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

mails and the other agencies Of in
terstate commerce, over which the
federal government is by the consti-
tuition given exclusive control, are
being used by dishonest promoters
to violate, evade, and to a large
extent nullify these laws which the
states have enacted for the protec-
ton of their citizens. And as a
result the people are being de-
frauded of hundreds of millions OF
dollars annually.
The securities officials of the diff
ferent states are now appealing to
congress for federal legislation to
help suppress this national evil.
Consideration, of these facts
which appear in the hearings, con-
WINGED the committee of the import
ance and, in fact, the necessity for
the legislation which is provided in
the pending bill.
The broad principal underlying
this bill is that the several states
ought to be permitted to protect
their own citizens from the sale of
fraudulent and worthless securities
in such manner as they think best.
And since the federal agencies-the
mails and other agencies of inter-
state commensurate being used to
violate, evade, and practically null
lily the state securities laws, the
federal government ought to CO.
operate with the several states to
the extent of preventing the use of
its agencies for promoting the sale
of fraudulent securities in the diff
ferent states contrary to the laws
of such states.
The necessity for federal legis-
lation upon this subject has become
urgent. Various plans have been
proposed. But the plan provided in
the pending bill seemed to the COM
mittee the simplest, NOSE effective,
economical, and soundest in prin-
ciple.
1t does not provide for any ad-
ditional offices or the creation of
any new bureaus. Its enforcement
is placed with the department Of
justice.
In principle the bill supplements
existing state laws and provides for
federal cooperation with the states
in suppressing a recognized national
evil, to the extent of forbidding
the use of the federal interstate
commerce agencies for the purpose
Of evading or violating the state
laws.
Section / defines the terms "per-
son" and security" as used in the
act. These definitions are compre-
hensive enough to include every
thing to which those terms are ap-
piled in the securities laws of all
the different states.
Sections 2 and contain the pro-
hibiting provisions of the bill.
Section 2 prohibits the sending
of any security by the United States
mails or any other agency of inter-
state commerce from any state,
territory, or district of the United
States to any other state, territory,
or district of the United States in
which such securities can not be
lawfully sold under local law.
| Section 8 prohibits the sending Of
any letter, message, postal card,
circular, or pamphlet intended ~
to tender for sale or dilivery, di-
rectly or indirectly, any security;
(2) to solicit subscription to or
forders for such security; or (3) to
procure advertisement for sale of
such security in a newspaper or
other publication when in either
case such letter, message, postal
card, circular, or pamphlet Is adj
dressed, sent, directed, or consigned
from one state, territory, or district
of the United States to another
state, territory, or district of the
United States in which it is unlaw-
full to sell such security under local
law.
| Section 6 provides penalties Of
$4,000 or Imprisonment for not
more than two years, or both, for
the first violation, and $4,000 or
Imprisonment for not more than
five years, or both, for the second
violation of the act.
Section provides that every sale
Of security made or in any man
ner directly induced by any of the
acts prohibited in sections and 8
shall be void at the option of the
purchaser; and the purchaser may
recover back from the person max
ing the sale or any other person
who knowingly performed any act
which contributed to bring about
the sale, the full amount paid by
him for the security, with all the
court costs and reasonable attorneys
fees in any suit brought for that
purpose.
This provision giving the pur-
chaser the right to recover back all
he has paid out for any security
sold to him in violation of the pro-
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