The Democratic banner. (Mt. Vernon, Ohio) 1898-192?, 1918-10-15
Saves People From Fraudu-
lent Stocks, Judge Berry's
Report Shows
MANY SALES APPROVED
BY THE DEPARTMENT
Securities, Par Value OF
$234,950, ,240, Disposed
OF In Fiscal Year


ICED for sale in Ohio during the fiscal
year, which ended June 30, by the
blue sky department is 1894 4,950,240,
according to the first annual report of
the department, made to Governor
Cox Saturday afternoon by Judge P.
A. Berry of this city, commissioner of
securities.
During the same period the depart
ment examined 3l9 applications for
certificates of corporate compliance
and the issuance Of $109, 9,314 .o26 under
such applications was authorized. In
many cases applicants sought the Ger.
tification of much larger amounts of
stocks, but. after investigations by
the department, reductions were re.
quired, approximating $5O,000,00O.
: The total number of all cases pass.
ed upon favorably during the year
was 1916, authorizing the disposal of
$344.264,266 securities in this state.
The securities passed upon are those
Ill COI WuOoC pIopCllICo dlC
located outside the state, the business
principally engaged in being mining,
industrial and real estate. No secur.
tiles may be sold in the state unless
approved by the department.
The present legislature made the
blue sky department, formerly under
the jurisdiction of the state bank su.
perintendent, a separate department
and Governor Cox placed Judge Berry
in charge of it. The tremendous
amount of business which comes be.
fore the department Is indicated by
the figures set forth in the report. Be-
fore approval is given any securities,
examiners of the department inspect
the properties of the companies issu.
ing the securities to ascertain II they
are as represented.
FUNCTIONS OF LAW
The function of the blue sky law
department is to prevent Ohio inves.
tors from being fieeced by unscrupu.
lous promoters with worthless stocks
to unload upon the unsuspecting and
guileless. Approval is withheld by
the department from all stocks which
do not look good. However, the fact
that the department may consent to
the sale of any certain stock in the
state does not In itself mean that the
stock will make lots OF money for the
purchaser. 1t merely means that in
the judgment of the department the
proposition Ia not fraudulent one
and that 1t may yield reasonable
profit.
Ohio corporations may be granted
exemption from certification II they
can show that their stock Is to be sold
without commission, and at tota
expense of not to exceed 2% plus
$500. II practically 100 cents of ev
cry dollar OF the investors money is
to go to develop the business of the
company, the department conclude.
the case Is not one for investigation
although rigid examination is made
to see that the exemption is warrant
ed. .
1t is asserted that the people o
Ohio are saved millions OF dollars an
nually, which otherwise would be in
vested in some "iy by night" concern
visionary oil scheme or In some dis
tant mine with no existence save OF
paper, by the blue sky department
During the past year certain com
pany sought permission to sell $4,000
900 of it's stock in Ohio. the proceed
to be used in financing the manufat
ture of rubber by a revolutionary pre-
cess. The company was refused pei
mission to market Its securities il
this state. Later the company sol
5000, 900 of its stock In one city in a
adjoining state having no blue SIX
law, and large blocks of stock wer
unloaded upon unprotected investor
: in other parts of the state, with tn
result that the entire money paid fo
the stock was total loss to the IL
vestors.
WHAT RECORDS REVEAL
The records of the department r.
veal many similar instances of wher
gross fraud was attempted in the sal
of securities In Ohio, all of whic
were prevented by the operation
the blue sky law. The amount Of 81
curities SO rejected since the passae
of this law during the Cox administr'
tion In 1913 approximates $65,OOO,OO
> of which more than s25,000.OOO wa
rejected during the past year.
:. Licenses were issued to SAG dealer
: In stocks who employed 1926 agent
| during the year
Commissioner Berry recommend