The Topeka state journal. [volume] (Topeka, Kansas) 1892-1980, 1914-10-22
BANK COMMISSIONER REPLIES
Carl Peterson Says Company
Has Been Irregular.
Ousted From Other States and
Its President Arrested.


members of the state charter board.
from interfering with the operations of
agents of the company in Kansas The
petition was filed in the United States
district court Wednesday, John Dawson,
attorney general: Charles Sessions. Sec
Rotary Of state. and Charles M. Sawyer.
state bank commissioner. being named
DEFENDANTS as members of the charter
board The application for the injunc-
tlon attacks the cOnStitutionality of the
Blue Sky law and must be heard by
three federal judges sitting together.
Ihls action follows the interference of
the state banking department. with
agents of the Canadian concern who
were selling their so-called home
building contracts to Kansas investors
about two months ago. No authorize
ton having been given them by the
banking department they were notified
TO stop work Carl J. Peterson, special
assistant bank commissioner, who has
personal charge of the administration
OF the Blue Sky law. discussed the suit
IN the federal court today in the alb
sence OF Commissioner Charles M. Saw
YER who is in Washington
Prohibited in Other States.
MI Peterson declared that the nature
OF the contract offered by the National
Mercant1le company made it of uncer-
tam advantage to any but the officers
OF the company and that the history of
this concern has been exceedingly I'M
satisfactory in other states. The COM
panyshas, he says, been prohibited from
doing business in Oregon and Wash
lnston and that the president has been
crlmlnaily prosecuted and convicted at
ieast twice for conducting schemes SIM
lar to or identical with the present.
describing the history of the company
day:
The National Mercantile companv
sent agents into Kansas and COM
menced doing business without submit
tlhs tnelr proposition to the state char
ter board. 1t never has filed the APP
pIlcation Tor permit required of all
companies operating under the blue skv
law. The state banking department. on
learning that the company was selling
contracts here simply ordered its
agents to quit business. After that the
company's attorney appeared before
me state cnarter board and undertook
10 argue the constitutionality of the
blue sky law but did not then applv for
permission to do business An inspec-
tlon OF the company's contract and lit
creature seemed TO preclude the nossi-
pfl1ty of the authorize ton of a hermit
anyway.
Features OF Contract.
was oOllc Sixty Gays ago. We
did not believe the contract was fair
IL provides that after a certain number
or payments have been made the owner
OF the contract becomes eligible to re-
ceive a loan- But the contract owner
mas no assurance when he is to re-
ceive- it. The company offers three
per cent loan. ~9As
The president of this comnanv
George Stillings, organized and oner-
ated, some ten years ago, what was
known as the Tontine Mercantile com
pahy OF Kansas City, Mo. At that time
investors lost Later he organized the
referred Mercantile company, also
selling contracts, by which. from the
best Information. obtainable, he took
In about 100000 and paid out about
100000 The result of the operation
OF the preferred Mercantile company
was Jail sentence in Boston. Mass.
Tor President Stillings, who now is
company.
Controlled by stillings.
He later organized the National
Mercantile company in Vancouver, B.
Z. The company was started for SELL
ing diamond contract In 1912 it
was changed to a loan contract From
, learn that the National Mercantile
company is $4,000 corporation and
; that Mr. Stillings owns control of the
company The National Mercantile
company has been ousted from doing
business in Oregon. the president, Mr..
Stillings and several of his agents
have been arrested in Washington.
fined and imprisoned for selling these
contracts in that state. Their appeals
are now pending in higher courts.
We have been unable to find any
provision safeguarding the interests
OF the contract owner. He pays the
expenses of running the business with
out having anything to say what the
expenses shall be-. Judging from
Stillings' history in the conduct of this
and similar companies which he has
organized. the state bank department
is convinced that his proposition is
not OF character desirable to be Of
fered to investors whose interest the
department is created to safeguard -