Out of SEC

Thirty years ago, George C. ("Bud") Mathews went into the regulating business as a member of Wisconsin's Railroad Commission (which then also regulated public utilities). Later he administered Wisconsin's famed Blue Sky Law which, in the high, wide & handsome days between 1925 and 1933, forced State registration, regulation of securities. After the Insull utility empire fell, Regulator Mathews in 1933 became vice president and general clean-up man of its Middle West Utilities Co. Same year President Roosevelt made him a member of the Federal Trade Commission.

With this background, no cheers went up from Business when he was named in 1934 as one of the two minority party (Republican) members of the new Securities & Exchange Commission. Last week, after five years and ten months of service, Bud Mathews resigned, but instead of being delighted, Business was more than a little sorry. No lawyer, he had proved himself a master at dealing with SEC's knotty legal problems. No Old Dealer, he had proved himself fair-minded and willing to give Old Dealers an understanding hearing.

Mathews' most important legislative baby has been SEC's Maloney Act, providing for voluntary self-regulation by U. S. over-the-counter (unlisted) security dealers. Striking is the contrast between this mild, cooperative act and the draconic laws regulating stock exchanges and holding companies.

Mathews' new job: management of the $255,912,815 Northern States Power system (serving 520,763 customers in Minnesota's Twin Cities, North Dakota, Wisconsin, thereabouts), a subsidiary of the $766,846,000 Standard Gas & Electric Co. now controlled by Manhattan Banker Victor Emanuel. Condition on which Mathews took the job: willingness of the new management of Standard to play ball with SEC, work out integration and recapitalization problems in conformity with the tough Public Utility Holding Company Act.

Said he: "I regret that my plans to leave the Commission should mature at a moment when the basic system of federal securities regulation is under attack. That system is fundamentally so sensible that it is inconceivable to me that the country would permit it to be destroyed or seriously weakened. . . . Basically, all of the statutes administered by the SEC are sound laws."

Said SEC Chairman Jerome Frank: ". . . He has represented a bulwark of technical expertness and highly intelligent business judgment which can best be described as good old American horse sense. He is the soundest financial analyst I have ever met."

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