Registry No. 1710-03 

NATIONAL RECOVERY ADMINISTRATION 

CODE OF FAIR COMPETITION 

FOR THE 

STOCK EXCHANGE FIRMS 

AS APPROVED ON NOVEMBER 4, 1933 

BY 

PRESIDENT ROOSEVELT 

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U.8. OE~Oftt 

1. Executive Order 

2. Letter of Transmittal 

3. Code 

UNITED STATES 

GOVERNMENT PRINTING OFFICE 

WASHINGTON 1 1933 

For sale by lhe Superintcncent of Documents, Wt1Bhin11ton, D.C. - - - - - - - - Price G centa 
• 

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(II) 
EXECUTIVE ORDER 

CODE OF FAIR COMPETITION FOR STOCK EXCHANGE FIRMS 

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 Stock Exchange Firms, 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 said act and that the requirements of clauses (1) and (2) 

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

NOW, 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 findings of the Administrator, and do order that the said code 

of fair competition be, and is hereby approved. 

THE WHITE HousE, 

Novembe1· 4, 1933. 

Approval recommended: 

HUGH s. JOHNSON, 

.Administrator. 

FRANI(LIN D. ROOSEVELT. 

(ill) 

19478°-188-1G7-33 
NOVEMBER 3, 1933. 

The PRESIDENT, 

The White House. 

Srn: I beg to transmit herewith the report of the Hearing on the 

Code of Fair Competition for Stock Exchange Firms conducted in 

the Auditorium, United States Chamber of Commerce Building, on 

October 17, 1933, in accordance with the provisions of the National 

Industrial Recovery Act. The application for this Code was presented by the Association of Stock Exchange Firms (New York) on 

behalf of its members and on behalf of similar associations of members of stock exchanges and members of stock exchanges throughout 

the country. The applicant thus represents approximately 983⁄4% 

of the recorded transactions in listed securities on all the important 

Exchanges in the first eight months of this year. 

The Hearing brought out a rema.rkable comparison of employment 

and wages as of a recent date with like figures during 1929. Current 

surveys of representative firms in New York and Chicago revealed 

that on August 1, 1933, the number of employees of such firms in 

New York was 99% of March 1, 1929, and in Chicago such number 

was 4.3% greater than on August 1, 1929. Wages of employees of the 

same firms in New York was 85% of the annual wages paid for 

1929, whereas in Chicago the average weekly pay per employee :for 

three months prior to August 1, 1933, was 66.2% of the average 

weekly pay for the three months prior to March 1, 1929. 

Firms in New York and outside of New York reporting to the 

Code Committee showed that 95% of the employees of the former 

and 93% of the latter are paid more than the minimum rate and 

more than 32% in both instances are paid over $35.00 per week. The 

average weekly sales volume on the New York Stock Exchange for 

the first eight months of this year was 67.5% of the average weekly 

volume for the year 1929, whereas on the Chicago Stock Exchange 

volume of business for the first nine months of 1933 was approximately 721⁄2 % of the like period of 1929. It would thus seem that 

Stock Exchange firms continue to employ about the same number 

of persons as they did when the volume of their business was much 

greater and that they have not discharged their employees proportionately with the decline of their business. It is necessary that firms 

employ complete technically trained staffs at all times in order to 

handle the unpredictable fluctuations in volume. The result is that 

at times they are overmanned and at other periods must work their 

staffs overtime. Provision in the Code is made for overtime remuneration. Moreover, in this respect it is common knowledge that 

Stock Exchange firms are exceptionally generous in bonus distributions to employees during active markets. 

The Code does not contain provisions covering Fair Practices, 

although the Division Administrator urged upon the Committee the 

inclusion of provisions intended to regulate and coordinate methods 

and practices on all stock exchanges. Detailed reasons for such 

omission were subsequently embodied in a letter from Counsel for 

(IV) 
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the applicant and included in this record. In substance, these reasons are: existing "fair practice" rules and regulations of the several stock exchanges; the time required to reconcile differences and 

promulgate a uniform system for dissimilar situations; obligations 

under a Code would have to be consistent with obligations of memberships in the several exchanges; limitation under a Code of the 

authority of the several Governing bodies to modify their respective practices as required by experience and ever-changing conditions; and the lack of power of, and the extended time required for, 

the Code Committee to negotiate fair-practice provisions for the 

entire business throughout the United States. It is conceded that 

there is substantial ground upon which these objections are based. 

In principle, fundamental changes affecting the welfare of many 

should be carefully considered. This opportunity the President and 

the Administrator hold under the Code. 

There were no objectors to the Code from the business and but 

one from the public, this relating to curb trades in an unlisted 

security. The protest was immediately filed by the Administrator 

with the Code Committee. 

The Code has been accepted by the Association of Stock Exchange 

Firms and has received the approval of the several Advisory Boards 

of the National Recovery Administration. 

I find that the Code complies with the pertinent provisions of 

clauses ( 1) and ( 2), subsection (a) of Section 3 of the National 

Industrial Recovery Act. I recommend, therefore, that you approve 

the Code of Fair Competition for Stock Exchange Firms as submitted herewith. 

Respectfully, 

HUGH s. JOHNSON, 

Administrator. 

CODE OF FAIR COMPETITION FOR STOCK EXCHANGE 

FIRMS 

This Code is adopted pursuant to Title I of the National Industrial Recovery Act to endeavor to effectuate the policy therein 

enumerated in so far as applicable. 

ARTICLE I-DEFINITIONS 

Whenever used in this Code or in any schedule annexed hereto 

the terms hereinafter in this Article I shall, unless the context shall 

otherwise clearly indicate, have the respective meanings hereinafter 

in this Article set forth. 

(a) The term " Code " as used herein means and includes this 

Code and all schedules annexed hereto as originally approved by 

the President and all amendments hereof and thereof made as hereinafter provided. 

(b) The term " employer " as used herein means and includes, 

but without limitation, every individual, partnership, firm, association, corporation, or other entity, that is (1) a member of any regularly organized stock exchange or has the privilege of any such exchange for itself or any of its partners or executive officers, and is 

also (2) regularly engaged as its major business in the buying, 

selling, trading in or otherwise dealing in stocks, bonds, or other 

securities, and/or commodities; provided, however, that no one whose 

business shall consist of dealing only in commodities shall be included in such definition and further provided that a member of any 

commodity exchange who is included in this definition shall be 

bound by all provisions of any Code of Fair Competition applicable. 

to members of Commodity Exchanges with the exception of the 

labor provision thereof"' in which latter respect the labor provisions 

of this Code shall be ettective. 

( c) The term "employee " as used herein shall apply to every 

person employed by an employer as herein defined. 

(d) The term "effective date" means and includes the date on 

which provisions of this Code become effective and will be the 

second Monday after this Code is approved by the President. 

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

Administrator appointed by the President under the National Industrial Recovery Act. 

(f) The term "President" means the President of the United 

States of America. 

ARTICLE II-LABOR PROVISIONS 

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

collectively through representatives of their own choosing and shall 

be free from the interference, restraint, or coercion of employers of 

(1) 
2 

labor, or their agents, in the designation of such representatives or in 

self-organization or in other concerted activities for the purposes 

of collective bargaining or other mutual aid or protection; 

(b) No employee and no one seeking employment shall be required 

as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of 

his own choosing ; and 

( c) Employers shall comply with the maximum hours of labor, 

minimum rates of pay, and other conditions of employment, approved or prescribed b:y the President. 

2. No person under sixteen years of age shall be employed by any 

employer; provided, however, where a State law requires higher 

minimum age, no person below the age so specified shall be employed 

within that State. 

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

hours in any one week, provided, however, that in order to meet 

contingencies which cannot be anticipated and over which the employers have no control, and_ in order to consummate contracts for 

the sale and purchase of securities, or commodities which require 

daily clearance, the said hours of employment may be increased to 

meet such contingencies, but in no event shall such employees work 

more than a total of 44 hours per week averaged over a period of 

£cur ( 4) months without the payment of overtime; 

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

shall not apply (1) to guards and watchman employed to safeguard 

securities or assets, 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 shall be paid (1) less than $16 per week in any 

city of over 2,000,000 in 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) less than $14 per week in any city between 2,500 and 250,000 

population; and ( 5) in any town of less than 2,500 population all 

wages of employees shall be increased by not less than 20% provided 

that this shall not require the payment of wages in excess of $12 

per week. In the event that any employer shall operate one or more 

branches or offices in towns or cities in different classes described in 

this paragraph (c) than the minimum wage requirement for the 

employees at each branch or office of such employer shall be determined by the classification of the town or city in which each such 

branch or office shall be located; provided, however, that where a 

State law provides a higher minimum wage than is provided in this 

Code, no person employed within that State shall be paid a wage 

below that required by such State law; 

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

above, if employed for more than a total of 44 hours per week 

averaged over a period of four ( 4) months, shall be paid for all such 

excess time of employment at the rate of 1331⁄2 % of the regular 

hourly rate at which such persons shall then be employed; but regardless of the calculation of such overtime averaged over a four months' 

period,- all such employees if em-ployed for more than 48 hours in 
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any one week shall be paid for such time in excess of 48 hours at the 

rate of 1331/g % of the said regular rate. The amount paid for overtime for any weekly period shall be credited on the amount of overtime paid at the end of any four months' period, and in computing 

the amount of overtime to be paid as herein · provided the regular 

hourly rate at which any person shall be employed shall be determined by dividing the amount per week which he shall regularly be 

paid by 40; and 

( e) The wages of employees ( except employees mentioned in the 

foregoing subdivisions (2), (3), and (4) of paragraph (b)) being 

paid on September 1, 1933, in excess of the established minimum shall 

not be decreased, notwithstanding that the hours worked in such 

employment may be hereby reduced. 

ARTICLE III-ADMINISTRATION 

The Board of Administrators, as provided for in Schedule B 

hereof, shall re.present the employers in the administration and supervision of this Code and shall have, in addition to the specific powers 

set forth in said Schedule, all general powers necessary for such 

administration and supervision, subject at all times to the power of 

the Administrator to veto or modify any a.ction taken by it. 

The Administrator may appoint a representative to the Board of 

Administrators who may participate without vote in all activities of 

the Board. 

In order to keep the President and the Administrator informed as 

to the observance or nonobservance of this Code, each employer shall 

prepare and file with the Board of Administrators at such times and 

in such manner as the Board may prescribe, statistics covering the 

number of persons employed, wage rates, hours of work, and such 

other data or information as the Board of Administrators, with the 

approval of the Administrator, or the Administrator, may require. 

All information so furnished shall be treated as confidential and used 

only for the sole purpose herein set forth. 

ARTICLE IV-GENERAL PROVISIONS 

Any employer may voluntarily assent to this Code by signing and 

delivering to the Board of Administrators a letter substantially as 

set forth rn Schedule A hereof. . 

The provisions of this Code shall apply to and be binding upon 

every employer, as defined in Article I hereof, whether or not such 

employer has voluntarily assented to this Code as herein provided 

or not; but only such employers as shall have voluntarily assented to 

this Code as hereinafter provided, or who have paid assessments 

hereunder, shall be entitled to participate in its administration and 

to vote for members of the Board of Administrators as herein 

provided. 

Upon the approval of this Code by the President, pursuant to the 

provisions of Title I of the National Industrial Recovery Act it shall 

constitute a binding contract on all those who have assented to this 

Code subject, however, to the right of amendment and termination as 

provided in this code. 
4 

The President may, from time to time, cancel or modify any order, 

approval, license, rule or regulation issued under Title I of the Na-· 

tional Industrial Recovery Act. 

AnTICLE V-AMENDMENTS AND TERMINATION 

Any employer assenting to this Code that may hereafter desire to 

have the Code amended or any supplementary provisions added 

should take the following procedure: Propose the amendment to the 

Board of Administrators who shall, if a majority of the Board shall 

approve the proposed amendment, submit it to a meeting of the employers assenting to this Code especially called for that purpose upon 

due notice; and if at any such meeting a majority of such employers 

shall vote in favor of the adoption of such proposed amendment, such 

amendment shall be submitted by the Board of Administrators to the 

President for approval, and such proposed amendment shall take 

effect as a part of this Code upon such approval thereof by the President. Employers voting on such amendments as above J?rovided may 

vote in person, by proxy in writing or may vote in writing without 

being personally present. 

This Code shall continue in effect so long and only so long as the 

National Industrial Recovery Act shall be in force and effect but in 

no event after June 16, 1935, and shall in all respect be subject to the 

provisions and conditions thereof; provided, however, that this Coda 

may be terminated at any time by the same action by assenting employers, with the approval of the President, as is above provided for 

the amendment thereof Such termination shall not release any employer from the payment of any unpaid assessment theretofore made. 
SCHEDULE A 

FORM 0•l!' LETTER OF ASSENT TO CODE 

The undersigned, by signing and delivering this letter to Frederick F. Lyden. 

42 Broadway, New York City, assents to all of the terms and conditions of the 

Code for Stock Exchange Firms, a copy of which is annexed hereto; and such 

assent shall be effective as of the date on which said Code shall become effective 

as therein provided or the date of the delivery of this letter, whichever shall 

be later. The undersigned hereby agrees with everyone similarly assenting to 

said Code, that said Code constitutes a contract between the undersigned and 

all such others and agrees to be bound by the provisions thereof as well as the 

provisions in Schedule B annexed thereto including particularly the right ot 

assessment for expenses as therein provided. 

(5) 
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3 1262 08585 2886 

SCHEDULE B 

RULES AND REGULATIONS FOR THE ADMINISTRATION OF THE CODE 

1. Every employer who voluntarily assents to this Code or pays assessments 

as herein provided, shall be entitled to one vote at all meetings of employers 

under the Code; and the Board of Administrators shall determine and resolve 

all questions which might arise as to the qualification of any employer and his 

right to cast a vote at any meeting. Any employer may vote by proxy in 

writing. At least 75% of the employers shall constitute a quorum for the 

transaction of business at any meeting. 

2. The Board of Administrators shall be constituted as follows : five members 

shall be appointed by the Board of Governors of the Association of Stock 

Exchange Firms (New York) ; five members shall be elected by a majority vote 

of all other associations or organizations of stock-exchange firms any of whose 

members shall have assented to this Code, each association or organization 

having one vote; one member shall be elected by a majority vote of the employers assenting to this Code who shall not be members of any of the forego- ing associations or organizations; a representative to be appointed by the Administrator as provided for in Article III. 

3. Immediately after the effective date of the Code employers shall meet in 

the City of New York for the election of the Board of Administrators. 

4. Members of the Board of Administrators, except the representative of the 

Administrator, shall serve a term of one year. If a vacancy shall exist on the 

Board of Administrators, then such vacancy shall be filled by the remaining 

members of the Board elected by the same persons electing the member in respect 

to which such vacancy shall then exist. 

5. All meetings of the Board of Administrators shall be held in New York 

City, or such other place as the Board may determine, and at all such meetings 

a majority shall constitute a quorum, and any member of the Board may vote 

by proxy in writing. Meetings may be called by any three members of the 

Board. 

6. The Board of Administrators shall have power to appoint, remove, and 

fix the compensation of its officers and employees, including accountants, attorneys, and experts. 

7. The Board of Administrators shall designate an Executive Committee of 

five from among its members which shall possess and may exercise all of the 

powers of the Board of Administrators except as otherwise specifically directed 

by such Board. All meetings of the Executive Committee shall be held in 

New York City and may be called by any two members thereof. 

The Board of Administrators may also from time to time appoint either 

from employers under the Code or otherwise such committees as it may deem 

necessary or proper in order to carry out its powers and duties under the Code, delegating to any such committee any powers and duties of the Board of 

Administrators as shall be deemed necessary or proper to effectuate such 

purpose. 

The representative appointed by the Administrator shall be :given notice of 

all meetings of any committee or committees appointed by~ t-he · Boatd of 

Administrators and shall have the right to participate with~llt .. :v:ote . in the 

activities of such committees. -. . 8. The expenses of administering this Code shall be borne by the_employcrs. 

The Board of Administrators may from time to time make such assessments 

on account of such expenses which shall be apportioned among all employers 

in such manner as the Board of Administrators shall deenr fair and equitable. Failure of any such employer to pay any such assessment for a· period of 30 

days after the date on which it became payable shall constitute a violation 

of the Code and such employer shall thereafter, upon notice from the Board 

of Administrators, not be entitled to any of the rights and privileges appertaining to an employer voluntarily as sending to the Code as therein and herein 

provided, but shall continue to be liable for all due and unpaid assessments 

up to and including the date of such notice. 

(6) 

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