Burlington weekly free press. [volume] (Burlington, Vt.) 1866-1928, 1912-11-14
KANSAS MEASURE POPULAR
Representative Flynn Introduces "Dlue
sky LAW" Bill Like That Of
senator HenPy's.

Montpelier Nov. l2.-There seems to
be alreaG! considerable sentiment
here In favor of law to keep out fake
investment companies or. as they call It
In Kansas. where rhis thing is almost
an old story. a "blue sky law" bill
Of this kind was mentioned the other
day az in process of preparation by
Senator Henry. A second very similar
measure has been introduced in the
House by Representative ]. c. Flynn Of
Dorset and is at present IN the custody
OF the committee on banks. Either there
has been long-fclt need of such a
measure, or these bills have been Pc
ouliary fortunate in catching the inter-
est OF members or else a little bit Of
both is true. Certain 1t is that the talk
heard in the corridors and Hobbies Is de.
cidedly in favor OF some measure along
the general lines OF these bills
When interviewed about his bill by a
representative of the Free Press Mr.
Flynn exhibited a thick packet Of type
written correspondence and printed mat
ter. all by people who knew about this
kind of law from experience with tho
blue sky law in Kansas and all en-
Enthusiastically recommending the law
The gist of the arguments put forward
in favor of the bill Is that it prevents
a species of robbery more brazen than
almost any other and does this by the
more approved method Of locking the
barn door before the horse is stolen.
BY preventing this blue sky" invest
ment robbery. money is not only saved
to class OF possessors who need It,
but is kept in legitimate and productive
channels and made to build up the COM
munity.
1t Is the opinion of j. y. Dolley. the
Kansas bank commissioner. that UP to
the time OF passing this law from three
to four million dollars year was being
taken out OF that State by companies
organized for the express purpose OF
swindling and offering not the slightest
chance of n return. 1t Is estimated by
Postmaster-General Hitchcock that from
three to four billions are every year con-
sumed by these companies in the whole
United States. The far-reachinP effect OF
this drain upon the community exchequer
becomes evident from the fact that It is
estimated that rs per cent. OF this money
Is either borrowed from the banks or
drawn out OF them to invest in the spu-
rious stocks. And the pathetic side Of II
Is that the victims most Systematically
sought out and preyed upon by the ven
ders OF these insecurties are the beneti-
Charles OF insurance policies. particularly
widows with no business experience.
Kansas first attempted to solve this
LOCUS investment problem by establishing
a State bureau of advice as to companies
att, ,,-t< ha Stnta "a, q
found Inadequate 1t turned out that
the cautious persons who could take
care of themselves asked and received
the advice but the inexperienced were
still Unidentified. Then Kansas decided to
keep the bad companies entirely out Of
the State. and passed the "blue sky law.
which requires any company of this kind
tefore operating within the State to open
Its books to the bank commissioner and
give bonds and submit to Investigation.
The law also provides for investigation
of any changes which may be made and
requires that the company shall no,
operate within the STATE until It shall
have received a permit. The law even
involves an Investigation of the agent:
who are to sell the Investments. And the
company not only has tn submit to
scrutiny but has to pay the cost OF H.
out Of l5oO applicants In Kansas, less
than 100 could stand the Investigation
There was an electric battery compan,
that claimed great things for Its tnven
ton. and showed letters from officials OF
a Kansas street railway who had wit
messed alleged demonstrations and de
clared the battery the invention Of the
age A battery was sent tn the State
university for examination and wal