Daily capital journal. (Salem, Oregon) 1903-1919, 1914-01-27
WATSON EXPLAINS How
BLUE SKY LAW WORKS
Declares oregon Is Now Practically
Free From wildcatters and I'm
principled Fakirs.
PURPOSE OF Law is TO
SEE INVESTOR PROTECTED
Means No Corporation Can Be Formed
In Future With No More Assets
Than Fountain Pen.

Declaring that Oregon is today prac-
tically free from "wild CATERS" un-
prineipled promoters, dishonest brokers
and fakirs, Ralph Watson, state com
missioner of corporations, explained
how this condition has been brought
about through his rigid enforcement of
Oregon's famous "Blue Sky Law" I"
Commissioner Watson's explanation of
the workings of this peace of legislature
should hold deep interest for every
man who has funds, large or small, to
invest. The article, written for the
United Press follows:
"The Blue Sky law is an instrument
of protection to the investors of the
state It is barrier placed across
the path of fraud and deceit. 1t is a
token of honest dealing between man
and man; a promise of fair play, an ex-
ponent of the square and the honest
deal. 1t is because of the unprincipled
greed of man, careless Of the misfortune
of Others in his mindfulness of his own
content; it is because of dishonesty
and Misrepresentation and untruth; it
is because too many men, intrusted with
the money and the hopes of others, have
proven untrue to their trust because
the voice of self profit has been loud
er than the voice of conscience, that
the law is necessary. The result of the
Blue Sky law will be that the unprin-
cipled promoter, the dishonest broker,
the falsir, the fraud and curbslone deal.
er in wildcat securities will find Oregon
less of vale of hope fulfilled and more
of garden of Gethsemene.
Child OF Legislature.
ga corporation is a child of the leg
islature, born of its statutes and obe
dent to them. 1t has no power that
the statutes do not grant, The corpor
alton is simply the creature of the law
by and through which many men cal
act as a single man to develop some
thing, to produce something of value tt
the stockholders and to the advantag,
of the public generally. The Blue SIX,
law reaches behind the company to- tn
promoter, and beyond the promoter t.
the stock salesman and the stock brob
er, demanding of them honesty of in
tention, and integrity Of action. 1t
! not the purpose, and it will not be tn
effect Of this law to hamper, circum
scribe or retard the progress or dc
velopment Of legitimate and honest col
porate activity in this state. The LAY
is the friend of the square corporation
Oregon wants and needs, the producin
corporation to come in, to develop he
resources, to market her products,
open her mines, to increase her worl
shops, her mills and factories.
"Suppose John Doe wants to buy
farm and has no money He know
where there are 100 acres Of good lar
worth 500 an acre. He wants to p'
it into crop and to carry it until !
produce will begin to pay him back fl
his wrok and worry. The land WI
cost him $4,000, the Improvements al
working capital 100000 more. Jol
Doe is entitled to borrow 100000
buy and equip his farm. He would n
be justified in borrowing $4,000
$4,000 or 100000 on the deal No oil
would be so optimistic as to hope
find any man, or set Of men, who wou
loan 100000 on a proposition, certain
not 100000. fail to see then, that
John Doe can not expect to borro
100000 on a $4,000 gamble, why q
promoter Of a corporation expects
borrow Of band Of stockholders ty
OF three times the value Of the bas
proposition he has to offer those wi
invest in his securities. No corporate
has the right to drown its stockholde
with saturated solution Of stock cC
tificates.
J Honest Speculation.
"But what about the speculative