Evening star., 1920-02-01
Blue sky LAW
FOR nation URGED
Legislation Needed to Aid
Commerce, Houston
Thompson Insists.

Writing "A blue sky law into the
FEDERAL statutes is necessary to change
the stream of commerce from n river
of doubt to one of confidence. accord
Ing to Houston Thompson of the Fcd-
eraI Trade Commission. There is large
group in Congress who are determined
that such a law must be passed at
the earliest opportunity. Reports from
ell sections of the country are inform
ing the members that people every
where are being fieeced right and left
by highly speculative stock schemes.
Those who are now engaged on the i'm
rortant task of framing legislation that
viii encourage and safeguard business
dev. lopHont and industrial activity are
learn nC at every turn that il is diff
fcu't to ge' money for leGit mate and
,eSeo tjal roeds of business because the
'ds -sy-' ,lht stock promCt RS have
been g ing off the ready money and
eY,0 u :" ve,I ment bonds.
Gov .Hm mt officials and members of
CO" re agreed that this situation
must c.a-e
Cf5s >oopc Advocated.
a b. -l,y s.a,utc should cover not
orly SO a ticas OF these who induce
tn U. Hj,t u. purchaser 10 trade his
f. II rr aitv bonds for some wildly
81 -tIr, took through m;srepresenta-
to 'i. Thompson warns. but it
sh uld cover those corporations
whose ties are termed legitimate
NJ -E, pf ta. latter. owing to tn water
ire tma-t r- manipula lation. bring the
c'.rni into the hands of 4 receiver.
y N .-c, bonding loss in confidence
an ~ % the unwilling investors
ir III COS
drawn and wisely admin
l. hiue sky law should re-
~
ban n house. because'it would have
no ~ 3D. iear. or conceal. whereas
tn va iI.- .prds would be put out of
III Ia.0. nr greatly restrained. 1t
r = 20 a r' arly automatic in action
s. E.--.i.. gud must relieve the pub
u no administers it of dis
49, .u..-v powers. 1t should apply.
G.rl.. - associations and corpora
cns it slOuid require those about
To- Sl rites in Interstate COM
mer e -1 f 20 certain Information with
& lies mated public official-such in
lorr n ON 20 reveal the purposes to
wy tH- money derived from the
sais IA be used and the method
by wAirl Il would be disbursed."
Further Points Suggested.
Mr. Thon pson further explains that
this statute should not only require
Information as to how money would
be received by the company from the
sale of the securities. but also what
percentages the underwriters. pro-
moterS. allocatorS and statesmen were
to receive. 1t should require that
this Information be printed in all
circulars letters. documents or ad-
vertiscments in newspapers Offering
the securities FOR sale. in type larger
than the type in the body of the ad-
vert scTnC mt"
Mr. TlomTSon also contends that
there sfo I'D be a clause carried in the
advertisement stating that further in
forIra ton is on file with the public
ofiici7i i med and open to the public
He believes that the blue sky" bill
now before the House judiciary COM
riftee which was drafted by Repre-
senss tive Edward T. Taylor. democrat.
OF Colorado. and on which extensive
he rim : We're held in the last Con-
sress and which was drafted with the
advice 0 the capital issues committee
and hioned after the English law of
1s9. eEould be amended to meet these
Ieur;lT.- CntS- When this is done"
Mr.. Thompson says. the investor will
be "a, o2 his guard and protected as
far Is il Is the duty of his government
to 20
The result- will be-" he explains,
"thaf while man will still have the in
alien ,Ile ri~ht to speculate, he will at
the SANE time be put on notice. 1t will
then be his own responsibility if he
chooses to take the gamble. if such it
be Moreover. millions of dollars will
be saved to the farmers and to the city
folks There Will also come from this
1esiSla ton" he says. "a confidence in
the affairs of corporations that will be
of lasting benefit to them and to the
people.