I want to be able to create ftp accounts for subdirectories on my server so that i can provide a few people with some free webspace.

I am trying to find a way to have a script in a higher directory that automatically adds code to the biggining of each file (advertisment). The code must be seperate from the files in that directory so that the ftp users can upload any code and they do not have control over the advertisments.

Thank you in advance for any help.

Wtf.
1. You never should modify your user's files without prior and mutual agreement.
2. You never should modify each file because it can be binary data file or config file or whatever else.
3. This should be done by means of your webserver, on the stage of sending the final output to the user. E.g. nginx can do it and I'm not totally sure but suppose that apache can too. You can also use auto_prepend_file setting in your php.ini but in this case you won't be able to attach your ads to html files.

1. There will definatly be a mutal agreement between me and the users. I would never provide anyone with free webspace without telling them that a banner will be included on each of thier pages.
2. By "each file" i meant each .html/.htm file.
3. This is a shared server and i am hoping for a solution that does not include server modification.

If you want to modify files physically you can write a simple script that will take html file name as an argument, check whether it is modified already and if not then append your bannerin front of it. This script can be run from shell or by cron along with 'find' command to recursively find all html files (something like "find -E /your/root/path -type f -regex '.*html?' -exec php yourscript.php {} \;") or you can reinvent recursive directory scanning in your script.

If you do not want to modify user's html files physically then I'm afraid you will not be able to avoid server modification in any case.