South Bend News-Times, Volume 37, Number 205, South Bend, St. Joseph County, 23 July 1920 — Page 12

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i 'HUM l MOH.M.M, JLLV i.it lyu iMt oOUTtt ÖtND NEWS-TIMEa

Fighting the

"Blue Sky" Menace Successfully

By Fred L. Hal mes

e jc:

5 on TYhi

fVf

.y ary

( f in'.r.'-y th.tt yo i vfi-jr '.! nc -'m- ' iliiji' sky" in th J '.- not (!.-';:'" "it1

tno i..ir!.i:.f" ar.-l In o ::nr :"; 1 cir-

mitfht retir

J.nanci.'.l wor!l

r t fi i ntiatf I y tho pro

t;-sr f r cin ular of th" fora pany. "Im't p-jt jour conJMrncp in ore 'a ho jiromlsf's ynj li Mends on ."-tck. I:f-m-mbfr that even clivi-

.tti on iTf rr-rrp'I Hock an- not o:

pr-c- . !ci"l t ncrmruish this rrc lesion.

! 1 '

at-

ly fraud-j! nt th" hiurlj p tlve s' uriti.- v pr n whi h tht : aif more ihanrcs fr yo-j to lo-' yi.ur r.io i y thm ill. oj nr1 to u'iti f';i. TJ; s" ?- curlt:- s t-nriy ff-1 I lor tulf in vjperl :ri)-;irtu.s thf vr-rj i crr.o cf t! o printer s .irf. I : -t jrs of th oroio..-.i i:rr.-y-iria!;in plant fat'irir.K' th': story. UrU-ht riht-or.i and K"H Ni-'O Um th tock r.-riti' atr. S-.ni' Ins Me Jnir.(ht on how the rnonry is to be T.-iolf inlird is told in irlowintf lan-

Ku.H''' in th' literature o the narnri of sme n:' n

kr.o-A- ;t ro j;sr-I a promoters t ,irk rf. AM the.. rt;it!trihut:. howvt r, do n-t prove the s. i-urity i worthy. Not .ill stocks ar- "!.luf sky" gre.it inaj rity .ire not. Thirty Mnts in th union

rnat.M lnus to p.ht th" "Mue .-ky' m-nrr. The of spekulativ

tah you

ar.l may and at -that : the

t-v ii rities, the off rir of uhh'h ma rot he in rw.d faith rvn hy th' promoter, hampers th1 j-alr of nmnd ururltWs and the rna truant .and rnfori ni-nt of blue sky law- usually haw the support of the h'st financial in.titut!on. Th ( 1-' of tluvas hro'Jk'ht a rKiil ir jhind-rh-:nd vith M-h'-nus f'T making jnonry hy ratdil transit routes. Tli- h!u- J-ky

1 jr!.-l ition of tho i at tew i

lia-

Ur." of tho commonest methods is : to isvjr a larro hlock of strxk for j patents and sell a part of such slock i to the puMIc. I Th" Wisconsin Muo .sky depart-

l.L-atior;s of tho company unless hut- rncnt has hdd that promoters snail ?.ci-nt arnins am mado. nrt L' allowffl U) makn their for"Kxamlne flnanci.il statomonts to tunes out of the mIo of stock which

arii';nt of stork i?. for pat- has no value, lr iny issue to inrinntv. formulas. liases. i.romof r.s' solves lare amounts of stock, for

;TYi- v, and othrr a.-n. of un- J intar.pltdc- apsc-ts. It requires that ortaiu or intaririh! value. Tho I most of this f.tork must he placed

in escrow under spec ifit-d terms. Suf'h rscrowrd stock does not participate in the afsrtfi of the company in case of bankruptcy or insolvency until all other Ftokholdt rs have he en paid In full. The stock must remain in escrow until the company has shown certain required earnings the percentage varies from three per cent to 'Zl per cent, depending upon the nature of the .business. Hy this means the department has checked the perpetration of many

a ! aev r schem wr.icn were lornnnj

in financial cirrlcs.

Wisconsin law dsii.ats what securities are speculatlv e." l-'roni examining Korr.e of the records ir. the olhce it was evident that the hlue sky department and the divorce court have some charac

teristics in common. Hoth are eni

poriunos where the woes of mankind

omo to Jiijht in the .ne financial, in the a th er domestic. Ilefore the blue sky law was fasse. there was much complaint over stock swindles in the state, l-'or

examine' A e f itr-i ri.-i r: - w-,!l mlt

l f. .... ..-4 lUlk K I

lot of stock in small amounts i common

fan ho denied. This has reen true in several instances." Occasionally a ? home of f!r.ancinfr is brought to the attention of the commission which on the face of it would wcjrk a fraud upon the purchaser. "Take your per.eil and follow this

i transaction," I was told.

A certain manufacturing company i

made application to sell its S per cent cumulating preferred stock participating up to 10 per cent. The company desired to sell the stock at 5125 per share (par alue $100) because of the participating feature. This would look like a fair buy to

the average man. The proposed circulars omitted one very Important point. It was callable in three years r.t J 115. Suppose a man invested in ftht shares of thi preferred stock, paying- 11.000 for it. Suppose also that the company earns enouch that the preferred stock frets its two per cent in, addition to the ropular eiirht per cent. In three

I yonrs, then, the investor will get i six per cent above the regular divi

dend, and six per cent on eight shares of stock of the par value of $100 amounts to $4S. Suppose the company called the stc-ck in three j ears, payir.fr for the df;ht shares at the rate of $113. the specified price. The man would then receive $:00 for stock for which he paid $1,000. a. loss of $S0. On the assumption that he Kts the two per cent above the specified eight per cent, which, as stated above, amounts (CONTINUED ON PA OK IS. )

WATCH US GROW-

'CN

jpCzjj (Miy iUUUv fL zftJlW'fl'tU LfUL U MUo

S. W. Corner Michigan Street and Jefferson Blvd.

dickid ;i saturnalia ot ir.es- sp' c i-

?.fi..t.vj s:i!'H 4?:ifnfs ;ir- iiass-d tolle

ter vent sind!s In th" f ale of

and to piotert honst isMHS. "Unn of th" worst sources of fraud in the past has been the sale of stock in companies, which are organized ostensibiy to munufaeture or cll patent- il articles m.td" by secret formula.", or exploiting oil, eras and minim: leases." sali i. S. Tanriht. director of the seiurities division, a branch of th- state railroad cornmission, who has the enforc'ment of the W isconsin st itute. When I called on the director his desk was crowded with buddini; financial scheine- which had been Mibmitte-l for his official consideration. He had Just finished examining fne asset report of one company, whose financial Joints showed slcns of weakness, and disease. Hhad penciled Its glowiiu: advertising literature rjnd was planning to write tip promoter saying that the Jinanci.il report did not Justify the statements made in the circulars, and could not be authorized in the original form. Having been stuntr once or twice on speculative s-curiti-s, I plunged riplit Into the subject of how the

people of tho country should be pro

tected, at least so that those who boufrht Fpeculative stocks would know that they are really speculative. Here is the character of adIce ho handed rm the same that be is frilr.f: every day to the public: "Pon't buy speculative securities unless you can afford to take a chance on lo.-infT the money paid for th-m. "Pon't lnvet nil j-our money in speculative securities. "pon't rely on tho verbal statements of the salesman which are

'On the Coast "We All Use Howard's Buttermilk Crcarr

throughout the state. IYoni tiie r.ior.ey received from th- sales of stock quarterly dividends w-r- paid lor two or three quarters. It then rit out a circular to th" stockholders tell im,- them of the wonderful profrrtss of th company and of the larfre suridus accumulated. They -xpl.-iin-d that it was essential that they enlarge the business. To do this the surplus would be used and the capital increased; by law each stockholder was entitled to his proportion of the increase. The sto k-hohb-rs naturally were enthused by

the report and The fact that subsfan-

dividends had been paid. Many

tock ' of them raised all thev ronld to taki'

their proportion. Within three months th- company was in bankruptcy, the oflicers and the assets fpne. Tho purpose of blue sky laws is not to prevent speculation but to protect the public from the faker, tii" financial shark and the optimistic fool. Comparatively few applications submitted to the railroad commission are pure fakes in the sense that there is no property or no busin ss from which ther- is even a possibility of making money. A few attempt to slip by the blue sky commission, but for the mos part th- promoters of siph ventures in blue sky states resort to the mails, hidimr behind tho int-rsate commerce clause of the constitution, or send a salesman into tho state for a day or two at a time hoping to escape arrest. Ily f ir tho largest numb-r of applications are by persons w ho hope to establish a paying business but who have planned the deal in such a way that the promoters risk little or nothing and make a substantial sum vcn if the business fails; and if it succeeds they fret most of the refit. The schemes

ummer

Dresses

Another scheme is for the Promoters to s"ll patents or formulas to a foirpary at a ridiculously hih price. In one case a company decided to increase its capital stock from $23,000 to $1.000.000. Investigation showed that originally, and before state supervision, the patents had been sold and for th m a part of the $25.000 capital stock had b-en issued to the incorporators and inventors. Later when the capital stock was increased to $l,00o.(02 it was voted to return the patents to the men who had originally assigned them to the company, because there patents were considered of no commercial value, h'ix or cipht weeks later the patents w-ro repurchas'd by the company from these same Inventors, who were also ofheers and dirctors df the company for mure than one-half of a million dollars. And they were planning to sell this stock themselves to an unsuspecting public. "In the case of oil securit i s," said

Mr. CanrijTht. "the commission takes i

the attitude that legitimate oil operators should be encouraged when their prospects are reasonable. The commission Investigates the properties, their title to the properties, their prospects of securing oil from tho bet preoptic data available, and tho re sponibility of the promoters. It is necessary that the commission know the freoloßical conditions of the property where the company proposes to drill. Many present peolopric reports that can be purchased for a price or reports from pood freoloprists that have no reference to their property. "In many cases the companies find that the requirements are so ri'id and the Investigation so likely to prove unfavorable that the appli

cation is withdrawn before a permit rjlj

CI D

WANTED

We Want at Once

For Counter Work Good wages, excellent board, good working conditions. Experience not necessary. Apply

Summer Dresses in fancy, figured and Horal Voiles; plain and fancy Organdies; plaid and checked Ginghams and Linens in smart new styles. Just the dress for vacation at $14.75, $12.50, $9.95, $7.95, $5 WOMEN'S UNION SUITS Women's silk lisle union suits, lace or cufT

knee, in low neck and no sleeves, all sizes

from 34 to 44; $2.25 suits, Sat

urday sale SILK GLOVES

Women's silk gloves, double finger tip, in

black, white and colors, all sizes. The $1.00 kind. Saturday

SILK HOSIERY Wo men's H300 silk hose. This hose in one of the best makes and comes in black.

white, navy and cordovan and the regular

retail price is $4.00 per pair and

we offer th em Saturday at. . .

BURSON HOSE Women's Burson hose, no seams, all sizes.

black or black with white feet; seconds of the 59c kind, Saturday. . . .

S1.49

65c

- $2.49

39c

Wash Goods 40-inch fancy figured voiles in liht and

dark colored grounds regular $1.3U QPft to $2.00 kind. Sale 30G'

40 -inch fancy voiles in all colors and patterns; regular $1.00 kind. 59 C 36 -inch fancy dress percales in light and dark colors; regular 40 kind. OQ f Sale Cm w O 40-inch fancy voiles in stripes and checks and plaids, light colors; regular QPrt $1.50 kind. Sale SOC 33-inch Zephyr ginghams in fBZt stripes, checks and plaids. Special OvU Apron ginghams in blue and white checks; regular 35c kind. 25 C 1,000 yards plain and fancy silks in odds and ends; values up to $3.00 a Id yard. Sale IJ) I mO

Store closes at 6:00 p. m. on Saturday night in July and August,

Oliver Cafeteria

At Oliver Hotel

J!!n!!!!l!!ll!ninH!lin!IIHt:illHI'll!!ll!nnri!niH!!!l!1H!Tinillllin!Hnilll'l!l!in'!IHI!llt!'MIITIIIIIIII!!IMriHIHIIMHIK

iIIIIIIIlllltlllllllllllllllJllllllllltl.TlllllllllLIIIIII'llllllilllllIlllllMlllllIllllirilTllillllllllllllllltlllllllllllllllllllllllllli

lllillilllllllllllliilllllllliiiiillii:

I ; vK-',l V7

uv;..;-viv i

This Kood-lookfni oung woman cays : Duttermilk and Cream simple remedies Lest keeps fice. hands and arms In exquisite condition sott, smooth and bcautlfulguaranteeJ. De sute you get Howard's Buttermilk Cream OntrnT Dr'JKT Store. South Pend; MUh.iwaka agents. Hod Cross Pharmacy.

(

-zu

When we say "No coupons, no ice" it is not our intention to offend or to cause hardship to anyone, but our losses from leaving ice without coupons were so great that we were compelled to adopt this rule or raise prices, so we protected our thousands of honest customers on prices by cutting off the losses.

I ice

M 2221 M 395

L 6123 L 5395

lives ill Msß m 1

That

Our Regular Selling Prices on the

hiest Ulm

maws

dise

fTt Ttk 9S

is below the lowest price asked by high-rent stores on "odds and ends.' If you want styles and fabrics that you will not see anywhere else

ee These Young ien's at $55.00, $60.00, $65.00 and $70.00.

mvii is mm lumm men

that sell elsewhere at $50.00, $60.00 and $65.00, are

Sis its

here at $40.00 and

Even's and Yousi

Suits 45.00

ien's

that sell elsewhere at $45.00, $50.00 and $55.00, are here at

Suits

Young

Eta

s and ien's

that sell elsewhere from $35.00, $40.00 and $45.00 are here at

Suits

Eta's Business

in good serviceable materials and splendid

Suits

SNAPPY CAPS in all the new colors and shapes at $2.50 to $4.00 LIGHTWEIGHT FELT HATS for late summer SILK SHIRTS A wonderful variety; everything that's new . . . .$6.50 to $13.50 NEW NECKWEAR Don't fail to see it MENS' EXTRA PANTS Hundreds to select from. $3.00 to $13.50 STRAW HATS Yet a good assortment at $2.50, $3.00, $4.00 and $6.00

patterns at

S24.4i

Palm

each Suits

Strictly hand tailored in all the new colorings; worth $35.00 to $40.00. Our price is $22.50 $25.00 and ... .

PALM BEACH SUITS AND COOL CLOTH SUITS

in other makes, $12.50 to

PMhers are Saving Money every day in our rapidly growing Boys' Department.

No Ikul IV?)fc N I . -o No Protitccnns

999" Corner Michigan and Wayne Sts., South Bend

alt

Ojxn Kvcry Afternoon TUI 6 O'clock. Close Saturday nt 10 1. 31.

COME IN SATURDAY

y W

1 Li x

t . .i 1

Vith 71 Stores Combining in One Grand

OOOQ0OO

THREE MILLION DOLLAR

G i g q r 0 n g g

Ladies' patent leather Oxheref'.L.::s... $3.98 Ladies" black suede, two-

eyelet tie, Louis heel

Ladies' brown kid. Theo tie . .

$3.98 $3.98

Ladies" comfort Oxfords

with rubber heel

S3.93

Ladies' black kid Pumps, LT $3.98

Men's Tan Work Shoes $3.98, $2,98, $1.98 Ladies black kid Oxfords, Louis 1 QQ heel $ I -5?ö Misses' and children's black lace J Qfi shoes 5 I -vO Child ren s extension shoes . $1.98

Boys' brown and black shoes UivU Boys brown and black bluchcr (p Qf) shoes P&aaClO Ladies brown suede, oneeyelet tie, Louis (P5 QQ heel 90.30 Growing girls patent vamp shoe, with (JO QO white buck top. Men's pun metal Enp;a:h0xfor.ds... $3.98

BARGA

Ladies' white canvas shoe, medium heel, or children's white canvas lace QOft shoes JÜÜ

Mens women's boys' and girls' Tennis Shoes (Keds) big line at. 3ÖU

Ud ies' white canvas Pump, medium 4 QQ o rhigh heel. . . $ ivU

BASEiEwl

M isses' brown or bl lace shoes; or black kid oxford, hih or low heel; growing girls' black lace shoes or boys' tan elk- fj O GO fkin shoes... tpbmmZßO Ladies two-eyelet tie. black, kid. Louis heel; or brown Oxfords (5 O Q O with chic heel. . JJÖiwU

Store Open Saturday Evening Till 9:30

East Wayne, Near Michigan

Store Onea Saturday Evening 'Till 9:30

SC'

Ü I t i

3X1