Approved Code No. 347 — Supplement No. 40 Registry No. 1312—01 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE DIESEL ENGINE MANUFACTURING INDUSTRY (A Division of the Machinery and Allied Products Industry) AS APPROVED ON AUGUST 1, 1934 WE DO OUR PART UNIV. OF FL LIS. DOCUMENTS DEPT. .... O^r:: U.S. DEPomjom UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents, Washington, O.C. -.>•.... Price 5 cents This publication is for sale by the Superintenaent of Documents, Government Printing Ollice, Wasliington, D.G., and by district offices of the Bureau of Foreign and Domestic Commerce. DISTRICT OFFICES OF THE DEPARTMENT OF COMMEBCB Atlanta, Ga,: 504 Post Office Building. Birmingham, Ala.: 257 Federal Building. Boston, Mass. : ISOl 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. 40 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE DIESEL ENGINE MANUFACTURING INDUSTRY As Approved on August 1, 1934 ORDER Approving Stjpplementart Code of Fair Competition for the Diesel Engine Manufacturing Industry A division of the machinery and allied products industry An application having been diily 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 Diesel Engine Manufac- turing 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: N0\^^ 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 all respects with the pertinent provisions and will promote the policy and purposes of said Title of said Act ; and do hereby order that said Supplemental Code of Fair Competition be and it is hereby approved subject to the following conditions : (1) That the provisions of Article VIII, Section (a), insofar as they prescribe a waiting period between the filing with the Code Authority and the effective date of revised price lists and/or dis- count sheets and/or terms of sale and payment ; and insofar as they empower the Code Authority to shorten the waiting period be and and they hereby are stayed pending my further order ; (2) That the provisions of Article VIII, Sections (c) and (f) be and they hereby are stayed until I by my further order otherwise direct ; (3) That the provisions of Article VIII, Section (g) be and they hereb}' are staj^ed pending the submission of satisfactory evidence 77G1G° 1044^13 34 1 (1) covering the distribution of the products of the Subdivision to the Administrator; (4) That the applicant shall amend its constitution and By-Laws to the satisfaction of the Administrator within sixty (60) days after the eifective date of this Code. Hugh S. Johnson, Admhihtraior for Induntt'lal Recovery, Approval recommended : Barton W. Murray, D Iv iaio th A dnihilstrafor. Washington, D.C, August i, I9S4, EEPORT TO THE PEESIDENT The President, The White House. Sir : This is a report on the Supplemental Code of Fair Competi- tion for the Diesel Engine Manufacturing Subdivision of Machinery and Allied Products Industry, a Public Hearing on which was held in Washington, D. C, on November 22, 1933, and reconvened De- cember 21, i933. The Hearing was conducted in full accordance with the provisions of Title I of the National Industrial Eecovery Act. GENERAL STATEMENT The Diesel Engine Manufacturing Subdivision, being truly repre- sentative of the manufacturers of the products defined in Article II of the Supplemental Code, has elected to formulate and submit a Supplemental Code of Fair Competition as provided in Article I of the Code of Fair Competition for the Machinery and Allied Products Industry, approved by you on the seventeenth day of March 1934. The Diesel Engine Manufacturing Subdivision means the manu- facture for sale of Diesel engines and/or parts thereof, except Diesel engines used (1) in, and for the propulsion of, aeroplanes, auto- mobiles, trucks or tractors, and (2) in, and for the operation of, portable air compressors, and includes all those engaged in such manufacture for sale. ECONOMIC EFFECT The manufacture of Diesel Engines is rapidly expanding into various new field applications, although the total volume production of the Subdivision has been very seriously curtailed from year to year since 1929, export volume declining much more, proportionately, than domestic production. With any general revival in capital goods production the volume of this Subdivision will expand rapidly. Volume declined from $26,800,000 in 1929 to $13,415,000 in 1931, or practically 50% . The Subdivision estimates that there was a further decline in 1932 to about $8,260,000. Exports in 1929 represented almost 14% of total production, and in 1932 only 7.5%. Official statistics on employment in the Diesel engine Subdivision are not available. In addition to the 9,588 wage earners in 1929, the Subdivision reported about 2,400 executives, supervisory, admin- istrative, and other employees. Wage earners in February 1933, were estimated at 3,690, rising to 4,420 by July 1933. The Research and Planning Division report it is difficult to deter- mine how much re-employment will be effected in this Subdivision as a result of the reduction in hours. This Division estimates hours would have to be reduced to an average of less than 19 per week in order to re-employ the 1929 labor force at the July 1933 level of production. (3) Average Meekly wages paid to factory employees amounted to $32.53 in 1929 for all wage earners and to '$23.69 for unskilled work- ers. By February 1933, these averages had declined to $18.91 and $13.23 respectively, but in July, 1933 they increased to $21.99 and $10.55 — this increase undoubtedly being due to the longer working week prevailing in July than in February. The wage ])rovisions for the Subdivision, which is operating under the Code of the INIachinery and Allied Products Industry, provide that employees engaged in plant operations shall be paid as follows: (1) in cities of more than 50,000 population and their im- mediate vicinity, 40 cents per hour; (2) in cities of more than 10,000 but not more than 50,000 population and their innnediate vicinity, which cities are not in the immediate vicinity of a city of more than 60,000 population, 38 cents per hour; (3) in cities of 10,000 popula- tion or less and their immediate vicinity, which cities are not in the immediate vicinity of a city of more than 10,000 population, 36 cents per hour, except that employees engaged in plant operations in all localities in the states of Virginia, North Carolina, South Carolina, Georgia, Florida, Tennessee, Alabama, Mississippi, Arkan- sas, Louisiana, Texas, and Oklahoma, shall be paid not less than 32 cents per hour. When females do substantially the same work as males or replace males, they shall receive the same pay. However, no female em- ployee shall be paid less than 87i/2% of the proper rate for the locality in which employed. Office boys and girls and apprentices shall be paid not less than 80% of the minimum wage. Employees other than those engaged in plant operations shall receive not less than $15.00 per week. This Supplemental Code provides that no person under sixteen years of age shall be employed in this Subdivision. RESUME OF SUPPLEMENTAL CODE Article I states the purpose of the Supplemental Code. Article II accurately defines specific terms applicable to the Sub- division as used in this Supplemental Code. Article III provides for the adoption of the employment pro- visions of the Code of Fair Competition for the Machinery and Allied Products Industry as approved by you on the seventeenth day of ]\Iarch, 1934 and as from time to time amended. Article IV provides for the adoption of Articles II, VI, VIII, and IX of the Code of Fair Competition for the Machinery and Allied Products Industry in accordance with the conditions of this Article governing their adoption. Article V provides for the establishment of the Code Authority and defines its powers and duties. Article VI provides for an accounting system and methods of cost finding and/or estimating. Article VII provides that no products shall be sold or exchanged below a reasonable cost when the Code Authority determines that an emergency exists. Article VIII provides for methods of setting up, revising, and filing price lists and discount sheets and terms oi sale and payment. Article IX sets forth trade practices for the Subdivision, Article X establishes that no provision of this Supplemental Code relating to i^ricing and marketing shall apply to export trade. Article XI : This Supplemental Code and ail the provisions thereof are expressly made subject to the right of the President in accord- ance with subsection (b) of Section 10 of the Act, from time to time to cancel or modify any order, approval, license, rule or regulation issued under said Act. Provision is also made that modifications may be submitted by the Code Authority. Article XII provides means for withdrawal of this Subdivision from the Basic Code and its continuance as an autonomous Code. Article XIII establishes that no provision of this Supplemental Code shall be so applied as to permit monopolies or monopolistic practices or to eliminate, oppress, or discriminate against small enterprises. Article XIV states the effective date of this Supplemental Code. FINDINGS The Assistant Deputy Administrator in his final report to me on said Supplemental Code having found as herein set forth and on the basis of all the proceedings in this matter : I find that : (a) Said Supplemental Code is well designed to promote the policies and purposes of Title I of the National Industrial Recovery Act, including removal of obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof and will provide for the general welfare by promotin^^ 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 governmental sanctions and super- vision, by eliminating unfair competitive practices, by promoting the fullest possible utilization of the present productive capacity of in- dustries, by avoiding undue restriction of production (except as may be temporarily required), by increasing the consumption of industrial and agricultural products through increasing purchasing power, by reducing and reheving 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 Actj 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 representa- tive 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 per- mit monopolies or monopolistic practices. (e) The Supplemental Code is not designed to and will not elimi- nate or oppress small enterprises and will not operate to discriminate aears that conditions have changed, the Code Au- thority, 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 applj' to (a) drop})ed lines, or (b) seconds, or (c) inventories v»'hich must be converted into cash to meet emergency needs, all of which may be disposed of by any empioycr, at any price and on any tonus or conditions, but only ir such emplo3'er, not less than two weeks be- fore sucli proposed disposal, has filed with Code Authority a state- ment in writing setting; forth the facts of, and reasons for, such proposed di.'^posal slid the Drice and terms and conditions of sale, and Code Authority ha5 ;iot, (with the approval of the Adminis- trator), before the termination of such two weok period, in writing, disapproved the proposed disposal. 11 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 of the competing foreign product, but only if he has first repoi-ted to the Code Authority his intention so to sell, and the facts as to the compe- tition which justifies such action. For the purpose of gathering statistical data for the determina- tion or revision of a lowest reasonable cost under this Article VII, the Code Authority shall have power, on its own initiative, or on the request of any employer, to investigate, to the extent permitted by the Act, any pric^ or the terms of sale and payment for any product or products of this Subdivision manufactured by any em- ployer; and, for the purpose of the investigation thereof, to require, to the extent permitted by the Act, such employer to furnish such information concerning the cost of manufacturing and selling such product or products as the Code Authority shall deem necessary or proper for such purpose. Article VIII — Price Lists (a) If and when the Code Authority determines that in any group of the Subdivision it has be^n the generally recognized practice to sell a specified product on the basis of net price lists, or price lists with discount sheets, and fixed terms of sale and payment, each employer manufacturing such product shall, within ten (10) days after notice of such determination, file with the Code Authority, a net price list, or a price list and discount sheet, as the case may be, individually prepared by him, showing his current prices, or pricea and discounts, and terms of sale and payment, and the Code Author- ity shall immediately ])ublish and send copies thereof to all known employers in the Subdivision manufacturing such specified product. Revised price lists and/or discount sheets and/or terms of sale and payment may be filed from time to time thereafter with the Code Authority by any employer manufacturing such product, but such revised price lists and/or discount sheets and/or terms of sale and payment shall be filed with the Code Authority twenty (20) days in advance of the effective date specified. The Code Authority or the proper Group Code Authority may establish a shorter period at any time, provided no revisions then waiting operative date shall be affected thereby. Copies of such revised price lists and/or dis- count sheets and/or terms of sale and payment with notice of the effective date specified, shall be immediately published and sent to all known employers in the Subdivision manufacturing such prod- uct, any of whom may file, if he so desires, to become effective upon the date when the revised price list and/or discount sheet and/or ' terms of sale and payment first filed shall go into effect, revisions of his price lists and/or discount sheets and/or terms of sale and payment establishing prices or prices and discounts not lower or terms of sale and payment not better than those established in the revised price lists and/or discount sheets and/or terms of sale and payment first filed.' 'See paragraph 2 (1) of order approving this Code. 12 (b) If and when the Code Authority shall determine that in any group of the Subdivision, not now sellinf]^ its product on the basis of price list^, with or without discount sheets, with fixed terms of sale and payment, the distribution or marketing conditions in said group are the same as, or similar to, the distribution or marketing conditions in a group of the Subdivision where the use of price lists, with or without discount sheets, and fixed terms of sale and payment, is well recognized, and that a system of selling on net price lists or price lists and discount sheets with fixed t^rms of sale anil payment should be put into elTect in such group, then each employer manufacturing the j^roduct or products of such group shall within twenty (20) days after notice of such determination, file with the Code Authority net price lists or price lists and discount sheets, containing fixed terms of sale and payment, showing his current prices and discounts and t^erms of sale and payment, and such price lists and/or discount sheets and/or terms of sale and payment shall be published and sent to all known employers in the Subdivision manufacturing such product, and may thereafter be revised in the manner hereinabove provided; provided, however, that the Code Authority shall make no determination to place any product of the Subdivision (not novv' on a price list basis) on a price list basis, as provided in this paragraph (b) of Article VIII, unless affirmative consent to such determination is given by a 66% per cent vote of em- ploj^ers in the Subdivision who are at that time engaged in manu- facturinfj such product, and who are entitled to vote pursuant to the provisions of Section (a) of Article V hereof, weighted on the basis of one vote for each $50,000 of sales of products of the Sub- division made in the latest previous calendar 5'ear for which sta- tistics have been reported to Code Authority, provided, however, that each employer who reports his sales shall have at least one vote. I (c) No employer shall take or accept in trade any second-hand or old equipment in part paj-ment for new equipment, provided, how- ever, that this paragraph shall not be construed to prohibit the return to the vendor within one year from the date of shipment of, and the allowance b}'^ the vendor of any fair adjustment on, any product which shall not have met the specified purposes for which it was 6old. Any employer may assist in finding a bona fide buj'er for second-hand or old equipment, but in no case shall he guarantee any particular return thereon or therefor.* (d) Each emploj'er shall prepare, and shall furnish the Code Authority for distribution with, such number of copies of his price lists and/or discount sheets and terms of sale and paj-ment as Code Authority may require for administration and distribution. (e) No em])loyer shall bid, quote or sell directly or indirectly by any means whatsoever, any product of the Subdivision covered by the provisions of this Article VIII at a price or at discounts or on terms of sale and payment different from those provided in his own current net price lists, or price lists and discoimt sheets, with terms of sale and pa3'mcnt. (f ) No emijlo3'cr shall sell to or through any broker, jobber, com- mission account or sales agency, (this is known in the trade as " pooled bu3'ing ") who or which is in fact an agent for an organiza- •See paragraph 2 (2) of order approving this Code. 13 tion of retailers or industrial consumers, with the result that any retailer or industrial consumer secures a discount, allowance or price different from the discount, allowance or price provided for pur- chasers of the same class in the employer's own current net price lists or price lists with discount sheets.' (g) Xo employer shall sell to or through any distributor who shall fail to agi"ee to resell in accordance with the provisions of Articles VII, VIII and IX of this Supplemental Code.* AkTICLE IX — UXFAIK PRACmCES (a) Xo employer shall pay or allow any rebate, credit, subsidy or discount, in money or otherwise, with intent to influence any sale; except as expressly provided in written quotations, written contracts or invoices, or in price lists, discount sheets, or terms of payment filed with Code Authority. (b) No employer shall pay or promise to pay money, or give or promise to give any valuable thing, to any agent, fiduciary, or representative with or without the knowledge of his principal for the purpose of influencing any sale to his principal. This commer- cial bribery provision shall not be construed to prohibit free and general distrioution of articles commonly used for advertising except so far as such articles are actually used for commercial bribery as herein defined. (c) Xo employer shall untruthfully advertise, represent or mark any product with intent to deceive or mislead prospective purchasers. (d) Xo employer owning a patent or trade mark shall intimidate customers of alleged infringers of such patent or trade mark by threats of suit not made in good faith. (e) So long as any employer, or his successor in business, manu- facturing any product oi this Subdivision which bears the manu- facturer's name or trade mark and which has required special design- ing, research or development expense continues to make and supply such spare, repair or replacement parts for such product, no other employer shall supply such spare, repair, or replacement parts for such product unless (1) the name of the actual manufacturer of such parts shall be plainly marked on each part, or, if this is impracti- cable, on the package or tag, and (2) in catalogues, price lists, quoted prices, advertisements, or advertising literature the ultimate user shall be clear]}" informed that such parts were not made by the original manufacturer of the product lor which such parts are supplied. (f ) Xo employer shall furnish to any purchaser (except the United States Government and the owners of ocean going ships, or as may be required by the American Bureau of Shipping, or Lloyds) and/or his agents, directlv or indirectly, detailed shop drawings of the products of this Subdivision, without filing a statement of such proposed disposal with the Code Authority, which may approve, or, with the approval of the Administrator, may disapprove the disposal within twenty days by written notice to the employers. (g) No employer shall disseminate false or misleading or dis- paraging information relative to competitor's products, selling prices, * See paragraph (3) of order approving this Code. 14 reputation, credit or financial standing, ability to perform work or make deliveries. (h) No employer shall wilfully interfere by any means or device whatsoever with any existing commercial contract or order dealing with the production, manufacture, transportation, purchase or sale of any product of the Subdivision. Article X — Sales for Export The provisions of this Supplemental Code concerning pricing and marketing shall not apply to direct exj)ort sales of any product. A similar exemption may be granted by the Code Authority as to sales of any product destined ultimately for export. Unless otherwise determined by the Code Authority, the term '' export " shall include all shipments to all places without the several states of the United States and the District of Columbia; provided, however, that no shipment to an}' territory or possession of the United States shall be considered as export when any employer is engaged in the Subdivision in such territory or possession. Article XI — Modificatioxs and Termination (a) As provided by Section 10 (b) of the Act, the President may from time to time cancel or modify any order, approval, license, rule or regulation issued under Title I of the Act. (b) Any additions to, amendments, revisions, or supplements of, this Supplemental Code, approved by a 66% per cent vote of em- ployers in the Subdivision who are entitled to vote pursuant to the provisions of Section (a) of Article V hereof, weighted on the basis of one vote for each $100,000 of sales of products of the Sub- division made in the latest previous calendar j'ear for which statis- tics have been reported to Code Authority, provided, hovrever, that each employer who reports his sales shall have at least one vote, shall be in full force and effect upon approval by the Administrator. (c) This Supplemental Code shall terminate on June 16, 1935, or on such date prior thereto when the Act shall be repealed or the President shall, by proclamation, or the Congress shall, by joint resolution, direct that the emergency recognized by Section 1 of the Act has ended. Article XII — ^^VITHDRAWAL As is provided by Article IX of the Code, upon thirty days' notice to Basic Code Authority and to the Administrator, this Subdivision may, upon a 60% per cent affirmative vote of employers in the Subdivision who are entitled to vote pursuant to the provisions of Section (a) of Article V hereof, weighted on the basis of one A'ote for each $50,000 of sales of products of the Subdivision made in the latest previous calendar year for which statistics have been reported CO Code Authoritv, provided, however, that each employer who re- ports his sales shall have at least one vote, withdraw from the jurisdiction of Basic Code Authority. After and in event such with- drawal is accomplished, this Supplemental Code, together with the provisions of the Code, except such portions of Articles I, II, VI 15 and VII as are not pertinent thereto, as determined by the Code Authority and the Administrator, shall become and be the Code governing this Subdivision, and the Code Authority, shall for this Subdivision, become and be the only Code Authority, and shall per- form all the functions with respect to such Code. Article XIII — Monopolies The Supplemental Code presented by it is not designed to pro- mote monopoly, and shall not be so construed or applied as to op- press or eliminate small enterprises or discriminate against them, and is designed to effectuate the policy of the Act. Article XIY — Effective Date This Supplemental Code shall become effective and binding on all persons engaged in the Subdivision on the eleventh day after its approval. Approved Code No. 347 — Supplement No. 40. Registry No. 1312-01. O t™ UNIVERSITY OF FLORIDA 3 1262 08583 0486