Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-04-22

or as being unnecessary was S9l7,-
1873, 900. Though they committe =
had no means of enforcing its de-
cisions, and doubtless much blue
sky stock was put on the marke'
without application to the CON-
mittee, it is eloquent of the extent
of blue sky issues in the United
States that practically one-quarter
of the applications were turned
down by the capital issues COM
mittee.
The committee estimated that the
American public is gulled to the
extent of $500,000,000 annually by
worthless stock issues.
Investments Complete Loss.
This sum-" the committee said,
present sheer waste and net loss
to the people of the nation, not
only in dollars and cents, but Of
morale, confidence and the incen-
tive to save. The nations loss
cannot be measured alone in mon
ey values, but in terms of those
things which make for good citi-
zenship."
The postoffice department and
the department of justice prosecute
swindlers of this nature under laws
now effective, but neither can func-
ton until the fraud has been COM
mitted and the damage done. The
federal trade commission has
lately undertaken to hale blue sky
promoters before it under the laws
governing unfair competition. Thus
some swindles have been stopped
almost at their inception.
Legislation has often been pro-
posed to protect the public, but al
ways has fallen short of enact
ment into law. The general plan
of proposed legislation is to create
a central bureau which must APP
prove all security issues in excess
of a certain amount, about $780,
600. Heavy penalties for break
ing this law would be provided.
There have been many famous
blue sky swindles. One of which
stands out in American and Brit
ish annals, is the Mississippi Bub-
Bile, a vast development scheme in
which thousands lost their savings
The recent Ponzi scheme was not
precisely blue sky scheme, as
there was no stock selling involved.
but probably new legislation will
be framed to include such enter
prises. Certainly any federal blue
sky commission would be likely to
inquire into such a scheme as soon
as it started operating, even though
the law did not provide specifical-
ly for curbing such schemes of
frenzied finance. Official inquiry
into the basis of fraudulent
schemes usually is sufficient to
burst the bubble without any other
action.
1t is rumored that number of
brilliant American adventurous
have gone to Russia to obtain con-
cessions there on which they plan
to sell shares in the Unit
ed States. Officials, aware Of their
activities will issue proper warnings
when 1t becomes necessary, as ii
has been ascertained that the plans
OF the promoters do not include
any real value behind their pro-
posed stock issues. These promot-
ers realize that Russia is far
enough away to prevent thorough
investigation by prospective stock
purchasers, and yet a sufficiently
romantic part of the world, under
present circumstances, to lure ad-
venturous investors to take a
chance on making a sudden for
tune out of radium or anything
else the glib-tongued statesmen
may suggest.
The federal trade commission Is
now engaged in the compilation
OF a reportyembodying a survey of
the blue sky" situation. There is
strong belief that upon receipt of
this report congress at last will act
for the protection of American in
vestors.