Business: Reform & Realism

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(See front cover)

The Securities & Exchange Commission, now just one year old. has 659 employes, occupies most of the old Interstate Commerce Commission Building, and has won the distinction of being the most ably administered New Deal agency in Washington. Its prime purpose is to police the U. S. securities business. And, under the direction of four SECommissioners (there is one vacancy), it does.

In the year past the men whom President Roosevelt picked to administer what well may prove to be his most enduring reform have brought under their supervision every important stock exchange in the land. They have assumed control of new corporate issues, previously handled by the Federal Trade Commission. They have registered virtually all listed corporations and made a matter of public record the salaries, bonuses and stockholdings of their officials. They have launched an investigation of protective committees. They have secured injunctions, issued stop-orders and published hundreds of rules & regulations which for all practical purposes are laws of the land. And because they have behaved with sense and decency, they have so deflated their onetime critics that today their wide authority is seriously challenged nowhere in the land.

First Phase. Last week SEC ended its first historic phase without ceremony or celebration. Stock exchanges quietly dropped from trading all securities not permanently listed in Washington except a few involved cases where SEC had granted additional time. Despite wrathful predictions made when the Securities Exchange Act was passed, no major corporation had failed to file. Most of the securities delisted were small inactive issues. Only popular stock to leave the Big Board was Noranda Mines, heavily traded in Toronto. Thus by last week SEC had peacefully carried out the last of its major Businessmen discovered sympathy, mandates upon which Congress had placed time limits.

When President Roosevelt picked his five SECommissioners, he found that the law did not provide for his designating one as chairman. Therefore he showed his personal preference by naming Joseph Patrick ("Joe") Kennedy for the longest term. The Commissioners took the hint, elected Mr. Kennedy chairman. But they must have done so with some misgivings. Chairman Kennedy was no New Dealer. He was not even a businessman. He was a Wall Street financier and a skillful practitioner of much that the New Deal deplored. During the 1920's he had been in the thick of cinematic mergers, deals and syndicates. Only a few months before his appointment, his fellow Commissioner. Ferdinand Pecora. had spread his name upon the record of the Senate Banking & Currency Committee as a member of a big and profitable pool that operated in alcohol stocks in the booming summer of 1933. But the President knew his man better than did anyone else in Washington.

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