The Holbrook news., 1918-06-28
Ruling by Corporation Commission

At an executive session of tht Arizona Corporation Commission held on June Fist. 1918, al members present, the following
 resolution was introduced bJ
 Commissioner A. W. Cole, ano
 adopted by a majority vote o1
 the Commission:
 Whereas this Commission
 has, as a condition precedent tc
 the issuance of a permit auth
 orizing any corporation to sell it's capital stock under the provi-
 sions of Chap. g, revised statu-
 tes of Arizona, 1913. ordered
 all of the stock issued in pay
 ment for property, usually term
 ed promotion stock, pooled with
 this Commission pending the
 complete financing and develop
 ment of such company, and,
 Whereas, it is obvious that
 such pooled stock can have no
 market value until the company
 issuing the same shall have be-
 come a going concern, and,
 Whereas, it is to the best in-
 terest of the future development
 of this state that worthless stock
 should not be disposed of either in Arizona or elsewhere; and
 this Commission should use all
 legal means within it's power to prevent the sale or disposal of such worthless stock.
 Now Therefore. Be It ResolY- ed by the Arizona Corporation Commission that no stock pooled with this Commission as a con- dition precedent to the issuanceI of authority for any company toI sell it's capital stock, shall be- released to the owner or theI owners thereof, until such com pany shall have declared and paid a dividend out of earnings of not less than 2 per cent on all of It's outstanding issued capital stock
 During the past fiscal year, the Arizona Corporation Com mission has issued a great many permits authorizing mining and oil corporations to issue and sell their capital stock for the pur- poses of raising funds to develop their properties. In practically every instance, a considerable percentage of the authorized capital stock was issued in pay ment for the property owned by | the company. This stock isS owned usually by the promoters 1 of such companies, and is term ed promotion stock. The Con- as a condition preced- ent to the issuing of authority | authorizing the company to sell it's capital stock, compelled the pooling of such stock with the Commission. All of these per mits will expire by the operation of law, July 1st, 1918, and the Commission is of the opinion that many of the said companies will not renew their application but will endeaYor 10 secure the of such pooled stock. If the Commission releases the same, there is no method by which it can prevent such stock being sold to the unsuspecting public. although the property owned by the company will not f have been developed and there may have been no intention upon the part of it's promoters to ever develop the same but to secure the release of such stock purely for purposes of disposing of same for whatever price they might obtain.
 Under the provision of the above resolution, this stock will | not be released and can not be released until the company shall have become a going concern and declared and paid a dividend out of earnings of not less than 2 percent on all of it's outstand- ing issued capital stock.
 If this resolution is adhered to by the Arizona Corporation Commission and we hope and trust that it will be, promoters of mining and oil companies can not realize upon their stock un- til the company is actually suc- cesful in securing mineral or oil in paying quantities.
 We believe the enforcement ot this resolution will be helpful to the legitimate mining industries of the state and will have a tendency to compel the promot- CTS of all companies using all the means within their power to en- deavor to make the company successful; otherwise, their pro- motion stock will never be re- leased by the Corporation Con- mission.