Daily capital journal. (Salem, Oregon) 1903-1919, 1914-12-08
AMENDED BLUE SKY
LAW IS PREPARED
Commissioner Drafts New
Law to Correct Weak Points
in the Old One

"First to make it crime TO do anY
overt act in furtherance of any scheme
or device to defraud, or to make any
untrue representation to enhance the
value of securities. or to conceal any
adverse fact; in other words, to require
that the truth, the whole truth, AMI
nothing but the truth be told about
security.
"Second, TO require that all matori.
ol facts in reference to any given prop
osition be filed, under oath, with the
corporation department, and, when 70
filed, become the basis of all represen.
tations in the sale of securities.
"Third, to eliminate unnecessary rec!
tape, to take the ordinary commercial
and industrial corporation, engaged in
| legitimate business, out from under tho
operation of the Blue Sky law; tt
| make the law clear simple. wholly
workable and at the same time effec.
tive. y
These are th> ,,iree fundamental
principles which form the basis Of an
entirely new Blue Sky law for the
state of Oregon, to amend or replace
the act that has been in force since
June B. 1913, and to correct the dc
f"cts and strengthen some of the weak
points that have been discovered in the
old law through the enforcement of its
provisions. Corporation Commissioner
Watson, the author of the new or
amendatory net is to have drafts O:
it printed and win mail copies to every
member of the legislature, together
with explanatory notes of every see.
tion of the bill 80 that every member
viii be prepared to oct upon it intelli
gently when it comes before them fo.
consideration.
"The Oregon Blue Sky law" SAYS
Mr. Watson, in discussing the subject.
mas been a sdccess even beyond th3
hope of those who were sponsors for #
and those who have had to do with its
enforcement. Experience has shown.
however, that the statute is defective
in some things; that it is cumbersome
IN operation; is, in some parts. ambip.
uous and uncertain, and that, as draft.
ed, il places unnecessary burden ppon
the strictly legitimate corporate bust
ness.
Kansas enacted the first known
Blue Sky law in 1911. Since that time
some 10 states have enacted similnr
laws These laws have been ATTACKED
rs unconstitutional in several states.
and. in several eases, have been so dc
clarcd by the lower counts. The lead.
ing cases, so far, are those hodirD
against the laws Of Michigan and Iowa.
The Michigan decision by the United
states supreme court, being especially
sweeping aud unfavorablc to the Kan.
sas type Of law.
"ln drofting the amendments the
central idea has been kept in mind that
the iutcnt Of Blue Sky legislation rs to
eliminate fraud and deception in the
sale of securities, to secure honest deal
ing in the same, and not to make the
state the supervisor or regulator Of
. business or speculative risk, or the
gramntor of investment II is believ.
, cd that the amendments if enacted
will give q clear simple, workable and
effective law and Of mdoubtcd con.
stitutionality"
Some of the Salient Features
Briefly stated, the principal features
Of the nmendutOry bill are.
II rcquires that every person or cor.
poration, dealing in securities directly
covered by the llwnmust filc state.
ment giving all material facts in con
ueetion with the proposition under pro
motion.
It does AWAY with the cumbcrsom
and ambiguous Investment company
definition, cuts the legitimate indua.
trial or commercial corporation ont OF
the grasp Of the law, and gets in di.
rect harmony with the real intent Of
the law by making the character Of th,
securities the standard Of measurement,