The Monte Vista journal., 1919-02-08
Colorado Needs a Blue Sky Law

"" W tov,ets"s
Issues COMMITTEES found IN It's re-
port Of pscombcr snd. 1913. to
Congress. that Federal supervision Of
securities issucs should bs continued
BY somo public agency. TO check tho
traffic In doubtful securities. mocts
the full approval OF those who have
any knowledge OF tho amount Of
worthless stocks that have boon and
are now being offered to tho public
under the disguise OF Industrial pro-
motions and mineral and oil dcvci-
oper'cnt schemes.
The Federal control Of such cx-
ploiiations would bc tho most cfrcc-
tive means Of checking tho tratIie
and prevention Of tho heavy financial
losses that people OF this country
arc suffering At this timc and will
suifcr until somc effective means has
boon found to eliminate tho fraudu.
lent promoter or Pirate OF Promo
ton"
~
Ia the duty ofthc Federal Government
to assume tho task ~ n matter OF
course. II tho Federal Government
created and gave life to tho corpora
tions and other organizations which
20 out and exploit tho public. thcn
Il would be the duty OF tho Federal
Government 10 scc that these fraud
ulcnt concerns were not allowed TO
proy on tho public.
Tho truth In that tho greater por-
ton OF tho organization which nre
now operating fraudulent schemes by
sale OF securities arc c, aturcs OF
tho different states. II IL possibi.
In this state to secure the right under
diss uiso OF . corporate charter. ut
a nominal expense OF '325to $50. NJ
Ing fees. to go out and fleece tho
people Of this state. by selling stock
and securities which arc worthless
when bought duo to the enormous
portion OF tho money laid by tho
purchaser. which is used by tho
promoter for his own use and ben-
cit.
A case In point IL that OF Tho
Tractor and Implement Co. orGaniz-
cd under the laws Of the State OF
Colorado. with q capital stock OF
$4,000 Of which sum $500 was
paid In cash and tho balance OF
$+s.ss6.0O. Otherwise" as appears
In tho Annual statement now on
Ale In the Secretary OF Sta. .cs ONCE.
This company sells its stock for
$4,000 per share. the par value Of
which u $500. Only $500 Of the
stockholders money reaches tho
treasury and the balance OF $22.OO
per share IL absorbed in commits
sions and fiscal agency contracts.
The stock purchase ontract is
direct with tho Company and all
checks and moneys are directed to
be paid to the company. but when
this money reaches the company It
Ii passed over q screen In the shape
of fiscal agency contract Under
this contract the fiscal agent is sup
posed to be the purchaser OF the
stock and the stock is first issued
to the fiscal agent and then cancelled
and reissued to the real purchaser.
The fiscal agent goes through the
form Of turning over to the company
the par value OF $500 less 40 per
cent commission or the sum OF three
dollars per share. This may be legal
on its face and under the contracts
but to the man who pays the money
II has at least the appearance OF un-
fairness. He cannot see the justice
Of the promoters taking $500 out
OF his 10000. and leaving him but
$1,000.
In view OF such state OF affairs
permissible under the present laws
of this state 1t does not appear that
the State OF Colorado has any COM
plant against the Federal Govern
ment for failure to protect 1t from
its own creatures.
The State Of Colorado owes a duty
to the people Of this state to protect
them from the operations Of its own
creatures and also those coming from
nthoe toto -. -,>n