Approved Code No. 141 Registry No. 1707-04 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR 

INVESTMENT BANKERS 

AS APPROVED ON NOVEMBER 27, 1933 

BY 

PRESIDENT ROOSEVELT 

UN,v. 011•FL L\1-

1. Executive Order 

2. Letter of Transmittal 

3. Code 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHING TON : 1933 

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Cleveland, Ohio : Chamber of Commerce. 

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St. Lou is, Mo. : 506 Olive Street. 

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Seattle, W ash.: 809 Federal Buihling. 
Approved Code No. 141 

CODE OF FAIR COMPETITION 

FOR THE 

INVESTMENT BANKERS 

As Approved on November 27, 1933 

BY 

PRESIDENT ROOSEVELT 

· Executive Order 

An application having been duly made, pursuant to and in full 

compliance with the provisions of title I of the National Industrial 

Recovery Act, approved June 16, 1933, for my approval of a Code 

of Fair Competition for Investment Bankers, and hearings having 

been held thereon and the Administrator having rendered his report 

containing an analysis of the said code of fair competition, together 

with his recommendations and findings with respect thereto, and the 

Administrator having found that the said code of fair competition 

complies in all respects with the pertinent provisions of title I of 

the said act and that the requirements of clauses (1) and (2) of 

subsection (a) of section 3 of the said Act have been met: 

No,v, THEREFORE, I , Franklin D. Roosevelt, President of the 

United States, pursuant to the authority vested in me by title I of 

the National Industrial Recovery Act, approved June 16, 1933, and 

otherwise, do adopt and approve the report, recommendations, and 

fin lings of the Administrator and do order that the said code of 

fair competition be and is hereby approved. 

FRANKLIN D. ROOSEVELT. 

Approval recommended : 

H UGH S. ,J OHXSOX 

Ad11iinistrator. 

THE vV HITE H o C-SE 

N ovembeT P,7, 1933. 

23790°- :M4- 109 - 33 (509 ) 
N OYEl\CB}~R ,., 1933. 

The RE IDEA:rT 

Th e n hite House. 

m: I hav:, th h nor to tran mit h r , ith the r p rt f the 

Hearing on the od of Fair ompetition for I1n : tment Bankr oncluct l in a ordance with the requir 111 nt f the .,. ational 

Reem- r \. lministration, in the Au litorium, nited tat s hamber 

of omn~er e Building on N ovemb r G 1933. The pon r of thi 

Code i the In-, e tment Bankers Association of meri a. Although 

its pre ent membership con i ts of only 392 out of om 6 76 se urity 

dealer~, the member com1 ri ·e th 1 ading inv tm nt hou. N of the 

Unite l tates and Cana la. For the} c, r 1932 the bu ·ine · of member f the Associati n ap1 roximated 90 per ·ent of the total volume 

ac or<ling to reliable r ecord . 

It i. important to note that th underwriting bu. in f in\'e..,t111 nt banking has d lined to a neglio·iblc amonnt at thi tim . This 

may b attributable to variouc causes and particularly to th xc s 

flotation of n w securiti s luring the year ulminatino· with 1929. 

In that p riod underwriting hou e keenl. compete l in combing the 

fiel l for new is ues and abnormall3 large sales oro·anization ,,ere 

created b. the dealers to dispose of the . ecuritie . Trade pra tice 

develop ,d which r 0 ulte l in the ena tn1ent of the curitie · ct of 

1933. The investment bankers definitely r aliz th ncl)cl for fair 

practice provi ions to aovern their bnsines and at their recent annual 

co1rrnntion lecided that adequate proYision be ma 1 a I art of the 

Code. They have voluntarily agr ed to ubmit Fair Pra lice proYision. in a upplementary ode within ninety day of your approval 

of thi Code. 

To this ncl a ational ommitt e, compo el of t" ,nty-t" outstanding inve tment banker · under wh m are ey nt n r o-ionnl 

Group hairmen i · working in onjunction with the o:ffi r and the 

Board of Governor of th Inve. tm nt Banker A.:- ciati n of 

Ameri a. In addition invitation have been j ne l to a numb r of 

Sta e O urity Commi. ioner · and other. to ollaborat ,Y1th the 

National Comm1ttee. Trade Pra ti Cts which will be fil l will as ·urc 

th 01 ration of th o le and will 1 lace th i1n- tment banl in•r 

bu. in . : on a far ounder nnd fairer ba i than it lrn.· been in the 

pa t. 

If in your juclo-m nt th air Trad Pra tic Provi~ilm wh n ·ubmittecl -ith r rlirninat cntir0l or rr t the abu . that affect tht' 

publi · int r : t th flow of {nv . tm nt ·apital int btL in : a.n,l 

in lu ·tr. whi ,h is au n ial elem n in the re oYery pr )gram, ,Till 

ha be n e,·1 e lite I. 

(510) 
511 

Supplementarv data submitted by the Association jn regard to 

employment ancf wages revealed a startling contrast to the prevailing inactivity in the investment field. A wide and thorough canvas -

of members as of November 1, 1933, who were in business on November 1, 1929, showed that there were 15,070 employees in these houses 

on N overnber 1 this year as compared to 24,406 employees on the 

corresponding date in 1929, or a reduction in numbers of 38%. 

The canvas further showed a wide divergence for a number of 

groups in the average reduction in wages of employees receiving, 

$150.00 per month or less on November 1, 1929, compared with the 

amounts they received on November 1, 1933. One group reported 

average increases of from. 1⁄2% to 45%, while the lowest group reported decreases over 30%. On the basis of the complete survey it 

seems reasonably clear that the average net reduction in wages of 

all employees receiving $150.00 per n1onth or less on November 1, 

1929, will not exceed 15%. The Labor provisions of this Code coincide with those of the 

Code for Stock Exchange Firms because of the inseparable relationship of the two businesses. Here again the provision for overtime payment is, in fact, of minor importance compared to the 

known generosity of employers to employees during prosperous 

periods. 

The only available record as to the volume of the investment 

banking business is in the compilation of capital issues publicly 

offered. Using figures taken from the table submitted, the 1929 volume of such financing exceeded $11,500,000,000 as against a possible 

$1,000,000,000 for 1933. The severity of this shrinkage in business 

may be better understood when it is realized that the estimated 

$1,000,000,000 of publicly offered issues is only 25% of the volume 

done in 1920, the low point of the previous depression, and only 

about 10% of the average volume of the years 1927, 1928 and 1929. 

In no year since 1919, except 1932 and 1933 has the volume been 

less than $4,000,000,000, hence it is reasonable to assume that the 

normal annual capital requirement of the country is somewhat in 

excess of that figure. 

From a summary of the foregoing, it will be seen that although 

the volume of recorded business decreased over 90% in the past four 

years, the number of employees decreased but 38%, and the wages 

of employees mentioned decreased on an average only 15%. Probably no other business in the country finds itself in a comparable 

position. The members do not hesitate to say that the average 

investment banker is today maintaining an organization far in 

excess of his present needs, due partly to the need for technically 

trained employees, even though their retention has not been justified 

during the past two years. 

No objectors from the business or from the public appeared at 

the Hearing, nor have any objections since been filed. 

The Code has been accepted by the Investment Bankers Association of America and has received the approval of the several Advi ory Boards of the National Recovery Administration with the 

exception of a qualification by the Consumers' Advisory Board, 

included in this report. 
12 

H H . J TI T .L 

Aclm,ini frator. 
CODE OF FAIR COMPETITION 

FOR THE 

INVESTMENT BANKERS 

PREAMBLE 

To effectuate the policy of Title I of the National Industrial Recovery Act, the following provisions are established as a Code of 

Fair Competition for Investment Bankers. 

ARTICLE I-DEFINITIONS 

(1) The term "investment banking business" as used herein shall 

mean the business of underwriting or distributing issues of bonds, 

stocks, or other securities, or of purchasing such securities and off ering the same for sale as a dealer therein, or of purchasing and selling 

such securities upon the order and for the account of others; provided, however, that the term. "investment banking business" shall 

not include transactions on regularly organized exchanges, but such 

term shall include all business relating to such transactions to the 

extent that such business is not conducted by a member of such 

exchange or by any person or organization having the privilege of 

any such exchange for itself or any of its partners or executive 

officers. 

(2) The term "employer" as used herein shall include every 

natural person, co-partnership, corporation, association, or other 

entity that is engaged in doing any investment banking business. 

If the major part of the business of any e-mployer consists of any 

business other than investment banking business which other business is governed by any other code or codes, such em.ployer shall not 

be bound as to his investment banking business by the wage and 

hour provisions of this Code, but shall be governed as to his investment banking business by the wage and hour provisions of such 

other code or codes; but all other provisions of this Code shall apply 

to such employer as to his investment banking business. 

( 3) The term " employee " as used herein shall mean anyone 

employed by any employer, regardless of the nature or method of 

payment of his compensation. 

( 4) The term "Administrator " as used herein shall mean the 

Administrator appointed by the President of the United States under 

the National Industrial Recovery Act. 

( 5) Population for the purposes of this Code shall be determined 

by reference to the 1930 Federal Census. 

ARTICLE II-LABOR PROVISIONS 

(1) (m) Employees shall have the right to organize and bargain 

collectively through representatives of their own choosing, and shall 

(513) 
51~ 

be free fr m th int rf r n e r traint or r ion of employers of 

lal r. or their agent · in th d . io-nati n f . ·uch r I r s ntutiye: or 

in If- r 0 ·anizati n or in oth r on rt 1 activiti for th purprn:P 

of oll tiv baro·aining r oth r mutual a; l r I rot ti on. 

(b) o mpl an l no one, kino- mpl ym nt :hall b r quir d 

a a onditi n of mploym nt t j in an compan uni n or to refrain from joining, or;anizing, r a i tin a lab r rcranization of 

hi own choo in o-. 

(c) Employ r shall comply with th maximum hours of labor, 

minimum rat of pay and oth r on li ions of emplo m nt approved, or prescribed by the Pre id nt of th United tate . 

(2) o person under sixteen years of age hall b employed by 

any mplo er; provided however, where a tate law requires hiO'her 

minimum age, no person below the age so specifi d shall be employed 

within that state. 

(3) (a) No employer shall employ any person for more than 40 

hours in any one week, provided, howe, er, that in order to meet 

contingencies which cannot be anticipated and ver which the employers have no control, the said hours of employment may be increased. to meet such contingencies, but in no event shall uch employees work more than a total of 44 hours per week averaged over 

a period of four ( 4) months without the payment of overtim . 

( b) The maximum hours fixed in the foregoing paragraph (a) 

shall not apply (1) to guards and watchmen employed at night to 

safeguard ecurities or assets (provided such guards and watchmen 

do not work more than six (6) days each week), or (2) to partners 

in any copartnership, or (3) to outside salesmen, or (4) to employees 

in a managerial or executive capacity or in any other capacity of 

distinction or sole responsibility who receive more than $35 per week. 

( c) No employee, except outside salesmen working solely on a 

commi sion basis, shall be paid (1) less than $16 per we k in any 

city of over 2,000,000 population; (2) less than $15 per week in any 

city between 500,000 and 2,000,000 population; (3) less than 14.50 

per week in any city between 250 000' and 500 000 population; ( 4) le s 

than $14 per week in any city between 2,500 and 250,000 popnlation; 

and ( 5) in any town of less than 2,500 population all wage of employees shall be increa ed by not less than 20% proYid cl that this 

shall not require the payment of wages in exce of $1Z per week; 

provided, however, that where a State law proYides a higher minimum wage than is provided in this Code, no per on mployed within 

that State shall be paid a wage below that required by such State 

law. 

(d) All employee , except employees mentioned in paragraph (b) 

above, if employed for mor than a total of 44 hours per we k averag 1 ov r a period of four ( 4) month , hall be pai l for Rll uch 

exc ss time of mploym nt at the rate of 1331⁄2 % of the r gular 

hourly rate at whi h u h persons shall then be mployed · but regardle . of he alculati n of such overtim av rao- cl o r a four 

month ' period, all uch employees if emplo. ed f r more than 4 

hour in any one we k . hall b pai 1 for su h time in ex e . of 48 

hour at the rat of 1331/s o/c of th saicl r gular rat . Th amount 

paid for oYertime for any w eld I erio 1 . hall b credited on the 

am unt of overtime paid at the ncl f any f ur months' period and 
515 

in computino- the amount of oYertime to be paid as herein provided 

the reaular hourly rate at which any person shall be employed shall 

be det~rmined by dividing the amount per ·week which he shall regularly be paid by 40. 

( e) '.I'he wag~s. ~f em12loyees ( except employees mentioned in ~he 

foregoing subd1v1s10ns (2), (3), and (4) of paragr~ph (b)) _being 

paid on September 1, 1933, in excess of the e tablished ml!lunum 

shall not be decreased, notwithstanding that the hours worked 1n such 

employment may be hereby reduced. 

ARTICLE III-Ao:inNISTRATION 

(1) To cooperate "ith the Administration in the administration 

of this Code there is hereby constituted an Investment Bankers Code 

Committee. Such Committee shall consist of three members appointed by the Pre ident of the Investment Bankers Association of 

America; two members chosen by a fair method approved by the 

Administrator to represent employers not members of the Investment Bankers Association of America; and a representative or representative without vote appointed by the President of the United 

States. The five voting members of said Committee shall be appointed or chosen from assenting employers. 

(2) The Investment Bankers Code Committee herein provided for 

shall be the representative body from the employers subject to this 

Code, to act on their behalf in the administration and enforcement 

of this Code, and shall have, in addition to the specific powers herein 

provided for, all general powers nece ary for such administration 

and enforcement; such general and specific powers shall be at all 

times subject to the right of the Administrator to veto or modify any 

action taken by such Committee. 

(3) The Inve tment Bankers Code Committee may from ti111e to 

time appoint such committee or committees as it may deem necessary 

or prop"'r to carry out its powers and duties under the Code and 

may delegate to any such committee ·uch o-f its powers and duties 

as it may deem necessary and proper to effectuate such purposes. The representative or representati,Tes appointed by the President of 

the United States shall be given notice of all meetings of any committee or committees appointed by the Investment Bankers Code 

Committee and shall have the right to participate without vote in 

the activities of such committee or committeeN. 

( 4) The Investment Bankers Code Committee may from time to 

time present to the Administrator recommendations which will tend 

to effectuate the administration 0£ the provisions of this Code and 

the policies 0£ the National Industrial Recovery Act. 

( 5) In order to keep the President 0£ the United tates and the 

Adinini trator informed a to the obserYance or nonobsen·ance of this 

Code each employer shall prepare and file with the Inve tment 

Bankers Code Committee, at uch time and in such ma1~11e r as said 

Committee may pr cribe stati tics covering the nurnL , of persons 

employed wage rates hour of working, an 1 ~uch other data or 

information a the Investment Banker Code Committee ma require, 

provided such other data or information hall also be required by the 

Ad1-:.1ini trator. All information o furnished shall be treated as 

confidential and used only £or the sole purpose herein set forth. 
516 

\\ ithin 90 day after the approval of this Code the Inve tment 

Banker Cod ommittee hall ubmit in ac ordance with th procedure set forth in paragraph (1) of Article V, uppl m ntary 

proYi ions relating to fair trade practice . 

ARTICLE V-AMENDMENT AND TERMINATION 

(1) Any employer a sen ting to this Code that may hereafter de ire 

to have the Code amended or any upplementary provi ions added 

shall take the following procedure: Propose the amendment to the 

In e tment Bankers Code Committee which shall, if a majority of 

the Committee shall approve the proposed amendment, submit 1t to 

a meeting of the emptoyers assenting to this Code especially called 

for that purpo e upon due notice; and if at any such n1eeting a 

majority of such emplo ers shall be present or repre ented and if 

a majority of such employers as are present or repre entecl at aid 

meetina shall vote in favor of the adoption of such propo eel amendment uch amendment shall be submitted by the In, e tment Bankers 

Code Committee to the President of the United State for approval 

and such proposed amendment shall take effect as a part of this Code 

upon such approval thereof by the Pre ident of the United States. 

Employers voting on such amendments as above provided may vote 

in person, by proxy in writino-, or may , ote in writing without being 

per onally present. 

(2) This Code shall continue in effect a long as the ational 

Industrial Recovery Act shall be in effect but in no e,ent after 

June 16 1935, and shall in all re p cts ba ubject to the provi. ions 

and conditions of the National Indu trial Recovery Act. 

( 3) This Code and all the pro vi ion. th r of are ex pres ly made 

subject to the right of the President of th 1'nite 1 tat in accor lance with the J?rovi ion. of sub ·e ·tion (h) of ~e tion 10 of the ational Inclu trial Recovery Act from bnL to time to cancel or 

mo lify any order approval, licen e rul or regulation i uecl nn 1er 

Titl I of the ational Indu trial Re OY ry Act ancl pe ifically 

but without limitation to the right of the Pr id nt f th nite l 

States to cancel or modify his approval of thi Cod or an conditions impo ed by him upon hi appro, al thereof. 

ARTI LE 1-EFFE TIVE DA TE 

This ode hall be me eff tiv on th 

approval by th Pre ident of th Unit c1 

Approyecl 'od ~o. Hl. 

Regi ·try No. 1707 4. 

0 

ncla after its 
. r' :; 
UNIVERSITY OF FLORIDA 

II I II IIIIII Ill Ill lllll lllll II IIIIII II IIIIII Ill Ill lllll Ill lllll I I 

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