The Securities and Exchange Commission was established in 1934 to regulate the commerce in stocks, bonds, and other securities. After the October 29, 1929, stock market crash, reflections on its cause prompted calls for reform. Controls on the issuing and trading of securities were virtually nonexistent, allowing for any number of frauds and other schemes. Further, the unreported concentration of controlling stock interests in a very few hands led to the abuses of power that the free exchange of stock supposedly eliminated.
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Agricultural Adjustment Administration
The Agricultural Adjustment Administration, or AAA, was a major New Deal program to restore agricultural prosperity by curtailing farm production, reducing export surpluses, and raising prices.
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The 1930s
When the stock market crashed in October 1929, millions of Americans lost their jobs, their savings and their homes. During the 1930s, the federal government stepped in to help solve these problems.
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Stock Market Crash of 1929
The 1929 Stock Market Crash, also called the Great Crash was a sharp decline in U.S. stock market values in 1929 that contributed to the Great Depression of the 1930s
To bring order out of chaos, Congress passed three major acts creating the Securities and Exchange Commission, SEC, and defining its responsibilities. The Securities Act of 1933 required public corporations to register their stock sales and distribution and make regular financial disclosures. The Securities Exchange Act of 1934 created the SEC to regulate exchanges, brokers, and over-the-counter markets, as well as to monitor the required financial disclosures. The 1935 Public Utility Holding Company Act did away with holding companies more than twice removed from the utilities whose stocks they held. This “death sentence” ended the practice of using holding companies to obscure the intertwined ownership of public utility companies. Further, the act authorized the SEC to break up any unnecessarily large utility combinations into smaller, geographically based companies and to set up federal commissions to regulate utility rates and financial practices.
The business community, wary of New Deal reforms, was mollified by the efficient chairmanships of Joseph P. Kennedy and William O. Douglas.
The Reader's Companion to American History. Eric Foner and John A. Garraty, Editors. Copyright © 1991 by Houghton Mifflin Harcourt Publishing Company. All rights reserved.
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May 27
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