The daily star-mirror. (Moscow, Idaho) 1911-1939, 1919-04-11
Get after BOGUS
STOCK SELLING
Federal Trade Commission to
Curb Widespread Misrep-
resentati0n.
GLASS SAYS MENACE EXISTS
H6tdSfs ~ Liberty 6onds and War
Savings StaTiPs u - Protected
Against "oet- Ri6h:6uiek"
Schemes.

0avinoo 9tAmpo u - Protected
Against "oet- Ri6h:6uiek"
i Schemes.
Washington.-The federal trade
commission has of1cially announced
that 1t will cooperate with the treas
ury department, the capital issues com
mittee and banking and commercial
institutions throughout the country t.
curb the present widespread misrepre.
sentation in the sale of stocks and Sc.
curities, recognized - being at this
time particular menace to holders
Of Liberty bonds and War Savings
stamps. -~ '-~-..~
The commission viii accord itnmedi-
ate consideration to complaints pre-
sented to it involving alleged ffaudu-
4 lent practices III the sale Of securities
in interstate commerce.; The commits
! siofi Has designated Commissioner
1 Huston Thompson u supervise the
ehtife subject.
The commissions acton follows Sp-
peajs made to It BY Representatives
Of the treasury capital issues COM
mIttee. federal reserve board, Asso-
riatcd Advertising Clubs of the World
and numbers of banking and CONNER
eidl interests, that the power given the
commission under it's organic act to
| prevent Unfair methods Of commerce
! Iii Interstate commerce be at ONCE EN-
bioyed to protect holders Of govern
fiieflt war securities from bogus, "get-
ficii-qiick" schemes Under which pro
moters offer to accept Liberty bonds
ID exchange for stocks Of doubtful
value.
IT was Urged that the G6tamissi8Il
Get on the ground that misrepresehtas
| liotis III the sale 81 securities constf.
title ill Riiifait method Of commerce.
Federal courts, 1t vas Pointed cut,
have held that securities afe "afticl&S
Of commerce"
Glass Says Menace Exists. :,
Secretary Of the Treasury Glass,
stating that promoters of worthless
stocks have ''already displaced q very
large amount Of government bonds BY
taking them in exchange for stock, :
declared Iii letter to the commits
si0f that "a menace exists which may
seriously interiors with. the placing Of
the new g6vertfnefit issue; II the stock
promoters are LETT without any re- !
straiht Or restriction" His letter ID j
aThe tfedstft department. ii pscu-
liariy interested iii tie effort t6 rs
strict improper stock flotations at this
title for the following reasons:
i''TIfhe ofefihg 81 Investments to the
public Completes with the Offering Of
government securities, and, as, you are
awnre. the treasury proposes to invite
thg ijiibiit tb subscribe to very large
Issue Of securities shortly. Stocks and
Securities Of d legitimate investment
character compete with the govern
tiient. bit not nearly so much as high
y st}eriitattve stocks offered with all
The ailtifeifiehtb tHstbrpAfi1x held out
by irresponsible. persons whose pin
cipal design is to obtain money from
investors without regard to the value
Of the stock sold. The operation Of |
the government Id the past, In endeav-
Brirg To induce persons Of all classes
To sbhrehasei ,g3YsrhHstt bonds; have, |
to q large degresi btFoe'usht ihtb being 1
a very large and new class Of Investors !
who are without experience or knowl- I
edge to. guide them wisely In making
But the very efforts Of |
he government agents, In persuading |
such persons to become Investors, have
prepared the way for promoters to
3iaos fi1any worthless stQcks. |
arhe fesuit Has Beer That these PRO
noters have already displaced d very
arge amount Of government bonds by
aking them in exchange for stock,
ind to such an extent as to undo the
work which Is so essential for the sue
,ess Of the governments financial 0p-
'rafiofis: because the government can
lot expect successful fotations OF It's
wn securities. or the preservation Of
proper price therefor In the f1nan-
ial market unless the great number
f small buyers continue 10 hold their
onds. Is
May Interfere With Loan.
Warned by the past the treasury
apartment feels that "a menace exists
7hich may seriously interfere with
he placing Of the new government is-s
ne. If the stock promoters are left +
,ithout any restraint or restriction.
ut cannot be expected, that proposed
,glslation. even If promptly enacted,
an become operative in time to be OF
ubstantial benefit to the government
the next loan campaign.
1T has been suggested that the fed
raj trade commission has authority,
n1er it's organic act, to take action
'hich would remedy the evil, at least
part. If a way can be found where
v. even the fraudulent promoters and
rose who indulge in unfair practices
+ selling stock can be stopped, the
'easury department feels that such
,tion will be Of great benefit to 1t In !
le immediate future.