Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-01-21
SKY BILL BOOSTED
KENYON MEASURE AIDED ~
TESTIMONY OF KELLEHER.
Senator Believes Presentation OF
Facts by Fort Dodge Man Assures
Adoption OF Stringent Law-Peop'e
Of Moderate Means Need Protection
From Sellers Of Improved Stocks.
[By z. @. Doughcrty.l

Washington. Jan. 2l.--The startling
testimony given before the senate
banking committee by d. NJ. Kelleher,
Of Fort Dodge, in description of the
manner in which Iowa people were
duped by fraudulent stock statesmen,
was characterized by Senator Kenyon,
father OF the blue sky law, in support
OF which Mr.. kelleher Was testifying.
as making the enactment of the bill
necessary.
Accompanying the testimony Of Mr..
Kelieher, a number OF letters from
Iowans we're placed in the record,
showing the manner in which the spec
ulators operated. Numerous instances
of farmers giving their liberty bonds IN
exchange for stock certificates which
proved worthless were cited.
Senator Kenyon believes that the
people not only Of Iowa but Of the
entire country are being robbed of hun
dreds of millions OF dollars by the issu-
ance of stock in corporations where
there Is no intention~of ever making
the organiZa ton a success. There
has BEEN he said, q tremendous in
crease in the number Of corporations
that have sprung up since the ending
of the war to catch the people who
heretofore have never had money to in
vest. Where they invested it in liberty
bonds or other government securities
paying a comparativly small rate OF
interest. promoters of wildcat corpora
lions, by promises Of large returns
have succeeded in getting these people
to exchange their government paper for
stock in worthless corporations.
Tt Is time the people had some pro-
lection from these sharks and shys-
ters." Senator Kenyon said. NO hon
est corporation can find fault with the
bill! I have proposed. Some of the
states have blue Sky laws, but little
attention is paid to them. 4 federal law
will be better observed. and some Of
these oily-tongued individuals now en-
gagged in robbing their fellow men in a
polite and artistic way will enjoy a
respite IN prison
Provisions Of Bill.
The Kenyon bill provides that when
an offering is made to the public OF
an original issue, security by any cor
poration engaged in interstate COM
merce, the issuing company must ME
with the postmaster at its headquar-
tiers and with the federal trade commits
sion at Washington a full statement
regarding the purpose Of the corpora
ton and what it is intended the money
obtained from the sale OF the securities
M 20 ~ n
must be included in this statement are,
The purpose for which each corpora
!! ton is organized; the names Of the
officers. directors and promoters
whether the securities are held by a
holding company; what commission
the officers. directors or promoters OF
the corporation are to receive for float
ing such securities. Also the latest
balance sheet OF the corporation: the
purpose to which the proceeds OF the
sale Of the new securities are to be
devoted; the terms Of the hotation, and
the price at which the securities are
sold by the issuing corporation.
Any purchaser who has bought stock
where misstatement has been made
In the statement provided for under
the bill may recover twice the amount
Of all monies paid for such stock, and
may bring action against the officers.
directors and promoters. provided the
suit Is brought within year after the
purchaser shall have knowledge or
the misstatement. The bill proposes TO
use the long arm Of the postoff!ce de-
partment to reach the promoters. II
provides that any person who shall
mail, or cause to be mailed, any orig
inal issue security, or any statements
required under the bill. knowing that