Evening star., 1923-03-22
ON EVE OF PROBE.
State and County Authorities
About to Investigate Deals.
By the Associated Press

Bt FtALO. n. u, March 22.-Leon-
ard Il. Steel, founder of the L. r.
steel Corporations, which went into
| iecelVershlp on March s, died early
today on d train en- route to Chicago
MRS. Steel was advised of her hus-
| Dand death IN d telephone message
from Toledo, where the BODY was
taken from the train.
SteeIs sudden death came on the
eve of Investigations into the stock
! SeiilnS anu other financial methods
OF ms promotions by county and state
authorities. Carl Sherman, state at
torney general, yesterday notified the
receivers that he desired to make a
thorough examination of the books
OF the various steel corporations and
District Attorney Guy q. Moore an
nounced last night that on account
OF reports OF gross extravaganza in
would JOIN in the inquiry. Federal
agents also are in touch with the re-
ceivers, but have as yet taken no
action.
Had Small Capital.
Starting with small capital in 1919.
Steel, personally directing advertis-
ing and stock selling campaigns dis
posed of more than s20.OOU,00O in
l.. X. Steel. Incorporated. and its va
poured in new corporations were
founded. chief among them being the
l.. K. Steel Service Corporation, which
had to do with stock sales; the L. r.
Steel Realty Development, handling
all leases and real estate owned by
the various branches, and other in
terlocking corporations, both in the
United States and Canada.
MIR. Steel, his former associates say.
ruled the policies and destinies of the
house of Steel with a high hand. Any
suggestion from "a subordinate in op-
position to Steefs plans for expan-
sion resulted in immediate dismissal.
it was said.
Methods Attacked.
Chain stores were purchased at
what We're alleged to be exorbitant
prices, restaurants and cafeterias
were opened and run at loss. A
large sum was invested in a coal
mine and about s1SO,000 was spent in
exploiting permanent international
exposition at Niagara Falls before
the enterprise had advanced beyond
the blue print stage: Steel also sur
rounded himself with high salaried
executives and paid high commits
sions on stock sales.
His methods were attacked by
financial publications. but with little
apparent effect, his stock selling or
ganiZation continuing to bring in
thousands of dollars daily.
First Sign of Distress.
The first sign of distress so far as
the public knew came in January, when
is was announced that Steel had sur
rendered the presidency of the parent
and several subsidiary corporations. 1t
was said at that time that he was
broken in health and retiring virtually
without d dollar except his large in
vestment in l.. r. Steel stocks.
board of control was placed in
charge and it was stated that d number
of promotions would be dropped and
that going concerns would be placed on
a sound financial basis. The board,
however, continued in operation the L.
r. Steel Service Corporation, and the
sale Of stocks did not stop until Febru-
airy 20, when Attorney General Sher-
man acted under the blue sky law and
the board of control entered into
stipulation to sell no more stock until
released by the state law department.
Receivers Appointed.
The board of control found itself
in financial difficulties within three
weeks, and on March Federal
Judge John R Hazel appointed re-
ceivers. A financial audit in prog
ress since then is reported to have
disclosed a scarcity of quick assets
in volume approximating a small
fraction of the $20,000.O0O invested
said today at the receivers office, will
not be completed until about April l.
Steel was born in Middletown, Pa,
in 1878. He was employed by chain
store corporation in 1918, when he
conceived the idea of branching out
for himself.
After his retirement from the
presidency of the Steel Corporations
Mr.. Steel went to his country home,
Marguerite Manor, few miles from
the city, and lived in seclusion. He
steadfastly refused to speak for
publication and denied himself to
visitors. Mrs. Steel said over the
telephone today that her husbands
western trip had nothing to do with
business affairs. He decided yester-
day that a. change would benefit his
health and she accompanied him to a
train last night. Four hours later she
was informed of his death
Mr.. Steel is survived by his widow
and one young son, Phillip.