Every evening, Wilmington daily commercial., 1922-04-22
v1CT1MIzING AMERICAN INVESTOR
BY yrsdsric J. Hasswin

l-powers OF the Government, the Capital
Issues Committee wss formed TO re-
strain tho isaue OF bauo sky stockH.
This was necessary In ORDER that the
investment funds OF the nation b con-
served TO pay war ooSts. The commit
tee existed only from May IL TO De-
cember 81, 1913, and In that short
time handled applications to is6ue a.
curitiee amounting to s3,777,sl3,000.
The amount disapprovcd as represent
ing fraud or as being unnecessary was
s9I7,133,000. Though tho committee
had no means OF enforcing It's deci-
sion2, and doubtless much blue sky
stock was put on the market without
application to the COMMITTEES. II "
eloquent Of tho extent OF blue sky
issues in thd United States that prno-
tically one quarter of tho applications
wero turned down by tho Capital Is
sues Committee.
The committee estimated that tho
American public ~ gulled to the ex-
tent Of $500. 900. 900 annually by worth
less stock issues.
| Investments Complete Loss.
This sum-" tho committee said.
4
the people of the nation, not only Of
dollars, but Of morale. confidence. and
the incentive to rave. The nations
loss cannot be measured slope in
money values. but In terms OF those
things which make for good citizen
ship"
The Post Of'ice Department and the
Department OF Justice prosecute
swindles Of this nature under laws
now effective, but neither can func-
ton until the fraud has been COM
nlltted and tho damage done. Tho Fed.
eral Trade Commission lately has un-
dertaken TO hall blue sky promoters
before II under the laws gcvernina 4
unfair competition. Thus som.
swindlea have bsen stopped almost a,
their inception.
Legislation has often been PROPOSED
TO protect the public, but always ha,
, fallen short OF enactment into law
The general plan OF proposed legisla
tion fs to create a central bureau wIhic1
must approve ell security issues i,
, excess Of a certain amount, abou
s11 900. Heavy penalties for breakinl
this law would be provided.
mere HdFb DtSn IIltDY LdrrkOuHt Dfu
sky swindles. One which stands ou
In American and British annals
, | the Mississippi Bubble, a vast develor
ment scheme In which thousands loe
their savings. The recent Ponzt schen
II was not precisely a blue sky schem,
9 az there was no stock selling involved
y but probably now legislation VIII
framed to include such enterprise,
j.. Certainly any Federal blue sky CON
!, mission would be likely TO inquire IN
to such scheme as soon as II starte
: operating. even though the law did N
provide specifically for curbing sue
. schemes OF frenzied finance. Offlci,
inquiry into the basis of fraudulei
=" schemes usually Is sufficient to burr
. the bubble without any other actio
II Is rumored that number
brilliant American ahventurers ha,
)" gone to Russia to obtain concession
e there on which they plan shortly I
= sell shares fn tho United States. o.
n ficials, aware OF their activities W,
y issue proper warnings when II become
% necessary. az Il has been ascertatns
y that the plans Of the promoters do nt
n include any real value behind the
- proposed stock issues. These prom,
g ters realize that Russia Is far enouG
d. away to prevent thorough investig;
I'd ton by prospective stock purchaser