The true Democrat. [volume] (Bayou Sara [La.]) 1892-1928, 1912-09-07
BLUE SKY LAW OF KANSAS.

(By j. N. DOoley, State Bank Com
( missioner of Kansas.)
We have in Kansas, as you proba-
bly, all know, what is known as the
kansas Blue Sky Law" law
which compels all companies and
! agents who desire to sell stocks,
| bonds or other securities in Kansas
to submit information to the bank
| ing department which will enable
the banking department to determine
whether or not their securities are
worthy of the confidence of the Kan
sas people.
At the time this law went into eff
feet there were between four and
| six millions of dollars annually being
taken from Kansas which was abso-
lutely lost to the investor as we'll as
to the state of Kansas. Postmaster
General Hitchcock, after careful in
vestigation, estimates that there is
$500, 100000 annually lost by the in
vesting public of the Unitd States.
Out of the 800 applications which
have been filed but about 70 have
been granted permission to do bust
ness in Kansas, and the greater ma
jOrity Of those granted have been
for Kansas industrial and home en-
terprises. The larger part of the
800 never get farther than making
the application.
The legitimate companies are rap
idly getting behind the law and com
plying with its provisions if they
have any. securities to offer the pub
lie. We do not attempt to say that a
company that secures a license from
this department is a firstjclass in
yestment and a sure thing, that is
not the intent and purpose Of the
law, but the permit is a notice to
the public that the company is at
least being handled honestly and up
on a business basis and has reason
able prospects of success, and, fur
Their, that if there is anything made
the stockholders will get it. With
one Of these permits it is no trouble
at all for a good, legitimate COM
pany to place it's stock and finance
itself in a very short time
1t has been said that the people
do not need a guardian to supervise
their investments, but l want to say
to you, and the most of you will
agree with me, that a large per cent
Of them do need a guardian, espec
tally in matters of this kind. On he
other. ha d, bankers are subject to
the very ,trictest of supervision. AL
most every state in the Union has
a banking department to regulate
and supervise the banks. Why should
the bank be regulated and super
ViSed any more so than the stock
selling company? History and Stats
tics show that losses through banks
are but drop in the bucket com
pared with the money which is lost
through investment in worthless
stocks and bonds.
The enemies of legislation of this
nature have criticised our law, and
say that it is not possible for bank
commissioner to judge all kinds of
companies and tell whether or not
they are a good investment. In Or
der to be a good banker one must be
good business man, and you will
generally find a good banker as bank
commissioner. I agree with the crit.
les that it is not possible for a bank
commissioner to judge them ALL and
in my case he does not try to. We
have the cooperation and assistance
in these matters of our various 9TH
er state institutions, our State Uni.
Versity, our Agricultural College, our
insurance department, etc. Whenever
We get an application from a compa-
ny we get what information we de.
Sire and then it is submitted to one
OF our various state institutions or
departments, who are experts in that
line, and we receive their advice and
opinion regarding the matter. For ex-
ample, a company recently came to
the department with a new electric |
battery, which they claimed was 60
Ing to revolutiOnize the electrical |
world. This matter was presented 10
us by a citizen Of the state of Okla
homa. He had endorsements from
number of prominent business men. |
he presented his battery to one of
our large railroads for tests, and they
ADVISED me that, while they had not |
gotten through with their tests as |
yet, it looked like a marvellous |
thing to them. We at once present
ed the matter to the electrical ey-