"NEGOTIATED RATES; THE INITIAL EXPERIENCE"
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 NEW YORK SOCIETY OF SECURITY ANALYSTS
15 William Street
May 28, 1975
New York, New York

It was with some trepidation that I accepted the invitation to be here this noon. While it is a personal privilege to substitute for President Ford, in these hypersensitive days there is some question whether I am compromising the SEC's independence or violating some unwritten clause in the Constitution by being here for this purpose. I take comfort against this peril by noting that the amenities have been meticulously observed. The White House did not ask me to come. I was invited by your Society.

Of course, I also know that I was not your first choice of ceremonial surrogate. But it would be unseemly for me to take offense at that, inasmuch as being here today and giving these remarks was not my first choice of where to have lunch.

I do not mean to suggest that your society and its members are not the salt of the earth. Naturally you are, and the fact that you are generally in an ugly mood when I show up is surely no reflection on your overall sterling character and disposition toward buoyant hospitality. The other time I was here, you were still smarting over an unpleasant experience with your bill to register financial analysts. Fresh as I was from the annual meeting of the National Federation, I was imprudent enough to say some kind words about its voluntary program while referring to your society as the New York "chapter". On the whole, it was not a very happy scene. This time I have another topic equally well-suited to cementing our friendship -- negotiated rates.

Sometimes it reminds me of the roving television crew that is lucky enough to be right on the spot when a mother watches her child get crushed by a huge truck. As the camera closes in, the reporter sticks the mike in her face and asks: :Tell me, Mrs. Loser, how does it feel to watch your child get crushed by a huge truck? All those viewers out in TV land want to know what is going through your mind at a time like this."

Sobbing, Mrs. Loser shrieks, "It's awful! Just awful!"

The reporter presses: "But tell us more, Mrs. Loser. We know it's awful, but what does it really feel like?"

Gaining some composure and motioning to the cameraman to get her from her good side, Mrs. Loser continues, "Well, it is quite a sensation, something I know I have never experienced before. In fact, no one on my block has ever had a thrill like this -- and with the TV camera right on the spot. You are shooting in color, aren't you?"

Like Mrs. Loser, I can assure you that I am experiencing a new sensation for SEC chairmen. Things have been bad before, but who else has had the thrill of opening the cage and watching the lemmings race for the sea?

But is it really that bad? And what are we going to do about it? The answers are simple. It really is too soon to tell, and we are not going to do anything about it for some time, if ever. As to what is "some time", it depends upon when things seem to have shaken down to a long range pattern. When they have, there may appear to be something we can and should do, and there may not.

As to how bad the present developments are, we do not yet have any data that are accurate and comprehensive. You know about as much as we do by virtue of what your firms are experiencing and what you hear from others and read in the press and the services. Except for random inquiries and volunteered reports, our monitoring program is based upon monthly and quarterly reports, so it will still be the end of June before we receive the first systematic information. Meanwhile, is it an exaggeration to describe what is apparently happening as pointing to suicide in disastrous proportions? I think we would respond yes, it is an exaggeration, although the long-term consequences cannot yet be clearly discussed because they depend upon some unanswered questions and what other developments come to pass....

back