SEC Historical Society , www . sechistorical . org
Commissioners and senior staff of the SEC , 1935 . support as proof that Kennedy would be the tough watchdog Roosevelt promised .
But could Kennedy get Pecora ’ s support ? That was presently in the hands of Landis .
Around 4 p . m . on July 2 , Landis put his head into Mathews ’ s office and asked Kennedy to follow him to his own office , four doors away . There , he let Pecora make one last attempt to wheedle away the gavel , at least for the next few months .
Kennedy calmly explained his refusal was not personal , but also was not negotiable . “ Roosevelt has decided that I am to be chairman ,” he kept insisting , “ so I have no authority to make the trade .” Pecora tried other arguments , other trade-offs ; none would move his rival from that position . The FTC building grew silent as its staff headed home .
Finally , Landis and his two colleagues emerged . Kennedy and Pecora led the way down the hall to Mathews ’ s office “ as chipper as two long-parted and suddenly reunited brothers ,” as one reporter put it . Ultimately , Pecora was a loyal Democrat ; he had bowed , at last , to FDR ’ s expressed wishes . An FTC notary swore them in , a quick executive session was held and the stock market speculator was unanimously , if improbably , put in charge of Uncle Sam ’ s first effort to be “ the cop on Wall Street .”
When the reporters came back in , Pecora smilingly shook off questions about the closed-door delay . “ I will try and do my part to put the child on its feet ,” he said . He would later say of Kennedy , “ I like him immensely … he knows how to do things .”
From his first day as SEC chairman , Kennedy did what FDR needed him to do . He treated Wall Street with reason and respect , but he did not abandon New Deal reforms .
“ We are not going ahead under the presumption that everybody connected with finance is a criminal ,” he told the press . “ No honest man need fear that our commission will do anything that will harm him .”
But he also warned that the SEC would not tolerate dishonest dealings . He was unsparing — indeed , brazen — in condemning the Street ’ s past sins , some of which he had committed . “ The days of stock manipulation are over ,” he said . “ Our ideas have changed . Things that seemed all right a few years ago find no place in our presentday philosophy .”
Diana B . Henriques was a staff writer for The New York Times from 1989 to 2012 . She is a George Polk Award winner and a Pulitzer Prize finalist and she has received Harvard ’ s Goldsmith Prize for Investigative Reporting , among other honors . She is the author of six books , including Taming the Street : The Old Guard , the New Deal , and FDR ’ s Fight to Regulate American Capitalism , from which this article has been adapted . Copyright © 2023 by Diana B . Henriques . Published by Random House , an imprint and division of Penguin Random House LLC .
Sources
Goodwin , Doris Kearns . The Fitzgeralds and the Kennedys . Simon & Schuster . 1987 .
Lasser , William . Benjamin V . Cohen : Architect of the New Deal . Yale University Press . 2002 .
Nasaw , David . The Patriarch : The Remarkable Life and Turbulent Times of Joseph P . Kennedy . Penguin Press . 2012 .
O ’ Brien , Justin . The Triumph , Tragedy and Lost Legacy of James M . Landis : A Life on Fire . Hart Publishing . 2014 .
Perino , Michael . The Hellhound of Wall Street : How Ferdinand Pecora ’ s Investigation of the Great Crash Forever Changed American Finance . Penguin Press . 2010 .
Ritchie , Donald A . James M . Landis : Dean of the Regulators . Harvard University Press . 1980 .
Seligman , Joel . The Transformation of Wall Street : A History of the Securities and Exchange Commission and Modern Corporate Finance . Aspen Publishers . 2003 .
Smith , Amanda ( Ed .). Hostage to Fortune : The Letters of Joseph P . Kennedy . Viking Adult . 2001 .
www . MoAF . org | Fall 2023 | FINANCIAL HISTORY 13