"MUTUAL FUNDS: FIFTY YEARS AND BEYOND"
THE OPENING PAGES OF THIS SPEECH AND OTHERS, GIVING A PERSONAL IMPRESSION OF RAY GARRETT, JR., HAVE BEEN GRACIOUSLY PROVIDED BY HARVEY L. PITT.

An Address by
Ray Garrett, Jr., Chairman
Securities and Exchange Commission

Presented before
THE INVESTMENT COMPANY INSTITUTE
Sheraton Park Hotel
May 15, 1974
Washington, D. C.

What do you say on the fiftieth birthday of someone who is still pretty big and husky but feeling generally poorly and oppressed on all sides with enemies and tormentors? "Happy Birthday!" may sound a little hollow. I guess it's safe to say that being 50 years old is at least better than the alternative. But is there anything else nice one can say? I think one can observe that the industry has lived through some tough times before and survived, but I would have to admit that it would be hard to find a tougher period since World War II and, as an industry, mutual funds were really not much prior to that time.

Maybe the nicest thing I can say is that I congratulate you on getting this far and, whatever further difficulties lie ahead, age will not hinder your overcoming them. After all, your major competitors are, institutionally, much older.

That's not very cheery, but it is difficult to see any fundamental improvement in the conditions of mutual funds and of those who manage them without substantial improvement in our equity markets, and I am not foolish enough to hazard any public forecasts in that area. It is my own inclination to view the present state of the market as a cyclical thing from which it will, in due course, recover -- perhaps not back to the frenzied days of the late '60's, but to something resembling a more normal condition. If this is correct, we are looking at some fantastic bargains. But also, even if it is correct, there is the big question of when. So I cannot stand here, as Chairman of the SEC, and buoy your spirits by assuring you that everything will be coming up roses by 1975. We can only hope.

What else can we talk about? We could talk about the past and, in the proper spirit of a golden jubilee, remember the good and forget the bad. There has been a lot of good, even in the legal department. It was good that the '40 Act was adopted when it was. It would have made things easier if it had been written in English but, as we all know in the end the industry representatives shared at least equal responsibility with those of the government for what we got. If you assume, as I do, that some Federal regulatory apparatus was inevitable for this industry, then it was good for it to be ready and waiting in 1946 when, once again, after many years of abhorrence, individuals in increasing numbers became interested in equity investing....

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