Evening star., 1935-09-25
s f. c. HEAD HELD
SAFE MAN IN lob
Lands, Following Kennedy,
Knows How to Mold
Act With Facts.
BY DAVID LAWRENCE.

P. Kennedy and the appointment OF
James M Lands to succeed him as
chairman of the Securities Exchange
Commission 1t goes to the root OF
the New Deal objectives and &C
complishments, high purposes and
failures.
For Joe Kennedy was outstanding
In his achievement-he took an un-
workable law and squeezed out of it
every ounce of workability: He did,
by the process of sensible regulation,
everything that the law could pos
sibly allow the commission in its dis
cretion to do. He made the heroic
attempt to reconcile New Deal pur-
poses with the practicalities of the
American economic system. And if
the truth be told. Mr.. Kennedy, who
is resigning only for business rea-
sons and remains on terms of intimate
friendship with the President, knows
better than anybody in America just
why the law ought to be amended in
many vital particulars so as to make
It what sincere friends of security
reform always wanted, long before the
New Deal came into power
To the credit of President Roose-
welt, it must be said that he crystal
lized into action the movement for
a Federal blue-Sky law after many
years of lip-service to that cause by
investment bankers and occasionally
by leaders of public thought.
Law Held Too Strong.
r. l.
political insight, seized upon the plain
blunders of the financial world in the
1929 era and its demonstrated in
ability to do by voluntary action that
which the investors and security
buyers demanded with respect to the
sale and exchange of securities in in
terstate commerce. It is. on the other
hand, no reflection on Mr. Roosevelt's
objective or purpose to say that the
law, as finally enacted, went too far
and has probably caused more eco
nomic damage than benefit
This is based on the fact that new
capital issues are relatively small in
quantity. even after the law Is two
years old. The public issues we see
in the press are largely refinaucIng.
The latter type are important and
helpful. of course, but everybody knows
that the process of getting new capital
is impeded to no small extent by the
nnworkable provisions of the present
law, which make the ambiguous and
loosely Worded sections on director
liability not merely a doubtful safe
guard today but positive barrier to
the flow of money into industry to
finance recovery.
Now. Mr.. Kennedy won the ccnf1-
dence of the financial community be-
cause he had no illusions about the
clumsily worded. drastic and def1a-
'tionary provisions. He told Wall
Street, on the other hand, that it
had better make up its mind to con-
form its businesses to the real pro-
vislons-those that related to posi-
bic misrepresentation or manipulation
in the sale of securities of all kinds.
And the better groups in Wall Street
got behind him. and today the war on
the chiselers goes on from within as
well as without. AS a matter of
fact, there are many men in the
financial world who say privately tnat
the securities law will some day be a
positive help to them in their business
because those with licenses to sell
securities will be regarded with more
prestige by the public than the same
kinds Of businesses were at any time
before the Federal law was adopted.
Landis Can Repress Prejudice.
Comes now Mr.. Lands as chairman.
He was placed there on the whole
hearted recommendation of Mr., Ken
nedy. The story of young Lands is
q story Of what happens when an
honest mind, radical or liberal or ex-
treme or theoretical as it may be.
comes in contact with facts and expe-
rience. Mr.. Lands has judicial tenn
perament. He knows how to repress
preJudices. And once he is proved
wrong, he is man enough to MAKE a
concession.
1t will be noted that Wall Street is
reported in the press as pleased with
the appointment of Mr.. Lands. This
might have been misconstrued a few
years ago as meaning he would be
their tool or instrument for the per-
petuation Of unethical practices. since
a large section of the public humps
the good and the bad In Wall Street
in an unthinking and unreasoning
prejudice against al persons engaged
IN the money markets.
But what the press report does
mean is that Wall Street feels that in
Jim lands it has chairman at the
head Of the Securities Commission
who will give it square deal Having
once faced in Congress death SEN
tence" threat to their whole business.
the financial men are glad enough to
have somebody in Washington who
will be fair and equitable in admins
tering such an important regulatory
law.
When Mr. Lands came here he was
one of the brain trust" He was
known as a protege of Felix Frank
future Of the Harvard Law School,
who is generally credited with being
the father of most of the legal mis-
chief written in the New Deal laws.
But just as Mr.. Frankfurter himself
will insist that he doesn't wear horns
and that at heart he believes in the
capitalistic system. so Mr.. Lands has
learned by experience why a reformer
and an administrator do not often
blend into an effective public official.
This is because the academic technique
and the governmental technique are
two different things. No amount of
argument at the outset can persuade
the newcomers in Government to this
viewpoint in their collegiate en-
thusiasm for reform. But time and
everyday experience finally teach them
otherwise-that the role of the Gov
eminent official must inevitably be
one of benevolence and not malevo-
lence.
Cost Worth While.
The education of Mr.. Lands, the
transformation of brain truster into |
q good administrative oficial, at the