V 
 
 Approved Code No. 84 — Supplement No. 18 
 
 Registry No. 1104—11 
 
 NATIONAL RECOVERY ADMINISTRATION 
 
 SUPPLEMENTARY 
 CODE OF FAIR COMPETITION 
 
 FOR THE 
 
 SCREW MACHINE PRODUCTS 
 MANUFACTURING INDUSTRY 
 
 (A Division of the Fabricated Metal Products 
 
 Manufacturing and Metal Finishing 
 
 and Metal Coating Industry) 
 
 AS APPROVED ON APRIL 28, 1934 
 
 WE DO OUR PART 
 
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 UNITED STATES 
 
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Approved Code No. 84 — Supplement No. 18 
 
 SUPPLEMENTARY CODE OF FAIR COMPETITION 
 
 FOR THE 
 
 SCREW MACHINE PRODUCTS MANUFACTURING 
 
 INDUSTRY 
 
 As Approved on April 28, 1934 
 
 ORDER 
 
 Approving Supplementary Code of Fair Competition for the 
 Screw Machine Products Manufacturing Industry 
 
 a division of the fabricated metal products manufacturing and 
 metal finishing and metal coating industry 
 
 An application having been duly made pursuant to and in full com- 
 pliance with the provisions of Title I of the National Industrial Recov- 
 ery Act, approved June 16, 1933, and in accordance with the provi- 
 sions of Section I of Article VI of the Basic Code for the Fabricated 
 Metal Products Manufacturing and Metal Finishing and Metal Coat- 
 ing Industry, approved November 2, 1933, for approval of a Supple- 
 mentary Code of Fair Competition for the Screw Machine Products 
 Manufacturing Industry, and hearing having been duly held thereon; 
 and the annexed report on said Supplementary Code, containing find- 
 ings with respect thereto, having been made and directed to the 
 President: 
 
 NOW, THEREFORE, on behalf of the President of the United 
 States, I, Hugh S. Johnson, Administrator for Industrial Recovery, 
 pursuant to authority vested in me by Executive Orders of the Presi- 
 dent, including Executive Order No. 6543-A, dated December 30, 
 1933, and otherwise; do hereby incorporate by reference said annexed 
 report and do find that said Supplementary 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 
 Supplementary Code of Fair Competition be and it is hereby ap- 
 proved; subject, however, to the following conditions: 
 
 55812° 482-178 34 (l) 
 
1. That the application of the provisions of Schedule A attached 
 thereto and made a part thereof be and it hereby is stayed for a period 
 of sixty (60) days from the date hereof, in order to afford an oppor- 
 tunity to consider any objections thereto by interested parties and 
 at the expiration of said period such provisions shall become effective 
 unless I, by my further order, otherwise direct; and 
 
 2. That Paragraphs F and G of Section 1, Article V be deleted. 
 
 Hugh S. Johnson, 
 Administrator for Industrial Recovery. 
 
 Approval recommended: 
 A. R. Glancy, 
 
 Division Administrator. 
 
 Washington, D.C., 
 
 April 28, 1934. 
 
REPORT TO THE PRESIDENT 
 
 The President, 
 
 The White House. 
 Sir: This is a report on the Supplementary Code of Fair Competi- 
 tion for the Screw Machine Products Manufacturing Industry, a 
 division of the Fabricated Metal Products Manufacturing and Metal 
 Finishing and Metal Coating Industry, the hearing having been con- 
 ducted thereon in Washington, D.C., February 9, 1934, in accordance 
 with the provisions of Title I of the National Industrial Recovery Act. 
 
 GENERAL STATEMENT 
 
 The Screw Machine Products Manufacturing Industry, being truly 
 representative of this division of the Fabricated Metal Products 
 Manufacturing and Metal Finishing and Metal Coating Industry, 
 has elected to avail itself of the option of submitting a Supplementary 
 Code of Fair Competition, as provided for in Section 1 of Article Vl 
 of the Basic Code, for the Fabricated Metal Products Manufacturing 
 and Metal Finishing and Metal Coating Industry approved by you 
 on the second day of November, 1933. 
 
 RESUME OF THE CODE 
 
 Article I states the purpose of the Supplementary Code. 
 
 Article II accurately defines specific terms employed in the Supple- 
 mentary Code. 
 
 Article III: This Industry is a division of the Fabricated Metal 
 Products Manufacturing and Metal Finishing and Metal Coating 
 Industry and the labor provisions of its Basic Code, as approved 
 November 2, 1933, are the labor provisions of this Supplementary 
 Code. 
 
 Article IV establishes a Supplementary Code Authority consisting 
 of seven (7) members to be elected by the members of the Industry 
 at a meeting called by the Temporary Supplementary Code Authority, 
 and gives the Administrator the authority to appoint one additional 
 member without vote and provides machinery for obtaining statistics 
 and the administration of the Supplementary Code. 
 
 Article V sets forth the unfair trade practices of this Supplementary 
 Code which has been especially designed to offset unfair competition 
 in this division of the Industry. 
 
 Article VI provides against monopolies and monopolistic practices. 
 
 Article VII contains the mandatory provisions contained in Section 
 10 (b) and also provides for the submission of proposed amendments 
 to the Supplementary Code. 
 
 Article VIII recognizes that price increases be limited to actual 
 additional increases in the seller's costs. 
 
 Article IX states the effective date and duration of this Supple- 
 mentary Code. 
 
 (3) 
 
Schedule A sets forth the formula for estimating cost. 
 Schedule B sets forth standard terms and conditions of sale. 
 
 FINDINGS 
 
 The Deputy Administrator in his final report to me on said Supple- 
 mentary Code having found as herein set forth and on the basis of all 
 the proceedings in this matter: 
 
 I find that: 
 
 (a) Said Supplementary Code is well designed to promote the 
 policies and purposes of Title I of the National Industrial Recovery 
 Act, including removal of obstructions to the free flow of interstate 
 and foreign commerce which tend to diminish the amount thereof 
 and will provide for the general welfare by promoting the organization 
 of industry for the purposes of cooperative action among the trade 
 groups, by inducing and maintaining united action of labor and 
 management under adequate governmental sanctions and supervision, 
 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 may be tem- 
 porarily 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 Industry normally employs not more than 50,000 em- 
 ployees; and is not classified by me as a major industry. 
 
 (c) The Supplementary Code as approved complies in all respects 
 with the pertinent provisions of said Title of said Act, including with- 
 out limitation Subsection (a) of Section 3, Subsection (a) of Section 7, 
 and Subsection (b) of Section 10 thereof : and that the applicant group 
 is an industrial group truly representative of the aforesaid Industry; 
 and that said group imposes no inequitable restrictions on admission 
 to membership therein. 
 
 (d) The Supplementary Code is not designed to and will not permit 
 monopolies or monopolistic practices. 
 
 (e) The Supplementary Code is not designed to and will not elim- 
 inate or oppress small enterprises and will not operate to discriminate 
 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 Sup- 
 plementary Code. 
 
 For these reasons, therefore, I have approved this Supplementary 
 Code. 
 
 Respectfully, 
 
 Hugh S. Johnson, 
 
 Administrator. 
 April 28, 1934. 
 
SUPPLEMENTARY CODE OF FAIR COMPETITION FOR 
 THE SCREW MACHINE PRODUCTS MANUFACTURING 
 INDUSTRY 
 
 A DIVISION OF THE FABRICATED METAL PRODUCTS MANUFACTURING 
 AND METAL FINISHING AND METAL COATING 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- 
 mentary Code of Fair Competition for the Screw Machine Products 
 Manufacturing Industry. Pursuant to Article VI of the Basic Code 
 of Fair Competition for the Fabricated Metal Products Manufac- 
 turing and Metal Finishing and Metal Coating Industry approved 
 by the President on the 2nd day of November, 1933, the provisions 
 of this Supplementary Code shall be the standard of fair competition 
 for such Industry and shall be binding upon every member thereof. 
 
 Article II — Definitions 
 
 Section 1. The terms "President", "Act" and "Administrator", 
 as used herein, shall mean respectively, the President of the United 
 States, the National Industrial Recovery Act, and the Administrator 
 for Industrial Recovery under said Act. 
 
 Section 2. The term "Industry" and/or "Screw Machine Prod- 
 ucts Industry" means and includes the business of manufacturing 
 Screw Machine Products for sale. 
 
 Section 3. The term "Screw Machine Products" means and in- 
 cludes any products first made from rod or tubing or other material 
 on either automatic or hand screw machines which .are made to 
 customers' specifications or stocked by members of the Industry for 
 future sale to customers except such products as are assembled by 
 the original manufacturer with products other than Screw Machine 
 Products and wliich thereby become an identifiable unit subject to 
 another particular code or codes approved or to be approved by the 
 President and except such products as are made in many different 
 sizes of the same or similar form for stock by all manufacturers and 
 become identified thereby as a standard article and as a separate 
 industry subject to a particular code or codes approved or to be 
 approved by the President, and except semi-finished nuts fabricated 
 from ferrous or nonferrous metals. 
 
 Section 4. The term "member of the industry" as used herein, 
 includes, but without limitation, any individual, partnership, asso- 
 ciation, corporation, or other form of enterprise, engaged in the 
 industry either as an employer or on his or its own behalf. 
 
 Section 5. The term "Product" means and includes Screw Ma- 
 chine Products, as that term is defined herein. 
 
 (5) 
 
Section 6. The term "Employee" as used herein includes anyone 
 engaged in the Industry in any capacity receiving compensation for 
 his services, irrespective of the nature or method of payment of such 
 compensation. 
 
 Section 7. The term "Employer" as used herein includes anyone 
 by whom any such employee is compensated or employed. 
 
 Section 8. The term "Basic Code" as used herein is defined to 
 mean the Basic Code of Fair Competition for the Fabricated Metal 
 Products Manufacturing and Metal Finishing and Metal Coating 
 Industry as approved by the President on the 2d day of November, 
 1933. 
 
 Section 9. The term "Association" means National Screw Ma- 
 chine Products Association, or its successor. 
 
 Section 10. The term "Board of Directors" means Board of Di- 
 rectors of National Screw Machine Products Association, or its 
 successor. 
 
 Section 11. The term "Managing Director" means Managing 
 Director of National Screw Machine Products Association or such 
 other impartial and confidential agency as the Supplementary Code 
 Authority may designate. 
 
 Section 12. The term "Supplementary Code Authority" as used 
 herein, is defined to mean the agency which is to administer this 
 Supplementary Code as hereinafter provided. 
 
 Section 13. The term "Member of the Code" as used herein shall 
 mean any member of the Industry who shall have assented to the 
 provisions of this Code by instrument in writing duly filed with the 
 Managing Director. 
 
 Article III — Employment Provisions 
 
 This Industry is a division of the Fabricated Metal Products 
 Manufacturing and Metal Finishing and Metal Coating Industry 
 and the wage, hour and labor provisions in Article III of its basic code 
 as approved by the President November 2d, 1933, including Section 
 1 of said Article III by which the provisions of Subsections (1), (2) 
 and (3) of Section 7 (a) of Title I of the Act are made conditions of 
 this Code, are specifically incorporated herein and made a part hereof 
 as the wage, hour and labor provisions of this Supplementary Code. 
 
 Article IV- — Organization and Administration 
 
 Section 1 . During the period not to exceed sixty (60) days follow- 
 ing the effective date, the Board of Directors shall constitute a Tem- 
 porary Supplementary Code Authority, who shall have all the powers 
 and duties of the Supplementary Code Authority herein set forth, 
 until the Supplementary Code Authority is elected. There shall be 
 constituted within the sixty-day period a Supplementary Code Au- 
 thority consisting of seven (7) members to be elected by the members 
 of the Industry in the manner hereinafter provided, at a meeting 
 called by the Temporary Supplementary Code Authority, upon ten 
 days' notice sent by registered mail to all members of the Industry, 
 whose names can be ascertained after diligent search, who may vote 
 either in person or by proxy. The members of the Supplementary 
 Code Authority first elected shall' serve until the following annual 
 meeting of the Association and until their successors are elected, and 
 
thereafter, members of the Supplementary Code Authority shall be 
 elected immediately after each annual meeting of the Association to 
 serve until their successors are elected. Notice of each election shall 
 be sent in the manner above provided. The membership of the 
 Supplementary Code Authority shall be made up as follows: 
 
 (a) Five (5) members who shall be members of the Industry elected 
 by a majority vote of the members of the Association present in per- 
 son or represented by proxy, each member to have one vote. 
 
 (b) Two (2) members, who are not members of the Association to 
 be nominated and elected by majority vote of the members of the 
 Industry 7 who are not members of the Association, present in person 
 or represented by proxy, each member to have one vote. In the event 
 that the said non-members of the Association should fail to elect said 
 two (2) members from among their number, or in the event of a 
 vacancy occurring in this number, the Supplementary Code Authority 
 shall submit several nominations of members of the Industry not 
 members of the Association to the Administrator, who shall thereupon 
 name such member or members. 
 
 (c) A vacancy in the Association membership of the Supplementary 
 Code Authority may be filled by majority vote of the remaining 
 Association members of the Supplementary Code Authority. 
 
 (d) In addition to the above the Administrator may appoint one 
 (1) representative without vote and without expense to the Industry, 
 unless the Supplementary Code Authority agrees to pay such expenses, 
 to serve with said Supplementary Code Authority in the administra- 
 tion of this Supplementary Code. Said representative shall be 
 entitled to reasonable notice of all meetings of the Supplementary 
 Code Authority. 
 
 Section 2. Any Association/Institute and/or Bureau directly or 
 indirectly participating in the selection or activities of the Supple- 
 mentary Code Authority shall (1) impose no inequitable restrictions 
 on membership, and (2) submit to the Administrator true copies of 
 its Articles of Association, By-Laws, Regulations and any amend- 
 ments when made thereto, together with such other information as 
 to membership, organization, and activities as the Administrator may 
 deem necessary to effectuate the purposes of the Act. 
 
 Section 3. In order that the Supplementary Code Authority shall, 
 at all times, be truly representative of the 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 Supplementary Code Authority is not truly 
 representative or does not in other respects comply with the pro- 
 visions of the Act, may require an appropriate modification in the 
 method of selection of the Supplementary Code Authority. 
 
 Section 4. The Supplementary Code Authority is hereby consti- 
 tuted the agency to administer the provisions of this Supplementary 
 Code and to collect and distribute all statistical reports of the Indus- 
 try. With a view to keeping the President informed as to the observ- 
 ance or non-observance of this Supplementary Code, said agency 
 shall collect through the Managing Director, such statistics as called 
 for by the President and/or the Administrator and send them in such 
 form as the President and/or the Administrator may require to the 
 Fabricated Metal Products Federation, or successor organization, as 
 
 55812° 482-178 34—2 
 
8 
 
 the agency administering said "Basic Code. All individual reports 
 shall be treated as confidential by the Managing Director and shall 
 not be disclosed to any member of the Industry or any other party 
 except where necessary in the enforcement of this Supplementary 
 Code and except to such governmental agencies as may be directed 
 by the Administrator. 
 
 Section 5. Said agency shall also from time to time furnish to the 
 Basic Code Authority, designated in said Basic Code, such informa- 
 tion as may be required to be furnished under the terms of said Basic 
 Code. 
 
 Section 6. The Supplementary Code Authority shall have power 
 from time to time to require each member of the Industry to furnish 
 to the Managing Director such information concerning the produc- 
 tion, shipments, sales and orders of each such member and the hours 
 of labor, rates of pay and other conditions of employment at the plant 
 or plants of such member and such other information as the said 
 Supplementary Code Authority shall deem necessary or proper in 
 order to effectuate the purposes of this Supplementary Code and the 
 policy of the Act. All individual reports shall be treated as confi- 
 dential by the Managing Director and shall not be disclosed to any 
 member of the Industry or any other party except where necessary 
 in the enforcement of this Code and except to such governmental 
 agencies as may be directed by the Administrator. 
 
 Section 7. The Supplementary Code Authority may require that 
 any such information be furnished periodically at such times as it 
 shall specify and may require that any or all information furnished be 
 sworn to or otherwise certified or authenticated as it shall prescribe. 
 Failure of any member of the Industry promptly to furnish to the 
 Managing Director information required by the said Supplementary 
 Code Authority and substantially in the form prescribed by it shall 
 constitute a violation of the Code. The Supplementary Code Author- 
 thority shall not require any information regarding trade secrets. 
 
 Section 8. Any or all information furnished to the Managing 
 Director by any corporate member of the Industry specifically 
 assenting hereto pursuant to the provisions of this Code, shall be 
 subject to verification by an examination of the pertinent books, 
 accounts and records of such member by the Managing Director or 
 by any accountant or accountants or other person or persons desig- 
 nated by the Supplementary Code Authority (none of whom shall 
 be connected with any member of the Industry) and shall be so 
 checked for such purpose, if the Supplementary Code Authority 
 shall require it. The cost of each such examination shall be treated 
 as an expense of administering the Code. 
 
 Section 9. All members of the Industry are subject to the juris- 
 diction of the Supplementary Code Authority; shall be entitled to 
 participate in and share the benefits of the Supplementary Code 
 Authority; shall be entitled to vote in the selection of the Supple- 
 mentary Code Authority as provided in Section 1 of this Article; and 
 shall pay to the Managing Director as the agent of the Supplementary 
 Code Authority their reasonable share of the expenses of the Admin- 
 istration of this Supplementary Code, such reasonable share to be 
 determined by the Supplementary Code Authority, subject to review 
 by the Administrator on the basis of volume of business and/or such 
 other factors as may be deemed equitable by the Supplementary 
 Code Authority. 
 
Section 10. Nothing contained in this Supplementary Code shall 
 be deemed to constitute the members of the Supplementary Code 
 Authority, partners for any purpose, whatsoever. Nor shall any 
 member of the Supplementary Code Authority be liable in any 
 manner to anyone for any act of any other member, officer, agent or 
 employee of the Supplementary Code Authority. Nor shall any 
 member of the Supplementary 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 Supplementary Code 
 except for his own willful misfeasance or non-feasance. 
 
 Section 11. If any member of the Industry as defined herein is 
 also a member of any other Industry, the provisions of this Code 
 shall apply to and affect only that part of his business which is in- 
 cluded in the Industry. 
 
 Section 12. The Supplementary Code Authority shall without any 
 limitation on the foregoing have the following further general powers 
 and duties subject to such rules and regulations as may be prescribed 
 by the Administrator. 
 
 (a) To insure the execution of the provisions of this Supplementary 
 Code and provide for the compliance of the Industry with the provi- 
 sions of the Act. 
 
 (b) To adopt by-laws and rules and regulations for its procedure 
 and for the administration of the Supplementary Code. 
 
 (c) To obtain from members of the Industry such information and 
 reports as are required for the administration of the Supplementary 
 Code. In addition to information required to be submitted to the 
 Supplementary Code Authority, all or any of the persons subject to 
 this Supplementary Code shall furnish such statistical information 
 as the Administrator may deem necessary for the purposes recited 
 in section 3 (a) of the Act to such Federal and State agencies as the 
 Administrator may designate. Provided that nothing in this Supple- 
 mentary Code shall relieve any member of the Industry of any existing 
 obligations to furnish reports to any government agency. 
 
 (d) To use such trade associations and other agencies as it deems 
 proper for the carrying out of any of its activities provided for herein, 
 provided that nothing herein shall relieve the Supplementary Code 
 Authority of its duties or responsibilities under this Supplementary 
 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 Administrator for the 
 coordination of the administration of this Supplementary Code with 
 such other codes, if any, as may be related to the Industry. 
 
 (f) To secure from members of the Industry an equitable and pro- 
 portionate payment of the reasonable expenses of maintaining the 
 Supplementary Codo Authority and its activities. 
 
 (g) To cooperate with the Administrator in regulating the use of 
 any N.R.A. insignia solely by those members of the Industry who have 
 assented to, and are complying with, this Supplementary Code. 
 
 (h) To recommend to the Administrator further fair trade practice 
 provisions to govern members of the Industry in their relations with 
 each other or with other industries and to recommend to the Adminis- 
 trator measures for industrial planning, including stabilization of 
 employment. 
 
10 
 
 Section 13. If the Administrator believes that any action of the 
 Supplementary Code Authority or any agency thereof is unfair or 
 unjust or contrary to the public interest, the Administrator may 
 require that such action be suspended to afford an opportunity for 
 investigation of the merits of such action. Further action by such 
 Supplementary Code Authority or agency regarding the matter com- 
 plained of may be taken if approved by the Administrator but shall 
 not be taken if disapproved by the Administrator within thirty days 
 of notice to him of intention to proceed with such action. 
 
 Article V — Unfair Practices 
 
 Section 1. For all purposes of this Supplementary Code, the fol- 
 lowing described acts shall constitute unfair practices. Such unfair 
 practices shall be deemed to be unfair methods of competition in 
 commerce within the meaning of the Federal Trade Commission Act 
 as amended, and the using or employing of any of them shall be 
 deemed to be a violation of the Code, and any member of the Indus- 
 try who shall directly or indirectly, through any officer, employee, 
 agent or representative, knowingly use or employ any of such unfair 
 practices shall be guilty of a violation of this Code. 
 
 A. The sale or exchange of any product in whole or in part below 
 the cost of such product to any individual employer determined 
 according to the estimating formula set forth in Schedule A hereof, 
 or the violation of any provision of said Schedule. 
 
 Provided, however, that dropped lines, seconds or inventories 
 which must be converted into cash to meet emergency need may be 
 disposed of in such manner and on such terms and conditions as are 
 necessary to move such product into buyers' hands; and all such in- 
 tended sales or other dispositions of such products shall be reported 
 immediately to the Managing Director; and 
 
 Provided, further, that no provisions of this Supplementary Code 
 relating to prices or terms of selling, shipping or marketing shall apply 
 to or affect the sale of any product for direct shipment in export trade 
 by any member of the Industry within the meaning of the term 
 "export trade" as it is used in the Export Trade Act. 
 
 B. The provisions of Article V, paragraphs B to G inclusive of 
 the Basic Code are a part of this Supplementary Code, to the same 
 extent as if here repeated and set forth in full. 
 
 C. To quote or contract other than subject to the Standard Terms 
 and Conditions of Sale shown in Schedule B hereof, which shall be set 
 forth in full in a prominent place on all quotations and contracts. 
 
 D. Making contracts of sale that permit the buyer to cancel and/or 
 provide for a reduced price in event of a market decline, but which do 
 not permit the seller to cancel and/or do not provide for an enhanced 
 price, in the event of a market rise. 
 
 E. Making contracts requiring delivery of specified quantity or 
 quantities in specified time, if demanded by buyer, but not requiring 
 the buyer to accept such quantity or quantities within the specified 
 time. 
 
 F. Making contracts of sale for products of the Industry at a 
 specified price for periods in excess of three (3) months (all such 
 contracts to expire not later than the last days of March, June, 
 September or December) or quoting on or entering into such contracts 
 
11 
 
 more than sixty (60) days prior to the first day of the quarter, or 
 shipping pursuant to any such contract more than lift con (15) days 
 after the expiration thereof, or as soon thereafter as seller can manu- 
 facture and ship the same, or making such contracts containing an 
 option of extension or renewal on the part of either buyer or seller. 1 
 
 G. Accepting orders for deliveries extending beyond four (4) 
 months from date of order. 1 
 
 H. Accepting any contract for an unspecified quantity, unless a 
 minimum quantity per release is specified, and unless it is agreed 
 that specifications placed during the last third thereof shall not 
 exceed the number of pieces specified for shipment during the first 
 two-thirds thereof. 
 
 I. Cancelling, in whole or in part, or permitting the cancellation, 
 in whole or in part, of any contract of sale of any product except for 
 justifiable cause or a fair consideration. 
 
 J. Consigning merchandise for any reason whatever except to a 
 wholly owned or controlled subsidiary or except under circumstances 
 approved by the Supplementary Code Authority where peculiar 
 circumstances of the Industry make the practice desirable. 
 
 K. Renting or selling on deferred payments automatic or hand 
 screw machines to operators for the purpose of avoiding or attempting 
 to avoid any of the provisions of this Code. 
 
 Article VI — Monopolies 
 
 No provision of this Supplementary Code shall be applied so as to 
 permit monopolies or monopolistic practices, or to eliminate, oppress 
 or discriminate against small enterprises. 
 
 Article VII — Modifications 
 
 Section 1. This Supplementary Code and all the provisions 
 thereof are expressly made subject to the right of the President, in 
 accordance with provisions of 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. 
 
 Section 2. This Supplementary Code, except as to provisions 
 required by the Act, may be modified or amended on the basis of 
 experience or changes in circumstances, such modifications or amend- 
 ments to be based upon application by the Supplementary Code 
 Authority or other representative group within the Industry to the 
 Administrator and such Notice and Hearing as he shall specify and 
 to become effective and a part of this Supplementary Code on approval 
 by the President. 
 
 Article VIII — Price Increases 
 
 Whereas the policy of the Act to increase real purchasing power 
 will be made more difficult of consummation if prices of goods and 
 services increase as rapidly as wages, it is recognized that price in- 
 creases except such as may be required to meet individual costs should 
 be delayed, but when made, such increases should, so far as possible, 
 be limited to actual additional increases in the seller's costs. 
 
 1 Deleted. See paragraph 2 (2) of order approving this Code. 
 
12 
 
 Article IX — Effective Date and Duration 
 
 This Supplementary Code shall become effective at 12:01 o'clock 
 A. M., Eastern Standard Time, on the tenth day after it is approved 
 by the President and shall continue in effect until June 16, 1935 or 
 the earliest date prior thereto on which the President shall, by procla- 
 mation, or the Congress shall by joint resolution declare that the 
 emergency recognized by Section 1 of Title I of the National Industrial 
 Recovery Act, has ended. 
 
 Approved Code No. 84. Supplement No. 18. 
 Registry No. 1104-11. 
 
SCHEDULE A* 
 Estimating Formula 
 
 Estimates made by members of the Industry regardless of the estimating 
 methods they employ, shall result in an estimated cost that in no case shall be 
 less than a cost which would be arrived at by the use of the following estimating 
 formula and no quotation or sale shall be made* except based upon a written esti- 
 mate in such reasonable detail as to indicate clearly that Paragraph 11 of this 
 Schedule has been complied with and such estimate for all products manufactured 
 and sold is to be retained by the particular member of the Industry together with 
 the price charged the customer therefor and a record of the actual average net 
 production per hour on the entire order: 
 
 1. Material at Market Cost, the market to be determined by the published 
 base price, plus delivery cost to estimator's plant, plus size, quantity and other 
 applicable extras on date of quoting for quantity required for each item esti- 
 mated, with scrap credit allowance computed at 80% of published market for 
 less than car load lots on said date. Market on material and scrap shall be de- 
 termined by reference to the published market for said commodities as set forth 
 in "American Metal Market", or to other sources approved by the Supplementary 
 Code Authority, or in the event of the discontinuance of said publication, as set 
 forth in any other similar publication approved by the Supplementary Code 
 Authority. Estimated quantity of material to be based on length of piece, plus 
 cut-off, plus facing (if any), plus bar ends, plus waste arising from defective 
 pieces. Waste arising from defective parts and from bar ends shall be figured at 
 not less than 5% of gross material. All weights for material to be figured from a 
 recognized table giving weights per lineal foot. 
 
 2. A charge for all necessary special tools including duplicates if required for 
 the quantity (and also special taps, dies or chasers) fixtures and/or gauges, which 
 shall consist of their direct prime cost (cost of material and direct labor) plus 
 overhead which shall not be less than 75% of the said direct labor. If purchased 
 outside the cost of such tools shall be included at cost to the estimator. 
 
 3. A special charge for "set-up" which shall be based upon the full time re- 
 quired for such "set-up" at the current full hourly rate paid to the set-up man, 
 plus the overhead hourly cost of the machine being set-up which is to be deter- 
 mined by the use of the formula contained in Paragraph 6. 
 
 4. Net production computed at not over 75% of geared production on standard 
 single spindle automatic machines; not over 70% of geared production on high 
 speed single and on multiple spindle machines; and not over 80% of gross pro- 
 duction on second operation and hand screw machines. 
 
 5. Direct Labor Machine Hour Cost, arrived at as follows: The Index Labor 
 Rate used in order to compute the direct labor as called for in this paragraph 
 shall be the current average hourly rate paid by the estimator to a first-class 
 operator for the type of machine involved when such operator is compensated 
 on an hourly basis. Such first-class operator shall be defined as one whose daily 
 duties are to set-up or set-up and operate machines, without technical assistance. 
 To arrive at the average hourly rate paid to first-class operators in case more 
 than one is employed, add together the sum of the different current hourly rates 
 paid to first-class operators and divide by the number employed. To arrive at 
 the Direct Labor Machine Hour Cost, divide the Index Labor Rate of first-class 
 operators arrived at in accordance with the foregoing by the Divisors for different 
 types of machines in the table below: 
 
 When no first-class operator as defined is employed on an hourly basis and 
 machines are both set-up and operated by a single individual who is paid on a 
 piece work basis, the Index Labor Rates shall be set for the particular plant by 
 the Supplementary Code Authority with the approval of the Administrator, 
 which Index Labor Rate shall not be fixed at a higher figure than that of the 
 average Index Labor Rate of other similar plants in the Industry similarly 
 situated but compensating their employees on an hourly basis. 
 
 * See paragraph 2 (1) of order approving this code. 
 
 (13) 
 
14 
 
 DIVISORS 
 
 Single Spindle Machines: 
 
 Low Speed— Up to z /%" inclusive, use Divisor 4.00 
 
 %" to %" " " " 3.75 
 
 over %" " " 3.25 
 
 High Speed — Up to j^e* inclusive, use Divisor 3.50 
 
 )U" to %" " " " 3.25 
 
 over %» " " 3.00 
 
 Multiple Spindle Machines: 
 
 Up to }{" capacity inclusive, use Divisor 2.6 
 1" to V/s" " " " " 2.4 
 
 over 1%" " " " 2.0 
 
 To arrive at the Direct Labor 'Machine Hour Cost for second operation and 
 hand screw machines where the machine requires an operator exclusively, use 
 as the Index Labor Rate the average full pay per hour to operators of the second 
 operation or hand screw machines to be figured. 
 
 6. Overhead Machine Hour Cost consisting of the product of the calculated 
 Direct Labor Machine Hour Cost (as determined in Paragraph 5) and the factor 
 "F" plus the overhead constant "A" both for the type of machine involved. 
 (The factors and constants appear in the table following.) The particular auto- 
 matic factors and constants for the types of machines involved, shall be applied 
 to the Direct Labor Machine Hour Cost for the corresponding automatic ma- 
 chines. The particular second operation and hand screw machine factor for the 
 types of machines involved shall be applied to the Direct Labor Machine Hour 
 Cost for the corresponding second operation or hand screw machines. 
 
 FACTORS 
 
 Overhead 
 
 Factor Constant 
 
 Single Spindle Machines: F A 
 
 Low Speed— Up to %" inclusive 1. 075 $0. 337 
 
 %" to 5 /s" " 1.15 .37 
 
 Over %" 1.225 .401 
 
 High Speed — Up to %$" inclusive 1. 125 . 375 
 
 }U" to %" " 1.20 .395 
 
 Over%" 1.25 .416 
 
 Multiple Spindle Machines: 
 
 Up to y%" capacity 1.305 .361 
 
 l"tol%" " 1.33 .40 
 
 Overly 1.375 .495 
 
 Formula 
 
 For Overhead Machine Hour Cost of automatic low and high speed single 
 spindle machines and multiple spindle machines: 
 Overhead Machine Hour Cost=DXF + A 
 When D = Direct Labor Machine Hour Cost 
 
 F= Overhead Factor for particular machine involved (see above 
 
 table) 
 A = Overhead Constant for particular machine involved (see above 
 table) 
 
 FACTORS 
 
 Secondary Operation Machines and Hand Screw Machines either for Primary 
 or Secondary Operations: 
 
 Factor F 
 
 Machines costing less than $750 1. 00 
 
 " from $750. to $2,000 1.25 
 
 " over $2,000 1.50 
 
 Formula 
 
 For Overhead Machine Hour Cost of Secondary Operation and Hand Screw 
 Machines: 
 
 Overhead Machine Hour Cost = DXF 
 When D = Direct Labor Machine Hour Cost 
 
 F = Overhead Factor for particular machine involved (see above 
 table) 
 
15 
 
 Explanation: The Overhead Factors for Machine Hour Cost as defined in 
 Paragraph G include the minimum possible charges comprising proper overhead 
 expense, viz: 
 
 a. Fixed Charges, such as depreciation on all plant equipment based on rates 
 allowed by income tax regulations, property taxes and/or rental costs, insurance. 
 
 b. All Other Variable Factory Expense such as supplies, light, heat and power, 
 factory supervision and indirect wages; repairs and maintenance, either in the 
 form of wages or purchases or both, and all other items of expense connected with 
 regular bulk packing and shipping, rough inspection, ordinary cleaning, oil sepa- 
 ration, stock handling, and other similar items. 
 
 c. Administrative and Office Expense, including executive and office workers' 
 salaries together with charges for office supplies and all other items of expense 
 proy erly chargeable to this classification. 
 
 7. A Special Charge at a fair estimated cost for all operations similar to the 
 following: Any inspection other than rough inspection, plating, hardening, or any 
 special packing other than regular bulk packing and other similar operations. 
 This special charge shall include a reasonable charge for overhead with respect 
 thereto, since the factors given above in Paragraph 6 do not include overhead on 
 such special operations. 
 
 8. To determine the minimum cost below which no product may be quoted or 
 sold, add the following: 
 
 Material Cost as explained in Paragraph 1 — 
 
 A Charge for special tools and set-up as explained in Paragraphs 2 and 3 — 
 The Direct Labor Machine Hour Cost explained in Paragraph 5 — 
 Overhead Machine Hour Cost explained in Paragraph 6 — 
 And other special items as explained in Paragraph 7 — 
 To the sum of these items, add an additional charge of 5% thereof on brass 
 products and miscellaneous base metal products other than steel, and on steel 
 products 7}i% thereof to cover selling expense. 
 
 To the cost so obtained must be added 1% to cover cash discount. 
 The resulting figure will be the minimum cost, below which a product shall not 
 be quoted or sold. 
 
 Formula 
 
 Total estimated cost exclusive of sales cost and] 
 
 cash discount explained in Paragraph 8 and>— M + T+S + X(D + A + (FXD)) 
 special estimates explained in Paragraph 7 J 
 
 When M = Cost of Material as set forth in Paragraph 1 
 T=Cost of Tools as set forth in Paragraph 2 
 S = Cost of Set-up as set forth in Paragraph 3 
 X = Number of Hours required for whole job 
 D= Direct Labor Machine Hour Cost as set forth in Paragraph 5 
 A = Overhead Constant Cost set forth in Paragraph 6 
 P= Overhead Factor set forth in Paragraph 6 
 
 9. In the case of articles made for stock and delivered in smaller quantities to 
 customers, the minimum that can be quoted shall not be less than a cost estimated 
 in accordance with this estimating formula for the exact quantity delivered or a 
 cost estimated for the last quantity made for stock by the use of said formula 
 plus a reasonable charge for carrying stock and for obsolescence. 
 
 Caution: The estimating formula set forth in this code includes only costs in each 
 instance at the irreducible minimum and does not include any profit to the estimator 
 or any interest on invested capital. The sum total of these irreducible minima will 
 result in a cost below that of the average as indicated by the questionnaires sent out to 
 the industry. All members of the industry are cautioned that use of this formula as 
 a selling basis will not only not produce a profit but will produce a loss on the average, 
 and that the formula is merely intended to establish an irreducible cost below which 
 no one should quote. 
 
 10. The provisions of this estimating formula may be modified or amended 
 on the basis of experience or changes in circumstances, by the Supplementary 
 Code Authority with the approval of the Administrator, at any time, and in any 
 event six months after the effective date of the Code, upon the direction of the 
 Administrator shall be reviewed and modified by him, after such hearing as he 
 shall proscribe if he shall determine that such modification is necessary. 
 
 11. Members of the Industry shall not estimate otherwise thin pursuant to 
 an estimate which includes cost of material at market, determined by published 
 base price plus size and quantity extras, on date of quoting for quantity required. 
 with scrap credit allowance computed at eighty per cent (80%) of published 
 
16 
 
 market for less than carload lots on said date, labor based on a net production 
 to be figured at not over 75% of geared production on standard single spindle 
 machines, not over 70% of geared production on high speed single spindle and 
 on multiple spindle machines, and not over 80% of gross production on second 
 operation and hand screw machines, a reasonable charge for overhead, deprecia- 
 tion, selling and administrative expense, and cash discount. Market on material 
 and scrap shall be determined by reference to published market for said commod- 
 ities as set forth in "American Metal Markets", or to other sources approved 
 by the Supplementary Code Authority, or in the event of the discontinuance of 
 said publication, as set forth in any other similar publication approved by the 
 Supplementary Code Authority. 
 
 12. Members of the Industry shall not make a repeat quotation or accept a 
 repeat order at a price based upon an estimated speed setting that cannot be 
 obtained on a machine in the particular member of the Industry's plant. 
 
 13. Members of the Industry shall not estimate or quote on the basis of a 
 speed setting which the particular member has reason to know cannot be ob- 
 tained or on the basis of any other facts, figures or data which such member has 
 reason to know are inaccurate. 
 
 14. Members of the Industry shall not accept any order based upon an esti- 
 mate or quotation made more than fifteen days prior to the date of the order if 
 the market price of the material has gone up between date of estimate or quota- 
 tion and date of order. 
 
 Example of the Application of Schedule "A" to a Standard Single 
 Spindle %"-%" Capacity Job of 50,000 Pieces 
 
 Hypothetical rates used 
 
 Cost Per 
 Paragraph 1. — Material: M Pieces 
 
 Material — Brass— 60 Pounds per M, at market of 120 base 
 
 plus size, quantity, extras, and delivery $7. 20 
 
 Plus 5% for defective work and loss of bar ends . 36 
 
 $7.56 
 30 pounds of scrap @ 80% of market which is 40 per lb... — . 96 
 
 Net Material Cost, per M $6. 60 
 
 Paragraphs 2 & 8 — Set-up and Special Tool Charge: 
 
 Set-up — 5 hours @ 700 per hour $3. 50 
 
 Plus Machine Overhead: 
 
 FXD + AX5, or 1.15X.186 + .37X5 = 2. 92 
 
 $6.42 
 6.42^-50 = cost per M . 128 
 
 Special Tools and Fixtures, including cut-off tools, cams, 
 form tools, special counter bores, special size taps, dies 
 and chasers $10. 50 
 
 Tool Room Overhead 75% 7. 875 
 
 $18. 375 
 $18,375-^50 equals cost per M . 368 
 
 Paragraph 5 — Direct Labor Machine Hour Cost: 
 
 Geared Production 600 per hour @ 75% equals 450 per 
 hour net production or 2.22 hours per 1000 pieces 
 
 times the Direct Labor rate of .1S6 per hr. = . 4129 
 
 Paragraph 6 — Overhead Machine Hour Cost: 
 
 Formula=FXD + AX2.22, or 1.15X.186 + .37X2.22 = 1. 296 
 
 Paragraph 7- — Other Special Items: 
 Other Items of Cost: 
 
 Plating 30X30 lbs. per M = . 90 
 
 Total of paragraphs 1, (2 and 3), 5, 6, and 7 $9. 7049 
 
 Plus selling expense, 5% of same • 4852 
 
 $10. 1901 
 Plus 1% cash discount ■ 1019 
 
 Estimated minimum cost, per M $10. 2920 
 
SCHEDULE B 
 
 STANDARD TERMS AND CONDITIONS OF SALE 
 
 Terms. — Discount of one percent on the 10th of the month covering invoices 
 between the 16th and the last day of the preceding month, both inclusive, and 
 one percent on the 25th covering invoices between the 1st and the 15th, both 
 inclusive, of the same month, or net 30 days from date of shipment. 
 
 General. — Stenographical and clerical errors subject to correction. Until order 
 is accepted, prices are subject to change without notice. Unless otherwise speci- 
 fied, prices quoted are on product as dropped from the screw machine. All quota- 
 tions, unless otherwise stated, are for immediate acceptance. All orders and 
 contracts subject to approval, if accepted by a salesman or selling agent. 
 
 Credit. — Accounts opened only with firms or individuals on approved credit. 
 The seller reserves the privilege of declining to make deliveries except for cash 
 whenever, for any reason, doubt as to the buyer's financial responsibility develops, 
 and shall not, in such event, be liable for non-performance of contract in whole or 
 in part. 
 
 Cancellation. — Orders placed cannot be cancelled, nor can deferred deliveries 
 of goods made up or in process be extended beyond the original delivery date 
 specified, except with the seller's consent and upon terms which will indemnify 
 him against all loss. 
 
 Quotations. — It is understood that all estimates and/or quotations are subject 
 to change without notice, until order is accepted. 
 
 Quantities. — All quotations are based on customer accepting over-runs or under- 
 runs not exceeding ten percent of quantity ordered, to be paid for or allowed pro 
 rata. 
 
 Delivery. — Every effort will be made to fill orders within the time promised. 
 Unless specifically stated to the contrary, quotations are made and orders are 
 accepted for delivery as fast as manufactured. 
 
 Samples.— If requested, the seller will submit samples for approval when com- 
 mencing operations upon any order, but does so with the understanding that his 
 machines are to be run immediately after they are set correctly to customer's 
 specifications, and he will assume responsibility for having the product in con- 
 formity with the original specifications during the period necessary in which to 
 obtain customer's approval. Any change in specifications can be made only at 
 customer's direction and expense. It is accordingly advisable to telephone or 
 telegraph at once if changes are to be made. 
 
 Claims.— -If any material furnished by seller proves defective, or not as ordered, 
 he must be notified within one week from receipt of shipment and shall have the 
 option of inspecting the goods on buyer's premises or of taking back the goods 
 and deciding whether he shall replace them or not. 
 
 Tolerances. — All dimensions must be limited by a specified tolerance. When 
 not specified by a customer, it is understood that commercial tolerances apply: 
 viz., for decimal dimensions, plus or minus .002 for diameters, and plus or minus 
 .010 for lengths and for fractional dimensions, plus or minus .005 on diameters, 
 and plus or minus .010 on lengths. Samples to be considered as fractional dimen- 
 sions, unless otherwise specified. 
 
 When buyer purchases pursuant to his own specifications, the seller will not be 
 responsible for the design and fitting of parts; the conforming of the seller's part 
 to the specified tolerances is sufficient evidence as to the correctness of the product; 
 
 It is definitely understood that concentricity is not a dimension, but is the 
 relation that one dimension bears to any other and must be specified separately from 
 dimensions. When concentricity limitation is specified, it is understood that 
 it means the actual eccentricity allowable between two dimensions and that the 
 actual eccentricity is one-half what is registered by a dial reading. When con- 
 centricity is not specified, the work will l>e manufactured in the most economical 
 manner without particular regard to concentricity and quotations are made and 
 orders are accepted on this basis. 
 
 (17) 
 
UNIVERSITY OF FLORIDA 
 
 18 
 
 3 1262 08855 6773 
 
 Threads. — It is understood that customer shall specify the standard to which 
 threads shall conform. The Seller will follow the commonly accepted standards, 
 namely U.S. (American-National) form for threads when no other form of thread 
 is specified. As there is no standard for V threads gages must be furnished by 
 the customer should this form of thread be specified. 
 
 External threads. — Unless .otherwise specified the seller will work to the limits 
 specified by the National Screw Thread Commission's 1933 report for Class 2 
 Free Fit. If the specified tolerance is not in agreement with the N.S.T.C. speci- 
 fication for classes 1, 2, or 3 fits, "go" and "not go" gages shall be furnished by 
 the purchaser. 
 
 Where threading to a shoulder is specified, it will be understood that the last 
 full thread will not be cut closer to the shoulder than a distance of two threads 
 and in the case of fine pitches, never closer than )W . 
 
 Internal threads. — Unless dimensional limits for minor diameter of tapped hole 
 are specified, threads will be tapped to % full depth in accordance with the 
 regular practice recommended by the tap and die manufacturer and unless 
 otherwise specified the seller will work to the limits specified by the National 
 Screw Thread Commission's 1933 report for Class 2 Free Fit for tapped holes %" 
 diameter or over and to Class 1 Loose Fit for tapped holes less than }{" diameter. 
 If specified tolerance is not in agreement with the N.S.T.C. specifications for 
 Classes 1 and 2 for holes less than }i" diameter and for Classes 1, 2 and 3 for holes 
 Yi" diameter and over, "go" and "not go" gages shall be furnished by the 
 purchaser. 
 
 Blind tapped holes will not have a full thread closer than five threads from the 
 bottom and in the case of fine pitches never closer than %i" . 
 
 Gages. — Gages are not included in estimated price unless especially stated. 
 Where tolerances are closer than commercial limits defined under "Tolerances", 
 or when dimensions cannot be readily gaged with standard gages or micrometers, 
 customers may furnish manufacturing gages or such gages may be supplied by 
 seller at cost. 
 
 Inspection. — Quotations do not include 100 per cent inspection unless especially 
 stipulated. Although it is the intention to charge for only good work without a 
 100 per cent inspection, delivery in this way cannot be guaranteed. It is there- 
 fore understood that such individual inspection will be made by the customer at 
 his expense and that only parts which have been proved defective by customer's 
 individual inspection will be returned with a claim for credit or replacement at 
 seller's option. When the manufacturing tolerances are closer than commercial 
 limits defined under tolerances the dimensions of the inspection gages to be used 
 by the purchaser shall be furnished the manufacturer. In the case of threads 
 the inspection gages shall not be outside the limits specified by the N.S.T.C. for 
 inspection gages. 
 
 Dies, tools, etc. — Charges for dies, tools and/or gages do not convey ownership 
 or the right to remove them from seller's factory, but buyer may purchase dies, 
 tools and/or gages. 
 
 Responsibility. — Seller is not responsible for drawings, samples, models, or 
 gages uncalled for within thirty days after the execution of any order or quotation. 
 
 Shipments. — In ordering, the customer should state explicitly the method of 
 shipment preferred. In the absence of shipping directions the seller will use dis- 
 cretion forwarding by express or parcel post when packages are small and there- 
 fore liable to be lost in transit by freight. Parcel Post shipments will be insured 
 at customer's expense unless otherwise specified. The seller assumes no respon- 
 sibility for placing valuations upon shipment unless specifically requested to do 
 bo by the customer. 
 
 Customer's material. — Quotations covering the machining of buyer's material 
 are subject to change if material furnished will not machine at speed and feed 
 estimated. When the material is furnished by the buyer, the seller cannot guar- 
 antee to furnish more than ninety percent of the amount of the order. When 
 strictly special material is used, this may vary. 
 
 Patents. — It is not the intention of the seller to manufacture any product which 
 is an infringement of a patented article and it is understood that the seller be 
 notified if the parts on which he is quoting are infringements of letters patent. If 
 any Buch infringement exists, the seller reserves the right to withdraw the quotation. 
 
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