The Wheeling intelligencer. [volume] (Wheeling, W. Va.) 1903-1961, 1914-08-25
DARST'S ANSWER To SUIT IS
DEFENSE OF THE BLUE SKY LAW

uarsl through his attorneys. has Ale,
IN me United States District Cour
rs answer 10 the petition OF IN,
movie Mining Company. an Ariron,
concern. which seeks through the led
tial courts 20 have the West VirrIni,
biue SKY Law declared uuconstitutiou
smith II Bracey. president O, ~,
arizona Gold Mining company. ar
.,s,eu lev weeks ago In Ohio coun
y Ior attempting 20 dispose OF IN.
7'oeh OF the concern without Eecurin.
incense under the Slemaker act 80
cured a temporary Injunction befor,
FEDERAL Judge A. q. Dayton. restrain
ing Auditor Darst. Attorney Genera
A A Lilly and Prosecuting Attorne,
X NJ Addleman. OF Wheeling. from
prosecuting him under the provision,
OF the Blue Sky statute
hrhcey charged that the Blue Sk,
law. with which he had made no enort
10 comply. was In contravention nj
the State and Federal Constitution
aFerring that II was a violation a. ~.
lttFstate commerce clause OF the or
bahlc law OF the nation. that IL de
pfiVed him OF his property without
que process Of law and that II vested
IN the state Auditor judicial as vel
as executive powers IN violation ol
the state constitution.
In his answer 10 the I'M ~ rom.
PLANT hled by Bracey. Auditor par,
declares that ~ for any cause tba
law IL rendered imperative II wouId
% n great calamity % our state 20 "a.
recites that while the Blua 81 la,
does not guarantee the inveetnent
u gives the Investor an opportunity
10 know the essential facts and pro.
lects him from the gross misrepresen.
tations OF conscienceless promoters. d
ana contends that the administration
OF The law has saved the investors N
west Virginia great amount Of
money and thus conserved il 10 the
channels Of legitimate Investment and
development
Eight Different Bills.
The state Auditor recites that Blua
SKY legislation f. popular In Wes,
virginia and recalls that not less
than eight members had such a hin
20 offer at the last session Of the 90.
islateure and that the legislation has
been Endorsed BY the National cor.
Venuon OF Insurance Commissioners
me National Association OF Conserya.
lions Commissioners. numerous Rank
ers' Associations and boards OF trade
IN ms EFFORT 90 preserve the validity
or the Blue Sky act. the Auditor a.
clares that In the enforcement % tho
law that he has endeavored 20 reduce
the labor and expense OF complying
WIN the law % minimum. 10 limit
inc promotion expense to q reason.
able amount. 10 make the promoter
oroht depend as far az possible upon
he success Of the company. and 10
place before the purchaser the mos,
vital information IN regard 10 tbe
The Auditor AYERS IN his answer
mat he has ruled that 10 per cent 81
~" par value Is the maximum allow.
ance Tor the sale o. stock under the
Increment of the Blue Sky Law and
mat the limitation Of commissions
.or the sale ~ capital stock has saved
thousands % dollars 20 investors not
only directly. but because such n lin.
.tation tends 20 establish the good
.aitn or promotion and eliminates
me large number o. companies organ.
.zed principally for tho benefit % the
promoters
Tie states further that Do has Az.
tempted 90 prevent those holding PRO.
motion stock in a patent rirhfs" or "a
imIlar company from disposfna az
.amo under tho ruise % financing tho
Company. that be- has required com.
pan.es issuing bonds on tho rarrr.f,
NJ "a leaFshoid which may o. forfeited
'or "a number 0f reasons 90 give the
purchaser notice Of the nature Of the
state bF which the bond issue De- &C.
lrcd. tr1t Do har required Gonna
pies to place on The stock suberrfrfI1r
blank Che amount Of stock or cash 81.
pended Tor frfarE.tL assets. or ar.
..s OF speculative value and re-
CURED Che company to rs~0lnIre cub.
.'ripfIors only vheu The approved
Inscription blank Del signed by tha
ltsrrIhrr
Source % Protection.
Since tho uI1e Shy fas. bara--. an.
'ra''Nr .r West Virginia In 1919. Aud.
'nr IarFt cave ffat COO romuarIrr had
liHra tor Investment company U.
.n.rs. rrrresenUnr stock Boo the
mount 90 sf1ff1l1f. and bonds ir
DO amount 40 ta0-r-rl O. this mum.
Der % were refused licenses. -ep-r.
.frt.r- stock of $500 rss. and bonds
'I f-.-i..". Hr says further thar a
frE. number no foreign companies did
boz mako formal application after aa.
.rf1'r.ru frr requirement.. that a
arse number 90 those licensed were
'si.r'd .n alter their plans In the Ir.
.'. % i..rrrss f1 fFn investor. and
bet before fhe law became erartfvs
1' ..'r.e 0' West Wire. ~ suffered
IeafF financial losses hv reason Of
formations which would have been
'r'Fen'ef under the operation % this
7v
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