WALL STREET: Back to Philadelphia

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As if the U.S. were back in 1937, Wall Street and SEC last week belabored each other with adjectives. A lawyer named Twombly said SEC was "unjust, unfair, un-American." SEC replied by exhuming the ghost of Dick Whitney. A new war had started over how to keep the peace.

Why Now? The House Interstate Commerce Committee last week concluded hearings on proposed amendments to SEC's two basic acts, the Securities Act of 1933 and the Securities Exchange Act of 1934. Wall Streeters were more hopeful of winning an SEC fight than in many a moon. Some even thought that SEC, not a war agency, was no longer even a White House favorite. Would it perhaps spend the war—then the peace—in limbo?

It would certainly spend the war in Philadelphia. Next week SEC takes possession of new quarters: the Penn Athletic Club, in the quiet elegance of Philadelphia's Rittenhouse Square. In Washington, SEC's offices were infested with cockroaches, but they were only two blocks from the White House. In Philadelphia, its new quarters has a swimming pool (to be boarded over), but among its nearest neighbors are several antique shops.

Where Does the SEC Stand? In its eighth year, under its sixth chairman, Ganson Purcell (TIME, Jan. 26), SEC is not the thrill-a-minute New Deal star wagon it once was. For one thing, defense and war have drawn heavily upon its brilliant staff. OPA took not only ex-Commissioner Leon Henderson, but Utilities Expert Joe Weiner, Legal Eagle Dave Ginsburg; many a lesser technician has gone to defense work. Betting is that only 750 of its 1,250 employes will follow SEC to Rittenhouse Square.

But the chief cause for SEC's loss of glamor is not directly connected with war. It is the simple fact that maturity, as it must to all enduring Government commissions, has come to SEC. Its main policy fights are over. Its job now is the technical one of carrying out the basic policies already determined. On the utilities front, the outlines of holding-company "disintegration" were established in the months before Jerome Frank became a judge (TIME, April 14). Even before that, the SEC-Wall Street fight had degenerated into skirmishes over "attitude," red tape, technical details.

What Are They Fighting For? For over a year, SEC and four Wall Street committees hashed over changes in the two Securities acts. Last August they tossed 86 suggestions into the Congressional hopper. Fifty-five of them—mostly designed to increase efficiency, cut red tape and unnecessary expense—carried a joint SEC-Wall Street blessing. But there is still real disagreement over at least three things :

¶Wall Street wants repeal of the provisions for penalizing executives (and large stockholders) who trade in their company's securities. It claims that publicity on such "insider" trading is enough. SEC says no.

¶Wall Street wants SEC to renounce, by okaying repeal of the pertinent clauses, its never-used power to segregate broker and dealer functions. SEC wants to "continue to study" this problem.