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violation of ?A. In practically all of these cases the manufacturers
were found r.uilty but nothing happened aPs there seemed no power to en-
force decisions handed down.

FFECT OF CODE

 An interesting sidelight on the mental condition of the industry
late in 1934 is best illustrated by relating an incident that happened
just prior to Christmas of 1934. Two manufacturers who had never been
real supporters of the code, happening to be in ;'Jashington and finding
out that I '-as also there called me on the telephone to ask if they
might see me for a few minutes that evening. This I agreed to and was
told by these men that they wished to apologize for any sins of
omission or commission respecting the code on their part, that they
were about closing their books for the year and were delighted to be
able to say that in their opinion the code had served them to such good
purpose they were going out of the year in black ink and felt further
that many other members of industry were of the same opinion as them-
selves.

 Having reached the point '--here at least 95% of the industry
were thoroughly sold on the value of their code and its administration,
the industry was literally stunned when the Supreme Court decision was
handed down in the Schechter case and today are moving heaven and earth
to get the industry to voluntarily arree to a code of their own, a copy
of which I attach and which is on file with the federal Trade Commission.

 I am told that 85% of the industry have already assented in writing
to this document and for the rest the old Directorate, still maintaining
an office on a very modest scale, are beginning to exercise pressure to
bring about conformance through local banks, clergy and chambers of
commerce or boards of trade in various localities in which such manufac-
turers are situated but I reco,--nize the great difficulty of enforcement
even with a 100o0 assent without the suEoc-rt of some governmental l agency.
In passing I may say that any steps tPken subsequent to the Supreme Court
decision have been closely scrutinized and in so far as possible opinions
sought from the federal rade Com'iiission as to legality.

 Respectfully submitted,

 /s/ 0. PEARSON

 0. ,. PEARSON
 Administration Merber


DIWP i0KJ