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Home > Journals > Michigan Law Review > MLR > Volume 31 > Issue 6 (1933)

 

Abstract

President Roosevelt in his inaugural address stated as one of the most important immediate necessities of the country "a strict supervision of all banking and credits and investments." This statement is in line with his campaign criticism of the failure of the Republican national administration to check the inordinate inflation of security prices in 1929. There is no doubt that the President's program in this respect received a sympathetic hearing throughout the country. Many state legislatures are now considering changes in state laws regulating securities. It is interesting that some States with rigid blue sky laws seem to be quite as dissatisfied as other States which have so-called "anti-fraud laws." President Whitney, of the New York Stock Exchange, has joined in the demand for new legislation. In his address before the Cleveland Chamber of Commerce on February 28th, he urged the adoption of a federal corporation law, or failing that, of uniform state laws, strictly regulating the issuance of securities, requiring full disclosure of corporate :finance and severely punishing corporate frauds. When the general public and the experts agree that something is rotten in the state of our security selling, it would seem to be time to consider the present state of regulatory statutes and how they may be modified or improved- always realizing, however, that it is impossible to create honesty by statute, and that the problem of investment is more one of education than of legislation.

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