The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-04-22

including the cost of building a
power plant.
All three things happened,
more or less. Toward the end of
the great bull market in stocks,
and even well into 1890 and 1881,
insult was paying high prices for
properties he wanted very much.
His companions kept on build
ing, thought at a less rapid rate.
They ran up bills and had to
borrow from the banks.
They ceased to be able to sell
stocks to the public at the old
speed, or even to sell stocks at all.
Finally. their companies began to
lose money.
ANE of the companies which
Olost money happens to be
street railway in Scranton, Pa.
This street railway can be used to
illustrate how the Middle West
Utilities was put together.
The railway had bonded debt
of 100000. 1t had 100000
worth of common stock. This
common stock was owned by the
Municipal Service Company,
which also owned other proper
ties. The Municipal Service Com
pany had a funded debt of S.
100000 and capital stock besides,
But the Municipal Service Com
pany was controlled by the Ma
tional Public Service Corporation,
which also owned other proper
ties. National Public Service had
borrowed $20,000,000 on the secur-
ity of it's stock in its subsidiaries,
and had sold it's own stock.
But National Public Service
was controlled by the National
Electric Power Company, and on
the security of its stock in Ma
tional Public Service and other
subsidiaries it had sold nearly
$10,000,000 in notes
Finally, National Electric Power
was owned by the Middle West
Utilities Company, the big insult
property which is now in trouble.
The Middle West Utilities Com
pany's subsidiaries, all of them
together, had borrowed hundreds
of millions, and Middle West
Utilities had itself borrowed near
ly $100,000,000.
A BOVE the Middle West COM
Apany were two more insult
holding companies. Corporation
Securities, Inc, and insult Utlli-
ties Investments.
Naturally, this inverted pyra-
mid of finance was fair weather
sort of structure.
So long as the myriad subsi-
dies made money, the profits
would pile up in golden flood
and pour in on the topmost hold
ing company.
But if many companies, like the
little Scranton electric railway,
began to lose money, the whole
structure would lose money pretty
fast. 1t would lost faster than
than anything could be done
about it.
Middle West Utilities tried to
save the situation by lending
money to its subsidiaries, and
these by lending money on down,
and finally the loan would get
down to the Scranton Electric,
but as many little properties
needed money they used it up
faster than it could be furnished.
And so the far-flung Middle
West holding company finally
toppled over.
DESPTTE his rise as a power
- magnate, insult had his dis
appointments. He could not make
his experimental electrified farm
pay.
He had spent 100000 in financ-
ing his wife's attempted come
back as an actress, but the effort
failed. She had been on the stage
before their marriage.
He had been forced by the
United States senate to admit he
had literally financed Republican
and Democratic campaigns.
He also financed the famous
Chicago Civic Opera through
many an Improbable season, and
now is having to leave it to stand
on its own feet.
No master Of diplomacy, insult
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
overthrow him.