Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1935-12-21
sec OFFERS Relief TO STATE nine FINANCE PROBLEMS

manly accepted standards Of his profession
need have no fear Of unhappy consequenees
1eetion win the diaErlhution and sals 81 min-
inE securities. Happily as was sApected ne
majority Of reports submitted hg minln& en-
rineers Of this country TO the commieaian
reflect the skin and INTEGRITY iot wniea mat
profession Is Justly renowned
Tse standards of skin and conduet gen
orally subscribed to b. the men engaNea IA
rninina engineering are not less eNafting
than the standards erected % me sernsttes
sct However, the commission, unfortuna1eIy
80 been confronted with e1preHnion2 Of
opinion Of engineers, which, either ~ M
advertence and lack Of skin, o. og asaa9n,
nislead the prospective investor - 70 me
possibfities Of the venture. In these in-
Stances, the commission has protected she
pnbIe either BY institution Of stop-order pro-
ceedings under section (D OF the act 20
suspend the effectiveness Of the parecalAf
reqistration statement containing the mis-
representations or By iniunctive proceedings
to restrain continued offering Of the stock
for sale.
At times an engineer Is employed 70 make
an Investigation Of the physical assets Of
4 particular venture for the exclusive pur-
rose Of placing q value upon such assets;
az other times. as Is the case with mining
prospects 70 determine whether the evt-
dence available and open to observation IS
sufficient to warrant the expending Of money
IN development OF the prospect. whether the
examination Is undertaken with view 70
final expression OF the results OF such ex-
animation in terms Of dollars and cents or
with view to expressing conclusions 10 SEN
eral comments and recommendations, the De-
taiIs OF the procedure followed in the course
OF the examination are the same
Follows Recognized NOrms
An appraisal expert, whether he be en-
gagged in the examination Of mining prop
critics, real estate. industrial plants or what
not is presumed to adhere to wen estab-
llshed technique. The commission expects, as
does the engineering profession itself, that
one who puts forward q report which pur-
ports to reflect the result Of accepted ap-
praisal and examination practices must, IN
the course Of his examination, have followed
accepted methods. The commission takes the
view that valuations contained in such q
report, even though in the final analysis
they represent merely informed JUDGMENTS
nevertheless are representations that tnese
accepted methods have been accurately anu
fairly followed II such accepted methods
have not actually been followed the valua-
lions finally arrived at are in essence mis-
representations Of fact. because they untrutn-
fully describe the basis upon which judgment
bas been exercised The same may be said
whether the valuation Is stated IN deiinite
figure or as q matter Of general descriptive
comment An engineer may not present re-
port which has been prepared in neglect OF
fundamental principles Of scientific method
and in disregard Of the standards he eN-
pressly or implicitly purported to follow.
Maintains high Standards
Any action OF the commission which has
the effect OF discouraging the preparation
and dissemination Of false and misleading
engineers reports on mining problems should,
and I believe does, receive the appreciation
and commentator Of group such as yours.
In its insistence that the recognized stand
ards Of the engineering profession be fol-
lowed in the drafting Of reports TO be used
in connection with the distribution OF securi-
ties to the public, the Securities and Exchange
commission is allied with every mining asso-
citation and mining society which has as It's
aim the maintenance Of the high standards
quite uniformly adhered to by engineers IN
America In a real sense, and to a substantial
degree, the objects Of this and every other
forward looking progressive mining group IN
this country are being furthered by the ac-
Invites OF the Securities and Exchange COM
mission It may also be said that voluntary
association OF mining men, such as your own,
organized for the purpose Of dissemination
Of technical knowledge and Improvement Of
technical practices, makes useful contri-
button toward achievement Of the results
sought to be attained through the adminis-
tration OF the securities act.