Indiana daily times. [volume] (Indianapolis [Ind.]) 1914-1922, 1921-08-03
STOCK
SELLING ISSUE
MEETS DEFEAT
Securities Commission Says
State Law FOrbids Pro-
posed Plan.
MAY MEET SITUATION

The Indiana securities commission has
refused to rescind its order made last
week. in which permission to sell $3.50, 0O9
of preferred stock Of the Farmers FL
nance Corporation, was denied. This de-
cision was affirmed today by the com
mission following q hearing held yester-
day afternoon, when attorneys and Of
ficers Of the corporation attempted to
show reasons why the original decision
should be rescinded.
while it is clear khat the board is
not antagonistic to the purpose and
program back Of the organization, IN
der our laws regarding the issuance of
preferred stock and the rules adopted by
the commission, we feel we cannot grant
the applications" reads a statement is
sued by the commission, and in which
all the members concurred.
EXPRESS SYMPATHY
WITH PURPOSE.
The statement Of the board indicated
there was no alternative other than to
deny the petition. The action Of the com
mission is not to be taken as an indica-
ton the members are not in sympathy
with the farmers and the purposes Of the
organization, the officials asserted.
Fred s. Jackson of Chicago, attorney
for the corporation. declared the next
move is up to the farmers, but was I'M
able to state what this step would be.
He indicated the farmers could reorgan-
ize 70 comply with the Indiana law, or
they could take recourse to the courts.
The latter course, however, is improbable,
since the law is clearly defined on the
matter.
1t was contended by Mr.. Jackson
that the commission had no right
TO refuse permission TO sell the stock
when the corporation was legally organ
lied under the laws Of another State,
and unless fraud is discovered.
MUST COMPLY
WITH INDIANA LAW.
The commission, however, declared no
matter under what State laws they were
organized the corporation must comply
with the Indiana law before the COM
mission can grant authority for the
stock sale IN this State. The Indiana law
states the preferred stock Of i corpora
ton must not be more than twice the
amount OF common stock. The pre-
ferred stock Of the Farmers Finance
Corporation is 500. 900, 00O with only
twenty one shares OF no par value COM
mon stock.
Secretary Of State Ed Jackson ex-
pressed the hope some way might be
found whereby the corporation could
meet the requirements Of the Indiana law
and added that unless this is done, the
commission has no alternative other than
to deny them permission to sell their
stock.
Il cannot see how this commission can
extend favors TO this corporation that
are not extended to domestic corpora
TONS" he said. "As officers Of Indiana
feel We would be recreant to our duty
II We did not follow the law
1T is ny candid opinion that as the
matter now stands the commission can
not approve the stock sale"
No objection could be made, according
TO the commission, to the corporation do
ing business in Indiana. providing It SId
not attempt to sell It's stock here.
EXPLANATION
AVAILS LITTLE.
Attorney Jackson explained that the
preferred stock which the company
wishes to sell in Indiana is the same as
common stock. with the exception Of cot
Ing power. However, this point avaiIed
little, as il was pointed out one Of the
principle differences between common and
preferred stock Is voting power.
James K. Mason Of Milton, treasurer
Of the finance corporation and a director
u the Outleu JEa4n growers inc, IN
attempting TO explain the company's po-
sition. outlined the form OF organization
Of another corporation doing business in
Indiana, which. be claimed. did not com
ply with the provisions or the law
Isn't that a worse fraud than this is 2"
be inquired.
We DO not say there is fraud IN this
corporation" replied Secretary Jackson.
amid laughter.
Ora Davies, treasurer Of State; Z. s.
Lesh. attorney general, and Maurice Men
denhal and Herman Gray. Of the admin
istration department Of the commission,
assisted Secretary Jackson at the hear
ing. John Brown. president Of the Indi-
ana Federation Of Farmers Associations.
attended the hearing, and took part in
the discussion.