Evening times-Republican. [volume] (Marshalltown, Iowa) 1890-1923, 1920-02-26
SHORT SHIFT FOR
BLUE SKY AGENTS
IOWA coNeREssMAN sAcks
BILL INTRODUCED ~ MIN.
NEsorA MAN.
DIFFERS FROM PREsENT
IOWA RGsTRIcrloNs
Proposed Law Puts Il Up to After.
nsy General TO Say. Whether Pro-
motion Scheme 10 Legitimate or
Graft-Thoss Accused Have Right
Of Appeal to Federal Courts.
by 4. G. Dougherty.l

[By 4. G. Dougherty.]
Washington, Feb. cs.-Short shift
L. to be msted out to fraudulent pro-
moters and illegally promoted
schemes according to the terms Of .
quick action blue sky law introduced
in the house by Representative Vol
stead, of Minnesota, and strongly
advocated by Representative Boies,
of the Sioux City district Of Iowa.
The measure differs from the blue
sky laws Of the thirty eight states,
of which Iowa is one. that have them
and also from hitherto proposed fed
posed federal legislation on this sub
ject in that it wholly ignores the
method of formation and organiza-
ton Of stock selling corporations and
all provisions intended to prepare
new corporations to come before the
public with clean hands. 1t simply
put the power in the hands Of the
attorney general to Gust from all
forms Of interstate commerce any
person or organization that in his
judgment is employing or Is about to
employ any manner of fraud or false
representation in selling any form
of security.
Recently before the senate COM
mittee on finance, Judge Kelleher. of
Fort Dodge. Iowa, testified that mil
lions of dollars were lost annually by
Iowa farmers to fake stock sales
men. He sought legislation that
would safeguard the Iowa farmer
from falling prey to the oily tongued
statesmen whose product finally was
found to be worthless.
Tha- bill Judge Boies is advocatin;
does not undertake to define what is
legitimate promotion3 as do most
of the blue sky laws, but instead it
simply forbids all interstate activity
in promotions that the attorney gen.
eral finds to be of a fraudulent ma
ture and leaves it to the accused to
clear his skirts afterwards.
If the accused feels that an in
Justice has been done him by the
attorney generals action, he shall be
entitled to a hearing before q United
States district court, which. pending
the proceedings before It,, may
suspend or modify the attorney gen
erals order. Violation of such an
order of the attorney general, how
ever, is punishable by fine of not
more than 10000 or Imprisonment
up to ten years.
1T is estimated that there are ct
least 5000 clearly fraudulent corpo-
frations operating in the United
States. and another 5000 companies
OF dubious nature. all OF which
will be subject to exclusion from in
terstate activities by a simple order
Of the attorney general should tho"
Volstead bill become a law. The
fraudulent foatations during the past
year have. 1t is estimated ABSORBED!
more than a billion dollars cash, and
the total capitalization of fake com
panies in recent years is put at more
than $4,000. 100000.
The Federal Trade Commission, a..
well as representatives Of Legitimate"
financial and industrial orsaniza-
tons who have examined the Vol
stead bill predict that if it becomes
law the United States will be prac-
tically free of fraudulent promotions
within a very short time The Fed
eral Trade Commissions ideas are
Incorporated in the bill, which the
house judiciary committee members
including Boies. will urge the house
to speedily pass.
Cyrenus Cole in Washington. -.
: Members Of the Iowa delegation n
congress and former Iowans who arc
now numbered among Washlngt on's
| corps OF newspaper correspondent
have been honored the past few days
with bit of humanity OF distinctly
Iowa flavor in the person Of Cyrenus
| Cole. of Cedar Rapids. Mr.. Cole,
editor. observer, politician. and con :
stant advocate. Of IOwa's char rms. has
been renewing old acquaintance
among the former Iowa Newspaper
men. making new ones of tho
Younger reporters who have come to
the capital, and permitting the Iowa
members Of the house and the sen
ntn to get from him an up-to-t,e-
n';nute view OF Iowa politics. Vi
r'so took time Saturday to corfe'
with Ambrose OConnell. Of New
York, formerly of Ottu,nwa. Iowa
who Is now president Of the Iow'
Society Of New York. and completed
arrangements for an Iowa address
hefore the society on March 9. Mr.
Cole will remain In Washington dur.
ing the present week and then 30 II