*s Approved Code No. 347 — Supplement No. 41 Registry No. 1399—59 NATIONAL RECOVERY ADMINISTRATION SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE (A Division of the Machinery and Allied Products Industry) AS APPROVED ON AUGUST 2, 1934 WE DO OUR PART UNIV. OF FL LIS. £MM£i£L§j ,.„ 0- :: L- U.&. DEPOSITORY UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON: 1934 For sale by the Superintendent of Documents. Washinjton, D.C -------- Price 5 cents This publication is for sale by tbe Superintendent of Documents, Government Printing Office, Washington, D.C., and by district offices of the Bureau of Foreign and Domestic Commerce. DISTRICT OFFICES OF TKE 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. 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Approved Code No. 347 — Supplement No. 41 SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE HYDRAULIC MACHINERY INDUSTRY As Approved en August 2, 1934 ORDER Approving Supplementary Code of Fair Competition for the Hydraulic Machinery Industry a division of the machinery and allied products industry An application having been duly made pursuant to and in full compliance with the provisions of Title I of the National Indus- trial Recovery Act, approved June 16, 1933, for approval of a Supplemental Code of Fair Competition for the Hydraulic Ma- chinery Subdivision of Machinery and Allied Products Industry, and hearings having been duly held thereon and the annexed report on said Supplemental Code containing findings with respect thereto, having been made and directed to the President : NOW, THEREFORE, on behalf of the President of the United States, I, Hugh S. Johnson, Administrator for Industrial Recovery, pursuant to authority vested in me by Executive Orders of the President, including Executive Order No. 6513-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 to the following condition : (1) That the provisions of Article VIII, Section 2 (a) be and they hereby are stayed pending my further order. Hugh S. Johnson, Administrator for Industrial Recovery. Approval recommended : Barton W. Murray, Division A dm inistrat o r. Washington, D.C., August 2, 1934. 78042° 1044-18 34 (J) REPORT TO THE PRESIDENT The President, The White House. Sir : This is a report on the Supplemental Code of Fair Competi- tion for the Hydraulic Machinery Subdivision of Machinery and Allied Products Industry, a Public Hearing on which was held in "Washington, D.C., on December 21, 1933. The Hearing was con- ducted in full accordance with the provisions of Title I of the National Industrial Recovery Act. GENERAL STATEMENT The Hydraulic Machinery Subdivision, being truly representative of the manufacturers of the products denned in Article II of the Supplemental Code, has elected to formulate and submit a Supple- mental Code of Fair Competition as provided in the second para- graph of Article I of the Code of Fair Competition for the Machinery and Allied Products Industry, approved by you on the seventeenth day of March, 1934. The Hyraulic Machinery Subdivision means the manufacture for sale, erecting, and selling of hydraulic machinery of all kinds and parts thereof, whether using water or any other liquid as enumerated in detail in the Supplemental Code attached thereto. It excludes, however, prime movers such as turbines, water wheels, and their accessory equipment, hydraulic brakes and/or parts therefor, hy- draulic shock absorbers, hydraulic bumpers and hydraulic dump trucks. It includes all those engaged in such manufacture for sale. ECONOMIC EFFECT This Subdivision has been severely affected by the recent depres- sion. This is evidenced by the steacty decline in annual sales since 1929. The volume of production as reported by the Division of Economic Research and Planning declined from $10,000,000 in 1929 to $2,000,000 in 1932, or 80%. Sales as reported for the first six months in 1933 amounted to only $700,000. However, an increase in production is indicated by an increase in man-hours reported since the second quarter of 1933. Employment of approximately 1,456 factory workers in 1929 declined to about 651 workers, or 55%, during the first quarter of 1933. Since then employment has increased. Approximately 44% of the factory workers in June 1933 were working more than 40 hours per week. The average work week in October 1933 was 37.8 hours. In June 1933 about 25% of the factory workers were receiving less than 40 cents per hour. The lowest minimum wage as of Oc- tober 1933 reported by the Industry was 30 cents per hour. (2) The wage provisions for the Subdivision, which is operating under the Code of the Machinery and Allied Products Industry, provide that employees engaged in plant operations shall be paid as follows : (1) in cities of more than 50,000 population and their immediate vicinity, 40 cents per hour; (2) in cities of more than 10,000 but not more than 50,000 population and their immediate vicinity, which cities are not in the immediate vicinity of a city of more than 50,000 population, 38 cents per hour; (3) in cities of 10,000 population or less and their immediate vicinity, which cities are not in the imme- diate vicinity of a city of more than 10,000 population, 36 cents per hour, except that employees engaged in plant operations in all local- ities in the states of Virginia, North Carolina, South Carolina, Georgia, Florida, Tennessee, Alabama, Mississippi, Arkansas, Louisi- ana, Texas, and Oklahoma, shall be paid not less than 32 cents per hour. When females do substantially the same work as males or replace males, they shall receive the same pay. However, no female em- ployee shall be paid less than 87^2% of the proper rate for the local- ity in which employed. Office boys and girls and apprentices shall be paid not less than 80% of the minimum wage. Employees other than those engaged in plant operations shall receive not less than $15.00 per week. The Code provides that no person under 16 years of age shall be employed in the Subdivision. ESTIMATED NUMBER OF FACTORY WORKERS RECEIVING LESS THAN DESIGNATED HOURLY RATES Distribution of factory toorkers receiving less than the minimum, regardless of location 1 Proposed minimum hourly rates Approxi- mate per cent Approxi- mate num- ber 40 cents (other U.S.). 38 cents (other U.S.). 36 cents (other U.S.). 32 cents (South) 24.7 20.4 16.1 181 150 118 65 1 Based on the distribution as of June 15, 1933, and on the specified percentages of the number of factory workers receiving less than the designated rates shown in the above table, the adoption of the proposed mini- mum rates will probably cause an increase in factory pay rolls. The estimated increase probably will not exceed four percent. RESUME OF SUPPLEMENTAL CODE Article I states the purpose of the Supplemental Code. Article II accurately defines specific terms applicable to the Sub- division as used in this Supplemental Code. Article III provides for the adoption of the employment provi- sions of the Code of Fair Competition for the Machinery and Allied Products Industry, as approved by you on the seventeenth day of March, 1934, and as from time to time amended. Article IV provides for the adoption of Articles II, VI, VIII, and IX of the Code of Fair Competition for the Machinery and Allied Products Industry in accordance with the conditions of this Article governing their adoption. Article V provides for the establishment of the Code Authority and defines its powers and duties. Article VI provides for an accounting system and methods of cost finding and/or estimating. Article VII provides that no products shall be sold or exchanged below a reasonable cost when the Code Authority determines that an emergency exists. Article VIII contains provisions relating to revisions and terms of employers proposals. Article IX sets forth trade practices for the Subdivision. Article X establishes that no provision of this Supplemental Code relating to pricing and marketing shall apply to export trade. Article XI. This Supplemental Code and all the provisions thereof are expressly made subject to the right of the President, in accord- ance with Subsection (b) of Section 10 of the Act, from time to time to cancel or modify any order, approval, license, rule or regula- tion issued under said Act. Provision is also made that modifications may be submitted by the Code Authority to the Administrator for approval. Article XII. No provision of this Supplemental Code shall be so applied as to permit monopolies, or monopolistic practices, or to eliminate, oppress, or discriminate against small enterprises. Article XIII states the effective date of this Supplemental Code. FINDINGS The Assistant Deputy Administrator in his final report to me on said Supplemental Code having found as herein set forth and on the basis of all the proceedings in this matter : I find that: (a) Said Supplemental Code is well designed to promote the policies and purposes of Title I of the National Industrial Recovery Act, including removal of obstructions to the free flow of interstate and foreign commerce which tend to diminish the amount thereof and will provide for the general welfare by promoting the organ- ization of industry for the purpose of cooperative action among the trade groups, by inducing and maintaining united action of labor and management under adequate governmental sanctions and super- vision, by eliminating unfair competitive practices, by promoting the fullest possible utilization of the present productive capacity of industries, by avoiding undue restriction of production (except as may be temporarily required), by increasing the consumption of in- dustrial and agricultural products through increasing purchasing power, by reducing and relieving unemployment, by improving standards of labor, and by otherwise rehabilitating industry. (b) Said Subdivision normally employs not more than 50,000 employees; and is not classified by me as a major industry. (c) The Supplemental Code as approved complies in all respects with the pertinent provisions of said Title of said Act, including without limitation Subsection (a) of Section 3, Subsection (a) of Section 7, Subsection (b) of Section 10 thereof; and that the appli- cant association is an industrial association truly representative of the aforesaid Subdivision; and that said association imposes no inequitable restrictions on admission to membership therein. (d) The Supplemental Code is not designed to and will not permit monopolies or monopolistic practices. (e) The Supplemental Code is not designed to and will not elimi- nate or oppress small enterprises and will not operate to discrimi- nate against them. (f ) Those engaged in other steps of the economic process have not been deprived of the right to be heard prior to approval of said Supplemental Code. For these reasons, therefore, I have approved this Supplemental Code. Respectfully, Hccn S. Johxsox, Administrator, August 2, 1934. SUPPLEMENTARY CODE OF FAIR COMPETITION FOR THE HYDRAULIC MACHINERY INDUSTRY A Division of the Machinery and Allied Products Industry Article I — Purposes To effectuate the policy of Title I of the National Industrial Re- covery Act, the following provisions are established as a Supple- mental Code for the Hydraulic Machinery Subdivision of the Ma- chinery and Allied Products Industry, and together with the Code of Fair Competition for the Machinery and Allied Products Indus- try shall be the standard of fair competition for this Subdivision, and shall be binding on each employer therein. Article II — Definition "Applicant " means the Hydraulic Machinery Manufacturers' As- sociation, a trade organization, all members of which are engaged in the manufacture and/or sale of the products of the Hydraulic Machinery Subdivision of the Machinery and Allied Products Industry. " Industry " means the Machinery and Allied Products Industrj', as defined in its Code as approved by the President, and as such defi- nition may from time to time be amended. " Subdivision " means this Hydraulic Machinery Subdivision of the Machinery and Allied Products Industry as defined and set forth in Paragraph 15, Article II of the Code of the Machinery and Allied Products Industry, as follows : " Hydraulic Machinery Subdivision means the manufacture for sale, erecting, and selling of hydraulic machinery of all kinds and parts thereof, whether using water or any other liquid, including specifically but without in any wa} T limiting the generality of the foregoing, hydraulic machines and presses, hydraulic testing ma- chines (made to special order), hydraulic accumulators, and also other accessories such as pumps, valves, and fittings and parts thereof incident to the operation of such hydraulic equipment. It excludes, however, prime movers such as turbines, water wheels, and their necessarjr accessory equipment, hydraulic brakes and/or parts thereof, hydraulic shock absorbers, hydraulic bumpers and hydraulic dump trucks. It includes all those engaged in such manufacture for sale ". " Code " means the Code of Fair Competition for the Machinery and Allied Products Industry, as approved by the President, March 17, 1934, and as from time to time amended. " Person " means a natural person, a partnership, a corporation, an association, a trust, a trustee, a trustee in bankruptcy, a receiver or other entity. (6) " Emploj-er " means any person engaged in the Subdivision either as an emplo} T er of labor or in his own behalf. " Employee " means anj* one who is employed in the Subdivision by any such employer. " The Act " means Title I of the National Industrial Recovery Act. " The President " means the President of the United States. " The Administrator " means the Administrator for Industrial Recovery. " Basic Code Authority " means the Code Authority for the Ma- chinery and Allied Products Industry as constituted by the Code. " Code AuthorhVy " means the Code Authority constituted for this Subdivision as provided by the Code and by this Supplemental Code. " Group Code Authority " means the Code Authority for any group or product classification within this Subdivision. Article III — Employment Provisions The following Articles of the Code, viz : Article III, " "Working Hours " ; Article IV, " Wages " ; and Article V, " General Labor Provisions ", are hereby made a part of this Supplemental Code, with the same effect as if they were written into this Supplemental Code. Article IV — Adoption of Other Provisions of Code The following Articles of the Code, viz : Article II, " Defini- tions "; Article VI, ''Administration ", to the extent that they shall be applicable to this Supplemental Code as such or as it may herein- after be administered as an autonomous Code; and Article IX " Withdrawal " ; are hereby adopted and made a part of this Sup- plemental Code, with the same effect as if the}* were written into this Supplemental Code. Article V — Administration (a) This Subdivision, having held an election for permanent Code Authority under the provisions of the Code of Fair Competition for the Machinery and Allied Products Industry, the Code Authority so elected shall constitute the first permanent Code Authority for this Subdivision if this method of election meets with the approval of the Administration. If this method of election does not meet with the approval of the Administration then the provisions hereinbelow provided shall apply for the election of the first permanent Code Authority. For elections after the first, the provisions of this Sup- plemental Code for election of a permanent Code Authority shall apply. (b) The Code Authority for this Subdivision shall consist of: (1) The Executive Committee of Applicant, consisting of 6 members ; (2) One additional member to be elected in any fair manner ap- proved by the Administrator, by employers in this Subdivision not members of the Applicant, if so desired by such nonmembers. (3) One additional member to be appointed in the discretion of the Administrator (without vote and without expense to the Sub- division) . (c) Any employer in this Subdivision shall be eligible for mem- bership in Hydraulic Machinery Manufacturers' Association. (d) It being found necessary in order to support the Administra- tion of this Code and to maintain the standards of fair competition established hereunder and to effectuate the policy of the Act, the Code Authorit3 T 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 (a) an itemized budget of its estimated expense for the foregoing purposes, and (b) an equitable basis upon which the funds necessary to support such budget shall be contributed by employers of the Subdivision ; (3) After such budget and basis of contribution have been ap- proved by the Administrator, to determine and obtain equitable contribution as above set forth by all employers, and to that end, if necessary, to institute legal proceedings therefor in its own name. (e) Each employer shall pay his or its equitable contribution to the expenses of the maintenance of the Code Authority determined as hereinabove provided, and subject to rules and regulations per- taining thereto issued by the Administrator. Only employers com- plying with the Code and contributing to the expenses of its admin- istration as hereinabove provided, unless duly exempted from mak- ing such contribution, shall be entitled to participate in the selection of members of the Code Authority or to receive the benefits of any of its voluntary activities or to make use of any emblem or insignia of the National Recovery Administration. (f) The Code Authority shall neither incur nor pay any obliga- tions in excess of the amount thereof as estimated in its approved budget, except upon approval of the Administrator; and no subse- quent budget shall contain any deficiency item for expenditures in excess of prior budgets estimates except those which the Administra- tor shall have so approved. (g) Each employer shall pay his proper pro-rata share of the reasonable cost of creating this Supplemental Code as determined by the Code Authority. (h) In order that the Code Authority shall at all times be truly representative of the Subdivision and in other respects comply with the provisions of the Act, the Administrator may provide such hear- ings as he may deem proper; and thereafter if he shall find that the Code Authority is not truly representative or does not in other respects comply with the provisions of the Art, may require an appropriate modification in the method of selection of the Code Authority. (i) Employers in this Subdivision having a common interest and common problems, may be grouped by Code Authority for admin- istrative purposes. There shall be a Group Code Authority approved or appointed by Code Authority for each such group. (j) If formal complaint is made to Code Authority, that pro- visions of this Supplemental Code have been violated by any em- ployer, the Code Authority or the proper Group Code Authority shall investigate the complaint and to that end, may to the extent permitted by the Act, cause such further investigation, examination or audit to be made, as may be deemed necessary. If such investiga- tion is made by Group Code Authority, it shall report the results of such investigation, examination or audit to Code Authority for action. (k) The Code Authority may appoint a trade practice committee which shall meet with the trade practice committees appointed under such other codes as may be related to the Subdivision for the pur- pose of formulating fair trade practices to govern the relationships between employers under this Supplemental Code and employers under such other codes to the end that such fair trade practices may be proposed to the Administrator as amendments to this Supple- mental Code and such other codes. Article VI — Accounting and Costing The Code Authority shall cause to be formulated an accounting system and methods of cost finding and/or estimating capable of use by all employers of the Subdivision. After such system and methods have been formulated, full details concerning them shall be made available to all employers. Thereafter all employers shall determine and/or estimate costs in accordance with the principles of such methods, with such variation therefrom as may be required to meet individual conditions affecting any member or group of members; provided, however, that any such variation shall not destroy the validity, and/or accuracy of the said accounting prin- ciples and methods. Article VII — Selling Below Reasonable Cost Section 1. When the Code Authority determines that an emer- gency exists in this Subdivision and that the cause thereof is de- structive price-cutting such as to render ineffective or seriously en- danger the maintenance of the provisions of this Supplemental Code, the Code Authority ma}^ cause to be determined the lowest reason- able cost of the products of this Subdivision, such determination to be subject to such notice and hearing as the Administrator may require. The Administrator may approve, disapprove, or modify the deter- mination. Thereafter, during the period of the emergency, it shall be an unfair trade practice for any employer of the Subdivision to sell or offer to sell any products of the Subdivision for which the lowest reasonable cost has been determined at such prices or upon such terms or conditions of sale that the buyer will pay less therefor than the lowest reasonable cost of such products. When it appears that conditions have changed, the Code Authority, upon its own initiative or upon the request of any interested party, shall cause the determination to be reviewed. 10 Section 2. The foregoing Section (1) shall not apply to (a) dropped lines, or (b) seconds, or (c) inventories which must be converted into cash to meet emergency needs, all of which may be disposed of by any employer at any price and on any terms or con- ditions, but only if such employer, not less than two weeks before such proposed disposal, has filed with Code Authority a statement in writing setting forth the facts of, and reasons for, such proposed disposal and the price and terms and conditions of sale, and Code Authority has not, (with the approval of the Administrator), before the termination of such two week period, in writing, disapproved the proposed disposal. Notice of such disposal, if not disapproved, shall be sent immediately to all employers manufacturing products of equivalent design, character, quality or specifications, who may sell such products at prices and on terms and conditions as favor- able as those stipulated in the proposed disposal, when meeting the competition of such proposed disposal. Section 3. The foregoing Section (1) shall not apply to a sale made in order to meet competition on products manufactured out- side the United States. For such disposal, any employer may sell, at prices and on terms and conditions as favorable as those of the competing foreign product, but only if he has first reported to the Code Authority his intention so to sell, and the facts as to the competition which justifies such action. Article VIII — Prices 1. Proposals submitted by an employer shall not be revised except : (a), when a change in the specifications is to be made, in which case the revised proposal must equal only the change in the specifi- cations; (b), upon the general reopening of bids. 2. Proposals shall not specify: (a) any discounts except one to cover cash payment in ten (10) days which discount must not exceed % of 1% ; 1 (b) any allowance for freight or transportation. Article IX — Trade Practices Each of the following acts and practices is deemed to be inimical to the best interests of the Subdivision and of the public, and each is, therefore, hereby declared to be and to constitute an unfair method of competition, and is hereby prohibited ; viz : 1. Destructive Price-Cutting. — Indulging in destructive price- cutting. 2. Inducing Breach of Contract. — Inducing or attempting to in- duce the breach of a commercial contract between a competitor and his customer during the term of such contract. 3. Defamation of Competitor or Disparagement of his Work. — The defamation of a competitor by words or acts imputing to him dishonorable conduct, inability to perform contracts, or questionable credit standing, and the false disparagement of the grade or quality of his goods. 4. Enticement of Employees. — Wrongfully enticing away the em- ployees of competitors with the purpose and effect of unduly 1 See paragraph 2 (1) of order approving this Code. 11 hampering, injuring, or embarrassing competitors in their busi- ness. Nothing in this paragraph shall be so interpreted as to in any manner restrict the right of any employee to seek employment with any employer at any time. 5. Misrepresentation by False or Misleading Advertising. — The making or causing or knowingly permitting to be made or published any false, materially inaccurate or deceptive statement by way of advertisement or otherwise, including misbranding and overrating of capacity. 6. Espionage of Competitors. — Procuring confidential informa- tion concerning the business of a competitor by a false or mislead- ing statement or by misrepresentation, by a false impersonation of one in authority, or by bribery. 7. Commercial Bribery. — To give, permit to be given, or directly offer to give anything of value for the purpose of influencing or rewarding the action of any employee, agent, or representative of another in relation to the business of the employer of such em- ployee, the principal of such agent or the represented party, without the knowledge of such employer, principal, or party. This provi- sion shall not be construed to prohibit free and general distribution of articles commonly used for advertising except so far as such articles are actually used for commercial bribery as hereinabove defined. 8. Secret Rebates. — The secret offering or making of any payment or allowance, of a rebate, refund, commission credit, unearned dis- count or excess allowance, whether in the form of money or other- wise, nor shall any employer of the Subdivision secretly offer or extend to any customer any special service or privilege not extended to all customers of the same class, for the purpose of influencing a sale. 9. Used Hydraulic Equipment. — (a) The sale of used hydraulic equipment without so classifying it as used equipment, (b) A copy of any offer to purchase used hydraulic machinery as part payment shall be made to the Code Authority at the time of the offer. 10. Threats of Suit for Patent or Trade-Mark Infringement. — ■ The circularization of threats of suit for infringement of patent or trade-mark among customers of a competitor not made in good faith and for the purpose of harassing and intimidating customers. 11. Improper Use of Competitor^ Design. — Knowingly to submit a quotation to a prospective customer based on original drawings and designs prepared by a competitor and submitted to the customer as the competitor's drawings and designs, without the competitor's permission. Article X — Sales for Export The provisions of this Supplemental Code concerning pricing and marketing shall not apply to direct export sales of any product. A similar exemption may be granted by the Code Authority as to sales of any product destined ultimately for export. The term " export " shall include all shipments to all places without the several states of the United States and the District of Columbia; provided, however, that no shipment to any territory or possession of the United States shall be considered as export when any employer is engaged in the Subdivision in such territory or possession. 12 Article XI — Modifications (a) As provided by Section 10 (b) of the Act, the President may from time to time cancel or modify any order, approval, license, rule or regulation issued under Title I of the Act. (b) Any amendments, additions, revisions, or supplements of this Supplemental Code, approved by a 66%% vote of the employers shall be in full force and effect upon approval of the Administrator. The eligibility requirements, method, and effect of such voting shall be the same as provided by Article VI of the Code. Article XII — Monopolies Applicant imposes and shall impose no inequitable restrictions on membership therein. The Code presented by it is not designed to promote monopoly, and shall not be so construed or applied as to oppress or eliminate small enterprises or discriminate against them, and is designed to effectuate the policy of the Act. Article XIII — Effective Date This Supplemental Code shall become effective and binding on all persons engaged in the Subdivision on the eleventh day after its approval. Approved Code No. 347 — Supplement No. 41. Registry No. 1399-59. O UNIVERSITY OF FLORIDA 3 1262 08583 0353