erecting, designing, servicing, maintenance, and repair of such machinery and/or parts thereof, and includes all those engaged in such manufacture for sale." The foregoing definition shall not permit the manufacture for sale under this Supplemental Code of electrical products included within the scope of the Electrical Manufacturing Industry as defined in the Code of Fair Competition for said Industry, except where such electrical products are sold as a part of the products of this Subdivision and are not sold as separate electrical products in com- petition with similar products included within the scope of the Electrical Manufacturing Industry as defined in the Code of Fair Competition for said Industry; provided, however, that any em- plover hereunder mav manufacture and sell under this Supplemental Code any spare and/or replacement parts of any such electrical products for use with products defined hereunder, which were originally manufactured and sold by him. (5) When carried on at the point of installation, the work of installing., erecting, rebuilding and/or servicing of the products of the Subdivi- sion (including attachments, accessories and/or replacement and re- pair parts therefor, included within the definition of the Subdivi- sion) shall be subject to the provisions of this Supplemental Code, only when performed by the employer hereunder selling such prod- ucts or by a company affiliated therewith. " Code " means the Code of Fair Competition of the Machinery and Allied Products Industry, as approved by the President, March 17, 1934, and as from time to time amended. " Person " means a natural person, a partnership, a corporation, an association, a trust, a trustee, a trustee in bankruptcy, a receiver, or other entity. " Employer " means any person engaged in the Subdivision, either on his own behalf, or as an employer of labor. " Employee " means any one who is employed in this Subdivision by any such employer. "Apprentice means an employee who is regularly engaged in learning a trade under a course of training designed to advance him systematically in the various operations of such trade to become a competently skilled mechanic. " The Act " means Title I of the National Industrial Recovery Act. " The President " means the President of the United States. " The Administrator " means the Administrator for Industrial Recovery. " Basic *Code Authority " means the Code Authority for the Ma- chinery and Allied Products Industry as constituted by the Code. " Code Authority " means the Code Authority constituted for this Subdivision as provided by the Code and by this Supplemental Code. " Group Code Authority " means the Code Authority for any group or product classification within this Subdivision. " Experimental Machine " means a machine of new design or type which requires mechanical experimentation in its development and which requires operation and testing to establish its ability to per- form the functions for which it was designed and manufactured. Article III — Employment Provisions The following articles of the code, viz : Article III, " Working Hours " ; Article IV, " Wages " ; and Article V, " General Labor Pro- visions " are hereby made a part of this Supplemental Code, with the same effect as if they were written into this Supplemental Code. Article IV — Adoption of Other Provisions of Code The following Articles of the Code, viz : Article VIj " Adminis- tration " and Article VIII, " Modifications and Termination " to the extent that they shall be applicable to this Supplemental Code as such, or as it may hereafter oe administered as an autonomous Code, are hereby adopted and made a part of this Supplemental Code with the same effect as if they were written into this Supple- mental Code. Article V — Administration (a) A Code Authority is hereby constituted to administer and supervise, and to facilitate the enforcement of, the Code and of this Supplemental Code During th»> period not to exceed sixty days following the effective date of this Supplemental Code, the Board of Directors of the Ap- plicant shall constitute a temporary Code Authority. The Admin- istrator, in his discretion, may appoint one additional member (with- out vote and without expense to the Subdivision). The temporary Code Authority shall, within sixty days after this Supplemental Code becomes effective, set up a permanent Code Au- thority to succeed the temporary Code Authority. Such permanent Code Authority shall be elected at a meeting called for this purpose, to which all known employers in this Subdivision shall be invited on at least ten days' notice by registered mail, with the right to vote either in person or by proxy. The permanent Code Authority shall consist of three members, who shall be connected with employers within the Subdivision, no two of whom shall be representatives of the same employer. The Administrator, in his discretion, may appoint one additional member (without vote and without expense to the Subdivision). Any employer in this Subdivision shall be eligible for member- ship in the Applicant. Any employer in the Subdivision shall be entitled to vote (subject to the provisions of Section (a) of this Article V) at the election of, and share in the benefits of the activities of, the Code Authority and may participate in any endeavors of the Code Authority, by paying his pro rata share of the reasonable cost of creating and adminis- tering it as determined by the Code Authority. The members of the permanent Code Authority shall be elected in the following manner : (1) Emptors in the Subdivision who are not members of the Applicant shall, if they so desire, be entitled to have one of their number a member of the permanent Code Authority. Such desire shall be evidenced by such employers at the meeting for the election of the permanent Code Authority. If the non-members of the Appli- cant desire to elect one of their number to the permanent Code Au- thority, this member shall be elected by a majority vote of such employers present in person or by proxy, each such employer to have one vote; and two members shall be elected from and by the em- ployers who are members of the Applicant, by a fifty-one per cent vote of such employers present in person or by proxy on the basis of one vote for eaeh such employer, and one additional vote for each such employer for each $150,000, or fraction thereof, of sales of products of this Subdivision made by him in the calendar year 1932, as reported by him to the Code Authority. (2) In case such representation is not desired by the non-members of the Applicant, as provided in the next preceding paragraph marked (1), then one member shall be elected to the permanent Code Authority by a majority vote of employers present in person or by proxy, each employer to have one vote; and two members shall be elected from and by the employers who are members of the Appli- 8 cant by a fifty-one per cent vote of such employers present in person or by proxy on the basis of one vote for each such employer, and one additional vote for each such employer for each $150,000, or fraction thereof, of sales of products of this Subdivision made by him in the calendar year 1932, as reported by him to the Code Authority. Any vacancy on the Code Authority, due to death, resignation, or because a member thereof has ceased to be connected with this Sub- division, shall be filled at a meeting of employers called by the Code Authority on at least ten days' notice by registered mail sent to all known employers in this Subdivision, and by a vote similar to the vote by which the retired member was originally selected. The Code Authority shall adopt rules and regulations for its procedure and employ such personnel as it may deem necessary. (b) In order that the Code Authority shall at all times be truly representative of the Subdivision and in other respects comply with the provisions of the Act, the Administrator may provide such hear- ings as he may deem proper ; and, thereafter, if he shall find that the Code Authority is not truly representative or does not in other re- spects comply with the provisions of the Act, may require an appro- priate modification in the method of selection of the Code Authority, or any Group Code Authority. (c) Action by employers in any Subdivision meeting for the adoption of procedural rules, revisions, or additions to the Supple- mental Code, or the transaction of other business of the Subdivision, shall be by vote of the employers in the Subdivision who are entitled to vote thereat, as provided in this Article V, and are present in person or by proxy duly executed and filed with the Code Authority. Any action taken at any meeting of employers shall be by a majority vote (unless otherwise provided in this Supplemental Code) cast and computed in each of the two following methods : ( 1 ) By one vote for each employer ; (2) By vote of employers weighted on the basis of one vote for each $150,000 or fraction thereof of sales of products of this Subdi- vision made by him in the calendar year of 1932, as reported by him to the Code Authority. Each employer shall be entitled to at least one such vote. (d) With a view to keeping the President informed as to the observance or non-observance of the Code and of this Supplemental Code, and as to whether this Subdivision is taking appropriate steps to effectuate the declared policy of the Act, each employer shall pre- pare and file with such person or organization as the Basic Code Authority or the Code Authority may designate and at such times and in such manner as may by Basic Code Authority or Code Author- ity be prescribed (to be held and used subject to the limitations of Article VI of the Code and this Article V of this Supplemental Code) statistics of plant capacity, volume of production, volume of sales in units and dollars, orders received, unfilled orders, stocks on hand, inventories, both raw and finished, number of employees, wage rates, employees earnings and hours of work, and such other related data or information as the Basic Code Authority or Code Authority may from time to time require. In addition to information required to be submitted to Basic Code Authority <>r Code Authority, there shall l>e furnished to Govern- ment agencies such statistical information as the President may deem necessary for the purposes recited in Section 3 (a) of the Act. The records required for such purposes shall be created and maintained in such a way as to disclose accurately the information required from time to time by Government agencies under the provisions of this Section (d) and of Section (e) of Article VI of the Code. (e) Except as otherwise provided in the Act, all individual sta- tistics, data, and information of individual employers, filed in ac- cordance with the provisions of the Code and of this Supplemental Code shall be kept confidential; provided, however, that nothing therein shall prevent the publication of general summaries of such statistical data and information. The statistics, data, and information relating to anj 7 one employer shall not be revealed to any other employer, or to anyone, except for the purpose of administering or facilitating the enforcement of the provisions of the Code or of this Supplemental Code. The Basic Code Authority, or the Code Authority, by its duly authorized repre- sentatives (who shall not be an employer or in the employ of any employer affected by the Code or this Supplemental Code) shall have access to any and all statistics, data and information that may be furnished in accordance with the provisions of the Code or of this Supplemental Code. (f) Aggregations of employers having a common interest and common problems may be grouped by Code Authority for admin- istrative purposes into various groups or product classifications. In each group or product classification there may be a Group Code Authority approved or appointed by Code Authority. (g) If formal complaint is made to Code Authority that provi- sions of the Code or of this Supplemental Code have been violated by any employer in this Subdivision, the Code Authority or the proper Group Code Authority may, to the extent permitted by the Act, cause such investigation or audit to be made as may be deemed necessary. If such investigation is made by Group Code Authority, it shall report the results of such investigation or audit to Code Authority* for action. (h) If any employer in this Subdivision is also an employer in any other industry, the provisions of this Supplemental Code, and the jurisdiction of Code Authority hereunder, shall apply to and affect only that part of the business and product of such employer which is within this Subdivision. Article VI — Accounting and Costing The Code Authority may cause to be formulated an accounting system and methods of cost finding and/or estimating capable of use by all employers in the Subdivision. After such system and methods have been formulated, full details concerning them shall be made available to all employers. Thereafter, all employers shall deter- mine and/or estimate costs in accordance with the principles of such methods. 10 Article VII — Selling Below Reasonable Cost Section 1. When the Code Authority determines that an emer- gency exists in this Subdivision and that the cause thereof is destruc- tive price-cutting such as to render ineffective or seriously endanger the maintenance of the provisions of this Supplemental Code, the Code Authority may cause to be determined the lowest reasonable cost of the products of this Subdivision, such determination to be subject to such notice and hearing as the Administrator may require. The Administrator may approve, disapprove, or modify the determi- nation. Thereafter, during the period of the emergency, it shall be an unfair trade practice for any employer of the Subdivision to sell or offer to sell any products of the Subdivision for which the lowest reasonable cost has been determined, at such prices or upon such terms or conditions of sale that the buyer will pay less therefor than the lowest reasonable cost of such product or products. When it appears that conditions have changed, the Code Authority, upon its own initiative or upon the request of any interested party, shall cause the determination to be reviewed. Section 2. The foregoing Section (1) shall not apply to (a) dropped lines, or (b) seconds, or (c) inventories which must be disposed of by any employer at any price and on any terms or condi- tions, but only if such employer, not less than two weeks before such proposed disposal, has filed with Code Authority a statement in writing setting forth the facts of, and reasons for, such proposed disposal and the price and terms and conditions of sale, and Code Authority has not, with the approval of the Administrator, before the termination of such two week period, in writing, disapproved the proposed disposal. Notice of such disposal, if not disapproved, shall be sent immediately to all employers manufacturing products of equivalent design, character, quality or specifications, who may sell such products at prices and on terms and conditions as favorable as those stipulated in the proposed disposal, when meeting the com- petition of such proposed disposal. Section 3. The foregoing Section (1) shall not apply to a sale made in order to meet competition on products manufactured out- side the United States. For such disposal, any employer may sell at prices and on terms and conditions as favorable as those on the competing foreign product, but only if he has first reported to the Code Authority his intention so to sell, and the facts as to the com- petition which justifies such action. Article VIII — Trade Practices 1. No employer shall secretly pay or allow rebate, subsidy, refund, commission, credit, unearned discount, or excess allowance, whether in the form of money or otherwise, nor shall any employer in the Subdivision secretly offer or extend to any customer any special service or privilege not extended to all customers of the same class, for the purpose of influencing a sale. 2. No employer shall publish advertising (whether printed, radio, display, or of any other nature) which is misleading or inaccurate in any material particular, nor shall any employer in any way mis- 11 represent any goods (including but without limitation its use, trade- mark, grade, quality, quantity, origin, size, substance, character, na- ture, finish, material, content,