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1932 › Franklin D. Roosevelt (Democratic) › Regulation of securities issuance and exchanges
Federal regulation of securities and commodity exchanges, interstate holding companies and interstate utility rates
pledge_forwardspecific_pledgecandidate_directevidence A Banking & FinanceEnergy & PowerIndustry, Business & Regulation similar solutions · similar reasoning
Solution
Regulate "to the full extent of federal power" holding companies that sell securities in interstate commerce, the rates of utilities operating across state lines, and exchanges in securities and commodities.
Rationale
Interstate operations escape state regulation; the preamble blames "the indefensible expansion and contraction of credit for private profit."
Statements (6)
Regulation to the full extent of federal power, of:
(a) Holding companies which sell securities in interstate commerce; (b) Rates of utilities companies operating across State lines; (c) Exchanges in securities and commodities.
That admirable document, the platform which you have adopted, is clear. I accept it 100 percent.
Blanket endorsement of every plank.
It is logical, it is necessary and it is right that Federal power be applied to such regulation.
Holding companies selling securities in interstate commerce.
For the very simple reason that the many exchanges in the business of buying and selling securities and commodities can by the practical expedient of moving elsewhere avoid regulation by any given State, I propose the use of Federal authority in the regulation of these exchanges.
Fourth: Regulation and control of holding companies by Federal Power Commission, and the same publicity with regard to such holding companies as provided for the operating companies.
Follow-through
kept
The Securities Exchange Act (June 6, 1934) created the SEC to regulate exchanges; the Public Utility Holding Company Act and Federal Power Act (August 1935) reached holding companies and interstate rates; the Commodity Exchange Act (1936) covered commodity exchanges.
Mechanisms
| Date | Type | Name | Effect | Consistent? | Source |
|---|---|---|---|---|---|
| 1934-02-09 | message | Message recommending a Securities Exchange Commission | I therefore recommend to the Congress the enactment of legislation providing for the regulation by the Federal Government of the operations of exchanges dealing in securities and commodities for the protection of investors, for the safeguarding of values, and so far as it may be possible, for the elimination of unnecessary, unwise and destructive speculation. | yes | Message to Congress Recommending a Securities Exchange Commission. |
| 1934-06-06 | statute | Securities Exchange Act | Created the SEC. | yes | Message to Congress Recommending a Securities Exchange Commission. |
| 1935-08-26 | statute | Public Utility Holding Company Act | SEC regulation of holding companies. | yes | Message to Congress Recommending Regulation of Public Utility Holding Companies. |
Assessments
The SEC was created in 1934.
In 1934, the Securities and Exchange Act created the Securities and Exchange Commission (SEC), which was charged with regulating financial markets.
Other positions on this issue
- No implied government approval of foreign bond sales; officials will not try to move stock prices — Franklin D. Roosevelt, 1932 specific_pledge
- Require full public disclosure on all offerings of stocks and bonds — Franklin D. Roosevelt, 1932 specific_pledge
- No federal 'blue sky' law — securities regulation belongs to the states, and the President should not police booms — Herbert Hoover, 1932 directional_stance
- Keep federal regulation of securities marketing and interstate utilities, vested in independent tribunals under definite standards subject to court review — Alf Landon, 1936 directional_stance
1932-fdr-regulate-exchanges-and-holding-companies · created by claude-fable-5-1 · review: unreviewed