Chieftain Royalties incorporated in Delaware in 1928 and conducted business in Oklahoma and Ohio.
Although it paid some dividends during a brief lifespan, the company lost its charters to do business in either state by 1931.
In Ohio, the Sandusky Star-Journal reported the arrest of a Chieftain Royalties salesman for violation of the state’s “Blue Sky Laws.” His offense was “making false statements about the earnings of the company he represented.”
The following day his 16-cylinder luxury automobile was seized by county authorities.
In the years leading up to the Great Depression, many investors were duped by highly speculative or even fraudulent but highly promoted stock investment schemes.
State-by-state laws began with Kansas in 1911 to curb “speculative schemes which have no more basis than so many feet of blue sky.”
Supreme Court Justice McKenna used the phrase to characterize “speculative schemes which have no more basis than so many feet of ‘blue sky’.”
Blue sky laws developed in response to fact that more and more ordinary investors were losing money in fraudulent schemes promising high investment returns.
Among the schemes were exaggerated claims of U.S. oilfield discoveries and exotic investments in foreign countries. The federal government intervened with the Securities Act of 1933.
The few financial records concerning Chieftain Royalties Corporation indicate it was a highly speculative but energetically promoted venture that failed.
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The stories of other attempts to join petroleum exploration booms (and avoid busts) can be found in an updated series of research at Is my Old Oil Stock worth Anything?
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