The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1923-04-03
Examiners Report Declares
Little Left in MOhall Oil
Company
MANY BOUGHT STOCK
Repetition Impossible Under
New Law and Regulars,
Secretary Says

ers for the state Blue Sky Commits
sion on the activities Of the Great
American Gas and Oil Company OF
Mohall, it was learned here today
when the veil Of secrecy was lifted
after official court action had been
instituted before Judge A. G. Burr
by Francis Murphy of Minot, special
assistant attorney-general.
Officials of the company are
charged with exceeding the orders
of the Blue Sky Commission in the
amount of commission allowed for
sale of stock; exorbitant salaries,
failure to complete an oil and gas
well started at Mohall, and gross
mismanagement.
Scores of farmers throughout the
state, particularly in the Northwest
crn parts and in Cavalier and Traill
counties purchased stock of the
company which has practically moth
ing left on hand, according to the
report submitted sometime ago by
l.. f. Wambhein, examiner. Many
persons put their Liberty Bonds in
to stock and others gave notes.
Farmers were the heaviest buyers
Of oil stock, the report says.
The state affairs aid to exist with
respect to this company will not be
duplicated again under the Blue Sky
law of the recent legislature and
rules of the commission, r. J. MUIR
ply, secretary, who laid the case
before the commission last August
when the permit of the company to
sell stock was cancelled, said today.
The Blue Sky Commission has plac-
ed a maximum Of allowance for pro-
motion of Is percent except in un-
usual instances, he said, and is en-
powered by the legislature to re-
quire that proceeds Of stock sales
he held in escrow until the capital
stock is fully paid up.
Action Started in August
Action in the Great American case
was instituted after protests OF
some stockholders were made and
. followed by a petition to Attorney
General George Shafer by A. NJ.
Sorenson, Geo. l.. Baska, Leo f. Be-
han, Robt. Altberg, Geo. ] Rodsater
and Harvey Pulley Of Mohall. The
petition charged mismanagement,
that the company had ceased to
operate in North Dakota, that the
company had violated the orders Of
the Blue Sky Commission in selling
too much of the stock, in overpaying
commission on sales, in taking notes
in excess of the amount allowed, in
paying extravagant salaries, in max
ing false reports and asking that
it's affairs be wound up in court.
Records in the Office Of the Secre-
tary Of State show the company
was incorporated August %, 1918,
the articles stating lit is the in
tention Of this corporation to pros
pect mine, pump, dig and drill for
oil, gas, coal and other allied SUBJ
stances in the vicinity of Mohall in
the county of Renville, state Of
North Dakota. and other places
where lease have been obtained
Capital 100000
The capital stock was placed at
100000, with William Clifford OF
Mohall president, E. R. Sinkler of
Minot, vice-president; and J. +.
Bryans Of Mohall, secretary. The
records of the Blue Sky Commis-
sion show the names Of r. E. Cliff
ford Of Mohall and c. w. Reichert
of Darlington as directors in addi-
tion to the officers.
On January Is, 1919, the company
was given permission to sell $25,OOO
of stock, the motion in the Blue
Sky Commission being made by
then Governor Frazier, it being pro-
vided that not more than $4,000 of
the $4,000 should 60 for promotion
purposes. On July 25, 1919, the
company was allowed to sell $780,
600 additional Of stock and on Oct.
%, 1919 was given permission to
sell the balance Of the capital stock
of 100000. The company was pro-
hibited from charging paying com.
mission greater than 20 percent fol-
sale of stock, and prohibited from
taking a note for stock for more
than 500. The company violated
this rule and took notes for IS much
as 5000 to $700 from one person, R.
]. Murphy declared.
1ue SAdMIueTS ISpOTtS ~ "0s
learned, declared that large
amount of notes taken for stock had
been discounted at banks, and that
$4,000 to 100000 Of worthless notes
remained on hand. The company
the report declared, was virtually
without funds.
Selling Campaign
A we'll was started near Mohall
Renville county. A mammoth sales
campaign was inaugurated. Autos
met prospects at the train and tool
them to the we'll. Gas had beer
found, it is said, and wells burned
brightly at night when prospective
buyers for stock claimed. Y
When the well was only partly
down to the depth it was planned
to, drill the company the contract
with the we'll drillers. was broken
the Wambhein report declared. The
Great American sued the drilling
company. The company sued thu
we'll dfillers. An attempt was made
by some parties to remove part oi
the equipment to Montana, it Il
charged.
It also is charged by the stat'
that stock. salesman sold stock t,
some people at the, par value O.
81 q share and would sell stock I,
others the same day for as high Al
S. share.