The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-05-09
IL MILLION IN
SECURITIES IN
STATE OFFERED
Total Amount For Which APP
plication Is Made to Sell
Stock in North Dakota
LAW STREN T H EN- E D
New Provisions Governing Sc
curities Sale Effective
July 1

Preparation is heing made by the
state Blue Sky Commission for en-
forccmcnt Of the strengthened blue
XIV laws of the state which become
effective July |. With regulations
laid down by the comm ssion UNI
den existing laws and the new pro
visions the prom otion of wild cat
stock in North Dakota will be made
mich more difficult, it is believed
by commission members.
During the last year the total
Capitalization of companies making
upnlicrtion to the commission was
Sl2O00O00 according to figures given
out today by K. j Murphy, ecre-
torv Of the comm sSion. The amount
Of securities grant, d to be sold was
- Eti}c less than $4,000 900 and see
ur.t;cs refused totalled $2,50OO0O,
and in addition during the year w.
the securities of companies whose
licenses were revoked or cancelled
amounted to close to $2,000,OOO, he
said.
"Few Of the applicants are licens-
ed to sell as much stock as they ask
permission to SELL Mr.. Murphy SAID
"lf their venture proves successful
they may return and request that
the sale of additional stock be allow
cd. The commission has laid down
the rule that only in exceptional
Ct cs viii they allow more than Is
"a loci FOR hn Ia n
stock and other expenses incidental
to the sale Of securities and has also
adopted a rule with reference to pro
motion stock; namely that no more
took shall be issued for promotion
services than represents the fair and
rca enable value 81 those services
The commission under the new act
may, where the assets consist IN
whole or part of patents, secret pro-
cesscs. undevelop.d oil or mining
leases. good will or other intang
ible assets where i is difficult to
determine values, cause the company
making application to place a certain
amount of their stock in escrow. The
escrow agreement has been found to
be IL very fair and efficient means of
solving questions of value with res
pect to untred devices and ideas
and undeveloped properties, and y
very good test of the sincerity and
good faith of an applicant"
Clean Business for Law
The clean business interests of
the state have manifested and eX-
dressed hearty sympathy and CO.
operation with the Blue Sky law and
are clearly in accord with its work
ings, the secretary said.
The occasional cry that business
is being stifled by the enforcement
of the law comes from those who do
not understand the operation CT the
law or from those whose business
will not stand investigation" said
Mr.. Murphy. THE business of prot
ing has become a profession. The
promoters are schooled in the art Of
advertising and of craftsmanship and
the common mind cannot cope with
their persuasions.
"The one great weakness and the
fact that promoters outside the state
have made unrestricted and unres-
trained use of the agencies of inter
state commerce, principally the mails
in advertising and promoting their
schemes with impunity. Until we
have some federal legislation such
as that proposed in the 'Denison
bill now in Congress our state laws
cannot accomplish all that is re-
quired to protect the public against
the wild cat promoters, operators of
confidence games, takers and ily-hy-
night dealers"
The term fraud in the state laws
does not have reference merely to
peImediated fraud alone, the secre-
tary said, adding tat lust as much
money is lost through the failure Of
bona .fide but misguided business
ventures as through out-and-o
frauds. In either case the stockhold-
ers generally lose. Both should be
prevented as far as possible and this
isSthe object of the law
All Must Be Licensed
All companies in North Dakota
must be, licensed and permits obtain
ed from the state department for
any agents or statesmen selling secur-
tiles, Mr.. Murphy said.
Persons before taking stock in a
doubtful or unknown company
should first see if the company is