Omaha daily bee., 1921-08-11
Hoagland Makes
Reply to Attack
By State Bureau
Says He Opposed Blue Sky
Law Because Of Ineffective.
ness; Charges TOWEL
With Incompetency.

North Platte, Neb., Aug. 10
Especial Telegram )--Replying 10
attacks made Monday by the state
bureau of securities that he had
crippled alleged attempts of the
state administration to. check Wild
cat stock selling schemes, Senator
w. V. Hoagland of North Platte
asserts that his opposition was due
to inefficiency OF the proposed blue
sky laws and incompetency OF the
present bureau.
Senator Hoagland's reply in part
follows:
"My. attention has been called TO
the statements of Guy I. Touvelle,
chief of the bureau of securities,
with reference to the operation OF
blue sky laws in Nebraska and in
ferring that | was responsible tor
the frauds that have been commit
ted in Nebraska by the sale. of wild
cat stock because of my connection
with the blue sky legislation in the
1919 and 1921 sessions OF legisla-
ture. t..
No Specific Change.
"He makes no specific charge and
it is apparent that he desires to pass
the buck to someone else for the
responsibility OF his department n
permitting wildcat stock to be sold
within the state and his failure to
cause prosecution where the law had
been violated.
''In fact representa- large clientage
who have been defrauded in the
sale of wildcat stock and | have been
endeavoring to getsthe department to
prosecute parties for violation OF
the blue sky law, but to no avail.
Other attorneys have been attempt
ing to do the same thing. We have
been trying to get them to prosecute
the higher-ups, but to no avail.
Says Departments Responsible.
1--WE have had in operation in the
state of Nebraska during the past six
years a blue sky law which at all
times permitted the railway commits
sion and the bureau of securities to
exercise their discretion and to re-
fuse to grant permits to any in
dividual for the sale of stock where
the application convinced the bureau
or railway commission that it was
inadvisable to issue the permit. The
provision of the law placed the re-
sponsibility upon these departments
for the issuance Of permits to persons
and corporations who should not
have them and they cannot escape
the inefficiency of their examination
and the recklessness in the issuance
of permits by attempting to pass
the buck" to some legislator who
has opposed their ideas in the pas
sage of legislation.
"When the average stock salesman
can go to the individual and tell him
that he has been interviewed by the
bureau of securities and the bureau
has permitted its sales, this merely
places the responsibility behind the
state for the sale OF spurious stock,
and it cannot avoid this RESPONSE
bility.
Unwilling to Kill Bureau. ss3
"The executive department recog-
nizes this situation, but was unWill-
ing for the good of the state to
abolish the bureau, because a lot OF
people woilld be left off the states
pay roll. So they attempted to, tlX
up a law providing that the investiga..
ton shall be made by the state and
the license issued, but the stock
statesmen shall not be permitted to
have possession of the license, which
is the letter of credit. However,
when the stock statesmen can read
the law to the stock purchaser and
show him that the investigation has
been made and his license issued, 1T
is more effective than the old certitl--
cate which the statesmen carried and
showed to the purchaser and which
had stamped across the face: The
bureau OF securities does not rec
ommend nor disparage investment
in any securities licensed by it..
ITO the cautious investigator, the
statement stamped across the old IL
cense was warning for the. IN
vestor to investigate, but now there
is no warning under the so-called
air-tight law.
Permits Interference.
"In addition, the present so-called
blue sky law permits an ofhcious, IN
competent and. autocratic bureau
chief to interfere with nearly all OF
the common business transactions
between competent individuals to a
Greater extent than does the bank
ing law permit. the banking depart
ment to regulate and control the
affairs of public banks. If any eiti-
zen OF the state will read carefully,
the present blue sky law he Will
find that nearly all of the elementary
and common business transactions
are within the control and may be
supervised by the state bureau OF Sc
curities. -,.se,:~.
"a Young man who never trans
acted any business in his lite toi
himself, who never, practically speak.
ing, made a dollar for himself ane
whose only qualification is Ne
braska university diploma, heads the
bureau.
81 believe that Mr.. Touvell wanted
to push into print He wants some
advantage and he thinks that h'
can give himself a clean bill O
health by merely charging some
body else with the responsibility O
the failures in his department.
Recognizing the failure of th'
bureaucratic government at Wash
ington and the failure of bureau
cratic government at Lincoln and il
an attempt to protect investors il
stocks and bonds who came to mi
Tor their protection. l introduced ii
the last session of the Legislature
senate bill $40.
n.-x>~A>I Y~ye.x1r