braries, 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 contained in this section shall prevent a seller rebutting the prima facle 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).

§ 205.16 Aiding or abetting use of unfair trade practices.

It is an unfair trade practice for any person, firm, 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 §§ 205.1 to 205.16.

§ 205.101

GROUP II

Repudiation of contracts.

Lawful contracts 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 condemned by the industry.

$ 205.102 Use of written sales contracts. (a) In order to avoid ambiguity and misunderstanding between buyers and 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.

(b) 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.

(c) The provisions in 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

(a) The industry disapproves the giving of samples without charge in greater quantity than is actually necessary to acquaint purchasers or prospective purchasers with the grade or quality of the product offered for sale. However, the furnishing of any samples shall not be carried out in a manner involving discrimination prohibited by the provisions of § 205.15.

(b) The industry interpretation of "actually necessary" quantities as above is: "A reference sample of each item not exceeding one 27" x 27′′ square or one full repeat of pattern, with one color line not to exceed 6" x 9"."

§ 205.104 Arbitration of disputes.

The industry approves and recommends the use of commercial arbitration for the speedy and efficient disposition of disputes arising out of the sale, processing, and distribution of the industry's fabrics.

§ 206.1 Misrepresentation (general). The practice of selling, offering for sale, advertising, describing, or otherwise representing gladiolus bulbs or gladiolus bulblets in a manner or under any circumstances having the capacity and tendency or effect of misleading or deceiving purchasers or prospective purchasers with respect to their size, grade, origin, kind, age, condition, vigor, flowering ability, period of growth required before flowering, price, or value, or in any other material respect, is an unfair trade practice.

§ 206.2 Deception as to size.

(a) In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for an industry member to misrepresent or deceptively conceal the size of any gladiolus bulb, or to use the term "jumbo," "large," "medium," or "small," or "No. 1," "No. 2," "No. 3," "No. 4," "No. 5," "No. 6," or "No. 7," or any other term indicative of size, as descriptive of industry products under any circumstance or condition having the capacity and tendency or effect of deceiving purchasers or prospective purchasers.

(b) Under this section the term "jumbo" shall be confined to bulbs which are 2 inches or more in diameter; the term "large" shall be confined to bulbs which are 14 inches or more in diameter; the term “medium” shall be confined to bulbs which are 34 inch or more in diameter; and the term “small” shall be

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member

(a) To misrepresent, directly or indirectly, the ability of any of such products to bloom or flower; or

(b) To misrepresent, directly or indirectly, the number of plantings and duration of growth necessary to effect satisfactory blooming and flowering.

When industry products are of such immaturity as not reasonably to be expected to bloom and flower satisfactorily the first season of their planting, such fact shall be clearly and conspicuously disclosed in all advertisements and sales promotional literature relating to such products: Provided, however, That such disclosure need not be made when the size of the product is specified in accordance with the requirements of § 206.2 and sales of the products are confined to nurseries and commercial growers for their use as planting stock. (See also § 206.4 (c)).

§ 206.4 Deceptive guarantees.

(a) It is an unfair trade practice for an industry member to represent that any product is "guaranteed" unless the nature and extent of the undertaking is conjunctively disclosed and without deceptively minimizing the terms and conditions relating to the obligation of the guarantor.

(b) It is also an unfair trade practice for any industry member to use, or cause to be used, any guarantee in which the obligations of the guarantor are impracticable of fulfillment or in respect to which the guarantor fails or refuses scrupulously to observe his obligations thereunder.

(c) When, because of their immaturity, bulbs or bulblets cannot reason

In the sale, offering for sale, or distribution of industry products, it is an unfair trade practice for any industry member to use the word "bulb" as a designation for or as descriptive of a "bulblet."

NOTE: A gladiolus bulb has a definite basal root scar denoting a separate root system during its growth. A glaciolus bulblet has no basal root scar, had no root system of Its own, and usually requires a growth of one season to produce a bulb.

§ 206.6 Misrepresenting products as conforming to standard.

Representing, through advertisement or otherwise, that gladiolus bulbs or bulblets conform to a standard recognized in or applicable to the industry when such is not the fact, is an unfair trade practice.

§ 206.7 Deceptive use of trade or corporate names, trade-marks, etc.

It is an unfair trade practice for a member of the industry to use any trade or corporate name, trade-mark, or other designation under any circumstance having the capacity and tendency or effect of misleading or deceiving purchasers, prospective purchasers, or the general public as to the identity, character of business, business relationships, or business connections of such industry member, or with respect to the origin, quality, or flowering ability of any product sold or offered for sale by such industry member.

66-034-72-16

The practice of selling industry products 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 coupled with the effect of unreasonably restraining trade, tending to create a monopoly, or substantially lessening 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.

§ 206.10

Use of lottery schemes.

The offering or giving of prizes, premiums, or gifts in connection with the sale of industry products, or as an inducement thereto, by any scheme which involves lottery or game of chance, is an unfair trade practice.

§ 206.11 Substitution of products.

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

The defamation of competitors by falsely imputing to them dishonorable conduct, inability to perform contracts, questionable credit standing, or by other false representations, or the false disparagement of the products of competitors in any respect, or of their business methods, selling prices, values, credit terms, policies, or services, is an unfair trade practice. § 206.14

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.

1 As used in this section, the word "commerce" means "trade or commerce among the several States and with foreign nations, or between the District of Columbia or any Territory of the United States and any State, Territory, or foreign nation, or between any insular possessions or other places under the jurisdiction of the United States, or between any such possession or place and any State or Territory of the United States or the District of Columbia or any foreign nation, or within the District of Columbia or any Territory or any insular possession or other place under the jurisdiction of the United States."

any member of the industry engaged in commerce, in the course of such commerce, to grant or allow, secretly or openly, directly or indirectly, any rebate, refund, discount, credit, or other form of price differential, where such rebate, refund, discount, credit, or other form of price differential, effects a discrimination in price between different purchasers of goods of like grade and quality, where either or any of the purchases involved therein are in commerce. and where the effect thereof may be substantially to lessen competition or tend to create a monopoly in any line of commerce, or to injure, destroy, or prevent competition with any person who either grants or knowingly receives the benefit of such discrimination, or with customers of either of them: Provided, however:

(1) That the goods involved in any such transaction are sold for use, consumption, or resale within any place under the jurisdiction of the United States;

(2) That nothing contained in this paragraph shall prevent differentials 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 in

termediary 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.

(1) 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 in this section 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.)

§ 206.17 Aiding or abetting use of unfair trade practices.

It is an unfair trade practice for any person 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.

GROUP II

§ 206.101 Trade standards of quality. The industry records its approval of the following standards of good quality: Bulbs or bulblets shall be of one variety except when sold as a mixture; shall be clean, sound, well cured, and free from decay; shall be free from insects or noticeable damage caused by insects; and shall be free from apparent disease, cuts, or mechanical damage: Provided, however, That in order to allow for variations incident to grading and handling not more than 5 percent by count of the bulbs or bulblets in any lot may be below the requirements of this standard, and that any lot containing more than 2 percent "rogues" shall be classed as a mixture.

The industry offers the following definitions of common trade terms:

"Clean" means that the lot of bulbs or bulblets are reasonably free from leaves, loose husks, roots, dirt, or other foreign matter.

"Sound" means that the bulbs or bulblets have not been damaged by freezing, over-heating, or curing.

"Well-cured" means that the bulbs or bulblets are sufficiently cured at the time of shipment to assure of no appreciable loss of weight or shrinkage in size during a reasonable length of time after grading or shipment.

"Damage" means any injury which would affect the growing quality of the bulb or bulblet or appreciably detract from its appearance.

"Rogue" means any bulb or bulblet in a lot that is of a variety different from the variety purchased.

Any lot of bulbs or bulblets not meeting the requirements of this section shall be classed as sub-standard quality.