Evening star., 1924-10-12

which prohibits their using the mails
in any form. This is a drastic and
hlghly effective measure in the hands
of the Government, which is con-
tinually used with great success.
During the same period the Post
ONCE Department obtained Yyl con-
Victions under the penal cade for
misuse of the mails with a purpose
of fraud.
Example in on Industry.
1t was the Post ONCE Department,
IN conjunction with the Department
OF Justice, which recently made a
drive against the fake oil stock pro-
noters in the Southwest. securing
the conviction of many persons.
one OF the highest estimates as to
the loss suffered by the public
through fraudulent stock sales and
exchange of Liberty bonds for worth
less securities has been made by An
drew Ten Eyck, member OF the New
York bar who places the figure at
the amazing total of S1,OOO,O0O, 600
annually.
Mr.. Ten Eyck, writing in the
Harvard Business Review. says this
loss of $4,000 900 -is not only an
inroad into the working capital Of
the Nation. but also a source Of un-
rest on the part of thousands OF VIC
tins OF security swindles. 1t is
recognized everywhere as legfti-
mate concern of the State" he ays.
More Investors Since War.
When American business has re-
covered it's sense OF direction and
proportion there Is still Likely to be
reflection in the leading security
markets of one permanent conse-
quence of the war. which is the in
crease in the number OF investors
from about 100000 to we'll over
20,000,000.'
Mr.. Ten Eyck recommends to
Americans for study the workings Of
the British companies act, which he
investigated in England for the New
York Stock Exchange. He fears that
the present method OF licensing secur-
ity sales under State supervision will
not protect the public, and explains
the completeness of information re-
quired in England as compared with
that required here.
THE American experience with
reference to measures in the interest
of pure food suggests an apt analogy.
Publicity as to what the security is
and the property behind it, and linn
tied to certain simple data should
be forthcoming by compulsion of the
State, with the emphasis always on
proper company management. Pres
| ident Coolidge stressed this point in
| an address to the investment bank
ers at the White House on October
90, 1923. Legislation founded on such
| principles, for which ample, prece-
dents are to be found in the British
| law, would be moderate and in accord
with common sense, and, what Is most
| important, make for the education OF
| the public in analyzing security val
ues for themselves and demanding
evidence of the wholesomeness of Sc
curities before they purchase.
"Such laws will not supplant, but
supplement- and strengthen, the GRIM
| inal statutes dealing with fraud,
whose rigid enforcement will always
be necessary to reach. the crooks
| They will most certainly create a
better atmosphere in the security
| field"
Bills Before Congress.
National legislation looking toward
regulation of the situation is before
| Congress in several bills, the mos,
prominent of which seems to be the
so-called Denison bill. originally
ganization of the blue sky commits
sioners of 81 commissions. 1t has
| since been rewritten and is now be-
| fore the House committee on inter
state commerce. Since recent reor-
ganization of the Blue Sky Commits
sioners' organization it is not known
exactly what position they take
toward the bill as it is now consti-
| tuted.
The Investment. Bankers Associa-
week at Cleveland, no doubt will dis