This section contains the nature of the case and procedural background.

D is a New York corporation organized for benevolent purposes having a membership of 25,000 Chinese. On September 1, 1937, the Republic of China authorized the issuance of $500,000,000 in 4 percent Liberty Bonds, and on May 1, 1938, authorized a further issue of $50,000,000 in 5 percent bonds. In October, 1937, D set up a committee which has had no official or contractual relation with the Chinese Government for the purpose the purpose in part of soliciting and receiving funds from members of Chinese communities in New York, New Jersey and Connecticut, as well as from the general public in those states, for transmission to China for general relief. Through mass meetings, advertising in newspapers distributed through the mails, and personal appeals, the committee urged the members of Chinese communities in New York, New Jersey, and Connecticut to purchase the Chinese government bonds. At the request of individual purchasers and for their convenience the committee received some $600,000 to be used for acquiring the bonds, and delivered the money to the New York agency of the Bank of China, together with written applications by the respective purchasers for the bonds which they desired to buy. The New York agency transmitted the funds to its branch in Hong Kong with instructions to make the purchases for the account of the various customers. The Hong Kong bank returned the bonds by mail to the New York branch which in turn forwarded them by mail to the purchasers at their mailing addresses, which, in some cases, were in care of the defendant at its headquarters in New York. D never received compensation. No registration statement under the Securities Act has ever been made. The court entered a decree denying P's motion, granting D's motion and dismissing the complaint. P appealed.

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