Approved Code No. 201 — Supplement No. 16 Registry No. 1135 — 03 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE SHEET METAL DISTRIBUTING TRADE (A Division of the Wholesaling or Distributing Trade) AS APPROVED ON JULY 27, 1934 WE DO OUR PART UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents, Washington, D.C. --»...». Price 5 cents This publication is for sale by the Superintendent of Documents, Government Printing Office, Washington, D.C., and by district offices of the Bureau of Foreign and Domestic Commerce. DISTRICT OFFICES OF THE DEPARTMENT OF COMMERCE Atlanta, Ga.: 504 Post Office Building. Birmingham, Ala.: 257 Federal Building. Boston, Mass.: 1801 Customhouse. Buffalo, N.Y.: Chamber of Commerce Building. Charleston, S.C.: Chamber of Commerce Building. Chicago, 111.: Suite 1706, 201 North Wells Street Cleveland, Ohio: Chamber of Commerce. Dallas, Tex.: Chamber of Commerce Building. 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Approved Code No. 201 — Supplement No. 16 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE SHEET METAL DISTRIBUTING TRADE As Approved on July 27, 1934 ORDER Approving Supplementary Code of Fair Comfetttton for the Sheet Metal Distributing Trade a division of the wholesaling or distributing trade An application having been duly made pursuant to and in full compliance with the provisions of Title I of the National Industrial Recovery Act, approved June 16, 1933, for approval of a Supple- mental Code of Fair Competition for the Sheet Metal Distributing Trade to the Code of Fair Competition for the Wholesaling or Distributing Trade, and hearings having been duly held thereon and the annexed report on said Supplemental Code, containing findings with respect thereto, having been made and directed to the President : NOW, THEREFORE, on behalf of the President of the United States, I, Hugh S. Johnson, Administrator for Industrial Recovery, pursuant to authority vested in me by Executive Orders of the President, including Executive Order No. 6543-A, dated December 30, 1933, and otherwise do hereby incorporate by reference said annexed report and do find that said Supplemental Code complies in all respects with the pertinent provisions and will promote the policy and purposes of said Title of said Act; and do hereby order that said Supplemental Code of Fair Competition be and it is hereby approved; subject, however, to the condition that the pro- visions of Article IV, Section 1 be deleted from said Code and the following provisions substituted therefor: "Section 1(a) Destructive price cutting is an unfair method of competition and is forbidden. Any sale shall be deemed prima facie destructive price cutting if the net sales price shall be less than the seller's net invoice cost plus transportation charges to seller's warehouse. " Notwithstanding the provisions of this Section any wholesaler may sell any article of merchandise at a price as low as the price set by any competitor on merchandise which is identical or essen- tially the same, where such competitor's price does not violate this Section or where such competitor is not subject to the provisions of this Supplemental Code. 76467° 829-159 34 (l) u Notwithstanding the provisions of this Section it shall not be deemed destructive price cutting for a wholesaler to sell the follow- ing merchandise at less than net invoice cost plus transportation charges, as provided above : obsolete goods, bona fide closeout mer- chandise, damaged merchandise, stocks being liquidated, merchandise sold for charitable purposes or to unemployment relief agencies, and such other merchandise as may be designated by the Divisional Code Authority. "(!>) If the Administrator shall at any time find (1) that an emergency has arisen within the trade, adversely affecting small enterprises or wages or labor conditions, or tending toward monop- oly or other acute conditions which tend to defeat the purposes of the Act, and (2) that the finding of a basis for determining mini- mum prices for all or any specified products sold by the trade is necessary for a limited period to correct the conditions constituting such emergency and to effectuate the purposes of the Act, the Code Authority may cause an impartial agency to investigate costs and to recommend to the Administrator a basis for determining mini- mum prices of said products. Thereupon the Administrator may fix a basis for determining the minimum price of any of said prod- ucts for a stated period. During such period no member of the trade shall sell such products at a net realized price below the minimum price determined in accordance with the base so fixed. From time to time the Code Authority may recommend review or reconsidera- tion or the Administrator may cause any determination hereunder to be reviewed or reconsidered, and appropriate action taken." Hugh S. Johnson, Administrator for Industrial Recovery. Approval recommended : Kobert L. Houston, Division A dministrator. Washington, D.C., July £7, 193^. REPORT TO THE PRESIDENT The President, The White House. Sir: This is a report of the Hearing on the Supplemental Code of Fair Competition for the Sheet Metal Distributing Trade, con- ducted in Room 2062, Department of Commerce Building, Washing- ton, D. C, on April 6, 1934. The Supplemental Code which is attached was presented by duly qualified and authorized representa- tives of the Trade, complying with the statutory requirements, said to represent about G8 per cent in number and about 68 per cent in volume of sales of the Trade which could be included under this Supplemental Code. THE TRADE The Census of Wholesale Distribution does not separately classify this Trade. According to what appear to be carefully and intelli- gently compiled statistics furnished by members of the Trade there are at the present time 185 concerns engaged in this business. In 1929 there were approximately 185 concerns so engaged. Total annual sales in the Trade in 1929 were about $38,000,000, and em- ployees were approximately 5,000 in number. In 1933 sales had declined to about $22,000,000, while the number of employees had fallen to about 4,500. PROVISIONS OF THE SUPPLEMENTAL CODE Since this Code is supplemental to the Cod-e of Fair Competition for the Wholesaling or Distributing Trade, it contains no labor pro- visions. The provisions containing supplementary definitions are inclusive and accurate. The supplement to the administrative provisions of the General Code establishes a Divisional Code Authority which is fairly and adequately representative of all the different elements in the Trade. The Constitution and By-laws contain no inequitable restrictions on membership. The method provided for the election of the members of the Divisional Code Authority adequately protects those members of the Trade which are not members of the Association. The Trade Practice rules contained in this Supplemental Code are not in any respect objectionable and are designed to promote fair competition in the Trade. FINDINGS The Deputy Administrator in his final report to me on said Pup- plemental Code, having found as herein set forth, and on the basis of all the proceedings in this matter; (3) 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 inter- state 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 trade groups, by inducing and maintaining united action of labor and management under adequate governmental sanction and supervision, by eliminating unfair competitive practices, by promot- ing the fullest possible use 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 indus- trial and agricultural products through increasing purchasing power, by reducing and relieving unemployment, by improving stand- ards of labor, and by otherwise rehabilitating industry. (b) Said Trade normally employs not more than 50,000 employees and is not classified by me as a major industry. (c) The Supplemental Code as approved complies in all respects with the pertinent provisions of said Title of said Act, including without limitation Subsection (a) of Section 3, Subsection (a) 01 Section 7, and Subsection (b) of Section 10 thereof; and that the applicant association is a trade association truly representative of the aforesaid Trade ; and that said association imposes no inequitable restrictions 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 elim- inate or oppress small enterprises and will not operate to discrim- inate against them. (f) Those engaged in other steps of the economic process have not been deprived of the right to be heard prior to the approval of this Supplemental Code. For these reasons the Supplemental Code has been approved. Respectfully, Hugh S. Johnson, A dnmuatrator. July 27, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE SHEET METAL DISTRIBUTING TRADE A DIVISION OF THE WHOLESALING OR DISTRIBUTING TRADE Article I — Purposes To effectuate the policies of Title I of the National Industrial Re- covery Act, this Supplemental Code is established as a Code of Fair Competition for the Sheet Metal Distributing Trade pursuant to Article VI, Section 1 (c) of the Code of Fair Competition for the Wholesaling or Distributing Trade, approved by the President of the United States on January 12, 1934. All provisions of the said General Code which are not in conflict with the provisions of this Supplemental Code are hereby incorporated by reference in this Supplemental Code and made a part hereof. Such provisions of the General Code together with the supplementing provisions of this code are the standards of fair competition for and are binding upon every member of said Sheet Metal Distributing Trade. Article II — Definitions Section 1. The term " Distributor ", as used herein, shall mean any individual, partnership, corporation, association, or other form of enterprise or definitely organized division thereof, specifically set up to render a general distribution service, whose business is selling to sheet metal contractors, roofers, fabricators, retailers, industrial, and other users; w,ho carries an adequately diversified stock of fer- rous and/or ferrous coated sheet metals including, but without limi- tation, galvanized sheets, metal roofing and siding, tin plate, sheet zinc, and kindred lines defined as eaves trough, conductor pipe and elbows, tinners' tools, solder, but not including iron and steel sheets, except galvanized sheets; buys such merchandise; warehouses a re- serve stock of it for servicing the Trade through salesmen, advertis- ing, and/or sales promotion devices; resells it; assumes the credit risk and/or such other obligations as are incident to the transportation, warehousing and distribution of sheet metals and kindred lines. The term shall not include any distributors whose business is prin- cipally the distribution of sheet steel seconds. Section 2. The term " Divisional Code Authority ", as used herein, shall mean the Divisional Code Authority for the Sheet Metal Dis- tributing Trade, a Division of the Wholesaling or Distributing Trade. Section 3. The term " General Code ", as used herein, shall mean the Code of Fair Competition for the Wholesaling or Distributing Trade. (5) Article III — Administration SUPPLEMENTING ARTICLE VI OF THE GENERAL CODE Section 1. The Divisional Code Authority for the Sheet Metal Distributing Trade shall be composed of fifteen (15) members. Section 2. The members of such Divisional Code Authority shall be elected as follows: (a) The Executive Committee of the National Association of Sheet Metal Distributors shall nominate as candidates, twenty (20) persons from among the members of the Trade who are members of the Association. The Administrator shall nominate ten (10) can- didates from members of the Trade who are not members of the Association. (b) The Executive Committee of the Association shall send out to all members of the Association, a ballot upon which are listed the names of the twenty (20) candidates nominated by the Association. At least ten (10) additional blank spaces shall appear on the ballot in which a voter may write his personal choices. To each ballot shall be attached a letter of assent to and compliance with this Sup- plemental Code and the General Code. At the same time, the Execu- tive Committee of the Association shall send out to all members of the Trade, not members of the Association, who names are discover- able after diligent search, the ballot containing the ten (10) candi- dates nominated by the Administration. At least five (5) addi- tional blank spaces shall appear on the ballot in which a voter may write his personal choices. To each ballot shall be attached a letter of assent to and compliance with this Supplemental Code and the General Code. (c) Twenty (20) days after the mailing of these ballots, the Exec- utive Committee of the National Association of Sheet Metal Dis- tributors shall publicly count the votes which it has received, only those ballots being counted which are accompanied by a signed letter of assent and compliance. The ten (10) members of the Trade, who are members of the Association receiving the highest number of votes and the five (5) members of the Trade not members of the Associa- tion, receiving the highest number of votes, shall be declared elected members of the Divisional Code Authority. (d) The Executive Committee of the National Association of Sheet Metal Distributors shall certify to the Administrator the method of conducting the election and the results thereof. Section 3. Vacancies in the membership of the Divisional Code Authority whether to fill unexpired terms or full new terms shall be filled by the same method of election as that provided in Section 2 of this Article III. Section 4. The Divisional Code Authority shall cause to be se- lected a Regional Committee of not more than three (3) members for each of such regional areas as it may establish to act as its agent in handling such matters as may be referred to such Committee provided that nothing herein shall relieve the Divisional Code Au- thority of any of its responsibjlities under this Supplemental Code or unaer the General Code and provided further that such regional committee shall at all times be subject to and comply with the provisions hereof. Section 5. The Divisional Code Authority shall have the follow- ing duties and powers, in addition to those prescribed in the General Code, subject to such rules and regulations as may be issued from time to time by the Administrator : (a) To adopt by-laws, and rules and regulations for its procedure. (b) To use such trade associations and other agencies as it deems proper for the carrjdng out of any of its activities provided for herein provided that nothing herein shall relieve the Divisional Code Authority of its duties or responsibilities under this Code, and that such trade associations and agencies shall at all times be subject to and comply with the provisions hereof. (c) To organize, elect officers, hire employees, appoint agents, and perform such other acts as may be necessary for the proper admin- istration of this Supplemental Code and the General Code. (d) To obtain from members of the Trade such information and reports as are required for the administration of the Code. In addi- tion to information required to be submitted to the General Code Authority and to the Divisional Code Authority members of the Trade suoject to this 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 he may designate ; provided that nothing in this Code shall relieve any member of the Trade of any existing obligations to furnish reports to any government agency. No individual report shall be disclosed to any other member of the Trade or any other party except to such other governmental agencies as may be directed by the Adminis- trator. (e) To appoint a Trade Practice Committee, which shall meet with the Trade Practice Committees appointed under such other codes as may be related to the Trade (except those appointed by another Divisional Code Authority under the General Code) for the pur- pose of formulating Fair Trade Practices to govern the relationships between production and distribution employers under this Supple- mental Code and under such others, to the end that such Fair Trade Practices may be proposed to the Administrator as an amendment to this Supplemental Code and such other Codes. Section G. Nothing contained in this Supplemental Code shall constitute the members of the Divisional Code Authority partners for any purpose, nor shall any member or members of the Divisional Code Authority or any Regional Committee be liable in any manner to anyone for any action or omission to act, under this Supplemental Code, except for his own willful malfeasance or nonfeasance. Section 7. If the Administrator shall deternnne that any action of the Divisional Code Authority or any agency thereof, may be unfair or unjust or contrary to the public interest, the Administrator may require that such action be suspended to afford an opportunity for investigation of the merits of such action and for further con- sideration by such Divisional Code Authority or agency, pending final action, which shall be effective in case the Administrator ap- proves or unless he shall fail to disapprove after thirty days' notice to him of intention to proceed with such action in its original or modified form. 8 Section 8. (a) It being found necessary in order to support the administration of this Supplemental Code and to maintain the standards of fair competition established hereunder and to effectuate the policy of the Act, the Divisional Code Authority is authorized: (1) To incur such reasonable obligations as are necessary and proper for the foregoing purposes, and to meet such obligations out of funds which may be raised as hereinafter provided and which shall be held in trust for the purposes of the Code; (2) To submit to the Administrator for his approval, subject to such notice and opportunity to be heard as he may deem necessary (1) an itemized budget of its estimated expenses for the foregoing purposes, and (2) an equitable basis upon which the funds necessary to support such budget shall be contributed by members of the Trade; (3) After such budget and basis of contribution have been approved by the Administrator, to determine and obtain equita- ble contribution as above set forth by all members of the Trade, and to that end, if necessary, to institute legal proceedings therefor in its own name. (b) Each member of the Trade shall pay his or its equitable con- tribution to the expenses of the maintenance of the Divisional Code Authority, determined as hereinabove provided, and subject to rules and regulations pertaining thereto issued by the Administrator. Only members of the Trade complying with the Code and contribut- ing to the expenses of its administration as hereinabove provided, unless duly exempted from making such contribution, shall be en- titled to participate in the selection of members of the Divisional Code Authority or to receive the benefits of any of its voluntary ac- tivities or to make use of any emblem or insignia of the National Recovery Administration. (c) Ihe Divisional Code Authority shall neither incur nor pay any obligation in excess of the amount thereof as estimated in its approved budget, except upon approval of the Administrator; and no subsequent loudget shall contain any deficiency item for expendi- tures in excess of prior budget estimates except those which the Administrator shall have so approved. Article IV — Trade Practices SUPPLEMENTING ARTICLE VII OF THE GENERAL CODE It shall be an unfair trade practice for any member of the Trade: Section 1. (a) To sell or offer for sale any goods at less than the cost to the seller. Such cost shall be defined to mean the actual net invoiced purchase price or market price whichever is lower plus transportation charges to seller's warehouse plus actual wages in- volved in the delivery of goods by the seller when determined in accordance with an accounting formula developed by an impartial agency chosen with the advice of the Administrator and published from time to time by the Divisional Code Authority after approval by the Administrator. (b) Notwithstanding the provisions of this Section, any wholesaler may sell any article of merchandise at a price as low as the price set by any competitor on merchandise which is identical or essentially the same, and where such competitor's price does not violate this Section or where such competitor is not subject to the provisions of this Supplemental Code. (c) Notwithstanding the foregoing provisions of this Section a wholesaler may sell the following merchandise at less than the prices established under the said provisions: obsolete goods, bona fide closeout merchandise, damaged merchandise, stocks heing liquidated, merchandise sold for charitable purposes or to unemployment relief agencies, and such other merchandise as the Divisional Code Authority may designate. 1 Section 2. To buy, carry in stock, or sell what is commonly known as sheet steel " seconds ", unless plainly stamped " seconds " on each sheet and unless invoiced as " seconds . Section 3. To allow for shipment direct from the mill, terms of credit or cash discounts other than those which are received by the distributor. Article V — Permissive Trade Practices SUPPLEMENTING ARTICLE VIII OF THE GENERAL CODE Section 1. Within ten (10) days after request to do so by the Divisional Code Authority each member of the Trade shall file with a confidential and disinterested agent of the Divisional Code Au- thority, or if none then with such an agent designated by the Admin- istrator, a price schedule for each of such regions as may be desig- nated, such identified list to include all of his prices, discounts, rebates, allowances and all other terms or conditions of sale herein- after in this Article referred to as " price terms ", which lists shall completely and accurately conform to and represent the individual prices and practices of such member. Such lists shall contain the price terms for all such standard products of the Trade as are sold or offered for sale by said member and for such nonstandard products of said member as shall be designated by the Divisional Code Authority. Price terms and revised price terms shall become effective im- mediately upon receipt thereof by said agent. Immediately upon receipt thereof, said agent shall by telegraph or other equally prompt means notify said member of the time of such receipt. Such lists and revisions, together with the effective time thereof, shall upon receipt be immediately and simultaneously distributed to all members of the Trade and to all of their customers who have applied therefor and have offered to defray the cost actually incurred by the Divi- sional Code Authority in the preparation and distribution thereof and be available for inspection by any of their customers at the office of such agent. Said lists or revisions or any part thereof shall not be made available to any person until released to all members of the Trade and their customers, as aforesaid ; provided that prices filed in the first instance shall not be released until the expiration of the aforesaid ten (10) day period after the request of the Divisional Code Authority. The Divisional Code Authority shall maintain a 1 Amended — See paragraph 2 of order approving this Code. 10 permanent file of all price terms filed as herein provided, and shall not destroy any part of such records except upon written consent of the Administrator. Upon request the Divisional Code Authority shall furnish to the Administrator or any duly designated agent of the Administrator copies of any such lists or revisions of price terms. Section 2. When any member of the Trade has filed any revision, such member shall not file a higher price within forty-eight (48) hours. Section 3. No member of the Trade shall sell or offer to sell any product of the Trade, for which price terms have been filed pursuant to the provisions of this Article, except in accordance with such price terms. Section 4. No member of the Trade shall enter into any agree- ment, understanding, combination or conspiracy to fix or maintain price terms, nor cause or attempt to cause any member of the Trade to change his price terms by the use of intimidation, coercion, or any other influence inconsistent with the maintenance of the free and open market which it is the purpose of this Article to create. Section 5. Subject to the approval of the Administrator the Divisional Code Authority may establish for shipment out of ware- house, a maximum period of free credit, discount for early payment, and rate of interest for invoices not paid in full within such period, in accordance with the requirements of the different areas. Article VI — Power or President to Modify This Supplemental Code and all the provisions thereof are ex- pressfy made subject to the right of the President in accordance with the provisions of the Sub-sect Jon (b) of Section 10 of the Act, from time to time to cancel or modify any order, approval, license, rules or regulations issued under Title I of said Act. Article VII — Effective Date This Supplemental Code shall become effective on the tenth day after its approval. Approved Code No. 201 — Supplement No. 16. Registry No. 1135-03. O 1111 IIIIIII 3 1262 08856 1187