The Monte Vista journal., 1919-02-08


~ . condittoa Of the isssaacs OF . |
permit 70 sell the securities OF stock |
hat tho company accept full ssspon-
slbtlily for ell fraudulent repsosents-
,ioas nsds BY Ne agent which we're
Of isduesmsat In psocvsias
The purchasers money. Every con.
tract should eonsain such provirion.
The usual psoviaion sound Ia tAsss
roatsscss regarding representations
other than contained In the con-
tract shall not bo binding on the
pr ncipsi and should bs eliminated.
We undess'snd that thoss selling
those stocks claim that thcy cannot
saord TO be reapousible for mis-rcp-
rssentations On tho part OF their
agents but Va shall answer that by
stating that experience has taught
that the purchaser cannot assume
the risk ~ many have done to their
rsGrst and iosA
The Law should BE- drawn 10 - to
include that recent arrival In the
field Of promotion. tho NO called COM
mon Law association. !. should reach
that special class OF 40 called ansoc-
iations which arc based on . self
declared tfunt under which the ben.
sAciariss are not In fact associated
and have no voice In the direction
Of the affairs Of tho association or
control over the property
This character OF an association
In now being used In the flotation Of
fraudulent and worthless oil stocka.
Under tho plan on the i.on-axsociat-
I'd bsnehciaries OF these trust ASSOC
lasions the promoter can and does
provide that he has absolute control
Of the propr'y and asset OF tho trust
aud he does Just what he pleeses
with money and property which falls
In his hands.
The issuance OF certificates oi
participation. stocks. shares or units
without proper and sufhcient iden-
tihcation Of trust or trust agreemen,
on tho face OF the certificate or other
evidence Of interest in the trust
should be prohibited.
Without this Identification II II
possible and promoters have used the
same properly to exploit different %
called associations. We do not wish
to bc understcod to contend that all
common law associations are fraud
uient for they are not. In fact some
OF the Target concerns doing bust.
ness in this country arc operating al
such associations. The necessity Is
to provide protection against the
crook useing this means to defraud
Tho Blue Sky Commission should
have explicit authority to investigate
such associations.
Another provision that should be
made II to require all notes given fol-
stock sold under any permit issued
by the state to contain the clause tha,
the consideration for the note II Ger.
tain shares Of otock In the company
making the sale and thus open ur
to the maker the same defense to
the note in the hands OF the assignee
rs could have been made against the
| orig nal payee. There has been q
too common practice OF liking notes
under false representations and
then discounting them to some limo.
cont purchaser to the detriment OF
the makers Of the notes.
There are cases In this state In which
the so called innocent note purchasers
has worked hand in hund with the
fraudulent stock salesman and dou.
ble-crossed the prospective stock
purchaser by aiding the salesman n In
his crooked work.
One OF the methods used in this
vicinity by stock salesmen and which
dis-armod the purshaser was to state
to the prospect who refused to buy
because he did not have the money
was for agent to tell the prospect
that he had money and would loan
II to the NJ OsDect n noto vos