(standing) Hamer Budge and Francis M. Wheat; (seated) Byron D. Woodside, Manuel Cohen and Hugh F. Owens
Dr. Kurt A. Hohenstein, Curator
Opened December 1, 2007
"Your action, in my opinion, does not tarnish the bright image of the Commission, as has been suggested in the press. Instead, it has added polish to that image. We must move forward with the major issues which are so important to investors, the securities industry, the business community, and the citizens of this country. We cannot afford to be sidetracked in our efforts. To do less would undermine the very purpose of the sacrifice you made in submitting your resignation."
- May 17, 1973 letter from SEC Commissioner John R. Evans to G. Bradford Cook
In the two decades before the election of President John F. Kennedy, the U.S. Securities and Exchange Commission exercised a hands-off approach towards the regulation of the market economy. By 1961, budget cuts had rendered the SEC unprepared to respond to many areas of concern in the growing economy.
A 1960 independent study of the SEC conducted by the General Accounting Office gave the agency generally high marks on "personnel and performance standards," but the report concluded that the SEC had problems in effective enforcement, inspection of securities businesses, and insufficient training for employees.(1)
From the beginning of the Kennedy Presidency to the resignation of President Richard M. Nixon, Presidential politics would interact with Congressional policymaking in a wide and diverse arena of economic matters. The SEC stood at the intersection of that interaction.
Between 1961 and 1973, the SEC faced challenges to its institutional authority on a wide array of complicated and pressing economic issues. The story of how the SEC addressed those issues would be an uneven one, with setbacks to the SEC's bright image that it had not faced in its previous thirty years of existence.
(1) "Study Finds S.E.C. To Be Effective," New York Times, January 17, 1961, 83.
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