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PAGE TWO Wall Street Turns Deaf Ear As Insult Empire Totters And His $3,000,000,000 Financial Structure Crashes LIFE STORY OF SAMUEL INSULL ji I i ivesT Middle Weit Utilities goet into receiver ship. (This is the fifth and final ar ticle of a series on how Instill rose and fell. This tells of his falL (By The Central Press) Chicago, May ft. On a summer's day in 1932 an old man, his face wan and haggard from sleepless nights j and his hand trembling as he wrote, | sat at a desk for three hours as he read and signed papers that n seei*.- tary placed before him. It was Samuel Insull no longer the haughty and autocratic czar of a three-billion-dollar utilities empire hut now a fallen idol. When Insull finished his three hours of signing resignations he had signed I away every vestige of authority that : he had possessed He had resigned as I a director of 85 public utility com-1 panics chairman of the board of d» I rectors of 6ft ami president of 11 Swept Before Tide The same tide that had suddenly I swept him to disaster also had swept away his personal fortune which peo ple believed to be 100 million dollars. He was out now, with an SIB,OOO a year pension that three Chicago utili ties company had granted him out of sympathy. It had taken Samuel Insull -10 years to rise to his position of wealth and power in Chicago. He had lost all this in as many days. The first public indication that all was not well with Insull’s vast utility empire came in April, 1932, when the Middle-West Utilities company was thrown into receivership through in ability to pay a comparatively small bill for printing. Wall Street, of course had known for months. Soon Insull s two great super-holding companies— Insull Utility Investments and Cor poration Securities company of Chi cago—came crashing down around his ears and his disaster was complete. An Army of Investors But Insull was not the only one who suffered. Scattered from Maine to California were 600,000 persons who had invested in Insull securities and the losses they sustained as the re sult of his failcre are estimated at from $700,000,000 to $1,000,000,000. One investor alone, Rosa Raisa not ed opera singer, lost $500,000 her earnearnings for years. Losses ranged from that on down to a few dollars— tout usually nearly everything the in vestor possessed. It was not the depression alone that wrecked Insull. It may have hastened the collapse by drying cp the sources of new money as the investing pub lic’s purse strings tightened, but the real cause lies deeper. The germ of destruction was already there. Auditors, digging into the Inscll ruins in search of assets uncovered amazing examples of financial jug glery an<d speculative revelry in his big holding companies. One*inVestigator declares the hand- FORECLOSURE SALE By virtue of the power contained in a Deed of Trust executed by E. L. Stone, Thelma Stone and Julian Stone recorded in the office of the Register of Deeds of ance County in Book 151, at Page 439 default having ibeen made in the payment of the debt therein se cured on request of the holder of the same, I will offer for sale for cash, by public auction at. the Court House door in Henderson, N. C., to the highest bidder, on the 6th day of June, 19&1, the following described property: All that certain 100 acres land in Kittrell Township, Vance County, N. C., touched on North by lands ot Blands and Kittrells, on West by lands of Peter Gill, and South by Peter Gill and described in deed from D. H. Gill and wife to Pattie D. Stone dated April 11, 1905, Book 43, Page 44h, Vance County Registry, and same in herited by parties of the first parr, said E. L*. Stone being the husband of Pattie D. Stone and Thelma and Ju lian Stone, their children. Pattie D. Stone died intestate in the year 1910. D. P. McDUFFEE, Trustee May 5, 1934. Louis P. Dunn Co. Insurance Real Estate Loans. Phones: Office .. 289; Residence .. 716-W NOTICE! To Merchants We have moved to the Crowder building, corner of Court and Montgomery Streets. Our stocks are being enlarged to include full lines of cig arettes, tobaccos and light gro ceries. Come To See Us. R. E. Satter white Candy Co. Wholesale Only—Phone 170 HHr jj i| Rosa Raisa, opera star, one of the I heaviest investors in Insull securi -1 ties, lost $500,000. some dividends which the public thought were coming oct of earnings really were paid out of Capital re ceipts, after making accounting en tries by which these capital receipts were camouflaged as earnings. In the whole period of their existence, he declared, Insull Utility Investments and Corporation Securities company hardly covered their operating ex penses, and yet they paid out over $16,000,000 in interest and over $12,- 000,000 in cash dividends. Profits Did Not Exist By shcffling of investments between various holding companies and Jug gling the accounts this same authoi ity says, it was possible to show “profits” that never really existed. When Insull Utility Investments folded up, the receivers’ report show ed total liabilities of $253,984,341 and total assets of $13,146,482, with all ut about $112,000 of thel atter pledged to secure notes payable. Middle West tJfo, Spun GM? Mft/pnSM, frftS' A TALE or SCOTLAND YARD 6y /•/f//Y>V<Ssiilllll^Mfc READ THIB FtRST : Johr Tait, stepson of wealthy Lady Tait. is engaged to marry Lucy Burnham., a widow. In France, ■where the three were sojourning , Lady Tait takes a dislike to Gillian Dundas. a beautiful girl, who. it is disclosed, is blackmailing Tait tor a past indiscretion. Back in London Tait becomes alarmed when his busi ness associate. Lord Mills, is found shot to death. Mrs. Burnham takes Miss Dundas "under her wing ' much to Lady Tait’s annoyance. A luncheon given by Lady Tait in honor ot Tait and his fiancee, and attended by John’s cousins, Alysia, Etta and Claud Naylor, is a poor success owing to Tait's apparent uneasiness Tea is interrupted by the discovery of John Tait’s body on the sidewall. , In front ot Lady Tait’s home. Sus pecting he has been poisoned, Chiet Inspector Pointer of Scotland Yard investigates what appears to be mur der and first questions the victim’s cousin, Claud Naylor. Talking with Burnham, Pointer learns that Tait received a death threat by letter the same day Lord Mills had killed himself. Then the inspector inter views Lady Tait. (NOW GO ON WITH THE STORY) CHAPTER 28 “I THINK YOU do” Pointer agreed. “Your idea then is, that whatever it was between them was being renewed?” "Oh. no! My son was entirely and deeply in love with Mrs. Burnham, as you would have known 'had you heard the tone of his voice, as vvel} as his words, when he left her—only a little over an hour ago!” Emotion then nearly overcame her, but she steadied her lips and went on after a pause. "No. He was trying to get out of some old affair—some escapade—that sort of thing.” There fell a short silence. Pointer asked her if she had ever seen the pen to which the gold top In his hand belonged. He had picked •t up, he told her too, off the dining room floor. Lady Tait looked at it without interest, said she had never Men one like it to her knowledge, and suggested therefore Mrs. Burn ham as the possible owner. "Though K would be quite in keeping with the preposterous belongings of Miss Dundas. if it were hers.” Cleverly concealed but very skill ful questions had led to no confi dences about threatening letters having been received by the dead man, so Pointer put the question Anally point blank. Had her step- Mn received any such? “Os course not!” she said to that to a tone of sharp, almost terrified Indignation. "What a wild and ro mantic idea, chief inspector!” So now he knew what she had been keeping back. Lady Tait knew of such a letter, or letters, or the possibility of their having been re ceived, and for some reason wished lo withhold the information from the police. . . . He thanked her, closed the Interview on that, and next saw hfiss Naylor. He learned nothing from Alysia. He did not think that ■he was in possession of any knowl edge that would help him. Her in terests in the tragedy were entirely ■a to how it concerned herself, so £e read her. He might be all wrong, •t course, but for the present, he put her down as a talker, not a doer. But her sister Etta, who came ■ext, was an entirely different prop osition, v apart from the strange glimpse' that he had had of her watching Gillian Dundas so intently. Here was a strong character, he thought. It was not the kind of face that he, the chief inspector, cared to see in the family of one who had died by poison. Not that it was an evil face, but It was the face of one who thought her own thoughts, would go her own way. Something about the hsndsonteiy-eut, full Ups HBN3B3SBN, IN. CJ DAILY DISPATCH, SATURDAY, MAY 5, 1934 Tty Auditor* find finan cial jugglery in intuit Hooka. Utilities company showed no assets to cover preferred and. common stocks carried at book value of $220,924,641. As the depression deepened and the golden flood of the public’s invest ments in InSull stocksd iminished to a mere trickle, Insull struggled des perately to stave off disaster. To bols ter his crcmibling pyramid of reckies,* finance, he raided Insull Investments, Inc., of millions in sound securities and tossed these into New York banks to obtain badly-needed loans, with the resclt that these securities were lost when the loans never were repaid. aßttle of Speculators Insull’s blight deepened as he lost $20,000,000 in a titanic financial fattle with Cyrus Eaton, Cleveland capitalist, who was buying into Insull’s three Chicago operating companies and threateneing to win control. Desperate for money, Insull pledged stocks of a marked value of $440/000,000 for a Etta claimed not to recognize the pen-top. suggested intense repression. The cheek bones were high, the neck short rather than long. A woman of swift action when roused, one would expect. Not the face of -one to quiet ly endqre. ; And yet Something about' those lips suggested a woman wh.o: had endured * much. Unlike Lady Tait, there was a singular tone of Insincerity about all that she said to him. But Pointer did not think her fundamentally insincere. She affected him more as a woman who might be very sincere indeed, but who, for some reason, chase to as sume a character, play a part quite at variance with her natural one. These smug sentences with which she referred to the inevitability of death and our duty to so live that we could at any time be called away, struck him as so many gags used by an actress, yet he felt that she was far more interested in the trag edy than she showed. Or rather, he felt that her interest was quite re moved from anything to do with the emotions, with grief, or with hdrtor. He had felt the same about her brother. There was a look in the eyes of both that spoke of some ac tive, engrossing preoccupation aris ing from Tait’s death. Pointer’s habit, in a murder case, was always to ask the person to whom he was talking who that person thought might have committed the crime, un less they had already suggested a criminal. His question was put en tirely with a view to obtaining in formation as to the relationships among themselves of the circle around the dead man. Many a time, unsuspected mistrusts, enmities of which he would never have other wise heapd, rustled and showed themselves in answer to that query, like snakes coming to the charmer’s flute. Etta, like Alysia, told him that she had no idea where to look for the criminal or the motive. So she would not name the girl on the land ing. Yet, if her fixed stare at that shrinking figure had not meant sus picion, what did account for it? Strange currents flow into and out of murder.. If John Tait’s death proved to be, as seemfed certain, a planned murder, they would surely be here too. He asked her to de scribe the scene in the hall when the body was brought In. He learned nothing, except that she confined herself rigidly to facts. "Who profits by Mr. Tait’s death?’ he asked, after a pause. "If you mean in a money sense, all three of us, his cousins, profit. But Um only real profit, chiui la- IGopjirUiht, IMH * — • | 1 * For three hours Insull signs resig- I nations, sweeping away every ves- I tisre of power he possesses. li —]| | Insull flys to New I York and I France. bank loan of $110,000,000 and bought Eaton’s stock at a price that repre sented a $20,000,000 profit to Eaton. When the market value of this col lateral dropped below the $110,000,000 loan, Insull tried to borrow more in New York. But that was the end; there was nothing more for him to pawn. Humbly this erstwhile czar of a three-billion-dollar empire begged and pleaded with Wall Street bank ers, tout they were deaf to his entrea ties. Their banks were in too deep;y already for safety’s sake. And so, for the lack of a few mil lion dollars that he could not raise, this genius of finance who had build ed a concern that once had been rated at 3,000 million dollars, fell in the big gest business failure in the world’s history. No PI ace f or Him As a face-saving measure Insull was appointed one of the three receivers of his Middle West Utilities company, spector, are the things that canntft be set down in a will.” “True.” he agreed placidly, "yet of the things that can be so set down and handed on, you. your sister, and your brother are the sole inheritors?" “We re his'opiy relatives. Yes. It is at times like this that one realizes how little money means, how passing its possession.” A question as to where Tait had lunched today met with an absolute inability even to guess. "What exactly is the position at the young lady whom I saw stand ing for a moment on the landing?" Pointer asked. Gillian Dundas was explained briefly but very accurately by Miss Etta. “She hardly knew Mr. Tait, then?” Etta further explained about Vichy. ‘‘So they had met at Vichy?” She nodded. “Yes. but she knew him very slightly indeed. She cer tainly did not know him well enough to poison him.” She said this with a certain gleam of the eye that made him feel sure that here was a bit of the real Etta Naylor. Pointer, find ing that there was nothing to toe learned from Miss Naylor without her will, and nothing with it, passed on for the moment, as he had done in the case of her aunt. She. like her elder sister, claimed not to recognize the pen top. "I wonder if you would kindly range for Miss Dundas to come In for a word?” he said as he went te the door. "I think she may be of great help.” For a second a curious look passed over Etta Naylor’s handsome face. A very singular look made up of more than one emotion. She shot a most penetrating look at Pointer. “Can you ride In this race and win?” was in her eye. But she only said “Indeed? On the principle that outsiders see more than insiders ?*’ “Something of that*, sort,” he agreed. As he opened the door for her Gillian Dundas came in very in differently, very listless In look and bearing. She sank into a chair with out a word, and, resting her fore head on her white hand vrith its mandarine-colored nails, looked dum bly down at the table. Then she raised her eyes and Pointer was genuinely startled. Terror and dread stared from her white, delicately painted face. And looking into his clear, calm, very fine gray eyes, the > 1 terror showed yet more plainly as guilty fear, abject and absolute. (TO BE CON TINE ED t ■ y ; I * Jfjf IW The Chicago fugitive makes his last plea I against extradition, in a Turkish court at Instanbul. but when the appalling condition of the nsull companies became known hi* was forced to retire. Soon thereafter Insull resigned all his other positions. A haggard and trembling old man who was now the mere shadow of his former self, nsull sought seclusion around Chicago for a while and then suddenly disappeared. It developed that he had boarded an airplane for New York and had sailed for France under an assumed name. He lived for a time in a small hotel in Paris but when rumors of a plan to indict him reached his ears, he slipped out of Paris on a train for Rome and flew by plane to Athens, Greece, where he believed he would be safe from extradition to the Unitea States. Indicted in Chicago for larceny and embezzlement of $500,000 from two of his former companies, Insull protest ed that he could not get a fair trial in Chicago and set aibout to fight re turn. In the Greek courts he won his battle against extradition, but when pressure from the American state de partment became too great the Greek government ordered Insull out of the country. Final Flight Fails On a dingy* tramp steamer, the Maiotis, which he chartered at Athena, Insull set sail for an unannounced port—presumably some country where he would be safe from extradition. But he never got there. At Istanbul, Turkish police removed the protesting Old man from his chartered ship, threw him into jail and turned him over to an agent of the nited States government fr return to Chicago and trial. Ace Racketeer $ '-ill .• * .*> ’ *1 X<&: HftfWS.'pHflßßiS Harvey Harris plays number one on the University of North Carolina ten nis team, which opened its annual eastern tour at Navy Saturday, May 1. The Tar Heels have won 72 con secutive matches since Princeton gave them their one defeat of the 1929 sea son, and on htei rlong, arduous north ern trips of the past thre years have established firs claim to the national team title. Harris, who plays a polished, all round game, is from Raleigh, N. C., and is a former State high school champion. On this year’ strip the Tar Heels will play Johns Hopkins Monday, Princeton Tuesday, Army Wednesday, Yale Thursday, Amherst Friday, and the Hartford, Conn., Golf dub team Saturday. Don Shelton, of New York, presi dent of the National Bible Institute, born at Odessa, N. Y., 6 years ago. LANDLADY— ;THIS SAOTh VOe'UE. Fog CHfWTe-: — d ■ffiKggg II - j --- 1 Under arrest Insull comes baijt to the U. s. Toda^ffiknes PIEDMONT LEAGUE Greensboro at Richmond Charlotte at Wilmington. Norfolk at Columbia. AMERICAN LEAGUE Chicago at Philadelphia. Cleveland at Washington. Detroit at New York. St. Louis at Boston. NATIONAL LEAGUE Philadelphia at St. Louis. New York at Pittsburgh. Brooklyn at Cincinnati. Boston at Chicago. ifiSSt Innjn^s Charlotte Wins Again Junie Barnes fell victim to Char lotte Hornets’ bats last night in Wil mnigton as the Buch were defeated 5 to 3. A ninth inning rally by Wil mington fell through when Anderson fanned with the bases loaded. Sandlappers Win Columbia made it two in a row over Norfolk yesterday by walloping them 13 to 8. Each team got 11 safeties. Pats Top Colts Greensboro’s Patriots gave the Richmond Colts another push last night in Richmond, sending them deeper into the collar, winning 8 to 2. Herb Moore allowed the Colts but four safeties. For old style or Champion Brand Chilean Nitrate of Soda see THE COOPER CO. The ground is Nature’s magic workshop. In the ground she brings seeds tolife, sheforms her jewels, her precious metals. In FOUR YEARS AFTER THOMAS the ground she creates plant foods JEFFERSON DIED AT MONTI’ | t J at * of farming in CELLO (l 826) CHI LEAN NATURAL the South —-potash phosphate NITRATE WAS FIRST USED TO j a “ d Chllean Natural Nitrate. FERTILIZE SOUTHERN CROPS. provide^^ j HHHHllfl FOR EVERYTHING. ** MHMEfHffIIWWWWW AGES AGO. BEFORE MAN IN- MPMfMiWW HABITED THE EARTH SHE CREATED CHILFAN NATURAL NITRATE AND AGED IT A MILLION YEARS SO YOU COULD HAVE IT FOR YOUR CROPS ■ ""7? }\ '*]&&** Headquarters For Chilean Nitrate KITTRELL HARRIS Phone 733 Henderson, N. C. INDEPENDENTS OPEH MON ON SOffil Meet Macon At Leat Ue p.. at 3:30 P. M. Silver Os sering To Be Taken ’ The Henderson Independents open their season her tomorrow^ 1 ' ternoon at 3:30 o'clock at i * a *' Park meeting Macon. Jpa £ Ur ' Captain Archer Boyd has had v ‘-oys working hard all during the , and has them in fine shape f OI game. No admission win toe cnarged but free will offering will be taken an 3 fans are asked to make it as liberal ° possible for the team needs funds w -*- which to start its season. PIEDMONT LEAGUE Club: VV. i„ Pct Charlotte 3 Columbia 7 4 Wilmington 7 5 Norfolk 7 5 Greensboro 4 « , Ai , Richmond 1 10 09l AMERICAN LEAGUE Team: W. |„ Pct New York 9 5 643 Cleveland ’ 7 4 g 3 (. Detroit 7 6 .628 [Boston 77 .500 Washington 7 St. Louis g 7 Philadelphia 6 g 4 . )( . Chicago 4 7 3 * 4 ’ NATIONAL LEAGUE Team W. l. ivt New York .* U 4 733 Chicago H 5 62 , Pittsburgh 8 6 .571 St. Louis 8 7 .533 Boston 77 Brooklyn 7 g 407 Philadelphia 4 10 286 Cincinnati 3 12 .250 Remits PIEDMONT LEAGUE Greensboro 8; Richmond 2. Columbia 13: Norfolk 8. Charlotte 5; Wilmington 3. NATIONAL LEAGUE Pittsburggh 4; New York 3 Chicago 8; Boston 1, Brooklyn 6; Cincinnati 3. St. Louis 3; Philadelphia 1. AMERICAN LEAGUE Cleveland 5; Washington 3. New York 3; Detroit!!. Boston 4; St. Louis 1. Cliicago-Philadelphia, rain. JAMES t COOPED §p.,L INSURANCE 5,,.. PHOHf iO4‘J HENDERSON , N.C
Henderson Daily Dispatch (Henderson, N.C.)
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May 5, 1934, edition 1
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