The Bottineau courant. (Bottineau, Bottineau County, N.D.) 1895-1929, 1921-06-23
LOOK OUT FOR
WORTHLESS STOCK

$E WltH bumper crop IN SlgnC the
stock promoters look towards North
Dakota with eager eyes. Millions Of
lars are lost every year thru the
lrchase Of. stock Of no value. The
respective investor could protect
himself by asking few simple ques-
tion. First What is the Nature of the
enterprise?
Are the basis sound? That is, by
comparison with undertakings of a
similar character elsewhere, is it prof
table? Competition will be met with
and what degree of opposition will be
faced ? Has the enterprise peculiar ad-
vantages over others / in. similar
line? What other advantages are
there indicating that the enterprise
can be profitably conducted under ex.
listing conditions.
Second What is the Plan of Or.
ganization and Control?
What is the manner of the issu-
ance of the stock? Has it been issued
in whole or in part in return for prop
erty turned over by the incorpora-
tors? If SO, in what proportion and
for what property? Is the stock Of
fered for sale fully paid and non-as-
sessable? Has any stock preference
If 50, of what does this preference
consist? Prospective shareholders
should demand permission to examine
bylaws. Who has the stock control ?
(Remember that in their hands rest
the rights of the smaller stockhold-
ers.) Finally, are there any unusual
features in the charter Of the bylaws
which may in the future be employed
to the detriment of the stockholders
Third-What are the present con-
ditions of the Enterprise?
The Property
To begin with, has the property
any value, and how has the value
been estimated. Are the properties
owned outright ? In other words are
the properties held under lease, IL
cense, grant, option or otherwise :? Are
there any encumbrances on the prop
critics or rights? If they are owned
outright, the holding papers should be
in proper form and it. ought to be
known, also if the holding terms are
reasonable, satisfactory and safe.
What has been the operation up to
date? Then, what have been the re-
suits and to what extent have they
proved profitable. Has any Difficult
ties been encountered, if any. In what
nature. What is the demand for the
product and what is the present stat
us financially? Are the books prop
er1y kept and are they open to the
inspectiat Of the stockholders /?
s Are the assets real or mostly paper
value? Are there any debts, claims,
fees, rents, royalties, or other pay
ments or obligations due and which
must be met?
Then there are the directors. Who
are they? Who are the active mem
bers Of the board. Who, if any, are
inactive? Are the meetings held reg
ularly and are they fully attended ?
Who compose the executive commit
tee, if any, and what are their pow
ers? Are the directors stockholders
to material amount?
Who are the officers? What com
-pensation do they receive or are they
to receive? What is the general plar
Of operation mapped out, and what
led to their adoption?
If there is an invention, who in.
vented it? What is the standing Of
the inventor? Are there any contracts
or obligations not now effective by
which the right could subsequently b.
affected q
The prospective investor should no
accept the statements Of stock sales
man, but should demand sworn
statement by the board Of directors
setting forth the conditions of th4
proposed project. He should be fur
nished with a complete financial re
port which will show how much capi
tai the project will require, and wha
assurance can be given that the re
quired amount will be raised. Remem
Der, that when a certain amount Q
capital is required to successful,
handle project, unless this amour
is raised, the chances are from tn
very beginning, that it will be fail
ure. M
jects nearer home, as you say, bu
this article is already quite lengthy
could show you how the Leagu
member in the Legislature worke