Evening star., 1934-03-20
lied the administration Of
securities act.
Control Need Recognized.

lied the administration Of the
securities act.
Control Need Recognized.
Leaving the administration of the
act to the Federal Trade Commission
naturally raises the question Of the
attitude to be taken toward the
alternative proposal of the New York
Stock Exchange for a special stock
exchange authority on which one
third of the members would be ap-
pointed as the express representatives
of the stock exchanges. The pro-
posals Of Mr.. whitney, for the New
York Stock Exchange, and of rival
bill which has been circulated widely
around Washington as the informal
proposal of the Association of Stock
Exchange Firms, are extremely in
teresting, both in so far as they repre-
sent a recognition of the need Of
Federal control over the stock ex-
changes and propose degree of con-
troll over stock exchanges which. in
the Fletcher -Rayburn bill, we're chal-
lenged half-heartedly as unconStitu-
tional I think I can say that the
constitutional argument against the
Fletcher -Rayburn bill never was any
thing more than smoke screen, and
has. since the appearance OF these two
rival bills, evaported completely.
There would seem no constitutional
question, even apart from the techni-
cslities of certain court decisions on
interstate commerce, that anything
which so completely dominates the
national credit situation as transac-
tions on, and in securities listed on,
the great national stock exchanges,
lies within the national power to
control
In so far as the proposals Of the
stock exchanges for alternative forms
of regulation suggest separate stock
exchange authority, 1t should be kept
in mind that the name by which the
body administering the act is known
is not important. The legislative es-
sentials are the same whether the
body is called an authority or a
board or Federal commission. Those
essentials are how much power the
administrative body shall have and
whether 1t shall be made up entirely
of representatives of none but the
public interest, or of representatives
as such of stock exchanges and OF
other distinct classes in the COM
munity. The two alternative pro-
posals that have been made left con-
troll of the ultimate factor in the
picture lie, the stock exchanges
themselveS-to the stock exchanges
and have further provided that at
least a certain number OF the mem
bers Of the regulatory authority, with
such smaller powers as it was granted.
should frankly be stock exchange
representatives or experts"
Experts Rarely Agree.
Insofar as the experts" are con-
cerned, it is the well learned lesson OF
administrative craftsmanship that
boards of men who are experts in de-
tails rarely agree among themselves,
and in their very expertness with the
trees seldom perceive the woods OF
broad public policy. The we'll learned
lesson of democratic government with
experts" is that they should be kept
on tap but not on top.
Insofar as making up a permanent
government regulatory body from rep
resentatives of special vested interests
is concerned we have long ago learned
that no harmony of policy can result
from q regulatory body packed with
advocates of warning interests, and
that the inevitable result of placing
on a regulatory authority able advo-
Gates who have at heart the definite
interest OF a particular class which
will profit by the least possible regula-
ton means qualification Of the regu-
lation. If the American people should
permit the stock exchanges in sub
stance to name the government COM
mission set to regulate the stock ex-