Free trader-journal and Ottawa fair dealer. (Ottawa, Ill.) 1920-1927, 1921-12-27
SCANLAN'S PET LAW
ON BOGUS STOCKS.
GIVEN FINAL PUNCH
BLUE SKY MEASURE FosTERED
THROUGH GENERAL ASSEMBLY
BY LA SALE COUNTY LEGiS-
LAToR UPHELD BY ILLINOIS
SUPREME COURT.

Springfield, H., Dec. 27-The state
Supreme Court, In decision last
week. conclusiyely upheld the consti.
nationality of the Illinois securities
or blue sky law. enacted In 1919 at
the instigation OF William L. Seaman.
Peru. representative from La Sale
county. The decision was rendered
in the case Of Ben A. Stewart against
David Brady, appealed from the Rock
Island Circuit Court. At the June
term the court held the law constitu.
tional in this case In an opinion writ.
ten by Justice Carter, but rehearing
was granted and It was on the re.
hearing that the final decision was
made. 4,
Secretary OF State Louis L. Emmer.
son. under whose administration this
law was prepared and passed by the
legislature, expressed himself as well
pleased With the final establishment
OF its validity. He pointed out that
under the provisions of the act more
than s100.000.000 OF fraudulent securi-
ties have been excluded during the
past two years and many millions
more have been discouraged from
coming into the state because OF the
evident impossibility of securing per
mission to sell.
The purpose of the act Justice
Ill., .txA - .t,,fA - tks.
court on the rehearing, says, lis not
only to furnish information to pro-
tect credulity and ignorance from de
ception and imposition and prevent
fraudulent and deceitful sales Of Sc
curities, but also to secure credit and
freedom of commerce in such securi-
ties as because of their character.
place and manner of their sale, or the
character of the seller are not sub.
ject to practices of deception and
fraud to such a degree as in
the Judgment OF the legislature re-
Quired legislation TO protect the pur-
cbasers. 1sl -
p Nonresident vendors and sleek
psrapatetic statesmen with glib ton
CUES and indurated consciences, of
stock and other securities for the pur-
pose of developing wildcat oil fields
in distant states, mythical rubber
plantations in Guatemala and imagin
airy copper mines III Mexico, and elec.
trio current from sea water and light
cucumbers and power from the rise
and fall OF the tides and for the hun
.dreds Of other visionary schemes, do
mestic and foreign, designed to Sc
cure great return from aysmall in
cyestment I'M short time, fall within
ethe terms Of, the act. n No one will
u question its application to such cases,
even though many of the enterprises
may prove successful eventually, be
4 cause many people have been cheated
and deceived by the statements made
in such cases and have unfortunately
invested their money in worthless Sc
curities and are without remedy"
1.-The court reviewed the provisions
OF the act and concludes that the leg
islature had power to provide for the
classification of securities at 1t has.
While the privilege of engaging
in lawful business is the right OF
every individual" the opinion says,
lit is subject to the police power and
must be exercised in accordance with
the requirements of the statutes pass
ed in the exercise of that power for
the protection Of the public"
The court points out that similar
acts have been adopted in about
forty states and that practically all
Of the objections made to this law
have beeen decided adversely to the
contention of the appellants by the
Supreme Court OF the United States.
= "The extent Of the penalty for deal
ing In securities contrary to the re-
quirements Of the statutes" the court
concludes, was q matter for the leg.
islature to determine, and the declar-
ing of all contracts made in violation
of the statutes void and the authoriz.
ing the recovery Of the purchase
money, together with reasonable az
torney's fees, was within the power.
Numerous suits and prosecutions
pending in various courts have been
awaiting the final decision on the con,
stitutionality of the act. Prosecut.
ing officers will now prosecute these
cases.