Milton Victor Freeman (1911-2000) was born in New York City, the
child of two Jewish immigrants from Russia. His father was a carpenter, until the Great Depression, when he lost his job, and his mother was “Chief Executive Officer of the house.” A precocious child, Freeman graduated from the City College of New York at the age of nineteen and from the Columbia University Law School three years later in 1934. He was an editor of the law review and, while a student, wrote a note on the Securities Act of 1933 that caught the eye of James Landis, the member of the Federal Trade Commission charged with implementing that statute. Landis offered Freeman a job straight out of law school and Freeman accepted. It was an easy decision because his only other interview was with one of New York’s “Jewish” law firms, and its partners dropped him once they learned he was considering the FTC job.Freeman claimed to have been “a convinced New Dealer” before he left for Washington, but after a few weeks of dull work at the FTC, he was ready to leave. He stayed only because he was assured that he would have more interesting work in the General Counsel’s office of the newly created Securities and Exchange Commission. Freeman would work at the SEC from 1934 to 1946. In his last position at the commission, he made $8,100 or about $86,000 today. He claimed not to have been discriminated against, but he did recall that his superiors once felt obliged to refer to a new hire as “I.S. Weissbrodt” rather than “Israel Saul Weissbrodt,” so as to minimize the chances of drawing fire from congressional overseers.
Looking back from the 1970s, Freeman thought that the legal staff worked easily with Wall Street lawyers, thanks to the SEC’s “constant policy . . . of consultation with industry and with the bar.” “None of us resented the people on Wall Street,” he claimed. “We listened to their arguments.” The SEC lawyers realized that they could never acquire “the experience in [the] day-to-day operation of industry and of the financial community that members of those communities” had. To regulate effectively, they needed to “harness that vast reservoir of knowledge”; consulting the financiers’ lawyers was the best way to do this. Only when private practitioners tried to undermine the securities laws did matters grow heated and Freeman get “called all kinds of names.”
On at least one occasion, congressmen did the name-calling. In 1942 Freeman oversaw the drafting of the SEC’s new “proxy rules,” which, among other things, required companies to disclose the name of any officer or director earning more than $20,000 ($254,000 in today’s money). A hostile committee of the House of Representatives called him to task in 1943. After grilling Freeman about his reported statement that “We [that is, the SEC’s members and staff] do make the law,” the congressmen moved on to other matters. One noted that Freeman had belonged to the Washington Committee for Democratic Action (which defended the civil liberties of government employees), the American League against War and Fascism, and the Washington Book Shop Association and that Congressman Martin Dies had named him a Communist. Freeman acknowledged that he had joined those groups and denied ever having been a Communist. He was then questioned about his draft status and speeches against the FBI’s surveillance of allegedly disloyal government employees.
In 1946 Freeman joined the firm later known as Arnold & Porter, where he would remain for the rest of his career. In his first year, he unsuccessfully represented a friend who had been fired from a government job because of “a reasonable doubt as to his loyalty.” When Truman established his loyalty-security program the following year Freeman told himself, “We just got out of the government in time.” As he later recalled, “All of our friends, and the friends of our friends, were being called” before loyalty review boards.
Freeman’s other cases at Arnold & Porter involved food-and-drug law, antitrust, taxation and of course securities regulation. “The prime responsibility of the private counsel” in an SEC case, he explained, “is to be as thoroughly familiar as conditions permit with the facts and business conditions” of the client’s transaction. Then the lawyer should consider whether “the underlying policy and statutory language fairly prohibit the transaction or can be said to allow it.” That, of course, was no easy task. Even “the most experienced and competent attorney . . . in one of the smaller industrial cities” might never learn of a shift in the informal views of the staff. Washington lawyers, in contrast, followed such subtleties closely and effectively represented their clients in conferences with the commission’s staff.
Image credit (and an oral history)
