EXHIBIT R - CODE OF ETHICS

CODE OF ETHICS FOR SECURITY TRADING & POLICY STATEMENT
REGARDING CORPORATE INFORMATION AND INSIDER TRADING

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Pursuant to Rule 17j-1 Under the Investment Company Act of 1940

BACKGROUND
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This Code of Ethics has been adopted by the Board of Directors of the
Company in accordance with Rule 17j-l(b) under the Investment Company Act of
1940 (the "Act") and the May 9, 1994 Report of the Advisory Group on Personal
Investing by the Investment Company Institute (the "Report"). Rule 17j-1
generally describes fraudulent or manipulative practices with respect to
purchases or sales of securities held or to be acquired by investment companies
if effected by access persons of such companies.

The purpose of this Code of Ethics is to reflect the following: (1) the
duty at all times to place the interests of shareholders first; (2) the
requirement that all personal securities transactions be conducted consistent
with the Code of Ethics and in such a manner as to avoid any actual or potential
conflict of interest or any abuse of an individual's position of trust and
responsibility; and (3) the fundamental standard that investment company
personnel should not take inappropriate advantage of their positions.

It shall be unlawful for any affiliated person or principal underwriter
for a registered investment company or any "access person" (as such term is
defined in this Code of Ethics) of an investment adviser or principal
underwriter for a registered investment company in connection with the purchase
or sale, directly or indirectly, by such person of a security held or to be
acquired, as defined in this section, by such registered investment company:

(a) To employ any device, scheme or artifice to defraud such
registered investment company;

(b) To make to such registered investment company any untrue
statement of a material fact or omit to state to such
registered investment company any material fact necessary in
order to make the statements, in light of the circumstances
under which they are made, not misleading;

(c) To engage in any act, practice, or course of business which
operates or would operate as a fraud or deceit upon any such
registered investment company; or

(d) To engage in any manipulative practice with respect to such
registered investment company.






APPLICATION

This Code of Ethics applies to the "access persons" of the Company (as
such term is defined in this Code of Ethics). Each access person must receive,
read, acknowledge receipt of and retain this Code of Ethics annually.


DEFINITIONS

For the purposes of this Code of Ethics, the following definitions
shall apply:

(a) "Affiliated Person" shall mean any person with power to vote
5% of outstanding securities of the Company or his employee or
partner.

(b) "Access Person" means any person with access to information on
the Company's activity, including all officers/employees or
advisory persons (as defined below) of the Company.

(c) "Advisory Person" of the Company means (1) any employee of
the Company or any person in a control relationship to the
Company who, in connection with his regular functions or
duties, makes, participates in, or obtains information
regarding the purchase or sale of a security (as defined
below) by the Company, or whose functions relate to the
making of any recommendations with respect to such purchases
or sales; and (2) any other natural person, if any, in a
control relationship to the Company who obtains information
concerning recommendations made to the Company with regard
to the purchase or sale of a security.

(d) A security is "being considered for purchase or sale" when a
recommendation to purchase or sell a security has been made
and communicated or, with respect to the person making the
recommendation, when such person seriously considers making
such a recommendation.

(e) "Beneficial Ownership" means an interest in securities, the
benefits of which are enjoyed, directly or indirectly, by
any person by reason of any contract, understanding,
relationship (such as, for example, that of a spouse,
children or other close family relationship), agreement or
other arrangement, and by reason of which such person should
be regarded as the true owner, although such securities may
not be registered or standing on the books of the issuer in
the name of such person. Thus, for example, securities held
for a person's benefit in the names of others, such as
nominees, trustees and other fiduciaries, securities held by
any partnership of which a person is a partner, and
securities held by any corporation which is controlled by a
person (directly or through intermediaries), would be deemed
to be beneficially owned by said person. Similarly, a person
ordinarily obtains benefits equivalent to ownership from,
and thus is generally regarded as the "beneficial owner" of,
securities held in the name of a spouse, a minor child, or
an immediate family member or a spouse. Other illustrations
of benefits substantially equivalent to those of ownership
include application of the income derived from securities to
maintain a common home and application of the income derived
from securities to meet expenses which the person otherwise
would meet from other sources. Such interests which confer
beneficial ownership of a security include having or sharing
with another: (1) voting power, including the power to vote,
or to direct the voting of, the security; and/or (2)
investment power, including the power to dispose, or to
direct the disposition, of such security. A person is also
deemed to be the beneficial owner of securities which such
person has the right to acquire beneficial ownership of such
securities: (i) through the exercise of an option, warrant
or right (including options traded on options exchanges)
exercisable within 60 days; (ii) through the conversion of
securities which are immediately convertible or will become
convertible within 60 days; or (iii) pursuant to a power to
revoke within 60 days; or (iv) pursuant to the automatic
termination within 60 days of, a trust, discretionary
account or similar arrangement. In addition, beneficial
ownership is conferred if voting or investment power is
shared with one or more other persons and, therefore, the
same shares of stock may be deemed beneficially owned by a
number of persons. The Securities and Exchange Commission
("SEC") regards securities held in trust for others as
beneficially owned by the trustee if he has or shares voting
or investment power with respect to such securities.

(f) "Control" means the power of a stockholder to exercise a
controlling influence over the management or policies of a
company; control is not power solely as the result of an
official position with such company.

(g) "Independent Director" means director of the Company who is
not an "interested person" of the Company within the meaning
of Section 2(a)(19) of the Act. A trustee or director is not
deemed an interested person of the Company solely by reason of
his being a member of the Board of Directors or an owner of
shares of the Company.

(h) "Investment Personnel" means portfolio managers who make
decisions about the Company's public securities investments
and analysts and traders who assist in the process.

(i) "Material Non-public Information" is not expressly defined by
The Insider Trading and Fraud Enforcement Act of 1988.
Non-public information can best be described as information
that comes to an employee through corporate channels that is
not known or reasonably expected to be known by the general
public. Material information is generally considered to be
information that would be likely to influence an investment
decision of a reasonable investor (i.e. would this piece of
information influence the reasonable investor to buy or sell
stock in a corporation because that person believed such
information might affect the market price of the stock).

(j) "Purchase or Sale of a Security" includes, among other
things, the writing of an option to purchase or sell a
security (as defined below).

(k) "Security" shall have the meaning set forth in Section
2(a)(36) of the Act. In general, the term includes any
interest or instrument commonly known as a security, except
that it shall not include securities issued by the United
States (including short-term debt securities issued or
guaranteed as to principal or interest by the United States
or by agencies of the Government of the United- States),
bankers acceptances, bank certificates of deposit,
commercial paper or shares of registered open-end investment
companies.

(l) "Insider Trading" shall mean the trading of any security
while in the possession of material non-public information
as to which the access person (1) has a duty to keep
confidential or (2) knows or should have known was
improperly obtained. Material information means information
which is substantially likely to be considered important in
making an investment decision by a reasonable investor, or
information which is reasonably certain to have a
substantial effect on the price of an issuer's securities.
Information is non-public until it has been effectively
communicated or made available to the market place.

(m) "Interested Person" shall mean any affiliated person of such
company, any affiliated person's family member, any
interested person of any investment advisor or principal
underwriter, legal counsel, broker dealers, or anyone the
SEC deems to have a material professional relationship.


EXEMPTED TRANSACTIONS

The prohibitions of this Code of Ethics shall not apply to:

(a) Government securities, banker acceptances, certificates of
deposits, commercial paper, open ended mutual funds,(1)
residential or commercial real estate, rated bonds, stock
index options, futures and future options. These are exempt
classes of securities.

(b) Purchases or sales effected in any account over which the
access person has no direct or indirect influence or control
(independent investors) or in any account which is managed on
a discretionary basis by a person other than such access
person and with respect to which such access person does not
in fact influence or control such transactions.
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(1) See page 10 of the May 9, 1994 Advisory Group on Personal Investing
by the ICI

(c) Purchases or sales of securities which are not eligible for
purchase or sale by the Company.

(d) Purchases or sales which are non-volitional on the part of
either the access person or the Company.

(e) Purchases which are part of an automatic dividend reinvestment
plan.

(f) Purchases effected upon the exercise of rights issued by an
issuer, pro rata to all holders of a class of its securities,
to the extent such rights were acquired from such issuer and
sales of such rights so acquired.


RESTRICTIONS ON PERSONAL INVESTING ACTIVITY FOR ACCESS PERSONS

1) No access person shall reveal to any other person (except in the normal
course of his duties on behalf of the Company) any information regarding
securities transactions under consideration by the Company or consideration by
the Company of any securities transaction.

2) No access person shall engage in "insider trading" whether for his own
benefit or the benefit of the Company or others.

3) No access person shall make recommendations concerning the purchase or sale
of securities by the Company without disclosing any interest such access person
has in the securities or issuer, including, without limitation:

(a) any direct or indirect beneficial ownership of any securities of
the issuer;

(b) any contemplated transaction by such person in such securities;
and

(c) any present or proposed relationship with such issuer or its
affiliates.

4) No access person of the Company shall participate in any securities
transaction on a joint basis with the Company in violation of applicable law.

5) Investment Personnel(2) are prohibited from acquiring any securities in an
initial public offering.

6) Any acquisition of securities in a private placement requires prior approval
of the chairman. Any investments in private placements by the chairman must be
pre-approved by the chief compliance officer and one other officer. In each
case, a determination must be made that
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(2) As defined in the May 9, 1994 Advisory Group on Personal Investing
by the ICI





such security is either not an appropriate investment for the Company, or that
such an investment will not result in any adverse effect on the Company.

7) Investment personnel are prohibited from receiving any gift or other things
of more than de minimis value (less than $100) from any person or entity that
does business with or on behalf of the investment company. Gifts received in
excess of $50 must be listed on each employee's quarterly compliance
statement.

8) Investment personnel must have the chairman's authorization to serve on any
boards of directors of outside companies other than charitable and non-profit
organizations and foundations. If Harris & Harris Group, Inc. has an
investment in a company, permission is not necessary to serve on the board. In
the case of the chairman of the Company, the Executive Committee shall approve
serving on any such board.

9) Management will prepare annually for review by the board of directors a
statement for the minutes summarizing and reviewing the existing procedures
concerning personal investing, identify any violations requiring significant
remedial action during the past year and identify any recommended changes.


PROCEDURES FOR BUYING OR SELLING HHGP COMMON STOCK

1) Access persons and Directors, their children under age 21, and family
members living in the same house will request in writing on the pre-clearance
security trading approval form (Exhibit 1) for HHGP common stock to either the
chairman, president, chief compliance officer or executive vice-presidents all
trades in Harris & Harris Group, Inc.'s stock they wish to make. These
requests will be kept on file by the Company clearly indicating the
authorizing person's response. The chairman will request pre-clearance from
either the president, chief compliance officer or executive vice-presidents.
Any pre-clearance approval for trading in HHGP common stock is subject to
withdrawal upon notification of HHGP being placed on the restricted stock
list.

2) Access persons and Directors, their children under age 21, and family
members living in the same house should inform the chief compliance officer
when buying and selling HHGP stock after having cleared it with the chairman.
The controller will assist with filing a Form 4.

3) Form 4 is required to be filed with the SEC and NASD within the first 10
days of the month following a purchase or sale transaction. A copy of broker's
advice on any sale or purchase transaction must be sent to the controller,
preferably by fax, so that a Form 4 may be completed accurately and on a
timely basis.

4) Any failure to make accurate and timely Form 4 filings must be disclosed in
the annual shareholders' proxy.

5) Directors and officers should note:





(a) Short sales are strictly prohibited.

(b) Short swing profits are recoverable by HHGP if a sale occurs
within six months before or after the seller's purchase of
HHGP common stock at a lower price.



GENERAL COMPLIANCE POLICY

1) All equity trades, including trades involving securities convertible into
or exchangeable for equity securities, that access persons wish to make or
have advised their children under 21, and family members living in the same
house to make, must be approved in writing by either the chairman, president,
chief compliance officer or executive vice-presidents on a pre- clearance
security trading approval form (Exhibit 2). These forms will be kept on file
by the company clearly indicating the authorizing person's approving
signature. The chairman will request pre-clearance approval from either the
president, chief compliance officer or executive vice-presidents. The
authorizing person will not approve personal trades in a stock or a derivative
of a stock including but not limited to a listed option if the Company has
purchased or has an open buy/sell order in that stock or a derivative of that
stock including but not limited to a listed option until seven days before or
after the order is executed or withdrawn except if access person is exercising
or rolling over an existing option or derivitive postion in which case, if in
the judgement of the authorizing person such exercise or rollover would not be
detrimental to the Company's interest, the seven-day restriction may be waived
by the authorizing person.

2) The controller will notify all the access persons and the directors of the
Company when the HHGP stock is placed on the restricted list or when it is
free to trade.

In order to avoid any appearance of impropriety, conflict with, or
disadvantage to the Company, prior to effecting any transaction in HHGP stock,
the directors must request pre- clearance from the chairman.

Each director will be asked quarterly to confirm in writing
that such director, their children under 21, and family
members living in the same house, have not purchased or sold
HHGP stock during the period that such security was restricted
without first having pre-cleared the transaction with the
chairman.

3) Every access person, (independent directors are not considered access
persons), will have their brokerage firm send duplicate monthly statements of
all security accounts to the Company. These statements should reflect all
transactions in which such access person is required to report under the Code.
If an access person does not have a beneficial interest in a security account
of their children under 21, and family members living in the same house, but
does influence the purchase or sale of any equity securities or securities
convertible into or exchangeable for equity securities, then all such
transactions during any quarter shall be summarized in writing (name of family
member, date of transaction, purchase or sale, number of shares, name of
security, symbol and price per share) and reported by such access person to
the chief compliance officer as of the quarter end. An access person shall not
be required to have duplicate monthly statements sent with respect to: (i) any
Government securities, banker acceptances, certificates of deposits,
commercial paper, open ended mutual funds, as well as rated bonds, stock index
options, futures and future options; (ii) any transactions effected in an
account over which such person does not have any direct or indirect influence
or control which includes spouses if they make independent decisions as
outlined in Exempt Transactions; (iii) any account which is managed on a
discretionary basis by a person other than such access person and with respect
to which such access person does not in fact influence or control such
transactions.

A) Access persons will be asked quarterly to state that all
security transactions and gifts required to be disclosed by
the access person under the current code of ethics have been
properly reported to the chief compliance officer.

B) Access persons and all employees will certify annually that
they have read and understand the Code of Ethics, that they
have complied with the requirements of the Code of Ethics and
that they have disclosed or reported all personal securities
transactions required to be disclosed or reported pursuant to
the requirements of the Code.

4) The controller will notify all the access persons when a particular stock
that the Company is interested in investing is placed on the restricted list or
when it is free to trade.

5) All material non-public information that relates to the Company's internal
business matters, business developments, business prospects or any other
relevant business information shall in no circumstance be disclosed by any
employee or Director of the Company to any person, including any person within
the Company, unless that person is employed by the Company and has a need to
know such information in connection with his or her employment or such person is
employed by an outside firm (e.g. legal counsel and accountants) retained by the
Company and that person needs to know the information to perform services for
the Company. This policy also applies to information relating to the affairs of
the Company's investees, customers, affiliates and business contacts.

6) All reports furnished pursuant to this Section will be kept confidential,
subject to the rights of inspection by the Board of Directors of the Company and
by the Securities and Exchange Commission.


SANCTIONS

Upon discovering a violation of this Code, the Board of Directors of
the Company may impose such sanctions as it deems appropriate, including, among
other things, a letter of censure or suspension or termination of the employment
of the violator.