South Bend news-times. (South Bend, Ind.) 1913-1938, 1921-07-26
SECURITIES BOARD
TO HOLD HEARINGS
Will Consider Farmers Fl
nance Corporation Petition
TO Sell Stock.

DlA4NAt+DLlSs july 20 "A re-
hearing OF the petition II the Farm
ers' Finance corDo-sUon a Della
ware corporation. = sell = 0ck IN
Indiana. PROBABLY VIII be held by
the Indiana securities c0mmlgtcn.
p. jackson. secreta.'y OF state, ant
a member AZ the commission. said
Monday.
Mr. jackson sail John @. Brown.
president OF the Indiana Federation
o. Farmers associ atoms. has ar
ranged Cor conference with him
relative 20 the commissions refusal
20 authorize the cOrpor. ton = Oper.
ate I'm Indiana, bus that before the
commissions attitude could he
changed IL would 30 necessary 20
have "A hearing. - hearing, he
sad. would have b - held oa'cre
tle entire commission.
Lcsh Abs; 1t.
Atty Cen. u. & Lssh. wa is
chairman Of the Indiana secTr:tI-s
commission. IS out p the city ard
velli not be here for the r. liar
meeting. 2 was said. Unless n
special meeting IS called. the matter
viii go over until a week from to-
morrow. Mr.. Jackson said.
An Indiana law does rot permit
companies 10 operate IN the state
when the companies have more than
twice as much preferred stock as
they have common stock, and this
was the principal reason the COM
mission declined 10 authorize the
sale OF the stock Mr. Jackson said.
"a
July 10. Mr.. Jackson said the
Farmers Finance corporations pa
pers show IT proposes to sell in In
diana $3.50. 900 OF its 100000. 900
preferred stock when the corpora
tion has but q shares Of common
stock OF no par value.
subscriptions Unpaid.
VI. L. MendeEall, who is admin
!, istering the blue sky" law, under
which the commission operates. said
an Indiana statute requires that di-
rectors Of a corporation shall own
some or the corporations common
stock. The Lapers filed with the
commission, however. show that the
directors Of the corporation have
only subscribed for shares OF the
corporations preferred stock and
that I'm some instances the subscrip-
tions have not been paid Mr.. Men
denhau said. Mr. Meadenhall said
he was Of the opinion that the sub
scriptions need not be paid until the
directors required themselves to pay
the subscriptions
The papers on file show that the
corporations common stock Is held
by the United States Grain Growers
association. Inc. and that the stock
is cared for by the q directors Of
the grain corporation. 20 OF which
directors constitute 20 OF the q di
rectors Of the finance corporation.
According to papers filed with the
commission. the grain corporation
was organized as farmers group
20 market farm products and the
finance corporation was organized 20
finance the operations Of the grain
corporation. The plan is for the
corporation 10 acquire warehouse re-
ceipts and other evidences OF own
ership and rights Of possession and
20 seeI 10 the investing public de-
benture notes or certificates i'm the
nature Of commercial paper running
one year or less TO finance the hold
ing OF grain
Probe Information.
c. II. Gustafson. OF Lincoln. Neb,
IS president or both corr orations.
When the petition was filed for the
y Indiana license. Il did not contain
figures in the blanks calling for sal
aries paid. The commission is in
ness OF information IL has, alleging
that Gustafson as president OF the
crain corporation. receives $4,000
year: Clifford Thorne. a Chicago
attorney. $4,000 a year; Frank NJ.
Myers. secretary. $4,000; William
C.. Eckhardt. treasurer. SIS, 900: t..
T.. Burdick, assistant general cOun-
sci $500; directors S25 a day each:
executive committee members S25 a
day each for 90 DAYS; Lee Moser.
director OF information $4,000. and
organizers. $500 each
Papers hled with the commission.
Mr. MendenhaI. said. show that the
holders Of the common stock. which
is the grain corporation. elect the
directors Of the finance corporation.
He said the grain corporation ap-
parently is paper organization"
and shat the electing or the directors
OF the finance corporation apparent
Is will be done by the directors OF
= the grain corporation lie could see
no reason. he said. why the direct
ors OF the grain corporation could
not keep or electinE themselves d.
rectors OF the finance corporation
and thus keep control of both cor
porations in the hands Of practically
q men.