By Ross Kerber

June 10 (Reuters) - The opinions expressed in this column are those of the author, a correspondent for Reuters.

A century ago, U.S. President Calvin Coolidge, nicknamed "Silent Cal," was quite vocal about how more corporations at the time were using dual classes of stock that gave top executives greater control of companies even as they raised money in public markets.

His concerns have new relevance today. Wall Street's top regulator has kept radio-silent about SpaceX's pending IPO despite its dual-class share structure, giving CEO Elon Musk tight rein on the business. That feature and other corporate governance details disclosed by SpaceX raise big questions for shareholders, index providers, rival companies and taxpayers. These include:

* Is it okay that Musk will have Word-of-God control over a company whose market capitalization would be among the 10 largest in the U.S.?

* Is it okay that major stock indexes split on whether to add the company, with S&P's hesitance delaying billions of dollars of passive fund inflows?

* Is it okay that the Pentagon, NASA and various intelligence agencies are so dependent on SpaceX's services?

One way to resolve these questions would be to treat them as policy matters deserving guidance from regulators, which has some people looking to Washington. A body to take this up would be the U.S. Securities and Exchange Commission, the country's main market regulator, said Oregon State Treasurer Elizabeth Steiner.

Her office oversees retirement funds that will likely own SpaceX shares as it is added to major equity indexes. Of the SEC, Steiner told me in a telephone interview that "I think it's part of their mandate about leveling the playing field between publicly traded companies and their shareholders. Governance is an integral part of the balance."

SEC Chair Paul Atkins and other commissioners have yet to weigh in. A spokesperson for Atkins and the agency declined to comment. The other two commissioners, both Republicans, did not respond to questions.

There used to be Democrats on the commission before U.S. President Donald Trump stopped appointing them. One, Robert Jackson, in 2018 worried that dual-class shares could create "corporate royalty."

Under Atkins, the agency has tried to encourage more companies to go public by easing rules on share issuance and reporting.

"SILENT CAL" SPEAKS OUT

It all marks a break from 100 years ago when Coolidge, by any measure a "free market" Republican, got all worked up about dual-class shares.

I first noticed Coolidge's name in this context in an academic paper I quoted in last week's column. It turns out that "Silent Cal" had a lot to say including on the issue of dual-class shares.

In two press conferences in 1926 linked here and here, the 30th American president and onetime Massachusetts governor praised Harvard professor William Ripley and cited his warnings published in The Atlantic magazine about the need for more corporate regulations.

However, Coolidge struggled with what sort of legislation or action could best protect shareholders when it wasn't the government's job to spot bad investments. As Coolidge said at one point:

"I am very keenly alive to the fact that we have in this country now about 20,000,000 security holders who have made investments in the business concerns of the country, and I want to have everything done that can be done adequately to safeguard their interests."

Coolidge left office in 1929 before the stock market crash that prompted Franklin Roosevelt to create the SEC in 1934.

Before the agency could act, however, the New York Stock Exchange effectively stopped allowing dual-class shares under pressure from Ripley's work and the uproar over dual-class stock issued by carmaker Dodge Brothers that gave insiders control of the company with very few shares. You could call Dodge the Snap Inc of its day, after the social-media company famously issued stock with no voting rights in 2017.

The New York Stock Exchange formally banned dual-class companies in 1940 and then relaxed the rules in 1986 amid competition from Nasdaq.

PESKY SHAREHOLDERS

It's noteworthy that even critics of dual-class shares like Ripley didn't look to ban them outright. In a 2023 article titled The Social Costs (and Benefits) of Dual-Class Stock, Arizona State University Law Professor Gregory Shill notes upsides like how dual-class company executives have more freedom to pursue longer-term goals and to ignore uninformed, meddlesome investors.

But Shill also identifies risks arising from corporate founders with complete control. Some might waste company assets on pet projects like a personal museum. Others could create social risks by making political campaign contributions aimed at forestalling regulations or lobbying for government contracts.

Shill suggests reforms like making it easier for investors to bring shareholder proposals at dual-class firms or barring dual-class companies from government contracts if they engage in political spending.

"We have general social concerns over corporate influence on society and elections. Relatedly, we have large questions about the role of corporations in society. These two things converge when we’re talking about dual-class companies, which allow a single person to wield the full powers of a corporation even if they own only a minority stake," Shill told me via e-mail this week.

Last month the union-aligned SOC Investment Group asked the SEC to weigh in on accounting questions at SpaceX, and on June 4 the group warned other investors about SpaceX's dual-class share structure. SOC's Executive Director Tejal Patel told me they never heard back from the SEC.

"I think the agency would say they have weighed in on the IPO during the confidential review process. But our concerns is that the SEC appears to be prioritizing capital formation and 'Making IPOs Great Again' over providing investors with accurate and complete information," Patel said.

She added, "That’s a particularly concerning thing to do when SpaceX is likely to be part of many investors’ portfolios and retirement savings accounts because of its inclusion in common indexes like the Nasdaq 100 and Russell 1000."

Speaking of Coolidge and Trump, here are some more differences: 1. Unlike Coolidge, President Trump has been more critical of The Atlantic, at one point calling it a " Third Rate Magazine ". 2. The two presidents also differed on having dogs around, according to this video starting around 20:34 . On some weightier matters, however, Trump and Coolidge's policies look similar such as on immigration and tariffs .