§ 207.3

Disclosure as to foreign origin of imported narrow fabrics. With respect to any narrow fabrics which have been imported from a foreign country into the United States in the greige or other unfinished state, or in a finished or semi-finished state, it is an unfair trade practice:

(a) To offer for sale, sell, or distribute any such narrow fabrics under marks, stamps, brands, labels, or representations which have the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public into the belief (1) that such narrow fabrics were woven or fabricated in the United States, when such is not the fact; or (2) that they were dyed, finished, redyed, or refinished elsewhere than in the United States, when such is not true; or

(b) To offer for sale, sell, or distribute any such narrow fabrics without the same being marked, stamped, branded, or labeled so as to indicate clearly and nondeceptively (1) the country of origin of the narrow fabrics, or (2) that such narrow fabrics were woven or fabricated in said country and were dyed or finished, or redyed or refinished, in the United States, as the case may be, where the failure, refusal, or omission to so mark, stamp, brand, or label such narrow fabrics has the capacity and tendency or effect of thereby promoting, abetting, or effectuating the marketing of such products under conditions which are misleading or deceptive to pur

chasers, prospective purchasers, or the consuming public.

(Nothing in this section shall be construed as relieving any member of the industry or other party of the necessity of complying with the requirements of the customs laws or regulations, or other applicable provisions of law or regulation, relating to the marking of imported articles.)

§ 207.4 Selling below cost.

The practice of selling narrow fabrics at a price less than the cost thereof to the seller, with the purpose or intent, and where the effect may be, to injure, suppress, or stifle competition, or tend to create a monopoly in the production or sale of such products, is an unfair trade practice. As used in this section the term "cost" means the total cost to the seller, including the costs of acquisition, processing, preparation for marketing, sale, and delivery.

This section is not to be construed as prohibiting all sales below cost, but only such selling below the seller's cost as is resorted to and pursued as a monopolistic practice with the wrongful intent referred to and where the effect may be unreasonably to restrain trade, tend to create a monoply, or substantially lessen competition.

All elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section. The costs referred to in the section are actual costs of the respective seller and not some other figure or average costs in the industry determined by an industry cost survey or otherwise.

§ 207.5 False or deceptive selling methods.

To use or promote the use of any selling method or credit term which has the capacity and tendency or effect of misleading or deceiving the purchasing or consuming public is an unfair trade practice.

§ 207.6 Tie-in sales; coercing purchase of one product as a prerequisite to the purchase of other products. The practice of coercing the purchase of one or more products as a prerequisite to the purchase of one or more other products, where the effect may be substantially to lessen competition or tend

to create a monopoly or unreasonably to restrain trade is an unfair trade practice. § 207.7 Substitution of products.

The practice of shipping or delivering products which do not conform to samples submitted, to specifications upon which the sale is consummated, or to representations made prior to securing the order, without the consent of the purchasers to such substitutions and with the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice. § 207.8 Consignment distribution.

It is an unfair trade practice for any industry member to use the practice of shipping narrow fabrics on consignment or pretended consignment for the purpose and with the effect of artificially clogging or closing trade outlets and unduly restricting competitors' use of said trade outlets in getting their products to consumers through regular channels of distribution, thereby injuring, destroying, or preventing competition or tending to create a monopoly or unreasonably to restrain trade: Provided, however, That nothing in this section shall be construed as restricting or preventing consignment shipping or marketing of narrow fabrics in good faith where suppression of competition, restraint of trade, or undue interference with competitors' use of the usual channels of distribution, is not effected. Nor shall anything in this section be construed to authorize any agreement, understanding, or planned common course of action by and between industry members mutually to conform or restrict their practice of shipping goods on consignment with the intent or effect of lessening competition.

§ 207.9 False invoicing.

Withholding from or inserting in invoices or sales slips any statement or information by reason of which omission or insertion a false record is made, wholly or in part, of the transactions represented on the face of such invoices or sales slips, with the capacity and tendency or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

§ 207.10 Unlawful coercion or combinations in restraint of trade.

It is an unfair trade practice for any industry member:

(a) To use, directly or indirectly, any form of threat, intimidation, or coercion against any industry member or other person unlawfully to fix, maintain or enhance prices, suppress competition, or restrain trade; or

(b) To enter into or take part in, directly or indirectly, any planned common course of action, understanding or agreement. combination or conspiracy. with one or more members of the industry, or with any other person or persons. unlawfully to fix, maintain, or enhance the price of any goods or otherwise suppress competition or restrain trade. § 207.11 Commercial bribery.

It is an unfair trade practice for a member of the industry, directly or indirectly, to give, or offer to give, or permit or cause to be given, money or anything of value to agents, employees, or representatives of customers or prospective customers, or to agents, employees, or representatives of competitors' customers or prospective customers, without the knowledge of their employers or principals, as an inducement to influence their employers or principals to purchase or contract to purchase products manufactured or sold by such industry member or the maker of such gift or offer, or to influence such employers or principals to refrain from dealing in the products of competitors or from dealing or contracting to deal with competitors. § 207.12 Enticing away employees of competitors.

It is an unfair trade practice for any industry member wilfully to entice away employees of competitors with the intent and effect of thereby unduly hampering or injuring competitors in their business and destroying or substantially lessening competition: Provided, That nothing in this section shall be construed as prohibiting employees or agents from seeking or obtaining more favorable employment.

which make only due allowance for differences in the cost of manufacture, sale, or delivery resulting from the differing methods or quantities in which such commodities are to such purchasers sold or delivered;

(3) That nothing contained in this paragraph shall prevent persons engaged in selling goods, wares, or merchandise in commerce from selecting their own customers in bona fide transactions and not in restraint of trade;

(4) That nothing contained in this paragraph shall prevent price changes from time to time where made in response to changing conditions affecting the market for or the marketability of the goods concerned, such as but not limited to obsolescence of seasonal goods, distress sales under court process, or sales in good faith in discontinuance of business in the goods concerned.

(b) Prohibited brokerage and commissions. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, to pay or grant, or to receive or accept, anything of value as a commission, brokerage, or other compensation, or any allowance or discount in lieu thereof, except for services rendered in connection with the sale or purchase of goods, wares, or merchandise, either to the other party to such transaction or to an agent, representative, or other intermediary therein where such intermediary is acting in fact for or in behalf, or is subject to the direct or indirect control, of any party to such transaction other than the person by whom such compensation is so granted or paid.

(c) Prohibited advertising or promotional allowances, etc. It is an unfair trade practice for any member of the industry engaged in commerce, to pay or contract for the payment of advertising or promotional allowances or any other thing of value to or for the benefit of a customer of such member in the course of such commerce as compensation or in consideration for any services or facilities furnished by or through such customer in connection with the processing, handling, sale, or offering for sale of any products or commodities manufactured, sold, or offered for sale by such member, unless such payment or consideration is available on proportionally equal terms to all other customers competing in the distribution of such products or commodities.

(d) Prohibited discriminatory services or facilities. It is an unfair trade practice for any member of the industry engaged in commerce to discriminate in favor of one purchaser against another purchaser or purchasers of a commodity bought for resale, with or without processing, by contracting to furnish or furnishing, or by contributing to the furnishing of, any services or facilities connected with the processing, handling, sale, or offering for sale of such commodity so purchased upon terms not accorded to all competing purchasers on proportionally equal terms.

(e) Inducing or receiving an illegal discrimination in price. It is an unfair trade practice for any member of the industry engaged in commerce, in the course of such commerce, knowingly to induce or receive a discrimination in price which is prohibited by the foregoing provisions of this section.

(f) Exemptions. The inhibitions of this section shall not apply to purchases of their supplies for their own use by schools, colleges, universities, public libraries, churches, hospitals, and charitable institutions not operated for profit.

NOTE: In complaint proceedings charging discrimination in price or services or facilities furnished, and upon proof having been made of such discrimination, the burden of rebutting the prima facie case thus made by showing justification shall be upon the person charged; and unless justification shall be affirmatively shown, the Commission is authorized to issue an order terminating the discrimination: Provided, however, That nothing herein contained shall prevent a seller rebutting the prima facie case thus made by showing that his lower price or the furnishing of services or facilities to any purchaser or purchasers was made in good faith to meet an equally low price of a competitor, or the services or facilities furnished by a competitor. (See section 2 (b), Clayton Act.)

§ 207.19 Unlawful interference with competitors' purchases or sales.

It is an unfair trade practice for any industry member, by means of any monopolistic practices or through combination, conspiracy, coercion, boycott, threats, or any other unlawful means, directly or indirectly, to interfere with a competitor's right to purchase his raw materials and supplies from whomsoever he chooses, or to sell his product to whomsoever he chooses.

§ 207.20 Selling of products which are "seconds" or which have latent defects.

It is an unfair trade practice for any industry member to offer for sale, sell, or cause to be sold, narrow fabrics which are "seconds," or which have latent defects, whether designated as special lots, close-outs, obsolete constructions, or otherwise, without making full and nondeceptive disclosure, by tag or label attached to the fabrics, and in all invoices, advertising, and trade promotional literature, of the fact that such narrow fabrics are "seconds," or have latent defects, as the case may be. § 207.21 Aiding or abetting use of unfair trade practices.

It is an unfair trade practice for any person, firm, organization, or corporation to aid, abet, coerce, or induce another, directly or indirectly, to use or promote the use of any unfair trade practice specified in this part.

business

The industry approves the practice of handling disputes between members of the industry and their customers in a fair and reasonable manner, coupled with a spirit of moderation and good will, and every effort should be made by the disputants themselves to compose their differences. If unable to do so they should, if possible, submit these disputes to arbitration.

§ 207.102 Repudiation of contracts.

Lawful contracts, either written or oral, are business obligations which should be performed in letter and in spirit. The repudiation of contracts by sellers on a rising market or by buyers on a declining market is equally reprehensible and is condemned by the industry. § 207.103 Dissemination of credit information.

The industry records its approval of distributing to its members information covering delinquent and slow accounts insofar as it may lawfully be done.

§ 207.104 Coercion in sales.

The use of buying power to force uneconomic or unjust terms of sale upon sellers, and the use of selling power to

force uneconomic or unjust terms of sale upon buyers, are condemned by the industry.

§ 207.105 Filing of trade-marks, etc.

To void confusion within the industry, it is recommended that each member thereof voluntarily file with a qualified agency designated by the industry all trade-marks, trade names, labels, or brands used by such member, and that such information be made equally available to all members of the industry and to the public.

§ 207.106 Giving of samples.

The industry disapproves the giving of samples without charge except only as may be necessary to acquaint purchasers or prospective purchasers with the grade or quality of the product offered for sale, and where the giving of such samples by any member of the industry is not practiced or accomplished in such way or to such extent as to effectuate an illegal discrimination in price contrary to the provisions of § 207.18.

§ 207.107 Use of written sales contracts. In order to avoid ambiguity and misunderstanding between and buyers sellers, all purchases and sales of products of the industry exceeding one piece, regardless of the total value thereof, should be made by written contract, signed by the buyer and seller. Such written contract should set forth the actual terms and conditions of the sale involved.

Wherever practicable, the delivery of all merchandise of any quantity should be made against a written receipt signed by the purchaser or a qualified agent or employee of the purchaser.

The provisions of this section shall not be construed as sanctioning or approving any agreement among competitors, or any planned common course of action among competitors, to agree upon, or to fix, specify, or determine, the prices, discounts, terms, or conditions of sale to be covered in any sales contract or transaction, but these shall be open to individual negotiation between the seller and buyer, subject to the requirements of §§ 207.1 to 207.21 and applicable provisions of law.

$207.108 Price lists.

(a) The industry approves the practice of each industry member independently publishing and circulating to