TRIEBER, District Judge
(after stating the facts as above). [ 1 ] It is a well-settled rule of law that a statute will not be declared unconstitutional at the instance of one not affected by it. Williams v. Walsh, 222 U.S. 415" court="SCOTUS" date_filed="1912-01-09" href="https://app.midpage.ai/document/williams-v-walsh-97511?utm_source=webapp" opinion_id="97511">222 U. S. 415, 423, 32 Sup. Ct. 137, 56 L. Ed. 253" court="SCOTUS" date_filed="1912-01-09" href="https://app.midpage.ai/document/williams-v-walsh-97511?utm_source=webapp" opinion_id="97511">56 L. Ed. 253; Murphy v. California, 225 U.S. 623" court="SCOTUS" date_filed="1912-06-07" href="https://app.midpage.ai/document/murphy-v-california-97683?utm_source=webapp" opinion_id="97683">225 U. S. 623, 32 Sup. Ct. 697, 56 L. Ed. 1229" court="SCOTUS" date_filed="1912-06-07" href="https://app.midpage.ai/document/murphy-v-california-97683?utm_source=webapp" opinion_id="97683">56 L. Ed. 1229, 41 L. R. A. (N. S.) 153; Rosenthal v. New York, 226 U.S. 260" court="SCOTUS" date_filed="1912-12-02" href="https://app.midpage.ai/document/rosenthal-v-new-york-97713?utm_source=webapp" opinion_id="97713">226 U. S. 260, 271, 33 Sup. Ct. 27, 57 L. Ed. 212" court="SCOTUS" date_filed="1912-12-02" href="https://app.midpage.ai/document/rosenthal-v-new-york-97713?utm_source=webapp" opinion_id="97713">57 L. Ed. 212, Ann. Cas. 1914B, 71; Missouri, K. & T. R. R. Co. v. Cade, 233 U.S. 642" court="SCOTUS" date_filed="1914-05-11" href="https://app.midpage.ai/document/missouri-kansas--texas-railway-co-v-cade-98188?utm_source=webapp" opinion_id="98188">233 U. S. 642, 650, 34 Sup. Ct. 678, 58 L. Ed. 1135" court="SCOTUS" date_filed="1914-05-11" href="https://app.midpage.ai/document/missouri-kansas--texas-railway-co-v-cade-98188?utm_source=webapp" opinion_id="98188">58 L. Ed. 1135. Applying this rule, a number of the grounds upon which the plaintiff attacks the constitutionality of this act cannot be considered in this proceeding.
As the plaintiff is not engaged in the banking business, it cannot be affected by the fact that the statute is applicable to state banks and trust companies, and not to national banks, for, as stated in Collins v. Texas, 223 U.S. 288" court="SCOTUS" date_filed="1912-02-19" href="https://app.midpage.ai/document/collins-v-texas-97550?utm_source=webapp" opinion_id="97550">223 U. S. 288, 295, 32 Sup. Ct. 286, 56 L. Ed. 439" court="SCOTUS" date_filed="1912-02-19" href="https://app.midpage.ai/document/collins-v-texas-97550?utm_source=webapp" opinion_id="97550">56 L. Ed. 439:
“Where the party attacking the constitutionality of a statute has not suffered, the court will not speculate whether others may suffer.”
Aside from this, the fact that national banks are excluded from the provisions of the act does not affect its validity for two reasons: First. National banks, being creatures of the national government, are not subject to control or regulations concerning the management of their business by the states. McClellan v. Chipman, 164 U.S. 347" court="SCOTUS" date_filed="1896-11-30" href="https://app.midpage.ai/document/mcclellan-v-chipman-94550?utm_source=webapp" opinion_id="94550">164 U. S. 347, 17 Sup. Ct. 85, 41 L. Ed. 461" court="SCOTUS" date_filed="1896-11-30" href="https://app.midpage.ai/document/mcclellan-v-chipman-94550?utm_source=webapp" opinion_id="94550">41 L. Ed. 461; Easton v. Iowa, 188 U.S. 220" court="SCOTUS" date_filed="1903-02-02" href="https://app.midpage.ai/document/easton-v-iowa-95779?utm_source=webapp" opinion_id="95779">188 U. S. 220, 23 Sup. Ct. 288, 47 L. Ed. 452" court="SCOTUS" date_filed="1903-02-02" href="https://app.midpage.ai/document/easton-v-iowa-95779?utm_source=webapp" opinion_id="95779">47 L. Ed. 452; Abilene Nat. Bank v. Dolley, 228 U.S. 1" court="SCOTUS" date_filed="1913-03-17" href="https://app.midpage.ai/document/abilene-national-bank-v-dolley-97823?utm_source=webapp" opinion_id="97823">228 U. S. 1, 33 Sup. Ct. 409, 57 L. Ed. 707" court="SCOTUS" date_filed="1913-03-17" href="https://app.midpage.ai/document/abilene-national-bank-v-dolley-97823?utm_source=webapp" opinion_id="97823">57 L. Ed. 707, affirming 179 F. 461" court="8th Cir." date_filed="1910-05-20" href="https://app.midpage.ai/document/dolley-v-abilene-nat-bank-8775401?utm_source=webapp" opinion_id="8775401">179 Fed. 461, 102 C. C. A. 607, 32 L. R. A. (N. S.) 1065. Second. The fact that some reasonable exceptions are made does not make the act unconstitutional. As stated in Mutual Loan Co. v. Martell, 222 U.S. 225" court="SCOTUS" date_filed="1911-12-11" href="https://app.midpage.ai/document/mutual-loan-co-v-martell-97491?utm_source=webapp" opinion_id="97491">222 U. S. 225, 236, 32 Sup. Ct. 74, 76 (56 L. Ed. 175" court="SCOTUS" date_filed="1911-12-11" href="https://app.midpage.ai/document/mutual-loan-co-v-martell-97491?utm_source=webapp" opinion_id="97491">56 L. Ed. 175, Ann. Cas. 1913B, 529):
“Legislation may recognize degrees of evil without being arbitrarily unreasonable, or in conflict with the equal protection provision of the fourteenth amendment to the Constitution” — citing Ozan Lumber Co. v. Union Bank, 207 *915U. S. 251, 28 Sup. Ct. 89, 52 L. Ed. 195; Heath & M. Mfg. Co. v. Worst, 207 U.S. 338" court="SCOTUS" date_filed="1907-12-09" href="https://app.midpage.ai/document/heath--milligan-manufacturing-co-v-worst-96735?utm_source=webapp" opinion_id="96735">207 U. S. 338, 28 Sup. Ct. 114, 52 L. Ed. 236" court="SCOTUS" date_filed="1907-12-09" href="https://app.midpage.ai/document/heath--milligan-manufacturing-co-v-worst-96735?utm_source=webapp" opinion_id="96735">52 L. Ed. 236.
There are reasonable grounds for excepting national banks.
The same rule applies to the objection that, while the act applies to stocks, bonds, and other securities, it is not applicable to the bonds of the United States, nor to municipal bonds of the state of Arkansas. It is unnecessary to state reasons why this is not an unreasonable classification. They are apparent. Nor is it material, so far as the rights of the plaintiff are concerned, whether that provision of the statute-which prohibits the sale of stocks, bonds, or other securities, unless-the company issuing them is solvent, is constitutional or not, as the complainant specifically alleges that it is a solvent corporation and can therefore satisfy the bank commissioner of that fact.
That the act denies to persons the right to purchase stocks, bonds, or other securities of an investment company when, in the opinion of the bank commissioner, such purchase would result in a loss to purchasers, certainly cannot affect the plaintiff, who does not engage in the purchase of stocks or bonds, and does not claim to be authorized to do so by its charter.
Is the act violative of the commerce clause of the national Constitution because it imposes a burden upon interstate commerce? Unless the business of the plaintiff, as set out in its complaint, shows that it is engaged in interstate commerce, it is, for the reasons before stated, in no position to question the constitutionality of the act. The allegations in the bill, as set out in the statement of facts, show the complainant is not engaged in the sale of stocks, bonds, or other securities, as were the complainants in Alabama, etc., Transportation Co. v. Doyle (D. C.) 210 F. 173" court="E.D. Mich." date_filed="1914-01-28" href="https://app.midpage.ai/document/alabama--n-o-transp-co-v-doyle-8790585?utm_source=webapp" opinion_id="8790585">210 Fed. 173 (construing the Michigan “blue sky” statute), and in William R. Compton Co. v. Allen, 216 F. 537" court="S.D. Iowa" date_filed="1914-07-06" href="https://app.midpage.ai/document/william-r-compton-co-v-allen-8793134?utm_source=webapp" opinion_id="8793134">216 Fed. 537, decided by the District Court of the United States for the Southern District of Iowa (involving the Iowa statute). Therefore these cases are not applicable to the instant case.
[2] Is the plaintiff engaged in commerce? It offers nothing for sale, but is purely an investment company. It undertakes to invest any moneys intrusted to it, and the profits derived from the investment, after paying the expenses of the plaintiff corporation, are, after 80 monthly payments have been made, to be paid to the party who made these payments. But these profits are not to exceed a certain sum mentioned bathe contract. This is no more commerce than insurance, and that insurance is not commerce, within the meaning of the commerce clause of the Constitution, is no longer an open question. The latest case on that subject is New York Life Insurance Co. v. Deer Lodge County, 231 U.S. 495" court="SCOTUS" date_filed="1913-12-15" href="https://app.midpage.ai/document/new-york-life-insurance-v-deer-lodge-county-98020?utm_source=webapp" opinion_id="98020">231 U. S. 495, 34 Sup. Ct. 167, 58 L. Ed. 332" court="SCOTUS" date_filed="1913-12-15" href="https://app.midpage.ai/document/new-york-life-insurance-v-deer-lodge-county-98020?utm_source=webapp" opinion_id="98020">58 L. Ed. 332, where the former decisions-of the court, holding that insurance is not commerce, were reaffirmed. Nor are loans of money made to clients for the purpose of enabling them to acquire homes commerce, within the meaning of the commerce clause of the Constitution. Nelms v. Mortgage Co., 92 Ala. 157" court="Ala." date_filed="1890-11-15" href="https://app.midpage.ai/document/nelms-v-edinburg-american-land-mortgage-co-6514240?utm_source=webapp" opinion_id="6514240">92 Ala. 157, 9 South. 141; Southern Bldg. & Loan Ass’n v. Norman, 98 Ky. 294" court="Ky. Ct. App." date_filed="1895-11-20" href="https://app.midpage.ai/document/southern-building--loan-assn-v-norman-7133263?utm_source=webapp" opinion_id="7133263">98 Ky. 294, 32 S. W. 952, 31 L. R. A. 41, 56 Am. St. Rep. 367. Lending money is-neither a sale nor a purchase.
*916Whether the .provision of the act (section 4) which requires an officer of a foreign corporation to verify the statements necessary to obtain a license to do business in this state in the office of the bank commissioner, while the officers of a domestic corporation may verify them in any part of the state of Arkansas, and before any officer of that state authorized to administer oaths, and send them to the bank commissioner by mail, is such a discrimination as to vitiate the act, is also immaterial, so far as the plaintiff is concerned, as the complaint alleges that the verification was properly made in the manner prescribed by the statute. But, assuming that it would be unlawful, it would not affect any other provisions of the act, as it is clearly separable. Besides, section 16 of the act provides that:
“Should the courts declare any section of this act unconstitutional or unauthorized by law, or in conflict with any other section or provision of this act, then such decision shall affect only the section or provision so declared to be unconstitutional, and shall not affect the other sections or part of this act.”
[3] The act is also attacked upon the ground that it authorizes the bank commissioner, his clerks, accountants, and examiners, to examine the business of such investment company, and may require it to divulge any and all facts in connection with said business, whether or not the same relates in any way to securities proposed to be sold in Arkansas. The plaintiff is a corporation, and it is now well settled by the decisions of the Supreme Court of the United States that the right to inquire into the condition of corporations exists, and, if necessary for the purpose of enforcing a law, to compel the production of all books, letters, and other records, without violating the provisions of the fourth and fifth amendments to the Constitution of the United States. Hale v. Henkel, 201 U.S. 43" court="SCOTUS" date_filed="1906-03-12" href="https://app.midpage.ai/document/hale-v-henkel-96424?utm_source=webapp" opinion_id="96424">201 U. S. 43, 74, 75, 26 Sup. Ct. 370, 50 L. Ed. 652" court="SCOTUS" date_filed="1906-03-12" href="https://app.midpage.ai/document/hale-v-henkel-96424?utm_source=webapp" opinion_id="96424">50 L. Ed. 652; Consolidated Rendering Co. v. Vermont, 207 U.S. 541" court="SCOTUS" date_filed="1908-01-06" href="https://app.midpage.ai/document/consolidated-rendering-co-v-vermont-96746?utm_source=webapp" opinion_id="96746">207 U. S. 541, 28 Sup. Ct. 178, 52 L. Ed. 327" court="SCOTUS" date_filed="1908-01-06" href="https://app.midpage.ai/document/consolidated-rendering-co-v-vermont-96746?utm_source=webapp" opinion_id="96746">52 L. Ed. 327, 12 Ann. Cas. 658; Hammond Packing Co. v. State of Arkansas, 212 U.S. 322" court="SCOTUS" date_filed="1909-02-23" href="https://app.midpage.ai/document/hammond-packing-co-v-arkansas-96959?utm_source=webapp" opinion_id="96959">212 U. S. 322, 348, 349, 29 Sup. Ct. 370, 53 L. Ed. 530" court="SCOTUS" date_filed="1909-02-23" href="https://app.midpage.ai/document/hammond-packing-co-v-arkansas-96959?utm_source=webapp" opinion_id="96959">53 L. Ed. 530, 15 Ann. Cas. 645; Wilson v. United States, 221 U.S. 361" court="SCOTUS" date_filed="1910-10-21" href="https://app.midpage.ai/document/wilson-v-united-states-97431?utm_source=webapp" opinion_id="97431">221 U. S. 361, 383, 31 Sup. Ct. 538, 55 L. Ed. 771, Ann. Cas. 1912D, 558.
[4] Does the fact that this corporation had, before the enactment of this statute, obtained a license to do business in the state of Arkansas, by complying with the laws then in force, and had entered into a. large number of contracts in the state, prevent the state from changing the former laws or placing additional burdens upon corporations, foreign and domestic? Section 11 of article 12 of the Constitution of Arkansas, in force at the time the plaintiff first came into the state, provides that foreign corporations shall, as to contracts or business done in this state, “be subject to the same regulations, limitations and liabilities as like corporations of this state, and shall exercise no other or greater powers, privileges or franchises than may be exercised by like corporations of this state.” Section 6 of the same article provides :
“The General Assembly shall have the power to alter, revoke or annul any charter of incorporation now existing and revocable at the adoption of this *917Constitution, or any that may hereafter be created, whenever, in their opinion, it may be injurious to the citizens of this state, in such a manner, however, that no injustice shall be done to the corporators.”
When a corporation accepts a charter in a state whose' Constitution or general statutes contain such a provision, that provision becomes as much a part of the charter as if it were incorporated in it, and therefore authorizes the state to make any changes it sees proper, provided they do not amount to a confiscation of property or an impairment of the obligations of contracts. City of Owensboro v. Cumberland Tel. & Tel. Co., 230 U.S. 58" court="SCOTUS" date_filed="1913-06-16" href="https://app.midpage.ai/document/city-of-owensboro-v-cumberland-telephone--telegraph-co-97952?utm_source=webapp" opinion_id="97952">230 U. S. 58, 33 Sup. Ct. 988, 57 L. Ed. 1389" court="SCOTUS" date_filed="1913-06-16" href="https://app.midpage.ai/document/city-of-owensboro-v-cumberland-telephone--telegraph-co-97952?utm_source=webapp" opinion_id="97952">57 L. Ed. 1389; Ozan Lumber Co. v. Biddie, 87 Ark. 587" court="Ark." date_filed="1908-11-02" href="https://app.midpage.ai/document/ozan-lumber-co-v-biddie-6547063?utm_source=webapp" opinion_id="6547063">87 Ark. 587, 113 S. W. 796.
. As to contracts made by and with the plaintiff prior to the time this act went into effect, it is sufficient to say that there is nothing in the act which prohibits the remittances of the monthly installments by its clients, as they become due, or prevents the plaintiff from carrying out its contracts entered into before this statute became effective. All this act undertakes to prohibit is the entering into contracts thereafter, unless the association complies with the provisions of the act. The statute is prospective and not retroactive.
[5] It is also claimed that the act is violative of the Constitution of the United States, in that the powers and duties conferred upon the bank commissioner amount to a delegation of legislative powers to him. That there is nothing in the Constitution of the United States which prohibits a state from conferring on a commission such powers as are conferred by this act has been frequently decided by the Supreme Court of the United States. United States v. Grimaud, 220 U S. 506, 517, 518, 31 Sup. Ct. 480, 55 L. Ed. 563" court="SCOTUS" date_filed="1911-05-03" href="https://app.midpage.ai/document/united-states-v-grimaud-1933842?utm_source=webapp" opinion_id="1933842">55 L. Ed. 563; Red C. Oil Mfg. Co. v. North Carolina Board, 222 U.S. 380" court="SCOTUS" date_filed="1912-01-09" href="https://app.midpage.ai/document/red-c-oil-manufacturing-co-v-board-of-agriculture-97507?utm_source=webapp" manufacturing="" of="" oil="" opinion_id="97507" v.="">222 U. S. 380, 395, 32 Sup. Ct. 152, 56 L. Ed. 240" court="SCOTUS" date_filed="1912-01-09" href="https://app.midpage.ai/document/red-c-oil-manufacturing-co-v-board-of-agriculture-97507?utm_source=webapp" manufacturing="" of="" oil="" opinion_id="97507" v.="">56 L. Ed. 240. That it is not prohibited by the Constitution of the state of Arkansas has been determined by the Supreme Court of that state in Mechanics’ Bldg. & Loan Ass’n v. Coffman, 110 Ark. 269" court="Ark." date_filed="1913-11-24" href="https://app.midpage.ai/document/mechanics-building--loan-assn-v-coffman-6549689?utm_source=webapp" opinion_id="6549689">110 Ark. 269, 162 S. W. 1090, involving this act.
That there is no foundation for the contention that the act is violative of those constitutional provisions of the United States and the state of Arkansas which prohibit excessive fines and cruel and unusual punishments requires no extended discussion. The punishment imposed by the act is not so excessive as to warrant a court in declaring it cruel, or even unusual. That is a matter for the legislative department of the government to determine. In order to enforce obedience to the law it is necessary to impose such punishment as will deter parties from violating it. The punishment of corporations is a fine of not less than $100 nor more than $5,000. Of course, there can be no imprisonment of a corporation; but even the imprisonment of individuals cannot exceed 90 days. In prosecutions for violations of this act the courts are given a great deal of latitude. A fine of $100 may deter a corporation with small capital, while it would not deter a corporation with millions of capital, from violating the law. The fact that many fines may be imposed for violations of the act, while an honest effort is being made to test the law, will *918justify a court of equity to interpose its aid, by granting a temporary injunction while the validity of the áct is being tested in the courts; but it will not justify a court to declare the entire act unconstitutional upon that ground,.especially “if we consider that the fine imposed under this act may be as low as $100.
The court is unable to find anything in the questions which applicants for permission to do business in the state are required to answer, which are inquisitorial tQ the extent of making them so unreasonable that the courts should set aside a statute, solemnly enacted by the legislative department of the state, except one. The exception referred to is the requirement of the 'bank commissioner of a true and complete list of the holders of all the securities of the company. It is no part of the statute,. and is not authorized by the act. If plaintiff had been denied the right to do business in this state for its refusal to comply with this requirement of the commissioner, his action would no doubt be unwarranted, and in an action by the plaintiff under section 6 of the act could be corrected. But there is nothing in the complaint to show that this was the case, nor is this a proceeding under section 6.
The claim of plaintiff that the bank commissioner is vested with arbitrary power cannot be sustained, for section 6 of the act provides that:
“Whenever a right of any investment company to do business in this state is refused or revoked as set out in this section, said company may, within twenty days after notification institute a suit in the chancery court in any county in this state where its principal office is maintained or its principal agent resides, asking that said refusal or revocation be annulled. * * * If it be determined that the refusal or revocation was wrongful, the company shall be reinstated and the costs shall be paid in the same manner, and out of the same fund as the cost for maintaining this department.”
There is, therefore, ample provision for preventing the bank commissioner from acting arbitrarily or unlawfully. Whether such a proceeding can be maintained in a court of the United States or only in the chancery courts of the state is immaterial in this case, for, as before stated, this is not a proceeding under that provision of the statute, but a direct proceeding to have the entire act, in so far as it affects the rights of this plaintiff, declared void as being in conflict with the Constitutions of the United States and the state of Arkansas.
[6] It is also claimed that the enforcement of the provisions of the act would amount to a deprivation of the right of freedom of contract. While freedom of contract is a right inherent in every person under the Constitution of the United States, and that of the state of Arkansas, it is not an absolute, but a qualified, right, free from arbitrary restraint, but subject to reasonable regulations. This subject has been so fully discussed in Chicago, B. & Q. R. R. Co. v. McGuire, 219 U.S. 549" court="SCOTUS" date_filed="1911-02-20" href="https://app.midpage.ai/document/chicago-burlington--quincy-railroad-v-mcguire-97368?utm_source=webapp" opinion_id="97368">219 U. S. 549, 566, 567, 568, 31 Sup. Ct. 259, 55 L. Ed. 328" court="SCOTUS" date_filed="1911-02-20" href="https://app.midpage.ai/document/chicago-burlington--quincy-railroad-v-mcguire-97368?utm_source=webapp" opinion_id="97368">55 L. Ed. 328, where the former rulings of , that court are collated, that it is only necessary to refer to that case, which was reaffirmed since in Mutual Loan Co. v. Martell, 222 U.S. 225" court="SCOTUS" date_filed="1911-12-11" href="https://app.midpage.ai/document/mutual-loan-co-v-martell-97491?utm_source=webapp" opinion_id="97491">222 U. S. 225, 235, 32 Sup. Ct. 74, 56 L. Ed. 175" court="SCOTUS" date_filed="1911-12-11" href="https://app.midpage.ai/document/mutual-loan-co-v-martell-97491?utm_source=webapp" opinion_id="97491">56 L. Ed. 175, Ann. Cas. 1913B, 529, Rosenthal v. New York, 226 U.S. 260" court="SCOTUS" date_filed="1912-12-02" href="https://app.midpage.ai/document/rosenthal-v-new-york-97713?utm_source=webapp" opinion_id="97713">226 U. S. 260, 270, 33 Sup. Ct. 27, 57 L. Ed. 212" court="SCOTUS" date_filed="1912-12-02" href="https://app.midpage.ai/document/rosenthal-v-new-york-97713?utm_source=webapp" opinion_id="97713">57 L. Ed. 212, *919Ann. Cas. 1914B, 71, and Erie R. R. Co. v. Williams, 233 U.S. 685" court="SCOTUS" date_filed="1914-05-25" href="https://app.midpage.ai/document/erie-railroad-v-williams-98193?utm_source=webapp" opinion_id="98193">233 U. S. 685, 699, 34 Sup. Ct. 761, 58 L. Ed. 1155" court="SCOTUS" date_filed="1914-05-25" href="https://app.midpage.ai/document/erie-railroad-v-williams-98193?utm_source=webapp" opinion_id="98193">58 L. Ed. 1155.
[7] The courts cannot review the economics or facts on which the Legislature of a state bases its conclusions that an existing evil should be remedied by an exercise of the police power. Central Lumber Co. v. South Dakota, 226 U.S. 157" court="SCOTUS" date_filed="1912-12-02" href="https://app.midpage.ai/document/central-lumber-co-v-south-dakota-97702?utm_source=webapp" opinion_id="97702">226 U. S. 157, 33 Sup. Ct. 66, 57 L. Ed. 174" court="SCOTUS" date_filed="1912-12-02" href="https://app.midpage.ai/document/four-hundred--forty-three-cans-of-frozen-egg-product-v-united-states-97705?utm_source=webapp" opinion_id="97705">57 L. Ed. 174. The requirements of the bank commissioner of a statement of the receipts and expenditures of the company, and a list of the officers of the company, with their holdings of stocks and bonds of the corporation, are not unreasonable. Experience has demonstrated the fact that some of the grossest frauds have been perpetrated on the public by investment companies by extravagant expenditures for salaries, agents’ commissions, and other apparently legitimate purposes through officers who had practically nothing invested in the association, and whose character' and reputation stamped them as adventurers and cheats. Such regulations are proper and wholesome. The dockets of the national courts have been crowded for the last few years with criminal prosecutions of persons charged with the use of the mails of the United States in carrying out fraudulent schemes by so-called investment companies and persons offering allurements to get rich quick. But those courts are only clothed with jurisdiction to prosecute those who, in carrying out their fraudulent schemes, make use of the mails, and then only after the commission of the offense. This necessarily affects only a small portion of those engaged in such schemes, and can in no wise act as a preventative. The states alone can provide for the prevention and punishment of all who commit frauds, although the mails are not used for their accomplishment, and enact laws to prevent the commission of these crimes. Legislation to prevent crime is of greater benefit to society than the punishment of the offender after the crime has been committed and innocent persons have been made to suffer. Statutes enacted for such purposes ought not to be declared invalid by the courts upon slight grounds, even if extreme cases can be imagined where they may work an injustice. The granting of the privilege to do business of that nature in the state by a high official is, to a certain extent, an assurance to the public that the corporation is properly managed. It is not only his privilege, but duty, to exercise great caution to satisfy himself that not only the scheme, but the men administering the affairs of the company, are of such character and standing, and have such a financial interest in the success of the scheme, as to1 give reasonable assurance to investors that their money will not be dishonestly dissipated or misappropriated. Nor can there be a reasonable objection to the provision of the statute that this information should be accessible to those who are inclined to invest their money in the securities of that association. There can be no better means of information than the sworn statements of the officers showing the condition of their corporation. National, as well as state, banks and insurance companies are required to publish similar information in the public press, and fully as much in their reports to the officials charged with their supervision. The validity of these requirements has never been questioned.
The claim that the provisions of the act are not within the police *920power of the state, as they are not necessary to protect the health, safety, morals, and welfare of its people, cannot be sustained. Noble State Bank v. Haskell, 219 U.S. 104" court="SCOTUS" date_filed="1911-01-03" href="https://app.midpage.ai/document/noble-state-bank-v-haskell-97337?utm_source=webapp" opinion_id="97337">219 U. S. 104, 31 Sup. Ct. 186, 55 L. Ed. 112" court="SCOTUS" date_filed="1911-01-03" href="https://app.midpage.ai/document/noble-state-bank-v-haskell-97337?utm_source=webapp" opinion_id="97337">55 L. Ed. 112, 32 L. R. A. (N. S.) 1062, Ann. Cas. 1912A, 487, and German Alliance Ins. Co. v. Kansas, 233 U.S. 389" court="SCOTUS" date_filed="1914-04-20" href="https://app.midpage.ai/document/german-alliance-insurance-v-lewis-98166?utm_source=webapp" opinion_id="98166">233 U. S. 389, 34 Sup. Ct. 612, 58 L. Ed. 1011" court="SCOTUS" date_filed="1914-04-20" href="https://app.midpage.ai/document/german-alliance-insurance-v-lewis-98166?utm_source=webapp" opinion_id="98166">58 L. Ed. 1011, are the latest expressions of the Supreme Court on that subject, and leave nothing to be added.
That the statute makes exceptions in favor of notes secured by mortgages on real estate lying in the state of Arkansas cannot be said to be so unfounded and unreasonable as to authorize the court to declare it void. When the lands mortgaged are lying in the state, where the investor resides, he can more easily satisfy himself as to the validity of the title and the value of the mortgaged premises than if they are in a * foreign state. The courts cannot pass upon the wisdom of legislation. As stated in Ozan Lumber Co. v. Union County Bank, 207 U.S. 251" court="SCOTUS" date_filed="1907-12-02" href="https://app.midpage.ai/document/ozan-lumber-co-v-union-county-nat-bank-of-liberty-96727?utm_source=webapp" opinion_id="96727">207 U. S. 251, 256, 28 Sup. Ct. 89, 91 (52 L. Ed. 195" court="SCOTUS" date_filed="1907-12-02" href="https://app.midpage.ai/document/ozan-lumber-co-v-union-county-nat-bank-of-liberty-96727?utm_source=webapp" opinion_id="96727">52 L. Ed. 195):
“It is almost impossible, in some matters, to foresee and provide for every imaginable and exceptional case, and a Legislature ought not to be required to do so at the risk of having its legislation declared void, although appropriate and proper upon the general subject upon which such legislation is to act, so long as there is no substantial and fair ground to say that the statute makes an unreasonable and unfounded general classification, and thereby denies to any person the equal protection of the laws. In a classification for governmental purposes there cannot be an exact exclusion or inclusion of persons and things.”
The motion to dismiss the bill for failure to state a cause of action is sustained.