Gallery: The Bright Image: The SEC, 1961-1973

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The Bright Image: The SEC, 1961-1973

Growing Political Concerns

Chairman Casey

While Budge's appointment proved controversial, President Nixon's next appointee as SEC Chairman appeared at first glance to be even more so. William J. Casey succeeded Hamer Budge in April 1971 and served until February 1973. Casey was a prominent New York trial lawyer and a leading authority on tax law, with limited experience in securities matters.

There were growing political concerns about the ability and effectiveness of the SEC as an independent regulatory agency, and the political nature of Casey's appointment did little to assuage critics. President Nixon paid close attention to the stock market as a measure of his political fortunes. He wanted to assure leaders of the business and securities community that his administration was actively pursing reasonable solutions to the problems they faced.

At his confirmation hearing, Casey told the Senate Banking Committee that he approached the job "without any preconceptions. I come here with an open mind. I don't want to be reappointed and I don't want a job in the securities industry."(23)

At the SEC, Casey faced problems created by the federal promotion freezes that the Nixon administration instituted in 1969 as part of its budget plan. These limits meant that the SEC's budget for 1972 would be a mere $23.3 million, an increase of only $368,000 over the 1971 budget. Casey fought for and received budget increases that allowed him to increase the SEC staff from 1,356 in 1971 to 1,814 by 1974. At his urging, SEC General Counsel Philip Loomis was named a Commissioner in 1971.

Andrew Barr, (left) and William J. Casey

Casey's approach to SEC operations followed more closely Chairman Cohen's example than that of his predecessor, Chairman Budge. "I want to be in on the takeoffs," he commented to reporters on taking the Chairmanship, "as well as the landings."(24) Casey's can-do attitude energized the SEC staff as it began to address several unresolved issues.

The future of the fixed commission rate structure and the development of a central securities market system were two issues that dominated Casey's tenure. SEC studies of these issues had begun earlier and Casey moved to implement each matter. By February 1972, the SEC had eliminated fixed commission rates on orders above $300,000 and announced its intention to lower the threshold to $100,000 by 1974.

When the SEC published its "Statement on the Future Structure of the Securities Markets" in February 1972, the creation of an electronically linked central market system to record and report all transactions became a central focus of the agency's work. The SEC, which had been content for decades to police the stock exchanges, now sought to lead in the development of a new system to insure fairness and to protect small investors.

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Footnotes:

(23) Eileen Shanahan "Senate Committee Clears Casey's S.E.C. Nomination," New York Times, February 11, 1971, 47.

(24) Eileen Shanahan, "Casey Feels Fees Brokers Get Are Too High," New York Times, May 5, 1971, 65.

Related Museum Resources

Papers

February 25, 1970: Memo from Dwight L. Chapin to President Nixon recommending meeting on economic policy, with handwritten notes from Hugh Sloan and H.R. Haldeman
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)
March 11, 1970: Memo from Hugh Sloan to President Nixon proposing meeting with Association of Stock Exchanges, Investment Bankers Association and Investment Company Institute
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)
October 20, 1970: Remarks by SEC Commissioner James J. Needham, Knoxville, Tennessee
[image] (pdf) (Courtesy of Stephen A. Zeff)
April 1, 1971: Remarks by SEC Commissioner James J. Needham before the Illinois Society of Certified Public Accountants
[image] (pdf) (Courtesy of Stephen A. Zeff)
May 5, 1971: "Evolution in the Capital Markets" - Address by SEC Chairman William Casey to the Society of American Business Writers
[image] (pdf) (Courtesy of Stephen A. Zeff)
June 1, 1971: Letter from Robert W. Haack, New York Stock Exchange to SEC Chairman William J. Casey
[transcript] (pdf) (All rights are owned exclusively by NYSE Euronext copyright 2007 NYSE Euronext, All Rights Reserved, Courtesy New York Stock Exchange Archives)
June 30, 1971: 37th Annual Report of the Securities and Exchange Commission
[image] (pdf) (Government Records)
August 4, 1971: Memo from Peter Flanigan to President Nixon recommending a cadre of economic spokesmen
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)
August 5, 1971: Memo from John Ehrlichman to Peter Flanigan with President Nixon's request that, in meeting with business groups, "you spend time on the economy"
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)
August 30, 1971: Memo from Charles Colson to George Schultz reflecting Chamber of Commerce anger about the Cost of Living Council
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)
September 27, 1971: Memo from Lee D. Arning, New York Stock Exchange on national securities market
[transcript] (pdf) (All rights are owned exclusively by NYSE Euronext copyright 2007 NYSE Euronext, All Rights Reserved, Courtesy New York Stock Exchange Archives)
September 28, 1971: Memo from William C. Freund, New York Stock Exchange to Robert W. Haack on working committee on a national securities exchange
[image] (pdf) (All rights are owned exclusively by NYSE Euronext copyright 2007 NYSE Euronext, All Rights Reserved, Courtesy New York Stock Exchange Archives)
November 22, 1971: Memo from Dwight Chapin to George P. Schultz on call from Bernard (Bunny) Lasker
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)
May 19, 1972: "Towards Common Accounting Standards" - Address by SEC Chairman William J. Casey to the Conference on Financial Reporting
[image] (pdf) (Courtesy of Stephen A. Zeff)
June 30, 1972: 38th Annual Report of the Securities and Exchange Commission
[image] (pdf) (Government Records)
October 2, 1972: "The Partnership between the Accounting Profession and the SEC" - Address by SEC Chairman William J. Casey to AICPA
[image] (pdf) (Courtesy of Stephen A. Zeff)
October 3, 1972: "Investor Relations and Corporate Credibility" - Address by SEC Chairman William J. Casey to National Investor Relations Institute
[image] (pdf) (Courtesy of Stephen A. Zeff)
October 18, 1972: "Financial Disclosure, Investor Confidence and Corporate Credibility" - Address by SEC Chairman William J. Casey to Financial Executives Institute
[image] (pdf) (Courtesy of Stephen A. Zeff)
November 15, 1972: Letter and Press Release from New York Stock Exchange to Herbert Stein on NYSE invitation to Soviet Government Bank of Foreign Trade
[transcript] (pdf) (Courtesy of the Nixon Presidential Library & Museum)

Photos

Early 1970s: SEC Division of Corporation Finance Meeting

Andrew Steffan, Chief Financial Analyst; Richard Rowe, Associate Director; Neal McCoy, Chief Counsel. This was not a prayer meeting.
(Courtesy of Richard Rowe )
August 1971: SEC Commission

James J. Needham, Hugh F. Owens, William J. Casey, Richard B. Smith and Albert Sydney Herlong
1972: Andrew Barr and William J. Casey
1972: SEC Commission

Albert Sydney Herlong, Hugh F. Owens, William J. Casey, James J. Needham and Philip A. Loomis, Jr.
1972: William J. Casey