Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1919-03-11
EQUITY CASE
NO TECHNICAL
ERROR" HALL
Secretary Contends That
Failure to File Copy of
Securities is Felony.

Bismarck. N. d., March 1.-THE
law does not consider this matter q
technical error 1T very plainly
makes 1t a felony, punishable by a
fine of 800 to 5000 OF by imprison-
ment in the state penitentiary from
n year to ten. or by BOTH" said
Secretary Of State Hall today. COM
menting upon an interview with Gov
ernor Frazier in which he was al
legged to have stated that the banking
board in citing the Equity Corpora
tive Packing Co.. to appear and open
Its books at the next meeting of the
blue sky commission purely a techni-
cal error vas alleged.
II contend" said Mr.. Hall, there
has been a deliberate violation of the
law. The blue sky law relates to CO.
operative corporations as well as 9TH
ers. When the recently organized
Farmers Milling, & Elevator Co. Of
Casselton came in under u cooper
alive laws, it properly applied to the
blue sky commission for permission to
sell its stock. 1 have never seen any
the effect that cooperative concerns
were exempt from the provisions of
section 2 Of the blue sky law, which
reads:
"'It shall be hereafter unlawful for
any persons, co-partnerships,% associa-
ton or corporation, hereinafter called
the promoter, either as principal or
through agents, to sell or offer for
sale Except to banks. bankers, trust
companies, dealers or brokers in Sc
curities, corporations Or partnerships)
by means of any advertisement,
circulars or prospectus, or by any
ofhor form If v,,h1ir afforino IN at.
tempt to promote the sale of any
speculative securities in this state,
unless there first shall have been fled
with the state examiner: IA copy
of the securities so to be promoted.
"a statement in substantial detail
Of the assets and liabilities OF the
person or company making or issuing
such securities, and Of any person or
company guaranteeing the same, in
Guiding specifically the total amount
Of such securities and of any securi-
ties prior thereto in Interest," etc.
Failure to comply with the provi-
sions in this section does not in law
constitute a technical error, but it is
a felony. The question as to whether
these packing companies come with
in the provisions Of Chapter 81 of the
session laws Of 1917, relating to the
organization Of cooperative associa-
tions, is not involved; but II any of
the members Of the Equity society
should be in doubt IS to the legisla-
tive construction of the act Of 1917,
they may gather a bit Of information
from Senate Bill 1913, passed by the
recent legislature. and which the
governor has signed. This act amends
section 16 of the cooperative laws to
include these companies organizing,
or which prior to March IL, 1917,
were organized, under the general
corporation. laws of the state, whose
articles Of incorporation or bylaws
did then provide for the distribution
of any part or the earnings or profits
on a cooperative basis. I If there had
been no doubt in the minds of these
cooperative organizations as to the
stability of their contentious, why
would they have asked the legislature
to enact a curative law.
From what has occurred since /
called this matter to the attention OF
the Cooperative Packing Co. last
summer, considering the resolutions
adopted at the Equity society conven-
ton in Bismarck and the general
tenor of Manager Hoopman's inter-
view, published Sunday in the Court
er-News, I am convinced that a de-
liberate attempt is being made by the
Equity officials to befog their men,
bers as to the real questions involved
and to place me in an unfavorable po-
sitioh before the Equity membership
and the farming class generally"