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such amount may have been paid as accrued interest moneys so transferred to the said state fair grounds sinking and thereon, shall be forthwith paid over by said treasurer into interest fund for the payment of the principal of said bonds, the state treasury, and must be by him kept in a separate shall be invested from time to time by the state treasurer in fund, to be known and designated as the "state fair grounds United States, state, county, city and county, municipal or fund” which fund is hereby established. Any and all sums school district bonds issued in the State of California, and such which may have been paid as accrued interest shall be forth- other bonds as are now or may hereafter be authorized by law. with paid over by said treasurer into the state treasury, and All interest payable on such bonds so invested shall be paid must be by him kept in a separate fund to be known and into the said state fair grounds sinking and interest fund and designated as the “state fair grounds sinking and interest be applied and held for the payment of the principal of said fund,” which fund is hereby established.

bonds or reinvested in other bonds for the payment of such Sec. 5. Any and all moneys derived from the sale of the principal, as herein provided. The principal of all said bonds bonds provided for in this act, are hereby appropriated and sold shall be paid at the time the same becomes due, from the shall be used exclusively for the following purpose, to wit: state fair grounds sinking and interest fund and the interest For the acquiring of additional land for the enlargement and on all bonds sold shall be paid at the time said interest becomes extension of the state fair grounds in the city of Sacramento, due from said fund and the faith of the State of California is the erection of additions to buildings now existing on said hereby pledged for the payment of the principal of said bonds grounds, the erection of new buildings on said grounds, the so sold and the interest accruing thereon. The state controller equipping of said buildings and the general improvement and and the state treasurer shall keep full and particular account beautification of said state fair grounds as a complete plant and record of all their proceedings under this act, and they for the exhibition and exploitation of the resources and products shall transmit to the governor an abstract of all such proceedof this state. The funds herein appropriated shall be expended ings thereunder, with an annual report, to be by the governor under the direction and control of the state board of agricul- laid before the legislature biennially; and all books and papers ture; provided, that the plans and specifications for the erection pertaining to the matter provided for in this act shall at all of additions to existing buildings and for the erection of new times be open to the inspection of any party interested, or the buildings and for the improvement and beautification of said governor, or the attorney general, or a committee or either branch state fair grounds shall be prepared by the state department of of the legislature, or a joint committee of both, or any citizen engineering subject to the approval of the state board of agri- of the state, culture, and all work at said state fair grounds to be paid for Sec. 7. When the bonds provided for this act are refrom the funds created by this act shall be carried out in ac- deemed, the state treasurer shall mark the same cancelled, and cordance with the general law governing the construction and shall, in the presence of the governor, destroy the same by prosecution of all public work for the State of California.

burning the said bonds. Sec. 6. There is hereby appropriated out of any moneys in Sec. 8. This act, if adopted by the people, shall take effect the state treasury not otherwise appropriated, the sum of twelve on the thirty-first day of December, 1914, as to all its provisions thousand five hundred dollars annually, to pay the principal of

excepting those relating to and necessary for its submission to the bonds issued and sold pursuant to the provisions of this act.

the people, and for returning, canvassing and proclaiming the Said annual appropriation to continue until the same, together

votes, and as to said excepted provisions this act shall go into

effect ninety days after the final adjournment of the session of with the accrued interest on the investment thereof, shall be

the legislature passing the same. sufficient to pay the principal of said bonds at the maturity Sec. 9. This act shall be submitted to the people of the thereof. There is also hereby appropriated out of any moneys State of California for their ratification at the next general elecin the state treasury not otherwise appropriated, such sum

tion to be holden in the month of November, nineteen hundred annually as will be necessary to pay the interest on the bonds

and fourteen, and all ballots at said election shall have printed issued and sold pursuant to the provisions of this act. There

thereon the words “For the state fair grounds bonds” and such

other designation as may be necessary to properly identify this shall be collected annually in the same manner and at the same

act, In a square immediately below the square containing said time as other state revenue is collected such a sum, in addition words there shall be printed on said ballot the words “Against to the other revenues of the state, as shall be required to pay the state fair grounds bonds." Opposite the words "For the the principal and interest on said bonds as herein provided and state fair grounds bonds” and “Against the state fair grounds it is hereby made the duty of all oficers charged by law with

bonds," there shall be left spaces in which the voters may make any duty in regard to the collection of said revenue to do and

or stamp a cross to indicate whether they vote for or against

this act, and those voting for said act shall do so by placing a perform each and every act which shall be necessary to collect

cross opposite the words "For the state fair grounds bonds” and such additional sum. On the 2d day of January and on the those voting against said act shall do so by placing a cross oppo2d day of July of each year, after the sale of any bonds as site the words "Against the state fair grounds bonds.” The herein provided for, the state treasurer and state controller governor of this state shall include the submission of this act to shall transfer from the moneys hereby appropriated to the state

the people as aforesaid, in his proclamation calling for said fair grounds sinking and interest fund, a sufficient sum of money

general election.

Sec. 10. The votes cast for or against this act shall be to pay all interest due and payable on any bonds sold, and said

counted, returned and canvassed and declared in the same manner transfer shall continue to be so made up to the date of maturity

and subject to the same rule as votes cast for state officers; and of such bonds and it shall be the duty of the state treasury to if it appears that said act shall have received a majority of all pay the same when the same shall fall due. On the first Mon- of the votes cast for and against it at said election as aforesaid, day in July of each year, after the sale of any of the bonds as then the same shall have effect as hereinbefore provided and shall in this act provided, the state controller and the state treasurer

be irrepealable until the principal and interest of the liabilities

herein created shall be paid and discharged, and the governor are hereby authorized and directed to transfer the moneys hereby

shall make proclamation thereof; but if the majority of the votes appropriated for the payment of the principal of said bonds to

cast aforesaid are against this act then the same shall be and the said state fair grounds sinking and interest fund. The become void. SAN FRANCISCO HARBOR IMPROVEMENT AOT OF 1913. FOR THE SAN FRANCISCO HARBOR IMPROVEMENT ACT OF 1913. [ ]

This act provides for the improvement of San Francisco harbor and for the payment of all costs thereof out of San Francisco harbor improvement fund. AGAINST THE SAN FRANCISCO HARBOR IMPROVEMENT ACT OF 1913. [ ]

This act provides for the improvement of San Francisco harbor and for the payment of all costs thereof out of the San Francisco harbor improvement fund.

An act to provide for the issuance and sale of state bonds to sand dollars for the expense of printing said bonds; and to create a fund for the improvement of San Vraneisco harbor by provide for the submission of this act to a vote of the people. the construction by the board of state harbor commissioners of

The people of the State of California do enact as follows: wharves, piers, state railroad, spurs, betterments, and appurtenances, and necessary dredging and filling in connection there- Section 1. For the purpose of providing a fund for the paywith in the city and county of San Francisco; to create a sinking

ment of the indebtedness hereby authorized to be incurred by fund for the payment of said bonds; to define the duties of state the board of state harbor commissioners for the erection of officers in relation thereto; to make an appropriation of five thou- wbarves, piers, seawall, state railroad, spurs, betterments and

appurtenances and necessary dredging and Alling in connection therewith in the city and county of San Francisco, at a cost not to exceed ten million dollars (which said wharves, piers, seawall, state railroad, spurs, betterments and appurtenances and necessary dredging and filling in connection therewith the board of state harbor commissioners are hereby empowered to construct and do in the manner authorized by law, and at a cost not to exceed ten million dollars), the state treasurer shall, immediately after the issuance of the proclamation of the governor, provided for in section ten hereof, prepare ten thousand suitable bonds of the State of California, in the denomination of one thousand dollars each. The whole issue of said bonds shall not exceed the sum of ten million dollars, and said bonds shall bear interest at the rate of four per centum per annum, from the date of issuance thereof, and both principal and interest shall be payable in gold coin of the present standard value, and they shall be payable at such place in the United States as may be designated in the bonds (full authority to designate such place being hereby conferred on the governor who shall sign said bonds), at the expiration of seventy-four years from their date, subject, however, to redemption by lot as in this act hereinafter provided. Said bonds shall bear date the second day of July, A. D. nineteen hundred and fifteen, and shall be made payable on the second day of July, nineteen hundred and eighty-nine. The interest accruing on such of said bonds as are sold, shall be due and payable at the place designated in said bonds as aforesaid, on the second day of January, and on the second day of July, of each year after the sale of the same; provided, that the first payment of interest shall be made on the second day of July, nineteen hundred and sixteen, on so many of said bonds as may have been theretofore sold. At the expiration of seventy-four years from the date of said bonds, all bonds sold shall cease to bear interest and likewise all bonds redeemed by lot shall cease to bear interest as in this act provided, and the said state treasurer shall call in, forthwith pay and cancel the same, out of the moneys in the third San Francisco Seawall sinking fund provided for in this act, and, he shall on the first Monday of July, nineteen hundred and eighty-nine, also cancel and destroy all bonds not theretofore sold. All bonds issued shall be signed by the governor, and countersigned by the controller, and shall be endorsed by the state treasurer and the said bonds shall be so signed, countersigned and endorsed by the officers who are in office on the second day of July, 1915, and each of said bonds shall have the seal of the state stamped thereon. The said bonds signed, countersigned and endorsed and sealed as herein provided when sold shall be and constitute a valid and binding obligation upon the State of California, though the sale thereof be made at a date or dates after the person signing, countersigning and endorsing, or any or either of them, shall have ceased to be the incumbent of such office or offices. Each bond shall contain a clause that it is subject to redemption by lot after the year nineteen hundred and fifty-four.

Sec. 2. Interest coupons shall be attached to each of said bonds so that such coupons may be removed without injury to, or mutilation of the bond. Said coupons shall be consecutively numbered, and shall bear the lithographed signature of the state treasurer who shall be in office on the second day of July, 1915. But no interest on any of said bonds shall be paid for any time which may intervene between the date of any of said bonds and the issue and sale thereof to a purchaser, unless such accrued interest shall have been, by the purchaser of said bond, paid to the state at the time of such sale.

Sec. 3. The sum of five thousand dollars is hereby appropriated to pay the expense that may be incurred by the state treasurer in having said bonds prepared. Said amount shall be paid out of the San Francisco harbor improvement fund on controller's warrants, duly drawn for that purpose.

Sec. 4. When the bonds authorized to be issued under this act shall be duly executed, they shall be by the state treasurer sold at public auction to the highest bidder for cash, in such parcels and numbers as said treasurer shall be directed by the governor of the state, under seal thereof, after a resolution requesting such sale shall have been adopted by the board of state harbor commissioners, and approved by either the governor of the state or mayor of the city and county of San Francisco, who shall only approve the same when in their judgment the actual harbor receipts, and those reasonably anticipated, will justify such sale of bonds and the consequent increased burden on harbor receipts; but said treasurer must reject any and all

bids for said bonds, or for any of them, which shall be belon the par value of said bonds so offered plus the interest which has accrued thereon between the date of sale and the last preceding interest maturity date; and he may, by public announcement at the place and time fixed for the sale, continue such sale, as to the whole of the bonds offered, or any part thereof, offered, to such time and place as he may select. Before offering any of said bonds for sale the said treasurer shall detach therefrom all coupons which have matured or will mature before the date fixed for such sale. Due notice of the time and place of sale of all bonds must be given by said treasurer by publication in two newspapers published in the city and county of San Francisco, and also by publication in one newspaper published in the city of Oakland, and by publication in one newspaper published in the city of Los Angeles, and by publication in one newspaper published in the city of Sacramento, once a week during four weeks prior to such sale. In addition to the notice last above provided for, the state treasurer may give such further notice as he may deem advisable, but the expenses and cost of such additional notice shall not exceed the sum of five hundred dollars for each sale so advertised. The cost of such publication shall be paid out of the San Francisco harbor improvement fund, on controller's warrants duly drawn for the purpose. The proceeds of the sale of such bonds except such amount as may have been paid as accrued interest thereon shall be forthwith paid over by said treasurer into the treasury, and must be by him kept in a separate fund to be known and designated as the "third San Francisco seawall fund" and must be used exclusively for the construction of wharves, piers, seawall, state railroad, spurs, betterments and appurtenances and necessary dredging and filling in connection therewith on the water front of the city and county of San Francisco. Drafts and warrants upon said fund shall be drawn upon and shall be paid out of said fund in the same manner as drafts and warrants are drawn upon and paid out of the San Francisco harbor improvement fund. The amount that shall have been paid at the sale of said bonds as accrued interest on the bonds sold shall be, by the state treasurer, immediately after such sale, paid into the treasury of the state and placed in the "third San Francisco seawall sinking fund."

Sec, 5. For the payment of the principal and interest of said bonds a sinking fund, to be known and designated as the "third San Francisco seawall sinking fund," shall be, and the same is hereby created, as follows, to wit: The state treasurer, after the second day of July, nineteen hundred and thirty-three, shall on the first day of each and every month thereafter, after the sale of such bonds, take from the San Francisco harbor improvement fund such sum as, multiplied by the time in months, the bonds then sold and outstanding have to run, will equal the principal of the bonds sold and outstanding at the time said treasurer shall so take said sum from said San Francisco harbor improvement fund, less the amount theretofore taken therefrom for said purpose; and he shall place the sum in the third San Francisco seawall sinking fund created by this act. Said state treasurer shall, on controller's Warrants duly drawn for that purpose, employ the moneys in said sinking fund in the purchase of the bonds of the United States, or of the State of California, including any bonds authorized, issued and theretofore sold under authority of this act or of the several counties or municipalities of the State of California, which said bonds shall be kept in a proper receptacle, appropriately labeled; but he must keep always on hand a sufficient amount of money in said sinking fund with which to pay the interest on such of the state bonds herein provided to be issued as may have theretofore been sold. The state treasurer may only purchase such bonds authorized and issued under authority of this act with moneys in said sinking fund as have been theretofore sold. And to provide means for the payment of interest on the bonds that may be sold and outstanding, said treasurer shall monthly take from the San Francisco harbor improvement fund, and pay into said seawall sinking fund, an amount equal to the monthly interest then due on all bonds then sold, delivered and outstanding. The board of state harbor commissioners are hereby authorized and directed by the collection of dockage, tolls, rents, wharfage and cranage to collect a sum of money sufficient for the purposes of this act, over and above the amount limited by section two thousand five hundred and twenty-six of the Political Code of the State of California. Between the first and tenth day of May, in the year nineteen hundred and fifty-five and between the first and tenth day of May of each year thereafter until the

maturity of said bonds, the said treasurer shall, in the presence Sec. 7. It shall be the duty of the state treasurer to pay of the governor, proceed to draw by lot such an amount of the interest of said bonds, when the same falls due, out of the bonds as shall be requisite to exhaust as nearly as may be the sinking fund provided for in this act, on controller's warrantz amount in said sinking fund at that time, and shall thereupon duly drawn for that purpose. and before the tenth day of June following, give notice by public Sec. 8. This act, if adopted by the people, shall take effect advertisement to be inserted twice a week for two weeks in two on the thirty-first day of December, nineteen hundred and fournewspapers published in the city and county of San Francisco,

teen, as to all its provisions except those relating to and necesand also in one newspaper published in the city of Oakland,

sary for its submission to the people, and for returning, canand also in one newspaper published in the city of Los Angeles,

vassing, and proclaiming the votes, and as to said excepted

provisions this act shall take effect ninety days after the final and also in one newspaper published in the city of Sacramento,

adjournment of the session of the legislature passing this sci stating the number of bonds so drawn and that the principal of

Sec. 9. This act shall be submitted to the people of the said bonds will be paid on presentation to the treasurer on or State of California for their ratification at the next general before the second day of July, following, and that from and election, to be holden in the month of November, nineteen after such last named date, all interest upon bonds thus drawn hundred and fourteen, and all ballots at said election shall have shall cease, and it shall be the duty of the treasurer as soon

printed thereon and at the end thereof, the words, “For the Sun as said bonds so drawn by lot are surrendered to him and paid

Francisco harbor improvement act of 1913," and in the same

square under said words the following, in brevier type: "This act to cancel the same, and the interest coupons thereon, and each

provides for the improvement of San Francisco harbor and for year beginning with the year nineteen hundred and fifty-five, the the payment of all costs thereof out of San Francisco harbor said treasurer shall in the manner aforesaid, proceed to draw by improvement fund.” In the square immediately below the lot such an amount of bonds as shall be requisite to exhaust as square containing said words, there shall be printed on said nearly as may be the amount in said sinking fund, and proceed

ballot the words: “Against the San Francisco harbor improvein the manner hereinabove stated. In the event that the state

ment act of 1913,” and immediately below said words “Against

the San Francisco harbor improvement act of 1913” in brevier treasurer employs moneys in said sinking fund in the purchase of

type shall be printed “This act provides for the improvement of any bonds authorized, issued and theretofore sold under authority San Francisco harbor and for the payment of all costs thereof of this act, than at the time in this section provided for the out of the San Francisco harbor improvement fund." Opposite drawing of bonds by lot, and immediately preceding such draw- the words, “For the San Francisco harbor improvement act of ing the state treasurer shall retire and cancel any bonds in

1913” and “Against the San Francisco harbor improvement act said sinking fund authorized, issued and sold under authority of

of 1913," there shall be left spaces in which the voters may this act, and the amount in said sinking fund remaining at the

make or stamp a cross to indicate whether they vote for or

against said act, and those voting for said act shall co so by time shall constitute the amount for the purposes of such placing a cross opposite the words “For the San Francisco drawing. After the payment of all said bonds, the surplus or harbor improvement act of 1913," and all those voting against balance remaining in said sinking fund, if any there be, shall the said act shall do so by placing a cross opposite the words forthwith be paid into the San Francisco harbor improvement

“Against the San Francisco harbor improvement act of 1913." fund.

The governor of this state shall include the submission of this At the time of the respective drawings by lot, as afore

act to the people, as aforesaid, in his proclamation calling for said, and also at the maturity of said state bonds, said treas

said general election. urer shall sell the United States or other bonds then in said

Sec. 10. The votes cast for or against this act shall be sinking fund, except bonds authorized, issued and sold under counted, returned and canvassed and declared in the same authority of this act, at governing market rates, after adver- manner and subject to the same rules as votes cast for state tising the sale thereof in the manner hereinbefore provided for officers; and if it appear that said act shall have received a the sale of bonds hereby authorized to be issued, and shall use

majority of all the votes cast for and against it at said election

as aforesaid, then the same shall have effect as hereinbefore the proceeds for the payment of such bonds as may be drawn by

provided, and shall be irrepealable until the principal and inlot, and at the maturity of said bonds outstanding shall pay

terest of the liabilities herein created shall be paid and disand redeem said matured outstanding bonds out of said moneys charged, and the governor shall make proclamation thereof; but in said fund in extinguishment of said bonds on controller's if a majority of the votes cast as aforesaid are against this warrants duly drawn for that purpose.

act then the same shall be and become void. Sec. 6. The state controller and the state treasurer shall

Sec. 11. It shall be the duty of the secretary of state to

have this act published in at least one newspaper in each county, keep full and particular account and record of all their proceed

or city and county, if one be published therein, throughout this ings under this act, and they shall transmit to the governor an

state, for three months next preceding the general election to abstract of all such proceedings thereunder, with an annual be holden in the month of November, nineteen hundred and fourreport, to be by the governor laid before the legislature bien- teen, the costs of publication shall be paid out of the San nially; and all books and papers pertaining to the matter pro- Francisco harbor improvement fund, on controller's warrants duly vided for in this act shall at all times be open to the inspection

drawn for that purpose.

Sec. 12. This act may be known and cited as the “San of any party interested, or the governor, or the attorney general,

Francisco harbor improvement act of 1913.” or a committee of either branch of the legislature, or a joint

Sec. 13. All acts and part of acts in conflict with the procommittee of both, or any citizen of the state.

visions of this act are hereby repealed. INVESTMENT COMPANIES ACT.

Submitted to electors by referendum. Creates state corporation department Authorizes governor to appoint commissioner of corporations who shall employ necessary deputies, fix their compensation, have control over investment companies and investment brokers and power of examination thereof as in state banks; prohibits issuance of securities before investigation by commissioner, regulates issuance and sale thereof, taking subscriptions therefor, advertisements and circulars respecting same; creates fund from official fees and declares salaries and expenses payable therefrom ; provides for broker's permit and agent's certificate, reports by companies and brokers, appeal to court from commissioner's decision, and penalties for violations.

WHEREAS, the legislature of the State of Cali- The people of the State of California do enact fornia, in regular session in May, 1913, passed,

as follows: and the governor of the State of California, on

Section 1. This act shall be known as the the 28th day of May, 1913, approved a certain

“investment companies act.” law and act, which law and act, together with its

Sec. 2. (a) The term “investment company," title, is in the words and figures following, to wit: when used in this act, includes every private

An act to define investment companies, invest- corporation, association, copartnership and comment brokers, and agents; to provide for the pany, which shall within this state, sell, offer regulation, supervision and licensing thereof; to for sale, negotiate for the sale of or take subprovide penalties for the violation thereof; to scriptions for any stock, stock certificate, bond create the office of commissioner of corporations, or other evidence of indebtedness of any kind and making an appropriation therefor.

or character, issued or to be issued by itself,

other than promissory notes not offered to the public by the maker thereof.

(b) The term "security,” when used in this act, includes the stock, stock certificates, bonds, and other evidences of indebtedness, other than promissory notes not offered to the public by the maker thereof, of an investment company.

(c) The term "investment broker," when used in this act, includes every corporation, association, copartnership, company and person who shall within this state regularly engage in the business of selling, offering for sale or negotiating for the sale, as agent or contractor, of any security of more than one investment company.

The term “contractor" means anyone who undertakes to sell securities for an investnient company for a commission or other consideration.

(d) The term “agent,” when used in this act, includes every corporation, association, copartnership, company and person who shall within this state sell, offer for sale, negotiate for the sale of or take subscriptions for any security of an investment company, either as an employee on a salary basis or for a commission, if acting either for the investment company or an investment broker.

(e) The term "sale," when used in this act, means the original transfer of title of its own securities from an investment company for any valuable consideration.

Sec. 3. This act shall not apply to corporations, associations, copartnerships, companies, firms and individuals now or hereafter subject to the jurisdiction or authority of the railroad commission, nor to corporations, associations, copartnerships, companies, firms and individuals after they have secured from the state banking department, the insurance commissioner or the bureau of building and loan supervision a certificate of authority or license to do business within this state, nor to corporations, associations, copartnerships or companies, subject to federal regulation or not organized for profit, nor to mutual water companies and irrigation districts, nor to the stocks, stock certificates, bonds or other evidences of indebtedness of such corporations, associations, copartnerships, companies, firms or individuals.

Sec. 4. (a) Before selling, offering for sale, negotiating for the sale, or taking subscriptions for, any security of any kind or character, each investment company shall file in the office of the commissioner of corporations of this state, an application for permission so to do, together with a filing fee, as hereinafter prescribed, an itemized statement of its financial condition, in such form and detail as the commissioner of corporations may prescribe, a copy of all contracts which it proposes to make with or sell to the public, a certified copy of its charter, articles of incorporation or articles of association and all amendments thereto, and such additional information pertaining thereto as the commissioner of corporations may, from time to time, prescribe. Said filing fee shall be five dollars if the par or face value of said security amounts to twenty-five thousand dollars or less; ten dollars if the par or face value of said security amounts to over twenty-five thousand doilars and not over fifty thousand dollars; fifteen dollars if the par or face value of said security amounts to over fifty thousand dollars and not over seventy-five thousand dollars; twenty dollars if the par or face value of said security amounts to over seventyfive thousand dollars and not over one hundred thousand dollars; and twenty-five dollars if the par or face value of said security amounts to over one hundred thousand dollars.

(b) If the investment company does not desire to sell its securities to the public the commissioner of corporations may make his written finding to that effect. Upon the filing of said finding the investment company and its securities shall be exempt from the provisio of this act until the commissioner of corporations makes and files his order setting aside said finding. The commissioner of corporations shall have power to make his order setting aside said finding if he finds that the investment company is selling its securities to the public, or for other

against it may be served with the same effect as if said company were organized or created under the laws of this state and had been lawfully served with process therein.

Service upon such attorney shall be deemed personal service upon such company. The commissioner of corporations shall forthwith forward by mail, postage prepaid to the person designated by such company by written instrument filed with the commissioner of corporations at the address given in said instrument, or, in case no such instrument has been filed, to the secretary of such company at its last known post office address, a copy of every process served upon him under the provisions of this section. For each copy of process, the commissioner of corporations shall collect the sum of two dollars, which shall be paid by the plaintiff or moving party at the time of such service, to be recovered by him as part of his taxable costs, if he succeeds in the suit or proceedings. Service shall not be deemed complete until said fee has been paid, and said copy of process mailed as hereinbefore directed.

Sec. 5. It shall be the duty of the commissioner of corporations to examine the statement and other information so filed, and he may, if he deems it advisable, make, or have made, at applicant's cost as hereinafter in this act specified, a detailed examination, audit and investigation of the investment company's affairs, providing that the investment company may at its option, in writing, refuse to have such examination, audit or investigation made, whereupon the commissioner of corporations must reject the application. If he finds that the proposed plan of business of the investment company is not unfair, unjust, or inequitable the commissioner of corporations shall issue to the investment company a certificate, authorizing it to sell securities, as therein specified within this state, reciting that the company has complied with the provisions of this act, that detailed information concerning the investment company and its securities is on file in the office of the commissioner of corporations and that the investment company is authorized to sell said securities within this state on such conditions, if any, as the commissioner of corporations may in said certificate prescribe. Said certificate shall recite in bold type that the issuance of this certificate is permissive only and does not constitute a recommendation or indorsement of said securities. The commissioner of corporations may impose such conditions as he may deem necessary to the issue of said securities, and may, from time to time, for cause, rescind, alter or amend the certificate. If the commissioner of corporations finds that the proposed plan of business of the investment company is unfair, unjust, or inequitable or that it does not intend to do a fair and honest business, he shall refuse to issue the certificate and shall notify the investment company in writing of his decision. It shall be unlawful to issue any security to which this act is applicable unless a certificate or a temporary permit authorizing the issue thereof shall first have been secured from the commissioner of corporations as provided in this act; and it shall further be unlawful for any investment company, investment brcker or agent as in this act defined, to sell, offer for sale, negotiate for the sale of or take subscriptions for any stock, stock certificate, bond or other evidence of indebtedness of any kind or character without exhibiting to the prospective purchaser or prospective purchasers of such securities, or any thereof, a copy of the certificate issued to such investment company in accordance herewith. A corporation may without applying for a certificate under the provisions of this act issue to each of its directors one share of stock for the purpose of qualifying as directors. The commissioner of corporations, if satisfied that the investment company intends to do a fair, just and equitable business, may, forthwith upon the filing of the statement and other papers required by section four of this act, issue to said investment company, upon such conditions as he may prescribe, a temporary permit to issue its securities pending the examination of said statement and other papers, and may, from time to time, for cause, rescind, alter or amend said temporary permit.

Sec. 6. The provisions of sections four and five of this act, in so far as applicable, shall apply to investment brokers; provided, that the commissioner of corporations may, if he finds that the applicant has a good business reputation and deals only in good securities, issue to an investment broker a general permit entitling such investment broker to sell securities within this state, authorized by him, until the first of March following, when it will be necessary to secure a new general permit. For each such general permit the commissioner of corporations shall charge the sum of five dollars. Such general permit, however, shall be

good cause.

(e) If such company is organized or created under or by virtue of the laws of any other state, territory or government, it shall also file in the office of the commissioner of corporations a certified copy of the law or laws under which it is organized or incorporated, and all amendments thereto, and also, in such form as the commissioner of corporations may prescribe, its written instrument, irrevocable, appointing the commissioner of corporations or his successor in office its true and lawful attorney, upon whom al process in any action or proceeding

subject to revocation by the commissioner of corporations at ang time for cause appearing to him sufficient. The commissioner of corporations shall forthwith mail written notice of such revocation to the investment broker.

Sec. 7. Any investment company or investment broker may appoint one or more agents, but it shall be unlawful for any such agent to do any business as specified in this act until he shall have secured from the commissioner of corporations a Certificate authorizing him to represent such investment company or investment broker within this state until the first of March following, when it will be necessary to secure a new certificate. For each certificate the commissioner of corporations shall charge the sum of one dollar. Such certificate, however, shall be subject to revocation by the commissioner of corporations at any time for cause appearing to him sufficient.

Sec. 8. The commissioner of corporations shall have general supervision and control, as provided in this act, over any and all investment companies and investment brokers, and all such investment companies and investment brokers shall be subject to examination by the commissioner of corporations or a duly authorized deputy at any time the commissioner of corporations may deem it advisable to have such examination made to carry out any provision of this act, and in the same manner and with the same powers as is now, or may hereafter be provided for the examination of state banks. Such investment company or investment broker shall pay to the commissioner of corporations, for each examination, a fee of ten dollars and traveling expenses for each day or fraction thereof that he or his deputy shall necessarily be absent from his office for the purpose of making such examination, and the failure or refusal of any investment company or investment broker to pay such fee upon the demand of the commissioner of corporations shall work a forfeiture of its or his rights to sell any further securities in this state until such fee shall have been paid to the commissioner of corporations, with interest at the rate of seven per cent from the time of the demand of the commissioner of corporations and an additional twenty-five per cent of such fee by way of penalty.

Sec. 9. It shall be unlawful for any investment company, investment broker or agent to issue, circulate or deliver any advertisement, pamphlet, prospectus, circular or statement or other document in regard to securities which it desires to sell in this state until after such investment company, investment broker or agent shall have been licensed to sell such securities as provided in this act. It shall be unlawful for any such licensed investment company, investment broker or agent to issue, circulate or deliver any such advertisement, pamphlet, prospectus, circular, statement or other document, unless the same shall be signed with the name of the investment company or investment broker and bear a serial number and a copy thereof shall first have been filed with the commissioner of corporations. The commissioner of corporations may for cause object to any such advertisement, pamphlet, prospectus, circular, statement or other document, whereupon it shall be unlawful for such investment company, investment broker or agent to further issue, circulate or deliver such advertisement, pamphlet, prospectus, circular, statement or other document.

Sec. 10. (a) Every investment company, until it shall have sold all the securities authorized by the commissioner of corporations and disposed of the proceeds thereof, shall file in the office of the commissioner of corporations, under date of December 31st and June 30th of each year, and within fifteen days after said dates, and also at such other times as may be required by the commissioner of corporations, a report setting forth in such form as the commissioner of corporations may prescribe, the securities authorized by him and sold under the provisions of this act, the proceeds derived therefrom, the disposition of such proceeds and such other information concerning its affairs relating to the subject matter of this act, as the commissioner of corporations may require.

(b) Every investment broker shall when called upon by the commissioner of corporations file in his office a report giving such information as he may call for, relating to the securities, the sale of which has been authorized under the provisions of this act.

Sec. 11. All papers, documents, reports and other instruments in writing filed with the commissioner of corporations under this act shall be open to public inspection; provided, that if in his judgment the public welfare or the welfare of any investment company demands that any portion of such information be not made public he may withhold such information from public inspection for such time as in his judgment is necessary.

Sec. 12. An appeal may be taken from any decision of the commissioner of corporations under this act by filing with the clerk of the superior court of the State of California, in and for the city and county of San Francisco, a certified transcript of all papers in the office of the commissioner of corporations relating to such decision. It shall be the duty of the commissioner of corporations to make and certify to said transcript upon payment to him of a fee of ten cents for each folio and one dollar for the certification. The court shall upon such appeal be limited to a consideration of the question whether there has been abuse of discretion on the part of the commissioner of corporations in making such decision.

Sec. 13. Any person who shall knowingly or wilfully subscribe to or make or cause to be made any false statement or false entry in any book of any investment company or investment broker, or exhibit any false paper with the intention of deceiving any person authorized to examine into its affairs, or who shall make or publish any false or misleading statement of its financial condition or concerning the securities by it offered for sale, shall be guilty of a misdemeanor and shall be punishable by a fine not exceeding one thousand dollars or by imprisonment in a county jail not exceeding one year or by both such fine and imprisonment.

Sec. 14. Any corporation, association, copartnership or company which violates or fails to comply with any of the provisions of this act, or which fails, omits or neglects to obey, observe or comply with any order, decision, demand or requirement, or any part or provision thereof, of the commissioner of corporations under the provisions of this act, is subject to a penalty of not less than five hundred dollars nor more than two thousand dollars for each and every offense, which penalty if unpaid after demand by the commissioner of corporations shall be recovered in an action brought in the name of the people of the State of California by the attorney general.

Sec. 15. Every person who violates or fails to comply with any of the provisions of this act or who fails, omits or neglects to obey, observe or comply with any order, decision, demand or requirement, or any part or provision thereof, of the commissioner of corporations under the provisions of this act in any case in which a different penalty is not specifically provided, is guilty of a misdemeanor and is punishable by a fine of not exceeding one thousand dollars, or by imprisonment in a county jail not exceeding one year, or by both such fine and imprisonment.

Sec. 16. There is hereby created a state corporation department. The chief officer of such department shall be the commissioner of corporations. He shall be appointed by the governor and hold office at the pleasure of the governor. He shall receive an annual salary of five thousand dollars, to be paid monthly out of the state treasury upon a warrant of the controller. He shall within fifteen days from the time of notice of his appointment take and subscribe to the constitutional oath of office and file the same in the office of the secretary of state and execute to the people of the state a bond in the penal sum of ten thousand dollars with corporate security or two or more sureties, to be approved by the governor of the state, for the faithful discharge of the duties of his office.

Sec. 17. The commissioner of corporations shall employ such clerks and deputies as he may need to discharge in proper manner the duties imposed upon him by law. Neither the commissioner of corporations nor any of his clerks or deputies shall be interested in any investment company, or investment broker, as director, stockholder, officer, member, agent or employee. Such clerks and deputies shall perform such duties as the commissioner of corporations shall assign to them. He shall fix the compensation of such clerks and deputies which compensation shall be paid monthly on the certificate of the commissioner of corporations, and on the warrant of the controller out of the state treasury; provided, however, that the total expenditures provided for in this act shall not exceed fifty thousand dollars per annum. Each deputy shall within fifteen days after his appointment take and subscribe to the constitutional oath of office and file the same in the office of the secretary of state.

See. 18. The commissioner of corporations shall have his office in the city of Sacramento and he shall from time to time obtain the necessary furniture, stationery, fuel, light and other proper conveniences for the transaction of the business of the state corporation department, the expenses of which shall be paid out of the state treasury on the certificate of the commissioner of corporations and the warrant of the controller.

Sec. 19. A fund is hereby created to be known as the "corporation commission fund” and out of said fund shall be paid

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