April 26, 1913
THE LITERARY DIGEST
937in addition to the suppression of the sale of fraudulent securitiesthe business of legitimate dealers is interfered with to an almostprohibitive extent. They see no reason why reputable firmsof stock-brokers should be made to submit full details regardingthe financial status of every new security they offer for sale inthe State. Certain publicity features seem too drastic, and, inMr. Franklin's opinion, would enable the public or a newspaperto get access to confidential information which ought to be theexclusive possession of responsible heads of firms. Anotherobjection is thus stated by the New York Chamber of Commerce:"The distributers of the lowest grade securities to which theconsent of the examiner had been obtained would give the factof the approval all publicity possible. The marketing of theweakest securities approved, particularly among the small andinexperienced investors, would be materially facilitated."So the Investment Bankers' Association of America, after acommittee had communicated with a score of Kansas bankcashiers and presidents and learned that the principle of thelaw was generally favored, have prepared a model'' blue-sky law.''They have drawn the measure, as they believe, in such a waythat if enacted into State law, it "would have the effect of preventing the sale of fraudulent securities, at the same time placingno considerable diffioulties in the path of the legitimate dealer."Copies of the model bill have been sent to all banking commissioners and to the State legislatures. Its features, we learn fromthe New York
financial comment,"include, first, the provision that all banking houses or institutions dealing in securities shall file with the Superintendent ofBanks the names and addresses of all partners or officers; second,a statement from two officers of savings-banks, national banks,State banks, or trust companies testifying to the good repute ofthe bankers; third, a designation, by a non-resident house, ofsome attorney within the State for legal service; fourth, authorityby the Superintendent of Banks to require, if need be, a statement from bankers describing in detail the character of anysecurity offered; fifth, authority by the Superintendent of Banks(subject to review by the courts) to order a banker not to sell oroffer any objectionable security, and, sixth, exempting Stateand public securities, commercial paper running not more thannine months, and stocks and bonds put out by certain well-established corporations."Since the experience of Kansas is being used as an argumentboth for and against the enactment of "blue-sky laws" in otherStates, it may be well to note what State Bank CommissionerDolley has to say. According to a statement which the Springfield
quotes on its editorial page, he is firmly convinced of the worth of the Kansas law, but concedes that it hasimperfections and should be amended. According to theCommissioner:"The Kansas law has saved the Kansas people more moneyduring the time it has been in operation than it takes to run ourentire State government, and this money was largely saved to aclass of citizens who can least afford to lose it, whose knowledgeof business is limited, and they are more or less at the mercy ofthe dishonesty and shrewdness of this class of confidence menand thieves. I beheve that any law which accomplishes suchresults should be upheld by our citizens"I believe that the Kansas law is founded on exactly the rightprinciples, with the exception that special provision should bemade for the investment banker, or any other person, firm, orcorporation dealing exclusively in stocks and bonds. The Kansas legislature when it meets next month will be asked to amendthe law so as to provide for a special blanket permit for theinvestment banker and others dealing exclusively in stocks andbonds, requiring them to file the statements, etc., required bylaw in regard to their own bank or firm, so that the bankingdepartment may investigate their reputation, both as to theclass of securities they handle and along other lines. When theysatisfy the banking department that they handle nothing butfirst-class securities, and their reputations along other lines arefound sa.tisfaetory, the bank commissioner may issue them apermit. .. . . With this provision in the law I see no reason whyanv legitimate investment banker should object to the law."
FRUITS OF THE "TITANIC" DISASTER
HE TRAGIC MEMORIES invoked last week by thefirst anniversary of the sinking of the
raise the^question: To what extent, in these twelve months, havegovernments and steamboat companies applied the lessonsdriven home by that appalling disaster? While some editoradetect a tendency on the part of the public to forget those lessons-and to relax the pressure of its demand for reforms, all agree thatocean travel is safer to-day because of that terrible sacrifice of1,503 men, women, and children in the icy waters of the NorthAtlantic in the early morning of April 14, 1912. "The com-
•'•'•• ' -rTBf
Showing the construction of the New inner sldn put in the
double hull, a feature
sister ship to the
at aalso of her two sister ships. cost of over $1,000,000.
ONE LESSON THE "TITANIC" TAUGHT—THE DOUBLE HULL.
parative safety of those who now go upon the sea in the greatliners is the service done for them by the 1,500 souls lost withthe
says the Springfield
and in the Brooklyn
we read:"Some good comes out of every great calamity and some goodhas come out of this. We have abandoned as a fallacy the theoryof the unsinkable ship. The preaching of many marine architectsin favor of the double hull would not in a dozen years have carriedthe conviction at once brought home to shipbuilders when the fullstory of the wreck became known. The agitation of legislative'reformers' all over the world would not have forced owners toincrease their equipment of life-boats and life-rafts so promptlyas they themselves increased it without compulsion when needfor the increase was tragically demonstrated. Marconi himselfcould not have argued so forcefully for the perfection of wirelessservice at sea as did the want of a perfected system on ships thatanswered the
call for help. If the catastrophe of April
1912, is recalled with grief for those who perished bravely anduncomplainingly, it will be remembered also that the dead diednot in vain."Perhaps the most important development in steamship building since the loss of the
says the New York
hasbeen the double-skinned steamship, the ship within a ship, withtransverse bulkheads extending between skins to the upper deck.The new Hamburg-American liner
the largest vesselafloat, was designed and built on this principle, while the WhiteStar hner
originally built with a single hull, has been