The Cordova daily times., 1917-01-22
(By Associated Press.)


 preme court today rendered a decis- ion upholding the blue sky laws of Ohio, South Dakota and Michigan, de signed to curb the sale of fraudulent securities. It held that the laws are not burden upon interstate com merce in the sale of bonds and stocks.
 Blue sky laws, enacted first in Kan sas in 1911 with the purpose of pro- tecting credulous investors against sales of worthless stocks and bonds, have been copied in some measure in more than half of the states of the union. Twenty-siX states are said to have laws embracing the fundamental principle of endeavOring by constitu tional methods to prevent sales of 'get rich quick or fly by night se- curities.
 Three cases brought before the su- preme court and argued together in October, 1916, concerned the consti- nationality of the blue sky laws of Ohio, South Dakota and Michigan. All had been held unconstitutional by low CT federal courts, and their enforce ment by state officials were enjoined while the officials appealed. The ori- ginal Ohio law of 1913 was amended February 6, 1914, by the state legis- lature to meet alleged defects of the South Dakota and Michigan laws. The South Dakota law of March 15, 1915, and the Michigan law of April 9, 1915, repeating the old 1913 act which had been held void. was substantially pat. termed after the model" blue sky law Association of Attorneys General fol lowing it's 1914 convention.
 Two principal points upon which the Ohio, South Dakota and Michigan acts were declared void and noen- forceable in the lower courts were:
 That they unduly burden interstate commerce, of which stocks, bonds and other securities were declared to be instrumentalities. and that the laws exceed the states police powers of To- cal supervision
 The states, however, cOntended that the laws prevent fraud only, and un- like the original Kansas type of blue sky legislation, do not attempt to pre- vent unwise investments Also they cortended that the laws do not re- strict or burden interstate commerce, applying only to sales within the states, and in preventing frauds upon preventive exercise of state police powers.
 Generally the laws provide for eX- aminationH Of securities, prospectus and other information by state se- curity commissions, or other officials; licensing of dealers, and penalties of $1 .OO0 fines and one years imprison- ment for violations. The Ohio law however, applies to sales within the state of securities on property outside of the state, the South Dakota and Michigan laws applying to both. Also the laws generally exempt certain se- curities, including those listed on the stock and other exchanges, of na- tional and state bank, trust and build ing and loan company securities; real estate transactions, including mort gages: secured commercial paper, in cluding promissory notes; and are said not to restrict individual trans. actions. The Ohio law, also does not prohibit mail order sales.
 The tWenty-six states reported to have blue sky law restrictions are Ari- zona, Arkansas, California, Connecti- cut, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Maine, Michigan, Missouri. Montana Nebraska North Carolina North Dakota, Ohio, oregon, South Carolina, South Dakota, Tennes- see, Texas, Vermont, West Virginia and Wisconsin.
 In addressing the supreme court the National Association of Attorneys General said the legislation was in re, apouse to the increased Notation of fraudulent securities during the last 2o years, causing loss of $100.000, ,O00 annually The association asked the court to uphold the legislation, par ucularly as meteoric value of stocks doe to the war has given new impetus 10 issues. and purchase by the public of fraudulent securities.
 Of the blue sky laws enacted. tho Kansas act. the West Virginia law 0 1914 and the Iowa statute, in addition to those of Ohio, Michigan and Soutl Dakota have been held void by lowe
 courts. Bills for such laws in Indians and Colorado. in 1913, were vetoed;
 Washington law was defeated by DOT uiar referendum in 1915. ReYise statutes differing materially from tn
 model statute adopted by Michigan and South Dakota have been enacte m Iowa. Oregon, Wisconsin, West Vii eihia. Kansas and North Dakota, abo @ Shing licensing of security vendors