Senator Wherry was chairman of the committee from 1947 to January 1949. The country corrected a mistake it had made 2 years before and returned the Democrats to power at that time and the Democrats took over. And in 1950 the new committee was established and that is when I became chairman of the Small Business Committee, and you may have still been there.

But anyhow, I wanted to point out to the committee that he has experience here on the Hill, that he did serve on the Small Business Committee, and I want to mention that particularly because small business at times-some small businesses become very much interested and involved in securities and exchange matters. It is very expensive, time consuming, and much red tape is involved to go to the Securities and Exchange Commission with one of these registrations. And often small business finds it quite frustrating.

Now we did manage after 2 or 3 years to change the tax provisions in such a way that did away with the exemption for the issuance of relatively small bonds issued by local industrial agencies or industrial associations. But it was claimed by the Securities and Exchange Commission that they still had the right, even though we corrected that after a couple of years, they claim that it is still incumbent upon them to require them to file for registration.

Now we passed a provision about three times through Congress, and finally with the cooperation of the Securities and Exchange Commission, we got all of that cleared up so that local industrial agencies now can issue up to a limited amount without having to go through the Securities and Exchange Commission.

I just wanted to review that with you and say that I hope that no other complications will come up in that connection because it is of great concern to many small businesses that simply cannot afford the time, the cost, and the redtape of going through Securities and Exchange registration.

As a matter of fact, I might say that I hope efforts will be made to simplify that so far as it can be for all businesses.

Mr. CASEY. I think it is very important to clarify and simplify the access for small business. I hope that will be done.

The CHAIRMAN. Fine. Now let me say this before turning it over to Senator Proxmire. I rather suspect we are going to have some legislation, and perhaps some very important legislation this year involving the Securities and Exchange Commission. I know we will have your cooperation as we have had of the Chairman who has served there previously.

Mr. CASEY. I will look forward to that very much indeed, Senator. The CHAIRMAN. And one other thing I want to mention. A couple of years ago we, through legislative action, called on the Securities and Exchange Commission to make a study of institutional buying and stock exchanges. You are familiar, I am sure, with that?

Mr. CASEY. Yes, I am.

The CHAIRMAN. That report was supposed to have come to us December 31, but as I explained to you privately, the Commission was not ready to make its recommendation. It was not ready to make the report, and so the report was delayed. I understand it is coming March 1, and I shall not ask you to comment on that at this time, but I hope that you will give attention to it and you will soon give

us your thoughts regarding that report and the recommendations that will come forth.

Mr. CASEY. Yes, I am aware the Commission is presently preparing its transmittal letter and preparing its recommendations and wants to get it to you by the 1st of March. I would not be able to have a considered opinion as to whether I concur or do not concur in the recommendations now, and I wouldn't want to delay those recommendations, so I think the best thing to do is let it go forward and I will send forward any supplementary thoughts or recommendations that I may develop as I have occasion and time to look into this institutional study, which is a rather monumental pile of documents and papers, facts, and statistics.

The CHAIRMAN. I may mention one other thing. I am sorry to drag this out, but these are matters that are of interest to us and to you, too. When we were considering the broker dealer insurance bill, Senator Brooke had an amendment-you are familiar with the amendment, I presume.

Mr. CASEY. I did talk with Senator Brooke yesterday. What amendment are you referring to?

The CHAIRMAN. What amendment?

Mr. CASEY. Yes. What was the nature of this amendment?

The CHAIRMAN. It had to deal with the balances and securities held by broker dealers for clients. But, anyhow, I'm not asking you to comment on it at this time. I am just calling your attention to it because we promised Senator Brooke, I believe, when the conference report was being considered that we would study that proposition further, if the conference did not agree to his amendment. I hope you will familiarize yourself with it.

Mr. CASEY. Yes.

The CHAIRMAN. And that the Commission will study it, too.

Mr. CASEY. Yes, that will be a very important part of the study. The Commission is required by the law to make a study of the practices of brokerage houses that may impair the security of investments left with them.

The CHAIRMAN. Well, fine. Thank you very much. Now Senator Proxmire.

Senator PROXMIRE. Mr. Casey, I want to serve notice that I am going to take a little time in this examination of you this morning because I think this is a very important appointment and because I think you have a background which is somewhat versatile, and I think in fairness to you and in fairness to the Congress and to the country, we ought to go into in some detail.

The SEC, as we know, is a tremendously important agency. In its 35 years of history it has had some serious problems; it has had some very distinguished Americans, as you know, who have been Chairmen. I think there have been few times when it has faced the kind of serious problem it faces today in many, many respects. We are all aware of that.

I would like to ask you if you could tell us yourself-we have heard from Senators Javits and Buckley-what you feel are your principal 1 qualifications for this job. Now I have gone over your record and I do know that you have written a series of articles, indicating that

you are a man of intellectual capacity and, of course, you have been very successful in business, which is certainly in your favor.

You have written one article entitled "Mutual Funds and How To Use Them." What background do you have which you think particularly qualifies you for this job?

Mr. CASEY. Well, Senator, to start off with, for the last 30 years I have spent a good deal of my time studying and writing and editing books about the relationship between Government and business, dealing with the entire regulatory process, back to the days of World War II when I prepared looseleaf volumes about the Office of Price Control, the War Production Board, and the whole pattern of controls which at that time directed American business.

Now at the same time, the last 20 years I have engaged in a very active law practice. I have been the head of a rather substantial law firm in New York City, and in the last 7 or 8 years I have been a partner in another firm here in Washington; and in the course of that practice I represented a great many corporations in their efforts to obtain capital, in their finding access to the capital market, registering their securities.

And while I have not been in securities work and I have not been on Wall Street and have not represented, with one exception, brokerage houses or other firms in the securities business, I have had a great deal of dealings with the securities mechanism and the governmental regulations of the securities mechanism representing companies which went there to seek capital.

So I think I have a pretty good feel of the structure and the problems and the controls, the whole process of disclosures designed to maintain investors' confidence.

I have a deep conviction it is of vital importance to the vitality and economic health of the Nation, and it is very important to the competitive posture of the American economy in the world.

I approach the job without any preconceptions. I think perhaps one advantage I have is that I come here with an open mind to the job and look forward to working with the committees of Congress and the staff of the SEC and the other commissioners to evolve the kind of policies that are right and necessary at this time.

Perhaps another qualification I have is that I don't want to be reappointed to this job and I don't want a job in the securities industry. Senator PROXMIRE. Well, those are very useful qualifications in view of our experience on this committee with your agency. You have made quite a sacrifice to take this job. You have given up a very substantial income, greatly in excess of what you will receive as Chairman of the SEC. As I understand, you have an income of $250,000 a year. You have given up, as I understand the chairman saying-I would like you to say it, if it is the case-that you expect to put your holdings in a blind trust. Is this correct?

Mr. CASEY. I expect to put my holdings under the management of an investment advisory firm in New York which will have full discretion with respect to investments.

Senator PROXMIRE. You will have no control?

Mr. CASEY. No control.

Senator PROXMIRE. You will have no ownership of any securities that would be under your jurisdiction as Chairman of the SEC?

Mr. CASEY. That is correct.

Senator PROXMIRE. Would you have knowledge of what this agency would do with your funds?

Mr. CASEY. Well, I suppose I would get reports, yes. I supoose I will get reports as to what they have done on a quarterly basis, which has been the practice.

I have been informed by the Commission that that was common and that was entirely within the rules of the Commission.

Senator PROXMIRE. I want to ask because I think everything I see on the record and I don't mean when I ask this question to indicate any partisanship or criticism, I just want to be sure whether this is the fact or not-did you contribute $17,000 to the presidential campaign of President Nixon in 1968?

Mr. CASEY. Oh, I think that I couldn't tell you exactly what I contributed. The New York Times said my wife and I contributed $17,000. Might have been a little more.

Senator PROXMIRE. Well, I have run myself and have had people contribute to my campaign and I was very grateful to them for doing it. I think Mr. Unruh, a fine Democrat, is right in saying "money is the mother's milk of politics."

Mr. CASEY. Sir, I believe very deeply in the democratic process, and I believe everybody who can should contribute and participate in whatever way they can, and we all know it is impossible in this country to run for political office without money and I've always been prepared to contribute according to my means. And until the Congress legislates money for political candidates, I guess individuals have to keep on contributing.

Senator PROXMIRE. Would you agree that we should reform our campaign contributions legislation to try to limit the contributions? This would be in the interests of

Mr. CASEY. Well, that is a little outside of my present scope. I do feel uncomfortable with the role that money does play in election of public office, and I think that it is something that should be looked at very carefully. And whether it can be solved by limitations or by tax credits or Government contributions, I don't know.

Senator PROXMIRE. You recognize it as a serious problem? Mr. CASEY. Serious problem, and should be faced promptly. Senator PROXMIRE. And you feel it will take legislation to bring it under better control?

Mr. CASEY. I think it will take legislation.

Senator PROXMIRE. I don't want to spend my time on this, but in view of the fact that this is a conspicuous issue that people know about, I think it is a good idea to have you say something on it. Mr. CASEY. I appreciate that very much.

Senator PROXMIRE. Now I would like to say this: Dean Landismy time is up. I will come back.

The CHAIRMAN. Senator Tower.

Senator TOWER. Mr. Chairman, I don't have any questions. I would simply like to comment to the effect that I think we in Government and the public generally are fortunate that a man of such substance would make a considerable sacrifice to serve as a public servant. This is a very difficult job. I believe Mr. Casey brings to this job a wealth of experience and knowledge. I think he will serve well.

I think we are fortunate that a man of his class would agree to take on a tough and difficult job at a great financial sacrifice to himself. I think he epitomizes all that is best in a public servant. I will be delighted to support Mr. Casey's confirmation.

The CHAIRMAN. Senator Bennett.

Senator BENNETT. Mr. Chairman, I had the privilege of discussing the position in Mr. Casey's problems as well as his qualifications privately, and I am completely satisfied that he can do the job. I think he has the intellectual capacity as well as the general background. I hope we have not reached the point in this country where a man's participation in business is held to be a handicap and where positions as responsible as this should be closed to people who have been active both in business and the law and in politics. I think we are fortunate that a man with Mr. Casey's background has agreed to give us so much, effectively bring his life's career to a close and spend time serving the Government.

No question has ever been raised about his essential integrity, and I think that perhaps it's the chief ingredient with which we should be concerned.

So I am very happy that he has accepted the position and I will be very happy to vote for his nomination.

The CHAIRMAN. Thank you, Senator Bennett.

Senator Gambrell.

Senator GAMBRELL. Thank you.

Mr. Chairman, I would like to comment that Mr. Casey appears to come with good credentials and a good background, a hard-working person, and I look forward to working with him. I was assigned just yesterday to the securities subcommittee, and I expect that I will be seeing him in that capacity and look forward to having the benefit of working with him.

Senator Brock and I yesterday pursued a line of questioning with Mr. Kleppe that I would like to pursue with Mr. Casey, and that is the possibility of the Chairman of this Agency taking the role of organizer or advocate within the industry which he is regulating, to encourage some creative activity on the part of people in the securities industry to develop new thinking and new ways in which to improve access to the capital market, I believe is the term which was used.

My own experience is that we have a dynamic situation with regard to financing smaller businesses. Every year there are new problems and new ways of thinking in this area. I would like to know if you feel that it would be possible in this capacity as Chairman of the SEC to encourage the industry to do some creative work, to not simply be satisfied with the existing ways and means, but possibly to encourage some of their own commitments within the industry to attempt. to make capital more readily available to smaller businesses. Could you comment on that?

Mr. CASEY. yes, Senator; I think I indicated to Senator Sparkman that I would hope that a great deal can be done to expedite and clarify the rules and procedures through which small companies have to pass in order to have access to the public capital market.

Now I fully recognize there is some kind of conflict between the task of getting full disclosure and the goal of simply simplifying access to capital markets. But I think as time has gone on, that the tech