Taming the Street: The Old Guard, the New Deal, and FDR’s Fight to Regulate American Capitalism

The campaign to clean up the Wall Street chicanery that brought on the Great Depression receives high praise in this surprisingly colorful history of New Deal financial regulation. Journalist Henriques (The Wizard of Lies) details the fraudulent practices that precipitated the 1929 crash, including banks knowingly selling investors worthless bonds and investors conspiring to create artificial stock market rallies during which they sold shares at marked up rates. The Roosevelt administration responded by creating the Securities and Exchange Commission, which was tasked with regulating over-the-counter stocks, utility holding companies, and the New York Stock Exchange. The narrative centers on four figures: Joseph P. Kennedy, the flamboyant financier and first SEC chairman; William O. Douglas, the hard-charging Yale law professor who succeeded Kennedy as SEC chair; Richard Whitney, who as NYSE president resisted SEC oversight until he was caught embezzling customers’ assets in 1938; and Franklin D. Roosevelt himself, a shrewd idealist who, according to Henriques’s hagiographic portrait, made capitalism work for the average person. Henriques makes the potentially dry subject of SEC regulation fascinating, and the vivid prose evokes the dynamic personalities involved (“Douglas abruptly stood up from his deck, punched the air with his fist, and forcefully answered: ‘Hooey!’ ”). It’s a skillful account of a pivotal era in America’s economic history. (Sept.)