Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-01-16
NEED FOR CONTROL
OF D. c. SECURITIES
SALE IS DISPUTED
Chairman of Local Business
Group and Senator Blaine
Disagree.
CAPPER TYPE BILL
TERMED UNRELIABLE
One Plan Would Register Dealers,
While Other Would Reg
lister Stocks

The need for enactment Of n law
regulating sale OF securities In the Dis
trict was stressed at q hearing TODAY
before the Blaine subcommittee of the
senate, which for some time has been
INVESTIGATING the need Of such 1egisla-
witnesses and Senator Blaine of wis
consin, chairman Of the Committee.
arose over the type Of act required,
raul v. heySer, chairman Of q Joint
group OF local business and professional
interests, urged adoption Of law along
the lines OF the one proposed by Sena-
Tor Capper OF Kansas, known generally
as e securities fraud law, and Senator
6lalne, In protesting against certain fea-
lures OF this bill, bespoke blue sky"
Dill, the enforcement of which, he
thought, would be more effective IN
stamping out fraud.
Plan Termed Unreliable.
A highlight Of the session was the
objection by Senator Blaine that the
Capper type Of bin could not be relied
upon because 1t placed too much dis
erection IN the hands of the United
States Attorney for the District. He
objected also to the injunction feature
OF this type Of fraud bill.
Senator Blaine In questioning mr.,
keyser about features Of the Capper
legislation, particularly objected 10 a
provision under which witnesses and
omc1alS OF the district attorneys office
would be prohibited from making public
reports OF an investigation being made
OF any party or concern. He said this
would leave too much discretion In the
hands OF one man as to whether or not
ne had found evidence SUFFICIENT for
prosecution.
''The purpose Of this provision Of your
law seems to be for the suppression of
Q naaladmintstration If the United
States attorney happened to engage
therein" asserted Senator Blaine.
Every law must be administered by a
public Official, and we should not pre-
sumo that such official would not do his
duty" replied Mr.. Keyser.
That Is a violent assumption, as wit
messed in many cases in the District"
Senator Blaine retorted. He added that
such provision providing the ''im-
pounding Of evidence" of an investiga-
ton conducted by the United States at
sorney might serve to protect . man
having political pull
Dealers Would Be Registered.
The proposed law was drafted ane
recommended by representa- tiVes of tn;
District Bar Association. the Women's
Bar Association, the Washington Bank
ers' Association, the Real Estate Board,
Federation of Citizens Associations, the
Better Business Bureau and the Invest
ment Bankers of America.
Mr.. KeySer explained that this type
OF law would provide for the regula-
ton Of the dealers in securities rather
Lnan registration OF the securities, as
provided In the Blaine bill.
Mr.. Keyser pointed out all dealers
and statesmen of securities would have
TO be licensed and bonded under the
Capper type Of bill, that the district
attorney Is given definite power of in
vest1gation and to sue out injuncticns
where evidence shows such need.
The type of legislation favored by
Senator Blaine would require the reg
istration OF securities sold in the Dis
tr1ct, with certain exceptions, such
legislation to be made by the Public
Utilities Commission. It would be un-
lawful for one to sell securities here
not licensed by the commission, unless
they were in the exempt class.
Smith Co. Case Is Cited.
In discussion of need for the leg
iSlation, Senator Blaine cited the Smith
Co. case and brought out that certain
OF its officials had been convicted of
acts In connection with their business.
He declared that this company had sold
securities valued at $50 600, 900 and said
he doubted If there was single issue
on which investors had not lost some
money.
This opinion was challenged, how
ever, by Mr.. Keyser as wei as Francis
@. Addison, jr., representative Of the
local bankers association, who con-
tended that certain of the mortgage
bonds issued by the Smith Co. were
soundly secured and would "pay out"
At the close of today's meeting SEN
ator Blaine announced the committee
would meet again at 10 O'Clock next
Tuesday morning to hear evidence in
regard to some specific cases relating
to the sale of securities. No announce
ment was made as to what witnesses
would be called.