Code of fair competition for the stock exchange firms


Material Information

Code of fair competition for the stock exchange firms as approved on November 4, 1933 by President Roosevelt
Portion of title:
Stock exchange firms
Physical Description:
v, 6 p. : ; 23 cm.
United States -- National Recovery Administration
U.S. G.P.O.
Place of Publication:
Publication Date:


Subjects / Keywords:
Stock exchanges -- United States   ( lcsh )
federal government publication   ( marcgt )
non-fiction   ( marcgt )


General Note:
Cover title.
General Note:
At head of title: National Recovery Administration.
General Note:
Registry no. 1710-03.

Record Information

Source Institution:
University of Florida
Rights Management:
All applicable rights reserved by the source institution and holding location.
Resource Identifier:
aleph - 004930951
oclc - 31989958
System ID:

Full Text


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Registry No. 1710--03







1. Executive Order

2. Letter of Transmittal

3. Code


This publication is for sale by the Superintendent of Documents, Government
Printing Office, Washington, D.O., and by district ofiles of the Bureau of
Foreign and Domestle Commerce.

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An pplcaton avig ben ulymade, pursuant to and in full
compliance with the provisions of tteIo h ainlIdsra
Recovery Act, approved June 16, 1933, for my approval of a Code
of Fair Competition for Stock Exchange Firms, and hearings hav-
ing 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 com-
petition 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:
NOWV, 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.
November 4, 1933.
Approval recommended :
Hucan S. JoHNuoN,

19478* 188-157-33

NOVEMBER 3, 1933.
The WThite Housec.
SmR: I beg to transmit herewith the report of the Hearing on the
Code of Fair Competition for Stock Exchange Firms conducted in
the Audlitorium, 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 pre-
sented by the Association of Stock Exchange Firms (New York) on
behalf of its members and on behalf of similar associations of me~m-
bers of stock exchanges and members of stock exchanges throughout
the country. The applicant thus represents approximately 988/4%o
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 remarkable 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%0 of Mfarch 1, 1929, and in Chicago such number
was 4.3%0 greater than on August 1, 1929. Wages of employees of th$
same firms in New York was 85%o 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 Miarch 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%0 of the latter are paid more than the minimum rate and
more than 32%0 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 t~he first nine months of 1933 was appronl-
mately 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 propor-
tionately with the decline of their business. It is necessary that firms
employ complete technically trained staffs at all times mn 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 re-
mnunerat~ion. Moreover, in this respect it is common knowledge that
Stock Exchange firms are exceptionally generous in bonus distribu-
tin oepThe Code coes! 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)

the applicant and included in this record. In substance, these rea-
sons are: existing fair practice rules and regulations of the sev-
eral 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 mem-
berships in the several exchanges; limitation under a Code of the
authority of the several Governing bodies to modify their respec-
tive practices as required by experience and ever-changing condi-
tions; 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 C~ommittee.
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 sub-
mitted herewith.
HuncB S. JoaFNson,
A administrator.



This Code is adopted pursuant to Title I of the National Indus-
trial Recovery Act to endeavor to efEectuate the policy therein
enumerated in so far as applicable.

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 here-
inafter provided.
(b) The term employer as used herein means and includes,
but without limitation, every individual, partnership, firm, associa-
tion, corporation, or other entity, that is (1) a member of any regu-
larly organized stock exchange or has the privilege of any such ex-
change for itself or any of its partners or executive officers, and is
also (2)rgurly engaged as its major business in the buyi ng,
selling, rdn in or otherwise dealing in stocks, bonds, or other
securities, and/or commodities; provided, however, that no one whose
business shaUl consist of dealing only in commodities shall be in-
cluded 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 elective.
(c) The term employee as used herein shall apply to every
person employed by an employer as herein defined.
(d) The term selective date means and includes the date on
which provisions of this Code become effective and will be the
second M~onday after this Code is approved by the President.
(e) The term "LAdministrator as used herein shall mean the
Adimnunstrator appointed by the President under the National In-
dustrial Recovery Act.
(f) The term Presidenft means the President of the United
States of America.

ArrIers II--Lanon Pnovrazows

1. (a.) Employees shall have the right to organize and bargain
collecively through representatives of their own choosing and shall
be free from the interference, restraint, or coercion of employers of

labor, or their agents, in the designation of such representatives or in
self-organization or mn 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 com any union or to re-
framn from jommig, 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, ap-
proved or prescribed by 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 em-
ploy~ers 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
fcour (4) months without the payment of overtime;
(b) The maximum hours fedin the foregoing paragraph (a)
shall not apply (1) to guards and watchman employed to safeguard
securities or assets, or ()to partners in any copartnership, or (3)
to outside salesmen, or ()to employees in a managerial or executive I
capacity or in any other capacity of distinction or sole responsibility:
who receive more than $35 per weekr;
(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 citybetwFeen 250,000 and 500,000 population;
(4) less than $14 per wee 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%J 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 offces 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 deter-
mined by the classification of the town or city in which each such
branch or offce shall be located; provided, however, that where a
StaRteC law provides a. hi gher minimum wage than is poie nti
Code, no person employed within that State shall b adawg
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,/3%J of the regular
hourly rate at which such persons shall then be employed; but regard-
less of the calculation of such overtime averaged over a four months'
period, all such employees if enuployed for more than 48 hours in

sny one week shall be paid for such time in excess of 48 hours at the
rate of 133j/870 of the said regular rate. The amount paid for over-
time for any weekly period shall be credited on the amount of over-
time 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 deter-
mined 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, m excess of the established minimum shall
not be decreased, notwithstanding that the hours worked in such
employment may be hereby reduced.

The Board of Administrators, as provided for in Schedule B
hereof, shall represent the employers in the administration and super-
vision 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 action 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 Admiinistrator 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
m 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.

Any employer may voluntarily assent to this Code by signing and
delivering to the Board of Administrators a letter substantially as
set forth m 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
Upon the approval of this Code by thle 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
provdedin this code.

The President may, from time to time, cancel or modify-an~y-ordier;
approval, license, rule or regulation issued under Title IM ti-:he Naz
tional Industrial Recovery Act.

Any empoer assenting to this Code that may hereafter desire to
have the Coe 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 em-
ployers 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 choapropose amendenfbytshal takes
effect as a part of this Code upon suchapoa hro ytePei
dent. Employers voting on such amendments as above provided may
vote in person, by proxy nwiigo a oei rtn ihu
being personally present. rii o a t n iig thu
This Code shall continue in effect so long and only so long as the
National Indust~rial 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 Code
may be terminated at any time by the same actions by assenting em-
ployers, with the approval of the President, as is above provided for
the amendment thereof. Such termination shall not release any em-
ployer from the payment of any unpaid assessment theretofore made.


Foax: or LFrran or AssaT To CIonE

The undersigned, by signing and delivering this letter to Frlederick 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
aliigent shall be effective as of the date on which said Code shall become effective
akthberein provided or the date of the delivery of this letter, whichever shall,
b'e-later. The undersigned hereby agrees with everyone similarly assenting to
sgid 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 Behedule B annexed thereto including particularly the right of
assessment for expenses as therein provided.



,:.... ..





ii: -



l\SH IS lallIA lI A
3 1262 08585 2886

1. Every employer whlo 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 east a vote at any meeting. Any employer may vote by proxy in
writing. At least 75%J 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 Stockr
Exebange Firms (New York) ; fve 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 v'ote; one member shall be elected by a majority vote of the em-
ployers 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 Admin-
istrator 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 meetingsP
a majority shall constitute a quorum, and any member of the Board may vote
by proxy in writing. MIeetings may be called by any three members of the
6. The Board of Admiftistrators shall have power to appoint, remove, and
$1x thle compensation of its ofilers and employees, including accountants,
attorneys, and experts.
7. The Board of Adlministrators~ 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 Especifically 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 Administratore 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.
The representative appointed bY the Administrator shall be iglien notice of
all meetings of any committee or committees appointed bgy te" Bonfi of
Administrators and shall have the right to participate the
activities of such committees.
8. The expenses of administering this Code shall be borne by the.emplyers.
The Board of Administrators may from time to time make such. assessments
on account of such expenses which shall be apportioned among ah employers
in such manner as the Board of Administrators shall deem fair and eqnizijble.
Failure of any such employer to pay any such assessment for a'peri~od 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 appertain-
ing 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 asseanaents
up to and including the date of such notice.