The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1919-03-11
NOT TECHNICAL
ERROR, FELONY
DECLARES HALL
Secretary of State Says Viola
tiOn of Blue Sky Law Is
No Simple Matter
QUOTES DAKOTA STATUTES
Heavy Fine or Imprisonment Up
to Ten Years Penalty for
Ignoring Rules

'"The law does not consider this
matter a technical error: it very
plainly makes it a felony, punishable
by fine Of 500 to $4,000 or by i'm
prisonment in the state penitentiary
from one year to ten, or by both,
said Secretary of State Hall today
commenting upon an interview with
Governor Frazier in which he was al,
legged to have stated that the banking
board in citing the Equity Cooperative
Packing Co., to appear and open its
books at the next meeting Of the blue
sky commission purely technical er-
ror was alleged.
II contend said Mr.. Hall, there
has been deliberate violation of the
law. The blue sky law relatives to CO.
perative corporations as we'll as 9TH
ers. When the recently organized
Farmers Milling & Elevator Co., OF
Casselton came in under our coop
erative laws, it properly applied to
the blue sky commission for permis-
sion to sell its stock. | have never
seen any opinion from the attorney
general to the effect that cooperative
concerns were exempt from the pro-
visions of Section of the blue sky
law, which reads:
1T shall be hereafter unlawful for
any persons, cOpartnerShip, assOcia-
tion 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 of brokers in Sc
curities, corporations or partnerships
or by means of any advertisement,
circulars or prospectus, or by any
other form Of public offering, to at
tempt to promote the sale or any
speculative securities in this state,
unless there first shall nave been fill
ed with the state examiner: |. A copy
of the securities so to sje promoted;
?. A statement in substantial detail
of the assets and liabilities or the per-
son or company making or issuin,;
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 provis-
ions in this section does not in law
constitute q technical error, but it is
felony. The question as to whetn-
er these packing companies come
within the provisions OF Chapter 81
of the session laws Of 1917, relating
to the organization of cooperative
associations, is not involved but if
any Of the members Of the Equity
society should be in doubt as TO the
legislative construction OF tie act OF
1917, they may gather a bit OF In
formation, from Senate Bill 1928, pas
sed by the recent legislature, and
which the governor has signed. This
act amends Section l6 of the coopera
tive laws to include these companies
organizing Or which prior to March
~, 1917, were organized. under the
general corporation laws OF the state,
whose articles Of incorporation or
bylaws did then provide for the dis
tribution Of any part or the earning5
or prots of cooperative basis. If
there had been no doubt in the minds
of these cooperative organizations as
to the stability of their contentious,
which would they have asked the leg
islature to enact curative law?
From what has occurred since |
called this matter to the attention OF
the Cooperative Packing Company
last summer considering the resolu-
tions adopted at the Equity society
convention in Bismarck and the gen.
eral tenor of Manager Eoopman's IN
terview, published attempt is being
made by the Equity officials to befog
tions involved and to place me in an
unfavorable position before the Equ-
ity membership and the farming class
generally