The Bismarck Tribune Newspaper, April 26, 1932, Page 2

es Though successful in building up a chain of public utilities worth billions, Samuel Insull experienced disapopint- j ment in his efforts to promote his! wife's comeback as an actress an | trying to make his model electrified! farm near Chicago show a profit.! Above is a scene from his model farm} —where everything was done by clec-| tricity, including currying the cows} with vacuum cleaners— which lost} money steadily. At the right is Mrs.| Insull, formerly known on the stage| as Gladys Wallis, upon whom Insull} spent $200,000, in financing her at-/ tempted comeback. The chart shows! a typical example of how Insull’s! hundreds of far-flung utilities were} operated through a series of pyramid- | ed holding companies leading up to| his giant Middle West Utilities com- | Pany, now in the hands of receivers. ! Insull Began MIDOLE WEST UTILITIES Co. Nat, Electrio Power C Municipal Service Co. Scranton Street Ry. THE BISMARCK TRIBUNE, TUESDAY, APRIL 26, 1932 New Device to Aid Deaf Is Perfected Washington, April 26—(%)—A new device to help the deaf to hear, in which sound hurdles dis- abled ear organs much as a race horse jumps a hedge, was shown for the first time Tuesday before the National Academy of Sciences. It does for the deafened person what his ears no longer can do— changes sound waves into vibra- tions which in normal persons are produced by three small bones of the middle ear. These vibrations, of changing wave length and pow- er, act on the fluid of the inner ear, which in turn actuates the nerves of hearing, The new device, developed by Dr. Frederick Bedell of Cornell university, changes sound into the special vibrations artificially and sends them to the inner ear by way of the bones of the head. Peace Park Will Be Located in Montana se | ' | ¢ Washington, April 26.—(4)—The Senate Monday passed and sent to the white house a bill creating the Wa- terton-Glacier International Peace park as a monument to American- Canadian good will. * His Purchase Campaign Just Before War | Rise as Utility Magnate no More | Surprising Than Money i Operations \ Editor's Note: This is the sec- ond of two stories on the rise and | fall of Samuel Insull, America’s | foremost public utility magnate, | whose giant Middle West Utilities | company is in the hands of re- | ceivers in the largest business de- fault in the world’s history. | By JOHN W. LOVE (Copyright, 1932, NEA Service, Inc.) ‘The story of Samuel Insull's rise as & public utility magnate, recently cli- maxed by the receivership of his giant | Middle West Utilities company which | was worth $2,500,000,000 at its peak, is) no more amazing than the story of, how he operated financially in build- ing up his billions, Beside the physical expansion of In- | ties Company, the big Insull property | which is now in trouble. $7,000,000. It had $2,000,000 worth of common stock. This common stock was owned by the Municipal Service Company, which also owned other Properties. The Municipal Service Company had a funded debt of $5,000,- 000 and capital stock besides. But the Municipal Service Com- pany was controlled by the National Public Service Corporation, which also owned other properties. National Public Service had borrowed $20,000,- 000 on the security of its stock in its subsidiaries, and had sold its own stock, But National Public Service was controlled by the National Electric Power Company, and on the security) of its stock in National Public Service and other subsidiaries it had sold nearly $10,000,000 in notes. Finally, National Electric Power was owned by the Middle West Utili- The Middle West Utilities Com- sull’s companies ran his remarkable pany’s subsidiaries, all of them to- financial system, equally the product gether. had borrowed hundreds of of his genius. It is his financial sys- tem, represented by his holding com- panies, which is in trouble now. The operating companies are not involved in the receivership. | Just before the World war Insull set | out on his campaign of conquest, buy-| ing property after property, scrapping little power stations and building new and larger ones, stringing his lines millions, and Middle West Utilites had itself borrowed nearly $100,000,- 000. # ee Above the Middle West company were two more Insull holding compan- ies, Corporation Securities, Inc. and Insull Utilities Investments, Naturally, this inverted pyramid of finance was a fair-weather sort of across the prairies and the moun- tains and along the lakes and rivers and, finally, the Atlantic ocean and the Gulf. Gradually, his operations Spread into 30 states from New Eng- land to Texas, in a wide variety of utilities which included ice plants, gas plants and other lines but was mostly power. structure, So long as the myriad subsidiaries made money, the profits would pile up in a golden flood and pour in on the topmost holding company. But if many companies, like the little Scranton electric railway, began to lose money, the whole structure would lose money pretty fast. It would lose * * * faster than anything could be done As Insull built an electric system he | about it. paid for it by bonds or notes which; Middle West Utilities tried to save he sold to the public. He retained the situation by lending money to its Part or all of the common stock,|subsidiaries, and these by lending which was the voting stock—and|money on down, and finally the loan therefore controlled the company, } would get down to the Scranton Elec- though he might have very littlejtric, but as many little properties money in it. |needed money they used it up faster Then he would sell his common | than it could be furnished. stock to a holding company of his} And so the farflung Middle West own, which owned the stocks of sev- ‘holding company finally toppled over. eral similar properties. | *** * Next he would issue notes with the; Despite his rise as a power mag- Stock of his holding company as se-} nate, Insull had his disappointments. curity, and sell these notes to the pub-| He could not make his experimental lic. This would give him funds to buy jelectrified farm pay. He had spent several more properties and form / $290,000 in financing his wife's at- them into a similar holding company. | tempted comeback as an actress, but After he got together a series ofthe effort failed. She had been on Ber 4 holding companies he would unite) them under another holding company, | @ sort of super-holding company, and} repeat the process. | Frequently he would retain only a! fraction of the stock of a holding, company and sell the rest to the pub- | lic, in little lumps. While the public} would hold most of the stock, Insull} would have by far the largest lump, and that gave him the management. Often he would not sell the stock, but only voting trust certificates, which left unquestioned control with Insull and gave the stockholder the divi- dends. Insull believed in customer- ownership, but not stockholders’ “in- terference.” kok Ox So long as prices of public utilities! were rising, and more and more peo- ple were using current, and more and more had money to invest in the se- curities Insull always had for sale, there was no end to this method of ion. There were only two or three ways| this sort of thing ever could come to a stop. One would be when Insull ‘and others who were doing the same! thing had bought all the power plants! in sight. Another way would be when | Insull and his rivals began bidding | against each other for properties, and paying prices much higher than they needed to. A third way would be when the bottom would drop out of prices, including the cost of building ® power plant. All three things happened, more or agtE Fe : é i baie Ie! z cH i E the stage before their marriage. He had been forced by the United States senate to admit he had liberally financed Republican and Democratic campaigns. He also financed the famous Chi- cago Civic Opera through many an unprofitable season, and is now hav- ing to leave it to stand on its own feet, No master of diplomacy, Insull had gone directly after what he wanted,! usually by buying it. The faster he bought, the faster his fortune grew, but the tidal slip of commodity prices finally overthrew him, Outlook Reports to Aid Farmers Planned Washington, April 26.—(?)—The agriculture department is planning a series of summer outlook reports to help farmers regulate their produc- tion and marketing. These reports, based on informa- tion gathered by the bureau of economics statistical, research and markets staff, will be issued in July, August and September. LL . Today in Congress ‘ —+ ° Senate Hears former Senator Heflin of Alabama, in plea to have election of his successor declared illegal. Agriculture committee confers with farm leaders and govern- ment officials on relief measures. Banking committee reopens stock market investigation. Finance committee continues work on tax bill. House Considers miscellaneous bil's. Ways and means committee considers soldiers’ bonus. Interstate Commerce committee studies railroad holding company regulation. Homestead Rights on Indian Land Restored Washington, April 22—(AP)—The senate Monday passed and sent to |the white house a bill by Chairman Nye (Rep., N. D.), of the public lands committee to restore home- stead rights to settlers on lands ceded to Indian reservations. The measure provides that the set- tlers who have paid the usual $1.25 per acre can make another home- stead entry as fi the previous entry had not been made. The Nye bill authorizing North Dakota to transfer 640 acres of school lands to the Interational Peace Gardens, Inc., also was passed by the senate and sent to the house. The land would be part of an area in North Dakota and Manitoba to stand as a memorial to the peaceful relations between the United States and Canada, Egg Production Is Lowest Since 1925 Washington, April 26—(AP)—The smallest number of hens in farm flocks on April 1 and the lowest number of eggs laid per 100 hens on that date since 1925 were reported Tuesday by the agriculture depart- ment. The number of hens and pullets of laying age averaged 77.4 per farm compared with 80.5 a year ago, 84.5 two years ago and a five-year April average of 83.4. The department said “the low prices of eggs were doubtless large- ly responsible for these conditions. The number of eggs laid per 100 hens was reported at 50.8 eggs. The number last year on April 1 was 52.7 while the five-year average is 53.4. Young Pickardville Farmer Dies in City Fred J. Brackett, 27-year-old farm- er from the Pickardville vicinity, died in a local hospital about 6:30 o'clock Monday evening. Death was caused by paralysis of the upper part of the spinal cord which was induced by an infection. Brackett was brought here for treat- ment Sunday. Brackett leaves his widow, son and daughter. His body was taken to McClusky Tuesday for funeral and interment services, arrangements for which have not been completed. Three Children, All Sioux Falls, 8. D., April 26—() —Because their mother was un- able to support them unaided, three children, all under nine paid by the county, the children left Sunday for Stavanger, Norway, to live with their grandparents, whom they have never seen and who asked that the youngsters be sent to them. Z z i id ? Zz [ The mother, whose name offi- cials declined to reveal, will re- Less Than Nine Years Old, Start Long Journey Alone main here with a fourth child, un- til she accumulates sufficient funds for the passage—“two or thee years"—-while the children adjust themselves to their new home. The parents of the children were divorced after the father failed to support the ‘amily, and the county has provided homes for the youngsters the last five years, After the grandparents asked for custody of the children coun- ty commissioners learned trans- portation costs would equal about six months support. They ap- proved the charges. So Mildred, 8; Clifford, 7, and Matthew, 6, were started on their i long journey. ’ a The park would comprise two parks already established—Glacier National park in Montana and Waterton Lakes National park in Alberta and British Columbia, Canada. The international'and forced it to stop. Inside lay boundary line runs through Waterton | lake. A | AT THE MOVIES CAPITOL THEATRE One of the classics of modern! American literature has become one| of the classics of the screen in “Ar- rowsmith,” Samuel Goldwyn’s produc- tion of the famous novel by Sinclair Lewis which came to the Capitol Theatre last night. It has reality,| tension, splendid acting, a gripping) sweep of emotions, and a new type of role for Ronald Colman to make it one of the film events of the year. It is easy to see that Colman’s per- formance of the young hero, Dr. Mar- | tin Arrowsmith, has as much to do} with the success of the picture as the brilliant story that made the book @ best-seller. In addition, “Arrowsmith” gives the world of movie-goers another op- portunity to see Helen Hayes, whose} emotional powers made her first pic- | ture, “The Sin of Madelon Claudet,”) such a triumph. Here this great! American actress has another role ex-| actly suited for her, that of the little nurse who marries Dr. Arrowsmith and stands by him in the face of dis-| appointment and death. | The story sweeps from the Dakota; wheat country to New York and then; down to a tiny island in the West In- 2! Two Extortionists Killed in Gunfight cens3en ee of the North Dakota Associ-! Third Man Loses Life in Effort to Defend Friend From Racketeers MACHINE GUN IS EMPLOYED Defender Used Shotgun to Pre- vent Enforced Collec- tion of $1,500 Taylorville, Tl, April 26.—(P)— Henry Allegrucci, 58, shot and killed two suspected extortionists in defense of @ friend Monday night and was slain himself in the gun fight. The shooting occurred at the home of Arthur Cioni in Langley, a nearby village, when Peter Larocca, 40, and Vincenzo Manteller, 40, both of Springfield, Ill, called with a com- {panion to enforce, Cioni said, pay- ment of $1,500. Allegtucci, who had agreed to help Cioni in anticipation of the visit, kill- ed Larocca with a shotgun blast as he advanced to thé door with a ma- chine gun, Larccca’s companions cpened fire and in the exchange, Al- legrucci was killed and Manteller was wounded. | Despite his wounds, Manteller fled with the third man in an automobile and state police were summoned and gave chase. They punctured the tires of the fleeing car after a 40-mile race ‘Manteller, dead. The third man escaped. Police ex- pressed belief the three men were the professional extortionists who killed (Mr. and Mrs. Dominic Severi, neigh- bors of Larocca, two months ago. Cioni said Larocca and the others had visited his home previously with demands for money and warned him to have it ready last night. Six Known Dead as Storms Strike South Memphis, Tenn., April 26.—(AP) —wWind and thunder storms struck across the south Monday leaving be- hind at least six dead, more than a score injured, damaged property and Haugied power and communication ines. All the fatalities were in farming communities near Memphis. A white rons and four negroes were known lead. The twisters swept into Tennessee from Arkansas where property dam- age and injuries were reported. Half a dozen southern Kentucky counties reported damage. Hail, winds and rain damaged homes and crops in northern Ala- bama and sections of Georgia. WILL PAY WIDOW Washington, April 26.—(?)—Pay- dies where Arrowsmith and his wife/ment of $5,000 to Senelma Wirkkula go to fight the Black Death that is|of Big Falls, Minn. whose husband, threatening the whole civilized world.|Henry Wirkkula was shot %o death by Quiet heroism, devotion, comedy, mingle in it in faithful transcription of the book. It would be worth see- ing for Colman’s performance alone. } As it is, with its gripping, human story, and perfect casting, it is making screen history. It is a United Artists picture, PARAMOUNT THEATRE Smooth as satin! Bright-polished and fast-moving as a new car! Bub- bling and effervescent and heart- warming as pre-war champagne! Ex-/ citing as a stolen kiss! That’s the! new Chevalier triumph, “One Hour With You,” a Paramount picture which is shown at the Paramount Theatre tonight and Wednesday. As a fashionable doctor whose wom- en patients find his prescriptions easy to take, Chevalier has a role full of opportunities for his special brand of foolery, and needless to say he doesn't miss one. However—and this is an original touch—the doctor is actually in love with his wife, Colette (played by Jeanette MacDonald) and though duty requires him to call on other ladies, hold their hands—that is, feel their pulses—and listen to the excit- ed fluttering of their hearts, he struggles manfully to be true to Colette. If only Mitzi (Genevieve Tobin) had played fair—but when did @ woman as pretty as Mitzi ever play fair? No other performance, however ex- cellent, can obscure the fact that “One Hour With You” is a Chevalier pic- ture—and one certain to add to the magnetic Frenchman's popularity. ANOTHER ROCKEFELLER ARRIVES New York, April 26—(AP)—John D. Rockefeller, Sr., has become a great grandfather for the fifth time. Friends of Mr. and_ Mrs, “Nelson Rockefeller learned Tuesday a son was born to them Sunday at Doctors hospital. The mother, the former Mary Todhunter Clark, was married to the son of John D. Rockefeller, Jr., in June, 1930. sizes in dresses, 141, to 2614. Visit the “Sport Shop” at Alex Rosen & Bro. Use the Want Ads A large assortment of half, Emmett J. White, United States bor- der patrolman, was approved Monday by the senate. CAUSE FOR JOY New York, April 26.—(4)—Rockefel- Jer can have his millions. “I can see!” whooped Jacob Lieberman, 87, as doc- tors took bandages off his eyes. He had been blind for 20 years but an operation fixed him up. TROUBLED ALL LIFE WITH CONSTIPATION But Kellogg’s ALL-BRAN Brought Real Relief If you are subject to headaches, loss of appetite and energy, sleep- Jessness and other effects that so often result front constipation, read Mrs. Turner’s voluntary letter. “For the past six months I have been eating Kellogg’s ALt-BRAN, and cannot praise it too highly. “Am fifty years of age. All life have been troubled with coi pation. Kellogg’s ALL-BRAN has not only helped me, but has cured me. “T thought I couldn’t like the taste of Dean, uy meleges ae Bran is delicious.” —Mrs. C. J. Turner, 507 Hanover Street, Fall River, Mass. Tests show ALtt-BRAN contains | two things which overcome consti- | pation: “Bulk” to exercise the in- | testines; Vitamin B to help tone the | intestinal tract, ALI-BRAN also sup- | plies iron for the blood. The “bulk” in Att-Bran is much like that of lettuce. Inside the boty, it forms a soft mass, which gent clears the intestines of wastes, Certainly this is more natural than faking «pile and d: often harmful, AtL-BRAN is not habit-forming. Two tablespoonfuls daily will correct most types of con- \ stipation, If you have intestinal trouble not r red this way, seo Got the radand | anit pie TONIGHT at “The perfect foo!” 35 PIECE TEXACO DON VOORHEES Musical Director . GRAHAM McNAMEE 7:30 KFYR ON THE AIR FOR THE FIRST TIME FIRE-CHIEF BAND CHORUS OF § MALE VOICES THE TEXAS COMPANY Kling Named Officer By Credit Bureau Men ation of Retail Credit Bureaus at a special meeting Monday. Jv. Henry Kling, Bismarck, was named vice persident, and Ethel Wil- Hams, Jamestown, reelected sécretary- treasurer. Territory was allocated to various bureaus in the state which will be beneficial to the consumer. 8. T. Westdal, Williston, and George D. Kelsey, Valley City, with the officers, form the executive committee. 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