Idaho Springs siftings., 1904-03-12
Safeguarding the Investor.

mere nave Dtth SAkh~@sfoA~ -
the matter of afTording state protection
to investors. The fling of reports of
companies at stated intervals Is the fav-
orite plan for reaching this end. How
ever, there are many loop holes in this
system left for the INSCRIPTIONS. and al
though the matter has been agitated
frequently, but few states have such
law on their statute books.
The Record believes that the investing
public can be best safeguarded by educat-
ing it 10 the end of basing an intelligent
Judgment regarding propositions pre-
sented. The Record is always willing,
nevertheless, to lend its aid in furthering
any measure whereby protection can be
given investors. II it were possible to
legisla,e against the public making fool
of itself in the matter of investments, the
Record would be found urging such legis-
la,ion with all possible vigor.
Fred Shaffer of Idaho Springs, Colo
hmslf mining promoter. has presented
the suggestion accompanying this article.
IL is a good one and we'll worth consider
alton. 1t is designed for safeguarding
the public and explains itself. The ques-
ton which naturally arises is: is the
scheme practicable2
Stockholders in mining companies
have the statutory right to rake an ex-
animation of the books of their COM
panies. These companies receive their
charters from the state. Why, then.
should not state official-an inspector
carry out this work for stockholders
living at a distance and who could not
except at a great expense do 1t them
selves? The system is practicable. 1t
can be carried out a. no expense to the
state. fee charged companies for ex-
l smination. the same as in the case of
boiler examinations, would more than
cover the expense. A sufficient number
of inspectors could be appointed to in
sure visit by them at least once year
to every company operating under state
charter. The time of the visit should be
kept secret as in the case of bank ex-
aminations.
/ The inspector would without warning
drop into the named Office of the COM
pany and demand to see the books. He
would note the result of his findings.
He would, if the company reported cash
on hand ask to be shown" He would
examine everything-the company's cash
books, ledgers and stock books The
system might be carried further by an
examination being made of titles to COM
panies' property. and further still by an
inspection of properties in the various
camps. While it is not to be expected
that an expert examination Of properties
be made, a personal visit would result in
the furnishing of statements which would
prove of incalculable value to intelligent
investors. For instance. many would be
greatly interested to learn that proper
til were situated so far from the nearest
shipper and tina, they were miles from a
railroad with no immediate possibility OF
a road being built
1t does not always require an elaborate
examination and an elaborate report for
a man with reasonable amount Of ex-
perieuce and knowledge of mining to
brand fake.
The fee charged could be made large
enough to cover the cost Of publishing
reports in book or pamphlet form. Pub
lished at frequent intervals, these reports
would find ready sale and bring in quite
a revenue in addition to the fees charged.
Nor would these reports have to be very
elaborate or lengthy.
It mus, be borne in mind that the ma
jority Of companies are in every sense
public concerns. They are created by
the public through the various state gov
ernments. They 60 before the public for
sale Of their stock and public represents
tions are made regarding them. The
public should be safeguarded to the ex-
tent of having these ssatements officially