The Birmingham age-herald., 1924-09-24
STATE PROTECTS INVESTORS.

| r hOI IN OnO.
 The duty of government to protect people against fraudulent securities is we'll established, but the laws by means of which government insures such pro- lection have been very slow of enact ment. To be sure, nRny people buy securities aknowing in advance that they are not listed and that they have no general market value, but, inspired by the gambling instinct, and having a cap ital too small to make conservative in- ter-est rates attractive, deliberately and knowingly take s chance on the allur- ing possibilities held out by the enthusi- astic salesman. Some salesmen easily become enthusiastic when sale is in sight. There are plenty of other peo- pie, however, who have no experience in investment and who are readily mis- led by promise of returns so large as to arouse the prompt suspicion of an informed person. The public is en- titled to protection against such fraud, and gradually both state and federal governments are assuming this respon- sibility.
 Among the states having effective laws of this nature, Alabama ranks high. The code of 1920 was better than the average, but was amended in 1923 so as to improve it greatly. The chief improvement lies in the fact that previously the code sought to define legitimate and fraudulent securities, whereas now all securities sold in the state must receive a permit from the state securities commission, with the exception of such securities as are S, e. officially allowed by law. It is difficult to draw statutory line between securi- ties that are safe and securities that are fraudulent. There is a certain specula- tive security which is not fraudulent and yet which would be barred by a rigid interpretation of a statutory definition. Hence the value of a commission for making "a study of each offering sepa- rately and on it's merits.
 Many enterprises are speculative in their beginning until the business or program upon which they are founded has justified itself. In business or in dustry, just as in ones personal activi- ty, the principle of nothing venture noth- ing have isffrequently applicable. In- deed, so generally accepted is the prin- ciple that asnew undertaking is usually spoken of as venture. Nevertheless, there must be some tangible basis on which confidence in the venture should rest, and there must be reasonable assur- ance of success if the affair is efficiently administered.
 It is a question such as this that the state commission will investigate and de- eide. An investor has a right to risk his money in any undertaking of legitimate or productive nature. But no investor is to be exposed to offerings that are frau dulent and which have no substantial basis, either in tangible assets or in pro ductive opportunity, to back the securf- ties or to be exchanged as guaranties for the sums invested. Of course, no effort is made to prevent an investor from plac- ing his money where he will. But effort is made to compel those who merchandise securities to show reliable financial or other responsibility. The offerings must be genuine, or the state will not sanction their exploitation in Alabama.
 All the government safeguards will not protect the man who doesn't want to be protected, but they will protect those who are innocently gullible and -who would fall an unwilling victim to sharp CTS and tricksters. There is wealth of reliable investment opportunity in Ala bama, sufficient indeed to absorb all the citizens have to invest. This opportunity is constantly expanding. Any person with a million dollars to invest will find in this state an abundance of safe and sound securities, enterprises, businesses and opportunities we'll within the law. If there is any doubt, the local bank or the state commission is ready and willing to give exact information, and even advice if such is desired. There is no excuse for any informed person buying worthless paper of any kind.