Date:    8/4/98  4:33 PM
          
          Subject: S7-14-98
         
          Dear Secretary,

          These are my comments on the proposed amendments to Securities Act of 1933 Rule
          504.  I have practiced securities law in California since 1960 and have provided
          services  exclusively in public and limited offerings of securities since 1991.

          Our experience suggests that Rule 504 should be amended to include its original
          requirement for a disclosure document reviewed by at least one state securities
          regulator.  With that amendment, we would also suggest that the maximum amount
          of securities that could be sold in a twelve-month period should be increased to
          $5 million.

          We have received several hundred telephone calls in the last seven years from
          entrepreneurs who have heard about direct public offerings as a capital
          formation alternative.   Less than two percent are even potential candidates for
          that program.  That is quite probably appropriate, and we do not suggest any
          amendment that would change this percentage.

          What can be addressed is the temptation for entrepreneurs to choose a proposal
          that may come from persons willing to violate the securities laws, or be
          reckless in understanding and observing them.  A business founder will listen to
          the cost, timing and probability of success for a public offering that complies
          with the securities laws,  then compare that with doing business with
          intermediaries who promise results that are inherently suspicious.  They may
          unfortunately go with the uncomfortable path, because the clearly legitimate one
          just costs too much, takes too long and has too many strings attached.

          Regulation A works very well currently, with most states applying only merit
          review standards and not duplicating the Office of Small Business review for
          disclosure standards.  We have recommended using Regulation A, even for
          offerings of under $1 million, where prospective investors resided in several
          states.

          The North American  Securities Administrators Association makes its Small
          Corporate Offering Registration Form U-7, and the extensive instructions and
          guidelines, available at its website.  Many state securities regulators have
          SCOR packages available and provide pre-filing advice.  Our experience in the
          last six years is that the review and follow-up surveillance is up to the
          highest standards of investor protection.  Regional Review has significantly
          alleviated the previous difficulties with multi-state SCOR offerings.

          Dishonest intermediaries will not be constrained by any changes in disclosure
          requirements.  They do their work principally by telephone, by "bait-and-switch"
          seminars and by circulating "tips."  The criminal activity can be reduced if
          businesses have feasible capital formation methods that provide investor
          protection.

          The Commission's Small Business Initiatives have definitely worked to this end.
          Having shares freely tradable after a Section 3(b) transaction has been a major
          part of that.  That is not so much because of the liquidity, as a marketing
          point.  It is mostly because of the confusion, the "strings attached" that comes
          from explaining Rule 144.  The average purchase in more than 20 direct public
          offerings we have worked on has been about $1,000, with only isolated purchases
          of more than $10,000.  Providing those investors with liquidity (while still
          restricting nonpublic purchases) poses no real danger of unfair practices.

          Raising the Rule 504 maximum would particularly help those businesses who could
          offer shareownership within their regional community.  Since nearly every state
          has by now adopted the U-7 filing, and with regional review, the transaction
          costs could be kept considerably lower, with no sacrifice in investor
          protection.


          Respectfully  submitted,


          Drew Field