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California Legislative Counsel Bureau California. Secretary of State.

Amendments to the Constitution and proposed statutes : with arguments ... online

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theretofore sold. All bonds issued shall be signed by the gov-
ernor, and countersigned by the controller, and shall be endorsed
by the state treasure 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 tbe seal of the state stamped thereon. The said bonds
signed, countersigned and endorsed and sealed as herein pro-
vided \dien sold shall be and constitute a valid and blading
obligation upon the State of Califomia, though the sale thereof
be made at a date or dates after the person signing, counter-
signing and endorsing, w 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 hun(k%d 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 ac-
crued 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 appro-
priated 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 ^all 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



U^ for said boo^s, or for any of them, which shall bf below
the par value of said bonds so offered plus the iRt&rest, which
has accrued thereon between the date of sale and the last pre-
ceding Interest maturity date; and he may, by public announce-
ment at the place and time fixed for the sale, contiflae such
tale, ai to the wbok of the bonds offered, or any part thereof,
offend, to racfa time and placa as be may select. Before offer-
ing any of said boRdi for sale the said treasnrer shall detach
therefrom all coupons which have matured or will mature before
the date fixed for such sale. Doe notice of the time and place
of sale of all bonds must be given by said treasurer by publica-
tion in two newspapers published in the city and county of
San Francisco, and also by publication in one newspaper pub-
lished in the city of Oakland, and by publication in one news-
paper published in the city of Los Angeles, and by publication
in (me 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 im-
IHvvement fund, on controller's warrants duly drawn for the pur-
pose. 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 FVancisco seawall fund" and must
be used exclusively for the construction of wharves, piers, sea-
wall, 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 \\an-ants upon said fund shall be drawn upon and shall be
paid out of said fund in the same manner as drafts and war-
rants are drawn upon and paid out of the San Francisco harbor
improvement fund. The amount that shall have been paid at
the sale of bald 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 ahd 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 here^y 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 sudi bonds, take from the San Francisco harbor im-
provement 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 pur-
chase of the bonds of the United States, or of the State of
Califomia, including any bmds authorized, issued and thereto-
fore 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 siiMig fund with which to pay the interest on such of the
state bonds herein provided to be issued as may have thereto-
fore been sold. The state treasurer may only purchase such
bonds auth(»1zed and Issued under authwity of tills 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 shiking fund, an amount equal to the monthly in-
terest then due <m 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 pur-
poses 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

Thirty-seyen



maturity of said bonds, the said treasurer shall, in the presence
of the governor, proceed to draw by lot such an amount of
b<mds as shall be requisite to exhaust as nearly as may be the
amount in said sinking fund at that time, and shall thereupon
and bef(M'e the tenth day of June following, give notice by public
advertisement to be inserted twice a week for two weeks in two
newspapers published in the city and county of San Francisco,
and also in one newspaper published in the city of Oakland,
and also in one newspaper published in ttie city of Los Angeles,
and also in one newspaper published in the city of Sacramento,
stating the number of bonds so drawn and that the principal of
said bonds will be paid on presentation to the treasurer on or
before the second day of July, following, and that from and
after such last named date, all interest upon bonds thus drawn
shall cease, and it shall be the duty of the treasurer as soon
as said bonds so drawn by lot are surrendered to him and paid
to cancel the same, and the interest coupons thereon, and each
year beginning with the year nineteen hundred and flfty-flve, the
said treasurer shall in the manner aforesaid, proceed to draw by
lot such an amount of bonds as shall be requisite to exhaust as
nearly as may be the amount in said sinking fund, and proceed
in the manner hereinabove stated. In the event that the state
treasurer employs moneys in said sinking fund in the purchase of
any bonds authorized, issued and theretofore sold under authority
of this act, than at the time in this section provided for the
drawing of bonds by lot, and immediately preceding such draw-
ing the state treasurer shall retire and cancel any bonds in
said sinking fund authorized, issued and sold under authority of
this act, and the amount in said sinking fund remaining at the
time shall constitute the amount for the purposes of such
drawing. After the payment of all said bonds, the surplus or
balance remaining in said sinking fund, if any there be, shall
forthwith be paid into the San Francisco harbor improvement
fund. At the time of the respective drawings by lot, as afore-
said, and also at the maturity of said state bonds, said treas-
urer shall sell the United States or other bonds then in said
sinking fund, except bonds authorized, issued and sold under
authority of this act, at governing market rates, after adver-
tising the sale thereof in the manner hereinbefore provided for
the sale of bonds hereby authorized to be issued, and shall use
the proceeds for the payment of such b<mds as may be drawn by
lot, and at the maturity of said bonds outstanding shall pay
and redeem said matured outstanding bonds out of said moneys
in said fund in extinguishment of said bonds on controller's
warrants duly drawn for that purpose.

Sec. 6. The state controller and the state treasurer shall
keep full and particular account and record of all their proceed-
ings under this act, and they shall transmit to the governor an
abstract of all such proceedings thereunder, with an annual
report, to be by the governor laid befwe the legislature bien-
nially; and all books and papers pertaining to the matter pro-
vided for in this act shall at all times be open to the inspection
of any party interested, or the governor, or the attorney general,
or a committee of either branch of the legislature, or a joint
committee of both, or any citizen of the state.



Sec 7. It shall be the duty of the state treasurer to M
the interest of said bonds, when the same falls due, out of t|
sinking fund provided for in this act, on controller's
duly drawn for that purpose.

Sec. 8. This act, if adopted by the people, shall take effn
on the thirty-first day of December, nineteen hundred and (o|
teen, as to all its provisions except those relating to and neci
sary for its submission to the people, and for returning, d
vassing, and proclaiming the votes, and as to said except
provisions this act shall take effect ninety days after the fH
adjournment of the session of the legislature passing tliis a

Sec. 9. This act shall be submitted to the people of I
State of California for their ratification at the next gene
election, to be holden in the month of November, ninety
hundred and fourteen, and all ballots at said election shall h
printed thereon and at the end thereof, the words, "For the i
Francisco harbor improvement act of 1913," and in the sa
square under said words the following, in brevier type: "This i
provides for the improvement of San Francisco harbor and I
the payment of all costs thereof out of San Francisco bail
improvement fund." In the square immediately below I
square containing said words, there shall be printed on ai
ballot the words: "Against the San Francisco harbra* improi
ment act of 1913," and immediately below said words "Agai
the San Francisco harbor improvement act of 1913" in breil
type shall be printed "This act provides for the improvement
San Francisco harbor and for the payment of all costs then
out of the San Francisco harbor improvement fund." Oppti
the words, "For the San Francisco harbor improvement act
1913" and "Against the San Francisco harbor improvement i
of 1913," there shall be left spaces in u-hich the voters n
make (u* stamp a cross to indicate whether they vote tat
against said act, and those voting for said act shall do so
placing a cross opposite the words "For the San Frand
harbor improvement act of 1913," and all those voting agaft
the said act shall do so by placing a cross opposite the wa
"Against the San Francisco harbor improvement act of 1913
The governor of this state shall include the submission of H
act to the people, as aforesaid, in his proclamation calling 1
said general election.

Sec. 10. The votes cast for or against this act shall be
counted, returned and canvassed and declared in the sa»
manner and subject to the same rules as votes cast for em
officers; and if it appear that said act shall have received i
majority of all the votes cast for and against it at said electioB
as aforesaid, then the same shall have effect as herelnbefoi
provided, and shall be irrepealable until the principal and i^
terest of the liabilities herein created shall be paid and d»-
charged, and the governor shall make proclamation thereof; M
if a majority of the votes cast as aforesaid are against tlos
act then the same shall be and become void.

Sec. 11. It shall be the duty of the secretary of state \i
have this act published in at least one newspaper in each countF,
or city and county, if one be published therein, throughout ttsi
state, for three months next preceding the general election to
be holden in the month of November, nineteen hundred and fotr-j
teen, the costs of publication shall be paid out of the Sm
Francisco harbor Improvement fund, on controller's warrants dulj
drawn for that purpose.

Sec. 12. This act may be known and cited as the "S«
Francisco harbor improvement act of 1913." ]

Sec. 13. All acts and part of acts in conflict with the pro-
visi(ms of this act are hereby repealed.



INVESTMENT COMPANIES ACT.

Submitted to electors by referendum.

Creates state corporation department Authorizes governor to appoint commissioner of corpora-
tions 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, advertisem'ents 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 de-
cision, and penalties for violations.

Whereas, the legislature of the State of Cali-
fornia, in regular session in May, 1913, passed,
and the governor of the State of California, on
the 28 th day of May, 1913, approved a certain
law and act, which law and act, together with its
title, is in the words and figures following, to wit :

An act to define investment companies, invest-
ment brokers, and agents; to provide for the
regulation, supervision and licensing thereof; to
provide penalties for the violation thereof; to
create the office of commissioner of corporations,
and making an appropriation therefor.
Thirty-eight



The people of the State of California do enact
as follows:

Section 1. This act shall be known as the
"Investment companies act."

Sec. 2. (a) The term "investment company,"
• when used in this act, includes every private
corporation, association, copartnership and com-
pany, which shall within this state, sell, offer
for sale, negotiate for the sale of or take sub-
scriptions for any stock, stock certificate, bond
or other evidence of indebtedness of any kind
or character, issued or to be issued by itself,



t)ier than promissory notes not offered to the public by the
lalier thereof.

(b) The term "security/' when used in this act. Includes
M stock, stock certificates, bonds, and other cTidences of in-
ebtedness, other than promissory notes not offered to the public
Y the ma^ thereof, of an investment company.

(c) The term "investment broker," when used in this act,
icludes every corporation, association, copartnership, company
nd person who shall within this state regularly engage in the
oslness of selling, offering fw sale or negotiating for the sale,
3 agent or contracts, of any security of more than me invest-
lent company. The term "contractor" means any one who
ndertakes to sell securities for an investment company for a
ommission or other consideration.

(d) The term "agent," when used in this act, includes every
orporation, association, copartnership, company and person who
ball within this state sell, offer for sale, negotiate for the sale
f or take subscriptions for any security of an investment com-
any. either as an employee on a salary basis or for a com-
ilssion. If acting either for the investment company or an
ivestment broker.

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

Sec 3. This act shall not apply to corporations, associa-
ions, copartnerships, companies, firms and individuals now or
lereafter subject to the jurisdiction or authority of the railroad
ommission, nor to corporations, associati(»is, copartnerships,
ompanies, firms and individuals after they have secured from
he state banking department, the insurance commissioner or the
fureau of building and loan supervision a certificate of authority
w license to do business within this state, nor to corporations,
associations, copartnerships or companies, subject to federal
'egulatira or not organized for profit, nor to mutual water
.'ompanies and irrigation districts, nor to the stocks, stock
%rtlficates, bonds or other evidences of indebtedness of such
lorporaticms, assodatiims, copartnerships, companies, firms or
ndividuals.

Sec 4. (a) Before selling, offering for sale, negotiating for
he sale, w taking subscriptions for, any security of any kind
Mr characto*, each investment company shall file in the office
i the commissioner of corporations of this state, an applica-
lon for permission so to do, together with a filing fee, as
lereinafto* prescribed, an itemized statement of its financial
condition, in such form and detail as the commissioner of cor-
)orations may prescribe, a copy of all contracts which it pro-
xies to make with or sell to the public, a certified copy of
ts charter, articles of Incorporation or articles of association
nd all amendments thereto, and such additional information
>ertaining thereto as the commissioner of corporations may,
rom time to time, prescribe. Said filing fee shall be five
iollars if the par or face value of said security amounts to
wenty-five thousand dollars or less; ten dollars if the par or
ace value of said security amounts to over twenty-five thousand
iollars and not over fifty thousand dollars; fifteen dollars if the
)ar (H* face value of said security amounts to over fifty thousand
Iollars and not over seventy-five thousand dollars; twenty dollars
f the par or face value of said security amounts to over seventy-
hre thousand dollars and not over one hundred thousand dollars;
ind twenty-five dollars if the par or face value of said security
mounts to over one hundred thousand dollars.

(b) If the investment company does not desire to sell its
ecurities to the public the commissioner of corporations may
aake his written finding to that effect Upon the filing of said
inding the investment company and its securities shall be
xempt from the provisions of this act until the commissioner of
(HDorations makes and files his wder setting aside said finding,
lie commissioner of corporations shall have power to make his
trder setting aside said finding if he finds that the investment
ompany is selling its securities to the public, or for other
ood cause.

(c) If such company is organized or created under or by
htue of the laws of any other state, territory or government,
t shall also file in the office of the commissioner of corpora-
ions a certified copy of the law or laws under which it is or-
anized or incmporated, and all amendments thereto, and also,
a such form as the commissioner of corporations may prescribe,
ts written instrument, irrevocable, appohiting the commissioner
>f corporations or his successor in office its true and lawful at-
oroey. upon whom all process in any action or proceeding



against it may be served with the same effect as If said con-
pany 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 com-
pany. The commissioner of corporations shall forthwith for-
ward 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.
Pop 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 herehibefore directed.

Sec. 5. It shall be the duty of the commissioner of corpora-
tions 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 writhig, refuse to have such examination, audit or investiga-
tion made, whereupon the commissioner of corporations must re-
ject the application. If he finds that the proposed plan of
business of the investment company is not unfair, unjust, or in-
equitable the commissioner of cwporations shall issue to the
investment company a certificate, authwizlng it to sell securities,
as therein specified within this state, reciting that the company
has complied with the provisions of this act, that detailed infor-
mation concemhig 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 certifi-
cate 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 in-
vestment 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 t
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 Indebt-



Online LibraryCalifornia Legislative Counsel Bureau California. Secretary of StateAmendments to the Constitution and proposed statutes : with arguments ... → online text (page 12 of 36)