attorneys were engaged only upon certain phases of complaints and upon interpretations and enforcements in connection with the Securities Act of 1933, due to the small force they were merely able to scratch the surface. This Division was able to call upon the Federal Trade Commission for experienced attorneys in the trial of such cases.

The broad scope of authority granted to the Securities and Exchange Commission under the Securities Exchange Act of 1934, and the great variety of activities to be investigated and regulated by this Commission, will require a very sizeable staff in the office of the general counsel.

Many involved and complicated trials will be held before the Commission and before examiners representing the Commission; also a great many cases will be prosecuted before the Federal courts. The work requires employees who, in addition to being attorneys eperienced in the conduct of the trial of cases, are intimately acquainted with the financial world, with the customs and practices of brokers, dealers, and investment houses, with the rules, regulations, and practices in connection with transactions on the exchanges, and with legal precedents established in the various States in connection with the above. The attorneys who represent this Commission will be opposed by the most skilled and highly paid advocates available.

In addition, the securities exchange act represents an extension of governmental powers, and accordingly there is little doubt but that the validity of the Commission's rules and regulations, as well as its interpretations, will be subject to judicial review. Then, too, the Commission is directed to draft rules and regulations in connection with the many matters which Congress has authorized the Commission to take jurisdiction over, if, in its discretion, conditions warrant.

The trend of correspondence received by this Commission since its establishment clearly indicates that the public have come to expect that this Commission will to a large extent supervise the sale of securities, to the end that fraud may be detected and fraudulent practices enjoined. This phase of the work will require that the Commission establish and maintain effective liaison with all enforcement agencies dealing with the fraudulent sale of securities in the States, including blue sky" commissions, Attorney Generals' Departments, officers of the district attorneys' offices, and with information agencies such as the better business bureaus and the chambers of commerce.

The above statements present a miniature picture of the scope of the activities of the Office of the General Counsel. As to the volume, it might be stated that during the past 12 months approximately 983 complaint cases have been received, of which number 602 were disposed of by office examination and correspondence; 194 were made the subject of field investigations and reports; and 188 are now in the process of investigation. In addition, the Commission has cooperated with the Department of Justice in the preparation for and aided in the trial of six injunction proceedings before Federal courts; and approximately 49 hearings were held by examiners in connection with stop-order proceedings.

OFFICE OF TECHNICAL ADVISER TO COMMISSION AND OFFICE OF ECONOMIC ADVISER TO COMMISSION

Owing to the broad scope of activities regulated by this Commission under the mandates of the Securities Exchange Act of 1934, and to the broad effect which actions taken by this Commission will have upon the investing public, brokers, dealers, issuers, and exchanges, the Commission has deemed it necessary to employ technical, financial, and economic advisers.

The employees assigned to the Office of the Technical Adviser and the Office of the Economic Adviser will be called upon to assemble industrial statistics: conduct studies of the markets for securities of different industries; assemble and maintain economic, market, and other statistics; examine and extract pertinent information from all general and financial publications; plan and develop indices relating to the capital market and stock exchanges; and cooperate with other divisions of the Commission in the conduct of special studies required under the Securities Act of 1933 and the Securities Exchange Act of 1934.

The functions of the Office of Technical Adviser and the Office of the Economic Adviser as presented above indicate the type, scope, and purpose of the work to be performed in these offices. The Commission is charged by law with the responsibility of supervising the security dealings on exchanges and in over-thecounter markets. Without the statistical analyses and economic studies contemplated in these offices, it would be impossible for the Commission to establish broad and general policies in connection with and determine the type and scope

of investigations to be made regarding the many security transactions subject to inspection and regulation by the Commission under the provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934.

STUDY OF PROTECTIVE AND REORGANIZATION COMMITTEES

Section 211 of the Securities Exchange Act of 1934 provides that "the Commission is authorized and directed to make a study and investigation of the work, activities, personnel, and functions of protective and reorganization committees in connection with the reorganization, readjustment, rehabilitation, liquidation, or consolidation of persons and properties and to report the result of its studies and investigations and its recommendations to the Congress on or before January 3, 1936."

The work to be performed by the division engaged in the study of protective and reorganization committees is compulsory under section 211 of the Securities Exchange Act of 1934. The above statement of the functions indicates the scope of the work to be performed by the personnel outlined. Since this study must be completed and the report prepared and submitted to Congress on or before January 3, 1936, it is believed that the estimate for personnel, as indicated above, is warranted.

OFFICE OF DIRECTOR OF EMPLOYMENT RESEARCH

The Director of this Division is charged with the responsibility of making the preliminary selection of personnel for the export groups within this Commission; for conducting the necessary investigations regarding prospective appointees to expert positions, both preliminary and subsequent to employment; for the supervision and direction of all plans for the formulation and functioning of his division involving the preparation of appointment notices, pay rolls, transfers, reinstatements, certifications, time and leave records, service records, retirement matters, promotions, demotions, efficiency ratings, separations, etc.; also for the conduct of work pertaining to the classification of positions, the preparation of justifications for the filling of positions, the examination of applications, the investigation of applicants proposed for employment and related personnel work. Since the Budget for the regular 1936 annual appropriation provides for a proposed personnel of 653 employees there is little doubt that the services of 8 employees as requested in the office of the director of employment research are absolutely essential. As indicated in the functions described above, these employees will be responsible for all personnel work of the Commission.

ADMINISTRATIVE DIVISION

The Administrative Division is divided into (1) office of the secretary, (2) docket, mail, and files section, (3) service section, (4) budget and accounting section, (5) stenographic section, and (6) library section.

The personnel in the office of the secretary under the supervision of the executive administrator is responsible for the supervision of all administrative activities of the Commission, the preparation and maintenance of the official minutes, the maintenance and custody of the official seal of the Commission, and related assignments not coming under the jurisdiction of any other division of the Commission.

The docket, mail, and files section is charged with the responsibility of indexing, recording, and filing of registration statements and amendments thereto; the docketing of cases for hearing, and the maintenance of records of final disposition of all cases; supervision over the public reference room; directing the duplication of copies of registration statements requested by the public and furnishing of information requested by the public and by other divisions of the Commission; the maintenance of the central files for the entire Commission and the receipt and distribution of mail.

The service section is responsible for all service activities of the Commission, including the procurement, storage, and issuance of supplies, material, and equipment for use by the Commission in Washington and its branch offices; for the maintenance of inventory and nonexpendable property accounts; for all duplicating work of the Commission; for supervision of the telephone unit; for the accomplishment of all printing work, including editorial work, laying out the copy for the printer, proofreading, etc.; for the perfecting of contracts for stenographic reporting services; for the selecting and leasing of space for field offices; and for supervision over the Commission's laborers and messengers.

The budget and accounting section is responsible for the collection of data in connection with and the preparation of the annual, deficiency, and supplemental estimates of appropriations, and of justifications for same, together with the supporting statements required by the Bureau of the Budget; the maintenance of all appropriation accounting records of the Commission; the audit of all vouchers covering appropriation expenditures to ascertain whether they are in accordance with the appropriation acts, administrative limitations, and Government fiscal regulations; the accounting for all fees filed with the Commission and the preparation of correspondence relative to the above.

The stenographic section is responsible for rendering reporting, stenographic, and typing services to all offices, divisions, and officials of the Commission.

The library section is responsible for the development and maintenance of the library collection, the selection and ordering of books and periodicals, the accessioning and cataloging of new books, the preparation of selected and annotated bibliographies, and the conduct of researches for specific data for use by members of the staff.

The Administrative Division is charged with the responsibility of carrying out a variety of functions, all of which are absolutely essential in order to assure the success, from an administrative standpoint, of the activities of the other divisions of the Commission. The number of employees to be assigned to this Division depends upon the number of employees assigned to and the amount of work performed in the technical and other divisions. As the staff and the work of the technical divisions increase, the staff of the Administrative Division must be increased.

In the office of the secretary to the Commission, the estimates provide appropriations for the payment of salaries to the secretary, a minute clerk, a secretary to the secretary, a stenographer, and a messenger. The need for these positions is so apparent that no further statements in justification are being presented. In the docket, mail, and file section, the estimates provide for 33 employees. When it is considered that one of the fundamental purposes of the Securities and Exchange Act is to make all information regarding the registration of securities and exchanges as well as all prospectuses, documents, accounting reports, and miscellaneous statements available to the public; that in order to accomplish this the maintenance of public reference room and a very extensive docket filing system is essential; that all such registration statements and accompanying documents must be recorded, distributed to technical divisions for action, action recorded, and files and records properly maintained; that in all cases docketed for examination and/or hearing all necessary papers must be assembled, including original and supplemental filings, correspondence, reports of investigations, etc.; and that correspondence must be conducted relating to all of the above, there is little doubt that a personnel of 33 people will be required to keep the work current.

A complex subject filing system will have to be maintained in the headquarters office and the files of the field offices set up and coordinated with those in the headquarters office. The many subjects involved in the work of the Commission as a result of the broad scope of authority granted under the Securities Exchange Act of 1934 will necessarily require a large number of employees to classify, index, brief, cross-reference, file, and search for information.

In the service section, the estimates provide for 45 employees. This section, as its name implies, is responsible for all service activities of the Commission. It is divided into a supply unit, a duplicating unit, a telephone unit, and a miscellaneous service unit.

The supply unit is responsible for the procurement, storage, and issuance of supplies and equipment for use by the Commission in Washington and its field offices.

The duplicating unit is responsible for all duplicating activities, including stencil cutting, stitching, mimeographing, operation of photostat and addressograph machines, multigraph, multilith, and similar activities. The legislation creating the Securities and Exchange Commission provides that copies of regi-tration statements, prospectuses, reports, and other material may be furnished to the public at such reasonable charges as the Commission may prescribe. This, along with the fact that the Commission will have to promulgate and issue rules and regulations, releases, forms, etc., in connection with the many activities placed under the jurisdiction of this Commission, requires that a large duplicating unit be maintained. It is believed, however, that the copying fees received from the general public for material duplicated will to a material extent pay for the salaries of the employees of this unit.

The telephone unit is responsible for the operation of the Commission's multiple telephone switchboard.

The miscellaneous service unit is responsible for the accomplishment of all printing work of the Commission, including editorial work, laying out of copy for the printer, selecting type, preparing copy to conform to standard style, proofreading, etc. It is also responsible for the maintaining of the mailing list, issuance of publications, forms, releases, rules and regulations, etc. Likewise, it is responsible for the supervision over the Commission's messengers and laborers, for the procurement and examination of bids, making of awards and perfecting of contracts for stenographic and reporting services, for the selecting and leasing of space for field offices, and for materials and supplies not purchasable under existing Government contracts.

In the stenographic section, the estimate provides for 38 employees. This section is responsible for rendering reporting, stenographic, and typing services to all offices, divisions, and officials of the Commission. Due to the fact that 520 employees are proposed for the departmental service, it does not seem unreasonable to request appropriations for the payment of a force of 38 stenographers and typists.

In the budget and accounting section the estimates provide for six employees. This section is responsible for the collection of data in connection with and the preparation of the annual, deficiency, and supplemental estimates of appropriations, together with supporting statements required by the Bureau of the Budget; the maintenance of appropriation accounting records; the audit of vouchers covering expenditures, and the accounting for all fees filed with the Commission. In the library section the estimates provide for five employees. The functions of this section are to develop and maintain the library collection; to select and order books and periodicals; to accession and catalog new books; to prepare bibliographies; and to conduct researches for specific data. The technical nature of the work of this Commission presupposes the necessity for a rather complete library, as well as the necessity for a considerable amount of research work.

Section 19 (b) of the Securities Act of 1933 and section 21 (b) of the Securities Exchange Act of 1934 both empower the Commission or any officer designated by it to administer oaths and affirmations, subpena witnesses, compel their attendance, take evidence, and require the production of any books, papers, correspondence, memoranda, or other records which the Commission deems relevant or material to the inquiry. Such attendance of witnesses and the production of any such records may be required from any place in the United States or any State at any designated place of hearing.

In view of this provision, and since the Commission is compelled to conduct investigations and hearings in order to assemble facts and evidence needed in the adjudication of cases to be acted upon by the Commission, the sum of $1,000 is requested for the payment of witness fees.

FIELD SERVICES

These offices will be

The Commission proposes to establish eight field offices. located in New York City, Boston, Chicago, Denver, San Francisco, Fort Worth, Atlanta, and Washington, D. C. Each office will be responsible for all enforce

ment, investigative, and regulatory activities of the Commission in each of the respective zones. The territory included in each zone may be generally indicated as follows:

Terriroty

New York, New Jersey, and Pennsylvania.
Massachusetts, Connecticut, Rhode Island,
Vermont, New Hampshire, and Maine.
Tennessee, North Carolina, South Carolina,
Georgia, Alabama, Mississippi, Florida, and,
Louisiana.

Minnesota, Wisconsin, Michigan, Iowa. Ili-
nois, Indiana, Ohio, Missouri (except Kansa
City), Kentucky, North Dakota, and South
Dakota.

Kansas, Oklahoma, Arkansas, and Texas.
Montana, Idaho, Wyoming, Utah, Colorado,
New Mexico, and Nebraska.

California, Washington, Oregon, Nevada, Ari-
zona, Alaska, Philippine Islands, and Hawaii.
Virginia, West Virginia, Maryland, Delaware,
and District of Columbia.

In zone 1 there are 4 exchange cities having 6 exchanges: Buffalo Stock Exchange, Buffalo, N. Y.; New York Curb Exchange, New York, N. Y.; New York Produce Exchange, New York, N. Y.; New York Stock Exchange, New York, N. Y.; Philadelphia Stock Exchange, Philadelphia, Pa.; and Pittsburgh Stock Exchange, Pittsburgh, Pa.

In zone 2 there is one exchange: Boston Stock Exchange, Boston, Mass. In zone 3 there is one exchange: New Orleans Stock Exchange, New Orleans, La.

In zone 4 there are 10 exchanges in 8 cities: Milwaukee Grain & Stock Exchange, Milwaukee, Wis.; Minneapolis-St. Paul Stock Exchange, Minneapolis, Minn.; Chicago Board of Trade, Chicago, Ill.; Chicago Curb Exchange, Chicago, Ill.; Chicago Stock Exchange, Chicago, Ill.; Cincinnati Stock Exchange, Cincinnati, Ohio; Cleveland Stock Exchange, Cleveland, Ohio; Detroit Stock Exchange, Detroit, Mich.; Louisville Stock Exchange, Louisville, Ky.; and St. Louis Stock Exchange, St. Louis, Mo.

In zone 5 there are no exchanges.

In zone 6 there are 3 exchanges in 3 cities: Denver Stock Exchange, Denver, Colo.; Colorado Springs Stock Exchange, Colorado Springs, Colo.; and Salt Lake Stock Exchange, Salt Lake City, Utah.

In zone 7 there are 13 exchanges in 7 cities: San Francisco_Curb Exchange, San Francisco, Calif.; San Francisco Stock Exchange, San Francisco, Calif., San Francisco Mining Exchange, San Francisco, Calif.; Seattle Mining Exchange. Seattle, Wash.; Seattle Stock Exchange, Seattle, Wash.; Standard Stock Exchange of Spokane, Spokane, Wash.; California Stock Exchange, Los Angeles, Calif.; Los Angeles Curb Exchange, Los Angeles, Calif.; Los Angeles Stock Exchange, Los Angeles, Calif.; Reno Stock Exchange, Reno, Nev.; Honolulu Stock Exchange, Honolulu, Territory of Hawaii; Manila Stock Exchange, Manila, Philippine Islands; and Philippine Stock Exchange, Manila, P. I.

In the Washington, D. C., territory there are 4 exchanges in 4 cities: Wheeling Stock Exchange, Wheeling, W. Va.; Richmond Stock Exchange, Richmond. Va.; Baltimore Stock Exchange, Baltimore, Md.; and Washington Stock Exchange, Washington, D. C.

Under the proposed plan of organization it is estimated that there will be approximately 133 employees assigned to these field offices. The number of employees to be assigned to each office has not been determined, but since by far the greater portion of the transactions will be conducted in New York City, that office will have assigned to it the most of the personnel.

SUPPLIES AND MATERIALS

It is estimated that $30,000 will be required for the purchase of supplies and materials during the fiscal year of 1936.

Approximately $15,000 of this amount will be required for supplies in conneetion with the duplicating activities of the Commission. Section 24 (b) of the Securities Exchange Act of 1934 provides that the Commission may make avail