After the severe stock market crash of 1929, the country's faith in the stock market system and system of capitalism in general was at an all time low. The economy was still declining when President Franklin D. Roosevelt saw this obvious need for reform and started to make adjustments in the way the system was run. He proposed a New Deal in order to restore public faith in the market system and in the paper economy (Roosevelt's Experts). For starters, "Congress passed the Truth in Securities Act of 1933 which required corporations issuing new securities to provide full and accurate information about them to the public" (Brinkley, 629). In June 1934, the Securities and Exchange Commission was passed "to police the stock market" (Brinkley, 629). This was meant to "restore investor confidence by ending misleading sales practices and stock manipulations that led to the collapse of the stock market in 1920" (Encyclopedia Britannica).
Successful?
Overall, the SEC was successful and accomplished its purposes of improving the conditions in the stock market and restoring the nation's confidence in capitalism. It proved to be beneficial for almost everyone, businesses and investors. It created better conditions for American businesses and a fairer market for American investors (The Best New Deal Agency). The only complaints came from the few businesses that had previously been benefiting from the system being fixed. Businesses were now required to make their information on securities accessible to the public so they could no longer take advantage of investors. The SEC required businesses to submit an annual report of their financial performance which became known as "Form 10" (Investopedia) and was one of the Commission's greatest achievements.
Achievements
The Securities and Exchange Commission was intended to be part of an effort towards reforming capitalism in order to save it (The Best New Deal Agency), and it was just that. With the addition of new regulations, the SEC slowly brought order and some honesty back into the economy. It prohibited the buying of stocks without enough money to pay for them (Encyclopedia Britannica), which benefitted the businesses who were being cheated out of some money by investors who were not fully paying for their share in the company. The SEC also required the registration and supervision of securities markets and stock brokers, created regulations concerning the solicitation of proxies, and leveled the playing field in stock trading by preventing unfair use of classified information (Encyclopedia Britannica). This was the first time there had ever been a specific government act concerning the regulation of stock and security exchanges of companies (Roosevelt's Experts).
A liberal reform
The Securities and Exchange Commission was a reform because it made economic changes that are still here today. The SEC restored confidence in American capitalism by making necessary changes to the economic system in order to prevent another devastating stock market crash. The SEC helped businesses by making sure investors were fair and helped investors by making sure businesses were fair. The SEC was a liberal program because it increased government control of the economy by putting them in charge of policing the market.
Bibliography Brinkley, Alan. The Unfinished Nation. New York: McGraw-Hill, 2010. Print.
"The Best New Deal Agency." Securities and Exchange Commission Historical Society. Securities and Exchange Commission Historical Society, 2002. Web. 10 mar. 2016. <http://www.sechistorical.org/museum/galleries/kennedy/legacy_c.php>.
"Roosevelt's Experts." Securities and Exchange Commission Historical Society. Securities and Exchange Commission Historical Society, 2002. Web. 10 mar. 2016. <http://www.sechistorical.org/museum/galleries/ctd/ctd03b_new_era_experts.php>. "Securities and Exchange Commission (SEC)." Encyclopedia Britannica. Encyclopedia Britannica, 2016. Web. 10 mar. 2016. <http://www.britannica.com/topic/Securities-and-Exchange-Commission>.
"SEC Form 10." Investopedia. Investopedia, 2016. Web. 10 mar. 2016. <http://www.investopedia.com/terms/s/sec-form-10.asp>.