Montana labor news., 1932-09-22


in its balance sheet, and even a year
later confessed to only about z pei
cent of the real deficit which the
auditor revealed"
The full tragedy of the situation
cannot be understood until one re-
calls that the insult companies had
a great number of small stockhold-
ers. insult vas a pioneer in the cam
paign for customer ownership"
Every one who paid light and gas
bills to Mr.. insult was solicited to
buy stock in some one of his COM
panies.
High pressure salesman worked
every suburb and residence section
in and around Chicago, and even
called on salaried workers at their
places of business. The whole Mid
die West was covered in a similar
manner.
The result is that the crash of
the insult Utility Empire has wiped
out the lifetime savings of thousands.
Profits by Insiders"
An even uglier aspect to the case
is given by a petition for leave to in
tervene in the receivership proceed
ings, filed the same day as the audi
tors report, by James P. O'Grady
and others.
This petition indicates that mem
bers and friends of the insult or
ganization divided nearly $79,00O,-
900 in profits" from an underwrit-
ing syndicate that distributed the
stocks Of the insult companies. The
difference between profits" and
"stealings" in this instance does not
seem spacious.
The same petition implies, though
it does not say so directly, that a
favored list of 1900 to 1000 friends
and associates of the insult group
were allowed to buy stocks in his
companies at less than the market
prices.
This, of course, happened before
the crash, when insult stocks still had
market prices. A number of petit
lions quite similar to this have been
filed; each one speaking a little
more plainly than the last.
Great Political pull"
In this regard, it must be remem.
bered that victims Of the insult crash
had good reason, at the beginning Of
the receivership, to tread softly, and
use gentle words. insult was the
most powerful magnate of the Mid
die West before the crash, and did
not lost all his influence at once.
He had been as active in politics
as in the utility business; he had
played a large part in c~orruptine
the public life of the whole state
and aver when he fell, his henchmer
were in office.
insults bankruptcy was thrown in
to a federal court whose members
probably never could have been ap'
pointed to the bench without his
consent. 1t is significant that he
took the Ease at first to Judge vii.
kerson, who had received insults re-
port for promotion; but this pro.
ceeding was a little too raw" anC
another judge, Walter C. Lindley
has handled the matter.
Picked His Own Receivers.
insult was allowed by the court t
choose his own receivers, although i
was known that the losses would b.
gigantic. His creditors have no
been allowed by the court to sci
the securities which he pledged will
them to get loans.
The auditor reports that lnsul
Utility Investments, Inc, owes sal,
5000 to different banks in Chi
. cago and New York, and that tn
collateral pledged for these loans
worth at present market prices onl.
S23, 718,000. But the banks have no
been allowed to sell these forfeite'
t securities.
Even SO, the banker-as usual
has come out better than others VIII
5 dealt with Samuel insult. The tire
great operating companies of the In
e sui group-Commonwealth Edison
Public Service of Northern Illinois
and Peoples Gas-are still sound an
: prosperous and making money, thong
t the HOLDING companies throug