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431 Days: Joseph P. Kennedy and the Creation of the SEC

Building an Institution

Divisions and Directors

Aerial View from Washington Monument

The Commissioners worked quickly to put the outlines of an agency in place. By July 17 they had created three functional divisions and hired one of the best senior staffs in Washington. James Landis brought his most valuable assistants from the FTC. Donald Montgomery began as head of the Examination Division, while Baldwin Bane became executive administrator. When the Examination Division became the Registration Division, Bane took over. This division examined all of the registration statements filed with the agency and made any necessary recommendations to the Commission. In addition to the usual attorneys and accountants, Bane's staff included financial examiners, mining engineers, and petroleum engineers, among others.

The Trading and Exchange Division was directed by David Saperstein, who had been Pecora's lieutenant during the Senate hearings. Saperstein was highly suited for overseeing the registration of securities brokers and dealers, promulgating rules for practices such as short selling, and detecting unlawful practices.

SEC Temporary Headquarters, 131 Indiana Avenue NW

The Legal Division conducted hearings, prepared orders, transmitted cases to the Justice Department, and provided expert support to the other two divisions. Kennedy named John J. Burns to head this division and act as SEC general counsel. Burns had become a full professor at Harvard Law School at the remarkable age of twenty-nine and sat on the Massachusetts Superior Court at age thirty. Not only was he a friend of Kennedy's but he was also close to Felix Frankfurter. The Frankfurter-Burns connection helped direct sharp young Harvard law students into careers at the SEC.

Also given division chief status was William O. Douglas. "Protective committees" had long been a target of reformers. Bankrupt companies were usually put under a trustee or committee charged with protecting bondholders during reorganization. But some trustees, such as commercial bankers, protected their own interests at the expense of others. The Commission was obligated by statute to investigate this problem, and Douglas, considered by many to be the nation's leading corporate law professor, agreed to take on this Protective Committee study. Douglas also encouraged promising Yale Law School graduates to join the Commission.

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Related Museum Resources

Papers

1934 to present

U.S. Securities and Exchange Commission Chairmen and Commissioners

[document] (tml) (Government Records)

1934

SEC Commission and Staff List

[document] (pdf) (with permission of the John F. Kennedy Library Foundation)

July 12, 1934

Telegram from Joseph P. Kennedy to Col. Marvin H. McIntyre for President Roosevelt in regards to Benjamin Cohen

[image] (pdf) (Courtesy of the National Archives)

July 17, 1934

Telegram from Joseph P. Kennedy to Herbert B. Swope on appointment of John Burns as SEC General Counsel

[image] (pdf) (Courtesy of the National Archives)

July 17, 1934

Telegram from Joseph P. Kennedy to Walter Stewart to organize a "division of economists"

[image] (pdf) (Courtesy of the National Archives)

July 25, 1934

Telegram from Joseph P. Kennedy to John J. Burns to consider "Mr. Shea of Harvard Law School" for SEC Records and Filing

[image] (pdf) (Courtesy of the National Archives)

October 19, 1934

Letter from Joseph P. Kennedy to the Comptroller General of the United States on SEC appropriations

[transcript] (pdf) (with permission of the John F. Kennedy Library Foundation)

November 1, 1934

Memorandum from Judge Burns to SEC Chairman Kennedy re Investment Bankers' Code Discussion

[transcript] (pdf) (with permission of the John F. Kennedy Library Foundation)

November 9, 1934

Report from SEC Chairman Kennedy to the National Emergency Council

[transcript] (pdf) (with permission of the John F. Kennedy Library Foundation)

December 17, 1934

Letter from Joseph P. Kennedy to Edward F. Heller on establishment of SEC office in San Francisco

[transcript] (pdf) (with permission of the John F. Kennedy Library Foundation)

December 17, 1934

Memorandum from Paul Gourrich to G.W. Goldschmidt on the 1933 Act

[transcript] (pdf) (Courtesy of the estate of Nathan Sameth)

1935 to present

U.S. Securities and Exchange Commission Chiefs of Staff

[document] (pdf) (Government Records)

1935 to present

U.S. Securities and Exchange Commission Division of Corporation Finance, Division Directors

[document] (pdf) (Government Records)

1935 to present

U.S. Securities and Exchange Commission Division of Market Regulation, Division Directors

[document] (pdf) (Government Records)

1935 to present

U.S. Securities and Exchange Commission Office of the Chief Accountant, Chief Accountants

[document] (pdf) (Government Records and Robert J. Kueppers)

1935 to present

U.S. Securities and Exchange Commission Office of the General Counsel, General Counsels

[document] (pdf) (Government Records)

1935 to present

U.S. Securities and Exchange Commission Secretary

[document] (pdf) (Government Records)

March 8, 1935

Letter from John J. Burns, SEC General Counsel, to Walter Lippmann

[transcript] (pdf) (Courtesy of the National Archives)

April 26, 1935

Memo from Abe Fortas to SEC Chairman Kennedy on Budget of Protective Committee Study

[document] (pdf) (Courtesy of the National Archives)

April 26, 1935

Memo from Abe Fortas to SEC Chairman Kennedy Re Senate Resolution 711

[document] (pdf) (Courtesy of the National Archives)

June 5, 1935

Letter from Joseph P. Kennedy to Colonel Clarence Owens on William O. Douglas and the Protective Committee Study

[transcript] (pdf) (with permission of the John F. Kennedy Library Foundation)

August 1, 1935

Letter from Nathan Sameth to Paul Gourrich on Disclosure

[transcript] (pdf) (Courtesy of the estate of Nathan Sameth)

September 1935

Employees of the Commission

[transcript] (pdf) (with permission of the Franklin Delano Roosevelt Library and Museum)

Oral Histories

18 September 2007

Paul Windels, Jr.

With Dr. Kenneth Durr

• audio (mp3)
• edited transcript (pdf)