to mean that the defendant was and is, in fact, engaged in such fraudulent practices, and that the use of the words "papers in form of order and subpoena" shall not be deemed an admission by the defendant of the invalidity of such papers. It is agreed that, without prejudice to the rights of either party, the time of return of the papers in the form of order and subpoena is extended to a fixed date subsequent to this determination and decision.

It is urged that the proposed examination of plaintiff and inquiry sought to be conducted contravenes the Constitution in that: First, it is a deprivation of the rights secured citizens by article 1, § 1, of the state Constitution; second, it is an attempt to give the Attorney General certain judicial powers in violation of article 6 of the state Constitution relating to courts; third, it is a deprivation of liberty without due process of law, within the meaning of section 5 of article 1 of the state Constitution, and the Fourteenth Amendment of the federal Constitution; and, fourth, it is a violation of section 8 of the Civil Rights Law (as amended by Laws 1923, c. 80).

In considering these various contentions made in behalf of the plaintiff, it is well to view the purpose of the law. Article 23-A of the General Business Law was enacted for the purpose of dealing with "fraudulent practices with respect to stocks, bonds, other securities." The original law was passed in 1921 (chapter 649, Laws 1921, amended in 1923, c. 600, and again in 1925, c. 239).

A practice has grown up in this state by which many people have been cheated and defrauded by the sale of worthless securities and stocks. Such condition has become nation-wide, and laws have been enacted to combat the evil. Hall v. Geiger-Jones Co., 242 U. S. 539, 37 S. Ct. 217, 61 L. Ed. 480, L. R. A. 1917F, 514, Ann. Cas. 1917C, 643; Matter of Ottinger v. State Civil Service Commission, 240 N. Y. 435, 148 N. E. 627. The law under consideration is known and referred to as the Martin Act. It is also known as a "Blue Sky Law." 8 Corpus Juris 1130.

That the purpose of the law is legal cannot be gainsaid. That it is aimed at an evil which exists cannot be questioned. It is necessary to determine whether the machinery established for the purpose of enforcement of the law is violative of the Constitutions. The general plan of the law is to provide for the prevention of fraudulent practices in the state in respect to stocks, bonds, securities, and other commodities, through the activity of the Attorney General and his deputies.

The law is made up of a number of sections. It provides that, whenever it shall appear to the Attorney General, either upon complaint or otherwise, that, in the purchase or sale within this state of commodities, or in the issuance, sale, or promotion of any stocks, bonds, etc., any person, corporation, or association shall have employed or employs or is about to employ a scheme to defraud or to obtain money by false pre

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tense, or when any person, corporation, or the like makes or attempts to make a fictitious or pretended purchase of securities or commodities in this state, or shall have engaged or is about to engage in any practice which is fraudulent or in violation of the law, or which would operate as a fraud upon the purchaser, or where any dealer has sold or offered for sale, or is attempting to sell, any security or securities in vi-olation of the law as to fraudulent practices, or whenever the Attorney General believes it to be in the public interest that an investigation should be made, he may, in his discretion, require such person, corporation, or the like, to file with him a statement in writing under oath, or otherwise, as to the facts and circumstances concerning the matter which he believes to be to the public interest to investigate, and for that purpose may prescribe forms upon which statements shall be made. The law further provides that the Attorney General may also require such other data and information as he may deem relevant, and is empowered to subpoena witnesses, compel their attendance, and order the production of books and papers which he deems relevant or material to the inquiry. The law provides that, if a person subpoenaed to attend such inquiry fails to obey subpoena without reasonable cause, or if the person attending shall without reasonable cause refuse to be sworn or examined or answer questions or produce books or papers when ordered so to do by the officer conducting such inquiry, or if a person, corporation, or the like fails to perform any act required thereunder to be performed, he shall be guilty of a misdemeanor. The law further provides that any officer taking part in the inquiry, or any person examined as a witness, shall not disclose to any one, other than the Attorney General, the name of any witness examined, or any other information obtained upon such inquiry, except as directed by the Attorney General, and the violation of such required secrecy is declared to be a misdemeanor. Section 352 (as added by Laws 1921, c. 649, and amended by Laws 1923, c. 600, and Laws 1925, c. 239). An investigation is permitted of the conduct of foreign corporations and the like, whose stocks, bonds, or other securities are sold or offered for sale within the state, and service of notice provided for where there is no designation of a person upon whom process might be served, as required by the General Corporation Law. Section 352-a (as added by Laws 1923, c. 600). Whenever the Attorney General shall be satisfied from evidence that fraudulent acts condemned by the law are practiced, or about to be practiced, he is authorized to bring an action on behalf of the people of the state to enjoin such fraudulent acts. Section 353 (as added by Laws 1921, c. 649, and amended by Laws 1923, c. 600, and Laws 1925, c. 239). Provision is made for the appointment of receiver, issuance of injunction and sequestration. of property derived from fraudulent practices. Section 353-a (as added by Laws 1925, c. 239). Whenever the Attorney General has determined to commence an action under the law, he may present to a jus

tice of the Supreme Court, before beginning such action, an application in writing for an order directing the person mentioned to appear before the justice or referee to answer questions and produce books and papers concerning alleged fraudulent practices which relate to the contemplated action. The justice of the court is required to grant order, and the application therefor may simply show upon information and belief that the testimony is material and necessary. The provisions of the Civil Practice Act in relation to examination of witnesses before commencement of action shall not apply, except as prescribed. The order shall be granted with preliminary injunction or stay as may appear to the justice proper, and, upon a showing by the Attorney General that defendant or an officer thereof has refused to appear, produce books or papers relevant, or answer material questions as ordered, a preliminary injunction may forthwith issue without any further showing. Section 354 (as added by Laws 1921, c. 649, and amended by Laws 1923, c. 600, and Laws 1925, c. 239). By another section of the law (section 355 [as added by Laws 1921, c. 649]) provision is made for signing and indorsing an order for examination and manner of service; and the powers of a referee appointed under the article are prescribed (section 356 [as added by Laws 1921, c. 649, and amended by Laws 1923, c. 600]). The Attorney General is authorized to prosecute violations of the law applicable to or respecting fraudulent practices, and by this section of the law power is granted to supplant a district attorney, or direct the action of a district attorney. Section 358 (as added by Laws 1921, c. 649). Immunity is provided for a witness compelled to testify before the Attorney General or his deputy, or any of the tribunals named therein. Section 359 (as added by Laws 1921, c. 649, and amended by Laws 1923, c. 600, and Laws 1925, c. 239). The appointment of deputies without civil service examination is provided for (section 359-a [as added by Laws 1921, c. 649]), and the constitutionality of any section or provision of the law shall not affect any other section or provision (section 359-b [as added by Laws 1923, c. 600]). It provides for an official' securities paper, in which are to be published the state notices pursuant to the provisions of section 359-e (as added by Laws 1925, c. 239), and which is referred to as "state paper" (section 359-c [as added by Laws 1925, c. 239]), and requires the publication of certain notices to be printed and published in the form as prescribed by law, which publication is to be made under a caption entitled "Dealers in Securities," etc. Copies of such publications are to be delivered to the Attorney General. Section 359-d (as added by Laws 1925, c. 239). Another section requires that any dealer shall, after the 31st of May, 1925, publish what is known. as a state notice, setting forth his name and address, or, if a corporation, the state and country in which incorporated, or, if a partnership, the names of the partners. The security or securities are also required to be stated and published in said notice, and provision is also made for

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the sale with proper listing and designation by selling group or syndicate (section 359-e [as added by Laws 1925, c. 239]) and also for the exemption of certain securities from listing, as required by a portion of another section. The list of securities which are not required to be published is quite extensive and varied (section 359-f [as added by Laws 1925, c. 239]). Any person, corporation, or the like that has been served. with an order issued pursuant to the provisions in relation to order of a justice of the Supreme Court, or with any order or with a final judgment in an action brought by the Attorney General, as provided in the article, and who disobeys the same, shall be deemed in contempt of court and be guilty of a misdemeanor, in addition to being liable to a civil penalty. Any person, corporation, or the like, violating any of the provisions of the article, is made guilty of a misdemeanor. Section 359-g (as renumbered by Laws 1925, c. 239).

A reading and studying of the act as a whole is proper in order to consider and determine its various purposes as well as validity. Different proceedings are contemplated by the law, and the whole scheme thereof is to vest in the Attorney General and his deputies, not only authority to carry out its purposes, but the power to do it with as little limitation and restraint as possible. The particular section of the law which is to be viewed and considered for the purpose of the determination of this controversy is section 352. Defendant is attempting to operate under that particular section. The question before the court is one solely of law. Whether or not the plaintiff would be deprived of the rights and privileges secured by the law of the land, or deprived of his liberty or property without due process of law, by the action of the defendant under the particular section, must be determined by many elements which enter into consideration.

[1] It cannot be successfully urged by the plaintiff that his business is not one which should be subject to regulation and control. People v.' Atwater, 229 N. Y. 303, 128 N. E. 196; Banta v. City of Chicago, 172 11. 204, 50 N. E. 233, 40 L. R. A. 611. The business of a dealer in securities has been regulated by some form of law and practice for a number of years. The court must take notice of that condition. The sales made as a rule are not of property, but of the evidence of an interest in property, and such is not an ordinary class of business. Hall v. GeigerJones Co., 242 U. S. 539, 552, 37 S: Ct. 217, 61 L. Ed. 480, L. R. A. 1917F, 514, Ann. Cas. 1917C, 643; Jermain v. Lake Shore & M. S. R. Co., 91 N. Y. 483, 492. It has been regarded of such character as to require administrative control. Merrick v. N. W. Halsey & Co., 242 U. S. 568, 585, 37 S. Ct. 227, 61 L. Ed. 498. The dangerous and uncertain practices in relation to dealing, or claiming to deal, in various forms of commodities and securities have prompted the Legislature to pass stringent laws. Penal Law, §§ 390-395, 951-957 as amended. The

Legislature's view of the dangerous practices to be guarded against is clear. It has the power to act and discretion in acting. Roman v. Lobe, 243 N. Y. 51, 54, 152 N. E. 461; People v. Beakes Dairy Co., 222 N. Y. 416, 427, 119 N. E. 115, 3 A. L. R. 1260; Klein v. Maravelas, 219 N. Y. 383, 114 N. E. 809, L. R. A. 1917E, 549, Ann. Cas. 1917B, 273.

"The intangibility of securities, they being representatives or purporting to be representatives of something else, of property, it may be, in distant states and countries, schemes of plausible pretensions, requires a difference of provision, and the integrity of the securities can only be assured by the probity of the dealers in them and the information which may be given of them. This assurance the state has deemed necessary for its welfare to require; and the requirement is not unreasonable or inappropriate. It extends to the general market something of the safeguards that are given to trading upon the exchanges and stock boards of the country-safeguards that experience has adopted as advantageous. Inconvenience may be caused and supervision and surveillance, but this must yield to the public welfare; and, against counsel's alarm of consequences, we set the judgment of the state. Hall v. Geiger-Jones Co., 242 U. S. 539, 554, 37 S. Ct. 217, 221 (61 L. Ed. 480, L. R. A. 1917F, 514, Ann. Cas. 1917C, 643).

The section of law under which the Attorney General is attempting to act provides two steps in the proceedings: One, the sending out of a request for information. He is authorized to require the statement to be in writing and under oath, and to prescribe the form thereof. Such request for a verified statement was made of the plaintiff. The other, causing to be issued and served a paper in the form of subpœna and a paper in the form of an order. Such subpoena and order were issued by the Attorney General, acting under the provision of law authorizing and empowering him to subpoena witnesses, compel their attendance, examine them under oath, and to require the production of any books or papers which he deems relevant or material to the inquiry.

A copy of the proposed statement in form of questionnaire is annexed to the stipulated facts. It is in the form of a communication to be returned to the Attorney General, made with spaces blank for furnishing information as to name of person, corporation, or association, place of business, location of head offices, name under which business is conducted, length of time in business, in what states licensed or registered, states applied to for license or registration, statement as to filing of required notices, whether refused license or registration, whether license or registration has been revoked, whether individual or any one connected with business has ever been charged with violation of law against sale of securities, whether any one connected with business has ever been convicted of crime, whether been declared bankrupt, list and description of books, statement of broker accounts, lists of brokers and addresses with whom account has been opened, statement of all loans with schedule of securities held as collateral, schedule of all securities, statement