Tonopah bonanza. [volume] (Butler City [i.e. Butler], Nev.) 1901-1909, 1904-09-10
TONOPAH BONANZA.
A CASE IN POINT.
A Prospectus Must be a Com
nlete Inventory of Facts.

vi ~ l. iDo BNSN@Dt
ing Record has lately dwelt upon the
great Importance of keeping free OF
suspicion the printed instrument
whereby investment propositions are
best placed before the public. Con-
siderable discussion along this very
line has been started in New York
CITY by a damage suit filed by Gov
ernor Odell against certain promot-
ers of the United States shipbuilding
his ground Of complaint
being that he was deceived by the
prospectus of the so called trust.
MISREPRESENTATION aud fraud are
charged, but not all the comment
that has been made upon the matter
has dealt with the governor as so
badly abused as it might appear. 1t
is minated that he went into the
venture with full knowledge Of the
"game," but that he was "nipped
in spite of his shrewdness. However
this may be, the hearing of the case
nav prove of considerable Importance
in determining the responsibility OF
American directors for direct or i'm
piled misrepresentation in a company
prospectus. In England directors
who are cognizant of the omission of
an essential fact from a prospectus
are individually liable to a stock
holder who can prove that he pur-
chased shares upon the strength Of
this instrument. In America it may
be possible that the laws can reach
such a case, but there have been but
few test cases.
Here is what the Wall Street Jour
nal says:
'If no dependence can be placed
upon a prospectus issued by or in the
name of men standing high in the
community or in institutions Of credit
extending aid to a promotion, then
we surely stand upon quicksands.
A prospectus is an important
means of accomplishing an end. L
is a convenience to the promoter ii
setting forth facts to investors. |
is a convenience to the investor il
acquiring such information as h,
should have before investing. It wa
never intended to be a piece of adver
Using in the circus poster sense.
it is not a complete inventory of facts
it is OF little actual service to an il
telligent stock buyer.
We do not believe that many mir
ing company p~rospectuses contai
false statements. Thousands Of the
have passed through the hands
The Record editorial staff in tt
course of its experience, and we al
prepared to say that we do not b
lieve a deliberate lie can be nailed
one per cent of those we examin
Exaggeratlon may be practice
over-enthusiasm INDUCED in, or pc
haps deceit by implication rare
perpetrated, but these are chara
t~eristic Yankee traits, and a lit
thought on the partof the ntellige
investor will relieve him of any ri
he may run in handling a circus post
prospectus. Positive falsehoods a
a rarely.
The chief fault which may be fou
with the average prospectus |
rather in what it does not say tn
what it does. Concealment is
worst evil with which the inves'
has to contend, and it therefore
comes incumbent upon him, first,
find out what facts he ought to knC
and, second, to hold on to his NOR
until he has secured them. Fa
are one thing, and opinions are
other, but facts are the foundat
of opinions. Let facts precede ;
opinions follows.
There may be differences of opin
as to what a prospectus should
should not contain, and how it she
be prepared, but there is n pt
upon which all honest men will agl
namely, that the integrity of
prospectus must be maintained
violate. What it actually sets fe
as fact must be believed or it is va
less. differences are ALWAYS aeceL