Evening star., 1933-12-24

$40 900 900, ann If loss occurs and it
| Is proved that q miSStatement OF fact
was made, the sub-underwriter 1t liable
for the loss on the whole issue.
Among the many proposals for
amendment is one supported by group
in the United States Chamber OF Com
merce which would relieve from liabil-
ity the underwriters of securities. Such
an amendment would, II Is believed gut
the act entirely, and 1t is not likely to
get far. Still another proposal Is to
make 1t necessary for the shareholder
who Is suing a corporation to prove
| that he himself was deceived by the
prospectus, and that he had read the
prospectus. etc. AS the law now stands,
the very fact that a misstatement oc-
Cured is sufficient to cause liability.
While the law implies that all investors
should make themselves familiar with
the prospectus of corporation before
investing, it is easy to see that a share
holder might have great difficulty in
proving to court that he had read the
prospectus. And so this amendment,
If it is offered, will likely be resisted
strongly.
The charge is made by those who at
tack the securities act that big and sub
stantial industrial concerns and banks
have for the most part declined to issue
new securities and to refinance because
of fear of liability under all the clauses
of the act. They say, for example, that
most of the corporations which have
filed statements with the Trade Com
mission before issuing new securities are
breWerieS, distilleries, investment bank
ers and gold-mining concerns. But OF
the big industrial concerns, few have
come forward.
Virginia Company Files.
To this it is replied by the Govern
ment officials that there have been
statements filed by industrial concerns
doing solid business. Fne Matheson
Alkali Works, a Virginia corporation
with principal offices in New York City,
is among those corporations which have
filed registration statements. This
concern is engaged, it is said, in the
business of manufacturing and selling
commercial chemicals and is doing
business in many parts of the country
1t has filed a registration statement
covering the issue of 234,9l7 shares OF
stock to raise between 100000 and
100000. The funds are to be used
principally for the construction Of a
new plant, costing 100000, in Louis
lana. The registration statement has
The commission Is receiving also
statements for registration from abroad,
as for example, statement from the
KonVersionskasse Fur Duetsche Aus
landSchulden Conversion once for
German Foreign Debts for the issue of
certificates Of Indebtedness in satisfac-
ton of the interest on certain German
loans in the total amount Of reichs-
marks 100000
1t seems clear that the administra-
tion Is intent upon preserving the Sc
curitieS act n all effectiveness. The
President, while he has called for in
formation and reports about the oper-
alton of the law as it now stands, has
not committed himself to amendments.
At the same time it is clear that it is
urged by administration officials that
something must be done to encourage
the ref1nancing of so-called heavy in
dustries and for capital expenditure for
the industries. Consumption industries
have been making progress and now, it
| is said. it is time these others had their
day. So the whole question of whether
the securities act really operates 10 dis
courage capital issues will be gone into
with great care.