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
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The ground is Nature’s magic
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provide^^ j HHHHllfl
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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