The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1934-10-18

procedure to be followed. Severe pen
alties are specified for violations Of
the terms Of the Act.
State laws to protect investors -
by requiring registration Of
statesmen with an appropriate
state authority prior to their under
taking the sale Of securities within
the stat-have been attacked as un-
constitutional. The contention was
made that these laws interfered with
freedom Of contract: resulted in an
unconstitutional delegation Of legisla-
tive powers to administrative bodies:
and placed an unreasonable burden
upon interstate commerce. Although
In the lower federal courts some Of The
earlier state laws were declared un-
constitutional, the supreme court, in
later cases, has definitely established
the constitutionality Of several Of
these laws. The court held that the
right to freedom Of contract may be
reasonably modified in the interest Of
public welfare; that the laws reviewed
did not unconstitutionally delegate
legislative powers: and that their re-
strictions upon interstate security
sales were not unreasonable burdens
upon interstate commerce.
Commerce Clause Rules
The constitut!onality Of the recent
federal law depends mainly, without
doubt, upon the adequacy OF the COM
merce clause Of the constitution as a
basis for its passage. Under the COM
merce. clause, congress possesses au-
thority to regulate all interstate and
foreign commerce.
Not all transactions Of business
among the several states, however, are
considered as interstate commerce"
by the supreme court. For example,
the court has held that policies Of in
surance are not articles or subjects of
commerce" Hence, interstate sales
Of insurance policies have not been
considered by the court to comprise
part Of the interstate commerce.
On the other hand, the court has
held that lottery tickets are articles Of
commerce; that interstate shipment
and sale Of them constitutes interstate
commerce; and that congress, relying
on the commerce power, possessed
adequate authority to prohibit their
interstate distribution. In the lottery
case. the court said that "undoubted-
| ~, the carrying from one state to an
other by independent carriers Of
things or commodities that are ordi-
rary subjects Of traffic. and which
have In themselves q recognized value
in money, constitutes interstate COM
merce." Securities are things" al
though probably not thought Of as
commodities" They are ordinary
subjects Of traffic and they would ap-
pear to have as definitely q recognized
value In money as lottery tickets.
Cites Decisions In Point
While the foregoing analysis shows
that securities meet the tests laid
down by the supreme court in the lot
terry case for q thing which should be
considered IN article Of commerce,
the court has not definitely held that
securities are articles Of commerce.
Lower courts, however, have SO ruled.
In . Michigan case, arising in 1914 in
connection with q blue-sky law Of the
state, the district court said: We
cannot doubt that stocks and bonds
are now subject to interstate COM
merce, and that shipments and sales
Of them, between the states, are in
terstate commerce" Another federal
district Judge, in q case involving an
Iowa blue-sky law, stated that mo
reason Is left for doubt but that nego-
table securities. corporate shares,
promissory notes, corporate and mu-
nicipal bonds. absolute In form. are
the subjects Of interstate commerce"
Other lower federal courts have ex-
pressed similar views. In a state blue
sky law case appealed to the supreme
court IN 1916, the court assumed the
interstate commerce character of in
terstate sales OF securities but held
that the state restrictions imposed in
connection with: such sales did not
constitute q substantial and direct
burden upon such interstate COM
merce.
Unless the supreme court should
hold that the interstate shipment and
sale Of securities is not part Of in
terstate commerce, there Is little rea-
son to believe the securities act would
b held unconstitutional on other
grounds. The power to regulate in
terstate commerce lis vested In con-
eress g absolutely as It would be in
single government" AS has been
noted the poper even permits-as in
the lottery act-the prohibition Of in
terstate commerce. Another consti-
tutional principle to be noted is that
It Is not within the province OF the
supreme court to pass upon the wis
dom Of the law. Congress, in the
words Of the court, has q large dis
erection which Is not to be controlled
by the courts, simply because, In their
opinion, such regulations may not be
the best or the most effective"
Farmers should not be permitted
to bump their heads against stone
wall.-Harry L. Hopkins. relief ad-
minigtrator.
Easy Pleasant Way
To Lose. Fat