s 679— B Registry No. 1403—42 NATIONAL RECOVERY ADMINISTRATION PROPOSED CODE OF FAIR COMPETITION FOR THE AS REVISED FOR PUBLIC HEARING WE DO OUR PART The Code for the Motor Vehicle Retailing Trade in its present form merely reflects the proposal of the above-mentioned industry, and none of the provisions contained therein are to be regarded as having received the approval of the National Recovery Administration as applying to this industry UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1933 For sale by the Superintendent of Documents, Washington, D.C. -------- Price 5 cents Submitted by NATIONAL AUTOMOBILE DEALERS ASSOCIATION (II) PROPOSED CODE OF FAIR COMPETITION FOR THE MOTOR VEHICLE RETAILING TRADE 1. Purpose This Code is set up by the National Automobile Dealers Asso- ciation, for the purpose of increasing employment, establishing fair and adequate wages, effecting necessary reduction of hours, im- proving standards of Labor and eliminating unfair trade practices to the end of rehabilitating the automobile retailing and/or servic- ing and/or repairing industry and enabling it to do its part toward establishing that balance of industries which is necessary to the restoration and maintenance of the highest practical degree of public welfare. It is declared purpose of the automobile retailing and/or servic- ing and/or repairing industry to bring, insofar as may be practicable the rates of wages paid within the automobile retailing and/or servicing and/or repairing industry to such levels as are necessary for the creation and maintenance of the highest practicable standard of living; to restore the income of enterprises within the industry to levels which will make possible the payment of such wages and avoid further depletion and destruction of capital assets; and from time to time to revise the rates of wages in such manner as will cur- rently reflect the equitable adjustment to variations in the cost of living. 2. Definitions Wherever in this Code, or in any proceeding under or in con- nection with this Code, the following words or terms are used, they shall be deemed and taken to have the meanings ascribed to them as follows : The word " dealer " includes, but without limitation, any indi- vidual, partnership, association, trust or corporation engaged in tvhole or in part in any phase of the business of motor vehicle retailing, and/or servicing and/or repairing new and/or used motor vehicles. The term " motor vehicle retailing " shall mean any phase of the business of retailing and/or servicing and/or repairing new motor vehicles and the retailing and/or servicing and/or repairing of used motor vehicles by dealers who deal in new cars as aforesaid. The term " motor vehicles " as used herein means automobiles, including passenger cars, trucks, truck tractors, buses, taxicabs, hearses, ambulances, and other commercial vehicles, for use on the highway, excluding motorcycles, fire apparatus, and tractors other than truck tractors. Describe association : Incorporated under laws of Illinois, princi- pal office in St. Louis. The term " association " as used herein means 3061°— 33 (1) National Automobile Dealers Association, a trade association, having its principal office at No. 1010 Pine Street, St. Louis, Missouri. 3. Employment Regulations a. labor code (1) Employees of the automobile retailing and/or repairing in- dustry shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organiza- tion or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection ; (2) No employee of the automobile retailing and/or servicing and/or repairing industry and no one seeking employment shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organiza- tion of his own choosing; and (3) Employees shall comply with the maximum hours of labor, minimum rates of pay, and other conditions of employment, approved or prescribed by the President. (4) Without in any way attempting to qualify or modify, by inter- pretation, the foregoing requirements of the National Industrial Re- covery Act, employers in this industry may exercise their right to select, retain, or advance employees on the basis of individual merit, without regard to their membership or nonmembership in any organ- ization. B. W T AGES AND HOURS (1) No person under 16 years of age shall be employed in motor- vehicle retailing provided, however, that where a State law provides a higher minimum rate, no person below the age specified by such State law shall be employed within that State, except that persons under 16 may be employed (but not in manufacturing or mechani- cal industries) for not to exceed 3 hours per day and those hours between 7 A.M. and 7 P.M. in such work as will not interfere with hours of day school. (2) No employee (except outside salesmen and watchmen) shall be employed for more than 48 hours in any one week. All places of business shall be kept open not less than 52 hours a week, unless such hours were less than 52 hours per week before July 1, 1933, and in which case such hours shall not be reduced at all. (3) The maximum hours fixed in the foregoing paragraph (2) shall not apply to employees in a managerial or executive capacity who now receive $25.00 per week or more; to employees in super- visory capacity or engaged in technical work; to employees engaged in emergency repair and maintenance work on automobiles for which, due to seasonal climatic conditions, there are in certain localities insufficient trained workers available to take care- of consumer de- mands; in such localities sixty hours shall not be exceeded in any one week. It is understood, however, that the average in any six months' period will not be over 48 hours. (4) Not to pay any employees, except as hereinbelow provided, less than at the rate of $15.00 per week in any city of over 500,000 population, or in the immediate trade area of such city; nor less than at the rate of $14.50 per week in any city of between 250,000 and 500,000 population, or in the immediate trade area of such city; nor less than at the rate of $14.00 per week in any city of between 2,500 and 250,000 population, or in the immediate trade area of such city; and in towns of less than 2,500 population to increase all wages by' not less than 20%, provided that this shall not require wages at the rate of in excess of $12.00 per week. Provided, however, that in places where unskilled labor, such as washers, greasers, porters, or helpers, were paid $12.00 or less per week on July 1, 1933, that this class of workers shall be paid not less than they were being paid on July 1, 1933, but that their hours be reduced to 48 per week. (5) Full-time outside salesmen, who are unrestricted as to hours and receive remuneration on a commission basis, shall be guaran- teed a drawing account of not less than $17.50 a week in any city of over 500,000 population, or in the immediate trade area of such city ; nor less than at the rate of $15.00 per week in any city between 250,000 and 500,000 population, or in the immediate trade area of such city; nor less than at the rate of $12.50 per week in any city between 2,500 and 250,000 population, or in the immediate trade area of such city; and in towns of less than 2,500 population all sales- men shall be guaranteed not less than $10.00 per week. An apprentice salesman is excepted from this guaranty until he has served at least six months — three months of which must be served with employer last employing him. Such apprentices shall be limited to one for each ten regular salesmen, or multiple thereof. Population for the purpose of this agreement shall be determined by reference to the 1930 Federal census. (6) No mechanic employed in this industry shall be paid less than 50 cents per hour unless the hourly rate for the same class of work on July 15, 1929, was less than 50 cents per hour, in which latter case such mechanic shall be paid not less than the hourly rate of July 15, 1929, and in no event less than 30 cents per hour. This paragraph establishes a guaranteed minimum hourly rate of pay regardless of whether the employee is compensated on the basis of a time-rate or a flat-rate performance, or otherwise. (7) No dealer shall reduce the compensation for employment now in excess of the minimum wages hereby provided (notwithstanding that the hours worked in such employment may be hereby reduced) and each dealer shall increase the pay for such employment by an equitable readjustment of all pay schedules. (8) No dealer shall use any subterfuge to frustrate the spirit and intent of this Code which is, among other things, to increase em- ployment, to remove obstructions to commerce, and to shorten hours and to raise wages for the shorter week to a living basis. (9) No dealer shall increase the price of any merchandise sold after the date hereof over the price on July 1, 1933, by more than is made necessary by actual increases in wages, or invoice costs of merchandise, or by taxes, since July 1, 1933, and in setting such price increases, each dealer shall give full weight to probable increases in sales volume and to refrain from taking profiteering advantage of the consuming public. (10) The maximum hours herein above provided mark the total number of hours which may be worked by any employee; whether he works for one or more employers ; provided, however, that if any employee works more than such maximum without the knowledge or connivance of any one of his employers such employer shall not be deemed to have violated this paragraph. (11) No employee shall be classified in any of the excepted classes hereinabove, provided unless such employee performs duties iden- tical with those performed by employees thus classified on June 16, 1933. 4. Industry Regulations a. used car allowance To prevent sales below cost, heretofore due to unfair competition that has resulted in the dissipation of the large part of the capital originally in this industry and has accumulated large losses since 1926, this industry agrees to regulate itself so as to return profit possibilities and support increased wages and shortened hours. Giving consideration to the public interest and to prevent sales below cost, it is hereby provided : (1) That the value of any used motor vehicle, either passenger or commercial, shall be the average price that the public in any given market area is then paying for such vehicle, as ascertained by Na- tional Automobile Dealers' Association from certified reports of actual sales, subject to the approval of the Administrator. The Association shall publish the average prices thus ascertained approx- imately every 60 days. (2) That no dealer shall, directly or indirectly, or by subterfuge, accept in trade any used vehicle at an allowance price of more than its value as determined in paragraph (1) above, less a minimum selling, handling, and reconditioning charge of 20%. (3) To provide a record for the establishment of used-car allow- ances in paragraph (1) above, there shall be provided in each logical trading area of the United States an official guide which shall be provided by the N.A.D.A. and such other organizations as shall be found desirable and shall be known as the N.A.D.A. Official Guide and shall be recognized as the authority for such allowances and which shall be based upon actual sales in each trading area for the preceding 60-day period. (4) There shall be used as a basis of establishing allowance values, as provided in paragraphs 1 and 3, the principle of averaging actual sales for the preceding period. Since this will, in isolated instances, by reason of very few or no sales on particular models, leave a need to establish a guide figure on such models, the following method of determining the allowance values will be pursued for the public protection. If any model car described in the Official Guide shows five or more sales within the district in any period, then the average figure published becomes the basis for determining allowances for the en- suing period. If any model car has less than five sales 'within the district for the period then the new-car dealers handling this particular make car within this district shall establish its allowance value ; same to be so published in the report. These figures to be subject to approval of the National Control Committee and the Administrator. If any make car is not represented in the district or is no longer manufactured and less than five sales are reported on each or any model of such car, then the National Control Committee, subject to the approval of the Administrator, will set the figure based on what like models of other makes bring in the District. B. MARKETING RULES The following Marketing Rules shall take effect 30 days after the approval by the President : (1) No dealer shall sell a new car for less than factory list prices, plus extra for equipment at listed prices, an amount equivalent to rail transportation and handling charge to point of delivery, plus all taxes paid by said dealer. The only exceptions to these prices shall be sales to proprietors' immediate families, or members of his organization when for the personal use of such buyer. Motor vehicles sold to employees for use in their employer's business as demonstrators or executives' cars, and cars used as demonstrators by dealers, must be so registered with their trade association, or with the State Advisory Committee; dem- onstrators and executive cars shall not be sold to a consumer at re- tail for less than the full retail price except when they have been in use for a period of at least GO days, from the date of registration as aforesaid, and have had at least 3,500 miles actual road usage, or when the manufacturer has made public announcement of a change in model. (2) No dealer or representative shall offer or give any gratuity, commission, service or accessory for the purpose of inducing a customer to purchase a car. Nothing herein shall prevent conduct pursuant to any warranty or declared policy of the manufacturer. (3) Charges for financing retail sales shall be upon an equitable basis to consumer, dealer and financing company. A dealer hand- ling his own paper on monthly payment basis shall not charge a lower or higher rate than that charged by regularly established finance companies doing a national business. (4) With the approval of the State Advisory Committee and the manufacturer concerned, and for a given reasonable time a dealer will be permitted to sell and offer for sale, new cars that have been discontinued or about to be discontinued at less than delivered prices as described in the first paragraph in this section. The intent of this provision is to enable dealers to clean up their own or their fac- tories' stock before or after new model announcement. In the event that approval is refused by the said Committee or the manufacturer, said dealer shall have right of appeal, to the Administrator, who may permit such sale. (5) It shall be unfair trade practice for any new car dealer or representative to sell or permit to be sold any new motor vehicle for resale in a territory already enfranchised for that make of motor 6 vehicle except through the regularly enfranchised dealer in that territory and it shall also be an unfair trade practice for any dealer to purchase a vehicle as above prohibited. (6) The retail list price for parts, accessories, and supplies shall be the manufacturers' published list price adjusted to include all taxes. It shall be an unfair trade practice for any dealer to sell such parts, accessories and supplies at other than retail list price except to duly authorized dealers, associate or sub-dealers, or au- thorized service stations operating under any N.R.A. Code. C. TRADE PRACTICE RULES Emergency National Committee shall hold a trade practice con- ference as often as may be necessary for the purpose of making recommendations to the Administrator in regard to the establish- ment and amending of rules of fair trade practice for the Industry. 5. Districts of the Industry (A) For the purpose of the administration of this code, there shall be in each state an advisory committee consisting of not less than five elected by the dealers of such state, in convention or by mail vote. The chairman of each State Advisory Committee shall be a member of the Emergency National Committee. The Vice Chairman of each State Advisory Committee shall be an alternate member of the Emergency National Committee. Each such State Advisory Committee shall constitute the fair, practical, and planning agency to cooperate with the Administrator in respect to problems relating exclusively to the said state. Pro- posals in respect to matters affecting more than one state may be initiated by any State Advisory Committee and shall be submitted for consideration to the Emergency National Committee of the motor vehicle retailing and/or servicing and/or repairing industry, hereinafter described and its determination, subject to the approval of the Administrator, shall be binding upon said state and all other states affected thereby. It shall be subject to the final appeal to the Administrator. For the purpose of the administration of this Code the District of Columbia, Metropolitan New York, and the rest of New York, and Metropolitan Chicago, and the rest of Illinois, shall each be considered one state. States may be divided or rearranged upon application of any asso- ciation or group of associations subject to the approval of the Emer- gency National Committee hereinafter described. b. executive committees - Each of the present component associations making up each State Group and any others which may subsequently be formed within the Motor Vehicle Retailing and/or Servicing or Repairing Indus- try, shall set up Executive Committees for the purpose of assisting in administration of the provisions of the Code, to secure adherence thereto, to hear and adjust complaints, to consider proposals for amendments thereof and exceptions thereto, and otherwise to carry out within the component associations by cooperation through the State Advisory Committee the purposes of the National Industrial Recovery Act as set forth in this Code, subject to final appeal to the Administrator, provided that no inequitable restrictions upon mem- bership in any such association shall at any time be imposed. 6. Emergency National Committee a. representation There shall be an Emergency National Committee of the motor vehicle retailing and/or servicing and/or repairing industry to con- sist of one representative by each State Advisory Committee. B. POWERS The Emergency National Committee shall be the general planning and coordinating ageney for the industry. Its members selected as aforesaid shall be empowered to act for their respective State Advisory Committees conclusively in respect to all matters before the National Committee for consideration and within its jurisdiction. The Chairman of the Emergency National Committee shall appoint eleven members, to be called the Administrative Committee. Such appointments are to be approved by a majority of the mem- bers of the Emergency National Committee and to insure balanced representation of all classes of dealers must include dealers from smaller towns, a majority of whom shall be retail dealers and dealers geographically representative of the nation as well as the various lines of cars and with consideration of the appointee's availability and willingness to serve. The Emergency National Committee shall delegate its power to the smaller body to be exercised as necessary to problems requiring 1 attention between meetings of the National body. The Emergency National Committee shall have powers and duties as provided herein, and in addition thereto it shall — (1) from time to time require such reports from state associations and component associations, or from local associations, or from indi- vidual dealers, as in its judgment, subject to the approval of the Administrator, may be necessary to advise it adequately of the administration and enforcement of the provisions of this code ; (2) upon complaint of interested parties or upon its own initia- tive make such inquiry and investigation into the operation of the code as may be necessary, and report its findings to the Adminis- trator; and (3) make rules and regulations necessary for financing the admin- istration and enforcement of this code, subject to the approval of the Administrator. The Committee may delegate any of its author- ity to the National Control Committee hereinafter provided and may designate such agents as it shall determine. 7. Statistics The National Automobile Dealers Association will serve as a medium through which all required statistics will be obtained, and 8 each dealer agrees, upon request, to furnish it with such informa- tion and make his books available to the National Automobile Deal- ers Association, to the end that the terms of this code regarding increase of wages, shortening of hours, and the establishment of fair used-car allowance, based upon actual sales and the maintenance of established prices, may constantly be availble to the government. 8. National Control Committee The Emergency National Committee of the motor- vehicle retailing and/or servicing and/or repairing industry shall appoint from its own membership a National Control Committee of three members. In addition, there may be two nonvoting members appointed by the Administrator. The National Control Committee shall exercise such authority as may have been delegated to it by the said Emergency National Committee. All communications and conferences of the Automobile Retailing and/or servicing and/or repairing Industry with the President or with his agents concerning the approval or amendment of this Code or of any of its provisions or any matters relating thereto, shall be through the said National Control Committee. The National Control Committee shall serve as an executive agency for the Emer- gency National Committee of the motor-vehicle retailing and/or servicing and/or repairing industry, and shall be charged with the execution of the duties, through agents or otherwise, of hearing and adjusting complaints, considering proposals for amendments and making recommendations thereon, approving recommendations for exceptions to the provisions of this code, and otherwise administering its provisions. Any member of this Industry shall have the right of appeal to the Emergency National Committee from decisions of the National Control Committee and the decisions of the said Emergency National Committee may be appealed from, to the Administrator. The function of this Committee shall be the general planning and coordinating for the motor-vehicle retail and/or servicing and/or repairing industry and the cooperation with similar boards of the Automobile Manufacturers Chamber of Commerce and other branches of the industry to the end of effecting a balanced national economy. 9. General (1) No provision in this Code shall be interpreted or applied in such a manner as to : Promote monopolies, Permit or encourage unfair competition, Eliminate or oppress enterprises, or Discriminate against small enterprises. (2) This Code is hereby expressly made subject to the right of the President, pursuant to Section 10 (b) of the National Industrial Recovery Act, from time to time, to cancel or modify any order, ap- proval, license, rule, or regulation issued under Title I of said Act, and particularly, but without limitation, to cancel or modify his approval of this Code or any condition imposed by him upon such approval. (3) The Emergency National Committee of the motor-vehicle re- tailing and/or servicing and/or repairing industry and the National Control Committee shall from time to time make to the Administra- tor such recommendations, including amendments of the code, as in their judgment will aid the effective administration of this code, or may be necessary to effectuate within the automobile retailing and/or servicing and/or repairing industry or within any state thereof the purpose of the National Industrial Recovery Act as administered. (4) Such of the provisions of this Code as are not required to be included therein by the National Industrial Recovery Act, may, with the approval of the President, be modified or eliminated as changes in circumstances or experience may indicate. It is contemplated that from time to time supplementary provisions to this Code or codes, including in particular, but without limitations, supplementary pro- visions relating to dealers engaged exclusively in the sale and repair- ing used cars and persons engaged exclusively in servicing or repair- ing, will be submitted for the approval of the President to prevent unfair competition in price and other unfair and destructive com- petitive practices and to effectuate the other purposes and policies of Title I of the National Industrial Recovery Act consistent with the provisions thereof. (5) Violation by any dealer of automobile retailing and/or servic- ing and/or repairing industry or any provisions of this code, or of any approved rule issued thereunder, is an unfair method of competition. (6) If any employer in this industry is also an emploA 7 er in any other industry, the provisions of this code shall apply to and affect only that part of the business of such employer which is a part of the industry covered by this code. (7) This code shall become effective upon its approval by the President, except as herein specifically provided. O UNIVERSITY OF FLORIDA 3 1262 08728 6232