BLUE SKY LAWS

legislation enacted in a large number of states for the purpose of protecting the investing public from fraudulent promotion schemes. The first law of this kind was pa ed in Kansas, in 1911, being directed against the many fraudulent and semi-fraudulent oil enterprises which were then being promoted. During the discu ions in the Legislature, one of the members, opposed to the bill, exclaimed, ‘How far is this sort of thing to go in oppre ing busine ?” To this another member, favoring the bill, replied: ‘The limitations to dishonest enterprises should reach to God’s blue sky,’ from which came the colloquial term ‘blue sky laws.’ By 1913 eighteen other states had followed the example of Kansas in legislation with this purpose. Laws restricting dishonest promotion schemes are now to bo found in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Idaho, Iowa, Kansas, Louisiana, Maino, Michigan, Minnesota, Mi i ippi, Mi ouri, Montana, Nebraska, New York, North Carolina, Ohio, Tenne ee, Texas, Vermont, Virginia, West Virginia and Wisconsin. Generally such laws compel promoters of new corporations to file information with a state official, usually the insurance commi ioner or a corporation commi ion, describing the enterprise in detail. On satisfactory evidence of the honesty of the enterprise being furnished, it is given a license to proceed with its plans for financing. There was much opposition against these laws and they were contested in the courts as unconstitutional, but in 1917 they were upheld by the United States Supreme | Court, as enacted in Michigan, Iowa and Ohio, this decision also covering the | laws in 26 other states, which were ruling before enforcing. ded down the court is within the ment | busine may not be done... Sig, 8Le