The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1932-11-15
'StandStiII' Agreement With
Bank Creditors Nego-
tiated.
United Press

81 L niIeU PTeSS
CHICAGO, Nov. 15.-Samuel In
sull Jr.'s successful attempt to Stave
off ruin of the two billion dollar
insult utilities empire on Dec. IA,
1881, by negotiating a "standstill"
agreement with bank creditors was
related from the witness stand to-
day by young insult.
He appeared before Federal Judge
Walter c. Lindley in the bankruptcy
hearing to recover assets of the
$3.50, 100000 insult Utilities Invest
ments, Inc.
The "standstill" agreement, which
froze the loans to the insult Invest
ment Company and prevented the
sale of the securities, came under
scrutiny in connection with charge
that the companies were insolvent
when the agreement was reached.
The insult utilities pyramids
crash did not begin until last April.
Tense as He Testifies
Sitting tense in Lis chair, young
insult testified that as far as he
knew, the agreement was reached
before the insult company's col
lateral had declined to a point
where bank obligations could not
be met.
In Somber attire, insult Jr. ap-
peared to sense the Importance of
his testimony. He spoke slowly,
deliberately, biting off Syllables with
touch of English accent. He pro-
nounced either, "eye-ther."
He was questioned by Floyd |
Thompson, former chief justice of |
the Illinois state supreme court,
who explained that his only con- |
Germ was to obtain the story of
young Insults part in the failure.
insult testified the insult regimes
affairs reached state On Dec. IA
where he recognized that the end
Of the situation was here from the
market point of view.
Beginning of the End
1--WE were aware" he continued,
that we had a certain amount of
collateral and no more. There had
been rather continual decline in
the market value of our portfolio.
The point was about reached
where we would not be able to put
up collateral on loans as we had
been able to do previously"
Into this situation stepped young
insult, as he told it-delegated to
make the effort success of which
would have meant temporary saliva
ton, at least, for his fathers firms.
insult spoke of his father without
visible emotion, although he re-
turned only last week from a trip
abroad and parted with the Elder
insult when the latter, indicted by
the Cook county grand jury, pro-
ceeded to Greece, where he now is
awaiting the outcome of extradition
efforts.
After the close of banking hours
on Dec. IA, young insult went with
Harold Foreman, his fathers assist
ant, and called on the city's bank
ing leaders.
He mentioned Herman Valdez,
vice president of the Continental
Illinois; Melvin A. Traylor of the
First National, and Philip R. Clarke
of the Central Republic Bank and
Trust Company-the last-named the
Dawes bank, which later was to OBJ
tain an $80000,0O0 loan from the
Reconstruction Finance Corporation
and Chicago banks to tide it over a
crisis.
Tells of Plea to Bankers
insult repeated what he had told |
these bankers-his request for a
standstill agreement, his explanation :
that he was assured of sympathetic
action by New York bankers if the ;
insult interests had the backing of
Chicago institutions.
Il told Mr.. Traylor," he testified,
that we wouldn't continue to
collaterize our bank loans"
Eyes, no dumping" insult ,
quoted Traylor as replying.
Traylor meant, insult explained,
that there must be no forced sale
of securities.
Those three words of agreement
with young insults views were the :
turning point of his round of bank
ing houses. Out of hectic evening
came the "standstill' agreement.