Malheur (Vale, Oregon) Enterprise, October 25, 1913, pages 1,6:


Corporation  Inquisitor  Watson  Claims  Kingly  Power

    Salem, Ore., Oct. 20.--The office of the state engineer is a barometer showing new development activities in the state, and the records there for the last quarter reveal the fact that Malheur and its bordering counties lead all other portions of the state. All told there were 150 permits for appropriation of water issued by the state engineer during the last quarter. Eleven of these were for the construction of reservoirs. Under these permits it is proposed to irrigate 18,690 acres, developed 21,716 horsepower, and in several instances use the water for municipal and domestic purposes. The construction of the works described in these permits would cost approximately $2,300,000 of which $550,000 is the estimated cost of constructing the reservoirs.
    One of the largest permits of the quarter was issued to Garfield Stubblefield of Portland. It authorizes him to store 30,000 acre feet of water in Silver Lake in Harney county and use it for the irrigation of 7,500 acres of land lying near the west end of Harney lake. Considerable activity, along irrigation lines has been noted in Harney county within the past year, probably due to the construction of the Oregon Eastern railroad west of Vale.
    A permit to appropriate the waters of Snake river for the reclamation of 2,162 acres of land in Malheur county lying across the Snake river from Welser and Fayette, Idaho, was leased to the Crystal District Improvement Company. It is understood at the state engineer's office that the works of the company are completed and consist of a complete set of electrically driven pumps by means of which the water is lifted out of the Snake river onto adjacent bench land.
    Russell Byron of Jordan Valley secured a permit, under which he contemplates the reclamation of 1,033 acres of land by the storage of 3,200 acre feet of the waters of Rattlesnake creek.
    C. E. S. Wood of Portland, lawyer and magazine writer, proposes to develop 622 horsepower with the waters of the north fork of the Malheur river. It is understood that he contemplates furnishing electric power and lights to the towns of Juntura, Drewsey and Riverside. With the building of the railroad through that section a rapid development is expected.
    The existence of every investment company or stock selling corporation in the state depends upon the approval of the corporation commissioner under the authority vested in him by the blue sky law.
    "This department not only passes upon the honesty of purpose behind an investment company," said Corporation Commissioner R. A. Watson, "but it takes into consideration the question of whether a company's scheme appears logical and a good investment for the public. We take the view that the blue sky law is for the protection of the public, and investors might lose as heavily through an unfeasible project as through fraud."
    Commissioner Watson said that this interpretation of the law meant that an investment company must convince the corporation department that it has good grounds for believing its plan of operation will be a success aad those who invest in its stock will not lose their money. He cited the Telephone Herald Company of Portland as an illustration. That company had developed a scheme to supply a general news service to its patrons by a telephone invention. The service would be constantly going on during certain hours of the day and night, and all a patron need do when he desired to "hear his newspaper" would be to take down the receiver and listen.
    "There was no question about the honesty of this concern," said Watson, "but the scheme isn't practical, and while it might be popular for a short time it would be a failure in the end; therefore, we refused them a permit to sell stock. That is the protection given the public by the blue sky law."
    The blue sky law is far reaching. Not only must investment companies make reports to the corporation department, but the department sends inspectors to check up the companies and make personal inspection of the properties involved. Commissioner Watson told of one mining company capitalized at $4,000,000. Three-fourth's of its stock had been sold. The company made application for a permit. Before it was issued Watson asked the officers for directions for reaching the company's properties, so an inspection could be made. The companv immediately withdrew its application for a permit to sell stock, and asked for an exemption blank. But the stock already issued was being listed with stockbrokers, and Watson put the stock on the black list, where all stock not approved by the department must go until a permit is issued. The matter is still pending before the department.