The Oklahoma City times. [volume] (Oklahoma City, Okla.) 1908-1984, 1919-06-03
blue SKY LAWS
DEMANDED OVER
WHOLE COUNTRY
Federal and State LegiSIa.
ton Being Urged,

Interruptions promoters have been
irving TO swindle ownrr OF Lib
erty bonds and war savings stamps
That Is why a law was proposed in
the last congress, and will be revived
in the next one. 10 enlist national ac
ton against blue sky" practices; NnA
that is why the government, authorize
are already interested in doing what
they can to surb unfair dealings in
the sale Of securities
But. to quote George W Bristol. a
View York LAWYER who ha. long bcco
interested in tisp otcd and the posi-
bility Of congres4ibnhl "h'rc sky" law
the batting OF liberty bond holdci
has only brought the matter to a
head"
Liberty Bonds One Phase.
There are grave reasons why ac-
ton should be taken by the federal
government 10 prevent the victimiIino
OF al unsophiSticated public with
worthless securities" Bristol con,in-
ued. This business OF Liberty bonds
is Just one phase OF it-an urgent pres
ent phase, But it looks as II. because
OF the Liberty bond matter pointing
the whole situation, needed laws arc
soon going to be passed.
No state laws can completely cover
the conditions and needs Throughout
the country. On the other hand.
think that state laws should be passed
to supplement national legislation. Blu,
nationd legislation we must hAve--a
law passed by congress to prevent mis-
deeds that we now only try 10 punish
Sending an offender to jail does no,
give their money back 20 the people
he has swindled.
Forty nine Laws.
"To make the situation clear and ex-
plain the legislation ! have been urg
ing we must go back to the basis of the
present ease with which worthless Sc
%cufitles can be sold throughout the
country. That basis Is the llxne" OF
Our corporation laws. We have forty
nine corporation laws-one for each
state and ono for the District Of Col
umbia. They are so liberal that any
inventor who has what he thinks is a
brilliant idea. or any man who owns
hole in the ground that he thinks
might have silver or gold In il, can
organize a company and start oN to
sell stock. And the reports required
under our corporation laws give no
facts whatever that will enable the in
weston 10 know what Is the actual re-
lation between the physical, practical
assets Of the investment and its mar
ket value.
Holes In Fence.
I'VE have a, the pre,en, time no
adequate legislation against the sale
OF untrustwor,hy or dishonest securi-
res. il is true that ONT states have
blue sky laws, but a man can usually
find a hole in = fence il he walks far
enough along il, and, in spite OF the
temporary scares these laws caused.
promoters have generally been able TO
lind some hole or other.
What We need i, Q federal law
which will prohibit the use OF the post
office for the sale OF stock, TO any
corporation, broker, or individual, or
TO any periodical advertising the
stock OF the corporation, until tina,
corporation has successfully passed a
thorough examination by . federal de-
partment. and its stocks are known to
be good. Congrc" could easily pa.
such = law, 1, would interfere neither
with the business Of legitimate corpo-
ra,ions nor with the freedom OF the
different states TO enact and enforce
their own laws.
English Law.
England has excellent legislation TO
prevent the victimiting OF u~nsoLhisti-
Gated people with worthless stocks
Under the consolidated eompanie, &C,
OF 1909, every corporation hoated in
that country must state, to quote a re-
cent summary, exactly what it is. what
its real business is, what ito assets are,
what contracts have been made prior
to its flo,ation, and explicitly those
responsible for its existence. who are
held liable civilly and under severe
criminal penalties for the truthfulness
OF the statements filed. Furthermore,
every corporation must make complete
periodical reports, under oath.
I'VE have no such law anywhere in
this country. Corporations must make
annual reports to the secretary Of state
In the state where they are incorpo
rated, bit these reports give no idea
whether their assets are good or bad.
workable or unavoidable"