But Wall Street conspicuously dissented. The investment economy’s opposition focused on two main points: Wall Street savants predicted that the Securities Act would slow economic recovery and thus prolong the depression; and they painted a dire portrait of a bureaucratic state gone mad, seeking ever-greater control and power. At first, it seemed that Wall Street would accept the new law, if warily. Even though “the underlying principle of Federal control of business is as repugnant as ever,” the New York Times wrote, “most industries and business executives are resignedly falling in with the purposes of the two-year experiment which Congress has been asked to authorize.” But this grudging toleration for regulation quickly gave way to resentment. A 14,000-word article in Fortune magazine in August 1933 (by lawyer Arthur H. Dean of the New York firm of Sullivan & Cromwell) warned that the act “contains many provisions not apparent on the first reading which will have a profound effect on the entire economic system of the country.” What’s more, Dean continued, the measure was “drastically deflationary” and “may seriously retard economic recovery.”

Franklin Roosevelt signing the New Deal Emergency Banking Act on March 9, 1933. Bettmann/Getty

By September 1933, the Wall Street Journal insisted that the “consensus” among bankers and executives was that the “hastily written” Securities Act “prevents the financing and refinancing of legitimate private enterprise.” The act could be amended in 1934, and at that point the country would face a moment of reckoning, forcing the depression-battered American public to “decide whether the private enterprise upon which our civilization has been built must make room for a bastard state capitalism.” Meanwhile, the Investment Bankers Association of America attacked the law as “a hindrance to national recovery,” and went on to explain that a “reservoir of money that can be translated into jobs for millions of people” was being blocked because of the Securities Act.

Richard Whitney, the president of the New York Stock Exchange, took it upon himself to campaign against a congressional measure that would have permitted the Federal Trade Commission to regulate the stock market. Whitney sent a letter to all members of the NYSE warning that the federal government sought powers so “extensive” that it might come to “dominate and actually control the management of each listed corporation.” Wall Street employees planned mass protests against the bill. One Republican congressman charged that the government was no longer run by the White House, but by a “little red house down in Georgetown” where “communistic” bills were formulated by the protégés of law professor Felix Frankfurter. When Congress finally established the Securities and Exchange Commission in the summer of 1934, appointing stock broker Joseph Kennedy its first head, much of the anxiety subsided; with one of their own now overseeing the nascent financial-regulatory state, many financiers relinquished their former diehard opposition and adapted to the new order of business on Wall Street. (Whitney, meanwhile, was convicted of embezzlement in 1938.)

Other New Deal measures met with similar opposition. Not only Republicans but conservative Democrats resisted emergency relief bills. Senator Thomas Gore of Oklahoma warned against spending for relief in 1933 with a distinctly dad-like bit of homespun wisdom of his own: “Credit is to a nation what chastity is to a woman. Without it, nothing counts.” When the Social Security Act was passed in 1935, the New York Times—while conceding that the legislation was of “great historic importance”—mused that the “measure is in some respects ill-considered.” First, the paper of record explained, it wasn’t yet clear that Social Security was constitutional: “If the Federal Government may compel the States to adopt unemployment insurance under the guise of a tax, why may it not similarly compel them to adopt any other sort of legislation?” The editorialists at the Times also objected to the high tax burden entailed in the creation of Social Security: “The problem of managing such a reserve fund, and its possible social and economic effects, have (sic) not yet received anything like adequate study.” Finally, the Times worried that the tax contributions of employers would ultimately be borne by workers and consumers. While praising the passage of the law, the editorial board urged “quiet, dispassionate study and mature amendment.” At the same time, Congress debated whether the program should be truly universal or whether people who had private pension plans should be allowed to keep them.