Evening star., 1934-04-06
CHANGES ARE SEEN
IN SECURITIES ACT
Mining Bloc Says Admin.
istration Will Allow
Amendments.
BY the Associated Press.

BY the Associated Press.
An agreement by administration
quarters to amend the securities act
was reported today by members of
the strong non-ferrous metals bloc
in the House.
Spokesman for this group stated
they had AN understanding" that
their demands would result in elimi-
mating provisions which they said
were "strangling the mining indus
try"
Chairman Rayburn, Democrat, of
Texas. Of the House Interstate and
Foreign Commerce Committee, who
guided through the administration
securities bill last year, and James
Lands, Federal trade commissioner
in charge of mining securities, were
reported to have promised the l65
members Of the bloc in an executive
session last night the law would be
modified to some extent this session.
The amendments. under one pro-
posed plan. would be placed as riders
on the stock market regulation bill
in order that the securities act itself
should not be reopened for general
amendments at this time.
Seen as Speculation.
Representative Scrugham, Demo-
crat, Of Nevada, chairman Of the nom
ferrous metals bloc, demanded q re-
duction in the criminal penalty pro-
visions for misstatements In the reg
istration Of securities with the Fed
eral Trade Commission.
He asked also the exclusion from
registration of securities by mining
corporations capitalized at sl00 900 or
less regardless Of the par value Of
their stock.
The non-ferrous mining bloc took
the position that prospective mining
was speculative enterprise and to
subject it to rules taking the chance
out of it reduced it to nothing
If this law had been effective" +"
said Scrugham, former Governor Of
Nevada. "Goldfields would never have
been found Two hundred millions of
dollars have been taken out of Ton
eph. but 1t didn't look like it was
worth a nickle, and if the securities
act had been in existence it never
would have been developed"
Mrs. Isabella Greenway. Democrat.
OF Arizona. who is secretary of the
group, said nine out of ten of the
great mines in the country. copper,
silver and gold. had been developed
after several attempts had failed.
Rayburn would not commit himself
as to how far he would be willing to
go in modifying the securities act
Landis said since the act was passed
$50. .000, 900 in mining securities. mostly
gold. had been registered with the
commission.
"The act is paralyzing mining de-
velopment," said Representative En-
glebright, Republican. Of California.
1T is the fear of the red tape and
criminal provisions that has caused
the paralysis" Mrs. Greenway added
Men in my State do not want to
sign q statement of the worth of a
prospect. not only because they may
become criminally liable if it does not
prove out, but because they know
many times it is gamble and they
do not want to take the RESPONSE
bility Of guaranteeing a possibly use
less hole as an investment to their
fellows"
Lands said to the Arizona Con-
greSswoman:
"You would not put $1,000 in an
enterprise that does not even keep
books after issuing stock"
I have done it many times" she
laughed.
All big mining developments In the
West came during a gambling period,
Mrs. Greenway explained.
Would Halt DEVELOPMENT.
This law tends toward a social
theory that will halt prospect develop
ment," Scrugham added. Many peo-
pie who used to take chances are
afraid to now, not because its is specu-
lative. but because of the penitentiary
IN the background. The fear of the
brand Of criminality has killed the
mining business"
Representative Stubbs. Democrat,
OF California, told Lands, "in your
great interest to protect the investors
you are killing the mining industry"
and warned that unless the bill was
made simpler you will have more or
less Of q rebellion"
In answer to coptentions by busi-
ness and financial oficials that the
act was slowing recovery by its drastic
provisions, Senator Hastings, Repub-
lican. Of Delaware, yesterday intro