Jasper County Democrat, Volume 14, Number 55, Rensselaer, Jasper County, 14 October 1911 — WORKS WELL IN KANSAS. [ARTICLE]

WORKS WELL IN KANSAS.

“Blue Sky” Statute For Protection of Investors Against Fakes Is Success. Kansas City, Mo., Oct. 12— The last Legislature of Kansas enacted a law popularly known as the ‘‘Blue Sky” law. This act requires all companies offering shocks, bonds or other securities for sale within the state of Kansas to secure formal permission from the Banking Department. A comprehensive report as to financial standing, plan of operation, organization, etc., is required. The department also investigates the reputation and financial standing of the Directors and others associated with the enterprise. If it is deemed necessary expert opinion as to physical valuation of properties and other data is secured from disinterested sources. This law has been in force about seven months, during which time over 500 companies have asked permission to offer their securities to the people of Kansas. But 44 of these have met the rigid requirements of the department. Many fake promotors did not file applications, one concern went as far as Winnipeg, Canada, to escape the jurisdiction of the department. A Utah mining promotor is now languishing in a county jail and faces long imprisonment and a heavy fine for selling stock without a permit. The people of Kansas have been victimized, so the Bank Commissioner savs, to the extent of $4,000,000 to $8,000,000 each year by fake promotion schemes, many of which never were intended to make any return to the investor either in principal or dividends. Few investors could afford to go to the expense of a personal investigation, as many did not know, how or where to secure the desired information. Under this law investors accept the per-j mit of the Banking Department i as a certificate of corporate j '“moral character.'” • The administration of the law by J. X. Dolley, Bank Commissioner, and F. J. Partridge, special deputy iri charge of invest-! ment companies, has been such that the Kansas people accept their certificate in lieu of a per-j sonal investigation. Especially, is this true in the smaller towns' and in the country, where peo-| pie do not have easy access toj other sources of information. ! Kansas is the first state to supervise the sale of stocks and bonds. The law has attracted attention from practically every state in the Union. British and German Consuls have asked for copies of the law for transmission to their respective Governments. Requests for informa-; tion have been received from fi-j journals and official sour- ! ces in many parts of the world.'