Omaha daily bee., 1921-08-05
Text Of Letter From
Davis to Judge Troup

NSOutiuueu rage oHe.J
thority under the statute passed il
1917, the defect of which l have
noted.
No Power to Supervise.
with the exception of the
Pioneer State bank and the Lion
Bonding company, none of these
concerns was under the direction or
control of the state any more than
was the business of any private citi-
zen, nor did any state department:
have any right to examine their
books or investigate them.
: Whatever may be the law, how
ever, it should be understood at the
outset that we cannot legislate wis
dom into the minds of investors; we
cannot make the foolish wise by
means of statute; we cannot pre-
vent corporate frauds by means of
state supervision, any more than we
can prevent highway robbery by
maintaining police force.
"The frauds that have been per-
petrated in Nebraska, are not pri-
marily frauds in the sale of stocks
to the public. They are frauds in
the use of corporate money. They
have been committed from the in
side. Instead of calling them mis-
management, they should be labeled
larceny, conspiracy to defraud and
embezzlement.
Directors Responsible.
"1n many cases, the directors are
morally as responsible as the cul-
prits. The most gross neglect of
directory duty is. apparent. Appar
entity the word has signified merely
a title, an Honor" and the use of
a name. I hope to make it syn
onym for responsibility.
There is a promising sign that
the public mind on these corporate
matters is beginning to be aroused.
The business conscience of Nebraska
is beginning to awaken,
II ain encouraged by this desire
Of our better citizens to raise a
higher standard of corporate morals.
For the last two years, | have IS
sued repeated warnings, have deliv-
cred numerous addresses, and have
filled columns of the daily press,
outlining the dangers of these pro-
motion enterprises, and the posi-
bility of lnismanagement which they
offer. When will our people learn
that oil companies with no oil men
in them; packing companies with no
packers; tire companies with no tire
men, are doomed at the outset. That
they are promotions and not busi-
nesses, and that they do not add to
the development of business.
Nebraska is now paying for the
debauch of promotion upon which
it embarked in 1918 and 1919, and in
which some of its most prominent
citizens prostituted their names for
pieces of gold. But the tide has now
turned. A sadder and wiser public
row reach outstretched arms to the
law for that vindication of justice
which the courts alone provide.
"The time and opportunity are
here to rid Nebraska of many of
these economic parasites. In some
cases the evidence is so clear that I
would be justified in filing a COM
plant, but my investigation shows
the lines of evidence so widespread
and the number of people concerned
so vast that 1 believe the inquisitorial
power of grand jury (Which | do
not possess) should be set at work,
that nothing may be left undone and
no stone unturned to bring to the
bar of justiceaboth those who con-
ceived and connived, as we'll as those
who executed this plundering of the
public. May l therefore request you,
the presiding judge Of this judicial
district, to cali at the earliest possible
moment a meeting of the district
judges, at which meeting l may dis
cuss with you the immediate i'm
panelling of a special grand jury. l
may add that l have consulted with,
and we can expect, the most COM
plete harmony and cooperation from
the United States district attorney
and the Federal Department of JUS
tice should any evidence disclose
crimes committed against the laws of
the United States.
very truly. yours,
t-. CLARENCE DAVIS,
Attorney General"