Evening Star Newspaper, September 16, 1932, Page 5

RECEIVERS BARE INSULL METHOD Earnings Reports Enhanced by Stock Exchanging, Says Third Report. By the Assoctated Press. CHICAGO, September 16.—The re- ceivers of Middlewest Utilities Co., once & $3,000,000,000 holding company em- bracing the vast Insull utilities system, reported in Federal Court today that earnings reports had been enhanced by “profits from sale of securities” although in many cases these were merely ex- changes on stock with subsidiaries. ‘The management also used stock divi- dends to build up the earnings showing, said Edward N. Hurley and Charles A. McCulloch, receivers. They approximated the Middle West HNabilities at $310,000,000 and assets at $208,805,041, the latter comprising chiefly investments in subsidiaries and other companies. Of the labilities, capital stock and surplus totaled $230,~ 348,069, Third Report Elaborate. ‘The audit and receivers’ report wes the third of the Insull investment or- ganizatiors placed in the hands of Federal Judge Walter C. Lindley this week. It comprised several hundred pages of financial statements and ex- hibits, with commients by the receivers. Notes and accounts payable totaled $38,798,893. Bank loans outstanding were $25,110,~ 281, and of these the receivers said: “The bank loans are amply secured ‘with plenty of collateral.” The holders are the Bankers’ Trust Co. of New York and the Central Republic Bank & Trust Co., Continental-Illinois Bank & Trust Co. and First National Bank of Chi- cago.” Hurley and McCulloch said the fu- ture of Middle West Utilities depended entirely upen “business conditions and good management.” From January 1, 1930, until the hold- ing company fell into receivership last April 14, it operated at a loss. “Funds provided” during that period were shown to have been $106,628.730, while expenditures were $110,355,271. . The receivers made it clear the audit “was not a detailed statement of cash and other transactions for the purpose of disclosing irregularities.” No estimate has been made of the value that can be realized from securi- ties held by the company. An item of $559,204 was shown as advances to employes to secure their stock investments. In a statement to the public, Hurley and McCulloch took cognizance of the published rumors of loans from com- pany assets to Marshall E. Sampsell, former president of the Central Illinois Public Service Co. Individual Stock Loan. “The records of Middle West Utilities Co,” they said, “show a loan of 9,000 shares of common stock of Central and Southwest Utilities Co., made to Mr. Sampsell in September, 1921. Other than this, Mr. Sampsell has no accounts owing the Middle West Utility Co., or its receivers. “However, within a day or two after the appointment of the receivers on April 15, 1932, it was ascertained that Mr. Sampsell, who was then president of the Central Illinois Public Servios Co., a_subsidiary of Middle West Utili- ties Co. in which he was a director, had taken from Central Illinols Public Service Co. 4,000 shares of $6 preferred stock of that company, being reacquired stock held in the company’s treasury, and in return had deposited his trust re- ceipts. The receivers demanded and accepted the immediate resignation of Mr. Sampsell and steps were taken for the protection of the Central Illinois Public Service Co. “Since that time 2,000 shares of this preferred _stock. which had been sub- stituted for other collateral held on joint notes of Mr, Sampsell and Mr. Martin J. Insull, were acquired by Cen- tral Iilinols Public Service Co. through the purchase of these notes. The re- ceivers have also been in negotiation with the holders of the balance of 2,000 shares which had been deposited by Mr. Sampsell as collateral on bank loans. Proper claim respecting this entire transaction has been filed - with the bonding companies, the New Amsterdam Casualty Co. and Lloyds of Londonm, England, with a view of protecting the Central Illinois Public Service Co.” Forty million dollars have evaporated from the assets of the Mississippi Val- ley Utllities Investment Co. at current ?flcs the receiver estimated in a pre- iminary report yesterday to the United States District Court. The books showed $49,595.732 assets when Eugene V. R. Thayer became re- ceiver upon the collapse of the Insull investment concern last April. But he said that probably $40,000,000 have been wasted away in shrinkage of securities walues. Thayer’s report was the second by Insull receivers this week. The air has been burdened with ru- mors of loans to individuals from the | corporate funds of the Insull invest- ! ment houses, and coincident with the first, disclosures of these today, State's {,‘ ttorney John A. Swanson announced ‘he would investigate possible violations 1" of the criminal laws. He appointed four i ' gasistants to conduct the inquiry int {fhe fall of the Insull utility mvest&mt ‘companies, engaged a conference ay + “~gith United States District Judge Wal- ter C. Lindley, who is presiding over the receiverships, and ordered cne prosecutor to study extradition laws and treaties with France and Canada. He did not explain the significance, but it was pointed out that Samuel Insull, former head of the utilities empire, is Jiving in retirement in Paris and his brother, Martin J. Insull, is in Canada. Loans to Individuals. The Mississippi Valley investment Budit showed $261,104 loans to indi- vidusls. Included in the figure were es of $170,000 “partially secured” O Macin Tasull; $44.143 to J. A Mo- Phail of the Canadian Insull organiza- tion and & number of others. Only two were not secured, and many had life insurance policies as collateral. The defleit of Mississippi Valley, Thayer said, was $2§,392,665; but, writ- ing off the entire capital stock, this would be reduced to $526,091. The first Insull Investment Co. audit, thet of the Insull Utility Investments, Inc., made public Tuesday, showed a deficit of - $226,000,000, including the stock. Thayer was _asked, _informally, whether the Mississippi Valley concern was_solvent at this time. “The outcome depends on the gen- eral future of business,” he replied. “I were $23,285,841, and $17,444,790 of $400,649 in stock sn: 672 in notes payable. Stocks Held by Company. Among the stocks held by the com- pany were such items as 1,000 shares of American Cirrus Engines, Inc.; 287 shares of Business Research Corpcra- tion, 5 shares of _Continental Shares, Inc.: ctock in the Pirst Trust & Savings Bank of Taylorville, Iil.; 5,000 shares of Intercolonial Exploration, Inc.; stocks, tes and $681,- A Golf Queen at Twelve SCHOOL GIRL DEFEATS CALIFORNIA TITLE HOLDER, e A - TWELVE-YEAR-OLD grammar school girl, Clara Callender (above left), climaxed a spectacular career when she defeated Mrs. Brent Potter, defending title holder, in the annual Del Monte, Calif., wom golf cham- plonship. Miss Callender has had a startling career as a shown with Miss Helen Lawson, Los Angeles, at Del Monte. . She is P. Photo. sissippi Valley Utilities Investment Co. engaged were +shown in the receiver’s report. They included a real estate devek:gmmt in the Shokie Valley, skirt- ing Chicago’s North Shore section, on which there was a loan of $1,600,000; the Quivira development project, near Kansas City, in which $579,768 was in- vested by Mississippl Valley; citrus fruit lands, Mexican real estate and a total of $12,856,000 invested in New England textile and newsprint plants. In addition to the $28,000,000 deficit, the receiver said the company owes the Government $742,075 in deficiency in- come taxes plus interest and penalties. State's Attorney John A. Swanson conferred with Judge Lindley and was given permission to have his assistants examine the company records. Swan- son said he wished to learn whether any laws, perhaps the blue sky laws of Ilinois, were broken in the issuance of the various Insull stocks and bonds. “So far,” said Judge Lindley, “no evi- dence of criminality has been brought to my attention.” INSULL HAS QUIET LIFE. Former Utilities Head, Now in France, Outdoor Man. BY PAUL SCOTT MOWRER. By Cable to The Star. PARIS, September 16.—A quiet, un- assuming elderly man with a white moustache may sometimes be seen these fine Autumn days strolling along the Champs Elysees. This is Samuel Insull, late of Chicago and now of Paris Though his gait is leisurely and his shoulders are slightly stooped, he car- ries his 73 years well. Sometimes he pauses and watches with alert eyes the children laughing in front of the Punch and Judy show or workmen hoisting steel beams and blocks of stone on the new American Embassy Building on the Place de la Concorde. Sometimes he sits and rests medita- tively beside the red and gold of an Autumn flower bed and then, rising, continues on into the Tullerles Gardens to inspect from every side and admire once more the statue of the late Georges Clemenceau. It is now three months since Insull, broken and ill by the strain of passing in the space of a few months from vast wealth and power to modest ob- scurity, came to Paris. His wife joined him here soon afterward. Together they are recovering their health and composure, making modest plans for an unobtrusive existence in that sooth- ing anonymity which Paris, of all citles, knows best how to bestow even on its most renowned visitors. They occupy two rooms on the court in a comfortable but not luxurious hotel. Insull met and chatted pleasantly with Anton J. Cermak when the Chicago mayor was in Paris recently. He ac- cepted to be 2 witness at the recent ;eddins of his friend, Bernard Mul- ney. For publication he has absolutely nothing to say. His viewpoint is that, having resigned and retired for good, he is no longer front page material and he has the right to live and be let alone. 8o now, for perhaps the first time since he went to work at the age of 14 in London 59 years ago, he is learning what leisure is. On fine days he walks sometimes for hours at a time. He answers his friends’ letters in his own firm and clear handwriting, for he has no ry or stenographer now. And sometimes he and Mrs. Insull go to | out to a restaurant for dinmer, though he has to watch his diet and he never touches alcohol in any form. He is heflnnnz:f‘ study Prench and he reads a good mainly in history. (Copyright, 1932.) —_— Luxury taxes in Czechoslovakis are producing less revenue than last year. MERTZ Tailor Made Suit, TOPCOAT OR OVERCOAT Hand Tailored to Order $17.50 WHY PAY MORE! M ettt Bors Rl aesin "ehe Fement™ 30 our eSact speciacations. 10,000 shares of South American Ofl Fields, Inc.; other shares of Sllreréo stocks. owes $16,700,000 to ‘West Uttifties Co. and the also owns 97 per cent of the Mis- 'alley stock. ) enterprises in which the Mis- T MERTZ & MERTZ 405-11th' St. NW, H. J. Froshlleh, Msr. District’s Heroes in the - World War Compiled by Sergt. L. E. Jaeckel. 8 recorded in the official cita- tion, Douglas MacArthur, then colonel, chief of staff, 42d Division, American Expedition- ary Force, was awarded the Distinguished Service Cross for ex- traordinary heroism in action with the enemy in the Sallent du Feys, France, March 9, 1918, When Compan D, 168th Infantry, was under severe attack, Col. Mac- Arthur voluntarily joined it, upon finding that he 80 with- interfering his regular duties, and by his coolness and con- spicuous courage aided materially cluster is awarded to Col. MacArthur for the following act of extraordinary heroism in action with the enemy: As brigade commander, Col, MacArthur person- ally led his men forward, and by the ‘skillful maneuvering of his bri- gade made possible the capturing of hills 288, 242, and the Cote-de-Chat- illon, Prance, October 14, 15 and 16. He r{lmhyed 1n:';xommblz resolution “I:d eaf rallying broken lines S ek e ing victory possible. On a field where courage and fearlessness were the rule his courage was the dominant Yeature. Residence at appointment, Washing- ton, D. C. With the rank of general, he is now Chief of Staff of the Armies, and re- sides at Fort Myer, Va. He was also awarded the Disting Service Medal under General Order No. 59, War Department, 1919. (Copyright, 1932.) CHICAGOAN DENTAL HEAD Buffalo Session Drops Committee in Ad Dispute. BUFFALO, N. Y., September 16 (#)— Dr. G. Walter Dittmar of Chicago was elected president of the American So- ciety of Dentists yesterday at the clos- ing session of the house of delegates. ge :uecw Dr. Martin Dewey of New ork. ‘The house suspended for a year the activities of the Educational Publicity Commif / $5 y | gress to pass AGANST WACE U A. F. Whitney Declares Fur- ther Reduction Will Be ‘Death Blow to Industry.’ By the Associated Press. NEW YORK, September 16.—A state- ment that further pay cuts would be a “death blow to the raflroad industry” was made last night by A. F. Whitney, chairman of the National Association of Railway Labor Executives. In an address prepared for delivery meeting of the National chasers, removing the specter ployment and establishing security of employment for all workers.” Other speakers, notably Willlam Jett Lauck, Wi econos and Isidor Teitelbaum, rvpmmunl' the National Purniture Manufacturers’ As- sociation, indorsed Whitney's stand for shorter work days to take up the slack in employment. Mlghree urged Federal regulation of the hours in every industry and | of the Navy. ‘working ery Lauck called for a stabil! to control prices and production and to exclude foreign product tion of which’intere: recovery. Al e e wo v them wanting, Lauck in his pre- pared address: “Stabilization of prices and produc- tion pum Mmmm':odm rvision is the only cal covery which can now be Must Share Hours. . declaring there were 700,- ployed . railway workers and ,000 working part time, to take the initiative in & six-hour day. day,” he concluded, “when even that stable, non-militant class of our citizens, the hmum l.‘;!’! on a strike, capitalistic system.” Teitelvaum Tn-od\wed s Tesclution petitioning special session of Con- legislation curtailing the hours of employment, without reduction road systems met in the New York Central offices yesterday for a discussion of plans for the 20 per cent reduction in the wages of organized employes, notice of which is to be posted October 1. Won't Offer Arbitration. No statement was issued. Members of the Easten Wage Committee and representatives of the Bureau of Infor- mation of Eastern railroads, the group appointed to handle the wage question, also conferred. S The Eastern Wage Committee is com- posed of J. G. Walber, vice president of New York Central; H.'A. ‘Erochs, operating vice president of the Penn- sylvania, and C. W. Galloway, operating vice president of the Baltimore & Ohlo. The Herald-Tribune says the rail- roads have decided not to accompany the wage reduction notices with invita- tions to arbitrate the issue, but to leave the initiative fox seeking arbitra- tion to the unions. BUY- ALDYS —— Y‘:::}\n Anthracite for ® Real Economy o Future Comfort SILO STORED and RE-SCREENED 649 Rhode Island Ave. N.E. KNOX HAS ALWAYS SET THE STYLE PACE Now—New lSmllarl: of Value! 87 HE rew Fall model onair—to suit your own fancy . .. Be surs to see them today or tomorrow. $I0 are dashing or deb- RALEIGH HABERDASHER 1310:FiStreet: IRISH TAXPAYERS SCORE DE VALERA Free State Farmers and Others Meet at Dublin to Demand Re- turn of Overseas Markets. By the Associated Press. DUBLIN, September 16.—A group of farmers and rate payers (taxpayers) from various parts of the Irish Pree State met here yesterdsy and passed resolutions condemning what was termed the “Jingo policy” of President Eamon de Valera. Immediate restoration of overseas markets was demanded, and an organ- ization was formed. The chairman pro- name “The United Farmers and Ra ers’ Association.” The convention was the outcome of war_resulting tariffs by the United Free State following the withholding d annuities payments by the latter. meeting warned the governmerft that pending the return of normal con- 4 Steaks for 4 People, Hot Gravy CHICKEN BINNER w12 Fried OYSTERS DELIVERED 7 5 HoT TAM to9 P.M. EORGE ARCHENBEAU, janitor of the Harvard College Architectural Bullding, at Cambridge, Mass., is shown dusting off a bust of himself which has just been completed for Harvard's Hall of Fame by John . The bust stands at the right-hand entrance of the Robinson Hall Building, opposite a bust of William C. Endicott, former Secretary Chaeice of Salads, French Fried e i Gomeetio sT. Louts, September 16 () —Ed- WAr agencies | president, in charge of the purchasing finding —Wide World Photo. Pickles and Hot Rolls department of the St. Louis-South-| | s Fotatees. Fckl western Railway Co,, died suddenly in | | ¥ Fhoace: XOrth 0663 or No» his office yesterday. Death apparently 1719 14th 8¢ N. '.or was caused by heart disease. Cotton Belt Official Dies. . Griffin, 65, assistant to the e WASHINGTON’S FINEST MEN’S WEAR STORE o AND YOU WON'T BE SORRY! E’VE been telling you for the past three weeks that Woolens, Silks and other commodity prices, along with labor in the clothing field, are rising . . . we've been telling you that you can save money by sharing in these Inventory Sale Bargains . . . Act NOW, and you won’t be sorry! 'SALES END SATURDAY AT 6 P. M. Nothing will be carried over. Assortments are broken; quan- tities limited; all items are subject to prior sale. All sales final. MEN'S CLOTHING 43 Topcoats; were $30 to $45; smart styles; all sizes 10 Hart Schaffner & Marx Suits; were $35 to $45.. 87 Hart Schaffner & Marx Suits; were $35 to" $45, all sizes.... 63 Hart Schaffner & Marx Suits; were $40 and $45 ... $1 Hart Schaffner & Marx Suits; were $50 to $60. 83 Hast Schaffner & Marx Overcoats; were $40 and $45 39 Hart Schaffner & Marx Overcoats; were $50 and $55....cccviiaeenns 38 Raleigh Tuxedos; were $35; pure silk body linings..... S S AT J AN szl_m MEN'S FURNISHINGS 180 Shirts; were $1.55 to $2.50; plain and fancy; all sizes ...--94¢ and 51.39 A special group of 118 fine quality White and Blue Shirts.. 140 Ties; were 95c to $1.50; broken lots......... ecrevescane orone 149 Ties; were $1.50 to $2.50; broken lots.....cceseens 105 Pairs of Men’s Hose; were 35c and 50c 161 Pairs Silk Hose; were 75c and $1; plain and fancy 190 Pairs of Pajamas; were $1.65 to $2.50; plain and fancy. 86 Pairs of Pajamas; were $2.50 to $3.00; plain and fancy 37 Pieces of Athletic Underwear; were $1; small sizes only 35_Pieces of Athletic Underwear; were $1.50; all sizes 105 Athletic Shirts and Shorts. Each .........cceeeeiiniiild o 31 Pull-over Sweaters; were $10; fine imported Shetland yarn......... i 64 Sweaters; were SZ.SO and $2.95; sieeveless; l]roken lots.. 73 Handkerchiefs; were to 75c; broken lots; each... 60 Pairs of Golf Hose; were $1.25; plain and fancy. 70 Pairs of Golf Hose; were $2.50 and $2.00; imported.’.........................SLIS 46 Belts; were $1.00; tongue-buckle-and-snap type ....cec.eecerencans 40 Belts; were $1.50; broken lots 25 Belts; were $2 and $2.50; broken lots 89 Pioneer Garters; regularly S‘Oc; good assortment 94 Pioneer Garters; regular $1.00 quality; clearance price. MEN'S SHOES $1 Pairs of Raleigh Shoes; were $600; broken assortments.. 62 Pairs of Raleigh Shoes; were $8.00; blacks or tans; all sizes. 34 Pairs of Sta-Smooth Shoes; were $10; blacks or tans; all sizes....cem. cessemascarease Use your Charge Account here, or open one during these sales o WASHINGTON'S FINEST MEN'S WEAR STORE e RALEIGH HABERDASHER 1310 F Street at at Chalklands, Edgar Bourne End, England, is to be sold —_— 1318 F St. N.W. (Over Becker's) s e s (| Sehainuch’s New SUITS TOPCOATS and 1 Values are so great that to quote compara- tive prices would seem like an ex- aggeration. Therefore, we only say come in and see for yourself. All sizes. DeLuxe Lines at #1475 & %16 Remember the Address CHAINUCK’S 1318 F St. N.W. (Over Bicker's) OPEN EVENINGS