Montana oil and mining journal. [volume] (Great Falls, Mont.) 1931-1953, 1938-10-08

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position that cost Of assets mas NOT =
/ measured in par value Of stock IL at To-
/ time Of the transaction through which strA
assets are acquired stock q the same cgaas
resentation OF cost under such circumstance
/ which Is based upon asgreeate par Is deema6
70 be an untrue and misleading statement 81
the actual cost Of such assets. The commission
In cases such as have mentioned Is con-
cerned only with the accuracy and corraex-
ness Of the representations. group which
has as one OF its primary detectives faciIita-
ton Of the financing Of primary mining cofa-
panies might well consider whether Aaoh
practices are not essentially preiudiciai 20 its
basic objective Repeated disappoiu Auants
flowing from the discovery that balance al.eef
figures are illusorys breed dstrust which even
tuaily extends TO all issuers o. that general
class.
I should like to say a few words about
another matter and that is the quite genafai
practice OF committing the preparation OF
formal documents for filing with the commits
sion TO professional men who are located q
great distance from the issuer's place of
business. Any superiority Of technique which
distant counsel may be presumed to possess
Is usually more than outweighed By the diff
culties Of communication. Furthermore, local
counsel ordinarily has clearer understanding
and more perfect knowledge OF the technical
problems Of mining and Is consequently
better equipped to present the enterprise 10
an investor in accurate, ineligible terms
Some OF the best and most informative pros
peetuses covering mining securities have been
prepared entirely by local men With little or
no experience in registration work Some OF
the poorest have been the work Of high priced
distant help The regional offices OF the COM
mission we're established not alone to detect
violations but to assist bona fide promoters to
effect compliance with the legislation. II Is
my experience that local men generally famfl-
lar with the problems of the mining industry
who have knowledge Of the particular enter
prise are best able to do the things which
the federal securities legislation requires be-
fore securities may be offered 70 the public.
The assistance OF the staff In Washington OF
in the regional offices OF the commission may
be readily obtained
Much OF what have said may indicate to
you unfriendly attitude toward mining
securities This Is not the case The COM /
not recognize the real assistance given It BY |
The mining fraternity. Many Of the best fea-
lures Of the form for registration Of securities 4
1f promotional mining companies both as 70 /
detail and general makeup we're contributed BY /
men active in the mining field. Professional I
mining groups and individuals interested IA
7arious phases Of mining have without ex- I
,eption responded Fundamentally to every
request Of the commission for suggestions or
critical comment Many mining engineers have
employed their technical sklfls
md knowledge for the benefit of the investor
Nor has it been necessary to the develop
nent OF my remarks to speak OF the good
asses. I should not like to leave you however,
Without a word about the many excellently
registration statements and pros
,ectuses covering mining securities We have
aore than few which reflect the application
4 the best standards not only in the pre-
entation to the public but in the actual con-
uct OF the enterprise itself. Let us hope
hat they may be the beneficiaries Of the
pade work Of this and similar professional