Perth Amboy evening news., 1922-11-04
BLUE SKY BUSINESS
TOLD OF BY S
Daily Letter by Frederic }. Haskin

WASHINGTON, Nov. 1.-The
American people are being exploited
by the greatest blue sky business in
the history of the world, in the opin-
ion of government officials who have
made a careful study of the vend-
ing here of foreign c~urrencies. There
is much perplexity as to just how it
can be regulated and it's most per-
nicious aspects halted. No federal
blue sky law exists and those Of
many of the states are regarded as
loose. Even if there were adequate
legislation to govern the sales of Sc
curities of doubtful value, there is
a question as to whether or not such
laws would owe the dealing in cur
rencies.
The case of the German mark is
the most notable. Billions of Ger
man marks have been purchased by
Americans, as well as by citizens of
other countries, in the hope and ex-
pectation that great rewards would
be reaped by the purchaser upon
the return of the mark to its gold
par value. The trick in the situation
is that the mark cannot recover.
The mark is by no means the only
case OIuSES are even nOTe nag
lant. The German mark has had
more publicity because of the con-
s%picuous position of the German
ration in world affairs. Also, the
fact that the German r~eparations are
involved in the matter has added in
terest and tended to give wider cir
culation to reports concerning the
dealing in this deprecated currency.
1NLaE Oh h1t,n IL. 40 A-- oNn
doing is selling to Americans for do
lars, notes of European countries
which are payable only in these
countries and not payable anywhere
III gold. Exchange in all these Eu-
ropean countries steadily declines
from week to week and in some of
them from day to day. This means
that a broker can sell German marks
today for a given price and by t.
morrow the buyer will have lost
money. What the buyer fondly
hopes is that the tide will turn AMI
that on some future tomorrow the
mark will go up again, ultimately
bringing him a value very much
greater than he paid.
Sharp Deals in Bonds
But the sales of currencies are not
lllc SOle DluS shy Duo4ilCSS VI llllo
sort. Sales of securities of these for
eign countries and cities are in much
the same class, although, in some
cases, there Is a shade more hope
for them. In such cases, the brok-
ers are even more fortunately plac-
ed. They can sell a Polish bond to-
day for a given sum in dollars. BY
delaying delivery eve a day or two
the depreciating currency will en-
able them to buy the bond at a low
er price than that paid them by
their client.
The speculation looks highly at
tractive to uniformed purchasers.
To be offered government bonds at
small prices seems an easy chance
to make money. 1t would be If the
bond were worth even the small
price asked. One of the companies
specializing in this type of business
offers a sort of grab-bag Of miscei-
laneous foreign securities for a lump
sum. A dozen bonds, national, mu-
nicipal and industrial. are offered for
a lump sum. The par value OF these
bonds adds up to the total of $28 285
The lot is offered to the purchaser
at $192.50. 1t seems an excellent
investment.
Another offer which recently at
tracted many Americans consisted of
some Polish securities. For a lump
| sum of approximately $40. a lot Of
Polish bonds having a par value OF
about $4,000 was offered. Secretary
of Commerce Hoover examined this
| proposal and discovered that any
person could buy these securities II
the open market for about So. The
company offering the bonds claimed
they were a bargain at $40. 1t is not
improbable that when the company
printed its circulars, the cost of the
bonds in the open market would
have been as much as $40. The elapse
of some weeks during which the
printed literature was being circu-
lated saw the depreciation of Polish
currency to a point where h bonds
could have been purchased for Sc.
Doubtless some of the companies
offering these currencies and secuf-
tiles have some faith in them and
when they prepared their literature
they quote fair prices. If the itera-
ture should be put out at the turn
of the tide when the prices OF these
evidences of Indebtedness started
upward, the offerings would indeed
be bargains. The trick in the thing
Is that the chance of a rise in these
quotations is remote. To buy these
currencies and securities, therefore.