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 section 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 section 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 section shall prevent price changes from time to time where made in response to changing conditions affecting either (i) the market for the goods concerned, or (ii) the marketability of the goods, such as, but not limited to, actual or imminent deterioration of perishable goods, obsolescence of seasonal goods, distress sales under court process, or sales in good faith in dicontinuance 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 fa

cilities 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 by 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 purchasers on proportionally equal terms.

(e) Illegal price discrimination. It is an unfair trade practice for any member of the industry or other person engaged in commerce, in the course of such commerce, to discriminate in price in any other respect contrary to section 2 of the Clayton Act as amended by the act of Congress approved June 19, 1936, or knowingly to induce or receive a discrimination in price which is prohibited by such section as amended.

(Sec. 2, 38 Stat. 730, as amended, secs. 2, 3, 4, 49 Stat. 1527, 1528; 15 U.S.C. 13, 13a, 13b, 21a)

§ 129.10 Deceptive selling methods.

The sale or offering for sale of any product of the industry by any false or deceptive means or device which has the tendency and capacity or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public as to the quality, quantity, substance, or size of such product, or in any other material respect, is an unfair trade practice.

§ 129.11 Consignment sales.

It is an unfair trade practice for any member of the industry to use the practice of shipping goods on consignment or pretended consignment for the purpose and with the effect of artificially clogging trade outlets and unduly restricting competitors' use of said trade outlets in getting their goods to consumers through regular channels of distribution, or with

99-134-69- -34

such purpose to entirely close said trade outlets to such competitors so as to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade: Provided, however, That nothing in this section shall be construed or used as restricting or preventing consignment shipping or marketing of commodities in good faith and without artificial interference with competitors' use of the usual channels of distribution in such manner as thereby to suppress competition or restrain trade.

§ 129.12 Misuse of word "free."

The use of the word "free' where not properly or fairly qualified when the article is in fact not free, with the tendency or capacity to mislead or deceive purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

§ 129.13 Commercial bribery.

Directly or indirectly to give, or permit to be given, or offer to give, 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 industry products from the maker of such gift or offer, or to influence such employers or principals to refrain from dealing or contracting to deal with competitors, is an unfair trade practice.

§ 129.14 Lottery schemes.

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

§ 129.15 Full-line forcing.

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 to substantially lessen competition or tend to create a monopoly or to unreasonably restrain trade, is an unfair trade practice. § 129.16 False invoicing.

Withholding from or inserting in invoices, bills of lading, delivery receipts, or other documents of title, any state

ments 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, bills of lading, delivery receipts, or other documents of title, with the purpose or effect of thereby misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

§ 129.17 Sales below cost.

The practice of selling goods below the seller's cost, with the intent and with the effect of injuring a competitor and where the effect may be to substantially lessen competition or tend to create a monopoly or unreasonably restrain trade, is an unfair trade practice; all elements recognized by good accounting practice as proper elements of such cost shall be included in determining cost under this section.

§ 129.18

Unlawful combinations in restraint of trade.

It is an unfair trade practice for any person, firm, partnership, corporation, or association to enter into or take part in, directly or indirectly, any agreement, understanding, combination, or conspiracy with one or more persons, firms, partnerships, corporations, or associations to fix, maintain, or enhance prices, or to suppress competition in respect of any product or products of the industry or other products, or to fix, maintain, or enhance prices or suppress competition by any other unlawful means.

§ 129.102 Repudiation of contracts. 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.

§ 129.103 Unwarranted return of merchandise.

The practice, by members of the industry, of selling merchandise and later permitting the purchaser to return it for credit or refund of purchase price, without good reason, creates waste and loss, increases the cost of doing business, to the detriment of both the industry and the public, and is condemned by the industry.

§ 129.104 Differentiating between wholesale and retail transactions. Where products of the industry are sold at wholesale and retail in the same establishment, the failure on the part of such member correctly to differentiate between or identify the two types of transactions, where the result may be to create confusion and deception as to the character of the transaction in the minds of purchasers or prospective purchasers, is condemned by the industry. § 129.105 Coercive 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.

§ 129.106 Adherence to safety require

ments.

In the judgment of the industry the practice of filling or using, for the distribution of liquid carbon dioxide, cylinders or containers which do not meet the requirements of Interstate Commerce Commission Specifications 3 or 3-A, and the practice of using converters or liquefiers which do not conform to the safety regulations of the locality in which they are used, may be dangerous to life and property and such practices are therefore condemned by the industry. In localities in which no official applicable safety regulations are in effect it is recommended as a proper practice to follow in the interest of safety that converters or liquefiers used be such as have been manufactured or constructed to meet the requirements of

the Unfired Pressure Vessel Code of the American Society of Mechanical Engineers (A. S. M. E.) in effect at the time of such manufacture or construction, or which have otherwise been manufactured or constructed in accordance with adequate safety requirements. The use of converters or liquefiers is not prohibited or condemned by this rule but safety precautions are deemed necessary and desirable in the interest of the public and for the welfare of the industry and are therefore recommended.

§ 129.107 Dissemination of credit information, etc.

The industry records its approval of the distribution among members of the industry of information covering delinquent and slow return of cylinder accounts as well as delinquent and slow credit accounts in so far as such may be lawfully done.

§ 129.108 Agreement as delivery.

to place of

The practice of selling, offering for sale, advertising, describing, branding, marking, or labeling woven cotton yard goods in a manner which is calculated to mislead or deceive or has the tendency and capacity or effect of misleading or deceiving purchasers, prospective purchasers, or the consuming public with respect to the preshrunk character of such goods, the residual shrinkage remaining therein, or with respect to the extent of the shrinkage to which such goods have been subjected, or respecting any other shrinkage properties, quality, or character of such goods, is an unfair trade practice.

§ 131.3

Misuse of descriptive terms.

In the sale or distribution of woven cotton yard goods, it is an unfair trade practice: (a) to use, or cause to be used, directly or indirectly, the terms "Full Shrunk," "Preshrunk," "Shrunk," "Shrinkproof," "Will not Shrink," "Mill Shrunk," "Double Shrunk," "NonShrinkable," or word, term, mark, label, or representation of like effect or similar import, as descriptive of such goods when the same are not in fact shrinkproof or non-shrinkable, or have not in fact been fully-shrunk or preshrunk to the extent that no residual shrinkage is left remaining in such goods, or (b) otherwise to use, or cause to be used, any such word, term, mark, label, or representation so as to mislead or deceive purchasers, prospective purchasers, or the consuming public into the belief that such goods have been shrunk to a greater degree than is in fact true or that the residual shrinkage of such goods is less than is in fact true.

§ 131.4 Permissible terms.

Nothing in this part shall prohibit the use of the terms "Full Shrunk," "Preshrunk," "Shrunk," "Shrinkproof," "Non-Shrinkable," or word, term, mark, label, or representation of like effect or similar import, as descriptive of woven cotton yard goods which have undergone the application of a shrinking process and thereby have been shrunk or preshrunk to the extent that no residual shrinkage is left remaining in such goods, And provided, That subsequent to the application of such shrinking process the goods have not been subjected to

stretching or to any condition or process which has restored shrinking properties or residual shrinkage to such goods. § 131.5 Use of terms "Preshrunk” or "Shrunk" with qualifications.

(a) In the case of woven cotton yard goods which have undergone the application of a shrinking process and have been shrunk to a substantial extent but as to which there remains a certain amount of residual shrinkage, nothing in these rules shall prohibit the use of the term "Preshrunk," "Shrunk," or term or word of like effect or similar import, as an integral part of or in immediate conjunction with a truthful phrase, statement, or assertion clearly and unequivocally stating the fact that such goods have been preshrunk or shrunk to a substantial extent and also setting forth in percentage or percentages the amount of residual shrinkage remaining in both the warp and the filling, or in the warp or the filling whichever has the greater residual shrinkage. To avoid confusion, deception, or misunderstanding, the standard shrinkage test provided for in paragraph (e) of this section should be used in determining percentages to be specified in such designations. The following are typical examples of designations provided for in this section:

(b) The residual shrinkage percentage designations provided for in this section for woven cotton yard goods should be stamped on or otherwise firmly affixed to the material in conspicuous size and legibility of type or style, and should also appear similarly on all invoices, labels, marks, or advertisements which carry reference to the shrinkage of the goods.

(c) The use of residual shrinkage percentage designations not in conformity with results obtainable under the test specified in paragraph (e) of this section, with the capacity and tendency or effect

of misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

(d) The use or specification of an unreliable or inadequate test in any such designations, or the refusal to specify a test which is proper and applicable, when done for the purpose or with the capacity and tendency or effect or directly or indirectly misleading or deceiving purchasers, prospective purchasers, or the consuming public, is an unfair trade practice.

(e) The following test is deemed to be an accepted and recognized test for determining shrinkage properties or residual shrinkage of woven cotton yard goods in the application of these rules and is recommended for use as a standard shrinkage test for this purpose:

"Commercial Standard CS59-36"

§ 131.6 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 this part.

PART 132-MACARONI AND NOODLE PRODUCTS INDUSTRY

Sec. 132.0 132.1

132.2

132.3

132.4

132.5

132.6

132.7

132.8

132.9

Definitions.

Concurrent jurisdiction of Food and
Drug Administration over labeling.
Deception (General).

Misrepresentation of protein, caloric
and starch content of products.
Misuse of words "macaroni," "spa-
ghetti," "vermicelli," "egg-maca-
roni" and "noodles," or "egg
noodles," etc.

Misrepresentation of semolina, du-
rum or farina products.
Misrepresentation as to the egg con-
tent of product.
Deception as to ingredients of prod-
ucts.

Defamation of competitors or false disparagment of their products. Prohibited sales below cost. 132.10 Imitation of trade-marks,

trade

§ 132.1

Concurrent jurisdiction of Food and Drug Administration over labeling.

(a) Definitions and standards for macaroni and noodles products promulgated under the Federal Food, Drug and Cosmetic Act by the Food and Drug Administration will, when relevant, be taken into consideration in the administration of trade practice rules for the industry.

(b) The Commission has jurisdiction over the advertising of industry products, and both it and the Food and Drug Administration have jurisdiction over the labeling of such products. In order to avoid unnecessary overlapping and possible conflict of effort, the two agencies have adopted a working arrangement under which the Commission regulates the advertising of such products and the Food and Drug Administration regulates the labeling thereof, with recognition that there may be unusual situations in which the Commission will exercise its concurrent jurisdiction over the labeling of such products.

(c) Nothing in this part is to be construed as relieving anyone of the necessity of complying with the provisions of the Federal Food, Drug and Cosmetic Act with respect to the labeling of industry products, and with the definitions and standards for such products as established by the Food and Drug Administration.