The Bismarck Tribune Newspaper, October 7, 1932, Page 3

| | y THE BISMAPCY TRIBUNE. FRIDAY, OCTOBER 7, 1932 “pam Insull Was Biggest Power in Mid-Continent| Combined Assets of All Companies Were Almost His (Editor’s Note: This is the first of @ seried uf six stories on the rise and fall of a financial giant— ¢ Samuel Insull, the world’s great- est failure.) nt — {*(Copyright, 1932, NEA Service, Inc.) Chicago, Oct. 6.—At the peak of his career, Samuel Insull was master of the most gigantic chain of public tilities ever controlled by one man. 7” His hundreds of electric plants, gas Plants, water plants, ice plants, street . Car lines, bus lines and electric rail- ‘Texas and overflowed into Canada ind Mexico. His varied enterprises operated in 32 states, served more than 5,000 cit- jes, towns and villages, had upwards * of 7,000,000 customers and supplied the public utility needs of approxi- mately 15,000,000 persons. The combined assets of all his com- panies was close to $4,000,000,000. Six hundred thousand persons owned stock in his companies, a half| million more had bought his bonds. Samuel Insull, personally, $100,000,000. Aside from ment income, he drew $500,000 a year in salaries from his companies. He was chairman of 65 companies, presi- ‘Dent of 11, sat on the boards of 85 more. It is no exaggeration to say that he was the most powerful man in Chicago. He held the world’s fourth largest city in the hollow of his hand. ‘Bankers courted his favors, politicians cowed before him. He was past 70 and an industrial tyrant. He absolutely dominated everything he had anything to do with, ran all matters as he pleased. ‘There was nobody to tell him “No.” Nobody dared. That was the Samucl Insull of yes- terday—the mighty Samuel Insull who was swept, almost overnight, from “billions to a pension in the gigantic collapse of the Insull empire of utili- ties. It will go down in history as . the greatest failure in American busi: ness annals. It was 10 times bigger than the Kreuger collapse in Europe. IS DEJECTED MAN The Samuel Insull of today, a vol- untary exile in France, is a vas different man. In six months he ha aged a dozen years, say those who have seen him. The fire has faded} from his eyes, his once brisk manner has yielded to an air which denotes either dejection or confused bewilder- ment. His $100,000,000 personal fortune is gone; he tossed it into his failing companies in a futile effort to stem the tide of disaster. Lost also is his magnificent 4300-acre estate at Lib- ertyville, Ill, with its $125,000 man- sion of Italian Riviera architecture, bird sanctuaries and sunken gardens. #His Chicago home, a fashionable apartment on Chicago's “Gold Coast,” is for rent, So is his old English pent house atop the 42-story Chicago Civic Opera building, which he built to gratify his love of music. Not only is Insull said to have lost everything he had, but he is also $15,000,000 in debt. Five millions of this represents his pledges to charity, which he never can pay. He is living in Paris now with Mrs. Insull, They have two rooms at the Prince des Galles Hotel, for which they pay $10 a day, with $2.75 added for Mrs. Insull’s maid. The former ster of billions is watching his pen- nies; the baggageman who carried up his trunks says Insull tipped him 60 cents. Insull’s only income at present, so far as known, is an annual pension of $18,000 from his three big Chicago; “»perating companies—the Common- wealth Edison, the People’s Gas and the Northern Illinois Public Service. ‘These three companies are not in- olved in the Insull failure or string of Insull receiverships. Also out of the country are Insull's son and brother, his closest business associates. The latter is Martin In- sull, former president of the mighty Middle West Utilities Co., greatest of the Insull holding companies. Mar- tin Insull disappeared from Chicago about the time Middle West went into receivership last April. He was re- cently found living with his wife in @ $20-a-week boarding house in the little town, of Orillia, Ont., 90 miles north of Toronto, shunning all com- panions and seeking seclusion. The most recent to depart was Samuel Insull, jr., 32-year-old presi- dent of the two vast Insull invest- ment trusts now in bankruptcy, who sf led for Paris unexpectedly a few days before a federal court bank- ruptcy hearing was to begin. Friends said young Insull was-called to Paris by the illness of his mother. LOSS TO THOUSANDS When the Insulls did not heed State’s Attorney John A. Swanson’s request to return home voluntarily to aid in the study of the utilites crash, the prosecutor had a Cook county grand jury indict Samuel and Martin on criminal charges—embezzlement and larceny. The indictments charge that $514,942.74 was taken from Insull financing companies to support a ginal stock brokerage account maintained by Martin. a Bond was set at $75,000 for Martin and at $50,000 for Samuel. An investigation is being conducted by Federal Judge Lindley in the gov- ernment’s hunt for bankruptcy assets. ; Another probe is being conducted by United States District Attorney Dwight Green, wha is trying to ascertain if any federal criminal statutes have been violated. é It is difficult to estimate what the collapse of the intricate system of Insull polding and investment com- pantes Will mean in terms of money Jost to investors, but conservative Chi- cago bankers fix the figure in excess of three-quarters of a billion dollars. Only many months of investigation— and perhaps years of litigation—will tell. Much of this money is lost by persons least able to afford it, for Samuel Insul] strongly encouraged er-ownership of his many se- cizities, and Insull’s name was magic am’ Chicago where his success had been so tremendous. Consequently, “when a new issue of Insull stock ap- peared, money came out of savings banks, out of socks, out from under mattresses and quickly found its way into his companies’ coffers. Insull stock could be bought with toasters, gas ranges, electric machines, coke or whatnot. Employes—from bookkeepers to meter readers—were given quotas of stock \Toads dotted the map from Maine to! | and ordered to sell the stock to dif- | ferent families. But Insull didn’t do this because? he needed capital from his customers. He had a deeper motive. If there was a rate increase, the customer's ob- Jection would be calmed by the idea that he was paying money to himself, If Insull wanted to seek a favorable franchise at city hall, the political in- fluence of thousands of small inves- tors, who felt they were part owners in the company, would be behind him, HELPED BOTH PARTIES Insull favored public ownership of utilities—but his brand of public own- ership meant customer ownership, under Insull control. In Chicago and vicinity alone he had nearly 300,000 investors. This gray-haired Napoleon of a utilities empire, who usually got what |he wanted, also had other irons in the fire. He was a generous, though cautious, contributor to political cam- paign funds. In 1926, as a senate in- vestigation later disclosed, he contrib- uted $125,000 toward the election of |Frank L. Smith, who was elected to the senate from Illinois but denied his seat in that body on the grounds of corruption. At the time of his can- didacy, Smith was chairman of the Illinois Commerce Commission, the State's utilities rate-maxing body. But cautious Insull played no fa- jvorites. The same investigation dis- closed that he had contributed $15,000; to the campaign of George Brennan, Smith's Democratic opponent. | In the years when Mayor “Big Bill”: ; Thompson was threatening to “bust jthe kaiser in the snoot,” holding ro-} deos in the city hall and performing! other antics, Insull was really the! power behind the throne at city hall, so Chicagoans tell you. They say In-! sull exercised this power through! Corporation Attorney Samuel Ettel-; |son, who really ran things. H 1 PYRAMID CRASHES It is of utmost importance to ac] member that the Insull operating} companies are not involved in the; {present debacle. The companies now | jin trouble are gigantic holding com- ; |panies, which produce no gas or elec- j tricity themselves, but merely own se-; curities of the operating companies. | Practically all the operating com-| panies are sound properties. | ; On these operating companies In-} {sull stacked a high pyramid of hold-! ing company upon holding company, | ;topped by two gigantic investment trusts—the $250,000,000 Insull Utilities Inystments, Inc., and the $150,000,000 | | Corporation Securities Co. | All was well until securities began to shrink in value, and then the whole |lofty financial superstructure came tumbling down amid a series of bank- rupteies and receiverships. Thousands of investors suffered loss or ruin. At the bottom of the pile was the 73-year-old Sanuel Insull, de- | Stroyed by the very thing that he had worked for 50 years to create. He is the world’s greatest failure! sibanekin scalar | DIXIE SPARING LASH | Atlanta, Ga., Oct. 71—(?)—Dixie is sparing the lash and substitutes the | honor system to prevent spoiling its convicts. Prison commissioners over {all the south say whipping the unruly is being abandoned, either as a result of legislation or voluntary action on \the part; of officials, because reward jof good behavior has been found a jbetter means of keeping order. In extreme cases, half a dozen states still thrash prisoners for misconduct but the whippings are few. North Carolina, South Carolina, Georgia, {and Florida have abolished the lash by statute. DAW! BANK OPENS Chicago, Oct. 7.—(”)—The City Na- tional Bank and Trust company, with Gen. Charles G. Dawes as chairman of the board, opened for business Thursday, taking over the deposit | liabilities and banking business of the {Central Republic Bank and Trust | company. | COTTON IS COLLATERAL | Washington, Oct. 7—(#)}—Cotton | Thursday was acceptable collateral on crop production loans under a plan j announced by the agriculture depart- ment designed to “ease the burden of repayment of such loans.” Henry 8. Clark, director of the 1932 production loan office, said this “should result in improving the cotton market.” JIMMIES WELCOMED BACK Jamestown, N. D., Oct. 7.—(P)— Homecoming for Jamestown college will open Friday night with a spe- cial program and continue Saturday with the Minot and Jamestown col- lege football teams providing the | celebration’s feature. Miss Florence {Smith of Devils Lake will be crown- ed football queen between halves of the gridiron tussle. Sell your live poultry and cream now to Armour Cream- eries, Bismarck. Tribune Want Ads Bring Results |The Ford share of national truck ht SAYS FORD AGAIN LEADING IN SALES) Local Dealers Reports Better Business as Volume of Pro- duction Rises Volume deliveries of Ford V-8 mo- tor cars and trucks, begun in June, have enabled Ford to lead all com- Petitors in sales of both passenger cars and commercial vehicles, ac- cording to figures received here Fri- day by F. A. Copelin of the Copelin Motor company, local Ford dealers. Ford took the lead in national mo- tor car sales in June, increased his lead in July as production of the new Fords mounted, and maintained the lead throughout August, according to reports for that month already re- ceived from 34 states, Copelin declar- | ed. In addition to this, the latest re- ports also reveal that Ford led in sales in the largest cities during the first 10 days of September. | In June, the first month when vol- ume deliveries of the new Ford cars were available, Ford's share of total Passenger car sales in the United! States reached 35.9 per cent, as com- | pared with 24.9 per cent for its near- est competitor. Ford commercial cars | were 50.5 per cent of all such vehicles sold as compared with 37.6 per cent for its nearest competitor, while Ford trucks represented 35.7 per cent of all truck sales, as compared with 27.6 per cent for the nearest competitor. Ford sales in July, as revealed by | official registrations, mounted over | June figures and Ford's share of the business was increased. Ford pas- senger car sales reached 38.4 per cent | of the total business as compared with 24.2 for its nearest competitor. Ford commercial cars were 54.4 per cent of all cars sold, giving Ford a greater | Percentage of the total business than | all other manufacturers combined. sales was 34.4 per cent as compared with 27.1 per cent for its nearest} competitor. Reports of registrations in August in the various states are not complete but on the basis of data thus far re- ceived from 34 states, Ford sales again led the field. Since volume deliveries of the new Ford began in June, Ford has ac- counted for a greater share of new passenger car sales in North Dakota than any other manufacturer. Ford ‘old 581, or 38.6 per cent of the total of 1,505 cars of all makes sold in the | state in June, July and August. Ford ‘otal commercial car and truck busi- Drug Victim > | A victim of drug parties that have caused a sensation in London society, Miss Brenda Dean Paul, above, has been sentenced to a corrective term in prison as an “example” in Scot- land Yard's efforts to curb use of narcotics. She had recently an- nounced her engagement to a promi- nent London broker. ness also was in excess of that of its nearest competitor. Mr. Copelin said also that Ford led the field in total car sales for June, July, August and September in Bur- leigh county. Use the Want Ads “Believe It or Not” The New “Lifetime” Battery Revolutionizes all precedents in battery construction and performance, Briefly—we can't tell you here all the outstanding ad- vantages of “Lifetime” Batteries: sider satisfaction and this is only half teries, ° 1, Neyer remove from. your car for charging—your properly operating generator does this in your car, 2 Virtually self-charging—if long severe use of lights or start- er runs down your “Lifetime” battery, wait 10 minutes and “Lifetime” will spin your motor again. (This can be done repeat- edly.) 3. Two-year guarantee. 4. No over-heating or buck- ling of plates, Any battery that does not give you this performance is con- red obsolete. 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DREAR: Those dotted Swiss curtains are @ sight ‘end I'm afraid os can be to wash ‘om. OARS. CHEER: | washed mine lest week with Oxydel and they're bright os new. Getting of it’s the hardest port of housecleaning @ Nothing like Oxydol to save elbow grease. This marvelous new granu- lated household soap can be put to work everywhere—on the prettiest things as well as on the hardest-to-wash. It cuts grease, loosens dirt and makes abig foamy batch of suds. Never balls in the dishpan and won’t make your hands red. LICENSES BROUGHT | $87,776 IN QUARTER Report For July, August and} September Made By Vehicle Registrar Receipts of the state motor vehicle registration department during the months of July, August, and Septem- ber totaled $87,766.60, according to figures announced Friday by the re- gistrar. This is in addition to $1,693,- 097.25 collected the first six months of 1932. Total registrations for the first three-quarters of 1932 were 152,822, which is 17.235 less than for the same period of 1931. Licenses were issued for 128,648 passenger cars during the | first nine months of this year, with the remainder being for trucks and | other vehicles. The quarterly statement of receipts and distribution covering the period | July 1 to Sept. 30 shows that receipts were apportioned equally between the respective counties, according to the amount received from each, and the state highway department. The third-quarter receipts: Adams $1.110.60; Barnes $3,369.05; Benson $1,129.10; Billings $205.9: Bottineau $1,453.35; Bowman $944.0: $857.20; Eddy $691.95; Emmons $1,- UJ $79.50 iy Choose from Three Phenomenally Low Prices For one week only... Ward’s stages this Amazing Value Event. Rich full pelts . . . all carefully matched. Every one generously made with a wide overlap, no skimping of fur. fine quality satin crepe linings. Sizes 14 to 44. Lengths 46 to 48. 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GROUP THREE Plain sealine with Johnny shawl collar or cape shawl collar. Black pony, shawl collar. Natural southern muskrat backs with pointed shawl collar. This value for one week only . . . . 5 6 8 es Burke $648.25; Burlei 006.93, ($1117.45; Grand Forks $5,913.25; | Mercer $1,291 Morton $2,672.1 iss Ses. Caveiee tae Grant $943.65; Griggs $739.20; Het-| Mountrail $1,33240; Nelson $8 Dickey $1,418.10; Divide $790.55; Dunn | nger $2,016.05; Kidder $634.85; La-|Oliver $317 Pembina $1,923. ; Ramsay $2,513.50; Ran- Mc- | Pierce $815.71 : McIntosh $1,332.90; | som $1,932.95; Renville $650.90; Rich- land $2,420.85; Rollette $937.30; Sar- gent $970.50; Sheridan $790.90; Sioux $551.85; Slope $818.65; Stark $1,966.65; | Steele $620.65; Stutsman $3,231.75; Towner $1,293.00; Traill $1,235.45; Walsh $1,424.10; Ward $4,609.50; Wells | $1,300.90; Williams $2,520.95. ROCKET BLOWS UP Strauchbuch, Germany, Oct. 7.- (#)—Johannes Winkler. inventor of a liquid fuel rocket which he calls a “space ship,” tried out the device here Thursday. It rose 15 meters from the ground, exploded with a deafening roar and fell back in | pieces. Winkler had hoped to send jit up to an altitude hitherto unat- | tained. | U. S. NOT YET INVITED Washington, Oct. 7.—(?/—The U. S. has not yet been invited to send an observer to the London meeting pro- posed by Prime Minister Ramsay MacDonald to give four or five of the larger powers an opportunity to dis- cuss means of bringing Germany | back into the world disarmaments | conference. FRENCH STILL STUDYING | Paris, Oct, 7—(P}—The foreign of- fice said Thursday the French gov- ernment had not decided what kind of a reply it will make to the British proposal for a four-power conference |to consider Germany's demand for arms equality and that the matter | was still being studied. 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