California Retail Lumber Code Approyed

A Code of Fair Competition for the Retail Lumber and Lumber and Building Material Industry of California was approved at San Francisco on October 3, 1933, by T. A. Reardon, Director, Department of Industrial Relations, and Edwin M. Daugherty, Commissioner of Corporations. The Code became effective on October 10, 1933.

For the purpose of efficient and economical administration of the Code, there is created two autonomous operating districts to be designated as "Northern California District" and "Southern California District." The Code will be administered in each of these two Districts by its respective Code Administrative Committee.

The Code includes Supplemental Codes and Provisions relating to the Northern and Southern California Districts which follow:

SUPPLEMENTAL CODE AND SPECIAL PROVISIONS RELATING TO THE , NORTHERN CALIFORNIA DISTRICT

l. The Northern California District shall be divided into seven di"isions. Each geographical division shall select from its retail Itrmber dealers two members, one to serve for one year, and one to serve for two years. At each annual meeting thereafter a number of members equal to that whose terms have expired shall be elected. Any member shall be eligible for reelection.

2. T.he "controlling authority" within the territory of this Code shall at all times maintain an impartial "co-ordinating committee", consisting of the Code Administration Committee and the Commissioner of Corporations, or his agents.

3. The Code Adr4inistration Committee shall be the "general planning and co-ordinating agency" for the trade in this district, and shall be empowered to act conclusively in respect to all matters within its jurisdiction, subject to the approval of the Commissioner of Corporations or his agent.

4. If any established division, as hereinafter provided, shall fail to perform its obligations as outlined above, the Code administration committee may act as a division committee, for the purpose of securing the adoption of standards and performance conforming to the provisions of this code.

, 5. Each division shall elect one dealer to serve as a member of ihe Central Control Committee, which will elect its own chairman. Five members will constitute a quorum.

6. All geographical divisions operating under the provisions of this Code, shall file application with the Central Control Committee, which application shall include a complete verbatim copy of the agreement or other instrument under which the said division is operating, and shall set forth its plan of operation including a statefnent of the Standards of Practice to. be applied, fermulae to be followed in establishing minimum prices, and such further and additional information as the Central Control Committee may require.

. Upon filing ol such application, it shall be the duty of the Central Control Committee to examine it and such papers and docutnents as may be filed therewith. If the Central Control Committee finds that the plan of operation of the divisions is in conformity ivith this Code, the National Industrial Recovery Act and the Calilornia Industrial Recovery Act and supplement thereto, and is not unfair or oppressive to competitors or to the public, and will not result in exorbitant prices, the Central Control Committee shall approve such plan of operation.

7- The Central Control Committee in this district shall serve as the Executive agent of the Code Administration Committee and shall have further duties and powers as provided herein:

(a) From time to time require such reports from divisions as in its judgment shall be necessary to advise it adequately oI the administration and enforcement.of the provisions of this Code.

: (b) Upon complaint of interested parties, or upon its own initiative make sucft inquiry and investigation as to the operation of the Code, as may be necessary.

(c) Make rules and regulations necessary for the administration and enforcement ol this Code.

(d) The committee shall be charged with the enforcement of , the provisions of this Code, and with duties through agent , or otherwise, of hearing and adjusting complaints, considerii ing proposals, for amendment, making recommendations il!"^ thereon, approving recommendations for exqeptions to the provfsions of this Code, arrd otherwise administering its prqvrsrons.

(e) The Committee shall be empowered to consider and adjudicate_any breach of this Code, or any dispute a_rising as the result of same. This committee may, if it sees fit. iite any person operating within its jurisdiction to the proper State Authority, for such action as the law or the regulation under which such person operates may provide.

(f) The Committee may delegate any of its authorities to any Divisional Authority or to such agents as it may determine. Plgposals regarding matters afiecting more than one Division may be initiated by any division, and shall be submitted for consideration to the Central Control Committee, and its determination shall be binding upon such division.

Cost shall constitute r.nt"..rnJrl price of merchandise, delivered in the dealer's yard or warehouse, plus such overhead as may be shown by the accirunting system, plus a reasonable profit, based on the capital structure as hereinafter provided.

III-PRICES

l. Each Division shall establish and from time to time thereafter, revise a scale of minimum prices for the standard items of lumber, building materials and building specialties, carried by the dealers in such Division. Minimum prices shall be based upon in- formation developed under this Code and shall be submitied for approval to its Central Control Committee. Upon approval by said committee and acceptance by the Chief of the Division of Coiporations or such constituted authority as he may designate. such minimum prices shall be binding upon all dealers under the' jurisdiction of this Code. The Central Control Committee shall disapprove such scale of minimum prices, or revisions thereof, only if it 6nds and so declares that it is unfair to competitors in other Divisions, or to the public.

2- It shall be an "unfair trade_ practice" to sell below a reasonable established cost of operation ai here defined, including replace- ment cost of merchandise and proper allocation of overhead expense, embracing in duch overheid ixpense, handling charges, loss by breakage, or deterioration, depreciation and a proper proportion of the expense of rent, interest on invested capital, reasonable profit on sales, salaries, credit losses, taxes, advertising and insurance incurred in conducting such business.

3. The phrase "unfair tiade practice" shall also include the act or acts of systematically rendering or performing any work or service at a price less than the cost thereof as a part, parcel or incident to any transaction with the object of rendering or per- forming such service or work for the purpo_se of acquiring an advantage in trade over competitors.

4. Each division shall use as its basic cost, the replacement cost of the merchandise plus the lowest freight rate, either rail or water, plus cost of operation as hereinbefore provided; and it shall be an unfair trade practice for any dealer in any division to sell or offer for sale any commodity at a price less than that established by said division.

5. All basic costs as herein provided shall not include delivery charges; cartage on all merchandise to be delivered by a dealer shall be computed in accordance with a standard cartage schedule, which shall be compiled by each division and shall be approved by the Central Control Committee. Said rates shall be not tess than the cost of operation, as provided in Section 2 of this article.

6. Dropped lines or surplus stocks, sometimes designated as "close-outs" of inventories, may be converted into cash to meet immediate needs, and may be sold at such prices as are necessary to move the merchandise into buyers' hands. However, all such stocks must first be reported to the Central Control Committee of the division and be disposed of subject to the approval of that committee.

IV_AMENDMENTS

Amendments to this supplemental Code may be proposed to the Code Administration Committee by any division thereof and when approved by the said Committee and the Central Control Committee of this district shall be efiective, subject to the approval of the Chief of the Division of Corporations, or his agents, and be in full force and effect as though contained herein.

V_REPORTS

For purposes of co-ordination and audit each division shall furnish the Central Control Committee with such reports and_ records as may be required.

VI_SALES PRACTICES

l. Terms of Sale. Terms of sale shall be on the basis of a standard set-up by the Central Control Committee. The failure (Continued on Page 24)