The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1933-03-29
ASKS CONGRESS TO
TIGHTEN UP LAWON
SALE OF Securities
Asserts Loss to Public Caused
BY unethicaI and Dishon.
est Practices
TO EXPEDITE LEGISLATION
Publicity is selected az Medium
For Controlling Blue Sky !
Marketing 4ssss
TO EXPEDITE LEGISLATION

"eSS
Washington, March 2e.-lRePresi-
dent Roosevelt asked congress We'd
nesday to provide federal supervision
Of investment securities.
In another direct special message
his sixth In less than three weeks
the chief executive declared the pub
lie has sustained severe losses
through practices neither ethical nor
honest"
Thereupon, he proposed to invoke
the power Of the federal government
in interstate commerce traffic to
control new securities.
Preparations already were under
way in house and senate to expedite
the newest administration legislation.
Representative Rayburn Oem..
Tex) said hearings would be held BY
the interstate commerce committee.
which he heads. possibly starting
Thursday. He endorsed the proposals
and introduced the bill when the
message had been read.
The president also informed con-
gress he soon would propose legisla-
ton relating to the better superN-
sion OF the purchase and sale Of ell
properties dealt In on EXCHANGES"
Raps Unsafe Practices
He also spoke Of legislation he has
in mind Ito correct unethical and UNI
safe practices on the part OF officers
and directors Of banks and other cor
porations"
what we SEEK" Roosevelt said, is
q return to . clear understanding OF
the ancient truth than those who
manage banks, corporations and other
agencies handling or using other peo-
pies money are trustees acting Tor
Others"
The presidents text follows:
ITO the congress:
Il recommend to the congress leG1
islation for federal supervision of
traffic In investment securities In inA
terstate commerce. I
In spite Of many state statutee.'
the public In the past has sustained
severe losses through practices neither
ethical nor honest on the part Of
many persons and corporations aell&
ing securities.
"Of course, the federal government
can not and should not take any acs
ton which might be construed -
approving or guaranteeing that uoWs
ly issued securities are sound IN tho
sense that their value win be main
tanned or that the properties which
they represent will earn profit,
Wants Full Publicity
There Is. however, an Obligation
upon US to insist that every issue Of
new securities to be sold In interstats
commerce shall be accompanied By
full publicity and information and
that no essentially important element
attending the issue shall be concealed
from the buying public.
This proposal adds to the ancient
rule OF caveat emptor, the further
doctrine let the seller also BEWARE
1T puts the burden Of telling tho
whole truth on the seller.
ut should give impetus to honest
dealing In securities and thereby
bring back public confidence.
1.-THE purpose Of the legislation I
suggest Is to protect the public with
the least possible interference to hon
est business.
"This is but one step in our broad
purpose Of protecting investors and
depositors.
at should be followed by lsgisla-
ton relating to the better supsst-
sion Of the purchase and sale u M
property dealt In on exchanges and
by legislation to correct unsthical and
unsafe practices on the part Of off,
GERS and directors Of banks and othor
corporations.
EmphAsises Trusteeohip
what we seek = Z return % .
clearer understanding Of the ancient
truth that those who manage hanks,
corporations and other agencies hand
ling or using other peoples money aro
trustees acting for others.
FRANKLIN D. ROOSEVELT.
THE white house,
March -, 1883"
Legislation regulating and Nlpe9vis.
ing the stock exchanges win b peo.
posed In . week o. 10 days.
In addition, the president has IN
mind banking legislation While
would separate security aftlllateG
from regular banking institutions and
divide commercial banking from trust
banking and include private BANKING
firms within the scope of regulations
that apply TO public institutions.
It 3 not likely that III Of this leg-
islation win 60 before this session a
congress, but the president = pgeGD
ing his bill for control q The staaaI
marietta
Il q understood new legislation also
win deal with sales Of foCeign socuzj-
ties "a this country. SECRETARY Aogog,
who has been working with expoxta
On the presidents ideas lai6 II
draft q the bin before Aocoevoll
Tuesday.
To preaident now has a ~ -
. thSee-polnt plan for refog1ning ~
national railroad sltalation. III nla
calls for authoGisation q : $50
coordinator % gnide . o1naeal foor.
gani1Atiou q tn cap1fo1 s1xuo1ol
q the roads: repeal q To e1Ano lo.
curing . return e IN Eo1l1oo3 80.
inGs over SIX pr cent: an1 ro111nu
q holding oompa11ea n I