Evening star., 1936-04-06
Says Dealer Seeking to
Withdraw Registration
Was Relieved of RESPONSE
biIity by "Stop-0rder.'
SUTHERLAND READS
SIX-THREE DECISION
Cardozo. Brandeis and Stone Laud
Law in Holding New Workers
Should Have Appeared to An
swer Questions-Guffey Act
Ruling Is Deferred.
BY the Associated Press.

BY the Associated Press.
In a 6-to-3 decision which did
not pass on the constitutionality
of the 1888 securities act, the
Supreme Court ruled against the
Securities Commission today in
its effort to compel j. Edward
Jones of New York to testify
concerning a proposed issue of
oil securities.
The promoter was within his
rights, the court held, in con-
tending withdrawal of the regis
tration statement for the stocks
made it no longer incumbent on
him to respond to the demand to
testify. He also mad attacked
the legislation itself as unconsti-
tutional.
The high court deferred, for at
least one week, a final decision
on constitutionality of the Cuff
fey coal act.
I'VE are unable" said the ma
jority in the securities decision,
by Justice Sutherland, Ito see
how any right of the general
public can be affected by the
withdrawal of such an applica-
ton before it has gone in effect.
The right of the registrant to
withdraw his application would
seem to be as absolute as the
right of any person to withdraw
an ungranted application for any
other form of privilege in respect
of which he is at the time alone
concerned"
Justices Cardozo, Stone and
Brandeis, in the dissenting opin-
ion, maintained that the regula-
ton prohibiting a regiStrant
from withdrawing a statement
once placed before the S. E. G..
was valid.
Minority Lauds Law.
THE rule now assailed was wisely
conceived and lawfully adopted to
foil the plans of knaves intent upon
obscuring or suppressing the know
ledge of their knavery," they said.
The witness was under a duty
to respond to the subpoena"
The legislation, which was later
amplified by Congress, was enacted
in the hundred days" session soon
after President Roosevelt'S inaugura-
ton as result of disclosures in the
Senate stock market investigation.
Jones defied the commission in its
long effort to compel him to testify
concerning proposed S100, 900 issue of
f0 urifl
registration statement filed with
the commission, but the Government
denied he had the right to do this.
The Southern New York Federal
District Court and the Second Cir
cult Court of Appeals upheld the legis-
lation and ruled that Jones should
testify.
BY coming today, the decision set
a record for speed of disposition of
New Deal cases at this term. Argu-
ments were completed only &c days
ago. Other cases have waited from
% to so days for action.
The decision was read as soon as
the court met. Again the court room
was filled
4llC SSSul lLICo dSG SptClIltu LIldG oil
the material facts about an issue of
securities must be placed on file with
the S. E. c. so the public would have
adequate information before it bought
Jones contended it improperly dele
gated congressional power, violated
States rights, took property without
"due process of law" and transgressed
the amendment barring unreasonable
searches and seizures"
Subjects of Commerce"
The Government disputed this, as
serting that securities are subjects of
commerce" and "a prohibition against
the interstate transportation of un-
registered securities is within the reg
ulatory power of Congress-
There are three main provisions of
the act. One forbids the sale of new
issues of securities by mail, or other
wise, in interstate commerce unless
statement is on file with the Securities
Commission disclosing all material in
formation.
Another makes officers. directors
and underwriters civilly liable for any
&C., (1OTTnT - q