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;he manufacturers, r-)rTticularl- the small -r11u'acturers rith limited
 :]it0-i, a-id -ith little or -ith no borrowing caacity, are willin- to
 'llo0 the 3. iiscorLnt in order to collect the-dr outstanding accounts
wroimotly, Ind enabl'1e then to maintain their o'.m credit and to earn
he c,-sh CAsco.int -1low7,d then for ),ynent on the due d(rte.

 The "irovisio.'. of the code -)rohibitin' the -ivi",.-- of terns in
!:cess of 3/10 eoni -as also inten(.ed to -)revent !.!.r-;e manufacturers
rho were fi-nr:-cioy able, froi j.,antin:. e-.d of the month dating on all
hi jnents -de on the rfter the teienty-fifth of the p-reviou: month.
y this ep!-c of :r?,ntin-' lon :er datin:, these large manufacturers had
n pdvr-it tt P t coauld be used az-ainot the small -,nufacturer with
ii ited cr i t-l', *-ho -ou.ld be unable to o)erate if he had to grant
he extra 30 dj'--s on fhi 'ments made after the t-enty-fifth of the
lonth. It ,cul -iso become the practice for retailer to have their
hiprients nade wh-.eniever possible, on or after the twenty-fifth of the
lonth, so as to take advanta,-e of the extra 30 da-s it allowed them.

 Some *Lanufacturers in the .industry are financially able to return
very renittoncc received after the due date, if the full amount of
ash discount is deducted. Others allo-.7 the deduction of a smaller
iscoiunt than 3S based on the nu'lber of days "ryent is -!ade -mast the
us date. So-,e iomnufacturers a.e in such ur-ent need of funds they
annot afford'. to return or hold the check --endinz an a.djustment'of
he discount erro-eously deducted. They de-oosit the check and try to
ollect the unearned -oortion of the discount.

 Dirin. the code, there were -rny crses nhero retailers demanded
f manufacturerr th-t he secretly allo-' f.rst of the month dating and
yen longer datin.-;, and Trhen -ranted, it wns used by the retailer to
arn extra, Pntici)-tion. Not more than 20 of the Manufacturers in the
industry are finoncirlly- able to grant terms beyond the tenth of the
month, without seriously affectin.- thei- ability to stayr in business.
rior to the code, the i,1nufacturers were lax in 'ermitting delinquents
o deduct the crshi discount after the due date of the invoice. Tot more
han 40,; of accounts receivnbloi were inaid ;oroTotly on the due date,
the tenth of thio onth.) The code rule required proy:pt -o-nneiits from
he retailer to entitle him to deduct the cash discount. The uanu-
acturer3 re-orted at that tine that as a results of this code rule,
ore than 80%' of their accounts receivable were aid -orourotly on the
enth day of each month.

 In calculr.ting costs, the manufacturer does not include the 3'!
ash discount in the cost of the article. The cash discount is figured
s a deduction front income. 81 discount could not be considered a
sBitimate cash discount. The extra 5"0 demanded by the retailer is
efinitel- a trade discount.and it must be included in the cost. In
emandin; r-n extra 5% discount, the retailer is really chiselling on
ne rice. If this is -hat is desired, he mirht try to get price re-
aiction fror'-i individual ,nnufacturers, since prices are not fixed in
ie industry, rand each manufacturer is at liberty to nmae any price
Dncessions to Pny buyer for any reason he thinks warrants such con-
sssions. It night require the retailer to bargain individually rith
ach manufacturer for prices, and for that reason he -orefers to force