The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1920-07-29
(Mining Congress Journall

kNliHllS 0OnEIGSS JOhIudl.J
The value of advertising has never
been more effectively illustrated than
in its relation to blue-sky laws. Among
the first of the effective blue-sly laws
was that known as the Pardee law,
so named after the then Governor,
Pardee of California, who was chair
man of the American Mining congress
which recommended the enactment
by the various state legislatures Of a
law which made misrepresentation of
any material fact relating to the value
of mining stocks offered for sale a
misdemeanor punishable by fine and
Imprisonment. The contamination of
the fraud was not essential to the eff
fective operation of this law; the only
thing required was evidence that
misrepresentation had been made,
and it was not required, as under the
laws against false pretense, that some
one should be swindled before the
penalties were incurred. This law was
enacted by a number of states but
was not properly advertised, and
therefore did not attract popular at
tentiOn.
Later the o-called Kansas blue
sky law was enacted which required
any person offering stocks for sale !
to first secure a state license, before |
the granting of which a full disclosure |
of the facts surrounding the offering /
was required. Various states have
enacted laws more or less patterned |
after the Kansas law. These laws /
have accomplished much of good and
much of harm. The harm grew out
OF the fact that legitimate oil and
metal promotions found it difficult to
meet the requirements of the law and
still be fair to their stockholders. This
difficulty grows from the fact that
every mining and oil development in
its early stage carries with it haz-
ard so great that on conservative
banker would approve the investment
to others. even though he might be
willing to invest his own money there
in.
All promotions carrying heavy haz-
ard necessarily promise large returns
n case of success. 1t has been stated
BY the representative of a large de-
5elopment organization that during d
Years. of his service for this large cor
)oration only one out of 100 PROPOSE {
ions offered were approved for fur
her examination, and that approx
nately one in 20 of those of which ex- Z
animation was made proved to be val
liable enough to induce the purchase
If the property by the development
indicate.
This does not prove that the 80 out
f the 100 propositions offered were d
fithout value. nor does it prove that II
3 out of 20 properties examined were u
alueless. It only proves that this +
articular organization was unwilling a
} take over but one of the 20, either d
ecause the proposition was not large 81
nough for its operation, or because III
he price fixed was out of proportion II
} the actual value disclosed, or that az
lie property did not show sufficient ie
alue to justify further expenditures. W
Every prospect offered carries some III
ling of the above hazard, and no one -
any possibility can predict correct y"
what conditions will be disclosed by SO
'velopment work. Someone must q'
Ike the risk which is incidental to Ia
e development of mining property ue
the mining business is to continue. WI
ne war has demonstrated that the IN
Iblic welfare is very largely depen- &c
mt upon mineral production. It is
well-recognized fact that all mines
Il some day become exhausted. Some ms
pper mines have a life of 40 or so be
ars; some coal mines have a life of ha
years; a zinc mine in the Joplin Pr
Id is usually equipped with a mill
tn a capacity which will exhaust
the ore within economical hauling tai
tance by two and one-half years of in
ltinuous operation. If all develop SIN
mt of new mining properties is to be
discontinued because no one is will we
g to undertake the hazard of their as
'elopment our presently worked tor