The silver state. [volume] (Winnemucca, Nev.) 1909-1925, 1922-04-06

the public by the sale of fraudu-
lent and worthless securities. There
are thousands of these professional
crooks, many of whom have
court records and who are experts
in the organization and exploit
tation OF all manner of get-rich-
quick concerns. They use expert
statesmen, work out all manner OF
plausible and attractive : schemes
which promise fabulous returns on
invested capital and rob the people
OF their savings by methods which
to the man experienced in bust
ness seem unbelievable. Their vic
tins are usually men and women
OF small means and little business
experience and who have no means
OF judging the value of security.
If an oil well is brought in in
some distant part of the country
or new mine is developed in
some out of the way place, these
pirates of promotion flock to the
scene and overnight organize their
get-rich-quick corporations and soon
flood the mails with lurid literature
promising fabulous returns.
These fly-by-night concerns are
generally unable to qualify their
| offerings under the securities laws
of most of the states. So their
agents can not go into such states
and sell their securities within the
jurisdiction of the state authorities.
But shrewd promoters have learned
how to evade the state securities
laws. They boldly take advantage
of the immunities of interstate COM
merce. Having organized their COM
panies with imaginary assets, they
print great quantities of alluring
circulars, prospectuses, and pamph-
lets, giving glowing and lurid de-
scriptions of their properties and
prospects of fabulous returns, and
flood the states with such liter
allure through the United States
mails and other agencies of inter-
state commerce. These promoters
have mailing lists in every state and
often in every county, and, fearing
prosecution if their agents enter the
states where their securities can
not be qualified, they carry on
the greater part of their fraudu-
lent promotions through the use of
the mails and other agencies. of
interstate commerce.
The states are powerless to stop
this. Their citizens are being daily
robbed without any method of pre-
venting it.
Conditions connected with or
growing out of the recent war have
greatly facilitated the increasing
evils connected with the promotion
Of fraudulent and unsubstantial Sc
curities. Before the war most men
of moderate means were content to
leave their savings with the banks.
Lack of acquaintance with stocks
and bonds made people suspicious
of such investments. But after our
entry into the war came the several
succeeding national campaigns for
the sale of Government bonds. APP
peals for such investments were
brought to the door of every home
in the land. Under the inspiration
Of patriotic purpose many millions
of American men and women who
had never before owned or seen a
bond or other security became the
owners of Government bonds. The
people became educated and accus-
toned to investing, owning, and
dealing in such bonds. 1t was but
an easy step across to investments
and dealings in industrial stocks
and bonds which promised much
larger returns.
Moreover, the increasing taxes,
war burdens, and cost of living
urged and often coerced people to
seek investments that promised
larger returns. These conditions
have in recent years furnished q
fertile field for the pirates of pro-
motion, who have taken advantage
of every opportunity, and, through
the mails and other avenues of in.
terstate commerce, flooded the
homes of the people with their lurid
literature offering securities that
promised and even guaranteed fabu.
lous returns.
1t has been officially estimated
that the people of this country have
lost as much as $500,000,000 an.
nually through the sale of fraudu.
lent and worthless securities. The
Treasury Department estimated that
$500, 100000 worth Of Liberty
bonds were taken from purchasers
in some Of the states in the middle
west in a few months in exchange
for worthless or doubtful securities
that promise larger returns.
A prominent Oklahoma newspaper
made an investigation of the stock
selling oil companies in Oaklahoms
in 1917. 1t found that the stock.
promoting companies produced les:
than two one-thousandths Of l pei
I l. l.