Evening star., 1937-09-22
BY JOHN c. HENRY.


chairman Of the Securities and Ex-
change Commission, today pledged
that body to service as the investors
advocate" but cautioned that it is not
within its power to save q fool from
his folly"
Rushing to Washington last night
after being notified at his Cape Cod
vacation home of his selection to head
the important regulatory department
Douglas met the press today with q
carefully prepared statement on his
views as to the function OF the COM
mission, his own opinion Of himself
and the immediate program OF the
agency.
An hour later he was back on q
train headed for Cape Cod and the
remainder Of the interrupted vacation
at q spot about miles from where
Supreme Court Justice Brandeis also
Is summering.
Throughout his interview today,
Douglas. q sandy-haired former pro-
fessor OF law at Yale, made it plain
that the commission will pursue with
even greater determination its intent
TO rid the Nations security markets
Of all artificial forces.
Ne Comment on Recent Slumps.
Making no comment on recent
weakness In the markets, the chair
man said the commission is mot in
terested in prices rs such"
Prices always will go up and
down." he said. From time to time,
we hope to get to the root of market
trends, to see whether they are being
shaped by natural economic forces or
by artificial ones. We will interfere
only when such forces are artificial.
There will be direct and aggressive
prosecution Of any cases We discover
of pools and manipulation Of security
prices. We are in favor OF q free
market, not a fixed one"
Repeatedly, he emphasized his feel
ing that the commission should be the
investors advocate" but with equal
force he insisted that such service does
not mean investment counsel"
The Government cannot provide
any substitute for investment judg-
ment," he pointed out. I'VE can act
to prevent manipulation and to pros
ecute fraud, but in the final analysis
the investors judgment must govern
his actions. We cannot save q fool
from his folly"
Commission COLLECTIVE"
Declaring the commission is being
objective and disinterested in its de-
termination to keep the financial mar
kets honest, Douglas said he was not
attempting to foist his own economic
and social ideas, but was keeping
strictly within the plain meaning OF
the statute setting up the agency.
IT believe In enforcement fairly
and fully, directly rather than indi-
rectly. We should not employ the
statute to accomplish by indirection
what was not intended by those who
wrote the law"
Douglas characterized himself, sub
ject of much speculation as his ele-
vation to the Craftsmanship loomed,
as "a pretty conservative sort OF a
fellow" who believes little stockhold-
ers should be treated as well as big
partners Of business, that simple hon.
esty should prevail in the financial
world and that there is something
wrong when the "big fellows" in busi-
ness circles want to deal themselves
three hands while dealing the little
fellows" none.
Liberal in his background, the new
chairman emphasized that the COM
mission is q growing agency. due to
expand materially and possessed OF
the power "to revise and revitalize"
certain features Of the capitalistic
system to the advantage Of all con-
cerned.