The Washington herald., 1918-12-26
CLASS WARS ON
BOGussToCks
Secretary and Capital Is
sues Committee Urge
Congress Action.

Immediate Congressional action,
aimed to reach by criminal process,
the army of vendors of worthless and
fraudulent investment securities, and
to protect the public from enormous
annual losses resulting from the He
gitimate traffic. is demanded by both
the Capital Issues Committee and
Secretary of the Treasury Carter
Glass.
In announcing it's decision to tenn
porarily suspend its activities on the
first of the year. the committee yes
terday stated that it would be un-
faithful to its responsibilities If it
failed to warn the public and earnest
ly direct the attention to Congress to
the menace of the nation of this par
ticular species of financial fraud
Secretary Glass. supplementing the
committees recommendations, said
he would ask the present session of
Congress to enact effective legislation
which would enable the Federal au-
thorities to stamp out operations in
bogus and "wild-cat'r securities, while
imposing no undue restrictions upon
the financing of legitimate business.
May ReassembIe Committee.
III VIC ne duutu. IL
might become necessary before such
Legislation is passed to reassemble
the Capital Issues Committee for
the purpose of resuming it's func-
tions.
The scope and extent of the traf-
fic in unmeritorious or wholly
fraudulent stocks is not realized by
the public, the committee states.
ct IN, tft,Na - all
as in times of war, but the holders
of war bonds, during the last year
offered a peculiarly fruitful field for
the financial takers.
AS illustrating the highly or
ganized and developed character of
their transactions, the bogus stock
promoters have actually organized
schools for the drilling of their
the public to invest in their worth
less wares.
Present Law Inadequate.
Considerable evidence along these
lines has been gathered by the COM
mittee, and 1t is understood that
scores of specific cases will be de-
tailed in supplementary report to
Congress. One of these schools of
instruction is said to be located in
st. Paul and another in Minneapolis.
1t is admitted that present laws are
inadequate to reach, the offenders or
to protect incautious persons from
imposition.
While the war activities of the Cap
ital Issues committee were confined
chiefly to preventing undue competi-
ton of private capital with govern
ment financing. its discoveries of in
Vulnerable fraud concerns caused
it to pursue its investigations in that
direction. Thus, it has come into
possession of an abundance of evil
dence which will be brought to the
attention of Congress.
To Show No Quarter.
The committee points out that even
now it is imperative that capital
should be saved and that the COM
mittee's temporary suspension should
not be construed as approval of un-
necessary public projects or private
enterprises of doubtful merit. The
present financial needs of the govern
ment and the large capital needed for
the readjustment of American indus
tries to a peace basis require the
strictest economy in the use of capi-
tai.
While legitimate business will be
largely left to work out it's own prob
lens. the government is determined to
show no mercy to the professional
swindlers who are still engaged in
fleeing the public