“Wall Street doesn’t believe Washington knows anything.”
- May 28, 1962 memo from Walter W. Heller, Chairman, Council of Economic Advisors, to President Kennedy
Promoting economic growth became a central theme of the Kennedy Administration. In the early years of Kennedy's term, the stock market seemed to respond to that call. Tremendous increases in volume and in price as measured by the principal market indicators created new challenges to the stock exchanges and brokers.
New York Stock Exchange President G. Keith Funston, concerned about how the growth of the market and how SEC regulatory efforts might affect NYSE members, cautioned that "some people had not yet discovered that it is impossible to get something for nothing."(3) In addition, concerns about the role of insiders trading on the market caused great concern for the SEC and the courts.
President Kennedy's initial efforts to reorganize all administrative agencies were met with staunch Congressional and securities industry opposition. Kennedy's plan would have given administrative agencies even greater rule-making authority. Funston, who favored self-regulation, called the plan "a blunderbuss approach." Many leaders in Congress supported the self-regulatory approach, sharing Funston's fears that the proposed changes would substantially increase the power of the SEC.
(3) "Sustained Heavy Trading Results in a Spectacular Market Performance," New York Times, April 16, 1961, F1.
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